FILE Copy Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2355b-MAG DEMOCRATICREPUBLIC OF MADAGASCAR FIFTH HIGHWAY PROJECT STAFF APPRAISAL REPORT May 18, 1979 Highways Projects Division Eastern Africa Regional Office 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. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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FILE CopyDocument of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 2355b-MAG
DEMOCRATIC REPUBLIC OF MADAGASCAR
FIFTH HIGHWAY PROJECT
STAFF APPRAISAL REPORT
May 18, 1979
Highways Projects DivisionEastern Africa Regional Office
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
Currency Unit - Malagasy Franc (FMG)US$0.0045 - FMG 1US$1.00 FMG 220
WEIGHTS AND MEASURES
1 meter (m) 3.28 feet (ft)1 kilometer (k4, s 0.62 miles (mi)1 square km (sq km) 00386 sq miles (sq mi)
GLCSSARY OF ABBREVIATIONS
AM - Air MadagascarCATP - Centre d'Application des Travaux PublicsCMW - Central Mechanical WorkshopDE - Directorate for EquipmentDPMT - Directorate for Programming, Management and TrainingDSCW Directorate for Stzdies, Control and WorksEEC European ZcuoL- ac ComESnityINSRE Institut NEatiuiiai de la Statistique et de la Recherche
Econo-mique (Natioiial Institute of Statistics andEconomic Research)
LESP L'Establissement d'Enseignement Superieur PolytechniqueLNTPB - Laboratoire National des Travaux Publics et du Batiment
(National Laboratory for Public Works and Building)MFP Ministere des Finances et du Plan (Ministry of Finance
and Pla-maing)MTP D Ministere des L:avaux Publics (Ministry of Public Works)MTR - Ministere des Transports et du Ravitaillement (Ministry
of Transport and Supplies)RNCFM - Reseau National des Chemins de Fer Malagasy (Madagascar
National Railway)SINTP - Societe d°Interet hTational des Travaux Publics
(National Public Works Agency)UNDP - United Nations Development Programmevoc - vehicle operating costvpd - vehicles per day
DEMOCRATIC REPUBLIC OF MADAGASCARFISCAL YEAR
January 1 December 31
FOR OFFICIAL USE ONLYDEMOCRATIC REPUBLIC OF MADAGASCAR
FIFTH HIGHWAY PROJECT
STAFF APPRAISAL REPORT
Table of Contents
Page No.
I. THE TRANSPORT SECTOR ............................. 1
A. Geographic and Economic Setting .... ........... 1
B. The Transport System .......................... 2
C. Transport Policy, Planning and Coordination ... 4
D. Past Bank Group Involvement in the Sector ..... 5
II. THE HIGHWAY SUBSECTOR ............................. 7
A. The Network ................................... 7
B. Traffic Growth and Characteristics .... ........ 8
C. Administration ................................ 10
D. Staffing and Training ......................... 11
E. Planning and Financing ........................ 13
F. Engineering ................................... 16
G. Construction .................................. 17
H. Maintenance ................................... 17
III. THE PROJECT ......... .............................. 20
A. Background .................................... 20
B. Objectives ... ................................. 20
C. Project Description . . . 21
D. Cost Estimates ..... ........................... 27
E. Financing ..................................... 30
F. Implementation and Procurement ................ 30
G. Disbursement ....... ........................... 33
H. Ecology ........ ............................... 35
IV. ECONOMIC EVALUATION ............................... 35
A. Introduction ....... ........................... 35
B. Benefits and Beneficiaries ................. ... 36
C. Economic Analysis ...... ....................... 37
D. Risks ......................................... 42
V. AGREEMENTS REACHED AND RECOMMENDATIONS .... ........ 42
This report was prepared by Messrs. E. Fellinghauer (Engineer) and M. LeBlanc
(Economist) who appraised the project in September/October 1978. The report
was edited by Miss P. Brereton.
Thi. document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Table of Contents (Continued)
TABLES Page No.
2.1 The Highway Network, 1976 72.2 Motor Vehicle Registrations, 1969-77 82.3 Fuel Consumption, 1970-76 92.4 Highway Expenditures, 1972-78 142.5 Revenues from Road Users, 1970-76 152.6 Highway Design Standards 16
3.1 Proposed Composition of Each Regravelling Brigade 24
3.2 Estimated Project Costs 28
3.3 Financing Plan 31
3.4 Estimated Schedule of Disbursements of IDA Credit 34
4.4 Economic Evaluation-Road Improvement andBridge Construction 41
ANNEXES
1 Project Reporting Requirements 45
2 Bridges to be Constructed under the Project 48
3 Related Documents and Data Available in Project File 49
CHARTS
1 Organization of Ministry of Transport and Supplies
(IBRD 15025(R))2 Organization of the Ministry of Public Works (IBRD 19763)
3 Implementation Schedule
MAP
Madagascar: Fifth Highway Project (IBRD 14098R1)
DEMOCRATIC REPUBLIC OF MADAGASCAR
FIFTH HIGHWAY PROJECT
STAFF APPRAISAL REPORT
I. THE TRANSPORT SECTOR
A. Geographic and Economic Setting
1.01 Madagascar, the fourth largest island in the world, has a land areaof about 590,000 sq km and is situated in the Indian Ocean about 400 km offthe southeast coast of Africa, from which it is relatively isolated botheconomically and culturally (see Map). Its topography is generally rugged,with a central mountain range of up to 2,800 m altitude traversing the countryin a north-south direction. The climate is marine tropical, but varies con-siderably within the country; cyclones and heavy rainfalls are especiallyfrequent on the east coast during the rainy season (November-May) while aridand dry zones are found in the south and the west. Because of this climateand topography, construction of transport infrastructure is difficult andexpensive. The island is therefore largely segmented into a number of ratherisolated regions, polarized around small townships, some of which are ofteninterconnected only by coastal shipping.
1.02 The population is estimated at about 9 million and growing at 2.5%p.a. Population distribution is uneven, and about one-half of all inhabitantsoccupy one-quarter of the island's area in the central Antananarivo andFianarantsoa provinces. Density averages 16 persons/sq km, but ranges from2 persons/sq km in the southern and western provinces to 25 persons/sq km inthe central and eastern coastal regions.
1.03 The population is 85% rural and engaged largely in the agriculturalsector. Although more than half the annual production is used for subsistence,agricultural products (chiefly coffee, spices and meat) account for about80% of Malagasy exports and 42% of GDP. The country will continue to relyon agriculture since industry, which accounts for 14% of GDP, is at an earlystage of development, and the numerous known mineral deposits, with theexception of chromite and graphite, are not commercially important. Averageper capita income has increased by less than 1% p.a. since 1960 and is cur-rently about US$210 p.a. Due to an economic recession which began in 1972,and the energy crisis and worldwide inflation which began in 1973, there hasbeen little economic growth since then.
Government's Development Efforts and Goals
1.04 Government aims at establishing a decentralized socialist systembased on the "Charter of the Revolution", dated August 1975. Its overalldevelopment efforts between 1978-2000 will be concentrated on improving thelevel of education of the population, providing better social services,achieving self-sufficiency in agriculture and creating an industrial base
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capable of satisfying the country's basic needs and at the same time provid-
ing greater employment opportunities. The First Development Plan establishedunder the new decentralized structure covers the period 1978-1980. Under thisfirst short-term Plan the Government intends to set up the necessary admin-istrative structures to carry out its long-term development strategy and, in
the transport sector, to provide a basic transport infrastructure for the
island.
B. The Transport System
The Network
1.05 The transport infrastructure comprises the following: about27,500 km of roads, of which 4,500 km are paved; two unconnected railwaysystems totalling 860 km; 4 main ports and 11 lighterage ports of some sig-nificance; and 56 airfields. There are no pipelines or navigable rivers.Transport needs are relatively well served only on the central plateau, withthe metropolitan area of Antananarivo generating or absorbing half of thecountry's commodity flows. Other populated areas are mainly concentratedalong the coast and are served mainly by coastal shipping or air transportdue to the lack of all-weather roads.
Highway Transport
1.06 Details of the highway subsector are discussed in Chapter II.
Railways
1.07 Madagascar's national railway, which plays a strategic role in the
country's limited transport system, dates back to 1913 when the main linebetween the port of Toamasina (formerly Tamatave) and Antananarivo was com-pleted. The railway is operated by the Madagascar National Railway (ReseauNational des Chemins de Fer Malagasy (RNCFM)) under the Ministry of Transportand Supplies (Ministere des Transports et du Ravitaillement, MTR, Chart 1).
It consists of two short unconnected systems (meter gauge) which total 860 kmof single-track line and an additional 175 km of industrial branch lines andprivate sidings. The northern system includes: (a) a 375 km section betweenthe port of Toamasina to just north of Antananarivo; (b) a 154 km section from
Antananarivo south to Antsirabe; and (c) a 167 km section from Moramanga northto Lake Alaotra. The southern system, 164 km, connects the port of Manakarawith the city of Fianarantsoa.
1.08 The railway system provides the only continuous means of surfacetransportation for most of the areas served. Its main line has a near mono-
poly in the area between Toamasina and Antananarivo while competition betweenroad and rail is very keen on the section between Antananarivo and Antsirabe.The southern system between Manakara and Fianarantsoa is the only transportlink between those cities. In the past, Government ensured the monopoly in
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the Toamasina-Antananarivo corridor by protective regulations setting a 5.5
ton vehicle load limit on the parallel road, which is now being reconstructedto paved standard to take the 10-ton maximum allowable axle load (para. 2.08).Freight traffic on the system amounted to 823,000 tons in 1977 and has beenstagnating since 1973 due to depressed local economic activity- Tariffs arebased on commodity values and range from FMG 16.5 per ton-km for less than acarload of general freight to FMG 3.3 per ton-km for chromite. Tariffs havenot kept up with the cost of operations, and RNCFM therefore shows a deficit.Unlike its freight traffic, RNCFM's passenger traffic has steadily increasedby about 7.2% p.a. since 1972 due to the rapid growth of suburban traffic.Over 3.92 million passengers were transported in 1977.
Air Transport
1.09 Internal air transport is important in Madagascar, and a very denseair transport network has developed. Of the 56 airports, 17 are built toall-weather standards including 5 suitable for international traffic. Theremainder are either gravel or grass strips. All are operated and adminis-tered by the Directorate of Civil Aviation and Meterology in MTR. More than50% of all air traffic is handled by Ivato Airport at Antananarivo.
Air Madagascar
1.10 Air Madagascar (AM), owned 70% by Government and 30% by Air France,began operations in 1969 and has since greatly expanded services and becomeincreasingly viable. AM's fleet currently consists of 18 aircraft, includingone B-707 for long distance; two B-737s for domestic and regional use; sixtwin Otters and nine light aircraft. A B-747 (combination cargo/passengerplane) has recently been acquired, and service started in March 1979. AM'smain international routes go to Europe via East Africa, and a regional networkserves Reunion, Mauritius and the Seychelles. Apart from Air France, the onlyother long distance international carriers serving the country are Alitaliaand Aeroflot which provide weekly service to Rome and Moscow, respectively.Air Tanzania and Air Mauritius operate a pool arrangement with AM for des-tinations in Tanzania and Mauritius.
1.11 In 1976 AM's traffic totalled 227.9 million passenger-km and 28.4
million ton-km. The company provides internal services to 52 scheduled,regular stops. Forty of these account for only 20% of traffic and producelosses but are continued for social reasons and for lack of alternative sur-face transport. In 1976, internal traffic comprised 77 million passenger-kmand 2 million ton-km (207,364 passengers and 4,893 tons of freight). During1973-76, the number of passengers on domestic flights increased by about 10%p.a. while the number of passengers on international flights decreased byabout 6% p.a. due to the departure of large numbers of expatriates and theconsequent reductions in their travel and in tourist travel.
Ports and Coastal Shipping
1.12 Madagascar relies almost exclusively on shipping for foreign trade;coastal shipping is also important and is the only means of transportingfreight between many areas. The major ports are located at Toamasina with
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two-thirds of total traffic, Mahajanga with 11%, and Antomboka in the northand Toliara in the south, each with about 4% of total traffic. Imports
and exports totalled 2.8 million tons in 1975. Because the amount of totaltonnage has stagnated since the downturn in economic conditions in 1972, themajor ports currently have sufficient capacity, and the port of Toamasinahas over-capacity. In 1975, coastal shipping accounted for about 300,000
tons, more than half of which went to or from the island of Nossi-Be.
