Report No. 1834b-CD

ChadFIECPThird Highway Project FILE COPYAppraisal ReportJuly 6, 1978

Western Africa Project DepartmentHighways Division

FOR OFFICIAL USE ONLY

Document of the World 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 Equivalents

US$1.00 C CFAF 245

Fiscal Year

January 1 - December 31

System of Weights and Measures: Metric

Metric British/US

1 meter (m) = 3.3 feet (ft)1 kilometer (km) 2 0.6 miles (mi)1 square kilometer (km ) = 0.4 square miles (sq mi)1 metric ton (m ton) = 1.1 tons (short tons)I liter (1) = 2.1 pints (pts)

Abbreviations and Acronyms

ADF - African Development FundASECNA - Agence pour la Securite de la Navigation Aerienne

en Afrique et a MadagascarATEC - Agence Transequatoriale des CommunicationsBDT - Banque de Developpement du TchadBTCD - Banque Tchadienne de Credits et DepotsCTT - Cooperative des Transporteurs TchadiensDCA - Directorate of Civil AviationDPD - Directorate of Planning and DevelopmentDPW - Directorate of Public WorksDT - Directorate of TransportEIO - Equipment Inspection OfficeENTP - Ecole Nationale des Travaux PublicsFAC - Fonds d'Aide et de CooperationFED - Fonds Europeen de DeveloppementICAO - International Civil Aviation OrganizationMCWMG - Ministry of Civil Works, Mines and GeologyMEPT - Ministry of Economy, Planning and TransportPO - Procurement OfficeRMA - Road Maintenance AuthorityRPDO - Road Planning and Design OfficeSHO - Studies and Hydraulics OfficeSTC - Swiss Technical CooperationUNCTAD - United Nations Conference for Trade and DevelopmentUNDP - United Nations Development ProgrammeUNIDO - United Nations Industrial Development OrganizationUNSO - United Nations Sahel OfficeUSAID - United States Agency for International Developmentvoc - vehicle operating costsvpd - vehicles per day

FOR OFFICIAL USE ONLY

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

Table of Contents

Page No.

SUMMgARY ........................................... ...... o............ i-iii

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

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

A. The Land and the Economy .................... 2B. The Transport System . ..................................... 3C. Investments .......................................... . 5D. Management and Planning ............................. 5

3. THE ROAD SECTOR .................................................... 6

A. The Network .......................................... . 6B. Road Transport Characteristics ........................ 6C. Road Transport Industry ..... ......................... . 7D. Administration ........................................ 8E. Staffing and Training ................................. 8F. Planning ............................................. . 8G. Financing ............................................. 9H. Engineering and Construction ..... ..................... 10I. Road Maintenance ...................................... 10J. Improvement of Feeder Roads ........................... 11K. Domestic Contracting Industry ..... .................... 11L. Appropriate Road Maintenance Technology ........... .... 12

4. THE PROJECT ................................................ 12

A. Description ....... ................................... 12B. Road Maintenance Program .............................. 13C. Training Program ..................................... 13D. Construction of Ferryboats ..... ....................... 14E. Technical Assistance and Fellowships ............. ..... 15F. Rural Roads Study ........ ...... .......................... 16G. Completion of the Improvement and Maintenance

Program for Cotton Feeder Roads ..................... 17H. Cost Estimates ........ .......................... ...... 17I. Execution ............................................. 19J. Procurement ..........................................* 19K. Financing and Disbursement ............................ 20

Frhis document has a restricted distribution and may be used by recipients only in the performance[of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Table of Contents (Continued) Page No.

5. ECONOMIC EVALUATION ......................... 22

A. Introduction ...... .................. 23B. Road M[aintenance Program ........................ 23

C. Replacement of Ferries ......... . . . . ......................... . 24

D. Distribution of Benefits ................. # ............. 25

E. Project Risks and Sensitivity Analysis .......... . ....... 25

6. AGREEMENTS REACHED AND RECOMMENDATIONS ...................... 26

TABLES

1. Principal External Trade Corridors .......................... 282. Public Sector Investment ................................... 29

3. External Assistance: Transport Sector ..................... 304. Road Network (1977) .................... .. ......... 5.. 315. Traffic on Road Network to be Maintained by DPW ............. 326. Growth of t]ne Vehicle Fleet, 1970-76 .......... .. ............ 337. Fuel Consumption, 1968-76 ............... .. .................. 348. Government Revenues from Road Users, 1969-75 ................ 359. Expenditures on Highways, 1971-76 ..... ...................... 3610. List of Roads to be Maintained ............. .. ............... 3711. Unpaved Road Maintenance Strategies .... ..................... 3812. Road Maintenance Equipment and Spare Parts for

Existing Equipment; Cost Estimates ................. . . ........ 39

13. Construction of Buildings and Workshops; Cost Estimates ..... 4014. Network to be Maintained and Maintenance Operations .. ....... 4115. DPW Personnel Training Requirements ......................... 4216. Equipment for Training Program; Cost Estimates ........... 4317. Four Locally-Built Ferryboats; Cost Estimates ....... ..... 4418. Project Cost: Estimates ................. .. ................... 4519. Project Implementation Schedule ............ .. ............... 4720. Estimated Schedule of Disbursements .... ..................... 4821. Road Maintenance Cost Estimates ............ .. ............... 4922. Ferryboat Recurrent Costs ............... .. .................. 5023. Road Maintenance Recurrent Expenditures; Cash Flow .......... 5124. Vehicle Operating Costs as a Function of Traffic

and Road Surface Characteristics ............................ 5225. Breakdown of Cost Components for Shadow Pricing ............. 5326. Summary of Economic Evaluation and Sensitivity Analysis ..... 54

This report has been prepared by Messrs. E. Staffini and A. Faiz, followingan appraisal mission in March/April 1977.

Table of Contents (Continued) Page No.

ANNEXES

I. Road Transport Industry ....... ................... ..... 55II. Technical Assistance for a Training Program -

Outline Terms of reference ............................. 72\III. Exhibit I - Proposed Ferryboat (Plan) ................. 76

Exhibit II - Proposed Ferryboat with Truck (Profile) .. 77\IV. Plan of Action . ........................................ 78\V. Technical Assistance for Strengthening Equipment

Maintenance Operations of the Directorate of PublicWorks - Outline Terms of Reference ....... .... 80

VI. Technical Assistance for the Reorganization of theRoad Planning and Design Office - Outline Terms ofReference ..................... . 83

VIIl. Transport Economist for the Directorate of TransportOutline Terms of Reference and Qualifications .85

VIII. Trucking Industry Expert to be Attached to CTT -Outline Terms of Reference and Qualifications ....... 87

IX. Rural Roads Study - Outline Terms of Reference .... ... . 89X. Economic Analysis of the Project ............ 0.......... 91

EXHIBITS

I. Directorate of Public Works: Organigramme .... ........ 115II. Incremental Benefits from Regravelling .... ............ 116III. Benefits from Grading of Tracks ............... ....... 117

MAPS

I. CHAD - Third Highway Project (IBRD No. 13241-R)II. CHAD - Third Highway Project, Main Road Connections (IBRD No. 13242)

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

SUMMARY

i. The Republic of Chad, a vast, landlocked country in the heartof north-central Africa, is counted among the world's poorest 25 countries(Gross National Product in 1975: US$120 per capita, with incomes in ruralareas about US$60 per capita). The economy is based on agriculture, whichaccounts for over 50% of the Gross Domestic Product (GDP); cotton is the prin-cipal export, providing over two-thirds of the export earnings. As Chad'sprincipal economic centers are located about 2,000 km from the nearest oceanport, external transport plays a critical role in Chad's economy. Roads formthe backbone of the internal transport system. The road network consists ofabout 7,300 km of classified roads and tracks, and about 24,000 km of tracksproviding access to agricultural areas. Only about 1,300 km are engineered,all-weather roads; of these 253 km are paved. Road distribution is uneven;the major portion is located in the cotton-producing areas in the south,while the sparsely-inhabited northern part is served mainly by desert tracks.Inadequate maintenance, due to shortage of funds, has impaired the service-ability of the road network.

ii. Bank Group assistance to Chad's transport sector has been confinedto two highway projects and transport components in two other Credits. The(First) Highway Maintenance Project (Credit 125-CD, US$4.1 million, August1968) was geared to improving road maintenance. It consisted mainly of afive-year maintenance program, and a preinvestment study. The road mainte-nance program was completed in 1973, but physical targets were only partiallyachieved, due to severe budgetary constraints as reflected in reduced alloca-tions for recurrent expenditures. The Second Highway Project (Credit 490-CD,US$3.5 million, June 1974), including an improvement and maintenance programfor cotton feeder roads, an interim program for maintenance of ferries, atraining program, preinvestment studies, a program of traffic counts, and aroad transport industry study is being implemented with satisfactory results.The project is due for completion in 1980. The training program has beenextended to July 1978 to provide continuity with the training envisaged underthe proposed project. The extension of this program has increased the projectcost by about US$400,000, net of taxes, which would be financed under theproposed project. This amount would be used to finance capital costs andoperating expenditures of the remaining part of the cotton feeder road main-tenance and improvement program. Two other IDA-financed projects have smalltransport-related components: (a) the Rural Projects Fund (Credit 664-CD,US$12 million, December 1976) includes maintenance operations on selectedsections of about 1,200 km of feeder roads; and (b) the Sahelian Zone Project(Credit 739-CD, US$1.9 million, October 1977) includes rehabilitation of sixairstrips.

iii. The Government's objectives in the road sector are to improvecommunications between the Sahel zone and the agriculturally productive southin order to promote national integration, and to facilitate the export and

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import of essential commodities. In support of these objectives, the proposedThird Highway Project aims to make road maintenance operations more efficient,strengthen road maintenance and planning, and improve the operations of thetrucking industry. The Government's increased commitment to road maintenance,despite the continuing critical budgetary situation, reduces the risk thatthe proposed project will experience the difficulties that hampered executionof the first project. The proposed project would include: (a) a four-yearroad maintenance program of about 5,300 km of unpaved roads and tracks, in-cluding purchase of equipment and construction of workshops and buildings; (b)a training program for DPW personnel, including a training/production brigadefor regravelling about 100 km of roads per year; (c) construction of fourferryboats; (d) technical assistance and fellowships to: (i) strengthen DPW,(ii) provide plaining support for the Directorate of Transport (DT), and (iii)improve the trucking operations of the Cooperative des Transporteurs Tchadiens(CTT); (e) a study to prepare a rural roads project; and (f) completion of theimprovement and maintenance program for cotton feeder roads started under theSecond Highway Project.

iv. The capital cost of the proposed project is estimated at US$21.9million equivalent, with a foreign component of about US$18.4 million (84%).Taxes amount to US$0.2 million as the Government has agreed to waive alltaxes, except those on fuel. Recurrent expenditures over the project periodamount to about US$8.1 million equivalent with foreign costs of about US$4.1million (51%). The cost estimates are expressed in end 1977 prices and in-clude physical and price contingencies during project implementation. Allthe capital costs (net of taxes) of the proposed project would be externallycofinanced on a parallel basis by the Association (IDA Credit; US$7.6 million),the United States Agency for International Development (USAID grant; US$9.0million), and the African Development Fund (ADF Credit; US$5.1 million).The Government would provide US$8.3 million equivalent; US$0.2 million tofinance taxes on fuel, and US$8.1 million for the recurrent expenditures ofthe maintenance program for roads and ferries.

v. The proposed project provides for about 531 man-months of consultingservices and technical assistance: 230 man-months for the training program,205 man-months to assist in strengthening DPW and improving regional workshopefficiency, 16 man-months to assist in ferryboat construction, 30 man-monthsto provide planning support to the Directorate of Transport, 15 man-monthsto improve CTT's trucking operations, and 35 man-months for the rural roadsstudy. In addition, fellowship support would be provided for DPW, DT, and CTTpersonnel. Consulting services and technical assistance for DPW, building offerryboats, and the rural roads study would be financed by the Association,while USAID would provide for the remaining technical assistance requirements.

vi. The Ministry of Civil Works, Mines and Geology (MCWMG) would imple-

ment, through its DPW, the road maintenance and training programs, construc-tion of ferryboats, and civil works. It would also supervise the technicalassistance for DPW and administer fellowships for DPW staff. The Ministryof Economy, Planning and Transport (MEPT) would supervise the technicalassistance for DT and CTT, and the rural roads study. Building materials

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for ferryboats would be procured under international competitive bidding

in accordance with Bank Group guidelines. Procurement of all other goods

financed by the Association would be carried out under local competitive

bidding procedures acceptable to the Association. Ferryboats would be built

under force account, but some of them, or parts thereof, might be contracted

to local workshops under local procedures. A small quantity of consumable

materials for ferryboat construction and office supplies (up to an aggregate

amount of US$60,000) might be purchased through local shopping. Consultant's

services for technical assistance to DPW and for ferryboat building would be

obtained following procedures, and on terms acceptable to the Association.

All other goods and services would be procured following the procedures

of respective cofinancing agencies. DPW will prepare bidding documents and

supervise construction of buildings. The Association would be responsible

for project supervision subject to agreement with all cofinancing agencies.

vii. The best estimate of the economic rate of return for routine mainte-

nance is about 75%, corresponding to a benefit/cost ratio of 3.25 at a 12%

discount rate. Regravelling of about 400 km of roads by the training produc-

tion brigade would yield an economic rate of return of about 17% equivalent to

a benefit/cost ratio of 1.31 discounted at 12%. The overall economic return

for road maintenance operations, accounting for costs of routine maintenance,

regravelling, and training, is estimated at 51%. Replacement of the four

ferries would produce an overall rate of return of 44%, ranging from 27% to

58% for individual ferries. The overall rate of return for the project,

including the maintenance program and the replacement of ferryboats, is about

50%. Improved quality of roads through maintenance would tend to retard the

escalation in transport costs and the corresponding multiplier effects, re-

sulting in increased prices of consumer goods and reduced net export revenues.

As some of the project benefits are expected to filter down to the producers,

further expansion of agricultural output and generated traffic could mate-

rialize.

viii. With the agreement reached on the conditions listed that in Chapter

6, the proposed project is suitable for an IDA Credit of US$7.6 million to the

Republic of Chad on standard IDA terms.

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

1. INTRODUCTION

1.01 Chad's economic situation has been deteriorating since the late1960's due to a prolonged drought and internal security problems. Increased

demand for Government services, resulting from the drought, and rising militaryspending, caused budget deficits that rose from CFAF 2.0 billion in 1970 to

CFAF 4.1 billion in 1974, leading to accumulated payment arrears of CFAF 11.6billion by 1976. The Government, therefore, has depended on external assis-tance for most of its investment needs. This fiscal situation presents ser-ious obstacles to transport development as the Government can neither con-tribute to investments nor fully finance recurrent costs. During 1972-75,annual expenditures on road maintenance averaged less than 2% of Government'sspending on recurrent expenditures. A properly maintained road network, how-ever, is critical to the growth of the country's economy, particularly in theagriculture and livestock sectors. It would also help to improve communica-tions between many important commercial and administrative centers and reducethe economic and administrative isolation of several prefectures. To helpmaintain and improve its primary and secondary roads, the Government hasrequested Bank Group assistance in financing a Third Highway Project.

1.02 To date, Bank Group assistance to Chad's transport sector has beenfor road maintenance and improvement of cotton feeder roads. The First High-way Maintenance Project (Credit 125-CD, US$4.1 million, August 1968) provideda five-year maintenance program for primary and secondary roads, feasibilitystudies of the Djermaya-Djimtilo road and lake side facilities, and a country-wide program of traffic counts. Training for road maintenance personnel ini-tially included in the project was largely deferred to the follow-up SecondHighway Project, although some training was provided under USAID auspices.

1.03 The project focused the Government's attention on the importance

of road maintenance and initiated the process of building a sound maintenanceorganization. Equipment, spare parts, and materials were purchased and work-shops improved. The shortage of local funds for recurrent maintenance expend-itures, low equipment utilization due to lack of spare parts and inadequateequipment maintenance, and grave internal security problems were the mainreasons for the shortfall in annual road maintenance targets (a maximum of2800 km compared to the appraisal expectation of 4350 km at the end of theproject). The shortage of local funds can be generally attributed to theallocation of fuel taxes to the general budget rather than the Road Fund,although from 1972 onwards insufficient Government allocation for road main-tenance was more a result of the Sahelian drought and the political unrest,which caused a steep decline in production and revenues. The OperationsEvaluation Department's Project Performance Audit Report (No. 1883) points tothe need for provision of increased local funds for maintenance, improvementof equipment utilization, expansion of training for maintenance personnel,and development of Government's ability to plan and execute road maintenanceworks. The design of the proposed project takes account of these considera-tions.

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1.04 The Second Highway Project (Credit 490-CD, US$3.5 million, June1974) started in 1975, comprising a five-year program of improvement andmaintenance of cotton feeder roads, a three-year interim maintenance programfor ferryboats, a training program for Directorate of Public Works (DPW) per-sonnel, a two-year traffic counting program, preinvestment studies of about120 km of cotton export rpads, a feasibility study for replacement of ferry-boats, and a road transport industry study. The improvement and maintenanceof cotton feeder roads is proceeding satisfactorily. The interim maintenanceof ferryboats, the feasibility study for replacing ferryboats, and the trans-port industry study have been completed, while the training and trafficcounting programs are in progress. Detailed engineering of the two cottonexport roads was not undertaken because the proposed investment in one roadwas not economically justified, and the other was contingent upon the imple-mentation of a soap factory project, which was cancelle4 by the Government.In view of the increased training requirements for the implementation of theproposed Third Highway Project, the training program has been extended toprovide continuity in the training activities between the two projects. Theuse of project funds for extension of the training program would requireadditional financing to complete the improvement of cotton feeder roads. Theresulting cost increase, US$400,000, net of taxes, would be financed under theproposed project (para. 4.14).

1.05 In addition to the First and Second Highway Projects, the RuralProjects Fund (Credit 664-CD, US$12.0 million, December 1976) includes minordrainage works and selective maintenance and improvement of about 1200 kmof feeder roads, mainly in the cotton zone. A first step to improve theair transport sector will be taken under the Sahelian Zone Project (Credit739-CD, US$1.9 million, October 1977) which includes a sub-project forminor rehabilitation works on six airstrips serving regional prefectures.

1.06 The proposed project serves as a logical sequel of the road main-tenance effort initiated under the Highway Maintenance Project and supportsthe Government's commitment to establish road maintenance on sound technicaland financial grounds. Serving as the first phase of a long-term improvementeffort in road maintenance in Chad, the primary objective of the project is topreserve the continued serviceability of the road network, so that earth roadsand tracks remain trafficable during the dry season and selected roads areregravelled to provide all-weather service.

1.08 This report is based on studies prepared by consultant BCEOM, oninformation provided by DPW and other Government agencies, and on the findingsof an appraisal mission comprising Messrs. E. Staffini (engineer), A. Faiz(economist), P. Sooh (engineer), A. Pappalardo (engineer, consultant forferryboats) and P. Gueye (transport economist, consultant for the truckingindustry), which visited Chad in March-April 1977.

2. THE TRANSPORT SECTOR

A. The Land and the Economy

2.01 Landlocked in the heait of north-central Africa, Chad occupiesan area of about 1.3 million km , with a population estimated at 4.0 million

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in 1976. The population growth rate is about 2.0% per annum. About 85%

of the population is concentrated in the southwestern savanna zone, whichoccupies only 10% of the land area. There, smallholders cultivate millet,

sorghum, groundnuts and, more recently, rice as food crops, and cotton as

the primary cash crop. As rainfall declines and becomes more erratic, trans-humant pastoralism replaces rainfed farming in the Sahelian region. The

vast northern part of the country is a rocky wasteland consisting of southernextensions of the Sahara and Libyan deserts.

2.02 With a per capita Gross National Product (GNP) of US$120 in 1975,

Chad is one of the poorest countries of the world and is included among the

25 least-developed member countries of the United Nations. Agriculture repre-

sents over 50% of the Gross Domestic Product (GDP) and accounts for nearly all

exports, of which cotton, livestock and animal products, and fish are the main

commodities. During the past ten years, the pace of development has been slow

due to the country's formidable growth problems, namely lack of natural re-sources (with the exception of recently discovered oil deposits), a hostile

climate, a literacy rate of 7%, a largely unskilled labor force., atl I .1i-uing political unrest. Between 1967 and 1975, per capita income dropped about1% per year, and Government budget came under increasing strain with few

internally financed investments. Efforts, however, are being made to put

Chad's financial house in order; a balanced budget appears possible by 1982in the judgement of the recent Bank economic mission (Report No. 1340-CD).

B. The Transport System

International Transport

2.03 The remoteness of Chad's urban centers from ocean ports (1,700 -3,000 km) and difficult internal communications give rise to high transportcosts, which in turn inflate the price of imports and most consumer goods,and have a debilitating effect on the competitiveness of Chadian exports.As land transport costs account for a significant 15-20% of the f.o.b. price,the competitiveness of Chadian cotton exports is becoming increasingly mar-ginal. Relative to imports, a bulk freight rate of about CFAF 34,000 (US$140)

per ton from ocean ports adds significantly to the final consumer prices.

2.04 The principal external transport corridors to the sea are: (a)

the Nigerian route via Maiduguri to Lagos or Port Harcourt, carrying about32% of the total freight in 1977; (b) the Cameroonian route via Ngaoundereto Douala, accounting for about 48% of the total tonnage compared with 16%in 1970; and (c) the Transequatorial route via Bangui and Brazzaville toPointe Noire, carrying about 12% of freight traffic compared with 47% in 1970(Table 1 and map). Since 1974, transit trade has diverted substantially fromthe Transequatorial route to the Cameroonian route, following the establish-ment of a railhead at Ngaoundere and the improvement of the road link betweenNgaoundere and N'Djamena. This diversion was accelerated by the dissolutionof the Agence Transequatoriale des Communications (ATEC) in 1969 and improve-ment of the road link between Sarh and the Cameroonian border via Moundouduring 1965-70. It is estimated that the Cameroonian route will continue to

attract an even larger share of Chad's transit trade, especially with the

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projected increase in capacity at Douala port and the proposed constructionof the Moundou-Guidjiba road linking southern Chad with the Trans-Cameroonianaxis by a more direct route.

Transport Infrastructure

2.05 Road transport is the predominant mode in Chad's transport system,accounting for about 75 million ton,-km? or nearly 85% of total freight traffic.The details of the road subsector are discussed in Chapter 3. Other modesinclude an air transport network and inland waterways comprising Lake Chadand the Chari-Logone river system.

Air Transport

2.06 Chad has 44 airfields and airstrips, including one internationalairport at N'Djamena for commercial jet traffic. Eleven of the larger air-ports are efficiently managed by the Agence pour la Securite de la NavigationAerienne en Afrique et a Madagascar (ASECNA), while most of the remainingairfields fall under the jurisdiction pf the Directorate of Civil Aviation(DCA). Most of the airstrips are unpaved, and due to lack of adequate mainte-nance, their serviceability has been impaired. A subproject under the ongoingSahelian Zone Project will restore six airstrips to their previous condition.

2.07 Total air freight traffic (arrivin$ anid departing) dropped from anall-time high of 29,000 tons in 1970 to 14,500 tons in 1975. This was dueprimarily to the recession in economic activity in Chad during the droughtyears. Major commodities exported via air are meat, fish and gum arabic.Domestic transport is handled by Air Tchad, an autonomous corporation whichoffers scheduled service between N'Djamena and ten interior cities; six majorairlines, including the multi-national, ptate-owned, Air Afrique, of whichChad is a member, handle the international traffic. The domestic demand forair transport (0.3 million ton-km of air cargo in 1975) is seasonal, peakingin August-September (the rainy season) when road transport becomes quitedifficult and in many cases impossible. Although preliminary studies carriedout by United Nations Conference pn Trade and Development (UNCTAD) and Interna-tional Civil Aviation Organization (WCAO) reflect favorably on the potentialof air transport development in Chad. supbstantial increase in air transportdemand does not appear likely in the near future.

Inland River and Lake Transport

2.08 The River Chari is navigable between N'Djamena and Lake Chad yearround, and between N'Djamena and Sarh (850 km) from mid-August to mid-December.The Logone river is navigable between N'Djamena and Moundou (1,000 km) fromSeptember to late October. Barge traffic on the rivers and Lake Chad is esti-mated at about 15-20,000 tons per year, or about 10-15 million ton-km. Majorcommodities include beer, timber, sugar, steel, fuel, natron and fish. Pros-pects for river transport development are limited bepause of river regime con-straints, although the outlook for developing barge transport on Lake Chad ismore favorable. The local construction of ferries under this project could wellserve as the nucleus of a future barge coinstruction industry for lake transport.

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C. lnvestments

2.09 Investments in the transport sector (including communications)averaged about CFAF 0.75 billion per annum during 1967-70 (38% of total public

sector investments), but declined to CFAF 0.60 billion (6% of total invest-ments) in 1975, due to a shift in government policy toward agriculturaldevelopment (Table 2). Major investments in the sector since 1970 comprise

the construction of the N'Djamena-Guelendeng and N'Djamena-Massaguet roads,the Moundou-Airport road, the Ba-Illi bridge and runway strengthening at theN'Djamena airport (Table 3), in addition to the Bank Group's highway projects(paras. 1.02-1.05). Transport sector investments decreased from 2.4% of GDPin 1967, to 0.5% in 1975.

D. Management and Planning

2.10 The primary responsibility for transport planning and coordination

rests with the Ministry of Economy, Planning and Transport (MEPT). Within theMinistry, the Directorate of Planning and Development (DPD) determines trans-port investment priorities and coordinates external assistance; the Director-

ate of Economic Affairs establishes transport tariffs; and the Directorateof Transport (DT) is responsible for transport policy and regulation of allmodes, including international transport agreements. The Ministry of Financeestablishes road user taxes, approves budget requests, and proposals fortariff modification. DPW, within the Ministry of Civil Works, Mines andGeology (MCWMG), is responsible for the construction and maintenance ofpublic works. ASECNA, and DCA within MCWMG, administer air transport.

2.11 The basic elements of a hierarchical transport planning process

are present in the Government's existing organization. DPW's Studies andHydraulics Office (SHO) and the technical planning sections of ASECNA andDCA are responsible for data collection, analysis of sectoral trends, andtechnical evaluation of projects. DT serves as the next operational levelin the transport planning hierarchy, liaising between the operating organi-zations (DPW & DCA) and DPD, as well as being responsible for sector policyand regulation. The next level of transport planning occurs in DPD whereinter- and intra-sectoral investment priorities are determined.

2.12 The Government has staffed its transport agencies with qualifiednationals where possible, and relies on technical assistance experts, mostlysupplied by thje Fonds d'Aide et de Cooperation (FAC), to fill other posi-tions. Most management positions are held by Chadians, but there remains asignificant shortage of qualified technical staff in most agencies. Forexample, technical staff of DCA consists of one civil aviation engineer whoheads the Air Transport Section, while the position of the director remainsvacant. DT is also understaffed; as a result, its activities have beenconfined to immediate problems concerning the road transport industry and

negotiations pertaining to international transport agreements. Owing to theshortage of trained local staff, technical assistance experts in most agenciesspend much of their time coping with routine administrative and operationalmatters. Consequently most planning activity centers on developing a "shopp-ing list" of projects for external financing. Although the Government is inthe process of formulating a development plan (1978-81), it is unlikely thatmore than generalized guidelines and objectives will emerge from the exerciseunder present constraints.

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2.13 The basic strategy for improving sector planning in this context isseen as a gradual one considering the country's limited absorptive capacityfor technical assistance, and other manpower constraints. The first and mostimportant need is to improve the system of data collection and technical anal-ysis, i.e. the lower echelons of transport planning. To this end, technicaland financial assistance is included in the project for SHO (paras. 3.12,4.09, and 4.10) and DT (para. 4.11).

3. THE ROAD SECTOR

A. The Network

3.01 The road network consists of about 7,300 km of roads divided intoabout 4,600 km of national roads and about 2,700 km of prefectural roads;and 24,000 km of unmaintained tracks (Table 4). The network includes 253 kmof paved roads and about 1,050 km of all-weather engineered gravel roads;most of the remaining roads and tracks are passable only during 7-8 monthsof the dry season. The major portion of the network is located in the cottonzone, covering about 10% of the area of the country. The sparsely populatednorthern part of the country is served mainly by desert tracks. Constructionof all-weather roads began in Chad in 1964 with the east-west trunk road fromSarh to Pala; this was followed by the paving of N'Djamena-Guelendeng andN'Djamena-Massaguet roads, completed in 1971. No further extensions or majorimprovements of the road infrastructure have been made since 1972, except forthe paving of the 11 km Moundou-Airport road and the construction of theBa-Illi bridge.

B. Road Transport Characteristics

Traffic

3.02 Current traffic levels can only be approximated, since the latestavailable traffic counts date back to 1970 (Table 5). It is estimated thattraffic flow on the network averaged about 25-30 million veh-km per year, andabout 70-75 million ton-km per year, during 1970-76. Except for the pavedroad between N'Djamena and Guelendeng, the classified network carries lessthan 100 vehicles per day (mainly trucks), varying from 30-60 vehicles per day(vpd) on the most trafficked national roads to under 10 vpd on prefectural roads.

Vehicle Fleet

3.03 The operational vehicle fleet is estimated to be about 9,300 vehi-cles (4,500 passenger vehicles, 3,000 pick-up and medium trucks, and 1,800heavy trucks) on the basis of available Government statistics, adjusted toaccount for vehicles retired from the fleet (Table 6). The vehicle fleethas increased at an estimated rate of 3-6% p.a.

Fuel Consumption

3.04 Fuel consumption appears to have remained constant during 1968-76(Table 7). This apparent paradox, in the light of an estimated 3-6% annual

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growth in the vehicle fleet and a 3% annual increase in total tonnage movedvia road transport during the period 1968-74, may be explained in terms ofincreasing unrecorded fuel purchases in Nigeria where the price of fuel isone-third of that in Chad.

