Document of The World Bank Report No. 16153-RO STAFF APPRAISAL REPORT ROMANIA Second Roads Project May 8, 1997 Infrastructure Operations Division Country Department I Europe and Central Asia Region CURRENCY EOUIVALENTS (as of April 30, 1997) Currency Unit = Leu US$1 = 7,095 Lei 1 Leu = US$0.00014 AVERAGE EXCHANGE RATES Leu = US$1 1995 1996 January 1997 February 1997 March 1997 2,033 3,084 5,146 6,896 7,236 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ARL - Enterprise for Road Repairs and Works CEE - Central and East European EBRD - European Bank for Reconstruction and Development EIB - European Investment Bank EU - European Union HDM - Highway Design Model ICRS - Interministerial Committee for Road Safety IPTANA - Design Institute for Road, Water and Air Transport IRI - International Roughness Index MOT - Ministry of Transport NAR - National Administration of Roads NMT - Non-motorized transport PHARE - Fund for Assistance to Central and European Countries RA - Regie Autonome RAR - Romania Automobile Registry RD - Regional Directorate (of NAR) SICRS - Secretariat of the Interministerial Committee on Road Safety TERN - European Road Network VPD - Vehicles per day ROMANIA - FISCAL YEAR January 1 - December 31 Vice President: Johannes Linn, ECAVP Director: Kenneth G. Lay, ECIDR Division Chief: Ricardo Halperin, ECIIN Staff:: Charles Jeremy Lane (Senior Highway Engineer; Task Manager); Jacques Yenny (Principal Transport Economist); Sven-Ake Blomberg (Traffic Safety Engineer); Anca Dumitrescu (Project Officer, Resident Mission); Sudipto Sarkar, Environment Specialist Peer Reviewers were: E. Vasur (EC2ET) and S. Lundebye (SAIIN) STAFF APPRAISAL REPORT ROMANIA Second Roads Project CONTENTS LOAN AND PROJECT SUMMARY ......... .... ........................ I. THE TRANSPORT SECTOR.1 A. The Transport System .1 . ........................... B. Traffic .................. ........................1 C. Investments.. 2 D. Institutions .............. ........................ 2 E. Sectoral Issues .............. ........................ 3 F. Sector Strategy ............. ........................ 3 G. Previous Bank Experience in the Sector .4 H. Role of the Bank and Lending Strategy .5 II. THE HIGHWAY SECTOR ............ ........................ 6 A. Infrastructure .......................... 6 B. Road Transport ............. ....................... 10 C. Environmental Aspects ................................ 12 m. THE PROJECT .. 13 A. Project Objectives ............ ....................... 13 B. Project Description ................................... 13 C. Engineering and Status of Project Preparation .15 D. Cost Estimates .............. ....................... 16 E. Project Financing ....... .. ....................... 16 F. Implementation and Monitoring ........................... 17 G. Procurement ....................................... 18 H. Disbursements ........................ 18 I. Project Supervision ................................... 19 J. Environmental Impact .19 K. Project Accounts and Auditing ............................ 20 L. Poverty Impact ......................... 20 IV. ECONOMIC EVALUATION .21 A. Framework .21 B. Cost-Benefit Analysis ................................. 21 C. Sensitivity and Risk ........................ 24 V. AGREEMENTS AND RECOMMENDATIONS . .25 CONTENTS (Cont'd) TABLES Table 1.1 - Freight Traffic by Mode of Transport Table 1.2 - Passenger Traffic by Mode of Transport Table 1.3 - Transport Sector Investment Table 2.1 - Road User Charges: Fuel Tax Revenues Table 2.2 - Road Sector Revenues and Expenditures, 1994-2003 Table 3.1 - World Bank Financed Road Sections Table 3.2 - NAR's Equipment Fleet by Type and Age Table 3.3 - List of Equipment to be Procured under the Project Table 3.4 - Project Cost Estimate Table 3.5 - Summary of Proposed Procurement Arrangements Table 3.6 - Estimated Schedule of Disbursement CHARTS Chart 1 - NAR's Organization Chart Chart 2 - NAR's Organization Chart ANNEXES Annex 1 Project Management Unit: Terms of Reference Annex 2 Procurement Schedule for IBRD Financed Items Annex 3 Traffic Safety Annex 4 Monitorable Indicators Annex 5 Technical Assistance for Traffic Safety: Terms of Reference Annex 6 Project Implementation Plan Annex 7 Economic Analysis of Road Sections to be Rehabilitated Annex 8 Documents in the Project File MAP IBRD No. 27751 ROMANIA SECOND ROADS PROJECTS Loan and Project Summary Borrower: Romania Beneficiaries and National Administration of Roads (NAR); Romania Automobile Registry Implementing Agencies: (RAR); Ministry of Transport Secretariat to the Interministerial Committee for Traffic Safety (MOT/SICRS); Ministry of Education; Traffic Police Department. Amount: US$150 million. Terms: 20 years including 5 years grace at the standard interest rate for LIBOR- based US dollar single currency loans. Commitment Fee: 0.75% of the undisbursed loan balances, beginning 60 days after signing, less any waiver. Onlending Terms: Same as Bank terms. Project Objectives: a) improve traffic safety and the fitness of the vehicle fleet; b) continue helping Romania to meet the changing pattern of demand for land transport infrastructure; c) improve the management and performance of NAR; d) assist the Romanian civil works construction industry in its transition to a market economy; and e) promote the reduction of lead in petrol. Project Description: The project will consist of 5 components: a) a program of about 1,000 km of road and bridge rehabilitation to include overlaying or reconstruction on the existing alignment, some widening, construction of hard shoulders and minor geometric improvements; b) a traffic safety program (TSP) involving components in education, engineering, (roads and vehicles) and enforcement; c) a program of institution building involving computerization of NAR and the introduction of bridge and pavement management systems; transport planning; continuation of work towards contracting ii out/privatizing of periodic maintenance and installation of permanent traffic counting and axle load controls; d) a program of assistance to the road and bridge construction industry, including establishment of a secretariat; training programs and financing of equipment; and e) preparation of an Action Plan for the reduction of lead in petrol. Project Benefits and Risks: The project supports the rehabilitation of infrastructure, harmonization of standards with the EU and environmental improvements which have been identified as priority concerns in the Bank's Country Assistance Strategy (CAS). The project also will raise the efficiency of public sector management, reduce the state role in the economy by contracting out construction and maintenance activities previously handled by force account. The project benefits are in terms of reduced transport cost and reduced accident costs which are expected to be widely dispersed throughout the economy. The weighted average ERRs for road rehabilitation is 48%. For the road safety component ERRs range from 40% to over 90%. There are few risks which would affect the economic rates of return of the project. For the road rehabilitation component, the main one would be that traffic growth would be less than expected and benefits would thus be lower than estimated. For the road safety component, the risk is that the reduction of accidents will be less than expected, but the savings of even minor reduction in accidents are so large in comparison to the level of investment that the ERR will remain high. The more significant risks are of a broader institutional nature: a) insufficient counterpart funds. The risk has been reduced with the recent approval of the Road Fund Law which will provide NAR with funds to complement the budget allocation. In addition the Government has undertaken that the project will be given priority over any other investments to be undertaken by NAR, however a residual risk does remain given Romania's history of fiscal difficulties, and in anticipation of potential problems, annual consultations on budget allocations and a mid-term review are provided under the project; b) strained implementation capacity in the earlier stages of the project, while the Transport Project is still under implementation. To reduce this risk, technical assistance to the PMU is provided in the project; c) delays in implementing the agreed strategy on commercialization of periodic maintenance operations. NAR has already started the iii process in 3 of its 7 regions and there is specific assistance in the project to deepen and extend the process; and d) implementation of the traffic safety component is dispersed among many different agencies not used to working together and coordination may be difficult. The project envisages drawing technical assistance from an established European traffic safety organization with links to its own analogous agencies. Economic Rate of Return: About 48 % Poverty Category: N/A Map: IBRD 27751 Project ID Number: RO-PA-39250 I. THE TRANSPORT SECTOR A. The Transport System 1.1 Romania is one of the largest of the former centrally planned economies in the Central and East European (CEE) Region with a land area of 237,000 square km and a population of 23 million, second only to Poland. Per capita income in 1995 was estimated at about US$1,450. The country has a wide range of natural resources, including a fertile agricultural base, deposits of coal, lignite, oil, natural gas and other minerals. Long a major food producer, Romania was a large exporter of agricultural products until the early eighties. 1.2 The transport system has relied primarily on the railways, which have a well developed network of 11,000 km, of which 36% is electrified and 26% is double track. The road network totals 73,000 km, of which 20% are national roads carrying 60% of the traffic. Road density, with regard to both population and land area, is the lowest among all CEE countries. The Danube offers a navigable distance of 1,075 km in Romania and the Danube-Black Sea Canal (68 km) was opened to traffic in 1984. Ninety percent of foreign trade is handled through the port of Constanza on the Black sea. There are five major river ports on the Danube, the largest of which is Galati, accessible to ocean-going vessels up to 15,000 tons. There are 17 airports of which 4 are international. The transport sector contributes 4.8% of the GDP and accounts for 5% of the country's employment. B. Traffic 1.3 Traffic on all modes has been adversely affected by the large downturn in the economy, compounded by the restructuring of the economy away from heavy industry which was traditionally a large user of transport. Since 1990, GDP declined by nearly 30%, industrial output declined by nearly 52%, exports fell by nearly 55%, real wages declined by about 30%, investment by nearly 60%, and unemployment reached 10% of the labor force by end-1995 from near zero in 1989. The share of industry in GDP declined to 40% from 54% in 1989, and that of agriculture has risen to about 24% from 14% in the 1980s, while trading activities have almost doubled since 1989. Modest growth was recorded in 1994 and in 1995. 1.4 As in other centrally planned economies, Romania's transport sector has been heavily rail oriented. In 1960, rail accounted for over 80% of freight traffic and over 70% of passenger traffic (Tables 1.1 and 1.2). While the rail share has gone down since then, in 1989 rail still accounted for almost 70% of freight and over 40% of passenger traffic. The high share of rail freight was the result of regulation forcing all transport above 50 km to the railways; this regulation has now been abolished. Rail freight reached 300 million tons and 80 billion ton-km in the late 80s, but has fallen dramatically since then. In 1995, it was down to less one third of its 1989 level at 27 billion ton-km. Passenger traffic held up better, going down to 45% of its earlier level. 1.5 Road traffic grew rapidly in the 70s but stagnated in the 80s as it was suppressed by physical control and regulation. Car traffic increased dramatically in 1990, but fell back thereafter as fuel prices were adjusted to reflect world market prices. Truck traffic has been less buoyant due to the downturn in the economy, but has been affected less than rail traffic. There is virtually no intercity bus service at this time and railways remain the essential long distance passenger carrier. 2 Non-motorized transport (NMT) is almost totally absent in cities, but both the bicycles and horse drawn vehicles are significant in, and adjacent to the linear villages. Both classes of NMT will be considered in a traffic safety pilot study under the project (Annex 3). 1.6 Traffic through Constanta port was around 60 million tons p.a. in the late 80s, but is also down by one third since then. Of the earlier traffic, about 60% was liquid bulk and another 30% dry bulk, leaving only about 5 million tons of general cargo. Container traffic was small but has increased rapidly since 1989 as Romania's markets are diversifying. Inland water traffic is insignificant at less than 4% of total land traffic. On the Danube-Black Sea Canal, traffic reached 12.5 million tons in 1989, well below the forecasts of 75 million tons made in 1979 before construction. Traffic in 1990 had fallen to some 6 million tons but has begun to grow again with the lifting of the embargo on Serbia. Maritime traffic carried by the Romanian fleet quadrupled in the 70s from 4 to 16 million tons p.a. and more than doubled again to 36 million tons in 1989. It has since fallen to less than 4 million tons. C. Investments 1.7 Investments in the transport sector have been around 10% of total public investments, substantially below the level in market economies. Until the late 70s, railways received the bulk of the investments in the sector. Later, the balance shifted toward water transport (maritime, river and canals) with the construction of the new Constanza port, the Danube-Black Sea Canal and the Bucharest-Danube Canal (now abandoned) and a major increase in the maritime fleet. In the 80s, total water transport investments absorbed well over 50% of total transport investments, while rail received about 27%. By comparison, investments in road infrastructure decreased from 9% in the late 70s to less than 5% in the 80s (Table 1.3). In the 80s, construction started on the Bucharest metro and, between 1986 and 1990, this absorbed about twice the amounts invested in the entire road infrastructure of Romania. In recent years, investments in the sector have come to a virtual halt as a result of the Government's efforts to reduce its budget deficit. For instance, in 1992, investment for the whole sector was US$35 million, only allowing for urgent capital repairs and periodic maintenance and no new investments. Transport sector capital investments increased to around US$75 million in both 1993 and 1994 and to US$130 million in 1995 as a result of the European Investment Bank (EIB)/European Bank for Reconstruction and Development (EBRD) Transport Project. The 1996 budget was around US$110 million, still a very low level at 0.3% of GDP. D. Institutions 1.8 In 1990 and 1991, major changes took place in the transport institutions. The former Ministry of Transport and Public Works was split into two separate Ministries. The Ministry of Transport (MOT) was reorganized to concentrate on policy making and regulation functions rather then being an operator of transport means. The railways, highways and ports became autonomous units or "Regie Autonome" (RA), while road transport departments, construction departments and design or research institutes became respectively transport companies, contractor and consultant commercial companies (CC). The shares of most of these CC are still owned by the state, but privatization has started and some CCs are now partially owned by the private sector. The MOT was reorganized again in September 1994 to place even greater emphasis on its policy making and regulatory function, while further limiting its interference in the running of transport operations, and its staff was reduced from 450 to 350. - 3 - E. Sectoral Issues 1.9 One of the main difficulties when assessing the justification of new investments in the sector is to evaluate the future volume and pattern of transport demand. The shift to a market economy is resulting in less emphasis on transport intensive industries such as steel, cement and petrochemicals and more on higher value added light industry such as textiles and agro-industry. The latter will require lower transport volumes and are more likely to use road transport than rail or water transport. Romania's use of energy was also very intensive. The demand for lignite and coal transport may decline as the electric power company, RENEL, switches to nuclear (the first unit of the Cernavoda power plant is in commercial operation) and from domestic lignite, which is currently transported by the railway, to imported coal. As energy subsidies are phased out, and industries conserve fuel to reduce operating costs, further reductions in coal transport can be expected. Railways are unlikely to recoup much of the lost traffic and will have to concentrate on developing new markets such as international freight and combined transport. On the passenger side, the need to increase tariffs in order to reduce subsidies could moderate travel demand somewhat. As regards road use by cars, it is expected that the growth in motorization will continue. 1.10 Investments in the transport sector were skewed toward very large projects without regard for economic and financial feasibility. The result is that funds for maintenance, rehabilitation, replacement of life-expired equipment and modernization were scarce. Existing infrastructure and equipment are obsolete and service availability is low. The Bank together with EBRD is introducing the use of economic feasibility studies as a basis for improving decision making on investments. 1.11 The sector was no exception to the general distortions resulting from administrative rather than market drices. Fuel prices are still controlled, but Government policy is to ensure that they reflect fluctuations in world markets. Under the 1992 Structural Adjustment Loan (SAL) agreement was reached that Government would adjust them periodically to reflect external prices and exchange rate movements. Road transport prices are free for freight, but still regulated for public passenger transport. Similarly, railways have some flexibility in setting freight tariffs, but full control remains on passenger tariffs. However, under the recently approved Railway Rehabilitation project agreement has been reached on financial targets that will drive the tariff setting process. During 1996 railway tariffs were cumulatively increased by 74% (freight) and 99% (passengers) over the December 1995 level. Further significant increases were made in February and in May 1997. F. Sector Strategy 1.12 The following principles and policies are guiding the action of Government in the transport sector: (a) Equality of treatment between private transport enterprises and state owned means of transport; (b) Financial autonomy of transport companies; (c) Freedom of action by transport companies, in terms of entry, routes, cargoes, tariffs and investments; (d) Free modal choice by transport users; and (e) Investment decisions based on economic analysis. Regarding investments in the sector, the strategy of the Ministry of Transport is as follows: (a) Short term: to arrest the technical and operational deterioration of the system; (b) Medium term: to renovate the existing transport capacity taking into account the patterns of changing demand resulting from free competition between modes; and (c) Longer term: to modernize and develop the infrastructure, equipment and vehicles to match the economic and technical levels of Western Europe. This strategy is sound and is reflected in this project on the investment side as well as by the agreements reached regarding reforms to be introduced in the sector. G. Previous Bank Experience in the Sector 1.13 The Bank has financed four projects in the transport sector; two under the previous political regime and two since 1989. The first two were the Danube-Black Sea Canal Project (Loan 1794-RO); US$100 million, January 1980; and the Land Transport Project (Loan 2034-RO); US$125 million, April 1981. More recently we processed the Transport Project (Loan 3593-RO), US$120 million; April 1993; and the Railway Rehabilitation Project (Loan 3976-RO); January 1996 both of which are under implementation. In January 1987, OED issued the PPAR for the first project. The main conclusion was that, although completion was 17 months behind schedule, the work was generally good. However traffic did not materialize to the extent expected and therefore the financial results and economic benefits were lower than estimated. A main issue raised in the report concerns the role of the Bank. The Bank loan came five years after construction of the canal had started and mainly supplied finance (about 5% of total cost). It would have been better to participate earlier in the project cycle to have an impact on technical and economic decisions before they were made. 1.14 The second project was completed and the loan closed on schedule in May 1987. The Project Completion Report (PCR) was issued in January 1992. The overall assessment was satisfactory. Disbursements were faster than expected and the project cost was well below estimates. Economic returns were lower than expected following the downturn in the economy since 1990, but all components remain justified. Issues of past irregular procurement practices were highlighted by the Government in its commentary on the project. 1.15 The ongoing Transport Project (Loan 3593-RO), co-financed with EBRD, EIB, and the European Union Assistance Program for Eastern Europe (EU-PHARE) was prepared rapidly and the cooperation throughout the project's preparation was outstanding, with the Bank's comments on project design, concept and implementation fully taken into account. Progress on project execution has been very good and disbursements which have reached 90% of the loan amount are ahead of schedule. The Railway Rehabilitation Project, cofinanced with EBRD and EU-PHARE, only became effective in August 1996, so it is still too early to assess its progress, but the quality of cooperation is very satisfactory. - 5 - 1.16 Findings of OED on recently completed highway projects indicate that project success is enhanced when: - operating agencies have authority delegated by line ministries to manage well defined projects and adequate budget resources to carry them out; - individual project components are of high priority, straight forward and under clear-cut responsibility of only one agency; - agencies demonstrate ownership of projects; - projects are closely supervised and there is a mid-term review; and - detailed terms of reference are available early on for the preparation of complex action plans, especially when many agencies are involved (road safety). In addition, OED found that efficiency is improved by devolving supply of services to the private sector, but privatization of state owned enterprises is politically difficult and can only be achieved when there is strong commitment. 