R E S T R I C T E D

Report No. T.0.235z

This report was prepared for use within the Bank. It may not be publishednor may it be quoted as representing the Bank's views. The Bank accepts noresponsibility for the accuracy or completeness of the contents of the report.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

APPRAISAL OF THE FEEDER ROADS PROJECT

IN

PANAMA

August 10, 1960

Department of Technical Operations FILE COPY

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CURRENCY EQUIVALENTSUS $ 1 Balboa

1 Balboa US $ 1

APPRAISAL

OF THE

FEEDER ROADS PROJECT - PANMKA

Table of Contents

Page

Summary i

I. INTRODUCTION 1

II. HIGHWAY SYSTEM CO F 1MMA

III. THE FIRST ROD PROJECT - IMON 123-PAN 3

Highway Department 3Rehabilitation and Maintenance of Highways 4

IV. THE PROJECT 4

Description of Project 4Design Standards 5Cost and Financing 5Proposed Construction Procedure 6

V. JUSTIFICATION OF THE PROJECT 6

VI. CONCLUSIONS AND RECOIMENDATIONS 8

Table : 1. CAM's Highway Budgets 1956 to 19602. Estimated Cost of Roads3. Minimum Design Standards

Annex I. Justification of Individual Roads (withstatements of traffic density, vehicleimports and registration, and gasolineconsumption).

Map Existing Highway Network and theFeeder Road Project.

SUMARY

i. The Government of Panama has requested a loan of USs7.2 millionequivalent for the construction of feeder roads and for the paving of con-necting roads to the existing main roads.

ii. The earlier Loan 123-PAN for ',5. 9 million of July 1955 wfas madeto assist the Government to organize a highway department in the Comisionde Caminos, Aeropuertos y Muelles (CAM), the entity within the Ministry ofPublic Works responsible for highways, and to provide for the rehabilitationand maintenance of about 1,000 km of highw#ays. The establishment of a properhighway department was completed in 1958. The road work was not completedwhen the Government repaid the loan in December 1958, but the program isstill proceeding. It appears that the physical and financial resources avail-able to CAM during the next few years would be adequate to finish this proj-ect, and it should be completed.

iii. In addition to the national highways CAI is responsible for muni-cipal streets, for which funds are included in global budgetary appropriations.CAM ought not to be responsible for the formal allocations to highways andstreets; separate appropriations should be made by the National Assembly.

iv. The new project consists of: a) the construction of 300 km ofsecondary and local roads; and b) the paving of 138 km of connecting roads.Completion of the project would add 438 km of all-weather roads to theexisting system. Total estimated cost is USM1..5 million equivalent, whichincludes a 20% allowance for contingencies; the foreign exchange componentof US,47.2 million, the amount of the Droposed loan, would be used for equip-ment, materials and services. The local currency component of US',D7.3 millioneauivalent is to be provided by the Government who applied to the U.S.A.Development Loan Fund to cover part of the local currency cost.

v. Preliminary studies of the project have been made by CAM with thecooperation of an experienced consulting firm. The final plans, etc., areto be completed in the same way and consultants would assist in the executionof the project, including the award of contracts which will be let on thebasis of international competitive bidding.

vi. The Inter-American Highway which will cross the country fromPanama City to the Costa Rican border when completed in 1962, and the Trans-Isthmian Highway between Panama City and Colon (Canal Zone) are the basis ofthe Panamanian transport system. Roads feeding into this system have beenimproved under Loan No. 123-PAN, and the present project would provide accessto consumption centers from additional areas. The immediate benefits of thisproject would be the reduction in transportation cost for agricultural prod-uce moving to market, and the enhanced production in existing areas fromimproved conditions. Additional benefits would be obtained in the openingup of about 135,000 hectares of land to agriculture and settlement, if suitableland legislation were to be enacted and progressive agricultural policiespursued. This subject should be explored during loan negotiations.

ii.

vii. The project is technically and economically sound. Subject to agree-ment with the Panamian authorities on: a) completion of the road project ofLoan 123-PAN; b) a separate annual budget appropriation for municipal streets;c) the retention of consulting engineers for the execution of the new project;and d) the availability of local currency, the project provides a suitablebasis for a Bank loan of USd'' 7.2 million equivalent. An appropriate termwould be 15 years including a four-year period of grace.

