n574 ~~~~~~~RESTRICTFED wiA 1RN R F .~ A YReport No. PTR-l$'a I- Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized AX1DD A TCATA T, A SECOND HIGHW'AY PROJECT ARGENI'INA Public Disclosure Authorized June 10, 1969 Public Disclosure Authorized Transportation P-rojects Department Currency Equivalent s: Currency Unit = Peso M$N US$:1.00 = M$N 350 US$l million = MIN 350 million M$N 1 million = US$2,857.1 4 Fiscal Year: January 1 to December 31 Units of Weights and Measures: Metric Metric: British/US Equivalents 1 kilometer (hm) = 0.62 miles (mi) l me+er tm - 3.28 feet (fPt 1 square kilometer ~1I 1" / S _,)U LJU. L4.L ZAII.L± % 1 IJLI. I 1 metric ton (m ton) = 0.98 lg. ton 1 metric +on (r.+ton) =1l.l USshort +on Totals may not add up because of rounding Abbreviations - Acronyms ADT - Average Daily Traffic BPR - 'unrdtedeStates Bureau oI Public Roads EFA - Empresa Ferrocariles Argentina LRTP - Long Range Transportation Pian (1962) OLD - Origin and Destination sI - Tippetts, Abbett, McCarthy and Stratton (US) -Consultants UwoS - -United Nations Special Fund (now United Nations Development Programme - Special Fund) USAID - United States Agency for International Development APPRAISwALT OF A QECOn3D H T(M T4AY PROJECT TABLE OF CO'NtTENlTS SUMARY Page 1. INTRODUCTION 1 2. BACKGROUND 3 A. General 3 B. The Transport Sector 3 C. Transport Coordination 4 3. THE HIGIDiY SECTOR 6 A. The Highway Network, Characteristics and Growth of Road 6 Traffic B. Highway Administration 6 C. Financing and Planning 8 D. Highway Engineering 10 E. Highway Construction 10 F. Highway Maintenance 11 4. THE PROJECT 13 A. General Description 13 B. Highways to be Upgraded and Paved 13 C. Additional Consulting and Expert Services 15 D. Miscellaneous Equipment 17 E. Cost Estimates and Financing 17 F. Execution of the Project 19 5. ECONOMIC EVALUATION 21 A. Introduction 21 B. Route 7, Laboulaye-Mercedes Section 21 C. Route 3 and Rpute 251 Sections 21 6. RECOMMEENDATIONS 23 This report was prepared by Messrs. Alexander (engineer) and Haker (econrrmist). TABLE OF CO,iENmTS (COINTD.) TABLES 1. Freight Traffic by Modes of Transport 2. Incidence of U 'serChLlJarges on VeicleJ. Costs- 3. Revenues from Principal User Taxes 4. ederal Vn' .LI[U adro-vinciaVl[IU £CV LE-L L MW1Ui1.L0i± Lp1 0nJituri e 5. Composition of the Highway Networks 6. Vehicle Registration 7. Fuel Consumption 8. Design Standards for National Roads 9. Roads to be Upgraded and Cost Estimates 10. Project Cost Estimates Annex 1 - The First Highway Project and Other External A5sistance for Highways Annex 2 - Transport Coordination Annex 3 - Basis for Economic Justification of Project Road Sections CHART - Organization of Vialidad MiAPS 1. Principal Roads of the National Highway Network 2. Railway Network 3. Project Road Section - Route 7 4. Project Road Sections - Routes 3 and 251 ARGENTINA APPRAISAL CF A SECOND HIGHWAY PROJECT SIJmaRy i. After making a highway loan in 1961 and acting as Executing Agency for a United Nations Special Fund Study (UNSF) of the transport sector at the same time, the Bank was for several years not closely asso- ciated with overall highway development in Argentina. This was due to poor performance under the highway loan, the reluctance of the Government to im- plement major reccmmendations of the UNSF Study and the lack of a consistent approach to transport development. In 1967, the present Government gave priority to improving the neglected transport sector, and to strengthening the capacity of the Government agencies responsible for the sector's plan- ning, administration and coordination. In the highway sector, a major three>- vear construction program (Three Year Plan) was started in 1968 and the strengthening process begun. The Government requested the Bank's assistance in financing a oronosed proiect which includes the unarading and paving of 796 km of national roads contained in this three-year program; the identification and prepnratiin nf a fiutiure 'hichwai investment program; and. assistance tc) improve the planning and administration of the highway network ;; 'Thae total coat of the m^Qe ;r'1v9;nc r+ia n ; . 