FILE COPYReport No. 888a-MLI

Appraisal of aThird Highway ProjectMaliNovember 25, 1975

Western Africa Projects DepartmentHighways Division

Not for Public Use

M

Document of the Worid Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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Currency Eauivalents

Currency Unit = Mali Franc (MF)US$1.00 M MF 450 !îMF 1 million = US$2,222

Fiscal Year:

January 1 - December 31

Weights and Measures: Metric System

Metric British/US Equivalents

1 meter (m) = 3.28 feet (ft)1 kilometer (km) = 0.62 mile (mi)1 square kilometer (km2) = 0.386 square miles (sq mi)1 kilogram (kg) = 2.2 pounds (lb)1 metric ton (ton) = 2,204 pounds (lb)

Abbreviations and Acronyms

BCEOM - Bureau Central pour les Equipements d'Outre-MerCMTR - Compagnie Malienne des Transports RoutiersDNPS - Direction Nationale du Plan et de la StatistiqueDNTP - Direction Nationale des Travaux PublicsDPW - Directorate of Public WorksHEP - Highway Equipment PoolMTPW - Ministry of Transport and Public WorksONT - Office Nationale du Transport (National Transport Office)UNDP - United Nations Development ProgrammeUSAID - United States Agency for International Developmentvpd - vehicles per day

1/ This rate has been used throughout this report. Actually theMalian Franc is floating pegged to the French Franc.

MALI

APPRAISAL OF A THIRD HIGHWAY PROJECT

TABLE OF CONTENTS

Page No.

SUMARY .............................................. i - iii

1. INTRODUCTION .......................................... 1

2. THE TRANSPORT SECTOR ................................. 2

A. Economic Setting . . 2B. The Transport System . . 3C. Planning and Investments . . 4D. Transport Regulation and Coordination . . 4

3. HIGHWAYS ............................................. 5

A. The Network . . 5B. Characteristies and Growth of Road Traffic 6C. The Road Transport Industry . . 6D. Administration . . 7E. Engineering and Construction . . 7F. Maintenance . . 8G. Financing .................. 8

4. THE PROJECT ................. 10

A. Description . .10-Feeder Road Improvement . .il-Backlog Maintenance. 12-Training Center . .12-Consulting Services . .12

B. Cost Estmates . .13C. Execution and Procurement . .15D. Financing and Disbursements . .15

5. ECONOMIC EVALUATION .16

A. General . .16B. Feeder Roads .......................... ,.,. 16C. Backlog Maintenance .......................... , 17D. Transport Plan ................... 18

6. AGREEMENTS REACHED AND RECOMMENDATION .18

This report was prepared by Messrs. M. Melegari (Engineer) and A. Byl(Economist).

Table of Contents (Cont'd)

TABLES:

1. Road Network, 19742. Registrations and Size of Vehicle Fleet: 1965, 1970-19743. Fuel Consumption: 1970-19744. Road User Contributions to Public Revenues: 1971 and 19735. Highway Expenditure and Financing: 1970-19746. Highway Maintenance Expenditures: 1974-19787. Feeder Roads to be improved, and Work Schedule 1975-19788. Feeder Road Design Standards9. Paved Roads to be maintained, and Work Schedule 1976-197810. Feeder Road Element: Cost Estimates11. Maintenance Element: Cost Estimates12. Training Center Element: Cost Estimates for Procurement of

Equipment13. Consultant Services: Cost Estimates14. Synthesis of Cost Estimates with Proposed Financing15. Cumulative Disbursement Schedule, 1976-197916. Feeder Roads to be improved, Summary Execution Schedule for

Economic Analysis17. Feeder Roads: Cost and Benefit Streams18. Internal Rate of Return and Sensitivity of the Feeder Road

Element of the Project19. Vehicle Operating Costs per km not including taxes20. Backlog Maintenance Element: Cost and Benefit Streams

MAP: MALI - Transport Network (IBRD 11682)

MALI

APPRAISAL OF A THIRD HIGHWAY PROJECT

SUMMARY

i. Mali's economy is primarily rural, with agriculture, livestock,and fishing accounting for roughly half of Gross Domestic Product, andemploying almost 90% of the population. An efficient transport system isvital in view of the country's landlocked position and the long distancesbetween economic centers. The present system comprises four main elements:3,300 km of all-weather roads; a 640 km railway linking the capital, Bamako,with the port of Dakar (Senegal) via the Senegalese railroad; about 1,650 kmof inland waterways, navigable only about seven months per year; an interna-tional airport at Bamako and about a dozen local airfields. This system iscomplemented by an extensive network of secondary roads and tracks whichprovide access to rural areas.

ii. The Covernment's transport strategy has focussed on developinglocal infrastructure in support of overall economic growth, building an appro-priate international network to reduce the country's foreign trade handicap,and promoting regional integration.

iii. Bank Group efforts in the transport sector, which began in 1966with a project (Credit 95-4MLI, US$9.1 million) to help rehabilitate andmodernize the railway, have responded directly to these objectives. In 1969,the United Nations Development Programme (UNDP) financed, and the Bank super-vised the execution of a countrywide transport survey which provided thebasis for subsequent Bank Group operations in the sector. These have inclu-ded: (i) a First Highway Project (Credit 197-MLI, 1970, US$7.7 million) forimprovement of highway maintenance, upgrading of agricultural feeder roads,and preparation of preinvestment studies to rehabilitate the country's twomain trunk roads, Bamako-Bougouni and Faladie-Segou; (ii) a Second HighwayProject (Credit 383-MLI, 1973, US$9.5 million, increased in 1975 to US$17.8million) for rehabilitation of the two trunk roads abovementioned, preparationof preinvestment studies for the Bamako-Kolokani road, and continuation oftechnical assistance for the maintenance and feeder road components of thefirst project; and (iii) a Second Railway Project (Credit 384-MLI, 1973,US$6.7 million) for procurement of additional equipment and for track renewal.

iv. The proposed Third Highway Project provides essentially for follow-up operations to the improvement of road maintenance and of agricultural feederroads, efforts which were initiated under the First and Second Highway Projects.The project consists of: (i) continuation over 3-1/2 years of a program forimprovement of about 1,200 km of feeder roads in the most productive cottonand groundnut areas; (iî) a 3-year pro-ram for elimination of the backlog ofperiodic maintenance on about 944 km of paved roads, and purchase of spareparts and equipping of repair shops in two new subdivisions; (iii) procure-ment of office equipment, teaching materials, and vehicles for the Training

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Center of the Department of Public. Works (DPW); and (iv) consulting servicesfor (a) technical assistance to DPW for implementation of the feeder roadimprovement and the backlog maintenance programs, (b) preparation of atraining program for the DPW Center and training of teaching staff, and(c) preparation of a study to establish a countrywide transport plan.

v. The total cost of the project (including taxes and contingencies)is estimated at US$13.4 million equivalent, of which US$8.4 million in foreigncosts (63%); the local costs of US$5.0 million equivalent include US$2.2 mil-lion equivalent in taxes and duties. The proposed Credit of US$10 millionwill finance the entire foreign cost of the project and an estimated US$1.6million of the local costs, equivalent to about 89Z of total project costsnet of taxes. The Government will finance all taxes and duties, plus theremaining local costs of about US$1.2 million equivalent.

vi. Execution of the project will be primarily the responsibility ofDPW, with the National Transport Cffice (ONT), being responsible for imple-mentation of the transport plan. The feeder road improvement and backlogmaintenance works will be executed by DPW's own forces established under thetwo previous highway projects. The planned schedule is as follows: improve-ment of feeder roads, January 1975 - mid-1978; elimination of backlog mainte-nance, January 1976 - December 1978, with some training in 1975; consultingservices for technical assistance and the transport plan study, 1976-78.The Association will provide retroactive financing for expenditures incurredfor the feeder road component in an amount estimated at US$900,000. Retro-active financing will also be provided for some technical assistance and forsome materials necessary for bituminous road maintenance training (estimatedcost of USS200,000). All consultants for the proposed project will be employedon terms and conditions satisfactory to the Association.

vii. The two ferries (US$0.6 million) which are simple in constructionand have to be assembled at the site, would not be attractive to suppliersoutside those currently established in Mali. They will therefore be procuredon the basis of local competitive bidding. Bitumen (US$2.3 million) may bepurchased from a refinery in Ivory Coast. This procurement method providesthe best transport advantage, and will be acceptable to the Association aslong as the prices obtained are in line with international price standards.Contracts for fuel (US$1 million) and other items estimated to cost less thanUS$20,000 each (US$0.3 million in total), may be let on the basis of theBorrower's standard procurement procedures provided these procedures shallcontinue to be acceptable to the Association. The four vehicles for thetraining center and the spare parts for the Highway Equipment Pool (US$0.6million) will be procured from licensed dealers at list prices which arereasonable. D)etails of these arrangements have been agreed upon with theGovernment.

viii. Disbursements from the proposed Credit for feeder road improvementand for backlog maintenance operations will be made on the basis of applicationssubmitted by the Government indicating in detail all work carried out and ex-penditures incurred. The Association will disburse 75% of the total c0st ofthe project.

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ix. Benefits of the feeder road and maintenance elements of the proposedproject will be perceived in lower vehicle operating coste and increasedagricultural production, and overall improved efficiency of the road transportindustry. Further, all works will be executed by DPW, which wlll use thisopportunity to strengthen the organizational structure built up under pre-vious projects financed by the Association.

x. The internal economic return on the feeder road component of theproject is estimated at about 17%; even with an increase in all costs or areduction of benefits of 25%, the return is still about 10%. The backlogmaintenance element of the project has a benefit/cost ratio of more than 3.

xi. The proposed project is suitable for a Credit of US$10 million tothe Government of Mali on standard IDA terms.

MALI

APPRAISAL OF A THIRD HIGHWAY PROJECT

1. INTRODUCTION

1.01 In recent years, Government objectives in the transport sectorhave been to develop local transport infrastructure in support of overalldevelopment, to foster economic integration among the various regions, andto reduce Mali's severe foreign trade handicap -- the result of its land-locked geographic position -- by improving international transport infra-structure. Bank Group operations in the sector have been geared to fulfill-ing these objectives.