PA1'kAA

AP._R-'LISAL 07 ' T-3 FE:iDER RCOIDS PROJECT

I . IIV 2 .-CDUtCTICN

1. The Government of Panama has asked the Bank to provide financialassistance in the amount of US?7.2 rnillion equivalent to further the devel-opment of the highway system in Panama. This a,mount repre-sents the esti-mated foreign exchange cost of imnorted equinn,ent, materials and servicesfor construction of the nroj.ict, which would be executed in four years.The borrower would be the Government.

2. This report discusses and assesses the works for which the loanhas been recuested. It is based on field studies made by Bank missionswhich visited Panana in 1957 and August 1959, and data furnished by thePanamanian authorities and the Consultants.

3. In July 1955, Loan No. 123-PAN for US,5.9 million ecuivalent wasmade to the Republic of Panama. to ornanize a highwqay a3enartment in the Co-mision de Carminos, keropuertos y 1luelles (C.A.TI) and to improve connectingroads to the Inter- American iighvay. A highwa'r department has 'oeen organ-ized; the road work perforned is satisfactory. In December 1958 the Glovern-ment of Panama elected to prepay the outstanding amounts of the loan infull.

II. HIGHW,1AY SYST71 O7 ' 2

14. Panama is traversed lengthwise by thle Ciontinental Divide, exceptwhere the Canal crosses the country between Colon and balboa. On theAtlantic side there is dense rain forest aind no substantial productionother than bananas. Host of the extensive land area between Paniama Cityand the Colombian border is virtually unexolored jungle~, 14hic.h may laterbe opened for development by extension of the Inter-American Highway.The iknediate trcnsport problem is therefore concentrated in the regionon the Pacific side of the Divide, between Panama City (the Canal Zone)and the Costa Rican border. A map is attached.

5. Conditions in this area are favorable for -enerr!l aTrriculture,dairyine and cattle-raisinz, for suga cultivation near David, a-nd coffeeand citrus fruits in certein localities. However, since the beginning ofthis century Panama has depended largely for economic develonment on ac-tivities generated by the Canal, and measures taken to stimaulate agricul-tur-1l production have had little effect. Such production reouires facil-ities for cheap and expeditious transportation to the centers of population.

6. During the neriod 1920-1936 a road was constructed between PanamaCity and David but it failed becauase of -ooor mainitenance, and did not there-fore make the expected contribution to develonment. From 1936 to 1946 someroad sections (David-Ooncencion, Arraijan-Rio Hato and the Trans-IsthmianHighwTay from Panama City to Colon) were constructed oy United Statesagencies at no cost to Panama. After WPJorld War II a reduction of activity

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in the Canal Zone together with the rressure of rapidly increasing popula-tion, led to the realization that expansion of agriculture and imDrovemefltof the incom,e of those enrmged in agriculture, about 55% of the total pop-ulation, were essential to economic progress.

7. The backbone of the nresent road system in Panana is the Inter-American Highway from Panama City to the Costa Rican border, -ihich is sched-uled to be completed in 1962. It wrill be a concrete surfaced hithway ofabout 480 km, and t-he cost will be almost US"hO million, of wlhich abouttwo-thirds is borne by the UJnited States of America and the rsmainder byPanama. The next most imoortant highway is the Trans-Isthmian, betweenPanama City and Colon, a distance of 90 km; it also has a concrete surface.

M. The oresent classification of roads in the highway stem is asfollows:

All Weather KM

Concrete 296Asphalt 476Gravel 695

1,467

Dry Weather

Earth 1,362

Total 2,829

9. Organized trucking is in its infancy a-d mainly operates on theInter-American and Trans-_sthmian Highways. The trucking industry consistsof:

1) One major freight company founded in 195h, which operates alarge fleet of modern trucks and trailers on scheduled runs,and oublishes its tariff. Traffic, wqhich is mainly betweenColon-Panama and Chorrera, increased from 5.3 million ton/kmin 1954 to 12.5 million ton/km in 1958;

2) 37 passenger and 16 freight trinsport companies. Theseare small conmanies and not well orranized. Passengerservices are scheduled and oo-)rate with official tariffs;the freight service is unscheduled and the rates chargedvary with the circumstances;

3) Onerators who use trucks in their o-rm business and engagein transport for others as a side line.

