RETURN TO , ~\ , REPORTS DESI<' RESTRICTED VJITHIN Rep 0 r t No. TO-294a ONE \\lEEK FILE Copy TO (IDA) 14

Public Disclosure Authorized This report was prepared for use within the Bank and the Association. It may not be published nor may it be quoted as representing their views. The Bank and the Association accept no responsibility for the accuracy or .. completeness of the contents of the report.

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

APPRAISAL OF HIGHWAY PROJECT

COSTA RICA Public Disclosure Authorized

October 4, 1961 Public Disclosure Authorized

Department of Technical Operations COSTA RICA

------APPRAISAL OF A ;UGHl;IAY PRC'JECT

TABLE OF COHTEr.i'TS

suai\TARY i-ii

I. mTRODUCTION 1

II. BACKGROUND mFDRl'1ATION 1 Geographic and Demographic 1 Occupation and Land Ovmership 1 Public Transportation System' 2 III. THE HIGHWAY SYSTEN J Classification and Condition of Roads 3 General HighwC'.y Hanagement 4 l'finistry of PuL1ic "l'lorks 5 Execution, Supervision and Naintenance of Roadworks 5 Traffic Growth and Characteristics 6 Highway Development Plans 7

IV. THE PROJECT 8 General Description 8 Studies, Design and Documentation 8 Estimates of Co:r:struction Cost 9 Execution of Project !dorks 9 Foreign and Local Components of Construction Cost 10 Construction, I'Iaintenance and Survey Equipment 11 Technical Advisory Assistance 12 Financing: Composition of Bank and Association Loan/Credit 12

v. ECOlWNIC JUSTIFICATION 14 Areas Affected by Road Improvements 14 Direct Economic Returns from Road Improv~aents 14 Additional Benefits from Road Improvements 16 Economic Benefits from Nev-r Road Construction 17 Higmlay Haintenance Investment 18 VI. CONCLUSIONS AND RECOHj\IENDATIONS 18 ANNEXES

TABlES

1. Road Lengths and Classification, December 1960. 2. Average Annual Expenditure on Roads and Bridges by Different Authorities, 1956 - 1959 3. MinistF,f of Public vJorks Expenditure" 1955 - 1960 4. Vehicle Registration and Gasoline Consurr~tion, 1950 - 1964 5. First Stage (Four-Year) Highway Development PJan 6. Sources of Local Currency for First stage Highl"ray Development Plan 7. Design Standards B. Road Works in First Three Years of Highway Plan 9. Foreign Currency Component of Highway Construction Costs 10. Foreign Currency Investment in Construction, }'Iaintenance and Survey Equipment 11. Application and Sources of Project Funds 120 Direct Economic Benefits of Highway Improvements

FIGUHF.B

1. llilinistry of Public vlorks; General Organization 2. Directorate of Public 1rJorks; HigmJay Department

M\.PS

1. Costa Fica; Road and Rail Systems 2. Central Zone and l'letropolitan ~'irea SUMMARY

(i) The Government of Costa Rica has asked the Bank and the Association to assist in financing the first stage of a seven-year highway development program for the improvement and extension of the country's highvTay network. The foreign currency requirements of a suit.able pro~iect amount to US$ll million equivalent; this wouJd be the first transportation loan to Costa Rica by the Dank or the Association.

(ii) The number of road vehicles in Costa Rica has more than tripled in the past ten yeClI's. The resulting increase in traffic volume has overloaded the capacity of a major part of the existing highway netvlOrk, and has caused damage to road surface and foundations. The situation has been aggravated by inadequate road maintenance in the past due mainly to the insufficier:.cy and poor condition of maintenance equipment and repair facilities.

(iii) Extensive improvement "JOrks and some new highway construction vlOrks are urgently required to provide adequate facilities for present and expected future traffic. The proposed pro.iect provides for:

a) the improvement of 640 lun (about one-third of the total) of existing nat2.0nal and regional roads, and the construc­ tion of 31 km of new roads; the total estimated cost of the lvorks is about US$13,,2 million equivalent of vJhich the foreign exchange component is about US$702 million equivalent;

b) the purchase of mechanical equipment, spare parts and materials for high-tolay construction and maintenance to an amount of about US$3 million equivalent in foreign exchange;

c) the foreign exchange cost of surveying instruments, en­ gineering studies, and consulting services, estimated at about US$0.5 million equivalent. (iv) The pro.iect is technically sound and cost estimates are realistic; it is adequately .iustified economically by the future savings in vehicle oper­ atirg costs which l~ll result from the improved road transport conditions.

(v) The responsible executive agency is the 11inistry of Public l;orh:s; the organization is sound and staff are generally competent although perhaps som81·fhat inexperienced in certain aspects of major high~olay works. The Ninis­ try is arranging with the U.S, Bureau of Public Horks to provide technical assistance on all phases of the projecto

(vi) About one-third of the pro.iect 1'11orks 1dll be executed by force ac­ count and tHo-thirds by contracts to bo awarded through international compe­ titive bidding. Although planned for three years, execution of the works "Jill probably take about three and a half years allowing for customary delays and extensions of contract periods. - ii ­

(vii) Financing arrangements appear satisfactory and as the project forms part of a -vn.der highVl'ay development plan to be financed from assigned sources of local currency revenue and special budget appropriations, assurances have been obtained from the Government that the project liwrks "Jill receive priority in the application of funds from these sources • • (viii) The proposed project provides a suitable b,asis for a Bank loan of US~~5.5 million equivalent and an Association credit of US$5.5 million equiva­ lente A suitable term for the loan liould be 15 years including a three and a half year period of grace~ COSTA RICA. APPRAISAL OF A HIGHWAY PROJECT

I <» INTRODUCTION

16 The Government of Costa Rica has requested the Bank and the Associ­ ation to assist in financing a highway improvement, construction, and mainte­ nance project which constitutes the first three-year program of a broader seven-year development plano The project provides for improving about 640 km of existing roads; the construction of 31 km of new roads; the equipping of highway const~lction and maintenance divisions; and for associated engineering stUdies and advisory services~ Participation by the Bank and Association w0uld cover the total foreign exchange costs for the project works, equipment and services amounting to US$11 million, and would be the first loan or credit to Costa Rica for transportation purposes~

2. This appraisal of the project is based upon findings of Bank mis­ sions to Costa Rica in Decem1~!' 1959, ,Tanuary and December 1960, and upon fi­ nancial and technical informat~on subsequently submitted by the costa Rican Government in March and May of 1961.,

IIo BACKGRO:JND INFORMATION

Geographic and Demographic

3. Costa Rica (Hap 1) has an area of approximately 51,000 sq. km .. (sli­ ghtly larger than Switzerland) and may be divided into three main topographical regions--the Caribbean coastal plains and hinterland with a tropical climate and heavy rainfall; the central plateau with a mild temperate climate; and the Pacific coastal plains and hinterland, again tropical but with much less rain than the Caribbean region. Most regions except the Caribbean enjoy a relative­ ly dry 4-month period from December to Aprilo

40 The population of Costa Rica is approximate~ 102 million and is in­ creasing at an annual rate of more than 4%, one of the highest net increments in the worlde About one-third of the total population is urban and two-thirds rural0 The central plateau is the most intensively developed and most densely populated area of the countrJr, accommodating over 60% of the total population with proportions of urban to rural population being about equal~ San Jose, the capital, is located in the central plateau at an elevation of about 1200mf the population of the metropolitan area is almost 250,000.

Occupation and Land Ownership

5. About half the active population is engaged in agriculture and approx­ imately 40% of national income is derived from agricultural produots, princi­ pally coffee, bananas, cacao, and beef cattle. The facilities for producing one of the principal exports, coffee, are owned and operated almost exclusively by Costa Ricans; production of the second most important export crop, bananas, is mainly in the hands of foreigners. - 2 ­

6. Land ownership is widespread among a large number of small holdings; 70% of farms in Costa Rica are less than 20 hectares in area. Most of the small farms are located in the central plateau, while large plantations are more common in the less-densely populated Caribbean and Pacific coastal areas. Public Transportation System " 7. The road and rail systems (Map 1) meet the country1s main domestic transportation requirements. The basic road netl-lork has developed gradually as a series of radiations outwards from San Jose, the traditional center of polit­ ical and commercial activities. A relatively recent road development has been the extension of the basic network to the north and south (Routes 1 and 2) to form part of the Inter-American high1f.Tay; sections of this highway are still under construction in the south. The present public road system comprises about 3,300 km of all-weather roads and about 10,700 km of local earth roads and tracks.

8. THO independent public railroads link San Jose with the country fS main seaports - Puntarenas on the west coast, and Limon on the east coast. A third independent system, co~prising isolated lengths of railroad, serves large privately mmed banana estates located along the Caribbean and Pacific coastal plains.

