RESTRICTED Report No. PTR-2b Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracyor completeness.The report may not be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF

THE SECOND HIGHWAY PROJECT

COSTA RICA Public Disclosure Authorized

March 18, 1970 Public Disclosure Authorized

Transportation Projects Department CURRENCY EQUIVALENT

Unit of Currency in use: Costa Rican colones (C)

Official Exchange Rate

1 - US$0.150 C 6.65 - US$1 ¢ 6.650 million - US$1 million C 1 million - US$150,000

Fiscal Year: January 1 to December 31

Units of Weights and Measures: Metric

Metric: British/USequivalents

1 meter (a) m 3.28 feet (ft) 1 kilometer (Km) 2 - 0.62 mile (di) I square kilometer (Km ) - 0.386 square mile (sq. si) 1 metric ton (m ton) - 0.98 long ton 1 metric ton (a ton) - 1.1 US short ton

ABBREVIATIONSUSED IN THE REPORT

BPR - United States Bureau of Public Roads CABEI - Central American Bank for Economic Integration CACM - Central American Common Market DGV - Direccion General de Vialidad (Costa Rica Highway Department) FEP - FerrocarilElectrico al Pacifico IDB - Inter-American Development Bank JAPDEVA - Junta de Adoinistracion Portuaria y de Desarrollo Econoinco de la Vertiente Atlantica LACSA - Lineas Aereas Costarricenses S.A. TCI - TransportationConsultants, Inc. (US) TSC - TSC Consortium (US) - Consultants TAMS/DYPSA- TANS IngenieriaS.A. (US), Disenos y ProyectosS.A. (Costa Rica) - consultants USAID - United States Agency for International Development COSTA RICA

APPRAISAL OF THE SECOND HIGHWAY PROJECT

TABLE OF CONTENTS

SUtMMARY...... i

1. INTRODUCTION ......

2. BACKCROUND INFORMATION . . .1...... ,...1

A. Geographic and Demographic ...... * 1 B. The Transport Sector...... ***.... v ... 2 C. Transport Coordinatio...... 5

3. THE HIGHWAY SECTOR ...... 6

A. Highway Administration...... 6 B. Highway Engineering...... 7 C. Highway Construction .. .. D. HighiwayMaintenance ...... 8 E. Highway Financing and Planning.... 9

4. THE PROJECT ...... so . . 11

A. GeneralDescription . . 11 B. The Siquirres-Limon Highway . . 11 C. Design and ConsultingServices . . 12 U. Cost Estimates...... 13 E. Disbursement . . .15 F. Execution of the ...... Project 16

5. ECONOMIC EVALUATION ...... 17

A. Background ...... 17 B. Project Area ...... 17 C. Future Traffic and Transport Capacity.. 18 D. Economic Analysis of Project Road . . .19 E. Feasibility Study .. . 20

6. RECOMMENDATIONS.... 20

This report is based on the findings of a Bank appraisal mission in August, 1968, consistingof Messrs. Schaefer (engineer)and Bronfaan (economist). The project was re-appraisedin February, 1970, by a mission consistingof Messrs. Schaefer (engineer),de Navacerrada (engineer)and Ahlstrand (econo- mist) . TABLE OF CONTENTS

- Page 2 -

ANNEX

1. Methodology for Economic Analysis

Annex 1 - Table 1 Atlantic vs. Pacific Annex 1 - Table 2 Total Demand for Transport in the San Jose-Limon Corridor and Traffic to be Moved on the Road Annex 1 - Table 3 Siquirres-LiwonHighway - Costs and Benefits Annex 1 - Table 4 SensitivityAnalysis - Siquirres-LimonHighway

TABLES

1. Classificationof Highways 2. Vehicle Fleet 3. Design Standards for Project Road 4. Highway Maintenance Expenditures 5. Highway Revenues and Expenditures1962-1973 6. Highway Income and Expenditure Account: Current and Capital 7. Highway Investment 1962-1973 8. Siquirres-LlmonHighway - Estimate of ConstructionCost 9. Traffic Projections - Atlantic Coast Corridor 10. Vehicle Operating Cost on Paved Roads

CHARTS

I OrganizationChart of the Ministry of Transportation II OrganizationChart of the Ceneral Directorate of Highways

MAP

Costa Rica - Highway Network (IBRD-2377R) COSTA RICA

APPRAISAL OF TUE SECOND HIGHWAY PROJECT

SUMMARY

1. The Governmentof Costa Rica has asked the Bank to help finauce a highway project comprising (i) the constructionof a new hiighwaybetween Sliuirres and Limon (57 km) and (ii) consultingservicee 4vz e feesPihility study for an improved road connectionbetween San Jose and Siquirres. ii. The total cost of the project, including contingencies,as well as interest and other charges during construction,is estimated at US$22.2 million equivalent. The Bank will finance the foreign exchange element of the project estimated at US$15.7 million. The balance will be provided by the Government. iii. This would be the second Bank highway project in Costa Rica. In 1961 a joint Bank/IDA/ Loan/Creditof US$11.0 million was made to help fi- nance the National Highway Progran (Plan Vial). Progress on the project lagged behind schedule due, among other factors, to periodic shortages of local currency funds and the problems of carrying out a large number of small works with local contractors. The Loan and Credit Closing Date was December 1967 when 85% of a reduced program was completed;the Government is continuingwith the remainder of the program. iv. The project will be executed by the Ministry of Transportatiou through the Direccion General de Vialidad (DGV)which has carried out the feasibilitystudy and detailed engineering. The US Bureau of Public Roads (BPR) has provided technical assistancefor preparing the project and will help to supervise the construction. Contracts for the construction works will be let on the basis of international competitive bidding. v. The San Jose-Siquirres-Limon road (already built from San Jose to Siquirres) will provide the first highway connection.between the densely populated Central Valley and the port of Limon on the Atlantic Coast. It will be part of the basic transport infrastructureof the country and of the Central American Common Market (CACH). The economic rate of return on the constructioninvestment for the Siquirres-Limonsection will be about 17X. vi. The project also makes provision for a feasibilitystudy of the existing San Jose-Siquirressection of this highway connection,as this is in need of improvement and will reach capacity shortly after the Siquirres- Limon section has been built. vii. The project provides a suitable basis for a Bank loan of US$15.7 million equivalent. On the basis of the economic life of the Siquirres- Limon highway and its constructionperiod, appropriateterms are 30 years, including a 6 year period of grace.

COSTA RICA

APPRAISAL OF THE SECOND HIGHWAY PROJECT

I. INTRODUCTION

1.01 The Government of Costa Rica has requested a Baiik loan to help finance (a) the construction of a new highway egtweenSiquirtes and Limon (57 km) and (b) consulting services to conduct a feasibility study for the improvement of the San Jose-Siquirres road link.

1.02 A joint Bank/IDA Loan/Credit (Loarn299-CR/CrediL 10-CR) of US$11.0 million was granted in 1961 to assist in financing the first stage (630 km) of the National Highway Program (Plan Vial) together with construction and maintenance equipment. The US Bureau of Public Roads (BPR) provided tech- nical assistance for the project. Progress on the project lagged behind schedule and the program was reduced to 513 km; about US$950,000 was even- tually cancelled from the Credit in December 1967, after the Closing Date had been postponed twice. At that time about 85% of the reduced program was completed and the remainder is now being completed gradually by the Government with its own resources. Delays were due to lack of local cur- rency funds and to the inability of the local construction industry to handle efficiently the large number of small contracts involved, interna- tional contractors having shown little interest. However, the project served, among other things, to help develop a local road construction in- dustry, although not yet to the point where it can handle large contracts such as are envisaged in the proposed project.

1.03 This report is based on a feasibility study prepared by the Government of Costa Rica, with the assistance of BPR experts, and on the findings of a Bank appraisal mission in August 1968, consisting of Messrs. Schaefer (engineer) and Bronfman (economist). The project was re-appraised in February 1970 by a mission consisting of Messrs. Schaefer (engineer), de Navacerrada (engineer) and Ahlstrand (economist).

2. BACKGROUNDINFORMATION

A. Geographic and Demographic 2 2.01 Costa Rica, with an area of 51,000 km , is somewhat larger than Switzerland. Its main cities, and nearly half its population, are in the elevated and climatically equable Central Valley, where most of the emerg- ing industrial activity is located and the bulk of the country's coffee is produced. The mountainous terrain surrounding the Central Valley has made communication difficult oetween it and the rest of the country, where, in a very hot and generally very wet climate, Costa Rica's main crop, bananas, is grown. These tropical areas have potential for timber and cattle pro- duction, as yet largely untapped for lack of comaunication. - 2 -

2.02 The populationof Costa Rica in 1969 was about 1.7 million. The populationgrowth rate averaged over 3.5% p.a. over the period 1958-1967, but fell to 3.1% during 1968 and 1969.

2.03 Costa Rica borders with Nicaragua in the north and Panama in the south. It is a member of the Central American Common Market (CACM)which also includes Guatemala, El Salvador, Honduras and Nicaragua. To help overcome the problems created by small domestic markets, low per capita incomes and poor communications, the five countries in the early 1960's ratified a treaty which has progressively freed a substantialproportion of the trade within the region from tariffs and other restrictions. The outlines of a transportsystem to facilitateinterregional trade were agreed upon and there have subsequently been some improvements in international highway connectionsin the Common Market area. Followingthese steps, commerce among the five countrieshas increasedsignificantly. The trade of Costa Rica with other Central American Common Market members, as a per- centage of its total foreign trade, increased from about 5% of total value in 1962 to slightly more than 202 in 1969.

2.04 Between 1965 and 1969 CDP grew at about 8% per year in constant prices or just over 4% per capita. GDP per capita in Costa Rica, which was estimated at about US$480 in 1969, is the highest and probably the most evenly distributedper capita income in the CACM area. In 1969, 25% of GDP originatedin agriculture,25% in manufacturingand construction,and 50% in transport, trade and other private and Government services. Coffee and bananas are the main export items; less important are sugar, Cocoa, meat and textiles.

B. The Transport Sector

a. General

2.05 Transport plays an important role in the economy of Costa Rica because of the heavy reliance on export crops and growing volumes of imported basic raw materials and manufactured goods. Increase of regional trade and the need to open up new lands for productiveuse are becoming more important. The country, however, has topographicaland climatic features which make the provisionof the necessary transport facilitiesboth difficult and costly.

