Document of The World Bank Report No. 14572-GH STAFF APPRAISAL REPORT REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM April 19, 1996 Infrastructure and Urban Development Division West Central Africa Department Africa Regional Office CURRENCY EQUIVALENTS Currency Unit Cedis US$1.0 = Cedis 1,550 1.0 Cedi = USS0 00065 WEIGHTS AND MEASURES I meter (m) = 3 28 feet (ft) I hectare (ha) = 2.47 acres I kilometer (km) = 0.62 mile (mi) I metric ton (t) = 2.205 pounds (lb) ABBREVIATIONS AND ACRONYMS ADB - African Development Bank AMISU - Accounting and Management Information System Unit CAS - Country Assistance Strategy DANIDA - Royal Danish Ministry of Foreign Affairs DFR - Department of Feeder Roads DRU - District Road Units DUR - Department of Urban Roads EIA - Environmental Impact Assessment EU - European Union ERP - Economic Recovery Program ESAF - Enhanced Structural Adjustment Facility EU - European Union GEPA - Ghana Environmental Protection Agency GHA - Ghana Highway Authority GOG - Government of Ghana GHPH - Ghana Ports and Harbour Authority GRC - Ghana Railways Corporation GTZ - Deutsche Gesellschaft fur Technische Zusammenarbeit HDM - Highway Design and Maintenance Model HSIP - Highway Sector Investment Program K'fW - Kreditanstalt fur Wiederaufbau MIS - Management Information System MMAs - Municipal and Metropolitan Assemblies MMS - Maintenance Management System MMUs - Maintenance Management Unit MRH - Ministry of Roads and Highways NDPC - National Development Planning Commission OECF - Overseas Economic Cooperation Fund OPEC - Organization of Petroleum Exporting Countries PIM - Project Implementation Manual SOE - Statement of Expenditures TRP- I - Transport Rehabilitation Project I TRP-2 - Second Transport Rehabilitation Project UNDP - United Nations Development Program USAID - United States Agency for International Development UTP - Urban Transport Project FISCAL YEAR January 1 - December 31 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM Table of Contents Page No. CREDIT AND PROJECT SUMMARY ............................i 1. BACKGROUND . . A. Introduction I B. Macroeconomic Context .2 C. Fiscal Issues and Affordability .2 D. Development Constraints .5 E. Broad Development Objectives .6 F. Lessons Learned from Bank Group and Other Donors' Involvement in the Transport Sector 7 2. TRANSPORTATION IN GHANA . .9 A. Transport Strategy .9 B. Role of Highways .9 C. Highway Sector Institutions .10 D. Construction Industry .12 3. THE HIGHWAY SECTOR INVESTMENT PROGRAM ..13 A. Program Concept .13 B. Program Objectives .13 C. Program Description .14 D. Components Supported by IDA Credit .17 E. Program Cost and Financing .23 F. Program Implementation .26 G. Status of Program Preparation 27 H. Procurement 27 I. Disbursement 30 J. Accounting and Auditing .31 K Reporting and Monitoring .31 The Project was prepared on the basis of four pre-appraisal missions and an appraisal mission carried out in the period March 1994 - June 1995. The missions comprised, at different times, Messrs./Mmes. Alfred Nickesen (Senior Transport Specialist), Hiroshi Ueno (Economist), Gordon Billington (Consultant), Shiferaw Demissie (Consultant, Highway Engineer), Ian Heggie (Principal Infrastructure Economist), Farida Khan (Operations Assistant), Ehsan Qureshi (Consultant, Procurement Specialist), Okwudili Ekejiani (Infrastructure Engineer), Godfrey Ewool (Municipal Engineer), Anil Bhandari (Senior Transportation Engineer) and Alan Coulthart (Senior Infrastructure Engineer and Task Manager). Mmes. H. Kofi and Perla San Juan provided the report production support. Peer reviewers were Messrs. Antti Talvitie (Lead Adviser), Koji Tsunokwa (Highway Engineer) and Gus Tillman (Environmental Specialist). Messrs. James Wright and Olivier Lafourcade are the Division Chief and Director, respectively of the operation 4. BENEFITS, IMPACTS AND RISKS ........................................................ 33 A. General .33 B. Economic Benefits .33 C. Social Benefits and Poverty Impact .37 D. Environmental Impact .38 E. Risks .38 5. AGREEMENTS AND RECOMMENDATIONS ..40 List of Tables 1.1 Fuel Levy and Allocations from the Road Fund, 1990 to 1994 . 4 1.2 Revenue from other Road User Charges, 1992 to 1994 . . . 4 1.3 Previous Bank Supported Projects 8 3.1 1996-2000 Road Sector Expenditure Program . . . 16 3.2 Required Increases to Fuel Levy . 22 3.3 Proposed Financing Plan for 1996-2000 Road Sector Expenditure Program . 24 3.4 Summary of Project Cost and Financing Plan 25 3.5 Summary of Proposed Procurement Arrangements .28 3.6 Allocation and Disbursement of IDA Credit 30 4.1 Economic Evaluation of the 1996-2000 Highway Sector Investment Program.... 35 4.2 Sensitivity Analysis of Selected Sections Proposed for Rehabilitation & Periodic Maintenance .36 4.3 Economic Evaluation of IDA Credit .36 Annexes 1-1 Donor Commitments in the Roads Sector (1988-94) 2-1 Accounting and Management Information System (AMISU) 3-1 The 1995-2000 Desirable Road Sector Expenditure Program (High Case) 3-2 The 1996-2000 Road Sector Expenditure Program (Base Case) 3-3 The 1995-2000 Trunk Road Routine Maintenance Program 3-4 Summary of Vehicles and Equipment to be Purchased 3-5 Summary of Technical Assistance to GHA and MRH 3-6 Summary of Training and Manpower Development for GHA and MRH 3-7 Training Needs and Facilities for Ghana Highway Authority Personnel; 3-8 Support to NDPC 3-9 Restructuring Plan for Management of the Road Fund 3-10 Detailed Project Costs 3-11 Detailed Project Financing 3-12 Project Implementation Schedule 3-13 Disbursement Schedule 3-14 Project Supervision Plan 3-15 Monitoring Indicators 4-1 Economic Analysis of 1996-2000 Road Sector Expenditure Program 4-2 Analyses of Road Investments in the Credit 4-3 Summary of Environmental Impact Assessment and Mitigation Plan 5-1 Documents Available in the Project File MAPS: IBRD Nos. 26967 and 26968 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM CREDIT AND PROGRAM SUMMARY Borrower: Republic of Ghana Beneficiaries: Ministry of Roads and Highways (MH), Ghana Highway Authority (GHA) and the National Development Planning Commission (NDPC). Poverty: The project, which would support implementation of Government's 1996-2000 Highway Sector Investment Program, does not include specific targeted interventions to reduce poverty. It will however have a significant impact on poverty alleviation, particularly for Ghana's 3.54 million rural poor, who account for 70 percent of those living below the poverty level. Studies show that improved roads were a major factor in reducing rural poverty from 42 percent to 34 percent between 1988 and 1992. This reduction came through sustained growth of around 10 percent in non-farm self-employment, mainly wholesale and resale trading activities, which was made possible by better and cheaper transportation. The program will also improve access to social services such as health and education and employment opportunities will be created in the private sector throughout the country in construction and maintenance works. Amount: SDR 67.8 million (US$100 million equivalent) Terms: Standard IDA terms, with 40 years' maturity Project Description: Investments in physical infrastructure will be complemented by a number of important institutional and policy improvements as outlined below. The main components of the 1996-2000 Highway Sector Investment Program are: (a) Maintenance, Rehabilitation and Reconstruction of the Road Network: the US$1,480 million 1996-2000 program allocates US$113 million (8 percent) for routine maintenance of the entire network; US$493 million (33 percent) for periodic maintenance of 16,500km; US$132 million (9 percent) for rehabilitation of 5,350km; US$586 ii million (40 percent) for reconstruction of 1,140km; US$158 million (11 percent) for administrative costs and the settlement of arrears to contractors; (b) Institutional Strengthening and Capacity Building: strengthening the institutional capacity of the Ministry of Roads and Highways (MRH), Ghana Highway Authority (GHA), Department of Feeder Roads (DFR), the Department of Urban Roads (DUR), the National Development Planning Commission (NDPC) and the domestic construction industry, through appropriate institutional reforms, technical assistance, training and logistical support; (c) Policy Reform: improving cost recovery by strengthening and restructuring the road fund; encouraging private sector financing of roads; raising environmental sensitivity; enforcing axle load control; and improving road safety. The project, funded by IDA's US$100 million credit, will support the following: Periodic Maintenance: -US$51.4 million; Rehabilitation of Roads and Bridges: - US$14.1 million, and Institutional Support: - US$34.5 million. IDA has a comparative advantage in providing institutional support because of its continuous involvement in the sector over the past 20 years; hence the relatively high allocation for this activity. Financing Plan: IDA US$100.0 m. GOG US$ 11.5m. Benefits: The main economic benefits of the investments will be derived from savings in vehicle operating costs through the reconstruction, rehabilitation and maintenance of roads and bridges. This will promote increased agricultural production, stimulate exports and increase the mobility of people, particularly in rural areas. The program will also improve highway sector management, through increased reliance on market orientation, and help develop more responsive institutions. The tangible benefits from road investments have been quantified using cost benefit analysis. The benefits arising from institutional strengthening and policy reform related components cannot be measured in monetary terms, but they are nevertheless critical to the long term sustainability of the physical investments. Economic evaluation of the roads and bridges to be funded under the IDA credit (66 percent of the total) show a cost-weighted economic rate of return (ERR) of 58 percent. The net present value (NPV) of the roads is US$218 million at an iii annual discount rate of 15 percent. The robustness of the investments was demonstrated by sensitivity analyses carried out on a representative sample of the roads (24 percent of the total credit) which showed that a combined reduction of benefits by 15 percent and increase in costs by 15 percent reduced the ERR of the sample from 40 percent to 32 percent. Risks: The main risks arise from Government having to find the optimum balance between meeting the country's need for improved road infrastructure and the electorate's willingness and ability to pay for it, relative to other needs. These risks are: (a) inadequate funding of maintenance - it may not be feasible to increase the fuel levy sufficiently to meet the full cost of maintenance, even with road user support and the value of the road fund may be eroded by continued depreciation of the Cedi; (b) securing the necessary contributions for Government's capital budget - the contribution is projected to decline from 44 percent in 1996 to 8 percent in 2000 with the enhanced road fund providing the difference; (c) sub-optimal selection of roads for improvement - Government agreed to a minimum qualifying ERR