1C __ _. mated at US$50 million equivalent. The Bank loan of US$25 million, of which UqS$3t 3 million is for vn-ge s would finance 50% Of the c5t of construction (US$17.6 million, including about US$5.28 million of local cvurrency cost-.s)s andA 4the forigr excge cost of fil -ndofceeup ment needed for the proper planning and administration of the highway net- work (uJS$500 0.j lTe Govexrnment w.ll-4LA2' L4. er.te cost of Ls coordination experts to the Secretariat of Transport (US$200,000 equivalent), consulting and expert services for the improvement of thne planning and ad- ministration of the highway network (US$1,000,000 equivalent), and a reccn- naissance stu.dy (US$400,0000 equivalenilj to identify t1he future road invest- ment program for which feasibility and detailed engineering studies will be carried out subsequently. The loan would also f inance 6up4 of the cost of services t.o be provided by local and foreign consultants for the construction supervision of the project roads (uS$600,000 equivalent), and. the carrying out of feasibility and detailed engineering studies (US$3.0 million equivalent). The figure 60% was selected in view of the substantial participation. expected by local firms and the recommendation that their services be financed by the Bank in the same proportion as would have been. the case had foreign consultants been enployed, so that financing arrange- ments would not affect the choice of firms. iii. Detailed engineering for the project roads has been completed by the Government and is satisfactory; consultants will assist the Government in analyzing bids and supervising construction. The cost estimates are considered reliable and adequate contingencies have been included. - ii - iv. The project is technically and economically sound. The economic rates of return for the different works range from 10 to 14%. v. Contracts for the project works will be let on the basis of in- ternational competitive bidding. Execution of the project wi.ll be the responsibility of the National Highway Department (Vialidad). vi. The project provides a suitable basis for a Bank loan of US$25 million eauivalent. An anpropriate term would he 25 years. nTniuding a four-year period of grace. ARGBM'1TINJA APPRAISAL OF THIE SECOND HIGrHtALLY PROJECT 1. hITRODUCTION 1.01 The Government of Argentina has requested a loan of US$25 million equivalent to help finance a project costing about US$50 million equivalent comprising (a) the upgrading of about 796 Im of three national highways including cornsulting services, and (b) additional consulting and expert services for the identification and preparation of a future highway invest- ment program. including feasibility and detailed engineering studies, the improvement of the planning and administration of the country's highway network and the improvement of transport coordination. 1.02 This would be the second Bank project in the transportation sector. The first was a loan (288-AR) of Us$h8.5 million equivalent. signed in June 1961, to finance the foreign exchange cost of improving 2,600 km of national highways (see Map 1), including advisorv services by consultants., and road maintenance equipment. At the time of the loan a study of Argentina's transoort svstem was inderwav with United Nations SDecial Fun(d (UNSF) financing (US$520,000 equivalent), the Bank acting as Executing AMenc'7 the study was cnrmltted in early 1962 arnd the results published as the Long Rlange Transportaticn Plan (LMITP). 1.03 A number of problems developed during the execution of the first nrn-iel. miicrh n 1.ln'k o~f' lrer:ll f'irno - incf'f8o+.;3 usl of ptr^on,i1+~nn.c nn management of the project and poor quality of work. After unsuccessful efforts by the Bankl to irove the situation, the amou-+ of the loan -was reduced to US$32 million and the scope of work curtailed in 1965. The S~i'oiibSn roln+ nff^+'r , - fc -~ T4 ., . ',,n,~-,,,---1E)-d +0- 4'-I,- 4-4 -.f..- ,-',r susquentef.forts.o a new V- lidad rage led to the C CV.4.VLtU completion of the project by its extended Closing Date of December 31, 1968. Fu_r+uh,er dCta-ils0 -------- n the above subJe-t and 04her-P-4 - as 4sistance VC~LCC 1JA~i. IJ.1~, U11C; CAJCJ Vt:; ou.L' ,Uo CXILU UlLd I J. VI U _'L6I .1. ., to the highway sector are given in Annex 1 and para. 3.19. This improve- men combIILVnLll wi thl V.L-aClV±Ud.adU j±LL£ f Lu Uplanse lor U.i1g iLts weak' organ. zLau-Lull justify the Bank in proceeding with the loan under consideration. 1.04 Early in 1968 the Government indicated its desire to give increased a4t4tenti4on to th-~,e 4transport sect-o r and t o c on sidLue r a- loaL-ucu' for- a ro0a d p ro-uject; for which feasibility studies were being carried out. An exploratory Bank missuilon to Argentina in May 1968 broaaLy examined the Government sS approach to the transport sector and concluded that the Bank could play an important role in the development oI the sector. This ied to a transport mission to Argentina in September-October 1968 to make a detailed review of rail anc6 road transport.