k; l;~ FILvE CCiRDOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPhlENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

For Exclusive Use of ï3ank Group Staff

CONFIDENTIAL

k- ;- --»< d i Report No. 3a-DA

t ~ ~ y . 7S - "y; t s'àSs0.t

APPRAISAL OF

A SECOND HICHWAY PROJECT

DAHOMEY

May 7, 1973

Western Africa Projects DepartnmentTransportatioin Divi.sion

The confidenti.ility of thi, report ntist b. '.kr ctly obscrvrd. It was prepared tor e:iclusivc use of theBatnk Group St:ff It may flot be pulb! -.dquoted or cited mithout Banik Group authorization.The 1Bantk Group does not accept responsiLthiy for the accutacy or completeness of the report.

To be returned lo RIports Desk imninediately after uim

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Currency Eguiva1ents:

Currency Unit = CFA franc (CFAF)US$1.O0 = CFAF 230CFAF 1 million = Us$4,ho0.

Fiscal Year:

January 1 - December 31

System of Weights and Measures: Metric

Netric British/us eguivalents

1 meter (m) 3.28 feet (ft)1 kilometer (km) 2 = 0.62 mile (mi)1 square kilomreter (km ) = 0.386 square mile (sq mi)1 hectare (ha) 2.47 acres (ac)1 liter (1) = 0.22 British gallon (imp gal)

0.26 US gallon (gal)1 kilogram (kg) = 2.2 pounds (lb)1 metric ton (m ton) = 2,204 pounds (lb)

Abbreviations and Acronyns

CIDA - Canadian International Development AgencyDLT - Directorate of Land TransportDPJ - Directorate of Public WorksEEG - European Economie CommunityFAC - Fonds dtAide et de CooperationFED - Fonds Duropeen de DeveloppementOCDN - Organisation Commune Dahomey-Niger des Cemins de Fer

et des TransportsUNDP - United Nations Development ProgrammeUSAID - United States Agency for International Developmentvoc - vehicle operating costsvpd - vehicles per day

DAHOOEY

APPRAISAL OF A SECOND IIIGHWAY PROJECr

TABLE OF CONTENTS

Page No.

SUMbARY ..... ,...................ii

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

2. THE TRANSPORT SECTOR .................. ... ..... ... 2A. Economic Setting . .............. 2B. The Transport System 2

- The Dahomey Route ........ 2- The OCDN and its Railway 3- The Port of Cotonou ....... 5

C. Management of the Dahomey Route .... 5D. Coordination between Transport Modes 6

3. HIGHWAYS 7

A. The Network ...... . ........ 7B. Characteristics and Growth of Road Traffic 7C. Administration 8D. Maintenance . .8E. Engineering and Construction ... .... 9F. Financing and Planning ... 9

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

A. Description ............................................. i0- Rehabilitation of the Parakou-Malanville Road .... il- Rehabilitation of the Cotonou-Bohicon Road ....... il- Extension of the Highway Maintenance Program ..... il

B. Execution ............................................. 12C. Cost Estimates and Financing *...................... 14D. Disbursements ....***.....*. ... .................. 15

5. ECONOMIC EVALUATION ................ *........* ............ 16

A. General .... .. * ......a. .... 16B. Rehabilitation of the Parakou-Malanville Road ...... 16

- Domestic Traffic ..........e..... ..... 17- Niger Transit Traffie (see Annex 1) . ............. 17- The Regional Case 19- The Dahomey Case (see Annex 2) 20

C. Rehabilitation of the Cotonou-Bohicon Road 21

6. AGREEMENTS REACHED AND RECOMMENDATION 22

This report is based on the findinga of an appraisal mission comprisingMessrs. R. H. Snel (Engineer), J. H. Doyen (Engineer/Economist, PMWA),D. S. Jovanovic (Economist), and Hl. Cuneo (Railway Consultant). Theproject was appraised in February 1972.

TABLE OF CONTENTS (Continued)

TABLES

1. Highway Network, 19712. Vehicle Fleet, 1967-703. Annual Highway Expenditures4. Design Standards for the Parakou-Malanville Road5. Estimated Schedule of Disbursements6. Inputs for Probability Analysis of Economic

Return (Parakou-Malanville Road)7. Evaluation of the Returns of the Project to

Dahomey

ANNEXES

Annex 1. Analysis of Future Volumes of Niger Transit Traffic on theDahomey Route

Tables:Ai-1. Niger Transit Traffic Annual Tonnage 1966-71Al-2. Potential Volumes of Niger Transit Traffic on

Dahomey Route by TypeAl-3. Transport Costs on Alternative Routes for Niger

International TrafficAl-4. Expected Breakdown of Niger Transit Traffic over

Possible International Routes 1976-95Ai-5. Expected Niger Transit Traffic through Dahomey

1976-95Al-6. Transit Traffic through Dahomey in-Case of Rapid or

Slow Development of Niger River Route

Annex 2. Revenues from Niger Transit Traffie Due to the Project

Tables:A2-1. Future Traffic on Dahomey RouteA2-2. Revenues and Costs due to Niger Transit Traffic on

Dahomey RouteA2-3. Forecasted Revenues from Niger Transit Traffic 1976-95

CHART

Organization of the Directorate of Public WQrks -*World Bank 6821(R)

MAPS

1. Dahomey - Transportation System (IBRD 10029R)2. Niger Outlets to the Sea (IBRD 10074R)

DAHOMEY

SECOND HIGIIWAY PROJECT

SUMMARY

i. The economy of Dahomey is dependent on roads, primarily for thetransport of agricultural products to domestic and foreign markets. The 6,800km road network adequately links most areas of economic activity. However,many of the earth tracks that make up the bulk of the network are closed totruck traffic during and after heavy rains, and about half of the 680 km ofpaved roads are breaking up under present traffie volumes. A study ofDahomey's transport requirements carried out in 1969-71 with financing fromthe United Nations Development Programme (UNDP) stressed the importance ofimnproving highway maintenance if the many low-standard but economically im-portant roads were to provide reliable and efficient transport links; thestudy also identified several sections of paved roads which urgently requirerehabilitation.

il. The vost important of these roads requiring rehabilitation isthat between the railhead at Parakou and Malanville on the Niger border.This road is not only the main transport link in the north of Dahomey fordomestic trade, but it is also part of the road/rail link from Niger tothe Dahomey port of Cotonou, which constitutes the major outlet for thesouthwestern region of landlocked Niger. If deterioration of the Parakou-Malanville road is allowed to continue, transport costs might increase 50

much that Niger would be forced to utilize what are presently more costlyalternative routes. The other sections requiring rehabilitation are partsof the Cotonou-Bohicon road, the main trunk road in the south.

iii. The Bank Group's first lending operation for highways in Dahomeywas a Credit (215-DA) of US$3.5 million made in 1970. That project includesa four-year program to improve highway maintenance, as well as detailed en-gineering for rehabilitation of the paved roads included in the proposedproject.

iv. The present project includes: (a) rehabilitation of the Parakou-Malanville road (320 km) and of two sections (totalling 20 km) of theCotonou-Bohicon road; and (b) extension of the ongoing highway maintenanceproject with additional technical assistance and materials. The total costof the project, net of taxes and duties, is estimated at US$21.1 millionequivalent, with a foreign exchange cost of US$17.3 million. The proposedCredit of US$11.8 million equivalent (about 56% of the total project cost)will cover US$10.8 million of the foreign costs and US$1.0 million equiva-lent of the local costs; financing of this latter (about 43% of the totallocal costs) is considered justified on country grounds. The remainingforeign costs and part of the local costs, US$8.0 million in total, wrill beprovidcd by the United States Agency for International Development (USAID)through parallel financing arrangements. The Government will meet the re-maining local costs amounting to US$1.3 million equivalent.

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v. The Directorate of Public Works in the Ministry of Public Works,Hlines and Energy will be responsible for execution of the project. For therehabilitation works, the Parakou-Malanville road will be divided into twosections, with USAID and the Association each financing construction of halfof the road under separate contracts. Rehabilitation of the southern half ofthe road, that portion financed by thle Association, as well as of the twosections of Cotonou-Bohicon, will be by unit price contracts awarded afterinternational competitive bidding in accordance with Bank/IDA guidelines.The materials to be purchased under the project for use in the highlway main-tenance prograin will be procured after competitive bidding, also in accordancewith Bank/IDA guidelines. The engineering design for the project works issubstantially complete. Consultants for construction supervision and fortechnical assistance will be engaged under terms and conditions satisfactoryto the Association.

vi. The project will assure that development of domestic trade is nothindered by rising transport costs on the country's most important trunkroads, and that the Dahomey transit route remains efficient and competitivewith other international routes for Niger's import-export trade. The pro-posed investments are economically sound and of high priority. Based onaggregate benefits to road users from Niger and Dahomey, rehabilitation ofthe Parakou-Malanville road -- even when possible diversion of Niger trafficto other routes is considered -- is expected to yield an economic return of17%. The economic return on the IDA-financed section taken alone is about19% because of the larger traffic volume. The economic return for Dahomeyis about 13%. Rehabilitation of the two sections of the Cotonou-Bohiconroad is expected to yield economic returns of 19% and 14%.

vii. The project is suitable for an IDA Credit to the Government ofDahiomey in the amount of US$11.8 million equivalent.

DAHOMEY

APPRAISAL OF A SECOND HIGHWAY PROJECT

1. INTRODUCTION

1.01 The present highway project has evolved from the Dahomey LandTransport Survey which was financed by the United Nations Development Pro-gramme (UNDP) with the Bank acting as executing agency. The survey wascarried out jointly by two Canadian consulting firms, N.D. Lea & Associatesand Lamarre Valois International Ltd., and was completed in 1970; it wasfollowed by a complementary feasibility study done by the same consultantsand completed in 1971. With regard to highways, the survey stressed the needfor improved maintenance, and identified several sections of paved roads whichurgently require rehabilitation. The highest priority was assigned to rehabil-itation of the Parakou-Malanville road which is not only the main trunk roadserving the north of Dahomey, but also a major supply route for landlockedNiger. In addition, two short sections of the Cotonou-Bohicon road, one ofthe two major trunk roads in the south, were found to require attention.

1.02 Based on recommendations of the survey and the study, the Associationfinanced a highway maintenance and engineering project in 1970 with a Credit(215-DA) of US$3.5 million. That project includes a four-year program for im-provement of highway maintenance, as well as detailed engineering for rehabil-itation of the three sections of paved road mentioned above. The maintenanceprogram is proceeding well (para. 3.09), and the engineering studies, which arethe basis of the present project, have been substantially completed by theconsultants, Dorsch A.G. (Federal Republic of Germany).

1.03 The only other Bank Group lending operation to date which directlyaffects the transport sector of Dahomey is a 1972 Credit (307-DA) for finan-cing a cotton development scheme. The Credit amount of US$6.1 million includesabout US$630,000 for improvement of about 600 km of agricultural feeder roads.

1.04 The total cost of the present project is estimated at US$21.1 mil-lion equivalent, with a foreign exchange cost of US$17.3 million. The pro-posed Credit will cover US$10.8 million of the foreign costs and US$1.0 mil-lion equivalent of local costs; this contribution will finance about 56% ofthe total project cost. The United States Agency for International Develop-ment (USAID) will provide the remaining foreign costs and a part of the localcosts, US$8.0 million in total, through parallel financing arrangements.

1.05 This report is based on the abovementioned studies, and on thefindings of an appraisal mission comprising Messrs. R.H. Snel (Engineer),J.H. Doyen (Engineer/Economist, IBRD Permanent Mission in Western Africa),D.S. Jovanovic (Economist), and H. Cuneo (Railway Consultant) which visitedDahomey in February 1972.

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2. TEE TRANSPORT SECTOR

A. Economic Setting

2.01 Dahomey is a relatively small (116,000 km2 ) country in westernAfrica, stretching about 700 km northward from a short coastline on theAtlantic Ocean. Ilost of the terrain is flat, presenting no major topograph-ical obstacles to road construction. More than one-half of the populationof 2.8 million lives in the coastal area. The economy is primarily rural,with about 80% of the population engaged in agriculture. While palm products,the main export, and most agriculture for domestic consumption originatein the tropical southern part of the country, two important exports (livestockand cotton) are produced in the north, far from the export outlet.

B. The Transport System

2.02 Dahomeyts transport system is simple, but fairly well developed(rJap #10029R). Cotonou, the commercial and administrative center, has botha modern deep-water seaport and an international airport; it is linked withthe rest of the country by a fairly extensive road network, a railway whichpenetrates deep into the interior, and five regional airfields. Roads arethe predominant mode of transport 1/, accounting in 1969 for over 60% offreight and about 90% of rassenger traffic, with the remainder carried byrail. By far the most important axis is the so-called "Dahomey route" whichextends the length of the country and consists of the port of Cotonou, therailway from the port to Parakou, and the road link from Parakou to Malanvilleon the Niger border, a total distance of 758 km.

The Dahomey Route

2.03 The Dahomey route provides the main outlet to the sea for landlockedNiger (Map #10074R). Dahomey's share of Niger's external traffic presentlyamounts to about 45% of the total: this includes 80% of petroleum imports,roughly 507 of general imports, and 30% of agricultural exports. Total tonnageswere estimated at 162,000 in 1971, of which 116,000 tons were general importsand petroleum products, and 46,000 tons were agricultural exports, mainlygroundnut products and cotton. Imports have increased regularly at about5-7%O per year, wliile exports have had a slower growth (Annex 1). Niger transittraffic accounts for about 25% of total traffic through the port of Cotonou,and represents more than 60% of the freight carried by the Dahomey railway.

2.04 In the best interests of the economic development of the regionas a whole, and of Dahomey in particular, it is essential that Dahomey continueto pursue a policy of keeping this route as efficient and competitive as pos-sible with alternative routes. The diversion of Niger traffic to what are

1/ Details of tlie highway system and its administration, as well as theerlaracteristics of road traffic, are cliscussed in Chapter 3.

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presently less economic routes might raise the already high cost of externaltrade for Niger; also, from Dahomey's point of view, the loss of transittraffic would result in a decline in foreign exchange revenues, and wouldjeopardize the financial position of the railway which generates considerablesalaries and pensions.

2.05 The present project includes rehabilitation of the entire roadportion of the Dahomey route, and will result in substantial savings in trans-port cost for Niger. From the viewpoinit of Dahomey, the project will enhancethe competitive position of the Dahomey route. The viability of the projecthinges on the capacity of Dahomey to retain a sufficient share of Niger'stransit traffic by providing efficient transport services on its route. Inorder to attain this objective, the Government will have to pursue a policyof improving service on the route, and of increasing the efficiency of itsseveral components. In this respect, improvements are needed mainly inmanagement of the route and in organization of the railway.

The OCDN and its Railway

2.06 The OCDN (Organisation commune Dahomey-Niger des chemins de fer etdes transports) is an autonomous agency set up in 1959 by the Governmentsof Dahomey and Niger to provide transport services on the Dahomey routebetween Cotonou and Niger. OCDN is responsible for the operation and manage-ment of Dahomean railways, and for the organization of road transport betweenParakou and Niger. The OCDN railway includes three lines of one-meter gauge:the main line from Cotonou to Parakou (438 km), and two secondary coastal linesfrom Cotonou west to Segboroue (34 km) and east to Pobe (107 km). On the whole,the existing infrastructure and the rolling stock are reasonably well maintained,and can be considered adequate for the low volume of traffic. The only fore-seeable large investment requirement is strengthening of about 150 km of themain line. Most freight transported by rail is carried on this line, with thecoastal lines used largely for passenger transport. Over the last five years,freight traffic increased at an average annual rate of about 9%. Total volumein 1971 was about 250,000 tons, of which 162,000 tons (about 65%) was Nigertransit traffic.