of 15 percent for roads to be included in the program. There will also be greater road user representation in the selection process; (d) delays in implementation - designs have already been prepared for 46 percent of the works and tender documents are available and prequalification proposals have been invited for the ICB works to be funded by IDA. There are no significant technical risks. The works will be carried out using conventional construction methods by contractors and consultants with proven capability. Maps: IIBRD Nos. 26967 and 26968 Project ED No.: GH-PA-957 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM STAFF APPRAISAL REPORT 1. BACKGROUND A. INTRODUCTION 1.1 This is the first time that an integrated sector-wide investment approach has been adopted for the sustainable development of a sector in Ghana. IDA's credit, together with pledges from other donors, would help support implementation of the 1996-2000 Road Sector Expenditure Program (the program) jointly developed by Government, user groups, the Parliamentary sub-committee for infrastructure, and all donors active in the sector. The main differences, which are elaborated in greater detail in para. 3.1, between the sector approach and the traditional system of donors negotiating on an individual basis with Government are that the sector approach: * covers the entire sector including maintenance as well as the more conventional capital investment, policy reform and institutional issues; * has been jointly prepared by local stakeholders (Government and private and public sector road users) and donors active in the sector, with the former taking the lead; * is supported by all donors active in the sector; * makes optimum use of scarce local resources; * promotes standardized implementation procedures. 1.2 Previous projects supported by the Bank and the many other donors have attempted to address the issues of seriously deteriorated highways and necessary institutional and policy reform on a somewhat piecemeal basis. Trunk, urban and feeder roads have for example generally been tackled separately. Given the scale of the problem and the investments required, such an approach was understandable. However, it has now been appreciated that because the road network is homogeneous, the full benefit of investments can only be secured by treating it as such. It was also recognized that Government's administrative and financial resources were being over-extended by having to deal with a multiplicity of donors with differing terms and conditions. This program therefore adopts a comprehensive sector wide approach as a means of directing and coordinating the efforts of Government and all donors towards sustainable development. 2 B. MACROECONOMIC CONTEXT 1.3 Ghana is a medium sized country along the west coast of Africa with land area of 239,000 sq.km. and a population of 16 million (mid-1993). It is well endowed with natural resources that include cocoa, timber and minerals. In spite of the country's potential, per capita income declined and poverty increased in the 1970s and early 1980s. In 1983, the Government introduced an Economic Recovery Program (ERP) supported by financial and technical assistance from the Bank, IMF and other donors. Under the ERP real GDP grew by 5 percent per annum, or around 2 percent on a per capita basis; the rate of inflation was reduced; and Ghana's foreign exchange reserves increased. 1.4 Following a number of years of strong economic performance, fiscal performance received a set-back during the run-up to the 1992 elections when large wage awards were granted to the civil service and other public sector employees and delays in passing increases in imported oil costs to consumers gave rise to large revenue losses. This led to a budget deficit of 4.8 percent of GDP in 1992, a rapid growth in the money supply and inflationary pressures re-emerging. Although the budget reverted to a surplus position in 1994, aided by divestiture receipts, the macroeconomic situation has remained fragile with inflation growing. Ghana's external position, after deteriorating in 1992-93, improved substantially in 1994 aided by receipts from the divestiture of public companies, and the foreign exchange reserves position improved to over four months of imports by the end of 1994, compared with only three months at the end of 1993. 1.5 The 1995 macroeconomic performance under IMF's Enhanced Structural Adjustment Facility was mixed. The external sector over-performed and GDP growth was close to program target. Despite some arrears in the road sector, fiscal surplus of 0.7 percent of GDP was close to the target of 1.2 percent. Monetary growth of 37 percent was higher than the target of 14 percent mainly due to a larger than anticipated external surplus in the last quarter. Inflation rose sharply in 1995 due to the lagged effect of large monetary expansion in the last quarter of 1994 and first quarter of 1995. However, a targeted fiscal surplus of 1.8 percent of GDP and monetary restraint is likely to lower inflation in 1996. C. FISCAL ISSUES AND AFFORDABILITY Highway Sector in Relation to Overall Budget 1.6 Until 1983, budget appropriations, together with donor grants, were used to finance all road sector expenditures. However, because of economic constraints the funds allocated were well short of the amounts required even to meet basic maintenance needs, let alone make any contribution towards reducing the maintenance backlog. As part of the ERP, funding of road infrastructure was increased to help stimulate economic growth. Between 1986 and 1990, the highway sector accounted for 20 percent of Ghana's total capital budget. Under the ERP Government began moving to a system of market prices and full cost recovery for all economic services. In furtherance of this a Road Fund was established in 1985 with its major source of revenue a levy on petrol, diesel, kerosene and refined fuel oil. Although this was a 3 move in the right direction it has not achieved its objective of providing sufficient funds to meet the costs of maintenance (see para 1.9). 1.7 In 1990 the Govemment decided to provide further impetus to the economy by accelerating the reconstruction and major rehabilitation of key roads and increased road spending to around 40 percent of the annual capital budget. However, this is not sustainable given the competing demands from other sectors of the economy and, recognizing the need to strengthen financing arrangements, GOG has decided to gradually raise the fuel levy and restructure the Road Fund (see paras.3.28 and 3.29). Initially Government intends implementing this in a fiscally neutral way i.e. part of the revenues that currently accrue to the capital budget and are allocated to the highway sector would be redirected to the Road Fund. However, the opportunity exists, once the public responds to the more transparent operation proposed for the Road Fund for Government to secure a net increase in revenue. 1.8 The projected impact of these measures is shown in the proposed financing plan for the 1996-2000 Road Sector Expenditure Program in Table 3.3 (page 24). Total planned road expenditures (including repayment of arrears and debt service), increase to US$319 million in 1996 and US$317 million in 1998, before falling back to US$260 million in 2000. During this period, Road Fund revenues are projected to rise from US$46 million in 1996 to US$106 million in 2000 (see Table 3.2, page 22). As a result, the burden on Government's development budget would progressively reduce from 44 percent in 1995 to 8 percent in 2000. The balance of the expenditures would be financed by external sources (50 percent over the program period) and Government's recurrent budget (4 percent). The pace of transfer of maintenance funding from the development budget to user charges will be dictated by road users willingness and ability to pay. The expenditure program will be reviewed jointly by Gcvernment, road user representatives and donors on an annual basis and adjusted as necessary to suit the funds available. The Road Fund - Moving to Commercialization and Fee-for-Service 1.9 Although the fuel levy has been periodically revised (e.g., when the statutory retail price of fuel is raised to reflect a devaluation), the portion going to the Road Fund has not fully compensated for the decline in the value of the cedi. As a result, the fuel levy, expressed as a percentage of the retail price, has fallen from a peak of 7.5 percent in 1992 to 3.2 percent in 1995. The fund transfers to the Road Fund consequently fell from US$28.8 million in 1991 to US$ 17.4 million in 1994. Table 1.1 below shows the level of the fuel levy and how the proceeds were divided between GHA, DFR and DUR during the period 1990-1994. 4 Table 1.1: Fuel Levy and Allocations from the Road Fund 1990 to 1994 US,/liter 1990 1991 1992 1993 1994 1994 Levy (cedis/liter) Petrol 6.3 15.0 15.0 18.0 18.0 1.80 Diesel - 12.0 12.0 14.4 14.4 1.44 Kerosene 5.6 9.0 9.0 10.8 10.8 1.08 Fuel Oil 2.2 5.0 5.0 5.0 5.0 .50 Allocations($million Equiv.) GHA 11.8 15.2 15.4 14.1 12.1 percent (55.1) (52.8) (62.4) (58.8) (69.5) DFR 6.2 5.0 4.2 4.5 1.8 percent (29.0) (17.4) (17.0) (18.8) (10.3) DUR 3.4 8.6 5.1 5.4 3.5 percent (15.9) (29.9) (20.6) (22.5) (20.1) Total 21.4 28.8 24.7 24.0 17.4 1.10 The other road user charges paid into the Road Fund include road and bridge tolls, ferry fees and vehicle inspection fees. However, as shown in Table 1.2 below, these charges contributed less than 10 percent of Road Fund revenues from 1992 to 1994. Consideration is being given to the recommendations of a recent Road User Charges Study that a heavy vehicle license fee be introduced, to ensure that heavy vehicles pay a higher proportion of the damage they do to roads. Table 1.2: Revenue from other Road User Charges, 1992 to 1994 (US$ million) Item 1992 1993 1994 Motorway Toll 0.19 0.78 0.57 Bridge Tolls 0.20 1.08 0.74 Ferry fees 0.03 0.04 0.03 Vehicle Inspection 0.88 0.66 0.64 Total 1.30 2.56 1.98 1.11 The Road Fund, as currently established, has some good points, but it also suffers from several important weaknesses. Its strongest feature is that the fuel levy is collected by the Ghana National Petroleum Company, which deposits the money directly into the Road Fund account at the Bank of Ghana. The funds are not handled by Customs (who nevertheless carry out an ex-post check to ensure all levies have been paid), or the Ministry of Finance, and this prevents diversion of funds and the protracted delays which affect some of the road funds in Africa. The weaknesses include: (a) the lack of a well developed 5 accounting system for funds collected; (b) the fact that the Road Fund only finances part of routine and periodic maintenance; and (c) the fact that a technical audit has as yet not been instituted. Under the program, allocations to the Road Fund will be increased by gradually raising the fuel levy to enable all maintenance costs to be met; and administration of the Road Fund will be strengthened (paras 3.28 and 3.29). Financial Management 1.12 Financial management and contract administration have been problematic in recent years in the road sector. There have been substantial budget overruns, which has resulted in large arrears accruing to contractors. Capital budgets were exceeded by some 65 percent in 1994 and 1995 and arrears were estimated to have grown to Cedis 120 billion (US$75 millior;) by December 1995. Government has negotiated agreements with the contractors on terms for payment. Provision has been made to pay some Cedis 64 billion (US$40 million) in 1996 and the balance has been rescheduled. 