9. The present total length of railroad is about 1,390 km, operated by the following three companies: RAILROAD SYSTEM Company Length operated (km)

1. Ferrocarril Electrico al Pacifico 140 2. Northern Raihyay Company 530 3. Compania Bananera de Costa Rica 720 Total 1,390

10. The first two companies are common carriers. The "Ferrocarril Elec­ trico al Pacifico" is an autonomous Government agency which operates the San Jose - Puntarenas railway and the port of Puntarenas. The second company operates the railway between San Jose and the port of Limon, and is responsible for a major part of the port's activities; most of the company stock is foreign­ o't-med.

11. The third rail netlrlork is owned by the "Compania Bananera de Costa . Rica", a subsidiary of the U.S.-owned "United Fruit Companylt, and operat.es in the relatively sparsely populated coastal regions of t,he country primarily as a carrier for the company's own produce. The amounts of public freight and passengers carried are understood to be relatively small. - 3 ­

12. The highway system predominates substantially as the countryts princi­ pal facility for transporting passengers and freight, accounting for about 80% of the totru_ passenger traffic and about 70% of freight. The remaining traffic is carried mainly by the railroads, with relatively small contributions by domes­ tic airways and coastal shipping.

, 13~ In the five years from 1954-1958, road passenger t.raffic increased by over 30% and freight traffic by over 50%. The corresponding increases on the railroads llTere less than 7% and 25% respectively.

14. A number of airline companies operating in C08ta Rica are carrying rapidly incre'lsil1g amounts of domestic freight ar.d paS3C::1gers annually; the t.otal amount tran81:.orted, however, is still somewhat less thHl1 4% of the passenger and 1% of the f~eight totals for the countryts domestic traffic. The largest air carrier cOTi!p::>.ny regist.ered in Costa Rica is II LAC SA" , a one-third share of VJhich is olIDed by the GO'ITernment.

15. Coastal shipping, mainly along the Pacific coastline, accounts for less than 3% of the tctal qu:mtity of domestic fretght moved. Studies are present.ly being made by a UoN. e}qx:~rt c('",,'}cerning the location and construction of more small port.s in the Gulf of Niccya and elsewhere in order to develop coast.al

traffic 3

16. Statistical data are not available for other means of tr8nsport in Costa Rica. Fe't,r rivers are navigable and consequently there has been little development. of inlClnd ';;raterway traffic. Traffic on unpaved local roads consists mainly of oxcart and packhorse.

III. THE HIGHHAY SYSTEM

Classification and Condition of Roads

17. Public roads in Costa Rica (excluding streets in municip~l areas) are classified into th~ee categories - national, regional and local - according to the relative importance of the corr~unities connected or the areas served; within each category the type of surface varies (see Table 1).. National and regional roads, 90% of Hhich are all-weather, comprise about 15% of the total road length of 14,000 krn. Only about 237~ of the total road length is all-1"Jeather.

18. National Routes 1 and 2 constitute the 640 km length of the Inter­ .lUnerican HighHay running through Costa Rica (Hap 1). The total length comprises tuo modern extensions to the long-established, but. poorly-aligr,ed roads from San Jose to San Rrunon and Cartago. The 240 km north-westerly extension from San Ramon to the Nicaraguan border was completed and surfaced within the past fel>1 years. About half of the 300 krn southerly section from Cartago to the Pana­ manian border is open to traffic but not yet surfaced; the whole section is ex­ nected to be opened "Hi thout surfacing tovlard the end of 1962, and to be surfaced during 1963. - 4 ­

19. With the exception of work on the Inter-American Highway, there has been relatively little major new road construction in Costa Rica during the past 10 to 15 years~ Any work has been confined mainly to replacement of in­ adequate bridges, realignment and improvement of short sections of some of the more important and heavily trafficked roads, or to the development of local roads. 20. Road maintenance in past years has been insufficient to keep pace with the rate of deterioration and consequently road surfaces generally are pooro A contributing factor to surface failure has been the inadequate thick­ ness of road foundation material in many places. Moreover, the number of vehicles using the roads has continued to increase rapidly and is now between three and four times that of ten years ago, with the result that the present main highway system is generally overloaded and inadequate to me8t expected future traffic volumes. General Highway Management 21. For all practical purposes roadworks in Costa Rica are limited to the Ministry of Public {iforke and the Inter-American High'iay Authority. Table 2 compares the average annual 0),:;enditure on roads and bridges by different autho::cities during the four ysars 1956-1959; about 85% of all hig:niay works (excludlng the Inter-American Highway) is undertaken by the ~dnistr-y of Public lrJorks.

22. Responsibility for the construction and maintenance of main highways is vested in the Ministry under the Public RoaQs Law of 1955. The Law confers the responsibility for maint.aining local roads to the Juntas Cantonales de Caminos (Canton Councils). 23. The Inter-American Highway Authority is a joint agency of the Government of Costa Rica and the U.S. Bureau of Public Roads established in San Jose for the design and construction supervision of that section of the Inter-American Highway passing through the country. Ministry personnel tempo­ rarily attached to this organization have been provided with a good basic highway training in design, bidding documentation and construction supervision. 24. New legislation for the limitation of vehicle weights and loads was enacted in Harch 1960 and the regulations have been promulgated.. They replace regulations of 1946, which were too restrictive and impractical for enforcement. The new ones are based on the recommendations of the Seventh Pan-American Highway Congress, and permit maximum axle-loads of 8 metric tons and loaded vehicle weights of 2S tons~ As present highway design standards are appropriate to the new regUlations the enforcement of weight limitations would be practicable, and would excuse no overloading of improved or newly constructed roadse - 5 -

Minist~ of Public Works

25. The present organization of the llinist~ of Public'}orks (Figure 1) is such that activities and expenditures fall roughly into three m;'Jin categories; road and bridge l.vorks accounting for nearly half of expenditures; architectural Horks (mainly schools) accounting for about one-third; and water supply vrorks together 1.vith other miscellaneous functions for the remainder.

26. Table 3 indicates the total expenditure of the lvJ.inistry for the period 1955-60 and the corresponding amounts expended on road and bridge Horks, the latter 8veraging about rJ 18 million (US~;3Q2 millionf annually excluding ad­ ministration costs. Budget ap·'Jropriations provide the main source of funds for the Minist~'s highu,Tay activities~ Revenues from road user taxes and vehicle import duties are not applied directly to road construction or maintenance costs but merely supplement national funds; in 1959 such revenues totalled about ¢ 46 rrullion (US(~8? 2 million1~

27. A comprehensive Civil Service Code governs the employment of the lIin­ istry personnel; operational continuity is maintained independently of changes of Government 1\1ith only the posts of l'·iinister and Director of Ad'l1inistrCl.tion being subject to change.

Execution, Supervision and r'lRintena.;.ce of Roadl.vorks

28.. The executive branch of the Hinistry is the Directorate of Public ·Horks (Figure 2). Most works in the past ha.ve been constructed by force account in one of the six regional Zones of the Hinist~, There has been an increasing tendency recently to execute certain types of high1'Jay vJork - mainly earth1:'Jorks ­ by contract; it is the Ministry1s policy to continue transferring more tvork to contractors and ultL'l1ately to redu~e the highway functions of the Directorate to those of design, supervision and maintenance only.

29. A number of small but competent domestic high1·my construction firms have emerged during the past fe"tv years:J largely due to the impetus provided by the Inter-Amencan Hightvay construction. Fourteen such firms are presently registered, tlrJO 1..:rith a capital of over rJ 5 million.

30. Foreign construction firms may undertake 1.fork in Costa Rica provided the firm and the senior engineer are registered vrith the requisite local bu­ reaus; tT:JO U.S o highl.vay contracting firms are presently working in the country.. The procedures of international cC1lTlpetitive bidding uill be applied to the project.

31.. Inspection of examples of road and bridge t-1orks designed in the Hin­ istry and recently constructed by force account and by contract indicates a reasonably high standard of technical ability and workmanship. The qualifica­ tions of the Minist~fs senior technical personnel are good but their average age is relatively low, and consequently in certaL~ cases, practical experience is someHhat limited. * AT the then prevailing parity ratio of t 5 .. 615 to the dollar. - 6 ­

32, Officials from the U.S. Bureau of Public Roads have assisted the rllin­ istry from time to time under the U.S. technical aid program; an Equipment Engineer is presently engaged in technical and manual instruction of Costa Rican drivers and operators, and a second Engineer is assisting and advising in new highway construction financed by the Export-Import Bank. Nore technical ad­ visors are considered necess~J if greater volumes of highway work are unde~n. .. 33. The Ministry mechanized its accounting system in 1959. The system is now operating efficiently in budget and contract accounting, inventory control, and limited maintenance costing; no proper system of costing force account l-l"orks is yet in operation, although a recent start was made with U.S. technical as­ sistance.