C. Road Transport Industry

3.05 The domestic road transport industry (details in Annex I) carriesabout 470,000 tons of freight per year including about 160,000 tons of import-export traffic. There is no scheduled inter-city passenger road transport inChad, nor statistics on passengers transported. Except for a few vans andcovered pick-up trucks, freight trucks double as passenger vehicles.

3.06 The Cooperative des Transporteurs Tchadiens (CTT), a Chadian asso-ciation of truck owners, has a monopoly of all internal and external publicroad transport activity in Chad, except for the domestic transport operationsof a number of semi-public and Government agencies such as COTONTCHAD 1/.Smal:L shipments on domestic routes are de facto not controlled by CTT.CTT has 350 active members who own about 660 vehicles with an average ageof 6-7 years; 65% of the CTT members own only one truck while only 7% own fiveor more vehicles. Each member manages his own operations, while CTT allocatesfreight, bills customers, and pays the vehicle owner. When necessary, CTTprovides working capital in the form of advances to purchase fuel and helpsfinance the purchase of new vehicles. For these services CTT charges itsmembers a commission equal to 10% of the freight transport cost. CTT is afinancially autonomous private enterprise supervised by DT, and its directorgeneral is nominated by the Government. There is no restriction on vehicleimports or entry into the industry, although a licensing system exists.

3.07 A number of factors have impeded the efficient development of thetrucking industry. The lack of coordination among shippers, carriers, andtransport intermediaries and an imbalance between exports and imports hasresulted in low truck fleet utilization (around 50% load factors) and highunit costs. The regulated road transport tariffs, established in 1974, havenot kept pace with the escalating cost of transport. Except for a few routes,transport tariffs are lower than transport costs, under assumption of modernbusiness practice. Liberal import policies, coupled with drought reliefprograms, have resulted in excessive vehicle imports in recent years, whilesufficient attention is not paid to the maintenance of the truck fleet.

3.08 The proposed project aims at improving the efficiency of the truck-ing industry by providing technical assistance to existing institutions. Onthe regulatory side, the institutional support to DT (para. 4.11) would prepareit to undertake normal regulatory functions of the road transport industry andcarry out basic planning studies aimed to improve the overall efficiency of

1/ COTONTCHAD is a semi-public company which has the monopoly for processingand marketing cotton, as well as the transport of seed cotton from fieldto ginnery, in its own fleet of 300 trucks.

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the transport sector. On the operational side, the technical assistance toCTT (para. 4.12) would help to improve its transport operations especially inthe areas of centralization of freight transport demand, freight allocation,and coordination among shippers, truckers, and transport intermediaries.

3.09 Maximum authorized gross vehicle weight limit in Chad is 38 tonswith a maximum single axle load of 13 tons, following the French practice.The movement of heavy vehicles on unsurfaced all-weather roads is forbiddenduring, and for a few hours after, a heavy rain. The enforcement of trafficreguLations is lax due primarily to a lack of funds and trained personnel.With the provision of portable weighing scales under the proposed project,enforcement of weight regulations is expected to improve. Regulatory func-tions fall under the purview of DPW's Service of Mines, which inspects andlicenses vehicles, and the Gendarmerie, which is responsible for enforcementof traffic regulations.

D. Administration

3.10 DPW, responsible for about 4,600 km of primary roads and about2,700 km of seconclary roads, also covers buildings and hydraulics. A fifthsubdivision will be created under the project. DPW has central services atheadquarters and four regional subdivisions. DPW's organization (Exhibit I)is adequate to maintain the roads under its authority, but is in need ofimprovements in some offices, additional training for its staff, and improvedworkshop facilities and equipment.

E. Staffing and Training

3.11 Except two, all DPW executive personnel are Chadian. Division andsubdivision chiefs are foreign trained graduate engineers, while middle-levelpersonnel have received training in local technical schools. Staffing willimprove in 1978 as the proposed DPW budget provides for the hiring of twoadditional engineers and more than ten middle-level technicians. FAC is pro-viding 14 technical assistance experts to DPW under a long-term agreementwith the Government. Training of skilled personnel was initiated in 1970with USAID assistance. Under the ongoing Second Highway Project, a trainingprogram is being implemented for several categories of skilled personnel.To consolidate the results of this program and assure the training of skilledpersonnel required for the road maintenance program, the proposed project alsoincludes a training program (paras. 4.05-4.06).

F. Planning

3.12 Until now, road planning has been carried out on a pragmatic, proj-ect-by-project basis, but with insufficient attention paid to economic con-siderations. Although DPW's SHO is responsible for basic road planning, ithas been hampered from undertaking planning activities by lack of personnel,equipment, and funds. To rectify this situation, the Government intends tostrengthen its SHO:; the road section of this office would become a RoadPlanning and Design Office (RPDO, Exhibit I). RPDO would carry out basichighway planning and engineering studies, evaluate road projects, and super-vise road construction. Furthermore, RPDO would collect and process data for

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economic analysis of proposed road investments; this would help to establishroad investment priorities on criteria which take account of economic consid-erationis.

G. Financing

3.13 Annual Government revenues from road users averaged about CFAF 1.1billion (US$4.4 million) during 1971-75, contributing about 8% to totalGovernment receipts, with about 45% derived from fuel taxes (revenue source

for the Road Fund); 45% from custom duties and other taxes levied on import ofvehicles, spare parts, and lubricants; and 10% from registration, license, andvehicle inspection fees (Table 8). Total annual highway expenditures (capitaland recurrent) during this period, including external assistance for construc-tion, purchase of equipment and technical studies (Table 3) averaged aboutCFAF 1.0 billion (US$4.1 million). As such, road user charges were commensuratewith the Government's financial outlays in the road transport sector.

3.14 Capital expenditures on roads during 1971-75 totaled about CFAF 3.2billion (US$13.1 million), while expenditures for road maintenance during thesame period amounted to about CFAF 1.9 billion (US$7.8 million). About 63% oftotal expenditures, primarily capital investments, was provided through exter-nal financial assistance, IDA accounting for about one-half of the externalfinancing. The remaining amount (37%), averaging about CFAF 380 million perannum, consisted of Government expenditures for administration and maintenanceof roads and ferries (Tables 8 and 9).

3.15 The road maintenance budget prepared by DPW is reviewed by theMinistry of Finance and finally approved by the Council of Ministers. Roadmaintenance expenditures are financed from different sources: the nationalbudget, the Road Fund, and external donors. The national budget normallyfinances administration expenditures, building maintenance, and salaries ofpermanent road maintenance personnel. The Road Fund finances other recurrentroad maintenance costs and salaries of temporary personnel. External donorshave financed capital expenditures and recurrent costs of ad hoc maintenanceprojects (e.g. Fonds Europeen de Developpement (FED) and Unitd States Agencyfor International Development (USAID) for drought relief roads, FED for pavedroads, IDA for the Second Highway Project).

3.16 Although legislation establishing the Road Fund stipulates thattaxes on gasoline and diesel oil (currently CFAF 18.5/liter on gasoline, andCFAF 1L6/liter on diesel oil) be earmarked for the Road Fund and deposited ina special account in the Treasury separate from general revenue, only about50% of the estimated fuel taxes were deposited in the Road Fund prior to 1976,in the form of an annual budgetary allocation. In 1974, as a credit conditionfor the Second Highway Project, the Government agreed with the Association todeposit fuel taxes and ferryboat tolls, earmarked for the Road Fund, in aspecial account to be opened in the Central Bank. This condition, however,could not be met by the Government as its already impaired fiscal situationwas dealt a further blow by rampant inflation during 1974-75, causing severebudgetary strains. In 1976, for the first time, the Government earmarked allfuel tax revenues to the Road Fund (still within the Treasury) and used thesefunds for road maintenance and related activities. In May 1978, the Govern-ment issued a decree which modifies the original law establishing the Road

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Fund. This decree provides for (i) the opening, as of June 1, 1978, of aspecial account for the Road Fund in the Banque Tchadienne de Credits etDepots (BTCD), and (ii) the deposit in the account of Road Fund revenues.

3.17 Budget allocations for road maintenance increased during 1970-72,and then decreased, in real terms, until 1975 (Table 9). These allocationswere minimal when compared with total requirements, estimated at about CFAF785 million in 1975, against expenditures of CFAF 220 million, and were amajor cause of the reduced road maintenance output. At times, availablefunds were just sufficient to provide for salaries of personnel and purchaseof some fuel. During project implementation, Road Fund revenues (CFAF 450-500million per annum) are expected to cover recurrent expenditures, excludingequipment depreciLation and taxes other than fuel taxes for the proposed roadmaintenance program, maintenance of ferries, and other ongoing road maintenanceand improvement projects (paras. 3.20 and 3.21). It is estimated that routinemaintenance of the entire road network of about 7300 km, including equipmentdepreciation and all taxes, would require about CFAF850 million (US$3.5 mil-lion) annually, iLn end 1977 prices. The proposed road maintenance program,however, has been tailored to the expected availability of recurrent mainte-nance funds over the four years of the project for all ongoing road main-tenance and improvement projects (para 4.24).

H. Engineering and Construction

3.18 Minor engineering studies are carried put by DPW's Studies andHydraulics Office (SHO), which also supervises construction works, whileall major roads are designed by foreign consultants under DPW's supervision.Design standards are selected on a project-by-project basis as there are noofficial design standards for roads. RPDO, to be established under the pro-posed project, would define these standards for different categories of roads.Facilities for soil and materials testing are available at the Ecole Nationaledes Travaux Publics (ENTP) laboratory in N'Djamena. Improvement and recon-struction of limited sections of road are carried out by force account, asdomestic contractors are not yet available for undertaking these civil works.Major road construction projects are executed by foreign contractors andsupervised by foreign consultants under DPW's overall charge.

I. Road Maintenance

3.19 Road maintenance is carried out by four DPW subdivisions located inN'Djamena, Abeche, Sarh and Moundou. The subdivisions are divided into roadsectors, each with jurisdiction over a part of the subdivision's network,but the sectors exist only on paper because of lack of offices, funds andequipment. Minor equipment maintenance is carried out in the small sub-division workshops, while heavy repairs are executed in DPW's central workshopin N'Djamena. Since the area covered by the Abeche subdivision is vast, theGovernment indicated that it was considering the establishment of a fifth sub-division in Mongo. This would permit more efficient equipment utilization,as much time is now spent in transporting equipment. Funds are thereforeincluded in the project to provide the necessary facilities for the additionalsubdivision (para. 4.04).

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3.20 Under the (First) Highway Maintenance Project, DPW was able to in-crease the maintained network from about 1,800 km in 1970 to about 2,800 kmin 1972, but with no equipment renewal since 1972 and recurrent maintenanceexpenditures averaging about CFAF 220 million p.a., the maintenance outputgraduaLly decreased to an estimated 1,800 km in 1976. Periodic maintenance(regravelling), economically justified for about 400 km of roads, should becarried out as soon as possible to avoid further deterioration of roads andthe loss in invested capital. Other than the proposed maintenance programfor unpaved roads, United Nations Sahel Office (UNSO) has undertaken a roadimprovement and maintenance program for 470 km of unpaved secondary roads andtracks in the Sahel, to be executed over a seven-year period at an estimatedcost of US$14.4 million.

3.21 Chad's three paved roads, totalling 253 km, were constructed between1969-73 under FED financing. Owing to lack of adequate maintenance, some sec-tions of the N'Djamena-Guelengdeng (157 km) and N'Djamena-Massaguet (85 km)roads have deteriorated to the point where reconstruction of the pavement isrequired. At the Government's request, FED has agreed to finance capital andrecurrent costs of about CFAF 750 million (US$3.1 million), for the deferredmaintenance and rehabilitation of paved roads, over a two-year period (mid1978-mid 1980). The Government would pay salaries estimated at about CFAF 53.6million (US$0.2 million) in end-1977 prices. The equipment procured under theFED program would be used for routine maintenance of paved roads after comple-tion of the program.

J. Improvement of Feeder Roads

3.22 The Government, with the assistance of the Association (SecondHighway Project and Rural Projects Fund), FED, and bilateral aid agencies hasmade considerable efforts to improve feeder roads in the cotton zone in thesouth-eastern part of the country. The Government's objective of producing200,000 tons of cotton per year by 1980 (compared to 175,000 tons in 1976-77)would require additional cultivation of about 50,000 ha, with related needfor feeder roads and probably some connecting secondary roads. Rural roadsare also required in support of development projects, in other parts of thecountry, namely: (i) Lake Chad polders area where the Lake Chad PoldersProject (Credit 592-CD) is in progress; (ii) the Lake Fitri area; and (iii)irrigated perimeters along the Chari River under the Rural Projects Fund. Astudy to define rural road needs and establish implementation priorities forthese roads is included in the project (para. 4.13). This study will coverall development areas except the Moyen Chari region, for which a separateSwiss-financed study is envisaged.

K. Domestic Contracting Industry

3.23 The domestic contracting industry is at an early stage of develop-ment. About 15 contractors deal mainly with building construction, althoughan additional number of small contractors carry out building repairs and otherminor works. The Government is trying to set up a contractor registrationsystem based on information furnished by the contractors. This operation isbeing carried out with the assistance of the Office for Industrial Promotion

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supported by UNIDO. Government efforts to identify domestic contractorsshould be encouraged and expanded to (i) estimat present and projected demandsof the civil works sector, and (ii) study the present structure, capacity andcompetence of the domestic contracting industry and make recommendations forits improvement, including financial assistance. The possibility of thisstudy being carried out under UNDP financing is being explored and the Gov-ernment will be kept informed of the outcome.

L. Appropriate Road Maintenance Technology

3.24 The proposed project includes appropriate labor-based maintenancemethods, as a substitute for routine road maintenance solely dependent onequipment (para. 4.03). For regravelling operations, a comparative analysisby a Bank Group consultant, investigating labor-based construction methods,showed by using data obtained from the Sategui-Deressia Irrigation Project(Credit 489-CD) that equipment intensive methods were more economical thanmethods employing a higher labor content due to the nature of regravellingoperations (e.g. need of compaction), the long haul distances for constructionmaterials, and the necessity to transport personnel to work sites.

4. THE PROJECT

A. Description

4.01 The proposed project would primarily support the Government'sobjective to improve road maintenance. The other main objective of theproject would be to strengthen transport planning operations.

4.02 The proposed project consists of:

(a) a four-year road maintenance program for about 5,300 kmof unpaved roads and tracks, including purchase of main-tenance and workshop equipment and spare parts, and reno-vation and construction of workshops and office buildings;

(b) a training program for DPW personnel including a training/production brigade for regravelling;

(c) construction of four ferryboats;

(d) technical assistance and fellowships to: (i) strengthenthe Directorate of Public Works; (ii) provide planningsupport for Directorate of Transport; and (iii) improvethe operations of the trucking industry;

(e) a study to prepare a rural roads project; and

(f) completion of the improvement and maintenance program forcotton feeder roads, started under the Second Highway Project.

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B. Road Maintenance Program

4.03 The proposed project supports the routine maintenance of approxi-mately 5,300 km of unpaved roads and tracks, and periodic maintenance of about400 km of main gravel roads (Table 10). Routine maintenance operations havebeen tailored to maintenance standards compatible with the road type andlevel of traffic (Table 11). Other than mechanical grading, compaction, andtractor-drawn dragging operations, 17 road gangs of 25 laborers each coveringroad sections of 100-200 km under the direction of a sector chief, would beresponsible for the maintenance of about 2,400 km of gravel and earth roadsand tracks. Specific routine tasks carried out by the road gangs would in-clude filling potholes, clearing ditches and culverts, maintaining shouldersand road furniture, and spot regravelling. For each sector, the projectprovides for an office with stores, hand tools, a small truck (2.5 tons) fortransport of labor and materials, and a motorbike for the sector chief tosupervise the maintenance works. Only mechanical grading (in most cases oncea year), would be carried out on the remaining 2,900 km of tracks, the objec-tive being to keep the tracks passable; of these, about 1,300 km would besubject to change from one year to another in accordance with the Government'seconomic priorities. Periodic maintenance (regravelling) of about 400 km ofrelatively more trafficked roads (over 45 vpd), would be carried out by atraining/production brigade (para. 4.05). Economic design standards forregravelling comprise a 6 m wide running surface, 0.5 m wide shoulders, anda 10 cm thickness.

4.04 The proposed project will provide maintenance equipment includingan inLtial stock of spare parts, workshop equipment, and spare parts for re-pairing existing equipment (Table 12). About 40% of the equipment procuredunder the (First) Highway Maintenance Project, deadlined due to lack ofspare parts, will be repaired and used in the execution of the proposedmaintenance program. The maintenance program also includes the constructionof a garage for maintenance equipment; buildings for the equipment inspectionoffice, the procurement office, and a spare parts store; and improvementsto the central workshop, all in N'Djamena. In addition, a garage will beconstructed and improvements made to office buildings and workshops in each ofthe existing four road maintenance sub-divisions, 14 small buildings will bebuilt to serve as administrative centers for the road maintenance sectors, andoffices, a garage and small workshop will be constructed for the subdivisionto be created in Mongo (Table 13). Agreement was reached with the Govern-ment at negotiations on: (i) the maintenance standards to be applied (Table14); (ii) the core network of about 4,000 km to be maintained annually (Table10); and (iii) sending to the Association, before October 31 of each projectyear, the following information on the maintenance program for the subsequentfiscal year: (a) the list of minor tracks (about 1,300 km), other than thecore network, and (b) the proposed regravelling program, including actual orestimated traffic on the proposed roads.

C. Training Program

4.05 The training program envisaged under the project will providetrained personnel for Chad's road maintenance and improvement works in orderto improve the productivity of road maintenance operations. Although only

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about 75 additional personnel at various levels within DPW are needed toimplement the proposed road maintenance program, and other maintenance andimprovement projects under FED and UNSO assistance, a total of about 225mechanics, technicians, and equipment operators need to be trained to ensureefficient DPW operations (Table 15). This estimate allows for a drop-out andturnover rate of 30%. The training program would combine classroom instruc-tion with field training, with greater emphasis placed on the latter aspect.A mechanized brigade will be used for field training, which, in addition toits training functions, is expected to regravel about 100 km of main roads peryear. Given the importance attached to routine maintenance to be carried outby road sectors (para. 4.03), appropriate training in road maintenance prac-tice for the sector chiefs is also included.

4.06 Specific project inputs for the training program include additionalworkshop equipment and teaching materials for the existing training center(established under the Second Highway Project); equipment for the training/production brigade (Table 16); technical assistance (230 man-months) to imple-ment the four-year training program, including the operations of the training/production brigade; and operating expenses for the training program. About 20fellowships will be granted to DPW personnel at all levels, to complement thetraining program. Provisions for a daily allowance during the training period(additional to the normal salary paid to DPW personnel) and cash prizes foroutstanding trainees have been made in operating cost estimates, to serve asincentives to recruit new trainees and attract in-service DPW personnel fromthe distant subdivisions to participate in the program. The proposed trainingpackage under the supervision of expatriate technical assistance is the mostcost-effective means of providing trained personnel in the Chadian context,since a major drawback of past training programs was the lack of adequateemphasis on field training. The Government agreed at negotiations to: (i)prepare, and submit to the Association for approval, a detailed traininrgcurriculum by December 31, 1978 and (ii) assess, by December 31, 1979, futuretraining requirements in consultation with the Association.

D. Construction of Ferryboats

4.07 The project includes the local construction of four ferryboatsto replace the existing ferries at Bongor, Lai, Bousso, and Hellibongo, aslimited traffic and wide river beds requiring long bridges make these struc-tures uneconomical. The proposed 50-ton capacity ferryboats (Annex III) wouldbe able to carry the heaviest truck-trailer units plying the national roads(38 tons, with full payload). The shallow draft (50-55 cm) ferryboats wouldbe identical in design, leading to standardization in construction (barges,ramps, decks) and future maintenance requirements (spare parts). The newferrybqats are characterized by simplicity in operation with maintenancerequirements kept to a minimum. The proposed project includes funds for thepurchase of materials, workshop equipment, labor, preparation of detaileddesign and specifications, and technical assistance (about 16 man-months) forconstruction executions (Table 17). The ferryboats would be constructed underforce account, at the DPW barge-yard, which has some experience in barge build-ing. Additional skilled labor, however, will be needed to build the ferryboatswithin the project time schedule. Should all the necessary skilled labor not

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be available, construction of some ferryboats, in whole or in part, would becontracted to local mechanical workshops. The cost of locally built ferry-boats, including the cost of workshop equipment and technical assistance, isestimated to be substantially lower than the cost of imported ferryboats,mainly due to reduced transport cost of disassembled building materials andless expensive local manpower.

E. Technical Assistance and Fellowships

4.08 Other than the technical assistance required for the execution oftraining program and ferryboat construction, additional technical assistancewould be provided under the project to: (i) assist the Government in develop-ing the necessary capability for equipment maintenance, execution of mainte-nance operations, and road planning; (ii) initiate transport planning on asystematic basis; and (iii) provide operational assistance to the truckingindustry. The technical assistance is complemented by a total of about 30fellowhips (including those mentioned in paras. 4.06, 4.10, 4.11 and 4.12)for training abroad so that a cadre of trained Chadian personnel is in placewhen the proposed technical assistance lapses. The selection of candidatesfor fellowships would be approved by the Association (Annex IV-C).

Strengthening of the Directorate of Public Works

4.09 Technical assistance (205 man-months) would be provided to set upan Equipment Inspection Office (EIO), centralize procurement functions in aProcurement Office (PO), and establish RPDO (para. 3.12). In addition, theproject provides for furniture and equipment for these offices to ensureeffective utilization of technical assistance. Portable weighing scales forcontrol of vehicles axle loads are also provided.

4.10 EIO would implement a cost accounting system, supervise PO, andinspect equipment maintenance carried out by the sub-divisions. PO will beentrusted with procurement of spare parts and other materials required tomaintain DPW equipment, and will also establish and maintain a central spareparts store with proper inventory and book-keeping procedures. The technicalassistance for EIO and PO (180 man-months), comprising one mechanical engineerfor EIO, one chief mechanic for PO, and four mechanics for the sub-divisionworkshops, 1/ is expected to be in the field for about three years, and willassist in training Chadian staff. To further improve the professional capacityof in-service personnel (particularly the chiefs of workshops and mechanizedunits), about six fellowships for practical training abroad will be financedfrom project funds. Appointment of key qualified Chadian staff (one mechanicalor road engineer, 2/ one chief mechanic, and three equipment controllers forEIO; and one procurement officer, and one forwarding officer for PO) to betrained by technical assistance specialists, will be a condition of crediteffectiveness. To ensure effective operation of EIO, PO, and the workshops,

1/ One mechanic will supervise the Abecht and Mongo subdivisions.

2/ The Government agreed that this position will be filled with a mechanicalengineer not later than October 31, 1979.

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appointment of key personnel (two mechanics, two accountants for EIO; onemechanic, one accountant, and three storemen for PO; five equipment fleetchiefs; and five subdivision workshop chiefs) will be a condition of dis-bursement for construction of buildings and improvement of workshops. RPDOwill receive about 25 man-months of technical assistance (one engineer-economist) to help establish this office and train local staff to carry outbasic road planning and engineering studies, evaluate projects, and superviseconstruction. The Government agreed at negotiations on the outline terms ofreference for the proposed technical assistance (Annexes V and VI).

Institutional Support for the Directorate of Transport

4.11 The proposed project provides for the services of a transporteconomists for 30 man-months to organize DT and help with: (a) collectionof transport data and publication of an annual report on transport statistics,and preparation of technical reports; (b) inter-departmental coordinationfor transport planning and road traffic regulation and enforcement; and (c)regulation of road transport industry. The Government should agree at nego-tiations on outline terms of reference for the technical assistance to DT(Annex VII). The expatriate transport economist would assist DT's local staffin their operational duties and train them to run DT with minimal external,assistance upon completion of his services. Funds for technical assistance,office equipment, furniture and supplies are included in the proposed project.The project also includes a fellowship for training in transport planning andoperations. At negotiations, the Government agreed to appoint a suitablyqualified Chadian to serve as a counterpart to the expatriate transport-economist, and other local staff needed to permit the implementation of itemsoutlined in Annex VII.

Operational Assistance to the Road Transport Industry

4.12 The proposed project provides for the services of a trucking indus-try expert (15 man-months) to assist CTT in improving its operations. Outlineterms of reference for the proposed technical assistance (Annex VIII) werediscussed and agreed at negotiations. The project includes a fellowship intransport industry operations and training abroad for CTT's assistant directorresponsible for transport operations.

F. Rural Roads Study

4.13 The Government wishes to improve rural roads in the cotton zone aswell as in other areas of the country, including the Sahel. Accordingly, theproposed project includes a three-phase study of rural road needs in relationto rural development in selected areas. The first phase will (a) identifydevelopment areas in terms of economic potential and investment requirements,concentrating on transport and rural infrastructure needs, and (b) examine andreport on basic and alternative institutional and manpower resources requiredto execute and maintain a possible rural transport/infrastructure project.The second and third phases will address detailed project description, economicanalysis and engineering design under guidelines resulting from discussionsbetween the Government and the Association following the first phase. This

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study, requiring about 35 man-months over an eight-month period, will alsoidentify a long-term strategy for rural transport development and outline aprogram for the construction, improvement and maintenance of transport facili-ties. Outline terms of reference for the proposed consulting services (AnnexIX) were agreed with the Government during negotiations.

G. Completion of the Improvement and Maintenance Programfor Cotton Feeder Roads

4.14 The training program under the Second Highway Project has been ex-tended to permit continuity between ongoing training activities and thoseenvisaged under the proposed project, resulting in a cost increase of aboutUS$400,000. As funds from the Credit for the Second Highway Project werereallocated to permit the extension of the training program, the ongoingprogram for the improvement and maintenance of cotton feeder roads under thesame project would have to be reduced without additional financing. Theproposed project will, therefore, finance this cost increase through theprovision of capital and operating expenditures, to complete the improvementand maintenance program covering about 760 km of cotton feeder roads.

H. Cost Estimates

4.15 The total capital cost of the project is estimated at about US$21.9million, with a foreign cost of about US$18.4 million (84%). As in previousBank Group financed projects, the Government would waive all customs dutiesand other taxes on project-related goods and services, except taxes on fuel,which amount to about US$0.2 million. An insignificant amount of taxes onconsumable items, procured from existing dealer's supplies, have not beenidentified separately. Recurrent expenditures during the project period(1979-82) amount to about US$8.1 million equivalent, with a 51% foreigncomponent of about US$4.1 million. Cost estimates reflect prices at end-1977.Detailed cost estimates, including physical and price contingencies, are givenin Table 18 and summarized on page 18. During negotiations, the Governmentconfirmed that (a) all contracts for goods or services to be provided underthe project will be free of commercial taxes (taxe d'enregistrement, taxe surle chiffre d'affaires, and similia); (b) the special quarry tax (OFCA, Officedes Carrieres) will be waived with respect to construction works; and (c)materials, equipment and spare parts for road maintenance equipment, includingthat of the training unit, and construction materials will be imported duty-free.

4.16 The cost of equipment and spare parts is based on consultant BCEOM'sestimates, updated by the appraisal mission following a survey of localdealers. The construction cost of buildings and workshops is based on thecurrent cost per unit of similar works. The cost of technical assistance andconsulting services is based on the cost of similar services rendered in Chad.The average cost per man-month of consulting services is estimated at aboutUS$5,800, including social security, bonuses, annual leave, expatriationallowance, overhead and the firm's fees. Reimbursable expenses, includingair trips, airfreight, subsistence and local allowances, field supervision,and vehicle purchase and operation, total about US$2,800/man-month. The for-eign component amounts to US$7,350/man-month, or about 85% of the total cost.

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SUMMARY OF PROJECT COST ESTIMATES

1/ llCFAF Million- US$'000- Foreign as

Local Foreign Total Local Foreign Total % of Total

A. Base Costs (End-1977)l.TMaintenance Program_/ 216,6 1717.5 1934.1 884 7010 7894 892.Technical Assistance& Training for DPW 340.6 1246.9 1587,5 1390 5090 6480 79

3.Fellowships - 73,5 73.5 - 300 300 1004.Construction of 4Ferryboats3/ 46.5 234.2 280,7 190 956 1146 83

5.Technical assistancefor Directorate ofTransport 9,0 76,7 85.7 37 313 350 89

6.Technical ass$stancefor Trupking Industry(30 man/months) 3,2 29.9 33,1 13 122 135 90

7.Completion of FeederRoad Improvement &Maintenance Program 41,2 66,6 107.8 168 272 440 62

8.Rural Roads Supply 7,3 66,2 73,5 30 270 300 90664.4 3511.5 4175,9 2712 14333 17045 84

B. Contingencies*1.Physical 62.4 321,2 383.6 255 1311 15662.Price 121 6 669.9 791.5 497 2734 3231

184.0 991.1 1175.1 752 AG45 4797TOTAL F75 430276 5351.0 3464 18378 2187#RUN$DD 3500 18400 21900

About US$0.2 million of taxes on fuel are included in items A. 2&3. The Government agreed towaive all other taxes,

SUMMARY OF RECURRENT COST ESTIMATES -

l.Unpaved RoadMaintenance 892.7 879,8 1772T5 3644 3591 7235 50

2.Ferryboat Maintenance&Operation 8475 123,5 208.0 345 504 849 59

TOTAL 977.2 1003.3 1980,5 3989 4095 8084 57ROUNDED 4000 4100 8100

1/ Net of taxes, except taxes on fuel amounting to about US$0.2 million.2/ Includes an insignificant amount of taxes.3/ Including contingencies.

