Docufient of The World Bank Report No. 15126 BEN STAFF APPRAISAL REPORT REPUBLIC OF BENIN TRANSPORT SECTOR INVESTMENT PROGRAM October 1, 1996 Infrastructure Urban, Water, Energy Africa Region CURRENCY EQUIVALENTS Currency Unit = CFAF USS1.00 = CFAF 500 FISCAL YEAR January 01 -- December 31 SYSTEM OF WEIGHTS AND MEASURES: Metric ABBREVIATIONS AND ACRONYMS ACDI Agence canadienne de developpement international (Canadian Agency for International Development AGETUR Agence d'execution des travaux urbains (Urban Works Agency) BAD Banque africaine de developpement (African Development Bank) BID Banque islamique de developpement (Islamic Development Bank) BOAD Banque ouest africaine de developpement (West Africa Development Bank) CAS Country Assistance Strategy CDEAO Communaute des etats d'Afrique de l'Ouest CFD Caisse francaise de developpement (French Bilateral Aid) CNCB Conseil national des chargeurs du Benin (National Shippers Council) CNSR Centre national de la securite routiere COBENAM Compagnie beninoise de navigation maritime (Benin Maritime Navigation Company) CPC Cellule de programmation et de coordination (Programming and Coordination Unit) CTN Conseil technique national (National Technical Council for Rural Roads) CU Circonscription urbaine DROA Direction des routes et ouvrages d'art (Roads and Works Department) DANIDA Danish International Development Assistance DMTP Direction du materiel des travaux publics (Directorate of Public Works Equipment) DTT Direction des transports terrestres (Road and Rail Transport Directorate) EAP Environmental Action Plan FED Fonds europeen de developpement (European Development Fund) GDP Produit interieur brut (Gross Domestic Product) ICB International competitive bidding IDA Agence internationale de developpement (International Development Agency) ERR Taux de rentabilite economique (Economic Rate of Return) KfW Kredit fur Wiederaufbau (German Bilateral Aid) MP Ministere du Plan (Planning Ministry) MTPT Ministere des travaux publics et du transport (Ministry of Public Works and Transport) NCB National Competitive Bidding NGO Organisation non gouvernementale (Nongovernmental Organization) NPV Valeur actuelle nette (Net Present Value) OCBN Organisation commune Benin-Niger (Benin-Niger Railway) PAC Port autonome de Cotonou (Benin Port Authority) PIM Manuel de mise en oeuvre (Program Implementation Manual) PIP Programme d'investissement public (Public Investment Program) SAL Prets a l'ajustement structurel (Structural Adjustment Lending) SERHAU-SEM Societe d'etudes regionales d'habitat et d'amenagement urbain (Regional Habitat & Urban Development Studies Bureau) SME Petites et moyennes entreprises (Small and Medium Enterprises) SOBEMAP Societe beninoise de manutention portuaire (Benin Cargo Handling Company) SROAs Services regionaux des routes et ouvrages d'art (Regional Roads and Bridges Unit) TIRP Transport Infrastructure Rehabilitation Project TSS Strategie du secteur des transports (Transport Sector Strategy) REPUBLIC OF BENIN TRANSPORT SECTOR INVESTMENT PROGRAM STAFF APPRAISAL REPORT Table of Contents Page Nos. Credit and Project Summary .................. iii-v 1. BACKGROUND ............................................................1 A. Introduction ............................................................1 B. Macroeconomic Context ............................................................ 2 C. Development Constraints and Broad Objectives ............ ............. 3 2. TRANSPORTATION IN BENIN ........................................................... 4 A. Transport Sector Context .......................4........................ 4 B. Public and Private Stakeholders ................................................ 7 C. Lessons Learned from Bank Group and Other Donors' Involvement in the Transport Sector ............................................ 11 D. Transport Sector Issues and Strategy ........................................... 12 3. FIVE-YEAR TRANSPORT SECTOR PROGRAM ....................................... 17 A. Program Concept and Objectives ................................. 17 B. Program Description ................................. 17 C. Program Financing ................................. 19 D. Program Implementation ................................. 20 E. Components Supported by IDA Credit ................................. 21 F. Cost and Local Financing of IDA Components ............................ 25 G. Program Implementation ................................. 26 H. Procurement and Disbursement ............. .................... 31 I. Accounting, Auditing and Reporting ................................. 34 J. Supervision plan ................................. 35 4. BENEFITS, IMPACTS AND RISKS ............................ 36 A. Economic Analysis ........................ 36 B. Social and Environmental Aspects ........................ 38 C. Poverty Aspects ........................ 39 D. Program Risks ........................ 39 - 11 - 5. AGREEMENTS, CONDITIONS AND RECOMMENDATION ............. 41 A. Agreements reached before negotiations ...................................... 41 B. Conditions to be met ................................................ 42 C. Recommendation ................................................ 43 ANNEXES A. Government Strategy Letter B. Detailed Program Costs, Schedules and Indicators C. Detailed Program Description D. Environmental Impact Assessment E. Economic Analysis F. Documents in Program File MAPS IBRD 27427 Road Infrastructure IBRD 27428 Cotonou City Roads IBRD 27429 Cotonou Port IBRD 27430 1994 Road Traffic Volumes This report is based on the findings of World Bank missions consisting of Messrs. Bernard Peccoud (Highway Engineer, Leader), Grosdidier de Matons (Port Economist), Hedi Larbi (Urban Transport Specialist), S. Haligrimsson (Principal Engineer), Denise Vaudaine (Municipal Finance Specialist), Vincent Chagnaud (Road Economist), and Jean-Luc Aka-Adjo (Financial Analyst). Mr. Ian Heggie was the Lead Advisor for this project, and Messrs. Michel Loir and J. J. Raoul were the peer reviewers. Ms. Suzanne Snell provided editorial support. Ms. Farida Khan provided support for the compilation of project cost tables. Ms. Elisabeth Herczeg also assisted in the preparation of the report. Mr. Theodore Ahlers and Mrs. Maryvonne Plessis-Fraissard are the Country Director and the Technical Manager, respectively, for the operation. - iii - REPUBLIC OF BENIN TRANSPORT SECTOR INVESTMENT PROGRAM Credit and Program Summary Borrower: Republic of Benin Beneficiaries: Ministry of Transport and Public Works (MTPT) for US$34.7 M and Port Authority of Cotonou (PAC) for US$5.3 M Poverty: The project does not include specific targeted interventions to reduce poverty. It will however have a significant impact on poverty alleviation through the reduction of transport costs, part of which would be transferred to rural farmers in higher farm-gate prices. The program will also improve access to social services, and will create construction and maintenance jobs in the private sector. Credit Amount: SDR 27.5 million (US$40.0 M equivalent) Terms: Standard IDA terms, with 40 years' maturity Onlending Terms: Two-thirds as standard commercial loan terms (7.1 percent) and one-third as equity to Port Authority. Project Description: Periodic road maintenance is the top priority item in the 1997-2001 Government Transport Program which amounts to CFA franc 247 billion. The main components of the Sector Investment Program are: (a) Paved Road Construction, Rehabilitation and Maintenance: CFA franc 134 billion for paving and CFA franc 51 billion for rehabilitation and periodic maintenance and support for restructuring of the road sector management to insure adequate maintenance; (b) Unpaved Road Rehabilitation and Maintenance: CFA franc 10.5 billion for rehabilitation and CFA franc 8.5 billion for periodic maintenance; (c) Institutional Strengthening for Road Network Management: CFA franc 4 billion for technical assistance and training; (d) Feeder Roads with CFA franc 15.5 billion for road building; (e) Port and Maritime Improvements, with CFA franc 18 billion for port - iv - operations improvements; and (f) Airport Rehabilitation, with CFA franc 3.5 billion for critical runway rehabilitation. Of the CFA franc 247 billion required to finance the program, CFA franc 140 billion has already been pledged by donors, a further CFA franc 28 billion is currently under negotiation, and CFA franc 63 billion is projected to be secured from donors during the program period. IDA's US$40 M credit, which is included in the CFA franc 140 billion pledged (8 percent of total program) supports important Government policy commitments as well as port and road works and is allocated as follows: Port Operations and Management, US$5.7 M (13 percent of IDA Credit); Road Repair, Maintenance, Safety and Network Management, US$32.1 M (71 percent); Rural Road Rehabilitation and Management, US$3.1 M (7 percent); and Urban Road Improvements and Traffic Management, US$4.3 M (9 percent). Financing Plan: IDA: US$40.0 M Benin: US$5.2 M of which US$2.2 M by the Road Fund, US$0.4 M PAC, and US$0.3 M beneficiaries, and US$2.3 M by the National Budget. Benefits: In the port, improvements in productivity yield shipper savings in road transport cost, incurred when port congestion in Cotonou diverts traffic to Lome, and physical improvements in the port yield cost savings for cargo- handling equipment. On national, rural and urban roads, improved road surfaces yield vehicle operating cost savings. On these bases, estimated cost savings from IDA- supported port improvements yield an economic rate of return (ERR) of 250 percent and a net present value (NPV) of US$74 M. Unpaved road works to be funded under the IDA Credit (52 percent of such works in program) show a cost-weighted ERR of 103 percent and a NPV of US$67 M. Other non-quantified but no less real benefits are expected to flow from program-supported activities which promote improvements in management and planning, effective use of the five-year priority program as an investment tool, development of a community-based, demand-driven rural roads rehabilitation and maintenance strategy, better contract management and better planning based on better road data. Safety and traffic management activities will reduce the cost of traffic accidents, in terms of human life and productivity and damage to vehicles. - v - Risks: Given that the program has been designed to build on existing positive initiatives and achievements in the sector, IDA component risks are limited to new and innovative activities introduced under the IDA components. These are: (a) inadequate replenishment of Road Fund - ftnding sources to be diversified through road tolls, return of authority for direct collection of funds to Road Fund staff, and gradual reduction of general budget support are measures taken to reduce the likelihood of this risk; (b) slow restructuring of DROA - restructuring has already been accepted and assimilated by DROA staff and has led the design of the reorganization process; (c) involvement of local communities and NGOs - mobilization and effectiveness of local communities will be increased through the support of international NGOs under the close supervision of IDA; and (d) continuous adherence of donors to the priority program - donors agreed on the Transport Sector Strategy and donor round table meeting will be held every other year. Maps: IBRD 27427 Road Infrastructure IBRD 27428 Cotonou City Roads IBRD 27429 Cotonou Port IBRD 27430 1994 Road Traffic Volumes Project ID No: BJ-PA-1 17 1. BACKGROUND A. INTRODUCTION 1.1 This is the first time that an integrated sector-wide investment approach has been adopted for the sustainable development of a sector in Benin. IDA's Credit together with pledges from other donors, would support implementation of the 1996- 2000 Transport Sector Priority Investment Program (the program) developed as part of the Transport Sector Strategy. The sector approach: * covers all the subsectors which still rely on Government financing or guarantees; * makes optimal use of resources in order to achieve a sustainable equilibrium between infrastructure maintenance and conventional capital investment, including rehabilitation and network expansion; • gives sector management priority over investment; * has been prepared on the basis of broad consultation among local stakeholders (Government authorities and private and public road users) and donors active in the sector, with Government acting as leader; * is supported by all donors active in the sector; and * promotes standardized implementation procedures. 1.2 Previous projects supported by the Bank and other donors have sought to improve road maintenance and sector performance, while financing port and road construction and rehabilitation. Economic liberalization beginning in 1991 made possible a rapid pace in transport sector policy reform. The ensuing economic revival and dramatic increase in transport demand stimulated internal reorganizations and adoption of more efficient road maintenance approaches, but also highlighted the need for closer donor coordination and a more consistent coordination across subsectors, in order to avoid overinvesting. The transport sector strategy and the associated priority expenditure program provide a basis for such coordination and consistency. Together they address the issues which continue to hamper sector productivity despite recent progress, in particular road maintenance financing and overall port management. The implementation of the strategy and program will bring a new dimension to recent Government initiatives, with a view to improving Benin's comparative advantage and competitiveness as a transit corridor to the Sahel. B. MACROECONOMIC CONTEXT 1.3 Strategically positioned between Nigeria and French-speaking African countries on the Gulf of Guinea, Benin is a small, narrow country with a long history as a regional trading center. A natural transport corridor for landlocked Niger and western Nigeria, Benin's highly open economy and low transport costs give it unquestionable advantages in the transit trade to and from the Sahel in spite of facilitation difficulties within the country. Beninese traders are also well placed to play the intermediary between the huge Nigerian market and Benin's francophone neighbors. About 60 percent of its five million residents live in villages and are primarily farmers, while about 40 percent live in the two coastal centers, Cotonou, capital and port city (700,000) and Porto-Novo (200,000) and in upcountry towns along the road to Niger. 1.4 With per capita income of about US$372 in 1995, Benin is somewhat better off than its neighbors (Niger, Nigeria, Togo) but remains one of the ten least developed countries in the world according to the United Nations Development Programme (UNDP) human development index. Real GDP per capita has been increasing since 1991 and is expected to increase at 2.5 percent annually from 1995. Benin's principal resources are its arable land and its trading capabilities, supported by an adequate transport infrastructure. The primary sector accounts for about 35 percent of GDP, more than 70 percent of exports--mostly cotton-- and 75 percent of employment, and grew at 5.4 percent per annum during 1992-95. Food production (about 69 percent of primary sector output and 25 percent of GDP) currently exceeds domestic consumption (excluding rice), and the country is potentially self-sufficient in food. The tertiary sector (52 percent of GDP) consists of vigorous trading, services and transport activities, some formal but mostly informal, growing at an annual rate of 3.6 percent. A small industrial sector (12 percent of GDP) features cotton processing, textiles and cement production, and exploitation of limited offshore oil resources. 1.5 The devaluation of the CFA franc in January 1994 has generated a strong supply response. Led by good performance in cotton, textiles, and construction, real GDP grew an estimated 3.6 percent in 1994 and 5.8 percent in 1995, one of the highest rates in the CFA franc zone, and the overall impact on Benin's balance of payments of the January 1994 CFA franc exchange rate realignment has been positive. In contrast to the political instability and economic stagnation of the 1970s and 1980s, when trade was slow and productive sectors were poorly managed, a steady pace of economic reform beginning in 1989 has resulted in overall economic revival, most visible in increased road and port traffic in Cotonou and the opening of five new commercial banks. With support from IDA under two structural adjustment credits, the role of the State in the economy has been substantially reduced in favor of promoting private sector activities. Government reinforced its adjustment strategy in connection with the 1994 exchange rate adjustment, and recent reforms, including deregulation of private sector activities and tax simplification, are contributing to increased private capital inflows. The main objectives of the reinforced adjustment strategy, supported by a third structural adjustment Credit (SAL III) approved in FY95, are: (a) faster GDP growth, with a target - 3 - of 5-6 percent in real terms from 1995; (b) reduced dependence on foreign assistance through balanced budgets and improved balance of payments; (c) reduced poverty and better social services delivery; and (d) rehabilitated social and physical infrastructure and better human resource development. C. DEVELOPMENT CONSTRAINTS AND BROAD OBJECTIVES 1.6 The road to recovery has not been easy and there remain serious economic difficulties in all sectors. Benin's strategic objectives involve addressing generic issues to development which apply across all sectors, namely: (a) regional competitiveness: a relative lack of competitiveness in production. limiting export growth; (b) investment policy: a low level of investment and continuing inefficiencies in public investment; (c) expenditure policy: a structure of public expenditures favoring payroll over maintenance and operations; (d) fiscal policy: a low level of domestic savings and limited financial intermediation; (e) private sector: remaining disincentives to the expansion of private sector economic activities; (f) capacity building: inadequate human resource management, and a still substantial and relatively inefficient public sector; and (g) environmental and poverty aspects: widespread soil erosion and the vulnerability of low-income groups, which require attention if any economic growth strategy is to be sustainable in the long run. 1.7 IDA's involvement in the transport sector investment program is consistent with the broader objectives of the Country Assistance Strategy (CAS) discussed with the Board in June 1994, which are to encourage and support private sector supply response and ensure adequate provision of basic social services. The program directly supports these objectives by: (a) creating an enabling environment for private sector activities through reduction of transport costs and further liberalization and privatization of transport operations; (b) supporting provision of basic social services by improving road infrastructure, mainly rural, and urban transport management; (c) and supporting agriculture sector growth by facilitating access to remote rural areas, which will also help reduce poverty. A comprehensive Transport Sector Strategy prepared in 1994 using a broad participatory approach gave birth to the investment program. The program, which is included in the CAS "base case" lending program, will help promote sound economic management through a better balance between investment and maintenance. It will promote consistent investment choices based on support to economic growth. Finally, the use of sectoral environmental guidelines in the program's execution will support the environmental strategy as defined in the National Environmental Plan. -4 - 2. TRANSPORTATION IN BENIN A. TRANSPORT SECTOR CONTEXT 2.1 Role of the Transport Sector in the Economy. Benin's prosperity depends heavily on trade and transport, and its transport sector is a major contributor to national income. The formal transport sector accounted for 8 percent of GDP in 1995, but nearly two-thirds of Beninese are involved in trade and related services, mostly through informal sector, medium- and small-scale enterprises. Most urban residents earn their living primarily from trade, and the efficiency of transport also has a major impact on agricultural development. 2.2 Demand Structure. The transport sector is organized to meet three principal aspects of demand: domestic cotton exports, transit traffic and trade with neighboring countries, and internal trade between towns and rural areas. The primary sector represents 35 percent of GDP, and agricultural products, especially cotton, make up the bulk of export transport demand. Transit traffic is the second largest category of freight transport demand. About 15 percent of all road traffic in vehlkm terms is international in nature; half of this is traffic going to or from the port, and the other half is passing through Benin (origin and destination outside the country). During the 1991-94 period, 14 percent, 5.4 percent and 2.4 percent of imports through the port of Cotonou were officially destined for Niger, Nigeria or Togo, and Burkina Faso, respectively. Transit demand is subject to considerable variation as a function of transport costs, but also in response to volatile political and economic situations in the subregion, where changes in import regulations and port operations and efficiency can cause dramatic shifts among competing routes. 2.3 Network Structure. The country's shape takes the form of an elongated corridor 800 km long and 300 km wide. The anchor of this north-south axis is the port of Cotonou and its backbone is the Cotonou-Save-Parakou-Malanville road, a 790 km, two-lane paved road, paralleled for about half of its length by the Cotonou-Parakou metric rail line (see IBRD Map 27430). Road transport is centered around the port of Cotonou. From Parakou, a two-lane gravel road which is currently being paved, branches off to the west, through Natitingou, towards the border with Burkina Faso. These main roads allow for the outflow of cotton from the main production centers to the port. Two other main east-west roads, a coastal road from Lome to Lagos, and another located about 150 km north of Cotonou through Bohicon, are the main links to Nigeria and Togo. 2.4 Transport Modes. For reasons of cost and availability, road transport is the dominant mode. Virtually all passengers (93 percent) and 73 percent of goods are carried by road, the remaining traffic being handled by the railway. The modal split for freight is about 50/50 on the Cotonou and Parakou where rail and road run side by side. Rail traffic on this line has been faced with increased competition since the recent paving of the gravel road between Save and Parakou. The market for air transport is limited by the small size of the domestic market. 2.5 Transport Infrastructure. Investment in infrastructure has created adequate networks in all modes. The total length of the road network is around 16,200 km. It consists of 3,425 km of national roads, including interurban highways and primary urban roads, 10,900 km of rural roads and around 1,800 km of municipal roads (secondary and tertiary roads in urban areas). Eighty percent of the national road network carries more than 50 vehicles a day, qualifying as the "priority" network, and 40 percent of the national road network is paved, including paving of Parakou- Natitingou now underway (218 km, financed by the European Union, BID, Kuwaiti Fund, BOAD, OPEP, CDEAO). The role of Benin as a transit corridor is apparent in its network classification: international roads represent 64 percent, or 2,178 km, of the national road network. Table 2.1 below shows the respective lengths of each network. Table 2.1: Benin: Transport Sector Program Road Network Lengths Length (kmn) Network Paved Unpaved Feeder Total National Road Network' International 1,256 922 2,178 National 161 1,086 - 1,247 Subtotal, National Roads 1,417 2,008 - 3,425 Rural Network - 3,100 7,827 10,927 Municipal Network loo 1,700 - 1,800 (secondary and tertiary) Total, All Networks 1,517 6,808 7,827 16,152 About 20 km of the national road network are primary roads within Cotonou. 2.6 The port of Cotonou has a loading/unloading capacity of around 2.3 million tons, given present operational practices, sufficient to meet demand until 1998; if productivity can be raised to international standards, it could be sufficient until 2001. Present port facilities consist essentially of 7 berths in deep water. The rail network is constituted by a single metric track between Cotonou and Parakou (438 km). The railway has a capacity of 600,000 tons, well above the 340,000 tons average annual traffic forecast over the next five years. An arrangement with a truck pool allows the rail shipments to complete their journey to Niger by truck (Parakou-Malanville- -6 - Niamey). The main runway at Cotonou international airport is 2,400 m long and 45 m wide and requires reinforcement now. Runway, taxiways, and parking areas of Cotonou airport were rehabilitated at the end of 1995. There are seven domestic airports serving Parakou, Kandi, Natitingou, Save, Porga, Benbereke, and Djougou. These are equipped with laterite runways, but have no night landing lights. 2.7 Trends in Road Traffic and Demand. Between 1987 and 1995, road traffic registered an overall increase at the very high rate of 9 percent on paved roads and 6 percent on unpaved roads. Such strong growth was the result of both the political and economic changes which occurred in Benin and the increase of trade transit since 1991 at the expense of the Togo corridor. Growth is twice as high for passengers than for goods, and accident rates are among the highest in Africa. The interurban network is adequate to face traffic increases, but the primary network in Cotonou is congested on some sections. 2.8 Urban passenger transport demand in Cotonou is estimated at 390,000 trips per weekday, based on the average daily taxi and mototaxi earnings. The modal split is dominated by mototaxis which carry 81 percent of trips. For all shared modes, average mobility is 0.6 trips per resident per day, a relatively high trip rate compared to that observed in African cities with good bus networks. This high mobility is due to the high level of commercial activity in Cotonou and a strong supply response, particularly from the informal sector. In the city of Cotonou alone, there are an estimated 60,000 two-wheelers, of which 30 percent are used as taxis for public transport in the city (compared to a total domestic vehicle fleet estimated at 42,000 units in 1994). 2.9 Traffic through the port of Cotonou is characterized by wide annual variations. Annual port traffic volumes peaked in 1979 at 1.5 M T in response to overflow from saturation of the port of Lagos, and in 1993 at 1.75 M T due to the virtual shutdown of the port of Lome, because of the political situation in Togo. Since 1989, traffic has steadily increased from 900,000 T to 2.050 M T in 1995. Used vehicle imports have been a major growth factor: annual imports of used vehicles from Europe through the port of Cotonou increased more than tenfold in four years, from 3,500 in 1988 to 40,000 in 1992, and Benin has become a very active regional repair and distribution center for used vehicles. The port authority's operating plan for 1995-2000 is based on a realistic overall annual growth rate of 4.8 percent for port traffic. If no change occurs in operating practices, saturation would be reached at 2.3 M T (in 1998) but if perforrnance improves to the standards of other ports in the region, saturation would be reached at 2.7 M T (2001). In other words, under present operating conditions, expected traffic levels could not be handled by 1998. 2.10 Demand for air travel is increasing slowly. Traffic forecasts indicate a volume of about 280,000 passengers by the year 2000 compared to about 245,000 passengers in 1994. Most traffic is actually international travel and domestic demand for air travel is quite low due to short travel distances and the failure of domestic air carriers. Benin is not a major tourist destination; what regional tourism does arrive, originates from Nigeria and Togo and relies mainly on the road network. 2.11 Transport Sector Financing. Revenues from taxes and fees collected from the transport sector amounted to nearly CFA franc 3.7 billion in 1990 and CFA franc 6.9 billion in 1993, with 1994 revenues estimated at CFA franc 5.7 billion. Resources allocated directly or through the Treasury in 1994 to the Road Fund represent around 40 percent of these revenues (CFA franc 2.4 billion). In order to survive in a competitive market, carriers have resorted to tax evasion, The low tax collection is mostly due to illegal fuel imports (80 percent of all fuel consumption from 1991-94 and 70 percent in 1995), estimated to be as much as CFA franc 8 billion. An additional CFA franc 2.5 billion is lost from uncollected customs duties on imported cars, and CFA franc 0.5 billion from other evaded taxes. Only road tolls are collected from both formal and informal sectors in a fair manner. In this area, Benin is performing well, collecting about 20 percent of the Road Fund resources through road tolls. B. PUBLIC AND PRIVATE STAKEHOLDERS Public Sector 2.12 The Ministries. The Ministry of Transport and Public Works (MTPT) continues to dominate the sector through its responsibility for (a) overall management of transport and public works sectors, including sector and subsector strategy and subsector coordination; and (b) road investment programming and implementation and maintenance of the national and rural road networks, including the primary urban road network. Responsibility for other urban roads is held by the municipalities in the main cities (Cotonou, Porto-Novo, Parakou), and in the smaller cities and towns by the Ministry of Environment, Urban Development and Housing (MEHU). MTPT coordinates its rural road operations with those included in donor-financed rural development projects, under the Ministry of Rural Development (MDR), through a National Technical Council for Rural Roads (CTN), which began regular meetings in early 1995. Autonomous port and rail entities have taken over investment programming and implementation and infrastructure maintenance from MTPT. Airport management will also be subcontracted to an autonomous agency which is currently being created. The Ministries of Planning and Finance are also involved in the Public Investment Program (PIP) and in providing counterpart funds and Road Fund subsidies. 2.13 Railway and Port Operators. The railway company (OCBN) is jointly owned by the governments of Benin and Niger and the maritime navigation company (COBENAM) by the governments of Benin and Algeria. Privatization of OCBN would likely be problematic, since rail operations are barely profitable due to fierce competitive pressure from road transport. The port authority (PAC), under Government ownership, is directly responsible only for coordination of port operations and contracts out other activities such as maintenance and security. COBENAM, the public shipping company, continues to exist despite the fact that it owns no ships. All other port -8 - operations (transit, consignment) are fully privatized. State-owned SOBEMAP holds a monopoly on cargo handling in the port; another parastatal (CNCB) coordinates national shippers and supports them through training and assistance. SOBEMAP is being supported by French bilateral aid (CFD) which has financed its restructuring. At current levels of port traffic, full privatization at this time could lead to control of all cargo handling in the hands of a single private company. This would introduce vulnerability into one of the most rapidly growing areas of Benin's economy. Therefore, Government is considering only progressive privatization, starting with container handling operations. 2.14 MTPT's Directorates. New management brought into MTPT in 1991 immediately began to design and carry out a very effective, internally driven reorganization which has corrected structural flaws and turned it into a sound organization. Where before a single central unit (Direction des etudes et des programmes) had de facto authority for both programming and execution, these functions were separated in February 1992 between a programming unit (Cellule de programmation et de coordination or CPC), and the roads and bridges department (DROA) for the road subsector. Each has since demonstrated its efficiency, CPC by managing preparation of the transport sector strategy, and DROA by reducing road maintenance costs by 80 percent and keeping both paved and unpaved priority networks open for the last several years (half of the unpaved network had become impassable in the rainy season during the 1980s). Other structural changes brought the previously illsupervised regional maintenance units under DROA's authority, began contracting out maintenance works to the private sector, reduced force account teams, and made the former equipment section into a separate department (DMTP) requiring chargeback to DROA of equipment rental costs. Further improvements in field data collection, maintenance of bridges and culverts, redeployment and training of staff, and streamlining of contractor payment processing, recently proposed by DROA, would make DROA one of the most effective road transport agencies in the region. 