34. The maintenQllce of all public works, including hight-rays, buildings and water supply, is carried out by the Zone organizations (Figure 2). The size of the country and the amount of work involved does not justify an entirely separate organization for highlmy maintenance, but the equipment at least should be se~regated. A further distinction should be drawn between highway maintenance and high'Hay construction equip:nent which is not now the case - often to the det­ riment of the highway maintenEnce effort. A sound central organization has been established for the purchase, control a~d distribution of materials and spare parts..

35. Of the six Zone depots, the three at Alajuela., Liberia, and Tibas are of fairly recent construction and wouln be adequate to meet future l'squirer:lents if plant and equipn:ent were supplemented. The trrree remaining depots vJOuld re­ quire improvement and extension in order to pro\"icJe sat,~.sfactory fut:ll'e ards of highway maintenance. A nll.rnber of s1.lbsidi'lr'J regional d.epots -vdthin the Zones provide for more efficient execution of vlOrk in areas rC.'TI.ote from the :nain depots; most of the regional shops need improvement and refii:'-:ii~lgo

36. A new Central depot, including shops and warehouses~ lias recently com­ pleted in San Jose, and work is nOv7 in hand to reha.bilitate old maintenance and construction equip~:lent. Standards of serviCing and repair of the equipment are high.

37. The liinistry has estimated the average annual cost of adequately main­ taining gravel roads at about ¢ 3,700/km (US$660/k:n.)~ and asph~l t roads (Hith periodic seal coat) at ¢ 3,590/km (US$635/la;o.)-l: The estimates ac.:sume the roads to be in fair coneb.tien originally and alloifJ for the depreciation and repair of equipment, the cost of labor and materials, but not for administrative costs. The estimates are reasonable and form the basis for the Hinistry's future high­ lVa~.r maintenance budgeting.

Traffic Growth and Characteristics

38. The total number of motor vehicles registered in Costa Rica has more than tripled during the past ten years (Table 4). The rate of grovrth has les­ sened however in the past few years and is now betvreen about 4% and 5% annually of a total vehicle fleet around 25,000 (1960 estimate). There are, in addition, about 7,000 motorcycles and bicycles in the country. The motor vehicle density per capita is about the same as in Hexico.

* At the exchange rate p~evailing at the time of esti~ate. - 7 ­

39. The bulk of the vehicle fleet is made up of passenger cars and light trucks of the "pick-upll type v-:rith a load capacity of about 3/4 ton. Heavy trucks over 2-ton capacity comprise about 20% of the total number of vehicles, the average type of truck being one of around 4-ton capacity. Both light and heavy trucks operCite under conditions of high capacity usage, t..rith payload fac­ tors normally between 0~65 and 0.90.

Highway Development Plans

40. As a consequence of the poor condition and general inadequacy of the existing highNay netvlOrk, the Hinistry of Public 1iJorks has prepared a seven-year Hight'ray Plan providing for:

(i) the improvement of the most important existing roads;

(ii) the purchase of constnlction and maintenance equipment and the development of the present highNay maintenance organization;

(iii) the constructi;);.1 of nevI main roads; and

(iv) the construction of a nett..rork of new local or feeder roads.

41. Estimates of total cost for the seven-year Plan made in 1959 amounted to ¢ 300 million (US~~54 millionYl due to later modifications and revisions of cost estimc:tes for narts of the wO:i.~ks and as a consequence of the recent deval­ uation of the colon" the total cost will be substantially more than this amount.

42. The highest priority t,.lOrks v-ut...'1in the seven-year Plan were recently consolidated by the Ministry into a "First stagell development plan covering a four-year periog approximately and estimated to cost about ¢ 170 million (US~~30 million)"; (Table 5). This program, with its related financing arrange­ ments, received Congressional approval in February 1961 and is incorporated in the Plan Vial 1a1..r, Decree No. 2719.

43, The relevant law authorizes the Executive to contract foreign loans or credits for the purpose of financing the highway plan to an amount of US~~15 mil­ lion equivalent, or about half t...'1e total cost of the plan. The law also spec­ ifies certain sources of local currency revenue, funds from 1'lhich are to be ap­ plied towards t...~e cost of the plan and to the servicing of any foreign loans contracted. These sources are expected to yield about ¢ 25 - 26 million (US::;3.9 million) annually in local currency (Table 6), but the funds will only become available after the first foreign loan has been ratified by Congress.

* At the exchange rate prevailing at the time of estimate. - 8 ­

IV • THE PROJECT General_Description 44. The proposed project covers the following items: (i) Those highway improvement and construction works scheduled to be carried out - partly by contract and partly by force account - in the first three yea:::'s of the consolidated four-year development plan (paragraph 42), at an estimated total cost of about US$13.2 million equiv8~ent; (ii) The purchase of mechanical equipment, spare parts and materials for the construction and maintenance division, estimated at about US$3 million equivalent in foreign exchange; and (iii) Th8 foreign exchange cost of surveying instruments, engi­ neering studies, and consluting services, estimated at about US$O,S million equivalent.

45. About 95% of the p~oject investment in highway works comprises the improvement of existing nation~~ and regional roads - 54 in number totalling 640 km~ The remaining part of the project works involves the construction of 3 new roads of high priority, totaling 31 km (Uaps I and 2). 460 The nature of the highway improvement work varies somew"hat in differ­ ent localities and terrain but consists mainly in improving existing geometric alignment, widening and strengthening existing road foundations and shoulders, widening or re-building existing bridges, paving, and improving drainage.

470 The highway works in the fourth and subsequent years which have been omitted from the presently proposed project involve mostly new highway con­ struction or lower priority improvement worksQ Further engineering and econ­ omic studies are required before the new highways could be considered for possible future Bank or Association participation. It is proposed that such studies be included in the engilleering services to be financed under the present projcet. Studies, Design and Documentation

48. As a preliminary to design and cost estimating, th~rough studies of soil and existing pavement conditions have been made by the San Jose University on behalf of the Public Works Directorate. Comprehensive traffic studies have been made by the Planning Division of the Directorate over the past few years, covering such aspects as traffic composition, growth, origin and destination, weights, etc. 49. For design purposes, roads have been classified into one of six types according to the traffic volumes expected after completion (Table 7). The standards proposed for new construction works are entirely satisfactory; those for improvement works are generally satisfactoryo The physical limitations - 9 ­

associated with improvements naturally dictate somewhat lower standards; in particulaT, the pavement and shoulder widths for improved roads of Types G and H are rather limiting and sholud be regarded as minimum standards.

50. Designs have been prepared by ~ti.nistry personnel lnth some guidance from U.S. Bureau of Public Roads' engineers. The drawings, specifications and contract documents appear generally satisfactory, and will be subject to a further final review by the Bank prior to the execution of the project works.

Estima.tes of Construction Cost 51. A list of the 57 project roads to be improved or constructed by con­ tract and force account within the three-year scheduled construction period is given in Table 8, with proposed design types and estimated construction costs. The unit prices used by the Ministry in preparing the cost estimates are based upon items of work executed recently by contract, as no accurate figures are available for past works executed by force accounto Quantities have been re­ vised recently and are realistic.

520 The costs for L~provement works vary according to the type of terrain, the nature of the existing road, and the expected traffic volume; the average cost per km is about ¢ 125,000 (US$20,000). Because of the difficulty in pre­ determining accurately the extent of some of the reconstruction work necessary, a contingency allowance of 15% has been included by the iVIinistry in the cost estimates; this allowance is reasonable but should be regarded as the minimum to provide for uncertainties in the works and for any possible price increases, including the effects on the local costs resulting from the devaluation of the colon.

53. As of June 1961 work had started on only three of the 57 roads. The cost estimates in Table 8 relate to total expenditures excepting for these three roads, which have been reckoned from January 1, 1961 when about 1% of the total project work had been executed.