A Detailed breakdown of cost contingencies:

Phys$cal Price ContingenciesContingencies 1976 1977 1978/79 1980/82

Equipment 5% 8% 7.5% 7.5% 7%Construction 10% 10% 9% 9% 8%Technical Assistance 10-15% 8% 7,5% 7.5% 7%Fuel 5% - sZ 5% 5%Labor 5% _ 5% 3% 3%

- 19 -

I. Execution

4.17 MCWMG will execute the road maintenance program, the training pro-gram, and the construction of ferryboats through its DPW, and will supervisethe technical assistance and fellowships provided for strengthening DPW (paras.4.09-4.10), while MEPT would have responsibility for the administration oftechnical assistance and fellowship for DT and CTT, and implementation of therural roads study. The project is expected to start in the second half of1978 and be completed by end-1982; the project implementation schedule isgiven in Table 19.

4.18 Preliminary contacts with USAID indicate that this agency would bewilling to let the Association approve the terms of reference for the servicesthey would finance. Agreement will be reached with all cofinancing agenciesto ensure the Association's involvement in all project components.

4.19 For the purpose of project monitoring, the Government agreed, atnegotiations, to designate a project coordinator, acceptable to the Associa-tion, who will liaise with the Association on matters relating to the progessof the project. He will prepare and send quarterly progess reports to theAssociation in a format'to be agreed between the Government and the Associa-tion. Eventually, he will prepare a final report to serve as a basis for thepreparation of a Project Completion Report.

J. Procurement

4.20 Construction and improvement of workshops and buildings under unitprice contracts (totaling about US$1.8 million, before contingencies; highestexpected contract price about US$365,000); and office furniture, equipment andsupplies for EIO, P0, and RPDO (totalling about US$250,000, before contingen-cies), would be procured following local competitive bidding procedures, whichpermit participation of foreign contractors and suppliers. These proceduresare acceptable to the Association, provided bids are opened in public. Biddersfor construction and improvement of workshops and buildings will be prequali-fied. DPW will prepare bidding documents for and supervise construction ofworkship and buildings. Building materials for ferryboats, to be constructedunder force account (about US$800,000), will be procured through internationalcompetitive bidding, in accordance with Bank Group Guidelines. A small quan-tity of con sumable materials and workshop tools required for ferryboatconstruction and office supplies will be purchased through local shopping,provided that the aggregate amount does not exceed US$60,000. Should DPWdecide to subcontract the construction of some ferryboats or parts thereofto local workshops (para. 4.07), contracts would be awarded following localprocedures acceptable to the Association. Materials, fuel and lubricants,and spare parts for the completion of the Cotton feeder roads improvement andmaintenance program would be procured folloing local procedures acceptable tothe Association. The services of consultants required for technical assistanceto EIO, P0 and RPDO, ferryboat building, and the rural roads study (and/or anyother services which would be financed by the Association) will be obtainedfollowing procedures and on terms acceptable to the Association.

- 20

4.21 Road maintenance equipment, spare parts, and workshop equipment andtools financed by ADF would be procured following ADF procedures. Equipmentand spare parts for the training program, inclu4ing phe training brigade, tech-nical assistance for training, DT, and the trucking induptry, and fellowships,financed by USAID, would be procured in accord4nce vith USAID procedures. Thesigning of loan, credit, and/or grant agreepents with USAID and ADF, and ful-fillment of conditions for initial disbursement under these agreements (exceptthe effectiveness of IDA credit), would be a condition of credit effectiveness.

K. Financing and Disbursements

4.22 The capital costs, net of taxes, of the pToject would be cofinancedon a parallel basis by IDA (US$7.6 million), US4ID (US$9.0 million), and ADF(US$5.1 million), under separate agreements for qaq4 agency. These agencieswould finance 100% of their respective sharqs qf project capital costs, netof taxes as shown below. In addition to f±4ancinp taxes included in projectcapital costs, amounting to about US$0.2 millton, phe Government is expectedto provide US$8.1 million for recurrent cost* over the project period.

Project Financing Plan (In US$ thousands)

IDA U$AID ADF Government 1/ TotalMaintenance Program

- Equipment, spare parts, tools; 5086 5086- Civil works; officefurniture, supplies 2716 2716

Training Program 79 b 158 8134Fellowships 345 345Technical Assistance for:

- DPW 2607 2607- DT and Trucking Industry 642 39 642Ferryboat Replacement 1527 1527Rural Road Study 345 345Completion of Feeder Roads Program 401 440

TOTAL 7596 8863 5086 197 21842

ROUNDED TOTAL 7600 9000 5100 200 21900

Percentage of Total Cost 34.7 41.1 23.3 0.9 100(excluding taxes) (35.9) (41.5) (23.5) - (100)

1/ Unwaived taxes on fuel.

4.23 On the basis of the above financing plan, the IDA Credit would bedisbursed to cover:

(a) 100% of total cost of building and workshop construction andimprovements;

(b) 100% of total cost of technical assistance for DPW includingoffice furniture, equipment, and supplies;

- 21 -

(c) 100% of total cost of design, materials, equipment and workshoptools, and technical assistance for four ferryboats;

(d) 100% of total cost of wages for local labor and locally procuredmaterials for ferryboat building;

(e) 100% of total cost of consulting services for rural road study;

(f) 100% of total cost of construction materials for the completionof cotton feeder road improvement and maintenance program; and

(g) 90% of the total operating cost for the completion of cottonfeeder roads improvement and maintenance program.

An estimated schedule of disbursements from the IDA account is shown inTable 20. Disbursements would be fully documented. Disbursements for ex-penditures under (d) and (g) would, however, be made against certificates ofexpenditure, the documentation of which would not necessarily be submitted forreview, but would be retained by the borrower and made available for inspec-tion by the Association's supervision missions. The Government agreed atnegotiations to make arrangements satisfactory to the Association for theaudit of expenditures covering disbursements under the latter procedure.

4.24 The Government is expected to bear the cost of: (a) taxes on fuel;(b) recurrent expenditures for road maintenance (Table 23) and for maintenanceand operation of ferryboats (Table 22); and (c) taxes on operating costs ofcotton feeder roads improvement and maintenance program. On the average, aboutCFAF577 million (US$2.36 million) in Government funds, excluding equipmentdepreciation, would be needed annually to implement DPW's overall roadmaintenance (including FED and UNSO projects) and ferryboat operations,equivalent to about 3-4% of the Government's total annual current expenditureduring 1974-76. On the basis of available information on present fuel taxrevenues and conservative estimates of future increase, the expected revenuesfor the Road Fund would average about CFAF510 million (US$2.1 million) annually,at the present level of fuel taxes. Permanent labor wages financed fromMCWMG's budget would add about CFAF60 million (US$0.25 million) per year tothe maintenance budget. Therefore, the total amount available would be aboutCFAF570 million (US$2.3 million) per year, permitting the Government to bearall recurrent expenditures for road maintenance, except equipment depreciation(estimated at about CFAF100 million, or US$0.4 million per annum). Thisassumes that all taxes, other than fuel taxes, would be waived (Table 23).

4.25 To ensure the availability of local funds for the project, theGovernment agreed at negotiations that it will: (a) establish and maintainadequate accounting procedures to record revenues to, and expenditures fromthe Road Fund account opened at BTCD; (b) earmark to the Road Fund and depositin the separate Road Fund account the amounts collected from fuel taxes andferryboat tolls; (c) establish in DPW's accounting office a sub-account toallocate all road fund revenues to the project, except about 13% required forother road-related expenditures outside the project; (d) maintain recordsadequate to record single and cumulative expenditures for the project com-ponents it would finance; and (e) send to the Association every semester,

- 22 -

beginning January 31, 1979, a summary statement, as of June 30 and December31, of (i) total revenues to the Road Fund; and (ii) expenditures incurred orcommitted for the project by category of disbursement.

4.26 As future requirements for local funds to finance recurrent costsof the project might change owing to higher than expected increase in pricesof fuel, spare parts, and labor, and as financing the depreciation of roadmaintenance equipment must remain a long-term objective, the Government agreedat negotiations to review in consultation with the Association not later thanDecember 31, 1979: (a) the amount of local funds required for project-relatedrecurrent costs over the remaining project period; and (b) the feasibilityof increasing Road Fund revenues to fully cover recurrent maintenance expend-tures including equipment depreciation.

4.27 The Government's lack of cash was a major problem in previous Bank

Group-financed projects where Government funds were to be used. Delayed pay-ment caused distrust among suppliers and slowed down project implementation.To avoid this situation, the project provides, immediately after Credit effec-tiveness, for an initial disbursement of US$100,000 into a project account tobe opened by the Government at the Banque de Developpement du Tchad (BDT).This account would serve as a revolving fund to finance labor and the purchaseof a small quantity of consumable materials for ferryboat building, and localprocurement of supplies for the operation of EIO, PO and RPDO. The Associa-tion will replenish the project account from relevant categories of disburse-ment upon receipt of Government withdrawal requests accompanied by satisfactoryevidence that expenditures were eligible for financing from the Credit fund.However, should any expenditure for which the Government requests replenish-ment of the project fund not meet this condition, the Government will beobligated to deposit the corresponding amount into that account. Assurancesto this effect were obtained at negotiations.

5. ECONOMIC EVALUATION

A. Introduction

5.01 Development of a reliable and inexpensive transport network withinChad and assurance of dependable external links to ocean ports are of primeimportance to Chad's economic development. As roads cater for about 85% ofChad's transport needs, the maintenance and improvement of the road networkis a basic prerequisite for Chad's future economic growth.

5.02 The economic return on investments in road maintenance and renewalof ferries is quantified on the basis of savings in vehicle operating costs.Additional benefits accruing from reliable and improved accessibility toadministrative and commercial centers, all-weather service on gravel roads,protection of past: road investments, and time savings have not been included.

5.03 As recent traffic data are not available, traffic on the road net-work (1978) was estimated by using 1969/70 traffic counts, adjusted by growthtrends in the vehicle fleet and fuel consumption (para. 3.03 and 3.04), andthe diversion of export traffic from the Transequatorial to Cameroonian routes.

- 23 -

Beyond 1978, a traffic growth rate of 3% p.a. was assumed. Vehicle operatingcosts were derived by using the road deterioration and user cost relationshipsdeveloped under IBRD/TRRL research program in Kenya (Table 24).

5.04 Costs and benefits are calculated in CFAF, net of taxes, in December1977 prices. As part of the analysis, shadow prices were used for valuing for-eign exchange and labor (Table 25). The shadow price for foreign exchange isestimated at 15% above the official exchange rate of CFAF. Unskilled laborhas been valued at 30% of the official minimum wage rate, while the shadowprice of the skilled labor has been set at 15% above the ongoing market rate.The opportunity cost of capital in Chad is estimated between 10-12% p.a. Theeconomic rate of return is estimated to be 75% for routine maintenance, cost-ing UJS$8.4 million (45% of total project cost excluding price contingencies),and L7% for regravelling, costing US$4.0 million (22% of total project cost).The combined rate of return for routine maintenance, regravelling and relatedtraining activities, costing US$14.7 million (79% of total project cost) isestimated at 51%. The rate of return for replacement of ferries, costingUS$1.2 million (6% of total project cost) is estimated at 44%. The averageeconomic rate of return for these components, which accounts for 85% of totalproject cost, is 50%.

B. Road Maintenance Program

5.05 The evaluation of the maintenance program followed a sequentialprocedure involving selection and classification of roads to be included inthe maintenance program, determination of the optimal maintenance strategyfor each class of road, and the overall economic assessment of the mainte-nance program. As the road network has not been functionally classified, itwas categorized broadly according to its engineering and traffic characteris-tics. Road links were then selected for inclusion in the maintenance program(Table 10) on basis of the following criteria:

(i) support of economic activity, e.g. maintenance of vital cot-ton export routes, including connection to cotton ginneries;

(ii) maintenance of accessible road connections between regional,administrative, and commercial centers, and the nationalcapital; and

,(iii) improved accessibility to the drought-prone Sahel zone.

5.06 An optimal grading strategy was then estimated for each road categoryby calculating the incremental vehicle operating cost savings associated withmore frequent grading operations, using the Bank's Highway Design and Mainte-nance Standards Model (HDM), modified where necessary to reflect operationalconditions in the field (Tables 11 and 14). The analysis for periodic mainte-nance indicated that regravelling was generally justified only on links withtraffic of 45-50 vpd (Annex X). The economic return was calculated by relatingthe incremental cost of equipment and other project inputs to the correspond-ing incremental benefits from improved road maintenance brought about duringthe economic life of the equipment (estimated to average about eight years).

- 24 -

Appropriate salvage value was assigned to inputs whose economic life was

longer than 8 years or where equipment was used for less than its estimatedeconomic life.

5.07 Project costs for the routine maintenance operation include capitalexpenditures on equipment, spare parts, workshop improvements, and relatedtechnical assistance as well as incremental recurrent maintenance costs, whileproject benefits consist of vehicle operating cost savings resulting fromimproved road surface conditions. The incidence and magnitude of vehicleoperating costs and related benefits, as a function of accumulated number ofvehicle passes, and level of road maintenance with and without the projectare shown in Exhibits II and III for a gravel road and a track, respectively.Routine maintenance operations under the maintenance program are expected toyield an estimated economic rate of return of 75%, corresponding to a benefit/cost ratio of 3.25 at a 12% discount rate. The benefits from regravellingconsist of incremental reductions in vehicle operating costs, additional tothe reductions effected under routine maintenance. The incremental rate ofreturn for regravelling operations is estimated at 17%, corresponding to abenefit/cost ratio of 1.31, discounted at 12%. The combined economic returnfor routine maintenance, regravelling and related training activities, account-ing for costs of routine maintenance, regravelling, and training, is estimatedat 51%, equivalent to a benefit/cost ratio of 2.20 at a 12% discount rate(Table 26 and Annex X).

C. Replacement of Ferries

5.08 The present condition of the four ferries, to be replaced under the

project, is generally characterized by damaged hulls, extensive rusting, andfrequent breakdowns. Their replacement is necessary to avoid severing thelink to Cameroon via Bongor and closing the cotton ginneries at Kyabe, AmTiman, and Bousso. The Hellibongo ferry is critically important in maintain-ing administrative links between Sarh and the prefectures of Guera, Salamat,

and Ouaddai. This ferry is frequently used to transport petroleum and mineralexploration equipment to northern Chad. Similarly, future development ofirrigated perimeters around Bousso would be contingent upon reliable accessto the main N'Djamena-Sarh road via the ferry.

5.09 The project will provide for larger ferries, capable of accomodat-

ing 38 ton truck-trailer units, resulting in significant vehicle operatingcost savings through diversion of traffic (mainly cotton) to shorter routesand the replacement of small six ton trucks with semi-trailer and truck-trailerunits. Other benefits include savings in handling costs, and savings in main-tenance and operating costs of the ferries. An additional unquantifiable ben-efit is the development of domestic capability to construct barges. The eco-nomic analysis assumes a five-year remaining life for existing ferries exceptfor the Hellibongo ferry, which is assumed to continue providing service afteradditional renovation. The new ferries are expected to have an economic lifeof 25 years with a 10% salvage value. Project costs include ferryboat con-

struction costs, and expenditures for design and technical assistance. Basedon these assumptions, the economic return for the replacement of ferries atBongor, Lai, Bousso and Hellibongo is estimated at 60%, 44%, 27%, and 31%,

- 25 -

while first year benefits are estimated at 48%, 43%, 11%, and 24% respec-tively. The overall economic return for this project component, includingall four ferries, is 44% (Table 26 and Annex X).

D. Distribution of Benefits

5.10 Cotton and related production inputs, fuel, sugar, and beverages,constitute the primary products transported by road. As the tariffs forinternational transport of cotton are negotiated annually between COTONTCHADand CTT, it is expected that COTONTCHAD and CTT, together with Camerooniantransporters who claim a fixed quota of Chadian transport demand, would be theprincipal beneficiaries of improved road maintenance. For the farm-to-ginnerytransport of seed cotton, however, COTONTCHAD would be the initial beneficiary,with benefits then accruing to the Caisse de Stabilisation du Prix du Coton.These benefits would in turn be shared between the government and cotton pro-ducers according to the Government's agricultural pricing and subsidy policy,which is reviewed annually. As part of the benefits are expected to be passedon to the producer, further expansion of agricultural output and generatedtraffic could materialize.

5.11 In case of other freight transport (about 55% of the total freighttransport demand), most of the road user savings are likely to pass to thetruckers since the regulated transport tariffs are not sensitive to changes inroad user costs. User cost savings passed down to automobile owners would berelatively inconsequential, as personal transport constitutes a small portionof the traffic activity (5% or less). Relative to passenger transport, im-proved road quality is likely to result in lower passenger fares and morecomfortable travel considering that trucks double as passenger vehicles, andthere are no fixed passenger transport tariffs. The road maintenance programincludes about 1,300 km of tracks in the drought-prone Sahel zone. Thesetracks would provide improved accessibility to the Sahel Zone for better hus-bandry of its livestock and agricultural resources. This would also ensurethat lines of communication remain open for transport of food and reliefsupplies during periods of drought. The beneficiaries would be the poorestand most vulnerable segments of the Chadian population.

E. Project Risks and Sensitivity Analysis

5.12 Since approximately 1,000 km of the proposed road maintenance pro-gram are located in areas subject to political unrest, there is some chancethat the envisaged road maintenance might not be implementable in these areas.Similarly, aggravation of the general economic situation could constrain theavailability of road maintenance funds. More specific risk elements concernincreases in project costs and shortfalls in the projected output of technicalpersonnel under the training program, with attendant repercussions on efficientequipment utilization, and maintenance productivity. Even if routine mainte-nance activities are confined to the most secure regions of the country withmaintenance output reduced to 3,500 km per year, this project component wouldhave an economic return of 66%. If the training program fails to produce suf-ficient personnel to expand maintenance operations or if a shortage of fundslimits road maintenance to present levels (1,800 km), routine maintenance isestimated to yield an economic return of 28%. The economic return was found

- 26 -

to be relatively insensitive to reduced equipment life as well as shadowpricing of foreign exchange and labor. With respect to the regravellingoperation, a 20% reduction in the annual regravelling output would lower theeconomic return from 17 to 14% (Table 26). Even if regravelling output dropsbelow 8Q km/year, the operation of the training/production brigade remainsjustified in terms of its institutional and training benefits.

5.13 Relative to ferries, the major project risk concerns delays in theconstruction of ferryboats, which could result in a fewer number of ferriesbeing built. If only two ferries were constructed rather than the four en-visaged under the project, this project component would still yield a returnof 32%. A 20% increase in the cost of this component would reduce the eco-nomic return to 38%, while a 5% increase in benefits would increase it to46% (Table 26).

6. AGREEMENTS REACHED AND RECOMMENDATIONS

6.01 During negotiations, agreement was reached with the Government onthe following items:

(a) provision of allowances and prizes as incentives for parti-cipants in the training program (para. 4.06);

(b) appointment of a Chadian counterpart to the expatriate trans-port economist and other local staff in DT (para. 4.11);

(c) tax and duty exemption for contracts and materials requiredfor project implementation (para. 4.15);

(d) financing arrangements for the project, including cofinan-cing by external donors (paras. 4.22 and 4.23) and local costfinancing (para. 4.25); and

(e) outline terms of reference for: (i) the training program(Annex II); (ii) strengthening DPU (Annex V); (iii) reorgan-ization of RPDO (Annex VI); (iv) instructional support forDT (Annex VII); (v) operational assistance to CTT (AnnexVIII); and (vi) the Rural Roads Study (Annex IX).

6.02 During negotiations, the following items, detailed in the Plan ofAction (Annex IV) were agreed upon with the Government and incorporated ascovenants in the Credit Agreement:

(a) road maintenance standards and the road network to be main-tained and/or regravelled each project year (para. 4.04);

(b) preparation and transmission of training curriculum to theAssociation; and reassessment of training requirements duringproject execution (para. 4.06);

- 27 -

(c) selection of fellowship candidates to be approved by theAssociation (para. 4.08);

(d) designation of a project coordinator to: (i) liaise withthe Association on progress of the project; and (ii) preparequarterly progress reports and, finally, a project completionreport (para. 4.19);

(e) procurement procedures (paras. 4.20 and 4.21);

(f) arrangements satisfactory to the Association for the audit ofexpenditures under para. 4.23 (d) and (g) (para. 4.23);

(g) procedures to ensure the availability of local funds for theproject (para. 4.25);

(h) review by December 31, 1979, with the Association: (i) theamount of local funds required for project recurrent costs;and (ii) the feasibility of increasing Road Fund revenues tocover the total road maintenance recurrent expenditures (para.4.26); and

(i) the opening, utilization and replenishment of the specialproject account (revolving fund (para. 4.27).

6.03 Conditions for Credit effectiveness would be the following:

(a) appointment of key Chadian technical staff to EIO and P0(one mechanical engineer, one deputy mechanical engineer,and three equipment inspectors for EIO; one procurementofficer and one forwarding officer for P0) (para. 4.10);and

(b) signature of loan, credit and/or grant agreements with USAIDand ADF, and fulfillment of conditions for initial disbursement,if any, under these agreements, except the effectiveness of theIDA Credit (para. 4.21).

6.04 A condition of disbursement for construction and improvement ofbuildings and workshops would be the appointment of: (i) two mechanics andtwo accountants for EIO; (ii) one mechanic, one accountant, and three store-men for P0, (iii) four equipment fleet chiefs; and (iv) four subdivisionworkshop chiefs (para. 4.10).

6.05 Following satisfactory agreements reached on the above items, theproposed project is suitable for a Credit of US$7.6 million equivalent to theGovernment of Chad on standard IDA terms.

CHAD

THIRD HIGHWAY PROJECT

Principal External Trace Corridors

Length Total No. of AverageRoute Section Road Rail River Length Transfers Trariait Practicability Remarks(km Time

1. The Nigerian Routes No transfer needed for some fuel transport;a) Lagos (Apapa)-NDjamena Lagos-Maiduguri - 1790 - 1790 high risk of loss and breakages; long(2040 km) Maiduguri-NDjamena 250 - - 250 1 port delays in Lagos and Port Harcourt;

(road-rail) 2-3.1/ All-year difficult custom procedures; differentb) Fort Harcourt-NDjamena Port Harcourt_Maiduguri - 1445 - 1445 weeks road regulations; carried about 32%(1690 km) Maiduguri-NDjamena 250 - - 250 of total estimated freight tonnage in1977.

2. The Cameroonian Routes Relatively simple administrative and

a) Douala-NDjamena Douala-N'Gaoundere - 932 - 932 custom procedures; same monetary zone;(1717 km) N'Gaoundere-NDjuamena 785 3 - 785 comparatively secure and reliable;(1717 kin) N'Gaoundere-NDjamena 785 - - 785 ~~~~~~~~~~~~~some problems relative to priority1 2-3 All-year accorded to Chadian goods at Douala;b) Douala-Mondou Douala-N'Gaoundere - 932 - 932 (road-rail) weeks carried approximately 48% of total(1674 km) N'Gaoundere-Mondou 742 - - 742

estimated freight tonnage In 1977.

3. The Transequatorial Routes

a) Pte. Noire-Mondou Pte. Noire-Brazzaville - 515 2| 515 Long transit time with associated(2450 km) Brazzaville-Bangui - - 1300- 1300 risk of loss,wastage and thefts;Bangui-Moundou 635 - - 635 3/ Poor condition of roads in CAE m2 4-6- 6-8 barges can carry a full load on theb) Pte. Noire-Sarh Pte. Noire-Brazzaville - 515 - 2 515 (road-river-rail) months months Obangui only from August-December, a(2450 km) Brazzaville-Bengui - - 1300- 1300 period when road access to Bangui isBangui-Sarh 635 - - 635 in its worst condition; carried about 12%

of total estimated freight tonnage in 1977.

4. The Benoue Routes

a) Burutu-Mondou Burutu-Garoua - - 1550-/ 1550 Suitable for bulk commodities;(1982 km) Garoua-Mondou 432 - - 432 long waiting time at Nigerian ports4 1 4-5 Benoue River of Wari and Port Harcourt; carriedb) Burutu-NDjamena Burutu-Garoua - - 1550-/ 1550 (road-river) weeks navigable approximately 6% of estimated freight(2032 km) Garoua-NDjamena 482 - - 482 2-3 months tonnage in 1977.

5. The Sudanese Route Poor condition of road between AbechP

Abeche-Port Sudan Abeche'-Nyala 570 - - 570 and Nyala; relativ iY e nt(2623 kin) Nyala-Port Sudan - 2053 - 2053 1-2 -All-year Sudan Railway; carried about 2% of(road-rail) estimated freight tonnage in 1977.

6. ~ ~ ~ ~ ~ ~ ~ ~ ~ 6. The Libyan Route

NDjamena-Tripoli NDjamena-Tripoli 3000 - - 3000 - - Through difficult and mountaneousNDjamena-Tunis NDjamena-Tunis 3000 - - 3000 - - terrain; politically troubled area.(3000 km)

1/ Does not account for excessive port delays; 2/ Via Oubangui River; 3/ As a result of storage of goods in Bangui during the dry season, when river navigation is not possible.4/ Via Benoue River.

SOURCE: Bank mission.

-29- Table 2

CHAD

THIRD HIGHWAY PROJECT

Public Sector Investments

(in percentage and CFAF billion)

1967-68 1969-70 1971-72 1973-74 1975

Agriculture 16.8 15.1 18.4 27.1 52.8

Industry 4.3 2.1 3.1 4.4 4.9

Transport & Communications 44.0 32.1 14.5 11.2 5.8

Health - - 3.8 4.9 2.9

Education 9.8 6.3 1.9 4.5 6.1

Community & Social Services 11.8 16.5 18.1 35.2 17.7

Unspecified 13.3 27.9 40.2 12.7 9.8

TOTAL 100.0 100.0 100.0 100.0 100.0

Total in billions of CFAF 3.5 4.5 4.6 7.1 9.9

As % of GDP 5.4 6.1 5.6 8.2 9.2

Source: Republic of Chad, Economic Memorandum, World Bank Report No. 1340-CD,June 30, 1977.

- 30 - Table 3

CHAD

THIRD HIGHWAY PROJECT

External Assistance: Transport Sector

(CFAF Million)

1971 1972 1973 1974 1975 1976 Total

A. FAC

Mondou Bridge Repair - 135 28 6 35 4 208

Drought Roads - - - 30 39 65 134

N'Djamena Airport _- - 18o0/ 180(Runway Strengthening)

B. FED2/

N'Djamena-Guelendeng Road 689 - 26 - - - 715

Mondou-Gidjiba Study - - 40 30 4 - 74

Mondou Airport Road - - 4 127 189 120 440

Bongor-Lai Study - - 27 85 20 - 1323/

N'DJamena-Massaguet Road - - - 69 62 7 138. /

Ea-Illi Bridge - - - 5 90 128 223

Cotton Roads(Drainage 192 21 7 _- - 220Project)

C. EEC

Drought Roads - 5 - 75 15 90Urban Street Improvement (NDjamena)- - 145 145

D. UNSO (United Nations Sahel Office)

Road Maintenance Study - - - - 53 - 53

E. USAID

Maintihance of Drought Roads- - - 25 92- 22 139Opening of Navigation Channel - - 19 19tetwaen e ,ol and Lake Chad

F.'fiDACredit 125-CDi} 422 123 226 145 8 '23 '947

Credit 490-CD - - - - 78 209 287

Total 1303 279 358 522 745 937 4144

1/ An additional CFAF 140 million provided by ASECNA2/ Prior to 1971, FED provided CFAF 1,905 million for this project3/ Prior to 1971, FED provided CFAF 754 million for this projecty/ Project to be completed in 1977 at a total cost of CFAF270.5 million5/ Funds obtained from proceeds of food sales under Aide Cgrgale6/ An estimated CFAF 79 million for equipment and spare parts7/ CFAF58.5 million from the Credit used in 1969-70

Source: Directorate of Planning and Development, 1977.

- 31 - Table 4

CHAD

THIRD HIGHWAY PROJECT

Road Network (1977)(km)

--------------Subdivision------------- % ofN'Dlamena Abeche Sarh Moundou Total Total

A. Classified Network 1/

National Roads (Primary)

1. Paved 242 - - 11 253 32. Gravel and Earth

a. Engineered 189 - 393 463 1,045 14b. Partially Engineered 83 259 150 128 620 9

c. Non-Engineered 2/ 773 556 682 633 2,644 37

Subtotal 1,287 815 1,225 1,235 4,562 63

Prefectural Roads (Secondary)

Earth 588 1,008 612 499 2,707 37

Total 1,875 1,823 1,837 1,734 7,269 100

B. Unclassified Network 2/

Tracks 24,000

1/ The classified network represents roads that have been maintained from timeto time by DPW and prefectural authorities, and is not based on a functionalclassified system.

2/ For all practical purposes, these may be considered tracks.

3/ The unclassified network represents an estimate of recognized or marked tracks.

Source: DPW, BCEOM.

