Documentif The WorldBan FOROFFICIAL USE ONLY Public Disclosure Authorized Report No. 6527-AL Public Disclosure Authorized STAFF APPRAISAL REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FIFTH HIGHWAY PROJECT April 17, 1987 Public Disclosure Authorized Public Disclosure Authorized Regional Projects Department Europe, Middle East and North Africa Region 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 (as of March 1987) Currency Unit Algerian Dinar (DA) DA 1 = US$0.21 DA 4.70 = US$1.00 FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES Metric System British/US Sy;tem 1 meter (m) = 3.2808 feet (ft) 1 kilometer (km) = 0.6214 mile (mi) 2 1 square kilometer (kMn) - 0.3861 square mile (mi ) 1 metric ton (m ton) = 0.9842 long ton (lg ton) 1 kilogram (kg) = 2.2046 pounds (lbs) PRINCIPAL ABBREVIATIONS AND ACRONYMS CTTP = Technical Quality Control Organization OW = Secondary (Regional) Road Designation DIB = Basic Infrastructure (transport) Directorate, in each region (Wilaya). DP = MOT's Port Directorate DPGER = Road Maintenance Planning and Management Department, in LNTP. DTT = MOT's Land Transport Directorate ETR = Regional Roadworks Enterprise (contractor) INDEFE = Enterprise Career Development and Training Institute LMS = Laboratory for Marine Studies LNTP = National Public Works Laboratory LTP = Regional Public Works Laboratories MOF = Ministry of Finance MOP = Ministry of Planning MOT = Ministry of Transport MPT = Ministry of Professional (vocational) Training MPW = Ministry of Public Works RD = MPW's Roads Directorate RN = Primary (National) Road Designation SDM = RD's Road Maintenance Sub-Directorate SNTF - National Railway Service SNTR = National Trucking (freight) Ser,ice SNTV = National Passenger Transport Service SOE - Statement of Expenditures URC = Pavement Strengthening Unit, in LNTP vpd = Vehicles per day FOl Oft CIALUS ONLY ALGERIA STAFFAPPRAISAL REPORT FIFTH HIGHWAYPROJECT lable of Contents Page No. Loan and ProjectSuummary i I. THE TRANSPOT SECTOR........................................1 A. The TransportSystem ........................ .......... 1 B. GovernmentOrganization Related to Transport......... 1 C. Past TransportInvestment 2 D. GovernmentPolicy in the Sector 3 E. ProposedTransport Investments .......................... 4 F. PreviousBank Projetts 5 II. THE H:GHWAYSECTOR .................. 6 A. General ............... 6 B. The Network 6 C. Trafficand Road Transport 7 D. Administration9.....9 E . Planning . b.*00009*0 e 10 F. DetailedEngineering 12 G. Construction.1... ........ ...... ........ 12 H., Maintenance ............... ............ .- . 13 I. Huan ResourcesDevelopment . 14 J. Expenditures,Revenues and Accounts .................... P 16 III. THEPROJECT .................. 19 A. ProjectObjectives 19 B. ProjectDescription 20 C. ProjectCosts Estimates 26 D. Financing . -00*aaa04 66*0 29 E. Implementation 29 F. Procurement... .. .... @6 . ** . ... ......... 30 G. Disbursements 32 H. Accountingand Audit .,....OA.......... .,....... 33 This reportwas preparedby Messrs.William Matthey (HighwayEngineer) and Roy Knightoa(Transport Economist) on the basis of missionsto Algeria in June and September1986. Assistancewas providedduring project prepara- tion by Mr. Jean-MichelVerdier, (Training Specialist) and by consultants Jean de Gryse (FinancialAnalyst), Andr6 Garaud (HighwayEngineer), and Jean-PierreNoel (TransportEconomist). Thisdocuhwant hasa rtricteddistfibution md may be used by relpientsonly in thepeformane of theioffici duties.Its contentsmay not otherwi be diclnd withoutWorld Bank authortlon. Table of Contents(contd.) ?age No. IV* ECONOMICEVALUATION .. ....... ................................33 A. Main Benefitsand Beneficiaries ......................... 33 B. Road RehabilitationProgram ....... ...................... 34 C. Road MaintenanceProgram ................................. 34 D. ProjectRisk ................................. 36 V. AGREEMENTSREACHED AND RECOMMENDATIONS...................... 36 1. ProjectAction Plan .......... ...........................39 2. Study on RecoveringHighway Expenditures from Users - OutlineTerms of Reference............... 57 3. PavementStrengthening Design Method ....................61. 4. EconomicEvaluation .....................................67 5. Overviewof Human ResourcePlanning and Development.... 82 6. PreviousBank Projectsand RecentDevelopments ......... 90 7. List of ProjectFile Documents......................... 