Execution of Project 11Torks

54. About two-thirds of the project works will be undertaken by contract and one-third by the Ministry's own construction forceso The main factors vJhich have influenced the apportioning of the works betl.;een contract and force account are: the degree of variation or uncertainty associated 1ilith some im­ provement works, making them more amenable to execution by force account; the decreasing capacity of the Ministry's construction force using mostly rehabil­ itated old equipment; the capacity of the small but increasing domestic con­ tracting force; and the participation likely by foreign contractorso 55. The follolving division of work has been planned for the three years .. of the project, and indicates clearly the },Iinistry's policy to undertake grad­ ually a greater volume of future highway work by contract as available contract­ ing forces develop - 10 -

Execution of Project Works Yearly (Cost in ¢ Million) 1st Year 2nd Year 3rd Year 3-Year Total KIn Cost %Cost~~ KIn Cost %Cost-)~ KIn Cost %COst~k KIn Cost ,%Cost*

Contract 77 8~9 10 137 18 .. 9 22 267 32 0 0 36 481 68 Force Account ---'------54 11.2 13 88 10~7 48 6.. 0-­ .J_ 190 32 Total =13=1====20:.i~=1===2=3 315 38 .. 0 671 100 * % of 3-year total 56. The first year works will be started toward the end of 1961 or the beginning of 1962. 57. Although the sizes of individual road sections proposed for contract are relatively small (maximum amount ¢ 701 million or about US$l.l million) the scope of the whole development program - if adequately publicized - should be sufficient to interest foreign firms in addition to those presently working in Costa Rica. 58. The execution of the project works will be supervised by IJ.linistry personnel, assisted by external tecfu~cal advisors; the extant of advice deemed necessary is discussed further in paragraphs 69-71. Although the works have been planned for a three-year execution period~ it is probable that this will extend to around three and a half years with customary delays and extensions of contract timeo Foreign and LOCal Components of Construction Cost

59. According to the Governme~tls estimates using the old parity ratio of 5.615 colones to 1 U.s. dollar, the foreign currency component of cost for the project highway work would be about 67% if the work is executed by foreign con­ tractors and about 48% if by domestic contractors~ These percentages cover equipment depreciation, servicing and repair parts, tires and tubes, fuel and lubricants, imported construction materials, and also allow for the administra­ tion costs and profit of foreign contractors (Table 9)£ The figures are reason~ able and compare with the foreign currency percentages for executing similar Bank-financed highway work in other Latin American countries (e.g. 64% for foreign contractors and 47% average for domestic contractors in Ecuador, Loan 176-EC) • 60. For project works to be undertaken by contract, the Ministry haa as­ sumed that about half will be executed by foreign and about half by don~stic contractors, resulting in an average foreign currency requirement of 5705% of the contract construction costs. Since, as a result of the recent devaluation, the foreign exchange cost in terms of colones has to be increased the percentage may be adjusted to 62%0 - 11 ­

610 For works my force account, the foreign currency cost component does not include an allowance for the depreciation of equipment since loan funds ~~ll be used for capital purchases of any new equipment required and also for the initial rehabilitation of old construction equipment. The remaining items which then comprise the foreign component of force account work are (Table 9): servicing and repair parts; tires and tubes; fuel and lubricants; and imported construction materials; in all, a total of 34.8% of the cost of force account ''lork. Again reflecting the effects of the de­ valuation, the percentage may be adjusted upward to 39%. 62. Applying the foreign currency percentages discussed in the foregoing paragraphs to the total yearly investments in the program (see Paragraph 55), the following local and foreign currency amounts are required for execution of the project works: Local and Foreign Currency Requj.rements for Project Works (-;;,) ~------cw rnillion and~'usrmil1IOn)- ..---­

First Year Secor.d Year Third Year Totals --­ For- For- l,"or- For­ Total Local eign Total Local eign Total ~~~al eign Total Local eign -_. --­ Contract 8.9 3.4 0~8 18.9 7.2 1.8 32QO 12.1 3 .. 0 59.8 22.7 5.6 Force Account 11,2 6.8 0.6 1007 6.S 0.6 630 ..:B.. Q~4 27.9 ~7~O 1.6 Total ¢20.1 %10.2 $1~4 ¢29.6 ¢1307 $2.4 ¢38.0 ¢15,S $3.4 %87.7 ¢39.7 $7.2

(*) Foreign component 62% for contract works and 39% for force account works.

63. The requirements of foreign currency would be met out of B&nk and Association loan/credit funds, and of local currency mainly from the sources of funds designated by the Plan Vial Law, and partly from the allocation for general admir.istrative expenses in tha }linistry's annual budget (see para­ graphs 71-73). Construction, Maintenance and Survey Equipment

64. For the execution of improvemont and cOJ"~truction work by force ac­ count, the Ninis:'ry int-enjs to rehabilitate some of its present old equipment and to supplement this with the purchase of a few essontial items of new equip­ ment. The rehabilitation will require repair parts, tires, et~o, to a foreign currency value of ¢2"S million equivalent while the new equipment will cost about %2.9 million equivalant~ Field workshops for the servicing of the con­ struction equipment on site will require the expenditure of an additional ¢0.8 million in foreign currency, making a total of about ¢6&2 million (say US$0.9 million equivalent) for the force account works division.

65. The old construction equipment is e~pected to have expended its use­ ful life towards the end of the three or four-year period of the development plan; the items of new equipment are such that for the most part they can be absorbed into the highway maintenance organization:> - 12 ­

66.. New highway maintenance equipment to the value of t9.l million equivalent vull be purchased for distribution to Zone maintenance divisions. A furtl'1er foreign currency investment of t3.8 million equivalent is proposed in the construction or extension of Zone buildings, the refitting of workshops, and the build-up of an adequate initial stock (about one year's supply) of spare parts and maintenance materials, making a total investment in highway mainte­ nance of about ¢12.9 million (say US$200 million equivalent)8 67. Additicnal laboratory equipment and surveying instruments are re­ quired by the ~~stry, also aerial photographs, and special photogrammatic surveys of road locations in difficult terrain, the latter partly in connection with the studies of new roads programed for the fourth and later years of the Highway Plan. Total foreign costs of this equipment and special studies amount to about tl.l million (say US$Oc2 million equivalent).

68~ Details of the requirements and estimated costs of the equipment re­ quired for construction, maintenance} workshops, laboratory and survey, etc., are surr~arized in Table 10 0 Technical Advisory Assistance

69. Technical advisers~ additional to those at present assisting the }unistry, are considered necessary for the duration of the proposed Bank-Assoc­ iation financed project. The further a~visory assistance should be directed principally towards developing the highway maintenance organization, cost accounting system, and construction division for force account and contract works; it should also include studies of future highway development works. 70. As the United states Bureau of Public Roads has been assisting the liinistry of Public -liorks on certain phases of its highway program for some time, ti.12 l'1inist::-y requested t~le D~Ireau to establish a special staff in Costa Rica to advise on all aspects of the proj90t" The Bureau has ind:Lcated its willingness to do this and an agreement between the two parties is now being drafted. This agreement will be subject to the approval of the Bank and the Association.

71. The cost of retaining four or five experts is estimated at t2.0 million (US$0.3 million) which is included in the request for financing.

Financing; Composition of Possible Bank and Association Loan/Er~d~ 72. Breakdowns of annual project expenditures and sources of local cur­ rency revenue are given in Table 11. Total local currency requirements would be adequately covered by national buc~ct appropriations and by the revenues specifically allocated to the over··all First Stage Highway Development Plan by the Legislature~

73. In view of the fact that the execution and financing of highway works other than the Project are envisaged within the Development Plan, an assurance has been obtained from the Government that the Project would receive first priority in the application of local currency funds from the various sources specified in Decree Law No o 2719/61 0 - 13 ­

74. All foreign currency requirements for the project would be met from Bank and Association loan/credit funds; the components are as follows:

Composition of Loan/qr~di~ Funds

Category Total Cost Forei~ Component 1TIDillion) ("!!t"J6-rru~·l...eilonr (U£$ 1Ilillion) A. Road Works §/

1. Contract 37.1 5.6 2. Force Account 10.. 9 1.6 B. Mechanical Equipment, Spares, Shop and Warehouse Materials

1. Force Account 6.2 0.9 2. Maintenance 1209 2 .. 0

C. Survey Equipment and Special Studi~ 1.1 0.2 D. Q9nsulting Engineering Services 2.0

E.. Additional Contingency Pro'"lision !:I 2~5 Total Amount of Loan !-72., 7

~ Including 15% construction contingency allowance. £/ This item is intended to rreet any deficiencies in the cost estimates for equipment and consulti~g services, and also in the construction cost estimates over and above the contingency allowance already included (see paragraph 52). 75. The probable annual disbursement flow from such loan/credit is in­ dicated below; the date of commencement of the project program is linked to the ratification by Congress of the loan and credit. Probable Loan/Credit Disbursement Flow (US$ Million Equivalent) Category 1st Year --2nd Year 3rd Year Total- A. Road \~Jorks 1. Contract 0.8 108 3.0 5.6 2. Force Account 0.6 006 0.4 1,,6 B. Mechanical Equipment, etc. 1. Force Account 0.9 0.9 2. Maintenance 1.5 OS 2.0 C" Survey Equipment, etc .. 0.1 001 0.2 D. Consultants 0.1 0,,1 0.,1 0.3 E. Contingencies 0.2 0,1 Oc,l 0,,4 Total 4.2 }..!.? J:& -11,,0 - 14 ....

v. EX:ONOHIC JUSTIFICATIONiI-

Areas Affected by Road Improvements 76. Over 95% of the 671 kID of road v10rks included in the project in­ volves the improvement of existing roads of inadequate standard, and will affect about one-third of the total present length Df national and regional rDads o The majDrity of the prDject roads service the densely pDpulated central plateau which cDntains the bulk Df the countryfs manufacturing and agricultural wealth. Many Df the roads to' be imprDved link the municipal center Df San JDse with outlying suburban areas, or connect the capital vri th nearby centers Df populatiDn such as Heredia and Cartago; these roads carry heavy volumes of traffic. The San Jose - Alajuelita road improvement "Jill serve a future urban develDpment project to provide housing for about 40,000 persDns .. 77 • An important aspect of some of the road imprDvement lvorks, such as that frDm Tilaran to Arenal, is the future social and political integration of connnuni ties v1hich are nON oi'ten inaccessible during the rainy season l'Jhen the existing earth roads are impassable. Direct Economic Returns from Road Improvements 78. Present vehicle operating costs over the existing roads are high because of the extremely 10l

8J.. The highest priority roads are generally those carrying the heaviest volumes of traffic, ~mcr the improvement of '~10st of these roads ~s included in the first or second year of the program. The roads showing a lower return on investment are usually those with low traffic volumes in rural areas where economic benefits additional to road user savings would be forthcoming from the effect on agricultural production. The inclusion of these roads in the project can be justified however from a consideration of road user savings alone. 82. The large number of separate road sections included in the pro­ posed project precludes an individual description of the merits of im­ proving each particular section. Classification into three broad cate­ gories according to traffic volumes is feasible however, and provides some basis for discussion of the resultant benefits.

