Document of

The World Bank

FOR OmCIAL USE ONLY

Report No. 11670-CD

STAFF APPRAISAL REPORT

REPUBLIC OF CHAD

SECOND TRANSPORT SECTOR PROJECT

June 3, 1993

Infrastructure OperationsSahelian DepartmentAfrica Region

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

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CURRENCY EOUIVALENTS

Currency Unit = CFA Franc (CFAF)I US$ 250 CFAF

I CFAF = 0,004 US$

FISCAL YEAR

January I - December 31

SYSTEM OF WEIGHTS AND MEASURES: METRIC

I meter (m) = 3.28 feet (ft)1 kilometer (km) = 0.62 miles (mi)

1 square kilometer (km2) = 0.39 square milesi metric ton (t) = 2.205 pounds (lb)

This report is based on findings of an IDA appraisal mission which visited Chad in January 1993,comprising Messrs. Amadou B. Cisse, Principal Transport Engineer and Mission Leader, AbdeighaniInal, Highway Engineer. Consultants were Messrs. Carlos de Castro, Transport Facilitation Specialist;Jean Baudoin, Transport Institution Specialist; Jacques Baillon, Road Maintenance Specialist; JacquesBret, Mechanical Engineer; Guirec Delanoe, Transport Economist; Jean Dubost, Transport IndustrySpecialist; Durany Jakob, Environment Specialist; Andre Garaud, Soils and Road Materials Specialist;Michel Guimbert, Road Maintenance Specialist; Hennion, Transport Economist; Jean Marc Heron, Fin.Specialist; Marc Pages, Environment Specialist; Louis-Pierre Ribes, Engineer, Bridge Specialist. Mr.Peter Watson and Ms. Katherine Marshall are the managing Division Chief and Department Directorrespectively for the operation.

FOR OMCIAL USE ONLY

ACRONYMS AND ABBREVIATIONS

AfDF African Development FundASECNA Agence de S6curit6 pour la Navigation A6rienneBDEAC Banque des Etats de l'Afrique CentraleBNF Bureau National de FretCAA Caisse Autonome d'AmortissementCAER Compte Autonome d'entretien routierCFD Caisse Francaise de DeveloppementCTT Cooperative des Transporteurs TchadiensDTS Direction des Transports de SurfaceECC European Community CommissionEDF European Development FundEDIFACT Electronic Data Interchange For Administration, Commerce and TransportFAC Fonds d'Aide et de CooperationGETRANS Gestion-Transport-ServiceGNP Gross National ProductGPR Groupement Professionnel RoutierICB International Competitive BiddingICC International Chamber of CommerceIDA International Development AssociationIMF International Monetary FundLCB Local Competitive BiddingLNBTP Laboratoire National du Batiment et des Travaux Publics

(National Laboratory of Public Works and Building)LVO Lettre de Voiture ObligatoireMSE Medium-Scale EnterprisesMTPT Ministere des Travaux Publics et des TransportsNFS Net Freight ServiceOFNAR Office National des RoutesONPC Office National des Ports du CamerounPASET Projet d'Ajustement Sectoriel des TransportsPIP Public Investment PlanPPF Project Preparation FacilityPST Projet Sectoriel TransportPTA Preferential Trade AgreementRFA R6publique F6d6rale d'AllemagneRRP Regional reform programSA Special AccountSDR Societ6 de D6veloppement RuralSDT Syndicat des TransporteursSNER Soci6t6 Nationale d'Entretien RoutierSOE Statement of expenditureTIPAC Transit International des Pays de l'Afrique CentraleTSAIP Transport Sector Adjustment/Investment ProgramTSP Transport Sector ProjectTSP2 Transport Sector Investment Project IIUDEAC Union des Etats d'Afrique CentraleUNDP United Nations Development ProgramUSAID United States Agency for International DevelopmentVIC Vehicle Inspection Centre

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

REPUBLIC OF CHAD

TRANSPORT SECTOR PROJECT II

STAFF APPRAISAL REPORT

Table of Contents

CREDIT AND PROJECT SUMMARY ..................................... i

I. COUNTRY POLICIES AND BANK GROUP'S ASSISTANCE STRATEGY .........A. Introduction .............................................. 1B. Background and Recent Economic Performance ........................ 1C. Bank's Assistance Strategy ..................................... 3

H. THE TRANSPORT SECTOR ....................................... 4A. Background .............................................. 4B. IDA Involvement in the Transport Sector ............................ 6C. Implementation and Achievements of the Three Previous Projects ............. 9D. Lessons Learned and Remaining Sectoral Issues ....................... 12

Ml. RATIONALE FOR IDA INVOLVEMENT ............................. 13

IV. THE PROPOSED SECOND TRANSPORT SECTOR INVESTMENT PROJECT .... 14A. Project Objectives .......................................... 14B. Project Description .......................................... 14C. Project Costs and Financing .................................... 24D. Impact on Environment ....................................... 27

V. PROJECT IMPLEMENTATION ....... .......... ................... 27A. Status of Project Preparation and Readiness .......................... 27B. Implementing Agencies ....................................... 27C. Project Coordination Unit (PCU) ................................. 28D. Monitoring and Evaluation ..................................... 28E. Procurement .............................................. 30F. Disbursement ............................................. 31G. Reporting and Auditing ....................................... 33H. Project Sustainability ........................................ 34

VI. PROJECT JUSTIFCATION AND RISKS .............................. 34

VII. AGREEMENTS REACHED AND RECOMMENDATION ................... 35

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ANNEXES:

Annex 1: Key Macroeconomic Indicators, Balance of Payment, Status of Bank OperationsAnnex 2: Detailed Cost EstimateAnnex 3: Disbursement ScheduleAnnex 4: Project Implementation ScheduleAnnex 5: Letter of Transport Sector PolicyAnnex 6: Regional Integration Action PlanAnnex 7: Road Design and Construction StandardsAnnex 8: Priority NetworkAnnex 9: Procurement PlanAnnex 10: Training Program

DOCUMENTS IN THE PROJECT FILE:

1: Evaluation de la composante institutionnelle routiere du PASET, Septembre 19922: Rapport de mission sur l'industrie des transports routiers du Tchad

Bilan et Orientations du PASET, Juin 19923: Incidence des coflts de transport sur les prix a la consommation a N'Djamena, Octobre 19924: Etude pour la Reforme de l'Entretien Routier

Rapport sur le diagnostic et les scenarios possibles, Septembre 19925: Etude pour la Reforme de l'Entretien Routier

Rapport sur la reorganisation, Novembre 19926: Definition d'un plan d'action pour la facilitation du transit international, AoOt 19927: Etude pour la restructuration de la Brigade Routiere de Cotontchad, Septembre 19928: Programme de recherche routiere pour l'amnlioration des standards de construction, Octobre

19929: Etude de restructuration du Genie Routier Tchadien, Septembre 199210: Inventaire - Diagnostic des ouvrages d'art du PST 2, Novembre 199211: Etude d'impact du Second Projet Sectoriel des Transports, Octobre 199212: Etude 6conomique pour le Second Projet Sectoriel des Transports, Novembre 1992

CHARTS:

Chart 1: Chart of the Ministry of Public Works and Transports

MAPS: IBRD 24924

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REPUBLIC OF CHAD

SECOND TRANSPORT SECTOR PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: Republic of Chad

Beneficiary: Ministry of Public Works and Transports

Credit Amount: SDR 26.2 million (US$37.0 million equivalent)

ITrms: Standard IDA terms with 40 years maturity

Co-financiers: European Development Fund (FED, US$22.0 million equivalent); FrenchDevelopment Fund (CFD, US$4.2 million equivalent); Central AfricaDevelopment Bank (BDEAC US$15.0 million equivalent); OPEC Fund(US$6.0 million equivalent). African Development Bank, BADEA, IslamicBank, Kuwait Fund also expressed interest with no precise amount yet.

Obective: The main development objectives of the proposed project are: (a) to helpstimulate industrial and agricultural development and regional trade throughconsolidating improvements in transport sector efficiency focussing oncontinued reductions in vehicle operating costs and improvement in theefficiency of the transport market; (b) to continue to improve publicinvestment efficiency, transparency and budgetary management; (c) toimprove internal resource mobilization to fill the long-term need for routineroad maintenance; (d) to promote private sector involvement in roadmaintenance and strengthen the road transport industry; and (e) to streamlineand continue to improve public administration of the sector. To achieve theobjectives, the proposed Second Transport Sector Project (TSP II) wouldimplement: (a) the consolidation agenda to ensure that the positiveachievements under the TSAIP are maintained, (b) the continuing agenda ofsectoral objectives that were only partially met under TSAIP and (c) theevolving agenda to address long-term issues of sustainability critical to thetransport sector program. In summary, the content of the agendas is asfollows:

Consolidation Agenda: investment planningroad maintenanceresource mobilization and allocationliberalization and deregulation

Continuing Agenda: institution buildingprivate sector involvement

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Evolving Agenda: secondary agricultural road rehabilitationenvironmentregional integration and trade facilitation

Description: The proposed project would support these agendas through a set of policymeasures largely met through up-front conditionalities and investmentcomponents. The physical works component consists of: (i) a program ofroad routine and periodic maintenance and bridge strengthening on theexisting priority network of 4,760 kIm; and (ii) a program of about 300 kun ofsecondary roads crucial for the linkage between regions of agriculturalpotential (Salamat region) and main consumption centers. The rograim ofinstitutional strengthening comprises: (i) consulting services for civil worksdesign and supervision, soil research studies and testing, and technical andfinancial audits; (ii) consulting services to promote private entrepreneurshipfor small and medium construction contractors and small truckers; (iii)technical assistance and training (mainly short-term consultancies) fortransport sector institutions (Directorate of Roads, Air Tchad, BNF,Directorates of Civil Aviation and Land Transport, and the ProjectCoordination Unit; (iv) support for the implementation of a regionalintegration action plan aiming at facilitating Chadian international trade forroad and air transport; and (v) implementation of a transport sectorenvironmental action plan.

Benefits and Risks: The proposed project is justified since Chad's landlocked economy reliesentirely on roads for efficient intra- and inter-country trade. Rates of returnfor highway rehabilitation and maintenance range from 14% to 42%. For thepackage of secondary road rehabilitation, the rate of return is 13%. Theproposed project's approach is comprehensive and takes into account thecomplementarity of air and road transport and measures aimed at having apositive impact on the environment. The principal risk remains the chronicpolitical instability which might affect the political commitment to fulfill orsustain policy reforms and agreed financial conditions. To minimize this risk,careful attention was given during project preparation to building a broadconsensus at a high Government level, with technical staff, and with alldonors that are active in the sector on the measures proposed and supportedby the project. In addition, detailed procedures, standardized biddingdocuments and implementation manuals, time-bound implementationindicators, and the Government's experience in project execution tasks fromprevious projects minimize the risks associated with project execution.

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Summary Project Cost Estimate and Financing Plan(Net of Taxes and Duties)

US$ MillionProject Components

Foreign Local Total

A. Physical Component1. Investment Costs - Civil works

(a) Rehabilitation 30.2 1.8 32.0(b) Periodic maintenance 21.6 5.1 26.7(c) Bridges 1.4 1.4(d) N'Djamena Interchange bldg 3.4 3.4

2. Recurrent Costs(a) Routine Maintenance 3.9 25.4 29.3

B. Institutional Strengthening Component1. Consultants services for Public Works

(a) Studies and works supervision 3.4 3.4(b) Technical assistance 2.9 2.9(c) Audits and Proj. Coord. Unit 1.6 1.6

2. Consultants services for Transport and Civil Aviation(a) Studies and supervision 0.3 0.3(b) Technical assistance 0.6 0.6

3. Training and scholarship 3.55 3.554. Operating Costs (PCU) 0.7 0.5 1.2

C. Continencies1. Physical contingencies 5.9 2.2 8.22. Price contingencies 3.4 2.2 5.6

D. Refinancing PPF 1.25 1.25

TOTAL 84.1 121.4

Financing Plan(US$ million equivalent)

Local| Foreign Total % of total project cost

Government 37.3 -- 37.3 31%

IDA -- 37.0 37.0 30%

Other donors -- 47.1 47.1 39%

Total project cost 37.3 84.1 121.4 100%

Economic Rate of return:For road periodic maintenance: 14% - 42%For the package secondary agricultural road rehabilitation: 13%

REPUBLIC OF CHAD

TRANSPORT SECTOR PROJECT II

STAFF APPRAISAL REPORT

I. COUNTRY POLICIES AND BANK GROUP'S ASSISTANCE STRATEGY

A. Introduction

1.1 The Government of Chad has requested IDA financing for a follow up of the ongoingTransport Sector Adjustment/Investment Program (TSAIP). The broad objective of the project is toconsolidate the achievements of TSAIP to help stimulate industrial and agricultural development andregional trade through further improvements in transport efficiency, and public investment efficiency andbudgetary management. Its specific objectives are to reduce vehicle operating costs and transport pricesthrough a defined program of road rehabilitation and maintenance, to achieve regular and reliablebudgetary allocations to road maintenance and to increase the involvement of the private sector inhighway maintenance.

1.2 The total investment program cost is estimated at US$121.4 million equivalent (net oftaxes and duties), with a foreign exchange component of US$84.1 million. Government will financeUS$37.3 million in recurrent costs for routine maintenance and counterpart funding for donorinvestments. The foreign exchange component will be fully funded by external donors. Under theproposed project, which will be the fourth IDA-financed operation for the development of the transportsector in Chad since 1986, IDA would finance a portion of the investment program for the five-yearperiod (1994-98) for an equivalent amount of US$37.0 million. Investment program and policy measuressupported through the project are based on lessons learned from the first three projects, the donors'roundtable held in November 1992, sector studies commissioned between 1990 and 1992, and theparticipatory approach adopted for the preparation of the project through the interministerial steeringcommittee.

B. Background and Recent Economic Performance

1.3 Background. Chad presents a major development challenge. It juxtaposes a highlyuncertain political situation, a prospect of renewed breakdown of order, extreme poverty, and reasonablegrowth prospects. Chad is a vast country, the fifth largest in Africa, and groups together a large numberof extraordinarily diverse ethnic groups. With 5.8 million inhabitants and a per capita GNP estimatedat US$210 in 1991, Chad is one of the poorest, least-developed countries in the world. Economicdevelopment efforts have been characterized by successive promising starts stymied by serious internaland external blows. Recurring political instability and domestic strife, which erupted into civil war from1979 to 1983, have been and remain the most intractable constraints to development. Chad has also beenseverely affected by drought. Despite a major post-war reconstruction effort, Chad's physicalinfrastructure, human resources, and institutional and administrative capacity to support development aretoday still at the level where most other low income sub-Saharan African (SSA) countries were in the1960s. Chad ranks 150th out of 160 countries on UNDP's 1992 Human Development Index.

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1.4 Despite all its handicaps, Chad has a number of positive elements to build upon and goodintrinsic growth potential. Compared to other Sahelian countries, Chad is relatively well endowed withnatural resources for agricultural production, especially in the south where much of the population isconcentrated. Food production is generally sufficient to meet domestic demand, and agriculture -particularly livestock and cotton production - are key sources of future growth. The private sector couldplay a dynamic role, beyond the informal and rural production circuit, as a driving force in the formaleconomy. Exploitation of proven oil reserves for domestic consumption could add impetus to economicgrowth in the medium term, by improving the reliability of supply and reducing the cost of electricityand diesel fuel--key production inputs. Oil exploration in the south holds out the promise of substantialreserves which could be exported; this could attract significant private investment and dramaticallytransform Chad's long-term economic prospects. Chad's turbulent history has also left positive elements:the civil service is modest in size; the economy is relatively unregulated; the population has shown greatself-reliance; and alternatives to public provision of services have developed. Chad does not have thebaggage of poor policies and entrenched interest groups supporting particular policies which hamper manyother African countries, so most development efforts are focused on building rather than dismantling.The Government has exhibited a positive, open dialogue with donors as well as a willingness to try newapproaches. Finally, the international community has expressed a willingness to respond positively tosuitable development initiatives in recognition of the country's poverty and urgent development needs.

1.5 Economic Structure. Chad's economy is based on agriculture, which generates 35-40%of GDP and provides a livelihood for more than 80% of the population. Subsistence production of foodcrops by smallholders is the principal economic activity, but output fluctuates widely, depending uponrainfall. Livestock and cotton constitute the most important sources of cash income for the ruralpopulation and for export earnings (75%). The small industrial sector, which contributes about 20% tovalue added, is dominated by the parastatal (COTONTCHAD) which processes and exports cotton. Therest of the sector consists of several medium-scale enterprises and a large number of micro-enterpriseswhich produce consumer goods for the domestic market. The service sector makes up the remaining 40-45% of GDP and includes a large trading sector.

1.6 Recent Economic Developments. During the post-war period 1984 to 1990, Chad madesubstantial progress in rehabilitating its economy and promoting growth, despite internal and externalshocks. By 1987, Chad's economy was more or less restored to its pre-war level, and economicconditions continued to improve during the 1987-90 adjustment period. The adjustment program focusedon improving public resource management and efficiency in the cotton sector, and also included policyreforms in transportation, livestock and trade. In 1988 and 1989, most of the macro-economic objectivesoutlined in the first two Policy Framework Papers (PFP) were attained. Important progress was madein reviving key sectors of the economy. Together the adjustment program and the investment programthat emphasized agriculture and transportation reversed some of the negative impacts on the income andliving conditions of the population caused by the succession of civil war, drought and the cotton crisis.Moreover, the program had a positive impact on growth performance, particularly in the cotton sector.Real GDP growth averaged 4.5% per year and inflation was low. Public investment, which was totallyexternally financed, doubled to nearly 10% of GDP in 1990; official development assistance flows tripled.With the recovery in cotton export revenues, the current account deficit was reduced to 27% of GDP in1990. The gross domestic savings rate, perennially negative, improved somewhat to -12% of GDP in1990.

1.7 With the abrupt change in political regime in 1990, the adjustment program went off-trackand the fiscal situation deteriorated; the third-year PFP targets (1990-92) for revenues, current

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expenditures, and the current budget deficit have all been missed by significant margins. The expenditureoverruns since 1990 have been due to pressures from the military expenditures and the civilian wage bill,while revenues declined (particularly for customs). In late 1991, the Government presented an informaloutline of a stabilization program, including budgetary targets and related policy measures. However,few concrete actions were taken until mid-1992. At that time, the Government, under the leadership ofa new prime minister, took decisive steps to stabilize the wage bill, including a temporary reduction ofnominal wages. The budget deficit burgeoned in 1991 (7% of GDP), although this was mitigatedsomewhat by the high level of budget support from external donors. In 1992, this external supportlargely dried up (dropping by half). The current deficit fell to US$65.7 million (4.7% of GDP) dueprimarily to actions on the wage bill and lack of liquidity (65% of the deficit was covered by newarrears). The most difficult economic issue facing the transition government, appointed by the NationalConference in April 1993, is how to deal with this financial crisis, in particular how to pay civil servantsand arrears to domestic suppliers who are on the verge of bankruptcy. Paradoxically, real economicgrowth for 1991 and 1992 averaged 8% as favorable weather conditions led to strong growth in outputof food crops and cotton. However, the economic picture is less favorable than these figures indicate.Though difficult to measure, a strong contraction in monetized, economic activity seems to be occurringwith the deepening of the budget crisis, decline of the cotton sector, and a substantial drop in investment.

C. Bank's Assistance Strategy

1.8 The Bank's assistance strategy supports the objectives of alleviating poverty andimproving the prospects for long-term growth by: (i) increasing the accessibility and quality of basicsocial services; (ii) increasing incomes through productivity increases and improved services (includingtransportation) to the agricultural sector where the majority of the population live and work; (iii)improving basic infrastructure which serves to increase competitiveness and improve welfare; (iv)promoting employment generation and entrepreneurship by encouraging the provision of services by theprivate sector; (v) supporting the reallocation of public expenditures towards development purposes; and(v) promoting a coherent strategy for tapping the potential of the energy sector.

1.9 The assistance strategy is flexible and designed to build on Chad's positive attributes,continue the policy dialogue and adjust rapidly to an improvement in country conditions. Under thecurrent circumstances, the Bank is implementing a core program of support to alleviate poverty throughactivities that address basic poverty issues, place minimal demands on Government administration andfinances, make maximum use of non-Government capabilities; and improve the prospects for long-termgrowth. It emphasizes operations that can succeed now and yield benefits for the next generation: health,education, agriculture, infrastructure, and energy. The Bank is working with Government towards aredefinition of its role combined with a major effort to build the capacity of private business, community,and voluntary organizations. The Bank will continue to work actively towards establishment of a macro-economic framework that meets stabilization goals. (The Bank's Country Assistance Strategy is fullyexplained in the Memorandum of the President for the Chad Education Project discussed by the Boardin May 1993.)

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II. THE TRANSPORT SECTOR

A. Background

2.1 Chad's survival and future development as a landlocked country almost 2,000 km fromthe sea with vast distances between the main urban centers depends on adequate transportation capacityand reduced transport costs. Among the major characteristics of Chad's transport sector are thepredominance of the highway subsector which accounts for the bulk of domestic and international traffic,and the limited volume of inter-urban passenger traffic, which was seriously disrupted by war and is stillnegligible. There is no railway, nor are there any feasible plans to build one. Seasonal inland watertransport is possible on a few river sections and certain parts of Lake Chad, though navigability ofwaterways has generally been negatively affected in recent years by erratic rainfall patterns. Because ofthis, a meaningful strategy for Chad's transport sector must be focused on the highway network and thetrucking industry.

2.2 Highway Subsector. Chad's highway network consists of about 7,300 km of classifiedroads (i.e. roads for whose maintenance the central government is formally responsible) and 24,000 kmof unclassified tracks in rural areas. The highway network suffered from many years of inadequate ornon-existent maintenance (particularly during the 1979-82 war). As a result, in 1986 only 30 km ofpaved roads were in good condition out of the mere 300 km that existed before the war. Since then,donor intervention, including strong and continuous IDA support has permitted the rehabilitation of about3000 km out of the 3800 km considered by Government and the donors to constitute the priority roadnetwork. The priority road network has been defined as the smallest subset of classified roads providingadequate links between N'Djamena and major domestic centers of economic activity and between Chadand neighboring countries. Out of the 3000 km rehabilitated, only 263 km have been paved; the resthave been rehabilitated to modem earth road standards.