2.15 Road Maintenance Financing and Execution Entities. The Road Fund finances road maintenance activities executed or supervised by DROA. It was created in 1984 as an independent public body to finance only road maintenance, with a board which includes user representatives. In fact, the Road Fund has not been independent: subsequent decrees allowed MTPT to directly manage the Road Fund, and the Minister has been the chairman of the board. As a result, the Road Fund has financed not only road maintenance but also road investments and certain MTPT operating costs, including the salaries of DROA staff involved in road maintenance and other tasks. DROA carries out its authority for the maintenance of the whole network (interstate, national and rural) through its six regional services (SROA), under the supervision of its road maintenance office (Sous-Direction de l'entretien routier or S/RER). SROAs are in charge of preparing maintenance programns, executing or contracting out minor rehabilitation works and periodic and routine maintenance operations, and monitoring maintenance works undertaken under contract and by force account. DROA's road management office (Bureau de gestion du reseau or BGR) is responsible for collecting -9- and processing the network status and traffic data, which are the basis for the preparation of investment and maintenance programs. 2.16 Municipality of Cotonou. While Cotonou's primary road network is part of MTPT's national network, the rest of the urban network is the responsibility of the municipality of Cotonou (Circonscription urbaine or CU), which comes under the authority of the Interior Ministry. To manage this network, Cotonou CU has recently created technical units (Cellules techniques de la circonscription urbaine or CTCU), which to date have limited authority. A Cotonou traffic management unit was created at the end of 1995 within the Cotonou CTU. Cotonou CU also draws on the services of a regional urban development studies bureau (SERHAU-SEM) and of an urban works agency (AGETUR). SERHAU was created in 1985 as a public-private venture which participates, under contract, in the implementation of the ongoing Urban Rehabilitation and Management Project (Credit BEN-2338). AGETUR was created in 1990 as a non- profit association which manages contracts with private firmns to carry out civil works, including the preparation of bidding documents, call for bids, evaluation of bids and contract award, monitoring of payments and works supervision. 2.17 National Road Safety Center. The National Road Safety Center (CNSR) was established in 1988 with IDA assistance under the Third Highway Project, in response to high road accident rates in Benin, as a permanent institution devoted to the design and implementation of a road safety policy for Government. Its US$1.2 million annual operating costs are divided about equally between civil service payroll and Government direct subsidies on the one hand, and CNSR revenues from vehicle inspection centers on the other. The CNSR enjoys considerable respect in West Africa, and its work is being observed by similar organizations in neighboring countries, with regional interaction, centered on CNSR, now in the making. It has focused on two main tasks: (a) systematic analysis of accident statistics available from 1988 to the present; and (b) a road safety program involving vehicle inspection, driver instruction, media information, and random roadside checks. The CNSR is a well-run operation and has succeeded in inspecting annually 35,000 of the 45,000 vehicles on the road, with only one full-time inspection station in Cotonou and part-time inspections in Parakou and Bohicon. As a result, accident rates appear to be leveling off, in spite of a rapid increase in motorization and a vehicle fleet, more than 90 percent of which is more than 10 years old. Private Sector 2.18 Since 1984, transport sector liberalization has seen the withdrawal of public entities from production activities, including road maintenance, road freight transport and passenger transport. Most road rehabilitation, and periodic and routine maintenance works, are already subcontracted to private operators, and road toll collections are being subcontracted. MTPT intends to cap the level of force account maintenance at the current level of about CFA franc I billion a year and contract out all planned increases in road maintenance activities, reaching about CFA franc 3 billion by 1998. - 10- 2.19 Informal Transport Operators. Most transport operations are carried out by the informal sector. The exceptions are private companies. either owned by foreign partners (new car dealers), or close to the fonnal sector (freight transport for the railway and for the cotton company). but the rest of freight transport is mainly informal. Port operations such as transit and consignment are officially carried out by formal sector companies, but in fact are subcontracted in part to informal operators. Urban and interurban passenger transport is fully infornal, although operators have been registered by the municipalities since 1992. Finally, the used car market is almost completely informal. The flexibility and quick supply response characteristic of the informal sector give the Beninese economy, in particular its transport sector, a major comparative advantage over those of its neighbors. 2.20 Local Civil Works Industry. The civil works private sector has grown dramatically since 1990. This growth has been fueled by the establishment of two contracting agencies, AGETUR and the Agency for Management of the Social Dimension of Adjustment (AGDSD), the availability of funds for the rehabilitation of Cotonou's municipal network, and the privatization of a portion of MTPT's unpaved road rehabilitation works. Some 800 contractors (construction and public works) have been identified in Cotonou and Porto Novo. Many of these belong to the informal sector. Some 38 firms constitute the most formal part of the sector and have demonstrated their willingness and capacity to meet public works demand. Privatization of road maintenance on MTPT networks began in 1988. Since 1991, around 50 percent of the minor rehabilitation operations (drainage structure repairs and spot rehabilitation) have been executed under contract. Privatization of routine maintenance was started in 1991 and by 1993 had expanded to cover 40 percent of manual maintenance operations and 14 percent of routine maintenance expenses. A contract for a pilot mechanized routine maintenance operation was awarded in 1993, and by 1998, 75 percent of road maintenance works will be contracted out. 2.21 Non-Governmental Organizations (NGOs). Prior to 1991, only religious organizations, mostly foreign, were active in both urban and rural areas. The democratic revival of 1989 resulted in the establishment of hundreds of local NGOs, and with the encouragement now being given to private initiatives, the numbers continue to grow. NGOs are involved in natural resources management, provision of basic health care, training and education, and support to income-generating activities. A number of NGOs focus primarily on rural women. providing training in nutrition and health education through participatory techniques developed by the West Africa Center of Social and Economic Studies in Burkina Faso. and by the Research Group for Support of Rural Self Promotion. At least four international NGOs are very active in Benin in the areas of rural roads, SME promotion, and construction of rural infrastructure such as wells and small earth dams. C. LESSONS LEARNED FROM BANK GROUP AND OTHER DONORS' INVOLVEMENT IN THE TRANSPORT SECTOR Donor Involvement 2.22 The European Development Fund (FED) and IDA are the two most active donors in the transport sector. FED has financed mainly road paving and rural roads, as have the African Development Bank (BAD), the West Africa Development Bank (BOAD) and German bilateral aid (KfW). French bilateral aid (CFD) has financed infrastructure and equipment rehabilitation for the port, the railroad and Cotonou airport and also rural roads. Other donors (Islamic Development Bank or BID, Community of West African States or CDEAO. and Organization of Petroleum Exporting Countries or OPEP) finance smaller amounts of specitic road paving works. Prior to the preparation of the 1994 transport sector strategy, the lack of a single unifying strategy led to conflicting initiatives by different donors. Past IDA Involvement 2.23 Since 1970, IDA has supported nine projects in Beninl's transport sector. These have had a major impact on the road network and port capacity: virtually the entire priority road network has benefited directly from works financed by IDA (see Map IBRD 27427), and most major works in the port since its opening in 1965, in particular the doubling of its capacity in the early 1980s, have been financed by IDA. These transport projects have also supported major sectoral reforms, including establishment of a Road Fund, a major financial and staff restructuring by the port authority, and preparation of transport sector strategies in 1984 and in 1994. During the recent Transport Infrastructure Rehabilitation and Maintenance Project (Cr. 1807-BEN), under the leadership of a small group of local technical managers, road investment and road maintenance improved markedly: the unpaved road network has remained free of serious cuts even during rainy seasons. Lessons Learned 2.24 There are four main conclusions drawsn from these IDA-supported projects: (a) Road Fund dependence on budget allocations or earmarked fuel taxes has not generated sufficient resources to ensure maintenance of infrastructure; what is needed is direct funding by user charges (extension of road tolls, which have proven successful); (b) the lack of coordination among donors and among transport entities has been a major obstacle to the sustainability of reforms; what is needed is agreement to follow a single sector strategy; (c) Government's effectiveness in transport programs has varied directly as a function of the continuity of leadership, within the Ministry; what is needed is a continuation of leadership. avoiding the high staff turnover. 2.25 The fourth lesson relates to the need for more mechanisms for participation by users and operators. The 1992-94 preparation of the sector strategy benefited greatly from a new consultation process, adopted in the wake of democratization beginning in - 12 - 1989. There remain a few key areas where adoption of this process would yield broad benefits. In the port, special interests stand in the way of greater user and operator involvement in decision-making: the monopoly of the cargo handling authority, SOBEMAP, and the privileges of customs officers. Decisions about road maintenance priorities continue to be dominated by internal administrative considerations, rather than by road users. Meeting users' and operators' needs is critical to improving transport facilitation and lowering transport costs in the future. D. TRANSPORT SECTOR ISSUES AND STRATEGY The 1994 Transport Sector Strategy Report 2.26 Preparation. Studies carried out in 1992 by MTPT, completed in April 1993, have formed the basis for the Transport Sector Strategy. focusing on facilitation, fiscal/financial and capacity building. Broad consultation of public and private stakeholders was sought through a number of seminars, allowing a broad exchange of views, and developing a national sector policy. Govenument presented its transport sector strategy to donors at a Round Table meeting in October 1993. Comprehensive discussions of this strategy continued during Bank visits in December 1993, and in March 1994 a Transport Sector Strategy Report. prepared jointly by MTPT and the World Bank. was issued (Transport Sector Strategy Report No. 12098-BEN, March 15, 1994). This transport strategy, summarized briefly below, was subsequently incorporated into IDA's country assistance strategy. and has continued to generate substantial momentum for change in Benin. Policy changes and other measures put into effect since the strategy's publication are covered below. Government's February 1996 Strategy Letter (ANNEX A), and detailed action plans (see ANNEX B), reflect both these recent developments and also the next steps which Government is planning to take in support of the sector strategy. 2.27 Findings. The Strategy report defines strategies for the sector as a whole and for each of the five subsectors (road, road transport, port and maritime, rail and air). The main findings are that Benin's transport infrastructure is well adapted to demand, and major improvements have been achieved under the recently completed Transport Rehabilitation Transport Infrastructure Rehabilitation and Maintenance Project (Cr. 1807-BEN). Since 1984, liberalization and privatization of transport activities have resolved many of the issues raised in the first sector strategy report (1984), and leadership within DROA has led to improvement in road conditions, especially on unpaved roads. Physically. institutionally. and financially. Benin is close to being able to manage its road system. independent of external assistance. Problems in road transport management, which weaken Benin's ability to compete against other corridors and to support growth in the agricultural sector, can be resolved within the framework of the strategy. Specific actions are recommended. A five-year programming approach is recommended to create a strong foundation for transport maintenance and investment for the remainder of the decade. - 13 - Road Maintenance. 2.28 The main issues are (a) continued vulnerability of even improved and maintained unpaved and paved roads; (b) continued shortfalls of about CFA franc 2.5 billion per year in funding of road maintenance through the Road Fund; and (c) specific technical weaknesses within the Ministry in traffic data collection, works programming and contract management. Since 1992, road maintenance operations have dramatically improved and the major issue now by far is the shortage of funds. Until 1994, the Road Fund's main income source was a share of fuel tax revenues. Due to the collapse of the economy in the late 1980s and the unauthorized and tax-free importation from Nigeria of around 80 percent of all fuel consumed in Benin during 1991-94, fuel tax income has contributed an average of only 23 percent of Road Fund resources. In addition, because the Road Fund lacks real autonomy and MTPT continually interferes in its management, only 60 percent of total resources are used for road maintenance. 2.29 Road Fund Restructuring. The statutes of the Road Fund (see Para. 2.15) are being revised to give it greater autonomy from MTPT and to guarantee the use of its resources for road maintenance. The new statutes will: (i) increase the power of the board, which includes road user representatives, by giving it authority to nominate its chairman and select its managers; and (ii) limit Road Fund interventions to financing the maintenance of MTPT-managed road networks and of expenses directly related to the management of road maintenance, giving priority to routine maintenance. The Road Fund will no longer finance payroll costs and other operating costs for road maintenance activities, but only the costs of works under performance-based contracts, whether executed by force account units or private enterprises. Revised Road Fund statutes satisfactory to IDA have been finalized as a condition of negotiations (Decree No. 96-373 of August 29, 1996). Its new management tools will be installed as stated in a supplemental letter agreed upon at negotiations (see ANNEX B). 2.30 Road Maintenance Financing. An essentially self-financing plan has been worked out based on the increase in Road Fund resources and on the reduction of road maintenance costs. Road Fund resources will be increased to ensure adequate financing for all routine road maintenance, and progressively for periodic maintenance as well. Three major steps in this direction were taken in 1995: the road tax collected at the port site was increased from 0.15 percent to 0.85 percent of merchandise value, Government's contribution to the Road Fund was increased from CFA franc 400 million to CFA franc 600 million. and road toll collection was turned over to private firms. As a result. the Road Fund collected around CFA franc 2.1 billion in 1995 compared to an average of CFA 1I.1 billion annually from 1989 to 1994. Additional resources will come from the extension of the road toll system to the entire paved network, expected to increase toll collections from the current CFA franc 200 million (US$0.7 million) annually to about CFA franc 1.5 billion (US$5.5 million) a year. These new revenues will be adequate to finance 100 percent and 30 percent of routine and periodic maintenance respectively, starting in 1997. The gap for periodic - 14- maintenance will continue to be financed by the national investment budget until the Road Fund is able to finance it. 2.31 The Road Fund will reduce its payroll costs, as defined in the January 1996 strategy letter, by encouraging early staff retirement and entering into single-man contractor agreements with the remaining maintenance laborers (about 350). Implementation of an early staff retirement plan started before negotiations of the proposed IDA credit. Completion of staff restructuring will be a condition of effectiveness of the proposed IDA credit. The Road Fund's financial situation would also be strengthened by accepting a lower service level, by transferring part of the cost of maintenance on non-priority rural roads (less than 50 veh/day) to local users, and by transferring urban road maintenance to municipalities. 2.32 Road Maintenance Execution and Programming. In order to guarantee the optimal use of Road Fund financing, MTPT will implement measures to improve road maintenance performance. MTPT will optimize the deployment of existing staff and reinforce skill levels, in order to meet requirements and to allow for adaptation to the progressive privatization of road maintenance operations. The top priorities will be given to staff management, user cost recovery, data collection, procurement, and bridge and drainage structure management within DROA. In its February 1996 policy letter (see Annex A), Government decided to: (a) limit the extent of force account activities to a fixed CFA franc I billion per year, with the balance of an increasing road maintenance budget being contracted out to private companies; (b) disengage itself progressively from heavy equipment management; (c) promote development of private sector capacity to carry out public works by facilitating private enterprises' access to public contracts, and by establishing a self-supporting technical advisory office for SMEs; (d) delegate authority to sign maintenance contracts up to US$1 million equivalent to MTPT; and (e) increase involvement of users in road maintenance planning and rural road maintenance and planning and transfer part of its financing to local communities. The reorganization of DROA will be completed as defined in a supplemental letter agreed upon at negotiation (see ANNEX B). 2.33 Road Transport. Road transit traffic toward neighboring countries is hindered by cumbersome regulations; more than 20 checkpoints on the road from Cotonou to the Niger border add an estimated 20 to 30 percent, or CFA franc 2 billion per year, to transport costs on this route. To facilitate road transport, Government intends to (a) improve facilitation of road transport and increase operator competence; (b) improve road safety and service quality by improved ftnctioning of the used vehicles market, including vehicle inspection; (c) improve performance of urban mototaxis by establishing traffic management and modifying roads; and (d) encourage transport operators to move progressively from the informal sector to the formal sector through a better professional environment. Organizational and regulatory aspects would be addressed by developing mechanisms for transport users in Cotonou to bring pressure to bear, improving existing regulations and statistics supporting road safety agencies and - 15 - road transport associations, and reviewing regulation of commercial trade movements in close coordination with Niger. Port Operations and Maritime Issues 2.34 The port of Cotonou compares very poorly with its competitors in terms of transport facilitation and operational productivity. Freight handling productivity is half of that in Dakar and transit time for a container through the port is around ten days, more than twice the average time in other regional ports. The main reasons are slow administrative procedures; poor performance, in particular of the customs office; lack of accountability regarding the overall port performance; and congestion due to the high volume of used vehicle imports passing through the port area. Despite major cost- cutting reforms and years of technical assistance in finance and accounting, the port authority, PAC, remains in poor financial health. In response to these issues, Government measures included in the Transport Sector Strategy were to (a) restrict new port investment to the minimum necessary to handle basic traffic levels and introduce cost accounting at PAC; (b) restrict the port area for port activities; (c) improve SOBEMAP operations and subcontract cargo handling in the port when SOBEMAP fails to perform and when sudden traffic increases create port congestion; (d) collect data on the efficiency of port operators and administrative bodies, identify the bottlenecks, and implement and monitor the necessary changes to reduce delays; (e) clarify responsibilities along the transport chain; and (f) review COBENAM and CNCB roles and activities in light of regional developments. Since the strategy report, the following initiatives have been undertaken in the area of Port operations management and coordination, and PAC's financial situation. 2.35 Port Coordination. In its February 1996 strategy letter, Government announced its decision to give priority to improve overall port performance, in preference to the earlier approach of focusing on individual operators, by strengthening the power of the port authority (PAC). PAC's statutes will be strengthened to give it the authority to enforce coordination and supervision of port operations, including specific authority over port operators' technical performance in accordance with the decrees signed on May 31, 1996. PAC's new statutes were finalized before negotiations of the proposed IDA credit and will not be modified without IDA's agreement. Under these statutes, PAC will be held accountable for specific measures listed in Government's strategy letter, including transfer of container customs inspection to an area outside the main port compound, along with storage and sale of used vehicles. All public actors (SOBEMAP, Customs, COBENAM and CNCB) would be linked by the port operation management software (Portware) used by PAC so as to increase the operational transparency and allow PAC to actually monitor their performance. A step towards dissolving SOBEMAP's monopoly would be taken, by assigning operations of the container handling to a private company. 2.36 PAC's Financial Situation. To allow PAC to play its new role, its financial situation will be strengthened. PAC has adopted a stricter policy towards non-paying - 16- clients, prepared a plan to further improve its accounting systems, including staff retraining, and decided to commission an update of the port development plan. PAC will also continue to work towards a sound and sustainable financial situation. To this end and subject to annual updating discussed as part of the updating of the sector investment program, PAC has set the following specific targets: (a) to freeze payroll expenditures at current levels until the year 2000; (b) to set aside around CFA franc 420 million to finance routine and periodic maintenance; (c) to limit external borrowing to CFA franc 3 billion over the next six years; and (d) to limit investment expenditures over the next six years to the strict minimum required for agreed improvements in operational performance. Rail and Air Sector Issues 2.37 The rail company, OCBN is not competitive, and airport infrastructure is close to failure. Government signed a "contract-plan" with OCBN in 1994 which includes measures to improve OCBN's management performance and should enhance its competitiveness. Under its "contract-plan" with the Government, OCBN has been given productivity targets and provision has been made that OCBN will receive no subsidy nor any guarantee for loans. Performance in meeting "contract-plan" provisions will be reviewed with IDA every year. This makes OCBN financially independent and creates a real incentive for performance improvement. The French CFD is supporting OCBN and finances its investment program, together with technical support. In the air subsector, Government is establishing an autonomous entity which will start managing airport operations with the support of French bilateral aid (CFD) beginning in June 1996. The Cotonou airport should generate enough revenues to cover operating and maintenance expenses for the whole sector, including the domestic airports, and to ensure debt service for the financing of the upgrading program. - 17 - 3. FIVE-YEAR TRANSPORT SECTOR PROGRAM A. PROGRAM CONCEPT AND OBJECTIVES 3.1 The Government's 1996-2000 Transport Sector Priority Investment Program reflects the priorities agreed in the recent Transport Sector Strategy and confirmed in Government's Strategy Letter (see ANNEX A). Strategy objectives relate directly to country issues of competitiveness, administrative capacity, resource mobilization, and private sector participation. They are (a) to safeguard the competitiveness of Benin's transport sector and of its transit corridor through open modal competition; (b) to improve Government's capacity for planning, programming, and managing transport sector investments; (c) to boost the allocation of resources to infrastructure maintenance; (d) to boost the recovery of infrastructure user charges; (e) to expand private sector participation in public works and maximize its impact on the creation of jobs for unskilled labor; (f) to build capacity in sector institutions and optimize human resource utilization; and (f) to protect the environment and improve road safety conditions. 3.2 The proposed program is the first to be conceived in the context of a sector strategy, based on a full review of the evidence and open debate by participants. Port operations and facilitation will be improved by networking PAC with all port and customs agencies so that PAC can fully deploy existing computer-based management tools. Selection of critical priority unpaved road works to be financed under the program has been based on minimum service levels required at specific traffic volumes, using a methodology developed by DROA during the recently completed Transport Infrastructure Rehabilitation Project, which optimizes the use of available resources. The program supports the extension of generalized road user tolls proven in Benin as the most reliable means of road infrastructure cost recovery, given the constraints on the alternative means of fuel taxation. The program design also supports Government objectives (a) to increase user participation in road maintenance finance and management, as in the case of rural road maintenance; and (b) to facilitate private sector construction industry in maintenance works contracting, in particular for small urban improvements. The program would also introduce one small new entity, an urban traffic management unit, under the responsibility of the city of Cotonou. Issues identified during the design phase, Government's response to date, and specific measures Government plans to implement over the next few years are summarized in action plan form in ANNEX B. B. PROGRAM DESCRIPTION 3.3 Management of transport sector investment by means of a rolling five-year priority investment program is a key element of Government's transport strategy. Such a program was first drafted as part of the sector strategy preparation, and was updated and reviewed with other donors at appraisal of the proposed program. The composition of the priority program and its phasing are shown in Table 3.1. The program, which includes all ongoing operations, will be updated each year by adjusting total sector investment to - 18- current macroeconomic conditions and adding new works only when they are justified. It will be broken down into successive phases of execution, defined in agreement with the involved donors during annual meetings. Total program cost amounts to CFA franc 247 billion (US$494 million) over the 1996-2000 period, or roughly a third of estimated gross fixed capital formation over the same period (CFA franc 680 billion), which is consistent with the transport sector's past and expected future share of fixed capital formation and public investment. The peak shown for 1996-1998 is due to the expense for the upgrading of Cotonou-Porto Novo Road. Transport represents one third of public investment and continues to be the highest of any sector (compared to about 20 percent each for rural development and social services). Table 3.1: Benin: 1996-2000 Five-year Priority Transport Sector Investment Program (CFA franc millions) Subsectors 1996 1997 1998 1999 2000 Total Paved and Unpaved 51,000 61,000 50,000 40,000 22,700 224,700 Road Networks Road Transport & Safety 100 100 100 100 400 Port & Maritime 5,000 4,000 5,000 3,000 1,400 18,400 Civil Aviation 400 2,600 200 100 200 3,500 TOTAL 56,500 67,700 55,300 43,200 24,300 247,000 3.4 About 90 percent of the five-year priority program cost consists of road paving and repair and periodic road maintenance, required to bring the paved and unpaved networks up to a fair or good standard. Periodic road maintenance is the top priority in the program. Government would continue to finance investment and maintenance of the priority rural network at expenditure levels justified from an economic viewpoint, normally when traffic exceeds 50 veh/day. 3.5 The new investments included in the program are intended strictly to upgrade existing infrastructure and strengthen institutions and procedures required to improve productivity. In particular, no expansion is foreseen in port berthing capacity until after the year 2000. No provision is made in the government investment program for rail investment (OCBN) which will no longer be receiving public funds or investment guarantees under the provisions of the "contrat-plan" signed between the Benin and Niger governments and OCBN. The program does include the paving of 318 km of gravel roads (of which 218 now underway), amounting to 9 percent of the program. Paving of a 60 km road section providing the main link into the Burkina Faso road system (Natitingou- Porga), and of another 200 km linking this section to the coastal region which provides alternate paved routings to the existing main north-south road (Savalou-Djougou-Ouake), have been included in the program at Government request, despite these investments' low economic justification (ERR below 12 percent). They have been phased at the end of the period and only about a fifth of their actual estimated cost has been included (CFA franc 7.8 million versus 44 million). Considered as a last priority, their ultimate inclusion in the PIP is subject to discussion following implementation of higher priority works. - 19 - C. PROGRAM FINANCING 3.6 Following discussions at appraisal with Government and external donors, financing has been secured for CFA franc 156 billion of the CFA franc 246 billion in the current program, including about CFA franc 20 billion equivalent from the proposed IDA Credit, and local counterpart fumds for all five years (CFA franc 16 billion). Financing agreed at the date of this report, for both ongoing operations and those about to start is shown in Table 3.2. French bilateral aid (CFD) will finance around CFA franc 9 billion for improvements in the port (cargo handling equipment replacement, technical assistance) and airport (runway rehabilitation). Financing of CFA franc 11 billion of road construction and rehabilitation already underway or about to begin on the paved network has already been obtained from BID, the Kuwait Fund, BOAD, OPEP, CDEAO, BAD, DANIDA, KfW, and FED. Table 3.2: Benin: 1996-2000 Priority Transport Investment Program and Financing Arrangements (CFA franc millions) Subsectors Funds from Benin IDA Other donors TOTAL (1) funds (proposed) Funding Funding gap under gap to Committed funds negotia- be found tion 1. ROADS Paved-construction 6,800 (NB) 2,600 BID, BOAD. OPEP. 67,200 24,800 32,800 134,100 BAD CEDEAO, FED, KFW. Paved-rehabilitation 600 (NB) FED, DANDER 32.900 3,100 36,600 Paved-periodic Main. 900 (NB) CFD 2.400 12,100 15,400 Unpaved -rehabilitation 1,000 (NB) 6,000 BAD 3,000 10,500 Unpaved-periodic main. 2,300 (RF) 3,300 -- 2,900 8,500 Feederroads 2,500(NB+ BEN) 1,400 KFW, BAD, FED, CFD 10,200 1.400 15,500 Instit. strengthening 200 (NB+BEN) 3,800 CFD. PAC. BAD, FED, 4,000* ACDI * Subtotal Roads 14,300 17,100 113,200 27,900 52,100 224,600 2. TRANSPORT Road transport 80 Road safety 75 (NB) -- - 325 Subtotal, Transport - 405 3. PORT & MARITIME Port of Cotonou 1,200 (PAC) 2,600 --- 8,800 12,600 Cargo handling SOBEMAP CFD 5,300 5,300 Merchant marine - 460 Subtotal, Port & Mar. 1,200 2,600 5,300 9,260 18,360 4. AIRPORT -- CFD 2,000 1,500 3.500 TOTAL 15,575 20,030 120,500 27,900 63,000 247,000 * Institutional strengthening is included in technical assistance and training elements of investment projects. (1) Beninese counterpart includes funds from National Budget (NB), Road Fund (RF), Cotonou Port Authority (PAC), Benin Cargo Handling Company (SOBEMAP), Beneficiaries (BEN) 3.7 The financing gap at the present time amounts to about CFA franc 91 billion (30 percent for the road program), of which CFA franc 28 billion (US$56 million) are currently in the final stages of negotiations with interested donors and CFA franc 63 - 20 - billion remain to be found. Completion of these negotiations would ensure financing for the rest of the paved road rehabilitation (BAD's CFA franc 3 billion for Pob&Ketou), and the continuation of works on access and through roads in Cotonou city (FED and BAD's CFA franc 25 billion for Godomey-Akossombo, and KfW funds for Sobebra Old Bridge). The remaining financing gap would involve mostly paved roads (CFA franc 33 billion), paved road periodic maintenance (CFA franc 12 billion), and completion of drainage repairs and periodic maintenance on unpaved roads (CFA franc 5.9 billion). The FED, which has been the main donor in these areas, has indicated its interest in financing the paved road works, but its participation cannot be confirmed until the Lome VIII program is finalized by the end of 1996. BAD and BOAD have expressed interest in the unpaved road works, either for the last three or first two years of the program. If this money is available for the first two years, IDA funds could be reallocated for third-year expenditures, and more IDA funds could be reallocated to later years in case KfW comes through with financing in drainage repairs, for which it has indicated interest. 