10. Apart from the statistics kept by the major firm mentioned above,no records are available for tota_l road services. The !iinistry of PublicWorks is resoonsible for traffic control and is establishing a statistical

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section. The iinistry is also studying traffic regulations, in particularvehicle weight and size limitations with a view to requesting legislation.

11. Outside of highways,there is no major system of internal trans-port in Panama except for the Trans-Isthmian railroad from Cristobal toPanama (80 kn) which handles about 50% of the imported goods.

III. THE FIRST RQAD PROJECT - LCAN 123-PAN

Highway Department

12. For many years prior to 1955 there was no highway departrmient inthe accepted sense of this term, and one of the objectives of Loan 123-PAN,dated July 1955, was to establish an effective highway department in CAM.,which is responsible for highways, seaports and airports, within the Minis-try of Public Works. A team of foreign experts, whose services were paidfor by the loan, was engaged for this task, and for the training of personnelfor maintenance and construction of highways. After some major difficultieshad been overcome, the advisers completed their assignment in 1958.

13. In the resulting organization, under the general supervision ofGAM, an Executive Director and his Assistant direct the daily operationsof the Department, which are carried out by Engineering, Planning, Bridge,laboratory, Equipment (including shops and warehouses) and AdministrationSections. For maintenance and construction field operations the countryis divided into three regional zones, each provided with camp facilities,shops and warehouses. The Department is well-organized and its operationsare efficiently supervised. Most of the staff of Panamanian engineers wastrained in the U.S.A. The Departmentts principal operational need is im-provement in the operation and maintenance of equipment. The assistance ofI.C.A. and the U.S. Bureau of Public Roads is being sought for a trainingprogram for this purpose.

14. CA1Ps financial resources are supplied by the national budgetThere is no allocation of road user taxes to the Highway Department. How-ever, duties and taxes from road transport elements are substantial. Im-port duties on vehicles, spare parts, tires and gasoline produced g 3.2million in 1950 and P 4.3 million in 1958, an average increase of 3.5% peryear. An ad valorem duty of 20 to 40%/ is charged on passenger cars and15% on trucks, and the duty on gasoline is B 0.12 per gallon.

15. Annual highway appropriations to CAM from the national budget haveaveraged B.2.5 million for the past several years, but they have not beensufficient to cover all requirements and because of this, improvement andrehabilitation have been delayed. A general statement of CAMI's highwaybudgets for the years 1956 to 1960 is given in Table 1.

16. In addition to national highways, CAN is responsible for theconstruction and maintenance of municipal streets for which funds are in-cluded in its annual global appropriation. Work in urban areas is increas-ing with their expansion, especially P½nama City which now has over 250,000

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inhabitants, and the difficulties of CAM in allocating funds for allhighway activities are naturally increasing because of municipal de-mands. It is usual in more developed countries for municipal authori-ties to be responsible for the physical and financial needs of munici-pal streets. It does not appear possible to make this separation inPanama at the present time, but it should be possible for budgetaryappropriations made by the National Assembly to contain separate allo-cations to national highways and municipal streets, which would specifythe amount of funds available for each purpose, and thereby relieve CAMof the responsibility of making the distribution. Consideration shouldbe given to making such separation of allocation a condition for theproposed loan.

Rehabilitation and Yaintenance of Highways

17. The proceeds of Loan 123-PAN were also allocated for the pur-chase of equipment and materials for maintenance and for the rehabilita-tion of 1,000 km of roads feeding into the Inter-American Highway. Theorganizational part of this project was completed, as described above,but the physical works are still going on, even though the loan has beenrepaid in full.