83. About 70 kIn of roads included in the project ,-mrks will carry volumes of traffic estimated at between 1,000 and 4,000 vehicles per day in 1963. Most of these roads are of short length and are located around San Jose, either in the suburban district or linking San Jose to nearby large community centers. Tot~l investment is about 20% of the project construction costs, the average investment per kIn being around ¢ 230,000 (us~~40,OOO/km). This portion of the investment yields the highest an­ nual rate of return from road user savings alone, amounting to bet'lrJeen about 20% and 40% for most of the roads in t heir first year of operation after completion of the improvements. The Ministry proposes improving almost all these roads in the first and second years of the progr~~.

84. A second cutegory of roads totalling about 280 km in length is made up of those estimated to carry between 200 and 1,000 vehicles per day in 1963. Total invest:neat amounts to about 35% of the project construction costs, the average expenditure per kID of road being somewhat less than ¢lOO,OOO per km (US$18,000/km). All roads in this category, with the exception of one (San Jose-Alajuelita) servicing a future housing project, will yield a return on investment in the first year of operation of over 15% from road user saVings. Most of these roads will be improved in the second and third years of the program.

85. The third category of roads totalling about 290 km are those estimated to carry less than 200 vehicles per day in 1963. Investment in these roads amounts to about 40% of the project construction costs, and averages about ¢llO,OOO per km (~~20,OOO/km). The exceptionally poor present condition of these roads will result in relatively higher road user savings after improvement, and first year rates of return of not less than 10% on investment are expected from all roads in this category. Most of these roads are scheduled for improvement in the second and third years of the program. - 16 ­

86~ An indication of the high level of direct economic benefits deriving annually from the project investment is afforded by cOIDIaring the total road user and other s8.vings from all roads included in the first, second and third years of the program with the total investments in those years. The following table shows the annual rate of return using 1963 traffic volumes as a basis for estimating road user savings, and the period in which the investment would be amortized assuming the annual level of savings to remain constant:

ECONOHIC RETURNS ON nrvEsTHENT IN HIGHHAY n;1PROVEtENTS , @lUillion) No. of Years Rnad User Annual Total to Repay Total Savings Road Naint. Savings %Return Investment Y~.s!I: ~st"J1'in:t* 12§~_ Se.vings -19.2L 1963 @ 6% 1st 16.8 5.7 0.4 6.1 36 Jt 2nd 31.. 6 6 .. 8 0.9 7.7 24 5 3rd k2.l ~ B 7.0 12 ~ Total 90.5 18.3 2.5 20.8 23 5

*Includes total construction cost, interest during construction, administration, engineering and supel'visory costs.

87. Road user savings can be expected to iCrJrease annually after

1963 at about 3% or 1.$ in keeping with general traffic growth j ter.ding to improve somewhat the economic picture presented in the a1:oye table. j\Totw-lthstanding any increase ir: i'utu:::'e benefits, the project invest:nent in highv;ay improv'ement works is adequateJ.y just.ified. and will be :C'EJ)aid well within the rCillaining econo~ic life of any of the improved facilities. !dditional BenefitB from Road Improvements

88. The natior~l economy will benefit from the project works for reasons additional to those discussed in the previous section, but not all of which can be expressed easily in quantitative for:n. !n:proved'road con­ ditions should reflect in reduced transnort costs for p:?ssengers and freight; incentive Hill :=[180 be aiven to d(welop nw] arricultur", 1 lands in some areas or to intensify present production, resulting in iocrG&8cd land and property values with consequent increases in local tax revenues, etc~ 89. Further benefits will result from the probable decrease in accident and fatality rates on the present r~rrow and poorly-aligned roads. Personal benefits, important from their social and psychological nature, will accrue from the improved convenience and comfort to drivers and passengers by reason of the greater freedom in vehicle operation compared with present restricted conditions. ~ 17 ­

~ponornic Benefits_from New Road Construction

90. Three sections of new road construction totalling 31 km- are included in the project works but account for about only 5% of the pro­ posed investment. Two of the sections are extremely short; the first, "Radial Zapotell in the ee.stern suburbs of San Jose (Map 2) is only 1.3 km long, but is intended to relieve the severe traffic congestion on exist­ ing roads leading into the city from the East. Origin and destination studies show that traffic volumes of around 3,000 vpd are likely to use this road in 1963. The second road is 2.5 km long and forms part of a proposed ring-road around Sun Jose (Nap 2). Traffic origin and destination studies indicate that road user savings in time and distance for traffic likely to divert to this section of the ring-road would yield a return on investment of about 15% in 1963. The construction of these two roads and their inclusion in the Bank-financed project is considered justified.

91. The third section of new road construction is 27 km in length running from Tres Equis to Siquirres in extension of the existing road from Turrialba (Hap 1). Ea~'i;!1works and drainage, accounting for about 25% of the total estimated c0St, are now under construction by contract and should be completed during the latter half of 1961.

92. The area around Siquir~es is fairly well developed agriculturally, but still has a considerable potential for further development. The grovrth rate of agricultural production in the area i~ higher than the national e,verage, the principal produce being cacao, coconuts, cattle and cattle n,..(v'hJ~tfl_ 'W"i th SO~Tle grain a.nd soft fruits.

930 Siquirres and its hinterlm'ld is nOliT served only by the Northern ~aihJay l:l.ne betusan San Jose and Liman on the Caribbean coast; there ~s, hO't-Jever, a long record of line blockages over the past fifty years due to land slides, river flOOding, and bridge washouts. i:'Iost of these blockages occur between Siquirres and Turrialba at intervals of betvleen one and two years on an average, vdth delays of up to 37 days before resumption of normal rail traffic. 94. The cos!' of slide removal and of repairing damage to rail track and bridges alone over the past ten years has been more than the estimated cost (¢4.3 million) of the new road from Tres Equis to Siqui­ rres, apart from the additional losses due to spoilage of cattle products and soft fruit awaiting rail shipment, and to the interruption generally to the country's economy. 95. Advice has been sought from eminent soils experts to help solve the landslide problem, but no practicable solution has yet been found. The new highway location would be farther to the East, on higher and more stable ground than the railway) and would not be subject to serious problems of blockage~ Over 100 vehicles per day are axpected to use the road immediately after opening. Its construction and inclusion in the Ban~ and Administration-financed project is considered justified. - 18 ­

Highway Maintenance Investment

96 Q The maintenance of the road system has been inadequate in the past principally because of the insufficiency and poor condition of road mainten­ ance equipment and servicing facilities. The proposed investment of US~~ million in new equipment, maintenance materials, and \-rorkshop improvements will not only reduce the excessive cost of repairing old equipment, but should result in better road conditions throughout the country, thereby reducing vehicle operating costs on roads not included in the project works.

VI. CONCLUSIONS AND RECOIt,!Er-IDATIONS 97. The large increase in traffic volume in Costa Rica over the past ten years has overloaded the capacity of a major part of the existing high­ vIay net"tfork, and has caused damage to road surfaCing and foundations. The situation has been aggravated by inadequate road maintenance in the past due mainly to the insufficiency and poor condition of the Minist~J IS equipment and repair facilities. 98.. Ex:tensi ve improvement Horks and some ne1:1 highway construction are urgently required to provide adequate facilities for present and expected future traffic. The proposed project for imprOving 640 km of existing nation­ al and regional roads, constructing 31 km of new roads, and improving the maintenance organization constitutes the first and most important stage of a seven-year highway development program to improve and extend the countryfs high"(.Jay network. 99. The project is technically sound and cost estimates are reasonably realistic; it is adequately justified economically by the future savings in vehicle operating costs which will result from the improved road transport conditions.