1.17 These lessons have been taken into account in the design and preparation of this project. The road administration - a regie autonome (see paragraph 2.6) - has full authority to manage the project and the introduction of the road fund (para. 2.13) will strengthen its financial situation. The selection of about 1,000 km out of 3,000 km analyzed in detail reflect the high priority of the roads to be rehabilitated under the project. The short list of roads to be improved was discussed thoroughly within the administration and with the line ministry and there is a high ownership of the project. We intend to supervise the project closely, including annual reviews (see para. 2.13). Detailed terms of reference have been prepared and agreed for the preparation of action plans for road safety and reduction of lead in petrol. The gradual transfer of maintenance activities from force account to contract has started under the Transport Project and will be developed further under this project. Enterprises for repairs and works (ARL) will be separated from the administration and commercialized with a view to privatization in the future. Separation has started with ARL Cluj. H. Role of the Bank and Lending Strategy 1.18 A revised Country Assistance Strategy (CAS) is presently being submitted for Board consideration. It focuses on support for a far reaching reform program in line with country priorities, and assigns special importance to support for EU accession programs and to strengthening partnerships with the EU and other external parties. At the same time, the strategy posits a future shift from infrastructure lending. This operation has been designed with these strategic objectives in mind. Thus it promotes the financial sustainability of the sector through the Road Fund (para. 2.13), cements the strong partnerships that had been developed under the ongoing Transport Project by continuing the close and fruitful collaboration with EBRD, EIB and EU-Phare (para. 3.12), pursues safety and environmental improvements and by funding roads in the European network and utilizing EU standards (para. 3.3) will facilitate EU accession. The ultimate goal is a balanced and cost efficient transport system, that would maximize the positive externalities of providing convenient and economic access to transportation services to the greatest number of people, while minimizing the negative externalities such as the number and severity of accidents and the impact on the environment. It builds upon the 1993 Transport Project (para. 1.15). - 6 - II. THE HIGHWAY SECTOR A. Infrastructure 2.1 Network and Traffic. Public roads in Romania are classified in a three-tier system: national roads, district roads and communal roads. The National Administration of Roads (NAR) is responsible for the national road network. The district and communal roads are directly under the local administrations, however, NAR provides technical assistance on standards, project design and budget submissions. 2.2 In 1996, the road network totalled about 73,000 km of which 15,000 km were national roads. Description ROAD NETWORK*l PAVED GRAVEL EARTH TOTAL km S km km km National Roads 14,462 98 221 _ 14,683 (of which motorways) (113) 100 (113) District Roads 18,111 67 7,718 1,138 26,967 Communal Roads 4,951 16 18,686 7,529 31,166 Total 37,524 26,625 8,667 72,816 (%) 51% 37% 12% 100% * (Excluding street networks) 2.3 In the past, roads and road transport were neglected as emphasis was placed on rail transport. As a result, the condition of the network deteriorated, particularly in the 1980s. It is estimated that about one third of the national road network, 5000 km, require some form of strengthening to avoid failure. The Transport Project -- Loan 3593-RO included the rehabilitation of about 1,100 km of national roads and works will be completed in 1997. The proposed project continues to focus on the urgent need to strengthen the national road network, which now carries 60% of the total road traffic in the country and all international transit traffic. 2.4 Road traffic grew continuously until 1980. However, it fell by about 20% in the 1980s when fuel was rationed and stricter restrictions applied to road transport, i.e. trucks and buses could only operate within district boundaries and all transport beyond 50 km had to be by rail. In 1990, traffic was 46% above 1989 levels, with all the increase due to private cars, but it fell again in 1991, following fuel price increases. Since then, traffic growth has followed a more regular and expected trend, in line with the large increase in vehicle registration (see below). Forecasts can be made with somewhat more confidence now that economic growth has resumed. Examples from other countries indicate that once growth resumes, road traffic can be expected to grow faster than GDP from the present relatively low levels. 2.5 Detailed traffic surveys, including Origin-Destination surveys are conducted once every five years on the entire national road network, with the last one in 1995. In the intervening years, continuous traffic counting is performed at over 350 locations on the network. Traffic composition is assumed constant between two detailed surveys. To improve the system, the Transport Project included the acquisition of some classification counters to provide continuous data on traffic composition which are being installed. Less than 10% of the network has traffic levels in excess of 6,000 vehicles per day (vpd) and less than 3% has over 10,000 vpd. 1990 1995 Traffic in V.P.D. (km) (km) < 1,000 1,796 1,575 1,000 to 3,000 6,353 5,294 3,000 to 6,000 4,407 4,547 6,000 to 10,000 1,136 1,910 > 10,000 347 718 TOTAL* 14,039 14,044 * excludes length through municipalities. 2.6 Highway Administration and Organization. Construction, maintenance and administration of the national road network is the responsibility of NAR which is a regie autonome under the control of MOT and is at present dependent on the budget for almost all its resources (some revenue is derived directly from bridge tolls, transit permits and overloading charges levied at frontier posts). Its present organization is shown in Charts 1 and 2. The field organization consists of 7 regional directorates further divided into 41 sections, their borders coinciding with those of administrative districts judets). Each section is divided into 4 to 6 districts for routine and winter maintenance. In addition, there are some 140 "formations" for periodic resurfacing and strengthening, each one equipped with one asphalt plant and the corresponding transport and paving equipment. Other equipment is held at the district level. There are small workshops for maintenance and minor repairs in each of the 41 sections and 7 regional workshops for major overhauls. All resources - equipment, personnel, building, used for periodic maintenance are currently being privatized. The plan to be executed under the project with EBRD financing is described in paragraph 2.10 2.7 Engineering, Construction and Maintenance. Engineering for the road system has generally been prepared by institutes of the MOT, the main one being the Design Institute for Road, Water and Air Transport (IPTANA). In 1990, these institutes became joint-stock commercial companies. The stock is still owned by the state but they are candidates for privatization. Private engineering consultants have emerged, often in joint-venture with foreign consultants working on the Transport Project and are competing with the institutes for work by contract . Road design standards are barely appropriate to traffic flows and physical characteristics, and upgrading is required to reach EU standards. The cross sections adopted for the proposed project involve a wider paved shoulder for safety and capacity reasons. 2.8 In the past, road construction was done by specialized groups under the MOT, with some specialization by mode. There were national companies as well as regional ones for the smaller works. In 1990, these large construction groups were divided into smaller commercial companies in a way similar to that described above for the institutes. A number of them have won bids under the Transport Project, both on their own and in joint-ventures with foreign partners. The latter are benefitting from technical assistance and technology transfer, which will increase their potential for eventual privatization. The project will provide assistance to the construction industry following the recommendations of an ongoing study. 2.9 Until 1993 maintenance had been done entirely by force account. Under the Transport Project NAR started the process of gradually moving more work to contract. The process of commercialization started in 1994 in one region (Cluj) and was extended in 1995 to the Brasov and Constanta regions. Periodic maintenance in these regions is carried out by a separate organization-- the Enterprise for Repairs and Works (ARL). Each year, a contract is negotiated between the regional directorate and the ARL for specific maintenance work. Accounting practices based on commercial principles are being used increasingly in the ARLs. However, a constraint to further commercialization is inadequate equipment in the ARLs. 2.10 An action plan for commercialization is being prepared with the assistance of EBRD under the proposed project. The plan agreed with EBRD has two phases: Phase 1 will commercialize periodic maintenance in the Cluj region in 3 steps: a) complete functional separation of all periodic maintenance activities; b) setting up of a state owned joint-stock company within MOT; and c) privatization of the company at an appropriate time in the future. Phase 2 will extend the process to other regions where ARLs are at various stages of development. The EBRD component also includes the establishment of an equipment financing facility, under which NAR would purchase equipment and lease it to the ARL's as they are privatized, recovering its cost over time from works it contracts with the ARLs. 2.11 Highway Expenditure and Financing. Total road expenditures (recurrent and capital) have been fairly constant between 1985 and 1991, fluctuating between US$260 to 300 million per year. The distribution of these between the national roads and the rest of the network has also been stable around 50-50. Most of the capital expenditures have gone to improving and strengthening existing roads rather than new construction. Priority has been given to basic routine maintenance and keeping the road surface in as good condition as possible at the least cost. - 9 - Highway Expenditures (in million Lei) l____ NATIONAL ROADS DISTRICT & COMMUNAL ROADS TOTAL Recurrent Capital Recurrent Capital US$ Costs Cost Total Cost Costs Total LEI Million 1985 1,489 744 2,233 1,580 545 2,125 4,358 255 1986 1,518 594 2,112 1,730 491 2,221 4,333 267 1987 1,480 612 2,092 1,680 512 2,192 4,284 293 1988 1,508 528 2,036 1,696 466 2,162 4,198 294 1989 1,557 528 2,085 1,918 534 2,452 4,537 304 1990 1,900 1,100 3,000 2,085 830 2,915 5,915 264 1991 8,288 918 9,206 6,515 2,671 9,186 18,392 307 1992 14,440 1,150 15,590 18,871 2,636 21,507 37,097 185 1993 64,107 47,144 111,251 49,077 8,705 57,782 169,033 222** 1994 286,260* 89,146 375,406 129,413 34,865 164,278 539,684* 326** 1995 443,189* 1 141,465 1 584,654* 203,000 61,481 264,481 849,135* 411** * The amounts include the rehabilitation costs The annual average of exchange rates, as published by the National Bank of Ronania was used 2.12 Until 1996 road user charges consisted of: annual vehicle license fees; vehicle registration fees; a 5% tax on the ex-refinery price of fuels and various fees and tolls. The level of taxation was low and total revenues amounted to some US$63 million in 1992, with about half of it from fuel taxes. In recent years as the price of fuel was gradually reduced in constant terms, fuel tax revenues did not increased in parallel with traffic and fuel consumption. Revenues from tolls and transit fees, however almost doubled since 1992. Fuel prices were increased substantially in July 1996 and again in January 1997 (Table 2.1). 2.13 A Road Fund Law was promulgated on October 2, 1996 based on a 25% charge on ex- refinery prices of fuels and a 10% charge on ex-factory prices of vehicles. This would generate revenues of some US$200 million per year starting in 1997, growing with traffic and vehicle purchases. This amount, combined with about US$35 million in various fees and tolls, would be sufficient to cover the variable costs of the network, but would fall short of covering total road costs, which are estimated at around US$400 to 450 million per year. The combination of the proposed fuel tax and the existing annual license fees would also be sufficient to cover the variable costs of each vehicle type, except for the heaviest trucks. The existing annual license fee, which has not been incorporated into the road fund, should, nevertheless, also be gradually increased, particularly for heavy vehicles as the fuel tax typically cannot cover fully the cost they impose to the roads. A modification to the Road Fund Law, that would introduce such an annual licence fee, is under preparation. Table 2.2 shows NAR's revenues and expenditures from 1994-2003. At Negotiations. Government confirmed its agreement to hold annual consultations by November 30 of each year on the Borrower's proposed budget and expenditures program for its national road network and confirm that any investments in its national roads network. estimated to cost US$6.000.000 equivalent or more shall be carried out only if determined to be economically viable in accordance with criteria agreed - 10 - with the Bank (para. 5.1 (a)). Acceptable criteria means that investments estimated to cost US$6 million or more should have an economic rate of return no less than 15% calculated in accordance with a methodology and procedures acceptable to the Bank. All costs and benefits will be estimated net-of-tax, and net cost and benefit streams will be developed taking into account the alternative investment scenarios considered, and related maintenance costs. B. Road Transport 2.14 Transport. Road transport was completely deregulated in 1990 for freight and passenger services. Transporters are now free to enter and operate any route they wish and determine their own tariffs. The single large road transport company under MOT and the other 423 own- account transport companies operated by various ministries for their own sectors have been transformed in smaller units (average of 280 vehicles per company versus 500 in 1989) as follows: the freight companies are commercial companies with state ownership of capital (share companies), while the 55 passenger companies are Regies Autonomes administered by the 41 districts and the Municipality of Bucharest. In addition to these state owned companies, there are already over 2000 private transport companies generally in the form of limited liability companies. The average size of private companies and individual transporters is small. The intention is to privatize the state owned companies starting with those dealing with freight. 2.15 There are now over 3 million four-wheeled vehicles registered in Romania, or about 146 vehicles per 1000 population. Commercial vehicles --buses and trucks-- account for 15% of the fleet with cars comprising the remainder. Cars are concentrated in the urban areas, with Bucharest accounting for 20% of the registration. Despite the rapid growth of automobile ownership, traffic on major intercity roads remains with a high proportion of heavy vehicles, often exceeding 30%. 2.16 The present legal axle load is 10 tons for a single axle on motorways and European roads (4,500 km) and 8 tons on other roads. NAR is studying the consequences of adopting the 11.5 ton limit of the European Community for roads and bridges on European roads as well as increasing the bearing capacity on other national roads. Trucks are only weighed at border posts and overloading was a problem before the 1989 revolution, mostly on roads in the vicinity of large construction sites. While the problem is less acute now, it is likely to come back with economic development. The Transport Project includes the purchase of weighbridges to improve data collection for pavement design. These are being installed. During Negotiations the Government agreed to collect data on axle loads for 12 consecutive months beginning not later than September 30. 1997 and presenting for the Bank's review a report on its analysis. and recommendations for a system of axle load monitoring and control by December 31. 1998 (para. 5.1 fb)). 2.17 Romanian Automobile Registry. The Romanian Automobile Registry (RAR) is a national regie autonome acting as a registering authority for all road vehicles. In this capacity RAR's main attributions are: periodic inspection of vehicles for technical fitness and emission levels; registration; certification of all new vehicles using public roads, based on testing in RAR own laboratories. RAR headquarters are located in Bucharest and it has 40 branches throughout the Romanian territory. RAR benefited from US$4 million financing from the Transport Project (3593- RO) for the supply of 40 vehicle inspection lines which now provide improved, scientifically based vehicle testing throughout the country, and an Automotive Emission Analysis System. RAR is self financing, taking its revenue from fees charged for vehicle inspections and certification. A US$3.9 million sub-component of the traffic safety component for testing equipment will ensure a gradual coming into line with EU standards of domestic vehicle production which is increasing rapidly. In view of RAR's responsibilities at a national level related to traffic safety and enviromnental - 11 - protection, the proposed project will finance equipment for the homologation and environment test of new vehicles. An amount for TA, would be provided within the traffic safety component through bilateral assistance or a trust fund. This component supports Government policy of aligning with EU standards by 2005. 2.18 Traffic Safety. Road traffic accidents have become a serious problem since the political changes of 1989/90. The annual number of traffic accidents, now exceeding 150,000, is growing rapidly, and growth in motorization is expected to make a trend reversal difficult. The growth registered from 1994 to 1995 was 37%. It is roughly estimated that some 2%-3% of the GDP is lost in accident costs (estimated to $600 million/year). In 1996 the traffic police registered 8,930 serious accidents, causing fatality or serious injuries and 11,600 causing light injuries to the victims. This exceeds the corresponding amount for 1992 by 12%. The annual consequences of the severe traffic accidents are out of proportion compared to Western European countries: * 37 fatalities per 100 injured (< 10 in Western Europe) * 8.6 fatalities per 10 000 registered vehicles (< 3 in Western Europe) * 1.22 fatalities per 10 000 inhabitants (high in relation to the low rate of car ownership) These statistics indicate a higher risk of traffic accidents and more severe consequences than in other CEE countries. 2.19 Institutional development has taken place in the field of traffic safety since the Bank- sponsored study of 1993 and a Road Safety Policy Seminar sponsored by the Bank for its Eastern Europe clients which took place in Budapest 1994. An Interministerial Council for Road Safety (ICRS) and a permanent secretariat (SICRS) were established in 1995. The members of the ICRS, chaired by the Minister of Transport, are leaders or authorized representatives from 11 ministries, the Department for Local Public Administration and the General Council of Bucharest Municipality which ensures the commitment to traffic safety on high level. The ICRS has so far approved a preliminary Priority Actions Program 1996-2000 for traffic safety based on the proposals of five Special Traffic Safety Commissions. A new road code has been submitted to Parliament for approval. 2.20 Defining objectives and targets for traffic safety, improving the cooperation between the entities involved in traffic safety development, establishing the performance indicators for traffic safety activities and monitoring these requires a clear logical framework and increased attention of the ICRS. Assignment of responsibilities needs adjustment to ensure that all major aspects are being covered. Lack of staff experienced in traffic safety work, lack of equipment and lack of funds hampers all systematic approach in spite of the established high level commitment to traffic safety and substantial efforts made by the Traffic Police, the SICRS and the Romanian Automobile Registry (RAR) to reduce the number and the consequences of accidents. Assistance will be provided to NAR in locating and addressing accident "black spots" i.e. locations on the road network where the number and the consequences of a certain type of traffic accident substantially exceeds the average under similar traffic conditions elsewhere. Particularly high traffic accident incidence is due to the poor - 12 - traffic environment of the typical Romanian "linear villages"' and the suburbs of the cities. High accident susceptibility due to poor traffic environment is also found on the designated European Road Network (TERN) where slow motorized transport, animal drawn transport and other non motorized transport (NMT) generally are using the same carriageway as the growing number of buses, trucks and small cars traveling at increased speed. The proposed project includes a traffic safety component addressing the above issues (see Annex 3). C. Environmental Aspects 2.21 Lead in Petrol. Romanian refineries currently add about 0.60 g of lead in the form of tetra-ethyl lead or tetra-methyl lead per liter of petrol as an inexpensive way to enhance the octane levels to meet the demands of the motor fleet. The lead content of Romanian petrol is high compared to other Eastern European countries (0.60 g/l versus 0.15 g/l in Bulgaria, Hungary and Poland). Due to the strong correlation between lead exposure and health effects, the government has taken a keen interest to reduce the amount of lead in petrol. The reduction in lead in petrol is planned in three phases. In Phase I, the aim is to reduce the current lead level of 0.6 gm/l to 0.32 gm/l in the short term (by 1998). In Phase II, at a medium term (less than 5 years) the level will be further reduced to 0.15 gm/I to meet EU standards. In Phase III, in the longer term, the plan is to move towards the use of unleaded gasoline keeping in mind that below the 0.15 g/liter threshold, the incremental cost per unit of lead reduction increases as the lead level decreases. 2.22 Preparation of Action Plan. Under the Commission for Motor Vehicles, a Working Party has been formed, including representation of Government and the vehicle manufacture and refinery industries to develop an Action Plan to phase-out lead in petrol. Technical Assistance is being provided to the ICRS to assist in developing the Action Plan to bring the lead content of leaded petrol to EU standards and to phase in unleaded petrol, with suitable incentives and under a realistic time table. During negotiations. Government confirmed that by December 31. 