3.8 Total Beninese funding would amount to about CFA franc 16 billion over the five- year period, of which about CFA franc 3 billion would be provided through the budgets of PAC and the Road Fund. Therefore, about CFA franc 2.5 billion a year would need to be included in the Government's investment budget to cover remaining counterpart fund requirements, about equal to the amount made available in 1995. D. PROGRAM IMPLEMENTATION 3.9 Government has agreed to include in its Public Investment Program (PIP) and undertake only those transport sector works included in the five-year priority program. The program may include only those investments with ERR greater than 12 percent for new works, and works on unpaved roads whose economic justification has been demonstrated according to the methodology agreed at appraisal and specified in the Project Implementation Manual (details in ANNEX C). Priority will be given to periodic maintenance works in preference to new works: should periodic maintenance not be fully executed under a specific year, the backlog will be the top priority in the program of the following year, and no new road improvement or upgrading works will be proposed under the rolling program or the PIP unless adequate funding for routine and periodic road maintenance has been demonstrated for the previous year. The five-year priority program will be updated on an annual basis and reviewed with IDA prior to December 31 of the preceding year. Definition of annual slices shall include all works from earlier slices which have not been executed. Beginning in 1997, the five-year program will include safety improvement works for paved roads as defined by CNSR and traffic improvement works on the MTPT network in Cotonou as prepared by the new traffic management unit. 3.10 Coordination of the priority program will be carried out by a committee including MTPT and the Ministries of Planning and Finance (MP and MF), under MTPT chairmanship. The committee will be responsible for (a) formulating priority investment and maintenance programs of all subsectors, in accordance with proposals from the entities in charge of each subsector; (b) defining yearly slices defined according to - 21 - availability of counterpart funds and road maintenance financing capacity; and (c) donor coordination. MP's involvement will ensure that the program is agreed upon by all entities involved in the road sector and that the size of the slices matches the PIP provisions. MTPT's Programming and Coordination Unit (CPC) will act as the committee's secretariat and will execute the administrative work of the committee, including donor meeting scheduling, preparation and organization. The definition of the committee's functions and its operating procedures are included in the Implementation Manual agreed upon at negotiations. 3.11 Every two years, Government will organize a donor round table to discuss program financing and define annual priority program slices. The first and second round table meeting will be held prior to November 30, 1996. and between January 1 and March 30, 1998. During this round table, Government will provide donors with a comprehensive report showing: (a) actual execution status of the investment program; (b) performance indicators for each subsector; and (c) actual progress in the implementation of policy and institutional measures. E. COMPONENTS SUPPORTED BY IDA CREDIT Component Selection 3.12 In light of the objectives of Government's overall adjustment strategy, as supported by SAL III in the context of the CAS, the choice of priority transport investments for IDA funding under the proposed program has focused on infrastructure maintenance and rehabilitation, supporting rural production, encouraging private sector supply response, mobilizing domestic resources through user charges, and building institutional capacity. The choices also reflect IDA's comparative advantage in the roads and port subsectors, and IDA's ongoing involvement in the urban sector. 3.13 IDA funds will be used only for private contracting operations and not for force account maintenance in the proposed road component, while also supporting improvements in overall maintenance planning. No routine maintenance would be financed by the Credit, since Government will finance all routine maintenance through the Road Fund. Previous difficulties with community participation in rural road works have led to the design of a pilot in the proposed program which is demand-driven. The only rehabilitation works are those required to bring the most important unpaved road sections in the network up to a maintainable standard and provide for their initial regravelling. The only paved road works financed by the Credit, which are required for traffic improvements in Cotonou and for elimination of high accident locations on the paved interurban network, are to be executed in line with institutional changes supported by the ongoing Urban Rehabilitation and Management Project (Cr. 2338-BEN). Two design changes running through all components involve (a) the switch from permanent to short- term technical assistance; continuity is maintained by retaining proven TA staff, and (b) revival or introduction of mechanisms for user participation in decision-making. 3.14 IDA funds would support primarily: (a) component A: port improvements, in an amount of about CFA franc 2.6 billion out of a total of CFA franc 12 billion needed; (b) - 22 - component B: rehabilitation and regravelling of the most important unpaved road sections in the network, and spot works critical to road safety on the paved network (CFA franc 9.3 billion); (c) component C: a pilot community-based feeder roads maintenance program in the amount of CFA franc 1.4 billion; and (d) component D: support for traffic improvement works in Cotonou (CFA franc 2.1 billion). IDA's funds under this credit will be used as last resort financing for the highest priority expenditures. Additional funds for the overall unpaved road works and maintenance program are to be provided by BOAD (CFA franc 0.5 billion) and the Govenmment of Benin (Road Fund and PIP, CFA franc 3.3 billion), leaving a financing gap of CFA franc 5.9 billion for unpaved roads. About CFA franc 15.5 billion for feeder roads will come from KfW, BOAD, BID, FED, CFD (CFA franc 10.2 billion), along with IDA's Credit. Institutional strengthening in the various subsectors is included in the technical assistance and training elements of investment projects funded by BAD, FED. CFD and ACDI. and IDA will finance around CFA franc 4 billion for institutional strengthening in the road subsector. Should other donors decide to finance works currently included in the proposed IDA components, IDA may finance other works in the five-year program in priority order. 3.15 The proposed Credit will finance works, goods and services in the program for the four components described below. Component content is summarized below, with detailed costs given in ANNEX B, and detailed component descriptions in ANNEX C. 3.16 Port Operations and Management (US$5.7 million). The purposes of this component are to (a) strengthen Benin's competitiveness by reducing port operation delays; (b) improve customs duty collection and freight handling performance by increasing operational transparency; and (c) enhance user involvement in the definition and implementation of port management improvements. It includes the following elements: (a) Civil works to rationalize use of space within the port, in particular, creating dedicated space outside the port compound for customs inspection of containers and for used car handling and repair, and paving of heavily trafficked surfaces (see IBRD Map 27429); (b) Short-term technical assistance and training to (i) PAC for operational improvements, including use of Portware software and training of port operators; (ii) to MTPT top management for preparation of a port operation and facilitation strategy and reform of user participation mechanisms; and (iii) to port users and the Chamber of Commerce for information diffusion and user group startup; (c) Short-term technical assistance and training to PAC for financial management and cost accounting improvements, for updating of priority port investment input to five-year priority program, and for implementation of the civil works subcomponent, including final engineering studies and works supervision. - 23 - 3.17 Road Repair, Maintenance, Safety and Network Management (US$32.1 million). The purposes of this component are to (a) redress the balance between road investment and maintenance; (b) strengthen MTPT's capacity to program and manage road investment and maintenance; (c) improve road user cost recovery: and (d) help reduce poverty by reducing transport costs to/from rural areas and by increasing local labor- intensive enterprises' access to road works contracts. It includes the following elements: (a) Priority civil works on MTPT's road network, including elimination of all unpaved networ-k trouble spots, involving about 1,066 km of unpaved roads, of whlich 400 km are currently cut during the rainy season; repair of critical bridges and drainage works on about 850 km of priority unpaved roads: periodic maintenance (regravelling) on about 600 km of priority unpaved roads: DROA's office buildings upgrading and road safety improvements at frequent accident locations on the paved network (see IBRD Map 27427): (b) A program of short-term assistance, training, studies and equipment for specific key management improvements within the Ministry in the areas of annual updating of the five-year priority program projects'financial managemenit, transport licensing, works contract management, bridge and drainage maintenance, heavy equipment operation, collection of data on road operators and road conditions, road maintenance financing management and personnel management (,total of 81 months of technical assistance, of which 36 local, 82 training sessions, 51 months of on-the-job training sessions. 15 vehicles. 20 computers, 15 months of study tours, and training of 12 specific staff ); (c) Traffic Safety Support Program including short-term assistance. training and studies to the CNSR and to MTPT for an action plan to improve road and vehicle safety. including equipment for processing road safety data, procedures for defining works to eliminate high accident locations, revisions of rules of the road, improvements in accident reporting procedures and in procedures for enforcing vehicle weight limits and rules of the road. and measures for user participation in accident reduction activities (total of 29 months of technical assistance, of which 9 local, 2 computers); (d) Private sector support to strengthen the implementation capacity of local civil works enterprises for greater participation in road maintenance and spot improvement contracts, through establishment of an office to assist small and medium-sized enterprises by a specialized NGO, training and support programs, studies to define measures to improve the private sector regulatory environment, and startup of a public-private equipment pool (total of 243 months of technical assistance, of which 152 months local); - 24 - (e) Overall program management. including studies required for annual updating of the five-year priority program. annual works audits, final engineering, preparation of bidding documents, and works supervision. 3.18 Rural Road Rehabilitation and Management (US$3.1 million). The purpose of this component is to: (a) help alleviate rural poverty by reducing transport costs to/from rural areas and improving road links to motivated communities; and (b) develop a national rural road rehabilitation and maintenance strategy which would transfer rural road management to local committees. It includes the following elements: (a) Civil works to rehabilitate a total of 300 km of rural roads in close collaboration with motivated local communities in Cobly, Adjohoun, Banikoara villages and three other areas, as a pilot for defining Government's rural road strategy: (b) Introduction of a pilot, locally operated rural road maintenance program, to be developed jointly by DROA and the local committees, including assistance to DROA for developing and implementing new procedures for programming, management and finance of rural road maintenance, and to local and international NGOs who would assist local committees in setting up the local organizations required for public education, collection of funds, and mobilization of volunteer road maintenance crews (total of 306 months of TA. of which 149 local); 3.19 Urban Road Improvements and Traffic Management (US$4.3 million). The purpose of this component is to improve traffic safety and transport conditions on the primary road network in Cotonou through efficient traffic management. It includes the following elements: (a) A program of road works required to improve road safety and traffic conditions in the city of Cotonou, including elimination of high accident and heavily congested intersections on main roads, 11 km of separate lanes for two-wheeled vehicles on the most heavily traveled itinerary, and renovation of the three main bus/truck stations plus creation of a management mechanism for such stations (see IBRD Map 27428); (b) Equipment and vehicles required for the newly established Traffic Management Unit within the municipality of Cotonou, short-term technical assistance and training, studies for Cotonou's first traffic management plan, studies for a first bus/truck station management plan and its implementation, and definition and implementation of a mechanism for urban user participation in traffic plan preparation and traffic safety measures, through a local NGO. 3.20 Technical Assistance in All Components. In contrast to previous IDA projects, the IDA-financed program components under this Credit support no full-time technical assistance. Instead, terms of reference have been defined for specific tasks to be carried - 25 - out during short-term assignments, and local consultancies have been specified wherever feasible. While all of port component technical assistance is external (30 months), 45 months out of 125 months of expertise required for the road component will be hired locally, as will 144 of 240 months of NGO assistance for the rural road component, 7 of 67 months of rural road specialists, and 50 of 60 months of traffic plan experts in the urban component (286 local out of 492 months total). All training in all components will be carried out locally, except for study tours for maintenance programming training (see tables in ANNEX C). F. COST AND LOCAL FINANCING OF IDA COMPONENTS Component Costs 3.21 Total cost of IDA-financed components of the program is estimated at US$45.2 million (CFA franc 22.6 billion) together with Beninese counterpart funding, net of taxes and duties but including physical and price contingencies. Base costs are in April 1995 prices, as determined by the appraisal mission on the basis of recent civil works contracts. IDA financed components would be executed over a four-year period (March 1997 through December 2001). Price contingencies have been based on the following annual inflation rates: Table 3.3: Annual Inflation Rates (percent) 1997 1998 1999 2000 2001 Foreign Exchange 2.6 2.5 2.5 2.5 2.5 Local CurTencv 3 3 3 3 3 Table 3.4: Estimated Costs of IDA Financed Components (US$million) IDA Component Local Foreign Subtotal Net of Percent of Taxes Base Cost Port Operation 2.4 2.4 4.8 13 Road Maintenance 12.6 14.7 27.3 71 Rural Roads 1.1 1.5 2.6 7 tJrban Roads 1.8 1.9 3.7 9 TOTAL BASE COST 17.9 20.5 38.4 100 Contingencies Physical 1.7 1.6 3.3 Price 1.9 ].6 3.5 TOTAL PROJECT COST 21.5 23.7 45.2 3.22 The proposed IDA Credit of US$40 million will finance 88 percent of the cost of these components of the program net of taxes and duties. This will cover approximately US$24 million of foreign costs (100 percent) and US$16 million of local costs (74 percent). Detailed IDA component financing is given in ANNEX B and is summarized in the table below. The local counterpart share of US$5.2 million will be financed as follows: (a) US$4.5 million by Government-- US$2.3 million from national budget and US$2.2 million from Road Fund-- for periodic unpaved road maintenance repair of - 26 - trouble spots, works and bridges on unpaved roads, buildings and equipment, and urban road works; (b) US$0.6 million by beneficiaries, including US$0.3 million by small and medium enterprises benefiting from the training and support operation (100 percent of the operating cost of the support unit, 50 percent of the cost of staff training and 100 percent of support by local expert), and US$0.3 million by local partners representing financing of works on rural road during the IDA Credit period; and (c) US$0.1 million by the Circonscription Urbaine (CU) under the Urban Road Component for operating costs of the Traffic Management Unit, which could come from parking and station fees, and US$0.4 million by PAC. Local counterpart funds provided from budget will be made available through project accounts opened by MTPT (DROA) and AGETUR. First deposit in these accounts is a condition of first disbursement under components B, C and D. The project accounts will be replenished quarterly by the National Treasure. Table 3.5: Financing Arrangements for IDA financed Components (US$'000s) Component GOB IDA Ben-efi City of PAC TOTAL ciaries Cotonou A. Port operation and Management - 5,295 - - 410 5,705 B. Road repair, maintenance, safety 3,966 27,818 316 - 32,101 and network management C. Rural road rehabilitation and 204 2,880 323* - - 3,083 management D. Urban Road Improvement and 324 4,007 - 96* - 4,331 traffic management TOTAL PROJECT COST 4,494 40,000 316 410 45,220 323* 96* Total including* 4,494 40,000 639 96 410 45,639 *Figures are not included in the project cost but financing is a an upfront condition. G. PROGRAM IMPLEMENTATION Program Implementation Manual 3.23 Detailed project implementation procedures are recorded in a Program Implementation Manual or PIM, organized in chapters by component. PIM contents are detailed in ANNEX C and include detailed procurement arrangements, standard bidding documents, key performance indicators, quarterly reporting formats, detailed IDA supervision program, detailed procedures for ex-post supervision of road works, environmental guidelines for road works, economic justification methodology, and copies of official documents such as AGETUR's contract with MTPT and the Finance Ministry's delegation of contract authority for road works to MTPT. The final PIM wchich has been agreed upon before negotiations will be adopted by the Government prior to credit - 27 - effectiveness. It will be updated if necessary during program implementation with IDA concurrence. Programn implementation, arrangements and Credit and program coordination, are summarized below (details in ANNEX C). IDA Credit Coordination 3.24 An IDA Credit Coordinator, under the responsibility of Chief of staff (directeur du cabinet), will coordinate project implementation, including (i) overall coordination of the IDA components; (ii) liaison with the Programming and Coordination Unit which manages the program as a whole; and (iii) management of expenditures under the IDA Credit, including Credit allocation on the basis of the data processed by DROA, PAC and AGETUR. Before negotiation, MTPT nominated an accountant acceptable to IDA who will work under the credit coordinator's authority. DROA, PAC and AGETUR would carry out program preparation, commitments monitoring, expenditure accounting, and withdrawal application supervision for their respective components. This documentation would then be transmitted to the Credit Coordinator who would consolidate the commitments and expenditures accounts for the overall Credit, monitor the Credit allocation, and be responsible for the execution of the annual audit. By or just after project effectiveness the accountants in each execution agency and at the credit coordination level will have training on IDA's credit management. 3.25 The borrower will carry out no later than 30 month after effectiveness, jointly with the Association and other donors, a mid-term review of the progress made in the carrying out of the Project. The review will cover: (a) the implementation of measures designed to strengthen the financial reporting, monitoring, accounting and auditing capabilities of the different agencies of the Borrower involved in the implementation of the Program; (b) the overall progress made in the Program and Credit implementation; (c) the performance of PAC, AGETUR and MTPT as executing agencies for their respective parts of the IDA financed components; (d) the adequacy of the Borrower's counterpart funding as well as the level of budgetary allocations and actual expenditure for routine maintenance; (e) the working of the Road Fund; and (f) the need for redesign and restructuring of Program components experiencing implementation difficulties. Not later than one month prior to such mid-tern review, the Borrower will furnish to the Association a report, for its review and comnments on the above topics, including an evaluation of the progress achieved in complying with Program implementation, and recommendations resulting from the studies conducted under the Program. Port Component of Cotonou Operations and Maintenance Implementation 3.26 The port component would be implemented by PAC. IDA Credit funds for port infrastructure works and PAC support will be made available to PAC by the Governmnent under an agreement which will be signed prior to Credit effectiveness. Two thirds of the amount will be onlent at commercial loan terrns (7.1 percent) and the remaining made available to PAC as an equity contribution. Delegation of authority for procurement for works, consultant services and training to PAC will be part of the agreement. Since PAC has demonstrated its capacity to manage contracts under the recently completed Transport - 28 - Infrastructure Rehabilitation and Maintenance Project (Cr. 1807-BEN), it could carry out procurement for MTPT and other entities involved in the port component. PAC will hire consultants for engineering studies, works supervision, and studies to be financed under the program. PAC's training program, focused on port operations and financial management, and agreed with IDA during appraisal, will be updated each year, according to the results of training to date and in light of operational priorities. 3.27 Before negotiations, Government transmitted to IDA, all legislation, decrees, and regulations required to (a) reinforce PAC's authority in the management of port operations; (b) end SOBEMAP's monopoly of container handling by opening the market to one or more private companies; and (c) revise licensing regulations for private port operators to bring them under PAC's jurisdiction. Prior to October 31 of each year of program implementation, PAC will prepare and transmit to IDA for its review, the five- year priority program, prior to its inclusion in the overall five-year transport program, along with five-year financial projections for PAC. PAC has agreed to include in its submission, only those investments (a) required to improve port infrastructure whose economic return is greater than 12 percent, and (b) for which PAC's ability to undertake such investments is demonstrated by financial projections based on principles and formats agreed at appraisal. Road Repairs, Maintenance, Safety and Network Management Component Implementation 3.28 The road component will be carried out by MTPT through DROA. To improve its efficiency DROA will be reorganized and strengthened (ANNEX B3 of the PIM). Prior to effectiveness, the Borrower shall take initial steps agreed upon for the reorganization of DROA and shall pursue the implementation of this reorganization during the Program execution. The Finance Ministry will delegate to MTPT, authority for issuing calls for bids, awarding contracts, and managing contracts for (a) routine, periodic maintenance and rehabilitation works on the upaved network, whether financed by the Road Fund or by the Credit; (b) DROA's buildings upgrading; and (c) elimination of trouble spots and unpaved road rehabilitation. DROA will hire consultants to carry out engineering studies and works supervision financed by the Credit, and consultants recruited for works supervision should participate in the finalization of bidding documents for these works, and in the analysis of bids. Engineering studies will include an environmental assessment of the impact of works, following the environmental guidelines to be agreed on at negotiations. Final engineering studies and bidding documents for the first slice of works and technical assistance are being prepared and are expected to be finalized by Credit effectiveness. 3.29 Prior to negotiations, Government transmitted to IDA: (a) draft revised statutes for the Road Fund; (b) draft contracts for toll collection subcontracting; (c) an action plan for restructuring of Road Fund staff; and (d) evidence of the start of staff restructuring implementation. New statutes for the Road Fund, road toll contracts with private firms, and signature of single-man contracts with the 347 surplus road maintenance staff are measures required to ensure Government's undertaking to provide sufficient funds for routine road maintenance. Government agreed to these measures at appraisal, - 29 - and to the provision of CFA franc 1.5 billion in 1996, increasing to CFA franc 2.635 billion in 1998, for routine road maintenance of MTPT's paved and unpaved network. 3.30 Government further agreed at appraisal to transmit to IDA, minutes of the first meeting of the Road Fund's new board of directors, and copies of the new contracts of the 347 road maintenance staff, as a condition of Credit effectiveness. Prior to October 31 of each year of program implementation, MTPT will prepare and transmit to IDA for review, its submission for the five-year priority program, prior to its inclusion in the overall five-year transport program, including road maintenance programming and budgeting. The 1997-2001 priority program was reviewed during negotiations. Government will not undertake any new works financed by the Credit unless it submits to IDA evidence of actual availability of budgeted funds and actual performance of routine maintenance works during each year, and payment of counterpart funds for prior contracts financed by the Credit. Government has agreed to deposit in the Road Fund on a quarterly basis, no later than three months after they have been collected, fuel taxes and road taxes collected on its behalf. Should the Road Fund not be able to mobilize sufficient funds to finance road maintenance at the agreed level. Government will increase its allocation to the Road Fund to make up the difference. With respect to the counterpart funds, the Borrower shall open a Road Funds Project Account, will make first deposits and will replenish them thereafter. Prior to June 30 of each year, Government will provide IDA with audit reports of Road Fund accounts, performed by an independent external auditor and based on terms of reference acceptable to IDA. Contracts for upgrading of DROA offices and equipment purchase included in this component will not be signed by Government before IDA receives the decree and the actual assignment of staff involved in the DROA reorganization, as outlined in the Program Implementation Manual. 3.31 The Private Sector Support Program will be implemented by DROA through a contract with a specialized NGO, covering all elements of the program. Annual training and support programs will be defined on an annual basis in close collaboration with beneficiaries, and forwarded to IDA for approval before October 31 of the preceding year. Program beneficiaries will contribute to program operating and staff training costs at a level which should cover at least the unit's operating costs, net of expatriate staff. The Traffic Safety Support Program will be prepared and its implementation managed by DROA in close coordination with CNSR. CNSR will analyze bids for studies and technical assistance, and CNSR's representatives will be members of the bid award committee. Final terms of reference for studies, technical assistance and training are being prepared and are expected to be finalized by project effectiveness. Rural Road Rehabilitation and Maintenance Component Implementation 3.32 Rural road maintenance works will be implemented by MTPT through DROA, under the same conditions as the road component with respect to programming and contract administration, including use of the same standard bidding documents. A detailed definition of the operation of the National Technical Council for Rural Roads (CTN), which will be responsible for supervising the execution of the pilot maintenance and rehabilitation operations, and defining a national strategy for rural roads to be applied - 30 - in future is a condition of initial disbursement for this component. IDA's agreement on the rehabilitation work program for each rural community selected will require adherence to agreed selection principles. It will be conditioned on receipt by IDA of the consultant's monitoring and evaluation report, indicating that local partners have actually carried out or caused to be carried out, initial site preparation for rehabilitation works and manual routine maintenance works for which they are responsible, representing their counterpart contribution. 3.33 Works programming and phasing will be carried out in close collaboration with local communities responsible for individual road sections with the help of a specialized NGO. Works will be restricted to rehabilitation or maintenance of only those roads or tracks on the approved list. Work programming will be carried out by local communities and final program will be agreed upon by CTN which will include local community partners. No rehabilitation or maintenance works will be carried out with IDA financing until arrangements required for financing and carrying out maintenance have been drawn up and finalized through written agreement with the communities involved. Urban Roads Improvement and Traffic Management Component Implementation 3.34 The Urban Traffic Component will be implemented by DROA, using the same standard bidding documents as for the road component. The urban works agency, AGETUR, will be hired for procurement and supervision of studies and works within its domain of competence, under a subcontracting agreement (contrat de maitrise d'ouvrage dgleguj). Such works would in principle include all works in this component except works involving asphalt paving. IDA credit funds for urban works, to be carried out by AGETUR, will be made available to AGETUR by the Government under an agreement which will be signed prior to Credit effectiveness. AGETUR executing fees would be financed by the Credit, up to 4.5 percent of the cost of engineering studies and works carried out under the subcontracting agreement. The Borrower shall open a AGETUR Project Account, will make the first counterpart deposits and replenish them quarterly thereafter. Bidding procedures and contract award would follow AGETUR's rules, and would be subject to the same ex-post review by the Finance Ministry as under the ongoing Urban Rehabilitation and Management Project financed by IDA (Cr. 2338-BEN). DROA and AGETUR will hire consultants to carry out engineering studies and works supervision (about 30 percent by DROA, 70 percent by AGETUR; see para. 3.38). 3.35 The establishment of the Traffic Management Unit within the Municipality of Cotonou and hiring of competent staff for it, which had previously been envisaged as a condition of Credit effectiveness, actually occurred in January 1996. The Technical Steering Committee for traffic management will be enlarged to include representatives of users by December 1996 and the traffic management plan will be completed by March 31, 1997. Adherence to agreed works selection procedures and finalization of the traffic management plan are conditions of IDA's financing of the works program to be financed under this component. - 31 - H. PROCUREMENT AND DISBURSEMENT Procurement 3.36 Table 3-6 below presents a summary of expected procurement by category of expenditure. Detailed features of procurement arrangements are provided in ANNEXES B and C. Unless otherwise indicated below, procurement arrangements for the items financed by the Credit are as follows: (a) all equipment and civil works contracts will be awarded on the basis of competitive bidding (ICB or NCB for works and ICB, NCB and International Shopping for Goods) in accordance with Bank Group Guidelines; (b) all civil works construction will be supervised by consultants acceptable to IDA under agreed terms of reference; (c) consultants and experts for technical assistance will be recruited in accordance with provisions stated below; (d) procurement decisions for civil works and goods in excess of US$200,000 equivalent, for consulting services with firms in excess of US$100,000 equivalent, and for consulting services with individual or training activities in excess of US$50,000 (covering over 80 percent of all procurement) will be subject to prior approval by IDA; and (e) post-review procedures will be applied for contracts under the above thresholds. Contracts and services financed by other financing agencies will follow the rules of the respective agencies. Contracts for civil works which are unlikely to attract international competition will be awarded on the basis of procedures for locally advertised competitive bidding (NCB), according to procedures which have been reviewed and are acceptable to IDA. Table 3.6: Summary of Proposed Procurement Arrangements (US$'000s, net of taxes) PROJECT ELEMENT ICB NCB OTHER N.B.F. TOTAL I Civil Works 20.731 12,452 0 0 33,183 (IDA) (17.679) (10,744) 0 0 (28,423) 2 Equipment 719 139 102 0 960 (IDA) (611) (118) (87) 0 (816) 3 Consultancies, NGOs, TA, Studies & Training 0 0 10.986 0 10,986 (IDA) 0 0 (10,670) 0 (10,670) 4 Operating & Maintenance Costs 0 0 91 0 91 (IDA) 0 0 (91) 0 (91) TOTALCOST 21.450 12,591 11.179 0 45,220 (IDA) (18,290) (10.862) (10,848) 0 (40,000) - 32 - 3.37 The Bank's standard bidding documents will be used. Bank standard bidding documents and standard bid evaluation reports for goods and civil works under ICB, civil works under NCB which could interest local SMEs, and consultant services, and processing time for key procurement activities were agreed at negotiations. Government also agreed to submit to IDA for review, draft legal texts for procurement arrangements, especially for bid evaluation, responsibility for processing in a timely manner, and delega- tion of contract award to DROA or AGETUR for works related to road maintenance, spot improvement works and improvement of traffic condition within Cotonou. 