18. The work performed is satisfactory. Haintenance of all roadsis proceeding. Improvements of structures, drains, and ditches, as wellas gravel surfacing, have been done, and some 4Q0 km have been finishedwith asphalt surface. Certain roads, originally included in the firstproject, which now require only asphalt surfacing, are included in theproposed new project.

19. Experience over the years from 1955 to 1958 indicates thatCAM's disbursements of national funds from an annual average budgetfor highways of B. 2.5 million were in the proportions 49% for theproject, 26% for maintenance and other purposes, and 25% for streets.In 1959 US$2 million equivalent were spent in the project. CAM'sbudget for 1960 is B. 1.7 million, not including about B. 600,000 forthe proposed new loan project. To complete 123-PAN road project,about US'l.8 million wfill be needed within the next few years.

IV. THE PROJECT

Description of Project

20. This is a feeder road project and it comprises:

a) Construction of 10 highways with a total length of 300 km.These will have asphalt or gravel surface, a controlling width of 6 meters,and a design speed of 80 to 65 km in flat or rolling country, and 40 kmin mountainous country.

b) Surfacing with asphalt of 8 highways with a total length of138 kn, connecting the Inter-American or the Central Highway (Divisa-LasTablas) with the above roads.

21. In all there are 18 roads of a total length of 438 km. The totalcost is estimated at US$14.5 million and the period of execution four years,beginning in 1960. The roads, their lengths and estimated costs (see para-graph 24) are listed in Table 2.

22. The primary purpose of the project is to assist in the economicdevelopment of potentially productive areas by replacing trails and seasonalroads with all-weather reads.

Design Standards

23. Standards are Class III for newly opened or improved intermediateall-weather roads with light bituminous surface, as recommended by the Pan-American Highway Congress, Technical Committee of Planning 1956, and theyare adequate for this project. Notwithstanding the relatively light traf-fic. the bituminous surface is desirable to avoid excessive erosion of theriding surface by heavy rainfall, which averages from 60 inches to 120 inchesper year in the mountains. The minimum standards are given in Table 3.

Cost and Financing

24. The cost estimate of US$14 .5 million including construction, en-gineering and supervision, and 20% for contingencies including price in-creases (see Table 2), is based on preliminary plans and studies by ChM,prepared with the cooperation of its consultants, Rader Associates. Thisestimate includes US$7.2 million equivalent of foreign exchange, the amountof the proposed Bank loan, and US$7.3 million equivalent of local currency.A subdivision by categories of expenditure and foreign and local costs isgiven below:

Estimated Expenditures in $(000)

Foreign Currency Local Currency Total

Construction: Feeder Roads 4,900 4,900 9,800Paving : Access Roads 600 600 1,200Engineering and Supervision 600 600 1,200Contingencies (20%) 1,100 1,200 2,300

7,200 7,300 14..5oo

A statement of estimated expendituresby years is given in Table 2.

25. The cost estimates are realistic, and accord with experience gain-ed in the construction of the Inter-American Highway which is being builtunder the supervision of the U.S. Bureau of Public Roads. The foreign ex-change component applying to imported equipment, materials and services isestimated at 50%, which is reasonable.

26. The Government wishes to cover the local currency cost of US$7.3million partly with a loan from the Development Loan Fund, to which it in-tends to apply for $5.3 million, and the remainder from budlgetary appropria-tions. The Government has set aside abo-.t '600,000 for the nroject in the1960 zT tionpl budget.

Proposed Construction Procedure

27. CAM intends to continue the services of Rader Associates to pre-pare final plans, design and specifications; to prepare the invitations totender, to advise on the pre-qualification of contractors and on the awardof contracts; and to supervise construction.

28. The project will be carried out by contractors selected throughinternational competitive bidding. A number of foreign and local contrac-tors hale experience of construction in Panama from working on the Inter-American Highway.

V. JUSTIFICkTION OF THE PROJECT

29. Seven of the feeder roads in the Project are to be built on thePeninsula de Azuero and in the provinces of Veraguas and Coale, an areawith about 250,000 inhabitants or 25% of the population of the country.Three of the roads are to be built in the Chiriqui Province which contains13% of the population.