2.06 Railways primarily serve the traffic needs of the banana and cocoa plantations,and, in the case of the Atlantic and South Pacific regions, do not have road competition. Over the last two decades highways have, however, become the main form of internal transportation. This is due partly to the need to open up areas not served by the railways,but largely because high- way transportis more appropriatefor the generallyshort transporthauls involved for most traffic and because of the absence of large volumes of bulk traffic (exceptbananas) suitable for haulage by rail. In 1968, road transportcarried about 83% of all ton-km generatedin the country and about 97% of all passenger-km, and the railways carried about 16% and 2% of ton-km and passenger-km. The remainderwas moved by air transport and coastal ship- - 3 - ping. Oil products are carried by a 123 km pipeline from the refinery on the Atlantic Coast near Limon to the terminal station some 17 km east of San Jose, the capital. b. Highways and Highway Transport 2.07 The present highway network consists of about 1,300 km of paved roads, 5,100 km of improved roads, and 12,200 km of earth roads usable only during dry seasons (see Table 1). Between 1962 and 1969 highway construction was rapid, the all weather system increasirgabout 36% ii length over tihat period. 2.08 Costa Rica had about 57,000 vehicles in 1969, or a ratio of about 30 persons per vehicle. In 1967 Costa Rica had 34 persons per vehicle which compared with Nicaragua (55), Guatemala (77), El Salvador (74), Honduras (109), Mexico (33), Brazil (41) and Argentina (13). The vehicle fleet has been growing rapidly over the last few years - at an average of 13% annually. One major factor has been the local assembly of vehicles which started about three years ago. Details of the fleet and growth rates are given in Table 2. 2.09 Traffic volumes are, of course, heaviest in the Central Valley near the population centers. Ministry of Transportationcensus figures indicate that for the country as a whole traffic has been increasingat the rate of about 8% per year in the last five years. c. Railways and Ports 2.10 Apart from a short length of railway close to the Panama border on the Atlantic coast and operated from Panama, there are three independently operated railway systems in Costa Rica: Length (Km Operated) 1. FerrocarrilElectrico al Pacifico (FEP) 137 2. Northern Railway Company (Northern) 546 3. Compania Bananera de Costa Rica 310 Total 993 The main ports, Limon and Puntarenas,have traditionallybeen operated by the railroad companies,but in April, 1969, the port of Limon was handed over to an autonomousGovernment agency (para. 2.14). A law establishinga National Port Authority has been drafted and presented to the Assembly,which may re- sult in Puntarenas port also becoming separated from railroad operations. A Bank port appraisalmission is studying the organizationand administration of the ports. FerrocarrilElectrico al Pacifico (FEP) 2.11 The FEP, which connects San Jose and Puntarenas, is the only electrifiedrailroad in Central America. It is an autonomousGovernment agency and a common carrier. Freight traffic on this line increasedfrom 340,000 tons in 1958 to a peak of 401,000 in 1964 but has declined since then to 350,000 tons in 1969. Passenger traffic in the same period, how- ever, has increasedsteadily from 652,000 to 755,000 annually. The average length of freight haul is about 85 km. The PEP also owns and operates the port facilitiesat Puntarenas;trucks do not have access to the pier. - 4-

The Northern Railway Company

2.12 The Northern Railway Company is foreign owned, but ownership of the railroad is to pass to the Government in 1989 on the expiry of the company's concession. The company, operating as a common carrier, has 166 km of main line between San Jose and the Atlantic port of Limon and 380 km of branch lines in the banana plantation areas. Total freight traffic grew from 347,000 tons in 1958 to 783,000 tons in 1968, an increase caused almost exclusivelyby the rapid expansion of banana exports. The average freight haul on the line is about 120 km. Passengers carried increased from 784,000 in 1958 to 1,262,000 in 1968, a growth of 60% in the period. The Northern Railway Company owned and operated the port facilities in Limon until April 1969, when it handed the port over to the Governmentwithout asking compen- sation. The reason for this decision was a stricter interpretationof the Company's contract by the Government,which could have resulted not only in a 35-50% reduction of port dues but possibly in a claim against the Company for retroactivepayments to compensatefor allegedly excessive rates during the last 10 years. The port was an importantsource of revenue, but the company hopes partly to compensate the loss through profits from the growing banana traffic.

2.13 Though its franchise is still valid for another 19 years, the Company has no major investment plans, as there is uncertainty about its future status. A solution has been discussedwhereby the Government,the banana companies and the Company would divide ownership of the railway. At present the Company meets the increased banana traffic, which is also its most profitable business, by modest investments,operational improve- ments (such as the recent conversion from steam to diesel) and the building of spur lines into new plantation areas.

2.14 The port of Limon is now operated by an autonomous Government agency, JAPDEVA. The physical conditionof the port is poor and it has insufficientcapacity. To meet imediate needs, a new finger pier is being constructedand completion is scheduled for the end of 1970. A study for additionalport facilitieshas recently been completedby a U.S./Costa Rican consulting firm (TAMS/DYPSA),partially financed from Bank Technical Assis- tance (para 5.07). The consultantsrecommend the constructionof protected deepwater facilities at Cieneguita,adjacent to the present port. A Bank mission appraised this project in March 1970, with a view to proposing a loan for its early construction.

Compania Bananera de Costa Rica

2.15 This company, a subsidiary of United Fruit (US), operates ex- tensivebanana plantationsin the southern Pacific coastal region and its railroad (which is not a common carrier) is primarily to serve these plantations. -5-

d. Air Transport

2.16 Domestic air transport in Costa Rica plays a useful role in serving isolated communities and sparsely populated areas. The largest domestic and internationalair carrier registeredin Costa Rica is "LACSA", one-third of which is owned by the Government. In recent years, because of road development,demand for domestic air transporthas leveled off. As a result LACSA's domestic passenger and freight load factors have fallen to 51Z and 58% respectively. Internationally,LACSA has performed much better, almost doubling the number of passenger-milesbetween 1964 and 1969. El Coco, about 12 km from San Jose, is the country'sonly interna- tional airport and is also used for domestic flights.

e. Coastal and River Shipping

2.17 Coastal shipping operates mainly along the Pacific Coast and accounts for only about 1% of the total traffic mDved. Inland waterways are few and present operations insignificant. In 1963, the Government, restarted an old project for a 112 km long intra-coastalwaterway to link Moin, near Limon, witb.the mouth of the Colorado River (near the Nicaraguan border) and to develop an area presentlywithout other transportationmeans. The project is now about 80% completed and will be finished in 1972. Its impact in,this rich but presently isolated forest region could be signifi- cant.

G. Transport Coordination

2.18 The Ministry of Transport is responsiblefor the formulationand implementationof transport policy in the country. Its General Directorate of Automotive Transport regulates routes and fares for all bus services. Franchisesfor new bus lines are open to bids by private operators. Gener- ally, services are efficient, rates reflect costs and high interest is shown in establishingnew services. Truck services are free of any regulation of entry, routes or rates, and competitionis intensive between the, generally, small size operators but there is no excess of trucking capacity. A few large trucking firms operate internationalservices, with increasingspecial- ization by type of cargo, but they face competition from other Central Ameri- can countries. However, vehicle weight control is almost non-existent;as a result, trucks are frequentlyoverloaded leading to excessive expenditures on maintenance (para 3.06). The question of highway user charges is discussed below (para 3.21).

2.19 The FEP and the Northern Railway Company operate in relative free- dom from competition. This situation is bound to change in the future with the opportunity that the Siquirres-Limonroad will provide for competition by highway transport. In general, the Government is working towards the provision of facilitiesthat will improve competitionin the transportsector. -6-

2.20 Although the technical and economic aspects of individual projects are usually closely examined, little analysis is done for the assignment of priorities within the transport sector. A greater effort will be required by the Government to establish proper priorities. To achieve this and to ensure the formulationof sound transport policy the economic staff of the Ministry of Transport should be strengthened. During negotiations, the Government gave assurance that it will engage a transport economist within six months of the signing of the loan agreement, to help the Ministry of Transport formulate long term and annual investment plans and to ensure that due regard is given to economic priorities. The Bank will assist the Government in formulating the terms of reference for the duties of such professional.

3. THE HIGHWAY SECTOR

A. Highway Administration

3.01 Costa Rica has a total network of about 18,800 km, of which about 1,500 km are national, 900 km are regional, and the balance are feeder roads (Caminos Vecinales). Fifty-two percent of the national and regional highways, and less than one percent of the feeder roads, are paved (see Map and Table 1).

3.02 The constructionand maintenance of national and regional high- ways and traffic law enforcement are the responsibilityof the Ministry of Transportation. The Ministry also constructs feeder roads, but their maintenance is the responsibilityof the Municipalitiesthrough their Road Councils. The law, however, provides for possible assistance to be given by the Ministry for the maintenance of feeder roads. The Ministry is accordinglymaintaining several municipal feeder roads and has also agreed to maintain 664 km of feeder roads constructedor being constructed with financing from the IDB (para 3.13 et seq.)

3.03 The Ministry of Transportationexercises its responsibility in the highway sector through the DGV (General Directorateof Highways) and the Direccion de la Carretera Interamericana(Directorate of Inter- American Highway) (Charts I and II). The separate directorate for the In- ter-American highway was organized because constructionof this 665 km high- way is being financed entirely with US funds (2/3 grant, 1/3 Export-Import Bank loan), and these funds are being administeredindependently of the Governmentbudget. Expenditureson the Inter-AmericanHighway are control- led by the Controlaria General (General Auditor) of the country, and the BPR (which maintains a permanent staff in Costa Rica) gives general super- vision to the project. - 7 -

3.04 Since 1962 the BPR has also provided technicalassistance to the Ministry of Transportationin connectionwith the Bank/IDA financed Plan Vial. This assistancewas extended in 1964 to the feeder road program constructedwith financialparticipation of the IDB. In addition the BPR recommendedsteps to reorganizethe DGV along modern lines, and in partic- ular to establish a strong and well equipped maintenancebranch (para 3.16).