3.38 Civil Works. All contracts for civil works in excess of US$500,000 equivalent will be awarded on the basis of ICB. Contracts for civil works under US$500,000 equiva- lent but not exceeding US$13 million in aggregate may be awarded on the basis of NCB, in accordance with procedures acceptable to IDA. International enterprises are best qualified to execute major improvement works on unpaved roads or bridges, and works on paved roads under the road component, local contractors are not yet qualified to do such works, even minor works on paved roads. On the other hand, international firms are not interested in minor works at dispersed locations on the unpaved network or at the port site, nor in minor scattered improvements on the urban network, works well suited to local contractors' abilities. Therefore, 63 percent of the works is expected to be awarded under ICB and 37 percent on the basis of NCB. Foreign firms, if interested, will not be excluded from participation in NCB. 3.39 Consultancies. All consultancies financed by IDA will be contracted in accordance with the Bank's Guidelines for the Use of Consultants (August 1981). Services for promotion and support of SMEs, for representation of users under the urban roads component, and for assistance to local communities under the rural roads component would be executed by experienced NGOs. During negotiations, Government confirmed that consultants responsible for works supervision will also be responsible for design and updating of bidding documents, and will actively participate in bid evaluation. Contracting and supervision of 70 percent of works and consultant services under the traffic improvement subcomponent will be executed by AGETUR, 30 percent by DROA. AGETUR operating expenditures for this task will be paid under annual contract agreements to be signed between MTPT and AGETUR; annual contract amounts will be estimated on the basis of actual expenditures submitted for IDA approval. Payment against these contracts will be made as the works are implemented. NGOs will be hired after careful selection following a consultation made on the same basis as for consultant services. 3.40 Goods for DROA, DFR (Directorate of Road Fund), CNSR and the Traffic Management Unit will be procured under ICB procedures. The exceptions to ICB procurement will be for goods contracts estimated to cost less than or equal to US$50,000 equivalent each, which in aggregate will not exceed US$240,000. For these contracts, goods could be procured under NCB or National Shopping. National Shopping will be limited to contracts estimated to cost less than US$20,000 each, which in aggregate will not exceed US$ 100,000. - 33 - Disbursement 3.41 The Credit is expected to be fully disbursed by June 30, 2001 and the Credit closing date will be December 31, 2001. The estimated quarterly disbursement schedule for IDA Credit and the detailed disbursement schedule. Credit categories and disburse- ment percentages are shown in ANNEX B. The disbursement forecasts take into account the advanced stage of procurement preparation which will allow a quick start of the project. The Credit will be disbursed as follows: Table 3.7: Allocation and Disbursement of IDA Credit Category Amount of credit % of Expenditure (UISS'000) to be financed by IDA I Civil Works (a) PAC Component A 3.336 90% (b) DROA other Component B & DROA Component D 18.932 85% (c) DROA Component C 1.665 90% (d) AGETUR Component D 1.749 90% 2 DROA Vehicles, Equipment for Component B & D 816 85% 3 Consultant/NGOsITA/'raining and Studies (a) PAC Component A 1.531 100% (b) DROA - SMEs of Component B 1,470 85% (c) DROA other Component B. Component C & DROA 5.889 100% Component D (d) AGETUR Component D 907 100% 4 AGETUR - Operating Cost Component D 89 100% 5 Refunding of PPF" 500 6 Unallocated 3.115 TOTAL 40,000 2 PPF advanced to carry out studies under Category 3 3.42 Special Accounts. To facilitate disbursement and reduce the volume of withdrawal applications, Special Accounts, will be opened in CFA franc for DROA, PAC and AGETUR at a commercial bank acceptable to IDA. The authorized allocations amount to US$1,000,000 equivalent (DROA), US$250,000 equivalent (PAC) and US$150,000 equivalent (AGETUR). The amounts are estimated to cover about four months of expenditures. The Special Account opened by AGETUR would finance expenditures under Categories 1(d), 3(d) and 4. The Special Account opened by DROA would finance expenditures under Categories I (b), (c), 2, 3 (b) and (c). The Special Account opened by PAC would finance expenditures under Categories 1(a) and 3(a). The Special Accounts will be opened prior to any disbursement. Upon effectiveness of the Credit, an amount of US$500,000 equivalent (DROA), US$125,000 (PAC) and US$75,000 (AGETUR), representing 50 percent of the authorized allocations, will be deposited in the Special Accounts. The remaining balance will be made available when - 34 - needed. The Special Accounts will be used for all payments representing less than 20 percent of the authorized allocations. Replenishments would be submitted monthly and include bank statement and reconciliation statement. 3.43 All replenishment requests would be fully documented except for: (a) contracts of less than US$200,000 equivalent for civil works and equipment; (b) contract of less than US$ 100,000 for consulting services by firms; (c) contracts of less than US$50,000 for consulting services by individuals; (d) training, studies and operating expenses (SOEs) which may be claimed on the basics of statements of expenditures. All supporting documents for SOEs will be retained by DROA, PAC and AGETUR for review by periodic Bank supervision missions and external auditors. I. ACCOUNTING, AUDITING AND REPORTING 3.44 The accounting for Credit expenditures and Special Accounts transactions including statements of expenditures would be maintained by DROA, AGETUR and PAC for their respective components. All expenditures under the Credit will be recorded and consolidated by the Credit Coordinator, who will countersign all withdrawal applications. Agreement was reached during negotiations that DROA, AGETUR and PAC have Credit accounts, Special Accounts and statement of expenditures audited annually by qualified independent auditors acceptable to IDA. Auditors missions will include the detailed audits of Credit accounts and SOEs with an opinion, the audit of the Special Accounts with a separate opinion and a management letter which includes the analysis of the internal control and accounting procedures along with recommendations to management. Auditors' reports will be submitted to IDA not later than six months after the close of their fiscal/financial year. In addition to Credit audit reports, AGETUR and PAC will also furnish to IDA, not later than six months after the end of their fiscal/financial year, separate audit reports on their component and on their operations. Selection of the project auditors to IDA's satisfaction is a condition of credit effectiveness. 3.45 DROA, AGETUR and PAC will each prepare quarterly progress reports covering all subcomponents within one month after the end of each quarter. These reports will include: (i) progress achieved against agreed implementation and disbursements schedules; (ii) key performance indicators; and (iii) work programs and cost estimates for the coming quarter and for the total program. Performance indicators are listed in ANNEX B. These reports will be consolidated by the Credit Coordinator into a single quarterly report which will be submitted to IDA. The main purpose of the reports will be to provide timely and updated information on the implementation of the components, highlighting issues and problem areas, recommending actions and commenting on progress in resolving previous reconmmendations. DROA, AGETUR and PAC will prepare a completion report within six months of the final disbursement in accordance with IDA guidelines. Reporting formats and requirements, and key performance indicators were agreed with DROA, AGETUR and PAC during negotiations. Agreement was obtained during negotiations that DROA, AGETUR and PAC submit to IDA, copies of all consultants' reports and studies financed under the proposed program. - 35 - J. SUPERVISION PLAN 3.46 Agreement was obtained during negotiations that MTPT hold a launch workshop as soon as the Credit is effective, and that there is a mid-term review by IDA two years from the date of Credit effectiveness (i.e. around April 1998), during which the status of the entire program will be reviewed in detail. During that mid-term review, particular attention will be paid to: (i) compliance with covenants, particularly the financial and audit covenants; (ii) progress in implementing program components; the implementation of PAC's financial priority plan with respect to debt service and accounts receivable; the road subcomponents and institutional strengthening results and variance from the appraisal estimates; (iii) status of the road network maintenance funding through the road fund; and (iv) status of the preparation of the national rural road strategy based on the results of the IDA-supported pilot operations. The review will be jointly carried out by IDA, Government, DROA, the Road Fund and PAC with the participation of other donors involved in the sector. Corrective measures may be proposed as a result of this review including necessary modifications in the scope of the proposed program and in the Implementation Manual which could be gradually applied to all projects financed by external donors. 3.47 The proposed supervision program for IDA components and key performance indicators for monitoring their progress were designed during appraisal and have been confirmed during negotiations. The two first years will require 22 staff weeks of supervision, and the following years 20 staff weeks per year. A table showing proposed mission activities and staffing, and a list of performance indicators are provided in ANNEX B. Routine supervision by IDA should normally include an engineer experienced in road maintenance and periodically a procurement specialist. Full-scale missions should include a financial analyst, a training specialist, an urban transport specialist and a port specialist. 3.48 Supervision will be carried out in close collaboration with IDA's Country Operations Department in order to ensure that the road investment and maintenance program is consistent with macroeconomic conditions. Particular attention will be paid to Road Fund operations during supervision. Preparation of the priority program with its annual slices will require special supervision, with participation by transport economists. IDA's annual review of the priority program will require expertise in economic analysis and in road maintenance and construction standards. IDA will play a major role in donor coordination during the annual donors' meetings, where these programs will be revised and updated. The meetings will take place during IDA supervision missions. Involvement of a number of small enterprises in civil works execution is another activity requiring close supervision and special attention. - 36 - 4. BENEFITS, IMPACTS AND RISKS A. ECONOMIC ANALYSIS 4.1 Project Benefits. All port and road improvements will reduce transport time and cost through less vehicle operating costs, and encourage trade and agricultural production. In the port, improvements in productivity yield shipper savings in road transport, incurred when port congestion in Cotonou diverts traffic to Lome, and physical improvements in the port will yield cost savings to forklift and other cargo-handling vehicles. On national, rural and urban roads, improved road surfaces yield vehicle operating cost savings. Other non- quantified benefits are expected to flow from IDA-supported activities which improve management and planning. Effective use of the five-year priority program as an investment tool should result in higher rates of return on transport sector investment as a whole. Development of a community-based, demand-driven rural roads rehabilitation and maintenance strategy will likewise lead to more effective resource use. Better contract management and better planning based on better road data will mean more roads can be maintained with the same budget. Safety and traffic management activities will reduce the cost of traffic accidents, in terms of human life and productivity and damage to vehicles. Economic analyses for individual IDA components are summarized below, with details provided in ANNEX E. 4.2 Port Operations. There are three types of benefits expected from investment in civil works and operational improvements in the port: (i) reductions in cost of trucking goods off-loaded in Lome when Cotonou's port is congested, and then trucked back to Cotonou for delivery in Benin or Niger; (ii) cost savings to forklift and other cargo-handling vehicles, through dockside paving and through reduction of congestion by creating dedicated space outside the port compound for container inspection and used car activities; (iii) reductions in income losses to PAC, SOBEMAP and private operators who lose business when port traffic is diverted to Lome. Diversion of traffic to Lome occurs when dock occupancy rates exceed 70 percent (saturation point), expected to occur in 1998, if there is no improvement in productivity, or in 2001 with IDA-supported improvements. The total of benefits from these three types of cost savings in a single year is estimated at CFA franc 2,193 million, of the same order of magnitude as the cost of all IDA-financed port improvements (CFA franc 2,041 million). The ERR is estimated at 250 percent and the NPV is about US$7 million using a discount rate of 12 percent. 4.3 Road Repair and Maintenance. Given that the four IDA components are but a portion of a larger priority program, and in order to assist in the definition of this program and to permit rational selection of investments for IDA and other donor financing from it, the economic analysis carried out during preparation covered all road investments proposed for Government's five-year priority program. This analysis included section-by-section review of proposed trouble spot repairs and bridges and drainage works to take into account, works recently carried out in the Transport Infrastructure Rehabilitation and - 37 - Maintenance Project (Cr. 1807-BEN), and identification of optimal maintenance strategies for paved and unpaved roads, in terms of maximizing the number of practicable itineraries (minimization of present value of net maintenance costs). ERRs were also calculated for the resulting maintenance cost flows. Cost stream-s included the cost of eliminating trouble spots and bridge and drainage works, both required to bring key network sections up to a service level where maintenance is possible, in addition to maintenance costs. Benefits are taken to be savings in vehicle operating costs due to improved road surfaces, with fuel shadow priced at CFA franc 140 a liter; time savings are not taken into account. The base case is defined as continuation of the lowest service level, or deterioration to the lowest service level, at which vehicles can still actually use the road. This is the only way to generate a baseline level of vehicle operating costs to compare with the with-investment case, although in actual fact, in a do-nothing case with no road maintenance, roads cease to be practicable and traffic would virtually cease. Not even minimal maintenance costs are included in the base case, because in their present state, the roads are not maintainable without the repairs of trouble spots and bridges, and the road standards in the with- investment case are already set at a minimum level. 4.4 The ERRs for works on the 61 sections of unpaved roads included for financing under the proposed IDA Credit range from 300 percent to six percent, depending on the section. Six of the 61 sections show ERR below 12 percent. Since these are itineraries lacking any possible detour in case of impassibility, they will be retained in the priority program; engineering studies will review the possibility of lowering technical standards on these sections. The weighted average of the ERR for all unpaved road investments taken together is 103 percent, and the NPV is estimated at US$85 million. While it is not possible to quantify the benefits of the other activities financed under this component-- road safety improvements and short-termn assistance, training and studies for management improvements, strengthening of SMEs, building renovations, and overall IDA Credit management-- these activities will certainly generate benefits by lowering traffic accident rates, improving the efficiency of resource use, and boosting competition in the private construction sector. 4.5 Rural Road Rehabilitation and Maintenance. There is no reliable or accurate way to estimate future income benefits to pilot area rural residents from additional agricultural production expected to be induced by better rural road conditions. Farmers can be expected to make rational choices of itineraries to propose for rehabilitation and maintenance, based on their own assessment of benefits likely to accrue to them. The component has been designed, in fact, precisely so as to apply selection criteria for screening programs eligible for Governm-ent participation, which takes into account user savings, increased agricultural production, and social and poverty impacts. Should it not be possible to calculate an ERR, other simple criteria will be used, such as population density or agricultural production per km of road to be included. Taking a broader view, however, this component represents the minimum investment required for Government to design a workable rural roads strategy, needed to replace the unsuccessful and uneconomic approaches of the past, which have re,.ulted in costly repeated rehabilitation of unmaintained rural roads. The requirement of commnunity contribution to program costs, - 38 - sufficient to ensure routine maintenance of included itineraries, has been adopted as a means to exclude economically unjustified investments from being financed under this pilot program. 4.6 Urban Road Repair and Traffic Management. Vehicle operating cost savings from improved traffic circulation due to both civil works and start-up of a traffic management unit are expected to be substantial in Cotonou. given the high volumes of traffic and the expected reductions in travel time. On the 11 km trip between Godomey and Sobebra intersections (see IBRD Map 27428), the current conflict between four-wheeled and two-wheeled vehicles and intersection bottlenecks have reduced speeds to around 20 km/hr, compared to a norm of 40 km/hr. creating delays of around 22 minutes, or 50 percent of a more normal trip time. Peak traffic volumes on this trip are in the 40,000 - 80,000 veh/hour range, of which about 70 percent are two-wheelers. Substantial improvements on this major itinerary will result from the implementation of the traffic plan, following which traffic improvement works such as modal separation, intersection reconfiguration and signaling, and parking improvements would be financed. Proposed works would be required to demonstrate an ERR of at least 12 percent to qualify for financing under this component. B. SOCIAL AND ENVIRONMENTAL ASPECTS 4.7 Benefits from User Participation in Decision-Making. The adoption of a participatory approach in the preparation of the transport sector strategy during 1992-94 was a fundamental departure from previous decision-making traditions, and it succeeded in changing participants' expectations of their roles. This has begun to raise expectations among a wider circle of participants, and it is to this end that the IDA Credit supports activities to revive user participation mechanisms in port operations and to develop new ones for main road and rural road maintenance. These activities will continue during the five-year Credit period to make transport agencies increasingly accountable to stakeholders. 4.8 Benefits to Women. The reconnecting of agricultural areas to the main road networks will encourage development of trade activities in which women are particularly active. Improvement of bus/truck station environments and management in the urban roads component will also benefit women, who are the main users of these facilities. 4.9 Environmental Protection. Benin has already begun to implement its Environmental Action Plan or (EAP), which provides a diagnosis, an environmental strategy and an action plan. The EAP was approved by the Ministers' Council on June 16, 1993, and an Environmental Council was created and a Director appointed in 1994. The main problems highlighted in the EAP are the reduction of plant cover, the spread of all forns of erosion, a general reduction in water quality, and uncontrolled urban growth. In both urban and rural areas, a lack of infrastructure, poor infrastructure management, and poverty are factors which encourage environmental deterioration. The proposed Credit therefore indirectly supports the EAP by increasing road infrastructure capacity, improving road maintenance programmning, financing and execution, and improving road safety. - 39 - 4.10 More directly, the Credit also supports the EAP by providing for development of criteria for a transport environmental action plan and environmental guidelines (see ANNEX D). The objective is not only to mitigate, through better maintenance and design, the negative impacts of road construction and maintenance activities, such as soil erosion and flooding, but also to promote environmental protection. Transport works financed by this Credit will contribute to sustainable trends in enviromnental improvement, by improving water management and using road infrastructure, in particular drainage structures, as a vehicle for improving drainage and reducing erosion. C. POVERTY ASPECTS 4.11 Transport and Poverty. Two of the factors underlying the high rate of poverty in Benin could be substantially alleviated through transport sector measures: difficulty of access to potentially productive rural areas, and the high rate of unemployment. Rehabilitation and improvement of rural roads do not in themselves guarantee the development of agricultural activities, but competitive agricultural production cannot occur without reliable roads which are kept in fair condition. In urban areas, especially Cotonou, unemployment has, until recently, been a major problem, due to a lack of job opportunities in the modem sector and to the restructuring of the public sector during the early years of structural adjustment. 4.12 Poverty Alleviation. To support the country's poverty alleviation objectives, the transport strategy aims to: (a) reduce the cost of transport overall; (b) improve access to isolated areas in particular; and (c) support operations which create job opportunities in both formal and informal sectors. The proposed Credit supports improvements to rural roads based on producers' and traders' priorities which are expected to increase access to inputs and markets, thereby increasing income potential. In particular, reducing seasonal variability in access can mitigate the factors underlying seasonal poverty in rural areas, and increasing reliability of access reduces the vulnerability of the rural population as a whole. The proposed Credit, following the successful example of the ongoing Urban Rehabilitation and Management Project, favors the use of labor-intensive civil works design using low- skilled employment for rural road works and works to be carried out in the city of Cotonou. The Credit also provides direct support to develop the capacity of SMEs in carrying out public sector road maintenance contracts. In its employment-creating aspects, the proposed Credit provides parallel support of Government's unemployment reduction program, launched recently in the context of a comprehensive poverty alleviation strategy, and is consistent with private sector development measures receiving-IDA support under SAL III. D. PROGRAM RISKS 4.13 Given that the program has been designed to build on existing positive initiatives and achievements in the sector, risks relating to the IDA components are limited to new and innovative activities supported by the IDA Credit. These are: (a) inadequate replenishment of Road Fund; (b) slow restructuring of DROA; (c) uncertainty about involvement of local - 40 - communities and NGOs in rural road maintenance; and (d) weak adherence of some parties to the priority program. The first risk involves being able to collect adequate resources for road maintenance; the diversification of funding sources and the fact that authority for direct collection of funds is given to Road Fund staff, along with the gradual reduction of general budget support, are intended to minimize the likelihood of this risk. Also, the diversification of funding sources will focus on road tolls, a financing source of proven practicality and high yields in Benin. 4.14 Concerning the second risk, DROA has led the design of the reorganization process with the support of outside consultants, and therefore the elements of this restructuring have already been accepted and assimilated by DROA staff. The restructuring process was begun from within in 1991 and there has been constant improvement over the period. DROA will also be able to call on specific external assistance as needed, financed by the Credit, of the same kind which it has successfully defined and made use of during the transport strategy preparation and the preparation of the proposed IDA components. A training program, closely linked to technical assistance, will define on an ongoing basis, the types of training required by the new DROA structure. 4.15 The third risk involves mobilization of local communities and the effectiveness of NGOs expected to provide support to these communities. IDA has already acquired some experience in this area from the use of similar arrangements in the Rural Water and Sanitation Project of May 1994 (Credit 2622-BEN), as those proposed for rural road maintenance in this subcomponent. Local and/or international NGOs will be used to offer support to local communities. NGOs will be carefully screened well in advance of field operations, and will be offered external assistance during the first three years of the component. Should local communities' motivation be low in respect of organizing community associations and the collection of local counterpart funds, this will not compromise pilot activity objectives. Rather it would mean a slower pace of implementation of this specific element, and of Government's definition of a new rural road maintenance strategy. 4.16 The fourth risk involves continuous adherence of all partners (Government and donors) financing to the priority program. All donors were involved in the definition of the TSS which proposed the priority program. The main donors commented on the Government Strategy Note. A yearly joint program review and periodic donor round table meetings will ensure continuing donor commitment and dialogue with the Government. - 41 - 5. AGREEMENTS, CONDITIONS AND RECOMMENDATION A. AGREEMENTS REACHED BEFORE NEGOTIATIONS 5.1 Government had taken the following actions prior to negotiations: The policy letter covering the above agreements reached at appraisal was approved by the Government Council on January 31, 1996 and sent to IDA (para. 2.26 and Annex A). This letter confirms the following actions: (a) creation of a port authority with greater powers (para. 2.35); (b) eliminating SOBEMAP's monopoly for container handling (para. 2.35); (c) improving procedures for licensing port operators (para. 2.35); (d) study aimed at liberalization of maritime transport and redefining CNCB's role and fees (para. 2.34); (e) updated five-year priority road works and maintenance program (paras. 3.3 and 3.4); and (f) expansion of CTN to include local community partners (para. 3.33). A draft action plan for Road Fund staff restructuring is also included in the above transport strategy letter (para. 2.31); Copy of the signed contracts for privatization toll collections on the existing road tolls was transmitted to IDA on February 1996 (para. 3.31); The Cotonou traffic plan study under the ongoing Urban Project started in February 1996 (Annex C and para. 3.35). Program Implementation Manual which includes the documents listed in paras. 9, 20, 28 and 35 of Annex C was submitted to IDA (paras. 3.10 and 3.23); and definition of the functions of program coordination committee. Nominate a program management coordinator and the IDA Credit accountant under the responsibility of the Director of MTPT's Cabinet (para. 3.24); Decrees to strengthen PAC's authority over all operators were signed on May 31, 1996. New PAC's statutes and legal texts defining the contract to improve cargo handling in the port and new arrangements for licensing port operators (para. 2.35) have been prepared; Draft revised statutes for the Road Fund (para. 2.29) have been submitted to IDA and MTPT started the restructuring of its staff (para. 2.31). - 42 - B. CONDITIONS TO BE MET 5.2 Conditions of Effectiveness The contract for making the funds of the Port Component available to PAC shall be signed (para 3.26); The contract for making the funds of AGETUR Component available to AGETUR shall be signed (para. 3.34): The Implementation Manual shall be adopted by the Borrower (para. 3.23); The Road Fund should be reorganized as agreed with IDA and its Management Comnmittee has met at least once (paras. 3.30 and 2.31): The Borrower has taken the initial steps agreed upon with the Association for the reorganization of DROA (para. 3.28); Project auditors should be selected to IDA's satisfaction (para. 3.44). 5.3 During Implementation The Borrower shall carry out the DROA reorganization program outlined in ANNEX B3 of the Implementation Manual (para. 3.28); The Borrower shall not undertake new road sector investment works prior to consultation with IDA (para 3.30); The Borrower shall enter into contracts with small enterprises through DROA for the SMEs training and support program (para. 3.31); The Borrower shall open Road Funds and AGETUR Project Accounts, will make first deposits and will replenish them quarterly thereafter (paras. 3.30 and 3.34); As a condition of disbursement of the rural road component, the Borrower shall furnish IDA with evidence that it has established the Conseil Technique National for rural roads with functions and organization acceptable to IDA (para. 3.32); The Borrower will not commence work on rural road maintenance until beneficiaries have carried out all manual routine maintenance and at least 15 percent of road rehabilitation. The Borrower shall enter into these agreements acceptable to IDA through DROA (para 3.32); - 43 - The Borrower shall complete Cotonou urban traffic management plan by March 31, 1997 (para. 3.35). 5.4 Quarterly, Annual and Mid-Term Review The Borrower shall furnish quarterly reports to IDA including review of performance indicators, status of Road Fund and project implementation (para. 3.45); By October 31 of each year, the Borrower shall furnish to IDA for comment an updated priority five-year road program, including a draft work program for the succeeding year (para. 3.30); By October 31 of each year, the Borrower shall furnish to IDA its draft five-year priority port program and updated financial projections (para. 3.27); By November 30 of each year, the Borrower will review with IDA the above draft programs and projections and project implementation (para. 3.9); By December 31 of each year, shall furnish agreed work programs and five-year projections to IDA (para. 3.9); The Borrower will provide annually sufficient budget to cover counterpart contributions and deposit quarterly in the Road Fund CFA franc 150 million and tax or greater amount which may be required for the road component. The Borrower will ensure Road Fund deposits are used for agreed expenditure (para. 3.30); The Borrower shall carry out a Mid-Termn Review with IDA no later than 30 months after effectiveness (para. 3.25); By June of each year, the Borrower shall furnish audit reports for the project accounts for PAC and AGETUR and a financial audit of the Road Fund (paras. 3.30 and 3.44). C. RECOMMENDATION 5.5 Subject to the above assurances and conditions, the proposed project constitutes a suitable basis for an IDA Credit of US$40 million to the Republic of Benin. AYM VEX A NOTE DE STRATEGIE DU GOUVERNEMENT Page I of 6 1. Compte tenu de la situation g6ographique du Benin et de la structure de son economie, le secteur tertiaire, et en particulier le commerce joue un r6le tres important dans l'econoMiie du benin. ce secteur presente. avec le secteur aaricole. des perspectives de croissances importantes. Les activites de commerce et de production agricole sont celles qui generent la majonite des emplois peu qualifies et le developpement de ces activites jouera donc un r6le important dans la reduction de la pauvret. l'amelioration de lFefficacite de l'ensemble des operations de transport est une condition indispensable au developpement du commerce et de I'agriculture. Conscient de ce fait, le Gouvernement du benin a elabore et presente en octobre 1993 a l'ensemble de ses partenaires au developpement sa strategie de transport. Cette strategie a ete etablie apres une vaste consultation des differents acteurs publics et prives. Le gouvernement du Benin confirme son engagement a mettre progressivement en oeuvre cette strategie. 