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World Bank Document Document of FILECOPY The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 1891a-PAN STAFF APPRAISAL REPORT HIGHWAYMAINTENANCE PROJECT Public Disclosure Authorized PANAMA April 20, 1978 Public Disclosure Authorized 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 C'urrencyUnit = Balboa US$1.00 = B 1.00 F'iscalyear January 1 - December 31 System of Weights and Measures: Metric 1 meter (m) = 3.28 feet (ft) 1 kilometer (kmi) = 0.62 mile (mi) 1 square kilometer (km2) = 0.386 square mile (sq mi) 1 metric ton (ton) = 1.1 US short ton (sh ton) Abbreviationsand Acronyms AADT - Annual average daily traffic APN - National Port Authority CAkM - Department of Roads and Ports C]ENAFOR - National Training Center FNC - Chiriqui National Railway COFINA - CorporacionFinanciera Nacional CO(EC - CompanilaMexicana de Consultores DAC - Directorateof Civil Aviation D]ENE - Directorate of Equipment DTIC - Directorate of Construction D2UM - Directorate of Maintenance DTTT - Directorateof Transit and Land Transport IDB - Inter-AmericanDevelopment Bank IFARHU - Institute for Training and Improvementof Human Resources MOP - Ministry of Public Works MEPE - Ministry of Planning and Economic Policy NDP - National Development Plan NTS - National Transport Survey ORT - Price Regulation Office PAH - Pan-American Highway USAID - US Agency for InternationalDevelopment UNDP - United Nations DevelopmentProgram FOR Ov"CAL US ONLY STAFF APPRAISAL REPORT HIGHWAYMAINTENANCE PROJECT PANAMA TABLE OF CONTENTS Page No. I. THE TRANSPORT SECTOR .................................. I A. General .......................................... 1 B. The Transport System ........... .................. 1 C. Planning, Coordination and Financing .... ......... 4 D. Recent Sector Improvements and Recommended Developments ....................... 5 II. ROAD TRANSPORT * ........................................ 6 A. General .................................... 6 B. Characteristics and Growth of Road Traffic ....... 7 C. The Vehicle Fleet ................................ 7 D. Operations and Organization of the Industry ...... 8 E. Tariffs and Costs ................................ 9 F. Government Role and Enforcement of Weight and Dimensions Regulations .........................9 III. THE HIGHWAY SUBSECTOR ................................. 10 A. The Highway Network .............................. 10 B. Highway Administration ..... ...................... 11 C. Highway Planning ................................. 11 D. Highway Financing ...... .......................... 12 E. Highway Engineering .............................. 13 F. Highway Construction ..... ........................ 13 G. Highway Maintenance ...... ........................ 13 IV. PAST BANK ASSISTANCE TO THE HIGHWAY SUBSECTOR .... ..... 15 A. General .......................................... 15 B. Completed Highway Projects ....................... 16 C. The National Transport Survey (1972-1975) ........ 16 This report is based on the findings of an appraisal mission which visited Panama during October-November 1977. The mission comprised Messrs. Enrique Pinilla (Engineer), Jose M. Veniard (Economist), and Carlos F. de Castro (Road Transport Industry Specialist). The report had been edited by Miss Virginia R. Foster. This document has a restricteddistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bankauthorization. TABLE OF CONTENTS (Continued) Page No. V. THE PROPOSED HIGHWAY MAINTENANCE PROJECT .... .......... 16 A. Objectives and General Description .... ........... 16 B. Background and Preparation of the Highway Maintenance Program ............................ 17 C. Project Components and Requirements .... .......... 19 D. Cost Estimates and Financing ..................... 21 E. Execution, Procurement and Monitoring .... ........ 23 F. Project Risk ..................................... 25 G. Project Impact and Adequacy of Technology ........ 25 VrI. ECONOMIC EVALUATION ................................... 25 A. Formulation of the Highway Maintenance Program ... 25 B. Traffic ......... ................................. 26 C. Benefits ........ ................................. 26 D. Overall Economic Return .......................... 27 E. Benefit Distribution ............................. 27 VII. AGREEMENTSREACHED AND RECOMMENDATION.... ............. 28 TABLES 1.1 - Summary of Freight and Passenger Traffic by Modes 30 1.2 - CompaLrison of Highway and Motor Vehicle Densities 31 1.3 - Development of the Highway Network .... ............. 