1.02 The Bank Group's association with the transport sector began inSeptember 1966 when the Association granted a first Credit (95-MLI, US$9.1million) to the Governnent for railway rehabilitation and modernization. Asecond railway project (Credit 384-MLI, US$6.7 million) followed in April1973 within the framework of the Government's 1973-76 railway investment plan.

1.03 In 1969 UNMP financed, and the Bank executed, a countrywide trans-port survey, which has formed the basis of subsequent Bank Group operationsin the sector. These have included a first project for highways (Credit197-MLI, June 1970, US$7.7 million) which consisted of a four-year programfor strengthening highway maintenance and improvement of about 1,450 km ofagricultural feeder roads, as well as preinvestment studies for rehabilitationof the two main trunk roads linking Bamako with Bougduni to the south (156 km)via Faladie (10 km Southwest of Bamako), and Faladie with Segou to the northeast(212 km). Under this project, the Government has built up a reasonably well-trained and well-equipped maintenance organization and feeder road constructionunit. However, because of many delays caused by circumstances outside thecontrol of DPW, and also due to increased costs, only 470 km out of theplanned 1,450 km of feeder roads were completed when funds for the projectran out at the end of 1974 (para. 4.02), and some backlog in maintenance hasbeen built up.

1.04 The Second llighway Project (Credit 383-MLI, May 1973, US$9.5 mil-lion) consists of rehabilitation of the two trunk roads studied under thefirst project; the purchase of highway maintenance equipment; preinvestmentstudies for another road Bamako-Kati-Kolokani (115 km); continuation of tech-nical assistance for highway maintenance and feeder road construction; and astudy of the trucking industry. The studies for Bamako-Kolokani have beencompleted, but road construction has been found premature at this time. Thetrucking industry study is underway, and is scheduled for completion during1976. Regarding the two trunk roads and the equipment purchase, the UnitedStatés Agency for International Development (USAID) had agreed to financerehabilitation of Bamako-Faladie-Bougouni and the purchase of US$2 million ofequipment, and the Association to finance Faladie-Segou. However, becauseof unexpected high bld prices, USAID could not finance Bamako-Bougouni with

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its original US$9 million loan allocation; it therefore decided to reduce theamount of the loan to US$2 million for a highway maintenance equipment pur-chase and to grant-finance one bridge on the Bamako-Bougouni road whichneeded urgent repa;Lr. The Government is seeking another source of fihancingfor the reconstruct-ion of Bamako-Bougouni. For Faladie-Segou, the Govern-ment received five bids which, after thorough analysis, were found acceptablein spite of their being 68% or more above appraisal estimates; the contractwas awarded to the lowest bidder, and work is progressing satisfactorily. OnJune 3, 1975 the Association granted the Government a supplementary Credit ofUS$8.3 million to finance the cost overrun resulting from the higher bid priceand the contractual price adjustment clause.

1.05 The Third Highway Project now proposed follows up the agriculturalfeeder road improvement and maintenance work carried out under the previousprojects. It comprises: (i) a 3-1/2-year program for improvement of about1,200 km of feeder roads; (ii) a 3-year program for eliminating the backlogof periodic maintenance on about 944 km of paved roads, procurement of spareparts and equipment of two new subdivision workshops; (iii) procurement ofoffice equipment, teaching materials, and vehicles for the DPW TrainingCenter; and (iv) consulting services for technical assistance to DPW forimplementation of the feeder road improvement and the backlog maintenanceprograms; preparation of a training program for the DPW Center and fortraining of teaching staff; and preparation of a countrywide transport plan.The total cost of the proposed project (including taxes and contingencies)is estimated at US$13.4 million equivalent, with foreign exchange costs ofUS$8.4 million. Taxes total about US$2.2 million equivalent, and other localcosts about US$2.8 million equivalent.

1.06 This report is based on a feeder road feasibility study preparedby consultants BCEOM (France), and on the findings of an appraisal missioncomprising Messrs. M. Melegari (Engineer) and A. Byl (Economist) which visitedMali in January/February 1975.

2. THE TRANSPORT SECTOR

A. Economic Setting

2.01 Mali is a landlocked country in Africa's Sahel, covering about 1.24million km2, with a sparse population (about 5.3 million) increasing at about2% p.a. Cross Domestic Product (GDP) is less than US$100 per capita. Growthof GDP over 1970-72 averaged 5% p.a. in real terms, but declined in 1973 and1974 due to drought and energy problems. The northern regions of the countryare largely uninhabited desert; the southwest, where economic activity isconcentrated, has a rainy season from July to September, enough to grow staplefoods such as sorghum and millet, and drought-tolerant export crops such ascotton and groundnuts. In the Niger River valley, there is some irrigatedand flood-recession cropping of rice.

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2.02 The country suffers from several development constraints, theprincipal of which are: (i) distance to the sea; the closest sea portsare Dakar (Senegal), and Abidjan (Ivory Coast), both about 1,200 km fromBamako, the capital (para. 2.06); (ii) lack of known mineral resources, (iii)because of low and ill-distributed 'rainfall and generally poor soils, a weakagricultural base; (iv) a serious shortage of skilled manpower, both tech-nical and management; and (v) problems of communications due to the country'slarge size, and its widely dispersed population. On the other hand, theMalian people are hardworking, and accustomed to living under harsh climaticconditions, with a minimum of social services.

2.03 Agriculture, including livestock and fisheries, is the mainstay ofthe economy, accounting for nearly half of GDP (43% in 1972), and for virtuallyall foreign exchange earnings (US$54 million equivalent in 1972). Rural activ-ities provide a livelihood for about 85% of total population. Of the 2 mil-lion ha under cultivation almost 1.7 million (85%) are devoted to food crops.Cotton and groundnuts are the principal cash crops, and in a normal yearoccupy about 90,000 ha and 250,000 ha respectively.

2.04 In recent years, performance of the agricultural sector has beendetermined by fluctuations in weather conditions. The main feature, however,has been an imbalance between rapid development of production for export,and the significant decline in food crop production. Thus, despite adverseweather, production of seed cotton rose from 39,000 tons in 1967 to 74,000tons in 1971, and that of undecorticated groundnuts from 81,000 tons to152,000 tons. Both these products have benefited from well-coordinated pro-grams carried out by adequately staffed and financed units of "Operationsde Developpement" (OD), which have supplied extension assistance and moderninputs; in addition, efficient marketing channels have been set up and producerprices established which have given good incentives to farmers. The presentproject is in direct support of the cotton and groundnut operations, and isan essential input in ensuring continuation of the growth record.

B. The Transport System

2.05 The transport system is fairly extensive. Its infrastructure con-sists of about 13,200 km of roads of which 3,300 km are all-weather; 640 kmof railway linking Bamako with Koulikoro and Kayes, and with the port of Dakarvia the Senegal Railway; 1,650 km of inland waterways, navigable about sevenmonths per year; an international airport at Bamako; and about a dozen localairfields.

2.06 The main external traffic flow has traditionally been through theport of Dakar via the railway. Since 1960, however, almost 20% of this flowhas passed through the port of Abidjan, and then by road or rail/road throughIvory Coast and Upper Volta. While land distances by either route are roughly1,200 km long, transport costs per ton-km are about one-third more throughAbidjan than through Dakar. This is because the sea transport distance fromEturope to Abidjan is longer than to Dakar, and because transport betweenAbidjan and Bamako is partly or completely by road, which is more expensiveper ton-km than rail transport; nevertheless, the Government is interestedin keeping the Abidjan option open. Alternative routes through Conakry

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(Guinea), Buchanan (Liberia) and San Pedro (Ivory Coast) appear to be shorterthan through Abidjan, but so far none of these routes has been developed foreither historic or political reasons.

C. Planning and Investments

2.07 Investments for each transport subsector are planned by the appro-priate department or agency in cooperation with the Ministry of Transport andPublic Works (MTPW), and in accordance with the broad objectives of the Govern-ment's Five-Year Development Plan 1974-78. The most recent transport surveyfor the country was prepared in 1969 by the Belgian consultants Tractionel,with UNDP financing and the Bank as executing agency. The Government nowwishes to update this survey as much as possible by its own means, and hasasked the Association to assist in the organization of such a study and asfar as necessary to finance the consulting and technical assistance servicesrequired to prepare this new transport plan (para. 4.08).

2.08 Investments in transport infrastructure during the three-year planperiod 1971-73 averaged MF 4.3 billion (US$10 million) annually, or some 20%of gross fixed investment. Estimated expenditures in the sector in the 1974-78 plan average MF 16 billion (US$36 million) annually at 1974 prices, equiva-lent to about 20% of total planned investments; however, the cost of theseinvestments has been substantially underestimated, and may have to be increasedby as much as 25% - 100%, depending on the project. This underestimation indi-cates a lack of planning inputs and review procedures which should be remediedthrough the transport survey to be carried out under the present project.The first phase of the survey will develop suggestions for the creation and/or strengthening of appropriate planning and review units in the Ministriesof Transport and Public Works, and Planning. About 75% of transport expendi-tures are scheduled for road development, about 21% divided equally betweenrailway and air transport infrastructure, and about 4% will be allocated toriver navigation. In preparing the proposed transport plan, the overallsize of the proposed investments and the soundness of the modal distribution,as well as the country's ability to finance and maintain the entire networkwill have to be studied closely (paras. 3.16-3.20).

D. Transport Regulation and Coordination

2.09 The Government has considerable control over the major transportcompanies: Regie des Chemins de Fer du Mali (RCFM), the Malian railways7Compagnie Malienne des Transports Routiers (CMTR), a trucking company whichcarries about 20% of total road freight, Compagnie Malienne de Navigation(COMANAV), a navigation company handling about 70% of waterway traffic; andAir Mhali, the only domestic air carrier, which also handles a considerableamount of international traffic. Furthermore, the Government controls thetruck fleets of state enterprises, and in sOme way regulates all rail andmost air traffic tariffs, as well as most of river navigation and truckingtariffs.