2. Un des principes fondamnentaux de cette strategie est d'accorder aux differents acteurs du secteur des domaines d'intervention dans lesquels ils sont les plus efficaces. Ce principe se traduit par une nouvelle repartition des r6les entre les acteurs publics et prives. Pour obtenir une repartition optimale, le Gouvernement s'engage a entreprendre les reformes decrtes dans la presente et qui reposent sur les principes suivants: - I'amrhioration du recouvrement des couts d'usage de la route et I'accroissement des ressources de 1'entretien des infrastructures publiques par laugmentation de la contribution des usagers - ia prise en compte des preoccupations des usagers dans les decisions relatives au financement et a la gestion des infrastructures publiques; - I'amelioration de lFefficacit6 des efforts financiers en assurant une etroite collaboration et l'echange d'information entre toutes les sources potentielles de financement (Gouvernement, bailleurs de fonds multilateraux et bilateraux, secteur prive, ONG, etc...) - 1'etablissement d'un systeme d'indicateurs qui permettra de suivre 1'evolution des resultats des reformes et de proceder, si necessaire, a des ajustements; - le transfert progressif a des acteurs pnrves de certaines fonctions actuellement assumees par l'administration ou des entites publiques et qui constituent un frein au developpement harmonieux du secteur. - la liberalisation de l'acces contr6le aux professions du secteur, tout en garantissant un niveau de performance acceptable ; et - arnelioration de la secun'te des biens et des personnes. AN.NEXA Secteur Maritime et Portuaire Page 2 of 6 3. Le Gouvernement se propose de poursuivre les reformes entrepnses dans le domaine man'time et portuaire depuis 1984, tout en arneliorant les performances des diff6rents acteurs publics et prives. a) Dans le domaine des transports mantimes. le Benin prendra les dispositions necessaires pour adapter ses procedures de geston des droits de trafic au nouvel environnement sous-regional et international. Les procedures et structures actuelles en matiere de gestion des droits de trafic seront revues sur cette base. En particulier les statuts du CNCB et son fonctionnement devront etre revus pour lui permettre de devenir un organe de representation des chargeurs et de promotion de la chaine des transports. b) Dans le domaine de la gestion portuaire et en vue de remedier aux dysfonctionnements actuels des operations portuaires, il sera constitue une veritable autorite portuaire qui sera dotee des pouvoirs lw permettant d'assumer cette autorite, entrainant de fait une revision des statuts du Port Autonome de Cotonou (PAC). I1 sera alors responsable des performances globales du Port et aura autonrte pour prendre les mesures necessaires en vue de s'assurer que les divers operateurs respectent les objectifs de performance technique auxquels ils seront tenus par contrat. La necessite d'une coordination des partenaires de la communaute portuaire appelle la redvnamisation du comite de coordination et la mise en place d'un observatoire permanent des performances de la chaine portuaire. La manutention des containers et la gestion du terre-plein a conteneurs seront confies a une structure privee regroupant a son capital 1'ensemble des operateurs interesses notamment les armateurs, les transitaires et les manutentionnaires. Les conditions d'acces aux differentes professions dans l'espace portuaire seront redefinies pour garantir F'acces a ces professions aux seuls operateurs presentant des garanties financieres et techniques suffisantes. L'autorite portuaire aura autonte pour contr6ler les performances de tous les operateurs et aura autorite pour prendre des mesures en cas de defaillance. Le raccordement de tous les services au logiciel de gestion portuaire notanument les acteurs publics (CNCB, COBENAM, SOBEMAP et DOUANE) et le fonctionnement correct du comite de coordination faciliteront ce contr6le. La creation d'une zone franche de stockage et de commercialisation des vehicules d'occasion permettra d'amrliorer les perfornances du Port de Cotonou et d'assurer une meilleure securite. Secteur Aerien Le Benin a decide, dans le cadre de sa strat6gie de developpement, d'engager un progranmue de mordernisation, de renforcement et de developpement du secteur aerien en particulier la rehabilitation et le developpement des infrastructures et des installations terminales de la plate-forme aeroportuaire de Cotonou. A.4Y.EX A Page 3 of 6 LEtat ne pouvant plus, par suite des engagements pris en matiere d'endettement exterieur dans le cadre du programmune d'Ajustement Structurel en cours avec le Fonds Mon6taire International et la Banque Mondiale, intervenir directement dans le financement de ces investissements, a dcide de la creation d'une structure de gestion a doniinante piivee, gage d'une gestion professionnelle et dynamique du secteur. Secteur ferroviaire Le Gouvernement poursuivra sa strategie en matiere de developpement de la concurrence intermodale dont l'enjeu est l'amelioration ordonnee du fonctionnement du cordor Benin-Niger par l'ouverture du trafic a une concurrence libre et loyale entre le rail et la route. Les modalites de cette coordination passent par la mise en place de postes de pesage-peage sur l'axe Nord-Sud Cotonou-Parakou et la reorganisation du metier de transporteur de marchandise. Les negociations se poursuivront entre les Etats du Niger et du Benin en vue de la mise en concurrence libre des transporteurs routiers de l'OCBN et de la creation d'une filiale de transport combine rail-route. Les resultats de la mise en oeuvre du plan d'entreprise de I'OCBN feront annuellement, l'objet d'evaluation. Entretien des infrastructures Le Gouvemement confirrne sa volonte de placer en premiere pniorite 1'entretien des infrastructures de transport pour assurer la conservation et le bon fonctionnement des investissements tres importants qu'il a consentis. Pour la mise en oeuvre de cette politique, le Gouvernement va mettre en place un programme quinquennal des transports. ameliorer les outils d'actualisation de ce programme. et arneliorer les procedures de financement et de realisation des programmes d'entretien routier. a) un programnme d'investissement et d'entretien de 1'ensemble des infrastructures de transport a ete e1abore. II place en premiere prion'te l'entretien courant et l'entretien periodique des infrastructures de transports, y compris celles qui sont gerees par les structures autonomes. Ce programme ne comprend que des investissements dont le taux de rentabilite interne est au moins de 12 %. Ce programme sera actualise chaque annee en fonction des besoins resultant de l'evolution de la demande et des recentrages eventuels de la strategie de transport. Ce programme sera discute avec les bailleurs de fonds du secteur lors de tables rondes qui seront organisees au moins tous les deux ans. Le volet transport du programme d'investissement public comprendra prion'tairement les projets inscrits dans le programme quinquennal. b) Le mode de financement de l'entretien routier sera revu pour permettre de garantir les fonds necessaires au financement des programmes d'entretien courant et periodique. Le Fonds Routier (FR) sera constitue en une structure autonome du type Groupement d'lnteret Public (GIP) ou simulaire. Le Fonds Routier financera exclusivement les actiVit6s d'entretien routier sur la base des travaux effectivement AVVEX A realises, le fonctionnement de la structure ainsi constituee, les audits des recettes et des Page 4 of 6 depenses et une participation aux fTais de fonctionnement partiel des services du Ministere des Travaux Publics et des Transports intervenant dans 1'entretien routier, en attendant la mise en place, pour ces dernieres, des budgets de fonctionnement necessaires aux activites du MTPT dans le domaine de la programmation et du suivi des activites d'entretien routier. c) Les recettes du Fonds Routier seront constituees essentiellement par une dotation du budget general de IrEtat, les reversements par le Tresor des taxes sur les carburants et de la taxe de voirie affectees a l'entretien routier par la Loi de Finances, des peages routiers dont la collecte sera confide a des operateurs prives dans le cadre de contrats de collecte adjuges apres mise en concurrence des candidats potentiels. Ia dotation sur le budget general correspondant au quart du montant annuel sera versee au debut de chaque trimestre et les versements des recettes collectees par le Tresor seront effectues dans un delai maximum de deux mois. Les peages seront progressivement generalises sur l'ensemble du reseau bitume pour permettre d'augmenter les recettes de sorte que le F R soit en mesure, a terme de 5 ans, de financer l'ensemble de 1'entretien courant du reseau a charge du MTPT et en prion'te les troncons sur lesquels sont installes des postes de peage ainsi que l'entretien mecanise du reseau rural progressivement recupere et 30 % de ltentretien periodique des routes en terre de ces deux reseaux. Les recettes du F R seront ensuite progressivement augmentees de sorte que le F R soit en mesure, a terme, de financer les 70 % de 1'entretien periodique restant dont le financement sera assure en attendant par le PIP. I est entendu que le financement de l'entretien periodique des routes bitumees continuera d'etre assure par le PIP. d) Des mecanismes permettant d'accroitre progressivement la parficipation des usagers et des ben6ficiaires au travers de leurs representants habilites dans la preparation des programmes d'entretien routier et dans la gestion du F R, seront mis en place. e) Les travaux d'entretien routier realises en regie seront limites a la capacite operationnelle actuelle des equipes soit environ 1 milliard de F CFA par an, en regime de croisiere, et seront payes par le F R sur la base des travaux reellement executes. Le reste des travaux sera confie aux entreprises privees dans le cadre de contrats adjuges apres appels d'offres. L'organisation de la D R 0 A et ses effectifs seront revus pour etre adaptes a ce recentrage de ses activites. Un systeme de support- fornation des PME locales, qui sera gere par les representants de la profession et, a terme entierement finance par les beneficiaires, sera mis en place. Un systeme de primes de production et de performance sera mis en place progressivement pour tous les agents intervenant dans l'entretien routier. Le Ministere des Finances deleguera au MTPT la gestion des marches relatifs a l'entretien routier depuis la procedure d'attribution jusqu'a la signature pour les contrats d'un montant inferieur a 1'equivalent de 500 Millions CFA. Le MF assurera un contr6le des procedures a posterionr. f) La DMTP sera transformee en une societe d'economie mixte de location de materiel ou similaire. La nouvelle structure fonctionnera sur des bases ANViVEX A Page S of 6 purement commerciales dans le respect des regles de concurrence avec les societes privees. g) Le Gouvernement transferera progressivement la gestion du reseau de pistes rurales aux usagers beneficiaires. La politique generale dans ce domaine est basee sur les principes suivants: IEtat participera au financement de la rehabilitation et de l'entretien du reseau qui n'est pas a charge du MTPT a la condition que ce reseau presente un interet conomique demontre et que des partenaires locaux prennent en charge la contrepartie aux financements et les depenses d'entretien courant manuel en assurant l'execution prealable des travaux objets de cette contrepartie; la programnmation et la gestion du reseau sera assuree par les partenaires locaux et le financement de lEtat assure par le biais de lignes speciales au sein du Fonds Routier apres venification de l'eligibilite du programme par un Conseil Technique National constitue des differentes entites administratives concernees (MTPT, MDR, MISAT, FR) et des representants des partenaires locaux. La strategie de transfert sera adaptee au vu des resultats des operations en cours ou a venir et sera ulterieurement applicable a toutes les entites publiques impliquees dans la realisation des travaux sur le reseau rural dans le cadre de financement sur budget national ou sur financement exterieur. Gestion de la circulation et securite routiere Afin de garanir une utilisation optimale des investissements importants consentis dans le domaine des infrastructures routieres dans Cotonou, une attention toute particuliere sera portee a la gestion de ces infrastructures. En particulier, une cellule de gestion de la circulation de Cotonou sera mise en place au sein de la Circonscnrption Urbaine de Cotonou pour concevoir et gerer le plan de circulation sur ['ensemble du reseau urbain. y compn's sur les troncons a charge du MTPT. La coordinanon des actions en la matiere sera assuree par un Comite Technique de Pilotage comprenant le MTPT, le MEHU, le Commissariat de Cotonou et la C U. Conscient des tres lourdes consequences humaines et economique des accidents de la circulation, le Gouvernement compte renforcer de fa,on importante le Centre National de securite Routiere pour lui permettre de renforcer son r6le de contr6le et d'information en faveur d'une reduction des accidents de la route. Ce renforcement permettra de mettre en oeuvre un programme de travaux d'elimination des "points noirs" sur le reseau prioritaire. ANNEXA Page 6 of 6 Respect de 1'eovironnement Tous les travaux de construction et d!entretien routier serQnt soumis a I'application des directives en matere d'environnement qui ont ete elaborees suivant les orientations du PNAE. Ces directives seront adaptecs si necessaare au fur et a mesure de l'evolution des problematiques environnementales du Benin et de 1'experience qui sera tiree de leur application. Pour le Gouvernement de 12 Republique du Benn, Le Ministre des Travaux Pu des Transports k :UEDO~~~DU Table B-I: Matrix of Port Sub-Sector Issues Covernment Response Planned Measures * Incomplete Liberalization of Port * agreement to allow private * suppression of SOBEMAP monopoly on containers handling Operations operators to make their own * SOBEMAP will be held to technical standards arrangements for container * study to review the role of the shippers' council (CNCB) handling * Lack of Coordination among Port * decree setting PAC as the t'ully * PAC's statutes to give it real autilority for overall port operating Operators entrusted poll authority, pending perforimiance formal approval by Council of * licensing regulations and procedures for private operators to be miniisters reviewed * port management software installed since 1992 to monitor performance indicators * Physical Constraints: Port * specific areas have been identified * execuitionl of specific civil worlks to improve port perforimianice and( Saturation in 1998 and allocated to the handling of postpone the need for extending the port surface used cars in the port facilities * Low User Involvement: Existing * decree establishing users * creation of a Techinical Consulting Commilittee to assist in the Committees Inefficient comm1littee involved in decisions mission coordination on port operations and facilitation * creation of an information base for monitoring operations performance * Chamber of Commerce to acquire the means and capacity to improve the effectiveness of its role * Weak Port Authiority Finances * agreement betweent CAA and PAC * freezing off payroll expenditures at CFA franc 1,060 M until the to reschedule the reimbursement of year 2000 long term debt * setting aside about CFA franc 270 M per year for periodic and * downsizing ofstaff in 1991-1992 spending CFA franc 150 M a year in routine maintenance (50% reduictioni) * limiting external borrowings to CFA franc 3MM over the next six years * limiting investment expenditures to the strict minimum required for operational performance to improve * if necessary, increases in port fees to bring sufficient revenues to cover for all maintenance related expenses * creationl and effective use of workable and tailored tools for accounting managemenit, including staff training IV Table B-2: Matrix of Road Sub-Sector Management Issues Government Response Planned Measures * improvements in data quality and program preparation * Limited capacity in updating of . five-year priority program . upgrading of CPC staff skills in updating of the transport strategy priority program, strategy oversight prepared in October 1993 as part adith or investmen pram and absorptive capacity for of the transport sector strategy and and the priority pgvestment program investment updated in July 1994 * five-year priority program to be reviewed at a Donor Round Table every other year * Poor quality and analysis capacity of * restaffing of BGR in 1992 . improvement of BGR capacity: (a) restructuring the architecture of road transport statistics: data the data base; (b) improve data analysis; (c) decentralization of the collection and programming data collection ; and (d) strengthening BGR's tools and staff skills * improvement of DTT capacity : (a) replacement of DTT's computer hardware and software ; (b) staff training ; and (c) study to propose measures to improve the quality and complete range of data . Reduced performance in . reorganization of DROA * creation of a procurement unit within DROA with appropriate staff procurement management and training . Limited capacity in implementation * 50% of periodic maintenance and . road maintenance to be carried out by force account will be limited of road maintenance programs 25% of routine maintenance to CFAF I MM a year executed by private enterprises * improve maintenance contract management tools * establishment of a "Sous * set up the drainage structure management unit within DROA Direction" in charge of road * DROA reorganization maintenance adequately staffed * building repairs and equipment purchase (vehicles and computers) * replacement of regional road * increase absorptive capacity of private sector in road maintenance directorates by regional service for * delegation of procurement and contract management to DROA road maintenance * payment of force account activities on the basis of outputs * Inadequate staffing: employment . full assessment of the staff a DROA support by short term technical assistance status, overstaffing, and qualitative situation in 1992 * employees laid off and re-hired as single man contractors and quantitative gaps * action plan prepared in 1994 * Inadequate staff management * * creation of a staff management unit within DROA, reorganization systems and staff training and reorientation of CRP * confusion on status and functions of . clarification of the status of the * Road Fund to become an autonomous agency the Road Fund Road Fund * essential function to define conditions for financing of road * reorganization of the Road Fund maintenance works (functions and staffing) * composition of the Board will change to include users groups * status of Road Fund staff to be redefined and formalized Matrix of Road Sub-Sector Management (cont.) inadequate funding for road * collection of existing road tolls * collection of road tolls will be extended to Cotonou-Porto Novo and maintenance (Mono-Sazue and North-South to the rest of the paved network Road) have been contracted to * Road Fund income will be reserved for financing road maintenance private operators works approved in the road maintenance program * three funding sources designated * MTPT overheads will be funded by government operating budget government budget allocation, * Road Fund will temporarily finance operating costs for funds collected by Treasury for programming and supervision of maintenance activities, until Road Fund and funds from users government budget can support it through tolls on paved roads * monthly financial summary will be produced to monitor financial * funds from road tax increased from performance indicators .15% to .85% of all exported * Road Fund accounting system will separately show different types merchandise of works by network * road accident rate in Benin is very * National Center for Road Safety * improve cooperation with police authorities, tax authorities, and high in relation to the fleet and the was established in 1988 to design insurance companies to improve the percentage of fleet passing number of vehicle/km driven and implement road safety policy inspection * analyze continuously accident statistics to provide a tool for determining the most urgent needs for improvement in road safety * expansion of CNSR's capacity for vehicle inspection and driver education Table B-3: Matrix of SME Sub-Sector Issues Government Response Planned Measures * limited market size * remove economic constraints by * increase allocation of funds for road maintenance providing a stable market and formal regulation * weak institutional environment * remove institutional constraints by * responsible for finalizing the training implementation manual, creating of a Strategy Committee drawing up a short list of potential training program managers, approving proposed subcontractors, updating the list of training and support activities, determining the number of initial training grants and setting up costs sharing structures oo0 Matrix of SME Sub-Sector (cont.) * limited absorptive capacity * upgrade staff performance in * ease access to public contracts by new procedures for contract award mechanized works and higher and payments quality works * ease access to heavy equipment by transforming DMTP into a * training and support for SMEs to mixed-economy company expand individual turnover * training program managed by a Strategy Committee Table B-4: Matrix of Rural Road Sub-Sector Issues Government Response Planned Measures * financing gap in the maintenance of * external financing has been sought * contributions from local partners for multiyear maintenance program rural roads to cover the gap * government financial support for this program with consolidated * rehabilitation and maintenance of budget constraints rural roads jointly financed by * local partners will cover a minimum of 10% of the total costs of government, local partners and works which result in road service improvements. donors * local partners will clear the land and terrace it for rehabilitation works * government will finance additional rehabilitation works and periodic maintenance * local partners will execute routine manual road maintenance on an ongoing basis * government will finance mechanized routine maintenance * rural strategy to implement a * government contribution to provide level of service relative to lack of planning for maintenance and social-economic interest poor coordination of rural policy of rehabilitation and investments maintenance * no coordination between the many * pilot operation in six geographic * assess the capacity and motivation of local partners to organize actors: several strategies, zones to define a workable maintenance activities approaches and programs approach to creating sustainable * assess their ability to assemble the resources in cash or kind for the local implementation of road above purpose maintenance by local partners * establish specific procedures for the coordination and panicipation of planning and execution of maintenance programs Matrix of Rural Road Sub-Sector (cont.) * weak institutional arrangements * Conseil Technique National (CTN) * close coordination of construction and maintenance of rural roads established for the coordination of and their conformity with government policies rural roads maintenanice * ensure effective transfer of government funds allocated to such * DROA to recruit an international maintenance through the Road Fund NGO with confirmed successful * supervision of the pilot operation by reviewing applications and experience in community selecting programs from eligible local partners participation * evaluate the results ot'the pilot operation and recommend actions to improve results * recruit a local NGO to lead pilot operation * dissemination of information about the pilot program * assistance to the local partner in completing required steps to become a formal legal entity and program participant Table B-5: Matrix of llrban Road and Traffic Managemenit Sub-Sectors Issues Government Response Planned Measures * Cotonou urban road nietwork is * since 1991 major int'rastrucLure 0* improvements in data quality and prograam preparation frequently congesred projects to increase capaiityr ctave * upgrading of CPC staff skills in updatinig oftthe transport strategy foencto increase sca it, hve and the priority investment program been completed or a* program to be reviewed at a Donor Round Table on June Ist of for completion soon every other year . creation of a trat'fic management unit within Cotonou Municipality * no formal structures for works * a Technical Steering Committee c programming, trafric management or has been created which includes * design and implementation of a traffic management plan associated funding public actors in traffic and infrastructure * a traffic study was commissioned in April 1995 to pinpoint problems and recommend remedial actions * intersections are not adequately * a traffic diagnosis has been * redesign and reconfigure 10 intersections in urban centers designed, signalization and traffic completed in 1994 * redirect the flow of traffic in compliance with the tratfic regulation haphazard, and parking management plan poorly located * relocate parking space * renovation and improvement of bus and trucks stations * traffic accident rates are very high * ongoing upgrading of the urban * construction of reserved lanes for two-wheelers road network * involvement of road users in the decision-making * rules of the road are not followed * effective enforcement of urban traffic rules on the roads through police training t THE DIRECTORATE OF ROADS AND BRIDGES CURRENT ORGANIZATIONAL CHART LEGEND: D BEP Bureau Etudes et de Planification BGR Bureau de Gestion Routiere CM Cellule des Marches COA Cellule Ourages d'Act CPR Cellule Pistes Rurales CRP Centre Recyclage et Perfectionnement DA Division Administrative SDER DAF Division Administrative et Financiere DAG Division Administration et Gestion DAP Division Analyse et Programmation IDB DUF FDA-PI FD AFl FSRE DB Division des Brigades DE Division Economie DEC Division Etudes et Contr6le DF Division Financiere BGR CRP SRDR SERC SAF DFGC Division Formation Genie Civil DFM Division Formation Mecanique III DROA Directeur Routes et Ouvrages d'Art L3 [ DA E| DFGC DAF DT DE [ | D FE DRPS| D DA DROS Div. Reglementation, Ouvrages Specifiques DT Di%ision Technique DTE Division Trafic et Economie DUF Division Unites de Fabrication PROPOSED ORGANIZATIONAL CHART S.OP. Service Operationalle SA Secretariat Administratif SAF Service Administratif et Financier SDAF Sous-Direction Administrative et Financicre DROA SDER Sous-Direction de l'Entretien Routier SDPP Sous Direction Planification et Programmation SDTN Sous-Direction Travaux Neufo CPI SEP Service Etude et Projet SERC Service Etudes, Reglementation et Contr6le SGCE Service Gestion Contrat Entreprise c m - SGCR Service Gestion Contrat Regie SGM Service Gestion des Marches SLC Service Logistique et Comptable SP Secretariat Particulier SP Service Programmation SDPP SDAF SPM Service Passation Marche SRDR Service des Routes de Desserne Rurales SRER Service Regional de I'Entrctien Routier B B E P S SGC S S P 5 E P 0 t: ANNEX B ROAD FUND RESOURCES AND FINANCING Page 7 of 18 Table B-6: Benin : Routine Road Maintenance Requirements: Estimated Total and Targets for MTPT Network, 1995 through 2000 (CFA franc millions, including taxes) 1996 1997 1998 1999 2000 MTPT Earth Network * rehabilitated before 1996 1,403 1,394 1.417 1,371 1,304 * to be rehabilitated 1996-97 110 219 219 219 * reclassified from rural 63 125 125 125 Subtotal, Earth Network 1,403 1,567 1,761 1,715 1,648 Rural Roads 60 120 180 240 300 Paved Roads 534 350 395 680 801 TOTAL 1,997 2,036 2,336 2,635 2,749 Table B-7: Benin: Road Fund Income Forecast, 1995-2000 (in CFA franc millions, 1994 base costs) Income Source 1995 1996 1997 1998 1999 2000 Central Government subsidy (transfer) 600 600 600 600 600 600 Existing toll stations 240 240 240 240 240 240 Fuel Tax 350 350 350 350 350 350 New toll stations 160 160 585 1,010 1,010 Roadtax 1,100 1,100 1,100 1,100 1,100 1,100 Other sources 80 80 80 80 80 80 TOTAL 2,370 2,530 2,530 2,955 3,380 3,380 Table B-8: Benin: Road Fund, Expenditure Forecast, 1995-2000 (in CFA franc millions) Expenditure Category 1995 1996 1997 1998 1999 2000 TOTAL Investment 190 190 Debt service 180 180 360 Road Fund operating cost 20 20 20 20 20 100 Payroll 230 230 Staff restructuring 470 130 600 Routine Maintenance 1,100 1,500 2,036 2,336 2,635 2,749 12,356 (percent of total covered) (55 %) (74%) (100%) (100%) (100%) (100%) Periodic maintenance 500 300 300 520 670 2,304 MTPT supervision 200 200 200 200 200 1,000 TOTAL 2,370 2,530 2,530 2,950 3,380 3,380 Table B-9: PORT AtlITONOME DE COTONOU PROJECTED FINANCIAL STATEMENTS (F CFA '000) P'rojectced 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Number ofShips 1,136 1,275 1.276 1,277 1,283 1,292 1,299 1,307 1,314 1,322 Annual Percent. Growth 12.2% 0.1% 0.1% 0.5% 0.7% 0.5% 0.6% 0.6% 0.6% Merchandise Sold 2,025 2,107 2,206 2,303 2,427 2,562 2,703 2,843 2,962 3,082 Annuul Percent. Growth 4.0% 4.7% 4.4% 5.4% 5.6% 5.5% 5.2% 4.2% 4.0% Total Operating Revenues 6.061,600 6,152,928 6,321.061 6,515,712 6.753,208 7,017,528 7,242,955 7,467,151 7,661,268 7.855,385 Non Operatng Revenues 574,000 161,000 161,000 161,000 161.000 161,000 161,000 161,000 161,000 161,000 Total Revenues 6,635,600 6,313,928 6,482,061 6,676,712 6,914,208 7,178.528 7.403.955 7,628,151 7,822,268 8,016,385 Total Operating Expenses 5,054,255 4,787,284 4,902,407 5.123,434 5,369,162 5,623,937 5,801,205 5,975,935 6,160,790 6,356,376 Other Expenses 1,406,911 1,392,593 1,432,002 1,437,458 1,424,387 851,414 859.249 863,933 853,340 838.669 Total Costs 6,461,166 6,179,877 6,334,409 6.560,892 6,793,549 6,475,351 6,660,454 6,839,868 7,014,130 7,195,045 Net Income 174,434 134,051 147,653 115.820 120,659 703,177 743,501 788,283 808.138 821.340 Total Owners' Equity 10,491,434 10,625,485 10,773.138 10.888,958 11,009,617 11.712,794 12,456,296 13,244,579 14,052,717 14,874,057 Long Term Debt 15,061.953 14,926,826 14,851,960 14,691,094 13,931.015 13,149,705 12,368,395 11,507,013 10,565,558 9.624,104 Internally Generated Funds 4.701,268 2,425,390 2,277,903 2,152,384 2,165.644 3,230,820 3,468,351 3,524.169 3,387,902 3,392,433 Debt Service - Principal (1,016,002) (958.127) (906,866) (906,866) (844,079) (781,310) (781,310) (861,382) (941.454) (941,454) - Interest (250.000) (402,433) (433,505) (458.471) (442,435) (420.435) (403,554) (380,792) (358,029) (335,267) Investments (2.913,060) (1,816.000) (1.322,000) (1,106.000) (869,000) (850,000) (352,000) - - Working Capital (1,244,834) (101,731) 24,079 90,664 96.782 37,854 (47,788) (47,964) 27,800 27,800 Net Surplus/(Deficit) (722,628) (29.901) 471,611 517,711 190,912 1,216,929 1,883,699 2,234,031 2,116,219 2,143,512 Cash Balance (1,051,003) (706,064) (208,350) 216,375 279,335 871,284 2,210.889 3,838,179 5,259,087 6.693.197 Retum on Equity Share Capital 2% 1% 1% 1% 1% 7% 7% 8% 8% 8% Current Rabio (times) 0.5 0 6 0.9 1 2 1.2 1.6 2.1 2.8 3.4 4.0 Total Liabilites % Total Capitalizabon 62% 61% 61% 60% 59% 56% 54% 51% 48% 44% See details in Project File X < KEY PERFORMANCE INDICATORS Project Implementation Component Action Date Overall Project Annual updating of the Five Year rolling program December 15 of each year Donor meetings November 1996, 1998 and 2000 Quarterly reports One month after the end of each quarter A- Port Operations and Management Full accounting system installed June 1, 1997 Preparation of maintenance program and budget October 31 of each year Establishment of a private container handling company December 31, 1996 Connection of all port operators to Portware December 31, 1996 Full implementation of port coordination tools December 3 1, 1996 Reform of CNCB December 31, 1996 B- Road Rep., Maint., Saf. and Managt Completion of DROA reorganization July 3 1, 1997 Signature of the contract for SMEs support unit July 30, 1997 Preparation of Road Maintenance Program and budget October 31 of each year Signature of the contracts for works with SMES 1.5 month after bid submission Payment of invoices to SMEs 30 days after the end of the month C- Rural Road Rehabilitation and Management Definition of road selection procedures and criteria September 17, 1997 Signature of the first convention with local entity November 30, 1997 D- Urban Traffic Management Definition of work selection procedures February 28, 1997 Completion of the traffic management plan March 31, 1997 SECTOR PERFORMANCE INDICATORS Performance Indicator 1996 1997 1998 1999 2000 Port Sector . Traffic (million of t.) 2,107 2,206 2,303 2,427 2,562 . Maintenance expenses (CFAF M) 150 150 150 150 150 . Estimate for port saturation 2,250 2, 400 2,500 2,600 2,600 MTPT Road Sector . Road Fund resources (CFAF M) 2,530 2,530 2,955 3,380 3,380 . Routine maintenance expenses (CFAF M) 1,500 2,036 2,336 2,635 2,749 . Periodic maintenance by RF (CFAF M) 500 274 394 525 611 . Km of regravelling 500 500 500 568 . Earth road rehabilitation km 300 311 311 300 . Maintenance needs covered 70% 100% 100% 100% 100% . Private sector capacity (CFAF M) 700 1,200 1,900 2,500 3,200 .Road condition: % below NS 3 50 40 20 10 0 Cotonou Traffic . Trip duration for Godomey-SOBEBRA (minutes) 45 35 30 25 22 Rural Road Sub-Sector Km transferred to local partner 0 50 150 250 300 'IV ANNEX B Page 11 of 18 REORGANIZATION OF DROA AND ROAD MAINTENANCE (Supplemental Letter No. 2) (1) approval by the Management Committee of the internal regulations and procedural manual of the Road Fund by February 28, 1997; (2) setting in place the proceedings within the MTPT relating to the evaluation and awarding of contracts for an amount of less than CFAF 500,000,000 by February 28, 1997; (3) setting in place the proceedings allowing the financing of road maintenance works executed by force account based on the outputs, by February 28, 1997; (4) finalization of redeployment of DROA's managing staff in conformity with the new organization of DROA by March 31, 1997; (5) hiring managing staff of the Road Fund by March 31, 1997; and (6) appointment of the new Director of the Road Fund, by the Chairman of the Management Committee of the Road Fund, by July 31, 1997. REPUBLIC OF BENIN TRANSPORT SECTOR INVESTMENT PROGRAM Summary of Project Costs CFAF '000s USS '000s CFAF '000s USS '000s Project Components Local I Foreign I Total Local |Foreign| Total Local I Foreign I Total Local |Foreign| I ocal orciUt Base Cost T nIclud. Contingencies t Port Operatlons & anagement 1,201,500 1,213,500 2.415,000 2,403 2,427 4,830 1,447,095 1,405,257 2,S52,351 2,894 2,S11 5,705 B. Road Repair, laIntenance, Safety 6,299,750 7,339,750 13,639,500 12,600 14,680 27,279 7,566,257 8,484,070 16,050,327 15,133 16,968 32,101 and Network Nlanagement C Rural Road Rehabilitation and 559,400 737,600 1,297,000 1,119 1,475 2,594 687,995 853,725 1,541,720 1,376 1,707 3,083 Management D. Urban Road Improvements and 874,960 950,640 1,825,600 1,750 1,901 3,651 1,067,316 1,098,143 2,165,459 2,135 2,196 4,331 Traffic Management _ OTAL BASE COST X,935,610 10,241,490 19,177,100 17,871 20,483 38,354 OTAL PHYSICAL CONTINGENCIES 859,472 790,006 1,649,478 1,719 1,580 3,299 OTAL PRICE CONTINGENCIES 973,581 809,698 1,783,279 1,947 1,619 3,56 _ ITOTAL PROJECT COST 110,768,6621 11,841,1951 22,609,8571 21,537 23,6821 452201 10,768,6621 11,841,195 22,609,857121,537123,6821 45,22N1 Note: Discrepancy in figures ia due to rounding. COMPARATIVE DISBURSEMENT PROFILE 900%0 70%4 60% SA+stm 70% -f 40% -'--Transport Profil 200h6 50% 1 2 3 4 5 6 7 S 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Quarters ANNEX B Page 13 of 18 REPUBLIC OF BENIN TRANSPORT SECTOR INVESTNIENT PROGRAM Detailed Project Financing Financing Plan (USS '000s) Project Components IDA Other ______________________________________ Credit Donors Govt Benef PAC Total A. Port Operations & Managenment 1. Works 3,687 0 0 0 410 4,097 2. Studies 55S 0 0 0 0 558 3. Technical Assistance & Training 1,049 0 0 0 0 1,049 ITOTAL COiMIPONENT A 5.295 0 0 0 410 5,705| B. Road Repair, laintenance, Salety and Network Nianagemrent 1. Works - EPC 6,381 0 709 0 0 7,090 - Bridge Repairs & Drainage 6,130 0 681 0 0 6,811 - Periodic Maintenance 6,188 0 2.289 0 0 8,477 - Building Upgrading 257 0 29 0 0 286 - Safety Works 1.119 0 124 0 0 1,243 2. Feasibility Studies 229 0 0 0 0 229 3. Technical AssistanceiTraining - DROA 1,958 0 0 0 0 1,958 -NITPT 165 0 0 0 0 165 -DTT 165 0 0 0 0 165 -CNSR 470 0 0 0 0 470 -Audit 171 0 0 0 0 171 - S%IES Promotioni 1.544 0 0 316 0 1,860 4. Studies and Supervision 2,278 0 0 0 0 2,278 5. Equipment -%ITPT 739 0 130 0 0 870 -CNSR 23 0 4 0 0 27 fOTAL COMPONENT B 27.818 0 3,966 316 0 32,101| C. Rui-al Road Reliabilitatioli wnd Manazemnent 1. Rural Road Works 1.832 0 204 0 0 2,035 2. Stipport by NGOs 688 0 0 0 0 688 3. Tecluiical Assistance 360 0 0 0 0 360 ITOTAL COiNIPONENT C' 2.880 0 204 0 0 3,083 D. Urban Road Inipr-ovemenits and Traflic Mana2emireint 1. Works - DROA 905 0 101 0 0 1,005 - AGETL'R 1,924 0 214 0 0 2,138 2. Studies 626 0 0 0 0 626 3. Support by NGOs 132 0 0 0 0 132 4. Eng. Studies & Supervision -DROA 92 0 0 0 0 92 -AGETUR 183 0 0 0 0 183 5. Equipment 54 0 9 0 0 63 6. Operating Costs - AGETUR 91 0 0 0 0 91 TOTAL CONIIIONENT D 4.007 0 324 0 0 4,331 [TOTAL PR)JEcr cosT .