2.07 Through most of the 1960's, the railway operated at a deficit whichwas financed jointly by Niger and Dahomey until 1966, when Niger discontinuedits subsidization of the OCDN budget, and freight rates were increased to morefully reflect transport costs. These rate increases, combined with improvementsin efficiency and increased freight traffic, resulted in elimination of thedeficit. In 1969, the railway was able to balance its accounts, and in 1970and 1971 it devoted about US$600,000 equivalent, i.e. about 12% of its revenue,to renewal of its physical assets. While day-to-day management appears reasonablyeffective, advance planning and programming are inadequate due to the lack ofqualified personnel and to an antiquated data collection system.

2.08 lu addition to its principal activity of operating the railway,OCDN assures road transport of freight between Parakou and Niger. The agencydoes not own a truck fleet, and charters the services of a number of trucking

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companies from Niger and Dahomey. During the crop season, OCDN operates itschartered trucks on a triangular circuit between Parakou, Niamey and Maradi,so as to make the fullest use of available return capacity. The role of OCDNas a road transport carrier appears to be a useful one. The agency providesreasonably reliable services at stable prices to remote areas in Niger.

2.09 OCDN is the largest employer in Dahomey after the Government. Thepersonnel complement of 1,400 has been at that level since 1968. There aresome redundancies, but in view of widespread unemployment, OCDN as a stateenterprise has limited possibilities for payroll reduction. Salaries andpensions constitute a burden on its finances. The Government is committedto keep OCDN in operation. The railway union is the largest in the countryand a strong political force. If, as a result of a deterioration of OCDN'sfinancial situation, payments for salaries and pensions were not covered byrevenue from operations, they would in all likelihood have to be supportedby the Government for some time.

2.10 In the future, OCDN will continue to assume most of the responsibi-lity for transport on the Dahomey route, through its railway and truck char-tering services. Prospects for OCDN will depend on its ability to maintainthe railway on a sound financial footing in spite of tlhe anticipated diver-sion to other international routes of some of the Niger traffic presentlyrouted through Dahomey. To preserve its financial viability, OCDN must pur-sue and amplify its present drive to improve efficiency and to keep expendituresto a minimum. The most important measures to be taken to this effect wouldbe: (i) to reduce the payroll by a planned program of staff attrition; (ii)to eclose down secondary stations; (iii) to concentrate capital expenditureson items essential to ensure good services on the main line (track renewaland rolling stock); and (iv) to set up a modern management information systemin order to improve operational planning. The Government has agreed at nego-tiations that it would, within one year of signature of the Credit Agreementfor the proposed project, draw up detailed proposals on a reorganization pro-gram comprising the above measures. The Government also agreed that it wouldnot undertake any extension of the railway north of Parakou unless a studyestablishing, to the mutual satisfaction of the Association and the Govern-ment, the economic justification of this work were carried out by qualifiedconsultants acceptable to the Association.

2.11 The consultants for the Land Transport Survey (para. 1.01) hadrecommended closing the two coastal railway lines because they found thatthese lines, unless stibsidized, cotild not compete with road transport, andwere contributing to OCDN's deficit. An undertaking to close the lineswithin one year following rehabilitation of the parallel roads was subse-quentlv included in the Credit Agreement (215-DA, September 1970) for thehighway maintenance and engineering project. The road paralleling the westernline -- Cotonou to Segboroue -- was rehabilitated in 1971, and according tothe abovementioned Agreement, closing of this line should have been consid-ered in 1972. The Governiment has however proposed postponement of this clos-ing because substitute passenger services have not yet been established. TheGovernment has also pointed out that since 1968 OCDN has considerably improvedits financial position, and that the deficit on the coastal lines has been cut

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down substantially following reduction in the number of trains and a recent25% increase in tariffs.

2.12 In view of their reduced deficit, the problem of the coastal linesis now of relatively little importance compared wtth that of reorganizingthe main line and improving services on the Dahomey route. Even if no cap-ital expenditures are made on the coastal lines, they could still continueto provide passenger services for another five or six years at marginal costswhich are less than prices charged by road carriers, and the viability ofOCDN would not be affected. In the short run, the railway would thus appearto be the more economic transport mode until its services deteriorate to suchan extent that road transport - which in the long run is more economical --would be substituted. The Association considered accepting a postponementof closing of the western coastal line under the condition that: (i) nocapital expenditures will be made on the line or on its equipment, and (ii)rates will be adjusted as necessary to eliminate the remaining deficit. Thismatter was discussed and agreed at negotiations, and closing of the line hasaccordingly been postponed until January 1, 1976. The Directorate of LandTransport assisted by consultants (paras. 2.14 and 2.15) would be responsiblefor assessing the necessary rate revisions. The Association has also dis-cussed with the Government measures that might be taken to encourage devel-opment of reliable road passenger services to substitute for the railways.Closing of the eastern rail line will not have to be considered until theparallel road is rehabilitated, i.e., by 1974-75.

The Port of Cotonou

2.13 The deep-water port at Cotonou, with a capacity of about 1 milliontons of dry cargo per year, was completed in 1965 with financing from theFrench aid agency, Fonds d'Aide et de Cooperation (FAC). The port is admin-istered by a financially autonomous port authority under the general controlof the Ministry of Transport, Post, and Telecommunications 1/; it is wellmanaged and financially sound. Traffic through the port has increased rapidlyfrom 351,000 tons in 1965 to about 608,000 tons in 1971, and is expected tocontinue growing at 7-8% per annum. Over the past three years, one-quarterof total port traffic has been in transit to or from Niger. Increased cap-acity for general cargo will be required over the medium term. FAC has in-dicated its intention to finance a feasibility study for expansion of the port,and the Government plans to request Bank Group financing for the project whichmight evolve from this study. In order to facilitate the transit of freightfor Niger, the Government has been considering for some time to establish onport property special bonded warehouses for Niger cargo.

C. Management of the Dahomey Route

2.14 OCDN and the Port Authority enjoy considerable autonomy in theirrespective fields, as does the Directorate of Public Works for road infra-structure. The Government itself exerts little direct influence over trans-port policies and operations. In fact, until recently, there was no singlebody responsible for overall coordination of transport policy and regulations;

1/ Hereafter referred to as the Ministry of Transport.

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OCDN functioned as a de facto coordinator mainly because of its responsibili-ties regarding rail and road services on the main transport axis. In 1970,following a recommendation arising out of the Land Transport Survey, the Gov-ernment established the Directorate of Land Transport (DLT) within the thenlinistry of Public Works and Transport 1/ to ensure overall coordination oftransport policies, and supervision of OCDN and the port. DLT also inheritedresponsibility for motor vehicle registration, issuance of drivers' licenses,etc. Since 1971, a transport expert provided under the First Highway Projectby the consultants Lamarre Valcis, has been attached to DLT. The work of theDirectorate is now only in a preliminary stage; so far, it has concentratedon preparing a plan to improve motor vehicle registration.

2.15 Implementation of the policy to improve service on the Dahomeyroute and to increase its efficiency (para. 2.05) requires that the Govern-ment assume a more active role in management of the route in order to: (i)improve coordination of operations between OCDN and the port of Cotonou, and(ii) define overall objectives and coordinate policies for tariffs and forinvestment planning. If it is to intervene effectively in the management ofthe Dahomey route, the Government would first have to develop through DLTan adequate understanding of operations on the route. DLT should thereforestudy and follow the problems and prospects of the route, and so provide thebasis necessary for defining policies and planning investments. The projectprovides for continuation of ongoing technical assistance which DLT wouldneed in this respect (para. 4.07). The Government has agreed at negotiationsthat DLT's role would be expanded to cover the above tasks, and that it wouldbe staffed with competent, qualified personnel.

D. Coordination between Transport Modes

2.16 The physical facilities at transfer points between rail and shipin the port of Cotonou, and between rail and road at Parakou, are properlyintegrated. There are however no suitable arrangements to plan and coor-dinate OCDN activities with arrivals of cargo at Cotonou and at Parakou,and this is the main cause of excessive pile-ups which occur regularly atboth these cities during the height of the crop season. This problem willbe remedied in the future as a result of the measures proposed to improvemanagement of the Dahomey route (para. 2.15).

2.17 The only modal distribution problem occurs between Cotonou andParakou which are linked both by a railway and by a parallel road about 450km long, of which the southern section from Cotonou to Bohicon (150 km) ispaved. Almost all through-traffic is presently carried by the railway, whileless important traffic to and from intermediate points is shared between roadand rail. This allocation reflects partly the preference of users, and partlythe Governnent's policy of directing freight to the railway. Since the rail-way is the most economic mode for the through-traffic, the present distribu-tion is considered rational.

1/ Since October 1972, the Ministry of Transport, Post, and Telecommunications.

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3. HIGHWAYS

A. The Network

3.01 The road network is fairly well developed, consisting of about6,800 km of roads and tracks (Table 1). About 680 km of one- and two-laneroads are bituminous paved; the remainder are earth and gravel roads of vary-ing standards. The network covers the country adequately, but some of thepaved roads constructed 8 to 15 years ago are breaking up under present traf-fic, and many of the earth and gravel roads are closed to truck traffic duringand after heavy rains. The average density of the total network is about 60km per 1,000 km2, or 2.5 km per 1,000 inhabitants, which is slightly lessthan in neighboring countries.

3.02 The Directorate of Public Works (DPW) in the Ministry of PublicWorks, Mines and Energy 1/ is responsible for roads classified as eitherprimary or secondary, about 3,400 km in total. The remaining classifiedroads, about 1,100 km of earth roads and tracks connecting the main roadnetwork with agricultural areas, are the responsibility of local authoritiesunder the supervision of the Ministry of Interior.

B. Characteristics and Growth of Road Traffic

3.03 Road traffic is largely concentrated in the southern third of thecountry; in 1969, two-thirds of the total volume of domestic freight carriedby road -- about 900,000 tons (145 million ton-km) -- moved on this southernnetwork. The main roads radiating out of Cotonou carry almost 1,000 vehiclesper day (vpd), but the only ones north of Bohicon which carry significantvolumes of traffic (70 to 200 vpd) are Bohicon-Dassa Zoume and Parakou-Malanville.

3.04 The consultants under the Land Transport Survey forecasted futuretraffic growth on the basis of production prospects in each region of thecountry, and concluded that-road transport would grow at 5-6% annually. Since1960, DPW has carried out one-week traffic counts twice a year on all majorroads; these counts have so far been of limited reliability, but their qualityis improving as a result of assistance provided by consultants under themaintenance project.

3.05 The motor vehicle fleet (Table 2) has grown only slowly over thelast few years, and now totals about 11,000. Vehicle density of one per 250inhabitants reflects the undeveloped state of the economy and, to a lesserdegree, the high level of import duties. The fleet consists mostly of cars,light trucks, and vans; heavy trucks and buses are in short supply. Vehiclesafety regulations (inspection, insurance, etc.) seem generally adequate, buttheir enforcement is loose, partly because of an ineffective registration

1/ Hercafter referred to as the Ministry of Public Works.

system. DLT is preparing a plan to reorganize motor vehicle registration,and this would be the first step toward a more stringent enforcement of safety

regulations. The legal limit on axle loading, is 11 tons, but this regulationis enforced only on the road which runs parallel to the main railway line(Cotonou-Parakou). On the Parakou-Malanville road, two weighing stations will

be installed as part of the project to enforce the limitation there. The Gov-ernment has confirmed that the proposed weighing stations will be adequatelystaffed, operated, and maintained.

3.06 The road transport industry is at an early stage of development, andappears insufficient for the country's needs. Shortage of capital seems to

be the main impediment to the growth of the industry. OCDN with its truckchartering service from Parakou to Niger, is the only organizing force in road

freight transport. Domestic road transport services are handled by numeroussmall operators. Vehicles are generally in poor condition, and overloading

appears to be widespread.

C. Administration

3.07 Within DPW, the Roads and Bridges Division is responsible for theengineering, construction, and maintenance of primary and secondary roads andbridges (see Chart). Works in the field are carried out by three district of-fices, each of wvhich is divided into three or four subdivisions. The southernand central districts are each in charge of about 650 km of roads, wehile thenorthern distric%' with its less trafficked network is responsible for about

2,100 km. The subdivisions deal mainly with roads, but also have responsibi-.lity for maintenance of public buildings and for providing assistance to local

authorities on technical matters.

3.08 The consultants under the Land Transport Survey studied the highway

organization, and found that field operations at the district level were gen-erally well suited to the needs of the country. To assure proper programmingof works, the consultants recommended establishment of a Planning and Program-ming Unit in DPW, and creation of a new post, that of Chief Engineer for Main-tenance, in the Roads and Bridges Division. These and other recommendationsare being implemented under the ongoing highway maintenance program (Credit

215-DA). The largely decentralized administration is made possible becauseDPW has a fairly large professional staff. In addition to foreign technicalassistance being provided by FAC and by consultants under the maintenanceproject, the Directorate employs 52 Dahomean engineers and technicians, 13of whom are assigned to the district offices. FAC has given assurances ofits intention to continue its technical assistance program under which fourexperts are presently assisting DPIW.

D. Maintenance

3.09 As mentioned previously (para. 3.07), highway maintenance is carriedout by subdivisions of the Roads and Bridges Division under the overall re-

sponsibility of a Chief Engineer for iaintenance, a post presently filled bya consultant. The subdivisions rent road maintenance equipment from DPW's

Equipment Division which is responsible for its purchase and maintenance.

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Until initiation of the highway maintenance program, the condition of theroad network had been deteriorating, largely because of the lack of adequatefunds and of trained personnel. The four-year program now provides for pur-chase of road maintenance and workshop equipment, reorganization of theEquipment Division including introduction of sound accounting and inventoryprocedures, training of maintenance personnel, and provision of adequate*recurrent funds for maintenance (para. 3.12). The program is proceedingwell, and the backlog of deferred maintenance is being eliminated.

E. Engineering and Construction

3.10 The Roads and Bridges Division has a Chief Engineer for Constructionwho is responsible, in collaboration with the Division's Studies Department,for preparation and supervision of new projects. Projects which are financedby foreign agencies, mainly FAC and the European Development Fund (FED), arenormally prepared and supervised by consultants. Major construction contractsare executed by foreign contracting firms, of which several have establishedbranches in Dahomey. There are no locally-owned construction firms capableof carrying out major road construction works, primarily because the volumeof business has fluctuated too widely to encourage its growth. A few smalllocal contracting firms carry out some minor building construction in andaround the capital. It has been agreed with the Governnent that constructionand repair of culverts and small bridges under the present project will becarried out either by DPW's own forces or by small local contractors (para.4.06).

F. Financing and Planning

3.11 Expenditures for highways over the period 1965-71 (Table 3) haveaveraged about CFAF 613 million (US$2.4 million) annually, of which about46% has been financed by allocations from the National Budget, supplementedin 1971 by the Road Fund (para 3.12); the remainder %-as financed by foreignaid from FED (38%), FAC (5%), and IDA (11%). Foreign aid was devoted tocapital expenditures, accounting for 88% of investments over the period;Government funds were directed largely to recurrent maintenance needs.

3.12 Up to about 1969, the allocation for recurrent maintenance wasinsufficient to keep the network in adequate condition, but in accordancewith the conditions of Credit 215-DA, the Government undertook to provideadequate funds for future needs, and has gradually increased the annualallocation following an agreed financing plan covering the period 1970-73.In 1970, the Government reactivated its Road Fund which is now managed bythe Ministry of Public Works as an autonomous account specifically for high-way needs. The Fund is fed by a surtax on fuel of CFAF 4 per liter. RoadFund revenues, totalling US$1.1 million in 1971, are supplemented by alloc-ations from the general budget. The total amount available for highway main-tenance in 1972 was about CFAF 460 million (JS$1.8 million), which appearedadequate for proper upkeep of the roads. During negotiations, a financingplan for highway maintenance expenditures over the period 1973-76 was agreedwith the Government on the basis of requirements assessed by consultants nowassisting DPW.