2.3 The rehabilitation works have stimulated road traffic levels that are considerably higherthan the forecasts made at the time of TSAIP appraisal. The traffic on paved roads ranges from 150 to200 vehicles per day, while on modern earth roads the average is 50 vehicles per day. Between 1989and 1992 the yearly growth in traffic was 25% with 50% of heavy trucks transporting both cottonproducts and agricultural products grown in the area, as well as imported manufactured goods.

2.4 According to official statistics, domestic freight transport by road handles about 330,000tons per year; of this 150,000 tons represents traffic internal to the relatively small cotton zone and45,000 tons the distribution of petroleum products. Domestic food flows in a normal year are estimatedat about 15,000 tons.

2.5 7rucking Industry. Historically, road freight transport in Chad has been characterizedby a high degree of regulation and lack of competition. The Cooperative des Transporteurs Tchadiens(CIT), which was liquidated under the TSAIP, was the cornerstone of this regulatory framework.Following independence, CTT was created to help organize small Chadian transporters to compete withUnitchadienne, a large foreign-owned transport company. In 1987, the Government passed legislationgiving C'T an absolute monopoly over all freight transport, international and domestic. Also in 1987,the Government dissolved CTT's Board of Directors and established a Managing Committee whosemembers were appointed by Government, effectively placing CTT directly under its control.

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2.6 Since CTT was the road freight transport monopoly, it was legally entitled to centralizeall supply and demand. On the one hand, all truckers were required to become members of CTT andto indicate to CTT their availability. On the other hand, all shippers were required to indicate to CTTtheir transport needs. On the basis of information received from truckers and shippers, CTT matchedfreight transport demand and supply according to internal procedures that were far from transparent.CTT charged freight rates established by the Ministry of Transport and Civil Aviation (on the basis ofcost data supplied by CTr itself). It kept a commission equivalent to 10% of invoice amounts, whichsome members complained was too high for the services provided by CTT. CTT was also in charge ofcollecting transport taxes on behalf of the Government and occasionally received significant subsidiesfrom Government for truck purchases. While some small shippers and truckers may have illegallynegotiated freight transport contracts outside the framework of CTT, larger shippers had no alternativeto the CIT.

2.7 The existence of a captive market encouraged inefficiency and high costs in the industry.In addition, the lack of competition among truckers allowed them to capture economic rents. Transportprices were thus doubly penalized.

2.8 In 1988, the financial status of CTT was reviewed by an international auditor whoproduced a proforma statement for fiscal year 1988. Inadequate accounting and irregularities had so farhidden the extent of its financial problems. CIT not only had a current negative net worth and deficitaryearning capacity, but it had accumulated significant arrears in transferring to the Treasury the taxes thatit had collected on behalf of Government. In addition, CTT was coming under increasing criticism fromsome CTT members, who were unhappy with the distribution of available freight, and by some shipperswho were disappointed with the quality of service. The combination of the complaints, the audit reportand increasing pressure from donors to liberalize the sector finally convinced the Government that CTThad outlived its usefulness and that there was no alternative to its liquidation.

2.9 The Transport Sector Adjustment/Investment Project (TSAIP) (Credit 2007-CD) wasundertaken to support Government decision to implement a major policy reform package focusing on theliberalization of the road transport industry, including specifically the abolition of CTT's monopoly (andits liquidation) and a return to free contract negotiation between shippers and truckers. Government alsoadopted a full liberalization of freight tariffs, by abolishing all government intervention in tariffdetermination. These policy reforms became effective in December 1989 and resulted in the creation ofthe three private groupings of independent truckers which substantially contributed to enhancedcompetitiveness among truckers and to reduced transport rates.

2.10 In addition, a National Freight Bureau (BNF) was created to operate, under the overallsupervision of the Ministry of Public Works and Transport, as a non-profit clearing-house makingpublicly available all demand and supply information provided by shippers and truckers. On the basisof this information, shippers and truckers could enter into freely-negotiated transport contracts, recordedby BNF for statistical purposes. BNF also started collecting freight taxes on behalf of the Treasury. Arecent audit of BNF showed that its mandate and statutes were satisfactory (although some amendmentsare needed to more clearly specify its attributes), but that serious improvements are needed in itsmanagement, notably with respect to financial management.

2.11 Air Transport. There is one international airport in Chad, serving the capital city ofN'Djamena, and a handful of smaller airports, of whiclh only those at Abeche, Sarh, Moundou, and Faya-Largeau are in acceptable working condition. Air Tchad, the national airline, is a government-owned

6

enterprise which runs domestic scheduled flights and international charter services. Domestic commercialair traffic is relatively light (about 8,000 passengers per year), but international traffic has grown rapidlysince 1982. N'Djamena airport handles annually about 2,000 international flights involving about 36,000passengers and 6,500 tons of air freight. Regular domestic air service is provided by Air Tchad betweenN'Djamena, Sarh, Moundou, Abeche, Mongo and recently Faya-Largeau. Demand for domestic airtransport is highly seasonal and average load factors are quite low. Although some domestic flightsoperate at a loss, the Government attached great importance to them during the current post-warreconstruction and unification period. Given the vast expanse of the country, the impossibility ofproviding economically efficient road infrastructure beyond the priority network and the continuingimportance of promoting national integration, domestic air transport will continue to play an importantrole in Chad's development for the foreseeable future.

2.12 Despite the extensive support given by Government, including the free transfer of twoplanes and free technical assistance provided by the French, Air Tchad was virtually bankrupt in 1988with an operating deficit of CFAF 685 million and a negative equity of CFAF 223 million. In thatcontext, it was agreed under the TSAIP to adopt a restructuring plan for Air Tchad through an ActionPlan agreed upon with IDA and signed by the Government and Air Tchad. Performance under the ActionPlan did not meet expectations (see para. 2.35), and the issue will be taken up in a revised form underthe proposed project (see para. 4.19).

B. IDA Involvement in the Transport Sector

2.13 IDA's post-war involvement in the transport sector began in 1986. IDA considered thattop priority should be given to restoring Chad's road maintenance capability in order to support thelargely uncoordinated efforts of many donors who were involved in rehabilitating parts of the main roadnetwork. Good roads were urgently needed to restore the economy, particularly the cotton industry (thecountry's main foreign exchange earner).

2.14 The Government had prepared an Interim Plan for 1986-88 which was presented todonors at a Round Table Conference held in December 1985 under the sponsorship of the United NationsDevelopment Programme (UNDP). In the plan, the Government identified the following broadobjectives: achieve food self-sufficiency; resettle the population; reconstitute the livestock herd;rehabilitate the transport system; and intensify, increase, and diversify export production, with a specialemphasis on cotton.

2.15 7he Highway Maintenance Project (Cr. 1728-CD). This project, approved on July 26,1986, was the first post-war intervention by IDA and was designed to complement the efforts of otherdonors in the sector and to initiate effective donor aid-coordination. It covered the first two years of afive-year maintenance program for the priority road network. In addition to the high priority maintenanceprogram, the project supported studies and technical assistance for restructuring and strengthening theroad authority--Office National des Routes (OFNAR)--and training staff in OFNAR and other transportpolicy-making agencies, in particular the Ministry of Transport and Civil Aviation. The goal of theproject was to develop, at least in nucleus form by 1988, the capacity to plan, manage and implementa sustainable program of rehabilitation and maintenance of the high priority network. The specificobjectives were:

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(a) to develop the logistical (material and managerial) capacity within OFNAR tomaintain and manage the priority network;

(b) to safeguard the road rehabilitation works already completed by foreign aid andto ensure their maintenance, for which no provision had been made;

(c) to re-establish normal use of the road network by repairing a damaged bridge,the dilapidated ferries, and an unserviceable industrial road serving N'Djamena;and

(d) to assist in organizing the transport sector as a whole and the road sub-sector inparticular.

2.16 7he Road Reconstruction Project (Credit 1901-CD). The main objective of the RoadReconstruction Project, approved on April 26, 1988, was to ensure timely completion of the agreed uponhigh-priority program. Two formerly paved roads-between Djermaya and N'Djamena and betweenN'Djamena and Guelengdeng-would be reconstructed, thereby reestablishing the urgently needed all-weather access and unimpeded flow of goods and passengers along the main North/South corridor of thecountry's road network.

2.17 These two important trunk roads were part of the pre-war 300 km paved road systemwhich had suffered severe deterioration through lack of maintenance. The N'Djamena-Djermaya road(30 kim) was a key link in the country's northern road system. Although it was among the first sectionsto be rehabilitated to gravel road standards in 1985 with financing from the French Government AidAgency (FAC), it had deteriorated rapidly again due to heavy traffic and poor soil conditions. Thesecond link (146 kim) connects N'Djamena to Guelengdeng, the first leg of the N'Djamena-Guelengdeng-Bongor-Moundou axis (505 kIm) connecting the capital with the centers of industrial and agriculturalproduction in the Southern zone. (he reconstruction of the Guelengdeng-Bongor-Moundou section wasfully financed by German aid (KfW) and the BDEAC under the Transport Sector Adjustment/InvestmentProject. The execution of the works is expected to start in September 1993.)

2.18 The Highway Maintenance Project and the Road Reconstruction Project were bothdesigned to help the Government carry out its post-war reconstruction efforts and strengthen its roadrehabilitation and maintenance capability. While focussed on short-term needs, the two projects alsoserved as a vehicle for dialogue between the Government and IDA in connection with major policy issuesand long-term options and provided the Government and the Association with an opportunity to preparea Comprehensive Transport Sector Strategy.

2.19 The transport Sector Adjustment/Investment Project (Cr. 2007-CD, approved on April25, 1989). The comprehensive Transport Sector Strategy was conceived and designed as a vehicle tosupport a Transport Sector Investment Plan (1988-93) and a package of major policy reforms. It alsoserved as a vehicle for coordinating donor involvement in Chad's road rehabilitation effort as a result ofwhich the transport sector has become a centerpiece of donor assistance in Chad.

2.20 The foundation of the Transport Sector Strategy is the premise that, in the medium tolong-term, Chad's economic growth will continue to depend essentially on agriculture and livestock. Theperformance of the agriculture and livestock sectors depend on three main factors: climatic conditions,the cost of production and the cost of distribution. Important in determining the latter two factors are

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the cost and price of transporting inputs and outputs. Transport costs and prices in Chad have historicallybeen significantly higher than in neighboring countries because of (a) high vehicle operating costs dueto poor road conditions; (b) inefficiencies and monopoly price determination in the trucking industry; and(c) inefficiencies and high costs resulting from limited competition in the road construction industry. Itwas these obstacles to the efficient functioning of the sector--and hence the economy-- that the TransportSector Strategy sought to attack.

2.21 The Government thus formulated a Transport Sector Adjustment/Investment Project(TSAIP, Cr. 2007-CD), which consisted of an integrated package of major policy reforms andinvestments designed to be carried out concurrently in order to yield the full extent of potential benefits.Without investments in road rehabilitation and maintenance, vehicle operating costs would remain high;without increased competition in road construction there could not be any cost savings in roadrehabilitation and maintenance, and, as a result, more resources would be needed to provide a givenquantity of transport infrastructure. And, without liberalization and deregulation, the savings in vehicleoperating costs would not be passed on to shippers and consumers.

2.22 Given Chad's landlocked situation, the reduction in the cost and price of transport supplycan be expected to have a greater developmental impact than in countries where the incidence of transportcosts and prices is less pronounced. In particular, the creation of a deregulated trucking industry, freefrom administered tariffs, operating on a well-maintained road network was expected to reducesignificantly the cost and the price of transport, to elicit a supply response from the productive sectorson the economy and, thus, to act as a stimulant to economic development.

2.23 Actions under the Project. The actions designed under the TSAIP to implement thestrategy outlined above were:

(a) a Government Transport Sector Investment Plan 1988-1993 aimed at completingby 1993, the rehabilitation of the 3.800 km priority road network;

(b) adoption of adequate road construction and design standards for the priority roadnetwork which, given soil conditions and traffic forecasts, should be consistentwith the minimization of discounted capital and recurrent costs over the lifetimeof the road;

(c) improvements in resource mobilization, notably from three different sources:- the improvement of performance on petroleum tax collection- the increase of petroleum tax rates- the creation of new road user chargesand resource allocation to ensure that, once rehabilitated, priority roads wouldnot fall back into disrepair;

(d) abolishing CTT's monopoly and returning to free contract negotiations betweenshippers and truckers;

(e) liberalize freight tariffs;

(f) increase the role of the Private Sector in road construction and maintenance:

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the promotion of more extensive international competitive bidding forroad rehabilitation

the implementation of a training program to assist small and mediumsized contractors to undertake road maintenance;

(g) reorganize sector institutions to clarify responsibilities, increase efficiency andstreamline administrative procedures; and

(h) implement a restructuring program for Air Tchad.

All the actions listed above were achieved except the restructuring of Air Tchad and the resourceallocation for road maintenance; those objectives and targets were partially met.

2.24 The TSAIP, however, was restructured in 1992 due to the deterioration of themacroeconomic situation following the abrupt change of government in December 1990. In fact, despitethe strong performance on sectoral reforms, the Government has experienced difficulties in re-establishingmacroeconomic balance. Specifically, revenue collection has proven difficult and overall budgetarymanagement has been weak, notably with respect to the civilian wage bill. As a result of this precariousmacroeconomic situation, IDA, at the request of the Government, reallocated the quick disbursing fundsto the investment component. Nonetheless, the restructuring pursued all the objectives of the initialproject and did not affect the policy reform package.

C. Implementation and Achievements of the Three Previous Projects

2.25 Overall, the three projects have made a significant contribution to restoring Chad'stransport sector to a level of performance that enables it to play a substantial role in the economicdevelopment of the country. Compared with the other parts of the administration, the transport sectoris a model in terms of planning, implementation, resource mobilization and allocation, deregulation andliberalization. It stands out as being a functioning sector in a country fraught with macroeconomicproblems, inefficient administration and chronic political instability. It is in large part due to theexistence of the three projects and to strong IDA pressure for effectiveness in project implementation thatthe transport sector has been substantially protected from the problems that have afflicted almost all othersectors. This is not to say that there have not been problems, but the achievements far outweigh theproblems. The following two sections set out the achievements and the unfinished agenda.

2.26 Physical Achievements. All three projects have been extremely successful in meeting theirphysical targets. Under the Highway Maintenance Project, 2500 km of road were maintained and 600km were rehabilitated. Costs were below appraisal estimates, the project was completed on schedule andthe Project Completion Report (PCR) confirmed that the economic rates of return were higher thanappraisal estimates (30% compared with 21%). The Road Reconstruction Project financed thereconstruction of 254 km of paved roads. This project was also completed on time, within budget andwith a higher than estimated rate of return (20% compared with 13% even after the strengthening ofconstruction standards).

2.27 Seen as a whole, these projects achieved desired results, especially in a region wheretransport projects typically suffer from substantial cost and time overruns and where rates of return are

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frequently below appraisal estimates. The proposed project will continue to pursue the road rehabilitationand maintenance objectives of its predecessors to ensure that roads are not allowed to slip back intodisrepair. It will also begin to expand investment interventions to rural roads connecting agriculturalproduction areas to the priority road network.

2.28 Financial Achievements. One of the important objectives of the TSAIP was to improveresource mobilization and allocation to highway maintenance. External mobilization was excellent,mainly due to IDA's active leadership in aid coordination. By December 1992, the rehabilitation of theremaining sections of the 3,800 km of priority road network had been fully funded. Internal resourcemobilization for counterpart funding of external commitments and for routine maintenance was adequateand allocated in a timely manner through FY91. A decline has been experienced since FY92, largely dueto the aftermath of the disturbances that disrupted political and economic life in Chad. Budgetarycontributions to routine road maintenance were adequate for 1989 and 1990 and amounted to 92% of thetarget in 1991 despite the difficult budgetary situation. The budgetary allocation for the 1992 budget wasadequate, but difficulties with liquidity led to problems and delays in the actual transfer of resources.950 million CFAF representing 70% of the FY92 allocation for road maintenance were actually paid.The routine maintenance program continued to be executed efficiently; however, arrears were built upconcerning suppliers and the salaries of OFNAR workers. In addition, even though the level andtimeliness of funds allocated to road routine maintenance has not completely met targets, it is worthnoting that, in terms of the percentage of committed funds allocated, Chad is substantially above theaverage of other Sahelian countries. Given that problems have been noted, the proposed project isintroducing--as up-front measures--mechanisms to improve future performance (see para. 4.6).

2.29 Liberalization and Deregulation Achievements. The program of liberalization andderegulation agreed upon under the TSAIP has been implemented with positive results. The CTI wasliquidated in April 1989, thus eliminating the monopoly on freight allocation. All road transport tariffsand freight allocations were liberalized in November 1990. Truckers and shippers are now free to enterinto private negotiation to determine shipping contract terms, conditions and prices. Since certain vestedinterests continue to try to undermine the liberalization process, it will be important in the proposedproject to include assurances from the Government that they will not take any steps that might tend toundermine the remarkable progress that has been achieved (see para. 4.7).

2.30 Development Achievements. Improved roads and the liberalization of the transport sectorhave resulted in an average 30% reduction of transport rates (not just costs). The following table showshow these reduced transport rates translate into savings for consumers:

Cost in CFAF N'Djamena AbWeh Moundou

Millet Cement Millet Cement Millet Cement100 kg 50 kg 100 kg 50 kg 100 kg 50 kg

1989 7400 3250 9000 3800 8000 3800

1991 6200 3100 4500 3500 4000 3200

1992 4500 3000 4000 3250 3000 3000

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2.31 Achievements in Privatization. The privatization process made progress in some areas,although delays occurred concerning private sector involvement in road maintenance activities.Privatization of the Mani quarry operation was completed in December 1989. All periodic maintenanceand rehabilitation works, because of their size and complexity, are currently carried out by privateexpatriate contractors. OFNAR has proved reluctant to put routine maintenance works--that could becarried out by local contractors--out to bid, preferring to keep them for its own maintenance brigades.Research work has confirmed that there are small Chadian firms with the capacity to carry out certainworks such as pothole filling, ditch cleaning and small bridge construction. Three pilot projectsdemonstrated that local contractors were able to respond to simplified and standardized biddingprocedures. Consequently, measures will be introduced under the proposed project to prevent OFNARfrom blocking future progress in the area and to ensure that a growing proportion of routine maintenanceis entrusted to the private sector (see paras. 4.13-16 and 4.22-24). The emergency food aid vehicle fleet,which was being operated by Government on an unfair competitive basis, has been disbanded and soldat an auction to private sector operators.

2.32 In contrast, one extremely successful privatization operation is the Autonomous RoadBrigade which became fully operational as a private public works company (Entreprise Tchadienne desTravaux Publics) on January 1, 1993.

2.33 The autonomous brigade was constituted in 1990 when bids were launched to rehabilitate300 km of earth roads in the Guera region in the center of the country. Five offers were received fromexpatriate firms, the lowest of which was twice as high as the project cost estimate. The analysis of theoffers showed clearly that the contractors were trying to cover the costs of potential risks of war byadding an amortization margin to their estimates, resulting in a cost/km of CFAF 50 million. It wasdecided, therefore, to cancel the bids and to create an autonomous brigade (detached from OFNAR) withits own budget covering all operating costs including staff salaries, equipment amortization and technicalassistance. The works were completed in two years under the supervision of a German consulting firm.Tlhe average cost/km of the road construction came to 23 million CFAF/km (10% below the consultantestimates and 54% below the private contractors' offers). The quality of the works performed and theability of the brigade to perform adequately in difficult conditions, made it relatively easy to privatize thebrigade and to find a large number of private Chadian partners. The equity of 200 million CFAF hasbeen fully subscribed (47% by individual private Chadians, 23% by the staff of the company, 10% bya private commercial bank, 10% by an expatriate firm and 10% by OFNAR.) It is worth mentioning thatno civil servant is among the shareholders. The privatization of this brigade is a perfect illustration ofwhat can be achieved if private initiative is protected from government interference. It is serving as amodel for the privatization of OFNAR, the first steps of which will be carried out under the proposedproject (see paras. 4.13-15).

2.34 The institution-buildingcomponent related to transport public sector organization was wellexecuted with reasonable performance by the consultants, many of whom were serving, by design, in linepositions. However, the capacity-building has been uneven. While management skills improved visiblyin accounting and procurement, the Chadians are still relying heavily on expatriate technical assistancefor planning, programming and works supervision activities. Part of the explanation is that there are notenough staff well-trained to occupy all the key positions and Chadians have had to rely on technicalassistance to overcome these shortcomings. The problem is compounded by a high turnover of high levelstaff and frequent cabinet reshuffles which affected the sector, both of which have disrupted trainingefforts. Despite these constraints, the key positions in the Ministry as well as in OFNAR are held by

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staff with good technical qualifications both at central and regional levels. It is hoped that such staff willremain in the Civil Service in spite of its limited possibilities for advancement, low salaries and erraticsalary payments. Under the proposed project, in-house resident technical assistance will be substantiallyreduced in favor of more short term assistance in order to allow (and to oblige) competent Chadians toexpress their talent, instead of being tempted to hand over their responsibilities (see para. 4.30).

2.35 Air Tchad Restructuring Achievements. The rehabilitation of Air Tchad is not yetcompleted. The original objectives, set out in an Action Plan, aimed at (a) providing for Governmentto compensate Air Tchad for losses incurred in supplying exclusive transport to isolated areas and (b)adopting a set of targets designed to reduce Air Tchad operating costs and increase its autonomy fromgovernment interference. Neither Government nor Air Tchad managed to comply with the Action Planand Air Tchad began experiencing renewed financial difficulties. After discussions with IDA, a newmanagement team, established in August 1992, introduced a number of changes, including reducedmanagement salaries, which are starting to reverse the trend. The new teamn also initiated negotiationsfor a management contract with an external airline company. Since the company appears to befundamentally salvageable, IDA has agreed to the establishment of a new Performance Plan for thecompany for the period 1994-1996. This Performance Plan will be closely monitored under the proposedproject (see para. 4.19).