30. Transportation conditions in the regions affected by the proposedprojects have changed very little since the appraisal made by a Bank missionin September 1954. Many farmers in the more isolated areas produce onlytheir subsistence needs. According to the 1950 census of agriculture, ofthose farmers who produce cash crops, 42% send their products to market bypack horses, 32% by human carriers, 8% by truck, 7% by boat, 4%. by oxcartand the rest by mixed means of transport.

31. Farmers producing for commercial markets must concentrate on prod-ucts- which can withstand the rigors of transport and it is therefore imprac-tical in many areas to grow the crops best suited to soil and climate.Food imports in 1957 amounted to 58,000 tons valued at US$14.8 millionequivalent. As transportation is one of the principal limiting factors toagricultural development, extension of the road srstem. opens the way formore supplies to reach market to meet an increasing demand and possiblyprovide scope for import substitution. Furthernore, the activities of thelimited number of expert advisers such as extension workers, veterinarians,etc., which are so important to the progress of agricultural communities,are impaired by lack of adequate transportation means and excessive timelost in travel.

32. Transport rates are high in all areas where there are no roads,and cover many methods, airplane, pack-horse, oxcart etc.,of which thefirst and last have probably the highest and lowest rates. Air freight,which is sometimes used for high value perishable produce, is provided bylocal companies owning one or two small planes; they charge about US$0.66 perton/km. Oxcart transportation costs about US$0.30 per tnn/km compared withUS$0.05 per ton/km charged by the regular trucking companies operating onhard surfaced roads. With the comp1stion of the proposed feeder roads atthe same time as the completion of the Inter-American Highway there willbe a substantial reduction in the highway transportation cost by the useof larger trucks and trailer-trucks, by increased speed, lowered vehiclemaintenance costs, longer useful life of equipment, and lower consumptionof fuel per ton/km.

33. The proposed improvement and extension of the Panamanian roadnetwork will stimulate further the already impressive growth of vehicletraffic during the last five years (See Annex I) which has been largelydue to the gradual extension of the paved part of the Inter-AmericanHighway and the substantial improvement of other existing roads carriedout under loan agreement 123-PAN.

34. The Comision Asesora de Planificacion Vial has made a study ofthe increased agricultural production that could be realized from the areasaffected by the new feeder roads. The total extent of these areas is notaccurately known but an estimate puts the figure at 200,000 hectares, ofwhich about one-third, 65,000 hectares, are already in use. This totalfigure is based on the reasonable assumption that about 3 km on each sideof the new roads would comprise the immediate service area.

35. The sources of the benefits to be derived from this project areclearly discernible, but expression of the advantages in specific terms isdifficult, and the estimates given below should therefore be taken as arough indication of the orders of magnitude involved. A more detailedjustification of the individual roads is given in Annex I.

36. There are three benefits, as follows:

a) Savings in transport costs. Such savings would be about 50%on present rates, and on the basis of estimates of present agriculturalproduction and cattle raising figures, the gross annual saving would beabout us$650,000 equivalent. This would be sufficient to cover the main-tenance expenses of the highways in question and interest on the totalinvestment of US$14.5 million, assuming amortization in 15 years and aninterest rate of 6%,

b) Increased production from the area now in use. There shouldbe a general improvement in conditions which would be reflected in theactivity of this area of about 65,000 hectares. Over a period of years,this improved transportation may cause production to increase by aboutone-third. Taking the national average product-value per hectare of US$40equivalent, the gross value increase would be about US$800,000 a year.

c) Additional production from new lands being brought into use.The area involved is about 135,000 hectares, and the Comision's estimateof the production that could be realized by 1967 indicates a potential an-nual gross value of US$5.54 million equivalent. No estimate is availableof the farm investment that would be necessary to obtain this increase inproduction.

37. The Comision's estimate of thne value of increased production wuhichwould eventually be obtained appears reasonable but considerable supjuortingadministrative action would be required if these agricultural benefits areto be achieved within a reasonable period. This would include the enactmentof legislation to open lands for settlement under conditions which wouldpermit soundly based development rather than speculative purchase for resale;the provision of essential credit facilities; and the provision of adequateextension services sup:ported by research as necessary. Such legislation isnow under preparation in form of an Agrarian Code which is to be consideredby the National Assembly during its sessionsstarting October 1960.