3.Q5 The organizationof DGV has been considerablyimproved in the last two years (Chart II). Staff and line functionshave been defined, and plan- ning, which used to be done separatelyby several divisions,is now the responsibilityof the Planning Departmentof the Ministry. Highway and traffic data are presently quite well collectedand recorded;however, as this work is important for the proper planning and management of the high- way system, the Government confirmed during loan negotiations that it will continue data collection for these purposes.

3.06 Traffic laws (includingvehicle weight and dimensionsregulations) are, for all practical purposes, not enforced. A small group of traffic police operates under the GerneralDirectorate of Automotive Transport (Chart I), but the group is not fully trained and is poorly equipped. An adequate force of highway police should be trained to assure proper law enforcementon national and regional highways; particular emphasis should be given to enforcing weight regulations;and permanentweighing stations should be installedat strategic points on the highway system and operated on a 24-hour basis (para 2.18). During loan negotiationsassurances were obtained that the above measures will be taken for enforcement of weight and dimension regulations.

B. Higlway Engineering

3.07 The Ministry of Transportationis authorized to establish appro- priate technical standards for highways. Design standards have been re- peatedly revised during the last few years and now conformwith modern engineeringprinciples.

3.08 During the period 1962 through 1967 shortage of adequate staff was a major cause of inefficiencyin the administrationof conatruction projects. ,Numerous small projects led to overextendingstill inexperienced staff. However, this situation has improved in spite of the continuous increase in road construction. Present contracts for the Inter-American Highway and the El Coco-San Ramon road are of larger size, making it pos- sible to use a more compact supervisoryorganization. The Directorateof the Inter-Anerican Highway has successfully competed on the private market for engineers and sub-professionals. In addition, the BPR gives consider- able direct technical assistance in the constructionof the Inter-American Highway. DGV uses experiencedengineers togetherwith local consulting firms for the administration and supervision of larger construction works which presently involve only the El Coco-San Ramon contracts. Younger engineers are usually assigned to the feeder road program in order to gain experience. -8-

3.09 The considerableload of design work during the past years has obligated DGV to concentrate much of its engineering staff in its design office. However, design work will soon decrease because practically all of the larger high priority projects have now been designed, and this personnelwill then be free for allocation to the supervision of construc- tion work. This, in addition to the fact that DGV can now count on better experienced personnel than in former years, should make it possible with the continued technical assistanceof the BPR to ensure adequate supervision of the Siquirres-Limonroad construction.

3.10 Maximum dimensionsand weights of motor vehicles are based on the Central American Agreement on Highway Traffic of June 1958, which was legalized in Costa Rica in September 1963. The regulationsspecify 8,000 kg as maximum single axle and 14,500 kg as maximum tandem axle loads. This is on the low side compared to other countries and a thorough study on the Central American level should be undertakenwith a view to up-dating the regulations. The Governmentof Honduras, in connectionwith Loan 495-HO, agreed to consultwith. other Central American countries regarding revision of the 1958 Agreement, and during negotiationsthe Government of Costa Rica indicated that it would. at an opportune time, press for action on this matter.

C. Highway Construction

3.11 The quality of recent constructionis generally satisfactory,due to the efforts of the supervisory staff of the Ministry and its BPR advisors. The local constructionindustry, however, is capable of handling only small contracts, except for one firm which has adequate equipment and staff for large scale highway works. The large contracts on the Inter-American Highway and the Coco-San Ramon Highway are exclusivelywith foreign firms, but small feeder road works are carried out by local contractors.

3.12 The Ministry carries out some force account work, such as the recent pilot road between Siquirres and Limon (para 4.02). Demand for force account construction, however, is decreasing, especially since DGV itself recognizes that not only new construction, but also reconstruction and improvements, can be accomplished more economicallyby contractors.

D. Highway Maintenance

3.13 Maintenance of the national and regional highway network by the Ministry is not satisfactory. Furthermore, the Ministry has assumed the additional responsibility for the maintenance of 664 km included in the feeder road program, of whicb 272 km have already been constructed (pars 3.02).

3.14 Maintenance expenditures for the 1962-1969 period and planned expenditures for the 1970-1975 period are shown on Table 4. Budget alloca- tions for maintenance of national and regional highways have since 1963 averaged about 0 6,150 km/year (US$ equivalent935 km/year) which should be adequate under normal conditions. Maintenancecosts, however, are high, due to (a) the use of old equipment resulting in high operating and repair costs, and (b) the generally poor standards of the roads which were not designed to support present-day traffic and many of which are in need of reconstruction. The problem is aggravated by the diversionof maintenance funds and equipment to other purposes, such as force account construction of additionalroads or maintenanceof feeder roads which are the responsi- bilIty Of the Municipalities.

3.15 Force account constructionis to be phased out by the Ministry, and an appropriatebudgetary control system will be set up to prevent diver- sion of funds and equipment. Special budget allocationswill be provided for work on feeder roads when undertakenby the Ministry (para 3.02). These measures were discussed and agreed during loan negotiations.

3.16 The BPR advisors reported and made recoimmendationsin May 1968 on improvementsin maintenanceoperations, cost accountingand control, annual maintenancebudgets, changes in the field organizationincluding improvementsof shops and offices, and procurementof maintenanceand shop equipment. The report piovided the basis for a US$7.1 million USAID loan (Loan No. 515-L-020)which was signed on July 31, 1969. This loan will assist the Government in financing: (1) highway maintenanceand shop equipment; (2) highway load control equipment; (3) trailers and truck modificationsfor private truckers,and (4) consultantand train- ing services. The Governmentwill contributeabout US$4.4 million equi- valent to the total cost of about US$11.5 million.

3.17 The Ministry is in agreementwith the BPR recommendationsand a correspondingmaintenance plan will be worked out with the assistance of consultants. This plan will aim at the establishmentof separately identi- fiable budget allocationssufficient for the maintenanceof national and regional roads and of those feeder roads which are the responsibilityof the DGV. The present budget allocationsfor normal maintenance during the period .1970-1974(Table 4) are already based on the BPR's recommendations that not less than US$950 equivalentper kilometer per year be provided for national and regional roads, assuming that new equipmentwill soon be available. During negotiationsfor the proposed Bank loan, the Government agreed that a maintenanceplan and schedule for its implementationwill be presented to the Bank for approval before being made operational.

3.18 The Ministry of Transportationhas agreed to keep accurate mainte- nance cost records and to furnish an annual report of these costs to the Bank.

E. highway Financing and Planning

A. Revenue Sources

3.19 Between 1962 and 1969, central and local governmentfunds financed about two-thirds,and foreign agencies (Bank, CABEI, IDA, IDB and US Govern- ment agencies) one-third,of total highway expenditures. For the planned - 10 - highway expendituresduring 1970-75, a higher proportion (over 60%) is ex- pected to come from abroad as indicated in Table 5.

3.20 Highway expenditures,comprising road constructionand maintenance, highway administrationand interest on foreign loans, doubled between 1962 and 1967, from e 48 to e 102 million. They are expected to reach a peak of ¢ 178 million in 1970 and to decrease thereafterto about ¢ 120 million in 1975.

3.21 Revenues from the use and ownership of vehicles amounted to C 40.5 million in 1962 and increased to e 76.3 million in 1968 (Table 6). About 45% came from gasoline taxes (diesel oil is exempt), 35% from import duties on vehicles and parts, 10% from license fees and 10% from taxes on tires, lubricantsand tolls. Table 6 also indicates that on an annual cash basis Government disbursementon highway construction,maintenance and the ser- vicing of foreign loans for highway purposes were almost in balance with the revenues received from the highway sector between 1962 and 1968. This is not to suggest, however, that road users are paying an amount exactly equal to the economic costs of the highway system or that the incidence of taxes borne by particularuser groups is appropriate. In order to in- vestigate these questions further the subject of road user charges in all Central American countrieswas studied by the Bank as part of a Honduras road project (495-HO),and the five Central American governments are now studying the report.

B. Highway Planning

3.22 Within the long range program there is a plan for the 1968-1975 period, which includes the completionof the first stage of the Plan Vial (the first Bank-financedhighway program, see para 1.02) and of the follow- ing 1,005 km of priority roads:

1) Inter-AmericanHighway

a) Improvementand paving of sections Cartago-PasoCanoas and San Ramon-Arizona 402 km

b) Reconstructionof Section Arizona-PenasBlancas 157 km

2) El Coco-San Ramon Construction 43 km

3) Feeder Roads Construction,IDB financed 346 km

4) Siquirres-LimonConstruction 57 km

Total 1tO5km

3.23 The investmentschedule for the 1970-1975 period is shown in Table 7, with the sources of financing,and details of actual highway invest- ments since 1962. The proposed investmentprogram is not overly-ambitious and is within the executive capacity of the Highway Department. - 11 -

4. THE PROJECT

A. General Description

4.01 The proposed project consists of:

(i) the construction.including paving and bridging, of about 57 km of trunk highway between Siquirres and Limon;

(ii) the construction supervision ftr (i); and

(iii) the feasibilitystudy of a new or improved highway between San Jose and Siquirres. -

B. The Siguirres-LimonHighway

4.02 There is presently no road connectingSan Jose and the Atlantic port of Limon, the only overland link being the Northern Railroad. A 110 km (partly unpaved) road exists between San Jose and Siquirres,the last 36 km section of which, between Pavones and Siquirres (see Map), was con- structed with Bank/IDA participation(Loan 299-CR and Credit 10-CR). During the past 10 months the Government has been constructinga rough pilot track between Siquirres and Limon. The purpose of this 74 km track is to establish an emergency connection until the proposed 57 km highway is constructed. The pilot track, which takes advantage of some existing road sections and abandoned railway beds, is being constructedvery quickly and without previous design. It cannot be considered an all-weatherconnection since large portions will be flooded during rainy seasons, and it is not feasible to adapt any of the newly constructedtrack into the final road solution. As soon as a permanent road link between Siquirres and Limon exists, port- able bridges should be removed from the pilot track and re-used elsewhere. Portions of the pilot track would then serve as feeder roads for the perman- ent trunk road.