[ 40,U00 0 4,494 316 410 45"20J Note: Discrepanncy ii ligirres is due to r ouwdinig. REPUBLIC OF BEN1N ANNEX B TRANSPORT SECTOR INVESTMENT PROGRAM Pagre 14 of 18 Detailed Project Costs (USS '000) Ccal CF'OOOs USS'O U0s CFAFF OOUs USS'UOOs Project Components l Local | For Total Local jForeignj Total Local Foreign I Total Local |oreign| Total *Base Cost Includi Contii8encies .. Port Operations & Management 1. Works 1,037,000 663,000 1,700,000 2,074 1,326 3,400 1,259,269 789,164 2,048.434 2.519 1.578 4,097 2. Studies 25,000 225,000 250,000 50 450 500 28,354 250,831 279,185 57 502 558 3. Technical Assistance&Training 139.500 325.500 465,000 279 651 930 159.472 365.261 524.733 319 731 1.049 BASE COST 1,201,500 1,213,500 2,415,000 2,403 2,427 4,830 hysical Contingencies 117.317 97,273 214,590 235 195 429 Price Contingencies 128277 94,484 222.761 257 189 446 TOTAL CONIPONENT A 1,447,095 1,405.257 2.XS2,351 2.894 2,811 5.7 1.,47,095 1,405.257 2,S52,3511 2,894 2,811 5.70 B. Road Repair, Mlaintenance, Safety and Network Management I. Works - EPC 1,794,600 1,196,400 2.991,000 3,589 2,393 5,982 2,141,004 1,404,094 3,545.098 4,282 2,808 7,090 - Bridge Repairs& Drainage 1,404,500 1,404,500 2,809,000 2,809 2,809 5,618 1,720,392 1,685,266 3,405,657 3,441 3,371 6,811 Periodic Maintenance 1,750,000 1,750,000 3,500,000 3,500 3,500 7,000 2,140,956 2,097,613 4.238.568 4,282 4,195 8,477 - Building Upgrading 72,000 48,000 120,000 144 96 240 86,325 56,568 142,893 173 113 286 - Safety Works 250,000 250,000 500,000 500 500 1,000 314,631 306,825 621,456 629 614 1.243 2. Feasibility Studies 10,000 90,000 100,000 20 ISO 200 11,689 102,895 114,584 23 206 229 3. Technical Assistance/Training - DROA 186,600 746,400 933,000 373 1,493 1,866 198,109 781,010 979,119 396 1,562 1.95 - NITPT 15,000 60,000 75,000 30 120 150 16,724 65,621 82,345 33 131 165 *DTT 15,000 60,000 75,000 30 120 150 16,724 65,621 82,345 33 131 165 CNSR 64,050 149,450 2 13,500 128 299 427 71,538 163,700 235,239 143 327 470 - Audit 8.000 72,000 80,000 16 144 160 8,706 76,926 85,633 17 154 I7-1 . SMES Promotion 486,600 324,400 811.000 973 649 1,622 562,589 367,481 930,069 1,125 735 1,860 4. StudiesandSupervision 200,400 801,600 1,002,000 401 1.603 2,004 231,457 907,340 1.138,797 463 1,815 2.278 5. Equipment - MTPT 41.700 375,300 417.000 83 751 834 44,041 390,923 434,9641 88 782 870 . CNSR 1,300 I 1,1G 13,000 3 23 26 1,373 12.187 13,560 3 24 27 BASE COST 6,299,750 7,339,750 13,639,500 12.600 14.680 27,279 Physical Contingencies 616,552 577,568 1.194,120 1.233 1,155 2,388 Price Contingencies 649.955 566,752 1.2 16,707 1,300 1,134 2.433 I _ _ _ TOTAL COINIPONENT B 7,566.257 8.484,070 16,050.327 15.133 16.96X 32,101 7.566.257 8,484,070 16,050,327 15.133 16,968 32.101 C. Rus-Ad Road RehabIlitation and Managemaent 1. Rural Road Works 496,200 330,800 827,000 992 662 1,654 616,559 401,087 1,017,646 1,233 802 2,03S5 2. Support by NGOs 30,800 277.200 308,000 62 554 616 34,932 309.024 343,955 70 618 688 3. Technical Assistance 32.400 129.600 162,000 65 259 324 36,504 143,614 180,118 73 287 360 BASE COST 559,400 737.600 1.297,000 1,119 1,475 2.594 Physical Conitingencies 52.683 53,03 1 105,714 105 106 211 |Price Contingencies 75,912 63.094 139.006 152 126 278 rOTAL COMPONENT C -1 687.9951 853,7251 1,541,720| 1,3761 1,707 3,083 687,995 853,725| 1,541,7201 1,376| 1,707j 3.083 |D. Urban Road lniprovenikeits and Trafric Manasenzent 1. Works DROA 252,000 168.000 420,000 504 336 840 304,601 -198,147 502.748 609 396 1.005 - AGETUR 521.160 347,440 868,600 1,042 695 1,737 647,606 421,276 1,068,883 1,295 843 2.138 2. Studies 28,600| 257,400 286,000 57 515 572 31,761 281,450 313,212 64 563 626 3. SupportbyNGOs 6,000 54.000 60,000 12 108 120 6,711 59,224 65,935 13 118 132 4. Eng. Studies & Supervision DROA 8.200 32,800 41,000 16 66 82 9,367 36,729 46,097 19 73 92 AGETUR 16,000 64,000 80,000 32 128 160 18.654 73,010 91,664 37 146 183 5. Equipment 3.000 27.000 30.000 6 54 60 3,192 28,307 31,499 6 57 63 6. Operating Costs - AGETUTR 40.000 0 40,000 801 0 80 45,422 0 45,422 91 0 91 BASE COST 874,960 950,640 1,825,600 1,750 1,901 3,651 Physical Contingencies 72.919 62,135 135.054 146 124 270 Price Contingencies 119.436 85.369 204,805 239 171, 410 ||OTAL COMPONENT D 1,067316| 1U98.143 2,165,459 2,135 2.1'6| 4I33 1067,316| 1.098.143| 2,165,4591 2,135| 2.1961 4,331 [rorAL BASE CVS'I' 8.935,6101 10241,4'90 19,177,100 17.871 20.483 38,354 [rOTAL PIIYSICAL CONTINCENCIES 839,472 790,006 1,649,478 1,719 1,580 3.299 TOTAL PRICE CONTINCENCIES || 973.581 809.6981 1,783,279 1,947 1.619| 3.567 _ ________ |frorAL I'ROJEC'T COST ][ I0,768,662 11.41,1'J 22,609,857 21,i37 23,682 45.22t11 IU,768.662 [11,841,1 95S 22,609,8571 21,5371 23,6821 45.220 Note: Discrepwicy in ligures is due to rowadisng. ANINEX B Page 15 of 18 REPUBLIC OF BENIN TRANSPORT SECTOR INVESTAIENT PROGRANI Detailed Procurenmel1t Mlethod Total Project C'ost of which IDA Financed I Project Components ICB | NCB | OT | TOrALj| ICB NC'B OTH TOTAL Port Oper.ations & Nlaiiagenieiit 1. Works 3,512 585 0 4,097 3,161 526 0 3.687 2. Studies 0 0 558 558 0 0 558 558 3. Technical Assistance & Training O 0 1.049 1 049 O0 1,049 1.049 TOTAL COMNiPONENT A 3.512 585 1,608 5,705 3,161 526 1,608 5,295 B. Road Repair, N%laiteiiance, Saf'ety and Network Manageniit 1. Works - EPC 4.816 2.275 0 7.090 4,334 2,047 0 6,381 - Bridge Repairs & Drainage 4.626 2,185 0 6,811 4,164 1,967 0 6,130 - Periodic Maintenance 5,758 2,719 0 8.477 4.203 1,985 0 6,188 - Building Upgrading 194 92 0 286 175 83 0 257 - Safety Works 844 399 0 1,243 760 359 0 1,119 2. Feasibility Studies 0 0 229 229 0 0 229 229 3. Tecniical AssistuinceTraining - DROA 0 0 1.958 1,958 0 0 1,958 1,958 *MTPT 0 0 165 165 0 0 165 165 - DTT 0 0 165 165 0 0 165 165 - CNSR 0 0 47i0 470 0 0 470 470 - Audit 0 0 171 171 0 0 171 171 - SMIES Promotion 0 0 1,860 1.860 0 0 1,544 1.544 4. Studies and Supervision 0 0 2.27S 2.278 0 0 2.278 2.278 5. Equipment - MTPT 719 139 12 870 611 118 10 739 - CNSR 0 0 27 27 0 0 23 23 TOTAL CONIPONENT 1B 16,956 7,8U9 7,336 32,101 14,246 6,5S9 7,013 27,818 C. Rural Road Rehalbilitiona ajid I .,mag:tenient II11 1. Rural Road Works ol 2.035 0 2,035 0 1,S32 0 1,832 2. Support by NGOs 0! 0 688 688 0 0 688 688 3. Techiical Assistance ol 0 360 360 0 0 360 360 rOTAL COMPONENT C u 2.035| 1,0481 3,U03| 0 o 1.8321 1,048| 2,880, D). Urban Road Iniprovements and Trafflc Marnagemient 1. Works - DROA 314 692 0 1,005 282 622 0 905 - AGETUR 667 1,471 0 2,138 601 1,323 0 1,924 2. Studies 0 0 626 626 0 0 626 626 3. Support by NGOs 0 0 132 132 0 0 132 132 4. Eng. Studies & Supervision - DROA 0 0 92 92 0 0 92 92 - AGETUR 0 0 183 183 0 0 183 183 5. Equipment 0 0 63 63 0 0 54 54 6. Operating Costs- AGETUR 0 0 91 91 0 0 91 91 TOTAL CONIPONENT D 9811 2,162 1,18 4,331 883 1.946| 1.178 4,007 ITOTAL FiouECTr cosr J[ 21,44-9i 12,5911 11,179 45,220 18.2901 10.8631 10,8481 40,00011 Note: Discrepancy hi tigur es is due to r owadling. ANNEX B Page 16 of 18 IDA SUPERVISION INPUT INTO KEY ACTIVITIES Missions Activities Expected Skills Staff Requirements Input (SW) Mission I Attend donor meeting to be held at the same time First Year Supervision mission Procurement 2 Project launching Engineering 2 Start of traffic plan study Urban Transport Specialist 2 Procurement review for equipment, studies, TA, training Economics 2 and civil works Financial Analysis 2 Training program discussion Training 2 12 Mission 2 Supervision mission to review start-up Engineering 2 First Year Implementation of civil works, procurement services Procurement I Equipment Financial Analysis 2 Follow-up on traffic plan Economics 3 Review of Port performances and discuss priority Port Specialist 2 programme for Port and Roads. 10 Mission 3 Supervision mission to review executing agencies Engineering 2 Second Year Performance and audits Financial Analysis 2 Technical assistance performance, training Training 2 Implementation and works execution, first result of rural Agro Economist 2 road pilot operation 8 Mission 4 Supervision mission to review overall progress of the Engineering 2 Second Year project with emphasis on Economics 2 road maintenance Urban Planning 2 donors coordination and port performances Financial Analyst 2 8 Mission 5 Supervision mission to review overall progress of the Engineering 2 Second Year project. Financial Analyst 2 4 Following years Same pattems as for Missions 3 and 4 (including one to Year 3-20 prepare Mid-term review meeting to be held at the Year 4-20 beginning of the third year) ANNEX B Page 17 of 18 Estimated Disbursement Schedule for IDA Credit Cumulative Cumulative Cumulative Quarter Disbursements Disbursements Disbursements Disbursements (US$ millions) (US$ millions) % (Profile) FY97 30 Sept. '96 0.00 0.00 0% 0% 31 Dec. '96 0.00 0.00 0% 0% 31 Mar. '97 0.80 0.80 2% 2% 30 June '97 1.61 2.41 6% 4% FY98 30 Sept. '97 2.01 4.42 11% 6% 31 Dec. '97 2.01 6.43 16% 12% 31 Mar. '98 2.93 9.36 23% 18% 30 June '98 2.93 12.29 31% 27% FY99 30 Sept. '98 2.93 15.22 38% 34% 31 Dec. '98 2.93 18.15 45% 42% 31 Mar. '99 2.37 20.52 51% 50% 30 June '99 2.36 22.88 57% 56% FY2000 30 Sept. '99 2.37 25.25 63% 62% 31 Dec. '99 2.36 27.61 69% 70% 31 Mar. '00 2.00 29.61 74% 78% 30 June '01 2.00 31.61 79% 82% FY2001 30 Sept. '00 2.00 33.61 84% 86% 31 Dec. '00 2.00 35.61 89% 86% 31 Mar. '01 1.47 37.08 93% 86% 30 June '02 1.46 38.54 96% 90% FY2002 30 Sept. '01 0.97 39.51 99% 94% 31 Dec. '01 0.49 40.00 100% 96% 31 Mar. '02 -- -- -- 98% 30 June '02 -- -- 98% FY2003 30 Sept. '02 -- -- -- 98% 31 Dec. '02 -- -- -- 98% 31 Mar. '03 -- -- -- 98% 30 June '03 -- -- -- 100% AANNEX B Page 18 of 18 REPUBILIC Of BENtN Transpovl S eota Program Pr,ot Imd zorrMmO Soheore 1997 1961999 2009 20 Io TAM Naw 0 r3 4|Q-b1 0t2 003t 04 0 1 Q 01Qr3021t4011t 0 !Qt, 2Q, 3|0tb 4001 100 21t, 3]Qt 40tr4 0 0Q 2 Lmpbmu"d- DvsiA I COMPONENT A. ton * 12 2 Work 2 Bifl Coona Awrxd i./___ 4 Sopawio A T-L A.i_ 6 TA, Stu A Trdladag 7 Bib &Co& nl Awrd _ EoeooIaes I COMPONENT M. Rod * 1 19 Wor- 11 Birdl A C-d Aw-rd 12 Ph- Ia 12 Ph s 11 14 Ph. In II Supci,iw, Is C-ftrou. 1T Ph- I 19 Phr 111 1s Phas IIl 20 TA,Sthldle & rILh 21 Did- ACoC Aw.ad 22 Eoo 2_ COMPONENT C. R-sel Road . .3 24 W.rA. 2S Bids & Con-toc Award 26 Pha I 2| Phase 11 26 Sop--sc« < , 29 Corootoc 30 PhoauI I 31 Pha se! 32 NCO. Opom.r I TA I33 I Sr"Ma M I 24 Sopplr 21 COMPONENT D. L' 1 36 Wor." 37 Shb & Con15 .sC AnAI 29 sthjo i 40 Phs ll [if 41 Supmr MM 42 Coo-t-ads. 43 PhI .!! P h- 11 0. 41 Phl! II 47 sdliio a Sand!.. __Task Salad Up r , xk Pro4ed: ImI l rrnlsoon uan orsirn ______P_g,___R___d_Up__A__ O^: 9i1Q195 ~~~~Mdawfone *R.11lZ Up PrC4grffs . S.umary * ANNEX C Page I of 16 DETAILED DESCRIPTION OF THE PROGRAM FINANCED BY THE CREDIT COMPONENT A: PORT OPERATIONS AND MANAGEMENT Description 1. The component comprises three elements: (a) a program of civil works to improve port operations performance; (b) an assistance and training program to improve port management and facilitation activities, including information campaigns targeting organizations representing public and private port operators and PAC personnel; and (c) a program of support to Programme d`appui a~ la conduite d'operations municipales in the areas of financial management, accounting, and management of this component. 2. Subcomponent A-1: Civil Works in the Port (Part BI of the Credit). This subcomponent is intended to assist PAC in improving port operations by improving port infrastructure. It includes: (a) a program of works to renovate the port docking area and other physical facilities in order to speed up port operations and clarify the assignment of responsibilities to individual port operators, in particular creating dedicated space for customs inspection of containers and for used car handling and repair (CFA franc 1,450 M); and (b) paving of dockside curbs and of the most heavily trafficked surfaces within the port, replacing and widening the current underdimensioned pavement (40,000 m2) and repairing related drainage works (CFA franc 250 M). 3. Subcomponent A-2: Operator Involvement (included in Part B2 of the Credit). This subcomponent consists of support to institutions and operators involved in port operations to improve the collection and processing of information indicating the efficiency of port activities, and establishment of mechanisms to involve users in port strategy and facilitation decision-making. Short-term assistance and training activities would include, for PAC: (a) short-term technical assistance to introduce new port management and information software and to analyse information on port performances and facilitation (two months year 1, 1 month each in years 2, 3 and 4); ANNEX C Page 2 of 16 for MTPT: (b) short-term assistance to the Minister's office (cabinet du Ministre) for a study designed to reform existing mechanisms for consultation with users; (c) short-term technical assistance to the Minister's office to update the facilitation and arbitration strategy, including studies and consulting (one month a year, or a total of four months). for port users and operators: (d) an information campaign for transport users, which would describe the impact of transport facilitation and ways to improve it, including their participation in the new port participation committee (two months); (e) short-term assistance for the Cotonou Chamber of Commerce to install an information system to monitor the competitiveness indicators for the Port of Cotonou (two months in year 1, one month during years 3 - 4, for a total of five months); (f) short-term training and assistance for the new port participation committee (one month a year for three years, or a total of three months). 4. Subcomponent A-3: Program of Support to PAC for Financial Management, Accounting, Priority Program Updating, and Component Implementation (included in Part B2 and B3 of the Credit). This subcomponent includes: (a) preliminary and final engineering and supervision of works to be carried out under A-I (CFA franc 100 M); (b) annual financial and performance audits for PAC operations (four audits totaling CFA franc 50 M); (c) a study to update the port development plan and to review the feasibility of port extension works (CFA franc 100 M); (d) technical assistance for introduction of a cost accounting system, including related training (CFA franc 40 M); and (e) a training program for operations management, financial management, and accounting, programming, and program management (staff training; CFA franc 245 M); Implementation 5. The civil works program in A- I above and training programs in A-3 will be included in PAC's priority program, which will be updated on an annual basis. PAC will prepare proposals for expenditures to be included in the program, including ANNEX C Page 3 of 16 routine and periodic port infrastructure maintenance, arranged in order of priority and including economic analyses and justification. These proposed programs will be updated each year on the basis of performnance evaluations, and following broad consultation with operators and other actors involved in the port zone. Each year's program proposal will be forwarded to IDA no later than October 31 of the previous year together with the financial projections based on principles and formats agreed at program appraisal and presented in the port section of the program implementation manual. 6. Detailed engineering for civil works will be prepared for PAC by engineering consultants (bureaux d 'etudes techniques or BET) and contracts will be awarded following bidding by a shortlist of consultants acceptable to IDA. PAC will hire engineering consultants to carry out works supervision or to assist with supervision. 7. The Finance Ministry will delegate the necessarv authority to award and sign contracts for these works to PAC. An internal PAC committee headed by the Director of PAC will award contracts to the least cost bidder whose proposal meets the post qualification criteria indicated in the bidding documents. Works contracts will be signed only by the PAC Director and the firm selected. Evaluation of bids on contracts which are to be supervised by technical agencies other than PAC, a representative of the entity in question (Public Works Minister's office, Chamber of Commerce) will be incorporated in the commission evaluating the bids and selecting the winner. 8. Local counterpart funds (around CFA franc 204 M) will be financed by PAC under its annual budgets. Funds made available to PAC for works under subcomponent A-I will be released under terms to be specified in an agreement acceptable to IDA. Financial audits of PAC will be carried out once a year by an external auditor selected following IDA review, and the audit reports will be forwarded to IDA prior to June 30 of each year for the previous year's accounts. 9. Tables C-1 and C-2 show a summary of the technical assistance, and training and a preliminary expenditure plan for this component. Further details regarding implementation are provided in the Program Implementation Manual (PIM) drafted during the program's preparation and finalized at negotiation. The PIM includes annexes defining: (a) detailed procurement procedures; (b) accounting procedures related to this component; (c) list of performance indicators; (d) draft terms of references for technical assistance and studies included in this component; (e) rules and methods for the preparation of the priority investment program and the updating of the annual budget; (f) method for economic analysis of the investment included in the priority program; (g) standard bidding documents to be used for this component; and (h) draft agreement between PAC and the Government for the onlending of the credit. ANNEX C Page 4 of 16 COMPOSANTE A Table C-1: COUT DETAILLE ET FINANCEMENT (1) (en millions de FCFAI CATEGORIE COUT UNITAIRE COUT TOTAL 1 (a) Al TRAVAUX Amenagement des terre-pleins et assainissement 1.450,000,000 Pavage des boads A qua, et des voies 40 000 m2 15.000 250,000.000 SlTotal 1,700,000,000 3 (a) A2 SERVICES DE CONSULTANTS Aupres du MTPT 5 hommes-mois 10,000.000 50.000.000 Aupres du MTPT 5 hommes-moIs 10 000,000 50,000.000 Aupres des usagers 10 hommes-mois 10.000,0 100,000 000 Etudes, contr6le des taraux et audits 130.000.000 Etude de plan de ddevloppement 10 hommes-mois 10,000.000 100 000.000 S/Total 30 hommes-mois 430,000,000 3 (a) FORMATION AT pour mise en place comptabilitL analytique 40.000.000 Fomation gestion, finarce et compte 174 agents 400,000 245.000.000 S/Total 174 agents 285,000,000 TOTAL GENERAL Z415,000.000 PAC 0 (1) Not including contingencies Table C-2: PLANNING DE MISE EN OEUVRE (en millions de FCFA) 1997 1998 1999 2000 2001 TOTAL Al TRAVAUX 500 1200 0 0 0 1700 A2 SERVICES DE CONSULTANTS AT PAC 10 10 10 10 10 50 AT MTPT 10 10 10 10 10 50 AT usagers 25 30 10 10 25 100 Etudes, conttible des travaux et audits 25 40 25 20 20 130 Etude plan de developpement 40 60 0 0 0 100 S/Total 110 150 66 50 65 430 FORMATION Comptabilite analytique 40 0 0 0 0 40 Formaton 88 87 46 24 0 245 S/Total 128 87 46 24 0 285 Total G6in6ral 738 1437 101 74 66 2415 ANNEX C Page S of 16 COMPONENT B: ROAD REPAIR, MAINTENANCE, SAFETY, AND NETWORK MANAGEMENT Description 10. The component comprises five elements: (a) a program of earth road network improvement and maintenance works; (b) a program of institutional strengthening for MTPT for programming and implementation of road investment and maintenance, including personnel management; (c) a program of assistance to entities responsible for road safety; (d) a program of promotion and support to develop the local private civil works sector; and (e) studies and audits necessary for the implementation of this component, and for the updating of the road investment priority program. I1. Subcomponent B-I: Priority Road Works in Support of Government's Transport Strategy (Part BI and B2 of the Credit). This subcomponent would finance a portion of the five-year rolling road improvement and maintenance program for the road network under MTPT. including: (a) elimination of all trouble spots (points critiques, or places where traffic is blocked for part of the year) remaining on MTPT's road network on road sections totaling about 1,066 km. of which 400 km are currently impassable throughout the rainy season; (b) rehabilitation and consolidation of bridge and drainage works included in the first two tranches of the priority program, on earth road sections with traffic in excess of 50 vehlday, totaling about 850 kim; (c) periodic maintenance (regravelling of laterite roads required at intervals greater than 12 months) included in the first three tranches of the priority program, on earth road sections with traffic in excess of 50 veh/day, totaling about 600 kmi; (d) upgrading of existing buildings according to the need of reorganized DROA. (e) a program of works designed to improve road traffic safety, including works to eliminate frequent accident locations ("points noirs" on the paved network, to be defined during program implementation on the basis of road safety data to be collected by CNSR (see Subcomponent B-3 below). 12. Subcomponent B-2: Institutional Strengthening of MTPT (Part B3 and B6 of the Credit). This subcomponent would include technical assistance and training required to strengthen performance in existing ministerial units, and to create new units, along with specific support in priority areas such as programming and implementation of investment and maintenance projects, data collection and ANNEX C Page 6 of 16 processing, and personnel management within DROA. Activities included are described below for each unit affected. (a) for CPC, introduction of procedures for updating the transport strategy and the corresponding priority works program, plus short-term assistance and training for annual program updating during the program period and financial management of road maintenance during the project implementation period (new Road Fund). (Equipment, six months assistance plus 5 months of training); (b) for DTT within MTPT, assistance to improve performance in issuance of driving licenses and commercial vehicle licenses (cartes grises), and to set up a system for collecting and analysing land transport data (two computers, training for 10 staff. ten months of studies and short-term technical assistance for DTT studies). (c) for BGR within DROA, a short-term assistance and training program, along with purchase of new equipment, to prepare BGR to effectively perform its role in gathering and processing road transport data required to update the priority road program (nine months of international experts, 36 months of local consultants, training for a staff economist and a programmer, 230 days of on-the-job training or study tours, four computers including software and printer., and vehicle weighing and traffic counting equipment to replace worn-out equipment); (d) for DROA's contract management operations. a program of short-term assistance and training plus equipment to set up a new unit for contract award and management for construction and maintenance works (five months assistance, five training sessions and 10 months of on-the-job training, two computers plus software and printer, and office furniture); (e) for DROA's maintenance programming operations, a program of short-term assistance, training and equipment to improve performance in the programming and management of maintenance works, management of road maintenance contracts with private enterprises, deconcentration of management activities to the regional level, and management of bridge and drainage works. This program includes short-term technical assistance (ten months at SDER and 11 months on-site), purchase of new or replacement vehicles required for on-site works supervision and road maintenance management (15 vehicles), purchase of computers with software and printers (13 computers), and staff training or refresher courses (24 months of training or internships, 37 sessions of refresher courses. and 200 days of study tours, vehicle supplies), and assistance for restructuring of staff assignments within ANNEX C Page 7 of 16 DROA to reflect its new functions under the new transport strategy (one month); (f) for DROA's personnel management, short-term assistance and training to support the creation of a new personnel management unit, to support the staff reorganization which this unit will carry out, and to give new impetus to the CRP training center which is responsible for management of training activities (nine months of assistance, six months of training, and 30 sessions of refresher courses). 13. Subcomponent B-3: Road Safety (Part B4 of the Credit). This subcomponent consists of assistance to design and carry out an action plan which would (a) consolidate and strengthen existing management capacities for road security within DTT and CNSR, including road user and public transport user participation; and (b) improve user safety by intensifying road safety prevention campaigns and by identifying high accident locations on the interurban road network, to be corrected under Subcomponent B-i. This would include: (a) office furniture and computer equipment for CNSR (two microcomputers and software for processing road safety data); (b) short-term technical assistance to DTT to improve rules of the road regulations (two months); (c) short-term technical assistance to both CNSR and the national police force to introduce new data collection procedures and training in data processing and analysis (five months); (d) short-term assistance to CNSR for processing of data collected and to define annual infrastructure improvement works (four months), and improve the system of on-site technical supervision and its management (five months), and (e) studies and short-termn support to CNSR designed to improve the system of enforcing vehicle weight limits and traffic rules, and to bring users and local residents into the process of improving safety performnance (four months of international experts and nine months of local consultants). 14. Subcomponent B-4: SME Support Program (Part B5 of the Credit). The purpose of this subcomponent would be to strengthen the implementation capacity of private enterprises in the civil works sector, in particular for road rehabilitation and maintenance. The program includes: (a) creation of a training and support mechanism which, by program completion, would be managed wholly by the SME beneficiaries and by construction industry professional associations; (b) a program of basic and ongoing training for participating enterprises' staff; and (c) a support programn to assist construction industry enterprises during the construction phase of works contracts. ANNEX C Page 8 of 16 15. Subcomponent B-5: Studies and Project Management (included in Part B3 of the Credit). This subcomponent would include the various studies required for management of the priority program and implementation of the works to be carried out, and for the management of the road network component as a whole. Specifically, it would include: (a) annual audits required to monitor program; (b) feasibility studies required to update annually the priority investment program; and (c) preliminary engineering required to prepare bidding documents for works financed under the program, and supervision of these works by consulting engineers. Implementation 16. MTPT will execute this component through DROA. Subcomponent B-l(d) and B-3 will be managed in close collaboration with CNSR, including the preparation of the priority program to eliminate trouble spots. Studies and assistance for vehicle safety will be initiated and supervised by CNSR, under MTPT's coordination. SME's development under subcomponent B-4 will be managed by DROA and the Steering Committee. The implementation of the training program and of support to professional associations and companies will be carried out under contract by an experienced operator, selected following limited bidding in accordance with IDA guidelines, and the shortlist will include NGOs specialized in this area of operation, selected with IDA advice. Training and support programs will be defined annually in close collaboration with beneficiaries, and sent to IDA for review prior to October 30 of the previous year. 17. At program startup and in agreement with the Road Fund, DROA will establish procedures required to ensure financing of force account works based on actual production. Conditions and procedures for financing road maintenance works, and for providing counterpart funds required for road maintenance works financed by external donors, will be defined prior to program startup. 18. Works to improve traffic conditions in order to eliminate trouble spots and improve road safety included in subcomponent B- I will be defined beginning in the second year of the CNSR information system setup and updated at least once a year. 19. Government counterpart funds will be financed by (a) the Road Fund, for periodic maintenance (regravelling) works eligible for Road Fund financing (IDA program counterpart funds estimated to total CFA franc 1,100 M); (b) beneficiary participation in the financing of the SME training and assistance program; and (c) the national budget for counterpart funding of rehabilitation works (trouble spots, bridge, drainage, building repairs equipment, road safety improvement works, and equipment), estimated to total CFA franc 900 M. Counterpart funds financed by National Budget will be made available by National Treasure in a Project Account opened by the Road Fund for this purpose. 20. Tables C-3 and C-4 show a summary of the technical assistance, training and equipment and a preliminary expenditure plan for this component. Further details ANNEX C Page 9 of 16 regarding implementation are provided in the Program Implementation Manual (PIM) drafted during the program's preparation and finalized at negotiation. The PIM includes annexes defining: (a) detailed procurement procedures; (b) accounting procedures related to this component; (c) list of performance indicators;(d) draft terms of references for technical assistance and studies included in this component; (e)action plan for the reorganization of DROA; (f) priority program for the road subsector; (g) method for economic analysis; (h) financing plan for this component; (i) procedures for the implementation of a sub-component related to SMEs support; (j) environmental guidelines; and (k) standard bidding documents to be used for this component. COMPOSANTE B Table C-3: DETAIL AT, FORMATION ET MATERIEL (POUR LES TRAVAUX, VOIR ANNEXE ECONOMIQUE) Coit Total Quantite Cofit Unitalre en FCFA Assistance Technique (Categorle 3 C) DROA- Expert intem 440,000,000 44 hxm 10 000 000 FCFA'mo,s Expert local 18,000,000 36 hxm 500 000 FCFA/mois Form. base 48,000,000 2 agents BGR 24 000 FCFA/a Voy. etude 25,000,000 250jours 100 000 FCFArjour Stages 36,000.000 180 jours 200 000 FCFA/jour 84,000,000 28 mois 300 000 FCFA/mois 72,000.000 12 mois 6 000 000 FCFA/mois Cessions 195.000,000 52 cessions 3 750 000 FCFA/c. 15,000,000 30 cessions 500 000 FCFA/mois S/Total 933,000,000 CPC du MTPT- Expert intem. 