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2.10 Since 1975 the newly created MTPW is responsible for overall trans-port coordination and for the execution of public works. The Ministries ofFinance, and of Planning, are also involved in various aspects of transporta-tion. This new organization will reduce the overlap in transport responsi-bilities which existed between the former Ministries of Transport, Tourismand Telecommunications and of Public Works. It will now be possible toimprove coordination especially in the areas of investment planning andintermodal distribution, and to develop a closer association between physi-cal and financial planning. Regarding intermodal coordination, there arestill conflicting views on whether, and to what extent, certain types oftransport should be used or created. This is the case in the Kayes-Bamakocorridor where the options are road and rail, and in the Koulikoro-Gaocorridor where the alternatives are road and river. Conflicts of interestalso exist over the choice between air or road transport for long-distancetravel in the southwest, and for all communications in the northeast.

2.11 The major problem regarding railways seems to be the Government'sgrowing discontent with the handling of import/export traffic on the Bamako-Dakar line. The difficulty, however, is mainly due to delays in transferringgoods at the port of Dakar on the Senegalese railway; this problem is outsidethe control of the Malian Government, and the Bank Group is trying to finda solution through an ongoing railway project in Senegal. Further attemptswill be made to improve cooperation between the Malian and the Senegaleserailways within the framework of a possible Third Railway Project in Mali.The Government has also recently obtained UNDP financing for a transportstudy in the Bamako-Kayes area, including a possible Bamako-Kayes road linkparallel to the existing railway; the Bank Group has agreed to be executingagency for this study.

3. HIGHWAYS

A. The Network

3.01 Mali's 13,200 km of roads are classified as national, regional,or local, according to the importance of traffic carried and the centers theyserve (Table 1). About 3,300 km are all-weather roads, of which about halfare paved and half gravelled: the remainder of the network consists of unen-gineered earth roads or tracks which are often impassable during the rainyseason.

3.02 The national and regional network carries most of the traffic andis fairly well developed, linking the main centers of economic activitywith each other and with the transport networks of neighboring Niger, UpperVolta and Ivory Coast. Due to lack of funds, however, the Government has notbeen able to maintain these economically vital roads to the required standard.Highest priorities in the hîghway stib-sector are therefore the maintenanceand selective rehabilitation of paved and gravelled roads, as well as mainte-nance and improvement of earth roads and tracks serving agricultural areas.

B. Characteristics and Growth of Road Traffic

3.03 According to 1974 counts, traffic volumes average 135 vehicles perday (vpd) on paved roads, 34 vpd on gravel surfaces, and about 10 vpd on earthroads and tracks. Trucks account for about 45% of total traffic, indicatingthe importance of road freight transport. Most trucks have a loading capacityof between 6 and 10 tons and are generally used to collect produce in the ruralareas. In addition, some heavy trucks and combination tractor/trailers areused for long-distance transport.

3.04 In 1974, the vehicle fleet was estimated at about 19,000, ofwhich about 62% were passenger cars, 21% vans and pick-ups, and 17% trucksand buses (Table 2). Over 1965-70, the average rate of increase of the fleetwas about 10% p.a.; this rate dropped to 6% between 1970 and 1972, and in-creased again to 7% between 1973 and 1974. Between 1972 and 1973 the size ofthe vehicle fleet actually declined by 2%. The ongoing trucking industrystudy under the Second Highway Project will reassess the size, age, composi-tion, and adequacy of the vehicle fleet.

3.05 Fuel consumption increased by some 5.4% p.a. between 1970 and 1973,but dropped by about 9.9% in 1974 (Table 3). According to available data,overall traffic grew by roughly 6% between 1970 and 1972, anci by about 4%between 1972 and 1974. Based on past trends and on the projected growthrate of the economy, traffic on the main network is expected to increase byat least 4% p.a. over the next ten years (para 5.07).

C. The Road Transport Industry

3.06 The Government, through YTPW, administers the road transport industry,controlling tariffs and the distribution of international as well as importantlocal freight. Trucking organizations are many, and range from a large cooper-ative to individual owners. The Union Nationale des Cooperatives des Trans-porteurs Routiers (UNCTR) is a cooperative consisting of some 550 vehicleowners; the Compagnie Malienne des Transports Routiers (CUMTR) is a stat&--ownedcompany with 250 vehicles of which 58 are buses for passenger transport.There are also a number of companies which have about 10-30 trucks, and manyindependent small firms with up to about four trucks.

3.07 The efficiency of the trucking industry is low. The industry isfaced with such problems as poor management and organization, and a seasonalwork cycle based on the agricultural calendar, all of which have resultedin a low average load factor. Part of the efficiency problem also seems tostem from the low truckers' rates which the Government kept fixed from 1967until October 1974, when pending the results of the trucking industry study,it awarded carriers a 43% interim rate increase. This rate adjustment washowever quickly offset by the rise in operating costs which resulted fromthe increase in fuel costs and overall high inflation rates.

3.08 One of the principal objectives of the trucking industry studyscheduled for completion in 1976, [s to determine the extent to which thesefixed low rates have caused truckers to lose incentives for new investments;

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also, to what extent the 'difficult trucking situation has been caused byinadequate management, organization, and maintenance, or the lack of liquidityof the state trucking enterprises. Another purpose of the study is to deter-mine the eventual need for technical assistance to help promote the truckingindustry (para. 1.04).

D. Administration

3.09 The MTPW has overall transport sector responsibilities (para. 2.10),its Directorate of Public Works (DPW), is responsible for highway planning,design, and construction, and for maintenance of all roads except local earthroads and tracks which are maintained by voluntary labor.

3.10 DPW has been extensively reorganized over the past five years, andthe responsibility for highway administration is now shared among several divi-sions, each under the direct control of the Director-General of Public Works:(i) the Bureau of Planning and Control prepares highway development programsand coordinates the work of the other divisions; (ii) the Central TechnicalService supervises consultants' studies, and carries out engineering forminor road works; (iii) the Administrative and Accounting Service manages theRoad Fund (para. 3.15) and performs general accounting vork; (iv) the Roadsand Bridges Division is responsible for supervision of construction, contracts,and for maintenance of all roads except earth roads and tracks; (v) the HighwayEquipment Pool (HEP) repairs and maintains all highway equipment and vehicles;the Pool has a central workshop in Bamako, and smaller workshops in the 13 sub-divisions; (vi) the Division of New Works vas specially created under theFirst Highway Project to carry out the feeder road program.

3.11 The DPW staff includes about 20 Malian engineers, 60 technicians,and 1,500 workers with varying levels of skill and training. Technical assist-ance for strengthening the organization of DPW and training of its staff wasprovided under the previous two highway projects. The results have been mostencouraging, but further training of technicians and laborers is still neededon a continuing basis. The Government, with the assistance of the Association,is setting up a DPW Training Center for technicians and laborers. The buildingfor the Center has been financed under the Second Highway Project, and equipmentand technical assistance will be provided under the proposed third project(para. 4.07).

E. Engineering and Construction

3.12 The Central Technical Service of DPW engineers minor road works, andentrusts major designs to consultants. A state-owned consulting firm, theSociete d'Etudes du Mali (SEMA), has been in operation since 1970, and hascarried out highway feasibility studies and engineering work jointly withforeign consultants. DPW's own Surveying Institute and well-equipped NationalPublic Works Laboratory are usually retained as sub-contractors to participatein highway engineering studies. The laboratory is equipped to perforo almostall soil and material tests required for design and supervision.

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3.13 Over the past few years, construction of major highways has beenexecuted primarily by foreign contractors, and to a lesser extent by DPW'sown forces and the Malian Arâiy. DPW has concentrated largely on simpleconstruction works, and has acquired good skill in this field. The state-owned construction firm SONETRA has recently cut back its highway construc-tion activity, concentrating instead on building construction. About 25 small,privately-owned local firms are also involved in building construction. Withappropriate training and financial assistance, some of these firms could branchinto civil works construction, and discussions on the possibility of Bank Groupassistance in this effort will be initiated with the Government during prepa-ration of future highway projects. Meanwhile, the present project, as a con-tinuation of the highway maintenance and feeder roads improvement programs,is designed to make use of the DPW brigades equipped under the First HighwayProject.

F. Maintenance

3.14 As mentioned in paras. 3.09 and 3.10, DPW's Roads & Bridges Divisionmaintains all roads except earth roads and tracks, and its Highway EquipmentPool repairs and upkeêps the equipment and vehicle fleet. While the basicorganization of both these services was considerably strengthened under theprevious two highway projects, maintenance guidelines, techniques and methodsstill need to be better defined, and further improvements are required indata collection, reporting, and book-keeping. Moreover, the output of thehighway maintenance brigades has been inadequate, primarily because of ashortage of funds and of fuel due to factors beyond the Government's control(inflation, stoppage of supplies, and the continuous drought between 1969-73).

G. Financing

3.15 Road users contribute to Government revenues through specific taxeson fuel and lubricants, ad valorem import duties on vehicles, equipment, andspare parts, and annual vehicle registration charges. Revenues from the fueltax are deposited directly into the Road Fund 1/, while those from the otherroad user taxes go into the generaL budget. In 1973, road user contributionstotalled MF 3.8 billion (US$8.5 million), which would have been sufficientto cover 120% of all highway expenditures in that year (Table 4). Coa-plete data for 1974 are not yet available, but there was probably a sharpreduction in receipts due to a decline in fuel consumption and in purchaseof motor vehicle spare parts.

3.16 In the period 1971-74, highway expenditures averaged MTF 4.3 billion(US$9.6 million) annually, of which about 75% spent on investments and theremainder on maintenance including administration. Financing was providedfrom external aid (MF 2.3 billion per year on the average) (Table 5). Totalexpenditures on maintenance and administration represented about 4% of current

I/ The Road Fund is an independent account in a local bank, which is usedto finance road maintenance and construction activities as well as DPW'soverhead. The Road Fund is administered by the Director-General ofPublic Works.

budgetary cesources including the Road Fund, and total highway expendituresabout 16%. With an ambitious road investment program and the rising cost ofmaintaining an expanding network, the Government is likely to experienceincreasing difficulty in financing future highway expenditures.