1.13 The overruns have arisen because too many fully funded contracts were signed in spite of tight budgetary situations. In some cases there had been insufficient project preparation at the feasibility and design stages resulting in major changes in the scope of works during implementation. In other cases additional lengths were added to existing contracts instead of treating them as separate contracts as currently practiced. Even though fluctuation clauses had been fully catered for, in accordance with International practice and Bank procurement guidelines, the projected effects were not included in project estimates and budgetary allocations. 1.14 Government recognizes the seriousness of these problems and has established a Cabinet Committee on road infrastructure to address them. Government agreed at negotiations to the following: (a) No project to be undertaken without detailed engineering studies including the preparation of technical specifications, accurate bills of quantities and realistic cost estimates. The cost of any changes in the designs, specification and scope of works after contract award to be kept within 25 percent of the original contract value; (b) Contract cost and duration to be strictly controlled through more effective contract management and supervision. Budgeting and accounting systems for monitoring contracts acceptable to the Ministry of Finance and IDA, to be implemented by MRH and the three road agencies by December 31, 1996. D. DEVELOPMENT CONSTRAINTS 1.15 During the economic crises of the 1970s and early 1980s transport infrastructure, essential for the movement of key exports and farm production to market, faced virtual collapse due to prolonged neglect of maintenance and rehabilitation. The resulting high transport costs had an adverse effect on the whole economy. Under the ERP, with support 6 from IDA and other donors, Ghana commenced the rehabilitation of its transport network and initiated generally sound and pragmatic institutional reforms. Significant progress has been made, with the proportion of roads classified as "good" increasing from 15 percent in 1984, to 43 percent in 1993. There has been a measurable impact with annual growth in domestic trading throughout the country of over 10 percent in recent years being largely attributed to improved road infrastructure. However, much remains to be done; 31 percent of trunk, and around 50 percent of feeder roads are still classified as "poor" and continued high levels of investment are required if this constraint to growth is to be fully eliminated, while preserving the condition of roads already restored. Studies carried out under the Bank/United Nations sponsored Sub-Saharan African Road Maintenance Initiative show that it costs between 2 and 3 times more to operate vehicles on "poor" roads than on roads that are kept in "good" condition through effective maintenance. Other studies show that on paved roads a regular maintenance strategy costs 35 percent less in NPV terms at 12 percent discount rate than carrying out no maintenance and reconstructing every 15 years. Similar savings in the range of 14 to 128 percent can be achieved on gravel roads. E. BROAD DEVELOPMENT OBJECTIVES 1.16 Government's developmental goal is to reduce poverty through increased growth, largely in the agricultural sector, and through improving access to social services, particularly in rural areas. The 1996-2000 Highway Sector Investment Program will contribute to achieving this by: (a) reducing vehicle operating costs through maintenance, rehabilitation and reconstruction of the highest priority sections of the road network; (b) ensuring the improvements are sustained by developing and implementing cost recovery policies, building and utilizing indigenous capacity in the public and private sectors, and improving financial management and control; and (c) strengthening donor coordination. 1.17 IDA's involvement in the program is consistent with the broader objectives of the Country Assistance Strategy (CAS) discussed by the Board in May 1995, which are to support: poverty reduction; capacity building; private sector development; and to create conditions for environmentally sustainable development. The program directly supports four of the five key elements of the Bank Group's strategy outlined in the CAS: (a) invest heavily in physical infrastructure, particularly to support agricultural growth - 80 percent of program funds will be allocated for the maintenance of 16,100 km, rehabilitation of 5,300 km, and the reconstruction of 1,000 km of trunk and feeder roads servicing agricultural areas; (b) promote higher private sector investment especially in agriculture and exports - improved road infrastructure has been identified as a major requirement for agricultural and export growth and the program gives priority to improving routes to the two key ports, Takoradi and Tema; (c) build and utilize indigenous capacity in the public and private sectors - heavy reliance will be placed on local consultants and contractors of proven ability, many of whom have benefited from training under previous Bank assisted projects, and technical assistance to the road sector agencies will be largely locally sourced; and (d) strengthen human resources by improving access to, and the quality of, basic social services - improved roads, particularly in rural areas, will facilitate access to health and education services. 7 F. LESSONS LEARNED FROM BANK GROUP AND OTHER DONORS' INVOLVEMENT IN THE TRANSPORT SECTOR Donor Support for the Roads Sector 1.18 There are more than a dozen multi-lateral and bilateral donor organizations active in the roads sector. Past commitments (1988-1994) made by Donor agencies have averaged about US$ 115 million equivalent per annum, mainly for major reconstruction and rehabilitation works (see Annex 1-1 for details). There has been increasing concern that insufficient funds are being allocated for maintenance while new reconstruction works continue to be funded. This issue was discussed at length during project preparation and agreement reached that maintenance would be given top priority by Government and donors. To this end it was agreed that the cost of maintenance should gradually be met from user charges (see para. 3.29). The 1996-2000 Road Sector Expenditure Program was jointly developed by Government, user groups, the Parliamentary sub-committee for infrastructure, and all donors active in the sector (OECF, KfW, European Union, the Dutch Government, BADEA, OPEC, DANIDA, USAID and ADF). 1.19 In the past, donor support has not been well coordinated and Government's institutional resources have been strained by a multiplicity of terms, conditions and reporting requirements. As part of the preparation for the program a donor conference was held in Accra in November 1994. Government will organize similar conferences each year to streamline dialogue with donors and report on progress with implementation of the program, review projected plans for subsequent years, and to seek additional funding. Government intends to adopt common arrangements for implementing, monitoring, accounting, and reporting on all donor assisted projects and MRH have already established an Accounting and Management Information Systems Unit (ANISU) to facilitate this. 1.20 The Bank Group in conjunction with various cofinanciers (OECF, ADB, UNDP, EU, Saudi Fund, OPEC and Danida) has supported the following 12 projects since 1974 as outlined in Table 1.3 below. 8 Table 1.3: Previous Bank-Supported Projects F ~~~~~~~Credit Project Amount Credit Ref. Commenced Completed |First Highway $13m 438-GH 1974 1981 Second Highway $28m 594-GH 1975 1983 Third Highway (Emergency $25m 1029-GH 1980 1986 Maintenance) Railway Rehabilitation $29m 1170-GH 1981 1988 Accra District SDR22.5m 1564-GH 1985 1992 Rehabilitation l Road Rehabilitation & SDR50.5m 1601-GH 1985 1991 Maintenance A-1GH Ports Rehabilitation $24.5m 1674-GH 1986 1993 First Transport SDR46.9m 1858-GH 1988 1995 Rehabilitation Second Urbanp SDR53.7m 2157-GH 1991 Ongoing Second Transport Rehab. SDR69m 2192-GH 1991 Ongoing National Feeder Roads Rehabilitation & SDR40.5m 2319-GH 1992 Ongoing Maintenance Urban Transport SDR55m 2498-GH 1993 Ongoing I/ General urban projects with substantial road components. 1.21 Conclusions drawn from past Bank supported projects are that: (a) highway sector changes should be based on a clear set of long-term sector objectives and targets; (b) a proliferation of donors acting independently ties up Government's limited institutional resources and does not provide a basis for reaching agreement on necessary sector reforms; (c) putting a deteriorated sector back on its feet, by rebuilding institutions and physical infrastructure, and creating adequate financing systems is a long-term undertaking; (d) revenue from road user charges has been inadequate to meet the cost of maintenance; and (e) the development and assimilation of policy and organizational changes has been hampered by limited institutional capacity 9 2. TRANSPORTATION IN GHANA A. TRANSPORT STRATEGY 2.1 A Transport Sector Strategy Note (TSSN, Report No. 5737-GH, June 1985), prepared by the Bank and agreed with Government in mid-1985, focused on the main transport problems and policy issues, and presented a short and medium term strategy for tackling them. Further Government/Bank joint reviews were undertaken in 1989, 1992 and most recently in November 1994. The agreed transport sector strategy calls for the allocation of a high proportion of budgetary resources to transport infrastructure until the constraints to economic growth caused by the backlog of maintenance have been removed. The capital investments are to be complemented by policy and institutional reforms to make the delivery of transport services more sustainable and responsive to user's needs. 