C. Transport Policy, Planning and Coordination
1.13 The overall governing policy for transport planning and coordina-
tion in Madagascar is based on the 1975 "Charter of the Revolution" whichstates that it is essential to: (a) connect regional capitals by all-weatherroads; (b) construct the Antananarivo-Moramanga-Toamasina road; (c) maintainthe road network effectively; and (d) review the transport organization to
improve services. Government's long-term 1978-2000 Plan restates theseobjectives to be implemented in a series of short-term plans. While con-struction of new roads has priority ranking in the National Development Plan
for 1978-80, there is no comprehensive transport program based on economiccriteria. Progress towards meeting the transport objectives has been slowdue to budgetary constraints (para 2.15); as a result, Government can under-
take major new projects only when outside financing is available.
1.14 Transport planning and coordination does not yet pose any serious
problems since the country's transport infrastructure is still very under-developed and new investments are concentrated on providing only a very basic
system. But, when completed, the Moramanga-Toamasina road, now being con-
structed with financing from the People's Republic of China, will provide anall-weather road link between Antananarivo and Toamasina which will competewith rail and air transport servicing this area; thus greater intermodal.coordination will be needed on this corridor in order to optimize use of thetransport system. Future investments will require a much greater planningeffort than in the past to ensure that use of the most economic mode bycommodity is encouraged. The Ministry of Finance and Planning (MFP) is
expected to be able to undertake these tasks in the near future. Duringproject supervision the Association will review the adequacy of MFP's planning
and coordination capabilities and may consider providing assistance to MFP
under future projects, should the need arise.
1.15 Responsibility for transport planning is divided between the Ministry
of Public Works (Ministere des Travaux Publics, MTP) for roads and MTR forair, water and rail transport; overall planning and coordination of invest-
ments is the responsibility of the lfFP. There is a shortage of qualifiedtransport planners in both MTP and MTR and insufficient data to analyzetransport demand. It is expected, however, that the data collectionneeded for highway planning will improve with the recent resumption of annualtraffic counts (para 2.04) and the preparation of an annual inventory of road
conditions to be started under the proposed project (para 3.12). In addition,a team of transport planners (SETEC-France/Berger-US) was financed under
Madagascar's First Railway Project (Cr. 488-MAG) to assist MTR's planning
effort and eventually improve highway planning through better coordination
between MTR and MTP. The team, which finished its assignment in August 1978,
carried out a number of transport studies, including a modal allocation study
of road/rail traffic in the Antananarivo-Toamasina corridor, but did not
succeed in training a sufficient number of local staff since counterpart staff
were not provided in adequate numbers and with the required qualifications.
The MFP is therefore assuming most of MTR and MTP's planning functions.
D. Past Bank Group Involvement in the Sector
1.16 Bank Group involvement in Madagascar's transport sector began in
1966 when the First Highway Project (Credit 90-MAG, US$10 million) provided
for construction to paved standards of two sections of the Antananarivo-
Mahajanga road, totalling 145 km. A Project Performance Audit Report (PPAR,
No. 1409) dated January 3, 1977 found that the cost of the road construction
was far below original estimates and the recalculated rate of return was
greater than estimated at appraisal. Surplus funds were used to finance sup-
plementary works and studies, which necessitated a delay in project completion.
1.17 The Second Highway Project (Credit 134-MAG/Loan 570-MAG, US$8 mil-
lion, 1968) helped finance construction of 146 km of two major trunk roads and
construction of three bridges. The project did not completely meet its
objectives, and completion was delayed by about one year due to difficulties
of the contractors who carried out the project. Actual project cost was
US$15.2 million in contrast to the appraisal estimate of US$11.5 million,
including contingencies. This represents an overrun of some 30%, of which
about half was due to price increases and half to increased quantities. The
cost overrun was financed in large part by Government, but savings under the
First Highway Project also contributed to financing. PPAR No. 811, dated
July 18, 1975, found that the economic justification of one of the project roads,
Ambilobe-Ambanja (91 km), was doubtful in view of its low rate of return (8%),
primarily caused by higher construction costs than foreseen at appraisal.
1.18 The Third Highway Project (Credit 351-MAG/Loan 876-MAG, US$30 mil-
lion, 1973) provided for construction of 417 km of primary roads, detailed
engineering of the Antsohihy-Ambanja road and a review of the traffic
counting system. In 1975 the project had to be modified due to substantial
cost increases as a result of price and quantity increases not anticipated at
appraisal, as well as the devaluation of the US dollar. A supplementary
credit of US$5.6 million was therefore provided while construction was reduced
by 67 km. PPAR No. 2143, dated July 27, 1978, found that while the overall
recalculated rate of return of 14% was acceptable and in line with appraisal
estimates, two road sections had individual rates of return of 10% or less,
since expected agricultural benefits failed to materialize due to the deter-
iorating political and economic situation of the country. The PPAR further
outlines the project's deficiencies, including an insufficient provision of
funds for road maintenance and a failure to train Malagasy nationals and
thereby contribute to institution building. These problems have been
addressed under the ongoing Fourth and the proposed Fifth Highway Projects.
1.19 The Fourth Highway Project (Credit 641-MAG, US$22 million, 1976)is currently helping to finance construction of 370 km of secondary roadsbetween Tsiroanomandidy and Maintirano and the 67 km of primary roads fromArivonimamo to Analavory deleted from the Third Highway Project. A roadmaintenance component is also included which provides for a study to evaluatemaintenance needs, including procurement of equipment and technical assistancefor training of local staff in road maintenance. The project's road construc-tion component is progressing satisfactorily and is nearly completed. Themaintenance study is finished; however, implementation of the recommendedtraining program has been delayed. Since training of local staff is essentialto improving maintenance operations under the proposed Fifth Highway Project,agreement was reached that Government would take the measures necessary toallow an early start of training (para 2.13).
1.20 Bank Group assistance has also helped finance the construction offeeder roads under agricultural and rural development projects. A 1974 pro-ject for Village Livestock and Rural Development (Credit 506-MAG) financedthe construction of about 170 km of secondary roads in Mahajanga province andmaintenance of about 280 km of roads. Under the Mangoro Forestry Project(Credit 525-MAG, 1974) provision was made for construction and maintenance of56 km of gravelled service roads, 840 km of plantation truck roads and 910 kmof tracks. The Morondava Irrigation and Rural Development Project (Credit322-MAG, 1972) included the improvement of 24 km of existing secondary ruralroads and construction of about 90 km of feeder roads. Finally, constructionof farm roads was included in the Lake Alaotra Irrigation Project (Credit214-4AG, 1970).
1.21 Other transport projects include a port project (Credit 200-MAG,1970, US$9.6 million) which provided for the extension of Toamasina Port,creation of the Toamasina Port Authority, and technical assistance formanagement personnel and training; in 1973 the Credit was increased by US$1.8million to cover a shortage of funds resulting from a currency realignment.PPAR No. 2299, dated December 22, 1978, concluded that: (a) the physicalobjectives of the project were satisfactorily carried out; (b) a lowerrevised economic return at 7.0% was due to lack of traffic growth resultingfrom adverse local and international political and economic conditions thatcould not have been foreseea at the time of appraisal; and (c) although thetechnical assistance towards institution building purposes did not achievesatisfactory results initially because of the low calibre of expatriateexperts, progress in achieving autonomy and better management is now beingmade by the port authority. The Bank Group also helped to finance a railwayproject (Cr. 488-MAG, US$6 million, 1974) to assist RNCFM in replacingoutdated equipment and to determine the railways' long-term prospects andrequirements; a second railway project, presented to the Board on May 8, 1979,will continue replacement of outdated equipment and the track renewal program.
1.22 The first four Bank Group projects in the highway subsector helpedGovernment to pursue its objective of providing better road access to re-gional capitals. However, some roads financed under previous projects alreadyshow signs of deterioration due to inadequate maintenance and, to a lesserextent, a failure to enforce vehicle weight regulations. Both problems wereaddressed under the Fourth Highway Project which provided for (a) purchase andinstallation of weighbridges to monitor vehicle weights and (b) a road mainte-nance study and implementation of some of the study's recommendations. Governmenthas agreed that a greater effort will have to be made to improve road maintenanceand assistance toward this goal will be provided under the proposed FifthHighway Project.
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II. THE HIGHWAY SUBSECTOR
A. The Network
2.01 The road network, totalling about 27,500 km, is divided into threecategories according to their function:
(a) primary or trunk roads (about 8,700 km) linking the provincialcapitals and major towns;
(b) secondary or district roads (about 6,000 km) within and betweendistricts; and
(c) tertiary or subdistrict roads (about 12,800 km), partly tracksserving as feeders to trunk and secondary district roads.
As shown in the following table, about 4,500 km are bitumen paved. Otherroads are generally low standard, dry-weather earth roads and tracks.
1/ Roads fully under MTP responsibility.2/ Of which about 85% are classified as all-weather roads, but only about 50% are
serviceable all year.
Source: Ministry of Public Works, and Mission estimates, 1978.
2.02 The road network is inadequate both in length and condition (para2.25), and large portions of the country have no all-weather land connectionsto the rest of the island. The network is particularly poor in the region of
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Antomboka, the only region where the trunk road linking Antananarivoto the regional capital, the city of Antomboka, is not yet completelyconstructed to all-weather standards (see Map). Still to be constructedis the section between Antsohihy and Ambanja (165 km), which is passableonly in the dry season between May and November. Various areas on thecountry's east and west coast also have no all-weather road connection withthe rest of the country, and road links to the southern regions are mainlyearth roads or trails, most of which are in poor condition although the dryclimate allows year-round serviceability. The paved road network consistsof a main north-south artery connecting Antananarivo with the regional centersof Mahajanga and Fianarantsoa, plus several short stretches on the centralplateau and around the major coastal towns. During the last few years, pavedroads have been deteriorating due to inadequate maintenance. Average density,considering all road types, is 47 m/sq km as compared to 87 m/sq km in Kenyaand about 49 m/sq km in Tanzania. In order to allow year-round road accessto the region of Antomboka, the proposed project will help finance theconstruction of bridges on the Antsohihy-Ambanja road (para 3.08) and willthus help meet Government's objective of connecting regional capitals byall-weather roads (para 1.13). The project would also provide for feasibilityand detailed engineering studies for about 170 km of National Road 13, toimprove road access to the regional center of Taolanaro (para 3.15); inaddition the project's maintenance components would improve the condition ofvarious parts of the network (para 3.04(c)).
B. Traffic Growth and Characteristics
2.03 Composition and growth of the vehicle fleet is given below. Between1969 and 1977 the fleet grew at an average annual rate of 6.4%, but since 1973the growth rate has fallen to 3.2% due to Madagascar's economic recession anda shortage of foreign exchange which caused Government to curtail the importof non-essential goods.
Source: Institut National de la Statistique et de la Recherche Economique(INSRE), "Situation Economique au ler Janvier 1977", 1978.
2.04 Present traffic volumes on paved roads range from about 100 vehicles
per day (vpd) in rural areas to more than 1,000 vpd near the main cities. Onunpaved roads, traffic flows reach a maximum of 75 vpd. Annual traffic countswere stopped after 1972 when most expatriate advisors left the country, andwere only resumed in 1978 with assistance under the Association's Third High-way Project. Although no recent traffic data are available to determine the
traffic growth rate, traffic volumes seem to be stagnating as indicated bya drop in total fuel consumption by about 1% p.a. between 1970-76 as shownbelow.
2.05 The Ministry of Finance and Planning's Tax Office estimates that
in total there are about 5,000 public freight transporters, including largetrucking firms, owner-operators, private carriers and cooperatives. Themajority of transporters own only one truck, and only 17 firms are listedas having more than 5 trucks. While the larger companies are well run andgenerally provide good service, individual transporters lack the managerialknowledge to operate efficiently. There are no barriers to entry into theindustry, which is generally competitive.
Regulations
2.06 The Ministry of Transport and Supplies is responsible for setting
inter-provincial road transport rates while rates for intra-provincial freighttransport are set by provincial authorities within a minimum-maximum ratesystem established by Government. However, in spite of the existing rateregulation, tariffs are in practice governed by supply and demand and thusvary considerably according to road condition, season and region and arereasonable.