D. Lessons Learned and Remaining Sectoral Issues

2.36 The most important lesson learned is the value of an integrated package of policy reformsand investments (it permits the achievement of more substantial benefits than pursuing the two agendasseparately). It also keeps the focus on the broad sectoral and development objectives, particularly whereeconomic ministries like Planning and Finance are concerned. With non-integrated projects, the debateis often relegated to the technical ministries that have neither the competence nor the interest to resolvecritical issues related to sector financing and strategic policy setting on issues such as privatization. Inthis case, the economic ministries were represented actively on the TSAIP interministerial steeringcommittee and participated actively in broad-ranging debates on issues that linked the sectoral objectivesto macro-economic policy. This approach will be continued in the proposed project.

2.37 In addition, an important lesson was learned regarding the long-term sustainability oftransport sector development and the need to focus on the precise mechanics of resource allocation. Ageneric agreement on a dollar allocation to the sector is not enough. Real progress depends on a goodunderstanding of the tasks of the Minister of Finance and on careful management of the resourceallocation process (at least in the short-term) to ensure that good habits are developed. The TSAIPsupervision effort has focused on these issues and, despite the country's severe financial difficulties, thesector has been reasonably well insulated from the financial problems that have plagued other sectors.The challenge under the proposed project will be to consolidate these habits and to establish theembryonic systems as permanent, fully internalized, reliable, sector-funding instruments (see para. 4.6).

2.38 Finally, we learned that greater private sector involvement requires a more fundamentalmental revolution than was first thought. Civil servants simply cannot be expected to promote the privatesector. What is required is a judicious combination of capacity-building based on reorganization andrestructuring of the public administration to perform more efficiently by using private management toolsand methods in utilizing financial and human resources, and capacity-tapping through greater privatesector involvement in public works construction programs as well as in transport services. The whole

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process of planning, bidding, contracting, supervision and payments has to be rethought from the groundup. The proposed project will take up the unfinished agenda of the TSAIP regarding institution buildingand private sector involvement in an attempt to undertake this revolution through streamlined publicinstitutions, procedures and practices, and greater self-reliance among civil servants, combined withcontracting out of as much as possible of design, supervision and construction tasks to take maximumadvantage of private sector talent (see paras. 4.9-4.12, and 4.22-4.24).

2.39 The TSAIP did not explicitly address issues of the environment since the vast majorityof the project was aimed at rehabilitating and maintaining existing infrastructure with negligibleenvironmental impacts. In addition, the weakness of the administration was construed as an impedimentto establishing any kind of environmental management capacity. Since some improvements have beenmade in sectoral administration, it is now believed that the time has come to begin to develop a basictransport sector environmental program, which will focus on the establishment of a system ofenvironmental assessments. The assessments would be carried out by the private sector, but the Ministryof Public Works and Transport would have to develop the capacity to manage the process and to interpretthe results. In addition, based on sector work results produced in the Sahel Department, the Ministrywould begin to introduce into its bidding documents and construction contracts clauses relating to theenvironmental correctness of designs and on environmental protection and conservation measures to beadopted during and after construction. Finally, the Ministry would carry out pilot projects to test thefeasibility of incorporating small water retention schemes (mini-dams) into road design (see also para.4.26).

2.40 A final, but essential element of the proposed project, designed to counterbalance theland-locked conditions of Chad, is a Regional Integration Program which will improve the regional routesbetween Chad and Cameroon in particular, thereby facilitating transit operations through internationaltransport corridors (see para. 4.274.29).

III. RATIONALE FOR IDA INVOLVEMENT

3.1 A major objective of IDA's strategy in supporting Government's economic stabilizationprocess is to encourage it to maintain sound national investment policies and improve its competitivenessin regional markets by reducing the cost of production inputs and outputs. Transportation has been atthe core of IDA's strategy over the past six years and road maintenance is still part of the core programalong with education and health. The proposed project supports these objectives, particularly thoserelated to private sector development, employment creation, and poverty alleviation. Furthermore, theimplementation of a set of sector policy actions and a comprehensive infrastructure rehabilitation andmaintenance program have already improved internal and external exchanges. Expanding and improvingboth is essential to achieve economic growth. IDA's intervention would also help the Government tocoordinate and channel donor support to those activities that would contribute to a well-managed and -maintained road network.

3.2 In addition, IDA's extensive country experience as well as its management experience inthe Sahelian region continues to contribute substantially to its successful leadership in coordinating donorinterventions.

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IV. THE PROPOSED SECOND TRANSPORT SECTOR INVESTMENT PROJECT

A. Project Objectives

4.1 The main development objectives of the proposed project are: (a) to help stimulateindustrial and agricultural development and regional trade through consolidated improvements in transportsector efficiency focussing on continued reductions in vehicle operating costs and improvement in theefficiency of the transport market; (b) to continue to improve public investment efficiency, transparencyand budgetary management; (c) to improve internal resource mobilization to meet the long-term need forroutine road maintenance; (d) to promote private sector involvement in road maintenance and strengthenthe road transport industry; and (e) to streamline and continue to improve public administration of thesector. To achieve these objectives, the proposed Second Transport Sector Project (TSP II) wouldimplement: (a) the consolidation agenda to ensure that the positive achievements under TSAIP aremaintained, (b) the continuing agenda of sectoral objectives that were only partially met under TSAIPand (c) the evolving agenda to address newly introduced long-term issues for the transport sector. Insummary, the content of the agendas is as follows:

Consolidatlion Agenda: investment planningroad maintenanceresource mobilization and allocationliberalization and deregulation

Continuing Agenda institution buildingprivate sector involvement

Evolving Agenda secondary agricultural road rehabilitationenvironmentregional integration and trade facilitation

In line with the lesson learned that an integrated strategy encompassing policy reforms and physicalinterventions is essential for sustainability, the project description presented below sets out in anintegrated manner the programs of policy objectives and the institutional measures and the physicalsupporting investment components for each agenda item.

B. Project Description

The Consolidation Agenda

4.2 Sector Investment Planning Program. Under the TSAIP, the Government adopted atransport sector strategy that included the following commitments:

(a) Government would allocate priority in road expenditure to covering the full costof routine maintenance of the priority network. In addition, Government wouldalso allocate adequate resources to cover the operating costs of the Directorateof Roads which is the key agency to implement the program.

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(b) Government would include in the Road Investment Program for the 1994-1998period only the 3,800 km priority main road network and the 960 km secondaryagricultural roads network and would only include roads that were demonstratedto be economically justifiable; and

(c) Government would open execution not only of periodic, but also of routinemaintenance, works to private contractors, including small and medium scalelocal firms.

These commitments are reiterated in the Letter of Transport Sector Policy that was presented to thedonors in November 1992 (attached as Annex 5). During negotiations, Government gave assurancesthat it will continue to apply these principles throughout the life of the TSP II (para. 7.2(b)); i.e., (a) thatit will only rehabilitate the roads identified under the Road Investment Program, and any other roadsmeeting a 12% economic rate of return, and (b) will apply the alignment, design and constructionstandards acceptable to the Association (see para. 7.2(m)). During negotiations, Government confirmedits intention not to undertake any investment or acquisition of transport equipment above an aggregateamount of CFAF 200 million annually that are not included in the Investment Program without the priorconsent of IDA (para. 7.2(c)).

4.3 Road Maintenance and Rehabilitation Program. The major physical investmentcomponent of the TSP II for the five year period (1994-98) would be a program of routine and periodicmaintenance aimed at keeping the priority main and secondary agricultural network (a total of 4,760 km)in adequate condition to handle traffic. Since previous projects focussed on the rehabilitation of the mainpriority road network, the program under the TSP II will ensure:

(a) the routine and periodic maintenance (including bridge strengthening) of thealready rehabilitated sections of the 3800 km main priority network;

(b) the routine and periodic maintenance of 960 km of secondary roads withagricultural potential, including cotton feeder roads; and

(c) a bridge rehabilitation and maintenance program.

T he works will be carried out on the basis of adequate road design standards which, given soil conditionsand traffic and the scarcity of resources for future road maintenance, have been chosen to require a higherinitial investment but aim at reducing future maintenance costs. The road links to be rehabilitated andthe corresponding standards are listed in Annex 8. During negotiations, Government confirmed itsintention to continue to employ alignment and construction standards and designs acceptable to theAssociation (para. 7.2(m).

4.4 The Road Maintenance (routine and periodic) Component which will support this programis summarized in the table below:

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Priority Main Network Secondary roads

km of roads 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998

Periodic 703 304 328 280 260 140 120 100 60 40Maintenance

Routine 3097 3496 3472 3520 3540 820 840 860 900 920Maintenance _

Total 3800 3800 3800 3800 3800 960 960 960 960 960

In addition, the project will support the rehabilitation of 300 km out of the 960 km secondary priorityroad network with agricultural potential. This rehabilitation subcomponent includes three roads intendedto open up the high potential Salamat agricultural region to urban markets in the North (Abeche),Northeast (N'Djamena) and South (Sahr, Moundou, Guelengdeng) of the country.

4.5 Resource Mobilization and Allocation Program. As in the case of the TSAIP, oneimportant objective of the TSP II is that rehabilitated roads should not fall back into disrepair. The largeamount of financing required for the road rehabilitation program is only justifiable if the rehabilitatedroads are adequately maintained during their lifetime. In this respect, financial resource mobilization iscrucial. The Government was able to comply with routine maintenance requirements of the road networkuntil 1991, but in fiscal year 1992, only 70% of the required funds were allocated. To its credit, despitethis shortage, Chad still remains the best performer in routine maintenance resources mobilization of allother African countries, particularly of the Sahelian countries. Nonetheless, increasing fiscal revenuesand strengthening financial management is essential to ensure that the road maintenance program isadequately financed on a sustainable long-term basis.

4.6 To ensure adequate funding for road maintenance and counterpart funding, theGovernment agreed during negotiations to allocate CFAF 1,800 million for FY94, including CFAF1,300 million for routine maintenance and 115 million for the Directorate of Roads operating budget,CFAF 2,000 million for FY95 including CFAF 1,500 million for routine maintenance and CFAF 120million for the Directorate of Roads operating budget, CFAF 2,200 million for FY96 including CFAF1,700 million for routine maintenance and CFAF 125 million for the Directorate of Roads operatingbudget. CFAF 2,400 million for FY97 including CFAF 1,900 million for routine maintenance and CFAF130 million for the Directorate of Roads operating budget, and CFAF 2,600 million for FY98 includingCFAF 2,100 million for routine maintenance and CFAF 135 million for the Directorate of Roadsoperating budget (para 7.2 (a). These sums will be raised through freight taxes, petroleum taxation andtolls on ferries and bridges. To ensure these funds are made available for road maintenance in a timelymanner, it has been agreed, as an interim measure and in consultation with the IMF, to create in acommercial bank the Compte autonome d'entretien routier (CAER), an autonomous account for roadmaintenance. During negotiations, agreement was reached that CAER will be created by instrument andwith operating procedures satisfactory to IDA and that CAER will be established in a commercial bankfor which withdrawal shall be made exclusively by MTPT for the payment of rehabilitation works, roadmaintenance works of the priority road network and operating budget of the Directorate of Roads (para.7.2(d)). In addition, it was agreed that CAER will operate in conformity with such operating proceduresduring the preceding two months before effectiveness (para 7.3(g)). This account will be audited on a

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quarterly basis (para. 5.13). The road maintenance account will receive directly, and on a monthlybasis, proceeds generated by freight taxes collected by BNF, ferry and bridge tolls, and the current share(19.5%) of petroleum taxes. The allocations will be as follows:

Allocation Ferries N'Gueli bridge Freight Petroleum Total MonthlyMillion CFAF taxes taxes Allocation

1993 50 240 570 640 1500 1301994 50 250 600 900 1800 1501995 50 260 630 1060 2000 1651996 50 280 660 1310 2200 1801997 50 300 700 1450 2400 2001998 50 300 700 1550 2600 215

The system of monthly allocations was initiated in November 1992 and the November and December1992 allocations were made satisfactorily. Despite some difficulties resulting from the operatingmechanisms for the autonomous account, allocations have also been made for the first five months of1993. During negotiations, agreement was reached on the monthly allocations (as indicated above) tobe deposited into the Autonomous Account for Road Maintenance (CAER) (para. 7.2(e)). An annualtechnical and financial review will be conducted to ensure that the amounts allocated during the previousyear were actually spent in accordance with the agreement above. It is worth noting that the averageyearly allocation for road maintenance over the period 1994-98 represents only 3.4% of the GeneralExpenditures Budget of Chad for FY92, considered to be a bad year for revenue collection.

4.7 LUberalizationandDeregulation Program. The liberalizationand deregulation agenda wascompleted under TSAIP. The agenda under TSP II is to ensure (a) that the achievements of TSAIP notbe eroded and (b) that the operations and management of the Bureau National de Fret (BNF) beimproved. BNF will be provided technical assistance to support it in carrying out its missions of roadtransport information broker and fiscal collection. The important missions of the BNF are as follows:

(a) to serve as an information center on supply and demand of transport capacity forboth users of transport (shippers) and transport operators (truckers);

(b) to monitor the share of freight carried by national and regional operators underbilateral agreements;

(c) to ensure the timely, efficient, and transparent collection of revenues related tothe Lettre de Voiture Obligatoire (LVO);

(d) to gather statistics on freight transport; and

(e) to provide the autonomous account for road maintenance (CAER) with revenuescollected from freight taxes.

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During negotiations, Government gave assurances that it will continue its policy to keep road transporttariffs free, freight allocations unregulated, and other basic shipping contract terms unregulated.

The Continuing Agenda

4.8 Institution-Building Program. One of the most important objectives of the TSP II is tocontinue to improve institutional strengthening actions started under the previous transport projects.Particular attention will be given to management issues and capacity-building to strengthen Government'scapacity to devise and implement appropriate transport sector policies and to plan and manage thedevelopment of transport infrastructure and services. The project will assist the Government throughtechnical assistance, training, and consulting services (a) to increase the efficiency of the MTPT and itsDirectorates in the area of planning, programming and road maintenance works supervision, (b) torestructure OFNAR into a Societf Nationale, and (c) to complete the restructuring of Air Tchad.

4.9 Improvements to MTPT--Road Maintenance. Institutional management and developmentaimed at focussing on policy reforms to ensure that road rehabilitation is managed effectively on a long-term basis by institutional strengthening, restructuring and broadening of ownership of transportparastatals directed toward short-term improvements and then the establishment of realistic strategies fordiversifying ownership or privatizing them in the medium-term. This has involved a fundamentalrethinking of all the agencies under MTPT tutelage and a redefinition of their respective roles,particularly vis-a-vis the private sector, resulting in a new approach to maintenance works execution andprofound changes in the regulatory framework and philosophy governing sector activities.

4.10 For routine road maintenance, GOC has always relied on force account for theimplementation of its road maintenance programs. Despite considerable support from IDA and otherdonors to improve the Road Authority (OFNAR) and the MTPT institutional capacity to program andexecute these works, problems remain: frequent rotations of trained staff out of the programs;cumbersome administrative procedures that hinder timely availability of all required inputs for workexecution difficult to achieve; and commandeering of public works equipment and personnel for non-programmed works.

4.11 The TSP II would adopt a new approach to these issues based on (a) strengthening thecapacity of the Directorate of Roads to carry out the normative tasks of planning and programming annualmaintenance interventions, and for managing and supervising works carried out by contractors; (b) therestructuring of OFNAR to de-emphasize its role in the execution of road maintenance by force account.Under this approach, the Directorate of Roads would operate more like a contract manager, identifyingthe roads to be maintained, and the maintenance standards, elaborating the detailed engineering documentsand bidding documents (with increasing participation by local consultants), managing the bidding process,and supervising the works (again with increasing reliance on local consultants). In effect, the directoratewould operate as a streamlined contract manager along the lines of the 'AGETIP"1 ' agencies. Inaddition, the road management unit established within the Directorate of Roads will monitor closely theevolution of the road network, particularly the enforcement of rain barriers regulation and the truckoverloading issue in order to minimize its negative impact on the road network. While this issue is notyet a serious problem in Chad, the road management unit will provide data collection and analysis whichwill be discussed at the mid-term review in order to assess the actions which need to be taken.

AGETIP: Agence d'ex6cution de travaux d'ist&rft public.

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4.12 An institutional reorganization of MTPT would also be carried out with the aim ofclarifying the responsibilities within and between the various entities concerned. A draft new organigramand cahier des charges for MTPT and its agencies were submitted at negotiations (para. 7.1(a)).During negotiations, Government confirmed its commitment to appoint and maintain high level staff(with qualifications and experience acceptable to IDA) to head the main Directorates in the Ministry ofPublic Works and Transport and entities under its tutelage (para. 7.2(f)).

4.13 Restructuring of OFNAR. The project will restructure OFNAR into the 'National RoadMaintenance Company" (SNER), a Government-owned company (Societe Nationale) operating accordingto private management principles. SNER would be allocated no more than 50% of routine maintenanceworks to be carried out through direct contract with the Directorate of Roads and financed byGovernment contribution. Although the works would be carried out under what is technically forceaccount, SNER would have to sign a "shadow contract" with MTPT that would set out the obligationsof each party. Thus, the works would be supervised and paid for by the Directorate of Roads in the samemanner as works performed by private contractors. This means that SNER will receive payments foractual works performed at a technical standard satisfactory to the supervision team. The "shadowcontracts" will be based on unit prices which will include SNER's operating costs, including technicalassistance fees, and equipment amortization as well as the costs of the works.

4.14 For 1994-1996, SNER will be allocated works for routine maintenance not exceeding 50%of the annual routine maintenance costs (see paras. 4.23 and 5.3). The creation of SNER will reduceOFNAR's 17 mechanized brigades to 11. The equipment division of OFNAR will be managed by SNERas an autonomous profit center, able to lease the equipment both to SNER works brigades as well as toprivate contractors.

4.15 In the medium-term, at the end of 1996, SNER would, on the basis of its privatemanagement experience, open its capital to private Chadians and would bid for routine maintenance workson a competitive basis with other private contractors. In the short-term, should SNER wish to participatein periodic maintenance or road rehabilitation, it would have to enter into the bidding process incompetition with private sector firms.

4.16 A draft statutes and procedures manual for SNER were submitted at negotiations (para.7.1 (b)). It was also agreed as a condition of effectiveness: (a) the adoption of a dissolution plan toterminate the operations of OFNAR; (b) the adoption of the new organigram and "cahier des charges"for MTPT; (c) the adoption of a new statutes and procedures manual for SNER; and (d) the appointmentof a General Manager, a Technical Director, a Financial Director, and a Management Comptroller forSNER (para. 7.3(c),(d),(e) and (f)).

4.17 While SNER would benefit from limited technical assistance, this would not be financedunder the project. SNER as an independent entity has to cover all of its costs out of the proceeds of the"shadow contracts" that it would sign with the MTPT. The practical result of this decision will be todramatically reduce SNER's demand for technical assistance, thereby promoting greater responsibilityand self-reliance.

4.18 Finally, effective project implementation under TSAIP has been largely assured by thestrong performance of the Project Coordination Unit and the Interministerial Steering Committee. TheInterministerial Steering Committee chaired by the Minister of Planning and comprising the Minister ofFinance, the Minister of Transport and Public Works, and the Secretary General of the Govermment and

20

Secretary General at the Presidency was very effective in dealing with all political decisions related tothe implementation of the ongoing TSAIP. During the preparation of the TSP II, the heavy involvementof this steering committee was instrumental in building ownership of the reforms to be undertaken andin re-enforcing Government commitment to creating an atmosphere favorable to good implementation ofthe project. To ensure that this progress continues, Government confirmed, during negotiations, itscommitment to maintain the Project Coordination Unit headed by a qualified technician whose experienceis acceptable to IDA and to maintain the Interministerial Steering Committee (para. 7.2(g)).

4.19 Restructuring of Air Tchad. The National Airline Company, Air Tchad, has been underrestructuring since 1990. This restructuring, which should have been completed by December 31, 1992,was designed to enable Air Tchad to become autonomous and more efficient by adopting private sectormanagement methods through a management contract with another airline. Despite the fact that thecompletion of the restructuring of the company was delayed mainly due to the non-observance of therequirements of the "Contrat-plan" both by Chadian government and Air Tchad managerial team,considerable efforts have been made by the new management team since September 1992 to reduce thefinancial deficit by adopting internal austerity measures (staff and salary reductions, lower operating costs,renegotiation of commercial contracts). In early March 1993, discussions for a management contractstarted between Air Tchad and an external airline company. During negotiations, it was agreed that amanagement contract between Air Tchad and an external airline company will be signed no later thanDecember 31, 1993 (para. 7.2(h)). A new performance plan for Air Tchad will be agreed upon andsigned as a condition of effectiveness (para. 7.3(a)). The new performance plan is expected to guaranteeAir Tchad management autonomy and the management contract with an external airline company isexpected to make Air Tchad management more efficient. By December 1993, the company should finditself in financial equilibrium. Since Air Tchad is supposed to be developing financial independence, notechnical assistance to Air Tchad would be financed under the proposed project.

4.20 The National Soils Laboratory (LNBTP), which has already been given the statute ofprivately-managed agency, will participate on a contract basis in all geotechnical research and studies,soil testing and civil supervision, and in the defining of road and building construction standards. Areorganization to enable LNBTP to function effectively as a privately managed agency is currentlyunderway with the financing of the French Development Agency (CFD).

4.21 Under the TSP II, a road research program will be developed in collaboration withLNBTP. This research program aims at optimizing the road construction standards and appropriate roadmaterials to be used for the road rehabilitation program, taking into account the lessons learned fromprevious construction programs. The research program will also seek optimal solutions for shoulders andslopes stabilization in relation with the environmental protection program. During negotiations,assurances were given that a contract will be signed between LNBTP and the Directorate of Roads forthe execution of the research program, on agreed TORs and the implementation schedule (para. 7.2(i)).

4.22 Increased Role of the Private Sector in Road Maintenance. Chad's domestic constructionindustry is very limited in size and scope and includes only about ten contractors with real experience,mainly in building construction. Nonetheless, experience elsewhere has shown that such an industrydevelops rapidly when the demand is present. One of the objectives of the TSAIP was to reduce the costof road construction and maintenance by using more of the private sector in the rehabilitation andmaintenance activities.