4.03 The proposed project consists then of the construction of an all- weather 57 km road link between Siquirres and Limon; the road would be con- structed to two lane Class E standards,with a pavement width of 6.70 m and 1.80 m shoulders. The design standards are detailed in Table 3. The pave- ment structure is designed for stage constructionand will consist of a 20-25 cm sub-base, depending on the sub-grade,an 18 cm base, and an ini- tial double asphalt surface treatment. Another surface treatment or road mix surface will be needed after seven or eight years of use, and asphaltic concrete after fifteenyears, if the traffic develops as projected.

4.04 The Siquirres-Limonroute traverses terrain which is difficult for road construction. The region is crossed by numerous rivers which run in a north-easterlydirection towards the Caribbean Sea. These rivers, which originate in the.mountains south of the proposed route, carry large volumes of water at considerable velocity when entering the plains,, and, having relativelyshailow beds, they often change course. Inundationsare - 12 -

frequent since it rains 200 to 250 days a year, and the yearly rainfall is very high (3,000 to 3,500 m). Consequently,the project includes the constructionof 19 bridges with a total,lengthof about 1,350 m, including river defense works, and about 150 drainage structures. Bridge and drainage structures account for 44% of the project cost, of which 38% is for bridges and 6% for drainage structures.,

4.05 In addition to the large amount of structuralworks, extensive embankment construction will be required in the flood plains. Since the soils found along approximately40% of the route cannot be used for em- bankment construction,the cost of the work will be substantial.

4.06 From the viewpoint of location, type of constructionand avail- ability of materials, the route can be divided into the three sections: Siquirres-Calderonriver (24 km), Calderon river-CedarCreek (16 km) and Cedar Creek-Limon (17 km). In the first section the route traverses rolling to mountainousterrain. Suitable materials for embankment construction are available along the route which generally follows the foothills. Numerous drainage structures and ten bridges are needed, including a 100 m bridge over the Barbilla river and a 200 m bridge over the Pacuare river.

4.07 The Calderon-CedarCreek section consists of flat lowlandswith especiallyhigh rainfalls and inundationslasting up to two days reaching levels of about half a meter above ground level. The extensive embankment constructionhere will require very careful compaction control due to un- favorable foundationconditions. It is planned to use granular materials from the rivers for embankments. There will be six bridges within this section, including the 400 m bridge over the Chirripo river.

4.08 The Cedar Creek-Limonsection consists of rolling terrain from Cedar Creek to Liverpool and more mountainousterrain from there to Limon. Some constructionwas done in 1968 on an 8.7 km stretch of the section; excavation and drainage are completed, and embankmentsare about 50% completed, and this work will be finished as part of the project. Embankment construc- tion for the Cedar Creek-Limonsection will be costly due to lack of suit- able materials along the route and it is planned to haul either granular materials from river beds or corralinematerials for this purpose. The route will terminate in Limon and the Government confirmed during negotia- tions that the connectingSanta Rosa street (1.4 km) will be improved during the constructionperiod of the Siquirres-Limonhighway, includingwidening of pavement to 6.7 m, and providing concrete curbs and sidewalks. Provision has been made for an intersectionwith a future access road to the proposed new port facilities.

C. Design and ConsultingServices

4.09 (a) Supervisionof Construction

The feasibilitystudy for the proposed highway was prepared by the staff of the Ministry, with the assistance of technical advisors from the BPR, and detailed engineering has been carried out in the same manner with - 13 - the exception of the design of the three largest bridges for which consult- ant services were secured. The designs for the bridges over the Pasare and Barbilla rivers were made by the Costa Rican consultantsEspiritu Salas ir a joint venture with the US firm Capitol Engineering,and for the Chirripo river bridge by Consultecnica (Costa Rica) and TransportationConsultants, Inc. (US).

4.10 Detailed engineering is finished, etcept for the last 4.0 kri section near Limon. This section is being relocated to provide for an appropriate access to the new port facilities. Detailed plans for this stretch will be completed in May 1970, but cost estimateswere sufficieetV accurate at the time of loan negotiations.

4.11 It is desirable that BPR coatinues to provide tecnuical assistance to the Ministry for the supervision of construction,to be financed from the proposed loan as was done under Loan 299-CR; BPR has indicated its Wialingneas. To avoid excessive supervision costs and duplication of personnel, bPRhwill provide only a limited number of key personnel to cooperate closely with the highway officials in charge of the works. This supervision arrangement was agreed during negotiations. The cost of supervision also includes the purchase of additional vehicles and engineering equipment not presently avail- able within the Ministry.

4.12 (b) FeasibilityStudy

As there is a need to improve the existing San Jose-Siquirres highway, which will have reached its capacity in about 1974, shortly after the Siquirres-Limon section has been put into operation, a study will be undertaken under the proposed project into the feasibility of (a) improv- ing and partially relocating the eXisting road between San Jose and Siquirres, or (b) constructing a new road between these terminal points, probably via Guapiles (see Map). The study would take about fourteen months and be carried out by consultants.

D. Cost Estimates

4.13 The total cost of the project is estimated at US$22.2 million equivalent, including contingency allowances and interest and other charges during construction. A summary of the project costs follows: - 14 -

of total Colones (millions) US$ (millions) expendi- Items Local For. Total Local For. Total ture

1. (a) Construction of Si- quirres-Limon Highway 27.1 63.1 90.2 4.1 9.5 13.6 62

(b) Quantity contin- gencies 10% 2.7 6.3 9.0 0.4 1.0 1.4 6

(c) Price contingen- cies 102 3.0 7.0 10.0 0.5 1.0 1.5 7

Subtotal Item 1 32.8 76.4 109.2 5.0 11.5 16.5 75

2. Construction supervision

(a) Supervision 8.2 4.6 12.8 1.2 0.7 1.9 8 (b) Vehicles & Equipment - 1.0 1.0 - 0.2 0.2 1 (c) Contingencies 10% 0.8 0.6 1.4 0.1 0.1 0.2 1

Subtotal Item 2 9.0 6.2 15.2 1.3 1.0 2.3 10

3. Feasibility study for San Jose-Siquirres . 1.3 2.7 4.0 0.2 0.4 0.6 3

4. Interest and other charges during construction - 18.7 18.7 - 2.8 2.8 12

Totals 43.1 104.0 147.1 6.5 15.7 22.2 100

4.14 The estimate of project cost is considered adequate. Quantities were taken from detailed engineering studies and are final, except for the last 4 km section near Limon (para 4.10). Unit prices were computed by the engineering staff of the Ministry with due consideration for the unfavorable climatic conditions of the area. They have been checked against unit prices of recently awarded contracts on the Inter-American highway and the El Coco- Ramon highway. Table 8 shows estimates of construction costs (without con- tingencies) for the three sub-projects into which the work would be divided (para 4.21), as well as Government expenditures up to 1968. The latter expenditures, amounting to 0 5.8 million (US$0.9 million equivalent), cover the construction work accomplished so far in the section between Cedar Creek and Liverpool (para 4.08), and would not be financed by the proposed loan.

4.15 A 10% contingency allowance has been added to the construction cost for quantity increases. This is considered sufficient in view of the accuracy of the quantity estimates in detailed engineering. The 10% price contingencies are to cover possible price increases during the 4-year construction period. - 15 -

4.16 The foreign exchange component for construction was estimated on the basis of contract awards to foreign firms, with duty free importation of equipment and materials required for the execution of the project (para 4.23). Although there is one local firm which may be capable of undertakingone contract, it has not been successfulin the bidding for major contracts on the Inter-Americanhighway. The foreign componentnas therefore been assessed in the probability that all contracts would be awarded to foreign firms; on this basis the foreign exchange coaponent of constructionwould be 70%.

4.17 The cost of constructionsupervision and of the feasibility study is based on estimates agreed with DGV. The foreign exchange cost of construction supervision (i.e. for the assistance to be rendered by BPR, together with some equipment) was estimated jointly by DCV and BPE and is, adequate.

E. Disbursement

4.18 The following Bank participationis proposed:

a) 70% of constructioncosts; and

b) the foreign exchange cost of the BPR advisors for construction supervision and the consultants for the feasibilitystudy, as well as of transportationand engineeringequipment needed for supervision.

It is proposed to include provision in the loan for meeting interest and other charges on the loan during the constructionof the project. These are estimated to amount to US$2.8 million equivalent. In view of the improvementof the fiscal situation since the August 1968 mission, the Governmentshould be able to provide the local funds needed to match financing on the above basis and also to carry out the highway investment plan discussed in paragraphs 3.22 and 3.23.

4.19 Constructionis expected to start at the beginning of the last quarter of 1970 and be completed towards the end of 1974; on this basis, the tentative annual breakdown between estimated Government expenditures and those covered by the Bank loan (excludinginterest and other charges during construction)would be as follows: - 16 -

Total Expenditures Local Expenditures Bank Disbursement Colon US$ Equiv. Colon US$ Equiv. US$ Equiv.Million Million Million Million Million

1970 2.9 0.4 0.9 0.1 0.3 1971 34.5 5.3 11.6 1.8 3.5 1972 40.0 6.1 13.5 2.0 4.1 1973 38.8 5.8 13.0 1.9 3.9 1974 12.2 1.8 4.1 0.7 1.1

Totals 128.4 19.4 43.1 6.5 12.9

Any surplus funds remaining in the loan account on completion of the project should be cancelled.

4.20 The loan will be to the Government of Costa Rica. The Ministry of Transportation (through DGV) will be the implementing agency and will administera revolving fund for payments to contractors and consultants. The Governmenthas agreed to maintain the fund at a level sufficient to cover one mouth of constructionwork, in accordance with work schedules to be sub- mitted regularly to the Bank. The establishmentof an initial revolving fund of 0 2.0 million (US$300,000equivalent), in a blocked account at a Costa Rican Bank, is a condition of effectivenessof the loan.

F. Execution of the Project

4.21 For contractingpurposes the project is divided into two road contracts and one bridge contract as detailed in Table 8. Qualified contrac- tors will be allowed to submit proposals for the three contracts either separately or in any combination.

4.22 Contracts for the project works will be let on the basis of internationalcompetitive bidding in accordancewith the Bank's established procedures. DGV is in the process of preparing prequalification, bidding and contracting documents. Appropriate price escalation formulae will be included in the contract documents and the corresponding indices will be published periodicallyby the Direccion General de Estadisticay Censos under the Ministry of Industries. Bidding and contractingdocuments were discussed with DGV, and drafts will be submitted to the Bank for approval.

