Assessment of Infrastructure Investments in Transport and Job Creation Public Disclosure Authorized Examples from Road Sector Investments in Lebanon and Jordan Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Final Report December 20, 2018 Assessment of Infrastructure Investments in Transport and Job Creation Final Report ACKNOWLEDGEMENT This report was prepared jointly by the World Bank and the International Labor Organisation (ILO). The World Bank team included Ziad Nakat, Radia Benamghar, Mira Morad, Rene Antonio Leon Solano, and Abdulhakim Ali Ahmed Al-Aghbari. The ILO team included Chris Donnges, Tomas Stenstorm, and Htun Hlaing. Assessment of Infrastructure Investments in Transport and Job Creation Final Report TABLE OF CONTENTS ABBREVIATIONS ............................................................................................................................................... 2 DEFINITIONS ...................................................................................................................................................... 3 TRANSPORT SECTOR CONTEXT .................................................................................................................. 4 OBJECTIVE OF THE STUDY ........................................................................................................................... 5 KEY FINDINGS AND OBSERVATIONS ......................................................................................................... 5 1. HOW MANY DIRECT JOBS ARE CREATED DURING CONSTRUCTION, REHABILITATION, AND MAINTENANCE? 5 2. WHO GETS THE JOBS (THAT IS, EDUCATIONAL REQUIREMENTS, AGE GROUPS, GENDER, NATIONALITIES, AND SO ON)? ............................................................................................................................................. 7 3. WHAT KINDS OF JOBS ARE CREATED (SKILLED, UNSKILLED, PERMANENT/TEMPORARY, BENEFITS, AND SO ON)? ..................................................................................................................................................... 8 4. WHAT CAN BE DONE TO INCREASE THE DIRECT LABOR INTENSITY IN ROAD SECTOR INVESTMENTS? ..... 9 ANNEX 1: DETAILED STUDY ....................................................................................................................... 13 STUDY BACKGROUND ............................................................................................................................. 13 1.1 Roads Transportation in Lebanon .......................................................................................... 14 1.2 Roads Transportation in Jordan ............................................................................................. 15 STUDY APPROACH .................................................................................................................................. 19 RESULTS AND FINDINGS .......................................................................................................................... 21 3.1 Rehabilitation of Old Damascus Road, Hazmieh, Mount Lebanon ........................................ 21 3.2 Saadiyat-Ain El Hour Road, Chouf District, Lebanon............................................................ 26 3.3 Rehabilitation of Nabatieh- Doueir Road, South Lebanon ..................................................... 31 3.4 Herbet El Ma’ani Road, Ba’albak, Lebanon .......................................................................... 33 3.5 Edde-Toula-Mayfouk Road in Jbeil District, Mount Lebanon ................................................ 35 3.6 Rehabilitation of Azraq Highway, Jordan .............................................................................. 37 3.7 Al-Salt Ring Road, Jordan ...................................................................................................... 43 3.8 Maintenance of Roads Project in Mafraq under EIIP, Jordan ............................................... 49 KEY FINDINGS AND RECOMMENDATIONS ............................................................................................... 54 ANNEX 2: MOCK PROJECT - LEBANON ................................................................................................... 65 DIRECT EMPLOYMENT FOR MOCK PROJECT ............................................................................................ 65 INDIRECT EMPLOYMENT FOR MOCK PROJECT ......................................................................................... 68 Page 1 Assessment of Infrastructure Investments in Transport and Job Creation Final Report ABBREVIATIONS Abbreviations Definition ARC Aqaba Railway Corporation BoQ Bill of Quantities CDR Council for Development and Reconstruction Conférence Économique pour le Développement, par Les Réformes et avec les CEDRE Enterprises CIP Capital Investment Plan EIIP Employment Intensive Infrastructure Program EmpIA Employment Impact Assessment GAM Greater Amman Municipality GDP Gross Domestic Product GIME Sao Tome and Principe Community Road Maintenance Groups GTD Government Central Tenders Department id:rc Interdisciplinary Research Consultants ILO International Labour Organization JHRC Jordan Hijaz Railway Corporation MoPWH Ministry of Public Works and Housing MoPWT Ministry of Public Works and Transportation SFD Saudi Fund for Development SME Small and Medium Enterprises UNDP United Nations Development Programme VAT Value Added Tax Page 2 Assessment of Infrastructure Investments in Transport and Job Creation Final Report DEFINITIONS Direct employment - employment created directly by the road rehabilitation and/or construction activity (including workers directly recruited by the main contractors and subcontractors, technicians, supervisors, and other skilled professional staff). Skilled: General definition - work which involves skill or competence acquired through experience on the job or through training as an apprentice or in a vocational institute and the performance of which calls for initiative and judgement. Semi-skilled: General definition - work which involves some degree of skill or competence acquired through experience on the job and which is capable of being performed under the supervision or guidance of a skilled employee and includes unskilled supervisory work. Unskilled: General definition - work which involves simple operation requiring little or no skill or experience on the job. Page 3 Assessment of Infrastructure Investments in Transport and Job Creation Final Report TRANSPORT SECTOR CONTEXT 1. The Governments of Lebanon and Jordan identified job creation as one of the key priority areas for support from international partners. Lebanese Republic 2. The road network in Lebanon is generally in poor condition due to years of underinvestment and inefficient spending. Road transport is by far the most dominant form of transport in Lebanon for passengers, freight, and commerce, with about 1.2 million vehicles in a country of only 4.5 million people. Lebanon ranks 121 out of 137 countries on road quality, with rural roads in lagging regions in particularly bad condition. Lebanon also has one of the worst road safety records globally, and the economic cost of road traffic fatalities and injuries in Lebanon is equivalent to 5.5 percent of national gross domestic product (GDP). In addition, since 2011, the influx of Syrian refugees has put further stress on Lebanon’s deteriorating roads and transport network, particularly in the lagging regions where the infrastructure is in bad condition and the concentration of refugees is high. 3. The transport sector is one of the main employment generators in Lebanon. Prior to the onset of the Syrian crisis, 70 percent of working age men were participating in the labor force, compared to 24 percent of working age women. Females and youth face higher unemployment rates than men (18 percent and 34 percent, respectively, versus 9 percent amongst men)1. Currently, about 7 percent of Lebanon’s labor force is employed in transport services (truckers, taxis, ports, and airports). In addition, a significant part of workers in the construction sector are actually working in the construction of transport infrastructure. On the other hand, the construction sector in Lebanon is facing a slowdown due to the economic situation and the decrease of real estate prices. Therefore, there is currently an oversupply of labor, both skilled and unskilled; however, the oversupply is expected to decrease sharply when the reconstruction of Syria picks up. Also, Lebanon hosts major construction and engineering consulting firms, with recognized international and regional experience. The needed workforce is available in Lebanon, including project managers, engineers, technicians, and skilled and unskilled labor. The Kingdom of Jordan 4. Recently, some of the major corridors of the Kingdom of Jordan have suffered from deteriorated conditions attributed to the lack of maintenance, which has resulted in severe operational and safety constraints along those corridors. Jordan is a small country that can be driven across in 5 hours, but in spite of its size, the country has a wide network of roads exceeding 7,000 km in length. Jordan ranks 68 out of 137 countries on road quality. In addition, transport-related inefficiencies account for at least 5 percent of national GDP yearly, and the economic cost of road traffic fatalities and injuries in Jordan is equivalent to 1.6 percent of GDP. The government has been investing in the past 5 years in reconstructing