1997 it would submit (through the ICRS) to the Bank a Lead Reduction Action Plan, satisfactory to the Bank and carry out the said Action Plan in accordance with its terms (para. 5.1 (c)). The ICRS will co-ordinate activities among key players involved in developing the Action Plan and will report to the Bank on progress. The Action Plan includes technical options and its economic implications for the refinery, the effects of reduced leaded petrol on the existing fleet, pricing policies related to providing incentives in using unleaded petrol, and increasing public awareness on the benefits of using reduced leaded petrol. 1/ Unlike medieval villages, where peasants were concentrated in nuclear villages for mutual security, travelling to and from their land by day, Romania's villages are linear in layout with houses facing the snan roads with the owner's land in the form of a long thin strip, typically 25-50m wide, stretching out behind the hous. This produces long thin villages often 5km from start to finish of the built-up area. Because of the number and closenes of houses to the road centre line, widening is difficult and requires the highway authority to purchase a lrge number of small plots of land each with a different owner. Widening without acquiring land, increases vehicle speeds and decreases the space for pedestrians, maring accidents inevitable and life for the vilagers unpleasant. Because of the linear nature of the villages, bypasses would seldom be economic. This presents a serious traffic safety dilmma. - 13 - III. THE PROJECT A. Project Objectives 3.1 The objectives of the project are to: a) improve traffic safety and the fitness of the vehicle fleet; b) continue helping Romania to meet the changing pattern of demand for land transport infrastructure; c) improve the management and performance of NAR; d) assist the Romanian civil works construction industry in its transition to a market economy; and e) promote the reduction of lead in petrol. In addition the project would assist Romania to harmonize the standards of its road network, its vehicles and their safety and the institutional practices of NAR with those of the European Union. B. Project Description 3.2 Project Description. The project will consist of five components: a) a program of about 1,000 km of road and bridge rehabilitation; to include overlaying or reconstruction on the existing alignment, some widening, construction of hard shoulders and minor geometric improvements; b) a traffic safety program (TSP); involving components in education, engineering (roads and vehicles) and enforcement; (see Annex 3 for a full description) c) a program of institution building involving computerization of NAR and the introduction of bridge and pavement management systems; transport planning; continuation of work towards contracting out/privatizing of periodic maintenance and installation of permanent traffic counting and axle load controls; d) a program of assistance to the civil works construction industry, including establishment of a secretariat; training programs and financing of equipment; and e) preparation of an Action Plan for the reduction of lead in petrol. 3.3 Road and bridge rehabilitation is vital in Romania as its contact with Western Europe with its higher axle loads and emphasis on road transport makes its impact. Roads have been selected from the European network, including portions of the Trans European Networks (TEM, "the - 14 - corridors") as a result of feasibility studies (see below). The work will consist of strengthening to carry 11 tonnes per axle, the EU standard, mostly by overlaying with asphaltic concrete, and by the addition of wider shoulders of which 1 m will be paved. This is essential for safety (there is still a significant proportion of non-motorized transport (NMT), including animal drawn vehicles, and slow moving agricultural machinery), to permit overtaking thus providing capacity for the rising traffic volumes, and to reduce shoulder maintenance. 3.4 The Bridge Repair Program. Bridges needing repair or widening, contained in lengths of road being improved will be included in the respective contracts, but there will also be a stand alone bridge rehabilitation program. This will involve some 50 bridges, and works will consist mostly of replacement of expansion joints and re-waterproofing of decks. Works will be identified and scheduled by the RD's (regional directorates) with assistance from local consulting engineers if required. Contracts will be managed by RDs. Some small bridge repairs will be done by force account for which the loan would finance materials such as joints and water proofing membrane. Technical Assistance and the equipment purchase program will combine to upgrade, modernize and re-equip the whole of NAR's bridge maintenance activities, served by a new bridge management system to be introduced at the same time. 3.5 The traffic safety program (TSP) is described in detail in Annex 3. Activities in engineering, enforcement and education will be pursued under the coordination of SICRS. Many traffic safety efforts fail because of poor cooperation among the many actors; an important feature of the TSP is therefore a pilot scale traffic safety demonstration project. In the important and heavily trafficked corridor between Bucharest an Brasov, all the actors in the traffic safety field have agreed to cooperate on an integrated project to show how the contribution of each component fits into the whole. Technical assistance will be obtained from a major European traffic safety organization, which would be able to call on the entirety of its home country's traffic safety services, as and when needed. The pilot study findings and other subcomponents will be used to prepare a National Traffic Safety Action Plan 2000-2009. Among the many agencies involved in the component will be RAR, which already received assistance under the ongoing project to set up a nationwide chain of vehicle inspection stations. This assistance, coordinated by SICRS, will be continued in the proposed project in the area of standardization and quality control of new vehicle production, in line with EU standards. During Negotiations Government reconfirmed its agreement to: 1) maintain at all times until the completion of the Project. the ICRS and SICRS with a sufficient number of qualified staff and adequate facilities, as satisfactory to the Bank: 2) (a) carry out the TSP with due diligence and efficiency: (b) review with the Bank. by June 30 of each year. the progress achieved in the carrying out of such a program: and (c) within four months of each such review, update the program and, thereafter. implement all measures required to ensure the efficient carrying out thereof during the period after such review. taking into consideration the Bank's comments on the matter: and 3) (i) by December 31. 1999. submit (through the ICRS) to the Bank. for its review, a draft National Traffic Safety Action Plan: (ii) immediately thereafter finalize said Action Plan taking into consideration the Bank's comments on such a draft: and (iii) carry out said Action Plan in accordance with its terms (inara 5.1 (d)). 3.6 Institution building in NAR will include bringing the pavement management system developed under the previous project up to operational level, to serve as a basis for maintenance works decisions, and introducing a bridge management system. A small cell will be established for advanced planning, which will put together traffic volume and weight data from automated stations now being installed, physical performance data from the PMS and BMS, and using Highway Design - 15 - Model (HDM) 4 and similar software serve as a tool to monitor the development of weak or congested sections, to serve as a basis for the investment program. Computerization will be completed and an NAR-wide cost accounting system will be installed (funded by EBRD). The periodic maintenance activities of NAR and the related equipment are being commercialized and eventually will be privatized. The project will provide equipment, software and technical assistance for this work (funded by EBRD), and some equipment will also be provided for routine maintenance activities remaining with NAR (funded by IBRD). 3.7 Assistance to the civil works construction industry will be based on the recommendations of a study of Romania's civil works construction industry, which is being financed from the Transport Project. The draft final report will be completed in the next few weeks. The component would provide technical assistance in contract management, and financial management and control of enterprises, to a technical secretariat to be established in the Association of Romanian Contractors. The study is also likely to recommend various measures to improve the business and contractual climate in which contractors operate, such as access to foreign exchange, import procedures and a price adjustment clause in standard public sector works contracts that correctly reflects price changes. These changes are expected to bring Romania's practices more in line with those of the European community. 3.8 Reduction of lead in petrol will be brought about by the efforts of a working group coordinated by SICRS to which the project will provide technical assistance (see paras 2.21,2.22). The work will lead to the preparation of a national action plan for the reduction of the lead in leaded petrol and the making available under price incentives of unleaded petrol by December 31, 1997. C. Engineering and Status of Project Preparation 3.9 Feasibility studies for the major road rehabilitation works were performed on a "long list" of some 2,500 km of roads in the E (European) network, from which about 1,000 km were selected by the Government and the co-financiers in May 1996 for final design2. Table 3.1 shows the road sections so far selected for World Bank financing totalling 304 km. Further road sections will be selected from these or subsequent studies in consultation with the Bank; criteria of eligibility will be an acceptable feasibility study, an economic rate of return not lower than 15% and a satisfactory environmental clearance. The sections already selected for Bank financing have ERRs between 39 and 62 percent. One road section to be financed by EIB/PHARE, with a lower ERR has been selected nevertheless because of its importance as part of EU Corridor #4. Design work is being carried out by two consortia of consulting engineers, both comprising an international firm and a Romanian firm. Complete contract documents for bids were sent to the Bank in January 1997. Designs and contract documents for the bridge repair program are being prepared by NAR's regional directorates (RD's) with the assistance of local consultant where necessary. A General Procurement Notice was published on July 16, 1996 and prequalification for ICB contracts is well advanced. Specifications for road maintenance equipment are being prepared by NAR. TORs for the major consultancies are substantially complete. 2/ Pre-investment studies and design are being financed from Loan 3593-RO. - 16 - D. Cost Estimates 3.10 The estimated total cost of the project is US$553 million equivalent. Detailed costs are shown in Table 3.4. Construction cost estimates are those prepared by the design consultants, based on outturn prices from ongoing contracts and include a 20% contingency because of the inherent uncertainties in rehabilitation work; the foreign/local breakdown is based on consultants' estimates. The local component includes import duties on equipment (about 15 percent for construction equipment), VAT (currently 18 percent) and other taxes and duties, amounting to a total of US$97 million. Costs of technical assistance, study travel abroad, computers and equipment are based on experience under the ongoing project or consultations with manufacturers. 3.11 In view of domestic inflation, price contingencies are based on cost estimates expressed in US dollars, and use the latest estimates of the Index of Unit Value of Manufactured Exports (MUV), averaged at 2.4 per cent per annum over the life of the project. Physical contingencies for civil works are assumed at 20% but for other items are not separately identified, and the amounts shown for each item are regarded as budgets not to be exceeded, however engineers' estimates include varying assumptions on quantities built in, depending on the terrain and degree of difficulty. E. Project Financing 3.12 The proposed IBRD loan of US$150 million would finance about 27 percent of total project cost. The Borrower will be Romania, with onlending to NAR. The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) will be financing about $87.5 million and $85.9 million equivalent, respectively. The remaining $214 million including all taxes and duties, will be financed by Government. A fourth source of finance for this project is expected to be the European Commission's PHARE Fund (EU-PHARE) which would finance most of the road safety and institutional development components with grant financing of about US$16 million, and may as the program develops, finance up to 30 percent of Government's contribution to the road rehabilitation component, up to a maximum of about US$60 million. Any amount in this later category would be as a substitution for GOR funds, and therefore would not increase any totals shown in the cost table. PHARE has its own procedures based on annual programs and funds are unlikely to be available until late 1997. During Negotiations. the fiscal viability of the proposed level of Government contributions was reconfirmed. Government also confirmed that it would meet all local costs including cost overruns and any shortfall in foreign exchange (para. 5.1 (e)). - 17 - 3.13 A financing plan has been developed and is shown below: FINANCING PLAN (in million US$) Organization Foreign Local Total IBRD 145 5 150 EBRD 82 4 86 EIB 84 3 87 EU-PHARE 15 1 16 GOR 0 214 214 TOTAL 326 227 553 F. Implementation and Monitoring 3.14 Overall direction of the project will be handled by the existing project management unit (PMU) now consisting of senior officers of NAR, SNCFR and RAR, without the SNCFR members to which will be added the Director, ICRS. ICRS has five commissions staffed by members of participating agencies, industry and research institutes, the chairmen of which in committee, will function as a sub-PMU for the safety component. Terms of Reference for the PMU are given in Annex 1. During Negotiations Government confirmed that the PMU will be maintained and suitably staffed throughout the life of the project (para. 5.1 (f\). At the detailed level, the project will be implemented by project implementation units PIU's with sub-PIU's in each implementing agency. Overall control of accounting and disbursements will be handled by the PIU established in NAR for the ongoing project, which is efficient and experienced. SICRS and RAR will handle procurement related to the "improvement of technical vehicle standards" component. The roads component including black spots will be managed by NAR, who will also give advice to other agencies on procurement. The traffic safety component will be coordinated by the secretariat of the ICRS (SICRS) which will function as a PIU. Limited technical assistance will be provided to the PIU's in their first year of operation, financed by EU-PHARE (see below). TOR's for this assistance are also given in Annex 1. As the other donors are ahead of the Bank in their loan processing and as prequalification is already underway and designs are ready, it is proposed to provide for retroactive financing and advance contractin2 up to $15 million, with effect from November 30. 1996. A set of monitoring indicators has been developed (Annex 4) and progress reports will list these indicators and show their status. NAR's PIU will continue to provide quarterly progress reports using the format developed for the ongoing project, which is satisfactory. Other agencies will be responsible for providing information on their components to NAR's PIU. - 18 - G. Procurement 3.15 Procurement arrangements for the Bank-financed elements of the project are detailed in the Procurement Schedule (Annex 2), and Table 3.5 and the Project Implementation Plan (Annex 6). All procurement financed by the proposed loan will follow the appropriate Bank Guidelines for goods, works and consultants. Prequalification is using a document based on EBRD's standard document which is essentially identical to the Bank's but with IBRD's eligibility criteria. Both EBRD and IBRD will use a document for works based on SBDW of January 1995, thus reducing the preparation work for the PIU. Prior review levels are shown in Annex 2. During Negotiations. agreement was reached on the procurement procedures (para. 5.1 (g)). A Country Procurement Assessment report has not yet been prepared for Romania, but all procurement will be based on IBRD standard bidding documents. H. Disbursements 3.16 The proposed Bank loan would be disbursed as follows: Category Description Amount ($m) % of expenditures financed I Road and Bridge Works 125 100% of foreign expenditures and 60% of local expenditures 2 Equipment 13 100% of foreign expenditures, 100% of local expenditures (ex factory cost), and 80% of local expenditures for other items l_________________________ procured locally 3 Consultant Services 4 100% 4 Unallocated 8 ILTOTAL 150 3.17 A schedule of disbursements is given in Table 3.6 which is based on the appropriate historical profile giving a 6.5 year disbursement period. This is longer than for the ongoing project because of Government's wish to spread its contribution over a longer period. As disbursement performance has been good under the ongoing loan, disbursements may go faster. Disbursements would be made against Statement of Expenditure (SOEs) for contracts less than (a) $4 million equivalent for road works; (b) $500,000 equivalent for bridge works; (c) $100,000 for consulting firms; and (d) $50,000 for individual consultants. For all contracts above these limits full documentation would be required. To facilitate disbursements, a Special Account will be established at a bank in Romania that is acceptable to IBRD. The Account will be managed by the National Administration of Roads' (NAR's) PIU. The authorized allocation for the Account will be $8.5 million, equivalent to about four months of expenditures under the loan. The initial deposit will be limited to $1.7 million and the remaining portions of the allocations will be disbursed when the - 19 - project has built up sufficient turnover to justify drawing on the full amount, defined as when the total of withdrawals for the Loan Account plus the value of any Special Commitments made against the loan are equivalent to $25 million. Application for replenishment of the Special Account would be submitted on a monthly basis or when one half of the amount deposited had been withdrawn whichever occurred earlier, and must include reconciled bank statements as well as other appropriate supporting documents. All other applications for direct payment, special commitment or reimbursement should be for amounts not less than 10% of the initial deposit of the authorized allocations to the Special Accounts or not less than 10% of the full authorized allocations once available. Submissions of replenishment applications take precedence over the minimum size application. The project is expected to be completed by March 31, 2003, and the loan closing date would be September 30, 2003. 1. Project Supervision 3.18 NAR and RAR are successfully implementing their parts of the ongoing project, so two missions a year plus ongoing support from the Resident Mission will be sufficient to supervise the components assigned to them. The traffic safety component with its dependence on collaboration between agencies not so far used to working together, will require three missions a year, the third by the traffic safety specialist until it is running smoothly. Procurement documents and withdrawal/replenishment applications will be reviewed by the assigned project officer in the resident mission before being forwarded to Headquarters, reducing the amount of work required on supervision. Until the end of 1998, missions will be combined with missions for the ongoing project. For the safety component, missions will consist of the traffic safety engineer and the task manager, and for highway missions, the task manager and the transport economist. Two missions by ECi's environment specialist will be required. Mission frequency and duration are expected to reduce in the outer years. In sum, supervision of the proposed project would require about 100 staff weeks in FY97 to FY 2003. J. Environmental Impact 3.19 The project has been classified as Category 'B' under the Bank's Operational Directive 4.01 which implies that limited environmental assessment would be required. The project involves rehabilitation and widening of existing roads only and does not include any realignment. Since the project would be limited to the existing right of way, there are no concerns related to the resettlement of displaced persons. The project does not affect any archaeological or historic sites. The project will contribute towards improving traffic flow and vehicles will travel at optimum speeds lowering the fuel consumption rate. Smoother road pavements will reduce the wear and tear of vehicles and lower levels of metals and other micro-particles normally found in the vicinity of roads. Improved vehicle flow and an asphalt concrete surfacing will also contribute towards lower noise levels. The project has a comprehensive safety component that will identify and ameliorate the black points that cause accidents. 3.20 The EA for this project was performed in two stages. In Phase I, during the feasibility study of the project, background environmental data was collected. Also, possible minor environmental effects in certain areas were identified which included removal of trees and the interference with the existing surface water and ground water flows. During Phase II, detailed mitigative plans were developed which included replanting of trees and installation of proper drainage - 20 - systems. To minimize environmental effects during construction, the roads will be watered to reduce dust levels and noise and emission control measures will be used on the equipments. The EA procedures followed in the project are consistent with Romanian regulations and Bank Operational Directives. K. Project Accounts and Auditing 3.21 NAR's PIU will have overall responsibility for project accounts and loan reimbursement and withdrawal applications. Other agencies--RAR, SICRS will maintain accounts for their project activities, and provide information to NAR. All project accounts, statements of expenditure and the special account and sub account and NAR's financial statements, as a regies autonome, will be audited annually, and a report of the audit will be sent to Washington by June 30 of the following year. During Negotiations agreement was reached that (a) all documents to sunport project expenditures would be maintained by the Borrower, and made available to the Bank for review (5.01 (h): and (b) all project accounts including the SOEs and the Special Account and NAR's financial statements will be audited annually. by independent auditors and audit reports acceptable to the Bank will be submitted six months after the close of the fiscal year (para 5.01 (i)). L. Proverty Impact 3.22 The project will not have a significant direct impact on poverty. The Bank has prepared a Social Protection Loan that is being submitted to the Board for consideration to help address poverty issues, which presently are a significant concern in Romania. The project, however, will have indirect benefits for the population at large: lower transportation costs would lower the costs of basic food staples and of energy inputs, which weigh heavily on the budgets of poor families. Traffic safety improvements will benefit pedestrians and NMT, which include many of the poor; furthermore this segment of the population lacks the resources for sound medical treatment following road accidents. Finally, the reduction of lead in petrol has an important potential benefit for children, as there is medical evidence linking exposure to lead to mental development. - 21 - IV. ECONOMIC EVALUATION A. Framework 4.1 Rehabilitation of infrastructure after many years of inadequate maintenance, and in face of significant traffic growth prospects, is an important economic priority. To achieve this objective under the present budget, managerial and institutional constraints, the Bank and EBRD have agreed to support a gradual strategy. The ultimate goal is a balanced and cost efficient transport system, that would maximize the positive externalities of providing convenient and economic access to transportation services to the greatest number of people, while minimizing the negative externalities such as the number and severity of accidents and the impact on the environment. Other CAS priorities are to raise efficiency of public sector management, reduce the state role in the economy, open critical areas to private sector participation, promote EU accession and address environmental issues (para. 1.18). The proposed project addresses all the above priorities as explained in more details in Chapters 2 and 3. It builds upon the 1993 Transport Project, which is being implemented in a satisfactory manner. 