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4.23 The Road Reconstruction Project and the TSAIP were successful in promoting moreextensive international competitive bidding for road rehabilitation and periodic maintenance leading tosubstantial reductions in the cost/km of road construction. However, private contracting for routinemaintenance fell short of the targets because of OFNAR's unwillingness to share the works with theprivate sector. In retrospect, it was in fact unrealistic to expect the agency responsible for theprogramming and the execution of routine road maintenance activities and the control of all the financialresources allocated for road maintenance to voluntarily relinquish control of its prerogatives. In light ofthis, the TSP II will reinstate contract award prerogatives in the Directorate of Roads, on condition thatat least 50% of which will go to the private sector. During negotiations, Government confirmed itsintention to contract out no less than 50% of routine maintenance activities to the private sector inaccordance with competitive procedures, and beginning January 1, 1997 not provide any preference toSNER relative to the domestic private sector in the contracting of routine maintenance works (para.7.2(j)), to pay all amounts due to private sector contractors within 60 days of their due date and toestablish a monitoring system to track due dates and payment dates (para. 7.2(k)).

4.24 A survey of local construction firms has confirmed that the capacity exists or can bedeveloped in Chad--especially in the N'Djamena area--to carry out the works that are required. Samplesimplified bidding documents and standard contracts have been prepared on the basis of three pilotprojects that tested local entrepreneurs capacity to respond to call for bids. The establishment of theCAER will also allow the Ministry to make payments to entrepreneurs on a timely basis, since this hasbeen shown elsewhere to be a critical element in developing a strong local construction industry. Inaddition, the establishment within SNER of an equipment leasing function will permit small entrepreneursto participate in small contracts and develop their capabilities without the need for heavy investments inthe early stages. Should firms choose to invest, however, credit and technical assistance are availablefrom the non-governmental organization VITA, financed under the Social Dimensions of AdjustmentProject (Cr. 1872-CD). The proposed project would complement this technical assistance withconstruction industry-specific training and assistance tailored to the construction industry. The technicalassistance and training program will focus on management of private firms and accounting andprocurement. During negotiations, agreement was reached on the technical assistance and trainingprogram for the private contractors (para. 7.2(1)).

The Evolving Agenda

4.25 Secondary agricultural road rehabilitation program. Since previous projects focussedon the rehabilitation of the main priority road network, the program under the TSP II will extend thismain priority network to include a rehabilitation of a priority secondary network designed to linkagricultural production areas to the main centers of consumption via the priority main network. Thesecondary road rehabilitation for the 1994-98 time slice would consist of 300 km (mainly the Salamatregion) out of the total 960 km of priority secondary road network rehabilitation program.

4.26 Environment. The TSAIP did not explicitly address issues of the environment since thevast majority of the project was aimed at rehabilitating and maintaining existing infrastructure withnegligible environmental impacts. In addition, the weakness of the administration was construed as animpediment to establishing any kind of environmental management capacity. Since some improvementshave been made in sectoral administration, it is now believed that the time has come to begin to developa basic transport sector environmental program. It will focus on the capacity to put in place a system of

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environmental assessments. The assessments would be carried out by the private sector, but the Ministrywould have to develop the capacity to manage the process and to interpret the results. In addition, basedon World Bank sector work, the Ministry would begin to introduce into its bidding documents andconstruction contracts clauses relating to the environmental correctness of designs and on environmentalprotection and conservation measures to be adopted during and after construction. Finally, the Ministrywould carry out pilot projects to test the feasibility of incorporating small water retention schemes (mini-dams) into road design.

4.27 Transit Facilitation and Regional Integration. The proposed project will support thedevelopment of a Regional Integration Program expected to set up customs and insurance-coveragemeasures and procedures which will:

* simplify procedures and transit documents related to transport, customsclearance, and trade in conformity with regionally (UDEAC) or internationally(ICC and UNEDIFACT) harmonized rules;

* redefine and strengthen civil and commercial responsibilities of road transportoperators and transit companies in order to streamline international transportoperations;

* simplify insurance procedures in order to improve the competitiveness of theregional transport corridors;

* encourage the creation of private freight bureaus in Cameroon and Chad;

e promote the grouping of individual truckers in order to ensure financial viabilityand credibility; and

* redefine the role of the Chamber of Commerce to limit negative interference.

The Regional Integration Program will be supported by the construction of a freight interchange centerin N'Djamena financed by CFD.

4.28 This strategy and plan of action have been developed specifically for Chad but fall withinthe broader objectives of regional road transport industry development. With the proposed introductionof the TIPAC (Transit International des Pays de l'Afrique Centrale) following the joint ECC (EuropeanCommunity Commission), World Bank initiative of UDEAC regional integration, the road transportindustry in Chad should undergo substantial improvement if it is to remain competitive within the region.The strategy proposed for the TSP and the plan of action encompass assistance to both the road transportindustry and to the institutions responsible for transport operations.

4.29 The Plan of Action aims at improving road transport by combining the Governmentcommitment to provide better transport services with the interest of the private sector operators; theproposed plan of action will be monitored through measurable indicators proposed in a matrix shown inAnnex 6. IDA will finance technical assistance through BNF and MTPT to assist the development of theRegional Integration Program.

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4.30 Technical Assistance and Training Component. The technical assistance program wasdesigned by taking into account the lesson learned from previous projects. As shown in the graph below,the technical assistance program under this project has been considerably reduced in comparison with theprevious project. The focus will be on short-term rather than long-term assistance. Furthermore, inorder to increase Chadian self-reliance, technical assistance in line positions will be discontinued and theproject will encourage spot advisory assistance to managerial positions as well as for the planning,budgeting and procurement units. This technical assistance program will support both public and privatesectors. The proposed project would finance technical assistance for the following agencies:

1. Project Coordination Unit (PCU): 30 man/months for Project coordination and sectorpolicy monitoring;

2. General Directorate for Public Works and Transports: 23 man/months for procurementissues, policy formulation and accounting. An additional 50 man/months will beprovided to assist emerging private contractors in management, accounting and worksexecution;

3. Directorate of Roads: 85 man/months for long-term and short-term assistance in the areaof investment planning, maintenance works supervision, technical studies and roadresearch and environmental issues;

4. BNF: 2 man/months for management and accounting.

The program totalling 190 man/months is estimated at about US$4.1 million. In addition, consultingservices will be provided for civil works supervision for an amount totalling US$2.1 million.

Second TransDort Sector Proiect120 Manxmonth Technical assistance to MTPT

100

* Public Works (Directorste of Roads,

80 OFNAR & Procurment unit* Transport & Civil aviation

60 E Proj. Coord. Unit

40

20

01990 1991 1992 1993 1994 1995 1996 1997 1998

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4.31 The training program of the proposed project will pursue the objectives set out under theTSAIP, with an emphasis on dissemination of private sector management practices, human resourcemanagement, and improvement of sector planning skills. The program will consist of: (a) 13 seminarsand 33 training courses for public sector staff; and (b) 36 seminars and 5 training courses for privatesector staff. The training program will amount to US$2.3 million. This program will be implementedover a three year period (1994-96). A condition of effectiveness will be the adoption of a trainingprogram for 1994 satisfactory to IDA (para 7.3 (h)).

4.32 The training program development for public sector staff main modules has already beenestablished under the previous TSAIP. For the private sector, the training module will have to beestablished and agreed upon with IDA no later than December 31, 1993. The training program andschedule is contained in Annex 10. It will be implemented and coordinated by the Ecole Nationale desTravaux Publics (ENTP) and the Centre de Perfectionnement des 7ravaux Publics (CTPT) supported bya technical assistance team.

C. Project Costs and Financing

4.33 The three agendas under the proposed project would be supported by (a) a physical workscomponent, comprising: (i) a program of periodic and routine road maintenance and bridge strengtheningon the existing priority main road network of 3,800 kin, plus routine and periodic maintenance on a 960km secondary agricultural road network; (ii) a rehabilitation program of about 300 km of secondary roadscrucial for the linkage between regions of agricultural potential (Salamat region) and main consumptioncenters; and (b) a program of institutional strenethening comprising : (i) consulting services for civilworks design and supervision, soil research studies and testing, and technical and financial audits;(ii) consulting services to promote private entrepreneurship for small and medium construction contractorsand small truckers; (iii) technical assistance and training (mainly short-term consultancies) for transportsector institutions (Directorate of Roads, Air Tchad, BNF, Directorates of Civil Aviation and LandTransport, the Project Coordination Unit); (iv) support the implementation of a regional integrationaction plan aiming at facilitating Chadian international trade for road and air transport; and (v)implementation of a transport sector environmental plan.

4.34 The table below summarizes the estimated project costs. A detailed cost table is foundin Annex 2. During appraisal, the scope of the project was reduced to be in line with the core lendingprogram and the total external and internal financing available for the sector. Total project cost, net oftaxes and duties for the overall five year program is estimated at US$121.4 million equivalent, includinga foreign exchange component equivalent to US$84.1 million, and a local cost component of US$37.3million equivalent. During negotiations the cost estimates were conrirmed by the Government (para.7.2(n)).

4.35 Cost estimates are based on unit prices gathered from recent data on civil works contractsfor rehabilitation, periodic and routine maintenance under ongoing projects in Chad and neighboringcountries. Given the specific nature of these estimates, physical contingencies have been set at 10%,which is adequate for the types of works to be performed.

4.36 The technical assistance cost estimates are based on recent rates for consulting servicesin the region which amount to US$14,000 per man-month.

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Summary Project Cost Estimate and Financing Plan(Net of Taxes and Duties)

________ US$ MillionProject Components |

________________________________________l Foreign Local Total

A. Physical Component1. Investment Costs - Civil works

(a) Rehabilitation 30.2 1.8 32.0(b) Periodic maintenance 21.6 5.1 26.7(c) Bridges 1.4 1.4(d) N'Djamena Interchange bldg 3.4 3.4

2. Recurrent Costs(a) Routine Maintenance 3.9 25.4 29.3

B. Institutional Strengthening Component1. Consultants services for Public Works

(a) Studies and works supervision 3.4 3.4(b) Technical assistance 2.9 2.9(c) Audits and Proj. Coord. Unit 1.6 1.6

2. Consultants services for Transport and Civil Aviation(a) Studies and supervision 0.3 0.3(b) Technical assistance 0.6 0.6

3. Training and scholarship 3.55 3.554. Operating Costs (PCU) 0.7 0.5 1.2

C. Contingencies1. Physical contingencies 5.9 2.2 8.22. Price contingencies 3.4 2.2 5.6

D. Refinancing PPF 1.25 1.25

TOTAL 84.1 373 121.4

4.37 Contingency allowances for price escalation were calculated according to the plannedimplementation schedule based on an annual average rate of 4% for foreign exchange and of 3% for localcosts during 1994/98.

4.38 External financing of the program will amount to US$84.1 million equivalent or 100%of foreign costs with the Government financing the remaining US$37.3 million equivalent or 31 % of totalcosts and 100% of local costs. Government financing will represent 100% of the routine maintenancecosts, 20% of the periodic maintenance costs, and 5% of the rehabilitation costs. Following a Donors'meeting held in November 1992, external financing is substantially assured for the required amount. IDAfinancing represents US$37.0 million or 30% of the total. IDA financing would be applied to theperiodic maintenance and secondary network rehabilitation components and to technical assistance,

26

training and PCU operating costs. Other external financing will be provided by: the EuropeanDevelopment Fund (EDF) US$22.0 million equivalent or 20% of the total; French Cooperation Agency(CFD) US$4.2 million equivalent; BDEAC US$15.0 million equivalent; OPEC Fund, US$6.0 millionequivalent. Kuwait Fund, Islamic Development Bank, African Development Bank (AfDB) and BADEAhave expressed interest in the road rehabilitation program and the training and technical assistancecomponent. The project activities to be financed by IDA are independent from other external financing.The financing plan was confirmed during negotiations in accordance with the commitments made by theother donors (para. 7.2(o)). Furthermore, the question has been raised as to whether these substantialfinancing requirements might in fact be crowding out donor financing for social sectors such as educationand health, where implementation and absorptive capacity may be less developed. Analysis has shownthat donor financing for the social sectors is adequate and that the donors attach high priority to transportsector development in Chad.

Financing Plan

(US$ million equivalent)(Net of taxes and duties)

Local Foreign Total % of total project cost

Government 37.3 - 37.3 31%

IDA - 37.0 37.0 30%

Other donors - 47.1 47.1 39%

Total project cost 37.3 84.1 121.4 100%

D. Impact on Environment

4.39 The maintenance and rehabilitation components of the proposed project would have nosignificant impact on the environment; the alignments of roads already exist and there is no risk ofdeforestation or property disturbances. Environmental consideration will be an important component inthe design and execution of infrastructure operations. Measures will be included in the terms of referencefor detailed engineering and specifications. The environmental protection measures will take into accountthe geographic specificities of the priority network with respect to geomorphology, hydrology, andclimatic conditions. For the existing network, measures will consist of preserving shoulders andproviding surface drainage systems, through: (a) protection of the slope of embankment and cutscontaining erodible soil, grass seeding, sodding or planting small trees and shrubs; (b) design of mainditches so that the water will be properly channelled and the ditch sector protected against erosion; and(c) improvement of critical parts of road surfaces vulnerable to erosion. In addition to protecting theenvironment, erosion control measures would have the advantage of reducing maintenance work,especially on surface drainage systems, small structures, and surfaces. While safety is also improved bysuitable shoulder greenery because it improves depth perception by providing vertical points of reference.Other measures will consist of clearing ditches to evacuate stagnating water, and removing vegetation tolimit bush fires along the roads. A detailed environmental plan for the transport sector is in Annex 5.3.During negotiations, Government confirmed its commitment to implement this plan (para. 7.2(p)).

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V. PROJECT IMPLEMENTATION

A. Status of Project Preparation and Readiness

5.1 Detailed project preparation was conducted by technical committees of the ChadianGovernment with the help of consultants financed under PPF P-722.0 and P-722.1 CD. During thepreparation process a donor meeting was held in November 1992 to endorse Government sector policystatements and the investment program to be implemented under the project. Draft legal documentsrelated to all institutional arrangements (draft statute of SNER and CAER, draft performance plan for AirTchad, organigram of MTPT), procedures manuals for SNER and Directorate of Roads, draft biddingdocuments, and a road maintenance execution program were prepared and are currently being reviewedby IDA. Detailed engineering studies for the reconstruction of secondary roads are underway.Throughout project preparation, discussions were regularly held with other donors, particularly with theEuropean Economic Community (EEC), France, AfDB and OPEC Fund.

B. Implementing Agencies

5.2 The project would be implemented by the Ministry of Public Works and Transport(MTPT) and the autonomous agencies under its tutelage, namely: the new national company SNER tobe created; the airline company (Air Tchad); the Soil Laboratory (LNBTP); and the National FreightBureau (BNF). The role of the Ministry would be redefined to include only planning, programming,budgeting and supervision. The role of SNER operating under private sector management rules wouldbe limited to execution of maintenance works. The role of the private sector in works execution wouldbe greatly enhanced.

5.3 In light of the promotion of domestic construction industry, the SNER involvement inmaintenance works will be limited to a maximum of 50% of total routine maintenance costs. Duringnegotiations, agreement was reached to limit SNER activities to a maximum of 50% of total annualroutine maintenance costs for FY94, FY95, and FY96. To facilitate the implementation of the Project,detailed Action Plans related to road maintenance, private sector development, training, regionalintegration and environment have been set up. During negotiations, Government confirmed itscommitment to carry out the project in accordance with the implementation schedule, supervision plan,and the Action Plans attached to the Statement of Sector Policy (para. 7.2(r)).

C. Project Coordination Unit (PCU)

5.4 The PCU, instituted under the previous project, will continue to coordinate the variousactivities within the Government and with donors. This unit will also provide to the implementingagencies technical support for all issues related to the procurement procedures, contracting, accounting,reporting and work supervision. In addition, the PCU would ensure inter-agency cooperation, facilitatethe smooth and timely implementation of the project, and provide channels of communication, not onlywith IDA and the other donors involved in the project, but also with the Interministerial SteeringCommittee which will monitor the project at a political level.

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5.5 The PCU would be responsible for day-to-day coordination of project implementation andmonitoring. More specifically, the PCU would: (a) coordinate the preparation of annual work programsand budgets for all components; (b) advise the implementing agencies on all procurement matters; (c)prepare the semi-annual and mid-term reviews of the project in relation with the donors; (d) maintain andconsolidate all project accounts including special accounts; (e) make arrangements for the audit of projectaccounts, SOEs, quarterly audits for CAER and Air Tchad; (f) prepare, as required, progress reports forIDA, the Government and cofinanciers; and (g) maintain effective dialogue with key donors.

D. Monitoring and Evaluation

5.6 The monitoring and evaluation of project performance, of investments, and of policies,would be carried out by the respective implementing agencies and coordinated by the PCU. Monitoringindicators are shown in the table below and in Annex 6 and will be used to assess the progress of thedevelopment of the transport sector program and to measure qualitative and quantitative improvementsdue to project investments. IDA will also regularly supervise the project according to the set indicators.Details of IDA's supervision plan are provided in Annex 4. During negotiations, Government confirmedits intention to establish a monitoring and evaluation system for all implementing agencies under thecoordination of the PCU and to assess project implementation on agreed qualitative and quantitativeperformance indicators (para. 7.2(s)).

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Table 1: Performance Indicators

Indicator Unit 1994 1995 1996 1997 19

1. GeneralAverage increase of traffic on the priority network % 5 5 5 5 5Reduction of V.O.C. -1 -I -2 -2 -2Average travel time on:- N'Djamena - Moundou hours S 7 6 6 6- N'Djamena- Amtiman hours 14 12 10 9 9Annual Expenditures for road research MCFAF S0 60 60 60 60Annual Expenditures for environment MCFAF 50 100 100 100 100

H. Rehabilitation worksAnnual disbursement MCFAF 14050 10750 12075 S900 8900Annual physical target km 178 174 147 100 100% of secondary agricultural road rehabilitation X 30 60 65 65 65Number of bridge rehabilitation U 2 6 6 3 3Number of works contracts, signed U 2 3 3 2 2Percentage of contracts executed on time 100 100 100 100 100No. of roads studied km 170 262 115 50 S0No. of bridges studied U 13 5 5 3 3

m. Road MaintenanceAnnual budget for maintenance (periodic and routine) MCFAF 3811 4162 4346 4346 4346Annual allocation to CAER MCFAF 1700 1900 2100 2300 2500Annual physical target (paved roads) km 378 498 578 683 763Annual physical target (earth roads) kmn 4200 4230 4230 4232 4232Percentage of agricultural roads % 20 20 20 20 20Number of contract with private sector U 17 17 17 17 17Percentage of conactm with local furm % 60 70 80 80 80Registration of roads data U 19000 25000 35000 40000 40000

IV. Land Transport ActivitiesQuantity of LVO delivered U 20000 21500 23000 24000 25000Percentage of LVO collection X 87 88 90 90 90Average delay for LVO collection days 45 40 35 30 30Number of passengers registered in the interchangecenter U 2500 2700 3000 3100 3200Passengers Traffic at N'Djamena Airport U 17000 24000 34000Freight traffic at N'Djamena Airport T

V. TrainineAnnual budget for training MCFAF 300 350 400 200 200Nujnber of staff trained:- in the public sector U 20 25 25 15 15- in the private sector U 150 150 150 80 80Number staff week of training:- in the public sector SW 260 260 260 100 100- in the private sector SW 285 285 285 150 150

VI. Institutions verformanceDelay for contract award days 150 120 90 90 90Delay for contract approval days 60 45 30 30 30Delay for due paymenu days 60 40 60 60 60Delay for production of activity reports days 30 30 15 15 15

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E. Procuremnent

5.7 The table below summarizes the project elements by category, estimated costs andproposed procurement methods. A detailed procurement plan and timetable are given in Annex 9.Chad's procurement laws and regulations have recently been revised and conform with IDA guidelines.No special exemptions, permits or licenses need to be specified in credit documents for InternationalCompetitive Bidding (ICB) as Chad's procurement practices allow IDA procedures to take precedenceover any contrary provisions in local regulations.

5.8 During the previous projects, special attention was given to the strengthening ofprocurement procedures and contract awards and streamlining of contract approval system. The proposedproject will continue to improve quality and transparency of procurement methods by streamlining andrationalizing bid analysis and evaluation procedures, and by setting up a technical committee morecompetent in procurement and civil works issues.

5.9 Procurement of civil works contracts for road rehabilitation, building, and constructionfinanced by other donors will follow their specific procedures and those financed by IDA will be carriedout under ICB, in accordance with Bank's Guidelines for Procurement under IBRD Loans and IDACredits (May 1992). Technical assistance and consulting services financed by IDA will be procured inaccordance with Bank's Guidelines for the Use of Consultants (August 1991). Maintenance worksfinanced by IDA estimated to cost less than the equivalent of US$300,000 each up to an aggregate amountof US$8.7 million may be awarded under contracts on the basis of competitive bidding advertised locallyin accordance with procedures satisfactory to the Association. Office supplies up to an aggregate amountof USS 100,000 may be procured through local shopping with procedures satisfactory to the Association.During project supervision, Bank financed works contracts above a threshold of US$200,000 would besubject to the Bank prior review procedures. The review process will cover about 85% of the total workscontract value. For consultants contracts, the prior review threshold would be US$100,000. Prior reviewwould also apply to all terms of reference, employment of individuals, sole source contracts and contractamendments raising the contract value to US$100,000 or more. Procurement arrangements under IDAfinancing are summarized in the following table:

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Procurement Method

Amount and Methods of procurnemet /aUSS miRlion equivalkt

Item ICB LCB Other Other donors bl Total

1 Civil Works 18.5 9.8 76.5 104.8(17.6) (8.7) (26.3)

2. Consulting services for T.A.,works supervision and studies 10.2 10.2

(6.2) (6.2)

3. Training 3.9 3.9

(2.55) (2.55)

4. Operating Costs (PCU) 1.2 1.2(0.7) c/ (0.7)

5. Reimbursement PPF 1.25 1.25(1.25) (1.25)

TOTAL 18.5 9.8 16.6 76.5 121.4(17.6) (8.7) (10.7) (37.0)

a/ Amounts in parenthesis indicate IDA financing el Operating costs fr Project Coordination Unitb/ Parallel financing by donors including Government would be in accordance with their own procedures

During negotiations Government confirmed its agreement to use the Bank's standard bidding documentsfor ICB, LCB, Letter of Invitation for Consultants, and the procurement plan (para. 7.1(t)). Governmentalso confirmed its intention (i) to allow any local or foreign contractor to indicate the percentage of thebid to be paid in foreign currency; (ii) to use the procedures manual for the Directorate of Roads relatedto bids, evaluation and payments of works which would be reviewed by and agreed upon with IDA (para.7.2(t)).