100. The organization of the responsible executive agency (the ~flnistry of Public Works) is sound; staff are generally competent although perhaps somewhat inexperienced in certain aspects of major highway "lOrks. External advisory assistance is considered necessary principally in the fields of cost accounting, hi~hway maintenance and construction supervision. Suitable ar­ rangements for such assistance are being made by the Government i4ith the U.S. Bureau of Public Roads. 101. Since the project forms ra rt of a "rider highway development plan to be financed from aSSigned sources of local currency revenue and special budget appropriations, assurances have been obtained from the Government that the project tforks ,nIl receive priority in the application of funds from these sources.

102. The proposed project provides a suitable basis for a Bank loan of us~5.5 million equivalent and an Association credit of uS$5.5 million equiva­ lent to the Government of Costa Rica. A suitable term for the loan would be 15 years including a 3}-year period of gracec TABLE (1)

COSTA RICA: HIGWdAY PROJECT

ROAD LENGTHS AND CLASSIFICATION, DEC. 1960 Ckm)

Type of SurfClce National Regional, Local Total

Concrete 63 26 0 89

Asphalt 553 328 75 ~ 956

Gr.qvel 447 471 1,282 2,200 ~I

Earth 2?6 21 10,508 ~ 10,755

Total 846 ll,865 14,000 9..1

~ Base'~ on latest available estimates.

~I Roads "Thich are traversable by motor vehicles of the "Jeep" type in the dry season. "--­

9..1 The grand total does not include 4,700 km of footpaths and mule-tracks.

Source: Government of Costa Rica, Ninistry of Public Works. TABLE (2)

COSTA RICA: HIGHWAY PROJECT

AVERAGE ANNUAL EXPENDITURE ON ROADS AND BRIDGES BY DIFFERENT AUTHORITIES J 1956 - 59 &/

Colones ( millions ) Percentage of Total 1. Ministry of Public Works a ) National Budget 18.3 EI b) Other Sources (Municipalities, private, etc.) 0.6 18.9 85

2. Juntas Cantonales de Caminos (Local Cantonal. Highway Councils) 2.1 9

3. Consejo Nacional de Produccion (National Board of Production) oS 2

4. Junta de Proteccion a 1a Agricul tura de 1a Cana (a private organization to improve sugar cane production) -1.0

Total Average Annual Expend! ture 22.5 100%

!I excluding Inter-American Highwq works executed on basis of 2/3: 1/3 contribution by U.S. and Costa Rican Governments; average Costa Rican investment for period, ~ 13.2 million.

~ excluding Ministry's administrative expeneee. COSTA RICA: HIGHWAY PROJECT

HINISTRY OF PUBLIC ','CRKS EXP3NDITUR.3, 1955 - 60

(Colones million)

TOVL EXPS'NTIITLqES IJJ ROAD AKD mIDGS T,J02.K3 m~Y Q/ Year Ordinaq Extraordinary Total Studies Roads Bridges Total Year

1955 27.1 17.6 4u.7 12.1 2.0 14.1 1955 1956 25.9 20.2 46.1 0.1 19.6 2.8 22.5 1956 1957 2A.5 19.9 u8.u 0.1 12.9 2.3 15.3 1957 1958 24.9 13.1 38.0 0.2 14.2 :;>.9 17.3 1955 1959 33.5 8.6 42.1 0.3 .0 2.8 18.1 1959

1960 27.2 19.3 46.5 o.u 15.2 3~5 19.1 1960 1961 27.7 - 9../

!I including administration costs for whole l1inistry £/ including maintenance expenditure ~ r:..I funds not ye~ appropriated t<:I ~-\..oJ Source: l'Tinistr:v of Public l'lorks TABLE (4)

COSTA RICA: HIGHWAY PROJECT

Annual Con~mmption Vehicle y (),1 I' TotAl Vehicles Increment of G,"l.sol tTH~ Movement -­ --_._--'-­ --fTf--­ I" .) (million veh.km.)

19S0 7,007 8.1 162 IS 1951 8,100 9.3 166 20 195:? 9,770 11.2 224 20 1953 11,733 13.6 272 20 1954 114,130 15.h 308 IH 1955 16,647 14.2 284 12 1956 18,626 16.2 324 14 1957 21,254 19.1+ 338 5 1958 22,228 20.2 404 l 6-2 Actual 1959 23,642 21.2 424 6 Estimated 1960 25,000 22.4 448 5 Projected 1961· 26,286 23.5 470 4! 1962 27,411 23.8 476 4 1963 28;472 25.4 508 3! 1964 29,421 26.5 530

Source: Ministry of Public Works TABLE (5)

COSTA RI~AI HIGHWAY, PROJECT

FIRST STAGE (FOUR-YEAR) H I G If lIT A Y DEVELOPMENT PLAN

Description of Works Estimated Cost (rt million)

1. Highway Improvement 74.825 74.825

2. New Highway Construction, in following regions: I San Carlos 3.584 II Atlantico 15.775 III Nicoya 1.--780 IV Pacifico 9.324

V . San Jose ~etropolitan Area 8.083 VI Other RoadS 3.793 42.339

3. Highway Maintenance 4 years @ rt 5 million annually 20.000 20.000

4. LOcal Roads, in followine regions:

I Region Central 7.960 II Valle del General 3.350 III Pacifico 2.681 IV Nicoya 7.100 V Guanacaste 5.250 VI San Carlos 4.295 VII Atlantico 1.800 32.436

5. Tortuguero La~oori Canalization 4.000 4.000 TOTAL 173.600 ••••••• Source: Le,y del Plan Vial, Decreto No. 2719, February 10, 1961. TABLE (6)

COSTA RICA: HIGHWAY PROJECT

SOURCES OF LOCAL CURRENCY FOR FIRST STAGE (FOUR-YEAR) HIGHWAY DEVELOPMENT PLAN !I (ij million)

A. BUOO'ST SOURCP'B 1961 1962 1963 1964, 1965 1. Minimum Assigned Bud!,!et Allocation for Roads and Bridpes 5.0 £! 18.0 18.0 18.0 18.0 2. Ordinary Budget Allocation for Planning and Laboratory .~/ 0.8 0.8 0.8 0.8 0.8 Subtotal 5.8 18.8 18.8 18.8 18.8

B. SPECIFIED TAXES AND REVENUES ~/

3. Vehicle Tax 2.8 2.8 2.8 2.8 4. Sugar Tax 0.8 0.8 0.8 0.8 0.8 5. Liquor Revenue 1.0 1.0 1.0 1.0 6. Revenues from the National Insurance InStitute 1.8 1.8 1.8 1.8 1.B 7. Banana Revenue 0.8 0.8 0.8 0.8 8. Property Betterment Taxes (Plusvalia) y Subtotal 2.6 7.2 7.2 7.2 7.2

TOTAL 8.4 26.0 26.0 26.0 26.0 y Law No. 2719 specifically assign's Items 1 and 3-B to the Plan.

£!Maximum av~lable for works in 1961 £I For expenditures not included in (1) ry Without taking into account the probable increa.se during the period of theH1ghway Plan. y Applicable to all land and properties affE!cted by the Highway Plan; revenues have not yet been assessed.

Source: l!inistry of Public Works, Government of Costa Rica TABLE (7)

COSTA RICA HIGffjAY PROJECT

DESIGJ.'J s'rAlmARDS

------Road T,ype------­

D E F G H I Equivalent average More than 8000­ 3000­ 1000­ 400­ Less than- daily traffic -a/ 8000 '3000 1000 400 100 100 Design speed (kph)£! (i) Improvements 96-64 96-64 88-56 80-48 72-40 64-32 ( ii) New construction 112-64 112-64 96-64 96-64 88-56 72-40 Minimum radius(m) (i) Improvements 290-125 290-125 250-95 195-70 160-50 125....30 (ii) New construction 580-160 580-160 350-160 290-125 250-95 160-50

Gradient (~o) £! (i) Improvements 8-5 8-5 9-6 10-7 12-8 15-8 (ii) New construction 6-4 6-4 7-5 7-5 9-5 10-5 Stopping sight distance (m) £! (i) Improvements 145-84 145-84 126-73 107-60 96-50 84-46 (ii) New construction 183-84 183-84 145-84 145-84 126-73 96-50 Paving width (m) (i) Improvements 13.4 7.3 6.1 5.5 5.0 3.7 (ii) Nel'1 construction 13.4 7.3 6.7 6.1 6.1 5.5 Surfacing c/ High type High type lied. type Led. type Low type L01;7 type Shoulder width (m) E/ or gravel

(i) Improvements 3.0-1.8 3.0-1.8 1.5 1.0 1 0 0 1 .. 0 (ii) New construction 3.. 0-1.8 3.0-1.. 8 3.0-1.8 2.4-1.5 1.8-1.2 1.2 Right-of-way width(m) 24-30 20 20 20 14 14 Bridge width (m) 14 8.3 8.3 7.3 7.3 6.1-3.7 Bridge loading (New construction) H.20-S.16 H.20-S .. 16 H.20-S.16 H.15 H.15 H.15