2.07 Passenger transport regulations are the responsibility of MTR andthe provincial authorities. Service is provided by cooperatives and individualcarriers. Although entry into the industry is nominally screened by Governmenton the basis of supply and demand considerations, in practice all applicants
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are admitted. Although there are no barriers to entry into the industry (para2.05), since 1976, individual passenger carriers have been able to operate foronly one year, after which they must join an existing cooperative or form anew cooperative (by Malagasy law requiring a minimum of seven members). Per-mits are given to serve specific routes for which an official tariff exists.Rates for inter-provincial transport range from FMG 1.40 to 5.60 per pass-kmdepending on the type and condition of the road. Since rates are not revisedfrequently enough to reflect changes in operating costs, carriers charge higherrates. Provincial authorities may fix rates for intra-provincial transportbetween the minimum and the maximum set by the official tariff, but in prac-tice rates are determined by competition.
2.08 Vehicle dimension and weight regulations allow 10-ton axle loadsand are adequate. Enforcement of these regulations is, however, lacking andGovernment is preparing to launch a major campaign to control axle loads.Weighbridges were purchased under the Association's Fourth Highway Projectand are now being installed on major routes where overloading has been foundprevalent under a recently completed survey using portable scales.
C. Administration
2.09 ITP is responsible for administration of the primary network (8,700km), and the decentralized local authorities are in charge of secondary andtertiary roads (18,800 km). The Ministry of Agriculture also constructsand maintains feeder roads under agricultural projects. As shown in Chart2, MTP functions through its:
(a) Directorate for Programming, Management and Training (DPMT),in charge of programming, evaluation and coordination ofengineering studies; centralization and collection of data;definition of standards; policy formulation for works carriedout by MTP's various units; and training of MTP staff;
(b) Directorate of Studies, Control and Works (DSCW), in chargeof execution of engineering studies and supervision ofconstruction works carried out by force account and bycontractors;
(c) Directorate of Equipment (DE), in charge of procurement,repair and maintenance of equipment which it provides forhire to the regional district offices; and
(d) Six regional district offices in charge of physical executionof construction works and periodic and recurrent maintenancecarried out by force account for primary and secondary roads.
2.10 MTP's administrative structure was set up in late-1977 and isaimed at giving greater authority and independence to the six regionaldistrict offices in line with Government's decentralization policy. Forprimary roads, the regional roads engineers report directly to the General
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Secretary of MTP and receive technical advice and assistance from DSCW forexecution of engineering studies and supervision of construction works car-ried out by force account. For secondary roads, the regional roads engineersare responsible only to the regional political authorities, although thesame staff and facilities are used for both primary and secondary roads.Tertiary roads are maintained by the local communities. At present, thereis no central administrative unit to supervise regional road maintenanceoperations. Although DPMT coordinates the annual primary road maintenanceprograms submitted by the various regional districts for approval before thebeginning of each year, it has no jurisdiction over the secondary and tertiaryroad networks. Strengthening of central control over planning and executionof maintenance works is needed to make operations more efficient. This needwill be met under the proposed project which includes the establishment withinMTP of a central unit in charge of maintenance of the country's road network(para 3.09).
D. Staffing and Training
2.11 MTP currently faces a shortage of qualified and experienced staff atall levels. This has been particularly acute since 1972 when a large numberof expatriates, who filled many of MTP's key positions, left the country.Furthermore, several reorganizations of MTP and changes in Government duringthe past few years have led to repeated changes in personnel in many of MTP'shigher-level positions. MTP's central administrative organization and itssix regional district offices are staffed by about 110 engineers and about150 technicians, all of whom are Malagasy. Although the number of staff isadequate to fulfill the administration's basic needs, additional trainingis needed as recommended in a recent consultant's study (para 2.13). Ashortage also exists of experienced middle and lower-level supervisory staff(such as chiefs of road sections, maintenance brigades and work gangs) and toa lesser extent, mechanics and vehicle operators. During the last few years,Government was reluctant to use technical assistance, and MTP dismissed all ofits expatriate technical advisers, thereby limiting its capability to improveits staffing situation. However, Government has altered its attitude towardstechnical assistance and has expressed its willingness to accept such assist-ance under the proposed project; the scope and timing of technical assistancehave been agreed by Government and the Association (paras 3.18 and 5.01(j)).
2.12 Most civil works training in Madagascar is theoretical ratherthan practical. The technical college in Antananarivo (L'Establissementd'Enseignement Superieur Polytechnique (LESP)) provides a four-year trainingcourse in civil engineering which leads to an engineering diploma; about15 to 20 students graduate annually. LESP's civil engineering departmentsuffers from a shortage of qualified lecturers, inadequate training equipmentand lack of funds. Courses at the LESP are given by MTP's engineers, whooften are not adequately prepared for their lectures or must cancel lecturesdue to other commitments. About 20 secondary technical schools have two- tofour-year programs to train technicians, with about 250 graduates annually inthe various technical fields. Although the number of trainees is sufficientto fill vacancies in MTP's central and regional administrations, the technical
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courses do not always provide the theoretical training needed, and practicaltraining is almost non-existent. The only practical training and refreshercourses available to MTP staff are given at MTP's own training school (Centred'Application des Travaux Publics (CATP)), which in 1977 provided training foronly about 25 MTP employees due to inadequate facilities, shortage of experi-enced instructors, and the limited local funds available.
2.13 Recognizing the shortage of skilled personnel in Madagascar, Govern-ment selected consultants, Louis Berger (US), to carry out a study of MTP'straining requirements. The study, which was financed under the Fourth High-way Project, outlines MTP's full manpower and training needs in the nearfuture (five years) to improve road maintenance to an adequate level. Itrecommended:
(a) improving training courses for both engineers and techniciansat the LESP through the appointment of a full-time lecturerfor the roads sector and the procurement of training equipment;and
(b) introduction of a long-term countrywide program for practicaland, to a lesser extent, for theoretical training of middleand lower-level supervisory personnel and craftsmen throughthe strengthening of CATP's training capacity.
The study was completed in mid-1978 and its recommendations accepted by theGovernment. The United Nations Development Programme (UNDP) has expressedinterest in providing funds for the LESP lecturer, and the Fourth HighwayProject will finance the CATP training program. Government has, however, beenrather slow in taking the necessary steps to allow for an early start of thetraining. Since training of local staff is essential to improving maintenanceoperations, Government and the Association agreed on the following: (a) aroad maintenance training program for MTP staff will be prepared and carriedout; (b) for this purpose, consultants will be employed by January 1, 1980,with qualifications, experience, and terms and conditions of employmentsatisfactory of the Association; (c) the Association will be consulted onGovernment's decisions relative to the training program to be executed; and(d) construction of such training facilities as shall be required to carry outthe training program will start by January 1, 1980 (para 5.01(a)). In addi-tion, employment of consultants by January 1, 1980 to prepare and carry outthe road maintenance training program, and start of construction of the requiredtraining facilities at CATP by January 1, 1980, will be conditions of Creditdisbursement for all project components except that referred to in para 3.04(a) below.
2.14 The ongoing Fourth Highway Project also includes on-the-job trainingfor MTP staff in the region of Antomboka. Technical assistance financedunder that project will set up an adequate regional maintenance organization,introduce efficient methods for planning, programming, execution and costaccounting for road maintenance in the region, and train local staff. Theproposed Fifth Highway Project will provide the same type of technical assis-tance for the two additional regions of Mahajanga and Toliara (para 3.10)and fellowships for local senior supervisory staff (para 3.19).
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E. Planning and Financing
Planning
2.15 The Development Plan for 1978-80 included the following programfor the highway subsector. For the primary road network, an additional1,000 km of roads were proposed for paving, and bridges on the paved networkwere to be strengthened. For the secondary road network, it was proposed toupgrade a total of 1,200 km of roads, primarily by force account, to permityear-round use and to construct bridges totalling 1,000 meters. The Planfurther provided that 500 km of resurfacing per year would be undertakenand that an average of FMG 150,000 per km per year (about US$700 equivalent)would be spent for road maintenance. Actual progress, however, has not metthese objectives. So far, commitments have been obtained from foreign donorsfor improvement to paved standards of 550 km of primary roads, and the upgrad-ing of secondary roads is estimated to be less than half of that scheduled.Construction of bridges, mostly with foreign financing, is following theplan. Only about 50 km of roads were resurfaced in 1978 (para 2.25), andmaintenance expenditures were less than half the amount programmed (para 2.17),primarily due to the country's tight financial situation; a large partof these expenditures covered salaries of MTP staff.
Financing
2.16 Highway investments are financed through the development budget;recurrent expenditures are financed out of the general budget. As indicatedin the following table, since 1975 investment expenditures for roads havebeen rising rapidly due to the number of major road construction projects inprogress. In 1977 expenditures for the highway sector amounted to about FMG8,308 million (US$38 million equivalent) for investment expenditures and FMG3,827 million (US$17.4 million equivalent) for recurrent expenditures. Thisrepresents about 14% of total Government expenditures; however, in 1978,Government's allocation for highways was reduced to 11% of total allocations.
Total HighwayExpenditures 6,603 7,799 8,363 7,775 11,817 12,135 14,236
/1 Budget provision./2 Estimate of Ministry's total cost share attributable to highways./3 Including equipment.
Source: Ministry of Public Works, 1978
2.17 Since 1972, total recurrent expenditures in real terms have barelykept up with inflation and have been insufficient for adequate maintenanceof the road network. In 1978, the budgetary allocation for operating expendi-tures for primary road maintenance was increased to FMG 2,827 million (US$12.9million equivalent), which would have been adequate. However, only about halfof the budgeted amount was actually made available to the regional districtoffices due to the country's difficult financial situation. The budgetaryallocation for secondary roads in 1978 was FMG 303 million (US$1.4 millionequivalent), which was about one-third of the amount required. Taking intoaccount operational equipment available in the regional districts and equip-ment included under the ongoing project and the proposed project, the fundsneeded to adequately maintain the primary and secondary road networks in 1980will amount to about FMG 3,960 million (US$18 million equivalent) for operatingexpenditures and about FMG 2,200 million (US$10 million equivalent) for equipment
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renewal. Agreement was therefore reached with Government that: (a) at
least FMG 3,960 million (US$18 million equivalent) will be allocated for
operating expenditures in the 1980 budget; (b) Government will allocate at
least FMG 1,100 million (US$5 million equivalent) for equipment renewal in
the 1980 budget and make its best efforts to obtain external financing foran additional FMG 1,100 million for the same purpose; and (c) alter 1980
and until the completion of the project, Government and the Association willfrom time to time discuss the appropriateness of budgetary allocations for
road maintenance in the light of inflation and the scope of required mainte-
nance operations (para 5.01(b)).
2.18 Aggravating the problem of inadequate allocations is the haphazard
release of funds to the regional districts depending on the availability
of funds in the Treasury. As a result, maintenance operations frequentlystop, thus making execution of an established program impossible and worksmore costly. Agreement was reached with Government that maintenance funds
will be made available to the regional district offices promptly as neededfor uninterrupted operations (para 5.01(c)).
Revenues from Road Users
2.19 Recurrent expenditures on roads are financed out of the general
budget to which road users contribute through taxes on vehicle ownership and
use. In 1976, total revenues from road users were about US$30 million. Eventhough these revenues have been declining since 1973 because of the country's
difficult economic situation, they have been in excess of road maintenancecosts in the past and are expected to be so in the immediate future.
Table 2.5: Revenues from Road Users, 1970-76(FMG millions)
/1 Includes: registration, permits, patents and property taxes.
Source: Ministry of Public Works, 1977.
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F. Engineering
2.20 As stated in para 2.09, DSCW has overall responsibility for engineer-ing design within MTP. Due to a shortage of qualified staff, it carries outfeasibility and detailed engineering studies for minor and medium-sized projectsonly, and relies on foreign consultants for design and supervision of majorworks. MTP's National Soils Laboratory (Laboratoire National des TravauxPublics et du Batiment (LNTPB)) satisfactorily carries out all the necessarysoil investigations and materials tests for the design and supervision ofconstruction for civil works done by both MTP and consultants.