80.000,000 6 hxm 10 000 000 FCFA/mois Stage Form. 15,000,000 5 mois 3 000 000 FCFA/mois S/Total 75,000,000 DTT- Expert 50,000,000 10 hxm 5000 000 FCFAVmois Cessions form. 25,000,000 10 cessions 2 500 000 FCFAtc. S/Total 75,000,000 CNSR- Expert intem. 200,000.000 20 hxm 10 000 000 FCFA/mois Expert local 14,000,000 9 hxm 10 000 000 FCFA/mois S/Total 214,000,000 Materibl (Cat6gorle 2) DROA-MTPT Vehicules 56,000,000 4 14 000 000 FCFAtv6hic. 182,000,000 13 14 000 000 FCFA/vehic. Mesure BGR 15.500.000 Comptage. uni, mobilier Ordinateurs el accbs 65,000,000 20 unit6s 3 250 000 FCFA Logiciels et mobilier DROA 98.500,000 Divers SlTotal 417,000,000 CNSR Ordinateurs 13.000.000 2 unites 7 500 000 FCFA ANNEX C Page 10 of 16 Table C-4: PLANNING DE MISE EN OEUVRE (en millions de FCFA)1 1997 1998 1999 2000 2001 TOTAL Cat6gorie BI TRAVAUX 499 2508 2626 2687 1600 9,920 1 (b) B2 RENFORCEMENT INSTITUTIONNEL MTPT Assistance technique formation 215 233 230 222 183 1.083 3(c) Materiel 153 264 417 2 S/Total 368 497 230 222 183 1,500 B3 SECURITE ROUTIERE Matnriet infonnatique 13 13 2 AT et formation 75 50 50 39 214 3 (c) S/Total 88 50 50 39 0 227 B4 PROMOTION PME 100 125 221 221 144 811 3 (b) B5 ETUDES ET GESTION DU PROJET Audit annuels 20 20 20 20 80 3 (c) Etudes de faisabilite 25 25 25 25 100 3 (c) Etudes techniques et contr6le de TX 362 175 230 185 50 1.002 3 (c) S/Total 387 220 275 230 70 1,182 Total G6n6ral 1,442 3,400 3,402 3,399 1,997 13,640 Not including contingencies COMPONENT C: RURAL ROAD REHABILITATION AND MANAGEMENT Description 21. The component comprises two elements: (a) a pilot program of works to improve and extend the rural road network, and (b) preparation of a strategy to manage and finance rural roads, plus support to DROA and to the rural communities in the implementation of the pilot works and maintenance operation, leading to an approach which can be extended to cover the entire rural road network. 22. Subcomponent C-1: Rural Road Works (Part Cl of the Credit). A pilot program of works to rehabilitation and improve about 300 km of non-classified rural roads would be carried out under DROA's supervision, in close collaboration with the local communities in three areas already identified (Cobly, Adjohoun and Banikoara), plus three more areas to be identified during program implementation. Implementation of this program will lead to finalization of a sound strategy for rural road maintenance which combines Government support and local community management. 23. Subcomponent C-2: Rural Road Management (Part C2 of the Credit). The purpose of this component is to help DROA and the local communities work out the best collaborative arrangements for implementing the pilot works program, and ANNEX C Page 11 of 16 for a sustainable national rural roads management strategy, including maintenance. It comprises technical assistance, studies and training. DROA would receive (a) short-term assistance to set up and progressively extend, procedures for programming, managing and financing rural roads, designed to support the new collaborative approach, and tested under the pilot rural road improvement program (7.5 months of international consultants, 5 months of local consultants). Local community partners in the six areas selected for the pilot operation would receive a program of assistance prepared by NGOs and consultants: (b) at the outset, to ensure that all groups interested in the rural road program in the six pilot areas are adequately briefed and given access to information about the program, that they are coached through the steps required to form a legally recognized entity for program participation purposes, and that they are given the assistance they need to prepare rural road programs eligible for Government financing; and, once financing has been approved for rehabilitation of rural roads under the pilot, to guide them in carrying out the works which will constitute their counterpart contribution, and in setting up procedures and methods for carrying out agreed road maintenance programs (96 months of international NGOs, 144 months of local NGOs, 54 months of consultants, and NGO operating costs). Implementation 24. MTPT will implement this component through DROA, in close collaboration with local community partners responsible for programming and phasing of works on the roads in their areas, with the assistance of an international NGO and a specialized consulting firm, and within the framework for coordination of rural road maintenance called the National Technical Council (Conseil techniqzue national or CTN). The procedures for identifying, programming and carrying out maintenance on rural roads will be recorded in a procedural manual subject to IDA's approval 25. An international NGO with successful experience in dealing with civil works in rural areas and in advising and coaching rural communities will be hired under the program following evaluation of at least three NGO candidates acceptable to IDA. The international NGO selected will be required to define its methodology for achieving the desired objectives, identify local NGOs capable of acting as local counterparts and intermediaries, make sure the local NGOs receive necessary training, and support them through the setup stage of the pilot operation. The contract with NGOs will include the cost of equipment and overhead for carrying out program support. A consulting firm with a good track record in rural road rehabilitation and labor-intensive civil works will be recruited to assist DROA in the definition of technical standards and techniques for carrying out and supervising rural road ANNEX C Page 12 of 16 rehabilitation and maintenance works. The consultant will be selected after evaluating at least three local consulting firms who are supported by experienced international consultants. 26. DROA will provide administrative support (secretariat) for CTN. Works to be carried out by the local partners will be carried out entirely at their initiative and under their responsibility. In this effort, the local partners will receive support as needed from the NGOs and specialized consultant financed under the program. DROA will supervise the works carried out by local partners in order to ascertain that the terms of the agreement with them have been respected. 27. Participation of local communities in rural road rehabilitation and maintenance works during the program period will be a condition of implementation of this component. The nature and degree of local participation will be defined during the preparation of works and maintenance programs. Under no condition will this local participation be less than that required to ensure: (a) routine manual maintenance of the local network which has been rehabilitated with Government funds, and (b) execution of manual works required to prepare for rehabilitation. 28. Government counterpart funds will be financed by the National Budget. Funds will be made available by the National Treasure in the Project Account opened by the Road Fund (see paragraph 19 above). 29. Tables C-5 and C-6 show a summary of the technical assistance, training and equipment and a preliminary expenditure plan for this component. Further details regarding implementation are provided in the Program Implementation Manual (PIM) drafted during the program's preparation and finalized at negotiation. The PIM includes annexes defining: (a) detailed procurement procedures; (b) accounting procedures related to this component; (c) list of performance indicators; (d) draft terms of references for technical assistance and NGOs' involvement under this component; (e) draft elligibility criteria for the selection of local partners and of works included in the programs; and (f) draft procudures for CTN operation and functioning. Table C-5: PLANNING DE MISE EN OEUVRE (en millions FCFA) 1997 1998 1999 2000 TOTAL Travaux 1ere tranche 190 219 409 Travaux 2eme tranche 193 225 418 Support ONG 77 77 77 77 308 AT A la DROA et ONG 50 50 31 31 162 Total 127 317 520 333 1297 ANNEX C Page 13 of 16 COMPOSANTE C Table C-6: COUT DETAILLE ET FINANCEMENT (en millions de FCFA)' Rubniques Cout Total Part AID Gouvmn Participation des parbonsirs Crbdit ocaux (non inclus dans is cout du projet) TRAVAUX REHABILITATION (CaIdgorie 1 C) p-6mmer t,ancho 3 zones (1 50 ks) 409 368 41 68 deu-dme tisoehe 3 zones (150 kin) 418 376 4 68 S/Tobl 827 744 8 136 SUPPORT AUX PARTENAIRES LOCAUX PAR ONG (Cat4gorie 3C) ONG Intemabonale 96 hom (2 sur 4 ans) a 750 000 FCFANns 72 72 ONG locale 144 hxm (24 hxm par site) a 250 000 FCFAIrors 36 36 Acr.at 2 o6hicoles tlot terain a 44 500 000 FCFA 89 89 Acrat 6 mobyleltes i 500 000 FCFA 3 3 Fo.cdonnemeot v6hicules 43 750 brn/arnehicule i 131 FCFA 46 46 Fonctonnnment nobfeftes 12 500 hkn/an/mobylette 4 50 FCFA 15 15 Fm,s Foncionnmoent 25 millions matenel divers. 5 6 rullonssan 47 47 SITotal 308 308 SERVICES DE CONSULTANTS (Cat*gorie 3C) Spec;abstepsteslnuraes. 48 hom (1 sur4 ass) a 750000 FCFA 36 36 Speca.iste nulgansat-on-oganisa1,on 4 honn epatne i 10 millions FCFA 43 43 et 2 honn local a 1 5 millions FCFA Sunw,-E,aluahon 7.5 hom consultant expatne i 10 mllons FCFA 83 83 et S hor loal i 1 5 millions FCFA SITotal 182 162 0 Total inclus dons I* cout du projet 1,297 1,214 8 136 ENTRETIEN COURANT (Non nclus dans Is cout du projet) En/nel,en mecanls6 - pmmee Iranche 105 10 - de.oerne tranche 105 10 Entrehen manuel - p,nmi4ne tranche 75 75 deuxenme Iranche 75 75 SITotal 360 21 180 Not induding contingences COMPONENT D: URBAN ROAD IMPROVEMENTS AND TRAFFIC MANAGEMENT Description 30. This component comprises two elements: (a) an initial tranche of infrastructure works and intersection improvements designed to improve traffic circulation and road safety in the city of Cotonou; (b) support and assistance for (i) creation and startup of a locally staffed traffic management unit within the local government entity (Circonscription urbaine de Cotonou or CUC), including training; (ii) preparation of a traffic management plan for Cotonou; and (iii) planning and ANNEX C Page 14 of 16 implementation of a management system for Cotonou's bus and truck stations (gares routieres). 31. Subcomponent D-1: Traffic Improvement Works (Parts Dl and D2 of the Credit). The works proposed for financing under the proposed program correspond to the priority tranche of works in the traffic and bus/truck station improvement program. The exact contents of this program will be determined by the traffic and bus/truck station studies to be prepared with program financing. On the basis of preliminary studies started under the ongoing urban program and to be completed during program implementation, these works would include: (a) improvement of ten (10) intersections located along the main primary roads, of which six will be equipped with traffic lights; (b) construction of an initial network of cycleways (about 11 km) along the most heavily traveled primary roadways between Godome and Sobebra; and (c) renovation of the three main bus/truck stations, whose management would be handed over to private operators under a concession agreement. 32. Subcomponent D-2: Support to Build Local Capacity for Urban Traffic and Parking Management (Parts D3 and D4 of the Credit). The proposed program would finance: (a) support for the creation of an urban traffic management unit (Cellule de circulation or CC) to handle traffic and parking management for the city of Cotonou, including the preparation and implementation of a first traffic plan, and management of parking and of bus/truck stations; (b) a program of assistance/advisory/training for the traffic unit to support: (i) preparation and implementation of the traffic plan; and (ii) preparation of a study covering the management and renovation of main bus/truck stations in Cotonou. The program would also finance preliminary engineering for the priority slice of works to improve traffic and renovate the stations; (c) assistance to define and set up a procedure for consulting with urban road and transport users in order to facilitate the implementation of the urban traffic plan and promote road user safety measures (through a local NGO with community participation); (d) equipment and office furniture for the startup of the traffic unit. Implementation 33. DROA will implement this component using AGETUR to be hired under a management agreement for management of small works. MTPT will sign an assistance agreement (convention d 'assistance) with SERHAU-SEM covering monitoring and coordination of: (a) the setup and management of the traffic unit for a period not to exceed two years, sufficient to complete the study for a traffic and ANNEX C Page 15 of 16 bus/road station management plan; and (b) support to the traffic unit (CC) in the preparation of this plan. DROA will be responsible for engineering studies, works procurement and supervision, and traffic light equipment purchase required for works to implement the traffic plan under subcomponent D-1. MTPT will sign a separate management agreement with AGETUR covering engineering and works to construct cycleways, to renovate three bus/truck stations (b and c of subcomponent D- I), and to make minor traffic improvement on primary roadways. 34. The traffic management unit (CC) will receive technical support at startup for the purpose of: (a) training for its own staff and for staff selected from other public and private entities to develop local expertise in urban traffic engineering and management; (b) assisting CC with the preparation of a study to produce a traffic structure plan; (c) assisting CC with the preparation of a study to produce an action plan for the management and renovation of bus/truck stations, which the City would then be able to implement, and which would increase income earned by these stations through private concession arrangements. This up front assistance would be followed up by short-term consultant visits on demand of the CC head. 35. Traffic signalization equipment (traffic lights) to be procured under the proposed program for installation on the primary network will become the property of the city once the equipment has been approved and commissioned, and the city will manage and maintain it. Updating signal synchronization patterns will be the responsibility of the traffic unit (CC). 36. Government counterpart will be financed by National Budget through two project accounts opened by both AGETUR and the Road Fund (see paragraph 19 above). National Treasure will deposit the necessary funds in these accounts. 37. Tables C-7 and C-8 show a summary of the technical assistance, training and equipment and a preliminary expenditure plan for this component. Further details on implementation are provided in the Program Implementation Manual (PIM) drafted during program preparation and finalized at negotiation. The PIM includes annexes defining: (a) detailed procurement procedures; (b) accounting procedures related to this component; (c) list of performance indicators; (d) draft terms of references for technical assistance, NGOs and SERHAU support; (e) functioning procedures for traffic management unit and CTP, and for the preparation of the works program; and (f) draft convention between MTPT and AGETUR. ANNEX C Page 16 of 16 COMPOSANTE D Table C-7: COUT DETAILLE ET FINANCEMENT (en millions de FCFA) CATEGORIE RUBRIQUES COUT DETAILLE Quantit6s | i C Travaux et equipements 1289 1 (b) Amenagement de 10 carrefours (DROA) 10 30 300 1 (b) Equipements 6 feux de signalisabon (DROA) 6 20 120 1 (d) Amenagement 6km pistes cyclables (AGETUR) 6 32 193 1 (d) Amenagement trois gares routieres (AGETUR) 3 225 676 MOD et Controle des Travaux 161 3 (d) Etudes et supervision travaux - AGETUR 10% tx 893 80 3 (c) - DROA 10% tx 420 41 4 Remunration MOD 4,5% tx 893 40 3 (c) Etudes, AT et ONG 346 Assistance Plan de circulation 10 mois 11 160 50 mois 1 Etude gestion des gares 1 60 60 Enquetes et suivi ONG local 1 60 60 Etudes techniques 5% tx 66 66 2 Equipements 30 Cellule circulation 2 ordinateurs 7 14 materiel bureau 23 16 TOTAL GENERA 1826 Table C-8: PLANNING DE MISE EN OEUVRE (en millions de FCFA) 1997 1998 1999 2000 2001 TOTAL Travaux 437 420 432 1289 - DROA 140 140 140 420 - AGETUR 297 280 292 869 Etudes techniques et supervision 67 27 27 121 - DROA 24 8 9 41 -AGETUR 43 19 18 80 MOD par AGETUR 14 13 13 40 ONG 20 10 10 10 10 60 Etudes et AT 168 30 30 30 30 286 Equipements 30 0 0 0 0 30 Total 734 600 512 40 40 1826 FonctionnementCC(AchargeCV) 12 12 12 12 12 80 ANNEXD Page I of 2 ENVIRONMENTAL IMPACT ASSESSMENT 1. An assessment of the environmental impact of the program was carried out during program implementation, based on field visits of the road networks (3,800 km of roads in all ecological areas of the country), consultations with rural and urban residents affected by road rehabilitation initiatives, and contacts with key administrative bodies. Negative impacts which road works might have were defined, and guidelines were prepared which would apply to all works in the program. Guidelines define either measures for limiting negative impacts which were identified, or methods for assessing such negative impacts and defining an appropriate response where conditions are more complex. These guidelines have been prepared within the framework of the National Environmental Plan (NEP), and are designed to facilitate consistent action by all entities involved in program implementation. 2. Since no new roads will be opened up under this program, the expected environmental impacts will be milder than in the case of new roads. In addition, the program will encourage labor-intensive road maintenance activities, which are generally more environmentally friendly than highly mechanized activities. On interurban road sections, potential environmental impacts and the accompanying mitigation measures are as follows: (a) Laterite quarries that are opened up along the roads to obtain road surfacing materials, if not rehabilitated after use, could induce erosion and stagnating waters. Roughly 300,000 m3 of materials are extracted annually from about 70 such sites, covering a total of about 30 ha. The rehabilitation of these areas is technically straightforward and easily carried out. Environmental guidelines require the restoration of such quarries by restoring the sites or transforming them into water reservoirs that may greatly benefit local residents. (b) Wetlands may be harmed by road crossing, particularly when road drainage infrastructure is ineffective. This may lead to an imbalance of fragile ecosystems, loss of agricultural land used during dry seasons, and eutrophication of certain water bodies. The five-year priority transport program includes repair and maintenance of all drainage works (around 3000), which will result in the restoration of the original water transfers upstream and downstream that naturally regulate wetlands. (c) The drainage of roads (runoff waters) sometimes leads to the accelerated formation of gullies and to erosion alongside the roads. It has generally been observed that existing drainage infrastructure carries water to areas with adequate vegetative cover and that erosion ANNEXD Page 2 of 2 is generally not exacerbated by road drainage. In cases where a problem is seen to occur, the guidelines include provisions for improving the downstream portion of road drainage systems.. (d) Atmospheric pollution linked to road rehabilitation and maintenance is very low and negligible compared to other sources of air pollution such as general passenger and freight vehicle traffic. The main problem at present is the dust generated by major rehabilitation works, which is easily controlled by frequent watering of construction sites, a method already widely practiced by road construction companies. (e) The destruction of human habitat is rarely a problem. In the few cases where households had to be evicted because of road works. compensation measures were deemed acceptable by residents, who were able to relocate easily within their original community. In any case, displacement of residents will not take place under this program. 3. In the framework of the implementation of the NEP, Benin has recently created a National Environmental Agency and prepared an environmental law that includes requirements for environmental impact assessments, for sectoral environmental guidelines and institutional coordination. In this respect, the program will be a leader, since it will propose the first set of sectoral environmental guidelines developed in Benin. 4. The guidelines include a conceptual framework for undertaking the necessary environmental impact assessments and the corresponding mitigation plans related to future road rehabilitation and maintenance works. Environmental requirements will be incorporated into the technical specifications of works contracts. 5. In urban and peri-urban zones, potential environmental impacts and mitigation measures are as follows: (a) The limited infiltration surface that characterizes urban areas increases the risks of flooding. Traffic improvement works under the program will be designed with adequate attention to the provision of proper drainage infrastructure. (b) Atmospheric pollution issues are more serious in urban areas due to the density of traffic, the large numbers of people affected, and the limited airflow that characterizes urban areas. Even more care is generally taken by road construction companies than outside the cities in order to minimize dust displacement. (c) Habitat destruction and relocation of city dwellers will generally be avoided in the program. Past experience in Benin has shown that when dwellings have to be destroyed, the levels of compensation are realistic and generally satisfactory to evicted households. ANNEX E Page I of 16 ECONOMIC ANALYSIS PORT COMPONENT AND ROAD COMPONENT This annex summar izes the results ol' the economic analysis for the work included in the port component A and for all works included in the priority road program, with detailed justification for works on the earth network which are proposed for IDA financing. Details of the economic analysis are in the Program files. At the end of the annex, there is a listing of all road works included in the priority program as of July 1995, including traffic, length, costs, internal rate of return where available, donor financing, and year in program (see Table E- 10) 'IThe phasing and financing of the priority program for all subsectors. and the selection of elements for proposed IDA financing are presented in the SAR, Chapter 3 (paras. 3.3 and 3.6). The economic justification for proposed IDA components C and D is presented in the SAR. Chapter 4 (paras. 4.5 and 4.6). PORT COMPONENT (COMPONENT A) 1. Methodology for Economic Justification. Under the present operating conditions, the port of Cotonou should reach its saturation level (70 percent of the quays occupation rate) at 2'.2'5 million tons in 1998, based on a realistic growth scenario. The port component of the Project includes implementing reforms necessary to allow efficient use of infrastructure to achieve higher productivity levels similar to those of neighboring ports. If these performance objectives are reached, the capacity of the port of Cotonou would increase to 2.6 million tons port traffic in 2001, assuming a growth rate of traffic or capacity of 4 percent per year. Past experience has shown that in the case of congestion in the port of Cotonou, maritime companies use the port of Lome as an alternative rather than putting up with long waiting times. The basic assumption used for the economic justification corresponds to the saturation of the port of Cotonou in 1998 at 2.25 million tons and the second assumption includes the proposed Project with 2.6 million tons in 2001. The quantified benefits of the Project include: (a) savings on transport costs for merchandise by road from Lome to Cotonou . (b) avoidance of the economic loss resulting from the loss of revenues by Beninese public and private port operators; and (c) savings on traffic and maintenance costs for port handling operations. 2. Savings on Transport Costs for Merchandise by Road from Lome to Cotonou. The total economic cost for the transport of merchandise by road, from Lome to Cotonou between 1998 and 2001, is evaluated at 879 million CFA franc (1995 terms with a 12 percent discount rate). Distance for the said transport is 150 km; transport is done by 25-ton trucks; 50 percent of the merchandise transferred to Lome will be returned to Cotonou by road; economic cost for operating a 25-ton truck is estimated at 500 CFA franc per kmi with an empty return to Lome assumed. A NNEX E Page 2 of 16 3. Savings on the Loss of Revenues by Beninese Port Operators. The economic loss of the transfer of 942,000 tons of merchandise to Lome, between 1998 and 2001, is estimated at 3,357 million CFA franc (1995 terms with a 12 percent discount rate). The assumptions used for this calculation are. as follows: PAC gross margin during the period is estimated at 5,569 million CFA franc; SOBEMAP gross margin during the period is estimated at 5,600 million CFA franc; and total gross margin per ton of merchandise is estimated at 5.73 CFA franc. or 2.86 CFA franc for PAC and 2.87 CFA franc for SOBEMAP. On this basis losses of gross margin for PAC and SOBEMAP from 1998 to 2001 total 3,358 million CFA franc. Loss in gross margin of private operators is unknown and has not been included in the analysis. 4. Savings of Traffic and Maintenance Costs for Port Handling Operations. The total amount of traffic cost savings within the port facilities, between 1998 and 2001, is estimated at 670 million CFA franc (1995 terms with a 12 percent discount rate). This amount is made up of the following: 594 million CFA franc for the maintenance of port handling equipment and 76 million CFA franc for improving road infrastructure within the port. The assumptions used are as follows: rehabilitation of quay edges; reorganization of port area; and improvement of port operations management. These are estimated to lead to a 17 percent reduction in operating costs for vehicles and port handling equipment. 5. Economic Analysis and Sensitivity Analysis For the economic analysis, three cases have been considered: (a) the base case using the above assumptions; (b) a case with a reduced port traffic growth rate; and (c) a case with a reduced productivity increase. Based on the above quantified benefits, the economic rate of return for the base case is estimated at 250 percent. This economic calculation takes into account the flow of investment expenses and benefits up to 2001, given in Table E-1. The net present value of the investments in 1995 terms with a 12 percent discount rate is estimated at 3,914 million CFA franc. If port traffic grows at 3 percent rather than 4.5 percent assumed in the base case, the ERR falls to 12 percent and the net present value to 0. If productivity were only half of that assumed for the base case, port capacity would be limited to 2.45 million tons leading to the congestion of the port at the end of 1999 instead of end 2001. Under this assumption, the economic rate of return would be reduced to 36 percent instead of 250 percent. Table E- I gives the assumptions and the results of the economic analysis for each case, and Table E-2 gives the flow of investment expenses and benefits in the base case. ANNEXE Page 3 of 16 Table E-1: Assumptions and Results of the Economic Analysis (in millions CFA franc) Assumptions Costs Benefits Net ERR Present Value Base Case Port traffic growth: 4% 1200 4900 3700 250% Port congestion: 2.6 M tons in 2001 Reduced Port traffic growth: 3% 1200 1200 0 12% traffic growth Reduced Port traffic growth: 4% 1200 1640 413 36% productivity Port congestion: 2.45 M tons in 1999 Table E-2: Base Case - Flow of Investment Expenses and Benefits COSTS BENEFITS _________________ I (in millions CFA franc) Year Investist Transport Cost Savings on Savings Gross TOTAL Net Lomd/Cotonou transport cost in maintenance margin PAC Present port SOBEMAP & Value SOBEMAP 1996 -446 0 0 0 0 0 -446 1997 -403 0 0 0 0 0 -403 1998 -368 58 19 155 223 457 89 1999 -366 179 19 150 685 1034 608 2000 0 293 19 147 1117 1575 1575 2001 354 349 18 141 1332 1840 2194 Total 1228 879 76 594 3357 4906 3677 FIVE-YEAR PRIORITY ROAD PROGRAM (COMPONENT B) PAVED ROADS Construction and Rehabilitation 6. Paved road works included in the five-year priority program fall into two categories: (a) new works (see heading 1.1 in Table E-7 at end of annex), involving (i) paving of existing interurban earth road sections, plus additional lanes for the Cotonou-Porto Novo highway, (ii) interurban road safety works at high accident locations, (iii) new urban highways in Cotonou, and (iv) urban traffic improvement works in Cotonou; and (b) rehabilitation of badly deteriorated sections of the paved interurban network (see heading 1.2). Cost benefit analyses for new paving and rehabilitation (a-i and b) were carried out by consultants financed by other donors, using HDM. New urban highway construction (a-iii) was analyzed by consultants ANNEX E Page 4 of 16 financed by other donors using the VOC module from HDM, along with other economic models tailored to urban conditions. Economic analysis of works under the two categories proposed for IDA financing, safety works (a-ii) and urban road works (a-iv), will be carried out during program implementation to finalize specific works to be carried out, following further study of high accident spots and preparation of a traffic plan for Cotonou. 7. All traffic and vehicle operating cost data used by consultants was provided by BGR or worked out in consultation with them; the estimates are considered sound. Analyses carried out during the 1992 preparation of the initial priority program for paved roads were adjusted for the 1994 devaluation. Construction design and costs for paved road works were based on technical standards for pavements developed during the strategy preparation. Double surface treatments, commonly used in the past, are to be avoided in favor of cement-asphalt base and sand-asphalt surfacing, which offer the triple advantage of (a) lower cost, (b) lower maintenance requirements, (c) use of local materials (lower foreign exchange requirement). The results of the economic analysis of paved road construction and rehabilitation are shown in Table E- I1 8. Three sections of earth roads to be paved are included in the priority program at Government's insistence despite their ERR. Of these, one I I -km section (Natitingou-Porga) is required to complete the paved western route from Parakou to Ouagadougou (Burkina Faso). Two other sections totalling over 200 km (Savalou- Djougou-Ouake) would create an alternative paved itinerary for Cotonou- Ouagadougou. branching off further south than Parakou. Since traffic levels are not currently expected to justify these investments during the 1995-2000 period, they were left in the program at the lowest priority level, including only a quarter of their costs. Incorporation of these investments in their totality will be reconsidered at such time as their economic justification can be established and after completing other higher priority investments, including all periodic maintenance. Maintenance 9. Periodic maintenance alternatives for paved roads (see heading 1.3) were analyzed by BGR staff with support from short-term consultants financed by IDA, using HDM. Operating cost functions for each of seven vehicle types were calculated directly by the HDM, whose VOC module incorporates variations in VOC elements according to road conditions as defined by roughness coefficients (IRI). Cost-benefit analysis compares an annual maintenance cost stream to a stream of benefits in the form of road user savings due to improved road conditions over the base case situation. A base case of routine maintenance only was compared with three periodic maintenance alternatives initially defined for analysis: (a) a base case of shoulder maintenance (cantonnage) only (ALTO); (b) shoulder maintenance plus surface patching (point a temps) (ALT1); (c) shoulder maintenance plus periodic surface sealing treatment, once 30 percent of road surface is lost to cracks, potholes or stripping (ALT2); and (d) shoulder maintenance plus cement-asphalt or sand-asphalt treatment, once the IRI reaches the value of 5 (difficult passage during rainy season) (ALT3). Analysis showed on the last two choices as the most economic ones. ANNEX E Page 5 of 16 10. Of the itineraries included in the priority periodic maintenance program, four have an ERR < 12. The ERR of the best alternative for each itinerary is given in Table E- I 1. Two itineraries (Dassa-Savalou and Bohicon-Parakou) despite their ERR below 12%, have been included in the priority program because of the extreme fragility of these road surfaces. The reasons for this are as follows: First, the ERRs are misleading because HDM does not reflect the rapid degradation of fragile road pavements, such as those with granular bases and water-permeable surface treatments on a clay foundation, typical of Benin. Second, when in fact such roads are not maintained, they deteriorate catastrophically, once the first potholes appear. Third, immediate investment in periodic maintenance is an economic alternative to waiting for the road surfaces to fail and then rebuilding them. Last but not least, the above economic analysis was carried out assuming a 1995 startup date for these works, when in fact financing has yet to be identified for 80 percent of them are shown in Table 1.3 of SAR. Since it is more than likely that they will not in fact start up until 1997, it is most likely that by that time, surfaces will have deteriorated to a point where ERRs will be at least 12 percent by then. The fact is that periodic maintenance is a necessary component of any economically viable long-term road investment strategy, whether or not the HDM results indicate it in this specific case. Government has recognized this necessity by giving periodic maintenance first priority in the road program, regardless of the low ERRs. EARTH ROADS Methodology 11. An optimal maintenance strategy for the unpaved road network was designed using a locally tailored approach, based on generalizing from empirical evidence of road deterioration at given traffic and maintenance levels, based on maintenance experience and observations of earth road conditions in Benin and neighboring countries over the last few years. For example, regravelling frequencies for periodic maintenance were defined based on local experience with different traffic and service levels. The main objective was to optimize the allocation of road maintenance resources, in order to maximize the number of itineraries that are practicable. Thus maintenance activities must be tailored to the traffic levels, terrain and slope, and weather conditions obtaining for each section to be maintained, if service levels are to optimize the overall balance between user cost savings and maintenance costs. The optimal maintenance strategy is that which minimizes the present value of the net cost of maintenance, with net cost on a given section defined as the difference between the cost of routine plus periodic maintenance activities, and the user cost savings for vehicles using the road section; the present value of the annual stream of net costs is calculated using a country discount rate of 12%. Cost Data 12. Vehicle Operating Costs. Base operating cost functions for each of seven vehicle types calculated by the HDM were adjusted using visually determined ANNEX E Page 6 of 16 roughness coefficients (see Program Implementation Manual (PIM)for details). Operating cost data collected during the 1992 strategy preparation reflect the impact of the 1994 CFA franc devaluation, with correction coefficients ranging from 1.3 for labor to 1.8 for vehicle purchase and tire costs. Fuel was shadow-priced at CFA franc 120 per liter for gas-oil and CFA franc 140 for gasoline (Government fixed pump price in Benin, CFA franc 165), taking into account widespread use of fraudulently imported fuel. 13. Cost of Works. All costs are based on private contract execution (not force account). Cost of works were calculated net of direct and indirect taxes as of April 1995. Total works costs include preliminary and final engineering, works, supervision, and physical contingencies. Data used are those collected during preparation of the strategy report in 1992 and thereafter from contracts awarded. Data from contracts awarded before January 1994 were corrected to reflect the impact of the devaluation of the CFA franc. The economic cost of periodic maintenance includes all necessary works to prepare road surfaces, that is, regravelling (15 cm) plus the initial grading of the roadbed, total cost of which is estimated at CFA franc 4,750 per cubic meter. Optimal Maintenance Strategy 14. The steps involved in defining an optimal maintenance policy for the national earth road network are to determine: (a) the desired average service level to be maintained between periodic maintenance activities; (b) the sequence of routine and periodic maintenance activities; and (c) the frequencies of these activities. These steps are summarized below, with details available in the PIM. 15. Definition of Service Levels on Maintainable Earth Roads. Five service levels ranging from excellent to very poor were identified, each of which corresponds to a road condition as described by a measurable indicator, in this case, roughness. The five service levels (niveau de service or NS) and the corresponding roughness values are as follows: NS5, excellent (IRI = 4 to 6); NS4, good (IRI = 6 to 10); NS3, fair (IRI = 10 to 16); NS2, poor (IRI = 16 to 20); NS1, very poor (IRI = 20 to 24). The current service level of each earth road section was assessed during program preparation using BGR methods based on a pragmatic field approach developed by OECD. The known functional relationship between service level and vehicle operating costs, as established by HDM, then also gives the relationship between IRI and VOC. Roads rated at IRI > 24 are considered impassable and are dealt with under the trouble spots category. 