Y Buses and trucks over 2 ton capacity have increased weightings as follo\-1s according to whether terrain is flat, rolling, or mountainous: x2, x3, x4. 'E./ Varies according to type of terrain - from flat (first figure) to mountainous (last figure). :Y According to "Asphalt Institute" Publications - Pavement Designs - 1961. TABLE 8

OOSTA RICA: HIOHWAY PROJECT ROAD WORKS IN FIRST THREE IlWIS OF HIGHWAY PIAN

Prlorlty Route Road Seotion Length Estilnated Oost of Works Proposed Work by Rating No. (Ian) Improvement »_ Roads Road Type OorA::J (¢ 000) !I (Table 1)

(1) (2) 0) (4) ( 5) (6) (7) (8)

First Year 1 5 San Jose-Santo Domingo-Pirro 9.9 2,000 D, F A 2 130 Alajuela-San Isidro 8.4 474 F, H A 3 6 San Jose-Guadalupe-Ranoho Redondo 16.4 1,889 D, 1:, G, H A 4 104 Sabana-Pa1T&S 4.5 401 F 0 5 12.3 San Joaquin-Santa Barbara 5.0 458 F A 6 211 Y Grlega-Ssn Antonio 3.8 522 F A 7 210 Curridabat-Ssn Antonio 2 • .3 185 H 0 8 4 Dessmparados-Aoosta 22.8 2,.392 E, F, H 0 9 21.3 San Jose-Paso Anoho 1.9 564 E A 10 2 Curridabat-Tres Rios 5.8 3,741 E A 11 215 Zapote-Curridabat 2.1 .318 ~ F A 12 2.35 Tres Equis-Siquirres 27 •.3 4,198 Y G 0 1.3 Radial Zapote 1..3 1,226 E A 14 21 Liberla-Guardia 18.7 1,698 G c Totals for First Year 1.30.2 14,642 ~ Seoond Year

15 20.3 FUentes-Lourdes 2.0 22.3 F, 0 A 16 214 San Sebastian-San Juan de Dios .3.7 .36.3 F A 17 7 San Jose-Villa Oolon 18.4 2,182 E, F, G A 18 15 Laguna-Ciudad Quesada 24.0 1,4.35 G 0 19 140 La Marina-Pi tal 17.1 1,46.3 H C 20 8 Oart8go-Volcan-Irazu 29.1 1,127 F. G, H A 21 145 Intersmericana-Las Juntas 6.4 538 H C 22 11 San Joseoito-Atenas 15.9 1,764 G C 23 100 Uruca-Inourables .3 •.3 471 F A 24 10 Cartago-Cer1Tantee 19.0 2,404 F, G 0 25 216 Ipis-San Isidro-Cascajal 1.3.9 1,261 F, G, H A 26 110 San Jose-llajuel1ta 2.5 1,896 E, F 0 27 125 Alajuela-Carrlzal 11.2 1,047 H 0 26 4 San Jose-Dessmparados 2.4 1,197 D, E A 29 2 San Jose-Curridabat 4.6 2,561 D A .30 20.3 Lourdes-San Ramon de Tree Rios 10.9 1,266 G A 31 C:!.rcunvalaoion (San Pedro-Guada­ lupe-Calle Blancos) 2.5 1,250 E C .32 21 Guardi a-Santa Cruz .36 •.3 7,110 G C Totals for Second Year 225.4 26,.354 1,250 Third Year

.3.3 201-202 Betan1a-Cluadalupe 1.7 1.34 F A 34 144 Interamericana-Miramar 7.2 2.3.3 H C .35 1.31 La Argentina-Grecia 7.9 927 H C .36 15 Narano-Laguna 21.0 1,501 G C 37 141 C:!.udad Quesada-Florencia 9.7 76.3 H G .36 141 Florencia-Muelle de San Carlos 14.9 2,0.39 H 0 39 10 OBr1Tan tes-TurriaJ.ba 22.0 2,470 a 0 40 2.32 La Suiza-Moravia 9.4 1,100 H 0 41 140 C:!.udad Quesada-La Marina 11.0 1,206 H 0 42 10 Turrialba-Tres Equis 19.7 .3,552 G 0 4.3 12.3 Sc:Ita Barbara-llajuela 6.1 764 0 0 44 214 San Jose-San Sebastlan 2.0 494 E A 45 102 Tibas-San Isidro 6.2 999 F; G 0 46 212 Desamparados-Patarra 5.6 772 G 0 47 204 Zapota-San Fco. de Dos Rios 1.0 165 F C 46 101 Tibas-Llorente 2.2 .305 F C 49 113 Heredia-El GaJ.l1to 6.0 679 F, a C 50 9 Keredta-Vara Blanca 29.4 4,497 F, 0, R A 51 19 Tilaran-ArenaJ. 15.0 I,: !I I C 52 120 Vara Blanca-Poas 1~.2 H A 53 7 Villa Colon-PuriscaJ. 16.0 1,758 H C 54 11 Atenas-San Mateo 14.9 2,571 H C 55 19 Canaa-Tilaran 22.6 2.16.3 H C 56 21 Santa Cruz-Nicoya .34.6 5,.322 0 C 57 III San Francisco-Belen-El Coco 9.7 ~ 0 C Totals for Third Year 315.4 )8,028

GRAlID TO'l'AL 671.0 61.024 6,676 :::aa. _:::r== Including a 15% contingency aJ.lowance C • Cont.ractl ·A • Administration or Force Account ~y A.fter Januar;r 1, 1961, when works about 50:( complete

ill Arter Janulll"1 I, 1961, vile verb about. 12% oc.pl.eMi !I A.fter January 1, 1961, wilen vorb about. 20% co.pl.te TABLE (9)

COSTA RICA: HIGHWAY PROJECT

FOREIGN CURRENCY COl1PONENT OF HIGHWAY CONSTRUCTION COSTS *

Item %Component of %Foreign Component for: Total Cost Foreign, Domestic, Contractors 1. Mechanic al Equipment Depreciation 13.3 Servicing and Repair Parts 8.1 Tires and Tubes 3.8 Fuel and Lubricants 8.3 33.5 33.5 33.5

2. Imported Haterials Cement 2.3 Steel 3.2 . Explosives 1.8 Asphalt 7.3 14.6 14.6 14.6

3. Local Materials 9.3

4. SRlariesz Wages and Social Beneftts 19.6

5. Interest! Insurance and Local Taxes 4.3

6. Administration 5.7 5.7

7. Profit 13.0 13.0

TOTAL --­100.0% 66.8% 48.1%

* On the basis of the foreign exchange rate of 5.615 colones to IUS dollar prevailing at the ti~~ of the estimate.

Source: Mi rd.stry of Public Works TABLE (lO)

COSTA RICA: HIGRWAl PROJECT

FOREIGN CURRENCY INVESTMENT IN CONSTRUCTION, MAINTENANCE AND SURVEY EQUIPMENT . (~ iI11ion equivalent)

1. Force Account Construction Equipment

a) Rehabilitation of old equipment (repair parts, tires, etc.) 2.50 b) New equipment 2.90

c) Field workshops, fittings, and tools .:::.,0,L:'8::.,::0:.....-...;;6;.:..-..20---. (say US$O. 9 million equivalent) 2. Maintenance Equipment

a) New equipment 9.10 b) Initial stock of spare parts for equipment (15%) 1.40 c) Initial stock of imported maintenance materials (asphalt, road signs, etc.) 1.30

d) Zone shops and warehouses

(i) Imported building materials 0.27

(11) New shop equipment 0.83 1.10 12.90 (say US$2.0 million equivalent)

3. Survey Equipment and SpeCial Studies a) Laboratory testing equipment 0.33 b) Surveying instruments 0.08

c) Aerial photographs and special surveys 0,71 ],.12 (say US$0.2 millin equivalent)

SOURCE: Ministry of Public Works

TABLE (11) (Page 2)

B. SOURC~S OF LOCAL CURRENCY (¢ million)

1961 1962 1963 1964 1965 1. Budget Sources a) Assigned I1inimum Allocation for Roads and Bridges !I 5.0 18.0 18.0 18.0 18.0 b) Planning and Laboratory Allocation 0.8 0.8 0.8 0.8 0.8 c) Estimated Portion of General Administrative Allocation applicable to Force Account Works - 0.7 0.7 0.4 0.4 2. Specified Taxes and Revenues !/ 2.6. 7.2 7.2 7.2 7.2 TOTAL 8.4 26.7 26.7 26.4 26.4

!I All +and donated free except for one new road 2.5 km long; costs not yet assessed but relatively small;

£/ The local portion provides for routine and special main highway maintenance, plus an allowance for the maintenance of local roads outside the project; sf Only part is attributable to the project;

.:y These figures slightly overestimate the project requirements tlf local currency (see !:I and :/)J

!I Forming the basis of the present loan application;