2.21 Road design standards adopted by MTP are appropriate for the variousclasses of roads (Table 2.6). Roads are usually designed for speeds of 60-80km/hour on the central plateau and coastal plains, and 40-60 km/hour in moun-tainous areas; standards for specific roads are usually determined by feasi-bility studies on the basis of economic conditions, traffic levels and terrain.Bitumen paved roads normally consist of a 6 m wide double surface treatment,or asphaltic concrete for the more heavily trafficked sections, with a 15-20cm gravel base. Pavements are designed for 10-ton wheel axle-loads, which issatisfactory.
Pavement width (m) 5.5 to 7.0 4.50Platform width (m) 8.8 to 10.3 6.50 (4.00)Maximum PermissibleAxle load (t) 10 10
2. BridgesCarriageway width (m) 3.5 and 7.0 3.0Sidewalks (m) 2 x 0.75 to 1.00 2 x 1.0Design load: in accordance with fascicule: 61 61 B
/1 Figures in parentheses indicate values adopted in exceptional casesfor specific short sections located either in very mountainous terrainor in other particularly difficult conditions.
Source: Ministry of Public Works, 1978.
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G. Construction
2.22 DSCW undertakes small construction works using equipment-intensivemethods while the regional offices carry out some spot improvement and periodicmaintenance operations by force account. Major road construction is done bycontractors, who are local subsidiaries of French or Italian firms. Construc-tion is financed mainly by foreign donors, and is usually carried out bycontracts let on a unit price basis following international competitivebidding or the bidding procedures required by the financing agency. Adminis-trative procedures for bidding and contract award follow well establishedregulations but are frequently carried out slowly, which has resulted inrather lengthy delays in contract award; work specifications are comprehensiveand precise. Construction supervision is the responsibility of DSCW whichcarries out some of this work with its own staff; however, because of a short-age of experienced staff, major works are supervised by foreign consultingengineers, though now partially in association with local consulting firms,which have recently been established.
2.23 A domestic contracting industry for highway construction has notyet developed due to lack of skilled personnel and scarcity of capital andcredit facilities. In 1974, a National Public Works Agency (Societe d'Interet National pour Travaux Publics, SINTP) was created as an independentand financially autonomous corporation whose sole stockholder is the Govern-ment. SINTP has already carried out some major construction works and hasbeen selected to upgrade the Tsiroanomandidy-Maintirano road financed underthe Fourth Highway Project. Its performance has, however, been hampered byan inexperienced staff, inefficient management techniques and a shortage ofconstruction equipment. In order to strengthen SINTP's operations, underthe Fourth Highway Project consultants have been employed to assist SINTP inexecuting the project work, which started in late-1978. Government is com-mitted to further increasing its participation in civil works projects carriedout by foreign contractors, and is currently negotiating the terms and condi-tions of its participation in these companies.
H. Maintenance
2.24 MTP's six regional district offices, through their subdivisionsand sections, maintain about 14,700 km of primary and secondary roads, pri-marily by equipment-intensive operations. Maintenance of the tertiary roadnetwork is discussed in para 2.28. The annual maintenance program is estab-lished by the regional district engineers on the basis of their judgment;there is no road inventory, and annual traffic counts on which to base main-tenance requirements have only been recently reintroduced (para 2.04). Beforethe beginning of each year, the proposed program for primary roads is submittedby the regional district engineers to DPMT for approval and coordination withthat of the other regions; the program for the secondary network is submittedby the regional engineers to the political regional authority only for their
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approval. Maintenance funds from the budget are distributed to MTP's regionaldistrict offices in proportion to the length of roads they must maintain. Oncompletion of maintenance operations, the district engineer prepares an annualreport outlining the general maintenance activities completed in his area,giving global cost figures and type and scope of works; no detailed costaccounting is carried out for these operations. As already mentioned (para2.10), MTP's central administration does not exert the necessary planning,programming and control functions for road maintenance works carried out bythe regions. Although DPMT coordinates the annual maintenance program forprimary roads, the approved programs are not always followed. Furthermore,DPMT is not sufficiently informed of the maintenance works carried out andtherefore cannot define corrective actions when needed. To assist in theestablishment of an adequate road maintenance organization, the proposedproject will provide for the creation of a central unit in charge of roadmaintenance throughout the country (para 3.09) and introduce efficient plan-ning, budgeting and cost accounting procedures for maintenance work in tworegions (para 3.10), which could later be applied to the rest of the country.
2.25 MTP's present routine and periodic maintenance operations are in-adequate because of shortages of maintenance equipment (para 2.26), inadequateequipment repair facilities (para 2.27), shortages of trained staff (paras2,11-2,14), and insufficient recurrent funds (para 2.17). Although nodetailed records are as yet available for work done in 1978, it is estimatedthat periodic maintenance of gravel roads, such as regravelling, was lessthan 20% of that required to keep the network in adequate condition; routinemaintenance, such as reshaping, is done only sporadically with many of themajor road links not maintained at all. As a result, gravel-surfaced roadsfrequently have an uneven surface and potholes, and many are negotiable onlyduring the dry season. Paved roads are also in poor condition. Less than50 km of roads were resurfaced in 1978, although about 600 km of resurfacingshould be done annually to meet periodic maintenance needs. Routine mainte-nance of paved roads, such as filling of potholes, repair of broken pavementedges and reconstruction of shoulders, has also been inadequate, partlybecause of an inadequate supply of materials (gravel aggregate and bitumen).As a consequence, about a third of all paved roads (1,500 km) have deterior-ated to such an extent that only full rehabilitation of pavement can restorethem to a serviceable condition, while about a quarter (1,100 km) requireresurfacing to avoid further deterioration and costly repair. Improvement ofmaintenance is urgently needed to avoid continued deterioration of the network.The Fourth Highway Project has begun to address this problem by assistingGovernment to improve routine and periodic maintenance operations to anadequate level in the regional district of Antomboka, and the proposedproject will expand this assistance to two additional regions (paras 3.10-3.12). The project will also provide financing for the resurfacing, reha-bilitation and maintenance of selected paved roads (paras 3.05-3.06).
2.26 One of the major problems preventing adequate road maintenance isa general shortage of operational equipment. Most of MTP's equipment wassupplied by France before Madagascar's independence in 1960, and is now mostlyobsolete; newer equipment, financed by Government and bilateral assistance,often stands idle due to lack of spare parts. Furthermore, even equipmentthat is still operable is poorly utilized. DE is in charge of MTP's equipment
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which it rents to the regional offices and charges rental for operating timeonly and not for idle time. Since there is little incentive to minimize idleequipment time, each superintendent requests as much equipment as possible,even if funds are not available to operate it. In addition, the chiefs ofeach subdivision were in the past not authorized to exchange equipment directlyamong one another, which would reduce total requirements. With assistanceunder the Fourth Highway Project, Government is beginning to address theseproblems by financing road maintenance equipment and introducing an efficientequipment management and rental system in the regional district of Antomboka,with equipment charges based on actual equipment rental time; these changesare expected to begin in the second half of 1979. If proven successful inAntomboka, the new equipment rental system will be introduced into the regionaldistricts of Mahajanga and Toliara, which will be provided with additionalmaintenance equipment under the project (para 3.10).
2.27 MTP's workshop facilities are not equipped to assure adequate main-tenance and repair of the equipment fleet. The Central Mechanical Workshop(CMW) in Antananarivo, which is responsible for major equipment repair andoverhaul, has adequate office and most of the workshop facilities needed, butlacks workshop equipment and tools, spare parts, and experienced staff tocarry out its work. Equipment sent by the regional offices for major repairmust often wait for years until funds are available for the purchase of thenecessary spare parts. A similar situation exists at the regional workshops,most of which lack adequate building facilities, workshop tools and equipmentand spare parts. Even preventive maintenance is not carried out as needed,which further shortens the useful life of the equipment fleet. With theassistance of the Fourth Highway Project, Government is establishing a specialequipment rehabilitation section within the CMW and a Central ProcurementOffice (CPO) in Antananarivo for equipment and spare parts. The FourthHighway Project also provides funds for spare parts and technical assistancefor CMW and CPO and improvement of workshop facilities in the district ofAntomboka; equipment procurement is now underway, and consultants fortechnical assistance will be recruited shortly. The new CMW section forequipment rehabilitation and the CPO are expected to begin operations inmid-1979. The proposed project will extend this effort by improving regionalworkshops in the remaining five districts (para 3.13).
Maintenance of Tertiary Roads
2.28 Tertiary roads and tracks are primarily maintained by hand labor,but the scope of these operations is limited, owing to the scarcity of fundsavailable to local communities. Villagers are recruited by the local com-munities and supplied with tools to patch uneven surfaces, clear culverts anddrains, and raise the level of the road in inundated areas; technical advicefrom MTP's regional offices is sometimes provided. The efficiency of thiswork is rather low and not always of lasting value since the local staff arenot experienced in the operations and lack the required equipment for compac-tion. Labor-intensive methods for road maintenance and improvement are viable,if properly executed, not only for tertiary roads but also, for certain typesof maintenance, for the primary and secondary networks in areas with highpopulation density and unemployment, since the wage rate for laborers is low(US$1.80 per day equivalent). The proposed project will therefore provide fora study to determine the optimum mix of labor and equipment for maintenanceand improvement works in the various regions, and, if viable, to train localstaff in these operations (para 3.14).
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III. THE PROJECT
A. Background
3.01 In view of the problems constraining road maintenance in Madagascarand the resulting deterioration of the network described above, improvement
of Government's road maintenance capability is of highest priority. However,
because of the magnitude of the work needed and the substantial financial,training and staffing requirements for improving road maintenance to an
adequate level, it has been necessary to strengthen the country's overall
maintenance capability in stages. Accordingly, the Association began to
assist Government in improving maintenance under the Fourth Highway Project
which financed a study to identify maintenance and training needs, a long-term
countrywide training program for MTP staff, the creation of a central main-
tenance workshop for equipment rehabilitation, and the general improvement
of maintenance operations in one of the country's six regional districts. The
proposed Fifth Highway Project will continue these efforts by helping Govern-ment to rehabilitate and maintain the paved road network on a countrywide
basis, to improve mechanical workshop facilities in the remaining five regional
districts, and to improve maintenance operations in two regional districts.
Improvement of road maintenance in the rest of the country could form the basis
of a subsequent project.
3.02 As discussed in para 2.02, construction of the all-weather road
between Antomboka and Antananarivo is incomplete; thus, during the rainy
season between November and May, the region of Antomboka must depend on sea
and air transport only. The Association has recognized the need to improve
this road, and an engineering study for the remaining link between Antsohihy
and Ambanja (165 km) was included under the Third Highway Project. Given the
shortage of Bank Group funds and the priority of improving road maintenance,
it is not possible for the Fifth Highway Project to include full construction
of the road in accordance with standards given in the engineering study men-
tioned above (total cost of about US$40 million). The project will, however,
allow for improvement of the road in stages, and provide for construction of
bridges to allow year-round serviceability of the road. In addition, the
project will include feasibility and detailed engineering studies for a
section of about 170 km of National Road 13, to provide an all-weather road
link between Antananarivo and the regional district center of Taolanaro.
B. Objectives
3.03 The project's main objectives are:
(a) preventing further deterioration of the paved network in
order to reduce transport costs and to avoid early andcostly reconstruction works;
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(b) increasing the long-run maintenance capacity of MTP bybuilding up the necessary central administrative structureand an adequate maintenance organization; and
(c) providing for an all-weather road connection between theregional district of Antomboka and the capital, Antananarivo.
C. Project Description
3.04 The proposed project consists of:
(a) resurfacing and partial rehabilitation of a notional 500 kmof paved roads and the provision of an initial stock ofmaterials (bitumen) for road maintenance;
(b) construction of bridges for the Antsohihy-Ambanja road;
(c) improvement of road maintenance operations by:
(i) strengthening MTP's central administrative organizationfor road maintenance;
(ii) improving routine and periodic maintenance in tworegional districts, including a regravelling programfor a notional 400 km of roads; and
(iii) improving the mechanical workshops in five regionaldistrict centers;
(d) a study to determine the most appropriate mix of labor andequipment for road maintenance and improvement works andimplementation of a two-year demonstration program;
(e) feasibility and detailed engineering studies forabout 170 km of National Road 13;
(f) training of MTP staff by technical assistance; and
(g) fellowships for MTP staff.