- 32 - Table 5

CHAD

THIRD HIGHWAY PROJECT

Traffic on Road Network to be Maintained by DPW

Road l.ink- Length Average Daily Trafii(ADTXI'(k.n) _Actual Projected

1963 1970 1978

A. All-weather Engineerad Roads

Paved -N'D.amena-Guelesgdeng 157 45 108 117NH'Ra-ena-Maasaguet 85 33 48 52Moundou-Kioutou 11 - - 100Unpaved(Laterite)

Niellim-Guere 80 13 16 17Guere-Doba 164 12 40 50Maindou-La Sido 86 12 12 9Pala-Kelo 107 25 39 55Kelo-Moundou 104 27 38 49Moundou-Baik-ro 20 - 45 56Baikoro-Gore-CAE 110 15 17 16

Unpaved (Earth)Massaguet-Karne 53 17 12 13Massaguet-Massakory 68 17 27 30Massakory-Bir Garat'3 38 - 10 10Chagoua-Linia 30 - 60 65CGere-Sorh 27 - 56 63Sar- Maindou 36 20 32 31Pala-Lere-Cameroon 122 - 7 19

B. Par-tially Improved Roads

Unpaved (Laterite)Baikoro-Doba 79 21 37 47

Unpaved (Earth)Guelengdeng-Bongor 83 22 25 30Abeche-Biltine 92 7 7 8Abeche-Adre 167 12 8 10Mogo-Miltou-Niellim 150 13 16 17Magou-Lai 49 23 30 34

C. Earth Tracks

Mi jarKarm;e-N'Goura 72 17 12 13Bongor-Magou 99 23 30 34C.elengdeng-Mogo 149 - 12 13Guidari-Kou.ora 116 8 14 16Kourvra-Mai.sala 74 11 13 14Lai-Doba 108 14 16 18Doba-Gore 95 18 14 10Lai-Guidari 44 8 14 16Moundou-Baibokoum-CAE 152 12 16 14Lai-Kelo 60 12 21 24K-aton-Bere 91 17 23 26Kelo-Gounou-Gaya 52 - - 15Sarh-Kyabe 98 9 10 10Ati-N'Goura3/ 233 17 11 10

MinorDjeroaya-Djintilo 82Couar-Bitkine 3 244Bir Tarat-Moussoro-r 96Linia-Massenya 127Ati-3unHadjer 165OueM8adjer-Abeche 146Ati-Mongo 154Bitkine-Mongo 59MongD-Mangalme 118Melfi-Bitkine 118 Estimated Traffic, 1978Oohadja er-Mangalme 110Mangalne-Ab-odeia 123 Under 10 vpd.Kyabe-Am Timoa 259Am T:iman-Aboudeia 135Moisoala-Kendere 125Gounnu Gaya-Tikem 58Pala--Fianga-Cameroon 83Oulibangala-Pandzangue 15Pala--Gagal-Beinamar 121Bein.abar-Koatoo 90Ati-ifenat

3/ 63

Daokala-Y5a/ 3/ 39Bir Garat-Moussoro 96Melfi.-Dik 149

1/ Traffic projeotions are based on: (i) frem 1970-74, no traffic growth; (ii)froo. 1975-78: (a) 3% traffic gro-th per ananu in Cotton Zone; (b) 1% trafficgrowth per amour in Sahel Zone; 6 (c) 2% traffic growth per annum around N'Djamena;and (iii) a diversion of 35-40,000 tons of international traffic fron Trans-equatorial to Cameroonian reate between 1970-74.

2/ Paved roads are not included in the Third Highway Project; their maintenancewill be carried out under FED assistance.

3/ To be improved and maintained under UNSO Road Rehabilitation Program.

Source: Mission eatimates.

- 33 -

Table 6

CHAD

THIRD HIGHWAY PROJECT1/

Growth of the Vehicle Fleet, 1970-76

1970 1971 1972 1973 1974 1975 1976 Annual Rateof Growth2 /

Motorcycles/Scooters 526 578 603 637 674 701 773 7%

Passenger Cars, Jeeps 4407 4765 4990 5560 5812 6058 6252 6%

Buses 100 126 134 137 144 152 159 8%

Pickup Trucks 3765 4202 4471 4745 4961 5145 5327 6%

Trucks 2345 2482 2648 2752 2907 3083 3165 5%

Special Vehicles 231 253 255 255 258 274 274 3%

Tractors 78 88 104 111 130 159 163 13%

Trailers 482 541 597 621 649 674 706 7%

TOTAL 11924 13035 13802 14818 15535 15545 16819 6%

1/ Inclusive of Government vehicles.2/ The annual increase in vehicle fleet does not account for normal vehicle attrition.

Source: Directorate of Planning and Development;Mission estimates.

CHAD

THIRD HIGHWAY PROJECT

Fuel Consumption, 1968-76 (m3 )

1968 1969 1970 1971 1972 1973 1974 1975 1976

Gasoline (regular) 15,880 16,441 16,359 16,994 14,957 13,662 9,327 12,063 10,074

Gasoline (super) 885 1,001 978 1,528 1,767 2,137 1,786 2,582 2,541

Kerosene oil 3,618 3,983 3,-069 2,956 2,890 2,304 937 986 1,432

Diesel oil 14,222 14,428 15,319 17,063 16,955 19,713 22,186 19,876 17,822of which forTransport 1/ 4,333 3,461 3,529 3,395 2,461 2,971 5,703 3,476 1,368 Lo

Aviation gasoline 7,350 7,420 11,730 10,567 7,374 7,034 6,769 6,770 3,513

Aviation kerosene 15,132 19,331 -24,79t3 23,144 26,714 31,942 / 23,175 16,413 32,245

11 Consumption by road transport total consumption - consumption of diesel oil for power generation

2/ Large increase due to drought teliAef air lift.

Source: Bulletin de Statistiques, Republique du Tchad, 1969- 1976.

0m

CHAD

THIRD HIGHWAY PROJECT

Government Revenues from Road Users, 1969-75

(CFAF Millions)

Year Fuel Taxes Custom Duties and Taxes Other Revenues

Gasoline Diesel Oil Total Lubricants Tires Tubes Spare Automobiles Trucks Trailers Special Total Annual 1/ Licencing2/ Vehicle TotalParts Vehicles Registration- Inspection

1969 233.9 116.0 349.9 32.7 43.6 n.a. 40.9 n.a. n.a. n.a. n.a. n.a. n.a. 2.6 n.a. n.a.

1970 337.5 136.8 474.3 42.4 75.2 n.a. 40.6 n.a. n.a. n.a. n.a. n.a. 51.1 2.8 n.a. n.a.

1971 363.0 174.2 537.2 33.6 64.3 7.2 43.3 117.6 170.0 21.2 4.4 461.6 67.2 3.7 n.a. n.a.

1972 297.9 113.6 411.5 28.6 42.7 5.4 36.1 83.7 75.8 11.0 1.0 284.3 66.7 4.3 n.a. n.a.

1973 337.6 209.2-/ 546.8 25.0 41.5 8.2 32.1 106.3 125.3 10.2 0.4 349.0 69.0 22.0 2.0 93.0

1974 253.6 235.0 488.6 55.2 48.9 10.6 91.5 187.1 188.3 25.0 0.0 606.6 94.0 11.0 8.0 113.0 "

1975-41 195.1 120.0 315.1 41.7 74.8 7.9 71.3 99.2 190.4 30.7 0.6 516.6 85.05/ 12.7-Y 9.&$' 107.5

1/ Vignettes - Annual fees on vehicles.2/ Licence fees derived from grey cards which are issued when vehicle ownership is transferred.3/ Inclodes an exceptional tax of CFAF 8/liter on an estimated 16.7 million litres of diesel oil for powar plants.

4/ Figures for "Fuel Taxes" and "Custom Duties and Taxes" are for 9 months (Jan. - Sept. 1975) only.5/ Figures for 1975

n.a. - Not WvailableSource: a) Bureau of Customs

b) Directorate of Minesc) Ministry of Finance

-36- Table 9

CHAD

THIRD HIGHWAY PROJECT

Expenditures on Highways, 1971-76

Year Capital Maintenance 1/Expenditure ActualExpenditures Budget Administration Total

DPW Prefectural AllocationAuthorities

1971 1303 188 40 (223) 137 1668

1972 279 244 40 (224) 132 695

1973 358 220 30 (225) 140 7483'

1974 522 220 - (220) 148 890

1975 745 220 - (221) 154 11064/

1976 738 303 - (442) 144 1185

1/ Includes approximately CFAF50 million per year in wages for operational staff.

2/ During the period 1971-76, the capital expenditure on highways representsthe total of external assistance for studies, construction and purchase ofequipment.

3/ Maintenance of prefectural roads taken over by DPW in 1974.

4/ CFAF420 million were actually committed for maintenance of roads and ferryboats.

Source: Directorate of Public Works, 1977.

- 37 - Table 10

CHAD

THIRD HIGHWAY PROJECT

List of Roads to be Maintained

Road Type - Traffic Volume/km----- Engineered------ -Partially Engineered-

Subdivision Laterite Sand/Clay Laterite Sand/Clay Tracks Totaland Roads A B A B A A B C A B C

A. N'IDjamena NorthMassaguet-Massakory 68 68Massapuet-llarne 53 53Karme-N' Goura 72 72Chagoua-Linia 30 30Linia-Massenya 127 127Djermaya-Dijimt 1In.___ 82 82

98 53 72 453 676

B. N'Djamena Southruelendeng-Bongor 83 83Bongor-Magou 99 99Guelendeng-Mogo 149 149

83f 99 149 331

C. AbecheAbeche-Biltine 92 92Abeche-Adre 167 167Ati-Oum Had jer 165* 165Osm Had jer-Abeche 146* 146

2i5 9 311 57-0

D. MongoNConura-Bitkine 244* 244At i-Mongo 154* 154Bitkine-Mongo 59* 59Mongo-Mangaime 118* 118Melfi-Bitkine 148* 118Oum Hadjer-Mangalme 110* 110Mangalme-Abou Deia 123* 123

9q2-6 9§2-

E. SarhMaindon-La Sido 86 86Guere-Doba 164 164Niellim-Guere 80 80Guere-Sarh 27 27Sarh-Maindou 36 36Mogo-Miltou-Niellim 150 150

Me If i-D ik 149 149Guidari-Koumra 116 116Koumra-Moissala 74 74Sarh-Kyabe 98 98Kyabe-Ams Timan 259 259Am Timan-Abou Deia 135* 135Moissala-Kemdere _ 125 125

164 166 63 150 190 617 1,499

F. MoundouPala-Kelo 107 107Kelo-Moundou 104 104Moundou-Baikoro 20 20Baikoro-Gore-CAE Border 110 110Pala-Lere-Cameroon Border 122 122Baikoro-Doba 79 79Magou-Lai 49 49Lai-Bere 20 20Bere-Kelo 40 40Koutou-Bere 91 91Lai-Doba 108 108Lai-Guidari 44 44Moundou-Baibokoum-

CAE Border 152 152Kelo-Gounou Gaya 52 52Gounou Gaya-Tikem 58 58Doba-Gore 95 95Pala-Fianga-Cameroon Border 83 83oulibangala-Pandzangue 15 15

Pala-Gagal-Beinamar 121 121Beinamar-Koutou 90 90

231 110 122 79 49 507 462 1,560

Total 395 276 161 175 79 132 150 259 99 918 2,674 5,318

Traffic Volume (vehicles per day)A 30-60B 10-30C Less than 10

* Tracks subject to change in annual program.

Source: Mission estimates.

- 38 -

Table 11

THIRD HIGHWAY PROJECT

Unpaved Road Maintenance Strategies

-----Engineered----- Partially EngineeredRoad Type Laterite Sand/Clay Laterite Sand/ClaY TracksTraffic Volume A B A B C A A B .C A B C

Dry Grading 2 2 1 1 1 2 1 1 1 2 1 1(frequency/year)

Grading-Compacting 1 1 1(frequency/year)

EmSrgency Repairs 50 50 50 50 50 50 50 25 25(m /km)

Light Maintenance 150 200 100 150 150 100 150 150 200(cantonnage)(km/year x unit)

Dragging(frequency/year) 30 20 30

Traffic Volume (vehicles per day)A 30 - 60B 10 - 30C less than 10

Source: Mission estimates.

August 1977

- 39 -

Table 12

CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Equipment andSpare Parts for Existing Equipment

Cost Estimates(US$'000, End-1977 prices)

TOTAL COST Foreign asQuantity Unit Cost Local Foreign Total % of Total

A. Road Maintenance Equipment

1. Bulldozer, 180/200 hp 3 145.4 30.5 405.7 436.22. Wheel Loader, 80/100 hp 4 63.5 17.8 236.2 254.03. Motorgrader, 120/130 hp 8 78.9 44.2 587.0 631.24. Towed Tank, Fuel, 5,000 1 7 14.4 7.1 93.7 100.85. Towed Tank, Wate5, 2000 1 8 5.8 3.2 43.2 4b.46. Motor Pump, 80 m /h 3 3.2 0.7 8.9 9.67. Liaison Vehicle, Pick-up 14 6.6 6.5 85.9 92.48. Liaison Vehicle,

4-Wheel Drive 9 9.9 6.2 82.9 89.19. Light Liaison Vehicle 6 4.9 2.1 27.3 29.4

10. Agricultural Tractor70/80 5 17.9 6.3 83.2 89.5

11. Motorbike, 250 cc 20 2.8 3.9 52.1 56.012,, Dump Truck, 2.5 ton 20 14.3 20.0 266.0 286.013. Truck, 2.5 ton flatbed 2 13.2 1.8 24.6 26.41C, Labor Tools (sets) 16 2.7 3.0 40.2 43.215. Trailer with Mechanical

Tools 5 15.9 5.6 73.9 79.516. Supply/Maintenance Truck 8 41.7 23.4 310.2 333.617. Workshop Truck 2 78.3 11.0 145.6 156.618. Management vehicle 1 9.2 0.6 8.6 9.219. Workshop mobile cranes 2 20.6 2.9 38.3 41.220. Electric transformer,

300 KVA 2 8.0 1.1 14.9 16.0197.9 2,628.4 2,826.3 93%

21. Spare parts stock (10%) 19.8 262.8 282.6217.7 2,891.2 3,108.9

22. Quantity contingency (5%) 10.9 144.5 155.4228.6 3,035.7 3,264.3

23. Price variation (about 15%) 33.7 448.1 481.4

Total 262.3 3,483.8 3,746.1

B. Spare Parts for ExistingEquipment 50.1 665.9 716.0

1. Quantity Contingency (15%) 7.5 99.9 107.457.6 765.8 823.4

2. Price Contingency 4.3 57.4 61.7

Total 61.9 823.2 885.1 93%

Source: BCEOM, mission estimates.

- 40 -Table 13

CHAD

THIRD IIIGHWAY PROJECT

Construction of Buildings and Workshops

Cost Estimates(End-1977 Prices)

-----CFAF million----- -------US$'000------ Foreign asLocal Foreign Total Local Foreign Total % of Total

A. N'DJAMfENA

1. Equipment Division

a. Improvement of existingWorkshop (1,500m ) 2 6.7 20.1 26.8 27 82 109

b. Procurement office (150 ) 2.9 8.5 11.4 12 35 47c. Spare parts store (800m ) 2 8.1 24.1 32.2 33 98 131d. Equipment inspection oVfice (200m ) 3.8 11.4 15.2 15 47 62e. Equipment Garage (8002 ) 8.1 24.1 32.2 33 98 131f. Transformer room (25m ) 3 0.2 0.8 1.0 1 3 4g. Land preparation (7,000m ) 2 3.1 9.4 12.5 13 39 52h. Roadways and aprons (10,OOOm ) 22.3 67.0 89.3 91 274 365i. Fencing and gates 1.0 2.8 3.8 4 11 15

Subtotal 56.2 168.2 224.4 229 687 Y16

2. Road Maintenance Subdivision 2a. Four road sector offices (4x200m ) 10.8 32.1 42.9 44 131 175

Subtotal A 67.0 200.3 267.3 273 818 1,091 75%

B. ABECHE

1. Garage Building (300m2 ) 2.0 6.0 8.0 8 24 322. Fencing (650 m) 0.9 2.7 3.6 4 11 153. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15

Subtotal B 3.8 11.4 15.2 16 46 62 75%

C. MONGO

1. Office Building (lOOm )2 1.7 5.9 7.6 7 24 312. Workshop Building (139m ) 0.8 2.4 3.2 3 10 133. Garage Building (300m ) 1.9 5.9 7.8 8 24 324. Fencing (650m) 1.0 2.7 3.7 4 11 15

Subtotal C 5.4 16.9 22.3 22 69 91 75%

1D. SARH

1. Garage Building (60 0m 22 4.0 12.1 16.1 16 50 662. Three Road Sector Buildings(3x200m ) 8.0 24.1 32.1 33 98 1313. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15

Subtotal D 12.9 38.9 51.8 53 159 212 75%

E. MOUNDOU

1. Garage Building (6 00m ) 4.0 12.1 16.1 16 50 662. Seven Ryad Sector Buildings 16.8 56.3 75.1 77 230 307

(7x200m )3. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15

Subtotal E 23.7 71.1 94.8 92 291 388 75%

Subtotal A-E 112.8 338.6 451.4 460 1,382 1,842 75%

F. PHYSICAL CONTINGENCY (15%) 10.1 57.3 67.4 41 234 275

G. PRICE CONTINGENCY 31.1 110.7 141.8 127 452 579 78i,'

Source: DPW, BCEOM, Mission estimates.

- 41 -Table 14

(CHAr

THIRD HIGHWAY PROJECT

Network to he Maintained and Maintenance Operations

…Engineered -- Partialiv EngineeredRoad Type Laterite Sand/Clav Laterite Sand/Clay Tracks TotalTraffic Votiime A P A -B A A B C A B C

Dry Cradine a) 1. N'Djamena North 98 53 72 209 432

(kin) 2. N'Dijamena South 83 99 149 331b) Abeche 259 311 570c) Mongo 926 926d) Sarh 164 166 63 150 190 766 1.499e) Motindou, 231 110 122 79 49 __ _____507 462 1,560

395 276 161 T75 79 132 150 259 99 918 2,674 5,318

GradinF a) 1. N'Djamena North 98 53 151Compacting 2. N'Djamena South 83 83

(ki) b) Abechec) Mongod) Sarh 63 63e) Moundou 49 49

161 53 T32 346

Emergencv a) 1. N'Djamena North 4,900 2,650 1,800 1/ 9,350Repairs 2. N'Djamena South 4,150 2.475 3,725 12,000 22,350

(m )b) Abeche 12,950 12,950

c) Mongo 2/

d) Sarh 3.150 7,500 4,750 6,007,/21,400

e) Moundou 6,100 3,950 2,450 12,675 5,000 30,175

18,050 8,750 3,950 6,600 7,500 12,950 2.475 22,950 23,000 96,225

Tight

Maintenance a) 1. N'Djamena North 98 53 72 223(cantonnage) 2. N'Djamena South 83 99 149 331(kh) b) Abeche

c) Mongod) Sarh 164 166 63 150 190 733e) Moundoui 231 110 122 49 507 1,098

395 276 161 175 79 132 150 99 918 2,385

Brushing a) 1. N'Djam.ena North(km) 2. N'Djamena South

b) Abechec) Mongod) Sarh 164 166 330

e) Moundou 231 110 79 420395 276 79 750

1/ Bongor and Bouisso ferryboat access roads.

2/ Hellibongo ferrvboat access road.

3/ Lai ferryboat access road.

Traffic Volmne (vehicles per day)A 30-60B 10-30C Less than 10

Source: Mission estimates

Table 15

THIR HIRCHAy PROJECT

0546 Personnel Training Haaolse.menin

Trained orPersonnel Traineng Available foeAvailable rr

4TL Training by

6 ~ 0 s r t a r o >Et

t7 p c 8 _ L W c ^ 9 s txJ 43 = l~~~~~~~~~~~~~~~~~~~~~oosI Ro-d a ° C 9 b' t t 4k T-n l R..dm

a)cito e t k X L .' (hI o L Mit7an ' L (f) (g, bh ti ( j k) Ii) in) la) io) (p) (q)

1M-ehai-al - R.od oaineeg - I 1 1 1 1 - 12. Chief

nr-hanlo 1 I I3, Eqaip-nn Controller 3 3 3 3 1 1 2 3 34, Suhoiolnior FlPnChief I I 1 5 5 5 5 55.neohanioaiiaxpenr 2 1 3 3 3 3 4 4 -; 5 36. isotar Chief 5 2 17 17 17 13 13 4 17 _ 13 4. BHigade Chief 4 1 5 5 1 2 3 8 B 2 88. Wp It,e Cief 10 2 12 12 6 28 0o 1 5 4 146 i 12 89.Cbiefbeoheeio 7 2 1 10 6 6 1i 1 1 2 18 4 14 2 16 10 810. lineal Neohanir 13 2 2 14 6 6 3 1 1 3 4 12 32 2 3 5 31 43 24 33 57 41 0 18II. HeoOaeif 6 6 6 6i 10}_ 3 4

12. M-hanla Forenar(C-ntePait-re) 3 3 3 6 3 313 Workshop Chief I I II 1 5 5 5 3 3 2 514. MNhrania Help-r/Greener 24 4 6 ' 34 3 1 1 3 3 11 45' 4 7 11 5f 5 55 60 .4 26 SI 35 2115. Buildoapr Operator 4 2 3 9 9 4 4 1 9 10 3

16. Lander Operator, I 3 3 11 I 2 4 6 13 9 8 i2 317. Grader Operator 16 3 8 27 23 5 5 22 95 11 40 51 44 18 24 8 22 1018. Ceepartor Opereooe 8 5 4 17 13 6 6 12 2q4 44 I5 14;9. PaIliole-r operator 2 2 2 2 2 4420 Tool SpeSiiliet 4 4 4 4 1 2 2 4 421i Laihe Opeettoe 1 1 1 1 1 5 4 5 5- 4 522. Drill Ope-eor I I6 1 4 5 6 4 523. Welder/1Dqkas.ith/

"onearPoe- 1 l 2 2 1 12 2 8 10 1 1 11 11 7 22 -il 11 8 32 yvp. eIor1ti2nl2 1 1 2 2 i 12 2 8 10 1 1 11 3 6 9 2 1 I0 8 325. rpete 1111 5 8 6 5 526, r e I 1 I 5 5 5 5 5 527. Skilled l.ebnr-r 8 B 8 8 2, 4 S 2. - 8 4 428. Skilled Lahorer - 16264

"Ieper 6 6 2 2 22 2 IC 14 16 12 12- 16 8 829 Driver 53 4 17 74 1 I 2 1 1 1 1 1 5 81 81 50 57 107 -i6 81 8130. Ad,iniat-atireOffi-er I 1 1 1 1 1 1 131. S-retar-y/Tf piaoliesairapher 1 1 1 1 1 1

32. Aooasntaot 2 1 3 3 3 3 2 7 11 .3 3 333.Typi.t 2 2 4 4 4 4 22 4 434 Ti-ek .eper 6 1 7 7 7 2 2 5 2 5 5 235 Storasvna =dHlelpeT 3 1 4 5 5 9 1 1 0D 3 12 15 .5 1 9 1 3 4

36. Pro- `rerent Offi-er I 1 1 1 1 1 137. Porarding Agoet I 1 _ 1 1 11

Slbtotal 230 65 101 396 22 39 61 457 166 243 409 751 120 139 175 17 730 291 139

topeotad Perroonel Tartover 54 4

Sultttal 227 22

TOTAL T NAINOIC NEEDS 249

1/ Refors airbaroenernt for o-nsrr- on-en of bulhdtngn tnd Vorekop. 2/ Only praini-o fil-rea oddsd. tlvee po-itieoo a-ready budgecd,3/ atirlntfd dooe_ for pereonol aoallability, 4t This poeitior shall bo Tilled iith a -e-oasicel e-g9eeer -0t laser than Otob-r 31, 1979.

So.e.e: BCEH, DPW, mlioioentioaien

- 43 - Table 16

CHAD

THIRD HIGHWAY PROJECT

Equipment for Training Program

Cost Estimates(End-1977 Prices)

…___---_ --- (US$ 000) …

Total Cost Foreign as

Item Quantity Unit Cost Local Foreign Total % of Total

A. Training Center

1. Lathe - Vernier 170 x 800 type

with accessories 1 15.7 1.1 14.6 15.7

2. Universal drill - Vernier

FV 250E type with accessories 1 31.4 2.2 29.2 31.4

3. Service vehicles 4 4.9 1.4 18.2 19.6

4. Tools and improvement - 20.9 1.5 19.4 20.9

Subtotal 6.2 81.4 87.6

5. Price Contingency 0.5 6.1 6.6

Subtotal A 6.7 87.5 94.2

Rounded 7 87 94 92%

B. Training Unit

1. Bulldozer 180/200 hp 1 145.4 10.2 135.2 145.4

2. Wheel loader 80/100 hp 2 63.5 8.9 118.1 127.0

3. Motorgrader 120/130 hp 2 78.9 11.0 146.8 157.8

4. Rubber wheel compactor 15/20 tons 3 54.5 11.4 152.1 163.5

5. Pulvimixer 3 1 89.8 6.3 83.5 89.8

6. Dumn) truck 6 m 12 37.0 31.1 412.9 444.0

7. Tank truck, water, 10,000 1

with pump 3 52.7 11.1 147.0 158.1

8. Tank truck, fuel, 10,000 1 1 53.2 3.7 49.5 53.2

9. Towed tank, fuel, 14,000 1 1 32.8 2.3 30.5 32.8

10. Towed tank, water, 2,000 1 1 5.8 0.4 5.4 5.8

11. Workshop truck 1 78.3 5.5 72.8 78.3

12. Supply/maintenance truck 1 41.7 2.9 38.8 41.7

13. Vibrating roller 0.7 ton 1 8.3 0.6 7.7 8.3

14. Liasion vehicle, pick-up 1 6.6 0.5 6.1 6.6

15. Liaison vehicle, 4-wheel drive 2 9.9 1.4 18.4 19.8

16. Towed camper 2 26.9 3.8 50.0 53.8

Subtotal 111.1 1,474.8 1,585.9

17. Spare parts stock (10%) 11.1 147.5 158.6

Subtotal 122.2 1,622.3 1,744.5

18. Quantity contingency (5%) 6.1 81.1 87.2

128.3 1,703.4 1,831.7

19. Price contingency 9.6 127.8 137.4

Total B 137.9 1,831.2 1,969.1

Rounded 138 1.831 1,969 93%

Source: ORT, USAID, mission estimates.

- 44 -Table 17

CHAD

THIRD HIGHWAY PROJECT

Four Locallv-Built Ferryboats

Cost Estimates(End-1977 Prices)

- …_-----CFAF Million------------ --------------US$ '000…--- …-______Local Local Foreign as

Item Taxes Other Total Foreign Total Taxes Other Total Foreign Total x of Total

A. Basic Costs

1. Ferrvboat Building

(i) Materials 2.1 5.0 7.1 174.8 181.9 8.5 20.5 29.0 713.3 742.3 96(ii) Labor - 32.4 32.4 - 32.4 - 132.1 132.1 - 132.1 -(iii) Loading/Unloading Rails - 0.4 0.4 3.3 3.7 - 1.5 1.5 13.5 15.0 90(iv) Ferryboat Transfer 0.1 0.2 0.3 0.5 0.8 0.5 0.7 1.2 2.0 3.2 62(v) Workshop Tools - 0.4 0.4 3.8 4.2 - 1.7 1.7 15.4 17.1 90

2.2 38.4 40.6 182.4 223.0 9.0 156 Y5 165.5 744.2 909.7 82

2. Consulting Services

(i) Technical Specificationsand Preliminary Design - - - 5.2 5.2 - - - 21.4 21.4 100

(ii) Final Design andProcurement List - - 13.1 13.1 - - - 53.5 53.5 100

= - - 18.3 18.3 - - - 74.9 74.9 100

3. Technical Assistanceand Training - 5.9 5.9 33.5 39.4 - 24.1 24.1 136.6 160.7 85(about 16 man-months)

Subtotal A 2.2 44.3 46.5 234.2 280.7 9.0 180.6 189.6 955.7 1,145.3 83

B. Contingencies

1. Physical

(i) 5% on A.1. and 2. 0.1 1.9 2.0 10.0 12.0 0.5 7.8 8.3 40.9 49.2 83(ii) 1OT on A.3 - 0.6 0.6 3.3 3.9 - 2.4 2.4 13.7 16.1 85

Subtotal 1 0.1 2.5 2.6 13.3 15.9 0.5 10.2 10.7 54.6 65.3 84

2. Price

(i) on l(i), (iii), 0.5 1.4 1.9 43.9 45.8 2.2 5.8 8.0 179.0 187.0 96(iv), (v)

(ii) on l(ii) - 3.2 3.2 - 3.2 - 13.0 13.0 - 13.0 -(iii) on 2 - - - 7.4 7.4 - - - 30.2 30.2 100(iv) on 3 - 1.9 1.9 18.4 12.3 - 7.5 7.6 42.6 50.2 85

Subtotal 2 0.5 6.5 7.0 61.7 58.7 2.2 26.4 28.6 251.8 280.4 90

Subtotal B 0.6 9.0 9.6 75.0 84.6 2.7 36.6 39.3 305.4 345.7 88

Total 2.8 53.3 56.1 309.2 365.3 11.7 217.2 228.9 1,262.1 1,491.0 85

Rounded 85

Source: Mission estimates.