2.2 Achievements of the GOG-Bank dialogue since 1985 include: (a) establishment of a Road Fund (fuel levy based) which finances a proportion of maintenance work and reduces dependence on general revenues; (b) increased use of the private sector, including the promotion of local contractors through training in competitive bidding and site organization; (c) large reductions in personnel at GHA (from 8,400 in 1985 to 4,650 in 1994) and DFR (from 2,000 in 1985 to 700 in 1993), due to the shift from force account to contracting; (d) introduction of a labor-intensive rural road rehabilitation program; (e) systematic reduction of foreign technical assistance requirements at MRH, GHA, DFR and DUR through the training and promotion of local engineers; (f) increased reliance on local consultants for engineering design and construction supervision; and (g) improved traffic safety through vehicle inspection and licensing, and training of drivers and mechanics. B. ROLE OF HIGHWAYS 2.3 Roads are the predominant mode of transportation, currently accounting for 94 percent of freight and 97 percent of traffic movements. There are no viable alternatives to roads other than for the movement of bulk commodities such as timber, cocoa, bauxite and manganese ore by rail from central collection centers to the ports. The railway network has limited coverage (Accra-Kumasi-Takoradi) and operates at low efficiency under parastatal management and internal water transport is limited to Lake Volta. A full description of rail and internal water organizations and facilities is given in the SARs for the Transport Rehabilitation Project (Report No. 6912-GH) and the Second Transport Project (Report No. 8945-GH). The road transport industry, which is dominated by the private sector, is competitive and has unrestricted entry, but its efficiency is constrained by the high cost poor roads impose on vehicle operation. 2.4 Government's highway sector objectives are to: (a) clear the large backlog of maintenance work to stabilize the road network condition mix to 70 percent "good", 20 percent "fair", and not more than 10 percent "poor"; (b) strengthen the organizational structure and institutional capacity of the road agencies and the local road construction 10 industry; (c) base road sector investment decisions on sound economic principles, and give highest priority to routine and periodic maintenance, (d) improve cost recovery to ensure that maintenance can be fully-funded on a sustainable basis; (e) promote greater private sector involvement in both execution of works and financing of transport infrastructure; (f) regain sector-wide discipline in expenditure management and control; (g) streamline transport regulations, enforce axle-weight regulations, and enhance road safety, (h) promote the use of non-motorized transport; (i) strengthen donor coordination, and (j) simplify and improve procurement, monitoring and reporting procedures for road sector programs. These are fully reflected in Government's Road Sector Policy Letter of February 9, 1996. C. HIGHWAY SECTOR INSTITUTIONS 2.5 Ministry of Roads and Highways: The MIRH was created in 1982 to take over responsibility from the Ministry of Works and Housing for the two road agencies then in existence, GHA and DFR. GHA was established in 1974 by decree and was originally responsible for all highways. DFR and DUR were subsequently created in 1981 and 1988 respectively, to provide a specialized focus on feeder and urban roads. Organisational charts of the four institutions are given in the Project Files. The basic legislation governing the road sector has not been amended to reflect the new institutional structure, even though many of the powers and responsibilities originally assigned to GHA have been taken over by DFR, DUR and MRH. To clarify matters, MRH has prepared a draft amendment to the GHA Decree, as an interim measure pending enactment of a comprehensive Roads and Highways Act, to formalize the institutional changes that have taken place, including establishment of the Road Fund. A draft of the Roads and Highways Act has been reviewed by Bank staff and is considered satisfactory. 2.6 MIRH is responsible for the formulation of road sector strategy and policy and for monitoring the performance of GHA, DFR and DUR in terms of budgeting, accounting and contract administration. An Accounting and Management Information System Unit (AMISU) was established in early 1995 to improve financial management in the sector through more effective disbursement, accounting, monitoring and reporting procedures. Currently AMISU is responsible for all donor funded projects. This role will gradually be expanded to cover all sector finances and MIS systems compatible to that of AMISU will be established in the three road agencies, under the program. It is headed by an accounting and MIS specialist and staffed by a financial manager; accountants and disbursement specialists; computer and data analysts; and short-term resource persons all of whom have been recruited from the local private sector (see Annex 2-1 for a full description of AMISU). 2.7 Ghana Highways Authority: The GHA was established in 1974 as an autonomous highway authority administered by a Board of Management consisting of seven representatives from the public sector, a member of the Institution of Engineers, a representative from the Private Road Transport Union, and a Chairman. In 1982 MRH was created to coordinate all works in the road sector. Around the same time there was a change in government policy which resulted in the creation of Interim Management Committees for all Public Corporations including GHA. Government now intends to reinstate GHA's I1 autonomy and Board with greater private sector road user representation to encourage the Authority to become a more commercial, customer-oriented agency. 2.8 GHA is responsible for 14,750 km of trunk roads, consisting of 6,000 km of paved roads and 8,750 km of gravel roads. It employs 4,650 personnel (down from about 8,400 in 1985) comprising 90 engineers and 620 administrative, technical and supervisory staff and some 3,940 skilled and unskilled workers involved in force account operations. GHA intends to reduce its personnel further in line with its policy of contracting out virtually all work to the private sector. 2.9 The following key principles of GHA's future organizational structure were agreed during appraisal: (a) The Board of GHA will be reinstated and the GHA Decree will be replaced by an appropriate Act of Parliament to make GHA more autonomous and subject to market forces. (b) The policy of contracting out road reconstruction, rehabilitation and most periodic maintenance to the private sector will continue. (c) GHA will strengthen its professional and technical staff, while it will reduce substantially the number of semi-skilled and unskilled personnel, presently still employed as force account labor. At negotiations, Government agreed that the semi-skilled and unskilled labor force will be reduced in the 1995-98 period to bring total personnel to about 3,100. Furthermore, by December 31, 1998, the staffing situation will be jointly reviewed and an action plan agreed to reduce personnel further. 2.10 Department of Feeder Roads: DFR is responsible for a network of some 22,000 km of feeder roads. It operates with a professional staff of 34 at three levels: (a) the head office in Accra; (b) 10 regional offices; and (c) 10 out of 32 road district offices. The management structure at the regional and road district levels is being reviewed with the gradual implementation of decentralization to political districts. Under the IDA and donor supported on-going National Feeder Roads Rehabilitation and Maintenance Project, greater emphasis is being placed on feeder road planning and selection, and integrating feeder road rehabilitation and maintenance with trunk road and agricultural priorities. In addition, a maintenance performance budgeting system has been developed to ensure that once feeder roads have been rehabilitated, they are taken over for systematic maintenance. 2.11 Department of Urban Roads: DUR was established in 1988 to take over responsibility for roads in Accra, Kumasi, Sekondi/Takoradi, Tema and Tamale. It has 550 personnel of whom 28 are professional staff located in headquarters and in District Road Units (DRUs) in the five cities. The IDA and donor supported on-going Urban Transport Project provides technical assistance to build capacity within DUR and the DRUs. The department works closely with the Municipal and Metropolitan Assemblies (MMAs), developing construction and maintenance programs. In 1990, the Accra Metropolitan Roads 12 Unit assumed responsibility for maintenance of Accra's roads, following strengthening of the unit, though major reconstruction and rehabilitation works are still administered by DUR. It is intended that all of the cities will follow Accra's example and eventually become responsible for their own roads in accordance with Government's decentralization policy. DUR would then focus on providing planning, coordination and technical support services. 2.12 National Development Planning Commission: The NDPC has prime responsibility for the strategic planning of transportation infrastructure and for directing the implementation of Government's decentralization policy. It produced a coordinated program of economic and social development policies, entitled "Ghana-Vision 2020 (The first step: 1996-2000)" in January 1995. This provides a policy and planning framework for the preparation of medium term sectoral and district development plans. The next phase of activities to be undertaken by NDPC includes preparation of the medium-term National Development Plan (1996-2000), which will become the reference document outlining the enabling environment to be provided by government in support of private investment, initiative and innovation and also highlighting the priority social and economic activities to be undertaken in the districts. D. CONSTRUCTION INDUSTRY 2.13 Ghana's domestic construction capacity has developed significantly over the past decade. At present there are about 270 road works and 700 bridge and drainage structure contractors classified by MIRH in eight categories. The majority of the contractors are capable of undertaking contracts ranging from US$150,000 to US$500,000 at a time within twelve months, while the largest can tackle contracts of several million dollars. Training has been provided to over 80 labor-based contractors each capable of undertaking 25km of feeder roads rehabilitation per annum, and equipment has been provided on a credit basis to 52 of them. 2.14 This domestic capacity, with some strengthening, can handle most of the gravel trunk and feeder road programs, while for paved trunk roads, there is still a need to build capacity. This can be done by facilitating access to credit facilities, ensuring timely payment of monthly certificates, generous advance mobilization loans and by providing training in business administration, field work planning and programming and resource management. There is also need to provide practical training to contractors on bituminous surface dressing operations. 