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3.13 Road users contribute to Government revenues through various taxes,import duties and fees which, over the 1965-1971 period, have averaged aboutCFAF 1.4 billion (US$5.5 million) annually; this contribution more thancovered total highway expenditures over the period. These revenues areallocated to the general budget, except for the surtax on fuel which isdirected to the Road Fund. The regular tax on fuel amounts to CFAF 24 perliter of gasoline and to CFAF 14 per liter of diesel oil. Import duties andinternal taxes on vehicles are quite high, substantially increasing theirpurchase price. For instance, taxes and duties totalling 29% are appliedto all heavy trucks imported from the European Economic Community (EEC),and trucks from outside the Community are subject to taxes of 43%. Thetaxes on passenger cars are even higher, ranging from 57% to 85%.

3.14 Highway planning is carried out by the Ministry of Economy andPlanning in cooperation with the Ministry of Transport. The Governnent'sDevelopment Plan for 1971-72 (an intermediate plan which represented anextension of the previous Five-Year Plan) gave priority to the upgrading ofspecific feeder roads serving agricultural areas, to rehabilitation of thepaved coastal road from the Togolese border to the Nigerian border viaCotonou, and to rehabilitation of the Parakou-Malanville road. Governmentresources under the Plan were concentrated on feeder road development, whichis also assisted by IDA. The Cotonou-Togo border road (104 km) was completedin 1971 with financing from FED; this agency is also financing the reconstruc-tion and upgrading of prim.ry roads serving the southeastern region, namelythe Porto Novo-Nigeria border road (35 km) and the Sakete-Pobe road (45 km);these works are expected to be completed in 1975. The Parakou-Malanvilleroad will be rehabilitated under the present project. The Government isalso considering upgrading the trunk road serving the northwestern regionfrom Bohicon to Dassa Zoume, Djougou, Natitingou, and Porga, a total lengthof more than 400 km.

4. THE PROJECT

A. Description

4.01 The project consists of the following:

(a) rehabilitation of the northern half (160 km) of theParakou-Malanville road;

(b) rehabilitation of the southern half (160 km) of that road,and of two sections (totalling 20 km) of the Cotonou-Bohiconroad;

(c) consulting services for supervision of construction works initems (a) and (b) above; and

(j) extension of the existing highway maintenance program withadditional technical assistance and materials.

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Rehabilitation of the Parakou-Malanville Road

4.02 The Parakou-Malanville road (320 km) connects the northern terminusof the railway with the Niger road network at Malanville. The road was im-proved during the mid-fifties from earth standard to a one-lane (3.5 m) pavedfacility; the original alignment of the road which dated from about 1927 was*not substantially changed at that time, and only minor earthworks were carriedout. A laterite base course of only 5-10 cm was provided, and paving consistedof a double-surface treatment. With the large proportion of heavy trucksusing the road, pavement failures started to occur as early as 1958, and theedges and shoulders quickly deteriorated; since then, about 185 km have had tobe repaved. The feasibility studies carried out under the Land Transport Surveyindicated that about 130 km of the road required rehabilitation, and an ad-ditional 170 km required pavement strengthening. On that basis, the consultantsDorsch A.G. were retained under the First Highway Project to carry out therequired detailed engineering. Technical surveys done during the engineeringphase revealed that deterioration of the base and subbase had been even moreextensive than previously estimated, and it was found that the entire roadwould require complete rehabilitation.

4.03 Under the project, the road will be rehabilitated and widenedto two-lane standard. The present one-lane width is no longer compatiblewith traffic volumes (now 120 vpd, with about 40% heavy trailer trucks andtankers); further, the cost of rehabilitating the road to its original one-lane standard was estimated to be quite high, so that that solution was un-attractive. The terrain is flat and rolling; no major realignment will berequired, but about 20 curves will be widened. Vertical curves will be easedwhere necessary to correspond with a design speed of 80 km/h (Table 4). About25 new pipe culverts and a few small bridges will be constructed, and existingstructures will be repaired, widened, or lengthened as needed. Materialssuitable for earthwork, subbase, and base are available along the road.

Rehabilitation of the Cotonou-Bohicon Road

4.04 This two-lane paved road connects the important centers of Cotonouand Bohicon, passing through the populous southern part of the country. Marshyterrain, combined with a high traffic volume, has resulted in rapid deteriorationof two sections of the road, totalling 20 km. The 6 kn section between Godomeyand Abomey Calavi, constructed in 1958, has been the subject of frequent repairsnecessitated by flooding. The second section between Sehoue and Zakpo (14 km)was constructed in 1964, and pavement failures occurred a few years later.Rehabilitation of the two sections involves raising the embankment, constructinga new pavement, and improving drainage by constructing about 15 pipe culvertsand one 20 m bridge.

Extension of the Highway Maintenance Program

4.05 Under the ongoing program, seven experts provided by consultantsare assisting DPW in the improvement of highway maintenance operations; thistechnical assistance is scheduled to terminate by mid-1974. While this first

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phase of the maintenance program is proceeding well, it will be necessary toextend the consultants' services by a total of 83 man-months over a two-yearperiod in order to consolidate the improvements being realized. As UNDP fundsallotted to the Dahomey Country Program have already been committed for otherpurposes, this technical assistance will be financed under the proposed Credit.

4.06 In the course of the ongoing maintenance program, DPW has identifiedthe need to improve drainage conditions at certain selected locations, and theCovernment has requested financial assistance for procurement of steel culvertpipes, and reinforcing steel for construction of culverts and small concretebridges. Funds for this procurement will be provided under the project.

4.07 The project will also provide for the continuation of technicalassistance to strengthen DLT in order to allow the Government to improvetransport coordination, and to assure it a more active role in managementof the Dahomey route (see para. 2.15). The scope and timing of future as-sistance needs of DLT were reviewed during negotiations in relation with thescheduled implementation of the proposed measures for reorganization of OCDNand improvement of transport service on the Dahomey route. It was agreed toprovide 24 man-months of technical assistance by an engineer and a transporteconomist.

B. Execution

4.08 The DPW in the Ministry of Public Works will be responsible forexecution of the project. Road rehabilitation under the project will be bycontract. As mentioned earlier (para. 1.04), USAID will participate in fi-nancing of the Parakou-Malanville road construction. Hlowever, since theAssociation's procurement conditions differ from those of USAID, the roadwill be divided into two sections, with each organization f inancing constructionof half of the road under separate contracts. The northern 160 km road sectionwill be tendered according to USAID regulations. The southern 160 km section,to be financed by the Association, and the two sections of the Cotonou-Bohiconroad, will be constructed under unit price contracts after international com-petitive bidding in accordance with Bank/IDA guidelines. There are no locally-owned road construction firmns in Dahomey (para. 3.10), but several firms ofvarying capacities are active in the region. To encourage the greatest participa-tion of these firms, the IDA-financed sections will be divided into three lots,with individual bidders having the option of bidding on one or more lots, depend-ing on their capacity. These arrangements were confirmed during negotiations.

4.09 The works consist of reconstructing the pavement base, includingin the case of the Parakou-Mtalanville road, widening and providing a newwearing surface. The base will be either a cement-stabilized or a crushed-stonie type of construction, depending on bidding prices. The wearing coursewill consist of a double-surface treatment or a sand asphalt layer. Becauseof their nature, execution of these works would require extensive use of equip-ment. Certain operations, however, such as the installation or extension ofculverts and bridge construction, are labor-intensive. Ilork on both sectionsof the Parakou-Halanville road is expected to begin by January 1974, and to becompleted in about 30 months. Wiork on the two sections of the Cotonou]-Bohiconroad is also expected to begin by January 1974, and be completed in about 12mon ths.

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4.10 Supervision of construction, including that of the USAID-financedsection, will be by consultants financed under the Credit. The Governmentintends to employ for construction supervision Dorsch A.G., the consultantswho prepared the engineering; this is acceptable to the Association.

4.11 Bidding documents for construction materials to build culvertsand bridges will be prepared by DPW with the assistance of consultants em-ployed under Credit 215-DA. The Government has confirmed that these materialswill be procured after international competitive bidding in accordance withBank/IDA guidelines.

4.12 The additional technical assistance to DPW and to DLT will be pro-vided by the consultants Lamarre Valois International Ltd. and N.D. Lea &Associates who are already assisting those agencies under the ongoing main-tenance project.

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C. Cost Estimates and Financing

4.13 The estiinated costs of the project are as followsl/:

--- OFAF million-- - ----- US$ tOO------- ForeignLocal Forelgn Total Local Foreign Total Component

1. USAID Fi.nancing

a. Recornstruction of Parakou-Malanville road fromkm 160 - km 320 /2 350 1,490 1 840 1 520 6 480 8 81%

2. IDA Financing

b. Reconstruction of Parakou-Malanville road fromkm O - km 160 314 1,336 1,650 1,367 5,810 7,177

c. Reconstruction of 20 km ofthe Cotonou-Bohicon road 66 280 2346 86 1,218 1,5C4

Subtotal (b) and (c) 380 1,616 1,996 1,653 7,028 8,681 81%

d. Supervision of works under(a), (b), and (c) 28 225 253 122 978 1,100 89%

e. Technical assistance:

(i) to DPW (83 man-months) 19 98 117 83 425 508 84%(ii) to DLT (24 man-months) 6 31 37 26 135 161 84%

f. Materials for culvertsand bridges 3 54 57 12 236 248 95%

Subtotal (b) through (f) 436 2,024 2,460 1,896 8,802 10,698

g. Contingencies:

(i) for quantity variationsabout 15% on (b) and(c) 57 242 299 248 1,054 1,302about 10% on (d) 3 22 25 12 98 110

(ii) for price variationsabout 10% on (b), (d),and (e) 37 169 206 159 735 894about 5% on (c) and(f) 3 20 14 73 87

Subtotal (g) 100 450 550 433 1,960 2,393

Total IDA financing 536 2 3,040 329 10 762 13 091 82%

TOTAL PROJECT COST 886 3,964 8 3,8149 21,091

(rounded) 3,800 17,300 21,100 82%

1/ Net of taxes and duties.2/ Including contingencies, based on early 1972 prices.

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4.14 The cost estimates (net of taxes and duties) for road constructionare based on the consultants' detailed engineering, and take into accountexperience gained from recently completed works in Dahomey and in neighboringTogo. Cost estimates for materials are also net of taxes and duties, and arebased on prices and quantities dètermined by consultants. The foreign ex-change component of these costs is estimated at 95%. The cost estimates forconsulting services for supervision of construction and for technicalassistance are based on man-month requirements.

4.15 Based on cost estimates available in early 1972, USAID approved inJuly 1972 a loan of US$8.0 million to Dahomey to finance the total cost (netof taxes) of reconstructing the northern half of the Parakou-Malanville road.USAID has now assured both the Government of Dahomey and the Association thatit stands ready to raise its contribution to this undertaking if, due to sub-sequent increases in construction costs and the currency realignments of early1973, the amount already earmarked for the project falls short of coveringthe total cost of the road reconstruction as specified above.

4.16 Cost estimates for the IDA-financed items of the project have beenadjusted to 1973 prices. The 15% quantity contingency for road constructionreflects uncertainties in the estimated thickness and quality of the existingcarriageway foundation; it also covers the possibility that the materials ofthe existing base course cannot be reused for the new road, and accounts forgreater deterioration on the roads than estimated. A 10% contingency has beenadded to the consulting services to take account of any unforeseen delay inthe road construction period. The contingencies for price variations arebased on a 7% annual price increase for road construction works, materials,and services in Dahomey and in the supplying countries.

4.17 The proposed Credit of US$11.8 million will cover 56% of totalproject costs, representing the entire foreign exchange cost and 43% of thelocal costs of the IDA-financed project items. The Government has confirmedat negotiations that it will meet the remaining costs. The following tableshows the approximate breakdown of financing of project costs:

-- -- --- ---- US$ millionLocal Foreign Total % of Total

USAID 1.5 6.5 8.0 38%IDA 1.0 10.8 11.8 56%Government 1.3 - 1.3 6%

3.8 17.3 21.1 100%

D. Disbursements

4.18 Disbursements from the Credit account will be made on the followingbasis:

(a) 89% of payments made to contractors for road rehabilitation,which represents the total estimated foreign exchange costs forthat item, plus about 40% of the local costs (excluding taxesand duties);

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(b) the foreign exchange costs of consulting services for super-vision of construction and for technical assistance to DPW,plus about 40% of the local costs for these services (excludingtaxes and duties); and

(c) 97% of the cost of imported materials (excluding taxes andduties).

An estimated schedule of disbursements is shown in Table 5.

5. ECONOMIC EVALUATION

A. Ceneral

5.01 The economy of Dahomey is dependent on roads both for the transport

of agricultural products to domestic and foreign markets and for passengertransport. In addition, its main north-south axis - the Cotonou-Malanvillerail/road link -- serves as a natural transit corridor for much of the overseas

trade of land-locked Niger, as it is the shortest route to the sea from Niger's

irost economically active and populated western region. The objective of the

project is to assure that development of Dahomey's domestic trade can continue

unhindered by rising transport costs, and that the Dahomey transit route, while

being of benefit to the country itself, remain economic and competitive withother international routes for a large portion of Niger's export-import trade.

B. Rehabilitation of the Parakou-Malanville Road

5.02 The economic evaluation 1/ is essentially directed at comparing thecost of the proposed rehabilitation with the expected savings in transportcosts for domestic traffic as well as for Niger transit traffic. Thisregional analysis was complemented by an evaluation of the project costs

and benefits strictly from the viewpoint of Dahomey which will bear theentire cost of the project. Both analyses show that the project is welljustified. The economic return for the region as a whole is about 17%,and the economic return for Dahomey, estimated on the basis of foreign

exchange expenditures and receipts, is about 13%.

5.03 A risk analysis was used to contend with the considerable uncer-tainty with regard to the future volume of Niger transit traffic that willbe routed through Dahomey. The inputs used in the evaluation are summarizedin Table 6. The present evaluation is mainly based on information gathered

under the Dahomey Land Transport Survey, and on an updating of the economicanalysis of the Parakou-Malanville road prepared in 1971 by DPW with the

1/ Data used in the cost/benefit analysis are based on early 1972 prices.Adjustments in construction coet estimates to 1973 prices for the IDA-financed section of the road (para. 4.13) would not affect the resultsof the economic evaluation, on the assumption of a parallel price devel-

opment in costs and benefits. Possible additional cost increases areintegrated in the probability analysis (Table 6).

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assistance of consultants Lamarre Valois under Credit 215-DA. In the analysisof future volumes of Niger transit traffic, extensive use was made of a studyof Niger's access to the sea carried out in 1971 by the same consultants underfinancing from the Canadian International Development Agency (CIDA).

-.Domestic Traffic

5.04 Traffic on the Parakou-Malanville road in 1972 averaged 120 vpd, ofwhich about 45 were heavy trailer trucks and tankers carrying Niger transittraffic which accounts for about 70% of the total tonnage carried on theroad. Domestic traffic on the road has been estimated on the ba8is of theDPW traffic counts. Future growth has been estimated on the basis of pasttrends and anticipated increases in agricultural production to be generatedby the IDA-financed agricultural project for the development of cottonproduction in the Zou and Borgou areas (Credit 307-DA, March 1972). Thebest estimates for future annual rate of growth of domestic traffic are5.5% for the period 1976-86, and 4% thereafter.