V A.ssigned by Law Decree No. 2719/61 to whole HighwaY' DeveJ.gpment Plan (see Table S), betterment revenues, not yet assessed, will supplement item. 2.• COSTA IUCAt HIGHWAY PRWOCT

DIRim ECONOMIC BENEFITS OF HIGlf"AY IMPROVEME!.TS

Annoal 196) Route !load s.cti.. 196) l Busee 1963 1Ioa!! U.... 5arlJIga (f 000) Road Maint$_ ~ Relati"" 110. ~ Traffic Volume and Heavy L18M. Vehicles Heavy Vehicles Savings (¢ 000) Sav1n~8 Benefit !'actors (v.p.d.) Tnlckl! (¢ (00)

(I) (2) OJ (4) (5) (6) (7) (8) (9) (10) (11)

~ S San Jon-Santo ~o-Pi:I'l'o 9.9 1,810 2,TIO 2) 8?9 586 42 1,L57 77 1)0 lla,luala-San 101dro 8.L 4b5 610 )5 13) 169 35 337 76 6 San J .....Quadal_-R&nch. Redond. lU ,nS I,520 )5 5)2 668 69 1,269 n 104 se--P...... LS )60 I,200 33 105 122 19 2L6 68 San J~-Santa _,. 128 21 249 58 123 ! __-San In\an1o 5.0 4)0 770 )5 100 2ll ).8 490 1,200 25 1)6 10) 16 255 52 no OIIr:ridabat-&m Jntani. 2.) 165 220 24 Ll )0 8 79 b8 Ii ~1Ldoa-J.o<>otll 22.8 2,l6S )80 )) 44S 500. 1,037 48 21) SanJOH-P.... Jnch. 1.9 .)0 1,220 )5 59 72 139 26 2 OIIrrldabat.-fHa 111" 5.8 2,985 )5 20S 242 4n 215 %opot;e-OIIrrl_ 2.1 )'~!I 16 62 27 97 i~y 2-'i~ IiI? 27 . 21 Ll.bor:ta~ 1~.7 ~ b6 ...1!! ..2E 'l'otal. tar nrot lear 101.6 1),590 2,766 ?,fl:PQ 6,05) -!!.!!:

20) ~. 2.0 210 1,~6O 26 10) ~) 8 194 92 ).7 56 39 11) 15 167 b9 214 San Sobut.:l..,-I\an """" de 1110. 3LO 60S 6) 7 San .fo.... ftl.la Col... 18.4 2,050 1,570 22 739 L87 77 1,303 )2 22) 27b 101 598 b6 15 ~01Udad Qaeoada 24.0 1,300 3SO W, 140 1.& kina-Pita:!. 17.1 1,)b0 1)0 LO ~ m 60 585 8 Qartago-Volc..,-lruu 29.1 1,060 280 35 135 177 11!\! 4lL bl 1LS InteraenOm.....Lu JUIlt.e..w 6.b 485 130 )0 89 88 22 199 41 62 638 LO 11 San Jo• ..,ito-4tenu 15.9 l,~ )60 26 )00. 275 Uru.c....luurabl•• 1,100 25 110 83 14 207 46 100 3.J )0 III 19.0 2,lH 620 35 252 317 80 649 216 1pi.-SanC&nac<>--. 1014ro-Cucaj&1 13.9 1,lSS 35 128 137 59 321. 27 L8S R 1lll San "....44juel.1ta M 1,715 900 38 56 78 11 14~ ll~a-o...rh&1 11.2 66 lOb 39 211 22 US 9lI.5 120 ItO 21 Ii s... .r....DIo_arlLdoa 2.4 1,125 ),110 3) III 119 10 2LO 2 s... .f.a-OIIrrldabat 4.8 2,hlO ),970 35 226 266 20 5:14 21 ~San _ de _. 1!1.. 20' ___til Cru 10.9 1,210_ bS5 24 117 88 L6 251 21 21 ..:!!!.:2 ..2..!1.!! 180 b6 2.5 .75 ~ 8Sh 13 'l'otale tor _ Year 222.9 26,020 ),1L6 3,481 880 7,513 !!!!:'!!!..!!!! _....-x_ au-202 1.7 125 1,LLO 25 L6 56 7 109 81 W. 7.2 210 1)0 )0 29 )0 25 8L Lo IJl ...-1.& ...... --...... 7.9 w.o 160 110 118 18) 28 329 39 ­ )2 IB2 206 B8 .76 35 15 --...... 21.0 1,)60 )50 141 01_ QI._-nOX'tOUlia 9.7 no 190 40 64 99 41 20L 29 141 n~11. d. San Carl•• :14.9 1,845 120 115 lIlli 276 52 L12 26 III _ta.._&1ba 22.0 2,235 460 38 185 25) 92 >30 2. 2)2 1.& Suioa-llorn1a 9.4 995 160 50 55 129 26 210 21 140 01_ QI._-I.& _ 11.0 1,090 170 ItO 66 1m .6 213 20 III 1'vrlAl.bo-_. Iqa1J 19.7 3,215 160 35 246 )O~ 7) 624 19 123 s..ta __-44juela 6.1 6,5 250 35 lOb 1)2 :>1 257 39 214 _ J-son Sobulhn 2.0 465 9)S 38 47 ~5 9 121 26 1112 'f1bu-San 101dro 8.2 905 660 2) 107 7) 15 215 24 1!1.2 DIo_radoe-Pat.orra 5.6 695 )80 33 57 64 2) lIlli 21 20L Sopota-Ban 1'00. de 00II 1!1.. 1.0 110 LSS )J 12 15 L 31 19 101 'f1bu-1.lon1Dta 2.2 275 5)0 24 2) 17 9 L9 16 W, 311 1~ 17 113 B_a-I!lB_~V__ !l&ll1to 8.0 79S 290 35 56 9 29.4 1>.225 310 L1 216 355 124 605 16 19 ~ 15.0 so 110 80 126 M 274 120 v_ Bl.&Dca-P_ 1lI.1 1,= 2.1 50 55 26 76 70 172 i~ y 7 VUl& Col... -hr!.oo&l 16.0 1,590 180 40 76 122 <;~ 25h 16 lJ. 4-.-San1l&__m_ u.., 2,325 110 29 158 ISO 52 )60 15 19 _Crus-IIl._ 22.8 1,975 70 27 115 99 80 294 15 21 "..6 1)0 228 240 122 590 12 _""..__I!lCoo. 4,815 31 III 2:1 ~ SLo 35 -E. ....!!!! --.!!! 2L2 L2 rotalo t .... _ Year 315.11 )b,61S l,51S 3,)b2 1,226 7,O~3

mu:IO to'lJL 6)9.9 74,225 8,427 9,709 2,513 20,649

~ Attar JUJIlM'T 1, 1961, _ 100..... about ~ ~ ~ Bued upon tot.al o..t of IIOrll:o y uter JUJIlM'T I, 1961, __11:0 about 20% ~.te I! COSTA RICA r------­ MIN1STER MINISTRY OF PUBLIC WORKS GENERAL ORGANIZATION

~------, I I I I I r------l

PAN AMERICAN PUBLIC WORKS ADMINISTRATION INSTITUTE OF GEOGRAPHIC • INTER-AMERICAN INTER-AMERICAN 1--­ GEODETIC DIRECTORATE DIRECTORATE GEOGRAPHY INSTITUTE HIGHWAY DEPARTMENT AND HISTORY SERVICE

See Organization Chart Figure 2

." G'i CENTRAL GARAGE c ::tl I"l JULY 1961 IBRD-870 COSTA RICA PUBLIC WORKS DIRECTORATE HIGHWAY DEPARTMENT

EQUIPMENT CONTROL I1.. _____ ,

1.._------,I

r.L.., I... -4 ....I PROJECTS

PROJECTS

ZONES

OPlmATION WAREHOUSES ." G) L ______~ C ;0 J1l JULY 196i IBRO- 869 f\.l ./ ,---=, '~Vll $<14­ .... ,-.-'-./ -;....~·--...·~:~\~:)~t"';- ""- ..... -. ...., ~

C'> -­ ~"'/L ". -;:0 OUpOIa ."'t.~~- I::P I::P <;<\ ". -z..

p 4 C I F I C

OC£4/l1 PANAMA

COSTA RICA ROAD AND RAIL SYSTEMS

~ NATIONAL Rou'rES ---[Wi'-"-' REGIONA], ROUTES t BANK-FINANCED PRO] ECT:

fhghways he improved

...... Highways t() be ('onstrucied

RA{LWA YS ALTITUDES OVER Mf~T ERS I COSTA RICA CENTRAL ZONE AND METROPOLITAN AREA

HANK-F'INA.NCED pf(.)J

Highways to he 11"l:1prov('o

..•...... • Highw.;:lys to

+N

Nationa 1 Routes Regional Routes

San IgnaCIO de Acosta

CENTRAL ZONE OF COSTA RICA

~ National Routes -....[ill]---- Regional Routes