- 45 - Table 18Page 1 of 2

CHAD

THIRD HIGHWAY PROJECT

Proiect Cost Estimates

--- CFAF million------ --------US$'000-------- Foreign asLocal Foreign Total Local Foreign Total % of Total

A. BASIC COSTS

1. Maintenance Program

(i) Road equipment & spare parts stock 53.4 708.3 761.7 218 2,891 3,109 93(ii) Equipment & spare parts for Training Unit 29.9 397.4 427.3 122 1,622 1,744 93

(iii) Spare parts for existing equipment 12.2 163.2 175.4 50 666 716 93(iv) Workshop equipment and tools 5.1 68.4 73.5 21 279 300 93(v) Workshop equipment for Training Center 1.5 20.0 21.5 6 82 88 93(vi) Office furniture and supplies, and equipment for 1.7 21.6 23.3 7 88 95 93

for EIO and PO(vii) Workshop and building construction

and improvement 2/ 112.8 338.6 451.4 460 1,382 1.842 75Subtotal 1 216.6 1,717.5 1,934.1 884 7,010 7,894 89

2. Technical Assistance and Training for DPW

(i) Training program for DPW specializedpersonnel (about 230 man-months) 67.4 381.9 449.3 275 1,559 1,834 85

(ii) Strengthening of DPW (about 180 man-months) 59.8 337.1 396.9 244 1,376 1,620 85(iii) Road Planning and Design Office, including

office equipment and supplies(about 25 man-months) 11.5 68.8 80.3 47 281 328 86

(iv) Operating costs(a) Training Center 2/ 57.3 159.5 216.8 234 651 885 74(b) Training Unit 3/ 144.6 299.6 444.2 590 1.223 1,813 67

Subtotal 2 340.6 1,246.9 1,587.5 1,390 5,090 6,480 79

3. Fellowships - 73.5 73.5 - 300 300 100

4. Ferrvboat Replacement

(i) Materials, labor and workshop tools 2/ 40.6 182.4 223.0 166 744 910 82(ii) Naval design and technical specifications - 18.3 18.3 - 75 75 100

(iii) Technical assistance (about 16 man-months) 5.9 33.5 39.4 24 137 161 85Subtotal 4 46.5 234.2 280.7 190 956 1,146 83

5. Directorate of Transport

(i) Technical assistance (about 30 man-months) 6.6 59.5 66.1 27 243 270 90(ii) Office equipment, furniture and supplies 2.4 17.2 19.6 10 70 80 88

Subtotal 5 9.0 76.7 85.7 37 313 350 89

6. Technical Assistance to Trucking Industry(about 15 man-months) 3.2 29.9 33.1 13 122 135 90

7. Completion of Five-Year Cotton Feeder RoadImprovement Program (Second Highway Project) 2.9 9.3 12.2 12 38 50 92

(i) Construction materials 2.9 9.3 12.2 12 38 50 92(ii) Operating costs 4/ 38.3 57.3 95.6 156 234 390 60

Subtotal 7 41.2 66.6 107.8 168 272 440 62

8. Rural Roads Study 7.3 66.2 73.5 30 270 300 90

Subtotal A 664.4 3,511.5 4,175.9 2,712 14,333 17,045 84

I/ End-1977 prices.

2/ Includes an i.nsignificant amount of taxes.

3/ Includes abotut 71 taxes.

4/ Includes abouit 10 taxes.

- 46 - Table 18Page 2 of 2

---- CFAF million -0 -------- 0USS0O…--------Local Foreign Total Local Foreign Total

C. CONTINGENCIES

1. PlOsical

(a) On A.1 (i) C 5%) 2.7 35.5 38.2 11 145 156(b) On A.1 (ii' ( 5%) 1.5 19.8 21.3 6 81 87

(c) On A.1 (iii) (15%) 1.7 24.5 26.2 7 100 107(d) On A.1 (iv) (10%) 0.5 6.9 7.4 2 28 30(e) On A.1 (v) ( - ) - - - - - -

(f) On A.1 (vi) (10%) 0.2 2.2 2.4 1 9 10(g) On A.l (vii) (10%) 10.8 32.6 43.4 44 133 177(h) On A.2 (i) (15%) 10.0 57.4 67.4 41 234 275(i) on A.2 (ii) (15%) 9.1 50.5 59.6 37 206 243(j) On A.2 (iii) (15%) 1.7 10.3 12.0 7 42 49(I) On A.2 (iv) (a)(10%) 5.6 15.9 21.5 23 65 88(1) On A.2 (iv)(b)(10%) 14.4 29.9 44.3 59 122 181(m) On A.3 (15%) - 11.0 11.0 - 45 45(n) On A.4 (i) ( 5%) 2.0 9.0 11.0 8 37 45(o) On A.4 (ii) ( 5%) - 1.0 1.0 - 4 4(p) On A.4 (iii) (10%) 0.7 3.5 4.2 3 14 17(q) On A.5 (i) (15%) 0.5 4.4 4.9 2 18 20(r) On A.5 (ii) (15%) 0.5 2.4 2.9 2 10 12(s) On A.6 (15%) 0.5 4.4 4.9 2 18 20(t) On A.7 (-) - - - - - -(u) On A.8 (- )

Subtotal I 62.4 321.2 383.6 255 1,311 1,566

2. Price

(a) on A.1 (i) 9.3 123.5 132.8 38 504 542(b) On A.1 (ii) 2.7 36.0 38.7 11 147 158(c) On A.1 (iii) 1.0 14.2 15.2 4 58 62(d) On A.1 (iv) 1.0 14.7 15.7 4 60 64(e) On A.t (v) 0.2 1.5 1.7 1 6 7(f) On A.1 (vi) 0.5 2.7 3.2 2 11 13(g) On A.1 (vii) 31.1 110.7 141.8 127 452 579(h) On A.2 (i) 14.2 80.4 94.6 58 328 386(i) On A.2 (ii) 13.0 63.4 76.4 53 259 312(j) On A.2 (iii) 2.0 11.5 13.5 8 47 55(k) On A.2 (iv)(a) 13.7 38.5 52.2 56 157 213(1) On A.2 (iv)(b) 21.1 70.8 91.9 86 289 375(m) On A.3 _ _ _ _ _ _(n) On A.4 (i) 5.1 43.9 49.0 21 179 200(o) On A.4 (ii) - 9.8 9.8 - 40 40(p) On A.4 (iii) 2.7 15.7 18.4 11 64 75(q) On A.5 (i) 1.4 13.5 14.9 6 55 61(r) On A.5 (ii) 0.5 2.7 3.4 3 11 14(s) On A.6 0.7 6.6 7.3 3 27 30(t) On A.7 _ _ _ _ _(u) On A.8 1.2 9.8 11.0 5 40 45

Subtotal 1 80.4 528.5 608.9 328 2,157 2,485

Subtotal B 184.0 991.1 1,175.1 752 4,045 4,797

TO'TAL 848.4 4,502.6 5,351.0 3,464 18,378 21,842

ROUlNDED 3,500 18_400 21_800

RECURRENT COSTS OVER THE P'ROJECT PERIOD

A. Basic Costs (Erd-1977)

1. Unpaved Road Maintenance 691.4 581.3 1,372.7 2,822 2,781 5,683 502. Ferryboat Maintenance and Operation 69.8 95.8 165.6 285 391 676 58

Subtotal A 761.2 777.1 1,538.3 3,107 3,172 6,279 51

B. Contingencies

1. Physical 37.9 39.0 76.9 155 159 3142. Price 178.1 187.2 365.3 727 764 1,491

Subtotal B 216.0 226.2 442.2 882 923 1,805

TOTAL 977.2 1,003.3 1,980.5 3,989 4,095 8,084

ROUNDED 4.000 4,100 8,1()0

_ 47 -

CHADTHIRD HIGHWAY PROJECT Table 19

PROJECT IMPLEMENTATION SCHEDULE(CALENDAR YEARS)

1978 1979 1980 1981 1982

Item Activity Responsibility Quarter Quarter Quarter Quarter Quarter

1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th

Credit Signature Got./IDA 0Effectiveness Government

Maintenance Program Procurement of Equipment,Spare Parts, andWorkshop Equipment Govt./ADFWorkshop and BuiidingConstruction

Biddmg Documents GovernmentCons ruction

Procurement of OfficeFurniture and Equipment Govt./IDA

Technical Assistance

to DPW Training ProgramConsultant Selection andContract Govt./USAIDConsultant ServicesProcurement of Equipment Govt./USAI DAssesment of results andfurther requirements forthe Training Program Govt./USAID/IDA

Strenghtening of DPWConsultant Selection andContract Govt./IDAConsultant Services

Pellooships

Ferryboat ConstructionConsultant Contract Govt./IDAFerryboat Design ConsultantProcurement of BuildingMaterials Govt./ConsultantFerryboat Construction Goot./Consultant,

Technical Assistanceto DT

Consultant Selection andContract Govt./USAID/IDAConsultant Servicesv.__________

Technical Assistancefor FB Consultant Selection and

Contract Govt./USAID/IDAConsultant Services

Completion of CottonlFeeder Road Maintenaisce Govt./IDA

Rural Roads StudyConsultant Selection andContract Govt./STC/IDAConsultant Services

Road Fund Revenues andExpenditunes Reports Government

Proiect Mmtoring Reports Government _ _ _ _ _ 1 F 1_

Source. Mission EstimatesMay 1978 World Bank - 18j82

- 48 - Table 20

CHAD

THIRD HIGHWAY PROJECT

Estimated Schedule of Disbursements(US$'000)

…------- Disbursements--------IDA Fiscal Year Quarter Ending During Quarter Cumulative

1979 September 30, 1978 --- ---December 31, 1978 --- ---March 31, 1979 150 150June 30, 1979 450 600

1980 September 30, 1979 1,200 1,600December 31, 1979 1,200 3,000March 31, 1980 800 3,800June 30, 1980 700 4,500

1981 September 30, 1980 600 5,100December 31, 1980 500 5,600March 31, 1981 400 6,000June 30, 1981 400 6,400

1982 September 30, 1981 350 6,750December 31, 1981 350 7,100March 31, 1982 300 7,400June 30, 1982 200 7,600

Source: Mission estimates.

May 1978

CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Cost Estimates

(End-1977 Prices)

_--------------- CFAF----------------- ----------------- US$------------------

Local Local Foreign as

Item Taxes Other Total Foreign Total Taxes Other Total Foreign Total % of Total

Maintenance Operations

Dry Grading, per km 822 6,492 7,314 7,991 15,305 3.35 26.50 29.85 32.62 62.47 52

Grading - Compacting, pes km 4,632 31,771 36,133 42,048 78,181 18.90 129.68 147.48 171.62 319.10 54

Emergency Repairs 2/per m 66 490 556 670 1,226 0.27 2.00 2.27 2.73 5.00 55

Dragging, per day- 1,173 5,813 6,986 9,177 16,163 4.79 23.73 28.52 37.45 65.97 57 1

Light Maintenance, per day 1,072 15,992 17,064 10,392 27,456 4.38 65.27 69.65 42.41 112.06 38

(cantonnage)

Road Maintenance Cost ------------CFAF Million/Year---------- ------------US$ 'OOO/Year-------------

N'Djamena North 2,154 19,104 21,258 21,150 42,408 8,792 77,975 86,767 86,327 173,094

N'Djamena South 2,837 25,556 28,393 28,174 56,567 11,580 104,310 115,890 114,996 230,886

Abeche 1,883 14,474 16,357 18,682 35,039 7,685 59,078 66,763 76,253 143,016

Sarh 4,458 40,961 45,419 43,291 88,710 18,196 167,188 185,384 176,698 362,082

Moundou 6,077 55,365 61,442 59,031 120,473 24,804 225,980 250,784 240,942 491,726

Total 17,409 155,460 172,869 170,328 343,197 71,057 634,531 705,588 695,216 1,400,804 50

1/ Excluding road administration, equipment, depreciation, import duty on spare parts, and other commercial

taxes, fuel tax included.

2/ Assuming operations over 45 linear km per day.

Source: mission estimates.

CHAD

THIRD HIGHWAY PROJECT

Ferryboat Recurrent Costs

Cost Estimates(End-1977 prices)

----------- CFAF Million------------ --------------US$ 000---------------Local Local Foreign as

Basic Costs Taxes Other Total Foreign Total Taxes Other Total Foreign Total % of Total

Personnel: 1979 - 9.5 9.5 - 9.5 - 38.7 38.7 - 38.71980 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.81981 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.81982 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.8

Subtotal - 38.0 38.0 - 38.0 - 155.1 155.1 - 155.1

Materials: 1979 2.0 7.8 9.8 29.5 39.3 8.2 31.8 40.0 120.4 160.4 11980 1.6 6.7 8.3 25.1 33.4 6.9 27.3 34.2 102.0 136.2 L1981 1.4 5.5 6.9 20.6 27.5 5.7 22.5 28.2 84.1 112.01982 1.4 5.5 6.9 20.6 27.5 5.3 22.5 27.8 84.1 -

Subtotal 6.4 25.5 31.9 95.8 127.7 26.1 104.1 130.2 391.0 521.2 75X

Total 6.4 63.5 69.9 95.8 165.7 26.1 259.2 285.3 391.0 676.3

Source: DPW, mission estimates.

- 51 - Table 23

CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Recurrent Expenditures

Cash Flow

------…CFAF M4illion--------- -------- US$ '000----------

Item 1979 1980 1981 1982 1979 1980 1981 1982

A. Expenditures

l. Outside Projecta. CILSS/'UNSO Brigade 10.0 10.0 10.0 10.0 40.8 40.8 40.8 40.8b. FED Brigade 26.8 13.4 - - 109.4 54.7 - -c. Paved road maintenance 24.2 36.4 48.4 48.4 98.8 148.6 197.6 197.6

Subtotal 61.0 59.8 58.4 58.4 249.0 244.1 238.4 238.4d. Quantity variation 5% 3.0 3.0 2.9 2.9 12.2 12.2 11.8 11.8e. Price variation 5.7 9.7 15.0 18.7 23.3 39.6 61.2 76.3

Subtotal 1 69.7 72.5 76.3 80.0 284.5 295.9 311.4 326.5

2. Project Components

a. Unpaved Road Maintenance /1 343.2 343.2 343.2 343.2 1,400.8 1,400.8 1,400.8 1,400.8b. Ferrylboat maintenance and operation 48.8 42.9 37.0 37.0 199.2 175.1 151.0 151.0

c. Fuel taxes for training unit 7.4 7.4 7.4 7.4 30.2 30.2 30.2 30.2d. Cotton feeder roads 4.7 4.7 - - 19.2 19.2 - -

Subtotal 404.1 398.2 387.6 387.6 1,649.4 1,625.3 1,582.0 1,582.0

e. Quantity variation (about 5%) 20.2 19.9 19.4 19.4 82.5 81.3 79.1 79.1

f. Price variation 54.8 76.8 98.6 122.4 223.7 313.5 402.4 499.6Subtotal 2 479.1 494.9 505.8 529.4 1,955.6 2,020.1 2,063.5 2,160.7

Total A 548.8 567.4 581.9 609.4 2,240.1 2,316.0 2,374.9 2,487.2

B. Revenues

1. Road Fund /2 477.4 498.9 521.3 544.8 1,948.6 2,036.3 2,127.8 2,223.7

2. Ministry Salaries /3 56.9 58.6 60.4 62.2 232.2 239.2 246.5 253.9

Total B 534.3 557.5 581.7 607.0 2,180.8 2,275.5 2,374.3 2,477.6

C. Balance (B-A) -14.5 -9.9 -0.2 -2.4 -59.3 -40.5 -0.6 -9.6

D. CumulatE!d balance -14.5 -24.4 -24.6 -27.0 -59.3 -99.8 -100.4 -110.0

/1 Excluding equipment depreciation and taxes other than tax on fuel./2 Based on CFAF 450 million estimated revenues in 1977, and the following annual growth: 2.5% in 1978,

3.5% in 1979, and 4.5% thereafter./3 Permanent labor. Based on CFAF 53.64 million in 1977 and 3% annual increase thereafter.

Source: DPW, mission estimates.

August 1977

- 52 -

CHAD Table 24

THIRD HIGHWAY PROJECT11

Vchicic -tc.-u casts (CEAF/lO0 kmn) as a Function of Traffic and Road Surface Characteri.Tlr-

Gravel Road (Laterite Surface) VOC Estimate

T R RD LD VL CMS CMR CLR

0 3250 11.0 15.5 52264 96147 169780 211172

1 3332 11.2 11.1 52266 96152 169790 211185

5 3632 12.1 5.9 52322 96280 170039 211513

10 3944 13.0 2.9 52495 96677 170814 212536

15 4200 13.9 1.9 52784 97340 172107 214241

20 4410 14.7 1.6 53188 98267 173916 216628

30 4744 16.5 1.5 54343 100917 179086 223448

50 5400 22.4 1.5 58039 109397 195630 245272

80 7794 43.1 1.5 67048 130067 235956 298468

100 11450 70.0 1.5 75364 149147 - -

2/max. voc: 76000 150000 250000 300000

Earth Road (Sandy Clay Surface) VOC Estimate

T R RD LD VL CMSM5 CMR CLR

0 3250 14.0 15.5S 50721 94560 165690 204287

1 4035 15.2 11.1 53813 99041 174092 216771

5 7175 20.0 10.0 64945 115666 205560 264572

10 11700 26.0 10.0 76132 133512 240080 319507

15 14000 32.0 10.0 84250 148100 269250 ;69092

20 14000 38.0 10.0 89311 159428 293076 378127

25 14000 50.0 10.0 91314 167498 511548 397212

30 14000 50.0 10.0 91500 172308 324669 406547

max. voc: -/ 92000 175000 325000 410000

Earth Track VOC Estimate

T R RD LD VL CMS CMR CLR

0 3250 14.0 15.5 50681 94212 165393 203632

1 4505 15.2 11.0 55755 101558 179219 224073

5 9525 20.0 10.0 72155 125814 225265 291067

10 14000 26.0 10.0 84391 145315 262877 343731

20 14000 32.0 10.0 88395 158510 293319 376250

30 14000 50.0 10.0 90410 169797 328719 409189

max. voc: 91000 170000 330000 410000

1/ Net of taxes, in January 1977 prices.2/ Max VOC corresponds to an average speed of 10-15 km/hr.

LEGENDT= cumulative traffic volume since last grading VL= light goads vehicle (2.5t)

in both directions (1000 vehs.) CMS= medium truck (13t)E= roughness (mm/km) CMR= medium tr-ck/trailer (29t)RD= rot depth (mm) CLR= heavy truck/trailer (38t)LD= depth of loose material (mm)

VOC= vehicle operating cost (CFAF11000 km)Source: Mission estimates. 1977.

- 53 Table 25

CHAD

THIRD HIGHWAY PROJECT

Breakdown of Cost Components for Shadow Pricing

Local CostsItem Skilled Labor Unskilled Labor Other Total Foreign Costs

(%) (%) (%) (%) (%)

Vehicle Operating Costs 8 2 24 34 66

Recurrent Maintenance Costs

Regravelling 13 1 28 42 58

Routine Maintenance 15 7 26 48 52

Workshop Buildings 10 10 5 25 75

Equipment - - 7 7 93

Fuel - - 15 15 85

Spare Parts -- 7 7 93

Technical Assistance - - 7 7 93

Source: Mission estimates.

- 54 - Table 26

CHAD

THIRD HIGHWAY PROJECT

Summary of Economic Evaluation and Sensitivity Analysis

Internal Rate of Return Cl)Without Shadow With Shadow

Prices Prices

A. Routine Maintenance - IRR = 75.0X; B/C a 12% = 3.25

1. Effect of Reduced Maintenance Output

Network Maintained

5300 km!1

74.1 75.03500 km 63.0 63.81800 km 26.6 27.4

2. Effect of Reduced Equipment Utilization

Economic Life of Equipment

8 yearsl/ 74.1 75.07 years 73.0 74.05 years 71.3 72.2

3. Effect of Cost Increase

Increase in Costs

5% 70.3 71.110% 66.9 67.515% 63.8 64.620% 60.8 61.6

4. Effect of Increase in Benefits

Increase in Benefits

5% 77.9 78.710% 81.8 82.6

B. Regravelling - IRR = 16.7% B/C H 12% = 1.31

1. Effect of Reduction in Annual Output of Regravelling

Kilometers Regravelled per Year

100 ki-/ 17.2 16.780 km 12.4 12.9

2. Effect of Increase in Cost of Regravelling

5% 16.1 15.910% 15.0 15.115% 14.0 13.820% 13,0 12.8

3. Effect of Increase in Benefits from Regravelling

Increase in Benefits

5% 18.4 17.710% 19.5 18.5

C. Road Maintenance and Training Programs CombinedIRR = 51.4%; B/C H 12% = 2.20

D. Ferries - IRR = 44.0%; B/C H 12% = 3.68

1. Effect of Decrease in Number of Ferries Constructed

No. of Ferries Constructed During Project Period

41/ 43.4 44.0

3 36.0 36.62 31.3 31.8

2. Effect of Increase in Costs

Cost Increase

5% 41.7 42.310% 40.0 40.615% 38.5 39.120% 37.2 37.7

3. Effect of Increase in Benefits

Increase in Benefits

5% 45.3 45.9

10% 47,1 47.7

1/ As assumed under project.Source: Mission estimates.

- 55 -ANNEX I

CHAD

THIRD HIGHWAY PROJECT

Road Transport Industry

1. Road transport industry is of vital importance to Chad's economydue to the country's dependence on road transport for both internal and ex-ternal transport functions. Beginning with the Bank Group's first transportsector survey of Chad in 1969, considerable importance has been attached tothis industry, and in particular, the trucking subsector, leading to a diag-nostic study of the road transport industry under the Second Highway Project(Credit 490-CD).

A. Road Transport Demand

2. The Chadian road transport demand consists of:

(i) international freight transport, comprising an annual ex-port/import tonnage of about 253,000 tons of which importsconstitute nearly 75%. The portion of freight transportcarried by Chadian carriers is estimated at 160,000 tons(63% of the total volume), corresponding to about 130 mil-lion ton-km. Freight transport demand and its distribu-tion by type of commodities are presented in Table I and2; and

(ii) domestic freight transport of about 226,000 tons 1/ ofwhich cotton accounts for 146,000 tons (64%). The farmto ginnery transport of cotton is effected exclusivelyby COTONTCHAD; the remaining internal freight trafficconsists of about 80,000 tons distributed among theprincipal commercial and administrative centers.Estimates of local freight between small towns arenot available.

3. There is no scheduled intercity bus transport in Chad. Exceptfor a few vans and covered pickup trucks, freight trucks double as passengervehicles, carrying 5-10 passengers in addition to their normal load. Recentstatistics on demand for intercity passenger transport are not available,but studies carried out in 1963 estimated intercity passenger transportationdemand at 190,000 passengers/year corresponding to about 74 million passenger-kilometers.

4. In 1976, Chadian transporters carried an estimated 130 million ton-km of dry goods and about 55 million ton-km of petroleum products. Short-termprojections of the Chadian share of dry cargo transport indicate a demand of

1/ Estimated tonnage for 1976/77.

- 56 -ANNEX I

about 150 million ton-km, excluding the farm-to-ginnery transport of seedcotton. It is difficult to establish future transport demand for petroleumproducts due to uncertainties concerning the construction of a mini refineryin N'Djamena.

B. Road Transport Policy and Regulations

Road Transport 'olicy

5. In October 1976, the Government granted exclusive rights to theCooperative des Transporteurs Tchadiens (CTT) for both international anddomestic public road transport (Ordonnance No. 027/CSM dated October 23,1976). At its formation in 1958, the objective of CTT was to organize smallChadian transporters under the umbrella of a cooperative that could offercompetition to Unitchadienne, a large foreign-owned transport company. Until1972, CTT and Unitchadienne operated under a system of freight allocation(applied to international transport only), that progressively favored CTT.Such restrictive freight allocation practices eventually forced Unitchadienneto cease its operations in Chad, and CTT assumed de facto control of inter-national freight transport. Other factors contributing to the sole controlof international freight transport by CTT between 1972-77 were: (i) transitagreements with Cameroon and Nigeria fixing Chad's share of international tradethrough a quota system; and (ii) the monopolistic control of the Cameroonianshare of Chad's itransit traffic by the "Syndicat des Transporteurs", thetrucking industry cooperative in Cameroon.

6. The Government's internal transport policy similarly appears toencourage a controlled transport industry structure. A number of semi-publicand Government agencies have exclusive rights to transport functions relatedto their activities. For instance, COTONTCHAD, the semi-Government cottonprocessing and marketing agency, operates its own fleet of about 300 truck-trailers with speCially-constructed frames, to transport seed cotton fromabout 2100 purchase points to ginneries. Exclusivity of seed cotton trans-port was granted to COTONTCHAD, as it was indicated that COTONTCHAD couldtransport seed cotton, using its special trucks, at a cost 50% lower thanthe rates charged by common carriers. Other agencies that operate their owntruck fleets are: Societe Nationale de Commercialisation du Tchad (SONACOT),for collection and transport of gum arabic, onions and hibiscus flowers;Direction de la Lutte Contre les Calamites Naturelles (DLCCN) which is respon-sible for the distribution of essential supplies to regions affected by droughtand other calamities (e.g., the regions of Ouadai, Guera, Salamat and Batha);and Fonds de Developpement et d'Assistance Rural (FDAR) for distribution offood aid. Until October 1976, the remaining internal freight transport (about60-80,000 tons/year) was free of direct control by CTT, although nearly allindependent transporters were members of CTT. As a few large transporters,through individual contracts with petroleum companies and the brewery inMoundou, were capturing a major part of the internal transport market, theGovernment gave dejure control of all transport activities, external as wellas internal, to CTT. Ostensibly, this measure was designed to protect theinterests of the smaller members of CTT.

- 57 -

ANNEX I

The International Transit Agreements

7. International arrangements governing Chad's transit trade are:

(i) With Cameroon: a transit agreement resulting in the awardof 65% of freight tonnage moved between N'Gaoundere and Chadto Chadian transporters and 35% to Cameroonian trucks.

(ii) With Nigeria: a transit agreement, although already obsolete,governs the allocation of freight between Chadian and Nigeriantransporters from Maiduguri to Chad as shown below:

(a) General Merchandise - 85% of tonnage to Chadiantransporters

- 15% of tonnage to Nigeriantransporters

(b) Fuel - 15% of tonnage to Chadiantransporters

- 85% of tonnage to Nigeriantransporters.

(iii) With CAE: there is no formal agreement between Chad andCAE, concerning goods transit, although transport of cottonexports and 85% of other goods is handled by Chadian trans-porters.

Road Traffic Regulations

8. The road regulations are defined by "Code de la Route" comprisingLoi No. 5 of February 9, 1971, Decrets 172/PR to 178/PR of September 16, 1971,and Arretes 502/TP-INT to 508/TP-M of October 12, 1971. Concerning vehicleoperations, the "Code de la Route" prescribes the following traffic regula-tions: (i) maximum speed, 60 km/h; (ii) maximum permissible payload on twoaxle vehicles, 19 tons; on three or more axle vehicles, 26 tons; and on semi-trailers and truck-trailer units, 38 tons; (iii) maximum axle load, 13 tons;and (iv) load distribution, a maximum of 5 tons/m between the two extremeaxles. In addition, the movement of heavy vehicles on unpaved all-weatherroads is forbidden during, and for a few hours after, a heavy rain.

9. The enforcement of traffic regulations, other than vehicle anddriver licensing and vehicle inspection, is lax. The weight regulations,however, could not be enforced as scales for weighing axles were not avail-able. Mandatory road closures during and after heavy rains are enforced byDPW wherever road barriers are available. The main reason for absence ofenforcement is lack of adequate funds and trained personnel.

- 58 -ANNEX I

C. The Truck Fleet

Characteristics

9. The exact size and age of the commercial vehicle fleet in Chad can-not be assessed accurately as vehicle statistics are not managed effectivelyand different sources give conflicting data. The vehicle fleet of CTT isestimatsd at 663 vehicles with a total capacity of 10,723 tons (trucks) and1,476 m (tankers). The distribution of the CTT fleet by vehicle type is shownbelow:

Light Trucks Heavy Trucks Tankers(5-15 t) (20-30 t) (9,5-30 mn)

Vehicle Fleet 252 356 55Payload 1,913 tons 8,810 tons 1,476 m3

Other than the 100 Fiat trucks and other vehicles purchased during 1974-75,the average age of the fleet is estimated to be about 7 years. There is aserious discrepancy between the size of the truck fleet given in Governmentstatistics and that obtained frQm truck ownership statistics of variousagencies. In view of the unreliability of Government vehicle fleet statis-tics, additional effort is needed to establish these data on a sound basis.

Maintenance

9. The truck fleet is maintained by vehicle dealers, some CTT memberswho operate private repair facilities, and the semi-public and governmentagencies that operate their own vehicle fleets. There are presently threeprivate garages in N'Djamena. In addition, mechanics in the "quartier", usingimprovised facilities, provide inexpensive repair services, and as such, playan important role in maintaining the vehicle fleet. The repair and after-sales services at the private garages, which are the major suppliers ofvehicle repair facilities, are effective and reliable, but expensive. Theelevated cost of spare parts has contributed to exorbitant vehicle maintenancecosts, which lead to prolonged immobilization of a part of the vehicle fleet.

Financing of Trucks

10. With few exceptions, purchase of trucks is financed through creditfacilities provided by commercial banks and truck dealerships. Normally, thebuyers makes an initial deposit equal to 25% of the purchase price. The re-maining amount is financed either by bank loans at an interest rate of 12%repayable in 3 years, or by credit provided by truck dealers at an interestrate of 18%, repayable in 12 installments spread over a period of 18 months(covering two seasons of transport activities). Commercial banks are gen-erally reluctant to lend to transporters that do not have financially sound

- 59 -ANNEX I

operations; accordingly, trucks are purchased mainly through credit arrange-ments with dealers. In 1974-75, however, the Government provided creditguarantees and permitted the entry of 100 Fiat carriers (60 tractor-trailers,25 semi-trailers, and 15 semi-tankers) free of import duties for sale to CTTat concessionary terms.

Truck Fleet Utilization

11. The physical condition of the road network and climatic conditionsadversely affect the utilization of the truck fleet. Light trucks (5-10 tcapacity) are used for short to medium haul operations. Heavy trucks andtankers (25 t capacity) operate primarily on international routes, and whenequipped with special tires for long-haul operations on domestic routes, e.g.,N'Djamena-Abeche or N'Djamena-Sarh. Road transport operations are mainlyconfined to the dry season (from October to May), with 80% of the annualtraffic movements occurring in this season. During the rainy season (Juneto October), the international traffic, except for fuel imports, is substan-tially reduced. With respect to domestic transport, there is no direct roadlink between N'Djamena and southern Chad during the rainy season; the onlyavailable route is via Figuil in Cameroon.

D. The Cooperative des Transporteurs Tchadiens (CTT)

Organization

12. Membership - As of March 1977, CTT had a roster of 826 membersof whom 350 were classified as active members. The majority of the activemembers (about 65%) have a one-truck operation; only 7% of the transportersoperate fleets of 5 or more vehicles (Table 3).