5.05 The Parakou-Malanville road serves the extensive agricultural areaof northern Dahomey with potential for the production of cotton, foodstuffs,groundnuts and livestock. The reduction in transport costs resulting fromthe proposed project will be sufficiently important (para. 5.08) to induceincreases in agricultural production. For lack of specific information onthe developmental effects of the road, the traffic that will be generated bythe increase in production has been roughly estimated as a percentage ofthe normal traffic: 20% for the southern sections which serve the areasbetween Parakou and Kandi, and 10-15% for the northern section which servesthe rather scarcely populated area north of Kandi. It was assumed that thegenerated traffic would develop over the five-year period following comple-tion of the project.

Niger Transit Traffic (See Annex 1)

5.06 The Dahomey route (1,060 km from Cotonou to Niamey and 1,520 kmto Maradi) is the shortest and least costly route for the western region(Niamey) and the central region (Maradi) of Niger, and presently carriesabout 45% of the total of Niger's exports and imports. The other routespresently utilized by Niger are: (i) the Nigeria land route (1,400 km)which connects Niger's central and eastern regions to the ports of Nigeria(mainly Lagos) by road and rail, and (ii) the Ivory Coast route from theport of Abidjan to Niamey (1,670 km) entirely by road, or by rail toOuagadougou in Upper Volta and from there by road to Niamney. The Nigerialand route is primarily used for groundnut exports from the eastern regionof Niger (east of laradi), and presently handles about 50% of Niger'sexternal trade; this land route is not expected in the future to improveits competitive position with respect to the Dahomey route. About 5% ofNiger's trade, particularly high value imports directed to the Niameyregion, utilize the Ivory Coast route because the Abidjan market is moreefficiently organized, and because of the lower ocean freight rates. Inthe future, the Ivory Coast route is expected to capture a growing shareof the import traffic to Niammey in view of planned improvements of trans-port infrastructure and services on several components of the route.

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5.07 Two other routes presently in the planning stage are alsoexpected in the future to compete with the Dahomey route. They are: (ï)the Niger River navigation route from the Niger Delta sea ports of Warriand Port llarcourt to Gaya, opposite Malanville on the Niger border(1,370 km), and to Niamey (1,670 km); and (ii) the Togo route which is toconsist of an existing road linking the port of Lome with Niamey (1,240 km).The-Government of Niger hopes to initiate barge transport on the NigerRiver route in 1973-74 with equipment and technical assistance providedby CIDA. The possibility of developing commercial navigation on the NigerRiver between the Niger Delta ports and Niamey is uncertain, and it is notpossible at this stage to judge the prospects of this route. If the NigerRiver route should prove viable, it would divert a substantial proportion(up to 75% of fuel imports and 25% of agricultural exports) of the Nigertransit traffic presently routed through Dahomey. In order to define arange of possibilities, the percentage of Niger transit traffic which inthe future would be diverted from the Dahomey route to the Niger Riverroute were estimated under three different assumptions corresponding torapid, normal, and slow development of navigation (see Annex 1, paras. 8, 9,and 29). The road from Lome to Niamey is only partly paved at present, butFED and FAC have tentatively scheduled the paving of additional sectionsunder their 1975-85 technical assistance programs. As the proposed pavingprogresses, the Togo route would attract transit traffic of Niger's westernregion.

5.08 Future prospects for the Niger transit traffic routed throughDahomey are uncertain. Although the volume of external trade generatedby the economy of Niger can be expected to grow regularly, Dahomey's shareof Niger transit traffic is likely to decrease as a result of its diversionto other routes. On the basis of road user costs, existing tariffs, andestimated costs of trans-shipment, the consultants for the study of Niger'saccess to the sea have estirmated transport costs on the routes which willeventually compete with the Dahomey route. The comparison of future trans-port costs on these various routes indicates that if the Parakou-Malanvilleroad is rehabilitated, the Dahomey route will remain among the most econo-mical routes for western and central Niger. If deterioration of theParakou-lIalanville road is allowed to continue, transport costs on thislink will become so high that, for some of this traffic, Niger will haveto settle for what are presently more costly alternatives. The most prob-able forecasts of future volumes of Niger transit traffic on the Dahomeyroute show that if the road is rehabilitated, the Dahomey route will retainabout 55% of its present share of Niger transit traffic by 1985, and roughly40% to 30% by 1995. In terms of tonnages, the Niger transit traffic on theDahomey route would grow from about 160,000 tons at present to about250,000 tons by 1980, and would stabilize around this level thereafter.If the road is not rehabilitated, however, the Niger traffic would only beabout 210,000 tons by 1980, and would decrease thereafter to about 150,000tons in 1990. The traffic that will be retained on the Dahomey route as aresult of the project is thus estimated at about 40,000 tons by 1980,increasing to about 110,000 tons by 1990.

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The Regional Case

5.09 The proposed rehabilitation will result in substantial savingsin transport costs for both domestic and transit traffic. Savings havebeen estïmated for the domestic traffic and for that part of the Nigertransit traffic which will be routed through Dahomey even if the Parakou-Malanville road is not rehabilitated, by comparing vehicle operating costson the rehabilitated road with those on the existing road. Vehicle operat-ing costs on the existing road reflect the fact that unless it is rehabili-tated, the road will deteriorate to gravel standard. These estimates areas follows (1976):

Average Vehicle Operating CostsWithout (in USé/km) With

Rehabilitation Rehabilitation

Passenger cars and lightcommercial vehicles 9.3 6.4

Trucks less than 10 tons 20.7 12.6

Heavy trucks and tankers 50.5 29.2

For that part of the Niger traffic which would be diverted to other routes ifthe Parakou-Malanville road were not rehabilitated, the user's savings con-sist of the difference in transport costs between the improved Dahomey routeand the next best alternative route (Annex 1, para. 22). The anticipateddevelopmental effects of the project (para. 5.05) and the difference inroad maintenance costs on the project road, with and without the project,have also been considered.

5.10 While it would be possible to calculate a single rate of returnfor the proposed investment, such a calculation would not reflect the un-certainties with regard to the future share of Niger traffic likely to beretained on the Dahomey route. Instead, therefore, a probability analysishas been carried out with each of the major variables in the analysis beingassigned a range of possible values. Various assumptions have been testedconcerning the development of commercial navigation on the Niger Riverroute as well as other factors affecting future Niger transit traffic, to-gether with the estimates of annual traffic growth, of generated traffic,of construction costs, maintenance costs and vehicle operating costs. Theinputs used in the calculation are shown in Table 6. The full range ofpossible returns and the likelihood of various results within this rangewere calculated by utilizing a computer program developed by the Bank Group.The results of the probability analysis, shown graphically below, indicatethat the expected economic return on rehabilitation of the Parakou-Malanvilleroad is 17%. As the probability is almost 95% thatthe economic returnwill be greater than 10%, the investment is considered to be sound. Theexpected economic return for the section to be financed by IDA is 19%, witha 97% probability that the economic return will be over 10%. The higherreturn on this section taken alone is due largely to the higher trafficlevels on the southern half of the road.

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RESULTS OF PF%OAE>ILITY ANALYSIS

t100%

e 90% 1 _ _ . 4 _ .- 0% t

»@80%_ _ _ _ __ _ _ 7 - __ _ 2 %20%

__% 30%W

i'-i 60% ~~~~~~~~~~~Mean Return hO d~

' 60% ___ - -_ Parakou-Malanville road 5O% %

40% 17.0% 60%

20° 90% r$~~~~~~~~~~~~~~~~~~~~~~~~ O 00%

O 2 4 6 8 10 12 1h 16 18 20 22 24 26 28 30

ECONOMIC RETURN (%)

The Dahomey Case (See Annex 2)

5.11 Rehabilitation of the Parakou-Malanville road will contribute toone of the most important objectives of the transport policy of the Govern-ment of Dahomey, i. e., to maintain the Dahomey route as one of the mainoutlets for Niger. The Government correctly believes that if Dahomey wereunable in the future to retain a sufficient share of the Niger transit traf-fic, its economy would suffer considerable loss in revenues and employment.Niger transit traffic plays quite an important role in the modern sector ofDahomey's economy. Gross payments for all services rendered by Dahomey forthe transit of Niger traffic are currently estimated at about CFAF 2 billion(US$8.7 million) per year. The foreign exchange expenditure incurred in pro-viding these services amounts to roughly 45% of total revenues. The netforeign exchange receipts due to Niger transit traffic can thus be currentlyestimated at about CFAF 1.1 billion (US$4.8 million), i.e. roughly 10% oftotal exports.

5.12 The above analysis (para. 5.10) has established the viability ofthe project on a regional basis without attempting to differentiate betweenthe outlays and the returns for each country. The proposed project can bepartly considered from the viewpoint of Dahomey as an investment to promotethe sale of transport services to Niger. As Dahomey will bear the fullcost of the project, it would be important to assess the soundness of thisinvestment compared with other investment opportunities available inthe country. Returns to Dahomey from the project will consist of: (i) sav-ings in transport costs for domestic traffic, (ii) developmental effects,

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and (iii) net receipts from the Niger transit traffic which because of the

project, would be retained on the Dahomey route (Annex 2). The project

was analyzed by comparing its economic cost with the anticipated economic

benefits which will accrue to Dahomey over the 20-year life of the roads.

Net returns from Niger's transit traffic have been quantified assuming the

salaries of local personnel to represent no economic cost, in view of the

widespread unemployment in Dahomey. The flow of costs and benefits is

shown in Table 7. On this basis, the best estimate of the economic return

is about 13%, which indicates that the project is a sound investment pro-

position from the viewpoint of Dahomey.

5.13 In order to realize the above return, however, the transport

agencies and firms involved in operation of the Dahomey route will have to

maintain their present level of efficiency; this would require that Dahomey

undertake the steps necessary to improve management of the route and to

reorganize the railway. For the purpose of the present evaluation, it was

assumed that the rates of the port and railway would remain at their present

level. A Bank Group study has determined that if OCDN continues to receive

assistance from FAC, as can reasonably be expected, then the planned invest-

ments of CFAF 1.5 billion over 1972-80 for track renewal of the main rail

line would not necessitate an increase in present tariffs. Although it was

assumed that present rates would be maintained, it is not implied that this

would be a good policy for Dahomey. As part of the measures to improvemanagement of the route, Dahomey should in the future pursue a flexible tariff

policy aimed at maximizing its returns from the Niger transit traffic.

5.14 To allow for the uncertainties affecting the forecast of future

traffic on the Dahomey route, the return to Dahomey has been computed by

assuming a 20% reduction in receipts from the retained traffic, and a 10%

reduction in benefits for domestic traffic (Table 7). Even under these un-

favorable assumptions, however, the return to Dahomey remains above 11%.

C. Rehabilitation of the Cotonou-Bohicon Road

5.15 The road from Cotonou to Bohicon is the first part of the country's

main trunk road stretching north from the capital. The two sections of this

two-lane paved road to be rehabilitated under the project have deteriorated

to gravel standard as a result of frequent flooding and a weak foundation.Traffic on the Godomey-Abomey Calavi section (6 km) averaged about 860 vpd

in 1971, and on the Sehoue-Zakpo section (14 km), which has several emall

bridges, about 420 vpd. About 85% of the traffic consists of passenger cars

and light commercial vehicles; the remainder are. heavy vehicles. On the

basis of a 20-year economic life (1975-94) of the road, and savings in vehicle

operating costs and road naintenance costs, rehabilitation is expected to yield

an economic return of 19% for the 6 km section, and of 14% for the 14 km section.

Even under the unfavorable assumption used for sensitivity purposes, when costis increased by 10% and benefits decreased by 10%, rehabilitation of the two

road sections remains justifiable with economic returns of 15% and 11% re-spectively.

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6. AGREEMENTS REACHED AND RECOMMENDATION.

6.01 During Credit negotiations between the Government and the Asso-ciation, agreements were reached on the following principal points:

(a) any northward extension of the Cotonou-Parakou railway will beundertaken only after the Association has been provided witha study establishing, to the mutual satisfaction of the Gov-ernment and the Association, the economic justification forthis work. This study would have to be carried out by qual-ified consultants acceptable to the Association (para. 2.10);

(b) the closing of the western coastal railway line has beenpostponed until January 1, 1976, on condition that (i) nocapital expenditures will be made on the line or on itsequipment, and (ii) rates will be adjusted as necessary toeliminate the remaining deficit (para. 2.12);

(c) a financing plan for highway maintenance expenditures overthe period 1973-76 (para. 3.12); and

(d) financing arrangements for the project (para. 4.17).

6.02 Within one year of signature of the Credit Agreement, the Govern-ment will furnish for approval by the Association a program of measures tobe taken: (i) to improve management of OCDN, with particular emphasis onoperation of the Cotonou-Parakou railway line (para. 2.10); and (ii) tostrengthen the Directorate of Land Transport to enable it to play an activerole in defining transport policy and in planning investments in the sector(para. 2.15).

6.03 The project is suitable for a Credit to the Government of Dahomeyin the amount of US$11.8 million equivalent.

May 7, 1973

Table 1

DAHOMEY

SECOND HIGHWAY PROJECT-

Highway Network - 1971(km)

Paved Gravel or Earth TOT-AL

A. Classified Network

Primary roads 627 1,567 2,194Secondary roads 49 1,167 1,216Tertiary roads - 1,100 1,100

Total classified network 676 M34 4,5a0

B. Unclassified Network - 2,300 2,300

TOTAL 676 6,t34 6,810

Source: Ministry of Public Works and Transport, February 1972

September 1972

Table 2

DAHOIOEY

-SECQND HIOEWAY_PROJECT__

VehicleFleet - 196 7-70 i

Estimated Number at End of Year Percentage of1967 1968 1969 1970 Total in 1970

Passenger Cars 6,953 6,933 6,995 7,011 6e

Light trucks, vans, 2,679 2,624 2,608 2,662 24hetc.

Heavy trucks 770 735 766 855 8%

Truck-trailers 126 124 123 126 1%

Special purpose 177 173 181 195 2%vehicles

TOTAL 10s705 10,589 10,673 10,849 100%

New cars purchasedduring the year__ 1,438 1,231 1,371 1,923

Source: Ministry of Public Works and Transport, February 1972

Septsmber 1972

Table 3

DAHOMET

SECOND HIGOWAY PROJECT

Annual Highway Expenditures(OFAF million)

Government' 8Recurrent

-------Capital Expenditures--------- Expenditures forYear FED FAC IDA Government Total Maintenance TOTAL

1965 53 53 236 289

1966 528 528 198 726

1967 716 716 197 913

1968 44 44 162 206

1969 140 140 198 338

1970 317 86 55 458 288 746

1971 470 200 670 401 1,071

Source: Ministry of Public Works and Transport, February 1972

September 1972

Table 4

DAHOMEY

-.---- SE0ND UIGUWAY POJEOT _

Des ign Standards for theParakou-Malanville Road

Design speed: 80 km/h

Horizontal Curves: minimum radius 600 m

Vertical Curvas: minimum radius, crest 5,000 m

Stopping sight distance: 200 m

Maxizm=u gradet (normal) 3.5 %(in exceptional case) 6.2 %

Road width: 9.0 m

Pavement width: 6.o m

Shoulder width: 1.5 m

Pavement type: subbase Selected granular materialsbase Cement statilized granular materials5

(alternatively: crushed stone)surface course Double bituminous surface

treatment(alternatively: sand asphait course)

Pavement design: design load 13 t

Source: Consultants Dorsch A.G., Highway Engineering Study, November 1971.

September 1972

Table 5

DAHOMEY

SECOID HIGHWAY PROJECT

Estim.ated Schedule of Disbursements

IPRV/IDA Fiscal Year Oumulative Disbursementand Quarter Ending at End of 'Quarter

(Us$ '500)

1973/74

March 31, 197h 850June 30, 1974 2,300

197h/75

September 30, 1971h 3,750December 31, 1974 4,750March 31, 1975 5,350J\ine 30, 1975 6,600

1.975/76

September 30, 1975 6,900December 31, 1975 8,800March 31, 1976 9,350June 30, 1976 10,500

1976/77

September 30, 1976 11,250December 31, 1976 11,375March 31, 1977 11,600June 30, 1976 11,800

Source: Mission estimate, May'1972.