4.23 The Government permits duty free import by local or foreign contractorsof equipment and material4 required for the constructionof projects carried opt with the participationof financing agencies. After completion of the project, however, the contractors must either re-export the equipment or pay the duty on its residual value.

4.24 Practicallyall of the right-of-way has been acquired. The cost was negligiblesince most of the land was donate4dby the.banana plantation owners. The Governmentis now in the process of acquiring the balance of the right-of-way and it has been agreed that no construction contract shall be awarded unless such acquisitionhas been completed. -O 117 -

5. ECONOMIC EV,%1.,T;ATION

A. Back ound

5.01 Thle proposed 5. km Siquirres-Liaor.road vi.ll3 p arr of the basic trunk road system of the Central American Comon N1ar At -whCic s intended to facilitata the srcecess of soial n.; oIl -.1;zgratio. of Ce; tral America and s-t3eee its econo%ic s veloioent. 966 Bauk Economic Mission, in sssessing pros&pe%.sof dfve . i. .entrAl America, considered "completion of th.:road to LoJ. tc have high prioritv in te7ms GEi the develop'nt strategy !. the cont incc. i. v',uld pro`2.w the fr.rst7oad link .o the Atlantic (now dependent on tail econnections).t and is particularly important for the Jevelopmentof exorts te US and burnnean markets; it would aeeo, stiuaola>e d?ve2 ¶eM of the new areas served by the proposed higusPysqy" 1/ Tl s ju.tab.3tt L .rd of ealiaer studiea carried out by Transpnrtat'ou Lanta lsris S) 2/ and by 37' 2cnscrdium (US). 3/

5.02 The constr iction of tae Siquirres-Limon road, h is onfly one part of the planned overall improvementof Ltietransport infrastruc- ture in thie eastern ?art of Costa Kica. The total. program includes the construction of new deepwacer port facilitias at Limon and the improvement of the present road between Saai Jose and Siquirres.

B. Project Area

J.03 Ihe zone of influe-nceof the project includes the area around the port and city of Limor.and the rural districtsof Limon, Matina, Pacuarito and Siquirres. This region had a very rapid growth at the beginning of the century due to "-irtroduction of banana plantations, and by 1925, Limon ranked as the world's leading banana exporting port. The area's production declined drastically in the 1930's when the "Panama disease"lhit Costa Rica, but disease-resistantvarieties have since been introduced and production is rapidly expanding to meet tne demands of US and European banana exporters who buy on long-term contracts.

1/ "EconomicDevelopment and Prospects of Central America" (in eight volumes), Volume VI, "TRANSPORTATION",June 5, 1967 (ReportNo. .WH-170a), page 19.

2/ "Costa Rica: Port and Railway Study", TransportationConsultants Inc., Washington, D.C., Novenber 1964, study financed by UNDP and the Bank as Executing Agency.

3/ "Central American transportationStudy" TSC Consortium,Washington, D.C., July 1965, for the Central American Bank of Economic Integration (CABEI). - 18 -

5.04 The Government is promoting cooperativeschemes for agricultural developmentin the Atlantic area. One such scheme is "Batan Colony" where 600 families will be settled on 10,500 hectares of public land under a cooperativearrangement avoiding the uneconomicsub-division of the land to be-able to apply modern agriculture technology. A project for the integrated developmentof this colony,which is on the alignment of the projected high- way, is partly financed by the Inter-AmericanDevelopment Bank.

5.05 Limon, in addition to serving the needs of its iimediatehinter- land, is also the country's most important port. Export traffic in 1968 through Limon was about 368,000 tons of which 60% were bananas. Dry cargo imports were 162,000 tons, largely manufacturedand consumer goods. Oil imports to the refinery located some 6 km north of Limon totalled 258,000 tons, refined products moving from there by pipeline (123 km) to San Jose.

C. Future Traffic and Transport Capacity

5.06 Planning is now underway to provide additional port capacity required after about 1975 on the Atlantic Coast, at Limon. The 1964 TCI study examined the strategy of port development for Costa Rica and recom- mended that additionalport facilities on the Atlantic Coast would be tech- nically and economicallyfeasible and should be built, and that minor improvementsshould be made at Puntarenas on the Pacific Coast.

5.07 These recommendationsformed the basis of the terms of reference for the port study which was completed at the end of 1969 (para 2.14). In addition to the constructionof new port facilities at Cieneguita,south of Limon, the consultants recomend the constructionof a new pier in Puntarenas.

5.08 Since new Atlantic port facilities cannot be in service until about 1974-75, the Government, in view of the growing banana traffic, has begun constructionat Limon of a finger pier which is scheduled for completion in 1970.

5.09 Traffic forecasts for the Atlantic region of Costa Rica indicate that by 1975 total dry general cargo traffic through Limon is expected to be about 1.5 million tons rising to 2.0 million tons in 1985 (Table 9). These traffic projections,prepared by the Ministry of Transportation,are based on forecasts made by TCI in 1964, TSC in 1966, by Schnitzler and Associates (a Central American consulting firm) in the same year. The Government'sforecast was revised by the appraisal mission and checked against TAMS/DYPSA'sestimates.

5.10 On the basis of these figures, the present port facilities at Limon (includingthe finger pier now being built) and the Northern Rail- road will both be able to handle the traffic forecast up to about 1975, although with considerable congestion in thte port in later years.

5.11 The Siquirres-Limonhighway is scheduled for opening to traffic by 1975, thus post-1975 inland traffic demands will be met. The proposed port extensionswhich are being appraisedby the Bank should be completed at - 19 - about the same time and will provide the Aiditionalcapacity needed.

D. Ecoaomic Analysis of Project Road

5.12 As a first step in the economic evaluation, a comtparisonwas made between the east (Atlantic) and west (Pacific) alternative routes for excess traffic after 1975. Annex 1 contains the methodology for this and subsequent analysis. It shows that the additional investmenits required for the Atlantic solution would be economicallyjustified including as benefits only savings in overall transport costs. These investments would include the new port facilitiesat Limon and the constructionor improvementof the San Jose- Siquirres-Limon highway. In addition they would pro6uce important development effeats on the eastern region of Costa Rica, but these benefits have not been quantified.

5.13 After determining the advantages of the Atlantic route, the next step involved the determination of the least cost transport solution for the corridor between San Jose and Li,'on. Feasible alternatives (i.e. inland waterways, rail, road, air and combinations of these) were evaluated and the construction of a new road connection was selected as the most economic. Investment on the whole road (construction now of Siquirres-Limon and in 1975 of San Jose-Siguirres) provides a transport system which minimizes total economic cost to satisfy the projected transport demand. Total economic cost includes investment, maintenance and vehicle operating cost.

5.14 One of the alternatives for meeting traffic demand in this corridor would involve a considerableexpansion in the capacity of the Northern Railway. Hlowever, it is a narrow gauge railway, completed in 1890. Between Siquirres and San Jose there is a 90 km section where the railway climbs 1,500 m. Frequent slides occur on this section where the railway passes close to the Reventazon river; thus, in the fall of 1969 the railway was closed for six weeks because of slides, and the traffic had to use the present road to Siquirres and then the railway from Siquirres to Limon. Major improvementof the railway section between Siquirres and San Jose would be expensive and difficult to justify. The railway managementhas also indicated that it is not willing to make major investment for expanding the capacity of the system.

5.15 Considering only the constructionof the Siquirres-Limonhighway section and assuming that the San Jose-Siquirressection remains as at present, the investmentin the project road yields an economic rate of return of 17Z, when discounted over.a useful life of 25 years. The sensi- tivity analysis shows a range between 13% and 19% for the economic return (Annex 1). The benefits used in the above analysis were the measurable savings in inland transport costs; there are other benefits which are not included in these calculations:

- considerabletime savings for passengers and goods; - 20 -

- reduction in rail freight rates expected as a result of highway competition;and

- reductionin losses of perishable products.

5.16 The possibilityof using at least some sections of the pilot track (para 4.02) as a temporarysolution, thus poptponing some of the in- vestment needed for the project road, was investigated. Since the pilot track is being constructedquickly and without engineering,it passes through terrainwhich is very diffic4l±tforthe constructionof an all-weatherroad. Consequently,the cost of improvingsuch sections, even to minimum standards, would be about the same as the cost of the correspondingsections of the properly engineeredproject road.

5.17 The proposed project is, therefore,economically justified. The constructionof the project,roadcould also have beneficial effects on the operations of the Northern Railroad, particularly since it will allow the railway to reduce passenger rail traffic substantially,and divest itself of less-than-carloadfreight trafficwhich would be more suited to trucking operations. This will allow the railroad to concentrateon carrying bananas.

E. FeasibilityStudy

5.18 A feasibilitystudy to be undertaken by consultants,at a total cost of US$600,000 equivalent,to determine the feasibilityof improving the highway connectionbetween San Jose and Siquirres is included in the proposed project. It is estimated that the present road between those points will be congested in 1975 when the proposed highway Siquirres- Limon is open to traffic. The analysis indicated in para 5.13 above shows there is sufficient economic basis to warrant proceeding with this study.

6. RECOMMENDATIONS

6.01 During loan negotiations,agreement was reached with the Government on the following principal points:

(i) the engagement of an economist for transport planning (para 2.20);

(ii) the enforcementof traffic laws, includingvehicle weights and dimensionsregulations (paras 2.18 and 3.06);

(iii) the presentationfor Bank approval of a highway maintenance plan (para 3.17);

(iv) the improvementof the Santa Rosa street in Limon (para 4.08); and

(v) the operation of the project revolving fund (para 4.20). - 21 -

6.02 The effectivenessof the loan will be contingentupon the Governmentestablishing an initial revolving fund of US$300,000 equivalent in a blocked account at a Costa Rican Bank (para 4.20).

6.03 The project provides a suitable basis for a Bank loan of US$15.7 million equivalent..On the basis of the constructionperiod and the econo- mic life of the investment,appropriate terms would be 30 years including a 6 year period of grace.

