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World Bank Document ReportNo. 732-YDR FIL'ECopy Appraisalof a SecondHighway Project People'sDemocratic Republic of Yemen Public Disclosure Authorized May 2, 1975 RegionalProjects Department Europe,Middle Eastand North Africa RegionalOffice Not for PublicUse Public Disclosure Authorized Public Disclosure Authorized Document of the International Bankfor Reconstructionand Development Public Disclosure Authorized InternationalDevelopment Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without BankGroup authorization. The BankGroup does not accept responsibility for the accuracy or completeness of the report. CURRENCYEQUIVAL ENTS Currency Unit = Yemeni Dinar (YD) US$1.00 = YD 0.315 US$2.90 a IYD1.000 US$2.9 million * ID 1 million SYSTEM OF WEIGHTSAND MEASURES: METRIC Metric System British/US System 1 meter (m) n 3.28 feet 1 kilometer (km)) = 0.62 miles 1 sq kilometer (a2) = 0.386 sq miles 1 hectare(ha) = 2.47 acres 1 metric ton (m ton) - 2,205pounds ACRONYMS AND ABBREVIATIONS Alyemda - DemocraticYemen Airlines CP - Cooperative Program CPC - Central Planning Commission dwt - deadweight tons FAO - Food and Agriculture Organization of the United Nations GDT - General Department of Transport ICAO - International Civil Aviation Organization ?MPW - Ministry of Public Works O-D - Origin-Destination PDRY - People's Democratic Republic of Yemen SF - Special Fund SIDA - Swedish International Development Agency UK - United Kingdom UNDP - United Nations Development Programme US - United States of America USSR - Union of Soviet Socialist Republics WFP - World Food Programme PEOPLE'S DEMOCRATICREUBLIC OF YEMEN FISCALYEAR April 1 to March 31 NOTE Prices of petroleum products in this report are as of end November 1974. APPRAISAL OF A SECOND HIGIIWAYPROJECT PEOPLE'S DEMOCRATICREPUBLIC OF YE!EN1 CONTEN4TS Page No. SUM24ARYAND CONCLUSIONS ...........................- u I. INTRODUCTION ....... * ********...........*........ .*. ... *.. * . 1 II, THE TRANSPORT SECTOR ................ .............. 1 A. The Country and Its Economy .... .............. 1 B. The Modes ...................... .. 2 C. Policy, Planning and Coordination .. *......... 4 III. HIGHlWAYS .......................................... 5 A. The Network ........... 5 B. Characteristics and Growth of Traffic ........ 5 C. Administration ......................... 6 D. Planning * ' 7 E. Financing 8 F. Engineering ... 8 G. Construction .......... 8 H1. lighway Maintenance 9 I. Trainiing ................. 10 IV. THE PROJECT .................... 10 A. General ............... 10 B. Road Construction ........................ .. 11 C. Engineering and Economic Studies of the Nagabah-Ataq-Beihan-Al Ayn Road ............ 12 D. Technical Assistance to the Ministry of Public Wotks..... 12 E. Purchases of Equipment and Related Spare Parts for Highway Maintenance ................... 12 F. Refinancingof Highway EngineeringCredit S-12 YDR ....... , 12 This report was prepared by Messrs. Snorri Hallgrimsson,Kalevi Myllylooma (Engineers),Niels Krogh-Poulsen (Economist)and lIs.Joan Chernock (Editor). It was revised by Messrs. Robert Mulligan (Engineer)and lienriBeenhakker (Economist). TABLE OF CONTENTS (Continued) Page No. G. Cost Estimates and Foreign Exchange Component. 13 H. Execution .................................... 15 I. Procurement . .............. .. ...... ...... 16 J. Financing ...........................................*... 16 K. Disbursements ............................... 17 V. ECONOMIC EVALUATION ...............s........ ... 17 A. Main Benefits and Beneficiaries ...... 17 B. Economic Evaluation ........................... 19 C. Road Studies and Technical Assistance ........ 22 VI. RECO1I1ENDATIONS................................... 22 TABLES 1. Activities in the Port of Aden, 1966-73 2. Revenues and Expenditures of Yemen Ports Corporation 1966-73 3. Aden Airport Traffic, 1965-72 4. Planned Public Investments During Fiscal Periods 1972-74 and 1975-79 5. Length and Distribution of Road Network, 1973 6. Registered Vehicles by Governorate, 1971 7. Highway Revenues and Expenditures, 1968-73 8. Design Standards for Project Roads 9. 1973 Fifth Governorate Population Statistics 10. 1974 Production and Consumption Estimates for Wadi Hadramawt and Coastal Area of Fifth Governorate (metric tons) 11. Public Investments in Fifth Governorate 1974-1979 12. Annual Through Traffic Between Wadi Hadramawt and the Coast 1968-1974 13. 