F. Disbursement

5.10 The IDA credit would be disbursed as follows:

Disbursement of IDA Credit

Category IDA Credit Disbursement 9 Expenditures to beAmount of Credit Allocated financed a/(US$ million)

1. Civil Works 23.0 952. Consulting Serv. for T.A.

works supervision and studies 6.2 1003. Training 2.55 1004. Operating costs for Project Mgmt Unit 0.7 755. PPF Refinancing 1.25 Amount Due6. Unallocated 3.3

TOTAL 37.0

a/ Of amounts net of taxes

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IDA Disbursement Schedule(net of taxes and duties)

US$ million

IDA FY TotalQuarters Partial Cumulative

1994 III 1.5 1.5III 1.0 2.5IV 2.0 4.5

1995 I 1.4 5.91I 1.4 7.3III 1.2 8.5IV 1.6 10.1

19961 1.4 11.5II 1.4 12.9III 0.7 13.6IV 1.8 15.4

1997 I 2.4 17.81I 2.2 20.0III 2.0 22.0IV 2.4 24.4

1998 I 2.2 26.611 2.0 28.6III 2.0 30.6IV 1.4 32.0

1999 I 2.5 34.51I 2.5 37.0

5.11 The credit is expected to be fully disbursed by December 31, 1998. The estimatedschedule of disbursement shown in Annex 2 assumes that the Credit would become effective by December1993.

5.12 To facilitate project implementation, the borrower will open a special account in a localcommercial bank on terms and conditions acceptable to IDA, to receive, upon effectiveness of the credit,an initial deposit equivalent in CFAF to US$750,000 representing the estimated level of expenditure fora four month period. The account will be replenished periodically and will operate according toprocedures and conditions acceptable to IDA. All withdrawal applications submitted to IDA will be fullydocumented except for payments against contracts of less than US$20,000 equivalent, in which case the

33

expenditure). Supporting documentation for such payments will be retained by the Executing Agency forexamination by IDA supervision missions and independent auditors. Should any disbursements be madefrom the account that are not acceptable to IDA, the Government would deposit the corresponding amountinto the account. The detailed disbursement schedule over a period of five years is given in Annex 2.In addition, disbursements in FY93 reflect the refinancing of PPFs P-722-0 CD and P-722-01 CD(US$1.25 million).

G. Reporting and Auditing

5.13 With the help of the consented technical Directorates and their consultants, the ProjectCoordination Unit will prepare quarterly reports on the project implementation and expenditures whichwill also be submitted to the Association, together with key indicators for monitoring progress of theenvisaged reforms. During negotiations, agreement was reached on the following:

(a) all project components and accounts will be audited annually by an independentauditor acceptable to the Association;

(b) the audit report should be made available not later than six months following theend of each year. Records and accounts in relation to the SOE operations willbe subject to a separate audit report; the satisfactory conclusions of which is onecondition for the replenishment of the special account. The auditor's reports willinclude an opinion on the reference to the use of the Statement of Expenditure(para. 7.2(u));

(c) to improve transparency in the management methods, a quarterly audit should beundertaken for the Road Fund (CAER); Air Tchad and BNF, in scope, detail andby independent auditors satisfactory to IDA, to be provided within thirty days ofthe end of each quarter (para. 7.2(v)).

(d) terms of reference and short list for audit firms (para. 7.2(w)). A condition ofeffectiveness will be the appointment of an external auditor under a multi-yearcontract acceptable to IDA (para. 7.3(b)).

5.14 Supervision Plan: A project monitoring and supervision plan totalling 108 staff weeksdurijng the life of the project is detailed in Annex 4.

5.15 Annual Reviews. The project will be implemented over a five-year period. The projectdesign will include an annual review to check the overall performance of the project, achievements ofprevious years as well as the program, the procurement plan and the budget for the next year (usingperformance indicators described in Annex 4). Agreement on the scope and dates for the annual reviewswas reached during negotiations (para. 7.2(x)).

5.16 Mid-term review. A mid-term review will be carried out in mid-1995, as a more in-depthannual review. The review will be another opportunity to evaluate, and, if needed, to modify some majorfeatures of the project. The review will also create an opportunity to evaluate the need to readjustactivities in order to meet the key project objectives. During negotiations, agreement was reached on

34

the scope and terms of reference of the mid-term review, which will be based on a technical and financialaudit of the project (para. 7.2(y)).

H. Project Sustainability

5.17 The focus of the policy reforms and institutional strengthening is to ensure that roadrehabilitation is managed effectively. The creation of a compte autonome d'entretien routier (CAER),an autonomous account which will receive the road maintenance funds on a monthly basis, will help toensure the adequate financing of road maintenance on a sustainable long-term basis. In the short-term,capacity improvements of the transport parastatals would be achieved through restructuring andbroadening ownership, which will set the stage for full privatization. Consolidating the achievements ofthe previous projects and adopting new approaches to continuing agenda items will also enhance projectsustainability.

VI. PROJECT JUSTIFICATION AND RISKS

6.1 The specific justification of the proposed project is provided by the standard cost-benefitanalysis methodology for road rehabilitation projects. On the cost side, the cost of road rehabilitationand subsequent routine and periodic maintenance have been taken into account. On the benefit side, theanalysis includes the expected reduction in vehicle operating costs accruing to normal traffic; it alsoincludes benefits associated with the increase in agricultural value added from the regions that producea marketable surplus, and the benefits derived from the induced traffic. These benefit estimates appearconservative when compared with the actual benefits observed under the Road Maintenance Project (Cr.1728-CD); the Road Reconstruction Project (Cr. 1901-CD) and the TSAIP (Cr. 2007-CD) whoseestimated rates of return were 21%, 42% and 15%, respectively. Other non-quantifiable benefits suchas positive externalities induced on the core network by its extension have not been included. TheEconomic Rate of Return (ERR) for the road rehabilitation component which accounts for 56% of thephysical investment has been estimated at between 14% and 42%. For the proposed secondaryagricultural road rehabilitation component, the approach taken is based on the increased agriculturalproduction that would be induced by the project. The Salamat area is of high agricultural potential andcouid potentially serve a number of urban markets to the northwest (N'Djamena), the northeast, (Abechd)and the south (Sahr, Moundou, Guelengdeng). Without improved roads, there is no possibility ofcommercializing agricultural production. The project proposes, therefore, a package of three roads tobe rehabilitated in order to maximize the access to markets of the agriculturalists. On the basis ofconservative assumption regarding induced production, the package of roads yields a combined ERR of13%, with ERR's for the individual segments of 10%, 14% and 15%. The decision to include the roadwith the 10% ERR is based on: (a) the economic judgement that production will increase more if theregion is truly opened up to a range of markets, (b) the fact that the market concerned is the capital city(i.e. the largest market) and (c) experience under previous projects that induced traffic has been typicallysubstantially higher (up to 50% higher) than appraisal estimates. Thus, we can be confident of theeconomic justification of this component.

35

6.2 The principal risk remains the chronic political instability which might affect politicalcommitment to fulfill or sustain policy reforms and agreed financial conditions. To minimize this risk,careful attention was given during project preparation to sustaining the dialogue at high Governrnent, aswell as technical levels, on the measures proposed and supported by the project, and to obtain consensusand commitment to the priority program with Government and all donors active in the sector. Inaddition, detailed procedures, standardized documentation for project implementation and the fact thatthe Government has experience in most of the project execution tasks from the previous projects minimizethe risks that might be associated with project execution.

VII. AGREEMENTS REACHED AND RECOMMENDATION

7.1 The following events took place prior to negotiations:

(a) the submission of a new organigram and cahier des charges for MT and itsagencies (para 4.12); and

(b) the submission of a draft statutes and procedures manual for SNER (para 4.16).

7.2 The following agreements were reached during negotiations

(a) annual allocation of:

- at least CFAF 1,800 million for road maintenance and rehabilitation forthe priority roads network for FY94 including at least CFAF 1,300million and at least CFAF 115 million for the Directorate of Roadsoperating budget;

- CFAF 2,000 million for road maintenance and rehabilitation for FY95including at least CFAF 1,500 million for routine maintenance andCFAF 120 million for the Directorate of Roads operating budget;

- CFAF 2,200 million for FY96 including CFAF 1,700 million for routinemaintenance and CFAF 125 million for the Directorate of Roadsoperating budget;

- CFAF 2,400 million for FY97 including CFAF 1,900 million for routinemaintenance and CFAF 130 million for the Directorate of Roadsoperating budget; and

- CFAF 2,600 million for FY98 including at least CFAF 2,100 million forroutine maintenance and CFAF 135 million for the Directorate of Roadsoperating budget (para 4.6).

36

(b) the application of the principles defined in the Letter of Transport Sector Policythat was presented to the donors in November 1992 throughout the life of theTSP II (para. 4.2), and, specifically, that freight tariffs and shipping contractswould be freely negotiated (para. 4.7);

(c) the confirmation of its intention not to undertake in the transport sector any civilworks or acquisitions of transport equipment above an aggregate amount ofCFAF 200 million annually which are not included in the Investment Programwithout prior consent of IDA (para. 4.2);

(d) confirmation that CAER will operate under operating procedures satisfactory toIDA and that CAER will be established in a commercial bank for whichwithdrawal shall be made exclusively by MTPT for the payment of rehabilitationworks, road maintenance works of the priority road network and operatingbudget for the Directorate of Roads (para. 4.6);

(e) the monthly deposit allocations for CAER (para. 4.6): CFAF 150 million/monthin FY94; CFAF 165 million/month in FY95; CFAF 180 million/month in FY96;CFAF 200 million/month in FY97; CFAF 215 million/month FY98 (para 4.6);

(f) the appointment and the maintaining of high level staff, with qualifications andexperience acceptable to IDA, to head the main Directorates in the Ministry ofPublic Works and Transport and entities under its tutelage (para. 4.12);

(g) the maintaining of the Project Coordination Unit headed by a qualified technicianwhose experience is acceptable to IDA and to maintain the InterministerialSteering Committee (para. 4.18);

(h) the confirmation of the signing of a management contract between Air Tchad andan external airline company no later than December 31, 1993 (para. 4.19);

(i) the confirmation of the signing of a contract between LNBTP and the Directorateof Roads for the execution of the research program, on agreed TORs andimplementation schedule (para. 4.21);

(j) the contracting out annually no less than 50% of routine maintenance activitiesto the private sector in accordance with competitive procedures, and beginningJanuary 1, 1997 not provide any preference to SNER relative to the domesticprivate sector in the contracting of routine maintenance works (para. 4.23);

(k) all amounts due to private contractors will be paid within 60 days of their duedate and a monitoring system will be established to track due dates and paymentdates (para. 4.23);

(I) the confirmation of the technical assistance and training program for the privatecontractors (para. 4.24);

37

(m) the employment of alignment and construction standards and designs acceptableto the Association (para. 4.3);

(n) the confirmation of the cost estimates of the project (para. 4.34);

(o) the confirmation of the financing plan in accordance with the commitments madeby the other donors (para. 4.38);

(p) the confirmation of Government's commitment to the implementation of theenvironmental plan for the transport sector (para. 4.39);

(q) the agreement to limit SNER activities to a maximum of 50% of total annualroutine maintenance costs for FY94, FY95 and FY96 (see para 7.2(g)) above andpara. 5.3);

(r) the implementation of the Project in accordance with the implementationschedule, supervision plan, and the Action Plans attached to the Statement ofSector Policy (para. 5.3);

(s) the establishment of a monitoring and evaluation system for all implementingagencies under the coordination of the PCU and to assess project implementationon agreed qualitative and quantitative performance indicators (para. 5.6);

(t) the use of the standard bidding documents for ICB, LCB, Letter of Invitation forConsultants, the procurement plan, and the procedures manual for the Directorateof Roads related to bids, evaluation and payments of works (para. 5.9);

(u) the carrying out of an annual audit of all project components and accounts by anindependent auditor acceptable to the Association (para 5.13(a)); assure the auditreport is made available no later than six months following the end of each year;and a separate audit is carried out for SOEs (para. 5.13(b));

(v) the undertaking of a quarterly audit for the autonomous account (CAER); AirTchad and BNF in scope, detail and by independent auditors satisfactory to IDA,to be provided within thirty days of the end of each quarter (para. 5.13(c));

(w) the agreement on terms of reference and short list of Audit firms (para. 5.13(d));

(x) the agreement on the scope and dates for the annual reviews (para. 5.15); and

(y) the agreement on the scope and terms of reference of the mid-term review to becarried out not earlier than June 1, 1995 and not later than September 30, 1995(para. 5.16).

7.3 The following are conditions of effectiveness:

(a) the performance contract for Air Tchad, acceptable to the Association, should besigned by Air Tchad and the Government (para. 4.19);

38

(b) appointment of an external auditor acceptable to IDA under terms and conditionsincluding a multi year period of service, satisfactory to IDA (para. 5.13(d));

(c) the creation of SNER by an instrument and with statutes, as well as the adoptionof operating procedures manual, satisfactory to IDA (para 4.16(c));

(d) the appointment and maintaining by SNER of a Managing Director, a TechnicalDirector, a Financial Director and a Management Comptroller, each withqualifications and experience and under terms and conditions satisfactory to IDA(para 4.16(d));

(e) the reorganization of MTPT in accordance with the new organigram agreed uponwith IDA (para 4.16(b));

(f) the adoption of a dissolution plan to terminate the operations of OFNAR (para4.16(a));

(g) the establishment of CAER by instrument and with operating procedures,satisfactory to IDA; and CAER operating in conformity with such operatingprocedures during the preceding two months (para 4.6); and

(h) the adoption of a training program for 1994 satisfactory to IDA (para 4.31).

7.4 Subject to the above conditions, the proposed project is suitable for a Credit of US$37.0million equivalent to the Republic of Chad on standard IDA terms.

39

,ANNEX 1

Key Economic Indicators

KEY ECONOMIC INDICATORS(in % a,cept as indicated othaeise)

E -- -: -: ~(cat)GDP growth rate l/ 25.9 -4.1 -2.0 15.5 4.9 4.5 8.4GDP per capita growth 23.4 -6.6 -4.5 13.0 2.4 -3.0 5.9

Exports/GDP 17.9 19.0 22.0 21.4 19.6 193 18.5InvestmentlGDP 5.4 9.1 10.2 7.9 9.0 9.4 8.1Dom.savings/GDP -22.4 -22.1 -19.6 -13.5 -16.0 -12.2 -17.0

Government revenue/GDP 6.9 6.8 7.9 8.0- 8.9 9,6 8.8Current expendituresJ

GDP - 9.5 11.3 10.0 13.1 14.4 10.8Current deficit/GDP - 2.7 -3.3 -2.0 4.2 -4.9 -7.0

Aid disbursetnents ($m) 144 221 285 291 315 327 373

Real cffective exchange 100 90.2 89.6 96.7 87,3 93.3rate index (1985 = 100) 2/

1/ Rainfall essentially explains the wide fluctuations in GDP growth rates From a longer-term perspective, thegrowth rate for the decade of the 1980's was substantially better than earlier periods (1977 constant prices): 0.6%for 1965-73 and -1.5% for 197380.2 Trade-weighted average of nominal exchange rate index for each of Chad's main trading paers andcompetitors, adjusted for relativc inflation in Ch and these countries. Increase idica appreciaton.

40

ANNEX"Page 1

Second Transoort Sector Proiect

Detailed Financina Plan(Net of Taxes and Duties)

US $ millionProject components BDEAC EDF CFD IDA OPEC GOC TOTAL

A. PHYSICAL COMPONENT1. Investment Costs - Civil works

a. Rehabilitation 7.1 3.6 14.3 5.2 1.8 32.0b. Periodic maintenance 5.1 7.8 8.7 5.1 26.7c. Bridges 1.4 1.4d. Road terminal 3.4 3.4

2. Recurrent costsa. Routine maintenance 3.9 25.4 29.3

B. INSTITUTIONAL STRENGTHENING COMPONENT1. Consultants services for Public Works

a. Studies and supervision 0.7 0.6 2.1 3.4b. Technical assistance 1.0 1.9 2.9c. Audits & Proj. Coord. Unit 1.6 1.6

2. Consultants services for Transport & Civil Aviationa. Studies and supervision 0.3 0.3b. Technical assistance 0.6 0.6

3. Training and scholarship 1.0 2.3 3.3

4. Operating costs 0.7 0.5 1.2

C. CONTINGENCIES1. Physical contingencies 1.3 1.6 0.4 2.2 0.5 2.2 8.22. Price contingencies 0.8 1.0 0.2 1.1 0.3 2.2 5.6

D. REFINANCING PPF 1.5 1.5

TOTAL 15.0 22.0 4.2 37.0 6.0 37.3 121.4

41

ANNEX 2Page 2

Second Transport Sector Proiect

Detailed IDA financina(Net of Taxes and Duties)

- US $ million -Project components Total IDA % IDA

A. PHYSICAL COMPONENT1. Civil works

a. Rehabilitation 32.0 14.3 45%b. Periodic maintenance 26.7 8.7 33%c. Bridges 1.4 0%d. Road terminal 3.4 0%

2. Recurrent Costsa. Routine maintenance 29.3 0%

B. INSTITUTIONAL STRENGTHENING COMPONENT1. Consultants services for Public Works

a. Studies and supervision 3.4 2.1 62%b. Technical assistance 2.9 1.9 66%c. Audits & Proj. Coord. Unit 1.6 1.6 100%

2. Consultants services for Transport & Civil Aviationa. Studies and supervision 0.3 0%b. Technical assistance 0.6 0.6 100%

3. Training and scholarship 3.3 2.3 70%

4. Operating costs 1.2 0.7 56%

C. CONTINGENCIES1. Physical contingencies 8.2 2.2 26%2. Price contingencies 5.6 1.1 19%

D. REFINANCING PPF 1.5 1.5 100%

TOTAL 121.4 37.0 30%

42 ANNEX 2Page 3

Second Transport Sector Project

IDA Disbursement Schedule(net of taxes and duties)

IDA FY US $ millionQuarters Total

Partial Cumulative

1994 111 1.5 1.5III 1.0 2.5IV 2.0 4.5

1995 1 1.4 5.911 1.4 7.3III 1.2 8.5IV 1.6 10.1

1996 1 1.4 11.511 1.4 12.9III 0.7 13.6IV 1.8 15.4

1997 1 2.4 17.811 2.2 20.0III 2.0 22.0IV 2.4 24.4

1998 1 2.2 26.611 2.0 28.6III 2.0 30.6IV 1.4 32.0

1999 1 2.5 34.511 2.5 37.0

43

ANNEX 2

Second transport Sector Proiect Page 4

Imnlementation Schedule (All donors financinal(Net of Taxes and Duties)

--- ---- ~- US S million -------Project components 1993 1994 1995 1996 1997 1998 Total

A. PHYSICAL COMPONENT1. Investment Costs

a. Rehabilitation 3.5 7.7 5.7 7.6 7.5 32.0b. Periodic maintenance 3.1 7.9 8.7 7.1 26.7c. Bridges 0.5 0.5 0.5 1.4d. Road terminal 1.7 1.7 3.4

2. Recurrent costsa. Routine maintenance 3.0 5.7 6.0 5.7 5.7 3.1 29.3

B. INSTITUTIONAL STRENGTHENING COMPONENT1. Consultants services for Public Works

a. Studies and supervision 0.9 0.9 0.8 0.5 0.3 3.4b. Technical assistance 0.3 1.2 0.9 0.5 2.9c. Audits & Proj. Coord. Unit 0.5 0.5 0.5 0.1 0.1 1.6

2. Consultants services for Transport & Civil Aviationa. Studies and supervision 0.1 0.1 0.3b. Technical assistance 0.0 0.2 0.2 0.2 0.6

3. Training and scholarship 0.0 1.1 1.0 1.1 3.3

4p.Operating costs 0.0 0.2 0.2 0.3 0.2 0.1 1.2

C. CONTINGENCIES1. Physical contingencies 0.3 1.6 2.3 2.1 1.2 0.7 8.22. Price contingencies 0.5 1.3 1.9 1.2 0.7 5.6

1.5 1.5

TOTAL 8.2 23.8 32.1 28.3 16.5 12.5 121.4

44

Annex 2Page 5

Second Transoort Sector Project1 20 Man x month Technical assistance to MTPT

100

*Public Works (Directorate of Roads,80 OFNAR & Procurmrnt unit)

* Transport & Cvil asiation

60 Proj. Cooed. Unit

40

20

01990 1991 1992 1993 1994 1995 1996 1997 1998

45

Annex 2Page 6

Second Transport Sector ProjectDisbursment schedule

140 -- US$ millionDisbursment

120

100

80- /0 -,'... Othe-r

60

40

2 0Chad10

1993 1994 1995 1996 1997 1998

46

Annex 2Page 7

Second Transoort Sector ProiectDisbursment profiles

140 US S millionDisbursment

120

100 * TOTAL

80 - CHAD

60 JIDA

40

20

01993 1994 1995 1996 1997 1998

47

Annex 3Page 1

Terms of Referencefor Technical Assistance

SOMMAIRE

INTRODUCTION

II. ACTIONS ENVISAGEES

1. Objectifs2. Composition des equipes3. Description des tlches et qualifications4. Suivi de siege5. Transfert de connaissance

III. PROGRAMME D'INTERVENTION

48

Annex 3Page 2

I. INTRODUCTION

Depuis 1989, le Ministere des Travaux Publics et des Transports met en oeuvre avec d6terminationla politique gouvernementale relative au secteur.

Au cours des trois prochaines ann6es, des efforts consistants doivent toujours etre foumis pouratteindre les objectifs assignes.

Un appui a l'Administration est donc indispensable pour la concr6tisation des mesures fondamentalesdeja arretees.

HI. ACTIONS ENVISAGEES

1. Objectifs

Les progres attendus en matiere de:

- liberalisation du secteur,- facilitation du transit international,- amelioration de 1'exploitation des transports routiers et aeriens,- entretien et r6habilitation du r6seau routier,- promotion du secteur prive,- renforcement des institutions,- gestion des ressources humaines,

doivent permettre de contribuer efficacement au developpement economique et social.

L'assistance technique, par ses activites d'appui a la Cellule Interministerielle de Suivi et deCoordination des Projets du Secteur et aux divers services techniques du Ministere doit favoriserl'atteinte de ces objectifs.