13 3. THE HIGHWAY SECTOR INVESTMENT PROGRAM A. PROGRAM CONCEPT 3.1 The 1996-2000 Highway Sector Investment Program and complementary institutional strengthening and policy reform initiatives articulated in Government's Letter of Sector Policy of February 9, 1996 were jointly prepared by Government, representatives of road users groups and all donors active in the sector. Unlike previous IDA supported projects it embraces the entire highways sector and seeks to coordinate and unify the activities of all donors. The differences and advantages offered by the sector approach over the traditional system of donors negotiating on an individual basis with Government are that the sector approach: (a) covers the entire sector - this recognizes that road networks are interdependent and that there is little point, for example, in improving the feeder roads in an area if there is not also a complementary plan to improve the trunk road to which they link; (b) supports a comprehensive program jointly formulated by all key stakeholders in the sector - involving users and donors has increased the focus on sustainability with a greater emphasis being given to maintenance; (c) is supported by all donors active in the sector - the joint efforts of donors and Government has produced a realistic program (Government's original proposed expenditure of US$1,900 million was scaled down to US$1,480 million based on a joint assessment, which took account of the overall needs of the economy and a more realistic projection of likely revenues) and facilitated the adoption of key policy reform and institutional changes, which will make the delivery of road infrastructure services more sustainable and responsive to users needs; (d) makes optimum use of scarce local resources - the need for expensive and unsustainable foreign technical assistance has been reduced to limited areas of specialization; and (e) promotes standardized implementation procedures - this reduces pressure on Government's limited institutional resources which have been overstretched in the past by the varying demands of individual donors. B. PROGRAM OBJECTIVES 3.2 Efficient cost effective road transport is fundamental to achieving the primary objective of Government and the Bank, as reflected in the Country Assistance Strategy (May 1995), of reducing poverty through increased growth, largely in the agricultural sector. The program will support this by: * Reducing vehicle operating costs through maintenance, rehabilitation and reconstruction of roads; and * Ensuring that improvements are sustained by developing and implementing cost recovery policies, building and utilizing indigenous capacity in the public and private sectors, and improving financial management and control. 14 C. PROGRAM DESCRIPTION 3.3 The main components of the 1996-2000 Highway Sector Investment Program are: (a) Maintenance, Rehabilitation and Reconstruction of the Road Network: Funding some 16,500km of periodic maintenance; 5,350km of rehabilitation; and 1,140km of reconstruction; (b) Institutional Strengthening and Capacity Building: Strengthening the institutional capacity of MRH, GHA, DFR, DUR, NDPC, and the domestic construction industry through appropriate institutional reforms, technical assistance, training and logistical support; and (c) Policy Reform: Issues addressed include cost recovery, private sector financing, increased environmental sensitivity, axle load control and road safety. 3.4 Maintenance, rehabilitation and reconstruction of the road network will be supported by all donors and the scope of works is described in the following paragraphs. The institutional strengthening and policy reform components will be primarily supported by the IDA credit because of IDA's comparative advantage derived through long-term involvement in the sector. The components to be supported by the IDA Credit are described in Section D (page 17). MAINTENANCE, REHABILITATION AND RECONSTRUCTION OF THE ROAD NETWORK 3.5 To clear the remaining backlog of deferred maintenance and stabilize the road network in ten years (by 2005), would require average annual expenditure of about US$387 rnillion compared to the average expenditure from 1988 to 1994 of US$140 million per annum. For the six year period 1995-2000, this would amount to a total expenditure of US$2.32 billion, which the MRH has designated as the "Desirable Program" (Annex 3-1). Such a massive increase in the level of expenditure is not feasible given current revenue projections, competing demands and the amount of external financing likely to be available. This program was presented by MRH and its three road agencies for discussion at a Donors' Conference in November 1994 attended by representatives of road and transport agencies, private sector road users and donor agencies. On the basis of ensuing discussions, it was agreed that the 1996-2000 Road Sector Expenditure Program should be reduced from US$1.94 billion to US$1.48 billion (an average of US$296 million per annum) with priority for funding as follows: (a) Routine maintenance, (b) Periodic maintenance; (c) Rehabilitation; (d) Completion of on-going donor financed reconstruction and upgrading projects, 15 (e) High priority reconstruction and upgrading projects in the pipeline with secured donor financing; (f) Completion of GOG fully financed on-going reconstruction and upgrading projects; (g) Fully-financed GOG reconstruction and upgrading projects in the pipeline; and (h) New roads 3.6 Around 62 percent by value of the roads to be included in the progran have already been identified (this includes eleven ongoing donor supported projects the details of which are given in Annex 3-2). The remaining roads will be selected on the basis of: economic benefit (ERR of at least 15 percent); their contribution towards alleviating poverty; and by taking due consideration of geographic distribution. The size and scope of the agreed expenditure program and its distribution between routine maintenance (8 percent), periodic maintenance (33 percent), rehabilitation (9 percent), reconstruction (40 percent); administration expenditures (6 percent); and payment of arrears (5 percent) is given in Table 3. 1. A brief description of the program is given in the following paragraphs (for further details including annual budgetary outlays, see Annex 3-2). At negotiations, Government agreed to the following: (a) The Road Sector Expenditure Program to be reviewed annually by November 30, by GOG jointly with IDA, other donor agencies and representatives of road users, to monitor progress and agree on the following year's expenditure; (b) The minimum qualifying ERR for investment in any road section to be included in the Road Sector Expenditure Program to be 15 percent. 3.7 Routine Maintenance: Routine, or preventative, maintenance provides the highest rate of return of all road expenditure. It covers the entire network and includes activities such as pot-hole patching, grading and reshaping gravel roads, cleaning drains and culverts and clearing vegetation from shoulders and verges. Up to 1994, routine maintenance was financed from the recurrent budget and the amounts allocated declined from US$17.6 million in 1992 to US$8.8 million in 1994. In 1995 it was increased slightly to US$10.5 million (still well below the required amount of around US$24 million) and incorporated in the capital budget, which means that the funds appropriated are less susceptible to Government cutbacks. Allocations for routine maintenance will increase to about US$24 million a year under the program. Annex 3-3 gives details of the trunk road routine maintenance program. 16 Table 3.1: 1996-2000 Road Sector Expenditure Program (US$ million) Length Cost Percent Sub-Programs (km) (USSm) (%) Routine Maintenance 1/ Trunk Roads 11,600 69 5l Urban Roads 830 13 1 Feeder Roads 18,800 31 2 Sub-total 31,230 113 8 Periodic Maintenance Trunk Roads 7,600 330 22 Urban Roads 400 74 5 Feeder Roads 8,490 89 6 Sub-total 16,490 493 33 Rehabilitation Trunk Roads 360 48 3 Urban Roads 0 0 0 Feeder Roads 4,980 84 6 Sub-total 5,340 132 9 Reconstruction Trunk Roads 920 427 29 Urban Roads 134 148 10 Feeder Roads 89 12 1 Sub-total 1,143 586 40 Administrative Costs (Including MRH) 83 6 Arrears Trunk Roads 53 4 Urban Roads 18 1 Feeder Roads 4 0 Sub-total 75 5 iTotal Road Sector Expenditure Program 1,482 o100 1/ Lengths for routine maintenance are per annum 3.8 Periodic Maintenance and Rehabilitation: Periodic maintenance covers activities such as the resealing of bituminised roads on a seven to ten year cycle, depending on cumulative traffic loading, and the regravelling of unsurfaced roads on a 5 to 7 year cycle. Costs range from US$10,000 per km for regravelling feeder roads to US$140,000 per km for overlaying asphaltic concrete trunk roads. Rehabilitation is required when the entire road structure, as opposed to only the surface layer, has failed. This applied to most of Ghana's roads in the early 1980's. Rehabilitation differs from reconstruction (see below) in the extent of work required; the former can normally be carried out at an average cost of US$20,000 per km on gravel feeder roads and US$165,000 per km on bituminised trunk roads. 17 3.9 The length of periodic maintenance and rehabilitation works carried out between 1988 and 1994 was 13,600km at a total cost of US$245 million. The 1996-2000 program target is 21,850 km (16,500km periodic maintenance and 5,350km rehabilitation) at a total cost of US$625 million. This is ambitious, but achievable given Government and donors' declared commitment to maintenance. The main constraints in the years 1988-1994 were shortfalls in funding and a cumbersome procurement system. With the proposed restructuring of the Road Fund (see paras. 3.28 and 3.29), continued support from external donors, and improvements in procurement and contracting procedures, which have already been implemented, the proposed increased output is achievable. 3.10 Reconstruction: Reconstruction differs from rehabilitation in the extent of remedial work required and often involves widening and partial realignment. It is generally required on the busiest roads which have deteriorated most because of heavy traffic loading. Costs per kilometer range from US$165,000 on surface dressed trunk roads to over US$1 million on congested urban roads with asphaltic concrete pavements. The proposed I, 140km reconstruction sub-program of US$586 million, which includes a provision of US$52 million for bridges, accounts for some 40 percent of the proposed program and would be financed largely by donors and, funds permitting, the government. D. COMPONENTS SUPPORTED BY IDA CREDIT 3.11 IDA's Highway Sector Investment Credit would be allocated to the following components of the program: (a) Trunk Road Rehabilitation and Maintenance: 1,100 km of periodic maintenance, 90 km of rehabilitation, bridge rehabilitation and the spot improvement of hazardous road sections; (b) Institutional Strengthening and Capacity Building: Strengthening the institutional capacity of GHA, MRH, NDPC, and the domestic construction industry through appropriate institutional reforms, technical assistance, training and logistical support; (c) Policy Reform: Issues to be addressed include cost recovery, private sector financing, increased environmental sensitivity, axle load control and road safety. 