VI. CONCLUSIONiS Ai'4D RECOI,MENDATIONS

38. The feeder road project is technically sound and economicallyjustified.

39. The very substantial benefit that could be realized by bringing135,000 hectares of new land into production should be encouraged by legis-lation to curb speculation and to assure development of the land. Thepracticability of obtaining suitable action on this subject, and the meansto provide credit and technical services, would be explored during loannegotiations.

4o. The road project of Loan 123-PAN should be carried to its conclu-sion. Agreement by the Panamanians to complete this program should be acondition of a loan for the new project.

41. CANi should not have the responsibility for dividing the annualbudgetary appropriation between national highways and municipal streets;the responsibility for the formal division should be assumed by the NationalAssembly. Agreement by the Government to make such separate allocationsin the next budget should also be a condition of a new loan.

42. CAM intends to retain consulting engineers to assist it duringthe execution of the project. CAii should be required to engage consultingengineers for this purpose, in the agreement for a new loan.

!~3. The Government of Panama is prepared to cover the local currencycost of the project from its own resources but has applied to the U.S.A.Development Loan Fund for a loan to cover a part of this cost.

44. Subject to the foregoing, the oroject provides a suitable basisfor a Bank loan of US,)7.2 million equivalent. An appropriate term uouldbe 15 years including a four-year period of grace.

Table 1

PARWAFeeder Road Project

CAM's Highway Budgetsfor the Years 1956 to 1960

Excluding loan Funds

item 1956 1925 1958 1959 1960- Balboas millions -

Ordinary Budget

Salaries and Wages 1.69 1.60 1.71 1.74 1.85Materials and Spare .48 .50 .54 .37 .73

PartsConsumable Supplies .09 .05 .05 .06 .30Equipment .20 .13 .12 .10 .20Other .10 .07 __.0 15

Sub-total 2.56 2.35 2.52 2.40 3.23

Special Items

Paving .18 - - -

Streets Pana.ma and - .20 - - -

ColonPlan Vial - 60

Total a.2.L 22

Table 2.

Feeder Road Project

Estimated Cost of Roads

(US$000 ecuivalent)

Construction Feeder Roads Kms. Total 1960 1961 1962 1963

Santiago-Pto Mutis 23.4 788 788Atalaya-Ponuga 21.9 611 611Pocri-Pedasi 19.4 647 647Llano de Piedra-Tonosi 45.5 1,631 1,631San Francisco-Santa Fe 41.2 1,211 1,211Volcan-Sere,io 44.6 1,488 88Orillas del Rio-El Tullido 16 433 433Sto. Domingo-Divala 14 264 264Ocu-Los Pozos-Pese 49.3 2,017 2,017Inter-American-El Cope 24.9 726 726

Sub-total construction 300.2 9,816 2,046 2,842 2,185 2,743

Paving Connecting Roads

Inter-American-Atalaya 4.6 32 32Las Tablas-Pocri 20.9 130 130Carretera Central-Macaracas 32.6 203 203Macaracas-Llano de Piedra 9.5 164 164Inter Amer.-San Francisco 18.5 115 115Inter-Americazi-Volcan 32.2 378 378A2lanje-Paso Mostrenco 1.0 60 60Carretera Central-Pese 18.9 118 118

Sub-total pavement 138.2 1,200 529 671

Total 438.4 11,016 2,575 3,513 2,185 2,743

Engineering and supervision 1,200

Contingencies 20% 2.300

Grand Total 14,500

Table 3.