La mission d'appui comportera deux volets:

- assistance a la CISCP et au sous-secteur routier,- assistance dans le domaine des transports.

2. Composition des 6quipes

49

Annex 3Page 3

La composition des equipes d'assistance technique et le temps de presence de chaque expert sont lessuivants:

a) Coordination et Travaux Publics

Quantites Positions Responsabilit6s Dur6e(homme/mois)

1 Conseiller du - Coordination des aides exterieures 30Coordonnateur - Toutes questions de politique gen6rale de l'OFNAR

et des TP en matiere de routes

- Administration des projets

I Chef de la Cellule - Toutes questions relatives a l'6laboration des dossiers 1SJuridique et des d'appels d'offres, et a la passation des contrats.Marches

I Adjoint au Directeur - Planification et normalisation dans le secteur routier. 10des Routes, Experten planification - Assistance et contr6le pour 1'ex&eution du I'actualisation

d'6tudes technico-&onomiques.

Conseiller en1 gestion des travaux - Toutes questions techniques et administratives au niveau de la 15

d'entretien Division de 1'Entretien Routier.

Chefs de serviceregional

2 - Toutes questions techniques de la competence d'une Delegation 45Experts court terme regionale dans le domaine routier.

- Diverses etudes et missions 15

TOTAL 130

so

Annex 3Page 4

b) Transports

Quantites Positions Responsabilit6s Dur6e (homme/mois)

Conseiller du Directeur - Toutes questions de 8General en matiere de politique generale entransports matiere de transports

Experts court terne - Diverses etudes1 ~~~~~~~~~~~~~~~~~~~20

TOTAL 28

3. Description des tAches et qualifications

Tous les experts de l'assistance technique doivent avoir une parfaite connaissance de la langue francaise et debonnes qualites pedagogiques pour assurer le transfert de leur technologie vers les cadres nationaux et avoirtravaille dans un ou plusieurs pays en developpement. Les qualifications et fonctions specifiques desmembres de l'equipe devront etre:\

a) Coordination et Travaux Publics

* Conseiller du Coordinateur

Cet expert, de haut niveau, devra poss6der une tres grande aisance dans l'art de pratiquer desrelations publiques. 11 aura une tres bonne connaissance des problemes techniques lids I laconstruction et 1'entretien des routes en Afrique ainsi qu'une bonne culture en economie detransport. II aura une pratique d'au moins cinq annees dans l'exercice d'une fonction de hautniveau. II aura une bonne pratique des bailleurs de fonds et de leurs procedures.

Cet expert aura pour taches essentielles:

- le conseil du Coordinateur

-l'assistance au Directeur General des Travaux Publics principalement dans sesfonctions de Conseiller technique de son Ministre en matiere de routes,

- la collecte, la tenue a jour et le traitement de toutes informations sur les projets dedeveloppement en cours de preparation ou d'ex6cution dans le secteur routier et destransports routiers,

- la preparation de rapports periodiques en cette matiere permettant la diffusion de cesinformations aupres des services nationaux et des bailleurs de fonds interesses etmettant en evidence les probIlmes particuliers pour lesquels une concertation entrecertains bailleurs et le gouvernement pourrait assurer des r6sultats plus satisfaisants,

51

Annex 3Page 5

- l'organisation de r6unions de coordination,

- l'examen des programmes de travail et des budgets annuels en vue des'assurer que toutes les obligations du gouvernement resultant de conventionsou d'accords de credit dans le secteur des transports soient assur6s.

* Chef de la Cellule Juridique et des Marches

Cet expert, specialiste de l'administration des march6s publics devra egalementposs6der une bonne experience technique en matiere de travaux publics.

II aura une pratique d'au moins dix ann6es dans des fonctions similaires.

Dans le cadre de l'organisation et la supervision du fonctionnement du service qu'ilanime, cet expert aura pour taches essentielles:

- l'application des textes reglementaires,

- la r6vision ou l'elaboration des documents contractuels types,

- l'instruction des appels d'offre pour les march6s du secteur des transports,

- le suivi des processus administratifs visant a la passation des march6s,

- la conservation des documents originaux des marches,

- le conseil des directeurs techniques en cas de litige dans l'interpretation desmarches.

* Adjoint au Directeur des Routes, expert en planification

Cet expert sera un ingenieur routier ayant une tres bonne experience en organisationet gestion des services de planification et normalisation en matiere de travaux routierset de bonnes connaissances en 6conomie des transports. I1 aura une experience d'aumoins dix ann6es de pratique dans un tel service, dont cinq ann6es de fonctionssimilaires exercees dans un pays d'Afrique.

Ces fonctions comporteront notamment les taches suivantes:

52

Annex 3Page 6

- assistance au Directeur des Routes en toutes matieres techniques, economiqueou de gestion,

- appui a la normalisation,

- aide au developpement de la recherche routiere.

* Conseiller du Chef de la Division de I'Entretien (Direction des Routes)

Cet expert sera un ingenieur routier ayant une excellente experience de l'entretienroutier tant en travaux qu'en gestion administrative et programmation. I1 aura uneexperience d'au moins dix annees de pratique dans ces domaines dont cinq annees enAfrique.

Cet expert aura pour taches essentielles:

- le conseil au Chef de Division en matiere de gestion de l'entretien routier,

- l'elaboration d'un systame de gestion informatise,

- le suivi de la normalisation dans les domaines de sa competence.

$ Chef de Service Regional des Routes

Ces experts seront des ingenieurs routiers ayant une experience administrative de suiviet contr6le de travaux d'entretien routier. Ils auront une experience de quelquesannees dans un pays d'Afrique dans des fonctions similaires.

Leurs fonctions comporteront les tiches suivantes:

- la mise en place des procedures de gestion administrative, financiere ettechnique adaptees a l'organisation generale de l'entretien routier,

- la supervision du point de vue de l'administration des taches de l'entretienroutier,

- la definition des plans types des rapports d'activite.

53

Annex 3Page 7

D'une maniere generale, ils animeront et dirigeront les activites de l'Administration dans les regionsdans le domaine des routes. Deux experts seront mis en place, l'un en charge des services routiersrelatifs aux delegations regionales du Sud Ouest et du Sud Est, I'autre du Centre Ouest et de l'Est.

Experts court terme

Ces experts de haut niveau sont appeles a etre mobilis6s en fonction des besoins deI'Administration. I1 pourra s'agir, sans que cette liste soit exhaustive, de:

- expert institutionnel,

- expert juriste,

- expert environnement,

- economiste specialiste des infrastructures routieres.

Une exp6rience reussie en Afrique est indispensable.

b) Transports

-- Conseiller Transports aupr*s du Directeur G&nral

Cet expert, specialiste des transports (terrestres et a6riens) doit avoir une grandeexperience en matiere d'economie, d'affretement et de transit. Un ou plusieursexperiences concretes dans l'entreprise sont souhaitables. Une bonne connaissance ducontexte africain sera appr6ci6e.

Cet expert aura pour tAches essentielles:

- le conseil du Directeur General en matiere de transports,

- la coordination technique des differentes directions concemees par lestransports,

- la mise a niveau de la reglementation des transports et le conseil en matierede transit intemational,

- le developpement des systames d'information sur les transports,

- l'appui et le conseil aux organismes du secteur (BNF et AIR TCHAD).

54

Annex 3Page 8

* Experts court terme

Ces experts de haut niveau seront mobilises en fonction des besoins del'Administration. II pourra s'agir sans que cette liste soit exhaustive de:

- expert 6conomiste,

- expert juriste,

- expert informaticien,

- expert statisticien.

Une experience reussie en Afrique est indispensable.

4. Suivi de siege

Pour chacun des volets, le Consultant devra definir l'appui qu'il compte fournir au travers d'uncorrespondant "au siege". Cet expert, de haut niveau, devra avoir une experience de l'Afrique, dusecteur des transports, des pratiques administratives, ainsi que des proc6dures et regles des bailleursde fonds.

5. Transfert de connaissance

Chacun des experts resident au Tchad devra assurer aupres de son adjoint (ou homologue selon lecas) le transfert de connaissance indispensable necessaire a assurer le releve au depart du consultant.

m. PROGRAMME D'INTERVENTION

La duree de l'intervention est de 36 mois.

Apres une phase continue fixee de 6 a 12 mois selon le cas (excepte le Conseiller du Coordinateur),I'appui au Ministare des Travaux Publics et des Transports sera apport6 au travers de missions plusponctuelles aux objectifs particuliers precis, etablis en fonction des besoins.

ANNEXE 3Page 9

PST 2 - PLANNING PREVISIONNEL ASSISTANCE, FORMATION, ETUDES, MINISTERE MTPT

1993 1994 1995 1996 1997 1998

III IV I 11 III IV I 11 III IV I 11 III IV I 11 III IV I 11

Cseiller Tech. DGTPT ARemise niveau reglem A _ _Informatisation DTS A _Comite Uaison AAide gestion PME F _ _ _ _ _Indicateurs Econ. A _ - _ _Gares Routieres E _Aide gestion BNF A _ _Plan formation trans. F _Negociations recipr. A

1Procedures UDEAC A _Audit Air Tchad A _ _ _ _ _ _ _ _Assistance Tech. DAC A _

Conseiller CISCPExperts court terme CISCP et DG _ _ _ - - _ _ _

Chef Div. Ress. Humaines

Expert Marche _

Conseil. Directeurs I Planif.Expert Planification _Expert Gestion Tx Entret. _Experts court terme _ _ _ _ _

Chef Serv. Reg. Routes NDJChef Serv. Reg. Routes SAR _ _Chef Serv. Reg. Routes MOUChef Serv. Reg. Routes ABE _

A: Assistance; F: Formation; E: Etudes.

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ANNEX 4Page 1

Project Monitoring and Supervision Plan

1. IDA Supervision Input. Regular supervision needs are described in Table I of this Annex.In addition, specific tasks such as review of program reports, terms of reference, quarterly and annual audits,annual work program, procurement and disbursement actions are estimated to require 14 staff weeks ofvarious specialist input a year which are not included in Table 1.

Borrower's contribution to Supervision

2. The bulk of the supervision will be handled by the Interministerial Steering Committee and theProject Coordination Unit which will focus on the monitoring of all the implementing agencies to follow allthe issues related to policy measures, budgetary allocations, donors coordination, procurement, and physicalimplementation.

3. Ouarterly progress reports would be submitted to IDA and all the other donors concerned. Theywould include a summary of implementation under each project component, financial statements on projectexpenditures, updated project implementation, procurement schedules, as well as the status of contractadvertising, bidding, awards, completion dates and compliance with aggregate limits on specified methods ofprocurement. The Project Coordination Unit would collect inputs for each implementing agency and preparethe reports. These reports will highlight in particular the actual status of performance indicators incomparison with the performance plans.

4. Quarterly audit reports will be provided for the CAER and Air Tchad.

5. Joint semi-annual reviews. Twice a year (October/November and March/April) the ProjectCoordination Unit would organize a joint IDA/other donors/Government review of the project implementationbased on: (i) the progress report (which, for the purposes of the semi-annual review, would also include anannual work program and corresponding budget for the year considered and a draft budget and work programfor the following year); (ii) an assessment of technical assistance performance and execution of the trainingprogram; and (iii) the status of policy and project monitoring indicators.

6. A mid-term review: In addition, the project management would carry out mid-way throughimplementation, a review of the project including donors commitments during the roundtable held inNovember 1992. This review will be held in June 1995. The review will cover all aspects, withi a specialfocus on (i) progress in implementing policy measures and their impact on sector development (public andprivate), cost and efficiency of the system; (ii) effectiveness of budget allocation measures; (iii) effectivenessof private sector development measures.

7. Project Completion Report. Within six months of the Credit closing date a completion report,prepared in accordance with terms of reference satisfactory to IDA would be transmitted to IDA.

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ANNEX 4Page 2

TABLE 1

Supervision Plan

IDA Fiscal Year (FY) Activity Skill Staff Weeksand Approx. dates Requirements

FY94 Launching of the project Sector policy dialogue, civil 12Oct/Nov 93 works, procurement, Project

Mgmt, privatization process

March/April 94 Supervision mission Civil works, financial 18Review the implementation specialist, Project Mgmtof the overall project. airline specialistPhysical implementation ofworks. Actual allocation forCAEF, Air Tchad,performance plan, TA andTraining program

FY95 Semi-annual review mission. Same as above 10June/July 94 Review progress made that

year and plans for the nextyear including efficiency inpublic sector management,performance of SNER, TAand Training program,Review of donorscommitment

Oct/Nov 94 Supervision mission 10

March/April 95 2nd Semi-annual review Same as above 10

FY96Jul/Aug 95 Supervision mission Same as above 10

Oct/Nov 3rd Semi-annual review Same as above 10mission

March/April 96 4th Semi-annual review Same as above 10mission

FY97Nov/Dec 96 Project completion mission TBA 18

TOTAL

FY94 30FY95 30FY96 30FY97 18

Annex 4Page 3

Project Implembntation ScheduleAll donors financed operations

Project Component1993 1994 1995 1996 1997 1998

Ill IV I 11 III IV I 11 Ill IV I 11 Ill IV I 11 III IV I 11

A. PHYSICAL COMPONENT

1. Investment Costs - Civil Worksa. Rehabilitationb. Periodic Maintenance _c. Bridgesd. Road Terminal

2. Recurrent costsa. Routine Maintenance

B. INSTITUTIONAL STRENGTHENING COMPONENT

1. Consultant Services for Public Worksa. Studies and Supervisionb. Technical Assistancec. Audit and Proj. Mang. Unit

2. Consultant Services for Transport & Civil Aviationa. Studies and Supervisionb. Technical Assistance

3. Training and scholarship

4. Operating Costs -

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ANNEX 5Page 1

Republic of ChadMinistry of Planning and Cooperation

From: Washington, May 15, 1993The Minister

To:Mr. Lewis T. PrestonPresidentWorld BankWashington, D.C.

Dear Mr. President:

On behalf of the Government of Chad, I have the honor to send you herewith the Letter ofTransport Sector Policy, prepared in close collaboration with representatives of the World Bank.

This Letter of Sector Policy ties in with the sector strategy prepared in collaboration withyour staff and submitted to the donor community in November 1992.

The Government of the Republic of Chad hereby requests IDA's support in the financing ofa Second Transport Sector Project (PST2).

With this in mind, I have included in the attached document a brief review of the objectivesof the program of reforms already undertaken in the transport sector and a description of further actions thatthe Government intends to take.

Yours, etc.

ls! Ibni Oumar Mahamat Saleh

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ANNEX 5Page 2

GOVERNMENT OF THE REPUBLIC OF CHADLETTER OF TRANSPORT SECTOR POLICY

1. Introduction - Recent developments in the Chadian economy

Chad, one of the world's poorest countries with an estimated average per capita income ofUS$190 in 1991, has been experiencing serious economic and financial difficulties for the past 20 years.

Since 1983, the country has been making progress along the path to political stabilization,democratization, and economic reconstruction. The National Conference held from January to April 1993represented an important milestone, holding out hope for the country's future. The many difficultiesencountered, linked essentially to the country's low level of development and to its physical environment,must be overcome.

During the period 1982-85, record cotton harvests allowed Chad to substantially increase itsGDP (+7% a year). But since the onset of the cotton crisis in 1986, the economy has slowed down somuch that its growth rate is now lagging behind that of the population.

The Chadian economy is characterized by:

- major handicaps of a non-economic nature, in particular the country's climateand landlocked situation;

inadequate levels of exports, concentrated mainly on cotton and cattle on the hoof;

inadequate levels of private investment to meet potentially large requirements.

2. Economic development strategy

To solve both its basic development problems and the structural problems of its economy,Chad proceeded at the end of the war, with the support of the international community (Geneva 1985), todraw up an Interim Development Plan (1986-88).

The long-term objectives of this plan, still valid today, consisted of making the country self-sufficient in food, reducing its dependence on cotton, rehabilitating and maintaining the transport system,and accelerating the development of its human resources.

In 1991, the Government confirmed the main thrusts of its development policy:

improve social conditions so that the people are better equipped to handle the cultural,political, socioeconomic, and technological changes that country has to face;

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ANNEX 5Page 3

increase production capacities through institutional modernization and economicliberalization;

- restore key economic and financial equilibria and maintain a healthy rate of growth.

Within the framework of this economic development strategy, the transport sector has a keyrole to play in light of the country's landlocked situation, the geographic dispersal of its economic activities,and the progress that it may be expected to achieve once it has access to the broader regional dynamic.

The role of foreign trade in Chad's economy, the growth of the country's urban population,and the development of regional markets are all further reasons for the key strategic role assigned to thetransport sector.

With its many macroeconomic functions, the transport sector supports the country's othereconomic activities. It plays a particularly important role upstream and downstream of both agriculturalproduction and trade, and is a major generator of employment.

3. Transport sector strategy

Bearing in mind the importance of this sector, and desiring to strengthen the objectivesassigned to it, the Government has reaffirmed the basic principles of its strategy:

- reduction of transport costs;

- institution building;

- liberalization of the sector.

These key principles essentially involve actions along the following lines:

- assigning priority, for the sector as a whole, to investment in routine and periodicmaintenance and rehabilitation, but limiting this investment to a specific high prioritytransport network providing a permanent link between the major production andconsumption centers;

promoting expansion of the private sector, by permitting private contractors to bid on workstraditionally and routinely executed by force account, leaving the Government to develop itsexpertise in the areas of design, planning, and supervision;

continuing the process of restructuring Air Tchad, including signature of a contrat-plan withthe Government or a cooperation agreement with external partners, for the purpose ofstreamlining the company's management and making it financially viable.

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ANNEX 5Page 4

These actions are designed to create the appropriate conditions for the sector's participationin the revival of the national economy.

To implement this strategy, the Government launched a Transport Sector Adjustment Project(1989-93), and has now prepared a Second Transport Sector Project (1993-98).

4. Action program

(a) Actions already undertaken

In 1989, the Government identified a high priority road network, and decided to concentrateits efforts on the rehabilitation and maintenance of that network. The investment program, approved at the1988 Donors Meeting, was launched and duly respected.

The key sector policy reforms were implemented, specifically the liberalization of roadtransport through the abolition of monopolies and administrative tariffs.

At the same time, the Government acquired the institutional resources required for rigorousmanagement of the sector. Government agencies and parapublic institutions were restructured in an effortto make them more cost-effective. Thanks to modernization of the administrative and legal framework forgovernment contracts it was possible for substantial progress to be made in the management of publicinvestment programs.

The Government also took resolute action to apply certain new basic legal provisions,particularly in the area of liberalization of the sector, with a view to improving the transport of both goodsand passengers and thereby improving conditions of trade, increasing the country's levels of economicperformance, and lowering costs.

(b) Proposed actions

In view of the magnitude of the tasks remaining to be done, despite the substantial effortsalready made, the Government wishes to confirm its adherence to its original objectives.

To ensure the coherence of its actions in the transport sector, the Government thus intendsto lose no time in implementing the following measures:

continued institution building at the Ministry of Public Works and Transport, with a view toimproving the efficiency of Government agencies by restricting their role to design,planning, regulation, and supervision;

development of human capacities through more rigorous human resource management;

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ANNEX5Page 5

support for the agricultural development policy through rehabilitation and maintenance of anetwork of some 900 km of feeder roads, thus bringing the priority network to close to4,700 km;

facilitation of international transit through measures designed as part of the move towardregional integration, primarily with Cameroon and the CAR;

improvement of surface transport operations;

coherent and increased mobilization of local resources linked to the sector;

allocation of adequate levels of local financial resources to road maintenance;

creation of an Autonomous Account for Road Maintenance, to ensure availability andefficient management of the funds allocated to maintenance;

promotion of local private entrepreneurs in the public works area, particularly where roadmaintenance contracts are concerned;

conversion of Office National des Routes into a societe nationale with a private-typemanagement structure, with plans to study its subsequent privatization;

opening up of LNBTP's capital to private-sector participation;

active continuation of the overhaul and adaptation of the procedures governing contractaward, approval and management, so as to make the choices more transparent, expediteworks execution, and ensure prompt settlement of the corresponding payments.

All measures relative to implementation of this Letter of Policy are set forth in the annexedaction plans.

Conclusion

The present Letter of Transport Sector Policy and the annexes thereto are evidence of theGovernment's determination to lay solid bases for our nation's economy within the framework of theTransport Sector Project. It is intended to serve as a reference for all actions taken in this area during theperiod concerned, and in that capacity merits the understanding and respect of all of our partners indevelopment.

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ANNEX 5-1Page I

ACTION PLANFOR THE ROADS SECTOR

Foreword

Within the framework of the Transport Sector Adjustment Program 1989-93, some 2,800km of the 3,800-km high priority road network have been rehabilitated. Within the framework of theSecond Transport Sector Project (1994-98), it was agreed to increase this priority network to 4,760 km, toinclude a network of what are essentially secondary rural roads, with a view to promoting the developmentof agricultural production and facilitating trade between surplus and deficitary areas.

Bearing in mind the efforts already made to rehabilitate the road network, and desiring tosafeguard the national assets, the Government intends to devote particular attention to maintenance of therevised priority network.

The Government intends to continue the efforts being made in the area of highway researchto optimize construction standards.

Environmentally-oriented actions are today high on the list of Government concerns. Thephysical investments already carried out represent a useful yardstick for measuring impact. Certainenvironmental changes, whose results are already perceptible, are sometimes negative. The factoring ofenvironmental considerations into transport sector projects should lead to improvements in investmentquality. Environmental data, like technical and economic data, should be available for the Government, ascontracting authority [mattre d'ouvrage], to use as pointers throughout the project cycle.

Objectives

Following are the objectives of the action plan for the road sector:

A. ROAD MAINTENANCE

Improve management of the road network through better works programming and rigorouson-site supervision.

Improve the conditions and methods of execution of road maintenance programs.

Ensure the availability of adequate financing for maintenance of the priority network.

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ANNEX S-1Page 2

B. NETWORK REHABILITATION

- Pursue rehabilitation of the priority road network and initiate rehabilitation of feeder roadslinking production areas with the priority network.

- Rehabilitate or construct bridges and culverts to ensure continuity of traffic flow within thepriority network.

C. HIGHWAY RESEARCH

- Improve the capacities of the Highways Directorate in the area of site investigation[gtotechnique routi&rej to ensure a more informed approach to the complexities andparticularities of the local context in terms of geomorphology, availability of materials andof water, climatology, and the environment.