32 1.4 - Transport Infrastructure Investment, by Mode, in Comparison with Total Public Sector Infrastructure Investment ........................ 33 1.5 - Estimate of Transport Sector Expenditures .... ...... 34 2.1 - Annual Average Daily Traffic by Type of Road Surface and Type of Vehicle .............................. 35 2.2 - Vehicle Registration ............................... 36 2.3 - Vehicle Fuel Consumption ........................... 37 2.4 - Freight and Passenger Vehicle Fleet .... ............ 38 2.5 - Limits on Weights and Dimensions .... ...............39 3.1 - Estimates of Highway Expenditures and Road Users' Contribution ..................................... 40 3.2 - Highway Sources of Funds 1970-1977 .... ............. 41 3.3 - MOP Highway Design Standards ....................... 42 5.1 - Inventory of Roads ................................. 43 5.2 - Summary of Maintenance Activities and Prescribed Standards ................ ......................... 44 5.3 - Estimated Annual Cost of Maintenance per Kilometer by Type of Road and Level of Traffic .... ......... 45 5.4 - Tentative List and Cost Estimate of Maintenance Equipment ........................................ 46 - iii - TABLE OF CONTENTS (Continued) Page No. TABLES (Continued) 5.5 - Estimated Highway Maintenance Budget Requirements and Financing .................................... 47 5.6 - Estimated Schedule of Disbursements ................ 48 5.7 - Tentative Implementation Schedule . .................49 6.1 - Summary of Formulated Highway Maintenance Program .. 50 6.2 - Summary of Vehicle Operating Costs .... ............. 51 6.3 - Summary of Maintenance Program Economic Evaluation 52 ANNEXES 5.1 - Outline of Equipment Fleet Manager Job Description ... 53 5.2 - Outline Terms of Reference for the Technical Assistance on Highway Maintenance .... ..............54 5.3 - Outline Job Description for Senior Maintenance Engineer in Charge of Program Coordination .... ..............59 5.4 - Example of Intended Maintenance Program Control Reports .................................... 60 5.5 - Related Documents and Data Available in the Project File ....................................... 63 CHARTS 18231 - Ministry of Public Works Organizational Structure 18230 - National Directorate of Maintenance Organizational Structure MAP IBRD 13290 - Panama - Highway Maintenance Project I. THE TRANSPORT SECTOR A. General 1.01 Panama, a long, narrow country, is divided lengthwise by a mountain range and across by the Panama Canal. As a result, the country has developed on two main axes: one along the Panama Canal and the other along the lands on the Pacific Coast, particularly to the west of the Canal. To the east of the Canal lies the relatively unexplored region known as Darien. The Darien region, as well as the lands on the Caribbean coast, consists of dense rain forests, relatively undeveloped, unpopulated and without land transport facilities. Except for these regions, where air travel and coastal shipping are the only and scant means of transportation, highways and road transport are the country's basic movers of domestic freight and passengers. As shown in Table 1.1, highways carry about 95% of all domestic freight traffic and near 99% of passenger traffic. 1.02 On the international side, the most important transport facilities are the Tocumen International Airport, the Canal ports and the Pan-American Highway, not counting the Panama Canal itself. The Panama Canal, its ports and ancillary facilities, including a transisthmic railway and a small oil products pipeline, carry an important part of the international cargo traffic. Its ports, in particular, handle most of Panama's general imports. All ports combined handle some 95% of total international dry cargo traffic, while the Pan-American Highway, although handling only 5% of that traffic, is playing a growing role in the development of interregional commerce. Of the total international passenger traffic, airports, in turn, handle some 80% (Table 1.1). 1.03 The transport system in the developed regions of the country is broadly adequate. Some expansion, especially in secondary and feeder roads, would be necessary to meet specific growing transport requirements in these regions and to give access to new areas of the country, presently isolated and undeveloped. However, of paramount importance is the adequate maintenance of the present transport infrastructure -- basically highways -- as a major factor in facilitating further economic development, competitive interregional transportation and expansion of the agricultural sector. B. The Transport System (i) Highways and Road Transport 1.04 Distances
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