(a) Resurfacing, Rehabilitation and Maintenance of Paved Roads
3.05 The project provides financing for resurfacing and partial rehab-ilitation of various sections totalling about 500 km of the Antananarivo-Mahajanga and Antananarivo-Fianarantsoa roads, with about 160 and 250 vpd,respectively. Both roads show extensive cracking, potholes, an uneven roadsurface and broken pavement edges; these problems create hazardous drivingconditions and cannot be improved solely by maintenance operations. Workwill consist of:
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(i) reconstruction of failed sections of the base course;
(ii) resurfacing with a bituminous concrete layer or abituminous surface treatment; and
(iii) reconstruction of shoulders.
The exact length, location and construction standards will be determined by a
consultant's study which is expected to be completed by the end of 1979 and
will be financed under the Fourth Highway Project. An additional 600 km ofrehabilitation and resurfacing work, which is not part of the project, will
be financed by Government.
3.06 At present, maintenance of paved roads is inadequate, not only for
the general reasons already cited (paras 2.25-2.27) but also due to a lackof bitumen and crushed aggregate (para 2.25). To help address this problem,
the project will provide for the purchase of an initial stock of about 400tons of bitumen; procurement of stone crushers under the Fourth HighwayProject will provide for the necessary supply of crushed aggregate. Agree-ment was reached that Government will ensure that adequate amounts of bitumenwill be made available as and when required over the project period for the
rehabilitation and maintenance of its roads (para 5.01 (d)).
(b) Construction of Bridges for the Antsohihy-Ambanja Road
3.07 As indicated in paras 2.02 and 3.02, the Antsohihy-Ambanja road isin need of improvement. At present, it is an earth road in poor condition
and impassable during the rainy season (November-May) when many of its exist-ing river crossings and low-lying road sections become flooded. Improvementof the road to all-weather standards ranks among Government's first prioritiesin the transport sector and is essential for year-round transport of goodsand passengers and for improving the region's economic development and its
economic and social integration with the rest of the country.
3.08 The proposed project will assist Government towards meeting these
objectives by financing the construction of major river crossings. This willconsist of construction to one-lane standards of six major bridges rangingfrom 40 to 320 m in length, with a total length of 650 m. Fourteen other
structures from 17 m to 32 m in length (total length 389 m) will be improved
to two-lane standards. The span and location of each bridge to be constructedunder the project is given in Annex 2. The project will also provide forconstruction to gravel standards of about 20 km of approaches to the bridges.
With its own financing, Government will improve the remainder of the road,
through execution of the necessary earth works to bring the road's vertical
alignment above the flood level, and by improvement of the road surface withselected materials to allow for year-round serviceability. Agreement wasreached with Government that its improvement of the Antsohihy-Ambanja road to
allow year-round serviceability will be completed by the time bridge construc-
tion for the road is finished (para 5.01(e)).
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(c) Improvement of Road Maintenance Operations and Equipment Repair Facilities
(i) Strengthening of the Central Administrative Organization
3.09 In order to strengthen the capability of MTP's centr-l administra-tion to better plan, program and monitor maintenance works carried out by theregional districts, the project includes the creation of a central unit forroad maintenance. The unit will be established within DPMT, which alreadyexerts a coordinating function for works carried out by MTP's various agencies.It will control and centralize data collection; coordinate planning, program-ming and budgeting; evaluate costs and scope of maintenance work done by theregional districts for primary, secondary and tertiary roads; and if necessary,define corrective actions required and monitor their implementation throughthe General Secretary of MTP. The unit would be headed by a Malagasy engineerexperienced in road maintenance who could be recruited from among the mostexperienced regional engineers. Agreement was reached by Government and theAssociation that a central administrative unit for road maintenance will beestablished within MTP and headed by a qualified and experienced engineer byJanuary 1, 1980, and will be provided with adequate supporting staff(para 5.01(f)).
(ii) Improvement of Maintenance in Two Regional Districts
3.10 Both routine and periodic maintenance operations throughout thecountry have been inadequate, but, as stated in para 3.01, because of thelimited human and financial resources available, it has not been practicableto improve maintenance simultaneously in all of the country's six regions.The project will therefore expand the efforts begun under the Fourth HighwayProject to improve maintenance at the regional level (para 2.25) by providingthe following assistance to the two regional districts of Mahajanga andToliara under a 2-year program consisting of:
(a) technical assistance to define a detailed program foradequate routine and periodic maintenance; to outline thecomposition and number of required maintenance brigades,equipment, staff and training needs and the requirementsfor capital and recurrent costs; to set up an adequatemaintenance organization, including introduction ofefficient techniques for programming, budgeting and execu-tion of works, as well as cost accounting; and to trainlocal staff in proper work methods (para 3.16);
(b) arising out of (a), the procurement of equipment and spareparts to complement existing equipment for setting up thenecessary recurrent and periodic maintenance brigades in thetwo regions, including equipment for one regravelling trainingbrigade in each of the two regions (paras 3.11-3.12); and
(c) operation over a 2-year period of one road regravellingtraining brigade in each of the two regions, including costsfor spare parts, fuel and materials (para 3.12).
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Government and the Association agreed on the two regional districts ofMahajanga and Toliara on the basis of overall road and traffic conditions,qualifications of local staff and availability of equipment (para 5.01(g)).
3.11 Training in road regravelling and cost accounting will be provided
to MTP staff in each of the two regions. An expatriate foreman for each of the
two training brigades and a cost accountant for each region will be financedunder the project (para 3.16). It is envisioned that training in organiza-tion and execution of works, including cost accounting, would be provided inthree-month cycles per team; the essential composition of each team is givenin Table 3.1.
Table 3.1: Proposed Composition of Each Regravelling Brigade
Equipment Staff
1 dozer, 150 hp 1 Chief of Brigade1 grader, 125 hp 4 Equipment Operators1 water tanker, 10,000 liters 3 Helpers for Equipment Operators1 front-end loader 5 Drivers1 compressor and drills 1 Mechanic1 roller (pneumatic), 10 ton 1 Mechanic's Helper5 dump trucks 6 cu m1 pick-up truck
Three Chiefs of Brigades will be trained concurrently during each trainingcycle in order to optimize utilization of expatriate services. It is thusexpected that over the 2-year period, training would be provided to a totalof 48 chiefs of regravelling brigades, about 64 equipment operators, 48helpers to equipment operators and 80 drivers, some of whom will be assignedfrom regions outside of Mahajanga and Toliara. Training of mechanics willbe more suitably carried out at the CATP under the training program financedunder the Fourth Highway Project (para 2.13).
3.12 The regravelling work would include the necessary earthworks forminor improvement of the horizontal and vertical alignment, the spreading andcompaction of a 15-20 cm gravel layer and construction and clearing of ditchesand drainage structures. On the basis of productivity rates in neighboringcountries, it is estimated that under the project a notional 400 km of roadswill be regravelled over the 2-year period by the two training brigades. Theseoperations will be complemented by three to four additional regravelling brigadesin each of the two regions, to be set up with existing equipment and equipment to
be procured under the project; operating expenditures for the latter brigadeswill be financed by Government under its annual maintenance budget and is notpart of the project. The exact number and composition of maintenance brigadesfor both periodic (regravelling) and routine maintenance (reshaping, fillingof potholes, etc.) will depend on the length and condition of the road networkin the regions selected and, on the basis of a road inventory and trafficcounts, will be determined by consultants financed under the project's tech-nical assistance component during the first three months of their assignment.Agreement was reached between Government and the Association that, followingthe definition by consultants of maintenance requirements, a list of roads tobe regravelled under the 2-year regravelling program (1980-82) as well as
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staffing needs, the number and type of equipment to be financed under theproject, and the timing of equipment procurement will be agreed betweenGovernment and the Association (para 5.01(h)).
(iii) Strengthening of Regional Workshop Operations
3.13 At present DE's regional workshop facilities are not equipped foradequate maintenance and repair of the equipment fleet. The proposed projecttherefore provides for improvement of workshop buildings and procurement ofworkshop tools, equipment and spare parts for the mechanical workshops atthe regional district centers in Antananarivo, Mahajanga, Fianarantsoa,Toamasina and Toliara. Workshop facilities in the remaining district centerat Antomboka will be improved under the Fourth Highway Project (para 2.27).Details of the scope of improvements to building facilities and requirementsfor workshop tools and equipment and spare parts have been confirmed withGovernment. The assistance provided under the proposed project and the FourthHighway Project should significantly strengthen the capacity of DE's regionalmechanical workshops to maintain and carry out minor and medium repairs toroad maintenance equipment; major equipment overhaul and rehabilitation willbe carried out at DE's central workshop in Antananarivo.
(d) Labor-Intensive Work Program
3.14 The project includes financing for a short consultants' study ofabout 10 man-months to determine which maintenance and improvement works,if any, might economically be carried out by more labor-intensive work methodsthan are currently used. If such methods seem feasible, based on the supplyof labor in the project area, the wage rate of laborers, and the availabilityof field supervisory staff or facilities for training supervisors, a detailed2-year demonstration program to train local staff in these methods will bedefined by consultants. For the 2-year program, consultants would list:specific projects to be carried out; the most economic equipment/labor mix;technical assistance requirements; equipment, spare parts, tools and materialsneeds; capital and operating costs; and the number and qualifications ofcounterparts and local staff required. Financing of the demonstration programwould cover technical assistance, equipment, and operating costs for fuel,spare parts and materials; adequate funds have been included in the projectcosts to cover these items. An outline of terms of reference for the identi-fication study have been discussed and agreed with Government. The demon-stration program will take into account the role and functions of localcommunities and Government's objective of developing cooperatives respon-sible for road maintenance and improvement. Agreement was also reachedwith Government that, following definition of the demonstration program byconsultants, Government and the Association will discuss and agree onspecific works to be carried out, equipment and materials to be procuredunder the project, and the staff required for the demonstration program(para 5.01(i)).
(e) Feasibility and Detailed Engineering Studies
3.15 The project provides financing for a feasibility study and, ifconstruction is economically justified, detailed engineering for about 170 km
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of National Road (RN) 13, located between RN 7 and the Manandrotsy bridge.With daily traffic of about 60 vehicles, this road forms part of the country'smajor north-south axis linking the regional district center of Taolanarowith Antananarivo. At present this is an earth road in poor condition and isparticularly poor during the rainy season when the safe driving speed isreduced to about 10 km/hour on most of the road. Improvement of this road toadequate engineering standards is one of Government's highest priorities inthe transport sector, and the proposed project will assist Government towardsthis objective.
(f) Training by Technical Assistance
3.16 As mentioned (para 2.11), Government's road maintenance effortis presently constrained by a shortage of qualified staff at all levels.Technical assistance will therefore be provided under the project to assistGovernment in improving the maintenance organization and operations in tworegional districts, strengthening equipment maintenance and repair in fiveregional districts, and training local staff. The mission estimates thata total of 168 man-months of consultant services will be needed over a 2-yearperiod and will consist of:
(i) two civil engineers, one in each of the two regionaldistricts for a period of two years each;
(ii) two cost accounting experts, one in each regional districtfor a period of two years each;
(iii) two road foremen, one in each regional district, for aperiod of two years each; and
(iv) one mechanical engineer for two years.
3.17 Training would primarily take place on-the-job. Each civil engineerin the above-mentioned team would advise the regional district engineer (hiscounterpart) in matters related to road maintenance (para 3.10) besides advis-ing and training the remaining supervisory staff in each region (about 3-5engineers, about 15 technicians) in maintenance activities. The cost accoun-tants would advise supervisory staff and train about 48 chiefs of regravellingbrigades (para 3.11) in cost accounting methods; part of this would includein-class training. The road foreman would be assigned solely to the project-financed regravelling brigade to carry out the training duties described inpara 3.12. The mechanical engineer would assist regional staff to implementimprovement of workshop facilities under the project, introduce a more effec-tive equipment maintenance and repair system, and train local personnel.
3.18 Government has accepted technical assistance for project execution,and agreement has been reached with Government on the scope and timing ofconsultant services for that technical assistance (para 5.01(j)). In addition,a notional amount of 72 man-months of technical assistance to train localstaff in labor-intensive methods has also been included in the project.Agreement was reached with Government that all experts financed under theproject will be employed on terms and conditions satisfactory to the Associa-tion (para 5.01(k)).