Set up geotechnic data banks based on works and experiments.

Assign a broader role to the LNBTP and develop its technological skills, spirit of initiative,and competitiveness.

Improve the quality of interaction among the LNBTP, the Directorates of the Ministry ofPublic Works and Transport, and the other technical ministries active in the area ofenvironmental protection.

D. ENVIRONMENT

- Minimize constraints, in particular through better protection of the forest resource andstrengthening of the reforestation policy.

- Improve the existing situation by instituting mechanisms for collaborating with externalagencies and with the local communities concerned.

Actions

1. TO ACHIEVE THE OBJECTIVES OF THE ROAD SUBSECTOR:

A. THE FOLLOWING INSTIUTIONAL MEASURES HAVE ALREADY BEEN TAKEN:

* Preparation of legislative measures redefining the organization of the Ministry of PublicWorks and Transport, focusing in particular on the role and functions of the HighwaysDirectorate.

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ANNEX S-1Page 3

* Preparation of all legislative measures redefining the existence, organization and functions ofthe High Interministerial Committee responsible for monitoring PASET projects, theTechnical Committee, and the Interministerial Project Monitoring and Coordination Unit.

* Preparation of the statuts of the new road maintenance company (Societe Nationale del'Entretien Routier - SNER).

* Preparation of legislative measures:

- creating the independent road maintenance account and establishing procedures forits management and the appointment of its authorized signatories.

These documents will indicate the pertinent budget line items and the procedures for fundingthe account;

* Preparation of decrees instituting a simplified procurement procedure for PST2:

a decree redefining the functions of the High Interministerial Committee, extendingthese to include supervision of all PST2 procurement operations during the period1994-98;

- a decree redefining the functions of the Technical Committee, extending these toinclude performance of all operations involved in the issue of invitations to tender,bid appraisal and analysis, and contract award;

- a decree delegating contract approval authority to the Chairman of the HighInterministerial Committee for the entire period 1994-98;

- Preparation of legislation to govern administrative classification of the road network.

* Approval of the General Conditions of Contract.

B. THE FOLLOWING INSIITONAL MEASURES WILL BE TAKEN:

By July 31, 1993:

* Approval of all of the above pieces of legislation.

By September 30. 1993:

* Establishment of OFNAR's closing balance at June 30, 1993.

* Establishment of SNER's opening balance at September 1, 1993.

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ANNEX S-1Page 4

2. TO IMPROVE MANAGEMENT OF THE ROAD NETWORK THROUGH BETTER WORKSPROGRAMMING AND RIGOROUS ON-SITE SUPERVISION, THE GOVERNMENTUNDERTAKES TO:

(a) Transfer network management and works programming and supervision from SNER to theHighways Directorate:

- prepare by June 30 each year a current and periodic maintenance program, takingaccount of the geographic distribution of the stretches concerned and of the availablebudget resources;

- perform a yearly update of the rain gates map, aiming in particular to have theseinstalled on rehabilitated stretches;

- organize annual programs for traffic counts, vehicle weight checks, and trafficsurveys;

(b) Have all periodic maintenance works performed by private contractors or companies withprivate-type management, in accordance with the specifications of contracts for worksconcluded with the Highways Directorate.

(c) Make settlement for all road maintenance works on the basis of a unit price list, paying onlyfor those services actually performed.

AND TO THIS END THE FOLLOWING ACTIONS HAVE ALREADY BEEN TAKEN:

(a) Preparation of sample bidding documents for both current and periodic maintenance,consisting in each case of the Special Conditions of Contract, Technical Specifications, billof quantities, and price list.

(b) Preparation of sample contracts for the management of ferries, traffic counts, and rain gates.

(c) Preparation of a manual of procurement procedures.

AND THE GOVERNMENT UNDERTAKES TO TAKE THE FOLLOWING MEASURES:

By June 30. 1993:

(a) Preparation of a manual of accounting procedures, including all accounting documentsrelated to contracts for road maintenance and related activities.

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ANNEX 5-1Page 5

(b) Preparation of a system of cost analysis for works, using actual data from the maintenancecontracts to determine the unit costs and costs per kilometer of maintenance tasks accordingto the nature of different stretches of road.

(c) Preparation of a road maintenance standards manual describing the types and frequency ofmaintenance tasks by standard of road stretch, geographic location, and traffic breakdown.

By June 30, 1994:

* Design an HDM-type computer model for network management and install this at theHighways Directorate.

3. TO IMPROVE CONDMTIONS AND METHODS OF IMPLEMENTATION OF ROADMAINTENANCE PROGRAMS THE GOVERNMENT UNDERTAKES TO:

(a) Take steps to promote autonomous administrative and financial management at SNER:

(b) Transfer from OFNAR to SNER the capital goods needed for its operations, to enable it toachieve the projected levels of competitiveness.

(c) Entrust SNER, by negotiated contract, with half of the current maintenance program for thefirst three crop seasons.

4. TO ENSURE ADEQUATE FINANCING OF THE HIGH PRIORITY NETWORK THEGOVERNMENT UNDERTAKES TO:

(a) Assume:

100% of the cost of management and operation of themaintenance units;100% of the cost of current maintenance;5% of the cost of periodic maintenance.

(b) Improve recovery of road user fees (road, ferry and bridge tolls, freight taxes [taxesd'affretement routier] collected by the BNF) and petroleum taxes.

(c) Ensure funding of the Autonomous Road Maintenance Account through monthly deposits incumulative annual amounts of at least CFAF 1,800, 2,000, 2,200, 2,400 and 2,600 million,respectively, for fiscal years 1994, 1995, 1996, 1997 and 1998. These resources will comeprimarily from road user fees and from DTS and petroleum tax revenues, in accordancewith the following distribution:

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ANNEX 5-1Page 6

1994 1995 1996 1997 1998 TOTAL

Ferry tolls 50 50 50 50 50 250N'Gueli bridge toll 250 260 280 300 300 1,390BNF freight tax 600 630 660 700 700 3,290Sales of public worksequipment 160 160 260 480Petroleum taxes 740 900 1,050 1,350 1,550 5,590

Total 1,800 2,000 2,200 2,400 2,600 11,000Per month 150 165 180 200 215

5. TO CONTINUE REHABILITATION OF THE HMGH PRIORITY ROAD NETWORK ANDENSURE REHABILITATION OF THE SECONDARY RURAL ROADS LINKINGPRODUCTION AREAS TO THE NATIONAL PRIORITY NETWORK, THEGOVERNMENT UNDERTAKES TO:

(a) Carry out the feasibility studies and detailed engineering studies prior to implementation ofthe works:

letters of invitation for the preliminary studies and bidding documents shall allconform to the external partners' rules of procurement;

the preliminary studies shall take the enviromnent factor into consideration: animpact assessment shall be systematically incorporated into each feasibility study andthe pertinent technical specifications included in the works contracts;

(b) Implement the investment program agreed with the external partners, and consequently:

- implementing only the program adopted for the period 1994-98;

- asking the external partners for prior consent to all other actions, not included in theabove investment program, in an annual cumulative amount of over CFAF 200million;

- revising the investment program annually in consultation with the external partners,in light of the past year's performance in terms both of program implementation andof the country's overall economic situation;

- carrying out the rehabilitation works in accordance with the design and constructionstandards adopted. Proposals to improve these standards may be envisaged, to takeaccount of the physical and specific environment of a given road and of its

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ANNEX 5-1Page 7

consequences in terms of sustainability of the works carried out (materials, erosion,etc.);

(c) Through the appropriate agencies, continue to seek financing from its partners for thoseparts of the program that are still without financing.

(d) Make available the counterpart funds necessary to successful implementation of the program.

6. TO REHABILITATE OR CONSTRUCT BRIDGES AND CULVERTS ESSENTIAL TO THECONTINUITY OF TRAFFIC FLOW WITHIN THE PRIORITY NETWORK, THEGOVERNMENT UNDERTAKES TO:

(a) Continue the inventory and diagnostic survey of bridges and culverts within the prioritynetwork during the first half of 1993.

(b) Establish a rehabilitation program with the Highway Data Bank taking account of thepriorities and programming of network rehabilitation.

(c) Perform the engineering studies of the bridges and culverts to be rehabilitated or constructed(bidding documents).

(d) Implement the program for rehabilitation of the designated feeder road network.

7. TO INCREASE THE CAPACITIES OF THE HIGHWAYS DIRECTORATE IN THE AREAOF SITE INVESTIGATION [GEOTECHNIQUE ROUTIEREJ TO ENSURE A MOREINFORMED APPROACH TO THE COMPLEXITIES AND PARTICULARITIES OF THELOCAL CONTEXT IN TERMS OF GEOMORPHOLOGY, AVAILABILITY OFMATERIALS AND OF WATER, CLIMATOLOGY AND ENVIRONMENT, THEGOVERNMENT UNDERTAKES TO:

(a) Initiate methodologies for laboratory tests most appropriate to the local context.

(b) Prepare display charts for use in programs to train personnel in methods of siteinvestigation.

8. TO SET UP GEOTECHNIC DATA BANKS BASED ON WORKS AND EXPERIMENTS,THE GOVERNMENT UNDERTAKES TO:

(a) Take inventory of all documentation existing at this date:

listing all reports of studies and all supervision and consultancy reports published bythe Highways Directorate since 1986 concerning paved and unpaved roads.

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ANNEX 5-1Page 8

listing all results of laboratory tests, whether obtained by LNBTP, acquired byconsultants responsible for studies or works supervision, or furnished by contractorsusing their own laboratories.

- classifying, systematizing, and filing all of these documents.

(b) Monitor the post-acceptance behavior of roads on which works were performed duringPASET, focusing in particular on paved roads, and compile or update the correspondingcontract compliance documents [dossiers de recolement].

(c) Draw up a study and research program related to road construction projects, and take thefollowing steps to implement it:

- initiate pavement and materials studies, taking account of the local context;

- participate in the design and implementation of test strips on future roads (paved andunpaved);

* initiate monitoring of these test strips during their implementation and followingtheir acceptance.

(d) Prepare a geotechnic map of Chad.

9. TO ASSIGN A BROADER ROLE TO THE LNBTP AND DEVELOP ITSTECHNOLOGICAL SKILLS, ITS SPIRIT OF INITIATIVE, AND ITS COMPETITIVENESS,T1HE GOVERNMENT UNDERTAKES TO:

(a) Effectively privatize management of the LNBTP and eventually set up a laboratory in theform of a private commercial company.

(b) Encourage the LNBTP, which will not receive any subsidized financial or technicalassistance, to conclude contracts for assistance, in particular with respect to management,the technical performance of its contracts, and the training of its personnel.

(c) Encourage the LNBTP to adopt a more dynanic trade policy, enabling it to participate instudies, works supervision, and monitoring activities involving the network.

(d) Encourage the LNBTP to participate in the training seminars and programs arranged by theMinistry of Public Works and Transportation.

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10. TO IMPROVE THE QUALITY OF LINKS BETWEEN THE LNBTP, THE DIRECTORATESOF THE MINISTRY OF PUBLIC WORKS AND TRANSPORT, AND THE OTHERTECHNICAL MINISTRIES ACTIVE IN THE AREA OF ENVIRONMENTALPROTECTION, THE GOVERNMENT UNDERTAKES TO:

(a) Set up a planning unit at the Highways Directorate to handle relations with all otherministries involved in the rehabilitation program.

11. TO PROTECT THE FOREST RESOURCE AND STRENGTHEN THE REFORESTATIONPOLICY, THE GOVERNMENT UNDERTAKES TO:

(a) Put in place an environmental unit attached to the Highways Directorate, to coordinateactivities and in particular to monitor project-induced environmental changes.

(b) Provide training on environmental topics, to ensure sustainability of the actions taken, andprovide managerial staff at the Ministry of Public Works and Transportation with the basicskills in this area.

(c) Include an environmental impact assessment in all road feasibility studies.

(d) Prepare technical specifications for subsequent inclusion in contracts for studies and works.

12. TO IMPROVE THE EXISTING SITUATION BY INSTITUTING COLLABORATION WITHEXTERNAL AGENCIES AND THE AFFECTED LOCAL COMMUNITIES, THEGOVERNMENT UNDERTAKES TO:

(a) Coordinate studies with the Ministry of Tourism and the Environment, and routinely consultthe local communities.

(b) Support the regional units of the Ministry of Tourism and the Environment (Regional ForestInspectorates), strengthening their capacities for controlling wood and fauna offtake.

(c) Sensitize the local communities to environment-related actions.

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ANNEX 5-1Page 10

13. TO SUPERVISE THE PROPER DEVELOPMENT OF THE PROJECT ANDACHIEVEMENT OF ITS OBJECTIVES THANKS TO THE PROGRAMMED ACTIVITIES,THE GOVERNMENT UNDERTAKES TO CARRY OUT PERIODIC MEASUREMENTS OFPERFORMANCE INDICATORS, AS FOLLOWS:

Institutional aspec:

(a) Have six-monthly audit missions check on the progress of institutional restructuring and itsimpact on the institutions' operations.

(b) Verify the existence of monthly activities reports (Divisions) and quarterly reports(Directorates and Regional Delegations).

(c) Verify the existence of specific technical reports (supervision missions, traffic counts, trafficsurveys, etc.).

(d) Verify that the computer model has been installed at the Bureau de Gestion Routiere.

(e) Verify that the Planning Unit and the environmental officer at the Highways Directoratehave been effectively installed.

(f) Verify the existence of the geotechnic library.

Road maintenance and rehabilitation:

(a) Perform quarterly audits of the Autonomous Account for Road Maintenance.

(b) Perform monthly comparisons of actual and estimated expenditure.

(c) Verify the number of maintenance contracts signed with private enterprises.

(d) Verify actual monthly disbursement on maintenance.

(e) Verify the length of rehabilitated roads or the number of bridges or culverts repaired orconstructed.

(f) Verify actual expenditure on rehabilitation.

(g) Survey traffic on the maintained and rehabilitated network.

(h) Obtain transport production indicators (load factors, passengers and tons/km) from theDirectorate of Studies and Planning.

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ANNEX 5-1Page 11

(i) Obtain annual information on vehicle operating costs (economic and financial).

(j) Ascertain the economic rate of return of the work performed.

Highway research and environment:

(a) Verify the existence of the geotechnic map of Chad.

(b) Verify the inclusion of impact assessments in the terms of reference for road studies.

(c) Verify the existence of environment-related technical specifications in study and workscontracts.

14. TO ACHIEVE THE ESTABLISHED OBJECTIVES THE GOVERNMENT UNDERTAKESTO TAKE THE FOLLOWING MEASURES IN THE AREA OF HUMAN RESOURCES:

(a) Perform a human resources assessment upon completion of PASET.

(b) Perform an assessment of the human resources required for PST2 (numbers, qualifications,etc.).

(c) Plan the human resources needed by the Government in order to ensure as smooth atransition as possible from the existing to the projected situation.

(d) Mobilize external resources (technical assistance) needed for implementation of the program,preferably in the form of short-term focused missions.

(e) Define the personnel management and career development structure.

(f) Perform ongoing job/skills match reviews.

(g) Coordinate all training activities with a view to maximizing efficiency.

(h) Identify actions to be taken in connection with management of PST2 personnel and withtraining.

(i) Redefine the roles of Ecole Nationale des Travaux Publics (ENTP) and the Centre dePerfectionnement et de Recyclage (CPT).

(j) Develop training programs covering new topics (environment, etc.).

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PRIORITY ROAD NETWORK

Name of stretch Length (lmn)

Primary Priority Network

- Walia-N'Gu6li 6.00

- Voie de conbournement 20.50

- N'Djam6na-Djermaya 26.50

- Djermaya-Massaguet 45.50

- Djermaya-Dandi 66.00

- Massaguet-Massakory 68.00

- Massaguet-N'Goura 124.00

- N'Goura-Bokoro 104.00

- Bokoro-Mongo 201.00

- Mongo-Mangalmc 122.00

- Mangalme-Oum Hadjer 109.00

- Oum Hadjer-Abechc 146.00

- Ab6ch6-Adre-Frontier 174.00

- N 'Djam6na-Guelengdeng 144.00

- Guelengdeng-Bongor-Koyom 160.00

- Koyom-Ere-Kclo 58.00

- Guelengdeng-Sarh 402.50

- Sarh-Moundou-Lr&6 603.00

- Sarh-Maro-Sido 125.50

- Massakori-Bol-Bagasola 237.50

- Ab6ch6-Biltine 92.00

- Mongo-Ati 154.00

- Mbaikoro-Bedaoyo 112.50

- Moundou-Bolarobou 115.00

- Mongo-Abou Deia 122.50

- Abou Deia-Am Tinman 135.00

- Doba-Gor6 95.00

SUBTOTAL 3,769.50

Secondary Priority Network

- N'Djamena-Linia-Dourbali 103.00

- Bitkine-Melfi 118.00

- Bokoro-N'Gama 75.00

- Sarh-Kyabc 98.00

- Kelo-Lai 60.00

- Koumra-Moissaia 74.00

- Koyom-Lai 68.00

- Pala-Fianga 72.00

- Kemdera-Moissala 127.00

- Doba-Lai 104.00

SUBTOTAL 955.50

GRAND TOTAL 4,725.00

FINANCING OF RoM MAINTENANCE

ANUIAL BUDGET BREAKDOWN

(in CFAF *itlions)

Name of stretch Length-km 1994 1995 1996 1997 1998 TOTAL Agent

PERIODIC MAINTENANCEBDEAC 528.0 425 425 425 425 425 2,125 BiddingCCE 715.5 650 650 650 650 650 3,250 BiddingIDA 197.5 662 721 850 960 1,085 4,278 BiddingCHAD 321 452 449 510 575 2,307 Bidding

Subtotat,Periodic Naintenice 1,'U1.0 2,058 2,248 2,374 2,545 2,735 11,90CURRENT MAINTENANCE

BDEACCCE 715.5 326 326 327 330 330 1,639 BiddingIDA .CHAD, graveL roads 3,917.5 768 863 920 1,030 1,130 4,711 SNER+BidCHAD, asphalt roads 526.5 130 130 153 212 232 857 SNER

SubtotaL,Cwrrent bmint 5,159.5 1,224 1,319 1,400 1,572 1,692 7,207Chad, network mgt (*) 193 193 193 193 193 965

TOTAL net of inflation andcontingenciesBDEAC 528.0 425 425 425 425 425 2,125CCE 1,431.0 976 976 977 980 980 4,889IDA 197.5 662 721 850 960 1,085 4,278CHAD 4,444.0 1,412 1,638 1,715 1,945 2,130 8,840

TOTAL NETWORK 6,600.5 3,475 3,760 3,967 4,310 4,20 20132

Inflation 69 231 415 645 925 2,265Contingencies 346 379 396 434 465 2,020

GRAND TOTALBDEAC 528.0 477 500 523 531 553 1,500CCE 1,431.0 1,095 1,138 1,182 1,225 1,275 3,415IDA 197.5 745 850 1,045 1,200 1,411 2,640CHAD 4,444.0 1,555 1,885 2,043 2,431 2,770 5,483

TOTAL 6,600.5 3,872 4,373 4,793 5,387 6,009 24,434

* Operating costs: road maintenance, ferries, rain gates, traffic counts.

OQ z(D M

k_n

rDto

m-

77

ANNEX 5-1Page 14

HIGHWAY RESEARCH ACTION PLAN

Foreword

During implementation of PASET, 263 km of paved roads were either reconstructed orstrengthened. Unpaved roads, bridges and culverts were rehabilitated.

The Government intends to pursue its efforts to increase the stretches of paved and unpavedroads, and in the case of the latter to improve the quality of works in terms of site investigation. Theinadequacy or outright absence of good quality road materials justifies this highway research action plan.

Objectives

The objectives are as follows:

improve the capacities of the Highways Directorate in the area of site investigation to ensurea more informed approach to the complexities and particularities of the local context interms of geomorphology, availability of materials and of water, climatology, and theenvironment;

set up geotechnic data banks based on works and experiments in progress;

assign a broader role to the LNBTP and develop its technological skills, its spirit ofinitiative and its competitiveness;

improve the quality of the interaction among the LNBTP, the Directorates of the Ministry ofPublic Works and Transport, and the other technical ministries active in the area ofenvironmental protection.

Actions

To achieve the above objectives, the Government undertakes to:

- take inventory of all study, supervision and other reports dating back to 1986 concerningpaved and unpaved roads;

- systematize these documents to ensure that the system used for their filing matches that ofthe Highways Directorate of the Ministry of Public Works and Transportation;

- inventorize, systematize and file all laboratory test results, whether obtained by LNBTP, bythe consultants hired to perform studies or supervisory services, or by contractors usingtheir own laboratories;

78

ANNEX 5-1Page 15

monitor the post-acceptance behavior of roads on which works were performed duringPASET, focusing in particular on paved roads;

prepare the corresponding contract compliance documents;

initiate methodologies for laboratory tests most appropriate to the local context;

prepare a geotechnic map of Chad;

participate in the design and implementation of strip tests on future roads (paved andunpaved);

initiate strict monitoring of these strip tests during implementation and following theirprovisional acceptance;

prepare display charts for use in programs to train personnel in site investigation methods.

79

ANNEX 5-2Page I

LAND AND AIR TRANSPORT ACTION PLAN

Foreword

During implementation of PASET 1989-93, the transportation subsector has undergoneradical changes at both the institutional and the sectoral level.

These radical changes have not yet been fully incorporated into the day-to-day operations ofeither the Government or the private sector.

The overall objective of the PST for the land and air transport subsector consists ofconsolidating options defined and developed within the PASET framework, and of empowering managerialand lower-level staffs of the hlTPT's transport divisions to assume responsibility for the management of thissubsector.

At the same time, particular attention will be devoted to training and sensitization of theprivate sector, actions essential to ensure the avoidance of misunderstandings between the Government andthe transport sector operators.

Given that the transport industry is so crucial to Chad's economic life, all of the institutions,both public and private, involved in the sector will ultimately need to provide initial training programs fortheir senior staff and specialized and full-time technicians, at present in woefully short supply.

Lastly, transport operations must respect the environment and observe the basic rules ofroad safety.