3.17 Over the new plan period 1974-78, road investment expenditures areexpected to amount to about MF 12 billion (US$27 million) annually. Thesefigures, however, are estimates of the Directorate of Planning and DPW atunderestimated 1974 prices. To reflect real prices they have to be increasedby as much as 25 to 100%, depending on the project (para. 2.08).

3.18 In 1974, Government expenditures for highway maintenance (includingDPW overhead and equipment renewal and spare parts) totalled MF 1.5 billion(US$3.4 million) (Table 6). DPW has estimated that expenditures would haveto be considerably higher to achieve an adequate standard of maintenance.The Government indicated to the appraisal mission that this matter would bethoroughly reviewed, and later informed the Association that the Road Fundbudget had already been increased from MF 1.8 billion in 1974 to budgetedrevenues and expenditures of about MF 2.3 billion in 1976. The Associationintends to keep monitoring this problem in the framework of the economicmission planned for 1976 (para. 3.21), as well as through the proposed trans-port plan study and review of its results with the Goverament (para. 3.22).

3.19 The resources required for normal maintenance of the existingtransport network appear to be approaching or already to exceed what canreasonably be set aside in the Government's current budget or permanentlyappropriated, quite apart from the possibility of additional maintenancearising from further expansion of the road network. The Government willtherefore have to find additioÜal highway revenues by lncreasing fuel taxesor earmarking more or all road user taxes for highway purposes.

3.20 This clearly means that Government will also have to scale downits investment program for the current five-year plan period. The proposednew transport plan study will re-evaluate and update the plan in light oftraffic needs, the new cost structures, and the country's financial position.The Government has agreed to review with the Association its five-yeartransport investment plan based on the recommendations of the forthcomingtransport plan study.

3.21 In order to find a solution to the basic issues raised by the finan-cial constraints described above, the Association is proposing to continuediscussion with the Government on determining the level of current and capitalresources which can reasonably be set aside for the sector in the light ofthe needs for maintenance and investment and of other priorities; it hasalready been arranged with the Government that the forthcoming economicmission (Spring 1976) will deal with this issue.

3.22 Tn the meantime, the Government has agreed to the following:

(a) to keep a separate accounting system for all road mainte-nance expenditures, and to establish a system of accounts

- 10 -

related to different roacl categories as an initialstep towards performance budgeting;

(b) to meet al! maintenance requirements out of Road Fundresources lefore allocating funds for road constructionwork;

(c) to include in the new transport plan a study of the costand benefits, for different road categories, of differentstandards of maintenance (para. 4.08); and to carry outthis study in light of the financial constraints determinedabove;

(d) to establish, on the basis of the results of the transportplan study, a feasible physical and financial medium-termplan for road maintenance, and then to review any outstandingroad lnvestment or road improvement proposals in the lightof resources and priorities for further capital expenditures.

4. THE PROJECT

A. Description

4.01 The proposed project is composed of:

(a) a feeder road component consisting of the continuation overthree and a half years of the feeder road improvement programinitiated under the First Highway Project (about 1200 km areplanned to be completed);

(b) a maintenance component consisting of a three-year programto eliminate the backlog of periodic maintenance on about944 km of paved roads, procuring of spare parts, and equippingof two new subdivision workshops;

(c) procurement of office equipment, teaching materials, andvehicles for the DPW Training Center at Bamako; and

(d) consulting services for:

(i) technical assistance to DPW for implementation of thefeeder road improvement and backlog maintenance pro-grams;

(ii) preparation of a training program for the DPW TrainingCenter and training teaching staff; and

- il -

(iii) preparation of a study to establish a countrywidetransport plan, including the organization and eventuallystaffing of a unit to execute the study in the Ministryof Transport and Public Works.

Feeder Road Improveeent

4.02 The 1969 UADP Transport Survey recommended that the Governmentconstruct and improve feeder roads to facilitate evacuation of agriculturalproducts from areas under cultivation, and to encourage expansion of productionin new areas. Accordingly, the Bank Group's First Highway Project includeda four-year program to improve 1,450 km of feeder roads in the most productivecotton and groundnut areas. When funds ran out at end-1974, however, onlyabout 470 km had been improved. There were two main reasons for the program'slow output: (a) a longer than expected organization and mobilization phase,resulting in an 18-month delay in start of field work; (b) most important,a shortage of fuel and spare parts, related to the Sahelian drought, theenergy crisis and worldwide inflation, making it impossible for the Governmentto provide the additional funds needed for the program.

4.03 The 1,200 km of feeder roads to be improved under the proposedThird Highway Project consist of some 750 km out of the remaining 980 kmfrom the first project, and some 450 km selected from an 800 km complementaryprogràm prepared by the technical assistance consultants employed under thesecond project. The choice of roads to be improved was based on a thoroughreassessment of priorities by the consultants, the Government, and theAssociation. Table 7 gives a list of the roads selected, the schedule forwork execution, and estimated costs. For two of the most trafficked feederroads, it will be necessary to purchase two ferries for river crossing, andto prepare ferry approaches on the river banks. The feeder road designstandards (Table 8) were developed by DPW assisted by consultants and incooperation with the Association, and were based on experimentation carriedout under the first project. These new standards are uniform for all roads,and are at the lower end of the spectrum used in the previous phases of theimprovement program.

4.04 The personnel of the feeder road units are dedicated and efficient;they have benefited considerably from continuous on-the-job training underthe previous two projects, and should be able to carry out the planned pro-Fram within the set time schedule as long as adequate funds are provided. TheIroposed project provides for the operating costs of these units. Since equip-ment and men vere already organized and in place, and because the Governmentexpects the Association to provide retroactive financing under the proposedproject, it decided to resume feeder road improvement works with its own fundsin 1975. The Association wi1l provide retroactive financing for expendituresincurred for this project item in an amount estimated at US$900,000 (para. 4.16).

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Backlog Maintenance

4.05 During the First and Second Highway Projects, MF 1.1 billion

(US$2.4 million) of highway maintenance equipment was purchased, a centralworkshop was completed, and field workshops were renovated and modernized.In addition, an accounting and inventory system was established to keepup-to-date records on the conditions, utilization, and maintenance of allequipment, and road maintenance staff at all levels were trained. The fieldwork which concentrated mainly on gravel roads, was less than expected, forthe same reasons as those mentioned in para. 4.02 above regarding feeder roadimprovement.

4.06 The maintenance element of the proposed project aims mainly ateliminating a substantial backlog of periodic maintenance on 944 km of pavedroads over a three-year period 1976-1978. The project provides for operatingcosts of the paved road maintenance ainits established under the previous high-way projects. The program will consist of the following work: backlog patch-ing of about 186 km, patching and resealing of about 580 km, patching andsingle-surface treatment of about 150 km, and reconstruction to double-surfacetreatment standards of two road sections totalling about 28 km. Table 9 showsa list of these roads and schedules for work execution. The maintenancecomponent of the project includes also the purchase of spare parts toincrease the stock of the HEP from 3Z of the replacement value of theavailable equipment to a more appropriate 15%, and the equipment of two newsubdivision workshops to be created in areas where feeder roads have beencompleted under the previous project.

Trainin,-, Center

4î.07 A DPW Training Center is being constructed at Bamako with funds)riginally provided under the Second Highway Project for training overseas,but which were later redirected at the Government's request. The proposedproject will provide office equipment, teaching materials, and four vehiclesfor operation of this Center, as well as 33 man-months of consulting servicesFor preparation of a training program and training of teaching staff (para.;.08). Up to 4 man-months of this assistance will be financed retroactively.

_onsulting Services

i.08 In addition to the abovementioned training assistance to DPW, theiroposed project provides 52 man-months of consulting services to help DPW2arry out the improvement of feeder roads and the maintenance of paved roads.Lhese services will be the last phase of a successful technical assistanceŽffort which started in 1972. This final effort will concentrate on trainingin the use of paved road maintenance equipment which arrived late, and onLmprovement of data-collection and accounting procedures for road maintenancemd feeder road improvement. Out of the total of 85 man-months of technicalissistance mentioned above for training and for improvement and maintenance

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works, it is expected that about 6 man-months will be financed retroactively(para. 4.16). The project also provides for 50 man-months of consultingservices to prepare a new transport plan. This plan would be expected toreassess transport priorities, examine the,problems affecting the sector,and récommend solutions. Work on, the plan will have to be closely coordinatedwïth the Trucking Industry Study and the Banako-Kayes Area Transport Study(para. 2.11). Terms of reference for the technical assistance to DPW andthe Training Center have been agreed upon at negotiations. The Governmentwill try, with the help of the Association to execute as much as possibleof the transport plan study by its own means. Only what cannot be done byGovernment institutions, eventually strengthened by IDA financed technicalassistance, will be given to consultants. The organization and the necessaryterms of reference for the transport plan study will be discussed and agreedupon with future IDA supervision missions.

B. Cost Estimates

4.09 Total project costs, including taxes and contingencies, are estimatedat US$13.4 million equivalent, with foreign costs of about US$8.4 million;local costs of US$5.0 million equivalent include about US$2.2 million intaxes and duties. Details of cost estimates are shown in Tables 10-13; asumunary of the estimates including taxes is shown on the next page.

4.10 Thti cost of feeder road improvement has been estimated on the basisof actual expenditures per kilometer on feeder roads improved under the FirstHighway Project. The cost of maintenance operations on paved roads has beenestimated on the basis of data contained in the consultants' study for theBamako-Kolokani road. All other costs are based on quotations obtained inBamako from suppliers and consultants.