16. Impact of Maintenance on Service Level. Maintenance of earth roads includes: (a) tasks which do not vary with service levels, that is, manual routine shoulder and drain clearing (cantonnage); and (b) tasks which have an impact on service levels, such as routine patching (point a temps) and periodic regravelling. Rainfall has an impact on manual routine maintenance needs, and soil sensitivity to water has an impact on regravelling needs. Data accumulated during regular network inspections over the last few years has led to the definition of the impact on earth road ANNEX E Page 7 of 16 roughness, and hence on service levels, of periodic gravelling and of different routine maintenance approaches at different traffic levels, during the intervals between periodic regravelling. The results are shown in Table E-5 (minimum routine maintenance requirements to hold a given service level). and Table E-6 ( minimum frequency of regravelling in years required to hold a given service level over a longer period of time). 17. Optimizing net maintenance cost. For each traffic level, the most economic service level to maintain has been determined. For each traffic level, a curve is generated of overall economic cost per km (net present value of VOC plus maintenance cost, over 15 years at 12 percent) as a function of road maintenance costs, at each service level (see Graph E-12). The graph shows an example of results based on truck/car modal split of 10/90 and one on 30/70. The resulting determination of optimal maintenance activities by traffic, service levels, and modal split is shown in Table E-7. In the short to medium term, service level 4 (good) will be the highest service level on the most heavily traveled earth roads. Using the service level/maintenance activities relationship developed in the preceding paragraphs, total maintenance costs were estimated for the entire earth network. Total estimated annual routine and periodic maintenance program costs are shown in Tables H-8 and H-9. The total annual cost of an economically optimal earth road maintenance program on all 2,066 km of the MTPT earth network is about CFA franc 9.3 billion for periodic maintenance during the next five years and CFA franc 1.6 billion per year for routine maintenance.. Elimination of Trouble Spots and Drainage Repairs 18. Spot Improvement on Trouble Spots (points critiques). The nature of the national earth road network requires that all sections be passable at all times of year. Network structure is such that reasonable alternative routings or detours simply do not exist for 20 of the 57 sectio is, equivalent to 26 percent of the total network length. The remaining sectors either carry more than 40v/d or do not have reasonable alternative detours and serve sous-prefectures. From an economic point of view, breakdowns on these priority roads have an adverse impact on agricultural production and trade. On 28 sections, representing around 50 percent of the existing network, traffic is currently slowed or blocked either year-round or during the rains, due to at least one trouble spot per section, that is, a muddy section due either to poor soil quality or to a drainage structure problem. The severity of trouble spots has been categorized by degree of passability (niveau de praticabilite or NP): (1) permanently blocked; (2) blocked during rainy season, difficult rest of year; (3) blocked during rainy season, passable rest of year; (4) difficult passage; (5) difficult passage during rainy season; and (6) smooth passage. For the entire network to be passable to an acceptable degree, trouble spots in categories (1), (2), and (3) must be eliminated. The priority program includes all 28 trouble spot sections (see heading 2.1), and all of these are included in the proposed IDA program. 19. Bridge and Drainage Repairs (ouvrages d'art et hydrauliques). There are around 600 bridges or drainage structures requiring repair on 54 sections of the earth ANNEX E Page 8 of 16 network (60 percent of network lengtlh), ranging from minor repair to complete reconstruction. This category of works helps prevent future trouble spots, as the sections involved remain fairly passable (NP 4 to 6); all sections requiring such repairs with serious problems (NP I to 3) were included in the trouble spots category. If these additional works are not carried out, the spots in question will without any doubt become the trouble spots of the future. Of the 54 sections, 21 are the nearest to becoming critical and are programmed for 1996-98. and repairs on these sections are therefore included in the proposed IDA program, along with financing for all of the trouble spots. 20. Economic Justification. - Base Case and Sensitivity. ERR of all rehabilitation works included in the priority program (elimination of trouble spots and rehabilitation of drainage structures) as well as routine and periodic maintenance have been calculated for each road sections and three cases: (a) base case with road maintenance corresponding to the optimum as defined above and assuming that the traffic on the road sections which are currently affected by major trouble spots will increase to 48 v/d after rehabilitation; (b) a case where the maintenance would be the same as in the base case, but the traffic will increase to only by half (25 v/d) on the sections in very poor condition; and (c) a case where road maintenance resources will remain at the same level as in 1994 (CFA franc 1.7 billion per year compared to 2.7 billion in the base case). Investment in each case with program include the execution of works of the three above for spot improvement, rehabilitation of drainage structure and periodic maintenance. 21. Situation without Project. Assumptions for the evolution of the network without Project have been used for the economic justification with respect to the expenses on earth roads, and are detailed below. In the scenario without Project, no investment would be made. Only the manual maintenance will be carried out to maintain basic traffic on the network despite a rapid and sustained degradation of the level of service and road blockages. The levels of service and their evolution, in the scenario with no Project, are presented in Table E-3. Table E-3: Situation without Project C 00iurret eo:Leiveiofi9t Ser:viceE: ;EYQ1Uti of Laeve Qf Servit Swith h:n Spot Impr vement>, n;oEtidS -: j - ;- - if - -Reh hia itatn of flr -ngeS $rtures no t 0veli (o i- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~. .EEE .ES .:E:. .:: . .. .E: .EER .. ..ES .: .E::E5 .E# :, .... ..:: .: ....... L..._ . .... ... .... Roads with two rainy seasons Roads with one rainy season * NS1 on 470 km of roads * NSI continue on the 470 km * NSI continues on the currently cut cut during the rainy seasons 470km NS2 on roads which . NS I over 2 years on the . NS. I over 3 years on the necessitate spot improvement roads that needs spot roads that need spot improvement improvement * NS3 on the network with . NSI 1/3. f.the.time.between . NSI 1/20 f the time between traffic <150 v/day two regravellings (3 years two regravellings (4 years max.) max.) *NS4 on the network with a traffic > 150_v/day_________________________________ ANNEX E Page 9 of 16 22. It has been accepted that the evolution of the levels of degradation listed above are valid for a percentage of 20% of heavy trucks. The time lag to reach the levels LSI has also been modified as presented above, in a linear fashion between the following extremities: 20% reduction in the values of the time lag for 10% of heavy trucks and a 20% increase in the values for 30% of heavy trucks. 23. Economic Rate of Return in the Base Case. The assumptions and the results of the economic analysis of the program for each of the three above cases are summarized in Table E-10. The results of the economic analysis for each itinerary and for the above three scenarios are given in Table-E-4 and summarized below. This table presents the length and traffic for each of the 61 road sections: (a) the cost of investment and periodic maintenance; (b) the present costs (12 percent discount rate) for elimination of trouble spots and rehabilitation of drainage structures; (c) the benefits resulting from the execution of works, which are savings on traffic costs, deducted routine maintenance costs compared to the solution without Project; (d) the net present value for the base case; and (e) the internal rate of return of the two sensitivity cases. The economic analysis for the base case shows the following: (a) the maintenance strategy resulting from optimizing the above, presents a high global economic returm; (b) 6 itineraries present an internal rate of return inferior to 12 percent. However, knowing thiat 5 out of these do not offer any alternative itinerary, a return has been computed on these sections reducing works to those necessary to enable traffic all year around but with difficult passages. In this case, only one section. (Datori-Cobli) presents an economic return inferior to 12 percent. Sensitivity to the level of routine maintenance is very high. 24. Sensitivity Analysis. Should traffic increase only by half (25 v/d instead of 48 v/d assumed for the base case) on the sections currently in poor or very poor conditions, the ERR for the overall program will remain very high but two additional sections will have an ERR below 12 percent. Therefore, the program execution on these sections will start by spot improvement, execution of the rest of the program (rehabilitation of drainage structures and periodic maintenance), being subject to an actual increase of traffic after the spot improvement works have been completed. 25. The reduction of the routine maintenance budget to the level of 1994 (CFA franc 1.7 billion) would result to an ERR below 12 percent on 42 sections. The investments in elimination of trouble spots. in rehabilitation of drainage structures and in periodic maintenance on these 42 sections will be conditioned to the actual execution of the maintenance programs at the required levels of service (CFA franc 2.7 billion per year). In the case when budgets are reduced, a rehabilitation works and maintenance approach on these sections will be considered and thus the program defined in the proposed program be redefined. ANNEX E Page 10 of 16 Table E-4: Base Case and Sensitivity Cases Assumptions and Results of Economic Analysis (in billion CFA franc) Cases Assumptions Cost Benefits NPV ERR - traffic measured on roads with service level above 3 (fair) - traffic 48 v/d on roads with 16.641 59.041 42.400 103% maxi Base Case service level below 3 302% mini -8% 6 sections below 12% - routine maintenance corresponding to the economic optimum (billion CFA franc 2.7 per year) - traffic measured on roads with service level above 3 (fair) Reduced by - traffic 25 v'd on roads with 16.641 54.990 38.349 98 % maxi Half Traffic service level below 3 302% mini -2% on Road in 8 sections below Poor 12% Condition - routine maintenance corresponding to the economic optimum - traffic same as in the base case 16.641 19.205 2.564 22% maxi 56% Reduced mini -13% Routine 42 sections Maintenancebeo12 - routine maintenance remains at 1994 level (CFA franc 1 .7 billion per year compared to CFA franc 2.7 billion per year) ANNEXE Page 11 of 16 Table E-5: Benin: Earth Road Routine Maintenance Required by Service Level Service Levels and Maintenance Activities Traffic Levels (vehicles per day) < 10 10 - 50 50 - 100 100 - 200 > 200 Service Level NSI (Very poor) Frequency of light grading/year 0 0 0 0% 0 0% 0 Heavy grading (% per year) 0% 0% lOm3 103m 0% . t, ~ ~~~3 3 3 ]ml 3 Emergency repairs (m /km) 15 m 15 m 10 m Service Level NS2 (Poor) Frequency of light grading/year 0.25 1 3 10% 4 10% 5 10% Heavy grading (% per year) Emergency 5% 10% 1i m3 1i lo 3 3 ~~~~ ~~~ ~ ~~~~ ~~~3 3 lo]Olo repairs (m 'km) 15 m 15 m Service Level NS3 (Fair) Frequency of light grading/year 0.5 2 5 15% 7 15% 8 20% Heavy grading (% per year) Emergency 10% 15% 10 m 1 n3 10 m3 3 3 3 repairs (m /km) 15 m 15 m Service Level NS4 (Good) Frequency of light grading/year 1.5 4 7 20% 9 20% 10 Heavy grading (% per year) Emergency 20% 20% l 3n 3 20% 3 3- lo lom repairs (m /km) 15 m 15 m 10 m Service Level NS5 (Excellent) Frequency of light grading/year 3 6 10 12 16 Heavy grading (% per year) Emergency 30% 30% 30% 30% 30% 10 3 ~ ~ ~ ~ ~~~ ~ ~ ~~3 3 - 3 3 3 repairs (m /km) 1 5m 15 m Om lOm m Table E-6: Benin: Earth Road Periodic Maintenance Required by Service Level (Frequency of regravelling in number of years) Traffic Levels (vehicles per day) Service Levels < 10 10 - 50 50 - 100 100 - 200 >200 Service Level NSI (Very poor) 14 years 14 years 14 years 14 years 14 years Service Level NS2 (Poor) 14 14 14 14 12 Service Level NS3 (Fair) 14 14 12 9 8 Service Level NS4 (Good) 14 14 9 7 6 Service Level NS5 (Excellent) 14 10 6 5 4 ANNEX E Page 12 of 16 Table E-7: Benin: Earth Road Service Levels and Economically Optimal Routine and Periodic Maintenance Activities Traffic and Service Levels Routine and Periodic TO Ti T2 T3 T4 Maintenance Activities < 10 10 - 50 50 - 100 100 - 200 >200 NS 3 NS 4 NS 4-5* NS 4-5* NS 4-5* Routine Maintenance Frequency of light grading/year 0.5 4 7 10 12 Heavy grading (% of length/year) 10% 20% 20% 10% 10% 3, 3 3 3 3 Emergency works (point a temps; m Ikm) 15 m 15 m 10 m 10 m 10 m Clearing of roadside vegetation 1.5-2.5 1.5-2.5 1.5-2.5 1.5-2.5 1.5-2.5 (cantonnage; no./year)* Mechanized drain clearing (no./year)* 1.5-2.0 1.5-2.0 1.5-2.0 1.5-2.0 1.5-2.0 Periodic Maintenance Frequency of regravelling (in years) 14 14 9 5 - 7 4 - 6 * NS4 when truck'car modal split is 10/90, NS5 when it is 30/70. Table E-8: Benin: Estimated Annual Routine Maintenance Cost for Earth Roads (millions CFA franc) Type of Routine Maintenance Works Works quantities and costs Light Heavy Patching Drainage Roadside TOTAL grading grading (point az clearing clearing temps) (cantonnage) Quantities 12,500 km 400 km 25.800 m 3,200 km 3,400 km Total cost, routine 660 M 140 M 120 M 150 M 540 M 1,610 M Table E-9: Benin: Estimated Annual Periodic Maintenance Cost for Earth Roads: Regravelling Requirements (millions CFA franc) Traffic Levels Works quantities and costs TMJA 1996 TMJA 1996 TMJA 1996 TOTAL < 50 veh/day > 50 < 100 veh/day > 100 veh/day Length to be regravelled 428 km 555 km 437 km 1,420 km Quantities 385,000 m3 583,000 m3 589,000 m3 1,557,000 m3 Total cost, periodic 2,300 M 3,500 M 3,500 M 9,300 M ANNEX E Page 13 of 16 Table E-10: Economic Justification of the Earth Road Work Program Base Case iLCase2 IlCase 3 hTnffic Length EPC OA Rech Total | Invest. a) Benefits ' [ NPV c RI % RI % IRI % Carrefour (Zian) - Igofo 402 12 '47 '82 ( 129 1,970 1841 302 302 56 Akpro - Adjohoun 354 25 '32 '168 200 3.576 3.376 392 392 62 Lokossa-Deve-Aplahoue 214 36 25' '244 ( 240 2.651 2411 184 184 45 Zuunhoue - Athiemre (Front Togo) 214 7 '49 44 514 471 199 199 47 Ouidah - Allada 209 35 '6 '238 218 2,507 2 299 193 193 46 Naitiongou -Carefour RN7 207 2 = 11 '15 ( 23 136 113 81 31 11 Ouake (Frootiere) - Djuugou 162 37 '254 '249 449 1,986 1.537 62 62 3 Okoulaosse (Lim Pro.) -Bassila 192 53 75 '356 ( 385 3365 2.980 123 123 34 Savalo - Okoutaosse (Urn Pr) 192 88 -189 '597 0 702 5596 4,895 112 112 32 Tchetr - Savalou 171 38 145 '258 360 2.198 1,838 as 95 Parakou - Binassi 209 25 '1i 0 151 1.706 1,555 165 165 39 Nikki- Ch,candou 161 22 '27 '152 179 1.298 1.109 100 100 30 N'Dal - Nikk, 139 55 98 '274 '374 98 746 3 201 2,455 97 97 29 Save - Okeuwo 96 28 '89 '144 1 208 766 558 53 53 9 Camefour RN7- Tanguiela 94 47 '184 '141 259 1,139 880 63 63 11 Bassila - Djougou 89 87 '761 '456 ( 970 2,032 1,062 30 30 3 Nikki K-alale (IDA) 89 48 '36 '250 229 1,063 835 98 68 12 Bankoana - Kand. 86 70 '294 367 39 503 1,525 1,022 44 44 7 Djougou - Affon (Limise Prenoce) 80 50 '99 263 263 281 996 715 51 51 8 Affon-Sonoumun 80 22 '25 113 11 110 436 326 57 10 10 Sonoumon- Boo 80 18 '53 95 9 118 362 244 44 44 7 Bon - NDal, 8t 37 '37 193 193 183 733 549 58 58 10 Aqohoun - Bonou (IDA) 76 31 '1 '137 161 599 599 972 373 26 26 2 FoBoure-GuessouSud 75 31 58 163 221 157 514 357 47 47 7 FoBoume-Sinende6 75 27 10 144 1 110 441 332 58 58 10 Tanguieta - Porga (Carrefour) 72 52 10 929 272 09 908 1.259 351 19 19 0 Dpougou- Pehunco 99 72 '521 210 305 51 1,036 1.877 841 28 28 2 Logozoh& - Glazou6 99 17 145 90 235 167 271 104 23 23 1 Kota - Kouande 54 43 '22 21 126 147 169 680 511 55 55 9 Pehunco - Umite Province 52 32 '133 169 93 262 395 610 215 23 23 0 Siendi - RNIE2 (Yar) "-848 51 '105 188 10X 289 393 968 575 46 46 6 Boukoumbe - RNIE 3 48 43 108 99 196 140 454 315 44 20 6 Bioass (Pinene)- Nikk, "25-48 77 '62 345 152 497 559 1.455 896 50 198 Fint Burktna- Knremou --48 321 '67 110 63 17 240 614 374 51 19 6 Knimou - Banikoara '-48 1 5 '30 21 29 5 80 278 198 81 29 11 Kandi-Segbana 48 95 '45 133 115 24 293 1.598 1,305 126 10 14 Segbana - Front. N(geia "'10-48 10 '21 315 20 336 356 245 -111 S -2 -5 UmOte Prounce - Fo Bourne 48 16 71 50 121 86 175 89 28 12 1 ULmst Province - Bankoara 48 42 51 91 133 94 436 342 62 28 10 Kalale - Bessass8 '1I7-48 15 '31 40 29 69 100 292 182 57 20 a Bessassi-Gaouenzi '10-48 11 '24 31 22 53 77 207 130 53 19 7 Geouenzi - Niganzi "10-48 35 '73 95 70 169 238 658 1 420 55 20 7 Niganzi - Sigbana "10-48 39 '91 105 77 192 263 733 470 56 20 8 Bonou-LUrnPmv "9-4 9 69 5 27 3 40 111 71 56 19 8 Urn Pro- Ouinhl -9-48 18 '37 18 81 136 335 199 47 16 6 Ouinhl-Kpidikpo -9-48 17 '36 182 26 208 244 342 98 21 6 0 Porga (Carreobur) - FrnotireBurkIn 45 '3 49 4( 35 138 103 51 51 6 Zuungbonou-Bopa-Come 43 47 '98 97 93 1 288 777 489 53 53 a Kemu - Unyite Pmomnce 43 25 42 0 132 94 235 14 35 35 3 Kouandi-FPhunco 41 39 '57 26 131 157 214 527 313 41 11 4 PFhunco - kerou 40 73 '34 99 209 3 342 1,032 690 52 52 6 Doumr (Fronotere) - Tchelti 39 23 '130 33 1D5 138 191 245 54 18 18 0 Cobly - Tangui6ta 27 35 '242 95 140 235 426 329 -96 7 7 -6 KorontiAre - Boukountm 17 17 '187 31 63 9 242 104 138 -1 -1 -8 Guene - Kanmama 186 41 '380 79 82 161 465 216 -249 0 0 -° Tchaoumnu - BAtirou 16 54 '338 279 199 438 693 297 -396 -1 -1 -9 Dauton - Cobly 7 32 '143 89 64 15 86 -121 -210 -9 -d -13 Total 3,534 6,987 8,632 9,08 16,842 99,041 42,676 Proposed under IDA finenQnol _ _ _ Traffic date colleced - estimated after rehebilitston IRI for the progam: 103 98 22 -' Spot irrwnpvement (EPC) and drrnmage structure repars (OA) _ _ I _ 6: Benefits uter cost savings minus oost of maintenance Fl Net Present value ANNEX E Page 14 of 16 Table E-11: PROGRAMME PROPOSE DROA BENIN: PROGRAMME PRIORITAIRE QUINQUENAL DES INVESTISSEMENTS ROUTIERS (1996 - 2000) Traffic km Couits T.R.I. Financement Year TMJA Totaux (mio FCFA) 1 - Routes bitum6es ( 1.1 Constnuction routes bitumees 1.1.1 Routes Interurbaines RNIE3 Djougou-Natitingou 82 5,240 BID + Fonds Koweitien En cours RNIE6 Parakou-Djougou Lot A 65 671 !BOAD + OPEP+CEDEAO+BN En cours RNIE6 Parakou-Djougou reste du projet 71 6,300 FED En cours RNIE1 Cotonou Porto-Novo Travaux 28 46,290 37% KFW+BAD+BOAD+FED+BN 1996 RNI E4 Abomey-Bohicon-Ketou-Illara 100 10,040 21% BAD+BOAD 1996 RNIE Natitingou-Porga 111 6,770 10% A rechercher (+5500 apres 2000) 1999 RNIE Djougou-Ouake 28 810 8% A rechercher (+3300 apres 2000) 2000 RNIE3 Savalou-Djougou 228 180 6% A rechercher (+20 200 apres 2000) 2000 Amelioration securite 600 IDA 1997 Total Const. Rtes Rev tues Inter-urbalnes 713 76,901 1.1.2 Construction routes urbaines MTPT (accAs et traversee de Cotonou) Lot Al Akossombo-Etoile Rouge Solebra 10 2,851 BAD-BOAD-BENIN Lot C Godomey-Akossombo 6 19,000 41, 2% En negociation Lot D Etoile Rouge OCBN-3 Banques 3 6,700 34,6% A rechercher Lot E Port-Ancien Pont 10 9,500 12,3% A rechercher Lot E Ancien Pont-Carr Sobebra 4 7,000 12.3% En negociation Lot F Akossombo-3 Banques 6 7,900 45% A rechercher PLan et travaux d'amelioration circulaton 2,200 IDA Sous-Total Const. acces et trav, de Cotonou 35 55,151 1.1.3 Am6iloration Circulation dans Cotonou 2,0001 IDA Total constnuction Routes bitum6es Urbaines 57,151 Total Construction Routes Bltum6es 134,052 1.2. Rehabilltation de routes bitum6es RNIE2 Beroubouay-Malanville 166 12,157 24% FED En cours RNIE 1 Cotonou-Hilacondji 90 12,600 15% FED 1996 RNA Pobe-Onigbolo-Ketou 43 3,400 12%/ __ En negociation 1997- RNIE4 Dogbo-Azove-Abomey+Azove-Toh+RN 2B Re 95 8,440 20% DANEMARK 1996 Total Rehabilitation RoutesBitumXs 394 - 36,597 1.3 Entretben P6rlodlque de routes bitum6ees RNIE1T Seme-Krake 1 10 730 30% A rechercher 1997 RNIE1B Porto-Novo-Avrankou-lgolo _ 28 2,300 56 a 123% A rechercher 1997 RNIE4 Dassa-Savalou/RNIE1B Bohicon-Parakou 33 10,000 10.50% A rechercher 1996 Postes de peage 1 2,400 CFD 1998 Total Ent. p6rlodIque Rtes Rev4tuea 71 15,430 2. Routes en terres I _ i _ I _ 2.1. Elimination Points Crttiques et R6habiDltatlon des Ouvrages (Detall tableau EIO) 1 zoungbonou - Bopa - Comen 43 47 195 N/A IDA 1996 2 Sinende- RNIE2 (Yara) 48 51 293 N/A IDA 1996 3 Gu6ne - Karimama 16 41 439 N/A IDA 1997 4 Okoutaosse (Lim pro) - Bassila 192 53 75 5 Bassila - Djougou 89 87 761 6, Natitingou - Carrefour RN7 207 2 1 1 7 Carrefour RN7 - Tanguieta 94 47 184L 8 Tanguieta - Porga (Carrefour) 72 52 636 N/A IDA 1996 10 Ouake (Fronbere) - Djougou 162 37 2541 11 Djougou - Affon (Limits Provin) 80 50 89 12 KorontiAre- Boukoumb6 17 17 218 N/A IDA 1997 13 Boukoumbe- RNIE 3 48 43 108 14|Kota-Kouande 54 43 43 N/A IDA 1996 ANNEXE Page 15 of 16 15lKouande-Pehunco 411 38 83 N/A IDA 1 1996 16 Djougou-Pehunco 69 72 731 N/A IDA 1996 17 Pehunco-Kerou 40 73 133 N/A IDA 1996 18 Kenou - Limite Province 43 25 42 19 Pehunco- Limite Province 52 32 302 N/A IDA 1996 20 Datori - Cobly 7 32 232 N/A IDA 1997 21 Cobly - Tangui6ta - 27 3g 337 N/A IDA 1997 22 Ouidah - Allada 209 35 -6 _ 9 24 Binassi (Perere) - Nikki __r 48 77 407 N/A IDA96 25 Nikki - Chicandou - 161 22 = 27 _ 26 Front Burkina - Keremou 48 32 177 N/A IDA _ 1996 27 Keremou - Banikoara __= 48 15 51 N/A IDA 1996 28 Banikoara - Kandi 86 70 264 29 Kandi - Segbana 481 95 =1i8 N/A IDA t 1996 30 Segbana - Front Nig6na 48 10 336 N/A I7DA 4 1996 31 Tchaourou - Beterou 16 54 617 N/A IDA 1997 32 Affon - Sonoumon 80 22 25 33 Sonoumon - Bori 80 18 53 34 Bon - N'DaIi = 80= 37 _ __ __ 35 N'dali- Nikki _ _ _ _ 1391 55 372 N/A IDA 1996 36 Limite Province 48 16 71 _. _ 37 Fo Boure - Guessou Sud 75 3f1 58 _ _ 38 Fo Boure - Sinende _1= 75 27 10 ._ __ 39 Limite Province- Banikoara 48 42 51 _ _ 40 Nikki- KaIaIl _ 89 48 36-_ 41 Kalale - Bessassi 48 15 71 N/A IDA 1996 42 Bessassi - Gaouenzi 48 11 55 N/A _ IDA 1996 43 Gaouezi - N4ganzl 48 35 16 N/A IDA 1996 44 Neganzi - Segbana 48 39 186 N/A IDA 1996 45 Lokossa - Deve - Aplahoue 214 36 25.................... _- 47 Carrefour (Zian) - golo 402 12 47 50 Akpro - Adjohoun 354j 25 3 51 Adjohoun - Bonou 761 311 438 N/A IDA 1996 52 Bonou - Lim. Prov 48 6 13 N/A IDA 1996 53 Savalou - Okoutaossle (Lim Prov) 192 88 189 56 bDoume (Frontire) - Tchetti | 39 23 163 N/A IDA 1996 S7 Tchetti - Savalou 171 38 145 5Lgozohe- Glazoue 69 17 1451 59 Save - Okeowo 96! 281 89 o60Lim. Prov - uinhi 48, 18 551 N/A |IDA [ 1996 d61Ouinhi-Kp6d6kpo | 48 17 218 N/A IDA 1996 Travaux urgents sur 1. 18, 27, 30, 36, 38. 40, 45. 52 | 540 N/A TBOAD 1996 |Sous-total Rehabilitation j 1996 Froutes en terres (EPC etOA) 2,022 10.521 (3.534 EPC + 6,987 OA) 1996 Sous-Total Ent. periodique Rtes non-revetues 2,068 8,532 (See detail per road in Annex 10) | _ _ __- 3. Routes Rurales Rehabilitation 407 km 646 BOAD -Rihabilitation Borgou, Oueme et Zou 3.141 BID Rehabilitation Mono II - 850 FED Amenagement Zou et Bourgou 6,000 CFD 6 Operations pilotes 1,600 |IDA 'Pistes Atlantique ___- 445 KFW Ponts dans I 'Atacora | | 1.300| | A rechercher Entretien periodique l 1., jBN Total Routes Rurales 15,482 TOTAL GENERAL 220,600 | RECAPITULATION j j j Construction ou amelioration routes bitumees 134,052 ANNEX E Page 16 of 16 Graph E-12: Definition of the Optimal Maintenance Strategy 10 % of Truck Traffic 250- 0 °NS1 E ° 0_ > 200 veh./day , w 150 NS4 NS5 0. 5 o NS1_5 100-200 veh./day > 0 - 0 a 1 0 1 2 14 16 t18 20 22 Cost of Road Maintenance per Km for each Level of Service (in CFAF 000) 0 70 0 60- o 50-1 00 ve h./day 0 U. E 40 - NS1 NS2 0.~~~~NS " 'U30- _ sNS3 NS5 10-50 veh./day ° 3 20 o NS1 NS2 NS3 NS4 NS5 ° < 110 veh./day S o o - 0 0 7 8 9 10 11 12 13 14 15 Coat of Road Maintenance per Km for each Level of Service (In CFAF 000) ANNEX F Page 1 of I REPUBLIQUE DU BENIN PROGRAMME SECTORIEL D'INVESTISSEMENT DES TRANSPORTS DOCUMENTS PRINCIPAUX DANS LES ARCHIVES DU PROGRAMME 1. Restructuration du personnel du fonds routier. Ass. Schene, decembre 1995. 2. Evaluation economique des strategies d'intervention sur les routes en terre. Audit du BGR. Actions de formation. Pierre Desgranges, consultant, septembre 1995 3. Etude sur la promotion du secteur prive des travaux publics. P. B. de Ronchi, J-L. Gallez, consultants, janvier 1994 et P. Achy, mars 1995. 4. Rapport de mission et annexes. Impact de la devaluation sur la strat6gie sectorielle des transports du Benin. J. P. Taroux et J. Baillon, Consultant, juillet et a6ut 1994. 5. Plan d'entreprise 1995/2000. PAC, Jonction Etudes Conseil, mars 1995. 6. Etude economique du programme de routes en terre, V. Chagnaud, novembre 95 7. Detailed project implementation, World Bank, decembre 1995 8. Justification economique. Composante portuaire et programme routier (Annexes A5 et B5, World Bank, decembre 1995 9. Formation MTPT. Mission de Dominique Prin aupres de la DROA/MTPT, fevrier 1995 10. Rapport de Mission. Etude exploratoire. Circulation de Cotonou et enquetes carrefours. Transitec Ingenieurs. Mars et avril 1995. 11. Rapport final et annexes B et C. Etude de faisabilite de la rehabilitation et l'entretien des routes de desserte agricole. Berocan International Inc, a6ut 1995. 12. Restructuration du Port. Document de travail. Mission d'evaluation du Projet Sectoriel des Transports. Gros Didier de Matons, a6ut 1995. 13. Clarification statuaire du Fonds Routier. Rapport de mission de Claude Piganiol. Ass. Schene,juin 1995. 14. Etude de l'impact environnemental du projet. Nicolas Engli, Consultant. I B URKINA FASCI'_ N GE ,, ModAIoUl; .~ \ f o - BN NIGR, N I E '4 1 NIGE UR KI NA \ 3 Iulos\dtored i ENN N I G E R I A 12 FASOStb.. Gooc S C -. KeIc ~ ~ ~ ~ IVESMENcPRGRA Redjecde IDe.epcgROAeINFASTR CTUR /o ' N/ ' - e aL s/ > \ ^t \ g P/ARAKOTRANSORT ECTO .i schooutonL ang~4 INVESTMENT PROGRAM 1996-2000 FIVE YEAR PRIORITY PROGRAM K,I,b; - CONSTRUCTIGN GR UPGRADING GF PAVED RGADS N - v; o, / PERIODIC MAINTENANCE GN PAVED ROADS t Brle - uesse .. SEASGNAIE IMPASSAbLE EARTH ROADS T O G O T O BE REMAyblIAIAlED' z I ~~~~~~~~~~~ID,bE. CoIo,e RECGNSIRCIJED RECSURFACED, OR RGAEE z ,! 1 7, Dlebe K°n;z ssTud_c 9 ~~~~~~~~~~~~~~UNDER PR EVIO S DA PROJECTS AREAS GF RURAL ROADS PILOT OPERATIONS' (V~~~~~~~~~~~~~~~~~~~~~~~~~~t TtSP CONTRIBUIING FINANCING o.o~~~~~~~~~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~ ou01 01.1iNO t3N ^lR SIO' IAC)S ..D PERIODIC |LIII PRORIllr IRCII AM IO RE fINANIjD (INDIA ISP : ! : stt |n X ,, 9 , 1 ~~~~~~~~~~~~~~~~~~~PAVI D ROA )5 'A I Recogeoc - ___ P. LARIH ROADS g-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~--- T b /i lRACKS I 'Adck,plc;> RIVERS I III \'' l;e. J INTERNATIONAL AIRPORT 3 I ~~~~ ~ ~~~~~~ ~ ~~~~D. K .1c REGIONAE AIRPORTS Alcee A jeyc'cI AEGMEY D_n SdcpEe -\ j < NATIONAL CAPITAL / obome AcTOR Oe.elA l A--4 A I SELECTED CITIES AND TOWNS ) l )< : t_gb_d_me 1 1 1sj 4 \ eJ~~~~gb REGION CAPITALS > Aploh_@v ) \ AL /)5 ' L {B_n_u t) iiA INTERNATIIGNAL bOUNDARIES 'A~~~~~~~~~~~~~~~~~~ k. ~ ~ ~ ~~~. 1 ic 09SSA Ad,d,<+f Nl9 s \ ..ucLoed,9Ap"A'AG,cc Pope w _ __ ; ,~~~~~~- IBRD 2;7_28 BENIN M A L I TRANSPORT SECTOR INVESTMENT PROGRAM COTONOU JSURKINA PASO C* r EXISTING BUS/TRUCK STATIONS MAIN ROADS PLANNED BLS/TRUCK STATIONS --- CITY BOUNDARY Th. b- d .. .. I, f BE N NIGERIA 3 INTERSECTIONS TO BE IMPROVED UNDER ONGOING PROJECTS PROVINCE BOUNDARY A, , _ n GHANA G r INTERSECTIONS TO RE IMPROVED UNDER THE TSP T h. MdS,An , P-m h'. VC. I MTPT NETWORK INTERNATIONAL BOUNDARIES (INSET) ... Aecro GA/f of GA,ne- -_ -- -- -- -- -- -- -- -- -- -- -- -- -- ------ ----- -- -- -- -- -- - - - - - - - ---------------- 7 ---------- _ r SHERATON HOTEL PORT ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~~~~~~~~~~~~~~~~~~HOTN To Ib=mez _ I z2 t Bigh 9 h t oNf Ben n, < ~ ~ ~ ~ -- - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - -- - - - -o ' - - - - -- - - - - SILH EE _B S9 ~~~~~~= gl…DE / r0 ,. :' -X--_ . I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~AY'9 IBRD 27A2? C 0 T N 2 N,CErr zJ L iL BURKINA * FASO Main entrance to port0 Fl =>-- -g\ B E N I N | 94ErJ | < 53>/ port ˘TOGO Ro Ro ramp Commercirzl berths iot recr// Derelict It _ ISynchrohhl // ~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~wharf G ins Port 6asin for ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~P.rt. N-~~~~~~~~~~~~otoN~o oo ffi \} 0?T m 3 ~~~~~~~~~~~ 11 *l~~~eters (36 feet) ssels,o/ od 9*Q*o etroleum~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~Lo~ andtonou t gL k // ~~~~~~~~~~~~~~~~~~~~~~~~containers tm - Nacigation buoy BEN IN TRANSPORT SECTOR INVESTMENT PROGRAM COTONOU PORT PAVEMENT TO BE UPGRADED Cut-off breakwater BUILT-UP AREAS '~------- ' RAILROADS t PORT CUSTOMS FENCE 0 0 MEtTERS , -- - ., ....;(>'<,iN I G E R |S< l 0% X sia I? B U R K I N An Lirr 'BUR INd\ 0p1.loo.. (0 ) LOT -J Rod1 coT,~~~~~~~~~~~~ ~G- \ a \ *tR ooot.oo / O G oau K / 4 l /) Goon. /1 OKooler: ~~~~Kosooo 46; -O Aogooo-Debo jo > K N IG ERIA J4 r' '40 . 010...0 H 51 ---- -i t PO{9 Sonsoro°tT.Loug- | X Dussosl ~ ~oI,ol °0loGogouooo Seygooo&' j DoTg-I,,oo 406 EK,,oo j / K.bi 25 32 Y-o j 7 ° T..k:.-_uno K.... l. G....n 0 Tookooo,ro Noo lLN 44 t2i K.oo,-qo 323.obo oS oO0Kooonl,.. 512 I Kolopoongo 37 PeTonLo 0c T '6 49~~~~~~~~0 0or 011-6-k,e& RowLokobeK 49 1Fo-Bou, 521 18S 1, 184 62 0G0000o- Sod ! 01 o10n 6J Se,ou 8|/oo 1'9 oNSLL ,- * 205 196 _- 0Boeleloungou ° O068 bo,, 101 'N K'Iooooo Bod,ood. (Doopogol3 0D^oogoo 75 no00on000 0 ;~~~~~~~~1 745 J \ 1 owe We 25 B ( K > tS 115 'P-k- / N.. ~~~~~~~~~~~~~~~~~234 P N, '_heeou j \ ~~~~~~~~~~~~~~~~~~~~592 A. ; 'B E N I N \ 2TRANSPORT SECTOR 9 jINVESTMENT PROGRAM 1,79 h 1994 ROAD TRAFFIC VOLUME Ns N 0ZOkofaoloouo Voo K,6o0 , OITNJAn1O VEHICLES/DAY to0e,e 486 o: ISoT 10<1NJAo20 VEbICIES/DAY <: aI T O G O ' Dlebe K:nionguudo \ ~~~~~~~~~~~~20