PA ,IrAMtA

Feeder aoad Project

Minimum Desic-n StandardsControlling

width of ExpectedConstruction Length in Type of surface completion-New Roads Kilometers surfacing in Meters date-end of

SantiagonPuerto i'4utis 23 ST 6 m 1960Atalaya-Ponuga 22 ST " 1960Pocri-Pedasi 19 Gravel " 1960Llano de Piedra-Tonosi 46 ST 1961San Francisco-Sta Fe 41 ST 1961Volcan-Sereno 45 ST 1962Orillas del Rio-El Tullido 16 Gravel 1962Sto Domingo-Divala 14 it 1962Ocu-Los Pozos-Pese 49 ST "1963Inter4Amreioen-El Cope 25 ST 1963

Total T55

Connecting Roads

Inter-American-Atalaya 5 ST 1960Las Tablas-Pocri 21 ST 1960Carretera Central-hiacaracas 32 ST 1960Macaracas-Llano de Piedra 9 ST 1960Inter-American-San Francisco 19 ST 1961Inter-American-Volcan 32 ST 1961Alanje-Paso Mostrenco 1 ST " 1961Carretera Central-Pese 19 ST 1961

Total T1

ST = Surface Treatment

Flat Rolling ?MountainousCountry Country Country

Design Speed 80 k.p.h. 65 k.p.h. 40 k.p.h.hiinimum Radius 200 m 125 m 40 mMawximum Gradient 7% 100 10%Width of Roadbed 8-8.5 8-8.5 - 7.5-8 7.5-8 mWidth of Surfacing 6 m 6-5.5 5.5 m

For all types of tonography:

Type of Pavement - single surface treatmentClear Width of Bridges - 6 mDesign Load for structures - AASHO - H 15 - S 12Width of Right-of-Way - 50 m

AIN@EX I

PANAMA

FEEDER ROAD PROJECT ROADS

JUSTIFICATION OF INDIVIDUAL ROADS

Statistics of the value of agricultural produce transported byroad to Panama City and Colon from the five provinces which would be trav-ersed by the new roads, are set out below:

(In 000 of Balboas)

Year Total Codle Chiriqui Herrera Sentos Veraguas

1951 13,511 4,905 3,238 1,787 2,123 1,4581952 14,555 5,681 3,633 1,573 1,986 1,6821953 150360 5,600 4,158 1,766 2,102 1,7341954 15,526 5,996 3,773 1,590 2,341 1,8261956 16,592 5,788 4,750 1,936 2,324 1,7941957 l8,90C 6,496 5,403 2,142 2,783 2,083

Statements at the end of this Annex contain statistical informa-tion on traffic density at major points on the highway network in 1958, onvehicle imports and registration, and gasoline corsumption.

1) Santiago-Puerto Mutis: 23.4 km and U% 788,000. The road connectsSantiago, capital of Veraguas, with the villages of Mbntijo, Rincon Largoand Mutis. Puerto Mutis has a 50-meter concrete dock for small craft navi-gating to Coiba Islands. The existing trail crosses rolling and mountain-ous country. Rice, corn, beans, sugar cane, bananas and cattle productionaccording to the 1957 census was approximately 12,500 tons and 7,500 headof cattle. Construction of this road should increase food crop productionand expand thi livestock industry. The reduction in cost of transport should~asoj attract,new settlers.

ANNEX I - Page 2

2) AtalayalPonuga: 21.9 km and US$ 612,000. This road crosses rollingcountry opening on to many little fertile valleys. The region's potentialresources permit a substantial development; rice, corn, beans, sugar, bananasand other fruits are produced at the rate of about 10,000 tons per year, andabout 4,000 cattle head are raised. Ponuga is a small isolated town of about4,000 inhabitants. Construction of this road would reduce substantially thecost of transport and facilitate the agricultural development of the areaserviced.

3) Pocri-Pedasi: 19.4 km and US$647,000. This road connects Pocri with thevillages of La Laguna and Mariabe. This is flat and rolling country. Foodcrops, grains, sugar, bananas and other fruits are produced at about 11,000tons per year and 11,000 cattle head are raised. Construction of this roadwould encourage expanded development of the livestock industry as this countryis suitable, being naturally provided with pastures.