4.2 The Government has made substantial progress in adopting market-based transport policies since the start of economic transformation in 1990, and there are no major policy distortions that will affect the implementation of the project. Further details are in para 1.8 and 1.12 for measures taken and policies in the transport sector in general and in Chapter 2 for more specifics on road and road transport. Besides the rehabilitation of infrastructure, the proposed project will continue and deepen the support to policy decisions in the areas of contracting out civil works including for maintenance, working through the Road Fund to ensure a stable funding basis for the sector that relies on road user charges, modernizing rules and regulations in the subsector; and improving traffic safety. 4.3 By lowering transport costs, the project benefits are expected to be widely dispersed throughout the economy. Savings in vehicle operating costs will initially be captured by intermediate producers such as truckers and bus operators as well as directly by consumers as car users. Because the road transport sector is now competitive, most of the intermediate savings will be passed on to the final consumers of goods transported, to the benefit of all income groups. Reduced transport costs will also make exports more competitive. Also, the present value of road expenditures will be reduced by undertaking road strengthening now and avoiding more expensive reconstruction at a later date. Road maintenance expenditures will also decrease on rehabilitated and strengthened roads. The road safety component of the project will reduce the cost of accidents on the economy at large. The environmental impact of the project is expected to be minimal, since it deals with rehabilitation of existing roads. On the positive side, reduced fuel consumption on improved roads will contribute to lower pollution, and gradual reductions of the lead content of petrol should result in significant health benefits. B. Cost-Benefit Analysis 4.4 Road Rehabilitation. The 1,000 km of roads to be rehabilitated under the project have been selected on the basis of detailed feasibility studies of over 2,500 km of national roads to establish priorities for this project. The main criterion used for selecting the roads for the project is that the economic rate of return should be above 15%. Consideration was also given to the strategic importance of the roads to the development of Romania and to international trade and to the regional - 22 - importance to the direct vicinity of each road. In carrying out the feasibility studies, consultants have carefully compared alternative geometric standards and maintenance policies in terms of their costs and benefits, with the use of the Bank's Highway Design Model (HDM-III). Feasibility Study reports are in the Project File. All costs and benefits were evaluated in constant 1996 prices and have been expressed in US$. Financial costs and prices have been converted into economic prices, net of taxes and duties, but no shadow pricing has been utilized. At present, the exchange rate is freely determined in the market. Since there is unemployment, and this is likely to continue during the period of project implementation, had labor costs been shadow priced it is likely that economic benefits would have been estimated to be higher. 4.5 Rehabilitation costs were estimated in function of the condition of the various roads, determined on the basis of deflection data and existing pavement investigations carried out by Romanian consultants for NAR in 1992-94 and of automated road analyzer (ARAN) surveys carried out in late 1995. The ARAN surveys measure the International Roughness Index (IRI), and an array of road conditions such as rut depth and distress situations (cracking, rutting, ravelling, potholes, etc). For the purpose of the economic analysis, the roads analyzed where divided into links and sections of homogeneous traffic levels and engineering characteristics. Work quantities were determined in relation to the conditions listed above, traffic safety considerations and compliance with European standards, especially for the width of shoulders. Regarding the latter, however, costs have been minimized in areas where the widening would be very expensive due to utilities relocation and land acquisition. Unit prices were based on those obtained on recent contracts being executed under the Transport Project. 4.6 The main benefits of the projects are measured in terms of vehicle operating cost savings. The variables affecting these are: the level and rate of growth of traffic by vehicle type and the road conditions with and without the project. Present traffic level on the various road sections was established by the detailed traffic counts and surveys done in 1995 by CESTRIN. Recent traffic trends indicate a growth rate of 7% p.a. in the last few years. Typically, in countries at the level of development of Romania, traffic growth exceed substantially the increase in GDP. Furthermore, in Eastern Europe there is a motorization back-log which is likely to feed further traffic growth. The Bank's forecast for Romania's GDP growth is to increase gradually, to about 2% in 1998, 3% in 1999, and 4.5% from 2001 onwards. For the project analysis, a conservative traffic growth rate of 5%, has been assumed up to the year 2000, falling to 4.5% between 2000 and 2005 and to 4.0% up to 2015. 4.7 For calculating vehicle operating costs, the traffic has been divided into six categories of vehicles representative of the Romanian vehicle fleet. The representative types have been derived from a weighted average of different models considering the present composition of the fleet and its probable future evolution. The basic characteristics of the representative types were developed from information on vehicle operation and prices from transport operators. They were then used in the HDM model to determine vehicle operating costs with and without the project, on the basis of road conditions measured in the ARAN surveys mentioned above. Time savings were valued at the predominant wage rates for drivers and working trips. Travel time savings for non-working and leisure trips have been excluded from the analysis. 4.8 Based on the above assumptions for costs and benefits, the economic rates of return (ERR) calculated over a 20 year period range from 39% to over 62% for roads to be rehabilitated under the project. The weighted average ERR for the road rehabilitation component is 48%. - 23 - 4.9 Traffic Safety. The World Bank's Highway Design Model HDM-III does not evaluate the benefits related to traffic safety improvement. The implementation of the traffic safety component will however substantially reduce the number of accidents by eliminating a large number of traffic accident black spots, by improving driver's training, by increasing and diversifying law enforcement, by improving traffic safety education and information etc. These activities will accumulate substantial annual economic benefits as shown in para 4.10. Additional benefits are anticipated to be generated from implementation of the long term Traffic Safety Plan 2000-2009, which will be launched in 1999 as a major output of the twinning arrangement included in the project. The civil works scheduled to be executed as part of the black spot elimination program and the two pilot projects are calculated to reduce the annual amount of fatal accidents in the black spot locations by a minimum of 40 (2 accidents/location/year) and subsequently, based on the present ratio of fatalities/injuries in Romania, reduce the annual amount of injuries by more than 120. The program is also expected to reduce the annual amount of accidents resulting in mere damage to property by at least 50% in the black spot locations. This reduces the annual amount of such accidents by some 800. The broad approach, which characterizes the traffic safety program, will also substantially improve the adverse ratio of fatalities/injuries (1:2.7) and bring it closer to western European averages (< 1:10). The target of the traffic safety plan will be to reduce the annual amount of serious accidents causing fatalities or injuries by 40% and the annual amount of accidents causing damage to property by at least 30% by 2009. It is expected that, if no action on safety is taken, due to growing motorization the number of injuries would rise by at least 12% a year. 4.10 The estimation of the annual economic burden to the society due to road traffic accidents has been made based on current accident pricing in western Europe and has been adjusted using the ratio of GDP/capita of Romania compared to that of western Europe. The following pricing has been used one fatality $ 130 000 one injury $ 13 000 one light accident $ 1 000 Trhe outcome of the implementation of the 10-year Traffic Safety Plan (TSP 2000-2009) will be a gradual reduction of the annual economic losses to the society caused by road traffic accidents. The annual benefits are estimated to accumulate as follows: 1999 - 1.0 % of the total economic losses in 1995 $ 5 million 2000 - 2.0 % " " $ 10 2001 - 4.0 % " " $ 20 A sound and stable financing for the Traffic Safety Plan 2000 - 2009 will continue to increase the annual savings in accident costs by an additional $ 20 million/year until all activities included in the plan have been implemented and the amount of accidents reduced by approximately 40% compared to the situation in 1995. This target corresponds very well with long term targets being set in many western European countries today (ref. Norway. Sweden and Finland all renowned for excellent traffic safety achievements). The black spot elimination program is expected to lower the amount of accident rates in black spot locations to standard level. The annual accident costs in present black spot locations will reduce as a consequence of the execution of the civil works program as follows: - 24 - 1999 - 25% of total impact of the program = $ 1.4 million 2000- 80% $ 4.5 2001-100% " =$ 5.6 4.11 The total costs of the proposed traffic safety activities amount to $ 24 million. The Bank loan would finance $8.6 million and the EU-Phare program cofinancing is expected to be $11.0 million. The implementation of the proposed $24 million Traffic Safety Program would yield an economic rate of return (ERR) of about 96%. The ERR for the civil works component of the program only, which is the main part ($13.6 million) supported by the proposed Bank loan would be about 40%. C. Sensitivity and Risk 4.12 There are few risks which would affect the economic rates of return of the project. For the road rehabilitation component, the main one would be that traffic growth would be less than expected and benefits would thus be lower than estimated. If unanticipated construction difficulties and or delays are encountered, construction costs could be higher than expected. Sensitivity of the ERR to these two risks and to increase maintenance costs was analyzed by reducing traffic and therefore vehicle operating cost savings by 20% and increasing costs by 20%. The effect of either on the ERRs is less than 20% and ERRs would still range from 32 to over 53% (see Annex 7). For the road safety component, the risk is that the reduction of accidents will be less than expected, but the savings of even minor reduction in accidents are so large in comparison to the level of investment that the ERR will remain high under any scenario short of major institutional failings. 4.13 The more significant risks are of a broader institutional nature: a) insufficient counterpart funds. The risk has now been reduced since the Road Fund Law has been approved as it will provide NAR with funds to complement budget allocation. In addition the Government has undertaken that the project will be given priority over any other investments to be undertaken by NAR, however a residual risk does remain given Romania's fiscal difficulties, and in anticipation of potential problems, annual consultations on budget allocations and a mid-term review are provided under the project; b) strained implementation capacity in the earlier stages of the project, while the Transport Project is still under implementation. To reduce this risk, technical assistance to the PMU is provided in the project; c) delays in implementing the agreed strategy on commercialization of periodic maintenance operations. NAR has already started the process in 3 of its 7 regions and there is specific assistance in the project to deepen and extend the process; and d) implementation of the traffic safety component is dispersed among many different agencies not used to working together and coordination may be difficult. The project envisages twinning of the road safety group with an experienced partner. With the arrangements and assurances provided under the project, risks are considered acceptable. - 25 - V. AGREEMENTS AND RECOMMENDATIONS 5.1 During loan negotiations agreements were confirmed on the following: (a) to hold annual consultations by November 30 of each year on the Borrower's proposed budget and expenditures program for its national roads network during the following fiscal year and confirmation that any investments in its national roads network estimated to cost US$6,000,000 equivalent or more shall be carried out only if determined to be economically viable in accordance with criteria agreed with the Bank (para. 2.13); (b) to collect data on axle loads for 12 consecutive months beginning not later than September 30, 1997 and presenting for the Bank's review a report on its analysis, and recommendations for a system of axle load monitoring and control by December 31, 1998 (para 2.16); (c) that by December 31, 1997 it would submit (through the ICRS) to the Bank a Lead Reduction Action Plan, satisfactory to the Bank and carry out the said Action Plan in accordance with its terms (para 2.22); (d) to: 1) maintain at all times until the completion of the Project, the ICRS and SICRS with a sufficient number of qualified staff and adequate facilities, as satisfactory to the Bank; 2) (a) to carry out the TSP with due diligence and efficiency; (b) to review with the Bank, by June 30 of each year, the progress achieved in the carrying out of such a program; and (c) within four months of each such review, update the program and, thereafter, implement all measures required to ensure the efficient carrying out thereof during the period after such review, taking into consideration the Bank's comments on the matter; and 3) (i) by December 31, 1999, submit (through the ICRS) to the Bank, for its review, a draft National Traffic Safety Action Plan; (ii) immediately thereafter finalize said Action Plan taking into consideration the Bank's comments on such a draft; and (iii) carry out said Action Plan in accordance with its terms (para. 3.5); (e) to meet all local costs including cost overruns and any shortfall in foreign exchange (para. 3.12); (f) that the PMU will be maintained, suitably staffed, throughout the life of the project (para. 3.14); (g) the procurement procedures (para. 3.15); (h) the documentation supporting project expenditures would be maintained by the Borrower, and made available to the Bank for review (para. 3.21); and (i) that all project accounts including the SOEs and the Special Account and NAR's financial statements will be audited annually, by independent auditors and audit reports acceptable to the Bank will be submitted six months after the close of the fiscal year (para. 3.21). - 26 - 5.2 The following are conditions of loan effectiveness: (a) that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and NAR; and (b) that all the effectiveness conditions of the EBRD and EIB loan (other than those related to the effectiveness of the Bank Loan) have been met. 5.3 With the above assurances and conditions, the project is suitable for a Bank Loan of US$150 million to Romania for a period of 20 years, including five years of grace, at the Bank's standard interest rate for LIBOR-based US dollar single currency loans. - 27 - Table 1.1 ROMANI A SECOND ROADS PR. ).Jb('T Freight Traffic by Mode ol Transport R 0 A 1) PUBLIC olwv RIVER PIPELINES TOTAL RAILWAY TRANSPORT AIC('(OAf 7 StB-T107 IL In billion ton-kim 1960 19.8 I 2 1 (.9 1.0 23.8 1965 31.0 2 - i 5.8 1.2 1.1 39.1 1970 48.1) 12.9 1.3 1.8 64.0 1975 64.8 ') 3 9.6 2.1 2.8 89.3 1980 75 5 1.8 :1 277 2.4 5.2 110.8 1985 74.2 7i 1____ 7.9 2.4 4.8 109.3 1989 X1.. I I ' 40) 3.7 6.7 121.5 1990 573 i ;)() 2.1 5.1 93.5 1991 37.8 I.) r. .0.5 2.0 3.2 63.5 1992 28.2 3 I ! '3 1.9 2.6 48.0 1993 25.1 2 8l 1 I 4.6 1.6 2.5 43.8 1994 24.7 i .0 , .! 1.6 2.8 35.1 1995 27.2 64) , ..i 2.6 Modal 1960 83nn 4%6;" )' 4°/n 4% 100.00%/C Distrib. 1989 67% 5"; 2' !) 3 % 5% 100.00%/c 1993 57% ) 6 2 " - ' 40%o 6% 100.00% II in illi o I tO Is 1960 77.6 56 7 !(17 - 161.4 1.9 5.6 249.5 1965 114.4 I i(6l 271 i 10I 2.9 7.5 526.9 1970 171.3 2 39) SMI) 4 8 3.4 11.3 1019.8 1975 228.3 4I 85 MK 128 I 4.1 14.5 1527.4 1980 274.6 4 1 3 I," 335 178o 5 12.3 22.5 2095.9 1985 - 283 4 3_2.2 I 1_ (21 2 189.4 21.3 2510.3 1989 306.3 3S23 3j 24!16 37.4 3(0.6 2790.3 1990 218.8 2).I 8 1732 e I'93-; 4 12.0 23.5 21887.7 1991 146.3 11H, I I:- ()S( 3 8.2 16.1 1159.9 1992 111.4 65) 1 04' 7C- 6 6.2 14.8 839.8 1993 99.0 453 52(' 574 5 7.1 13.4 694.0 1994 99.2 i 0 11. 8 0 16.0 1995 105.11 1 59.(6 _i al 3 _ _ __ 11 31 A v e r a g e i s t 'i n c c i n kim 1960 255 )6j II I 474 179 1965 271, 1 I4 414 147 1970 2X80 |1 1 382 159 1975 284 22 Ii V 512 193 1980 275 260 12 I 195S 231 1985 262 1 1 11 I 13(0 225 1989 265 15 13- I 99 219 1990 262 ')k 1-'1 1 175 217 1991 258 3 9 1 2S 1 243 199 1992 253 55 Ij 2 306 161 1993 253 62 122 2> 225 186 1994 242 2 2(0 175 1995J.___ -Ajy\romV - o _s_s.-_, ,_ in jy(romVroads21sartab1 x s - 28 - Table 1.2 R O M A N I A SECOND ROADS PROJECT Pssenger Traffic by Mode of Transport | ~R O A D |' 004-.. ';- RAILWAY ''i t- ,.T, . PUBLIC BUS OTHERS SUB-TOTAL In billion passenger km ) 1960 10.7 1.4 2.3 3.7 .. 44 1965 13.5 3.6 5.7 9.3 1970 17.8 7.9 12.5 20.4 382 1975 22.4 18.9 30.1 49.0 ' 714 1980 23.2 24.0 37.9 61.9 854. 1985 31.1 21.7 31.0 52.7 13.8 1989 35.5 23.1 26.3 49.4 84.9 1990 30.6 24.0 21.1 45.1 75.7 1991 25.4 20.6 - - - 1992 24.3 25.3 16.4 41.7 66.0 1993 19.4 19.8 13.7 33.6 53.0 1994 18.3 25.0 n.a. n.a i 1995 18.9 22.4 n.a nMa .n, Mod. dist. % 1960 74% 10% 16% 26% 100% 1989 42% 27% 31% 58% 10% 1993 40% 32% 28% 60% 100% _______________ ( In Million Passengers _ _ _ _ _ _ _ 1960 215 72 188 260 475 1965 262 170 474 644 907 1970 328 359 1043 1402 1730 1975 367 815 2469 3284 3651 1980 348 1034 3035 4069 4417 1985 460 837 3722 4559 5019. 1989 481 879 3153 4032 4513 1990 468 781 2531 3312 3780 1991 363 760 - - 1992 324 678 1808 2486 2810 1993 226 506 1463 1969 2195 1994 207 1543 1995 211 1406 ( Average Distance In Km 1960 50 20 12 14 30.0 1965 51 21 12 14 25.0 1970 54 22 12 15 22.0 1975 61 23 12 15 20.0 1980 67 23 12 15 19.0 1985 68 26 8 12 17.0 1989 74 26 8 12 19.0 1990 65 31 8 14 20.0 1991 70 27 - - 1992 75 37 9 16 23.0 1993 86 39 9 17 24.0 1994 89 16 n.a n.a n.a. ource: NRA m:y y2% .p ROMANIA SECOND ROADS PROJECT Transport Sector Investment (In Lei Million) 1976-1980 1981-1985 1986-1990 1991 19921 1993 1994 1995 1996* Total % Total % Total % . . Railways 31'108 35.7 33'417 27.5 28'440 26.5 360 877 11'649 20739 78'620 59'541 Highways 7455 8.5 4'867 4.0 4'842 4.5 918 1'882 10'508 35'642 93'900 102'160 Road Motor Vehicles 18'014 20.7 9'980 8.2 4753 4.4 - - - - - - Rivers & Canals 11'289 12.9 15'515 12.8 21'302 19.9 1'214 3'678 9'068 24787 30'614 39'394 Maritime 15'965 18.3 47'670 39.2 35'954 33.5 - Aviation 1'826 2.1 2'379 2 3'265 3 135 827 6'104 17'875 26'250 101'453 M Pipelines 1571 1.8 - - - - - - - - - - Subway (Metro) 7'827 6.4 8756 8.2 943 1'914 19'948 32'920 35'332 30'000 Total in Lei (m) 87'228 100 121'655 100 107'312 100 3'570 9'178 57'277 131'963 264716 332'548 Transport as share of public investments (%) 10.9 10.6 Exchange rate in US$ I 308 760 1'660 2'070 3'200 US$ million equivalent 6'830 = 59.0 29.8 75.4 79.5 127.9 103.9 * Estimated M:\CJL\ROM\SAR\TAB1 3.XLS Romania Second Roads Project Road User Charges Fuel Tax Revenues Fuel Prices as of January 1, 1997 Fuel Prices as of July 2, 1996 (Estimated Yield of Road Fund) (without Road Fund) Premium I Regular I Normal I Unleaded Diesel Premium Regular Normal Unleaded Diesel Prices in Lei/ton Before July 2, 1996 618840 576711 509931 625863 392910 Ex refinery 1298700 1192400 1055400 1327200 914600 Ex refinery 794326 722643 639631 804381 509446 Excise 194805 178860 158310 179172 54876 Excise 119149 108396 95945 108591 30567 Road fund 324675 298100 263850 331800 228650 Fuel tax 39716 36132 31982 40219 25472 Retail Margin 175000 175000 175000 175000 175000 Retail Margin 136400 136400 136400 136400 136400 VAT 358772 331985 297461 362371 247163 VAT 196'o6 180643 162712 196126 126339 Retail Price /ton Retail Price /ton ill l ei 2351952 2176345 i950021 2375543 1620289 in Lei 1285718 1184214q 1066669 1285718 828224 ___ ._ -I _ .I._ - _ __ _n US5 783.98 725.45 650.01 791.85 540.10 in US$ 428.57; 394.74 355.56 428.570 276.07 Retail Price /liter Retail Price /liter in Lei 1811 1654 1463 1829 1329 in Lei 990 900 800 990 679 in US$ 0.45 0.41 0.37 0.46 0.33 in US$ 0.33 0.30 0.27 0.33 0.23 RATES % RATES % Excise 0.15 0.15 0.15 0.135 0.06 Excise 0.15 0.15 0.15 0.135 0.06 Road fund 0.25 0.25 0.25 0.25 0.25 Fuel tax 0.05 0.05 0.05 0.05 0.05 VAT 0.18 0.18 0.18 0.18 0.18 VAT 0.18 0.18 0.18 0.18 0.18 g/cc 0.77 0.76 0.75 0.77 0.82 g/cc 0.77 0.76 0.75 0.77 0.82 Lei/US$ 4000 4000 4000 4000 4000 Lei/US$ 3000 3000 3000 3000 3000 m:\cj\rom\sar\ruc.xls(table 2.1) - 3 1- Table 2.2 ROAD SECTOR REVENUES AND EXPENDITURES. 