4.11 Contingencies for quantity variations have been judged necessaryfor this project at a rate of 10%. The exception concerns backlog maintenancework not previously executed and difficult to estimate; 15% has been taken forthis item (Tables 10 - 13). Contingencies for price increase have been addedto the cost estimates at December 1974 prices on the following basis, andtake into account the execution schedules shown in para. 4.12.

1975 1976 1977-1978

Civil Works 16% 14% 12%

Equipment purchase 15% 10% -

Consultants' services 15% 10% 8%

- 14 -

Cost Estimates Including Taxes

Foreign----- HF million …----US$ thousand---- ComponentLocal Foreign Total Local Foreign Total (%)

A. Items with-out contin-gencies 1,579 2,519 4,098 3,509 5,598 9,107 61

(1) Feeder roadimprove-ment 1,012 934 1,946 2,249 2,075 4,324 48

(2) BacklogMaintenance- 393 1,181 1,574 873 2,625 3,498 75

(3) TrainingCenter /1 14 31 45 31 69 100 69

(4) Consultingservices 160 373 533 356 829 1,185 70

B. Contingenciesfor quantityincreases 146 343 489 324 762 1,086 70

C. Contingenciesfor priceincreases /2 524 892 1,416 1,165 1,982 3,147 63

1). Total 2 249 3 754 6 003 4,998 8,342 13 340 63

(Rounded) 5,000 8,400 13,400

V! )Does not include consulting services (see item A 4)./2 Price contingencies have been calculated as shown in para. 4.11.

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C. Execution and Procurement

4.12 The planned execution schedule is as follows: (i) feeder road workfrom January 1975 to mid-1978; (ii) preparation of river banks for ferriesfrom January 1976 to June 1977; (iii) maintenance work from January 1976 toDecember 1978 with some training in 1975; (iv) delivery of ferries, spareparts, and equipment, mid-1976; (v) consulting services for technical assist-ance, 10 man/months in 1975, and 75 in 1976/77; and (vi) transport plan study,1976-1978.

4.13 DPW vill be responsible for execution of all elements of the projectexcept the transport plan, which will be the responsibility of ONT. The feederroad improvement and backlog maintenance works will be executed by DPW's forcesestablished under the previous two highway projects. Consultants vill assistDPW in carrying out improvement and maintenance works, and in training of itsstaff. The consultants for technical assistance, training, and preparationof the transport plan study, will be employed on terms and conditions satis-factory to the Association.

4.14 The two ferries (US$0.6 million) which are simple in constructionand have to be assembled at the site, would not be attractive to suppliersoutside those currently established in Mali. They will therefore be procuredon the basis of local competitive bidding. Bitumen (US$2.3 million) may bepurchased from a refinery in Ivory Coast. This procurement method providesthe best transport advantage, and will be acceptable to the Association aslong as the prices obtained are in line with international price standards.Contracta for fuel (US$1 million) and other items estimated to cost less thanUS$20,000 each (US$0.3 million in total), may be let on the basis of theBorrower' s standard procurement procedures provided these procedures shallcontinue to be acceptable to the Association. The four vehicles for thetraining center and the spare parts for the Highway Equipment Pool (US$0.6million) will be procured from licensed dealers at list prices which arereasonable. Details of these arrangements have been agreed upon with theGovernment.

D. Financing and Disbursements

4.15 The proposed Credit of US$10 million would finance the foreign costsof the project estimated at US$8.4 million plus US$1.6 million equivalent ofthe local costs, representing in total 89% of project costs net of taxes. TheGovernment will finance the remaining local costs net of taxes, estimated atUS$1.2 million equivalent, plus about US$2.2 million equivalent in taxes andduties. Table 14 shows a summary of the cost estimates and the proposedfinancing plan for the project. Retroactive financing by the Association toa maximum of US$1.1 million is provided to meet expenditures incurred onfeeder road improvement works, bituminous road maintenance, and about 10 man-months of technical assistance (paras. 4.04, 4.07, and 4.08).

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4.16 Disbursements ror feeder road improvement and paved road maintenancewill be made on the basis of applications submitted by the Government indicat-lng in detail all work carried out and expenditures incurred. The operatingcost of the feeder road and maintenance units include wages and salaries,equipment rental without depreciation at rates established by the EquipmentPool, supplies of materials, and overhead for management and supervision.

4.17 Credit proceeds will be disbursed at a rate of 75% of the totalcost of the project.

4.18 To avoid delays in the progress of work under this project due tolack of liquidity of the Road Fund, a revolving fund of US$500,000 will beopened by the Association in a local bank immediately after the date ofeffectiveness of the credit. The Government will be allowed to use thisaccount for expenditures for the project eligible for financing under theproposed credit.

4.19 Table 15 shows the estimated schedule of disbursements from theCredit Account. Any funds remaining in the Account on completion of theproject will be used for additiona'L feeder road improvement.

5. ECONOMIC' EVALUATION

A. General

5.01 The proposed project is clesigned to expand the agriculturalfeeder road network, and to improve the efficiency of Mali's major roadsystem. These aims are in lîne wit:h current Government policy, and are adirect continuation of the Associat:ion's First and Second Highway Projects.Both feeder road improvement and road maintenance will be executed by DP,which will take advantage of this opportunity to further improve the c -izational structure built up under the! previous projects. Through transpor.-improvement, the present project iES expected to support and stimulate economicactivity in its zones of influence. The proposed project is economic;^ fl.sound, with an internal rate of return of about 17% for the feeder r Celement, and a Benefit/Cost ratio of more than 3 for the maintenance element.

B. Feeder Roads

5.02 The 1,200 km feeder road improvement program will be executedover a three and a half year period (Table 16). Vehicle operating costs onthe roads to be improved are high, and during the rainy season, the roadsare largely impassable. The economic analysis assumes an eleven-year lifespan for each improved feeder road, with regular maintenance each year andregravelling to be executed in the sixth year. The improvement cost of anaverage kilometer of feeder road is about MF 1.1 million (US$4,450).

- 17 -

5.03 The feeder road project is conceived in direct support of ongoingcotton, groundnut, and general agricultural schemes for which the agriculturalsupport institutions, CFDT (Compagnie Francaise pour le Developpement desFibres Textiles) and BDPA (Bureau pour le Developpement de la ProductionAgricole, called "Operation Arachides" in Mali), and the European DevelopmentFund (EDF) are providing technical and financial assistance. The goal of theseprograms is to double production along the 28 feeder roads in the five-yearperiod following their improvement, and again in the next five years. Thesetargets were confirmed by CFDT and BDPA and can be considered realistic. Yetin determining the economic rate of return for this project, a very conserva-tive 9% average rate of production increase per year has been assumed for thefirst five years (or 54% in total), and 5% for the remaining 6 years (or 42%in total).

5.04 In calculating the rate of return, only operating cost savings oftrucks travelling on project roads have been considered as benefits, whileall expenditures, including technical assistance and overhead, have beentaken into account as costs (Table 17). The rate of return on each feederroad individually is at least 10%, and the rate of return on the whole feederroad component is about 17%. Even with an increase in all costs or a reduc-tion of benefits by 25%, the rate of return remains about 10% (Table 18).As very conservative estimates of benefits were used in the calculations(para. 5.03), this rate of return is considered satisfactory. In view ofthe favorable economic return arrived at when only trucks were counted, itwas not considered necessary to determine potential savings of passenger-cardrivers. Increased agricultural production and overall improved communicationshave been considered as benefits of agricultural extension schemes only, andexcluded from consideration in this project. Truck operating cost savingsbetween an unimproved earth track and an improved and well-maintained feederroad have been estimated at 42% (Table 19). This is in line with experiencein other West African countries. The benefit/cost ratio is 1.29 at 10%, and1.19 at 12% interest.

5.05 Direct benefits of feeder road improvements are expected to goto the rural population through easier access to fields and extensionservices, and through higher production. As the increased output will beaccompanied by decreased vehicle operating costs for the Government agenciesthat collect and market the crops, these savings can then be expected notonly to improve the financial situation of the agencies, but also to allowthem to redistribute part of their savings in the form of higher producerprices and/or better quality of service.

C. Backlog Maintenance

5.06 The maintenance element of the proposed project consists primarilyof the execution of backlog maintenance on 944 km of the most travelledpaved roads in the country. No attempt was made to calculate a cost/benefitratio for the two other small elements of this project item (spare parts

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and new workshops) as the benefit/cost ratio of the maintenance element ishigh enough to absorb a considerable amount of additional co0tS (para. 5.08),two to three times the present estimate.

5.07 Daily trafEic over the roads to be resurfaced averaged some 135vpd in 1974 (roughly 47 trucks and 88 passenger cars). The growth rate oftraffic has been assumed at 4% per year over the life of the project, com-pared with more than 5% per year over the past ten years. Benefits fromthe proposed maintenance operations have been expressed in vehicle operatingcost savings for a period of 20 years for reconstruction, five years forresealing and resurfacing, and one year for regular backlog patching. Costsfor routine maintenance during the life of the works have been added to thecost of the maintenance operations (Table 20).

5.08 The benefit/cost ratio of the maintenance element of the project is3.4 at 10% interest, and 3.2 at 12% interest. This is equivalent to a rateof return of about 120%, which is so high that it was not necessary to do asensitivity analysis for this project element.

5.09 Benefits from backlog maintenance of paved roads will in the shortrun directly accrue to owners of passenger cars and trucks, including theGovernment. Over the medium term, the Government, which controls freight andpassenger rates for international traffic, is expected to pass some of thesebenefits on to the consumer in the form of lover transport tariffs. On na-tional roads where there is keen competition among truckers, project benefitsare likély to be passed on directly to the consumer in the form of reducedtransport charges, which constitute a large element in overall commodity costs,and in the form of improved quality of service.

D. Transport Plan

5.10 The most recent Transport Survey dates back to 1969, and needs coh-siderable revision in view of the drastically changed transport cost situation.The study of a new transport plan is expected to contribute to more realisticobjectives, more rigorous resource allocation, and substantial savings ininvestment outlays over the next plan period.

6. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During negotiations on the proposed Credit, agreement vas reachedwith the Government on the following principal points:

(i) based on the recommendations of the proposed new transportplan study, the Government vill review with the Associationits five-year transport investment plan, with a view toscaling down investments (para. 3.20);

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(ii) (a) the DPW will keep a separate accounting system for allroad maintenance expenditures, and will establish a systemof accounts related to different road categories as aninitial step towards performance budgeting; (b) it willmeet all maintenance requirements out of Road Fund resourcesbefore allocating funds for road construction work; and (c)on the basis of the results of the transport plan study, willestablish a feasible physical and financial medium-term planfor road maintenance, and then review any outstanding proposalsfor road investment or improvement in the light of resourcesand priorities for further capital expenditures (para. 3.22);

(iii) details of terms of reference for technical assistance toDPW and the Training Center (para 4.08);

(iv) disbursements from the Credit Account for feeder road improvementand paved road maintenance vill be made on the basis of applica-tions submitted by the Government indicating in detail allwork carried out and expenditures incurred (para. 4.16);

(v) the use of a revolving fund (para. 4.18);

(vi) the use of remaining funds after completion of other items ofthe project for additional feeder road improvement (para. 4.19).

6.02 The proposed project is suitable for a Credit of US$10 million tothe Government of Mali on standard IDA terms.

November 25, 1975

'Table 1

THIRID HIGIIWJAY PROJECT

Road Network, 1974(Length in kilometers and average daily

traffic in number of vehicles)

Technical ClassificationAdministrative TotalClassification Length

Paved Gravel Tracks Nletwork

NationalRoads (NR) 1,587 1,110 3,0h9 5,746

ReelonalRoàds 5ER) 35 528 5,1 78 5,741

LocalRoads (LR) 9 40 1,664 1,713

TOTAL 1,631 1,678 9,891 13,200

of which maintained by the DPW 11i,536(NR + RR + IR paved and gravelled)

of which all-weather roads 3,300

Average daily tnu2M 135 34 10 28

Source: Department of Public Works (DPW)

August 1975

'Dib1e 2

lA LI

THIRD HIGHWAY PROJECT

fRegistrations andi Size of Vehicle Yleett 165 1 970 - 1974

(in number of vehicles)

Type of Vehicle 1965 1970 1971 1972 1973 17h4 '4of Total in1973 197M

Registrations ]/during the year

Passenger Cars n n.. 1,359 1,455 1,428 1 ,591 1 ,714 3 rz6Vans, pick-ups_ na-. 56? 485 508 610 764 24 2h fTrucks nOa- 16.3 249 279 199 386 8 13Trailer trucks n.a. 23 87 24 80 126 4 lBuses n.a. - 12 2X i2 2

Total 1,729 2,111L 2,288 2,263 2,506 3,0o0 100 100of which -

Temporary reg. 333 33L 373 296 536 525rTotal Number of Vehicles a; the end of the

-ear_

Passenger Cars 4,522 3,775 9,675 10,485 11 ,093 11 ,870 63 62Vans, pick-ups2/ 2,668 3,667 3,672 3,841 3,720 3,968 21 21Trucks 2,098 2,734 2,845 2,649 2,U82 2,620 14 1lTrailer trucks 117 262 256 225 296 406 2 2Buses 88 20 89 97 114 137 - 1

Total 9,493 15,532 16,537 17,300 17,705 19,001 100 100- ~~ ___

Average annual increase of 1965 - 1970 aboutlO percentvehicle fleet between: 1965 - 1974 about 8>percent

1970 - 1972 about 6 percent1972 - 1974 about 4 Dercent

/ First registrations of new and imported second-hand vehicles and temporaryregistrations.

2/ Includes four wheel drive vehicles.,3/ The fleet of the Gendarmerie and the Army are excluded.

Source: DNTP, Etude du Parc Automobi:Le du Mali 1966-1974, Juin 1975

November 1975

ILble3

MlALI

THIRJD HIGHWAY PROJECT

Fuel Consumptioni./: 1970e-1974

(in thousands of liters)

1970 1971 1972 1973 1974

GasDline 40,900 43,260 45,350 46,700 4o,88o

Diesel Fuel 18,600 19,370 21,100 23,000 21,900

Total 59,5o0 62,630 66,4.5o 692700 62,780

Increase in % n.a 5.3 6.1 4.92/ - 9.9

1/ Does not include untaxed consumption which was 2,800,000 liters of gasoline in thulst nine months of 1974.

2/ Average increase of 5.4% per year between 1970 and 1973.

Source: Statistiques du Commerce Exterieur.DPW.

November 1975

Table 4

LAI Li

THIRD IIIGHdAY PROJECT

Road user contributions to public revenue in 1971 and 1973

Sources of Revenue Volume o:r value Applicable Taxes & Receipts intaxed Duties in of the billions of MF

CIF value -

197'1 1973 1971 1973 1971 i 73

Taxes on-Petroleum Products

Fuel: (in million liter) (in MF per liter) 1 .96 2.1 7

Gasoline : 43.:3 46.7 33.6 33.4 1.45 1.56(Gas Oil : 19.4t 23.0 19.5 19.5 0.38 0.45Motor Oil: 2.5 3.1 51.7 52.o 0.13 0.16

Taxes on Equipment &Spare Parts (in billion of MF) 0.82 1.1(

New & used vehicles(1855 vehicles in 1971and 2552 in 1973) 1 .5 2.9 30i/ 30/ 0o57 0.87

Spare Parts and tires 10CI 0.9 25'/ 259 0.25 0.23

Registration (grey card,driving licence, sticker,freight tax, patent, etc. 0o49 0.53

Total payments by roadusers (receipts) 3.27 3.80

Total expenditure for highways 3-43 3-l6Total receipts as 0° of total expenditure 95% 120%Total expenditure as a %

of total revenues 105% 83%Expenditures for highway maintenance (in billions of HF) .-70 1.12Maintenance expenditure as a percent of total receipts 217 29%

1/ Except when otherwise indicated.

Source: Mali, DPW, Bureau of Planninj and Control, National Budget and theNational Transport Office

November 1975

Table 5

MALI

THIRD HIGHWAY PROJECT

Highway Expenditure and Financing: 1970-1974

(in millions of MF)

1970 1971 1972 1973 1974

I Expenditure 2,231 3,431 6,100 3,9 4363

A. Current expenditure 778 697 906 1 1,343Road Maintenance 636 -ho 730 914 1,118Administration.1/ 142 157 176 209 225

B. Investment expenditure 1,453 2,734 5,194 2,036 3,020

II Financing 2,231 3,431 6,100 3,159 4,363

A. National Sources 1,300 1,557 2,097 2,202 1,995Road Fund 1,158 2/ 1,4oo 2/ 1,921 1,993 1,770of which Investment (380) (526) (856) (900) (182)Other 142 157 176 209 225

B. External Sources 931 1,874 4,003 957 2,368

1/ Ineludes 75% of the items "Personnel" and "Matériel" in the National Budget forDNTP and 100 percent of the "Personnel" item for the HEP (AM) and LNTP (theNational Public Works Laboratory).

Souirce: DPW

November 1975

Table 6

MALI

THIRD HIGHWAY PROJECT

Highway Maintenance Expenditures 1974-1978

(in millions of MF)

1974 19-i5 1976 1977 1978Calendar Year Actual. Revisec Mission's Projections

Expen- Budget _ of maintenance needs2ditures

Current expenditureincluding DPW 3/ overhead 1,343 1,2400

Equipment renewal(including spareparts) 170 276 600 700 800

1,513 2,1ff) 2,700 3,100 3,600

1/ Estimate based on the Ordonnance of January 30, 1975 which increasesthe Road Fund budget to MF 2,340 million.

2/ These projections will be revised on the basis of the results of theplanned Transport Flan Study (para. 3.22)

3/ Includes the Government's share for backlog resurfacing of pavedroads as foreseen in Third Highway Project for 1976 through 1978.

Source: DPW and mission estimates

November 1975

Table 7Page 1 of 2

MALI

THIRD HIGHWAY PROJECT

Feeder Roade to be improved, an(i Work Scherjule 1975-7ti

Agricul- Name of Lengt,h n Ttural Feeder Annual Traffic Cost ofRegion Roads in improvement

in tons in thousands in millions of MFkm 1975 1980 of ton-km net of incl.

1797751980 1975 1980 taxes taxes

A. First Brigade (Groundnuts Region)

(a) First Year 150 4470 6100 321 435 165.9 199.61975

Kita L50 4470 6100 321 435 165.9 199.6

*iambiri-Kouroumikoto 60 27C0 3800 162 228 66.4 79.8Badingo-Madina 90 1770 2300 159 207 99.5 119.8

(b) Second Year 173 17900 25800 884 1268 191.3 230.31976 - -

Kolokani 347 26790 41130 1289 1943 383.8 461.9

*Kolokani-Sirakorola 57 8500 12800 485 730 63.0 75.9*Massantola-Niokona 55 4700 5800 259 319 60.8 73.2*Niokona-Faladib 19 2500 3600 48 68 21.0 25.3*Kolokani-Sobekoro 42 2200 3600 92 151 46.5 55.9

(c) Third Year 174 8890 15330 405 675 192.5 231.61977

*Sirakorola-Niamina 71 2600 3800 185 270 78.5 94.5Faladié-Dralé 46 2100 4000 97 184 50.9 61.2Banamba-Sacko 31 2785 5000 86 155 34.3 41.3Madina-Boron 26 1405 2530 37 66 28.8 34.6

(d) Fourth Year 163 8050 12450 330 56 180.3 217.0Bamako 1978- -Haute 163 8050 12450 Do 506 180.3 217.0Vallée

Dialakorobougo-Tyele 48 2450 3800 118 182 53.1 63.9*Kangaba-Banankoro 60 2500 3800 150 228 66.4 79.9Karan-Madina 25 1500 2300 38 58 27.6 33.3Narena-Karan 18 750 1150 14 21 19.9 23.9Banankoro-Dioulaforndoul2 850 1400 10 17 13.3 16.0

TOTAL FIRST BRIGADE 660 39310 $9680 1 2884 878.5

Table 7Page 2 of 2

Agricul- Name of Leng-,htural Feeder Annual Traffic Cost offegion Roads in improvement

in tons in thousands in millions of MFkm of ton-km net of incl.