4) Llano de Piedra-Tonosi: 45.5 km and US$1l,637,000. This road, after cross-ing mountainous country, will open the rich and isolated valleys of Tonosi andGuanico. Foodstuffs, grains, and fruits are produced at about 12,,500 tons peryear and 6,000 head of cattle are raised. The valleys are suitable for mechan-ized cultivation. Construction of the road could bring into production theisolated region of the "Peninsula de Azuero".

5) Volcan-Sereno: 44.6 km and US$1,488,000. This road opens a mountainouscountry; from Volcan at an elevation of 1,400 m. it crosses a heavy forestregion at a higher elevation and then descends to Sereno at 850 m. Theclimate (70oF) and rainfall maintain an evergreen country. It is ideal forcoffee, fine livestock raising and the dairy industry. The valley was open-ed about 14 years ago and is producing at present about 2,500 head of cattleand about 4,000 tons of foodstuffs, grains, coffee, etc. The region, similarto the Costa Rican plateau, is being opened by private effort. This is anarea where European immigrants have settled, and the opening up of the regionby a good road should encourage further settlement.

6) San Francisco-Santa Fe: 41.2 km and US$1,211,000. The area to be openedby this road is in the temperate zone of Veraguas province, and is importantbecause it can produce green vegetables. Production is now about 6,000 tonsof foodstuffs and coffee and 22500 head of cattle.

At present traversed only by trails, development of the region hasbeen hampered by lack of surface transportation and high costs of MS$0.66 ton/km

f r air fr#iht. An a±rTlace land stri serves Santa Fe for the shipmentof0 vegetabIea - about two tons per cray - to towns in Veraguas.

7) Carretera-El Cope: 24.9 km and US1726,000. This road follows the valley ofRio Grande and reaches El Cope at an elevation of 450m. Production of food-stuffs, grains and fruits is about 17,000 tons per year and 1,000 head of cattleare raised. A new alignment, following the valley of "Rio Grande" from theInter-American Highway will pass through an area of better soils for agri-culture and serve more farms, without increasing the construction cost.

ANNEX I - Page 3

8) Orillas del Rio-Tullido: 16 km and US$433,000. )9) Santo Dowingo-DUvala : 14 km and US$264,000. ) These roads are in thesami Locality and one of the best regions for flat agricultural soils inPanama. Mechanized agriculture is increasing. There are possibilities ofirrigation. Absolute statistics are not available but production of food-stuffs, grains and fruits is estimated at about 6,000 tons and some 2,500head of cattle. The benefits from these roads will be better transporta-tion means for a sizeable area which has great farming and population in-crease potentials,s direct connections with the Inter-American Highway, andreduced transport costs.

10) Ocu-Las Minas-Los Posos-Pese: 49 km and US$2,017, 000. This road crossesrolling and mountainous country. Production is estimated at about 10,000tons of foodstuffs, grains, fruits, coffee and 7,500 head of cattle. This willbe a shorter route for the production of the region to Santiago or to Divisa,the cost of transportation will be considerably reduced, particularly forcettle which hno moves on the henf.

Density of Traffic on the Road lNetwork, 1958Motor Vehicles per day

Arraijan 2,000 David 700Entrance El Valle 700 Concepcion 500Penonome 600 Volcan 350Nata 500 Chitre 1200Agua Dulce 400 las Tablas 300Santiago 500 Macaracas 100Sona 350 Ocu 100San Lorenzo 400 La Pintada 100Entrance Gualaca 100

Im otation of Motor Vehicles in Panama

Trucks from Pickups, deliveries1.5 to 12 cars, station wagons

Year tons Buses and jeeps

1951 303 47 2,7871952 248 73 2,1601953 349 105 2,3461954 318 88 2,1001955 410 24 2,5661956 388 44 3,0861957 409 37 3,9661958 545 99 2,918

ANNEX IPage 4.

Registered Vehicles

Year Comnercial Private Total

1955 6sO14 13,411 19,4251956 7,033 l5,.478 22,5151957 7,055 15,151 22,2061958 7,228 15,171 22,399

Gasoline Consumption

Year Gallons

1953 24,567,2041954 26,181,3971955 27,641,1611956 28,826,0671957 33,553,697

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NOVEMBER 1959 IBRO-6ZSR