13. Management - The principal management personnel are the President,the Director-General, the Assistant Director and a Technical Advisor (seeExhibit I). Although the chief executive officer of CTT is the Director-General, who is nominated by the Government and acts under the authority ofthe Ministry of Economy, Plan and Transport, the actual management of theorganization is in the hands of the President, who is closely assisted by theAssistant Director and the Technical Advisor.

14. Functional Organization - The headquarters of CTT are located inN'Djamena. In addition, CTT operates branch offices of N'Gaoundere, Bangui,Garoua, Moundou and Sarh, and has a representative in Maiduguri. CTT opera-tions at the headquarters consist of (see Exhibit I):

(i) Operations Service, which comprises the centralization offreight demand and distribution of freight to transporters.

(ii) Accounting and Invoicing Services, which provide billingfacilities and process payments made to CTT. These ser-vices are also used to determine the transporter's shareof the payments received from clients.

(iii) Computing Services, for preparation of accounts and finan-cial statements of the co-operative members.

- 60 -

ANNEX I

(iv) Operation Fiat, to oversee the use of Fiat trucks purchasedunder credit guarantees provided by the Government and toensure the reimbursement of credit guaranteed by the Gov-ernment.

CTT's operational staff consists of 66 employees; of these 44 are stationedin N'Djamena.

Operations

15. Membership Requirements and Capital - Membership in CTT is contin-gent upon the ownership of at least one truck and the payment of CFAF 10,000per ton of vehicle payload. This sum is considered as capital subscription.However, a CTT member in financial difficulties can borrow from CTT (appar-ently without interest), an amount up to 75% of his initial subscription.CTT's capital, as of February 1977, was CFAF 165,158,000. The magnitude ofCTT's capital assets fluctuates over time depending upon the amount of fundstransferred to members in financial need, and the level of membership.

16. The Operational System - The shippers, either directly or throughagents (commission agents for domestic freight; freight forwarding agents forinternational freight) inform CTT of their freight transport requirements.Then CTT's operation service, under the direct control of the President andthe technical adviser, assigns freight to one or more transporters. Eachtransport contract: is made under a voucher which indicates the characteristicsof the freight, the origin and the destination, and the tariff charged. Thetransport contract is completed when the transporter presents to CTT a confir-mation of the delivery of the merchandise, signed by the consignee. At thistime, CTT processes the payment for the transport services provided. Afterdeducting the advance made for the purchase of fuel, the 4.4% turnover tax,freight insurance and a 10% commission, the accounting service pays thebalance to the transporter. At the end of each month, the accounting serviceprepares a statement of all financial transactions. This financial statementpermits the identification of active transporters. The 10% commission ischarged by CTT for the services it provides in centralizing and processingfreight shipments. In case of a directly contracted shipment between CTT andthe shipper, the commission is retained by CTT. This applies to almost allof the international freight and the major portion of domestic freight trans-port. Where a commission agent serves as the intermediary between CTT andthe shippers, the 10% commission is divided equally between CTT and the com-mission agent. A small portion of internal freight transport (in 1975, lessthan 10% of total CTT operations), falls outside the purview of CTT. Thishappens because a number of commission agents do not convey all the freightorders to CTT; instead, they privately negotiate a more favorable rate withindividual transporters, especially for transport on relatively difficult andinsecure routes, e.g., to Abeche or Farcha. The truck operators also contri-bute to illegal transport activities by overloading trucks with clandestinefreight or by carrying passengers when returning empty at the completion offreight assignment. Para-CTT transport activities, however, appear to have

- 61 -ANNEX I

decreased since CTT assumed exclusive control of public transport in Chad in1976. CTT revenues increased from CFAF 1.2 billion in 1975 to about CFAF 2.0billion in 1976. The ordinance granting exclusive transport rights to CTTprovides CTT with policing functions to control unauthorized transport ac-tivity. Small freight shipments on domestic routes, however, are not moni-tored by CTT. Despite the penalties (6 months to 3 years in jail and/orfine of CFAF 50,000 to CFAF 5 million) for illegal movement of freight, itremains difficult for CTT to enforce this regulation.

17. Freight forwarding agents, who also serve as assessors and collec-

tors for the Chadian Customs Service, play a key role in Chad's internationalcommerce. The various functions performed by freight forwarding agencies areclearance of Chadian goods at the port, inter-model trans-shipment of freight(such as from rail to road at N'Gaoundere), and clearance of goods at Chadiancustoms. In most cases, international transport shipments are contractedbetween CTT and the freight forwarding agents on behalf of their clients.

Freight Allocation

18. CTT's Operations Service (Service d'Exploitation) is charged withfreight allocation. When requests for shipment (normally large internationaland domestic transport contracts) are received by this service, these areallocated according to the availability of truckers, as recorded on a first-come first-serve basis. Some transporters complain that freight is notimpartially distributed, but this is contradicted by CTT's management.As the existing freight allocation arrangment under CTT does not provideeither a systematic basis for identifying freight transport demand or themeans of achieving a balance between transport demand and existing truckingcapacity, there is a need to improve the operational efficiency of CTT.

Fiscal Performance

19. Each fiscal year (September 1 to August 31) CTT prepares an in-ventory of membership and the operational truck fleet, a profit and lossstatemerLt, and a balance sheet. Since the last three years, the financialstatements have been prepared by a professional accountant. After interestpayments and a 30% deduction for the legal reserve, the net profits fromeach year's operation are either distributed to the members in accordancewith the volume of business generated by them or deposited in the surplusaccount. The 10% commission charged by CTT is estimated at about CFAF 200million (10% of gross revenues) for 1975-76, while its operational expendi-tures, including debt repayment, payment to commission agents, and reimburse-ments for loss of merchandise, is estimated at CFAF 109 million.

Bankruptcies

20. It is suspected that bankruptcies are common especially amongtransporters owning 1 or 2 trucks. Of CTT's 826 registered members, only350 were active during 1975-76. Although a number of CTT members are onlytemporarily inactive due to lack of working capital or vehicle breakdown, a

- 62 -ANNEX I

majority of inactive members have either suffered bankruptcies or sold theirbusinesses to members with more profitable operations. Except by voluntaryresignation, a CTT members is rarely removed from the membership roster.

E. Economic Characteristics

Tariffs

21. Transport tariffs were established by official decree (Decret 327/PR/TPT/DT) for different routes in December 1974 (Table 5), and have not beenrevised since that time. Some freight categories have special tariff struc-tures such as transport of material for the army, transport for explorationof petroleum, and tranport of beer from the brewery at Moundou to N'Djamena.On international routes, with the exception of Nigerian routes, the tariffslie between CFAF 10-22 peS ton-km for dry goods. Tariffs for fuel traisportvary from CFAF 11.7 per m -km (Lagos-N'Djamena route) to CFAF 20 per m -km(Maiduguri-N'D-lamena route) depending upon length of haul. The tariffs ondomestic routes are of the same order of magnitude as on international routes(CFAF 10-22 per ton-km). On difficult routes such as tracks in the Sahelzone, tariffs vary between 25-66 per ton-km. The tariffs for the Maiduguri-N'Djamena route' (Nigeria) do not conform to the general tariff structure; theofficial rates for general merchandise and sugar on this route are CFAF 38.4per ton-km and CFAF 31.2 per ton-km respectively, compared to CFAF 18 perton-km for general merchandise and CFAF 13.5 per ton-km for sugar on theN'Gaoundere-N'Djamena route. The higher rates on the Nigerian route reflectthe higher transport costs associated with the use of smaller trucks (5-10ton capacity) and are indirectly designed to protect the interests of smalloperators. If light trucks were replaced on this route by larger capacitycarriers, a large part of CTT's membership would be out of business. TheGovernment and CTT, however, appear to endorse the preservation of thesesmaller operators on social grounds, as most of the operators on this routeown one or two old vehicles that serve as their only source of income.

22. Most transporters consider the official tariffs on internationalroutes and major domestic routes as too low; this is particularly true forsubsidized items such as flour for which the transport tariffs are about 30%lower than for other commodities. Contrary to the widely held impressionthat the transport tariffs are high in Chad, road transport tariffs in Chadare of the same order of magnitude as in Upper Volta and Niger where therange of international transport rates varies from CFAF 15-23 per ton-km(1975 figures). On the average, the Chadian tariffs are lower than thetransport rates used in northern Cameroon by the Cameroonian Syndicat desTransporteurs. The transport tariffs used by the Syndicat since December 15,1976 vary from CFAF 19-25 per ton-km (see Table 4).

- 63 -ANNEX I

Financial Transport Costs

23. Average transport costs, in early 1977 prices, are summarized asfollows:

Average Financial Transport Cost (CFAF/ton-km)International Domestic Tracks in

route route Sahelian Zone

(i) Dry GoodsAverage Annual Kilometrage 40000 60000 30000 50000 20000 40000

Truck 12 t PayloadLoad factor - 65% 28 26 31 28 43 38

- 55% 33 30 36 33 48 43

Truck-Trailer 26 t PayloadLoad Factor - 65% 17 16 21 19 - -

- 55% 20 19 25 22

(ii) FuelAnnual Kilometrage 70,000 80,000 90,000

Tanker - 30 m (50% Load Factor) 14 13.5 13

Comparison of Transport Costs with Tariffs

24. Except for the tariffs on the Maiduguri-N'Djamena route, the exist-ing road transport tariffs are lower than transport costs (in some cases asmuch as 20-25%). Accordingly, there is some justification for the upwardadjustment of tariffs to adequately reflect transport costs. The primaryfactor contributing to high transport costs is the low rate of truck utiliza-tion. If the load factor were to increase to 75-90%, the resulting transportcosts would be within the range of the existing tariffs. Similarly, an in-crease in average annual haul distances would help to lower transport costs.However, owing to the structural imbalance between exports and imports, whichis further magnified because a large proportion of imports (55%) are destinedto N'Djamena while most exports (over 90%) originate in the south, it isunlikely that vehicle utilization can be improved much above a 60-65% loadfactor in the near future, although there is scope for increasing annual hauldistarLces through better control of truck supply.

Trucking Capacity

25. The available trucking caeacity considering only the CTT fleet(10,723 tons for trucks, and 1,476m for tankers, see para. 9 ), is estimatedto be:

- 64-ANNEX I

Truck Capacity(million ton-km)

(i) Dry Goods Transport /1Annual Kilometrage 40,000 60,000Load Factor - 55% 236 /2 322

- 65% 279 418

Tanker Capacity(million ton-km)

(ii) Fuel TransportAnnual Kilometrage 50,000 80,000 90,000 100,000Load Factor - 50% 30 /3 48 54 60

3(Im = 0.81 tons of fuel)

/1 Includes domestic transport of fuel in barrels or containers./2 10,723 x 40,000 x 0.55 = 236 million ton-km./3 1,476 x 50,000 x 0.50 x .81 = 30 million ton-km.

26. Transport demand available for exploitation by Chadian transportersconsists of: 85 million ton-km of dry goods transport and 55 million ton-kmof fuel transport on international routes; and 45 million ton-km of dry goodstransport (including fuel in barrels) on domestic routes; that is, about 130million ton-km of dry goods transport and 55 million ton-km of fuel transport.

27. A comparative analysis of available transport capacity with trans-port demand is given below:

Excess Capacity(percent)

Dry GoodsAnnual Kilometrage 40,000 60,000Load Factor = 55% 82% /1 148%

= 65% 115% 222%

FuelAnnual Kilometraget 50,000 /2 80,000 90,000 100,000 /3Load Factor = 50% -45% /4 -15% -2% 9%

/1 (236-130)/130 = 0.82/2 Equal to 12 round trips between N'Djamena and Lagos per year (1/month)./3 Equal to 24 round trips between N'Djamena and Lagos per year (2/month)./4 (30-55)/55 - 0.45

- 65 -

ANNEX I

28. At the existing rate of truck utilization (40,000 km/year, anda load factor of 0.55), there is an excess capacity of 80% for dry goodstransport. For fuel transport, an undercapacity in the range of 15-45% isindicated with utilization of tankers varying from 50,000 to 80,000 km/year.With improved scheduling and better coordination of transport with suppliersin Nigeria, the existing tanker fleet could cater for the present demandfor fuel transport. The load factor for oil tankers, however, will continueto remain 50% as long as Chad remains an importer of fuel. The foregoinganalysis shows that, at the current levels of transport fleet utilization,the supply of fuel tankers would have to be increased, and future importof trucks curtailed in order to strike a closer balance between transportdemand and supply. The excess transport capacity, however, is not a sourceof serious concern considering the average size and poor maintenance of thetransport fleet.

Influence of Transport Costs on Consumer Prices

29. The variation in the price structure of a number of commoditiesfrom CIF Price, port of entry to retail price in N'Djamena is traced inTable 5, as a function of international transit routes. The average cost oftransport per ton between Douala and N'Djamena is about CFAF34,000. Exceptfor sugar and flour, actual transport costs account for at most 20% of thedifference in CIF and retail prices. In fact, elevated import duties, dis-tribution costs and markups are the primary contributors to high importprices in Chad. Therefore, it appears unlikely that a reduction in transportcosts by itself will have an appreciable effect on lowering final consumerprices in Chad, as long as taxes and distribution costs continue to accountfor the major portion of intermediary costs. On the other hand, an increasein transport costs would tend to be accompanied by corresponding increasesin transport tariffs and distribution costs, which, in turn, would have aninflationary impact on consumer prices.

User Charges

30. Total road user charges during 1973-75 averaged about CFAF 1.2billion. The share contributed by road transport industry is estimated at50-60% of the revenues. Custom duties and taxes on new trucks are about40-60% of CIF price, while taxes and duties on spare parts are 60%. Therelatively higher price of spare parts makes the cost of vehicle maintenanceprohibitive, and consequently, results in prolonged immobilization of asignificant part of the vehicle fleet.

ANNEX I- 66 - Table I

CHAD

THIRD HIGHWAY PROJECT

Estimated Demand for Freight Transport1976-77

International Freight

Transit Route Imports other Exports Totalthan Petroleum (tons) Exports & Imports

(tons) (tons)

Nigeria 15,000 2,000 17,000

Cameroon

- via N'Gaoundere 50,000 37,000 87,000- via Benoue & others 36,000 8,000 44,000

CAE 14,000 14,000 28,000

Other Overland Rouates 5,500 500 6,000

Subtotal 121,000 61,5001' 182,000

Petroleum Imports (tons)

Nigeria 65,000 65,000

Other Routes 5,000 5,000

Subtotal 70,000 Total 252,000

--------------------------------------------------------------- __------------__-------

Ddmestic FreightTonnage

N'Djamena - East and North 21,000

N'Djamena - South

- Beer 20,000- Other Merchanclize 20,000

Sarh - Moundou 20,000

Farm to Ginnery Transport of Cotton 145,000

Total 226,000

1/ Cotton exports account for about 54,000 tors.

Source: - SEDES,'"ia nostique Sur l'Industrie de Transport Routiere au Tchad"', 1977.- Mission estimates.

ANNEX I- 67 - Table 2

CHAD

THIRD HIGHWAY PROJECT

Distribution of International Freight Transport Demand by Type of Commodity

1976-77

Tonnage (tons/year)

1. Imports

Petroleum products 70,000

Agricultural related products

Sugar 25,000

Cement 15,000

Fertilizer and Insecticide 16,000

Timber 7,500

Wheat Flour 10,000

Food Products 20,000

Equipment 3,500

Miscellaneous 24,000

2. Exports

Cotton 54,000

Others 7,450

TOTAL 252,450

Source: SEDES, 1977

- 68 -

ANNEX ITable 3

CHAD

THIRD HIGHWAY PROJECT

CTT - Distribution of Truck Ownership

Truck Ownership Number of Transporters %(Number)

1 227 64.85

2 63 14.99

3 27 7.70

4 7 2.00

5 10 2.90

6 5 1.40

7 6 1.70

8 1 0.28

9 1 0.28

10 and more 3 0.84

350 100

Source: ORGATEC, "Evaluation de l'Industrie des Transports Routiersau Tchad", 1977.

ANNEX I-69- Table 4

CHAD

THIRD HIGHWAY PROJECT

Principal Road Transport Tariffs

(Excluding 4.4% Taxe de Chiffre d'Affaire)

A. INTERNATIONAL ROUTES

1. Dry Goods---------------Tariff (CFAF/ton-km) -----------

RoutesCameroonian Transequatorial1/ Nigerian

Item (To N'Gaoundere) (To Bangui) (To Maiduguri)

Sugar 13.5 14.0-20.0 31.2

Cotton 17.0 16.53 15.87

Metal Sheets (+7m) 19.0 16.6-21.4 38.4

Flour 13.5 12.3-15.9 27.4

Cement 13.5 14.1-18.2 38.4

Other Merchandise 18.0 14.8-19.1 38.4

2. Fuel

Routes Tariff (CFAF/m3 -km)

Nigerian Route

- From Lagos 11.76

- From Kano 13.95

- From Maiduguri 20.00

Transequatorial Route 17.0-19.3

B. DOMESTIC ROUTES

-----------------Tariff (CFAF/ton-km)-------------

Item N'Dlamena to: Tracks in Sahelian

Sarh Moundou Abeche Zone

Cement 13.8 13.2 20.6

Flour 10.8 10.1 17.5Metal Sheets 14.7 14.1 23.8 25-46

Other Merchandise 14.7 14.1 19.0 JFueL/ 3/ 16.1 16.1 20.7 -

Transport for the Army- 20 20 30 30-66

Transport for Petro-leum Exploitation 19.5 19.5 - 55

Beer3/ - 12.4 -

C. COMPARATIVE ROAD TRANSPORT TARIFFS IN CAMEROON

(From N'Gaoundert to North Cameroon, Chad, and CAE)

Item ---Tariff (CFAF/ton-km)---

Metal Sheets 25.0

Rice, Flour, Sugar, Malt, Cement 20.0

Fertilizer 19.0

Cotton 20.0

Other Merchandise- 24.0

1/ Tariff variable depending upon point of origin or destination in Chad.

2/ Price in CFAF/m3-km.3/ Tariffs obtained under special contract.

Source: - Chad, "Decret No. 327/PR/TPT/DT", December 4, 1974

- SEDES, 1977

CHAD

THIRD HIGHWAY PROJECT

Intermediary Costs Between CIF Price, Pbrt of Entry, and Retail Price in N'Djamena(CFAF/ton in 1974 Prices)

I te rn C I F P ri c e , P o r t H an d l i ng D i s t r i b u t i o nItemCIF Price, Port Handling & . Transport Duties and Costs and Retail Price

Port of Charges Storage Cost Costs Taxes CoIrerc±alEntry at the Port Mark-uc

Reinforcing Steel- Cameroonian Route 70,000 175 9,805 19,600 42,504 49,090 191,174- Nigerian Route 70,000 140 11,675 15,590 41,348 47,939 186,692- Transequatorial Route 70,000 590 10,346 25,515 42,133 51,335 199,919

Corrugated Metal Sheets- Cameroonian Route 104,800 175 10,260 19,600 64,361 123,501 322,607- Nigerian Route 104,800 140 12,130 15,590 63,205 121,436 317,301- Transequatorial Route 104,800 590 10,741 26,110 63,998 127,868 334,107

Tea

- Cameroonian Route 170,000 523 17,995 27,183 182,840 105,613 504,154 1- Nigerian Route 170,000 172 12,580 23,628 180,557 102,538 480,475 -- Transequatorial Route 170,000 972 17,387 38,364 181,750 108,248 516,721 0

Sugar 1/

- Cameroonian Route 100,000 125 5,800 19,945 1,597 - 127,467- Nigerian Route 100,000 140 7,870 15,690 431 - 194,131

- Transequatorial Route 100,000 690 8,470 25,925 1,102 - 136,187

Flour- Cameroonian Route 68,000 125 6,235 18,700 1,622 19,883 114,565- Nigerian Route 68,000 140 8,673 13,290 461 19,018 109,582- Transequatorial Route 68,000 490 6,001 20,200 959 20,086 115,736

Tires less than 15 kg- Cameroonian Route 2,835 740 1,985 1,410 6,970

(Douala-N'Djamena by Air)Light Truck

- Cameroonian Route 1,138,600 1,128 32,169 106,500 568,000 398,815 2,245,437 >|

Heavy Trucks - 12 t Payload- Cameroonian Route 4,290,700 2,958 62,510 175,000 1,590,986 1,690,283 7,812,437

1/ Wholesale price to factory.Source: SEDES, 1977.

- 71 -ANNEX IExhibit I

CHADTHIRD HIGHWAY PROJECT

CTT - ORGANIGRAMME

PRESIDENT

MINISTRY OF ECONOMY,______- PLAN & TRANSPORT

DIRECTORATE OF TRANSPORT

TECHNICAL~~~~~~~~~ CHARTERED|ADVISER | ACCOUNTANT|

_ | X ~~~~~~~~DIRECTOR

OPERATION GFIAT

l _ ~~~~~~~~~~~~SECR ETAR IATU

ANT

| _ _ _ _ __ _ | DIRECTOR

I~~~~~~~

_V NNPERSONNE71SERVICE

OPERATIONS ACCOU NTS |INVOICING COMPUTINGSERVICE SERVICE SERVICE SERVICE

AGENCY AGENCY AGENCY(ABECHE) | (SARH) MOUNDOU)

REPRESENTA- EXTERNAL EXTERNAL EXTERNAL^ TIVE | | AGENCY AGENCY AGENCY

(MAI UGURI) (GAROUA) (NGAOUNDERE) (BANGUI)

World Bank - 18583

- 72 -ANNEX II

CHAD

THIRD HIGHWAY PROJECT

Technical Assistance for a Training ProgramOutline Terms of Refernce

Objectives

1. The ob.jectives of the technical assistance for the training programare:

(a) continuation and strengthening of training of mechanicsand other technical staff in the brigades and regionalworkshops;

(b) implementation of training and seminars for road sectorchiefs and other skilled personnel required for theroad maintenance brigades;

(c) management, administration and oupervision of:

(i) a training-production brigade for regravelling; and

(ii) the training center; apd

(d) assistance to DPW in recruiting additional skilled staffneeded to execute the road maintenance program.

Team Composition

2. A team of six technical experts will be assigned to DPW. Tentativecomposition of the team and the length of each expert's assignment is summar-ized below:

Expert Man-months

(a) mechanical or highway engineer (chief of mission) 45

(b) road maintenance and construction expert 40

(c) heavy equipment mechanic for gasoline and diesel-powered machinery 45

(d) expert in equipment operator training 40

(e) brigade chief 40

(f) expert in technical/administrative training 20

TOTAL 230

- 73 -ANNEX II

The team's exact composition and detailed schedule of activities will bedefined in agreement with DPW so that the training program under the SecondHighway Project will not be delayed or interrupted.

Qualifications and Duties

3. Each expert should have:

(a) fluency in spoken and written French;

(b) training experience in his field in order to facilitateprofessional and technical instruction;

(c) work experience in a developing country; and

(d) education commensurate with the position to be occupied.

Particular qualifications and functions of the team members are describedbelow:

(1) Chief of Mission

4. The Chief of Mission should be a mechanical engineer (or seniortechnician) with experience in operation and maintenance of road equipment,or a civil engineer (or senior technician) with experience in road construc-tion and maintenance. He should have at least (a) ten years' experience inroad administration, construction and maintenance, as well as in budget mat-ters and cost price accounting; (b) five years' experience in a managerialposition in Africa; and (c) five years' experience in technical and profes-sional training, preferably in on-the-job training. Experience in adminis-tration and financial management of a construction firm and/or in manpowerplanning and personnel management is desirable. His duties will include:

(i) coordinating all mission activities and maintainingliaison with DPW officials;

(ii) preparing and implementing the training program inconjunction with DPW;

(iii) preparing professional ability tests to be used as abasis for recruiting personnel, and recommending thepersonnel to be recruited; and

(iv) preparing a road maintenance manual.

(2) Road Maintenance and Construction Expert

5. He should be a civil technician or road works foreman with atleast five years' experience. In particular, he should have extensiveknowledge of and experience in (a) construction and maintenance equipment,(b) use of heavy equipment, (c) various elements of road construction, and(d) soils engineering. He should:

ANNEX II

(i) train the work-site chiefs;

(ii) assist in training equipment inspectors and operators;and

(iii) provide practical, on-site training to sector chiefs.

(3) Heavy Equipment Mechanic

6. He sihould have at least eight years' professional experience in theuse of heavy equipment for public works. His qualifications are as follows:(a) specialization in both diesel and gasoline engines; (b) experience inoperation and imaintenance of equipment used in maintenance work; (c) knowledgeof vehicle electrical systems; and (d) basic knowledge of general mechanics.His task will lbe to:

(i) train and give refresher courses to diesel- andgasoline-engine mechanics;

(ii) train and give refresher courses to mechanics,mechanic-helper/greasers for workshops andmechanized road units;

(iii) train spare parts storemen; and

(iv) assist in training equipment inspectors.

(4) Expert in Equipment Operator Training

7. This expert should have at least three years' experience in train-ing equipment operators. He should be familiar with the major types of heavyequipment currently used in road construction and maintenance. He will:

(i) train and give refresher courses to operators ofvaricius types of road machinery; and

(ii) supervise the mechanics and greasers assigned toworksites.

(5) Brigade Chief

8. He should have at least eight years' experience in the use of publicworks equipment and for periodic maintenance and road construction in general.His duties will be the following:

(i) organizing the training production brigade forregravelling, in collaboration with the Chief ofMission and DPW;

(ii) preparing the manpower and functional organiza-tion of the training brigade;

- 75 -

ANNEX II

(iii) assisting DPW in preparing the training brigade'sannual work program;

(iv) supervising the road maintenance work performed bythe training brigade; and

(v) ensuring the training of DPW personnel in the aboveworks and that of Chadian counterparts who will thenbe able to assume responsibility for the trainingbrigade and any other brigades which might be formed.

(6) Expert in Technical/Administrative Training

9. This expert should be a road technician with at least ten yearsof experience in the organization, management and administration of roadmaintenance. In particular, he should have good knowledge of working con-ditions in developing countries. He will have the following tasks:

(i) implementing the training and/or refreshercourses given to the road sector chiefs inthe areas of (a) modern techniques of lightmaintenance of earth roads (cantonnage) andoperations to preserve the road surface, (b)basic soil mechanics, (c) preparation of annuallight maintenance programs for earth roads, (d)principles of accounting; and

(ii) assisting the chief of mission in all mattersrelated to technical and administrative training.

CHADTHIRD HIGHWAY PROJECT

Proposed Ferryboat (Plan)

ENGINE

CASING

ENGINE /12.40 BARG 12.40

BARGE ARRANGEMENT I

SCALE 1:125 | >4

'-4

1-3

Worldi Bank - 18847

CHADTHIRD HIGHWAY PROJECT

Porposed Ferryboat with Truck (Profile)

LONG - VEHICLE TRANSPORT - (PROFILE)

SCALE 1:125 | 4

Hl HWorld Bank -18848

- 78 -

ANNEX IV

Plan of Action

A. Road Maintenance Program

The Government agreed on:

(l) maintenance standards to be used in routine maintenanceoperations;

(ii) the core network of about 4,000 km to be maintained annually;

(iii) sending to the Association, before October 31 of each projectyear, the following information on the maintenance programfor the subsequent fiscal year: (i) the list of minor tracks(about 1,300 km), other than the core network, and (ii) theproposed roads to be regravelled, with relevant trafficvolume estimates.

B. Training Program

The Government agreed to:

(i) provide a daily allowance during the training period, inaddition to the normal salary paid by DPW, and cash prizesfor outstanding trainees, up to about 12% of estimatedrecurrent cost of the training program, to serve as incen-tives to recruit potential new candidates and attractin-service DPW personnel from the distant subdivisions toparticipate in the program;

(ii) prepare and send to the Association for approval, a detailedcurriculum by December 31, 1978;

(iii) assess, in consultation with the Association, by December 31,1979, future training requirements; and

(iv) give first priority to the road maintenance program inassigning personnel trained under the project.

C. Fellowships

The Government agreed that each candidate for fellowship would be:(a) required to sign a commitment to serve for at least five years after hisreturn in the DPW Department or Service for which the fellowship is granted;(b) considered in full service while on fellowship; (c) approved by theAssociation, following submission by the Government to the Association ofhis name, background and other information needed for fellowship award.

- 79 -

ANNEX IV

D. Project Monitoring

For the purpose of project monitoring, the Government agreed todesignate a project coordinate who would:

(i) liaise with the Association on matters relating to theprogress of the project;

(ii) prepare and send quarterly progress reports to theAssociation in a format to be agreed between theGovernment and the Association; and

(iii) prepare a final project completion report.

E. Project Recurrent Costs

The Government agreed to:

I(i) establish and maintain adequate accounting procedures torecord revenues to, and expenditures from the Road FundAccount;

(ii) earmark to the Road Fund and deposit in the separateRoad Fund account the amounts collected from fueltaxes and ferryboat tolls;

(iii) establish in DPW's accounting office a sub-acccountto allocate to the project all Road Fund revenues except13%, or any other percentage to be agreed periodicallybetween the Association and the Government, required forother road-related expenditures outside the project;

(iv) maintain records adequate to record single and cumu-lative expenditures for the project components itwould finance;

(v) send to the Association not later than July 31 and January 31of each project year, a summary statement as of June 30 andDecember 31, of (a) total revenues to the Road Fund; and(b) expenditures incurred or committed for the projectby category of disbursements;

(vi) review in consultation with the Association not later thanDecember 31, 1979 (a) the amount of road funds required forproject recurrent costs over the remaining project periodand (b) the feasibility of increasing Road Fund revenuesto fully cover recurrent maintenance expenditures includingequipment depreciation.