1975 1980 1975 1980 taxes taxes

B. Second Brigade (Cotton Region)

(a) First Year 17I 10300 16600 731 1161 198.0 238.21975 - =_ - --

Dicila 96 3700 6800 183 348 106.2 127.7

*Dioila-Massigui 30 1700 2800 51 84 33.2 39.9Massigui-Kouale 66 2000 4000 132 264 73.0 87.8

Fana -*Nangola-Komankou 8, 6600 9800 548 813 91.8 110.5

(b) Second Year 3 63250 2 78 149.3 179.71976 àd ==l.

Koulikoro Santiguila-Fegou 21 17150 .44800 3 941 23.2 28.0

Koutiala 340o 28250 37950 861 1149 376.o 452.5

Bougoukouroula-Konina 22 2600 3450 57 76 24.3 29.3,>-Konina-Konsegue1a 29 2500 3600 73 104 32.1 38.6*Konseguela-Koutiala 40 4000 5600 160 224 44.3 53.2l*rM'Pessoba-Peguena 23 4000 5800 92 133 25.4 30.6

(c) Third Year 171 13350 16900 38 469 189.1 227.61977-

*Peguena-Falo 46 2000 2500 92 112 50.9 61.2*Sirakele-Rte Koutiala 7 4500 5800 32 41 7.7 9.3Tigui-Sanando 28 2650 3600 74 101 31.0 37.3

>Sirakele-Dieramana 35 2500 3000 88 105 38.7 46.6!-Karongasso-N'Tokonasso 55 1700 2000 94 110 60.8 73.2

(d) Fourth Year 1800 2600 99 143 60.8 73.21978 ~

*Kaledougou-Narena 55 1800 2600 99 143 60.8 73.2

TOTAL SECOND BRIGADE 540 55700 9935 1952 5 597.2 718.7

TOTAL PROJECT 1200 95010 159030 3 6135 1327.2 1597.2!m ~ -î am- -iiîi

Roads taken over from the First Highway Project

1/ As the pro(duction figures for the 197L/75 or 1973/74 season were not available forthe roads taken over from the First Hi-ghway Project the estimates of production in1972/73 has been taken as a basis for projections. In reality production hasincreased little in 1973 and 1974 because of the Sahelian drought.

November 1975

Table 8

MALI

THIRD HIGHWAY FROJECT

Feeder Road Design Standards

- Clearing width 12.0 m to 16.0 m

- Roadway vidth 4.3 m

- Shoulders none

L/- Laterite base thickness- 13 cm

- Drainage structures ditches, outlets,and stone fords

1/ The mission estimated that a laterite base will be required on 840 km(70%) out of 1,200 km of roads. Elsewhere, the natural soils will beused.

Source: DPW and mission estimates.

November 1975

Table 9

MALI

THIRI HIGHWAY PROJECT

Paved l(oads to be maintained, and Work Schsdule 1976-78

(Length in kilometers)

Single Surface Double SurfacePatching Resealing & Treatment & Treatment & Total

Patching Patching Base

1976

- Bamako-Kati - 13.0 - 13

- Bougouni-Sikasso - 107.0 50.0 - 157

- Koutiala-Kimparana 59.0 - - 59

- Kiniparana-San 41.0 * - - l

- Subtotal 100.0 120.0 50.0 - 270

19??

- Bougoun±-Sikasso - 92.0 50.0 2.0 14

- Kout-ala-Bla 41.0 32.0 - - 73

- Bla-San - 65.0 - - 65

- San-Mopti 45.5 26.0 - 25.5 97

- 3Subtotal 86.5 215.0 50.0 27.5 379

1978- Bamako-Tienfala - 30.0 - - 30

- Bougouni-Sikasso - 13.0 -

- San-Mopti - U5.0 - - 115

- Bla-San - - 37.0 - 37

- Bla-Segou - 80.0 - - 80

- Segou-Markala - 20.0 - - 20

- Subtotal - 245.0 50.0 - 295

Tota 186.5 580.0 150.0 27.5 9144

source: DFW.

Novemirer 1975

Table 10

MALI

THIRD HIGKWAY PROJECT

Feeder road element: cost estimates

(in millions of MF)

1 2Local Total Total IDA

net of net of with

Taxes taxes Foreign taxes taxes Financing

A of 2 AI! cf 2 A of 2 A of 2 A A of 1 of 2

A.Improvement of 1200 kmof feeder roads 270 17 64o 4o 687 43 1,327 83 1 597 1 191 90 75

1. Local staff T 10 3 90 58390 8 8 83 752. Equipment rental 101 22 14 3 341 75 355 78 456 341 96 75

3. Fuel 55 19 9 3 229 78 238 81 293 220 92 75

4. Materials 37 30 4 3 84 67 88 70 125 88 100 70

5. Overhead 12 16 30 4o 33 44 63 84 75 56 89 75

B.Preparatiorn of riverbanks for ferries 27 20 22 16 86 64 108 80 135 101 94 75

1. Local staff 2 10 17 90 - - 17 90 19 1h 82 75

2. Equipment rental 17 22 3 4 55 75 58 78 75 56 97 75

3. Fuel 5 17 1 3 23 78 24 83 29 22 92 75

4. Materials 2 29 - - 5 71 5 71 7 5 100 71

5. Overhead 1 20 1 20 3 60 4 8o 5 4 100 75

C.Procurement2 ferries 46 21 6 3 162 76 168 79 214 162 96 76

1. Procurement 22 6 3 154 75 160 78 204 154 96 752. Overhead 2 20 - - 8 80 8 80 10 8 100 80

D.Subtotals

A + B + C 343 18 668 34 935 48 1603 82 1 946 1,454 91 75

1. Local staff 7 10T 6 90 -gO _6 0 667 500 83752. Equipment rental 118 22 17 3 396 75 413 78 531 397 96 75

3. Fuel 60 19 10 3 252 78 262 81 322 242 92 75

4. Materials 39 30 4 3 89 67 93 70 132 92 99 70

5. Proc. ferries 44 22 6 3 154 75 160 78 204 154 96 756. Overhead 15 17 31 34 44 49 75 83 90 68 91 75

E.Contingencies forquantity increase 34 21 67 14 94 65 160 76 194 145 90 75

1. 10% on A 27 21 64 W r U 133 7f 159 119 90 752. 10% on B 3 21 2 14 9 64 10 79 14 10 91 71

3. 15% on C 4 19 1 5 16 76 16 76 21 16 100 76F.Contingencies forprice increuses 102 17 211 36 274 47 485 83 587 4 91 75

1. 29% on A + E.1 86 17 204 40 219 43 423 83 509 380 90 752. l4% on b + E.2 7 18 6 18 23 64 29 80 36 27 93 77

3. 18% on C + E.3 9 21 1 3 32 76 33 79 42 32 97 76(..Totals D + E + F 4 18 9h6 34 14303 8 1 248 82 2 7 2 038 2 75

1. A + E.1i + F.1 17 908 40 975 43 1, 83 83 2,265 1,690 93 75

2. B + E." + F.2 37 20 30 16 118 64 148 80 185 138 93 753. C + E.3 + F.3 59 21 8 3 210 76 217 79 277 210 96 75

1/ A = AmountSource: DNTP and mission estimates

November 1975

Table 11MAII

THIRD HI3HWAY PROJECT

Backlog Maintenance Element: Cost Estimates

(in millions of MF)

1 2Iocal Total Total IDAnet of net of with

Taxes taxes Foreie taxes taxes Financing-r 1 yr- %9 % A of 2 A- of 2 A of 2 A of 2 A A of 1 of2

u. Backlog maintenance

of paved roads 187 14 149 il 1,015 75 1.164 86 1,351 1.013 87 751. Local staff 1h 12 107 88 - - 107 88 121 91 85 752. Equipment rental 52 22 7 3 180 75 187 78 239 179 96 753. Fuel 23 20 3 3 86 77 89 80 112 84 94 754. Materials 90 il 25 3 699 86 724 89 814 610 84 755. Overhead 8 13 7 11 50 76 57 87 65 49 86 75

. Procurement ofspare parts 50 22 6 3 167 75 173 78 223 167 96 751. Procurement t7 22 T 3 159 75 165 78 213 159 96 752. Overhead 3 25 - _ 8 75 8 75 10 8 100 75Subtotal withoutcontingencies 237 15 155 10 8 L 337 85 1L574 1 180 88 15

. Contingencies forquantity increase 35 15 24 10 177 75 201 85 236 177 88 751. 15% on A 28 I1 23 11 152 75 175 86 203 152 87 752. 1.5% on B 7 21 1 3 25 76 26 79 33 25 96 75Ccntingencies forprice increase 100 14 73 10 525 75 598 86 698 524 94 811. 42% on A + D.1 90iv 72 i1 40 75 568 89 9 812. 18% on B + D.2 10 22 1 2 35 76 36 78 46 35 97 76

F. Totals 372 2 10 1 884 136L 2509 1881 L81. Backlog maintenance

A + D.1 + E.1 305 14 244 il 1,657 75 1,901 86 2,207 1,654 87 752. Spare parts

B + D.2 + E.2 67 22 8 3 227 75 235 78 302 227 97 75

1/ A = Amount

November 1975

Table 12

MALi

THIRD HIGHWAY PROJECT

Training Center Element: Cost Estimates(in millions of MF)