1994 - 2003 II-.le1461 BASE CASE (Road Fund xtarts 1997; 25% fuel tax; 1 0% car purchase tax: 3% economic growwth; lIl/Stata funds-60%I40% M=S etUDe.. TMa vaieeel 1994 1995 1396 1991 19981 1999 2000 2001 2002 20031 Actual Actual Buoget Proiectld ProjectJd Projectid Proje.ctd Ptojectjd Prajectld Proiactid Aam t.c e.:u.q* ve cl RCL'JSD 1650 2300 3000 REVENUES Own Re-enue. Soecial Fuel Tax 16, 24 27 Road Fund Fel T. 0 0 0 126. 130 IN4 138 ?4Z 146 15? Road Fund Car Purchaso Tax 0,: 0 0 .25 261 26 27 ~28 2 30 Bridge Tolls & Crossing Taxes 47 42 3.4 35 361 37 38 38. 41. - 42 OthearRevenues it: A a a of a a 0 a a Subtotal fat Own Revenues 74 70 .- 61 186. 192 197 20 ZiaO .21I 22 Net Tall Revenue. for Pit..a a Q 0 .0 0 a *r .1 lntemar,ort.l Funds IFIlLoans: Road Rehabilffdon I 49. .5 87 65 O a 0 0 - IF Loanrs: Rcad Re?abill2oonl 01 0 0 32. 97 97 27 a 0 0 EBRD: Buchiarest-PitesdMotorway :0 0 .0 27 27 a0 0a SNP: Loan for 7bridgesrer~oilaof1 03:: 0 2 3 1 0 0 0r a 0 PNARE (ECU 21m) 0 5 12 9 0 0 0 0 0 -0 Subtotal for Intermetionel Funds 48... 60 101 136 125 ST 92 a0 0 a LocalCommercial Loans 0:;-7O: la . - 44 0 0 0 0 1 . ...: .0~ State budget fund. C0"MbUV01ni, inO .sm.r .39: 28 is 0 0 0 a a a a Conrnfburion for debr s.rvice 2 6 19 26 45 so 6 74 as ea Contnbuion for maintanance 71t :54 61 16 .7 2, 0 56S 4t 44 Counterpart funcds for IrFi Rehab, I 2' 23- 48, 34 0 a-Q 0 01 a Counteroarn funds for IF! Refrab. II . 0 21. e 65 65 a6O5 Counterpart fundis for Sucharest-Pilazzi Moto 0 0 0 25 25 0 Sui.,otaxl state budget funds I". 1 . 4 123 142 i 131 130. 130 130i Total Road Sector Revenues 1 2621 2511 360 443 46S 4.1S 4311 340cI 3alz1 EXPENDITURE Maintenance Routine Maintenance -30:: 30 . .- 30 30 30 -33 S1.. 6S .1 55 Penodlic Maintenan-e 80:: au so so aD .85 85 .s 16 12 6 Eou:oment 17 1 ~~~~ ~~~ ~~~ ~~~~~~~~ 13 20 20 20 20 20 20 20 Subtotal Maintenance Expenditurea 127: .117, 123 130 130 140. 186 205 227 238 Rahabilixation Rehabilitbaln IExpenditures 16 - 14 108 aj0 0 Renhab itation!It Exoenditures 0 0 5 1621 162 1162 a M.. II Subtotal Rehabilitation Expendiurwe 76 - 8 14".5 162 162j 162 lI 0. 6 Non-moxtorway Inveanimnta OIlier invesonerw 26 18. 11 30 301 30 30 m '30 30 Subtotal non-motorway inveetynnt. 26 .18 1`1 30 30 30 30 30 -30 30 Debt Service, Debt Service for iFrs Roadis Raltabirraon I .2 6. 19 24 36 38 3? 36 33 32 Debt Service forlIFlasRoacs R.habb,kIal,':.O. 0 0 .1 .6 13 20 31' :48 - 47 Oebt Srviceefor BNP Loan (T bridges) Cu- 0_. 2 2 - DebtSeic.tfoLacalLoana(Ouclt.-CoNstI - Q. 3 21 4 38 28 `IS `01 0 - Debt service for 8ucuresti-Piete.i 0 a0 0 1 31 4 9 a a Subtotal debt s.rvic. 21 Sf *40f 111 6Sf 841 63j 1Sf 18 86a Total Non-motorway Expenditures 2311 2271 3191 3931 4011 41 3 t 348 35 MOTORWAY PROGRAMMEI Fond. potentially e.ail.bl* lRtav.-EaP.I 311 241 311 521 521 GI 01 -0 0o 0 IS Road Sector Revenues 12% ..10% .9% 12% 11% 0% 0% ay. . 0% Q. Motor-Y Propoasles 8ucn*,est-Pit*sti 1US$ 103 mn) 0 a 52 521 0 0 0 el a Diner Motor-ays 31 24 31 0 o 0 0 0 0 0 ( Sub-total Moiorwveye 31 24 31 52 621 0 a a - 0 Fundling Gap a 0 0 0 a a 0 a GI - 32 - Table 3.1 ROMANIA SECOND ROADS PROJECT World Bank Financed Road Sections CONTRACT # NUMBER ROAD SECTION NAME LENGTH KM ERR % 201, 202 DN6 Bucharest - Ale.-andria 78.0 38 203, 204 DN2/E85 Urziceni-Buzau-Rimnicu Sarat 88.4 51 205, 206, 207, 208 DN65/E70 Craiova - Slatina - Pitesti - Motorway 115.6 44 209, DN1/E60 Campina - Comarnic 22.2 38 TOTAL 304.2 m:\cjl\rom\sar\tab3 .xis Romania Second Roads Project NAR's Equipment Fleet by Type and Age (As of December 1995) (includes equipment supplied under Transport Project) Age 1-5 years 6-10 years 11-15 years Over 15 years Total No. Equipment Type Number % Number % Number % Number % I Trucks 160 31 210 40 112 22 36 7 518 2 Fuel Tankers 11 26 6 14 6 14 20 46 43 3 Bitumen Storage Tanks I 1 12 7 8 28 32 42 48 88 4 Motor Graders 12 11 42 41 19 18 32 30 105 5 Front Loaders (< 2 m bucket) 27 36 6 8 32 42 11 14 76 6 Bitumen Distributors 12 19 31 49 12 19 8 13 63 7 Snow Blower 19 12 22 14 32 21 80 53 153 8 Bulldozer 6 43 3 21 4 29 1 7 14 9 Excavator 0 0 6 17 12 34 17 49 35 10 Asphalt Plant 12 10 9 8 40 33 59 49 120 11 Road Marking Machine 16 76 4 19 1 5 0 0 21 12 Asphalt Flnisher 14 12 6 5 51 43 48 40 119 13 Compacting Rollers 48 15 30 9 73 22 180 54 331 14 Tractors 86 15 136 24 131 23 213 38 566 15 Multipurspose Vehicles for Road 54 100 0 0 0 0 0 0 54 Maintenance, with attachments 16 Multipurpose Backhoe Loaders 24 100 0 0 0 0 0 0 24 for Road Maintenance, with attachments TOTAL 512 518 553 _ 747 = 2330 :\qI\rom\sar\tab32.xIs - 34 - Table 3.3 ROMANIA SECOND ROADS PROJECT List of Equipment to be Procured under the Project** No. Item No. Units 1 Multipurpose Road Maintenance 42 Vehicle (including attachments) 2 Double drum Vibrating Compactor 1-1.5 tonne 42 IBRD Routine 3 Bridge Maintenance Equipment Set 42 Maintenance 4 Bitumen Emulsion Spreader 42 5 Road Marking Materials 6 Laboratory Equipment EBRD Routine 7 Multipurpose Road Maintenance Vehicle 42 Maintenance (including attachments) 8 Bridge Inspection Unit 1 9 Asphalt plant 80-100 t/h 5 10 Asphalt paver-finisher 10 EBRD Periodic 11 Bitumen Emulsion Spreading Machine 40 Maintenance 12 Doubledrum Vibrating Compactor 4-5 t. 15 13 Bitumen Spreading Machine 10-15 t. 5 14 Tipping Truck 25 t. * Without taxes ** Other items may be purchased by direct contracting through current or recent contracts m:\cjl\rom\sar\tab33.x1s Romania: Proposed Second Roads Project COST ESTIMATES (US$ thousand equivalent; including taxes, duties & contingencies) TOTAL IBRD IBRD EBRD EIB PHARE GOR FOREIGN LOCAL PROJECT COMPONENT COST a! COST % COST COST COST b/ COST c/ COST COST I TRAFFIC SAFETY b/ la Strengthening ICRS 120 0 0 0 0 120 0 84 36 lb Education and driver training 200 0 0 0 0 200 0 140 60 Ic Traffic Law Enforcement 4,000 0 0 0 0 4,000 0 2,800 1,200 Id Black spot treatment 8,500 5,610 66 0 0 0 2,890 5,610 2,890 le DN Traffic Safety Pilot 3,500 2,310 66 0 0 100 1.090 2,310 1,190 If Linear Village Traffic Safety Pilot 1,100 720 66 0 0 0 380 726 374 Ig Bucharest Traffic Safety Pilot 1,100 0 0 1,100 0 726 374 lh Vehicle Homologation Equipment (RAR) 3,880 0 0 0 0 3,830 50 2,716 1,164 li Traffic Safety Services (Twinning Arrangement) 1,700 0 0 0 0 1,700 0 1,615 85 sub total 24,100 8,640 33 0 0 11,050 4,410 16,727 7,373 2 ROAD REHABILITATION 2a State roads 445,350 104,060 66 65,160 85,500 0 190,630 244,943 200,408 1 2b Bridge Programme 26,100 17,000 66 0 0 0 9,100 19,575 6,525 U 2c Supervision 12,170 4,800 100 3,530 2,000 0 1,840 11,562 609 2d Road and bridge design 1,500 1,500 100 0 0 0 1,425 75 sub total 485.120 127,360 67 68,690 87,500 0 201,570 277,504 207,616 3 EQUIPMENT & MATERIALS 3a Equipment & materials for routine mamt. of roads, 24,820 14,000 70 6,730 0 0 4,090 17,374 7,446 bridges, for CESTRIN; for item 4a, for road signs; 3b Equipment for Periodic maintenance 14,220 0 70 10,480 0 3,740 9,954 4,266 subtotal 39,040 14,000 17,210 0 0 7,830 27.328 11,712 4 INSTITUTIONAL DEVELOPMENT 4a TA for proj mng't 400 0 0 0 0 400 0 380 20 4b Assistance to construction industry 500 0 0 0 0 500 0 475 25 4c Computerization of NAR 1,000 0 0 0 0 1,000 0 950 50 4d CommercializationofNAR 1,130 0 0 0 0 1,130 0 1,074 57 4e TA for PMS,BMS, traffic planning; legislation; 1,800 0 0 0 0 1,800 0 1,710 90 ;t sub total 4,830 0 0 0 0 4,830 0 4,589 241 GRAND TOTAL 553,090 150,000 85,900 87,500 15,880 213,810 326,148 226,942 a/ including price contingencies which reflect anticipated changes in local and intemational prices of 2.4% per year (USS) b/ No taxes on PHARE financed items. c/ includes all applicable local taxes, incl. VAT of 18%; & Customs duty of 15% on equipment. file m:\cjlrom\sar\aprcost.xls May 1. 1997 - 36 - Table 3.5 SUMMARY OF PROCUREMENT ARRANGEMENTS a/ (US$ million equivalent) Procurement Method Project Element ICB NCB Other b/ NBF c/ Total 1. Civil Works Road Rehabilitation 157.67 287.68 445.35 (104.06) (104.06) Bridge Rehabilitation 26.10 26.10 (17.00) (17.00) Black Spot Works 8.50 8.50 (5.61) (5.61) Civil Works for DN Traffic Safety Pilot 3.50 3.50 (2.31) (2.31) Civil Works for Linear Village Traffic Safety Pilot 1.10 1.10 (0.72) (0.72) 2. Equipment and Goods Equipment for Routine Maintenance 14.00 7.82 21.82 (12.00) (12.00) Materials 3.0 3.00 (2.0) (2.0) 3. Technical Assistance and Consulting Services Supervision 4.80 7.37 12.17 (4.80) (4.80) Road Design 1.50 1.50 (1.50) (1.50) 4. Other Project Components (NBF) 30.05 30.05 Total Project 171.67 39.20 9.30 332.92 553.09 (116.06) (25.64) (8.30) (150.00) a/ Costs include contingencies and taxes. Figures in parentheses are amounts to be financed by the IBRD Loan b/ Equipment and goods procured by international shopping and Consultancies following Consultants Guidelines c/ Not Bank Financed File name: m:\cjl\rom\sar\aprcost.doc - 37 - Table 3. Romania Second Roads Project Estimated Schedule of Disbursement * Cumulative Disbursements Bank Fiscal Year Quarter Ending US$ Million Equivalent 98 September 30, 1997 1.7** December 31, 1997 3.0 March 31, 1998 6.0 June 30, 1998 11.3 99 September 30, 1998 18.0 December 31, 1998 25.1 March 31, 1999 30.0 June 30, 1999 37.5 00 September 30, 1999 45.0 December 31, 1999 52.5 March 31, 2000 60.0 June 30, 2000 67.5 01 September 30, 2000 75.0 December 31, 2000 82.5 March 31, 2001 90.0 June 30. 2001 97.5 02 September 30, 2C0 i 105.0 December 31, 2001 112.5 March 31, 2002 120.0 June 30, 2002 127.5 03 September 30, 2002 132.8 December 31, 2002 138.8 March 31, 2003 142.5 June 30, 2003 146.3 04 September 30, 2003 150.0 Loan Effectiveness estimated in first quarter FY98 Initial Deposit of US$1.7 million to a Special Account. File name: m:\cjl\rom\sar\tab36.xls ROMANIA SECOND ROADS PROJECT NATIONAL ADMINISTRATION OF ROADS MINISTRY OF TRANSPORT GOVERNING __,latm)ng Orgarniztion and APPROVED, NATIONAL ADMINISTRATION couNc J *GENERAL DIRECTOR OF ROADS eng. DANILA BUCSA GENERAL DIRECTOR --wl_ vkooorn Offce (M STAFF 220 TA pars. 195 DEPUITY GENERAL Worker 25 DIREC OR Roads and Bridge F .pfm6ll @d Con4n,Afetion Pt neraioa Finia TomclDprmn oonclDprmn Depwtlrvt Aralays, En*ronffwnt Progrwns Depahmeit D~eptor o r .~~ 0 V0 0i E tDenerecto U.-)t_ tmdDSo Slr J t kd; leo w ECSfurdantZ) ROMANIA SECOND ROADS PROJECT NATIONAL ADMINISTRATION OF ROADS . r REG. DIR. _{ SECTIONS (7) DISTRICTS (54) t_BUCHAREST J WORKSHOPS (1) Asphalt Plant Units 12 EG L ( VR SECTIONS (5) DISTRICTS (33) CRAIOVA JWORKSHOPS (1) Asphalt Plant Units (12) REG.DR, A { SECTIONS (5) DISTRICTS (37) TIMISOARA___~- WORKSHOPS (1) Asphalt Plant Units (i19)) _ J ~~REG. -DI:R. 5 _ _ SECTIONS (7) DISTRICTS (47) CL J WORKSHOPS (1) Asphalt Plant Units (18) ~SORGANIZATION )----GENERAL DIRECTOR v( WORKSHOPS (l)) Asphalt Plant35U)nit (17) ) REG.~~~ F:I:{ SECTIONS (9) DISTRICTS (S6) LA U\I J_WORKSHOPS (1) ApatPatUis(1 -RE SECTIONS (6) DISTRICTS (32) CLNiZ 3~~~CETI - 40 - Annex I Page 1 of 5 Romania Second Roads Project Project Management Unit Terms of Reference The Project Management Unit (PMU) will be responsible for the management, administration and coordination of the project. Its members will include a Chairman and seven representatives in a managerial position of: (1) the National Administration of Roads (NAR) department of construction; (ii) the NAR department of Maintenance; (iii) the NAR department of Equipment and Materials; (iv) the NAR Procurement Division; (v) the NAR Economic Department; (vi) SICRS and (vii) RAR. The PMU will have a secretary provided by NAR, with three permanent staff; an engineer, an accountant, and an administrative officer. All permanent staff of the PMU will be provided under the current budget of the NAR. The Chairman and members of the PMU can delegate its functions temporarily in other persons(s) of their departments when duly justified reasons exist. I1. The main functions and responsibilities of the PMU will be: a. monitor and coordinate the activities of the project until its completion, including the one- year guarantee maintenance period for civil works; b. liaise with the Bank in all matters concerning project implementation and supervision; C. provide advice and assistance to project beneficiary departments on procurement matters, and clear procurement documents in order to ensure that they meet Bank procurement guidelines; d. finalize arrangements for the technical assistance advisors; e. submit to the Bank disbursement applications on behalf of the beneficiary agencies or departments; f. monitor and supervise the project accounts; g. prepare (and submit to the Bank) quarterly progress reports describing (in accordance with the progress implementation indicators previously established and agreed between the Government and the Bank) project implementation and compliance with time schedule, and identifying issues arising during the project implementation and solutions proposed, as outlined in the legal documents; h. submit to the Bank annual project audit reports, prepared by independent auditors, as described in the legal documents; and i. contribute to the preparation of a project completion report (PCR); based on the submission of the progress reports, correspondence with the Bank, and actual tasks completed compared with those established and scheduled at appraisal. - 41 - Annex 1 Page 2 of 5 2. Various departments would nominate persons responsible for their own part of the project (sub- project). These persons, who can be the respective members of the PMU, would act as coordinators of department project activities with the PMU. 3. The functions and responsibilities of these sub-project implementation coordinators would be to: a. ensure the timely and proper implementation of their sub-projects; b. liaise with the PMU and seek procurement advice and/or other advice from the PMU to perform (a) above; c. prepare all detailed and technical specifications and documents for the procurement of works and goods, and submit them to the procurement specialist in the PMU for clearance; d. prepare terms of reference and draft contracts for all consultants and submit them to the PMU for approval and further processing; e. submit to the PMU related contribution to the quarterly project progress reports, as applicable; and f. at the completion of their respective project component, submit to the PMU previously specified information for the project completion report. Annex 1 Page 3 of 5 TERMS OF REFERENCE GOVERNMENT OF ROMANIA MINISTRY OF TRANSPORT NATIONAL ADMINISTRATION OF ROADS SECOND ROADS PROJECT TECHNICAL ASSISTANCE TO PROJECT IMPLEMENTATION UNIT JUSTIFICATION Target Sector: The Government of Romania (GOR) has applied for loans from three International Financing Institutions (IFIs) namely the International Bank for Reconstruction and Development (IBRD), the European Bank for Reconstruction and Development (ElIRD), and the European Investment Bank (EIB), in various currencies towards the costs of the Second Roads Project ("the Project"). The Project consists of improving operations in the road infrastructure sector through various actions implemented by the National Administration of Roads (NAR) and the various ministries involved in road safety. In essence, the Project shall consist basically of reconstructing and upgrading approximately 1,000 km of National Roads, provision of equipment, institudior-ial development and road safety improvement. Recipient Institutions: The Executing Agency for the roads rehabilitation, institutional development and provision of equipment and materials components shall be NAR and the Interministerial Committee on Road Safety (ICRS) shall be responsible for the implementadion of the road safety component. The funding contribution of the IFIs is estimated in the region of 355 million of US$, while the local contribution shall be approximately 155 million US$. The programme PHARE of the European Community is expected to participate in the cofina:uLirIg lcr an amount of about 15 million US$, addressing mainly the institutional development. General Description of NAR: The public road network in Romania has a length of 153,000 km and comprises approximately 15,000 km of national roads which are administered by the National Administration of Roads, whereas country and communal roads ire administered by provincial authorities. The NAR is a regie autonome with autonomous management under the Ministry of Transport (MOT). It is staffed with approximately 15,000 employees located both at headquarters and in 7 road and bridge regional divisions. Each regional division is managed by a gull director and a deputy director chief engineer. At the headquarters level the NAR is divided into five specialized departments (Maintenance Division, Externally Funded Projects Division (DEFP), Motorways Division, Technical Division and Economic Affairs Division). - 43 - Annex 1 Page 4 of 5 The budget of the National Administration of Roads is in the region of 500 billion of Lei. The main activity of NAR has shifted in the recent years from one of constructing roads and bridges to one of planning, setting construction, maintenance and safety standards and specifications. Project Management. To manage, administer and coordinate the First Road Project, a Project Management Unit has been established within the NAR. Its members include a Chairman and other representatives in a managerial position of (i) the NAR (ii) the MOF, and (iii) the MOT. The PMU have delegated parts of its day-to-day functions to the Project Implementation Unit (PIU) works whose staff come mainly from the Department of Externally Funded Projects (DEFP and responsible for monitoring and coordinating the activities of the Project until its completion, including the one-year guarantee maintenance period for civil). Such an arrangement will be maintained during the Second Roads Projects and the PIU will liaise with the IFIs in all matters concerning Project implementation and supervision. Ever since its establishment PIU has been supported by external expertise and procedures have been prepared and implemented to improve Project management. The NAR intend to recruit consultants to assist in the completion of the First Road Project and in the implementation of the Second Roads Project. Obiectives. The main objectives of the assignment will be to provide assistance to the Project Implementation Unit (PIU) established within DEFP to enable it to undertake the function of planning, operating and monitoring during the period 1997 through to 1998. Now that the PMU operates in an orderly manner the technical assistance is no longer required on a permanent basis and the consultants selected for this assignment will be expected to staff the PIU on a part-time basis in order to ensure efficient execution of the Project. Scope of tasks: - complement, if appropriate, the system of procedures used by PIU staff; - advise DEFP on the need to modify the existing organizational PIU structure, given the upcoming Second Transport Project; - advise on civil works, equipment and consultants services procurement and ensure that IFIs guidelines are met; - assist PIU in the review of proposal and tenders, contracts, specifications and study reports; in particular with respect to ongoing pre-investment studies assist DEFP in commenting periodic reports; - follow up civil works physical progress and design automated system to periodically monitor progress; - liaise with project supervisors and contractors, as may be necessary to resolve difficulties as they arise, and to ensure the smooth progress of the project; - 44 - Annex I Page 5 of 5 assist with the implementation of IFIs' loan covenants such as the Road User Fund and the privatization of road maintenance; follow up the development of training operations conducted by a foreign consultant and comment on progress; assist with the production of project completion report as required by the IFIs and the ministries of Finance and Transport; provide assistance and liaison to visiting IFIs missions as necessary; and assist with the preparation of Work Programmes due under PHARE procedures; assist and provide expertise in financial administration of contracts including procedures to deal with price variations; follow up loans management and ensure that loan funds are used in the more efficient manner, in particular, assist with the preparation of appropriate disbursement schedules; advise on preparation of local counterpart budget; assist in the production of annual project audit reports to the IFIs; assist in submitting to IFIs disbursement applications on behalf of the beneficiary agencies or departments; liaise with local banks to monitor and supervise the project accounts; organize training programmes abroad on such areas as contract management, accounting, development of new technologies in the road and bridge construction. The Consultant is requested to provide a budget of 27,000 ECU for training activities abroad in its financial proposal; - propose personnel to attend training programmes; and - implement such programmes with the approval of NAR. Expertise required. It is envisaged that the appointed consulting firm will provide short term expertise at least in the areas of (a) contract management and accounting; (b) procurement of goods and services; (c) construction and maintenance of roads and bridges by contract; (d) quality assurance and quality control; (e) road safety aspects; (f) construction industry organization; and (g) institutional and organizational arrangements. Staff input and time frame: It is currently envisaged that this assignment will require at least two specialist advisors in the following areas: contracting, road engineering and construction, finance, IFIs procedures, and claims by contractors Intermittent inputs on an "as and when required basis" over the period from 1997 through to 1998 shall be provided, amounting to an estimated total of 6 staff months. - 45 - Annex 1 Page 6 of 5 They will be supported by a team of local experts, providing intermittent inputs amounting in total to 12 staff months. Their expertise should replicate that provided by the expatriate team. Organization Arrangements. The NAR will provide to the Consultants a furnished office and access to international phone/fax for the duration of the services. The Consultants are requested to provide the following equipment (to be left with NAR-PIU at the end of the contract): 1. Laser printer 2. Computers PC (IBN compatible) with at least: 486 DX 66 Mhz processor 500 MB HDD 8 MB RAM with relevant softwares: 6 WINDOWS and MICROSOFT OFFICE 1 photocopier Reporting: The advisory team shall participate and assist the PIU for the production of the following reports: (1) quarterly report to each International Financing Institution; (2) monthly reports to the Ministry regarding the progress of works and disbursements; (3) preparation of PHARE work programmes; (4) any report required by any of the institutions mentioned above. - 46 - Annex 2 Page 1 of 3 PROCUREMENT PLAN: ROMANIA - SECOND ROADS PROJECT (BRD-flnanced elements only) 1 2 3 4 6. Estinmted schedule Description' Type2 No. of Procure- Prequali- Document Invitation Contract Contract slices/ ment fication Preparation to bid signing Comple- items/sub- Method' tion packages' Road Rehabilitation Works CW 3 ICB 7/16/96 03/30/1997 01/10/1998 06/10/1998 06/10/2002 1997 >S10mIII Road Rehabilitation Works CW 6 ICB SEE ANNEX 6, PAGE 73 FOR ALL DATES. 