- 80 -

ANNEX V

CHAD

THIRD HIGHWAY PROJECT

Technical Assistance for StrengtheningEquipment Maintenance Operationsof the Directorate of Public Works

Outline Terms of Reference

Oblectives

1. The objectives of the technical assistance are the following:

(a) to establish the new Equipment Inspection Office (EIO) andProcurement Office (PO);

(b) to convert subdivision workshops into equipment centers;

(c) to assist DPW in (i) purchasing road equipment and all otherequipment or tools related to the use and maintenance ofroad equipment; (ii) supervision of construction worksand improvement of Buildings; and (iii) setting up toolsand equipment;

(d) to train on the job, management personnel and, in general,staff required for the offices mentioned in (a) and (b)above; and

(e) to establish a cost accounting system for equipment.

Composition of the Team

2. A team of six technical assistance experts will be assigned to DPW.The composition of the team and the estimated length of service of each expertcan be summarized as follows:

Expert Man months

a. for EIO: one mechanical engineer (or seniortechnician), Chief of Mission 30

b. for PO: one senior mechanical technician 30

c. for Subdivision workshops: four mechanics(30 man months each) 120

180

- 81 -ANNEX V

The exact composition and schedule of activities of the team will be definedin agreement with DPW so as to best meet the objectives of strengthening DPW.

Qualifications and Functions

3. Each expert should: (a) be fluent in French; (b) have training ex-perience in his field; (c) be experienced in working in a developing country;and (d) have education commensurate with the position to be filled. Specificqualifications and functions of the different team members are described asfollows:

Mechanical Engineer (or Senior Mechanical Technician)

4. He should have at least ten years of experience, of which six inmanaging workshops and maintaining public works equipment. He will serve asadvisor to the Director of EIO, with whom he will collaborate closely in set-ting up EIO's organization and in improving, equipping and overseeing subdi-vision procurement offices. In particular, he will:

(a) direct and supervise the rehabilitation of existingequipment;

(b) participate in all phases of purchasing spare parts,equipment, tools, etc.;

(c) plan and supervise the establishment of subdivisionprocurement offices;

(d) conceive and implement systematic methods for settingup and maintaining road maintenance equipment;

(e) conceive and carry out the establishment of an analyticalaccounting system for the sound use of equipment;

(f) define the functions of the central workshop and thesubdivision equipment centers;

(g) train technical staff assigned to EIO;

(h) standardize work methods and establish functional rela-tionships between the subdivisions using the equipmentand the central offices; and

(i) supervise the establishment and management of EIO.

Senior Management Technician

5. The technician will have appropriate technical and managerial qual-ifications, with at least seven years' experience in setting up stores andprocurement of equipment and spare parts. He will serve as Deputy to theDirector of PO. In particular, he will:

- 82 -

ANNEX V

(a) organize, in close collaboration with the mechanicalengineer/chief of mission, the new PO and supervise itsoperation;

(b) recei've and verify orders for spare parts submitted bythe subdivisions and order those parts which PO doesnot have in stock;

(c) follow up orders with suppliers and ensure the ship-ment and distribution of ordered spare parts; and

(d) provide on-the-job training to Chadian staff, i.e.,the procurement officer, forwarding agent, storemenand accountant.

Four Mechanics

6. These mechanics will be well qualified and will have at least fiveyears' experience in repairing and maintaining public works equipment. Theywill participate in organizing the subdivision equipment centers and ensuretheir efficient operation. They will advise either a subdivision Chief onmatters relating to equipment, or the chief of a subdivision equipment center.They will be assigned to subdivision headquarters and will occasionally takefield trips, if necessary. In addition, they will assist in the more generalactivities carried out by the experts assigned to EIO and PO.

- 83 -ANNEX VI

CHAD

THIRD HIGHWAY PROJECT

Technical Assistance for the Reorganization of theRoad Planning and Design Office

Outline Terms of Reference

Qualifications and Duties of the Engineer/Economist

1. He should hold a graduate degree in highway engineering with somebackground in transport economics and have at least five years' experiencein the technical and administrative aspects of preinvestment studies, engi-neering design, project execution and supervision of works. He should speakand write fluent French. Experience in a developing country is preferred.

2. The expert will be the technical advisor to the Director of RPDOand assist him in the tasks outlined in paras. 3-6. He will participate inthese tasks and train Chadian staff so that they would be able to continuethe work once the expert's services have been expired.

3. RPDO's tasks consist of: (a) planning of road investments; (b)design of road improvements and construction; and (c) supervision of roadconstruction. These activities are detailed below.

Road Investment Planning

4. This ftnction will encompass the following activities:

(a) road inventory and classification, to be revised periodi-cally as necessary;

(b) traffic studies with periodic updating, to be carried outwith the assistance of DPW subdivisions;

(c) traffic data analysis and forecasts, including a programof vehicle weighing control;

(d) preparation of design standards for different types ofroads;

(e) determination and annual revision of unit prices for roadmaintenance and construction;

(f) determination and annual revision of vehicle operatingcosts;

(g) preparation of the annual road investment budget; and

- 84 -ANNEX VI

(h) execution of road improvement feasibility studies orsupervision of those prepared by consultants.

Road Improvement and Construction Projects

5. RPDO will assist in preparation of final engineering and biddingdocuments for road improvement and construction projects under DPW's respon-sibility. It will prepare in-house technical studies for small projects andsupervise the more complex studies prepared externally.

Supervision of Road Construction Works

6. RPDO will be responsible for supervision of road construction worksunder DPW's charge. The works will be supervised by RPDO within the limitsof available personnel. RPDO will oversee works supervised by other offices.

- 85 -

ANNEX VII

CHAD

THIRD HIGHWAY PROJECT

Outline Terms of Reference and Qualifications for aTransport Economist for the Directorate of Transport

1. The transport economist will help the Director, DT, to organize DTand assist in elaborating and applying a rational transport policy. In par-ticular he will:

(i) participate and supervise in the collection and annualpublication of transport statistics and preparationof technical reports on:

(a) vehicle fleet inventory by type and age, on acountry-wide basis with provisions for annualupdating;

(b) proposal for revised of surface transport tariffsin light of the recommendations made by consultantSEDES, under the Second Highway Project, and consultantORGATEC;

(c) review of road user charges from the viewpoint ofequity and efficiency considerations, includingthe identification of financial resources forcreating a financially autonomous road mainte-nance authority by 1985, and fiscal measuresaimed at reducing the cost of spare parts toensure improved vehicle maintenance;

(d) assessment of the future needs of the vehiclefleet in light of the present excess truckingcapacity, and if necessary, recommendations forregulation of vehicle imports;

(e) recommendations for reducing import duties onspare parts and the effect of these measureson road user revenues;

(f) review of Chad's international transit agree-ments and preparation of proposals for revisionof these agreements;

(g) measures directed at harmonizing road regula-tions between Chad and its neighbors, espe-cially Nigeria; and

- 86 -ANNEX VII

(h) establishment of scheduled inter- dty bus transportin Chad.

(ii) assist. in inter-departmental coordination for transportplanning and enforcement of road traffic regulations;

(iii) develop a system of periodic analysis of freight transportdemand to establish the freight allocation system withinCTT on a scientific basis, and provide assistance to CTTon economic and statistical matters;

(iv) collect and analyse financial and operational statisticsof the transport industry (CTT, Air Tchad, and othertransport entities);

(v) establish and organize an advisory committee, comprisingrepresentatives of concerned Government ministries, shippers,CTT, freight forwarders, the Chamber of Commerce, and otherrelated groups, to help formulate a national freight transportpolicy and to resolve operational difficulties arising fromtime to time in freight transport operations. The Directorof DT would act as chairman of the advisory committee; and

(vi) establish a system for classification of trucks, and formulatecriteria for road transport operations on international anddomestic routes.

Qualifications

2. The expert should hold a graduate level degree in economics andshould have at least five years of post-graduate work experience in trans-port planning and operations. He should be familiar with regulations andtariff setting for various transport modes. He should have worked for sometime in a developing country, preferably in West Africa. He should be fluentin French.

- 87 -ANNEX VIII

CHAD

THIRD HIGHWAY PROJECT

Outline Terms of Reference and Qualifications of theTrucking Industry Expert to be Attached to CTT

Functions

1. The trucking industry expert will serve as a technical adviser(operations) to the President, CTT, and provide technical assistance to CTT'sAssistant Director responsible for freight operations. In particular, he will:

(i) review the transport operations of CTT, and suggestmethods to improve them:

(ii) evaluate the freight allocation system within CTT,and devise a more equitable and efficient method,if necessary;

(iii) collaborate with DT to:

a) establish a system for classification of trucks,and formulate criteria for operations on inter-national and domestic routes;

b) establish and organize an advisory committee forcoordinating freight transport operations;

c) recruit an appropriately qualified Chadian fortraining abroad in trucking operations; and

d) arrange appropriate practical training (for a six-month period) abroad for CTT's Assistant Director,responsible for freight operations.

(iv) explore the possibility of creating an external branchof CTT in Douala with a view to expedite transit ofChadian goods through Cameroon;

(v) determine the feasibility of establishing:

a) inter-city bus transport; and

b) workshop for maintenance of the truck fleet aspart of CTT operations; and

(vi) prepare a final report on his assignment including recom-mendations for improving the efficiency of freight transportoperations.

- 88 -ANNEX VIII

Qualifications

2. The expert should hold a graduate degree, preferably in economicsor finance, and have five years experience in the transport field with atleast three years in trucking industry operations, preferably in a freightforwarding agency or freight bureau. Managerial experience in a multi-national transport organization would be desirable. He should have workedfor some time in a francophone African country, and have familiarity withFrench transport industry regulations and legislation. Fluency in Frenchis mandatory, while some knowledge of Arabic would be useful.

- 89 -

ANNEX IX

CHAD

THIRD HIGHWAY PROJECT

Rural Roads StudyOutline Terms of Reference

A. Scope of the Study

1. The study shall examine transport needs in rural areas of Chad andpropose the most economic way of meeting these needs. Excluded from thestudy are primary and secondary roads to the extent that they do not imposean important obstacle in the way of the flow of goods and persons to and fromthe rural network. Although it is expected that the study shall be mainlyconcerned with the construction, improvement and maintenance of roads, thestudy should also examine alternative means of surface transport (e.g. appro-priate vehicles and barge transport).

2. The proposed study shall be carried out within the overall frameworkof the country's development plan and, in particular, the development of thetransport and agricultural sectors. In addition to normal engineering andeconomic criteria, the study shall concern itself with the social needs ofthe population and the extent to which the rural population can participatein the construction and maintenance of rural road facilities, or associatedinfrastructural needs (which shall be identified by the Government) such assmall dams, wells and grain stores.

3. The general objective of the study will be the development of along-term (ten-year) strategy and a four-year program of rural road develop-ment and maintenace. This strategy and program shall be related to priorityeconomic and social objectives and will include proposals for the most effi-cient way of implementation including physical, personnel and institutionalrequirements. Where it seems appropriate, consideration should also be givento road making units' participation in other infrastructure activities in theareas in which they are already working.

B. Methodology of the Study

Identification and Preparation Program

(a) study and identification of economic and social goals andthe translation of these into specific projects and proj-ect areas;

(b) determination of existing and future transport needs tomaintain efficiently existing economic and social activityand to promote planned economic and social activity, payingparticular attention to population patterns, existing andpotential agricultural production and the needs of surplusand deficit areas; consideration should be given to ongoingroad programs and agricultural projects;

- 90 -

ANNEX IX

(c) inventory of existing transport facilities, and hydrological

data, soils and materials surveys, and estimation of thecost of transportation using the existing facilities;

(d) estimate of the cost of constructing, improving and main-taining identified transport needs to the most economiclevel, paying particular attention to construction tech-niques, including local participation and estimation oftransport cost savings associated with the improvements;

(e) study and evaluation of the agricultural potential withinareas of interest; this study shall be supported by a suf-ficiently detailed sociological/anthropological assessmentof huiman attitudes, achievements and potential;

(f) evaluation of induced economic and social benefits thatwould follow from improvements to the transport system;in producing these estimates, attention should also bepaid Ito possible associated infrastructure investments;

(g) a cost benefit analysis of the proposed transport improve-ment projects and associated infrastructure investmentsover a ten-year period using, where appropriate, economicand shadow pricing techniques; and

(h) preparation of a long-term strategy and a four-year programof rural transportation improvement and maintenance, basedon the above surveys and analyses, paying due regard toareas of risk and uncertainty.

Implementation Strategy

(a) examine the structures and capabilities of existingorganization engaged in construction, improvement andmaintenance of transport facilities in relation to theproposed improvement program and other commitments;

(b) recommend the optimum practical method of executing theproposed program (considering (a) above) including, wherenecessary, institutional and administrative changes;

(c) specify the needs in equipment, spare parts, ancillaryservices and buildings to carry out the proposed program;

(d) specify technical assistance needs at all levels andChadian personnel to carry out the proposed program;

(e) specify training needs for implementing the proposed pro-gram and for providing a capability within the Governmentto undertake future studies, design and project implemen-tation; and

(f) use of the Government's Directorate of Mines and ENTP, withappropriate technical assistance, to carry out the soilsand materials survey.

- 91 -ANNEX X

CHAD

THIRD HIGHWAY PROJECT

Economic Analysis of the Project

A. Engineering-Economic Analysis of the Road Maintenance Program

1. The evaluation of the maintenance program is based on a dynamicanalysis that relates maintenance costs to vehicle operating cost (voc)savings by evaluating the effect of maintenance operations on road sur-face condition which, in turn, influences the cost of vehicle operation.The mathematical models that relate road surface condition and vehicleoperating costs to traffic were developed under the IBRD/TRRL researchprogram in Kenya.

Road Deterioration Relationships

(a) Lateritic Gravel Roads

R = 3250 + 84 T - 1.62 T + 0.016 T

RD = 11 + 0.23 T - 0.0037T + 0.000073T3

LD = 1.5 + 14e

T2

GL = 0.9 5 - (4.2 + 0.092T + 3.5 R + 1.88 VC)

a

(b) Sandy-Clay Earth Roads

R = 3250 + 785 T

RD = 14 + 1.2 T

LD = 1.5 + 14e 023T; under dry grading with LD > 10.0 mm.

LD = 1.0 , under wet grading

- 92 -

ANNEX X

(c) Tracks

R 3250 + 1255 T

RD = 14 + 1.2 T

LD = 1.5 + 14e 0-23T; with LD > 10.0 mm.

where, R = mean roughness (mm/km)

RD = rut depth (mm)

LD = depth of loose material (mm)

T = cumulative traffic volume in both directionssince last grading (thousands of vehicles)

GL = annual gravel loss (mm)

T = annual traffic volume in both directionsa (thousands of vehicles)

RI = annual rainfall measured in meters

VC = rise and fall, vertical curvature (%)

The Kenya study relationships for sandy-clay earth roads and tracks weremodified to reflect the relatively dry environment in Chad.

Vehicle Operating Cost Relationships

2. Except for vehicle depreciation, crew cost, and insurance, all otherVOC components were calculated for four typical vehicles using the Kenya Study 1/equations relating the various physical components (e.g. fuel consumption) ofvoc to road surface deterioration functions. For vehicle depreciation, themethod recommended in "Quantification of Road User Savings" 2/ was used. Phys-ical components of VOC were then translated into costs, net of taxes. The re-view of these results showed that once the road characteristics were fixed,both road surface deterioration parameters and vehicle operating costs wouldbe related to the same common variable, traffic. Accordingly, the composite

1/ TRRL Report 672 "The Kenya Road Transport Cost Study: Research onVehicle Operating Costs," 1975.

2/ World Bank Staff Occasional Paper No. 2, 1966.

- 93 -

ANNEX X

vehicle operating costs determined for the four vehicle types were regressedwith cumulative traffic (T). The results of the regression analysis arepresented in Table 1. The average road and environmental characteristicsassumed in developing VOC relationships are: moisture content, 3%, averagerise, 30 m/km; average fall, 30 m/km; average horizontal curvature, 175degrees/km; and average altitude, 375 m. Although these characteristics aresomewhat severe, the sensitivity of VOC to these elements, within the rangeused in this evaluation, was not significant. One of the reasons for usingthese characteristics was to reconcile actual consumption of VOC componentsobserved in Chad to those predicted by the model.

Traffic

3. Since the available traffic counts date back to 1970, forecastsfor 1978 were made by relating general economic trends to traffic. It wasassumed that there was no traffic growth during 1970-74 (the drought years);between 1975-78, 3% traffic growth per annum in Cotton Zone, 2% aroundN'Djamena and 1% in the Sahel Zone. Beyond 1978, an average traffic growthof 3% per annum was assumed for the whole network. These estimates weremodified to account for a diversion of 35-40,000 ton of international traf-fic from the Transequatorial to the Cameroonian route between 1970-74. Thedistribution of traffic by vehicle type was assessed in the light of 1970traffic counts and changes in the characteristics of the vehicle fleet sincethen.

Determination of Benefits from Reduced Vehicle Operating Costs

4. With the formulation of VOC equations shown in Table 1, savingsin vehicle operating costs can be estimated directly as follows:

(i) determination of a composite VOC equation byweighting the VOC equations for differentvehicles by their respective percentages inthe traffic distribution;

(ii) summation of the total vehicle operating costsfor the accumulated vehicles between gradingintervals for a given maintenance strategy (e.g.2 gradings/year);

(iii) summation of the total vehicle operating costsfor the accumulated vehicles between gradingintervals for an alternate maintenance strategy(e.g. regravelling and 2 gradings/year);

(iv) calculation of VOC benefits as the difference oftotal vehicle operating costs corresponding tothe two maintenance strategies, respectively.

- 94 -ANNEX X

Mathematically, this can be expressed as:

VOC Savings = Sf(T)1dT - 5f(T)2dT

where: f(T)1 - VOC equation corresponding to strategy 1

f(T)2 = VOC equation corresponding to alternate strategy 2

This procedure simplifies the calculation of benefits and does not requirediscrete addition of vehicle operating costs. For example, VOC benefits fromtwo gradings per year, as compared to one grading per year on a sand-clayearth road, for a traffic stream containing only light vehicles (VL) can beexpressed as:

X L

B = SIOOO (50721 + 3152.7T - 61.16T2) dT - 2(1000) 50721 + 3.152.7T - 61.6T2) dl

= 100003152.72 - x2) 61.16(x3 - x

where: x = accumulated number of vehicles per year in thousands

B = VOC benefits in CFAF/1000 km

Determination of Maintenance Strategies

5. The design of the maintenance program required the determinationof the traffic level at which regravelling would be economically justified,and the optimal grading strategies for various classes of roads to be in-cluded in the routine maintenance program. The Bank's Highway Design andMaintenance Standards Model was used for this purpose. The summary of theresults showing breakeven averaged daily traffic where regravelling becomeseconomically justified as a function of unit cost of regravelling is shown inExhibit I. The benefits used in this analysis included incremental reductionsin vehicle operating costs due to regravelling as compared to routine main-tenance and stockpiling costs for two months, resulting from road closuresto all-weather service. For one-month continuous stockpiling, the totaldiscounted storage costs were estimated at CFAF 0.2 million per km of roadclosure. On basis of this analysis, it was concluded that: (i) 7 meter wideregravelling by contractor was economically justified only on roads with basetraffic over 65 vpd; and (ii) about 400 km with base year ADT in the range of45-50 vpd could be included in the regravelling program by the trainingbrigade.

6. The optimal grading strategies for routine maintenance wereobtained by determining the grading frequency that resulted in maximumnet present value for a given class of road (Table 2).

- 95 -

ANNEX X

Benefit/Cost Analysis of Regravelling (Periodic Maintenance) 1/

7. (M) Costs - Total cost of equipment for the training/production brigade; cost of technical assistancedirectly used for operation of the training brigade;and operating recurrent costs of the brigade.

(ii) Benefits - Incremental reduction in vehicle operatingcosts over and above the reduction produced by incre-mental routine maintenance.

(iii) Salvage Value - (a) At the end of the project period,regravelling equipment would have been used for onlyone-half of its economic life, therefore a 50% salvagevalue was assumed; and (b) as the regravelling cyclewas calculated to be about 8 years, the remainingthickness of the gravel surface was assigned a ter-minal value.

(iv) Traffic - Traffic was assumed to grow at a rate of3% per annum with a base year weighted ADT of 51vehicles. Traffic distribution was taken as lightvehicles (VL)-45%, 13t medium trucks (CMS)-15%, 27tmedium truck-trailer (CMR)-25%, and 38t heavytruck-trailer (CLR)-15%.

(v) Economic Return - IRR = 16.7%

B/C @ 12% = 1.31B/C @ 15% = 1.11

The details of the analysis are presented in Table 3.

Benefit/Cost Analysis of Routine Maintenance

8. The network was first classified into 15 sections according totype of road and the estimated traffic distribution (Table 4). The main-tenance output with and without the project is given in Table 5. Benefitswere taken as the VOC savings resulted from routine maintenance operationswith and without the project and accumulated over 15 classified sectionsand categorized in three broad road categories. The details of the analysisare presented in Table 6.

(i) Costs - Cost of maintenance and workshop equipment, spareparts, buildings, technical assistance for strengtheningDPW (other than road planning) and incremental recurrentmaintenance expenditures;

1/ The results of all benefit-cost analyses reflect costs and benefitsadjusted by appropriate shadow-pricing factors, namely 1.15 forforeign exchange and skilled labor, and 0.30 for unskilled labor.

- 96 -

ANNEX X

(ii) Benefits -. Reduction in vehicle operating costsdue to improved routine maintenance;

(iii) Traffic - 3% growth per annum; traffic distributionas given in Table 4;

(iv) Economic Return - IRR = 75%

B/C @ 12% = 3.25

B/C @ 20% = 2.66

Benefit/Cost Analysis of Maintenance and Training Programs Combined

9. As it was difficult to distribute the benefits of the trainingprogram between periodic and routine maintenance, a further analysis, includ-ing the training program costs, was made. The additional costs (besides thecosts of regrave]Lling and routine maintenance) comprised:

(i) 81% of cost of technical assistance and recurrentexpenditures for the training center, spread overfour years reflecting the proportion of trainedpersonnel to be assigned to the project. Proratedcost (81%) of training equals CFAF 88.8 million peryear for technical assistance and CFAF 48.3 millionper year for operating expenditures over a 4-yearperiod. As the benefits of the training program wereassumed to be distributed over about 25 years, a 66% 1/residual value was assigned to the training programcost included in the analysis.

(ii) The life of equipment for the training center was takenas 15 years. These equipment costs, amounting to CFAF 21.5million in the first year of the project, were also in-cluded in the analysis; the equipment is assumed to havea 33% salvage value.

(iii) The combined incremental vehicle operating cost savingsfor routine and periodic maintenance were taken as benefits.

(iv) The economic rate of return for the overall maintenanceprogram was found to be 51.4%, equivalent to a benefit/costratio oE 2.2 discounted at 12%.

1/ 66% = (15/25 + 16/25 + 17/25 + 18/25) 1/4. Residual value of first yeartraining program cost was taken as 15/25; for the second third and fourthyears, cost residual value was assumed to be 16/25, 17/25 and 18/25 res-pectively.

- 97 -ANNEX X

B. Economic Analysis of Ferries

General

10. The project includes the replacement of four ferries at Bongor, Lai,Bousso, and Hellinbongo through local construction of ferry boats. The exist-ing ferries are over 30 years old and are subject to frequent breakdowns caus-ing extended traffic delays. It is estimated that ferry service at the abovelocations will cease to function within the next five years; the Hellibongoferry, however, could be restored with provision of new boats and relatedappurtenances.

Costs

11. The costs of this project component include expenditures for de-tailed design and specifications, cost of technical assistance for worksupervision and training, and cost of workshop equipment and constructionmaterial. Of these costs, the share assigned to the project were 70% ofdesign costs and 100% of all other capital expenditures. The costs weredivided equally among the four ferry boats. All costs are expressed inDecember 1977 prices. The expected life of new ferries is 25 years with asalvage value of about 10%.

12. The maintenance cost of existing ferries is estimated at CFAF 2.2million per ferry and is expected to increase by 10% per annum during theremaining 5 years of the estimated life span of the ferries. Engine re-newal on new ferries is expected every 15 years while, on the old ones,the renewal cycle was 10 years. Maintenance cost of new ferries is esti-mated at CFAF 0.64 million. For Hellibongo, the option of renovating theexisting ferry was also considered. The total cost of improvements wasestimated at CFAF 42.6 million spent over two years. These improvementswould reduce the existing maintenance cost of Hellibongo ferry by about50%. Future average maintenance cost of new ferries, as well as theHellibongo ferry, were assumed to remain constant during the first fiveyears, to increase by 15% for years 6 to 15 and by 35% for years 16 to 25.

13. The operating cost of existing ferries comprises an estimatedfixed cost of CFAF 1.15 million/year and a variable cost of CFAF 1400 perhour of operation, while, for new ferries, the fixed and variable costs areCFAF 0.73 million, and CFAF 2630/hr, respectively. The time for an averageround trip by existing ferries is about 30 minutes while, for the new fer-ries, it is estimated to be 20 minutes.

Benefits

14. General benefits associated with provision of new ferries consistof reduction in maintenance and operation costs of the ferries and vehicleoperating cost savings from traffic diversion to shorter routes, use of

- 98 -ANNEX X

larger trucks, reduced waiting time, and avoidance of economic dislocationresulting from the loss of ferry service. Vehicle operating costs used incalculating voc savings were estimated as follows according to road type andvehicle:

Vehicle Type Road Surface VOC (CFAF/km)

CLR Paved 181Gravel (ERL) 225Gravel (PERL) 248Earth (SC) 282Track (Maintained) 309Track (Unmaintained) 434

CMR Earth (SC) 219Track (Maintained) 239Track (Unmaintained) 350

GMS Track (Maintained) 134Track (Unmaintained) 161

Handling costs avoided under the project were valued at CFAF 500/ton.

a. Bongor Ferry

15. Situated 240 km upstream from N'Djamena on the Logone River,the Bongor ferry serves to connect Bongor with the international routesin Cameroon. It also provides the only direct link between Bongor, theprefecture headquarters, and parts of Mayo Kebbi prefecture across theLogone. Although the existing ferry has a payload capacity of 25 t, itsdeck cannot accommodate truck-trailer units. With the provision of newferry, cotton export traffic originating in Onoko and Bongor, and destinedto N'Gaoundere or Garoua would travel via Fianga and Lere rather than viaLai, Kelo and Lere. It is also estimated that 50% of cotton transportdemand generated by the ginneries at Fianga, Pala and Gounou Gaya would beserviced by trucks on the return haul from N'Djamena via Bongor rather thanvia Lai. With complete disruption of existing ferry service expected in fiveyears, about 1/2 of the light and medium truck traffic would be obliged totravel an extra 100 km on every trip from Bongor to the left bank of Logone.Benefits derive from voc savings resulting from diversion of export trafficto new ferry and avoidance of diversion of local traffic to longer routes.Traffic projections and details of the economic analysis are given inTables 7 and 8. The estimated economic rate or return for Bongor Ferryis 60% with first year benefits of about 48%.

b. Lai Ferry

16. Situated on the Logone, 390 kilometers upstream from N'Djamena,the existing ferry cannot handle heavy traffic between Moundou and N'Djamena.The provision of a larger ferry would reduce the distance between N'Djamenaand Moundou, by 93 km for transport of fuel, beverages and other general

- 99 - ANNEX X

merchandise using heavy trucks. Additional benefits would accrue to trans-port ofE seed cotton from the right bank of Logone to the ginnery at Kelo,which has excess capacity. The external transport of cotton ginned at Guidariwould gain from vehicle operating cost savings resulting from a distance re-ductioa of 147 km. Traffic projections and details of economic analysis aregiven in Tables 9 and 10. Based on the foregoing assumptions, the investmentin Lai ferry is expected to yield an economic return of 44% and first yearbenefits are estimated at 43% of investment costs.

c. Bousso Ferry

17. Located 300 km downstream from N'Djamena on the Chari River, itconnects Bousso, a market town and the administrative center of the Boussosub-prefecture, located on the right bank of Chari with the main N'Djamena-Sarh route. The ferry is indispensable to the operation of the ginnery inBousso, as about 60% of seed cotton ginned here comes from the left bank.Since the ferry cannot accommodate truck-trailers, baled cotton is firstferried across the river in small trucks to Mogo where it is transferredto larger trucks for export. The envisaged development of 16 irrigationperimeters in the vicinity of Bousso would depend on the ferry for trans-port needs. If the ferry service were to terminate, Bousso would be effec-tively isolated, its only outside link being to Massenya via tracks thatare virtually impassable. Traffic projections and details of the economicjustification are presented in Tables 11 and 12. Although the first yearbenefits for this ferry are lower (about 11%) compared to other ferries,the ferry needs to be replaced as early as possible to avoid the possibilityof economic dislocation in the Bousso area. The economic return for Boussoferry is estimated to be about 27%.

d. Hellibongo Ferry

18. Serves as the southern gateway to the Sahel zone. Of all theferries included in the project, Hellibongo has the highest justificationin terms of its impact on the economy of the region it serves. Loss offerry service at Hellibongo would result in closure of cotton ginneriesin Kyabe and Am Timan, return to subsistence farming on land used for grow-ing cotton on the right bank of Chari near Sarh, and permanent disruptionof the only viable transport link between Sarh and the Sahelian prefecturesof Guera, Ouaddai and Salamat. The ferry is also vital to petroleum andmineral exploration in north Chad; in fact, the ferry was partially reno-vated recently with assistance from petroleum exploration companies. Thetraffic projections and details of economic justification are presented inTables 13 and 14. The primary benefits result from reductions in ferry main-tenance and operating costs, avoided handling charges, and substitution ofsingle-unit trucks by larger capacity truck-trailer units for transport ofcotton from ginneries at Kyabe, Am Timan, and Melfi. The economic rate ofreturn for replacement of this ferry is 31% with first year benefit esti-mated at 24%.