3.12 IDA, in conjunction with other donors, is already providing support to trunk roads through the 1991 Second Transport Rehabilitation Project (TRP2); feeder roads through the 1992 National Feeder Road and Rehabilitation and Maintenance Project (NFRRMP), and urban roads through the 1993 Urban Transport Project (UTP). As the TRP2 funding is already fully committed and largely disbursed it has been agreed with Government that priority should be given to trunk road periodic maintenance and rehabilitation. Further support to feeder roads is in the lending pipeline (projected Board presentation in 1999) and it is proposed that preparation should be under streamnlined procedures within the framework of 18 the HSIP. Additional support will also be considered for urban roads in deprived areas if the UTP is implemented satisfactorily. PERIODIC MAINTENANCE AND REHABILITATION 3.13 The credit will help to clear part of the remaining maintenance backlog by financing 90 km of rehabilitation in Central and Eastern Regions, and the rehabilitation of bridges in Brong Ahafo and other regions. The periodic maintenance of 1,100 km of roads throughout the country will restore deteriorated running surfaces to "good" condition and preserve the investment in these roads. The periodic maintenance works will be undertaken predominantly by local contractors (45 NCB lots and 3 ICB lots) and the road rehabilitation and bridge works have been packaged in 4 ICB lots. Designs have been completed for most of the roads and bridges and bidding documents are being finalized (see PIM for more details). Details of the roads to be funded are given in (Annex 4-2). INSTITUTIONAL STRENGTHENING AND CAPACITY Ghana Highway Authority 3.14 Legislative Changes: The proposed Amendment to the GHA Decree will, amongst other things, specify the composition and terms of reference of GHA's Board and include provisions to enable GHA to enter into contract with private sector entities to build, operate and maintain selected trunk roads under concession agreements. The new Board will consist of a Chairperson and ten members. Of the ten members, 4 will represent concerned ministries (as before), 4 will represent road users (Chamber of Commerce, road transport industry, farmers, and Association of Consultants), and 2 will be nominated by the Minister of MRH. The CEO will be appointed in consultation with the Board in conformity with the provisions of the 1992 Constitution. In the interim, Government has agreed to reinstate GHA's Board of Management in accordance with the original GHA Decree. 3.15 Technical Assistance: GHA has a Maintenance Management System (MMS), which requires updating and upgrading through the introduction of computerized systems. A Management Information System (MIS) has also been designed under TRP2. The credit will provide 36 person months (p/m) of technical assistance for GHA to implement the MIS, to update and upgrade the MMS, and train GHA staff in the application of both systems. Of the 36 p/m of technical assistance, 12 p/m will be sourced locally and 24 p/m will be international. The credit will also provide 18 p/m (12 p/m local; 6 p/m international) of technical assistance for the establishment of a Bridge Condition and Maintenance System, which will enable GHA to undertake systematic bridge condition assessments. Other technical assistance will include 165 p/m (all of which will be sourced locally) for four Accountants and an Internal Auditor in headquarters. In order to assist GHA conduct studies from time to time in the following area: the privatization of quarries, workshops and ferry operations; review of staffing needs after 1998; review of axle load regulations, assessment of training needs and facilities; and so on; the credit will provide funds (up to US$1.0 million) for approximately 54 p/m (12 p/m local; 42 p/m international) for consultancy studies and short-term technical assistance. 19 3.16 Design and Supervision: Engineering designs and preparation of bidding documents have already been completed for some 4,000km of trunk roads. These design works were funded under TRP-2 and a PPF advance. The credit will fund an estimated 320 p/m of local consultants for supervision of the ICB works. The supervision of all contracts under national competitive bidding will be carried out in-house by GHA and local consultants (approximately 200 p/rn). In addition, IDA will finance international and local consultant services (approximately 240 p/m international and 460 p/m local) for engineering design and feasibility studies for around 2,600km of trunk road works to be undertaken after 2000 in follow-up projects. 3.17 Logistical Support: GHA has four mobile maintenance units to undertake emergency works and a proportion of programmed maintenance on roads and bridges. The credit will fund the purchase of a limited amount of road maintenance equipment to replace old and deteriorated essential equipment and spare parts to refurbish some of the equipment. Vehicles and motorcycles will be purchased to enhance GHA's capacity to supervise contracts in the regions and to facilitate site visits from Accra. Other vehicles and equipment to be purchased under the project include materials testing equipment for the Central Laboratory; vehicles, communication equipment and accessories for the road safety patrol; and drafting and survey supplies for GHA's Design and Surveying Division (see Annex 3-4 for details). 3.18 Extension to Central Laboratory: Over the years, GHA has expanded its facilities at the Central Materials Laboratory to provide the equipment and technical know-how for quality control and adherence to technical specifications during road construction and maintenance operations. The building space is inadequate to house recently acquired equipment. The credit will therefore support construction of an annex to the existing building using available land within the existing compound. 3.19 Staff Housing Units: GHA needs to keep qualified and experienced staff in its 10 regional and 32 road district offices to ensure efficient performance, acceptable quality standards and cost effectiveness. The lack of adequate living conditions in the regions and districts has been a key constraint to attracting and keeping qualified and experienced staff in the field, particularly due to a wide disparity in remuneration between the public and private sectors. To provide an incentive GHA needs to resolve the problem of accommodation for its field staff. Under TRP-2 about 40 housing units were constructed and the program proved highly successful. The credit will provide funds for the construction of 25 additional units of 2-3 bedrooms for professional staff. Ministry of Roads and Highways 3.20 Technical Assistance: The credit will fund a Claims and Legal Specialist (up to 12 p/m of short term international services) as required for evaluating claims from contractors and settling disputes. The following support will be provided to AMISU: 620 p/m of local and up to 8 p/m of international short-term resource persons as required; logistical support; office supplies and equipment; and an operations budget to carry out its functions. AMISU will also be responsible for appointing consultants and local experts from time to time to enable it to conduct baseline and follow-up studies to assess and monitor the performance and 20 developmental impact of the program. Support will also be provided to a newly established Road Fund Secretariat (see para. 3.28) by meeting its operational costs including staff hired on a consultancy basis for the first two years. Other Road Fund management costs associated with the Board will be financed from the Road Fund. 3.21 Logistical Support: To facilitate the overall coordination and oversight functions of MIRH; enable it to organize and supervise local contractor training programs, and to enhance its policy formulation, donor coordination and progress monitoring functions, the project will provide funds for purchase of the necessary additional transport vehicles, office equipment, computers and photo copiers required to achieve this (see Annex 3-4 for details). 3.22 A summary of the technical assistance to GHA and NIRH (including financing arrangement) envisioned under the credit is given in Annex 3-5, while their objectives and draft terms of reference are detailed in the Project Implementation Manual (PIM). Training of GHA and MRH Staff 3.23 To build institutional capacity, the credit includes training of GHA staff at local institutes; through regional study tours; and at overseas or local seminars, conferences and short courses. A summary of the 1996-99 manpower training program for GHA and MRIH is given in Annex 3-6, while details are given in the PIM. GHA currently has no training facilities for road sector technicians or contractors. A needs and feasibility study would be undertaken to assess the options which include building a dedicated facility or developing capacity at existing training institutions. Financial provision has been made to carry out building works (see Annex 3-7 for details). Incremental Operating Costs 3.24 To help defray incremental operating costs and enable MRH and GHA supervise roadworks projects scattered all over the country, the credit will finance, on a declining basis (100 percent in the first two years and 70 percent thereafter) operating costs related to vehicle operation, office supplies, travel expenses, and so on, but excluding salaries of Government officials, to a maximum of US$1.1 million for GHA and US$0.9 million for MRH, the latter to include the costs associated with the Road Fund Secretariat referred to in para. 3.20. Support to the National Development Planning Commission (NDPC) 3.25 Under TRP-1, IDA provided support to NDPC with technical assistance from two development specialists who assisted the staff of NDPC in preparing the coordinated program of economic and social development policies, developing the National Development Policy Framework and initiating the training program for building capacity in the Districts for development planning. The credit will provide further support for technical assistance (infrastructure development specialists); field studies; research; operational workshops; staff development and training; and logistical support required in the process of implementing, monitoring, and evaluating the first five-year development plan (see Annex 3-8 for details). 