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(g) Fellowships
3.19 In order to improve MTP's long-term road maintenance capability,local supervisory staff should receive advanced training in specializedaspects of highway maintenance and equipment repair as well as civil andmechanical engineering; the proposed project will therefore provide fellow-ships abroad for suitable qualified Malagasies. Government has agreed thatthe number and types of fellowships required to train local staff will bedefined by consultants under the project's technical assistance componentand thereafter will be agreed by Government and the Association (para5.01(1)).
D. Cost Estimates
3.20 Total project costs, including contingencies, are estimated by themission at about US$45.7 million or US$40.9 million, excluding taxes. Theforeign exchange component is estimated at US$34.0 million or 74% of totalproject costs. Details of project costs are provided in Table 3.2 below.
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Table 3.2: Estimated ProJect Costs
FMG million US$ '000 ForeignLocal Foreign Total Local Foreign Total Exchange
I. ROAD REHABILITATION
(i) Paved Roads (500 km)(a) Construction 503 1,173 1,676 2,286 5,334 7,620 70(b) Supervision of construction 17 67 84 76 304 380 80
(i) Physical - 10% on I(i), II 142 279 421 648 1,268 1,916
(ii) Pricel1 297 594 891 1,350 2,700 4,050
Subtotal VIII 439 873 1,312 1,998 3,968 5,966
TOTAL 2,586 7473 10,059 11,756 33,966 45,722 74
TOTAL (net of taxes) 1,529 7,473 9,002 6,954 33,966 4020
1/ Price contingencies provide for anticipated inflation over the implementation period and werederived as follows:
(i) Foreign costs:
1979 1980 1981 1982% Z Z Z
Civil works 7.5 7.0 7.0 7.0Equipment 6.5 6.0 6.0 6.0
(ii) Local costs: 1979 - 9%; 1980-82 - 8%.
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3.21 Total project costs, estimated at May 1979 prices, were derivedas follows:
(a) Rehabilitation of Paved Roads - based on average costs
for similar work in Madagascar;
(b) Materials, Fuel - based on the Maintenance Study carriedout by consultants Berger (US) under the Fourth HighwayProject and actual costs for these items in the country;
(c) Salaries - for local staff, based on the Government payscale;
(d) Construction of Bridges on Antsohihy-Ambanja Road - basedon detailed engineering by consultants, BCEOM (France), in1976 and updated to reflect current costs for this item inthe country;
(e) Road Maintenance Equipment - notional amount, based onmission's estimates (pending detailed evaluation of needsby consultants under the proposed project);
(f) Workshop Tools and Equipment, Spare Parts and Improvementof Workshop Buildings - based on detailed estimates byGovernment which are satisfactory;
(g) Bitumen Stock - based on mission's estimate of requirementsand current actual costs of bitumen in the country;
(h) Labor-Intensive Works - based on costs for similar worksin the region, assuming (i) 10 man-months of consultants'services for an identification study at US$8,300 per man-month including costs of travel, report processing, localhousing, etc., and (ii) implementation of a 2-year demon-stration program, including a notional amount for procure-ment of minor equipment and equipment operating costs, handtools, materials and costs for about 200 laborers;
(i) Technical Assistance - based on the current cost of con-sultants in Madagascar, consisting of about 240 man-monthsof consultants' services at the billing rate of aboutUS$6,000 per man-month, net of taxes and contingencies,including salaries, overheads (home and offices expenses,expatriate allowances, social security and other indirectexpenditures) and fees. In addition, reimbursable expensespayable to consultants average about US$1,400 per fieldman-month and include housing, internal and externaltravel, telecommunications, report preparation, etc.;
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(j) Supervision of Construction - assumed to be 5% of total costof rehabilitating paved roads and about 6% of total cost ofbridge construction works;
(k) Feasibility and Detailed Engineering Studies - based onUS$5,500 per km of road as currently paid by Governmentfor similar studies in the country; and
(1) Fellowships - based on mission's estimate of trainingneeds.
E. Financing
3.22 An IDA Credit of US$24.0 million will be provided for projectfinancing. A Special Action Credit of about US$10.0 million from the EuropeanEconomic Community (EEC) will also be available and will be administered bythe Association. These amounts should cover the project's total foreign costs;Government will provide about US$11.7 million for local costs, includingUS$4.8 million in taxes. A project financing plan is shown on the followingpage.
F. Implementation and Procurement
Rehabilitation and Resurfacing of Paved Roads
3.23 The MTP, assisted by consultants provided under the project, willbe responsible for project execution. Rehabilitation and resurfacing of pavedroads will be by contract let on a unit price basis following internationalcompetitive bidding (ICB) in accordance with Bank Group Guidelines. It is ex-pected that contractors from EEC member countries will be awarded most of thecontracts, which will be financed under the EEC Special Action Credit. A con-sultant's study to be financed under the Fourth Highway Project will definethe length, location and construction standards of road sections to berehabilitated and resurfaced; the study will be completed by the end of 1979.Work is expected to start in early-1980 and to take about 12 months to com-plete. The following points have been agreed with Government (para 5.01(m)):
(a) the length, location and construction standards of roadsections to be rehabilitated and resurfaced under theproject will be agreed by Government and the Associationfollowing completion of the consultant's study;
(b) the execution of works by contractor following ICB;and
(c) the supervision of construction by consultants selectedby Government on terms and conditions satisfactory to theAssociation.
TABLE 3.3: FINANCING PLAN(us$ '000)
% OF FINANCINGIDA EEC GOVERNMENT TOTAL OF TOTAL COSTS
Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total IDA EEC GOVT.
GRAND TOTAL - 23,966 23,966 - 10,000 10,000 11,756 - 11,756 11,756 33.966 45,722 >2 22 26
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Bridge Construction
3.24 Construction of bridges and approaches on the Antsohihy-Ambanja roadwill be let on a unit price contract following ICB, in accordance with BankGroup Guidelines. Works will be divided into three separate lots and willbe bid concurrently in order to attract foreign participants. Contractorswill be prequalified to bid on one or more lots. Construction is expectedto start in early-1980 and to be completed within 30 months. Supervision ofconstruction will be carried out by consultants selected by Government andemployed on terms and conditions satisfactory to the Association. The scopeof each of the three lots will be defined by Government on the basis of apreliminary work program and will then be agreed by Government and the Asso-ciation; bid award following ICB and supervision of construction by consultantson terms and conditions satisfactory to the Association have also been agreedby Government and the Association (para 5.01(n)).
Improvement of Road Maintenance Operations
3.25 Routine (reshaping, filling of potholes, etc.) and periodic mainte-nance (regravelling) will be carried out by MTP's regional district offices byforce account. Regravelling operations will be done by mechanized brigades;eventual introduction of the appropriate labor/equipment mix for these workswill be considered in more densely populated areas following completion of theidentification study described in para 3.14. Consultants financed under theproject will work in an advisory capacity to the regional district engineersand are expected to begin work in early-1980.
Improvement of Regional Workshops
3.26 Construction and improvement of workshop buildings in five regionalcenters will be carried out by force account for minor improvements of exist-ing buildings, and by contractors for major improvement work or new construc-tion, following local competitive bidding procedures which are satisfactory.Work is expected to start in early-1980 and to take about six months tocomplete.
Labor-Intensive Work Program
3.27 The identification study to determine an appropriate labor/equipmentmix for rehabilitation and maintenance operations in Madagascar will becarried out by consultants, commencing in early-1980, and will take aboutthree months to complete. If this methodology proves economically viable, a2-year demonstration program to train local staff in these methods will bedefined by consultants and thereafter agreed by Government and the Association(para 3.14).
Feasibility and Detailed Engineering Studies
3.28 The studies will be carried out by consultants selected on termsand conditions satisfactory to the Association. The feasibility study
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is expected to start in early-1980 and to take about six months to com-plete. If construction is found economically justified following review ofthe study's recommendations by Government and the Association, detailedengineering is expected to take about six months to complete.
Equipment, Spare Parts and Materials
3.29 Equipment and spare parts will be procured by ICB, following BankGroup Guidelines. Spare parts can also be procured by other means besidesICB if Government can demonstrate to the Association that ICB will not havesatisfactory results. Agreement was reached with Government that contractsfor single units of equipment and groups of equipment, tools, materials andsupplies costing less than US$50,000 will be awarded on the basis of quota-tions from suppliers; the total amount of these items will not exceed US$500,000(para 5.01(o)). Procurement of a stock of 400 tons of bitumen will beaccording to established local Government procurement procedures which aresatisfactory. The DE will be in charge of procurement of equipment and spareparts.
3.30 Completion of the project is expected by the end of 1982. An imple-mentation schedule (Chart 3), a progress reporting system (Annex 1) andthe preparation of a project completion report within six months of theClosing Date have been discussed and agreed by Government and the Association(para 5.01 (p)).
G. Disbursement
3.31 Disbursement from the Credit will be made on the following basis:
IDA Credit
(a) 70% of total expenditures for the rehabilitationand resurfacing;
(b) 62% of total expenditures for construction of bridgesand their approaches on the Antsohihy-Ambanja road;
(c) 60% of total expenditures for improvement of workshopbuildings including materials;
(d) 100% of foreign expenditures for equipment, workshop toolsand equipment, spare parts, fuel and bitumen, or 75% of localexpenditures if previously imported; and
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EEC Special Action Credit
(a) 70% of total expenditures for the rehabilitationand resurfacing;
(b) 62% of total expenditures for construction of bridgesand their approaches on the Antsohihy-Ambanja road; and
(c) 100% of foreign expenditures for consultants' services forconstruction supervision under (a) and (b).
All disbursement will be fully documented. Disbursement from the Creditaccount will be as follows:
Table 3.4: Estimated Schedule of Disbursements of IDA Credit
IDA Fiscal Year Cumulative Disbursementsat Quarter Ending at End of Quarter
3.32 The road rehabilitation and maintenance works carried out underthe project will improve drainage and thus help to decrease soil erosion,which is a serious problem in Madagascar. Otherwise, the project will haveno influence on the ecology of the country.
IV. ECONOMIC EVALUATION
A. Introduction
4.01 The proposed project will continue the training and maintenanceeffort begun under the Fourth Highway Project. Its main objectives are:(a) to improve the condition of 500 km of paved roads through a resurfacingand rehabilitation program; and (b) to strengthen the road maintenance capac-ity of the central administration of the Ministry of Public Works and itsdecentralized regional authorities through: acquisition of road maintenanceequipment, spare parts and tools, a regravelling program for 400 km of roadsand the training of personnel at all levels through a combination of formaland on-the-job training.
4.02 Proper maintenance of roads is of vital importance in Madagascarwhere an often scattered population must rely on roads as the only meansof communication. Better maintenance would also support the country's effortto improve the production and distribution of foodcrops, and could help toreduce the country's dependence on imported foods, particularly rice, bystimulating production through better and cheaper access to markets.
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4.03 The project also includes construction of 6 major and 14 mediumsize bridges (total length 1.04 km) on the road section linking Antsohihy-Ambanja, including the necessary approaches, and upgrading of the road topermit year-round travel, the latter to be performed by Government. This isthe only section of the Antananarivo-Antomboka road not yet constructed to allweather standards. Construction of bridges under the project will allowyear-round access to the northern part of the country which is now cut offduring the rainy season, and is in line with Government's objective of linkingall provincial capitals to Antananarivo. Antomboka is the only provincialcapital which is not currently accessible to Antananarivo on a year-roundbasis.
B. Benefits and Beneficiaries
4.04 The project's maintenance components will provide significantbenefits to the majority of the population over a wide area of the country.Generally, they should result in: reductions in transport costs of marketedgoods; improved access to areas which are otherwise cut off during certainperiods of the year; and better access to administrative and social facili-ties. Project components for the rehabilitation and resurfacing of pavedroads and the regravelling of gravel roads will help prevent furtherdeterioration of roads to be included in the program, all of which are keyportions of Madagascar's primary road network. Benefits from the rehabili-tation and resurfacing will accrue to road users primarily in the form ofvehicle operating cost (voc) savings and reduced maintenance costs. For theroad maintenance component, benefits will also accrue in the form of reducedvehicle operating costs and improved maintenance capability. Furthermore,if labor-intensive work methods prove economically feasible for road mainte-nance, the use of such methods will enhance job opportunities and reduce theneed for foreign exchange required to purchase equipment and fuel from abroadif equipment-intensive techniques were used.