CHAD

THIRD HIGHWAY PROJECT

Vehicle Operatin,; Cost Equations

1/ Upper BoundRoad Surface VOC Estimation Equation- Maximum 'Number of Coefficient of Standard Error Limits onVOC

and T Observation Determination of Estimate (CFAF'G0jVehicle Type R2

2/l nterite-VL VOC = 52264 + 2.31T2 100 19 0.985 453 76CMS VOC = 96147 + 5.30T2 100 19 0.991 802 150CMR VOC = 169780 + 10.34T2 S0 19 0.984 2091 250CLR VOC = 211172 + 13.64T2 80 19 0.984 2683 300

3/

Sand-Clayl3 VOC = 50721 + 3152.7T - 61.16T2 30 17 0.987 1646 92CMNS VOC = 94560 + 4547.OT - 65.18TZ 30 17 0.994 2056 173 1C'R VOC = 165690 + 8509.3T - 106.95T2 30 17 0.994 4154 325 H

CLR VOC = 204287 + 12591.9T - 194.71T2 30 17 0.994 5510 410 -

TrackVI VOC = 50681 + 5270.5T - 197.24T2 + 0.07T4 30 17 0.986 1817 91CMS VOC = 94212 + 7605.7T - 259.54T2 + 0.1OT4 30 17 0.991 2528 170CYR VOC = 165393 + 14300.5T - 475.21T2 + 0.20T4 30 17 0.992 4712 330CLR VOC = 203632 + 21188.9T - 747.90T2 + 0.30T4 30 17 0.990 7102 410

1/ VOC's on partially engineered roads taken 10% higher Legendthan V0C's on engineered roads. T = Cumulative traffic volume since last grading in

2/ Applies to gravel roads with at least 4cm of laterite. both directions (1000 vehicles).3/ Applies to earth roads, and gravel roads with less VOC = Vehicle Operating Cost (CFAF/1000 km).

than 4cni of laterite surface. VL = Light goods vehicle (2.5 t).CM S = Medium truck (13 t).CiR = Medium truck/trailer (27 t).CLR = Feavy truck/trailer (38 t).

Source: Mission estimates. lb

H >1

- 101- ANNEX XTable 2

CHAD

THIRD HIGHWAY PROJECT

Optimal Grading Frequencies

Gravel Roads Earth Roads Tracks(Laterite) (Sand-Clay)

1. Approximately optimal number of 7000 5000 3000vehicle passes per blading

2. Base Year Traffic = 45 vpd

(a) t (45 vpd X 30) 5.2 3.7 2.2

Grading Interval (months) 5 4 2

Grading Frequency/Year 2 3 6

3. Base Year Traffic = 20 vpd

(a) + (20 vpd X 30) 11.7 8.3 5.0

Grading Interval (months) 12 8 6

Grading Frequency/Year 1 2 2

4. Base Year Traffic = 6 vpd

(a) ; (6 vpd X 30) - - 16.7

Grading Interval (months) - 12

Grading Frequency/Year - 1

Source: CPS (Transportation)

- 102 - ~~~ANNEX _X- 102 - Table 3

CHAD

THIRD HIGHWAY PROJECT1/

Regravelling - Benefit/Cost Analysis

BenefitsCosts (CFAF millions) VOC Savings (CFAF millions)

Year Equipment2 Technical Recurrent Regravelling!/ NetAssistance3/ Expenditure Salvage Value -Alt.15J/ *Alt.21/ Incremental6/

Benefits(Alt.2-Alt.1)

1 448.8

2 19.5 113.6 167.4 196.6 24.2

3 19.5 113.6 175.8 252.3 76.5

4 19.5 113.6 182.8 313.6 130.8

5 -224.4 19.5 113.6 192.4 394.8 202.4

6 648.8 897.2 248.4

7 660.1 921.9 261.8

8 673.1 950.9 277.8

9 -141.9 685.6 979.8 294.2

Without Shadow Prices: IRR = 17.2% With Shadow Prices: IRR = 16.7%B/C @12% = 1.26 B/C @ 12% = 1.31B/C @15% = 1.10 B/C @ 15% = 1.11

1/ The analysis is based on the following assumptions: (a) equipment life = 8 years with a50% salvage value aEter 4 years; (b) traffic growth = 3% per annum; (c) base ADT =51 vpd; (d) all benefits and costs in Dec. 1977 prices; (e) benefits realized throughincremental reduction in vehicle operating costp; and (f) regravelling(lOnthick) calculatedcycle to be about 8 years, reflecting an average annual gravel loss of about 12mm/year.

2/ 100% of training brigade equipment costs assigned to regravelling operations; the50% salvage value applied at end of training program.

3/ 100% of technical assistance directly used to supervise regravelling operations.4/ Salvage value of remaining gravel, (448.8+ 4(133.1) - 224.4) X (1/8 + 2/8 + 3/8)1/4 =

CFAF 141.9 millions.5/ Maintenance Alternative"l"= 2 gradings/year + other routine maintenance

Maintenance Alternative"2"= Regravelling @ 100 km/year + 2 gradings/year + otherroutine maintenance.

Without Project Case = one grading/year + other routine maintenance for initial three yearsof project, no maintenance thereafter.

6/ Net Incremental Benefits Due to Regravelling = (VOC2 - VOCO) - (VOC1 - VOCn), wheresubscripts refer to maintenance alternativesand VOC to vehicle operating costs.

Source: Mission estimates.

- 103 - ANNEX XTable 4

CHAD

THIRD HIGHWAY PROJECT

Classification of Road Network for Economic Analysis of Routine Maintenance

Section: Road Type Length Weighted Base Distribution of Traffic(km) ADT (vpd) %VL %CMS %CMR %CLR

1. Engineered Laterite (ERL) 395 51 45 15 25 15

2. Engineered Laterite (ERL) 276 15 45 15 25 15

3. Partially Engineered Laterite (PERL) 79 47 45 15 25 15

4. Engineered Sand-Clay (ERSC) 63 45 45 15 25 15

5. Engineered Sand-Clay (ERSC) 98 41 45 30 0 25

6. Engineered Sand-Clay (ERSC) 175 17 45 30 0 25

7. Partially Engineered Sand-Clay 83 30 45 30 0 25

8. Partially Engineered Sand-Clay (PERSC) 49 34 45 15 25 15

9. Partially Engineered Sand-Clay (PERSC) 150 17 45 15 25 15

10. Partially Engineered Sand-Clay (PERSC) 259 9 45 30 0 25

11. Major Tracks 99 34 45 15 25 15

12. Major Tracks 846 17 45 15 25 15

13. Major Tracks 72 13 45 55 0 0

14. Minor Tracks 1544 5 45 55 0 0

15. Minor Tracks 1130 7 45 15 25 15

TOTAL 5318

VL = Light goods vehicle (2.5 t).CMS = Medium truck (13 t).CMR = Medium truck-trailer (27 t).CLR = Heavy truck-trailer (38 t).

Source: Mission estimates.BCEOM

- 104 - ANNEX XTable 5

CHAD

THIRD HIGHWAY PROJECT

Maintenance Output

Routine MaintenanceYear Without Maintenance With Maintenance Regravelling

Program (km) Program (km)_ (km)

Gravel Earth Tracks TotalRoads Roads

1 474 161 965 1600 -

2 474 161 565 1200 18001' 100

3 474 161 165 800 531821 100

4 400 - - 4003/ 5318 100

5 - 5318 100

6 - 5318

7 - 5318

8 - 5318

9 3 545-/

1/ Only one-third of program output corresponding to the amount ofequipment delivered in the previous year.

2/ Distribution of roads and tracks to be maintained as defined in the project.

3/ The existing- equipment pool estimated to have outlived its economiic life.

4/ Two-third of program output corresponding to the remaining useful life ofequipment , provided under the project

Source: Mission estimates.

CHAD

THIRD HIGHWAY PROJECT

Routine Maintenance - Benefit-Cost Analysis I/

COSTS BENEFITSYear Capital Investment (CFAF million) 2/ Recurrent Maintenance Costs (CFAF million) -Iitemental VOC 'Savlngsll (CFAF millions)

Equipment & Buildings Technical-3/ With Project Without ProjectAl Incremental Costs5/ GRAVEL ROADS EARTH ROADS TRACKS (3691 km) TOTALSpare Parts Assistance ER (671 ki) PER (79 km6 ER (336 km) PER (541 km)

1 360.8 173.5 152.2

2 721.6 347.0 152.2 120.8 120.8 - 45.8 9.8 21.7 34.9 281.5 393.7k3 152.2 362.4 100.4 262.8 157.6 115.7 106.1 220.9 1013.9 1614.2

4 362.4 100.4 262.8 151.1 117.9 197.7 306.0 1042.1 1814.8

5 362.4 59.7 302.7 143.9 120.4 311.1 348.9 1108.6 2032.9

6 362.4 59.7 302.7 208.0 123.0 353.7 354.5 1178.1 2217.3

7 362.4 59.7 302.7 323.2 125.4 362.0 363.3 1197.2 2371.1

8 362.4 59.7 302.7 575.2 127.8 369.7 372.1 1218.7 2663.5

9 362.4 59.7 302.7 661.7 130.1 379.0 350.5 1239.8 2761.1

10 -260.2-/ 241.6 59.6 181.9 453.6 88.4 257.8 261.7 848.0 1909.5

Without Shadow Prices: IRR = With Shadow Prices: IRR = 75.07.BB/C @ 12Z = 3.17 B/C @ 12% = 3.25B/C a 20% = 2.60 B/C @ 20% = 2.66

1/ The analysis is based on the following assumptions: (a) Equipment life = 8 years; (b) traffic growth - 3% per annum; (c) all benefits and costa in Dec. 1977 prices and (d) benefitsrealized through reduction of vehicle operating costs by routine maintenance.

2/ One-third of capital expenditure for equipment, spare parts and buildings in year 1, remaininp in year 2.

3/ 100 percent costs of technical assistance for DPW reorganizations (except road planning) assigned to routine maintenance operations.

4/ GFAF 56.3 million for salaries of permanent road maintenance field staff.

5/ Only 1/3 of incremental recurrent costs and VOC savings assigned to project in year I and 2/3 of incremental costs and VOC savings assigned to project in year 10.

6/ ER = Engineered Roads; PER = Partially Engineered Roads,

7/ Salvage value of buildings estimated at 50% of cost.

Source: mission estimates.

- 106 - ANNEX XTable 7

CHAD

THIRD HIGHIWAY PROJECT

Bongor Ferry - Traffic Projections

I/Year Annual Traffic- 2/

No. of No. of Round Trips -

VehiclesVL CMS

Without Project

1979 2750 2750 3667

19823/ 3000 3000 4000

With Project NL CMS CLR (cotton)From Onoko Return Haul& Bongor From NDiamena

1980 2832 2832 138 597 2556

1982-4/ 3000 3000 153 655 2404

1985 3267 3250 167 713 2612

199 5/ 3790 3500 194 826 2940

2005 3790 3500 194 826

1/ Traffic operations confined to dry season (about 250 days/year). Cotton trafficassumed to grow at 5% per annum until 1982, 3% thereafter; other traffic estimatedto grow at 3% per year.

2/ Round trips estimat'ed on following basis: (a) Existing ferry - 1.5vehicles/roundtrip;(b) New ferry - 3 light vehciles or medium trucks per round trip, 2 truck-trailersper round trip for local traffic and 1 truck-trailer per round trip for return haulfrom NDjamena.

3/ Existing ferry estimated to cease operations.

4/ Estimated commodity flows: cotton fiber from Onoko (1,415 t); from Bongor (500 t);and one-way return haul from N'Djamena (16,400 t).

5/ ferry traffic assumed constant after 1990 due to uncertainties in economic andtraffic forecasts.

Source: mission estimates, BCEOM

- 107 - ANNEX X

CHAD Table 8

THIRD HIGHWAY PROJECT

Replacement of Bongor Ferry - Benefit Cost Analyois

Year Capital Costs (CFAF million) Recurrent Costs gCFAF milliol) Benefits (CFAF million)Desig Technical Materials Operating Costs Maingenance Costs voc savings from

Assistance and Labor Without With Without With D$version of l/ Avoidance of2jProject Project Project Project export traffic Diversion of

to new ferry local trafficto longer route

1 (1978) 3.4

2 10.8 58.5

3 3.80 2.71 2.84 Q,64 30.72

4 3.88 2.78 3,11 0,64 31.67

5 -1.1 2' 3.96 2.84 3.43 0.64 32.63

6 2.90 0,64 34.22 32.53

7 2.96 0.64 35.40 33.48

8 3.02 0,73 36.35 34.44

9 3.08 0.73 37.41 35.50

10 3.14 0.73 38.69 36.57

11 3.19 0.73 39.75 37.63

12 3.25 0.73 40.92 38.8'

13-16 3.31 0.73 42.09 39.97

17 3.31 8.73-/ 42.09 39.97

18 3.31 0.86 42.09 39.97

19-26 3,31 0.86 42.09 39.97

27 9.9 3.31 0.86 42.09 39.97

Without Shadow Prices: IRR = 59% With Shadow Prices: IRR =60%B/C a 12% = 5.60 B/C @ 12% = 5.72

FYB = 46.8% FYB = 48%

1/ Export traffic crossing the ferry at Bongor, instead of going to Lai wo4ld save a travel distance of 33 kmon tracks, 49 km on earth roads and 107 km on gravel roads.

2i/ Once existing ferryboat ceasesoperation, 50% of local traffic assumed to divert to longer rQutes since parts ofMayo Kebbi prefecture across the Logone River are administered from Bongor.

3/ Salvage value of the motor on existing ferry.

4/ Includes cost of replacement of motors.

5I Salvage value of new ferry.

Source: Mission estimates.

- 108 - ANNEX XTable 9

CHAD

THIRD HIGHWAY PROJECT

Lai Ferry - Traffic Projections

Annual Trafficl/Year Number of Vehicles No. of Round2/

VL CMS CMR CLR Trips by FerrySeed Beverages Cotton Fuel Other TotalCotton Merchandise

Without Project

1979 3285 2555 38933/

1982 3590 2920 4340

With Project

1980 3383 2752 309 254 247 246 171 918 2658

1981 3485 2835 333 267 254 266 181 968 2757

1982k4/ 3590 2920 357 280 261 286 192 1019 2858

1985 3922 3191 389 324 285 312 210 1131 3131

1990 4548 3699 451 414 331 361 244 1350 3650

2005 4558 3699 451 414 331 361 244 1350 3650

1/ After 1982, cotton traffic assumed to increase by 3% per year; beverage traffic by 5% peryear; fuel and other traffic by 3% per year.

2/ Round trips estimated on following basis: (a) existing ferry - 1.5 vehicle/round trip;(b) New ferry - 3 light vehicles or medium trucks/round trip, and 2 truck-trailer units/round trip.

3/ Existing ferry estimated to cease operations4/ Estimated commodity flows: seed cotton (2,500 t); beverages (3,500 t); cotton fiber

(3,280 t); fuel (4,300 m3 ); and other merchandise (2,400 t).5/ Ferry traffic assumed constant after 1990 due to uncertainties in economic and traffic

forecasts.

Source: Mission estimates, BCEOM.

ANNEX X- 109 - Table 10

CILAD

THIRD HIGHWAY PROJECT

Replcacement of Lai Ferry - Benefit Cost Analysis

Capital Costs (CFAF million) Recurrent Costs (CFAF million) Benefits (CFAF million)Year Desig Technical Materials OPerating Costs Maintenance Costs voc savings 1

Assistance and Labor Without With Without WithProject Project Project Project

1 (19,'8) 3.4

2 10.8 58.5

3 3.98 3.05 2.84 0.64 27.38

4 4.08 3.15 3.11 0.64 28.75

5 -1.1 2/ 4.19 3.25 3.43 0.64 30.12

6 3.24 0.64 31.55

7 3.44 0.64 32.99

8 3.53 0.73 34.41

9 3.62 0.73 35.70

10 3.71 0.73 36.98

11 3.81 0.73 38.28

12 3.90 0.73 39.60

13-16 3.99 0.73 40.85

17 3.99 8.733-' 40.85

18 3.99 0.86 40.85

19-26 3.99 0.86 40.85

27 -9.9 4i 3.99 0.86 40.85

Nithout Shadow Prices: IRR = 43% With Shadow Prices: IRR = 44%B/C @ 12% = 3.06 B/C @ 12% = 3.12

FYB = 42.3% FYB = 43%

1/ The larger capacity ferry to be provided under the project would allow a 48 km distancereduction on tracks for transport of seed cotton and use of truck-trailer units; a distancereduction of 48 km on tracks and 99 km on gravel (lateritic) roads for cotton export traffic;and a distance reduction of 93 km on laterite roads for domestic transport between N'Djamenaand Moundou.

2/ Salvage value of the motor on the existing ferry.

3/ Includes cost of replacement of motors.

4,' Salvage value of new ferry.Source: Mission estimates.

- 110 - ANNEX XTable 11

CHAD

THIRD HIGHWAY PROJECT

Bousso Ferry - Traffic Projections

Year Annual Trafficl/No. of No. of Round TripsVehicles by Ferry .

2/Without Project VL CMS

1979 426 2127 1702

1980 439 2474 1942

1982-/ 465 2700 2110

2/

With Project VL CMS CMR CLR

1

1981 452 1648 247 86 867

1982 465 1724 257 89 903

1985 506 2220 281 97 10985/

1990 587 2574 326 113 1273

2005 587 2574 326 113 1273

1/ Traffic growth assumed to be 3% per annum except for traffic generated by proposedirrigation perimeters.

2/ Includes traffic generated by irrigation perimeters, estimated to growfrom 156 vehicles in 1979 to 1070 vehicles in 1990.

3/ Round trips estimated on following basis: (a) existing ferry - 1.5 vehicle/round trip; (b) New ferry - 3 light vehicles or medium trucks/ round tripand 2 truck-trailer units/round trip.

4/ Existing ferry estimated to cease operations.

5/ Traffic using ferry assumed constant after 1990 due to uncertainties ineconomic and traffic forecasts.

Source: Mission estimates.BCEOM.

ANNEX X

- 111 - Table 12

CIUAD

THIRD HIGHWAY PROJECT

Replacement of rousso Ferry - Benefit Cost Analyois

Capital Costs (CFAF million) Recurrent Costs (CFAE_ __lion)_ Benefits (CFAF million_/Year I I rr-

Design Technical Materials OperatlgCgst6 VainteaanceCoPt$ 31Assistance Without ith With Savings- VoC Savings

Project Prolect Project groJe-t inHandlingCosts

1 (L978) 3.4

2

3 10,8 58.5

4 2.57 1.49 3.11 0.64 1.50 2.29

5 -1.1 4 2.62 1,52 3,43 0.64 1,55 2.35

6 1,58 0.64 26.20

7 1.63 0.64 26.97

8 1.69 0.64 27.78

9 1.72 0.73 28.65

10 1,75 0.73 29.54

11 1.79 0.73 30.42

12 1.82 0.73 31.34

13-16 1.85 0.73 32.28

17 1.85 0.73 32.385/

18 1,85 8.73 32.28

19-26 1.85 0.86 32.28

27 1.85 0.86 32.28

28 -9.9 6/ 1.85 0.86 32.28

Without Shadow Prices: IRR = 26% Wiph Shadow Prices: IRR = 27%B/C a 120 = 2.32 B/C @ 12% = 2.37

FYB . 10.2%7/ FYB = 11.017/

1I Until the existing ferry remains operational, savings in operating and maintenance costs are the primary benefits.

2/ The new larger capacity ferry would permit use of truck-trailers for hauling cotton instead of a single unittrucks, thereby reducing vehicle operating costs and eliminating the need for loading/unloading; if ferry servicewere to terminate, truck traffic would have to use 313 km of large unmaintained tracks as opposed to travellingon 156 km of paved roads and 149 km of maintained tracks between Bousso and N'Djamena.

3 Loading/unloading charges estimated at CFAF 500/ton for transport of seed cotton as well as ginned cotton.

4/ Salvage value of the motor on the existing ferry,

5/ Includes cost of replacement of motors.

6/ Salvage value of new ferry.

7i If expenditures for desigp and specifications are treated as a sunk cost, first year benefits increase to 11%,and 12% respectively for the two cases without and with shadow prices.

Souirce: Mission estimates.

- 112 - ANNEX XTable 13

CHAD

THIRD HIGHWAY PROJECT

Hellibongo Ferry - Traffic Projections

Year Annual TrafficNo. of Vehicles./ No. of Round Trips 2/

Kyabe Sarh Am Timan Melfi

3/f

Without Project VL cMS CMS CMS CMS

1979 4082 358 216 30 23 3139

1982 4461 391 266 32 28 3452

1985 4862 427 290 35 31 3763

1990 5640 495 336 40 35 4364

2005 5640 495 336 40 35 4364

With Project VL CLR CMR CLR CLR

1981 4335 91 107 7 6 1535

4461 94 114 8 7 1599

!-35 4862 103 124 9 8 17434/

ii9O 5640 119 144 10 9 2021

2005 5640 119 144 10 9 2021

1/ Traffic .rowth estimated at 3% per year.

2/ Round trips estimated on following basis: (a) existing ferry - 1.5 trips/round trip;(b) New ferry - 3 light vehicles or medium trucks per round trip, 2 truck-trailersrer round trip.

3/ Exhisting ferry assumed to continue operations witb udditionrl renovaLi2n andprovision of four new boats.

4/ Ferry traffic assumed constant after 1990 due to unce ,aintxes ir. economic andtraffic forecasts.

Source: Mission estimates; BCEOM.

ANNEX X- 113 - Table 14

CHAD

THIRD HIGHWAY PROJECT

ReplaceMent of Hellibongo Ferry - Benefit Cost Analysis

Capital Cost of Renovation Recurrent Costs (CFAF million) s 31and Purchase of 4 New Boats Oaerating Cotgata-ntaace UO5tS 3/Capital Costs (CFAF million) (CFAF million)l/ Without With Without Vith Savings2l VOC Savings__________________Project_____ect

in from(with project) (without project) Project Project erojct et Handling Conversion

Year Design Technical Materials Costs to l.arger

Assistance Capacity Trucks

1 3.4

2 21. 34

3 10.8 58.5 21.3!'

3.50 2.08 1.42 0.64 0.65 3.89

5 -1.1 -/ 3.57 2.13 1.42 0.64 0.67 4.01

6 3.64 2.17 1.42 0.64 0.69 4.126~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~67 ~~~~~~~~~ ~ ~ ~ ~ ~~~~~~~3.71 2.22 1 6/ .6 0.72 4.25

& 3.78 2.26 5.42 0.64 0.74 4.379 3.86 2.31 1.64 0.73 0.75 4.51

10 3.95 2.36 1.64 0.73 0.78 4.65

11 4240 1.64 0.73 0.80 4.78

12 4.13 2.50 1.64 0.73 0.83 4.93

13-16 4.20 2.50 1.64 0.73 0.86 5.08

17 4.20 2.50 l164 0.73 0.86 5.08

18 6/ 6/ .8 54.20 2.50 5.64 8.73 0.86 5.08

19-26 4.20 2.50 1.92 0.86 0.86 5.08

27 4.20 2.50 1.92 0.86 0.86 5.08

4.20 2.50 1.92 0.86 0.86 5.0828 -9.9 21 4.20 2.50 1.92 0.86 0.86 5.08

Without Shadow Prices: IRR = 30% With Shadow Prices: IRR = 31%B/C @ 12% = 2.39 B/C a 12°' = 2.44

FYB = 23.0% FYB = 24.0%

1/ Existing ferry capable of providing service after substantial renovation and provision of four new boats.

2/ The larger capacity ferry to be constructed under the project would permit use of truck-trailers for haulingginned cotton instead of single unit trucks, thereby reducing vehicle operating coats and eliminating theneed for load/unloading at an estimated cost of CFAF 500/ton.

3/ With larger capacity ferry, ginned cotton would be carried on truck-trailers instead of single unit trucks betweenSarh and: Ci) Ryabe (98 kmn); (ii) Ain Timan (35 km);and (iti) Nelfi (299 kmn). Seed cotton from the right banLkof Chari would be transported to Sarh over an average distance of 50 km.

41' Estimated cost of renovation spread over two years.

5/ Salvage value of the motor on existing ferry.

6/ Includes replacement cost of motors.

7/ Salvage value of new ferry.

Source: Mission estimates.

- 114 -ANNEX X

CHAD Exhibit ITHIRD HIGHWAY PROJECT

Breakeven Base ADT vs. Unit Regravelling Cost(2-month stockpiling)

80 _7-m (20%)

7-m (10%)

70 -/ 6-m (20%)

70 _ / // 6-m (10%)

65 vpd (12%) // /

60 _ / / ;/ /5~~~~~~~~~~~~~-rn (20%)60 1

5-m (10%)

50 48vpd (12%)

I-

2

a)

4 / _

30

20~~~~~~~~~~~~~~~

C~~~~~~~~.

US$/m3 6 8 10 12 14

CFAF/m*3 980 1470 1960 2450 2940 3430

Unit Regravelling Cost

(Figures in parenthesis are the discount rates)

World Bank -18219

- 115 -EXHIBIT I

CHADTHIRD HIGHWAY PROJECT

DPW Organigramme

|Ministry of Civil VVorks,||Mines and Geology

DirectorateGeneral

Directorates

Study and Hydraulics _. Drectoaef_Office PublicWok__

Contract |Ropad Planning anE . Adm in istrative Central FilingAdministration Design Office Buildings Hydraulics Services and Correspondence

(Accounting-Personnel) Office

l I I l I I 1 | ~~~~N'Djannena WaterL |Drawings Topography General | Supply and

Urbanization

N'DJA?SMENA SAR HDivision Division

EuipmetPoceen

1 1Road | Buildings and | |~ ~ Equpmen

iI I .__ |~ ~~ ~o o | Ferryboat Workshop Procuemen

Key

Hierarchic Liaisons

- - ~ - Functional Liaisons

L Office to be reorganized

1/ Temporary

To be established under the project World Bank- 18053

CHAD EXHIBIT IITHIRD HIGHWAY PROJECT

INCREMENTAL BENEFITS FROM REGRAVELLING230 -

Base ADT = 51vpd; Unit Length = 1 Km; 8-Year Project Life220 - Vehicle Distribution = 45% VL; 15% CMS; 25% CMR; 15% CLR

Traffic Growth = 3 % Per Annum

210 - \ koad ..............--n--jpv-n-->210~~~~~~~~~~~~.

200 ,A , _ r ' Y //

'7.~~~~~~Q

OsC) I77'

c 170 1 27 3 • 567

160 I ~~~//7 7 ///77777777 cl

With Proj/c (Rga777777O 120 +0004T

150

140: 10

V "'1L~~~~~A AU' C130: I'/ il 0

110 ' 100

Project Year 0 1 2 3 4 5 6 7 8

V/Year 18.6 19.2 19.7 20.3 21.0 21.6 22.2 22.9 (000' VEMH)1V 18.6 37.8 57.5 77.8 98.8 120.4 142.6 165.5 (000' VEH)

With Project (Regravelling) - VOC = 1 12.06 + 0.0064 7T 2

EW(l = Incremental VOC SavingsWith Project (No Regravelling) _ VOC= 109.07±6.11687T-0.09324T 2

from Routine MaintenanceWithout Project (No Regravelling) W,.,,,,,,,. X VOC = 109.07 t 6.11687T-0.09324T2 = Incremental VOC Savings

V= No. of Vehicle Passes in Both Directions (000' VEH) from RegravellingVOC = Vehicle Operating Cost (CFAF/Km)

T = No. of Vehicle Passes in Both DirectionsSince Last Grading (000' VEH)

World Bank -18246

CHADTHIRD HIGHWAY PROJECT EXHIBIT III

BENEFITS FROM GRADING OF TRACKS

150Base ADT = 5 vpd; Unit Length = 1 Km; 8 Year Project LifeVehicle Distribution = 45% VL; 55% CMS.

140 Traffic Growth = 3% Per Annum

E 130 -

< , P^xo'.,¶r///7//7/7/7//7/7/7/7//7//////7/7//////////////////////u- 120

_ s-////~~///////////////////////////////////////////////////////////////// s,

'0 ~~~0)~o ,/////////////////////////////////////////////////////////////7//////// .E _o) 110 .///7////7///////////////////////////////////////////////////////////// ',I

co ~~~~~~~~~~~~~~~~~~~~~~~a,-Z -,0 a-OcCu

v ///////7////7//////////7/////////////////////////////////////////////// 0 a o] a

100 L/////////,//////////////////////////////////////////////////////////7// & - -a s.23 c a' ,////////////////7///////////////////////////////////////////////////7/ s V B-' 0 a,

a, IV///////////////////////////////////////////////////////////////////// ._ CuL

sc 7////7/7/ /7/7/7/ /7/7//// /7//7/7// ,/7///o /7/7/7/, /7/7/7/, /7/7/7/,__ ,

a, /807 /7/7 /7/7 /7// /7/ /77 _77 7)777/ 70~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

> ~~~~~~~~~~~~~~~~~~~~~~~~~~IZ -i LL

80 zll ~ ~ ~ ~ ~~~~~~~ 0c

Project Year 0 1 2 3 4 5 6 7 8V/Yr - 1.83 1.88 1.94 1.99 2.05 2.11 2.18 2.24 (000' VEH)

IV 9.1 10.9 12.8 14.7 16.7 18.8 20.9 23.1 25.3 (000' VEH)

VOC = 74.62 + 6.55485T - 0.23151T2 + 0.00009T4 r/,,//A = VOC savings from Routine MaintenanceV = No. of Vehicle Passes in Both Directions [ , V

VOC = Vehicle Operating CostT = No. of Vehicle Passes in Both Directions Since Last Grading (000' VEHS)

World Bank - 18247

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