94 TABLES 1. ImplementationSchedule 2. Estimated Schedule of Disbursements CHARTS 1. Organizationof Ministryof PublicWorks 2. RegionalGovernment [Wilayal Organization MAP I8RD 19890R- Algeria - Fifth HighwayProject (7084D)(Text) (7077D) (Annexes) ALGERIA STAFFAPPRAISAL REPORT FIFTH HIGHWAYPROJECT Loan and ProjectSummarr Borrower: Democraticand PopularRepublic of Algeria Beneficiaries: Ministryof PublicWorks (MPW)and Ministryof Transport (NOT). Amount: US$120 million equivalent. Terms: Repayable in 15 years includingthree years of grace at the standardvariable interest rate. ProjectOblectives and Description: The proposedproject would assist the Governmentin con- centrating its reduced resources on preservation of existing roads and in improvingthe efficiencyof land transport,in particularroad transport,while collater- ally absistingwith the timely preparationof engineer- ing studies for the railway and port sub-sectors.The project would contributeto: (i) reducing the backlog of pavement strengthening;(ii) rationalizingplanning and control of this work; (iii) improvingplanning and operationalefficiency in road maintenance;(iv) elimin- ating distortionsin maintenancecosts; (v) strength- ening personnel management and training functions in MPW, HOT and transport enterprises,so as to improve planning,operational efficiency and policy formulation in the transportsector as a whole. To achieve these objectives, the project will support: (i) the newly established Technical Quality Control Organization (CmTT) in planning and supervisingpavement strengthen- ing programs; and road maintenance planning and manage- ment; and (ii) the creation of a transport investigation study and planning center under MOT's direction, to improve sector policy formulation.The proposed loan would finance (i) the road rehabilitationand contracted maintenanceworks; (ii) technicalassistance to improve: collection and use oZ road network data, planning, optimization, preparation and control of pavement strengtheningand road maintenance programs; use of natural material for road construction;and personnel skills of MPW's, MOT's and transportenterprises' per- sonnelmanagers, teachers, instructors, training -ii- officers, as "Io' A^ DIB enginoers, "technicians and field laboratorystaff through trainingprograms in num- erous priority fields, including overseas training; (iii) preparationof a comprehensive,multi-modal trans- port study includingdiagnosis of road traffic safety problemsand analysisof road user charges; (iv) prepar- ation of engineeringstudies and analyses for railway track rehabilitation,port modernization,a container term4nal for Algiers'port and evaluation of a maritime shipping model; #4 (v) procurementof related training materials and pi1ppent. Benefits and Risks: The financial beneficiariesof the proposed project would be the road users benefittingfrom reduced trans- port costs. Institutionaland proceduralchanges would serve to avoid unnecessaryincreases of road maintenance costs through improved planning and control of road maintenance work and timely pavement strengthening. Trainingunder the project would support the effort to improve the e.ficiencyof transportand protect capital investments. Additional,non-quantified benefits would accrue from (i) improved personnel management in MPW, MOT, and thrp4h"t the trapsport sector enterprises, (ii) improvement:in -tbe quality of teaching in MPW's and MOT's schools,and (iii) preparationof highlyimportant studies which would provide the Ministry of Transport with the basis for formulatingpolicy changes. No eco- nomic risks are associatedwith the project because of the high economic returns expected from both the road maintenanceand road rehabilitationprograms. There is hcwever the risk that the introductionof competitive biddingfor maintenancecontracts may not be immediately successful. Rlipit*tion of subsidizationof certain maintenance un$t pricis may increase thqse prices more than improved efficiency can reduce them. Also the responseof those road contractorswho presently do not engage in maintenance,may initially be tentative and limited. The institutional objectives of strengthening planning and control capability, hiowever,should be fully attainable,thus serving to assure sustainability in view of the high prioritygiven by the Governmentto road rehabilitationand maintenance. The risk of budge- tary shortagesare minimal. Funds for the road strengthening prRgram hbve already been included in the proposed 1987 budgets and the required increases in maintenance costs for the pilot mqintenance program have been agreed. EstimatedCosts: ' Local Foreign Total * - US$ millions PavementStrengthening (400 km) s' 64.2 48.4 112.6 Road Maintenance (in 7 Wilayase over 2 years)"o' 66.7 46.9 113.6 MOT Assistanceand Studies 4.0 7.0 11.0 Equipmeat,Vehicles and Goods 0.5 2.8 3.3 Total Base Cost 135.4 105.1 240.5 PhysicalC6dtingeiacies ''10 O.O 8.5 18.5 Price