April 1973

Table,6Pege 1

DAiOMEY

.!c:0R4m pyTiffl'MAr p.TT

Inputs for Probability Analysis of &Ronomie Rtumrn

Parakou-Malanville Road (319 krn) - 1974-39S5

item Basic Estimate2/ Nature of Uncertainty Prba t itit___________________ Vira'1tion f rom Orgia Prebability

1. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ J. Conistruction ot- _2__1

Section I !.~J5s CFAF 560 million - Outcome of bidding -5 to +55Section Il CFAF 420 million - Possibility to reuse +5 to +10 65Section III CFAF 1065 million existing base material +10 to +15 20Section IV CFAP 515 million +15 to +25 10

Total CFAF 2960 million

2. FMair.tenance Cost iJ CFAF _16 million - lack of data -25 to +25 Uniform- Weather conditions and

3. Annual Traffic Growth effects of heavy rainfallA. Vehicles (1) and (2)

Sections I to IV 1576-1965 t 5.5% - Piedium term -20 to -7 15forecast -7 to +7 70

+7 to +20

1986-1995, 4% - Long-term -25 to -l5 eforecasts -15 te -5 1.7

-5 to 45 50+5 to +15 17

êl5 to +25 8

B. Vehicles (3) heavy5" 1976-3980 7.8% - Short-tern -15 to -5 10truoks for Niger forecasts -5 to +5 80transit traffic +5 to +15 10

1961-1985 4.1% - Medium-teri -20 to -7 15forecasta -7 to +7 ' 70

+7 to +20 15

1980-1995 4.1 - louig-t!m, -25 to -i5 14foreeasts -15 to -5 17

-5 to +5 50+5 to +15 17

+15 to +25 8

4, Â-verage daily trafificin 1976 6/

A. Yehicles type (1) type (2) - Lack of accuracy -15 to -5 10of traffic counts -5 to +5 80

Section I 62 47 conducted in 1908- +5 to +15 10Il 142 43 1972

IlI 59 35 - Short-term forecastIV 39 12 1971-76

B. Vehiele type (3)heavy trucks carrying Niger traffic

(i) Sections I to IV 514 - - Lack of accuracy of -15 to -5 10(Total potential Niger traffic present traffie estimates -5 to +5 80in daily nuaber of trucks) - Short term forecaat +5 to +15 10

1971-1976

(ii) Proportion of potential 8/ - Possible scope and timiingNiger traffic on Dahomey of cormercial navigationroute includ-ing permanent on Niger River betweonand retained traffic Niger Del-ta porta and Gay&

and Niamey.1976 80% _ Probability rating: -'t to -6 3

- rapid development 30% -6 to +8 40- slow development 30% +8 to +24 30- best. estimate 140%

1980 60%, -9 to -3 30-3 to +13 14o

+13 to +39 -Io

1965 h16% -9 to -3 30-3 to +15 140

+15 to +45 30

1590 30% 0to +5 70+5 to +"5 30

Page 2

Item Basic Dstimate Nature of Uncertainty Probability DistributionVariation iromi Original Probability

Eatimatt in n Fro

5. Vehicles operating costa (CFAF per veh. per km)

A. Without the project Imprecision of estimsateFuture deterioration of theroad

SectJon I

Type of vehi'cles: (1) (2) (3)

1976-1980 24.12 54i20 131.371981-1985 24.98 56.03 136.201986-1990 25.49 57.20 139.251991-1995 25.56 57.44 139.88

Section Il

1976.1980 25.io 56.38 137.46iî-ôU1985 25.40 57.o6 139.22 -15 to O' io1986&1990 25.53 57.38 139.73 0 to +10 45199i-m1995 25.56 57.44 139.-8 +10 to +20 30

+20 to +35 15Section III

1-976-1980 24.37 54.47 132.291981-1985 24.95 55.57 136.101986-1990. 25.36 57.02 138.781991-1999 25.50 57.32 135.57

Section IV

1976-1980 23.31 51.67 125.171981-1985 23.44 52.05 126.191986-1990 23.75 52.83 128.181991-1995 23.57 53.44 125.69

B. With the project 10/ Imprecision of estimate -i5 to -5 15- -~~~~~~~~~~~~5 to -5 70

1976-1995 Sections I to IV +5 to +15 15(1) (2) (3)16.4 32.4 74.8

6. Generated Traffic 11/

Type (1) Type (2) Forecasting uncertainty -15 to -5 15-5 to +5 70

Sections I and Il 20% 20% +5 to +15 15Section III 15% 15%Section IV 10% 15%

Note: Vehiele Type (1) Car and vans anci rick-up up to 2 tons(2) Trucks, buses from 2 to 10 tons(3) Heavy trailer trucks over 10 tons (22.5 ton cargo or 22,000 liter tankers)

1/ Consultants base estimates and mission estimates. The ana1ysis is based on early 1972 prices; net of all taes

and duties.Y Supervision included; 40 percent of cost in the first construction year and 60 percent in second construction year.

/ Section I Parakou-Ndali 60 kmII Ndali-Bembereke 114 kmIII Bembereke-Kandi 110 kmIV Kandi-tialanville 105 km

, Difference betwecn total maintenanec cost vith and *uithout the proJect over 20 year economic life; pavementresurfacing included every 8 years.

/ Growth rate have been deducted from study of Niger transit traffic; see Annex 1, para. 26.6/ Traffic components are correlated./ See Annex 1, para. 21.

See Annex 1, para. 29./ VOC in the without project case tnking into account future deterioration of the existing road./ Savings in VOC for the thrfe types of vehicles are correlated./ Expressed as percentage of normal traffic; no generated traffic for Group (3): benefits

from generated traffic are campated by the use of triangle method.

Source: N.D. Lea & Associates and Lamarre Valois Internat1onal Lttd., Dahomsey Land Transport Survey, 1969n,amarre Valois International Ltd., Study of Niger Access to the Sea, June 1971

Dorsch A.G., Hlighway Fnginecring Study, November 1971Mission estimates, August 1972

April 1973

Table 7

DAHOMEY

S.COND ITCWAY PROJRCT

Evaluation of the Returns of the Project to Dahomey

(CFAF million)

Con- Mainte- Savings2/ to Receiptsh/from Net Stream ofstruction nanca Domestic Traffic Niger Traffic Costs and Benefits

Year Costi/ Cost{' Best Low Best Low Best LoW

l97' -1107 54 -1053 -10531975 -1660 57 -1603 -1603

1976 52.5 108.5 97.7 32.9 26.3 193.9 176.57 36 117.6 105.9 67.8 54.2 221.4 196.18 37.5 126.8 114.1 102.7 82.2 267 233.89 39 135.9 122.4 137.6 110.1 312.5 271.580 43 145.1 130.6 172.5 138 360.6 311.6

1981 15 154.2 138.8 207A4 165.9 376.6 319.72 47 167.1 150.4 231.2 184.9 445.3 382.33 -716 180 162 255 204 -281 -3504 48 192.9 173.7 278.8 223 519.7 444.75 51 205.8 185.3 302.6 242.1 559.4 478.4

1986 52 218.7 196.9 326.5 261.2 597.2 510.17 55 231.7 208.6 380.2 30>4.2 666.9 567.88 58.5 244.8 220.3 43h 347.2 737.3 6269 60 257.8 232.1 487.8 390.2 805.6 682.3

90 -711.4 270.9 2h3.8 541.6 >433.3 101.1 -34.3

1991 67.5 283.9 255.5 59<.14 L476.3 0,6.8 799.32 70.5 298.5 268.7 62o.$ I$6.5 989.'3 835.73 - 74.3 313.2 2 81.g 65.83 516.6 1033.3 872.74 76.0 327.8 295.0 671.0 536.8 1074.8 907.8

1995 80 342.5 308.2 696.5 557.2 1119 945.4

Econcthic Return: 13% 11%

Note: Negative value indicates net cost; positive value indicates net benefit.The analysis is based on early 1972 prices.

f Net of taxes and local salary expenditure (-15»); 6% for supervision, and105 for physical contingencies included.

2/ Best estimates of maintenance cost net of taxes and local salary expenditure(-255. for current maintenance and -15% for periodic maintenance).

3/ Tsken from Table 6, net of taxes and local salary expenditures (-îO).See Annex 2, Table A2-3.

Source: Mission estimates.

April 1973

DAIlOME-f

SECOND HIGHWAY PR`JECT

Analysis of Future Volumes of Niger Transit Traffic on the Dahomey Rouic

1. Nigerts vast landlocked territory lies to the north of Togso, ahcpncyand Nigeria. Most of Nigerts internal transport moves on its well-developedroad network. Groundnuts and cotton are the main exports while imports ineludepetroleun products and manufactured goods as well as chEffnicals for t}he Arlituranium mine. Niger presently has three main outlets to the sea:

(i) the Dahomey route which serves western and central Niger fromthe port of Cotonou;

(ii) the Nigeria land route'which connects Nigerl's central andeastern regions to the ports of Nigeria (mainly Lagos) byroad and rail;

(iii) the Ivory Coast route which connects Niger's western regionwith Abidjan via Ouagadougou in Upper Volta by road and railor by road entirely.

A. Fast Volumes and Routing Pattern

2. Table Al-i shows the volume of Niger traffic uhich was channoLledthrough Dahomey over the period 1966-71. ',JIide variationi in the volume etexports are due to increases in groundnut production o-ter the year- 1Q67-6pcombined with a shift in routing. Dahoney's share of groundnut exportsincreased from 20% in 1966 to more than 35/ in 1968-69, and bas remaine_stable at about 30% in 1970-71. This shift was caused by capacity shortageon the Nigeria land route. On the whole, groundnut exports through 1971have slightly decreased compared with the 1966 level. Other export:3, mflinlycotton, are increasing steadily but represent small tonnages. Imports havegrown steadily: petroleum at the average annual rate of about 6% and generalimports at about, 6.5%, not taking into account the traffic generated byr theArlit uranium mines. The Arlit uranium mine and concentrating plants in theAir Region were built by the French lead-mining consortium SOMA]R over theperiod lQ69-70 and entered *nto production in l97, generating about 10,200tons of transit traffic.

ANNEX 1Page 2

3. Volumes of Niger 1 s transit traffic routed through Dahomey in 1971are ai follo0Ws:

(iOOO t)SxportS 46.0Imports:Petroleum products 52.5General imports 54.1Supplies for Arlit mines:

- petroleum 3.0- chermicals and other

Total imports 116.

Total exports and imports 162

4. The following table indicates the proportion of total Niger inter-national traffic by type, which has been routed through Dahomey over the pasttwo years. This routing pattern can be considered as normal, given the Dresentstate of existing access routes.

Niger transit traf tic channeled through Dahomey route(as % of total transit traffic)

Agricultural exports 30%Petroleum products 80%General imports 50%Supply for uranium mines(other than petroleum) 100%

B. Future Volumies of External Traffic

5. Future transit traffic on the Dahomey route will depend on thevolumes of overseas trade generated by the economy of Niger and how it isrouted. Future volumes of general imports and petroleum p-oducts canadequately be forecasted on the basis of past trends, with the needs of theArlit uraniumx mine and i-ts planned extension being taken into accountseparately. Niger's exports will consist mainly of groundnuts, replacedgradually by groundnut oil, cotton and foodstuffs, notably niebe (black eyedbeans). Future volumes of agricultural exports are difficult to assess sincethey will depend on climatic conditions, domestic marketing organization andworld market.

6. The forecasts proposed on the following page are based on projectionsprepared by the consultants Lamarre Valois International Ltd. for their study"Etude des Acces a la Mer de la Republique du Niger", November 1970.

ANNEX 1Fage 3

Best Estimates of Volume of

Transit Traffic - 1971-95

Forecast Basis

Petroleum products 1/ 6% p.a. from 1971-95 Past trend 1966-71 7% 1/

General imports 1/ 5% p.a. from 1971-95 Past trend 1966-71 6% 1/,

Uranium mine 1971-74: increasing linearly Development of productionfrom 10,200 t (1971) to of existing mine.36,500 t (1974), of which15,000 t petroleun, 20,000 teupplies and chemicals,and1,500 t exports of uraniumore.

1975-80: increasing linearly Second mine entering irltOfrom 37,500 t to 73,000 t, production. The decision toofi which 30,000 t of petrol- double existing facility haseun products,10,000 t sup- been taken recently by theplies and 3,000 t uranium ore, SOMAIR. Further extenEion noixleveling off thereafter. under consideration (notably

by Japanese firm) has notbeen taken into account.

Agricultural exports

(a) Groundnuts and Leveling off at 35,000 t Production has declined ingroundnut products recent years and is expected

to stagnate or at best growslowly. As Niger has decidedto process all its productiondomestically, exports Touladshift f rom groundnuts togroundnut oil.

(b) Cotton, onions Increasing linearly from The growth of cotton prcductioand others 6,000 t in 1971 to 14,500 t which developed considerablv

in 1980 and 31,500 t in over t'ie last three years is1990. Leveling off there- expected to continue toafter. increase at a moderate pace.

(c) Niebe (black-eyed Increasing linearly from The introduction of simplebeans) 2,000 t in 1971 to h7,000 t preservation process wi]l

in 1980 and 55,000 in 1990. allow the full developmentLeveling off thereafter. of this production for whlch

Niger has a comparativeadvantage.

1/ Not including uranium mine traffic.

ANNEX 1Page 4

7. The above forecasts have bean used to compute the volume of transittrade which would be channelled through Dahomey assuming no changes in thepresent routing pattern. Results are shown in Table Al-2 and summarized below:

Transit through Dahomey under Present Routing Pattern(1,000 tons)

First YearBase Year of Project1970-71 Benefits 1976 1980 1985 1990-.1995

Petroleum products 56.0 81.2 118.5 148.2 188.0General imports 59.9 85.5 124.0 147.2 176.8

Exports 43.7 68.3 99.5 112.0 124.5

159.6 235.0 342.0 407.4 489.3

C. Future Routing

Development of Transport Infrastructure

8. The pattern of distribution of Niger international traffic will evolve

as existing routes are improved and new ones are opened. The single majordevelopment likely to affect Dahomey's share of Niger's transit traffic is the

opening of the Niger River Route. Recent studies have concluded that the

establishment of commercial navigation from the Niger River deltâ porté

(Warri and Port Harcourt) to Gaya and Niamey, respectively 1,370 km and 1,670 Ionupstream, is technically feasible for an average period of six to seven monthseach year (September/October to March/April). It is difficult at this stage toassess the economic advantages as well as the optimum scope and timing of theproposed navigation because of uncertainties concerning tonnages, transportcosts and the amount of necessary investment in navigation aid and terminalfacilities. The Government of Niger, which has a standing policy of trying todiversify its access to the sea, has decided to undertake the experimentsnecessary to check the feasibility of the Niger River Route. Field tests withequipment and technical assistance financed by the Canadian InternationalDevelopment Agency (CDA) are scheduled for 1973.

9. In order to reach a conservative estimate of the future trafficvolumes on the Dahomey route,one should assume that the Niger River Routewould start to be operational by 1975 for the transportation of petroleumproducts which, according to several estimates, could be transported by theriver at savings representing 15 to 50% of the cost on the Dahomey route.Petroleum traffic could be initiated rapidly since it does not required expen-

sive terminal facilities. Dry goods traffic requiring more important terminalfacilities would start later. Once the petroleum traffie develops, river

tcarriers will certainly attempt to use the available return trip capzcity for

transporting bulk exports, groundnut products, cotton and foodstuff;/.

1/ The following Eechnical arrangements are being considered for the transportof petroleum products and dry cargo with the same equipment: petroleumproducts would be carried upstream in folding plastic reservoirs,whilst the

barges with folded reservoirs on board would carry dry goods downstream.