1l(45"Jie I91t7 t

ANNEX1

METHODOLOGYFOR ECONORMICANALYSIS

i. Atlantic vs. Pacific

The following analysis, based on incremental cost figures, compares the alternatives of moving the excess traffic via the Atlantic or via the Pacific Coast:

(a) According to the feasibility study which a4 British- French consulting grc'iphas recently completed on Nicaraguan ports under Bark financing, shipping rate differentials between the port of Liwn on the Atlantic Coast and Corinto on the Pacific Coant of Nfaragua averaged from US$2 to US25 per ton according to the type of cargo; for the foreign traffic mix of Costa Rica the average rate diffreTetial aov d be about US$9.50. The rates stated for Corinto can be used as well for Puntarenas since the rates quoted by the shipping companies apply usually to all Pacific ports in Central America. The net additional cost for moving the excess traffic between 1975-1995 via Puntarenas and the Panama Canal is US$138.4 million after taking into account the added inland transport costs caused by Limon being 50 km further from San Jose than Punta- renas. (The net additional transport cost per ton is US$7.65.)

(b) Engineering estimates indicate that moving the traffic involved via the Pacific Coast would require the same amount of port investment at Puntarenas as at Limon and that investment of about US$10 million would be needed to improve the San Jose-Puntarenas highway.

(c) As against these added costs of US$148.4 million for moving traffic via Puntarenas, the cost of the invest- ment required to improve the highway connection over the whole route San Jose-Limon is about US$40 million.

(d) This is equivalent to an incremental rate of return of 17% (see Table 1) for the investmerts required to move the traffic through the Atlantic Coast, and demonstrates the economic advantage, in purely trans- port terms, of developing a transport route via the Atlantic. There would also be a devctlopmentstimulus in an area otherwise largely divorced from the rest of the Costa Rican economy. ANNEX 1 Page 2 ii. TransportAlternatives in the San Jose-Limon Corridor

The preceding analysis demonstratesthe need to expand port capacity on the Atlantic Coast and shows that this will require the improve- ment.of transport facilitiesin the San Jose-Limon corridor'.To determine, therefore,which particular improvementis the most economical, an analysis was made by the Government on the followingpossible alternatives:

AlternativeA: The Northern Railroad would make good deferred maintenance and would work to its full capacity of about 1.5 million tons per year after 1975. Traffic over that figure would move by river between Limon and Siquirres and then by the existing Siquirres-SanJose road. Passenger trafficwould move by rail or air.

AlternativeB: A new road would be built in stages between San Jose and Limon. In Stage I, the project section Siquirres-Limonwould be built first, with constructioUstarting in 1970 at a total cost of e 113.0 million and being open to traffic over its full length in 1975. The maintenanceand upgradingprogram for that road assumes: (a) expendituresof e 6,285 equivalent a year per km for routine maintenance,including seal coating,

(b) expenditurestotalling about ¢ 1.7 million equivalent for double surface treatmentin 1982,

(c) expenditurestotalling ¢ 7.9 million equivalent for bituminous concrete carpet in 1988.

In Stage II the section of the San Jose-Siquirresroad, via Guapiles,would be built between 1974 and 1977 at a total cost of about 0 144.6 million and with a main- tenance and improvementprogram similar to the one described above..

To forecast the mode of transportby which traffic could be expected to move, the demand was divided in four.main categries: export, import, and local traffic of goods and passengers. The forecasts took into account existing and planned productionpotentials in the Costa Rican economy for the different crops and products; the trends of demand in foreignmarkets, especiallyUS and Central Europe for Costa Rican products; the role of import substitution in Costa Rica and in the Central American Common Market generally for goods not likely to be produced in that area; and the demand elasticities associated with income and population growth. Separate projectionswere made for eight export commodity groups and for seve4 import groups. Demand for local traffic of goods and passengers was not subdivided. Table 2 shows the complete traffic projections. ANNEX I Page 3

Traffic thus forecastwas assumed to select the appropriatemode according to location, cost, time or speed and other characteristics of service, and the flow by mode for each alternative wes arrived at and total operating costs computed (for highway vehicle operating costs, see Table 10). By adding investmnentand maintenance costs, the total econoeic cost of transportationfor each alternativewas obtained. Savings in inventory costs due to faster and more dependable trar.Fpot:,t Aon service were not considered for lack of data. The analysis show that alternative B, that is, building a comvilete tnew road link betwieenxSani Jose and Limon provides the least cost transport solution in tv, g9ziiori. If alternative A is considered.aot4e.situtiqn 'twiti3outCtile project (aad excluding any generated traffic) the investment on the whole San Jo6e-Limon road (includinggenerated traffic), assuming.a useful economic life of 25 years, yields an economic rate of return of about 13%e iii. The Proj___Road (Siquirres-Li mcon)

A similar analysis was carried out for the road section Siquirres- Limon itseef, to establish its economic justification. That is, alternative A was as given above but alternative B was mdified and the assumption made that the road section San Jose-Siquirres remained as at present. For analytical purposes this means lower total road construction and mainitenance costs because of the shorter distance involved, while on the benefit side unit savings in transport costs are also reduced and generated traffic is smaller. The investment in the project road yields an economic rate of re- turn of 17%, when discounted over a useful economic life of 25 years (Table 3). The sensitivity analysis shows a range between 13% and 19% for the eco- nomic return (Table 4). Table 2 of this annex shows the total traffic pro- jected for the Atlantic corridor and the share of the road in moving freight and passengers.

In 1975 after the road is open, highway transport is expected to move 345,000 tons of goods and over half million passengers. In 1980 similar figures would increase up to about 700,000 and 1.1 million and to 1.4 and 1.7 million in 1990. General import and export cargo, paper and paper products, bananas, coffee, fertilizers and local traffic would be the most important products to be nauled by highway transport.

COSTARICA - SECONDHIGHWAY PROJECT

ATLANTIC VS. PACIFIC - COKPARISONOF INCRSMENTALCO6TS AND BENEFITS (AU rigures in million us})

Net Additional Transportation Cost Tons via Panama Canal and San Jose-Limon San Jose-Puntarenas Net Atlantic Present Value 2/ Discount Year ('000) Puntarenas 1/ Road Road Investment Benefits Costs Factor

1970 - 0.14 - 0.4 0°34 .855 1971 - 14.3 0°5 3.8 - 2.78 .731 1972 - - 5.3 3.5 1.8 - 1.12 .624 1973 - - 5.3 3.0 2.3 - 1.23 .534 1974 - 1.8 2.5 -0.7 - -0.32 .456 1975 - 3.6 0.5 3.1 - 1.21 .390 1976 527 4.o 7.2 7.2 1.33 2.40 .333 1977 553 4.2 7.2 7.2 1.20 2.05 .285 1978 586 4.5 3.5 3.5 1.09 0.85 .243 1979 615 4.7 0.98 - .208 1980 651 5.0 0.89 - .178 1981 675 5.2 0.79 - .152 1982 715 5.5 0.72 - .130 1983 758 5.8 0.64 - .111 1984 803 6.1 0.58 - .095 1985 851 6.5 0.53 - .081 1986 889 6.8 0.47 - .069 1987 942 7.2 0.42 - .059 1988 998 7.6 0.39 - .051 1989 1,058 8.1 0.35 - .043 1990 1,121 8.6 0.32 - .037 1991 1,199 9.2 0.29 - .032 1992 1,234 9.4 0.25 _ .027 1993 1,271 9.7 0.22 _ .023 1994 1,309 10.0 0.19 - .020 1995 1,346 10.3 -10.0 31 0.28 -0.17 .017

Total 11.82 11.119 February, 1970

1/ US$7.65 per ton. T/ Discount rate 17%. 3/ Salvage value of bridges and structures. COSTA RICA - SECOND HIGHWAY PROJECT

TOTAL DEMANDFOR TRANSPORTIN THE SAN JOSE-LIMON CORRImR AND TRAFFIC TO BE MOVEDON THE ROAD ('000 tons)

E X P O R T S I M P O R T S

Other Total General Paper & Other Total Local TOTAL TRAFFIC PASSENGERS Year Coffee Banana Exports Exports Cargo Paper Products Fertilizers Imports Imports Traffic Goods FREIGHT - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~('000) 1958 T 42 4 20 65 - 7 141 148 1 38 252 838 H - - _ - - ______

1962 T 47 65 50 163 - 17 - 196 213 82 459 922 H - - - - - ______1966 T 41 136 74 251 67 22 26 22 137 82 470 931 H ------______1968 T 49 230 89 368 89 36 37 - 162 95 625 995 H - - - - - ______

1970 T 54 590 98 742 124 Bo 37 17 258 105 1,106 1,008 _ H ------_ _ _ _ 1975 T 63 975 137 1,175 199 107 52 23 381 122 1,679 1,102 H 48 50 57 155 111 31 3 5 150 40 345 551

1980 T 83 985 164 1,232 260 120 76 31 488 148 1,868 1,265 H 76 176 89 342 199 56 10 10 276 98 717 1,151

1985 T 111 995 209 1,315 336 160 112 42 651 173 2,139 1,502 H 101 310 119 530 267 103 35 16 422 136 1,087 1,427

1990 T 147 1,005 274 1,426 450 215 165 56 886 209 2,521 1,784 H 134 352 158 644 372 165 58 23 619 176 1,439 1,695

1995 T 194 1,015 367 1,577 602 288 243 76 1,209 248 3,033 2,118 H 175 357 207 739 511 230 85 31 858 218 1,816 2,013

T: Total demand 1958-1968: Actual data 1970-1995: Projections(See para 5.09) H: To be carried by highway transport 1/ SOURCE: Ministry of Transportation, Costa Rica - Including crude oil

February1970 COSTARICk: SVDf'lDTIIRGILY PROJEC ANNU I - ~~~~~~~~~~Table3 SIQUIRRES-LIM1HIHWAY - OSTSA" WITS (In millions of colomes) Construction cost Transportatim cost in Savings In transporta- and increase in San Jose - Lbmn Corridor tion coat through the maintenance cost Without Siquirres- With Siquirres- construction of with Siquirres- Limwuhighway Limon highway Siquirres-Limon high- Year Limon highway (i.e.Alt A) wy. 1970 2.7 _ 1971 29.5 _ 1972 34.6 - 1973 35.2 - 197 11.0 - 1975 0.2 55.9 42.3 13.6 1976 0.2 59.4 42.0 17.4 1977 0.2 63.8 41.9 21.9 1978 0.2 69.0 42.2 26.8 1979 0.2 69.1 40.8 28.3 1980 0.2 68.7 41.8 26.9 1981 0.2 71.1 142.9 28,1 1982 -4.8' 73.5 44.1 29.4 1983 1.6 76.2 45.3 30.9 1984 0.2 79.4 46.6 32.8 1985 0.2 82.6 48.2 34.4 1986 0.2 85.5 50.1 35.4 1987 0.2 89.8 51.9 37.9 1988 0.2 93.5 53.9 39.6 1989 7.9 97.5 56.o 11.5 1990 0.2 101.6 58.2 43.4 1991 0.2 105.9 60.6 45.3 1992 0.2 110.6 63.1 47.5 1993 0.2 115.5 65.7 49.8 1994 0.2 120.4 68.4 52.0 1995 0.2 125.7 71.3 54.4 1996 0.2 131.4 74.4 57.0 1997 0.2 137.3 77.7 59.6 1998 0.2 1143.6 81.1 62,5 1999 -18.3L2 150.4 84.7 65.7 With a discount factor of 17.21% the sum of costs and benefits are equal, thusthe internal rate of return of the proposed project road Siquirres-Limcn is 17%.