Local Total TotalNet of net of With IDA

Taxes Taxes Foreign Taxes Taxes Financing

A of 2 A'/ of 2 A of 2 A of 1 A A of 2 of 2

A. Procurement of:

1. Office equipment 2.0 18 3.0 27 6.0 55 9.0 82 11.0 8.3 92 75

2. Teaching materials 5.0 21 1.0 4 18.0 75 19.0 79 24.0 18.0 95 75

3. Vehicles 3.0 30 - - 7.0 70 7.0 70 10.0 7.0 100 70

4. Subtotal withoutcontingencies 10.0 22 4.0 9 31.0 67 35.0 78 45.0 33.3 95 74

B. Contingencies forquantity increase

1.10% on A.4 1.0 22 0.4 9 3.1 69 3.5 78 4.5 3.3 94 73

C. Subtotal

1. A.4 + B.l 11.0 22 4.4 9 34.1 69 38.5 78 49.5 36.6 95 74

D. Contingencies forprice increase

1. 28% on C.1 3.0 22 1.2 9 9.5 69 10.8 78 13.9 10.2 94 73

E. Totals

>.1 + D.1 14.0 22 5.6 9 43.6 69 49.3 78 63.4 96.8 95 74= = = - = _ ====

- A = Amount

N-vember 1975

Table 13

MALI

THIRD HIGHWAY PROJECT

Consultants services: Cost estimates

(in millions of MF)

1 2L]ocal Total Total IDAnet of net of with

Taxes taxes Foreig taxes taxes Financing

A of 2 A2:.' of 2 A of 2 A of 2 A A of 1 of 2

A. Technical Assistanceto DPW 53 16 47 L4 235 70 282 84 335 251 89 751. Peeder roads TF 16 Ù 114 20 70 8 T 28 21 88 752. Maintenance 28 16 25 14 124 70 149 84 177 133 89 753. Training center 21 16 18 14 91 70 109 84 130 97 89 75

B. Study transp. plan 32 16 28 14 138 70 166 84 198 149 90 75C. Subtotal without

cont-ingencies 85 16 75 14 373 10 448 84 L3 400 a 75D. Cont-ngencies for

quantity increases 8 15 8 15 38 70 46 85 4 41 89 751. 10% on A 5 15 2 70 29 85 3 90752. 10% on B 3 15 3 15 14 70 17 85 20 15 88 75

E. Subtotal with quantitycontingency 93 16 83 14 411 70 249 84 587 441 751. Technical assistance 58 6 52 259 70 311 277 89 752. Study 35 16 31 14 152 70 183 84 218 164 89 75

F. Contingencies forrice increase 19 16 16 15 82 70 98 84 117 88 9 75

1. 20% on E.1 12 W 1 10 1 52 70 55 89 752. 20% on E.2 7 15 6 15 30 70 36 85 43 33 89 76

G. Totals (E + F) 112 16 9 14 4 70 592 84 704 529 89 751. Technical assistance 70 16 62 l4 311 70 373 84 4r3 332 89 752. Study transp. plan 42 16 37 14 182 70 219 84 261 197 89 75

1/ A = Amount

N(vember 1975

M/ALT

TXIRD HIGHWAY PROJECT

Synthesis of cost estimates, with proposed financing

in millions of MF in thousands of US$ IDA

in %Total Total of total

Taxes Govt. IDA net of inc. Taxes Govt. IDA net of incl. net of incl.taxes taxes taxes taxes taxes taxes

(1) Feeder road element 343 149 1,454 1,603 1,946 762 331 3,231 3,562 4,324 90 75

(2) Backlog maintenance 237 157 1,180 1,337 1,574 527 349 2,622 2,971 3,498 88 75

(3) Training center i/ 10 2 33 35 45 22 5 73 78 lo0 94 73

(4) Technical assistance 85 48 600 448 533 189 107 889 996 1,185 89 75

A. Subtotal 675 356 3,067 3,423 4,096 1,500 792 6,815 7,607 9,107 90 75

B. Contingencies forquantity increase 78 45 366 411 489 173 100 813 913 1,086 89 75

C. Contingencies foprice increase 2. 224 131 1,061 1,192 1,416 498 291 2,358 2,649 3,147 89 75

D. TOTAL L77 532 4,494 5 026 6 003 2,171 1 182 9,987 11,169 13,340 89 75

E. Rounded 2,200 1,200 10,000 11,200 13,400 89 75

1/ Not including technical assistance for training center (see item (4))2/ Price contingencies have been calculated according to CPS guidelines.

Source: Tables 10-13

November 1975H-

Table 15

MALI

THIRD HIGHWAY PROJECT

Cumulative Disbursement Schedule, 1976-1979

(in thousands of US$)

IDA

Fiscal Year Percentand Amount otfSemesters total

1976

lst

2nd 2,000 20

1977

* st 3,900 39

2nd 5,600 56

1978

lst 7,100 71

2nd 8,4oo 84

1979

lst 9,500 95

2nd 10,000 100

1/ An average 3-month delay between the completion of lhilled work andehe relative disbursement has been taken into accour.t in projectingthi s schedule.

Source: Mission estimates

November 1975

Table 16

MALI

THIRD HIGHWAY PROJECT

Feeder Roads to be I>proved

Summary Execution Scheckile for Economic Analysis

Length Volume of trafficin in thousandsim of ton/km

1975 1980

a) First Year (1975) 329 1052 1296

First Unit 150 321. hi35

Second Unit 179 731 1161

b) Second Year (1976) 308 1626 2746

First Unit 173 8)l 1 268

Second Unit 135 742 14T5

c) Third Year (1977) 345 785 1144

First Unit 174 4°5 675

Second Unit 171 380 469

d) Fourth Year (1978) 21 8 429 649

First Unit 163 330 ,O6

Second Unit 55 99 1';3

TOTAL 1200 3892 6135-

Source: Table 7

1/ Rate of increase about 9.5 percent (1h percent on BCE014 roads and7 percent on others).

February 1975

Table 17MJLI

THIRD HIGIIWAY PROJECT

Feeder Roads: Cost and Benefit Streams

(:in millions of MF)

C O S T Si/

Year Maintenance BenefitsYImprovement Ferries Reguar Periodic1.106 per km .025 per km 0.31 perkm

1975 363.9 - -

1976 340.6 233.1 8.2 - 75.5

1977 381.6 53.9 16.0 _ 202.8

1978 241.1 - 24.6 _ 280.1

1979 - - 30.0 - 337.1

1980 - - 30.0 366.3

1981 - - 21.8 102.2 393.6

1982 - - 22.3 95.5 415.5

1983 - - 21.4 107.0 437.1

1984 - - 24.6 67.6 459.0

1985 - - 30.0 - 481.9

1986 - - 30.0 - 506.0

1987 - - 21.8 - 385.4

1958 - - 14.0 - 153.5

1989 - - 5.4 - 56.5

3ource: Mission estimates and BCEOM, République du Mali, Etude d'Aménagement dePistes Agricoles, Programme complementaire, Actualisation au 15 juin 1974.

1/ Include quantity contingencies for ferries, but not for feeder roads. Do notinclude price contingencies.

2/ Based on estimated savings of MF615 per ton km of commercialized agriculturalproduction at December 1974 prices and assuming (1) that trucks are filled5096 on non-improved tracks and 600)* on improved feeder roads; (2) that oneway of the trip is done empty, except for a 596 load factor with consumptiongoods.

November 1975

Table 18

MALI

THIRD HIGHWAY PROJECT

Internal rate of return and sensitivity of the feeder road component

(in percent)

Variations Internalrate of return

A. Mission estimates i6.75

B. Sensitivity analYsis

Costs + 10 14.15

+ 15 12.95

+ 20 il. 5

Benefits - 10 13.85

-15 12.35

- 20 10.85

- 25 9.25

Source: Computer runs made by mission

Table 19

MALI

THIRD HIGHWAY PROJECT

Vehicle Operating Costs per km not including Taxes

(in Malian francs)

1/Class of Road Passenger Car Average Truck

Well maintained paved road 45 11h

Paved road which needs patching 49 132

Paved road which needs resealing 53 140

Paved road which needs resurfacing 55 142

Improved feeder road n.a. 201

Paved road which needs reconstruction 100 287or on unimproved earth track

Source: Republique du Mali, Minist,ère du Developpement Industriel, Directio)Nationale des Travaux Publics, Etude d'Aménagement des Pistes Agric les:Programme Complémentaire - Actualisation au 15 juin 1974, BCEDM, pand mission estimates.

1/ 6 and 1 0-ton trucks are the most coumonky used.

February 1975

MALI

THIlD HIGHWAY P1iDJECT

Backlog Maintenance element: Cost and benefit streamsL/

(in millions of MF)

C 0 S T S B E N E F I T S

Year Maintenance Reconstruction Resurfacing Resealing. PatchingReconstruction RFerfacing Resealing Patching

1975 - 81.1 115.5 19.4 - 22.9 44.1 45.61976 215.1 81.1 206.9 41.5 - 71.5 285.8 40.81977 - 81.1 206.9 58.0 149.1 124.0 312.8 -1978 - 7.4 206.0 73.4 155.1 177.4 543.2 -1979 - - - 70.3 161.3 208.1 656.2 -1980 - - 70.3 167.7 216.4 682.4 -1981 - - - 54.1 174.4 167.1 599.0 -1982 _ 44.6 - 31.4 181.4 113.4 415.0 -1983 - - - 15.5 188.7 55.2 215.3 -1984 - - - 1.7 196.2 - - -1985 - - - 1.7 204.0 - - -1986 - - - 1.7 212.2 - - -1987 _- - 1.7 220.7 - -1988 - 44.6 - 1.7 229.5 - - -1989 - - - 1.7 238.7 - _1990 _- - 1.7 248.3 - - -1991 - - - 1.7 258.2 _- -1992 - - - 1.7 268.5 _- -1993 - - - 1.7 279.3 - - -1994 - 44.6 - 1.7 290.4 - - -1995 - - - 1.7 302.0 _- -1996 - - - 1.7 314.1 _ _1997 - - - 1.7 326.7 - _1998 - - - 1.7 339.8 _ _ _1999 - - 1.7 353.3 - -

oe

I/ Based on 914 km. Does not include the extrta 30 km (Bamako-Tienfala) added at negotiations.

S2urce: Mission estimates

November 1975

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