ANNEX 1Page 5

It is reasonable to expect that the transport of agricultural exports on theNiger River route would start to devolop by 1980. As far as general importsare concerned, it seems that their diversion to the Niger River route ahouldnot be considered before 1985 because of their high average value and increasedrisks and longer travel time.

10. The Ivory Coast route will benefit ffurther from the advantages ofbetter commercial organization and lower maritime freight rates. The followinginvestments are envisaged on this route:

(i) paving of the Ouagadougou-Zorgo-Koupela road section (130 ka)by 1975;

(ii) improvement of poorly maintained laterite sections totalling383 lm and paving of the Niamey-Torodi section (154 km) by1980; and

(iii) paving of the entire route by 1990.

11. The Government of Togo has embarked on a program for paving of itspart of the road linking the Port of Lome to Upper Volta and to Nianey. Thefollowing improvements are under execution or planned on the Togo route:

(i) by 1975-77 the entire road from Lome to Lama Kara (433 km)will be paved;

(ii) by 1980 the poorly maintained laterite sections totalling436 km will be improved and the Niamey-Torodi section willbe paved;

(iii) in the long run, say by 1990, the entire 1,240 lm road wouldbe paved.

12. The Ni%eria land route presently suffers from the congestion on theNigerian railways, particularly acute during the crop season and from the poorservices offered in the port of Lagos. The situation of Nigeria's railwaysand port is expected to improve slowly. On the other hand, the paving of theroad from, Dosso to Maradi (525 km) and Tchadaoua (600 km) to be carried outover the period 1973-76 will resuit in substantial reductions in trucking coststo and from Parakou. These reductions representing 10 to 15% of the presenttransport cost from Cotonou to Maradi would more than compensate for possibleimprovements on the Nigeria land route. It is thus reasonable to assume thatthe Dahomey route would retain its present share of the transit traffic toand from central Niger except for diversion to the river route.

COmparison of Transport Costs

13. Transport cost as experienced by the users on competitive routes havebeen estinated for western Niger (focal point Niamey) and central Niger (focalpoint Maradi) (see Table Al-3), taking into account planned improvements. Thecosts on the Ivory Coast route have been adjusted to reflect lower shippingrates. Transport costs on the river can hardly be estimateed at this stage sincethe capacity of the barges, the number of barges per convoy and the duration ofthe trip will oaly be known after the proposed experiment scheduled for 1973-74.To underline the uncertainty attached to transport coats on the river route, two

ANNEX 1Page 6

estimates are given. The "best" estimates, those which have been adopted forcomparison of transport costs, reflect the conclusion of the 1970 study "Etudesdes Acces a la Mer de la Republique du Niger". The "low" estimates reflect theexpectation of the team of experts in charge of the experiment. The low esti-mates which seem clearly optimistic are as much as 40% below the best estimate.

14. Transport cost on the OCDN railway is basid on the average rates in1970. Average railway rates for general freight are roughly equal to transportc>st on a paved road. For petroleum products they are about 15% abovy costs ona paved road. Although transport costs shown in Table Al-3 are approximations,clear trends can be drawn from their comparison. In view of the uncertaintyconcerning the future distribution of Niger transit traffic the forecasts weremade in the form of a probability range. The range was defined to cover pos-sible variation from the best estimates which are analyzed hereafter. Bestestimates of Niger transit traffic routed through Dahomey were prepared forthe "with project"t alternatives. A separate analysis was then performed toestimate the portion of the traffic which would be diverted to other routesif the Parakou-Malanville road were not reconstructed, i.e. for the "withoutproject" alternatives.

General Freight

15. If the Parakou-Malanville road is rehabilitated the Dahomey routewill remain the least expeilsive route for general freight for both western andcentral Niger. For western Niger increasing competition would come from theTogo route for which the cost differential would decrease from about CFAF 1,400in 1971-80 to almost nothing in 1985-90 when the paving of the route would becompleted. The cost differential on the Ivory Coast route will vary from aboutCFAF 2,800 now to about CFAF 1,250 in 1985. If the Parakou-Malanville road isnot rehabilitated the Dahomey route would cease to be the most economic routefor general freight for central and western Niger by 1980 and by 1985-90 itwould be more costly than both the Ivory Coast and Togo routes. If the NigerRiver route proves feasible and if necessary infrastructure investments areundertaken on this route, it would be able to attract some of the agriculturalexports from, central Niger. This is all the more likely since the navigationperiod corresponds roughly with the crop season.

16. Traffic assignment curves are not known and shifts in routing whichmay result fron the changes in cost differentials can only be estimated appro-ximately. The following trends have been inferred from the above to define thebest "with project" estimates: the Togo route will start attracting freighttraffic from western Niger by 1985; its percentage of general imports to Niameywould grow up to 20% by 1990 when the cost differential would be negligible.The Ivory Coast route will develop its comparative advantages and its share ofimporfs to western Niger would continue to grow attracting 5% of Dahomey's shareby 1975 and 10% in 1980. The Niger River route will not attract cargo to orfrom western Niger. The cargo traffic for central Niger will stay on the Dahomeyroute except for diversion to the river which would reach 25% by 1985.

17. If the Parakou-4ilanville road is not rehabilitated, i.e. in the"'without project" case, the Dahomey route would romain the least expensiveroute for general imports to western Niger until 1980. The cost difforentialwith the Togo route would dwindle rapidly after 1980 and be negligible by 1985

ANNEX 1Page 7

at which time the Togo route could attract about 20% of imports for westernNiger. By 1990 the Dahomey route would be among the most expensive routes andwould retain no more than 30% of its present share of imports for the westernregion, the remnainder of which would be shared between the Togo and the IvoryCoast routes. If the Parakou-Malanville road is not rehabilitated, agriculturalexports would certainly be diverted to the Niger River route sooner and inlarger proportion. Imports to central Niger including the traffic to the Arlituranium mines have only the Niger River route as an alternative to the Dahomeyroute. If the Parakou-Malanville road is not reconstructed there will beincreased pressure to develop the transport of bulk imports (fertilizers andchemicals for the uranium mine) on the Niger River route. One could thus expectthat by 1985, 20% of the imports would go on the Niger River route growing to40% by 1990.

Petroleum Products

18. The rough estimates of transport cost show clearly that the NigerRiver route if proved feasible will attract the petroleum traffic. Estilatedcost differentials between the Dahomey route and the Niger River route rangebetween CFAF 2,500 and CFAF 7,000 per ton. In order to reach a realistie esti-mate of future traffic volumes on the Dahomey route, it has been assumed tbatby 1980, 60% of Niger petroleum imports will be carried on the Niger river routeand 75% by 1985. The remaining 25%, including aviation fuel, would stay on landroutes. In view of the possible establishment of a refinery in Togo one shouldassume that by 1985, 10% of the remaining 25% will come from Lome.

19. If the Parakou-Malanville road is not rehabilitated, the cost difffer-ential between the Dahomey and the Niger River route would range between CFAF 5,500and CFAF 10,000 per ton. In view of the added incentive, the development of theNiger River route would take place more rapidly and it is assumed that by 1980. 75%of Niger petroleum products would go on the river. The Togo route would verylikely capture as much as 20% of the remaining 25% as soon as 1985.

D. Future Volumes of Niger Transit Traffic on Dahomey Route

20. For the purpose of the present appraisal the future Niger transittraffic on the Dahomey route has been classified in two categories:

(i) the so-called permanent traffie which would remain on theDahomey route even if the Parakou-Malanville road îs notrehabilitated; and

(ii) the so-called retained traffic which would stay on theDahomey route rr-the Parakou-lMalanville road is rehabili-tated but would be diverted to another route if this isnot the case.

If the Parakou-Malanville road is rehabilitated, the traffic on the Dahomey rsltewould consist of both permanent and retained traffic. If the road is notrehabilitated the Dahomey route would only have the permanent traffic.

ANNEX 1

21. The resulting projections are presented in Table Ai-4 and Al-5. Theyare summarized below.

Future Volumes of Niger Traffic on Dahomey Route

------ Total tonnages (1,000 t per year)--------1976 1980 1985 1990

(a) Potential 235.0(100%) 342.0(100%) 407.4(100%) 489.3(100%)(b) Permanent 204.2 (86%) 211.5 (62%) 186.7 (46%) 153.7 (31%)(c) Retained 12.3 (5%) 43.6 (13%) 62.9 (15%) 108.7 (22%)

Total volumes"with project"(b)+(c) 216.5 (91%) 255.1 (75%) 249.6 (61%) 262.4 (53%)

----------Average Number of Trucks Daily----1976 1980 1985 1990

(a) Potential 58.B 78.3 95.5 123.0(b) Permanent 43.3 44.2 34.9 28.2(c) Retained 4.2 8.0 12.9 22.8

Total trafficIlwith project"(b)+(c) 47.5 52.2 47.8 51.0

E. Savings In Transport Costs

22. For the permanent traffic,the savings in transport cost due to therehabilitation of the Parakou-Nalanville road are equal to the difference invehicle operating cost "with" and "without" the project. In the case of theretained traffic, the next best alternative to the Dahomey route "with" theproject is another international route rather than the Dahomey route "without"the project. The savings for that traffic generated by the project would thusconsist of the dif£erence between the economic transport costs on the Dahomeyroute with the project and those on the next best international route.

23. The volumes of traffic retained from the Togo and the Ivory Coastroutes are small and would represent only marginal increment compared to thetotal traffic on these routes. One can reasonably assume that no investmentwould be needed on these routes specifically to carr-y the retained traffic ifthe Parakou-Malanville road would not be reconstructed. The economic transportcost on the Togo and the Ivory Coast routes can thus be taken as the marginalcost. If the Parakou-Malanville road project were not undertaken, the NigerRiver route would also carry a share of what is being considered as retainedtraffic. This would require that investments in equipment and terminal facil-ities be carried out sooner than would be the case if the retained traffiewere clanneled through the Dahomey route. For this reason the amortizationof these investments has been includad in the estimates of economic transportcosts on the Niger River route.

ANNEX 1Page 9

24. The calculation of differences in transport costs (Table Al-7) showsthat in several cases (Togo 1980 general freight and Ivory Coast 1985 generalfreight) average transport costs on alternative routes arc higher than theaverage cost on the Dahomey route even without the project. This is to beexpected since we are only comparing averages. In these cases, for lack ofbetter information, the transport savings for the traffic retained from theseroutes have simply been equated with the savings expected for the permanenttraffic. Benefits from petroleum products traffic retained from the NigerRiver route have been taken as nil to reflect the fact that the average trans-port cost on the river route is less than the cost on the Dahomey route "with"the project. The above simplified assumptions may underestimate somewhat thesavings and will thus produce conservative estimates of the economic benefitsdue to the retained traffic.

Economie Benefits due to Retained Traffic(CFAF per ton)

1976 1980 1985 1990-95

Petroleumretained from Niger River route 0 0 0 0retained from Togo route - - 1,975 0

Imports to western Region -retained from Togo route - 1,375 1,335 15retained from Ivory Coast route - - 1,,435 1,235

Imports to central Regionretained from Niger River route - - 665 665

Exportsretained from Niger River route - 665 665 665

25. To prepare a simplified input for the computer program used in theevaluation of the Parakou-Malanville road, the savings for the retained traffichave been compared to the savings for the permanent traffic. The retainedtraffic has then been expressed in equivalent number of trucks of permanenttraffic. The computations are summarized below:

1976 1980 1985 1990Total savings on retained traffic(CFAF million par year) 0 21.34 69.28 55.56

Savings on permanent traffic for ADT=l 6.72 7.16 7.47 7.57(CFAF million per year)

Retained traffic expressed in equi-valent ADT of permanent traffic 0 3 9.3 7.3(trucks per day)

ANNEX 1Page 10

216. The resuiting traffic estimates are thus as follows:

ADT oni Parakou-Malanville road due to Niger Transit Traffic

1976 1980 1985 1990

Permanent 43.3 44.2 34.9 28.2i?etaincd equivalent o 3 9.3 7.3Total equivalent 43.3 47.2 44.2 35.5Potential 53.8 78.2 95.5 123.2

Total equivalent as percent-age of potential 80% 60% 46% 30%

F. Probability Analysis

27. The above traffic projections are best estimates based on the limitedavailable data and on judgment. They involve, however, considerable uncertain-ties arising mainly from the lack of a basis to forecast the future routingpattern of Niger transit traffic. In order to reflect the uncertainties affect-ing traffic projections, it was decided to apply the technique of risk analysisto the economic evaluation of the Parakou-Malanville road rehabilitation project.Each input was described in the foam of an original estimate and a range ofprobabilities. The definition of the range of probable volumes of Niger transitwraffic channeled through Dahomey should ideally be based on a traffic distri-

bution model. The necessary data for building such a model are, however, notavailable. The probability distribution was therefore assigned on the basis ofthe Bank Group's judgment as to the future volumes of Niger transit trafficand to the future percentages of this traffic routed through Dahomey.

28. The factors affecting future volumes of Niger transit traffic havebeen described in para. 5 above. The major uncertainties concern (i) thepossible increase in imports which might result from opening of a new uraniummimne; and (ii) possible wide variations in the volume of agricultural exportswhich are affected by weather condition, world market, etc. Variation in thevolume of exports would, however, have lesser effects than variations in-umports,because the volume of Niger traffic is expressed in number of trucksand the number of trucks are based on import tonnages (Table Al-5). Thegrowth rates for successive periods have been computed so as to model thevalues obtained for 1976, 1980, 1985 and 1990 (see para. 21). The uncer-tainty of forecasting future Niger transit traffic through Dahomey is takeninto account by the follow,ing: (i) the forecast for the first year of theproject has a probabilîty distribution centered on the best estimates with arange of -15% to +15% corresponding to short range forecast; (ii) the over-all growth rates also have probability distributions centered on the bestestimates with a range of -15% to +15% for 1976-79, -20% to +20% for 1980-84,and -25% to +25% for 1985-95.

29. The major ure crtainties affecting the future routing of Niger transittraffie arise from possible variations in the timing and scope of the develop-ment of commercial navigation on the Niger River route. The best estimatesare based on the realistic assumption that capacity of this route to carry

ANNIX 1Page Il

petroleum products will develop quicklybetween 1976 and 1980, while thecapacity to carry dry goods will develop more slowly in view of limitedcompetitive advantage and of the investments required in terminal facili-ties. If the proposed experiment (para. 8) on the Niger River route issuccessful and if the optimistic predictions concerning transport cost onthis route are realized, the traffic will develop much £aster than fore-cast. There is an equal risk, however, that navigation will be provedmore difficult than anticipated, in which case the development would bealower. The two possibilities are illustrated in Table A1-6 and summa-rized below:

Future Volunes of Niger Transit Traffic on Dahomey Route

AssumptionconcerningRiver Route 1976 1980 1985 1990

Total Tonnage rapid 171.7 237.1 169.5 262,4(1,000 t par year; best 216.5 255.1 249.6 262.4permanent and retained: slow 245.0 332.3 310.5 297.3

ADT (trucks) rapid 39.2 48.2 43.4 51.0best 47.5 52.2 47.8 51.0slow 57.3 68.4 67.5 56.0

30. The characteristics of the probability distributions modelling theuncertainty concerning the Niger River route are derived as follows: (j) therange of the distribution covers ail the values between those correspondingto the rapid and slow hypothesis; (ii) the range is divided into three zones:the central zone centered on the best estimates is given a probability of40% and the two exterior zone 30% each.