4.05 It is expected that reductions in vehicle operating costs will bepassed on to producers and consumers in the form of reduced transport costsand reduced prices for marketed goods. Since freight and passenger tariffsare based on road conditions, they would take into account reductions invehicle operating costs due to road improvements. While these tariffs are
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intended for all transport, in practice they are only applied to government-related transport. Tariffs applied to non-government transport do, however,reflect road conditions, and such transport is competitive.
4.06 The road improvements and bridge construction on the Antsohihy-Ambanja road will have an influence on an area with a population estimated atabout 1.2 million. The work to be carried out will permit year-round use ofthe road and result in decreased vehicle operating costs. It is also expectedthat a considerable amount of traffic will be generated by these improvementssince this road is the only surface link between the provincial capital ofAntomboka and Antananarivo. Unquantified benefits include the eliminationof the cost of operating two ferries and the annual reconstruction of a numberof small wooden bridges which must be rebuilt at the end of each rainy season.The time and cost of getting crops to markets will also be reduced. With theroad now impassable during the rainy season, the crops produced in the area(sugar cane, cotton, corn, cocoa and cassava) are usually transported bycoastal shipping which results in long delays and high transshipment costsdue to the insufficient capacity and small size of ships available in thecoastal shipping fleet.
C. Economic Analysis
Rehabilitation and Resurfacing of Paved Roads
4.07 The economic analysis for this project component compares thecosts and benefits arising from the rehabilitation and resurfacing of sec-tions of the Antananarivo-Mahajanga and Antananarivo-Fianarantsoa roads overa period of five years, taken to be the economic life of the new road surface.Economic costs of the program are adjusted to exclude taxes and to include a10% allowance for physical contingencies and are expressed in constant May1979 prices. The quantified benefits consist of savings in vehicle operatingcosts derived from the following table. Savings in reconstruction costs,which would be necessary if the resurfacing and rehabilitation program werenot undertaken, have not been quantified but would be substantial.
4.08 On the basis of traffic counts carried out by Government and con-sultants in 1978, annual average daily traffic on the present paved road fromAntananarivo to Mahajanga is 160, of which one-third are cars, one-third heavyvehicles and the remainder distributed between buses and light commercialvehicles. On the Antananrivo-Fianarantsoa road section, traffic is currently250 vpd, with about one-half cars and light vehicles and one-half heavytraffic. The analysis assumes that traffic will grow at only 3% p.a. over thelife of the improvement, in line with the observed increase in the vehiclefleet (para 2.03). The economic analysis indicates that the rehabilitationand resurfacing of the two road sections would yield rates of return in excessof 100%. Cost and benefit streams for this component are as follows:
Table 4.2: Economic Evaluation-Paved Road Rehabilitation and Resurfacing(FMG millions)
Antananarivo-Mahajanga RoadCost of Maintenance Maintenance VOC
4.09 This component includes the creation of one regravelling trainingbrigade in each of two regional districts. Since the specific roads to beregravelled will only be selected during project implementation (para 3.12),the economic evaluation is based on average road conditions and trafficcounts. The analysis compares the "with project" situation, in which about100 km of gravel roads are regravelled annually by each brigade during a 2-yearperiod, with the "without project" case, with the roads receiving no more thana minimal level of recurrent maintenance. All costs and benefits are net oftaxes and subsidies, and are in constant May 1979 prices.
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4.10 The costs of the road regravelling component are calculated toinclude the cost of labor, equipment, materials, fuel, spare parts and thetechnical assistance used in implementation. Also included are the incre-mental recurrent maintenance costs required to maintain the roads in propercondition if all of the benefits from the regravelling are to be realized.
4.11 The quantified benefits of the road regravelling component consistof savings in vehicle operating costs based on the estimates presented inpara 4.07. All roads to be regravelled are taken to be in poor conditionat present and will be raised to good gravel standard under the proposedproject. The lifetime of the regravelled surface is taken as five years,considering the presently estimated average traffic volumes of about 60 vpd.Traffic growth is assumed at 3% p.a. On the basis of traffic counts in 1978,traffic composition co.nsists of one-third cars, one-third heavy vehiclesand one-third light commercial vehicles and buses. Economic analysis ofthis component indicates an economic rate of return of 37% and a benefit/costratio of 1.49:1, assuming a 12% cost of capital. During project execution,individual road sections selected for regravelling will be subject to aneconomic evaluation to determine their acceptability. At that time, theanalysis will be based on actual costs and traffic volumes for each roadsection. The analysis will be carried out by Government based on semi-annualtraffic counts and reviewed by the Association. The method of economicevaluation of roads to be regravelled and the acceptability for IDA-financingof roads having rates of return of at least 12% were agreed with Government(para 5.01(q)). Cost and benefit streams are as follows:
Economic Rate of Return: 37%Benefit/Cost Ratio: 1.49:1 (based on 12% discount rate)Sensitivity Tests: + 50% costs: ERR = 18%
- 25% benefits: ERR = 18%
Road Maintenance Components
4.12 No rate of return calculation has been attempted for project com-ponents intended to improve maintenance operations, but historically thesehave tended to result in relatively high rates of return. The road mainte-nance components primarily involve the establishment of an improved main-tenance capacity without being directly linked to any measurable output or
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defined program. However, they will undoubtedly result in improved workorganization, increased efficiency in operating and maintaining equipment, and
better road maintenance procedures. Overall, these maintenance elements areexpected to result in reduced vehicle operating costs and increased efficiency
of the road transport industry; these benefits will accrue to the economy as awhole and will be passed on to different segments of the population in varying
degrees. Reduced vehicle operating costs will directly benefit the owners ofprivate cars and commercial vehicles, and since transport prices are deter-mined in a competitive framework, part of this benefit should be passed on toproducers and consumers. There will also be Government savings in future roadrehabilitation costs.
Road Improvement and Bridge Construction
4.13 For the construction of bridges and their approaches on theAntsohihy-Ambanja road, the costs are calculated to include both physical andprice contingencies as well as the cost of supervision. In addition, theeconomic evaluation takes into consideration the estimated cost of work to beperformed by Government to ensure year-round use of the entire road length(165 km). The quantified benefits of the project component consist of savingsin vehicle operating costs based on the estimates presented in para 4.07. Theexisting road is an earth road in poor condition with many of its low lyingareas and existing bridges flooded during the rainy season. The analysiscompares the "with project" situation, in which 20 bridges will be constructedand the road improved to a good earth standard with the "without project"case, where the existing road is only open for about five or six months of theyear and receives no more than a minimal level of recurrent maintenance. Allcosts and benefits are net of taxes and subsidies, and are in constant May1979 prices.
4.14 The lifetime of the bridges and road improvement is taken as 20years. Traffic on the existing road is currently 57 vpd. In addition toexisting traffic, the analysis assumes that construction of the bridges androad improvements will generate new traffic as well as divert a certain per-centage of traffic from coastal shipping and air transport to the road. Forthe purpose of this analysis only the existing and generated traffic havebeen quantified. Generated traffic is calculated on the basis of one-halfof the traffic on the road sections leading from both ends of the Antsohihy-Ambanja road. The analysis assumes that these benefits will be realizedone-third in the first year, one-third in the second year, and the last third
in the third year of the economic life of the road. The economic analysis ofthis component indicates a rate of return of 16%. Cost and benefit streamsare as follows:
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Table 4.4: Economic Evaluation-Road Improvement and Bridge Constructionon the Antsohihy-Ambanja Road
(FMG million)
Benefits
Year Costs Normal Generated NetTraffic Traffic Eenefit
1980 1257.90 0.00 0.00 -1257.90
1981 1257.90 0.00 0.00 -1257.90
1982 738.95 0.00 0.00 -738.95
1983 110.00 200.14 153.10 243.24
1984 110.00 206.14 306.20 402.34
1985 43.50 212.33 459.30 628.13
1986 43.50 218.70 473.08 648.28
1987 43.50 225.26 487.27 669.03
1988 43.50 232.02 501.89 690.41
1989 43.50 238.98 516.95 712.43
1990 43.50 246.15 532.45 735.10
1991 43.50 253.53 548.43 758.46
1992 43.50 261.14 564.88 782.52
1993 43.50 268.97 581.83 807.30
1994 43.50 277.04 599.28 832.82
1995 43.50 285.35 617.26 859.11
1996 43.50 293.91 635.78 886.19
1997 43.50 302.73 654.85 914.08
1998 43.50 311.81 674.50 942.81
1999 43.50 321.17 694.73 972.40
2000 43.50 330.80 715.57 1002.87
2001 43.50 340.72 737.04 1034.26
2002 43.50 350.95 759.15 1066.60
Rate of Return: 16%
Sensitivity Tests:+20Z costs or -202 benefits: ERR- 132
Overall Project Rate of Return
4.15 The project's major components for which benefits have been quan-tified include the paved road rehabilitation with rates of return in excessof 100%, the regravelling component with a rate of return of 37% and theroad improvement and bridge construction on the Antsohihy-Ambanja road forwhich the rate of return is 16%. The overall weighted return for the proj-ect is 61%.
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D. Risks
4.16 Rates of return for the rehabilitation and resurfacing program ofpaved road sections exceed 100% in both cases. Large increases in costs ordecreases in benefits are unlikely to make this program uneconomic. For theroad regravelling component, where the rate of return is 37%, sensitivitytests reveal that a 50% increase in costs or a 25% decrease in benefits wouldboth yield an 18% rate of return. For the bridge construction and roadimprovements on the Antsohihy-Ambanja road, sensitivity tests indicate that a20% increase in costs or 20% decrease in benefits will yield a 13% rate ofreturn. Since generated traffic contributes a major part of the benefitsaccruing from the bridge construction and road improvement, sensitivity testshave been carried out which reveal that a 35% decrease in generated trafficwould still allow a 12% rate of return for this component.
4.17 The successful implementation of the rehabilitation and regravellingcomponents could be jeopardized by (a) the failure of Government to release ona timely basis adequate maintenance funds to the regional district offices;(b) interference of the regional political authorities in the implementationof an established maintenance program; and (c) Government slowness in timelyrecruitment and nomination of consultants. These problems, which couldprolong project implementation and thereby increase costs and postpone benefits,were discussed with Government and measures to minimize these risks have beenagreed (para 5.01(b), (c), (f) and (j)).
V. AGREEMENTS REACHED AND RECOMMENDATION
5.01 Agreement was reached with Government on the following:
(a) a road maintenance training-program for MTP staff will beprepared and carried out; for this purpose, consultantswill be employed by January 1, 1980, with qualifications,experience, and terms and conditions of employment satis-factory to the Association; the Association will beconsulted on Government's decisions relative to thetraining program to be executed; and constructionof such training facilities as shall be required tocarry out the training program will start by January 1,1980 (para 2.13);
(b) at least FMG 3,960 million (US$18 million equivalent)will be allocated for operating expenditures in the 1980budget; Government will allocate at least FMG 1,100million (US$5 million equivalent) for equipment renewalin the 1980 budget and make its best efforts to obtainexternal financing for an additional FMG 1,100 millionfor the same purpose; and after 1980 and until thecompletion of the project, Government and the Association
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will from time to time discuss the appropriateness ofbudgetary allocations for road maintenance in the lightof inflation and the scope of required maintenanceoperations (para 2.17);
(c) annual budgetary allocations for road maintenance willbe made available to the regional district officespromptly as needed for uninterrupted operations (para2.18);
(d) Government will ensure that adequate amounts of bitumenwill be made available as and when required over theproject period for the rehabilitation and maintenanceof its roads (para 3.06);
(e) the improvement by Government of the Antsohihy -Ambanja road to allow year-round serviceability will becompleted by the time bridge construction on the roadis finished (para 3.08);
(f) a central administrative unit for road maintenance willbe established within MTP and headed by a qualified andexperienced engineer by January 1, 1980, and will beprovided with adequate supporting staff (para 3.09);
(g) the improvement of road maintenance in the two regionaldistricts of Mahajanga and Toliara (para 3.10);
(h) following definition by consultants of maintenance require-ments, Government and the Association will agree upon alist of roads to be regravelled under the 2-year regravellingprogram (1980-82) as well as staffing needs, the number andtype of equipment to be financed under the project, and thetiming of equipment procurement (para 3.12);
(i) if more labor-intensive work methods are economically viablefor maintenance operations, consultants will define a 2-yeardemonstration program, and Government and the Associationwill discuss and agree on specific works to be carried out,equipment to be procured under the project, and the staffrequired for the demonstration program (para 3.14);
(j) the scope and timing of consultant services for technicalassistance (para 3.18);
(k) all consultants financed under the project will be employedon terms and conditions satisfactory to the Association(para 3.18);
(1) the number and types of fellowships required to train localstaff will be defined by consultants and thereafter will beagreed by Government and the Association (para 3.19);
- 44 -
(m) the length, location and construction standards of roadsections to be resurfaced and rehabilitated under the projectwill be agreed by Government and the Association followingcompletion of the consultant's study; the execution of works bycontractor following ICB; and the supervision of constructionby consultants selected by Government on terms and conditionssatisfactory to the Association (para 3.23);
(n) construction of bridges for the Antsohihy-Ambanja roadwill be divided into three lots, the scope of each lotto be defined by Government and satisfactory to theAssociation; bid award following ICB; and supervisionof construction by consultants on terms and conditionssatisfactory to the Association (para 3.24);
(o) contracts for single units of equipment and groupsof equipment, materials and supplies costing less thanUS$50,000 will be awarded on the basis of quotationsfrom suppliers, the total amount of these items not toexceed US$500,000 (para 3.29);
(p) an implementation schedule, a progress reporting system andthe preparation of a project completion report withinsix months of the Closing Date (para 3.30); and
(q) the method of economic evaluation of roads to be regravelledand the acceptability for IDA-financing of roads having ratesof return of at least 12% (para 4.11).