1997 m:\cjl\rom\roads.doc rD X a - 49 - Annex 3 Page 1 of 8 ROMANIA SECOND ROADS PROJECT TRAFFIC SAFETY PROGRAMME Project Description 1. Objectives The activities within the traffic safety component aim to reduce the amount of road traffic accidents in accident "black spots" to an acceptable "standard" level for Western Europe and by increasing the efficiency of education and law enforcement to gradually improve the conduct of drivers and other participants in traffic so as to reduce the rate of road traffic accidents. The project would provide the required traffic safety know-how for producing and monitoring a Traffic Safety Plan for a 10 year period 2000 - 2009, which when implemented will reduce the amount of serious accidents by at least 40% (saving the lives of 1,100 Romanians and keeping 3,200 Romanians from being injured in traffic accidents annually). The project aims at establishing a permanent framework and a program for traffic safety research and development (R&D) to support further improvement of traffic safety. It is expected that funding will be provided through the PHARE programme. 2. The trafMic safety component consists of: 2.1 Elimination of traffic accident "black spots" Traffic accident "black spots" are locations on the road network where the amount of traffic accidents substantially exceeds the average amount of the same type of accidents occurring in similar traffic conditions elsewhere. The "black spots" are evidence of poor traffic environment and should be eliminated urgently. Recent statistics indicate that a substantial amount of accident "black spots" exists on the rural as well as the urban road network in Romania. An substantial part of "black spots" are located within the typical "linear villages" with mixed motorized and non-motorized traffic using the same carriageway and uncontrolled access from the plots to the main road. The project would provide technical assistance to NAR for identification of accident "black spots" on the national road network and definition of the causes for accident accumulation. Technical assistance would also be provided for compiling a priority program for improving the traffic environment and for advising and supervision of technical design of the safety measures required in each "black spot". The accident "black spot" elimination program would address the problems causing accidents in prioritized road locations in most of the 41 regions but special emphasis would be put on identification and implementation of alternative solutions for "black spot" elimination and studies related to the impact of such designs in 6 regions, where the accident rates are high and which can be studied in connection with the rural and urban pilot projects (ref. 2.3, 2.4 and 2.5). The pilot projects would provide the required technical support for the research and development needed in connection with such studies. - 50 - Annex 3 Page 2 of 8 The proposed loan to NAR would be used for technical design and implementation of the civil works program. Technical assistance will be provided to assist NAR with compiling a draft "black spot" elimination program for 1997 which would be based on systematic "black spot" identification, accident analysis, impact assessment and cost/benefit evaluations. Assistance would also be required for related technical design. Technical assistance for identifying and evaluating the "black spot" elimination program for 1998 would be provided through the twinning arrangement (ref. 2.9). The PIU at NAR would procure and supervise the required consultants' services defined in the Terms of Reference (ref. annex 5) and the civil works. The World Bank would provide technical expertise for supervision of the urgently needed cofinanced consultants' services. Implementation Schedule Technical assistance for "black spot" identification, 9/97-3/98 $150,000 accident analysis, programming and design Japan (PHRD) Site studies, final technical design and programming 9/97-4/98 GTA ($150,000) Civil works and supervision 6/98 - 10/99 $8,500,000 2.2 Improvement of technical vehicle standards The total registered fleet of motorized 4-wheel or larger vehicles excluding tractors is 3,019,000 and the average rate of annual growth exceeds 7%. The main part of the vehicle fleet is old and a poor level of maintenance combined with lack of vehicle inspection capacity has dropped the technical standard of the vehicles to a level which is below satisfactory when compared with Western European standards. Many accessories, which are mandatory and therefore standard equipment of Western European vehicles or recommended as provisions in order to provide a better technical safety level for the driver and the passengers, are still missing or if provided of extremely poor quality. The consequence is both reluctance and ignorance related to use of them. Extensive environmental problems related to emissions from vehicles also need to be solved urgently. Assistance to the Romanian Automobile Registry (RAR) would be used to define and purchase laboratory equipment for testing vehicle emission levels, safety and noise. The laboratory would be used for homologation of vehicles and equipment to required standard. The homologation would gradually improve the technical standard of vehicles on the road and contribute to solving problems related to traffic safety of vehicles, noise and pollution. Technical assistance would be required for (i) assessing the needs of Romania related to harmonization of vehicle homologation to EU and EEC guidelines and; (ii) identifying tests and homologation equipment requirements. The twinning arrangement (ref. 2.9) would later on make available technical assistance for institution development ie. reviewing and assessing the requirement of developing the organization of vehicle inspection and all registries related to vehicle use. EU-Phare would be expected to provide $ 3.83 million for financing the required procurement of homologation equipment. - 51 - Annex 3 Page 3 of 8 RAR would, assisted by the consultant specify, procure and supervise the delivery of the vehicle homologation equipment in accordance with EU-Phare procurement guidelines. RAR has drafted the Terms of Reference (TOR) for the consulting assignment. Implementation Schedule Technical assistance 9/97-12/97 $50,000 bilateral aid or trust fund |Procurement of equipment 2/98-6/98 $3,830,000 2.3 DN Traffic safety pilot project: "Bucharest-Ploiesti-Sinaia-Brasov" The pilot project is composed of (i) studies and analyses of the present traffic safety situation on the pilot road; (ii) implementation of non conventional low cost activities for addressing the causes for accidents; (iii) implementation of advanced traffic surveillance and road user information technologies; (iv) intensified well coordinated accident emergency intervention; (v) local accident board activities; (vi) installation of a pilot road weather information system (RWIS); (vii) improved preventive winter maintenance; (viii) traffic safety research and development (R&D); (ix) intensified public traffic safety campaigns. The pilot will demonstrate and study the impact of the numerous activities and actions on road user behavior, measure the impact on frequency and consequence of different types of accidents and give a sound background for traffic safety development by extending the traffic safety experience and know- how of the participants the SICRS, the NAR, the Traffic Police, the Ministry of Health, the research institute INCERTRANS and local public authorities. The pilot will be coordinated and monitored by the ICRS and implemented by the entities responsible for the individual activities. Technical assistance for planning and execution of the pilot is provided through the twinning arrangement (ref. 2.9). The proposed loan would provide financing to NAR for procurement of required studies and analysis, technical design, civil works, equipment/installations, materials and research/reporting. The financing of the equipment required by the Traffic Police for this pilot to intensify accident intervention and road user information is expected to be provided by EU-Phare and is part of the planned support for traffic law enforcement (ref. 2.6). The costs of equipment required to improve accident emergency intervention and start local accident board activities amounts to $100 000 and would be financed by EU- Phare. NAR would procure the consultants' services for studies, analysis, research and reporting from INCERTRANS which is nominated to be responsible for all local traffic safety study- and research activities. Supervision of the consultants' services would be a joint undertaking by SICRS and NAR. NAR would procure and supervise all investment related technical design, civil works, road equipment/installations and materials required for execution of the pilot. The traffic police would specify and procure the equipment required to start local accident board activities. The SICRS would with assistance from the Ministry of Health specify and procure the equipment needed to improve emergency intervention. - 52 - Annex 3 Page 4 of 8 Implementation Schedule Site description by SICRS/NAR/INCERTRANS 10/97 NAR Studies and analysis/pilot design 2/98 - 5/98 GTA ($70,000) Procurement of equipment 2/98 - 5/98 $100,000 Improving signs and road markings 5/98 - 10/98 $1,600,000 Implementation of developed technologies 5/98 - 10/98 $1,700,000 Installation of RWIS and adapting preventive maintenance Follow up, research and reporting 10/98 - 12/2000 (GTA) $30,000 2.4 Bucharest traffic safety pilot proiect The pilot would be composed of (i) studies and analyses of the present traffic safety situation in an identified residential area and along a main street in Bucharest where the light traffic accident rates are exceptionally high; (ii) planning and implementation of low cost traffic safety improvements ie. advanced traffic surveillance, improved signing and guidance of traffic; (iii) improved traffic arrangements for pedestrians and other non motorized traffic and; (iv) follow up & research. The pilot would aim at creating models and masterplans for improving the traffic environment of light traffic to be used generally within urban areas. EU-Phare would be providing financing for technical design and procurement of the civil- and installation work. Technical assistance for pilot preparation would be available through the twinning arrangement (ref. 2.9) The traffic division of the Municipality of Bucharest would procure and supervise the technical design as well as the civil- and installation work. Implementation Schedule Studies, pilot planning and design 9/98 - 2/99 GTA Follow up and research 10/99 - 12/2000 ($150,000) | Civil works and installations in Bucharest 6/99 - 10/99 $1,100,000 Annex 3 Page 5 of 8 2.5 Linear village traffic safety pilot project The pilot project would be composed of (i) studies and analysis of the traffic environment for pedestrians and other non motorized transport in an identified typical linear village; (ii) planning and implementing cost efficient traffic safety improvements; (iii) testing the feasibility of using advanced technologies to improve driver conduct in built up surrounding and; (iv) research. The pilot would aim at creating a model for developing a safer traffic environment for pedestrians and non motorized transport in locations where the construction of by-passes to separate transit motorized transport from local motorized and non-motorized transport is not feasible. The technical assistance required for final studies, pilot planning and technical design as well as for all pilot related follow up and research would be provided through the twinning arrangement (ref. 2.9). NAR would procure and supervise the technical design and the civil- and installation work in accordance with IBRD guidelines for NCB and ICB. Implementation Schedule Studies, pilot planning and 2/98 - 8/98 GTA (US$70,000) design Follow up and research 10/98 - 12/99 Civil works and installations 6/98 - 10/98 $ 1,100,000 2.6 Traffic law enforcement The driving behavior of vehicle operators is deteriorating. Some part of this could be due to the liberation from the previous regime and some part due to a steady increase in the number of new unexperienced drivers (+8%/year). The main reason for driver misbehavior is however increasing ignorance compounded by lack of efficient traffic surveillance. The project would provide equipment and accessories to the Traffic Police for general traffic surveillance, road user information, speed control and alcotesting. EU-Phare financing of $4.0 million would be requested for the procurement of the equipment consisting of (i) patrol vehicles; (ii) communication equipment: (iii) speed radars; (iv) mobile information displays and signs and; (v) alcotesters. The Traffic Police will specify and procure the equipment. Technical assistance for specifying the equipment was provided using the Finnish CTF for Eastern Europe. Implementation Schedule l Technical specification of equipment 7/96 - 10/96 CTF Actual $ 4,800 Procurement of equipment 10198 - 6/99 $4,000,000 - 54 - Annex 3 Page 6 of 8 2.7 Education and driver training: Public school pilot The pilot would facilitate the start of traffic safety education in 10 pilot schools. The education would be provided to the pupils attending 3 separate levels starting from the youngest group of pupils. One part of the pilot would be to prepare for future driver's training to be obtained voluntarily in connection with public education. The aim of the pilot would be to develop traffic safety education for children in order to improve children's behavior in traffic and reduce the amount of accidents involving children and new young drivers. The costs of the pilot would amount to $200,000 which would be financed by EU-Phare. The pilot would provide material for traffic safety education. Technical assistance required for pilot planning, studies, follow up and reporting would be provided through the twinning arrangement. The SICRS would be assisted by the Ministry of Education, procure and supervise the delivery of equipment. Implementation Schedule Pilot planning and design 2/98 - 4/98 GTA Follow up and reporting 9198 - 12/99 (US$25,000) Procurement of equipment and material 2/98 - 4/98 $200,000 2.8 Strengthening the secretariat of the ICRS (SICRS) The capability of the SICRS to prepare the ICRS meetings, to monitor and to coordinate traffic safety activities is hampered by the lack of experienced staff and equipment. Technical assistance to make up for the lack of experience, know how and monitoring tools will be provided through the twinning agreement (ref. 2.9). This component will provide the most urgent equipment required by the secretariat to enable it to perform properly. The SICRS would specify and procure the equipment consisting of one vehicle, 4 computers with modems and one photocopier in accordance with EU-Phare guidelines. EU-Phare would be requested to finance the procurement amounting to $120,000 Implementation Schedule || Procurement of equipment | 2/98 - 4/98 $120,0000 - 55 - Annex 3 Page 7 of 8 2.9 General Technical Assistance for Traffic Safety (GTA) The major part of the technical assistance required for the traffic safety component would be provided as arrangements with established appropriate institutions, administrations and consultants working in the field of traffic safety. This arrangement would make up for the lack of staff experienced in traffic safety work in the ICRS, the secretariat for ICRS and all traffic safety entities. The objective would be to, during the GTA period ending in December 1999, establish the tools and transfer the know how required for the monitoring of traffic safety on ICRS level and in cooperation with ICRS and the individual entities produce a Traffic Safety Plan 2000 - 2009 which will reduce the serious traffic accidents by 40% when implemented completely. The GTA arrangement would provide traffic safety expertise and related services from a group of entities covering the pluridisciplinar activities related to improvement of traffic safety from a country with distinguished records of traffic safety achievement for: (i) institutional development; (ii) reviewing legislation and law enforcement: (iii) monitoring traffic safety development; (iv) improving driver's training; (v) improving traffic safety education and information; (vi) design, planning and follow up of pilot projects; (vii) transfer of know how by arranging visits abroad; (viii) traffic safety research and development (R&D) and (ix) developing and launching the Traffic Safety Plan 2000-2009. The total costs of the GTA would amount to $1.7 million and would be financed by EU-Phare. The technical assistance would consist of expert services (minimum 48 man months), training and workshops, study tours abroad, equipment and material related to provision of the Services for a period of 2-3 years. The ICRS would, using standard EU-Phare procuring procedures, procure and supervise the technical assistance services defined in the drafted Terms of Reference (ref. annex 5). Implementation Schedule Procurement of services 9/97-12/97 l Provision of technical services 1/98 - 4/2000 $1,700,000 3. Performance indicators (outcome/impact) for traffic safety development 3.1 Elimination of accident "black spots" 1. Calculated impact of annual programs financed through the loan ie. reduction of fatalities and injuries. 2. Recorded annual reduction of fatalities and injuries in "black spots" after implementation 3.2 Improvement of technical vehicle standard 1. Development of homologation 2. Repair orders issued at random road side inspection - 56- Annex- Page 8 of 8 3.3 DN Traffic safety pilot project: "Bucharest-Ploiesti-Sinaia-Brasov" 1. Recorded annual change in number of fatalities and injuries within the pilot area 2. Amount of fines and reminders issued to drivers 3. Amount of R&D project proposals 4. Level of winter maintenance 5. Amount and quality of local accident board reports/initiatives 3.4 and 3.5 Bucharest traffic safety pilot and Linear village traffic safety pilot 1. Change in number of serious accidents involving light non motorized transport 2. Level of traffic safety knowledge and behavior (based on interviews/questionnaires) 3. Client satisfaction level (based on interviews/questionnaires) 4. Amount of R&D proposals 3.6 Traffic law enforcement 1. Number of fines/punishments for speeding and drunken driving 2. Number of serious accidents caused by imprudent driving 3. Number of road side inspections (days/location) 3.7 Education and driver training: Public school pilot 1. Development of traffic safety knowledge (before/during/after tests) 2. Number of traffic accidents involving children from the pilot schools 3.8 Strengthening of the secretariat of ICRS 1. Capacity and efficiency in monitoring traffic safety - amount and quality of ICRS meetings and TS workshops 2. TS research development 3. Change in number of registered traffic accidents 3.9 Twinning services 1. Level of traffic safety commitment and know how within all traffic safety entities 2. Availability and quality of the Traffic Safety Plan (TSP) 2000-2009 3. Quality of Traffic Safety Seminar/launching of TSP 2000-2009 File name: m:\cjl\rom\sar\annex3 - 57 - Annex 4 Romania Second Roads Project Monitorable Indicators BORROWER Unleaded Petrol Action Plan A. Prepare and Submit Action Plan by: December 31, 1997 by year's end 1997 1998 1999 2000 2001 2002 2003 B. Average Lead Content of Leaded Petrol (gm/L) 0.45 0.30 0.30 0.30 0.30 0.15 0.15 Traffic Safety Programme by year's end 1997 1998 1999 2000 2001 2002 2003 Number of Black Spots treated (cumulative) 0 10 20 30 40 50 50 % accident reduction at selected treated spots' 1 year after treatment: Predicted 50% Actual Year Severe Fatalities Total Overall Accident Rate 1996 620 200 7600 in Pilot Study Area2 2000 500 160 7000 NATIONAL ADMINISTRATION OF ROADS (NAR) Axle Load Control A. Complete installation and commissioning of September 30, 1997 nine (9) automatic weight in motion stations B. Collect data for 12 month period from October 1, 1997 to September 30, 1998 C. Make recommendations on a system for axle December 31, 1998 load monitoring and control Road and Bridge Rehabilitation by year's end 1997 1998 1999 2000 2001 2002 2003 Number of Road Contracts awarded (cumulative) 2 6 9 9 9 9 9 Number of Kilometers completed (cumulative) 0 0 50 75 125 250 300 Number of Bridge Contracts awarded (cumulative) 10 10 20 30 50 0 Number of Bridges rehabilitated (cumulative) 0 6 12 28 30 50 50 Spots will be chosen where good site- and cause-specific "befoic" accident data exist. 2 Bucharest-Brasov Road m:\qc\rom\sar\annex4 .xis - 58 - Annex 5 Page 1 of 14 ROMANIA SECOND ROADS PROJECT TECHNICAL SERVICES FOR - ACCIDENT BLACK SPOT IDENTIFICATION, - ANALYSIS AND - RECTIFICATION TERMS OF REFERENCE BACKGROUND 1. The road network and trafric The road infrastructure in Romania, consisting of 113 km of motorways, 14 570 km of national roads, 26 167 km of county roads and 31 166 km of department roads, is highly deteriorated due to insufficient funding of required reconstruction and rehabilitation. Budgetary constraints have lately continued to reduce the resources allocated to roads also leading to a growing backlog of the rnational and local road network maintenance. Traffic performance is growing steadily due to increased need for domestic transport of goods, growth of transit traffic and increased car ownership (8..9% annually). A total amount of 3 million vehicles and 320 000 motorcycles and scooters are registered. The amount of vehicles is still very low seen against a population of some 23 million and leaves plenty of room for additional growth in the number of cars. 2. Traffic accidents The traffic safety situation in Romania is very poor by international standards. A total of 115 103 accidents were recorded in 1995 and 9 334 of these were rated as serious accidents causing fatalities or injuries to the victims. The fatality rate is extremely high; 9.4 fatalities per 10 000 vehicles, 37 fatalities per 100 injured and 1.22 fatalities/10 000 inhabitants. The traffic accidents are estimated to accumulate total costs rising close to 2% of the GDP. A substantial increase (+ 37%) in the total amount of traffic accidents was recorded in 1995 compared to 1994 although the amount of serious accidents was slightly reduced (- 3%). The amount of traffic accidents is likely to continue increasing, due to growing traffic volumes, unless steps are being taken to systematically improve the traffic environment and reduce all other main causes for traffic accidents within the framework of a long term Traffic Safety Plan. 3. Traffic safety development The institutional framework and commitment for traffic safety improvement exists in Romania today. The Minister of Transport initiated the establishing of the Interministerial Council for Road Safety (ICRS) in the beginning of 1995. The Council, chaired by the Minister of Transport, assembles 4-5 times per year. The meetings are prepared by a Permanent Secretariat (SICRS) headed by Director Ion Marin. The members of the ICRS are leaders or authorized representatives of 11 - 59 - Annex 5 Page 2 of 14 ministries, the Department for Local Public Administration and the Local Council of Bucharest Municipality and the activities of the ICRS are coordinated by the Prime Minister. Representatives of territorial units of local public administrations and related NGOs may be invited to participate at the debates of the ICRS and of the S Special Traffic Safety Commissions (S7SC), established in 1995 in connection with the ICRS. The SICRS with 4 staff members is getting prepared to gradually start monitoring and coordinating all traffic safety activities. The 5 Special Commissions are composed of ICRS members and experts of public authorities represented in the ICRS. The commissions debate and initiate activities within specified individual traffic safety sectors to raise the awareness of the ICRS of measures required for addressing current traffic safety problems. The ICRS elaborates and submits priority action programs and proposals for their financing to the decision makers as well as supervises draft legislation and formulates recommendations in the field of traffic safety. A preliminary Priority Actions Program for 1996 - 2000 has been drafted based on proposals made by the commissions and has been debated by the Council. 