Probability distribution reflecting uncertainties concerningthe dovelopment of the River Route

Variation from best estimates average for period (in ,Assumption concerning 9b 19 l9River route

rapid -19 -8 -10 0 0best ° O ° ° Oslow +23 +40 +44 +14 +14

Probability Distribution: Variation from best estimates

Probabilities 1976 1980 1985 1990 1995

30% -19.to -6 -8 to -3 -10 to -3 - 0 - - 0 -40% - 6 to +8 -3 to +13 -3 to +15 0 to +5 0 to +530% +8 to +23 +13 to +40 +15 to +44 +5 to +14 +5 to +1I'

Sentember 1972.

Table Ai-1

DAHOIEY

SECOND HIGWAY PROJECT

Niger Transit Traffic

Aanual Tonnage 1966-71

(1000 tons)

1966 1967 1968 1969 1970 1971

A. EXPORTS (Southbond)

*roundnut and groundnutproducts 29.1 78.9 62.1 42.9 34.8 n.a.

(20.3%)1/ (39.2%) (36.4%) (31.5%.)

Others 1.6 1.3 1.6 7.1 8.7 n.a.

Total A 30.7 80.2 63.7 50.0 43.5 46 (estiniete)

B. IMIPORTS (Noithbacund)

Petroleum products 35.2 40.3 39.9 45.8 52.6 55.5(81%)2/ (97%) (89%)

Others 35 32 31 43.6 56.6 60.6(47%)3/ (41%) (52'J,)

Total B 70.2 72.3 70.9 89.4 109.2 116.1

Total traffic2-way (A and B) 100.9 152.5 134.6 139.4 152.7 162.1

1/ Percentage of total groundnut exports.

2/ Pcrcentage of total petroleum imports.3/ Percentage of total imports other thaa petroleum products.

Source: "Dahomey Land Transport Survey", Lamarre Valois Int. & Lea Ass. 1964"Etude des Acces a la Mer de la Republique du Niger"l, Lamarre Valois, Octobrp 197o.

- "Rapport annuel de l'OCDN" 1970, & prelimînary 1971 infornmation provided by OCDNPebruary 1972.

September 1972

Table A1-2DAHo<EY

SECOND HIGHWAY PROJECT

Potent,al Volunes of Niger Transit Traffic on Dahomey Route by Type

(1000 t/yoar) aseuw6g ame routing pattern as in 1970-71)

First YearBase Year of Project

1970-71 1976 1980 1985 1990-95

Petroleum products 52.5 66.2 88.5 118.2 158General imports

to Western Niger 37.7 45.9 58.9 75.2 95.8to Central Niger 16.2 19.6 25.1 32 41

Uranium mines:(a) petroleum prods. 3.5 15 30 30 30

(b) supplies 6.0 20 40 40 40

(c) exports 0.7 1.5 3 3 3

10.2 36.5 73 73 73Agricultural exports

(a) groundoduts 35 35 35 35 35

(b) cotton & others 6 9.8 14.5 23 31.5

(c) niebe 2 22 47 51 55

Total: 43 b6.8 96.5 109 121.5

Totals

Petroleimn produats 56 81.2 118.5 118.2 188

Other imports:to Western region 37.7 45.9 58.9 75.2 95.8

to Central region 22.2 39.6 65.1 72.0 81.09-.9 o5.5 124.0 147.2 176.8

Exports 43.7 68.3 99.5 112.0 124.5

Total Tonnage 159.6 235 3!42 !C7. à

Potential traffic expressed in daily number of trucks

Petroleum products 27.8 40.6 50.7 64.4Cargo 26 37.7 44.8 58.8

Total 53.8 78.3 95.5 123.2

Note Average daily number of trucks are computed on the basis proposed by ConsultantsLamarre Valois in the complementary econonic study of the Parakou-Malanville road.

(i) For freightt one round trip per 15T of cargo (22T trailer truck loaded at80%) in the most heavily trafficked direction

ADT - 2 x ann. al tonnage 0.3044 x annual tonnage35x l1

(ii) For petroleum product: one round trîp per 16T (20,000 liter trailer tankfully loaded)

ADT 2 x annulal tonnage - 0.342h x annual tonnage3 x16

Source: "Etude des Accès à la Mer de la République du Niger" Lamarre Valois Int. June 1971Mission estimates February 1972

September 1972

Table Al-3

râaport Costs on Alternagve Routes for Nirer Internationa ff

(CFAF per ton) L/

EstimatedLoadingfactor 1971 1976-80 1980-85 1985-90

WESTERN NIGER (NIAMEY)

General freight:Dahomey route with project 75% 7,765 7,765 7,765

Dahomey route without project 75% 9,375 9,140 9,200 9,285

Abidjan route 65% 12,150 11,900 11,100 9,000

Togo route 70% 10,815 10,205 9,100 7,780

Niger river route (downstream) 75% ,/ 9,100-5,500 9,500-5,500(Up ta Niamey) (best-low) (best-low)

Petroleum products:

Dahomey route with project 50% 13,025 13,025 13,025Dahomey route-. without project 50% 16,460 15,995 16,165 16,345

Togo route 50% 17,820 16,900 15,000 12,800

Niger river route (upstream) ) 50% 10,400-5,750 10,400-5,750 10,400-5,750) 75% 7,400-3,800 7,400-3,800

(best-low) (best-low) (best-low)

CENTRAL nIGER (MARADI)

General freight:

Dahomey route with project 75% 11,275 11,275 11,275Dahomey route without project 75% 12,650 12,610 12,715 12,765

Niger river route (downstream) 75% 3/ 11,940-9,170 11,940-9170(up to Gaya) (best-low) (best-low)

Petroleum products:Dahomey route with project 75% 20,585 20,585 20,585

Dahomey route without project 75% 24,015 23,550 23,695 23,810

Niger river route (upstream) ) 50% 19,750-14,040 19,750-14,040 l9,750-14,0140(up to Caya) ) 75% 17,950-12,440 17.950-12,1440

(best-low) (best-low) (best-low)

Definitn of routes:

Dahomey Route Togo Route_Cotonou-Parakou (rr) = 438 km Lome-Niamey (rd) 1,240 kmParakou-rlalanville (rd) = 320 kmMalanville-Niamey (rd) =_30Q k,m Paved in 1971: 250 km

Total to Niamey: 1,058 km Paved by 1975: 5140 kmFaved by 1980: 830 km

Malanville-Maradi (rd) - 760 km Paved by 1985: l,2140 kmTotal to Maradi: 1,51 km

Nirer River Route Ivorv Coast RouteNigeria Delta ports-Gaya (riv) = 1,370 km Abidjan-Ouagockugou (rr) = 1,148 kmGaya-Niamey (rd) - 300 km Ouagadougou-Niamey (rd) = 527 km

Total to Niamiey: 1,670 km Total to Niamey: 1,675 km

Gaya-Maradi (rd) -760 kmTotal to Maradi: 2,130 km

1/ In 1971 prices; road user costs, tariffs, and transfer costs oombined.Costs on OCDN railwa,r taken as average rates.

î/ Abidjan route: road transport cost minus CFAF 2,350/T reflecting averagedifference per ton on maritim rate between Abidjan andother ports, Cotonou and Lome.

3/ Petroleum in folding plastic reservoirs upstream, ombined with bulk ex-ports cbwnstream.

Source: "Etude Acces a la mier", id.DFW Internal Document on Dahomey Route, December 1971.

- Mission estimates February 1972.

September 1972

Table Al-h

DAHOMEY

SECOND HI( W AY PROJECT

Expected Breakdomn of Niger Transit Traffic over Possible International Routes1976-1995

A. Best Estimates of Future Changes with respect to present Routing Pattern(traffic diverted to other routes as percentage of total in each category)

-- General Imports Exports Petroleum

Year Routes To Western Ragion To Central Region Products

With Without With Without With Without With Witllout

1976 Nig*r River - _ -_ 20' 35%Togo _ _ - _ _ _ _ -

Abidjan 5% 5% - -

1980 Niger River - - - - - 207 60% 75%Togo - Io- - - - - -Abidjan 10% 10% - - - - - -

1985 Niger River - - - 20% 25% 35% 75% 75%,Togo 10% 20% - - - - 10% 20%Abidjan 10% 15% - _ - - -

1990-95 Niger River - - - 4h% 25% 50% 75% 75%

Togo 20% ho% - - - - 10% 20%

Abidjan 10% 25% - _- -

B. Forecasts of Niger transit traffic channelled through Dahomey Route 1975-1995Cin > of total potential traffic and in 1000 tons)

General Imports Exports Total Petroleum Totalto to Cargo products Tonnage¢

YrWestern Central

-ear % iooo i 1000 % 1000 1000 % 1000 îoootons tons tons tons tons tons

1976Permanent 95 43.6 100 39.6 100 68.3 151.5 65 52.7 20,.2Retained from Niger River - - - - - - - 15 12.3

Total 9Z37--- 100 -3-9. 100 -677 151.5 2E =,o 216.5

1980Permanent 80 47.1 100 65.1 70 69.7 181.9 25 29.6 211.5Retained from Niger River - - - - 20 19.9 19.9 15 17.8

from Togo 10 5.9 - - - - 5.9 -

Total §9 -To 100 65.1 r 89.6 207.7 0S E775 255.1

1985Permanent 65 48.9 80 57.6 65 72.8 179.3 5 7.4 186.7Retained from Niger River - - 20 14.4 20 22.4 36.8 - -

from Togo 10 7.5 - - - - 7-5 1C 14.8from Abidjan 5 3.8 - - - - 3-8 -Total Fo 60 2 oo 72.0 75 9.-2 227 i 22 249.6

1990-95Permanent 35 33.5 60 48.6 50 62 2 144.3 5 9.4 153.7Retained from Niger River - _ 25 20.2 25 36.1 56.3 - -

from Togo 20 19.2 - - - - 19.2 10 18.8from Abidjan 15 V4 - - - - 14.1s _ _

Total 70 67.l - 17 7U 183 -ZF I5 2U.2 26 2.4

Source: Mission estimates, February 1972

September 1972

Table A1-5

DAHOMEY

SECOND HIGHWAY PROJECT

Expected Niger Transit Traffic through Dahomey 1975-1995

A.. Volume of Niger transit traffic on Dahomey Route (1000 tons per year)

1976 1980 1985 1990-95With Without With Without With Without With Without

Petroleum Producte 65 52.7 47.4 29.6 22.2 7.4 28.2 9.L

Other importsto Western region 43.6 43.6 53 47.1 60.2 48.9 67.1 33.5to Central region 39.6 39.6 65.1 65.1 72.0 57.6 68.8 48.6

Total 53. 2 73-.2 îII 112.2 iT2-2 106.5 13539 B2.1

Exports 68.3 68.3 89.6 69.7 95.2 72.2 98.3 62.2

Total tonnage 216.5 204.2 255.1 211.1 249.6 186.7 262.4 153.7

Permanent Traffic 2o4.2 211.5 186.7 153.7

Retained traffic(a) Petroleum 12.3 17.8 14.8 18.8(b) Other imports

to Western region 5.9 11.3 33.6to Central region 2145.7 20.2

Total 25 7 73(c) Exports 19.9 22.4 36.1

Total cargo (b+c) 25.8 48.1 89.9Total retained (a+b+c) 12.3 43.6 62.9 108.7

B. Average daily number of heavy trucks carrying Niger transit traffic on Parekou-Malanville Road (1976-1995)

1976 1980 1985 1990-95With Without With Without With Without With Without

Petroleum 22.8 18 16.2 10.1 7.6 2.5 9.6 3.2

Cargo 25.3 25.3 36 34.1 4o.2 32.4 41.h 25.0

Average Loadin factorf or cargo (')73% 7 3'1 70; 65% 6 9 ie 67% 69% 70%

Total traffic 47.5 43.3 52.2 [4.2 47.8 34.9 51 - 28.2

Permanent traffic 43.3 44.2 34.9 28.2

Retained traffie 4.2 8 12.9 22.8

Source: Mission estimates,February 1972.

September 1972

Table A1-6

DAHOMZY

SECOND HIGHWAY PROJECT

Transit traffic through Dahomey in case of rapid or slowdevelopment of NMger iiiver Route

Assumption concerning Permanent traffie routed throughthe development of Dahomey Route

Nature of traffic commercial navigation___ __ ___ __ ___ __ __ ___ __ ___ __ ___ __ __1976 1980 1985 1990-95

i OOOt 7 iOOOt 7 lOOOt % OOOt

Petroleum rapid 35 28.4 25 29.6 5 7.4 5 9.4best (Table A1-4) 65 52.7 25 29.6 5 7.4 5 9.4slow 100 81.2 65 77 35 51.9 5 9.4(100 i ) (81.2) (118.5) (148.2) (188)

Exporta rapid 70 47.8 65 64.7 50 56 50 62.2best (Table A1-4) 100 68.3 70 69.7 65 72.8 50 62.2slow 100 68.3 100 99.5 70 74.8 65 8o.9(100 %) (68.3) (99.5) (112) (124.5)

Imports toCentral region rapid 100 39.6 80 52.1 60 43.2 60 48.6

best (Table A1-4) 100 39.6 100 65.1 80 57.6 60 48.6slow 100 39.6 100 65.1 l00 72 80 64.8(100 t) (39.6) (65,1) (72) (81)

Imports toEastern region best (Table A1.4) 43.6 47.1 48.9 33.5

Total Imports rapid 83.2 99.2 92.1 82.1best 83.2 112.2 106.5 82.1slow 83.2 112.2 120.9 98.3

Average daily number Trucks per dayof trucks

Petroleum (Table A1-2) rapid 9.7 10.1 2.5 3.2best (para 20) 18 10.1 2.5 3.2slow 27.8 26.3 17.8 3.2

Cargo (Table A1-2) rapid 25.3 30.2 28 25best (para 20) 25.3 34.1 32.4 25slow 25.3 34.1 36.8 29.9

Total permanent rapid 35.0 40.2 30.5 28.2best (para 20) 43.3 44.2 3409 28.2low 53.1 60.4 54.6 33.2

Equivalent retained traffio(see para 24) best O 3 9,3 7.3

Total permanent + retained rapid 35.0 43.2 39.8 35.5best 43.3 47.2 44.2 35.5slow 53.1 63.4 63.9 40.5

% of total ADT

% of differonce with respect rapid - 19 - 8 - 10 0to best slow + 23 +34 + 44 + 14

Source: Mission estimates February 1972September 1972

ANNEX 2Page 1

DAHOMEY

SECOND HIGHWAY PROJECT

Revenues from Niger Transit Traffic Due to the Project

Introduction

1. For Dahomeythe return from the project would consist of (i)savings in transport costs for domestic traffic, (ii) developmental effectsand (iii) net receipts from the Niger transit traffic retained on the Dahomneyroute because of the project. The third type of benefit is briefly estimatedbelow.

2. The first problem in analyzing the return to Dahomey is to definethe nature of the cost to be taken into account. First, the tax element hasto be excluded from all costs. Second, unemployment is widespread in Dahomneyat all levels of qualification, and the agencies involved in the operation ofthe Dahomey route: i.e., the Port, the ODAMÂP_/ and the OCDN, have linitedpossibilities for staff reduction. It would thus seem logical to considerthe salaries of local personnel as representing no economic cost. This wouldleave the foreign exchange cost as the only component of economic cost.

3. The second problem is one of pricing. The receipts to Dahon.eyclearly depend on the future prices charged for transport services on theDahomey route. In the analysis of the Niger transit traffie two assuxptionswere made in forecasting future users' costs on the Dahomey route and onother competing land routes. It was assumed (i) that the users' costs wo-ildbe reduced in an amount equal to the savings in vehicle operating costs dueto the proposed road investments; and (ii) that the rates for other transportservices: i.e., railways, ports, etc., would remain at their present level.These assumptions were selected because they are reasonable and simple andlikely to yield consistent traffic forecasts.