/1 An investment in river facilities in this year for Alt. A gives the negative value. /2 Salvage value of bridges and structures.

February1970 ANNEX1 Table 4

COSTARICA - SECONDHIGHWAU PROJECT

SENSITIVITYANALYSIS SIQUIRRES- LIMONHIGHWAY

Rate of Return 1. Best estimate 17.21

2. Banana traffic decreased 30% 14.40 3. All goods traffic decreased 20% 15.40

4. Passenger traffic decreased 20% 16.13

5. All traffic decreased 25% 14.01 6. Unit costs decreased 10% 15.78 7. Unit costs increased 10% 18.39 8. No. 6 and No. 2 13.60 9. No. 6 and No. 3 14.42

10. No. 6 and No. 4 14.78

11. No. 6 and No. 5 13.08 12. No. 7 and No. 2 15.20 13. No. 7 and No. 3 16.79 14. No. 7 and No. 4 17.42

15. No. 7 and No. 5 14.74

16. Const.costs and salvagevalue up by 10% 15.9 17. Unit costs for road decreasedby 10% 18.4 (AlternativeII)

Range: Minimum13.1 Maximum18..4

March1970 COSTA RICA - SECOND HIGHWAY PROJECT

Classification of Highways

Length According to Type and Jurisdiction

Year 1962 1963 1964 1965 1966 1967 1968 1969

National Highways

Paved -/ 611 615 625 643 656 678 752 784

Improved 2 550 618 692 708 751 802 723 691

Totals 1,161 1.233 1,317 1.351 1,407 1,480 1475 1.475

Regional Highwas

Paved l/ 354 371 371 381 386 391 426 426

Improved 2 427 439 457 457 460 465 434 434

Totals 781 810 828 838 846 856 860 860

Feeder Roads

Paved i/ 95 103 124 124 124 121 121 123

Improved 2 1,512 2,118 3,173 3,297 3,350 3,425 3,675 4,057

Earth 3 10,274 10,142 10,618 12,000 11,948 12,178 12,290 12,280

Totals 11881 12,363 13,915 15,421 15,422 15,724 16,086 16,460

Totals (All systems)

Paved -/ 1,060 1,089 1,120 1,148 1,166 1,190 1,299 1,333

Improved2/ 2,489 3,175 4,322 4,462 4,561 4,692 4,832 5,182

Earth 3 10,274 10,142 10 12,000 11,948 12,178 12,290 12,280

GRAND TOTAIS 13,823 14,406 1606 1 076 18,060 18,.421 18,795

1/ Concrete or asphalt pavements,

2/ Surfaced with gravel or selected materials. 3/ Trafficable only during dry season.

Source: Ministry of Transportation, Planning Department, Costa Rica

February 1970 TABLE 2

COSTARICA - SECCNIDHIMHWAY PROJECT

VEHICIEFLET

Passenger Trucks Cars (Light & Heavy) Buses Total 1958 12,758 7,175 1,127 21,060 1959 14,258 7,741 1,217 23,216 1960 15,952 8,397 1,289 25,638

1961 17,160 7,924 1,339 26,423 1962 17,736 7,823 1,371 26,930

1963 l8,630 8,195 1,505 28,330 1964 20,328 8,932 1,540 30,800 1965 22,733 10,195 1,952 34,880 1966 27,154 12,287 2,058 41,4999

1967 11 29,772 13,678 2,235 45,665 1968 32,660 15,504 2,400 50,564

1969 36,o65 18,009 2,612 56,686 Averagerate of growth 1958-69: 9.9% 8.7% 8.0% 9.4% Averagerate of growth 1964-69: 12.2% 15.0% 11.0% 13.0%

/ Provisional

Source: Ministry of Transportation, Costa Rica

February 1970 TAL 3

COSTARIA

SECCHDHgXOWAI PROJECT

DESIN STANDARDSFOR PROJECTROAD

Flat RolLing Ioutainous Design Speed (km/) 96 88 6

Minim Horizontal Radius (m) 350 290 130 Sximum Grade (%) 4 6 7

MinimumStopping Sight Distance (m)) 130 85 Ninimum Passing Sight Distance (m) 650 600 450 Tldth of Pavement (m) 6.7 6.7 6.7

Widthof Shoulder (m) 1.8 1.8 1.5

Width of Bridges (m) 8.5 8.5 8.5

BridgeLoading H20-516 H20-S16 H20-S16 Right of iry (m) 24 24 24

lrote: Design standards correspond to Costa Rica Class -El Highway.

Source: I-lnistry of Transportation, Direccion General de Vialidad, Costa Rica

January1969 COSTA RICA - SECONDHIGRWAY PROJECT

HIGHWAYMAINTEN,tNCE EXPENDITURES

1962 - 1915

NATIONAL AND REGIONAL HIG8LWAYS FEEDE8 ROADS 4/ ______~an itur o ______Cooperative Plan Contrihotion Length ~~~~~~OTHER Length Contbtioo Thniiplities and Aiverage EXPENDITUtRE YEARt Roadway TOUTAL Bridges Total Average per Ka IDB Financed Rqada Ministry of Tran-p. Road Councils Totsl per Ke 2/ Km 0 million million 0 0 million 0 I 4/ 0 million 0 million 0 million 0 0 eillion0 million 0millin

1962 1,942 3.0 { 0.4 3.4 1,750 2,500 --- 1.5 4.0 5.5 2,200 0.5 9.4 1963 2,043 11.8 0.9 12.7 6,250 2,500 --- 1.5 3.0 4.5 1,800 4.2 21.4 1964 2,145 11.4 0.7 12.1 5,650 2,900 --- 1.2 3.8 5.0 1,750 3.9 21.0 1965 2,189 13.1 1.0 15.l 6,450 3,000 --- 0.7 4.0 4.7 1,600 4.1 22.9 21966 2,253 13.2 1.2 14.4 6,400 3,000 --- 1.7 3.9 5.6 1,900 4.0 24.0 1967 2,336 11.7 0.8 12.5 5,350 3,000 ___ 0.9 4.0 4.9 1,650 4.0 21.4 1966 1,933 2/ 12.6 0.8 13.4 6,950 3,317 0.9 1.9 2.3 5.1 1,550 5.1 23.6

1 969 2,o68 3/ 11.8 0.8 12.6 6,ioo 3,317 1.6 2.3 1.9 s.e 1,750 5.9 24.3 1970 2,138 3 12.6 1.2 13.8 6,4So 3,366 1.8 2.0 2.1 5.9 1,75D 5.7 25.4 1971 2,241 3 13.8 1.2 15.0 6,700 3,316 2.6 2.4 2.3 6.7 1,960 6.9 27.7 1972 2,379 14.9 1.2 i6.1 6,750 3,507 2.5 2.5 2.5 7.5 2,150 6.o 29.6 1 1973 2,379 15.3 1.5 16.8 7,050 3,684 3.4 2.5 2.8 8.7 2,350 6.1 31.6 Sl 197L 2,379 16.1 1.5 17.6 7,400 3,868 4.8 2.6 3.0 10.4 2,700 6.1 34.1 _ 1975 2,439 17.4 1.6 19.0C 7,800 4,o6o 6.9 2.7 3.2 12.8 3,150 6.2 '38. 0

- Before 1968 theee roads ware maintai.ed with Cooperative Plan furds.

Rapenditures for shops, worehousee, crushers and aephalt plants.

Sections of the Inter-american Highway now under -onstru-tion are not included. - - Only regularly maintained feeder roads are -onsidered.

Sorcee Ministry of T7ranportation, Di-eocion General do Vialidad, Costa Rioa

FPbruary 1970 COSTARICA - SECOND EIGHWAYPROJECT

HIGHilAYREVENUES AND EXPENDITURES1962-1975 (in million of Colones)

R E V E N U E S E X P E N D I T U R E S

Year Government Other BANK/ CABEI IDB Exim US USAID Private MJOC TOTAL Construction Maintenance Administration Interest on Purchase of TOTAL Funds External IDA Bank BPR Foreign 1/ Foreign Loans Maint. Equipsent Sources Banks -

1962 25.0 - - - - 9.6 9.0 - - 4.3 47.9 29.9 9.4 4.7 3.9 - 47.9

1963 36.8 - 12.4 - - 7.9 2.3 - - 4.8 64.2 26.2 21.4 S.0 3.6 9.1 64.2

1964 43.8 - 11.0 - - 7.0 0.1 3.3 - 5.5 70.7 33-3 21.0 6.1 4.5 5.8 70.7

1965 47.2 - 13.4 - 5.3 0.9 0.1 5.4 0.1 5.8 78.2 38.4 22.9 6.8 4.5 5.6 78.2

1966 56.4 - 11.1 - 6.4 0.2 0.3 3.3 0.4 5.7 83.8 46.8 24.0 7.1 5.4 0.5 83.8 o 1967 59.0 - 19.3 - 6.5 2.2 4.5 1.9 3.1 5.8 102.3 67.2 21.4 5.8 5.3 2.6 102.3

1968 53.1 - - 11.3 3.0 6.5 12.7 - 1.5 3.8 91.9 57.1 23.6 6.8 4.4 - 91.9

1969 51.6 - - 22.1 6.8 11.7 22.7 - - 3.2 118.1 80.9 24.3 6.9 6.0 - 118.1

1970 53.6 - 2.0 43.4 11.4 16.4 31.7 15.9 - 3.6 178.0 128.2 25.4 2.0 6.5 15.9 178.0

1971 71.3 - 22.9 19.9 15.5 11.3 21.8 0.9 - 3.8 167.4 130.8 27.7 2.0 6.o 0.9 167.4

1972 76.8 - 26.5 - 16.8 - - 16.5 - 4.1 140.7 87.1 29.6 2.0 5.5 16.5 140.7

1973 73.7 33.5 25.8 - 4.8 - - o.6 - 4.4 142.8 103.1 31.6 2.0 5.5 o.6 142.8 1974 65.9 50.0 8.1 - _- - - - 4.6 128.6 86.7 34.1 2.1 5.7 - 128.6

1975 65.6 50.0 ------4.8 120.4 74.5 38.o 2.1 5.8 _ 120.4

V/ Mhnicipalities and Local Road Councils

Source: Ministy of Transportation, Costa Rica

February 1970 TABLE.