21 Developing the Domestic Construction Industry 3.26 Domestic contractors and GHA's Maintenance Management Units (MMUs) need training in practical field operations in bituminous surface dressing and road pavement construction in order to enhance quality and improve road riding surfaces. This will be organized by the Training Division of GHA through periodic training of domestic contractors, MMUs and GHA staff in the field by specialists drawn from within the country and from abroad. The credit will also provide funding for training of local contractors in the areas of business management; finance and accounting; planning and programming of field operations; and practical operations in the field. Training will be based on the recommnendations of a domestic contractor assessment and development study completed under the NFRRMP. MRH will coordinate the overall effort in this area. Institutional Inputs from other Donors 3.27 The European Union will fund an internationally recruited Program Coordinator (36p/m) appointed by the Borrower to assist the Chief Director of MRH coordinate the HSIP and donor assistance. GHA will receive managerial assistance from OECF (72 p/m) and financial and budgeting assistance (24p/m) from GTZ. GTZ will also provide technical assistance to help implement maintenance in Brong Ahafo and Ashanti Regions. DFR already receive assistance with maintenance planning and budgeting from Danida and the Nordic Development Fund are supporting a Transport Planner (24p/m) in DUR. POLICY REFORM 3.28 Cost Recovery -Restructuring the Road Fund: Assistance would be provided to restructure the Road Fund so that it can operate according to sound accounting principles. The key elements in the restructuring plan (see Annex 3-9 for a more detailed description) are: (a) putting the administration and management of the Road Fund under the MRH Advisory Board on which road users are represented; (b) increasing revenues paid into the Road Fund through road user charges; (c) ensuring that the first charge on the Road Fund is for preservation of existing road assets (i.e., financing routine and periodic maintenance); and (d) managing the Road Fund in a pro-active manner using clear and consistent procedures for dividing funds between the various road agencies, disbursing funds, and auditing work financed from the Road Fund. The rules governing operation of the Road Fund have been incorporated in the draft Roads and Highways Act. The nine members of the MRH Advisory Board have already been appointed and Government have agreed that three additional road user representatives (giving six in all) shall be co-opted to deal with Road Fund issues. Formal inauguration of the MRH Advisory Board is a Condition of Credit Effectiveness. The MRH Advisory Board will be supported by a Secretariat comprising a Director and up to four accounting, planning and engineering staff to manage the day-to-day affairs of the Road Fund. 3.29 In order to fully recover the annual cost of optimum routine and periodic maintenance estimated at around US$132 million, the road fund component of the fuel levy (the road levy) on petrol and diesel would have to be increased from its current average level of US cents 1.6 22 to US cents 9.5 per liter. Government raised the levy in the 1996 budget from Cedis 18 to Cedis 60 (approximately US cents 4) per liter by allocating an increased proportion of the overall tax on fuel. This would provide close to 60 percent of the 1996 planned maintenance expenditure. They have also agreed to raise it incrementally in real terms by one US cent per year thereafter until it reaches US cents 9.5 per liter (see Table 3.2). However, as stated in para. 1.8, the rate at which user charges will be increased would be subject to what road users are willing and able to pay. The MRH Advisory Board will take account of road users views, when recommending increases after 1996 to the Ministry of Finance for incorporation into subsequent budgets. These recommendations would also be discussed and analyzed at the annual donors review conference (see para. 3.53). If the MRH Advisory Board performs as intended and effectively mobilizes road user support, it is envisaged that subsequent increases could be met by raising the price of fuel in real terms rather than by reallocating the existing fuel tax. Government agreed at negotiations that the proceeds of the Road Fund will be used exclusively to finance routine and periodic maintenance and administration of the Fund. Table 3.2: Required Increases to Fuel Levy (US$ million) Recommended Estimated Planned Mtce. Year Fuel Levy Consumption Revenue Expenditure Percent (US Cents/1) (billion liters) (US$ million) (US$ million) Recovery 1995 1.60 1/ 1.10 18 37 48 1996 4.00 1.14 46 78 58 1997 5.00 1.19 60 107 56 1998 6.00 1.24 74 120 62 1999 7.00 1.29 90 129 70 2000 8.00 1.33 106 127 84 2001 9.00 1.38 124 130 96 2002 9.50 1.43 136 134 101 1/ Average levy on petrol and diesel Private Sector Financing 3.30 Government recognizes that the shortage of public revenues limits it's ability to meet the road sector's investment requirements. In this regard, it intends to assess the feasibility of attracting private sector investment to build and/or operate selected roads under concession agreements. The MRH organized, with IDA assistance, an international conference in Accra in June 1995 to learn from the experience of others both in, and outside, Africa. To take matters further, provision has been made under the credit to fund a feasibility study for five road sections on which private sector participation may be viable. The proposed Roads and Highways Act will provide the enabling legislation to enter into concession or lease agreements. 23 Improving Road Safety 3.31 Under TRP-I and II, GHA improved its staff training in the areas of traffic engineering, accident hazard analysis and design of low cost remedial measures. It also improved some hazardous road sections. This credit will continue to support GHA's road safety work. It will concentrate on reducing accidents on hazardous road sections through minor realignment, provision of warning signs and appropriate road markings, and provision of speed breakers. The credit will also provide up to 12 person-months of local consulting services to enable GOG to implement recommendations from earlier road safety studies and improve coordination with the National Road Safety Committee and recommend how it might be made more effective. The review will also recommend whether the Committee needs a full-time secretariat and, if so, its source of financing. Environmental Sensitivity 3.32 Environmental units will be established within the Planning Division of GHA and in MIRH to supervise future preparation of environmental impact assessments, spearhead the development of training programs in environmental aspects of road projects in all agencies, assist in developing environmental regulations, and oversee ongoing monitoring and maintenance of construction activities. Capacity will be developed by providing 24 p/m input from an Environmental Specialist consultant over 4 years to train three staff members from GHA and one from MRH. The consultant will also oversee the environmental aspects of the contractors' work in conjunction with the general supervision consultants. The unit will have authority to halt work or impose financial penalties on contractors for non-compliance with environmental laws or contract documents. The operating cost of the unit (about US$0.4 million) will be met from project funds. Appointment of the Environmental Specialist consultant is a condition of Credit Effectiveness. Axle Load Control 3.33 To enforce the vehicle and axle load regulation and reduce the high incidence of vehicle overloading, the project will finance permanent weigh-bridge stations at five locations. It will also provide portable equipment for spot checking by using mobile axle load control units and include construction of buildings for the permanent weigh bridge stations and appropriate transport and communications equipment for the mobile axle load control units (Annex 3-4). MRH proposes to explore the feasibility of having the weigh-bridges operated under contract by a private company. E. PROGRAM COST AND FINANCING 3.34 The estimated cost of the program is US$1,480 million (see Annex 3-2 for details). Costs have been estimated at January 1995 prices and at an exchange rate of US$1.00 = 1,000 Ghanaian cedis and are based on recent contract costs. The funding allocations for different categories of work and provisions made to meet administration costs and accrued arrears together with the sources of financing are given in Table 3.3. Of the US$1,480 million 24 required, US$540 million has already been pledged by twelve donors (US$200 million comes from ongoing projects); a further US$200 million is projected to be secured from donors during the program period; US$376 million is expected from the restructured Road Fund; US$281 million from Government's development budget; and US$83 million from Government's recurrent budget. Table 3.3: Proposed Financing Plan for the 1996-2000 Road Sector Expenditure Program (US$ million in 1995 constant prices) ITEM TOTAL 1996 1997 1998 1999 2000 Growth of GDP (% p.a.) 5.5% 5.5% 5.7% 5.7% 5.90/ rojected GDP (1995 prices) 6,594 6,957 7,354 7,773 8,22 Total Development Budget 230 250 272 295 313 evelopment Budget as % of GDP 3.5% 3.6% 3.7% 3.8% 3.8% otal Road Expenditures: lanned Road Expenditure 1,406.5 279.1 310.1 308.9 252.9 255. Repayment of Arrears and Debt Service 75.0 40.0 17.0 8.0 5.0 5.0 TOTAL 1,481.5 319.1 327.1 316.9 257.9 260.4 oad Financing Plan: Financed byExternal Sources 741.0 144.0 182.0 172.0 123.0 120.0 Financed by GOG Development Budget 281.5 115.0 70.3 54.2 27.3 14. Financed by Road Users (Road Fund) 376.2 45.6 59.5 74.4 90.3 106.4 Financed from GOG Recurrent Budget 82.8 14.5 15.3 16.3 17.3 19. TOTAL 1,481.5 319.1 327.1 316.9 257.9 260.4 oad Financing Plan (percent of total) Financed by External Sources 45.1 55.6 54.3 47.7 46.1 Financed byGOGDevelopment Budget 36.0 21.5 17.1 10.6 5.6 Financed by Road Users (Road Fund) 14.3 18.2 23.5 35.0 40.9 Financed from GOG Recurrent Budget 4.5 4.7 5.1 6.7 7.4 TOTAL 100.0 100.0 100.0 100.0 100.0 Contribution from GOG Development Budget as percent of Total Development Budget 50.0 28.1 19.9 9.3 4.7 3.35 The donor-supported components are largely self-standing though, as stated previously, the overall success of the program will depend on a greater degree of mutual cooperation than has occurred in the past. 25 Table 3.4: Summary of Project Cost and Financing Plan (US$ million) Project Components Credit Ghana ITotal I(IDA) Govt GHA A. Civil Works 1. Rehab. & Periodic Maintenance 61.4 53.5 7.9 2. Improvement of Hazardous Road Sections 0.9 0.8 0.1 3. Rehab. & Reconstruction of Bridges 4.8 4.3 0.5 4. Building Works 6.0 5.4 0.6 Total Civil Works 73.1 64.0 9.1 B. Design and Supervision 1. Engineering Design and Feasibility Studies 3.6 3.6 0.0 2. Supervision 2.2 2.2 0.0 Total Design and Supervision 5.9 5.9 0.0 C. Eauipment, Spare parts. Vehicles & Materials 7.3 6.5 0.7 D. Institutional Support 1. Technical Assistance 2.7 2.7 0.0 2. GHA Staff Training 1.5 1.5 0.0 3. Local Transport Studies and Short-term TA 0.6 0.6 0.0 Total Institutional Support 4.8 4.8 0.0 |E. Incremental Operating Cost [ 1.1| 1.0] .i1 ITOTAL G H A COST 92.11 82.2] 10.0o M R H/NDPC F. Institutional Sutnort 1. Technical Assistance 3.3 3.3 0.0 2. Training (MRH) 0.7 0.7 0.0 3. Support to NDPC 1.8 1.8 0.0 Total Institutional Support 5.8 5.8 0.0 |G. Vehicles and Office Equipment (MRH) 1 2.01 1.81 0.3 H. Incremental Operating Cost 1 0.91 0.81 0.1 Total MRH/NDPC | 8.81 8.41 0.4 TOTAL BASE COST 100.9 90.6 10.3 TOTAL PHYSICAL CONTINGENCIES 4.5 4.0 0.5 TOTAL PRICE CONTINGENCIES 6.1 5.4 0.7 |TOTAL PROJECT COST | 111.5 100.0| 11.5 3.36 The program components to be funded by IDA's credit of US$100 million, which together with Government counterpart funds of US$11.5 million equivalent (10 percent matching funds plus taxes of US$1.5 million equivalent) are indicated in Table 3.4 above (see Annexes 3-10 and 3-11 for details). Government agreed at negotiations that the project 26 counterpart funds will be deposited in separate project accounts opened by GHA and MRH. Payment of initial deposits of US$250,000 equivalent and US$50,000 equivalent to GHA and MRH respectively is a Condition of Effectiveness. 