5.02 Employment of consultants by January 1, 1980 to prepare and carryout the road maintenance training program, and start of construction of therequired training facilities at CATP by January 1, 1980, will be conditions of.Credit disbursement for all project components except that referred to inpara 3.04(a) above (para 2.13).
5.03 With the agreements and conditions outlined above, the project issuitable for an IDA Credit of US$24.0 million on standard terms to the Republicof Madagascar and an EEC Special Action Credit of about US$10.0 million.
May 18, 1979
- 45 -
ANNEX 1Page 1
DEMOCRATIC REPUBLIC OF MADAGASCAR
FIFTH HIGHWAY PROJECT
STAFF APPRAISAL REPORT
Project Reporting Requirements
A. Project Progress Reports
1. The borrower will prepare Progress Reports that should be submitted
semi-annually in triplicate, no later than one calendar month after the end
of each six-month period. The first report should cover the half-year period
ending June 30, 1980.
2. The information that Progress Reports should contain is described
below:
(a) General information: this should include the following:
(i) the physical progress accomplished during the reportingperiod;
(ii) actual or expected deviations from the project imple-mentation schedule;
(iii) actual or expected difficulties or delays and their effectson the implementation schedule, and the steps planned ortaken to overcome the difficulties and avoid further delay;
(iv) expected changes in the completion data of the project;
(v) key personnel changes in the staff of the administration,consultants or contractor;
(vi) matters which may affect the cost of the project; and
(vii) any development activity likely to affect the economicviability of project components.
(b) A bar-type progress chart, based on the project implementationscheduled should show the progress in each project component.
- 46 -
ANNEX 1Page 2
(c) A financial statement should be set out in the tabular formand indicate for each project component:
(i) original estimated cost;
(ii) revised cost, if appropriate;
(iii) actual expenditure;
(iv) projected expenditure; and
(v) actual and projected withdrawals from the Credit Account.
(d) Finally, Progress Reports should state the status of action oneach covenant of the Credit Agreement.
3. Progress Reports will be an important input in the preparation ofthe Project Completion Report.
B. Project Completion Report
4. The borrower will prepare a Project Completion Report (PCR), to besubmitted to the Association not later than six (6) months after the ClosingDate.
5. The primary objective of the PCR is to reinforce self-evaluationby the borrower and the Association's operating departments and to facilitatedissemination of lessons learned through the project:
(a) the performance by the borrower and the Association of theirrespective obligations under the Credit Agreement and whetherthe Association could have been more helpful;
(b) the results that can be expected from the project, as comparedwith expectations at appraisal, and whether the original ex-pectations were realistic; and
(c) whether in retrospect the project was worth doing or couldhave been done better.
6. For those components of the project for which a rate of returnwas estimated during appraisal, the PCR should contain a new estimate of thereturn the project is now likely to yield and analyze the reasons for physicalor economic deviations. However, the new rate of return calculations shouldbe as simple as possible under the circumstances and should absorb only aminor portion of the time devoted to the preparation of the PCR. An annexwith the relevant information supporting this analysis should be included.
8. The Highway Division, Eastern Africa Projects Departments, will
review and comment on the PCR in consultation with the Programs Department.After approval by the Highway Division Chief, the PCR is sent to the BankGroup's Operations Evaluation Department (OED) which is responsible for con-ducting an audit of the project subsequent to the PCR exercise. This auditcan lead to suggestions for changes or additions in the PCR as OED preparesthe Project Performance Audit Report (PPAR) for submission to the BankGroup's Board of Directors. Before going to the Board, the draft PPAR, whichincludes the PCR, is sent to various Bank Group divisions, to the Government,and occasionally to consultants.
May 1979
- 48 -ANNEX 2
DEMOCRATIC REPUBLIC OF MADAGASCARFIFTH HIGHWAY PROJECTSTAFF APPRAISAL REPORT
Bridges to be Constructed Under the Project
Number ofRiver to Cross Station Span Traffic Lanes
(km)
Andampy 16.229 2 x 30m 1
Anjingo No 1 17.600 1 x 30m 2
Anjingo No 2 18.227 2 x 40m 1
Tsilokivary 19.995 26m 2
Sahavalanina 30.001 32m 2
Antsohihely 32.017 17m 2
Maevarana 42.641 8 x 40m 1
Manambaro 59.341 1 x 40m 1
Maropapango 64.403 1 x 30m 2
Antotoro 67.296 21m 2
Mahitsihazo 69.002 2 x 30m 1
'Ratsianarana 72.327 1 x 30m 2
Ampanolaka 78.186 1 x 30m 2
Ambahitsivikinina 89.490 1 x 30m 2
Anadroadro 104.718 21m 2
Ankaramihely 110.897 2 x 16m 2
Ankaramibe 115.140 2 x 16m 2
Andaingibe 137.024 26m 2
Ankingameloka 138.690 32m 2
Djangoa 145.749 3 x 30m 1
- 49 -
ANNEX 3
DEMOCRATIC REPUBLIC OF MADAGASCAR
FIFTH HIGHWAY PROJECT
STAFF APPRAISAL REPORT
Related Documents and Data Available in Project File
1. Feasibility of Labor-based Methods for Road Constructionand Maintenance: Identification Study, Outline Terms of Reference.
2. Detailed Engineering Study of the Antsohihy-Ambanja Road, BCEOM, 1976.
3. Situation of the Fourth and Fifth IBRD Highway Projects and Identi-fication of Requirements to Improve Regional Workshops, Directorateof Equipment, MTP, 1978.
*May 1979
DEMOCRATIC REPUBLIC OF MADAGASCARFIFTH HIGHWAY PROJECT
ORGANIZATION OF MINISTRY OF TRANSPORT AND SUPPLIES
MINISTRY __ dvsr
MSnistere des Transports et durRavitailnment a t
Secretary General
Sea, Road and River Transpo upplies Civil Aviation and Meteorologyo ._ ~~~Transports Maritimes, Routiers..
_ .- _t lviut Ravitalillement Aero. Civile et Meteorol.
. w ,2 ~~~~~~Mercantile Mlanning Ai Tranpor
. x I ~~~~~~~Marine marchad lanfictio Transport Aerien l_ GIseto
0. L) Port Operation P Air Navigation General MattersExploitat. portuaire Navigation Aerienne r Affaires Generales
L'
Roads and River Transport Meteorology_ ransport Routiers et .. _
g w Fluviaux . . _ .Meteorologie
Coast Divisions Provincial Div. I Airfields and Meteo. Posts
e Capitainerie rovinciaux Rav Arodromes et Stations Me6to.
c}. -| Rilas RNF
- ~ ENEM Auxiliares de Navig. Air Madagascarc
LU AEN'a E Socite d'Exploitation ASECNAc c du Port de Toamasina Ecole Nationale d'Aviation Civile
zt 0Bureau Profes. des Transports
SoUrce: Ministry of Transport and Supplies World Bank-15025(R)
DECENTRALISESI ET G LINSPECTION) ET CONVENTIONS) GESTIONI
DIRECTORATE FOR PROGRMMING SIRECTORATE OF STOGIES
MANAGEMENT ANG TRAINING CoNTOL AND WORKS GIRECTORAT OF EQUIPMENT GIRECTORATE FORUARBANIZATION ANO MOUSING
RECTION DE LA PROGRAMMATION, DIR CON D00 ETUEES DE DIRECTION DU MATERIEL) (DIRECTION DE LAURAN SME ET GE LHOASITAT
DE LA GESTION ET DE LA FORMATION) CONTROLE ET DES TRAVAUX I
S.u- VWs .1 Public 1978 W-dd B -
-1970
MADAGASCAR CHART 3
FIFTH hIGHWAY PROJECT
Implementation Schedule
Responsibility
I. Road Maintenance 1979 198 1981 1982
A. Procurement of Equipmenti) Preparation of bidding documents Government/Consultants
ii) Bidding Governmentiii) Evaluation of bids and contract award Government/IDA
iv) Delivery Government/Suppliers
B. Workshop Buildings, Tools and Equipmenti) Preparation of drawings and bidding
documents Governmentii) Bidding Government
iii) Evaluation of bids and contract award Government/IDAiv) Construction of buildings Government/Contractorsv) Delivery of tools and equipment Suppliers
C. Material Stocki) Bidding Government
ii) Evaluation of bids and contract award Government/IDAiii) Delivery Seppliers
II. Bridges - Antsohihy-Ambanla Road
i) Prequalification of contractors Government/IDAii) International competitive bidding Government
iii) Evaluation of bids and contract award Government/IDAiv) Works Contractor _
III. Road Rehabilitation
A. Paved Roadsi) Preparation of project and bidding
documents Government/Consultantsii) International competitive bidding Government
iii) Evaluation of bids and contract award Government/IDAiv) Works Government
B. Gravel Roadsi) Preparation of program and identification
ef rieeds Government/Consultantsii) Agreement by Association IDA
iii) Equipment Procurementa) Preparation of bidding documents Government/Consultantsb) International competitive bidding Government _c) Evaluation of bids and contract Government/IDA
awardd) Equipment delivery Suppliers
iv) Execution of Programl_7
IV. Labor-Intensive Works
A. Identification Studyi) Agreement on Consultants Government/IDA
ii) Contract award Government/IDAiii) Execution of study Consultantsiv) Agreement on study's recommendations Government/IDA
B. Demonstration Programi) Procurement of equipment
a) Preparation of bidding documents Governmentb) Bidding Governmentc) Evaluation of bids and contract award Government/IDAd) Equipment delivery Suppliers
ii) Execution of program Government/Consultants
V. Feasibility and Detailed Engineering Studies - RN 13
* i) Consultants' shortlist Government/IDAii) Proposals Government
iii) Evaluation of proposals and contract award Government/IDAiv) Works
a) Feasibility Government/Consultantsb) Detailed Engineering Government/Consultants
VI. Technical Assistance
i) Agreement on consultants' shortlist Government/IDAii) Selection of consultant and contract award Government/IDA
iii) Works Consultants - - - - - _ - --- -
VII. Fellowships
i) Definition of needs Government/Consultantsii) Agreement on training program Government/IDA
iii) Training
I/ Will Be started with existing Government equipment until arrival of equipment financed under project.
IBRD 14098R14?2' 44' _ 28 MAY 1979
T2- g 12~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1t
Ant mboka
MADAGASCARTRANSPORT SYSTEM
FIFTH HIGHWAY PROJECT NOSi-Eob
PREVIOUS HIGHWAY PROJECTS- H o- PAVED ROAD CONSTRUCTiON ......... FEASLITY STUDY Ano 1 o,
GRAVEL ROAD CONSTRUCTION DETAILED ENGINEERING\ BRIDGES * WORKSHOP IMPROVEMENT
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