4. Traffic safety dericiencies and problems Defining the objectives and targets for traffic safety promotion, improving the cooperation between the various entities involved and establishing performance indicators for monitoring traffic safety activities requires the attention of the ICRS and a clear logical framework. Assignment of responsibilities needs adjustment to ensure that all major aspects are being covered. A lack of staff experienced in traffic safety work, lack of necessary equipment and lack of sufficient funds hampers all systematic traffic safety development in spite of the present efforts of the Traffic Police, the Romania Automobile Registry (RAR) and the SICRS to in compliance with the Priority Actions Program. (i) improve the quality of accident data (new accident data collection format); (ii) increase the availability of accident data (statistics and publications); (iii) distribute regular traffic safety information using the press, radio and TV; (iv) improve technical vehicle standards (vehicle inspection); (v) improve traffic regulations (new road code); and (vi) increase visibility of traffic surveillance. 5. The Romania Second Roads Project The Government of Romania in cooperation with IBRD, EBRD and EIB is executing a Transport Project and preparing a Second Roads Project both aimed at improving the physical condition and the traffic environment of a significant part of the national road network. The costs of the Romania Second Roads Project will be in the range of $ 500 million. This project is composed of road rehabilitation, procurement of equipment for maintenance, institutional development and a comprehensive traffic safety component of $ 24 million. The financing of the traffic safety - 60 - Annex 5 Page 3 of 14 component is planned to be a joint undertaking between IBRD, EU-Phare and the main beneficiary the Romania Road Administration (NAR). The traffic safety component is split into two separately financed subcomponents. a) an investment program financed by IBRD, and b) a program of Institutional development and technical assistance for all the entities involved in traffic safety planned to be financed by EU-Phare. 6. The Trafric Safety Component The Traffic Safety Investment Programme of $ 14 100 000 covers the engineering components of the list of activities proposed to be performed: (i) elimination of traffic accident "black spots"; (ii) installation of intelligent surveillance and information systems along the Bucharest- Ploiesti-Sinaia-Brasov road (DN/pilot 1); (iii) civil works of a pilot project for improving the traffic environment for non motorized transport in a pilot area of Bucharest and a typical "linear village" on the Bucharest-Ploiesti-Sinaia-Brasov road (pilots 2 and 3); (iv) improving preventive winter road maintenance and installation of a road weather information system (RWIS) on Bucharest-Ploiesti-Sinaia-Brasov road (pilot 1); and The Institutional Development and Technical Assistance of $ 10 000 000 will provide equipment, material and technical services/assistance for: (i) increasing the efficiency of traffic law enforcement and traffic safety information, improving the standard of driver's training and improving the quality of road traffic accident reporting and registering (accident data base); (ii) developing traffic safety education for school children (pilot 4); (iii) improving accident emergency intervention and establishing local accident boards in the regions along the Bucharest-Ploiesti-Sinaia-Brasov road ( pilot 1); (iv) strengthening the secretariat of ICRS by providing equipment for access to accident data and making available the traffic safety services of renowned traffic safety consultants and institutions (twinning). The goal of strengthening the secretariat is to improve its ability to coordinate and monitor the development within the entire traffic safety sector; - 61 - Annex 5 Page 4 of 14 (v) traffic safety studies and related research & development ( pilots 1, 2 and 3); (vi) identification and analysis of accident black spots; (vii) assessing the impact of alternative traffic safety measures; (viii) planning and design of "safe" environments for non motorized traffic (pilots 1, 2 and 3); and (ix) vehicle homologation. THE TECHNICAL SERVICES FOR BLACK SPOT IDENTIFICATION, - ANALYSIS AND - RECTIFICATION 7. Technical assistance shall be provided to the Romanian Road Administration (NAR) for establishing "short" lists of black spots to be rectified within a proposed $ 8 500 000 program of civil works. The rectification measures shall efficiently address the identified deficiencies of the traffic environment in the identified traffic accident black spots on the national road network. Special emphasis shall be put on determining non-conventional measures to be tested when addressing black spots on the pilot road Bucharest-Ploiesti-Sinaia-Brasov. Some technical services are also required as support for supervision of the technical design of rectification measures. OBJECTIVES 8. The overall objective of the Technical Services is to: (i) establish a well-grounded road traffic accident black spot "long list" and a related US$ 8.5 million "short list" by providing the experience, the skills and the methodology required for black spot identification and analysis; (ii) identify and propose the effective and cost efficient measures for rectifying the present deficiencies of the traffic environment in the "short listed" black spot locations; (iii) ensure that the design of proposed rectification measures meets the targets and the required quality standard; and (iv) transfer the methodologies, skills and know-how of black spot identification, analysis and rectification to the client (NAR). - 62 - Annex 5 Page 5 of 14 SCOPE OF WORK 9. The Consultant(s) will provide technical expertise and feasible methodology/systems for identifying and analyzing road traffic accident black spot locations using the accident data which is computerized and available with NAR and the Traffic Police. This data covers the evolution of accidents on the national road network since 1989. The data is reliable but does not fulfill all the requirements of a western European accident data base. The accident data base is not yet connected to a computerized road data bank. The Consultant(s) will work in cooperation with NAR, the Traffic Police and the SICRS when reviewing and revising existing accident "long lists" and establishing the "short list". The "short list" shall be composed of the top priority black spots to be rectified and indicate the planned measures of rectification. The Consultant(s)' services shall include but not be limited to: (i) familiarizing themselves with the general evolution and the causes for road traffic accidents on the national road network in Romania by studying the available accident data at NAR, the Regional Road Administrations and the Traffic Police; (ii) determining the nature of deficiencies of the traffic environment which are causing the extremely high rate of severe road traffic accidents in both rural and urban surroundings in Romania today; (iii) reviewing and revising the contents of existing accident black spot "long lists" and the proposed rectification measures. These have been compiled by NAR and the Traffic Police; (iv) establishing a priority "short list" of black spot locations and rectification measures to be executed as part of the proposed IBRD financed traffic safety investment program of $ 8.5 million. The "short list" shall indicate priority order based on assessment of impact and cost efficiency, describe the proposed measures of rectification and show the costs of the work to be performed. The consultant(s) shall show that the program meets the targets of reducing the total amount of fatalities in the targeted black spot locations by > 40 and the amount of injuries by > 120; (v) compiling a $2 million black spot rectification program feasible for execution in 1997 and assisting in supervision of the technical design required for executing the program. Special attention shall be given choice and design of non conventional rectification measures to be included in a R&D program. The execution of this R&D program will be a vital part of traffic safety development to be performed as part of pilot 1 Bucharest-Ploiesti-Sinaia-Brasov road; (vi) specifying the R&D related to above $2 million black spot rectification program; (vii) on-the-job training of the NAR counterparts to facilitate transfer of related methodology, skills and know-how. - 63 - Annex 5 Page 6 of 14 PROJECT MANAGEMENT AND WORK PLAN 10. In order to successfully achieve the targets related to the impact of the Black Spot Rectification Program and facilitate a smooth procurement and execution of the civil works it is important that: (i) ownership and commitment is strengthened by deep involvement of the counterpart staff in planning the work to be performed and setting the related targets; (ii) the key counterpart staff participate in reviewing the existing programs and take part in site studies; (iii) the counterpart staff resume responsibility for preparation of the required design- and procurement documents under supervision of the consultant(s); and (iv) the SICRS at an early stage is consulted in all matters related to general targets of the program, determination of priorities and proposals for R&D. TIME SCHEDULE 11. The technical services shall commence within 1 month from signing of the contract and be completed within a period of 36 months. REPORTING 12. The Consultant(s) shall provide following progress reports in 5 copies to the client NAR in Romanian, 2 copies to the SICRS in Romanian and 3 copies to IBRD in English. (i) An inception report 4 weeks after commencement of the assignment containing: - a time schedule for completing the assignment - a draft "long" list of accident black spots - a detailed work plan for compiling the $ 8.5 million black spot "short list" and the $2 million rectification program for 1997 - comments on any issues that might substantially change the targets or influence the completion of the assignment. (ii) A progress report 8 weeks after commencement containing: - a final prioritized traffic accident black spot "long list" - a draft for a $ 8.5 million black spot rectification "short list" - a draft for a $ 2 million civil works program for 1997 - individual reports on completed site studies. - 64 - Annex 5 Page 7 of 14 (iii) A progress report 12 weeks after commencement containing: - a final $8.5 million prioritized traffic accident black spot "short list" - a final $2 million prioritized civil works program for 1997 addressing deficiencies in the identified prioritized locations of traffic accident black spots - site study reports. (iv) A progress report 16 weeks after commencement containing: - the progress of design of the civil works to be executed in 1997 - a draft civil works procurement plan. (v) A final report containing: - the final $8.5 million traffic accident black spot "short list" - impact assessment and cost-benefit analysis of the "short list" - the final $2 million prioritized civil works program for 1997 - impact assessment and cost-benefit analysis of the 1997 civil works program the site study reports - assessment of the design- and procurement documents for the 1997 civil works program - assessment of the transfer of methodology, skill and know-how to the counterparts R&D proposal. RESOURCES 13. The Consultant(s) shall provide the required traffic safety experts and appoint an experienced team leader to complete the assignment in close collaboration with the Romanian counterparts. The technical services shall mainly be provided in Romania. The assignment is estimated to require a minimum of 5-6 man months of expert services. The Consultant(s) shall provide all major equipment needed by the expert(s). The client will, free of charge, make office facilities available at the Romanian Road Administration in Bucharest. These facilities will include task related access to telephone, facsimile and copying equipment. The client will provide for limited transport and interpreter service free of charge. The total financing available for the assignment is $150 000. - 65 - Annex 5 Page 8 of 14 ROMANIA SECOND ROADS PROJECT GENERAL TECHNICAL ASSISTANCE SERVICES FOR TRAFFIC SAFETY TERMS OF REFERENCE BACKGROUND 1. The road network and traffic The road infrastructure in Romania, consisting of 113 km of motorways, 14 570 km of national roads, 26 167 km of county roads and 31 166 km of department roads, is highly deteriorated due to insufficient funding of required reconstruction and rehabilitation. Budgetary constraints have lately continued to reduce the resources allocated to roads leading to a growing backlog of the national and local road network maintenance. Traffic performance is growing steadily due to increased need for domestic transport of goods, growth of transit traffic and increased car ownership (8..9% annually). A total amount of 3 million vehicles and 320 000 motorcycles and scooters are registered. This is still very low seen against a population of some 23 million and leaves plenty of room for additional growth. 2. Traffic accidents The traffic safety situation in Romania is very poor by international standards. A total of 169 383 accidents were recorded in 1996 and 8 931 of these were rated as serious accidents causing fatalities or serious injuries and 11 601 causing light injuries to the victims. The fatality rate is extremely high; 9.4 fatalities per 10 000 vehicles, 37 fatalities per 100 injured and 1.22 fatalities/10 000 inhabitants. The traffic accidents are estimated to accumulate total annual costs rising close to 2% of the GDP. A substantial increase (+ 37%) in the total amount of traffic accidents was recorded in 1995 compared to 1994 although the amount of serious accidents was slightly reduced (- 3%). The amount of traffic accidents is likely to continue increasing, due to growing traffic volumes, unless steps are being taken to systematically improve the traffic environment and reduce all other main causes for traffic accidents within the framework of a long term Traffic Safety Plan. 3. Traffic safety development The institutional framework and commitment for traffic safety improvement exists in Romania today. The Minister of Transport initiated the establishing of the Interministerial Council for Road Safety (ICRS) in the beginning of 1995. The council, chaired by the Minister of Transport, assembles 4-5 times per year. The meetings are prepared by a Permanent Secretariat (SICRS). The members of the ICRS are leaders or authorized representatives of 11 ministries, the Department for Local Public Administration and the Local Council of Bucharest Municipality and the activities of the ICRS are coordinated by the Prime Minister. Representatives of territorial units of local public - 66 - Annex 5 Page 9 of 14 administrations and related NGOs may be invited to participate at the debates of the ICRS and of the S Special Traffic Safety Commissions (STSC), established in 1995 in connection with the ICRS. The SICRS with 4 staff members is getting prepared to gradually start monitoring and coordinating all traffic safety activities. The 5 Special Commissions are composed of ICRS members and experts of public authorities represented in the ICRS. The commissions debate and initiate activities within specified individual traffic safety sectors to raise the awareness of the ICRS of measures required for addressing current traffic safety problems. The ICRS elaborates and submits priority action programs and proposals for their financing to the decision makers as well as supervises draft legislation and formulates recommendations in the field of traffic safety. A preliminary Priority Actions Program for 1996-2000 has been drafted based on proposals made by the commissions and debated by the council. 4. Traffic safety deficiencies and problems Defining the objectives and targets for traffic safety promotion, improving the cooperation between the various entities involved and establishing performance indicators for monitoring traffic safety activities requires the attention of the ICRS and a clear logical framework. Assignment of responsibilities needs adjustment to ensure that all major aspects are being covered. A lack of staff experienced in traffic safety work, lack of necessary equipment and lack of sufficient funds hampers all systematic traffic safety development despite the present efforts of the Traffic Police, the Romania Automobile Registry (RAR) and the SICRS to in compliance with the Priority Actions Program. (i) improve the quality of accident data (new accident data collection format); (ii) increase the availability of accident data (statistics and publications); (iii) distribute regular traffic safety information using the press, radio and TV; (iv) improve technical vehicle standards (vehicle inspection); (v) improve traffic regulations (new road code); and (vi) increase visibility of traffic surveillance. 5. The Romania Second Roads Project The government of Romania in cooperation with IBRD, EBRD and EIB is executing a Transport Project and preparing a Second Roads Project both aimed at improving the physical condition and the traffic environment of a significant part of the national road network. The costs of the Romania Second Roads Project will be in the range of $ 500 million. This project is composed of road rehabilitation, procurement of equipment for maintenance, institutional development and a comprehensive traffic safety component of $ 24 million. The financing of the traffic safety component is planned to be a joint undertaking between IBRD, EU-Phare and the main beneficiary the Romania Road Administration (NAR). The traffic safety component is split into two separately financed subcomponents: - 67 Annex 5 Page 10 of 14 a) An investment program to be financed through an loan agreement between NAR and IBRD; and b) A program of Institutional development and technical assistance for all the entities involved in traffic safety planned to be financed by EU-Phare 6. The Traffic Safety Component The Traffic Safety Investment Program of $14 100 000 covers the engineering components of the proposed list of activities to be performed: (i) elimination of traffic accident "black spots" (ii) installation of intelligent surveillance and information systems along the Bucharest- Ploiesti-Sinaia-Brasov road (DN/pilot 1) (iii) civil works required for improving the traffic environment for non motorized transport in one suburban area of Bucharest and a typical "linear village" on the Bucharest-Ploiesti-Sinaia-Brasov road (pilot 2) (iv) improving preventive winter road maintenance and installation of a road weather information system (RWIS) on Bucharest-Ploiesti-Sinaia-Brasov road (pilot 1) The Institutional Development and Technical Assistance of $10 000 000 will provide equipment, material and technical services/assistance for (i) increasing the efficiency of traffic law enforcement and traffic safety information, improving the standard of driver training and improving the quality of accident reporting and registering (accident data base); (ii) developing traffic safety education to school children (pilot 4); (iii) improving accident emergency intervention and establishing local accident boards in the regions along Bucharest-Ploiesti-Sinaia-Brasov road ( pilot 1); (iv) strengthening the secretariat of ICRS by providing equipment improving access to accident data and technical services of renowned traffic safety institutions through a twinning arrangement, with the aim of improving the coordination and monitoring of traffic safety development within all traffic safety sectors; (v) traffic safety studies and related research & development ( pilots 1, 2, and 3); (vi) identification and analysis of accident black spots; - 68 - Annex 5 Page 11 of 14 (vii) assessing of impact of alternative rectification activities; and (viii) planning and design of 'safe" light traffic environments (pilots 1, 2 and 3). (ix) vehicle homologation THE TECHNICAL SERVICES 7. Technical assistance will be provided through a twinning arrangement between the newly established traffic safety organization (ICRS) and related entities from the traffic safety sector in Romania and a team of renowned and experienced traffic safety consultants and institutions/administrations working in the field of traffic safety from a country with good records of traffic safety development. OBJECTIVES 8. The overall objective of the Technical Services are to: (i) make up for the lack of staff experienced in traffic safety work within the ICRS, the STSC's and the SICRS; (ii) transfer traffic safety know-how and experience; and (iii) assist in establishing a clear framework for all traffic safety activities and assigning responsibilities to the various entities involved in traffic safety The Services will provide experienced guidance and fresh know-how for traffic safety policy making, organization of activities, development and use of accident data bases, traffic safety planning and design, activity impact assessment and alternative financing.The twinning arrangement will assist the ICRS to produce a long term Traffic Safety Plan (2000-2009) by the end of June, 1999. The plan shall cover the institutional framework for traffic safety, the logical framework for traffic safety activities, objectives and interim traffic safety targets, a mid term (5 years) program of priority activities and list of performance indicators required for monitoring implementation of the Traffic Safety Plan and related programs. The overall target of the Traffic Safety Plan shall be to reduce the amount of fatalities and injuries in traffic accidents by at least 40% within a 10 year period from the commencement of implementation of the Plan. This target corresponds to similar targets set in many Western-European countries. - 69 - Annex 5 Page 12 of 14 SCOPE OF WORK 9. The Consultant(s) will provide technical expertise to all the agencies involved for addressing problems related to: a) the human factor; b) vehicles; c) road infrastructure and carry out these services in close co-operation with the ICRS, the STSC's and the SICRS. The Consultant(s) will establish and throughout the contract keep available links between the SICRS and the agencies and institutions teamed up with the Consultant(s). The Consultant(s)' services shall include but not be limited to: (i) acquainting themselves with the procedures of the traffic safety sector and the prevailing traffic safety situation in Romania; (ii) initiating and providing flexible expert services to the ICRS, the STSC's and the SICRS for: - establishing logical frameworks for traffic safety development - developing traffic safety policies, defining objectives and setting targets - developing performance indicators - assigning responsibilities - reporting and monitoring (iii) reviewing and initiating improvements to present traffic safety regulations and traffic safety related procedures: - traffic legislation - law enforcement - drivers training - education of school children - information to road users and the public - accident data collection and developing/use of accident data bases - identification of accident black spots - methods for analyzing causes for accidents and assessing the impact of activities aimed at addressing current problems - technical vehicle standard/inspection procedures/harmonization with EU - emergency intervention - analyzing of serious accidents/establishing local accident boards - traffic safety research & development (iv) planning and follow up of urban pilot project "Bucharest suburb and "linear village"; - 70 - Annex 5 Page 13 of 14 (v) assisting the client in obtaining traffic safety literature and related material; (vi) assisting the client in planning and implementing traffic safety training; (vii) organizing visits abroad for transfer of skills and know-how; (viii) assisting the client in compiling technical specifications for procurement of traffic safety equipment and related material; (ix) assisting the client in improving traffic safety planning and design; (x) assisting the client in producing the Traffic Safety Plan (2000 - 2009); and (xi) assisting the client in launching the Traffic Safety Plan (2000 - 2009) at a National Seminar. PROJECT MANAGEMENT 10. For the successful development of the Traffic Safety Plan it is important that: (i) Initial planning. ownership and commitment: The person(s) responsible for each traffic safety sector or subsector program is deeply involved in defining and setting the limits for the tasks he (she) will be responsible, setting the time limits for each identified step of the sector program and commits him (her)self to the timely execution of the plan. (ii) Project management system: A suitable project management system shall be provided to enable the management of the Traffic Safety Plan to describe and in detail follow up and monitor the progress of the plan and its components. The management system shall generate monthly reports to be issued by the management, describe the overall progress as well as the progress of each individual subcomponent against the set targets of the plan. TIME SCHEDULE 11. The technical services shall commence within 1 month from signing of the contract and be completed within a period of months. REPORTING 12. The Consultant(s) shall provide following reports in 10 copies to the client SICRS in Romania, 3 copies to the PIU of EU-Phare in Romania and English and 3 copies to the World Bank in English: - 71 - Annex 5 Page 14 of 14 (i) An inception report 6 weeks after commencements including a report of the existing situation, a revised detailed plan for initiating traffic safety sector improvements, a draft time schedule for developing the Traffic Safety Plan (2000 - 2009) and comments on any issues that might substantially change or influence the successful completion of the technical services. (ii) Interim progress reports every 3 months on Consultant(s) initiated activities and provision of services requested by the client describing the situation within each sector. (iii) A final report (draft) covering: - description of all activities undertaken and service rendered within each traffic safety sector - a summary of the development (changes) within each sector - a description of the evolution of traffic safety situation in Romania during the contract period - a summary of traffic safety training and study trips during the contract period including rate of involvement of the Consultant (s) - an evaluation of Traffic Safety Plan (2000 - 2009) including proposals for further donor involvement in the development of the traffic safety sector - a summary of Consultant(s)' conclusions from the Traffic Safety Seminar; and (iv) A revised final report one month later, taking into account reasonable comments by NAR and the World Bank. RESOURCES 13. The Consultant(s) shall make available a team of traffic safety experts representing entities working in the various fields of traffic safety activities headed by a very experienced team leader. The required services shall be provided as well from the home offices of the team members as in the field in Romania. The assignment is estimated to require expert services amounting to a minimum off 48 man months. The Consultant(s) will provide all major equipment needed by the team. The client will, free of charge, make office facilities available at the Ministry of Transport in Bucharest. These facilities will be provided with access to telephone, facsimile and copying equipment, the user costs of which will be carried by the Consultant(s). The client will have limited transport and limited interpreter service available free of charge. The financing available for all activities within the Technical Services is $ 1 700 000. This amount is not to be exceeded. File name: m:\cjl\rom\sar\annex5 - 72 - Annex 6 Page 1of 4 ROMANIA Ministry of Transports National Administration of Roads PROJECT IMPLEMENTATION PLAN 1. Proiect Obiectives The primary objectives of the project are: - to improve the traffic conditions on the national roads network and bring the geometrical elements and road structure up to the level of the European standards requirements; - bridges rehabilitation; - the endowment with road and bridge maintenance equipment; - to provide the technical assistance needed for the design and execution of works; - the restructuring and computerisation of the NAR; - the improvement of NAR's operational, commercial and financial management. 2. Proiect Descrivtion The Project will include the following components: A. Road rehabilitation works - The rehabilitation of approx. 1000 km of national roads through upgrading the road system to the level of bearing capacity imposed by the expected traffic volume, the correction of the cross and longitudinal sections, for bringing them to the required traffic capacity through the widening of the carriageway to min. 7.00 m for the roads in the technical class 3 and to 14.00 m for the roads in the technical class 2, the consolidation and widening of the shoulders, the arrangement of the pluvial vater collection and drainage system. There have also been provided measures for bringing the bridges on the considered routes up to the European standards level, both conceming the technical state and the bearing capacity. B. Bridae Proaramme -The rehabilitation of 97 bridges, representing 8,865 L.m, consisting of the widening of the way on the bridge, the remake of the footways, the remake of the waterproofing and the replacement of the pavement on the bridge and of the expansion joint devices. C. Black Spots Treatment The clearing of 52 black spots on the national roads through the correction of the geometri_al elements of the curves, the execution of a third lane in the areas with steep slopes, the provision of pluvial vater drainage of the road platform. -73 Annex 6 Page 2 of 4 D. Equipment for routine maintenance Equipment for routine maintenance of roads and bridges and equipment for the CESTRIN laboratories. The list of the equipment to be purchased is attached. E. Traffic Safety The objective of this component is to reduce traffic accidents by providing the financing for technical assistance to the individual traffic safety sectors, facilitating efficient traffic law enforcement, developing traffic, safety education and information (Inter-ministerial Council for Traffic Safety). F. Technical Assistance - Supervision of civil works; - PMS, BMS; - Construction Industry G. Civil Works Design The provision of preliminary studies in viewof selecting the road sections comprised in the rehabilitation program. Issue of the Tender Documents for the contracts settled after the road sections' selection. Elaboration of the Working Drawings. 3. Proiect Imdlementation Plan The PIP includes all essential documents prepared with NAR, the project beneficiary and implementing agency that are necessary following up on, and monitoring progress in project implementation. The PIP includes: - Detailed Project Description - Procurement Plan - Implementation Plan - Monitorable Indicators - Reporting Plan ,PR()CURIMEN'r PLAN Deadlines Nattire Number Procureisient Tender Comnponent Contract of of m oethbud docurnmeits Invitation Invitation Contract Contract package Contract preparation Precalilicatlon Tendering ' Signature Colupiction A. Road Rehabilitntion Works I)N6 lticharest-leleomrman country limit A201 civil works I 1(11 16 D)ec 1996 15 Oct 1996 01 May 1997 30 Nov 1997 31 Dec 2001 DN6 7elcorman country limit-AlexandriA A202 civil wotks I I lt 16 Dec 1996 15 Oct 1996 01 May 1997 30 Nov 1997 31 May 2001 DN2(E85) Urziceni-lluzau A203 civil works i ICII 16 llec 1996 15 Oct 1996 01 May 1997 30 Nov 1997 31 Dec 2001 D)N2(E85) Buzau-Rimnicu Sarat A204 civil works I 1(11 16 D)ec 1996 15 Oct 1996 01 May 1997 30 Nov 1997 31 Dec 2001 IDN65(E70) Craiov'a-Olt country limit AZIS civil works I 1(1t 31 Aug 1997 15 Apr 1997 20 Sep 1997 31 Mar 1998 01 July 2001 D)N65(E70) Olt country limit-Slatina A206 civil works I IfCB 31 Aug 1997 15 Apr 1997 20 Sep 1997 31 Mar 1998 01 Sep 2001 DN65(E70) Slatina-Arges country limit A207 civil works I ICH 31 Aug 1997 15 Apr 1997 20 Sep 1997 31 Mar 1998 01 Sep 2001 DN65B(E70) Argescoutrry limit-Pitesti A208 civil works I 1(11 31 Aug 1997 15 Apr 1997 20 Sep 1997 31 Mar 1998 01 Sep 2001 D)NI(E60) Cimpina-Comarnic A209 civil works I ICB 31 Aug 1997 15 Apr 1997 20 Sep 1997 31 Mar 1998 01 Sep 2001 ODN28 Sabauari-lTirgul Frumos A210 civil works I lUll 31 Dec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 DN28 Tirgu Frumos-lasi A211 civil works I 1(W 31 D)ec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 *IDN24 lasi-Sculenr A212 civil works I 1(B11 31 Dec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 5DN2(E85) Rimnicu Sarat-Focsani A213 civil works I IC(: 31 D)ec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 JDN2(E85) Focsani-Matasesti A214 civil woks I 1(11 31 DIec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 DN2B Oalatl-Oiurgiulesti A215 civil works I lCII 31 Dec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 'DN52 Alexandria-Turnu Mfagurele A216 civil works I ICB 31 Dec 1997 31 Jan 1998 30 Jun 1998 31 Dec 1998 31 Dec 2001 n. Bridges Programme BI- B28 civil works 28 NCII 30 June 1997 31 July 1997 31 Oct 1997 31 Aug 2001 U129- 1151 civil works 23 NCUB 30 Nov 1997 20 Dec 1997 31 Mlar 1998 31 Dec 2001 Ci - Clt) civil works 10 NCB 01 Sept 1997 01 Nov 1997 01 Feb 1998 31 Dcc 2001 C. Black spots treatment Cl I - C21 civil works I NCB Of Aug 1998 01 Nov 1998 31 Jan 1999 30 June 2001 1). EquIpment for -- routine maintenance of roads,bridges. for CESTRIN laboratory Multipurpose Road Maintenance Truck 1)1 goods I lUlN 01 May 1997 30 Junel997 30 Sep 1997 31 Mar 1998 AtmLchmnents for MPRMT 1)2 goods I I(CIJ 15 May 1997 31 July 1997 31 Oct 1997 31 Mar 1997 llridge Routine Maintenmnce Equipment D3 goods I lCIl 0f May 1997 30 June 1997 30 Sep 1997 31 Mar 1998 Duble l)rum VibratIng Compactor 1-1I5to 14 goods I RIC 01 Junel997 31 July 1997 31 Oct 1997 30 June 1998 ILaboratory Equipment 1)5 goods I 1(11 B01 July 1997 30 Sep 1997 30 Dec 1997 30 Nov 1998 Bitumen emulsion spreading machine _ i6 goods I ICU 01 June1997 31 July 1997 31 Oct 1997 30 June 1998 E. 1raflc safety El - E2 civil works 2 NCn 30 Sept 1997 30 Nov 1997 31 Mar 1998 31 July 2001 F. Technical assIstance for -- works supervision Fl consultant services 3 lIl1 30 Nov 1996 16 Dec, 1996 01 May 1997 30 Sep 1997 31 D". 2001 -- PMs F2 consultant services I lUIl 30 Mlar 1998 -- IIMs F3 consultant services I TwAr. 30 Apr 1997 31 Oct 1998 -- construction industry F4 consultant services I ICU 30 Oct 1997 05 Jan 1998 31 Mar 1998 31 IMar 1999 t. Road and bridges works design (31 - (.3 designer services 2 1(11 15 IOct 1995 31 Mar 1999 * = Additional Contrac s proposed by NAR frons founds availlable after tendering. u ICII = Interntrional Cormpetitive Biddint > NCll - National Competitve Bidding ° D Tw Ar. T lwinninrg Arrangesiert X W ' MPLEMENTATON PLAN ~~~~~____!_ I_ Component No. Conactr A. Road Rehabilitation Works _ _ _ _ ON6 Bucharest-Teloorman conylimit A201 civil works @ . ONEtelormn cunt illt-laondr A 203 Ii works .cI DNZ(ES)BzuimiuSeP04 cvlwrs ..N585) Urziceni-Buzau _ __202 civil wrk' lbs *** f 4 h6. .iy i. AiI . 1j; .t r b.q i t ; i tDNES(F7Qi Craova-Olt counE ~t A 205 civil works . . - .: j ..I A |ri i i i 1|& . . . . . . _ _ |ON6$ES 70 OIl cm rnilm-Stetne P206 civilworks . i;t ~-- gdLAt______Ii5i.-_ O)N65(F701 Criopva-CoamcP9 civil works I DNES70) SIacontryge cont, i 20 ii ok ONES EJO9 BB *5 C o C rni-e A2089 Civil works j -; IrI 17N28 Sabauars-Tirgul Frmnos A210 civil woks V M'D28 Tlrg u Frumos-las, A211 clviL wor ks *j t , - . _ - ttN24 lasi-Sculev A212 ciilwok 4 DN2(E5) Rmnic Sara-Focani A213 civil works & tN2 Gaslat-CGiur i t t t ON52 AJexandra-Turnu Mauce Ara|e6 6 ci ks 8 Bridges Progrmme 81 828 civi orks | |rizii , ; . C, Black spotstreatment ci_ii - works' iF Techmentst for _;RMTi -o tnemitnne Mof rlrloadn dpems. ____ i or 8 ES R N laoatr -3 |__ __ _ sen_c_s | _ ; ;_ - _; *** * | |_| M-opsurpse oaid Maitennc Trc F4 oodMcs ~1 4 > 1 i ,t At tacmnt01sfor| MRM __ ____ 0 goods risble_Drum Vibrating Compactor l-1S5to 04 sd Laboratory Equip ment _____ Bitumen emulsion spreading machine 06 goods I ~ ~ ~ ~ ~ ( I f. Technical assistance for: Extiori - PEtS ______~~~~~~~~~~~~~~~~ ____S __ -ES F3 S Cseiie $f. -constucton inus y I FP4 servCes _ _ _ _ _ _ _ _ _ _ _ _ _. . .- 0.Rod and b~ridq es wrks des n Gl-G3 sie Loan EffectunesProject CompYleton * Tende Documents preperston and Precelitication N * Tondeftln 0 7 Contract Evaluation and Negotiations 4 * Contec. Execuwion - 76 - Annex 7 Economic Analysis of Road Sections to be Rehabilitated 1. Two consultant teams have prepared detailed feasibility studies of over 2,500 km of national roads to establish priorities for this project. Consultants' reports are in the project file. They give very detailed analysis and all the parameters used in the Bank's Highway Design Model (HDM-III). 2. Below are a few summary tables and a sample detailed cost-benefit analysis for 2 sections retained for Bank financing. Table 1 gives the inputs used by HDM to calculate vehicle operating costs. Table 2 gives the base year (1995) traffic levels, cost estimates and IRR for the sections to be financed by the Bank and the sensitivity of the IRR in 3 scenarios: Sensitivity test 1. Increase of the roads rehabilitation costs by 20%. This is applied to the economic costs of rehabilitation, occurring in the first three years of the analysis (1997, 1998, 1999). All other parameters are left unchanged. Sensitivity test 2. Increase of the road maintenance costs by 20%. This is applied to the annual and recurrent periodic costs, at their economic values. All other parameters are left unchanged. Sensitivity test 3. Decrease of the annual savings by 20%. This decrease is applied to the annual amount of savings in the years of operation of the Project (2000 through 2019), in economic terms. This sensitivity test, applied directly to the savings, takes into account two factors and the combined effects of their possible decreases (e.g. the traffic volumes and the amount of the specific savings of the vehicles). It can be verified that the reduction of the recurrent costs (road maintenance) does not affect the IRR while some influence of IRR is observed for the increase of the construction costs and the reduction of the benefits (annual savings). Generally, the obtained results can be considered stable, as the elasticity factor is less than 1. Table 3 gives detailed cost-benefit analysis for 2 typical road sections. All other C-B calculations are in the consultants' report in the project file. m:\jy\rom\roadtext - 77 Annex 7 Table 1 TAB. 5.4.3 VEHICLE OPERATlNG COST INPUTS Name Pan:ercar Utilirt Bus j Medium truck Heanz ArtcuMted Vehicle Type 1 4 5 8 9 1io Number of Tires 14 1 4 6 6 10 114 Gross vehicle veight 1.35 1-2.01 13.35 13.38 19.62 14M Equivalent standard 0.00 0.00 1.48 1.48 1.43 3.6 axdes v Axles Der vehicles _ 2.00 2.00 1 2.00 2.00 3.00 15.00 Vehicle pavload 0.30 0.50 4.00 7.00 12.10 123.67 Driiing Power 30 3 1 134 95 151 193 Desired speed 98.3 94.9 80.00 75.00 75.00 _ 1 8.00 Fuel efficient factor 0.85 0.90 0.90 0.90 0.90 10.80 Reca cost 40.0 Number of Recap _|- _- __ __ _-_ ,_ *_|I.0 Economic prices Vehicle(USS x 1,000) 4270 11780 34600 17070 26440 59000 Tire 70.0 130.0 156.9 156.9 193.4 1236.4 Maintenance labour 1.70 1.70 1.66 1.20 1.20 11.58 _Crewcost _0.14 °0.90 0.90 0.70 0.70 0.90 Time cost 11.60 0.60 0.60 0.60 0.60 10.60 Interest % |10.0 10.0 10.0 10.0 10.0 110.0 Petrol/liter 10.195 0.186 1.00 I Annual km driven 115000 30000 33000 33000 33000 50000 I VehicleLife 110 _10 15 15 IS |Ss HR driven 1250 600 660 660 660 l1000 Hourly utlization J 0.7 0.7 0.7 0.7 °0.7 u rabo a e 0 1 5. 0. . I I Numnberofpassenger lo.9 I.o Isoo0 0.5 los5 lo.o - 78 - Annex 7 Table 2 Economic Analysis of World Bank Finance and Road Sections Road Name Length ( 1995 Traffic Average cost Total link EIIR % AADT USSIkim cost USS DN I (E60) Campina-Comnamic 22.2 11,400 894,129 19,849,664 38.50 DN 2 (E85) Urziceni-Buzau 49.8 7,800 380,809 18,964,288 53.90 DN 2 (E85) Buzau-Rm. Sarat 38.6 9,700 469,921 18,127,371 50.80 DN 6 Bucuresti-Alexandria 78 9,800 396,246 30,907,188 61.90 DN 65 (E70) Craiova-Slatina 45.1 7,800 399,726 18,027,643 44.50 DN 65 + DN 65B (E70) Slatina- 70.5 7,700 422,860 29,811,630 45.10 Pitesti Motorway (DN 65B) TOTALS/AVERAGES [ 304.2 446,048 135,687,784 49.87 Results of Sensitivity Tests Base case Sensitivity 1 Sensitivity 2 Sernsitivity 3 Road Name cash nlow IRR IR IRR _ _ _ _ _ _ _ R R (%_ _ __ _ _ _ DN 1 (E60) Campina-Comnamic 38 33 38 32 DN 2 (E85) Urziceni-Buzau 54 48 5, 46 DN 2 (E85) Buzti-Rm. Sarat 51 44 51 43 DN 6 Bucuresti-Alexandna 62 55 62 53 DN 65 (E70) Craiova-Slatina 45 39 45 38 DN 65 + DN 65B (E70) Slatina- 45 39 45 38 Pitesti Motorway (DN 65B) m.:WyomVroads2Isartab2.xIs - 79 - Annex 7 Link 1 Campina - Comamic Table 3 Year Increase in ncrease in Savings in Savings in Base Sensitiviry 5ens,;z;j Sens.:ivity road capital roal reci rr. existing veh. existing veh. case I 3 costs costs ocerating travel time cash flov. 1997 -5,75 C,00 0,00 0.00 -5,75 -6.90 -5..5 -5.75 1998 -7,66 0.00 0,00 0.00 -7.66 -9.20 ,7.56 .6 1999 -5,75 0.00 0.00 0,00 -5.75 -6,90 -5.75 -5.,75 2000 0.00 0.00 9,40 0,84 10.24 10.24 '2.2: S. 19 2001 0,00 0.00 9,61 0,88 10,49 10.49 10.49 8.39 2002 0.00 0,00 9,90 0,92 10,82 10.82 10.82 3.66 2003 0,00 0,00 10,13 0,97 11,10 11,10 11.10 5.86 2004 0,00 0,CO 10,27 1,01 11.26 11,28 11.28 9.O0 2005 0,00 0,00 10.30 1.04 11.34 11,34 11.34 9.07 2006 0,00 0,00 10,28 1,08 11,35 1 1 ,'5 t 1.35 9,e0 2007 0.00 0,00 10,15 1,10 11.25 11.25 t1,25 9.00 2008 0,00 0.00 9,74 1,10 10,85 10,85 10.85 8.68 2009 0,00 0,00 8,69 1,04 9,73 9.73 9,73 7.79 2010 0,00 0.00 6.05 0,78 6,83 6.83 6.83 5.4 2011 0,00 0,00 2.20 0,31 2,51 Z.51 Z51 2.01 2012 0.00 0,00 0,38 0,05 0,43 0,43 0,43 0,35 2013 0,00 0,00 0,40 0,05 0,45 0,45 0.45 0.36 2014 0,00 0,00 0,41 0,06 0,47 0,47 0.47 0.38 2015 0.00 0.00 0,43 0,06 0,49 0.49 0.49 0.3 2016 0,00 0.00 0,45 0.06 0.51 0,51 0.51 0.41 2017 0,00 0,00 0,46 0,06 0.53 0.53 0.53 0°4 2018 0,00 0,00 0,48 0,07 0.55 0.55 0.55 0. 2019 4,79 0.00 0,50 0,07 5.35 6.31 5.35 5.2 IRR = 38% 33% 33% 32% Link 2 Urziceni - Buzau Year Increase in Increase in Savings in Savings in Base Sensitivity Sensiaroy Sensitivity road capital road rerr. existing veh. existing veh. case 1 2 3 costs costs operating travel Ume cash flow costs costs 1997 -5,56 0.00 0,00 0,00 -5,56 -6,68 -5.56 -5,56 1998 -7,42 0,00 0,00 0,00 -7,42 -6.90 -7.42 -7.4 1999 -5.56 0.00 0,00 0,00 -5,56 -6,68 -5,56 -5,56 2000 0,00 0., 13,06 1,04 i4,10 14.10 14,10 tl,23 2001 0,00 0.00 15,53 1,37 16,90 16,90 16,90 13,5 2002 0,00 0,00 16,01 1.4.4 17.45 17,45 17,45 13,96 2003 0,00 O.00 16,41 1,51 17,92 17.92 17,92 14,33 2004 0,00 0,00 16,66 1,57 18,24 18,24 18.23 14,5 2005 0,00 0,00 16,76 1,63 18,39 18.39 18.39 14,71 2006 0,00 0,00 16,85 1,69 18,53 18,53 18,53 14.82 2007 0,00 OC.O 16.87 1,74 18,60 18.60 1 8.60 14,8 2008 0,00 0.00 16,72 1,78 18.50 18,50 1,50 14.8 2009 0,00 0,00 16,24 1.79 18.03 18,03 18.03 14.42 2010 0,00 0,00 15,08 1,74 16.80 16,S0 16.79 13,4_; 2011 0,00 0.00 12,44 1,53 13,97 13,97 13,97 11. 16 2012 0,00 0,00 6,71 0,90 7,61 7,61 7.61. 6.09 2013 0,00 0.00 1,17 0,17 1,34 1,34 1,34 1,07 2014 0,00 0,00 -0,31 -0,04 -0,35 -0,35 -0,35 -0,28 2015 0.00 0.00 -0,32 -0,04 -0,36 -0,36 -0.35 -0.29 2016 0,00 0.00 -0,33 -0,04 -0,37 -0.37 -0,37 -0.30 2017 0,00 0,00 -0,34 -0,44 -0.78 -0,78 -0.78 -0.63 2018 0.00 0.00 -0.35 40,05 -0,40 -0,40 -0.40 -0.32 2019 4,64 0,00 -0.37 -0.05 4,22 5.15 :22 4,3C IRR . , 54% 48% S4% 46 ROMS SEN.XLS Page I - 80 - Annex 8 ROMANIA SECOND ROADS PROJECT DOCUMENTS IN THE PROJECT FILE 1. Detailed Project Description. NAR. November 1996 2. Second Transport Project (Regional Group 2). Pre-Investment Study. SPEA - Italy and Iptana - Search. In 5 volumes, Bucharest. June 1996 3. Second Transport Project (Regional Group 1). Pre-Investment Study, Louis Berger International & Viacons, Consistrans, Relax, Eurometudes. In 2 volumes, Bucharest. June 1996 4. La Securite Routiere en Roumanie; Gerondeau and Others. June 1993 5. Dinamica Accidentelor Grave de Circulatie 1991-1995 and various other publications. Ministry of Interior, Inspectorate-General of Police, Bucharest. May 1996 File name: m:\cjl\rom\sar\annex8 lS e GL t n H - l o 1ILOMETERS 25- \~ -,.~' - I /& IBRD 27751 KILOMETERS 2- X2.o /2 25 50 75 10KAIERO AI 0 25 50 75 1001-- U K R A I N E T 11vov 1- , % R O M A N I A 0 ;0 20 M3OLESJ0 Kh__- SECOND ROADS PROJECT 4ao sotu < j - - > OSA NETWORK SELECTED FOR R E S ~~~~~~~~~~~~~~~~~~~~~NETWORK STUDIED H U N G A R Y J A M>bat - -x S U C E A V X , %g o =~~~~~~~~~~~~~ (2,500 km HUNGARY ii- MARAM~~~~~~~~~~~~~~~~~~~~~~~~~~~RE5 '~~~~~~~~~~- ~~REHABILITATED UNDER 01 PREVIOUS PROJECT BIS< a C. - _ 2 0 *( ( 615TRITA- > - \ < { -4 \ < s NRA REGIONS Y NASAUD/T. Ki,- IASI HEADQUARTERS T. $ - - N7eRNI A BOUNDARIES Zo ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 SELECTED CITIES * a r _<\ t , 2 = A ' --~~~~~~.1 M FEDERALA (3S 0 COUNTY (JUDET) CENTERS U NATIONAL CAPITAL N,.. K,,~T.o - EXPRESSWAY f ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - MAJOR ROADS CLUJ N -A P~~~~~~~~~~~~~~~~ AILROADS (SERBIA/MONTEN EGRO) ! "-.X D cljL J ~ tGAIUR,G I UL. ) _ ' - s,l,,-ovC0SANSTTA'L BOUNDARIES .ogsn undof Ga World8n Rock iG-\)< ] Aean Gugi AC bounoclon,, color,, deoom,oon,j<,.,eil,L_t/ '' rVoo, w- cod coy oil,., ,clormcOoo sho,cc on ~ ~ ~ ~ Albaful, In. app do nol aiply. cc ie pcr. of \u Ov,o, Goe World Rank Groip. ony oudgronnt ~Mgree-\y/ v- ' on edosei.i r OcplncTO I oI 2VRA CE c~~~~~myfiosem~o0cwe0f 2 2 H14BUNEDOARA BRAO I. A A UmZe Kb RS AOV Ia.e'-7 N, ,och boundor,to 2 ,* SEVERIN -HOV-AI A - SEPTEM8 9EM IMAGING Report No.: 16153 RO Type: SAR