Objectives

The objectives are as follows;

* ensure coordination and monitoring of the various PST activities;

* bring the regulatory framework into line with the present economic context;

* keep track of the fleet and its growth in order to maintain the transport data bank andprovide a basis for economic indicators;

* control fraud, introduce basic safety habits and install a more regular system of taxcollection;

* update the files;

80

ANNEX 5-2Page 2

* monitor the development and economic impact of measures taken, or to be taken, in thetransport sector;

* facilitate transport document control by routing all vehicles through a designated hub [centred'echange routierl;

* update BNF's 1992 accounting system;

* implement a staff training plan;

* negotiate new reciprocity agreements with Cameroon;

* conclude an agreement with Nigeria;* ensure smooth transition between the two systems;

* implement the recovery program for Air Tchad;

e update the regulatory framework governing civil aviation and the functions of theDirectorate of Civil Aviation.

Actions

To achieve these objectives, the Government undertakes to:

e assign a transport adviser to the MTPT General Directorate;

* update overland transportation legislation by April 30, 1993;

i put in place an operational data processing system capable of issuing the various transport-related documents;

* set up an Interministerial Coordinating Committee linking the different departmentsresponsible for road inspection;

* by November 30, 1993, develop a management assistance plan for SMEs in the transportsector;

* construct a hub [centre d'echange routierl at N'Djamena;

* put in place an accounting plan at BNF, and recruit and train a qualified accountant to keepthe accounts and perform quarterly financial audits;

* implement a management training plan for SMEs in the transport sector;

81

ANNEX 5-2Page 3

* by December 31, 1993, develop transit reciprocity negotiations with Cameroon and Nigeria;

* adopt measures, legislative provisions and deadlines for performance of the UDEACagreements, by January 31, 1994;

* implement a recovery program for Air Tchad that will enable it to regain financialequilibrium, redefine its trade policy within a national, international and interregionalcontext, and initiate performance of a management contract by December 31, 1993;

* develop the Chadian Code of Civil Aviation and reorganize the functions of the Directorateof Civil Aviation;

* formulate a short- and medium-term civil aviation development policy.

82

ANNEX 5-3Page 1

ENVIRONMENTAL ACTION PLAN

Foreword

Attention to environmental considerations in transport sector projects should make it possibleto improve investment quality. Environmental data, like technical and economic data, should be availablefor the Government, as contracting authority Imaftre d'ouvragel, to use as pointers throughout the projectcycle.

Objectives

The objectives are as follows:

minimize constraints, in particular through better protection of the forest resource andstrengthening of the reforestation policy when road works are to be performed;

minimize the negative impact of environmentally-motivated changes through better projectdesign and greater collaboration between government agencies and local communities.

Actions

To achieve these objectives, the Governrment undertakes to:

- put in place an environmental unit attached to the Highways Directorate, to coordinateactivities and in particular to monitor project-induced environmental changes;

- support the regional units of the Ministry of Tourism and the Environment (Regional ForestInspectorates) to strengthen their capacities for controlling wood and fauna offtake;

- sensitize the local communities to environment-related actions;

- provide training on environmnental topics, to ensure sustainability of the actions taken andprovide managerial staff at the Ministry of Public Works and Transportation with the basicskills in this area;

- include an environmental impact assessment in all road feasibility studies;

- prepare technical specifications for subsequent inclusion in study and works contracts;

- coordinate studies with the Ministry of Tourism and the Environment, and routinely consultthe local communities.

83

ANNEX 5-4Page 1

ACTION PLAN FOR PRIVATE SECTOR DEVELOPMENT

Foreword

In developing the private sector, the Government intends to facilitate the emergence of small-and medium-scale enterprises qualified to carry out road maintenance and rehabilitation programs.

The existence of a favorable political, legal and economic context is essential to expansionof the Chadian private sector. The Government therefore intends to adopt practical measures andadministrative, financial and technical procedures that will lead to prompt solution of the problemsencountered by local contractors.

Objectives

The objectives of this action plan are:

improve the productivity of government agencies in order to establish optimum relationsbetween those agencies and the private sector;

promote private initiative in the areas of public works and transportation;

improve the performance of the parapublic enterprises to make them competitive andprepare them for privatization.

Actions

To achieve these objectives, the Government undertakes to:

- improve organization, operation and supervision of the financial circuits, so as not to holdup contractors' payments;

- extend to implementation of PST2 the same regulatory provisions and procurementprocedures used for awarding the project preparation studies;

- enact the necessary legislation (General Conditions of Contract) to ensure coherentmanagement of works contracts;

- organize external and internal audits of financing operations;

- dissolve OFNAR and set up the Societe Nationale d'Entretien Routier, with a private-typemanagement structure;

- open up the capital of LNBTP to private sector participation;

84

ANNEX 5-4Page 2

actively pursue the recovery of Air Tchad, take steps to ensure sustainable consolidation ofits operating equilibrium through conclusion of a partnership agreement, and open up itscapital to the private sector;

sell its shares in the capital of SOTEC to Chadian private citizens, in accordance with atimetable renegotiated with the company's external shareholder;

provide technical support and develop training programs for Chadian SMEs;

assign to the Ministry of Public Works and Transportation the functions of delegatedcontracting authority [mattre d'ouvrage d6ligu0l and engineer [mattre d'oeuvre] formaintenance works on cotton feeder roads that are to be performed under private contract;

open up the road maintenance market to SMEs, including provisions for subcontracting[tdcheronnagel, through appropriate works packaging.

85

ANNEX5 5Page 1

HUMAN RESOURCE MANAGEMENT ACTION PLAN

Foreword

From the analysis of the summary reports prepared, particularly in 1992, it appears thatadoption of an overall personnel management strategy is absolutely essential in the present context.

The higher levels of performance required of both Government and private sector personnelwill require a more rigorous approach to career development, with greater attention to staff qualificationsand assignments.

Objectives

The objectives are as follows:

- plan the human resources needed by the Government in order to ensure as smooth atransition as possible from the existing to the projected situation;

- perform ongoing job/skills match reviews;

- streamline personnel management procedures;

- coordinate all training activities with a view to maximizing efficiency.

Actions

To achieve these objectives, the Government undertakes to:

- study a human resources management plan (overall assessment of resources existing andrequired, definition of ENTP's role, definition of the detailed objectives of the managementstructure);

- install and update a file of the staff of the Ministry and its various agencies;

- perform ongoing staff performance evaluations;

- define rules of management (recruitment, new staff regulations);

- establish a forward management system as a basis for the preparation of recruitment andtraining plans;

86

ANNEX 5-5Pag 2

extend in-service training programs to new agencies (particularly those of an administrativeand financial nature);

strengthen action already initiated within the PASET framework in the road and transportsectors;

develop training programs on new topics (the environment, for example);

support the Centre de Formation et de Perfectionnement to enable it to expand its actions,aiming primarily at the private sector;

redefine ENTP's functions and objectives in light of the results of the planned study.

87

ANNEXCPage 1

ACTION PLAN FOR REGIONAL INTEGRATION AND TRANSIT FACILITATION

1. Transport and regional transit facilitation in Chad has been naturally constrained by itslandlock situation and by its dependance on transit services from neighboring countries ( in particularCameroon and Nigeria). In spite of substantial progress made in liberalization and competitive edge inrecent years (liberalization measures taken under the TSAIP), the Chadian transport industry suffers fromsevere constraints of both regional and natural character.

2. Since the UDEAC Treaty came into force, there have been no successful efforts to facilitateregional transport among member countries. Individual actions have proliferated; but the potential benefitsof such national actions has been neutralized by regional vested interests or by interests of groups orinstitutions which run counter to the efficiency of transport, to the liberalization of trade, and in general tothe integration of practices, documents and procedures.

3. National regulations show substantiai disparity between UDEAC countries depending onoriginal legal models, date of adaptation and latest amendments. All regulations have diverse weights anddimensions standards. In addition, national regulations have priority of observance. Both the UDEACregulations and national regulations are not adapted to modem multimodal transport technical developmentsand are, therefore, restrictive.

4. The most important effects of this disparity are high cost of services and transit delays. Thecost of regional non factor services on imports was estimated in 1989-1990 to be 16% for Cameroon, 39%for Chad, and 31% for Central Africa.

5. Aggregate total transports costs through the Cameroon corridor (including freight-forwardingfees) for freight travelling to the Central African Republic are estimated between 1.2 and 2.6 billion CFAFper year and between 980 million and 1.5 billion for Chad.

6. At present, the consequences of the trade and transport logistic issue in Chad and in theregion may be summarized as follows:

(a) generalized cost of transport raising the cost of imports and exports and short cuttingcompetitiveness;

(b) substantial financial cost of trade due to immobilization of freight in transit;

(c) inefficient utilization of equipment and facilities;

(d) substantial fiscal losses in terms of import duties; taxes, etc.;

(e) growth of parafiscal remunerations to parasite institutions not contributing to economicgrowth;

88

Annex 6Page 2

(f) lack of confidence in legal channels; and

(g) discouragement of import substitution of non-factor transport and insurance services (freightforwarding).

7. A strategy and plan of action contained are structured in agreement with the specific needsof Chad but fall within the broader objectives of regional road transport industry development. Inconsideration of the proposed introduction of the TIPAC (Transit International des Pays de l'AfriqueCentrale) as a result of the joint ECC (European Community Commission), World Bank initiative ofUDEAC regional integration, the road transport industry in Chad should undergo substantial improvement ifit is to remain competitive within the region. The strategy proposed for the TSP and the plan of actionencompass assistance to both the road transport industry to the institutions responsible for transportoperations.

8. The development strategy falls within the following general parameters:

(a) define and strengthen civil and commercial responsibilities and liabilities of road transportoperators with a view to integrating the Chadian road transport industry within theresponsibility and liability legal framework of regional transport;

(b) strengthen the institutional capacity of the DTS, Conseil Consultatif des Transports, andBNF with a view to providing a coherent institutional framework for private sectordevelopment and to improving information and fiscal collection channels;

(c) encourage private sector associations of operators (groups d'interet economique) with theobjective of: (a) providing road transport operators with economies of scale for theprocurement of inputs; (b) channeling financial assistance for vehicle rehabilitation; and (c)channeling professional training to the road transport industry;

(d) provide financial assistance to the road transport industry for vehicle rehabilitation andfacilities, with a view to allow Chadian road transport participation in the TIPAC regionalsystem; and

(e) link provision of financial assistance to the private sector small and medium enterprises(road transport) to access to professional training, and provide human resources developmentfor both private and public sector.

9. The Plan of Action contains the following measures proposed with the objective ofincreasing the efficiency of road transport by combining the Government commitment to provide bettertransport services with the interest of the private sector operators; the proposed plan of action will bemonitored through measurable indicators proposed in a matrix shown in Annex_

Institutional Measures:

89

Annex 6Page 3

(a) define the objectives and role of public institutions related to road transport development, inparticular DTS, and Comite Consultatif des Transports;

(b) assist the above institutions and develop their human resource capabilities;

(c) update and harmonize road transport legislation in the national and regional context; inparticular harmonize liability, vehicle standards and security requirements with regional andinternational requirements (when appropriate);

(d) draft a road safety policies and regulations; and

Private Sector Development Measures:

(a) promote road transport associations;

(b) encourage professional training by linking improvement in management of small andmedium enterprises and accounting;

(c) promote private sector investment in joint industry terminal facilities.

Technical Measures:

(a) create a vehicle Inspection control center in N'Djamena;

(b) encourage rehabilitation of econimically viable vehicles.

90

Annex 6Page 4

Plan of Action: Monitoring Indicators

Monitoring Indicators Timing

I) Institutional Measurmc

(a) Define objectivea and role of public tnnsport (i) Adopting of adminiatrative and/or (1) prior to TSP nI effectiveneasinstitutions (DTS, Comite Consultatif des legal instruments defining objectives andTransports) role of DTS and Comite Consultatif

(b) Development of transport institutions humsn (i) drafting a blue-print of appropriate (i) prior to TSP n effectivenesresource capabilities training and profeusional development

measures in accordance with TSP IIparameters and donors capabilities(ii) agreeing with Bank and with donorson human resourcea development actions (ii) following TSP U effectivenea(iii) implementing human resourceprogranms iii) one year after TSP n effectiveness

(c) Harmonize road transport legialation in the (i) drafting liability, vehicle standards and (i) in agreement with the timing ofnational and regional context: security standards proposala in TIPAC implementation agreements to be- liability requirements coordination with the ECC/World Bank aigned by 1993- vehicle standardt TIPAC initiative, with a view to- secufity requirements harmonize road transport legialation on a

regional basis(ii) enscting national legislstion inaccordance with recommfendations of (ii) at the time of TIPAC implementationTIPAC implementation; protocol to be as a full transit system early 1994signed by 1993(iii) signing nd executing proposed (iii) horizon of 1995legialation

(d) Draft a road safety policies and regulations C') As for (1)(r)(ii)(iii) above Ci) As for (l)(c)(i)Cii)(ii)

(e) Draft and implement technical control of vehicle (i) Drafting of regulations and actng on Ci) Prior to TSP H effectiveneuregulations vehicle technical control facilities decision

as part of TSP 11 implementationCiH) Setting-up vehicle technical controlfacilities and approving corresponding (ii) Following TSP 11 effectiveneuregulations(iii) Enforcing tochnical control of (iii) Two yers after TSP [ effectiveneavehicles

2) Private Sector Development Measures

(a) Promote road transport associations (i) Agreement with ECC and Worid Bank (i) in agreement with the tiding foron financial intermediation to private TIPAC implementationector as part of TIPAC implementation

(b) Encourage professional training (i) Agreement with ECC and World Bank (i) As part of the TEPAC irnplementationon a mechanism to liak acceu to creditfacilities to professional trining

(c) Encourage private sector investrmnt in joint (i) Preparation of a program to facilitate Ci) As part of the TIPAC implenentationindustry terminal facilities acces to ECC and World Bank credit,

directed to private secto opertorswishing to invest in joint industryterminal facilites

(3) Technical Measures

(a) Create a vehicle inspection contrl center in (i) Feasibility sudy for proposed facility (i) Following TSP U project effectivene"N'Djamena Gti) Acdng on proposah in agreement CiH) Early 1994

with TSP U implementation schedule

91

Annex 7Page 1

TECHNICAL DESIGN STANDARDS FOR ROADS

Geometrical Standards

The geometrical standards applicable to the road system in the Republic of Chad are illustrated indiagrams 2/1 and 2/2.

For paved roads, distinction is made between rural sections, and the urban sections of nationalhighways.

For unpaved roads, standards are based on a certain level of heavy vehicle traffic (DLW exceeding3T).

92

Anex 7

Page 2

DIAGRAM No. 2/1

GEOMETRICAL STANDARDS

PAVED ROAD Crovn wd h. 8 m.

A) RURAL

Flatrne sols I ' ' ng- 'm/

Fine 3o3 = ' Road bass

) N SE Nub -base

2 h l I ,-NG I \2-

SLf grade w.1m.

ICrown wkih . S m.

Laterite 3ols0i13nw6m

pnZ | 5 | | > ~~~~~~~~~~Usurfaced shodder

_ , ~~~~~~~~~~~~~Road bass

3/ /~~~~~~~~~~~~~~~~~~~~u -Sbase

774 1 I ~~~~~~~~~~~~~~~NG \/2

l ~~~~~Sib - grad w 9.5 9Om'.

B ) URBAN SECTION

C ta&g 71 m. Sh. wo ,

I t' Subbrgw-7m. 1~~~~~~~~~~~~Su -basswihz

93

DIAGRAH No. 2/2 Agnex 7Page 3

GEOMETRICAL STANDLARDS

UNPAVED ROAD

Level 1 0-5 HV/DAY C Cmwifutu6m. IWeascouUeu1520Ocm.

<~~~~~~~tr reuedt 10 -15Xm. <

Su -ngrade Sw a 7m.

S Y32 for iat bwmaions

2V1 crotr sois

Level 2 5-10 HV/DAY

Cn>e wif.68M.1- ow~ ' -~dm - 'l. ___________i Wear gouu th25-30cm.

/ | ~~~~~~~~~~~Sub -gade w.-9 m. \

Levels 3 to 5 over 10 RV/DAT

Cmaw wi 9 gm

W, Ii,h hco 2u0t .-. 30 35cm.

Sub- guow.10 l

94

Annex 8Reseau Prioritaire

Designation de I 'inzineraire Longueurs (kn)

Reseau routier Prioritaire Primaire

- Walia-N'Gueli 6,00- Voie de contournement 20,50- N'Djamrna-Djermaya 26,50- Djermaya-Massaguet 45,50- Djermaya-Dandi 66,00- Massaguet-Massakory 68,00- Massaguet-N'Goura 124,00- N'Goura-Bokoro 104,00- Bokoro-Mongo 201,00- Mongo-Mangalme 122,00- Mangalme-Oum Hadjer 109,00- Oum Hadjer-Abeche 146,00- Abch-Adr&-Frontiere 174,00- N'Djamena-Guelengdeng 144,00- Guelengdeng-Bongor-Koyom 160,00- Koyom-Ere-Kelo 58,00- Guelengdeng-Sarh 402,50- Sarh-Moundou-Lere 603,00- Sarh-Maro-Sido 125,50- Massakori-Bol-Bagasola 237,50- Abeche-Biltine 92,00- Mongo-Ati 154,00- Koyom-Ere-Kalo 58,00- Mbaikoro B6daoyo 112,50- Moundou-Bolarobou 115,00- Mongo-Abou Dela 122,50- Abou Dela-Am Timan 135,00- Doba-Gore 9S0

Sous Total 3769,50

Reseau routier Prioritaire Secondaire

- N'Djamena-Linia-Dourbali 103,00- Bitkine-Melfi 118,00- Bokoro-N'Gama 75,00- Sarh-Kyab6 98,00- Keio-Lal 60,00- Koumra-Moissaia 74,00- Koyom-Lai 68,00- Pala-Fianga 72,00- Kemdera-Moissala 127,00- Doba-LaT 1040

Sous Total 955,50

TOTAL GENERAL 4725,00

ANNEX 9Page 1

Second Transport Sector Project

Procurenent Plan

Call Bid Award Contract Implementation

for offers opening approval starting

Bridge rehabilitation study 5/15/93 7/15/93 8/15/93 10/15/93 10/30/93

Detailed Engineering for 8/31/93 10/30/93 11/30/93 1/15/94 1/30/94

secondary road rehabilitation

Technical assistance to MTPT 5/31/93 7/15/93 8/15/93 9/30/93 10/30/93

Civil works supervision 5/31/93 7/31/93 8/15/93 9/30/93 10/15/93

Road maintenance works (IDA-1) 5/311/93 7/31/93 8/15/93 9/30/93 10/31/93

Road maintenance works IIDA-2) 5/31/93 7/31/93 8/15/93 9/30/93 10/31/93

Road maintenance works (IDA-3) 5/31/93 7/31/93 8/15/93 9/30/93 10/31/93

Road maintenance works ICHAD-1) 5/31/93 7/31/93 8/15/93 9/30/93 10/31/93

Road maintenance works (CHAD-2) 5/31/93 7/31/93 8115/93 9/30/93 10/31/93

Road maintenance works (CHAD-3) 5/31/93 7/31/93 8/15/93 9/30/93 10/31/93

Road maintenance works (CHAD-4) 5/31/93 7/31/93 8/15/93 9/30/93 10/31/93

Other maintenance contracts {CHAD) 7/31/93 9/30/93

Secondary road rehabilitation (IDA-1) 1/15/95 3/15/95 4/15/95 5/31/95 9/30/95

Secondary road rehabilitation (IDA-2) 1/15/95 3/15/95 4/15/95 5/31/95 9/30/95

96 ANNEX 10

Page 1

Second Transport Sector Project

Training Program

ACTIONS INDICATORS IMPLEMENTING AGENCY MONITORING METHOD

Training for public - 11 training for Pubiic Works staff - Human resources unit - Physcal supervisionsector staff - 22 trainings fir Transport & Civil IDAF/MTPT) & extemal audits

Aviation staff - Progress report- 13 seminars for lower staff PWITAC - Human roeources unit - Extemal audits

(DAF/MTPT)

Support to privato - 5 training for high level staff - Human resources unit Specific auditscontractor 30 mechanical seminars (40 por.) (DAF/MTPT) on performance target

- 6 seminars for manager (6 pet.)- Training for lower staff (150 road toehnk - Training center

and lower staff at N'Damena) Progress report- Training for small contractors Troining oenter Physoal supervision

50 staff per year in accounting,management and mechanic

- Training for medium level stoff Ecole Nationale doc TP(60 pars.)

Support to private Mechanical and driving seminar Training oenter - Specific auditssmall truckers with private PW staff Progress report

- Seminar for management/accounting Servido Ressouroeeto 10 small truckers (80 par.) Humaines (DAF/MTPT)

97

; | X~~~~~~~~~~~

MINISTERE DES TRAVAUX PUBLICSET DES TRANSPORTS

(Services centraux)

INSPECTION CENERALE DIREC|ON

.~~~~~~~~~~~~~~~~~~~~~~Csr .. D.r.b

j D C LA InCATtON l DIRECTION l l DC SUBACC l NRCCT l DIRECTION DIRECTION DIRU C TIO.:tTuD95 ICT DISDiTRA14SPORTS ~~~~~~~Dt LAVAO D I VILE DES TRAVAUXI DE LURSANISM DU CADflA11RE TDE LA PLAMI AT" "ACE ~~~~~~~~~~~~~~~~~~~De ILATIMINTS CIVILS ET DE LUHA*17AT DC LA CAR OGRAIPHII

NOTES

NOTES

MAP SECTION

'6.I. 2' 212 24

N ~~~~~~~~~~~~~~~~~~~~~~~~~~~CHAD ARAB>- \ ' \ \SECOND TRANSPORT SECTOR REP.

PROJECT (TSP 11) OF

22 \ goh Pnordy NMb , PobdR.6*d by 1993 EGYPT'm on Pg_d Ro.d,

\l - T.oo-o- 5y Ro=d Nb-4 . b. R4.6ood Llnd.r TPS i

BYA ' t i _ Rrldgo be 8.9200.4 sl d ' ''

LIBYA ArpASeO-y 44h tb RR.hod il.nd

Rood Nnt-okm

tt \ 20^ ? 9_r/ todo gi d J

NIGER P - Eok{d

Mino, E.00 T-,ok

/' CHAD .j (E ,Ai,g OFNAR R. ol Rood M1otlolo0 !j,01 IAn Rg- Agoncr , C otlto e.

SUDAN Mo., i C ey eet!

NIGERIA . f L - -dtonnoi do,,ns |n

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