4. The first assumption implies that savings in vehicle operating costsdue to the project would be passed on to the users, i.e., to Niger. Thenecessary rate adjustments are likely to happen over a period of three to fiveyears in the form of avoided rate increases rather than immediate reductions.During the adjustment period, the savings in vehicle operating costs wouldbenefit the truckers. As 80% of the trucking between Parakou and Niger isdone by Niger truckers, the benefits during the adjustment period would alsomainly accrue to Niger. The first assumption is thus reasonable from theviewpoint of Dahomey even for the transition period during which rate adjust-ments would take place.

I/ ODAMAP - "Office Dahomeen des Manutentions Portuaires", a state-ownedagency providing stevedoring and longshore services in theport of Cotonou.

ANNEX 2Page 2

5. The second assumption seems also reasonable from the viewpoint ofDahomey since present rates allow the OCDN, the Port and the ODAMA.P to achievefinancial equilibrium. Although for the purpose of the present evaluation itwas assumed that OGDN rates would remain at their present level it is notimplied that this would be a good policy for Dahomey. In the years to comre,Dahomiey should pursue a flexible tariff policy aimed at maximizing its receiptsfrom the Niger transit traffic. The Bank Group believes that if the Dahomeyroute is properly managed, Dahomey is likely to achieve returns higher thanthe present estimates.

B. Future Traffic Volumes

6. The analysis of the Niger transit traffic presented in Annex 1 showsthat the proposed rehabilitation of the Parakou-Malanville road would have asubstantial effect on future volumes of Niger transit traffic routed throughDahomey. The relative importance of the Niger transit traffic with respect tothe domestic traffic for the railway and the port is analyzed in Table A2-1.The trends are summarized below:

1976 1980 l985 1990

OCDN Railway

Niger transit traffic as %of total tra,ffic (ton-km) 69% 66% 60% 54%on Cotonou-Parakou line

Retained traffic as % of total 4% 11% 15% 22%

Port of Cotonou

Niger transit traffic asof total tonnage 27% 24% 18% 14%

Retained traffic as% of total tonnage 2% 4% 5% 6%

7. The Niger traffic will remain the most important part of OCDN traffic.Tle relative importance of the retained traffic will grow to about 20% of totaltraffic by 1990. The above shows that the retained traffic can be treated asa marginal increment with respect to the total OCDN traffic. The Niger trafficwill, in the future, represent a decreasing proportion of the total traffic inthe port. The retained traffic will amount to no more than 6% of total porttraffic and can also be treated as a marginal increment with respect to totaltraffic.

Revenues from Niger Transit Traffic

8. Dahomey's revenues from the project will include the net foreignexchange receipt from transport services for the retained traffic. Thesereceipts equal the difference between the total payments for these servicesmade to the Dahomean agencies and fiims and the foreign exchange component of themarginal cost incurred by these agencies and firms in rendering these services.

ANNEX 2Page 3

The receipts for the Port, the OUkMAPI/, the DEPP/, the forwarding agent,the OCDN and the truckers are presented in Table A2-2 and briefly summa-rized hereafter. The estimates presented in Table A2-2 are average estimatesconsistent with the overall financial results of the different agencies andfirms involved in transport operation on the Dahomey route. The estimatesof foreign exchange component of the cost are based mostly on judgnent andhave systematically been taken on the high side.

Estimated Revenues from Niger Transit Traffic

---------- (CFAF per ton)----------------Net Foreign

Gross Revenue Exchange Rece-'ptAgency or Firm Freight Petroleum Freight Petroleumx

Port of Cotonou 406 406 296 296Port handling and storage(ODAMAP and DEPP) 1,520 1,730 1,229 1,220Forwarding Agents 1,565 891OCDN railvay 4.,272 5,264 2,71l4 2,835Trucking "without" 2,329 1,773 861 710

Uwith" 1,830 1,081 709 612

Total "without" 10 092 9 173 5 991 5 06'"with" _____ _____

Difference between"without" and "with" 499 692 152 98

9. As far as Niger transit is concerned,the major effects of the pro-ject will be to keep the retained traffic as well as the net foreign exchangereceipts attached to it in Dahomey. A secondary effect will be to reduce thenet receipt from trucking on the Parakou-Malanville road for the permanenttraffic. This reduction will, however, be small.3/ The aggregate effects ofthe project in terms of foreign exchange revenue to Dahomey due to the Nigertransit traffic are computed in Table A2-3 and sunanarized below in para. 11.Net foreign exchange receipts would grow rapidly and reach about CFAF 200 mnil-lion (US$800,000) by 1980 and CFAF 600 million (US$2.4 million) by 1985.

10. Table A2-3 presents also estimates of the future total gross revenuesfrom Niger transit in the years to come. If the ?arakou-Malanville road isrehabilitated, the gross revenues would grow slowly from their present level ofabout CFAF 2 billion (US$8 million) to about CFAF 2.5 billion (US$10 million)in 1990. If, on the contrary, the Parakou-Malanville road is left to

1/ See footnote, page 1.:/ The DEPP is a firm jointly set-up by major oil companies to handle anud

store petroleum products unloaded in the port of Cotonou.3/ It is correct to use the above estimates'to evaluate this reduction

because for trucking, marginal costs have been taken as average cost.

ANNEX 2Page 4

deteriorate, the gross revenues would stay at the level of about CFAF 2 billionuntil 1980 and decrease thereafter to reach about CFAF 1.5 billion (US$6 million)by 1990. This shows the importance of the Niger transit for Dahomey.

il. The comparison of gross revenues "with" and "without" the project pro-vide another approach to the evaluation of net foreign exchange receipt fromthe project. The foreign component of the average cost of providing transportservices on the Dahomey route is roughly estimated at about 45% of the totalrevenue to Dahàmey. Therefore the average foreign exchange surplus is about55% of total revenues; 55% of the difference between gross revenue "with" and1"without" wzould thus provide an estimate of the net foreign exchange receiptfor the project. As shown below these estimates are slightly inferior to theprevious ones. This is to be expected since they do not take into account thefact that the re'ained traffic would represent marginal addition to the totaltraffic on the route and would therefore be transported at cost below theaverage.

Dahomey's Revenues from Niger Transit

--------- (CFAF million)-1976 1980 1985 1990 1995

(a) Additional foreign exchangereceipt due to project 32.9 207.14 326.5 595.4 696.5

(b) Gross revenues "with"project 2,004 2,393 2,363 2,485 2,907

(c) Gross revenues "without"rproject 2,012 2,106 1,870 1,542 1,804

(d) Difference "with" and"without'" project -8 287' 493 943 1,103

(e) 55% of difference -4.4 158 271 519 607

September 1972

Table A2-1

DAHOM

sEp01rN HfllHWA PR0JE0Y

Future Traffic On Dahomey Route( '000 tons/year)

1976 19~~~~~~~~~~~~~~~~~19Preight Fetroleum Prni ht Petroleum FreiLbt Ptroleun Freîaht Fetroleui

Niper Transit Traffie

Permanent (without proJect) 151.5 52.7 181.9 29.6 178.7 7.14 144.3 9.4Retained O 12.3 25.8 17.8 48.1 14.8 B9.9 18.8Total 151. 650 207.7 47.4 226.8 - .22.2 2314.2 28.2Total (with project) pî6.5 6 2249.0 2262 .

Traffic on OCDN main railwayline Cotongu-Parakou

Domostic1 / 102.0 9.3 133.3 12.2 174.2 15.9 227.7 20.8(million ton-km per year) (38-8) (3-5) (50.7) (4.6) (66.2) (6.0) (B6.5) (7.9

(142.3) (55.3) (72.2) (914.14)Total without project 253.5 62.0 315.2 141.8 372.0 30.2(million ton-km per year)l (103-9) (26.2) (128.4) (17.3) (143.0) (9.2) 148.5 (11.9

(130.1) (146.2) (152.2) (160.4)

Total with project 253.5 74-3 341 59.6 401.0 38.1 456.9 49.0(million ton-km per year) (103-9) (31-5) (1140) (25) (163.7) (15-5) (187.2) (20.0

(135.4) (165.o) (179,2) (207.2)Iiiger transit traffic as% of total with project- ln tons 60% 87% 61% 79% 56% 58% 51% 579- in ton-km (63%) (89%) (64%) (82%) (59%)

(69%) (66%) 6)(5%Rletained as % of totaliw±th project- in tons 0% 16% 7% 30% 12% 39% 20% 38S- in ton-km (0%) (17%) (8%) (31%) (13%) (140%) (21%) (240o

(140 (11%) (15%) (22%)

Traffie through Port of Cotonou

Domestic 1491.4 87.8 689.2 124.7 96Q..7 150.0 1,355.8 l9.tTotal without project 642.9 140.5 871.1 154.3 1,145.4 157.4 1,500.1 205.1Total with project 642.__ 152.8 896.9 172.1 1,193.5 172.2 :1,590.0 2;14.795.7 '1 9.0 1,V6. 1814.2

Niger transit traffic as% of total with project 23% 2 42% 23% 27% 19% 13% 14 2

27% 214 18% 114%

Retained traffie as % oftotal with project 0% 8% 3% 10% h.% 12% 6%% 8

2% 14% 5% 6%

A/ Annual growth rate of 5.5 %: base year (1971) freight-82,300 tons; petroleum, 7,500 tons.À/ Average hauling distance 380 km.

L/ Average hauling distance for Niger traffir 1430 kn./ Annual growth rate of 7% for freight and 5.5% for petroleum producta;

base year (1971) freight-371h,900; petroleum 70,900 tons.

âourcet Port Authority, 0D00isaslon estimates, rebruary 1972

September 1972

Table A2-2Page 3.

DAHOMEY

SECOND uBCYT-1AY PRO%E.T __

Revenues ard Costs due to Ntiger Transit Traffic on Dahoiiey Route (1'7ÇC-'7'

A. The Port of Cotonou

a) Revenue

- Total revenue from traffic CFAF 247 million- Total tonnage 608 tons- Average revenue per ton CFAF 406/ ton

b) Cost

- Direct variable costs CFAF 127 million- Variable overhead (20%) 25.4

Total CFAF 1P2.1n million- Average per ton CFAF 250/ ton- Average marginal cost (variablecost plus 10% for congestiohcost) CFAF 275 ton

- Foreign Exchange Component- Supplies, equipment and salariesof foreign personnel 40 5s CFAF 110/ ton

c) Net foreign exchange receipts (406 - 110) - CFAF 296/ ton

B. The ODAMAP (Freight handling ageney)

a) Average revenuoesper ton of freight were estimated at about C.OA' 1,520 per ton

b) Cost- Direct variable cost CFAF 775- Variable overhead (20 s) CFAF 19h

Marginal cost OFAF 969- Foreign exchange component coveringsupplies equipment and salaries offoreign personnel 30 % CFAF 291

c) Net foreign exchange reeeipt (1,520 -291) = CFAF 1229/' ton

C. The DEPP (Handling of Petroleum product)

a) Average revenues (including storage fees and tax ) CFAF 1730 per tonb) Cost

- Marginal cost 1020 1020- Foreign exchange component 50 % 510

.c) Net foreign exchange receipt (1730-510) OFAF 1220/ton

Table .A2-2Page 2

d) The Dahomoyan Forwarding Agents Iioft Mport

a) Average revenue CFAF/ton 3,506 353b) Cost - marginal cost 2,475 251

- foreign exchange component,supplies, salaries offoreign personnel and profittransferred abroad - 80% 2,060 201

c) Net foreign exchange receipt 1,.445 152Weighted average 891

e) The OCDN Railway and the Transfer at Parakou

Freight Petroleum

a) Average revenue CFAF/ton 4,272 5,264b) Marginal cost

- direct marginal cost (CFAF5/ton) 2,150 (CFAF7/ton) 3,010- transfer and storege 200 150- variable overhead (10%) 215 301

Total 2,517 3;W61- foreign component (45%) 1,131 (55%) 1,903- amortization of additional 427 526

rolling stockTotal 2 1429

c) Net foréign exchange receipt 2,714 2,835

f) Trucking on Parakou-Malanville Road

(i) On the whole Dahomeyan truckers will handle as it is presently the caseabout 25% of-the frei-ghlt traffic.

Freight PetroleumWithout With Without With

a) Average reve»e CFAF/ton 6,144 4,898 8,948 6,548b) -Average cost-erevenue

tax 20% minimum profit(10%) 5,293 4,407 7,808 5,4o8-Foreign exchange component 75' 3,969 3,305 5,856 44,o56

(including cost incurred in Niger)c) Net foreign exchange receipt 2 175 1 863 20

(ii) Niger truAkers wno will carry 75,1 of thefreight anid 100, of the petroleum trafficvill also generate econoriic activity inDahoniey tirougih purcliases of fuel, lubri-cant and parts, and maintenance services.

Table A2-2Page3

Freight Petroleumwithout without

with with

a) Marginal cost to Niger truckers 5293 4047 7808 5408

b) Payments for supplies providedby or services rendered byDahomeyan fiums

- fual and lubricants 2- repair and parts 20 % 1058 809 1773 1081

Foreign exchange cost of abovesupplies and services 60 0 635 485 1063 469

c) Net foreign exchange receipts 423 324 710 612==5 ==2 ==

Gross Revenues Net foreign exchange receipt(iii) Average for freiget trucking without with without with

- Dahomey truckers 25 % 1 224 S 4 Li 1;- Niger truckers 75 793 606 317 243

Total 2329 1830 861 709

1/ For trucking, marginal cost has been equalled to average cost.

Source: Jomplementary Study of Farak.ou- M, lanville road and working papersby Lamarre Valois Ir.t. February 1972.

Working Paper on Competitive posit-ion of Dehomey route byR. Bouyssoux DPT, February 1972.

Dorne es fondamentales sur les chemins de fer du ]ahomey byH. Cuneo, IBRD Jonsultant, February 1972..

Mission estimates February 1972.

September 1972

Table A2-3

DAHOMEY

SECOND HIGHWAY PROJECT

Forecasted Revenues from Niger Transit Traffic

A. Additional Foreign Exchange Receipt to Dahomey pue to the Reconstruction ofthe Parakou-Malanville Road

Receipts per ton _ Total Receipts (CFAF million)(CFAF/ton) Increase due to Decrease due to

Retained Permanent Retained traffie Permanent trafficYear Freiet Pet. Freight Pet. Freight Pet. Total Freight Pet. Total Total

1976 5839 4963 - 152 - 98 0 61.0 61.0 23 5.1 28.1 32.9

1980 5839 h963 - 152 - 98 150.6 88.3 238.9 27.6 2.9 31.5 207.4

1985 5839 4963 - 152 - 98 280.9 73.4 354.3 27.1 0.7 27.8 326.5

1990 5839 4963 - 152 - 98 524.9 93.3 618.2 21.9 0.9 22.8 595.h

199% 5839 4963 - 152 - 98 _(normal growth 4 P p.a.) _ 696.5

B. Gross Revenues from Transport Services for Niger Transit on Dahomey Route

_Gross Revenuesper ton___ Total Gross Revenues (CFAF million)(CFAF/ton) "Without the Difference

Year 'twith" "without" "with the project" project" t'with""without"Freight Pet. Freight Pet. Freight Pet. Total Freight Pet. Total 100% 55%

1976 9593 8481 10092 9173 1453 551 2004 1529 483 2012 - 8 - 4.4

1980 9593 8481 10092 9173 1992 401 2393 1835 271 2106 287 158

1985 9593 8481 10092 9173 2175 188 2363 1803 67 1870 493 271

1990 9593 8481 10092 9173 2246 239 2485 1h56 86 1542 943 519

1995 9593 8481 10092 9173 2907 1804 1103 607(normal growth h% p.a.)

Source: Mission estimates February 1972

September 1972

DAHOMEY

SECOND HIGHWAY PROJECTORGANIZATION OF THE DIRECTORATE OF PUBLIC WORKS

MINISTRY 0F PUBLIC VWORKS,MINES ANO ENERGY

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