COSTARICA - SECONDHIGHWAY PROJECT

HIHWiAYINCOI!E AID EXPENDITUREACCOUNT: Current and Capital (in Million of colones)

INCOME 1962 1963 1964 1965 1966 1967 1968 a) Road User Charges

Importduties on vehicles14.6 20.7 22.2 18.3 19.8 16.1 25.6

License fees 4.7 5.4 5,9 5.9 7.0 10.0 9.5 Fuel tax 8.5 20.6 30.3 24.6 31.3 25.8 33.9 Taxeson tires 2.2 2.8 2.6 2.7 3.3 4.0 4.2

Taxes on lubricants .5 .4 .5 .6 .5 1.3 0.7

Tolls - - - .9 1.9 2.1 2.4 Sub-total 40.5 49.9 61.5 53.0 63.8 59.3 76.3 b) Foreignloans 9.6 20.3 21.3 25.1 21.4 33.0 22.3

c) Foreigngrants 9.0 2.3 .1 .1 .3 4.j 12.7 Total 59.1 72.5 82.9 78.2 85.5 96.8 111.3

EXPENDITURES a) Paid with PublicFunds

Central Government 32.9 39.7 46.8 63.3 65.9 67.7 60.5

Municipalities h.3 4.8 5.5 5.8 7 5.-8 -.- 8 37.2 44.5 52.3 69.1 71.6 73.5 64.3 b) Paid with ForeignFunds 18.6 22.6 21.4 2 21.7 375 5.0

55.8 67.1 73.7 94.3 93.3 11.0 99.3

* Includes amortization and interest of foreign loans.

Source: Ministry of Transportation, Costa Rica. February 1970 9~~~~~~~~- ° 2w °>°b1 H. - C'.

o . 0 1

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U' 0'H " ' ' H 0' U 0' COSTA RICA - SECONDHIGHWAY PROJECT

SIQUIRRES-LIMON HIGHWAY

Estimate of Construction Cost (Millions)

Sub-Project A Sub-Project B Sub-Project C Total Project-/

Limon-Chirripo River Chirripo-Siquirres Bridges over Chirripo, To be TYPE OF WORK (28.8 lkm) (27.6 km) Pacuare & Barbilla Rivers Constructed Constructed TOTAL 2/ To be 3/ (790 m) Constructed Constructed To be Constructed To be Constructed US$ C US$ s$ 0______0 0 0¢ Equiv. 0 Equiv. ¢ Equiv.

Earthwork 5.0 19.2 16.2 - 5.0 0.7 35.4 5.3 40.4 6.1

Pavement - 7.5 7.3 - - 15.0 2.3 15.0 2.3

Drainage Structures 0.8 1.8 3.6 _ 0.8 0.2 6.1 0.9 6.9 1.0

Bridges - 6.o 5.2 23.4 - - 33.7 5.1 33.7 5.1

TOTAL 5.8 34.5 32.3 23.4 5.8 0.9 90.2 13.6 96.o 14.5

1 Amounts do not include contingencies

2/ Chirripo Bridge is not included

Barbilla ani Pacuare Bridges are not included

March 1970 TABLE 9

COSTARICA. - SECOND HIGHWAYPROJECT

TRAFFIC PROJECTIONS - ATLANTICCQAST CORRIDOR (Tons '000)

1970 1975 1980 1985 1990

Banana Exports 590 975 985 995 1,005 Inputs to Banana Plantations 40 60 60 65 70

Subtotal 630 1,035 1,045 1,060 1,075

Other Imports 220 325 430 580 815 Other Exports 150 200 245 320 420

Subtotal 370 525 675 900 1,235

TOTALPort Traffic 1,560 1,720 1,960 2,310 Local Traffic (San Jose/LimonCorridor) 105 120 150 175 210

TOTAL 1,105 1,680 1,870 2,135 2,520

Source: Ministry of Transportation,Costa Rica

February, 1970 TADIS 10

COSTARICA - SECONDHIGIWAY PROJECT

VEHICLEOPERATING COST ON PAVEDROAX (Without Taxes) TYPEOF TlRAIN TRUCKS BUS !-/AU1TCMBIIZ Light Yedium Heavy

A. MDUNTAINOUS:

AverageOperating Speed (km/hr) 40 32 24 32 48 1. US centsper vehicle/km 12.7 13.7 28.7 16.5 2.9 2. US centsper ton/kmor passenger/km: Payloadfactor 10% 16.9 3.1 2.4 0.4 o.6 ti it 75% 23.6 4.1 3.2 0.6 0.8 , ,i 60% 28.2 5.1 4.0 0.7 1.0 " 50% 1.2 B. ROLLING

Average Operating Speed (km/br) 48 40 32 40 56

1. US cents per vehicle/km 9.5 10.5 20.5 12.3 2.3 2. US cents per ton/km or passenger/km: Payload factor 100% 12.7 2.3 1.7 0.3 0.5 if 1" 75% 16.9 3.1 2.3 0.4 o.6 "! " 60% 21.1 3.9 2.8 0.5 0.8 "50% " 0.9 C. FIAT

Average operating Speed (km/hr) 56 48 40 48 64 1. US centsper vehicle/km 8.0 8.9 16.6 10.5 2.0 2. US centsper ton/kmor passenger/km: Payloadfactor 100% 10.7 2.0 1.4 0.3 0-4 "1 1" 75% 14.2 2.6 1.8 0.4 0.5 "1 it 60c 17.8 3.3 2.3 0.4 0.7 it it 50f 0.8

/ Includin truckers overhead _ __ _ Descriptionof _'picaj Vehicles: Light Truck:Pick-up, Loading capacity: .75 tons - bdium " : Two axles, six tires,loading capacity: 4.5 tons. Heavy : Tractor and semi-trailer, four axles. 14 tires, loading capacity: 12 tons. Bus : 185 HP, 40 seatsfor passengers. Automobile: Medium,84 HP, 5 seats. SOURCE: Dlinistry of Transportation, Costa Rica February1970 COSTARICA: HIGHWAY PROJECT ORGANIZATIONCHART OF THE MINISTRY OF TRANSPORTATION

MINISTER

VICE-MINISTER

LEGAL | t PLANNING ASSESSOR DEPARTMENT

ADMINISTRATIVE DEPARTMENT

I . I I __,,_j____I 'I GENERALDIRECTORATE DIRECTORATEOF GENERL DIRECTRAE OF AUTOMOTIVE INTERAMERICAN IGSTITUTE

TRANSPORT MIGHWAY STTE

GENERALDIRECTORATE DIRECTORATEOF ASSISTANCETO OF PORTS CIVIL AVIATION SMALL. COMMUNITIES

O~te-t- ',F e B3RB-4095

CHARTII COSTA RICA: HIGHWAYPROJECT ORGANIZATIONCHART OF THE GENERALDIRECTORATE OF HIGHWAYS

DIRECTOR

SUBDIRECTOR

[ PROGRAMMING ADMINISTRATIVE LEGALOFFICE ENGINEERING AND CONTROL SERVICES

UI. U-

I-

WORK SCHEDULES |T RAWY

COST CONTROL BRIDGES

MAINTENANCE AND SUPPLIES AND BETTERMENTS TAF ERING

LU z

IBRD - 4830

LA1 MlAlt6UA = = 9 = _ - - N I CA A-----.U A SNOAS-- ~ ~ ~ ~ ~ ~ ~ ------

4-- COSTA RICA

- N ... --HIGHWAY' °u- '\NETWORK ( -

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... ~~ ~ ~ ~ ZON ~ ~> 01 ------

OCEAN 9y

, s ~~~~RED8ONDAF1'' -_ v ' _ REIOAL HIGHWAYS > Z N AA EL GALLSTG ~~~~~~~~~~~~NATIAONA '' ===== \Jk - a ffi~~~~~~0.CARRIZAL .. SW* ASHA, PAVED NDERtCONSTRUCTION OR IMPROVEMENT -R CI *.-

N APRENTINA *VO -II. D O 'ELDER ROADS CONSTRUCTED WITH IDB PARTICIPATIO 5 . (ALL WEATHER ROADS) ,\*_-_-_ -_ tPCONSTRUCTED -U-----LNDER CONSTR CTION

IRRO STRRUCARE5ADST!A.GO _ A N > '''-"'''''' TO BE CONSTRUCTED AoNA_N N

SAN ISIDRO D EGACNADO PLANNED ROADS(LONG RANGEPLAN) ...... OTHER ROADS

*'OJARls STA-!tA DAVASAMPA f PWSECOND HIGHWAY PROJECT SANS7 LLWANO GAN coNsrRUCTION SIQUIRRES-LIMON ROAD A* AS'~ EA ~ ~ ...... FEASIBILITY STUDY,SAN GOSE-SIQUIRRES(VIA GAPLS

NEGRASIEA SATAIA MAINTENANCE ZONE LIMITS

OESAPNDS A PTRAMAINTENANCE SHOPS WAIN - o SECONDARY

G IFO PRIS 5 5L RAILWAY KD 30 40 KORM ALTO .. LP.RtSCAL- KILOMETERS FEBRUARY 1970 IBRD-2377R