1971 and 1974 Local Traffic (ADT) 14. Normal Traffic 1979 Before Opening of Al M4ukalla-SaywunRoad (ADT) 15. Normal Traffic 1979 After Opening of Al Hlukalla-SaywunRoad (ADT) 16. Vehicle Operating Costs of Typical Vehicles by Type of Road (YD/1,000 km; exclusive of taxes) 17. Average Characteristics of Typical Vehicles by Type of Road 18. Conistruction and Ilaintenance Costs (YD) 19. Rates of Traffic Growth and Return on Sections of the Al Mukalla-Saywun Road 20. Results of Sensitivity Analyses ANNEXES A. Previous Transport Projects B. Summary of Project Financing C. Estimated Schedule of Disbursements D. Probability Analysis CiART Organization of the ,iinistry of Public IJorks MAPS IBRI) 11045R - Transport Infrastructure IBRD 11046 - Project Area APPRAISAL OF A SECOND IIIGHWAYPROJECT PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN SUIMARY AND CONCLUSIONS i. The present transport network of the People's Democratic Republic of Yemen reflects its historical, economic and political development. Aden, capital and economic center, is isolated from most of the hinterland, former- ly a number of small feudal states which discourageddevelopment of an ade- quate transport system. Consequently,at the time of independencein 1967, the transport network consisted of a few good roads around the capital and a well-developedport in Aden, with limited air connectionsand coastal ship- ping. ii. At present, the total length of the network of roads and main motor- able tracks is about 5,500 km of which about 4,800 km are rough tracks pas- sable only by light trucks and four-wheel-drivevehicles, 475 km are asphalted, 200 km are cobbled, 1/ and a negligible length gravel-surfaced. Both in terms of extent and quality the road network is insufficientto meet the present demand of freight and passenger traffic. iii. The Government aims to change the traditionalservice economy, based on trade and bunkering in Aden, into a mixed service and commodity-producing economy. To achieve this aim, considerable investments in agriculture and fisheries have been made and are planned as well as development of a good road network linking the agriculturalareas with market centers and with Aden. The proposed project supports this policy. iv. The Government'sFive-Year Development Plan 1975-79 envisages a total investment of YD 19.1 million in the communicationsand transport sec- tor, or about 25% of the total proposed public investment over the Plan period. Of this amount, YD 16.3 million is allocated to the highway sector. The need for coordinatingthe transport investmentsproposed is recognized and is im- plicit in the Plan. v. The main component of the proposed project is constructionwith supervisionof 358 km of road between Al Mukalla and Saywun, with a branch to Ash Shihr. This road would connect and serve two currently isolated re- gions with major potential for agricultureand fisheries development. The project also includes the procurementof road maintenance equipment and spares, technical assistance to and training of personnel of the Ministry of Public Works, and engineeringand economic studies of the Nagabah-Ataq-Beihan- Al Ayn Road. The proposed road constructionwould support the agricultural and fisheriesprojects, either being implementedor planned in the Fifth Governorate. 1/ Constructedfrom natural cobblestones10-25 cm diameter, loosely embed- ded in a 30 cm sand layer. - ii - vi. During negotiationsfor the Highway EngineeringCredit S-12 YDR the Governmentand the Associationagreed that the Credit might be refinanced under any subsequenthighway project. The outstandingbalance of US$530,000 under Credit S-12 YDR will thereforebe refinancedfrom the proceeds of the proposed credit. vii. The Ministry of Public Works will be responsiblefor executing the project which is expected to be completedby early 1979. viii. The total project cost is estimatedat US$31.8 million equivalent, with a foreign exchange componentof US$20.8 million or about 66%. The Asso- ciationwould finance US$10.39 million (50%) of the foreign cost and US$5.11 million (46%) of the local cost on the usual terms; the Governmentwould financeUS$1.0 million (9%) of the local cost, and the Kuwait Fund which has agreed to also participatein the projectwould finance the balance, being US$10.4 million (50%) of foreign cost and US$4.89 million (46%) of local cost. US$60,000would be financed retroactivelyto meet the costs of exploring for water for road construction. In the absence of any serious response to the internationaltendering of the road constructioncontracts the UK Crown Agents will provide the technicalexpertise and managerial skills, presently in short supply in the Ministry of Public Works, needed to operate a special construc- tion unit to build the project roads. The Crown Agents' estimated cost of constructionis based on current prices in PDRY. The cost of the supervision, detailed engineeringand technical assistancewas estimatedon the basis of the cost of recent servicesof a similar nature in PDRY. ix. The economic return on the investmentsin road constructionis es- timatedat about 15%, with
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