3.37 Costs include physical contingencies tailored to each defined project component, averaging 5-10 percent of base cost. Price contingencies have been derived from the following assumed rates of price increase: foreign prices 2.9 percent in 1995, 3.0 percent in 1996, 2.6 percent in 1997, and 2.0 percent per annum between 1998 and 2000; local prices 18.8 percent in 1995, 11.3 percent in 1996, 6.1 percent in 1997, and 5.5 percent per annum between 1998 and 2000. Recent p/m rates in Ghana have been used for local and foreign consultant services. For equipment, costs were based on 1993 prices for actual equipment procured under TRP-2 and NFRRMFP. F. PROGRAM IMPLEMENTATION 3.38 MIRH would have overall responsibility for the program. No parallel project administration units would be created, though some strategic support would be provided within the existing institutional structure (see para. 3.20). MRH would specifically manage the sector policy reforms; coordinate the expenditure program and related donor assistance; arrange local contractor training programs; ensure the establishment and smooth functioning of the restructured Road Fund and its Board and organize and chair the annual donor review meetings. The technical assistance provided to NDPC would also be coordinated by MRH. The Accounting and Management Information System Unit (AMISU) would develop and implement accounting, monitoring and reporting procedures in MRH, GHA, DUR and DFR and manage donor specific information systems (para. 2.6). An internationally recruited Program Coordinator funded by the European Union would work directly under the Chief Director to ensure timely implementation of key project activities and coordination of the sector-wide expenditure program. Implementation responsibility for the civil works components would rest with GHA, DFR and DUR who will be supported by consultants to design and supervise the works. Components funded by the IDA credit would be implemented by MRH and GHA. 3.39 An Implementation Manual covering the IDA credit has been prepared by GOG with IDA's assistance.. This includes detailed schedules covering design, bidding, evaluation of bids, award and implementation of contracts for civil works and goods under ICB and NCB, and for technical assistance and studies, etc. The summarized implementation schedule included in Annex 3-12 provides the baseline against which implementation progress will be monitored. The program is expected to take about five years to implement and is scheduled for completion by December 2000. Confirmation of Government's agreement to adopt the implementation manual and the schedule incorporated therein is a Condition of Effectiveness. 27 G. STATUS OF PROGRAM PREPARATION 3.40 Plans for the road sector are prepared on a rolling basis and incorporate large contracts which are implemented over several years. Around US$360 million of the US$1,480 million program is already committed in terms of on-going contracts and engineering designs have been prepared for some 10,500km (46 percent of the total). With regard to the IDA credit, tender documents for the rehabilitation of 93km of trunk roads in Central and Eastern regions (ICB Lots No. I and 2) and for the periodic maintenance of 330km of paved roads in Eastern and Volta regions (ICB Lots No. 3,4 and 5), are nearing completion, and contractors have been invited to prequalify. Periodic maintenance contracts to be carried out under NCB will be implemented in three phases and road sections totaling some 772km have been selected. Designs are already available and GHA have prepared a detailed program for updating them where necessary and preparing contract packages. GHA intends to invite bids for road works after negotiations, so that contracts can be awarded as soon as the credit becomes effective. Draft bid documents for the vehicles and equipment to be procured under the project have also been reviewed by the Bank. Based on experience gained under TRP- 1 and TRP-2, contract completion periods for periodic maintenance would be around 15 - 24 months, while contracts for rehabilitation and reconstruction would be around 36 months. 3.41 On the institutional related components, a draft amendment of the GHA Decree has already been prepared and organization and management studies for all of the sector agencies have been carried out in the past two years. MRH in conjunction with the agencies is preparing a coordinated plan to implement the recommendations of these studies. A MIS has been developed for GHA and consultants have been engaged to start implementing it. The recommendations that will be implemented under the program for strengthening the domestic construction industry through training were made in a study carried out by international consultants in 1994. Regarding restructuring of the Road Fund, Government has agreed that the MRH Advisory Board will manage the Road Fund. This has been incorporated within the draft Roads and Highways Act. Studies on road user charges and axle load control were carried out in 1994 and the recommendations will be reviewed by the Board to determine possible additional means of raising revenues. H. PROCUREMENT 3.42 The three road agencies, under previous projects, have adopted NCB bidding documents acceptable to the Bank and other donors. During project implementation, efforts will be made to promote adoption of standard bidding documents for ICB. Procurement arrangements for the IDA funded components are given in Table 3.5. 28 Table 3.5: Summary of Proposed Procurement Arrangements (US$ million equivalent) Procurement Method Project Element ICB NCB OTHER Total L________ ________ ________ C ost I Civil Works< 1. 1 Roads and bridges 27.9 47.2 75.1 l (IDA) (25.0) (40.6) (65.6) 1.2 Building Works 4.7 2.3 7.0 (IDA) (4.2) (2.1) -- (6.3) 2 Equipment, Spare parts, Vehicles and Materials 1. I GHA 6.3 0.0 1.2 7.5 (IDA) (5.7) 0.0 (1.1) (6.8) 2.2 MRHI/NDPC 0.6 1.6 0.0 2.2 (IDA) (0.5) (1.4) 0.0 (1.9) 3 Consultancies 3.1 Design, Supervision and Studies 6.4 6.4 (IDA) (6.4) (6.4) 3.2 Technical Assistance (GHA) 3.5 3.5 (IDA) (3.5) (3.5) 3.3 Technical Assistance (M1IWNDPC) 4.6 4.6 (IDA) (4.6) (4.6) 4 Training 4.1 GHA 1.6 1.6 (IDA) (1.6) (1.6) 4.2 MRH/NDPC 1.4 1.4 (IDA) (1.4) (1.4) 5 Miscellaneous 5.1 Operating Cost (GHA) 1.2 1.2 (IDA) (1.1) (1.1) 5.2 Operating Cost (MRH) 1.0 1.0 (IDA) (0.9) (0.9) TOTAL 39.5 51.1 20.9 111.5 (Of which IDA) (35.4) (44.0 20.5) (100.0) 3.43 More than 90 percent of procurement of the IDA funded components will be managed by GHA. MRH will handle the balance on their own behalf and for the NDPC. Both GHA and MRH are familiar with Bank procurement procedures through their involvement in past and on-going projects. Goods and civil works financed by IDA will be procured using procedures outlined in "Guidelines for Procurement under IBRD Loans and IDA Credits, January 1995." During negotiations, Government agreed on: (a) the procurement arrangements; (b) Bank standard bidding documents being used for works and goods procured under ICB and for consultants services, (c) all procurement of goods through ICB 29 being exempt from pre-shipment inspection for price, though quality and quantity inspections may be carried out; and (d) standard procurement processing times for key activities. 3.44 Bank-financed civil works have already been divided into ICB and NCB packages taking into account geographic spread, lengths of the road sections and the objective of fostering growth in the domestic construction industry. The ICB works will be packaged into eight separate contracts consisting of rehabilitation of 93km in Central Region (2 lots); periodic maintenance of 330km in Eastern and Volta regions (3 lots); rehabilitation of four bridges (2 lots); and construction training facilities. 3.45 Contracts for civil works estimated to cost individually more than US$2.0 million, and for goods more than US$200,000, will be procured by ICB. Eligible domestic contractors' bids will be evaluated on a 71/2 percent margin of preference for ICB bids. Civil works estimated to cost less than US$2.0 million, and goods valued from US$50,000 to US$200,000 would be procured by NCB procedures which will include: local advertising; public opening, clearly stated evaluation criteria; award to be made to the lowest evaluated responsive bidder; and non-exclusion of foreign bidders if they wish to participate. The first NCB document will be subject to review by the Bank regardless of the estimated contract value, before it is released to the bidders. NCB contracts would consist of around 45 resurfacing, resealing, regravelling and other rehabilitation contracts of average value around US$1 million scattered all over the country. These works will be implemented over the whole project period in order to spread the workload and the financial burden on Government. There will be adequate competition as there are sufficient qualified local contractors and international contractors will be permitted to bid if they so wish. The aggregate value of NCB contracts for civil works will be about US$49.5 million of which IDA will finance up to US$42.7 million, and for goods, US$1.6 million, of which IDA will finance up to US$1.4 million. Goods valued at less than US$50,000 per contract will be procured by national shopping based on at least three quotations and will be limited to an aggregate maximum of US$0.6 million. Spare parts and accessories, which are of a proprietary nature may be purchased with prior approval of IDA up to an aggregate value of US$0.5 million, under directly negotiated contracts from original manufacturers/suppliers or their authorized agents. 3.46 Bank-financed civil works contracts above a threshold of US$1,000,000 will be subject to Bank's prior review. The review process will cover about 75 percent of the total civil works contracts by value. Goods contracts above US$100,000 will also be subject to prior review by the Bank covering 80 percent of total value of Bank financed goods. The prior review threshold for consultant services will be US$100,000 in the case of consulting firms and US$50,000 in the case of individual consultants. Selective post review of awarded contracts below the threshold levels will be carried out during supervision missions. 3.47 The following procurement information will be provided by GHA to the Bank in quarterly reports: (a) volumes of contracts awarded; (b) revised costs of contracts, if and when increases occur, giving reasons for the increases; (c) updates of the procurement processing schedule giving reasons for any delay in project implementation; and (d) compliance with aggregate limits on specified methods of procurement. 30 L. DISBURSEMENT 3.48 The credit is expected to be fully disbursed by December 31, 2000. It will be disbursed against the following categories as indicated in Table 3.6. Table 3.6: Allocation and Disbursement of IDA Credit (US$ million) Category Amount of % of Expenditure to be financed Credit from IDA (US$ million) 1. Civil Works (a) Roads and bridges 60.00 100% of foreign and 70% of local expenditure (b) Building works 5.40 100% of foreign and 90% of local expenditure 2. Equipment, Spare parts, Vehicles and Materials (a) For GHA 6.50 100% of foreign and 90% of local expenditure (b) For MRE/NDPC 1.70 100% of foreign and 90% of local expenditure 3. Consultant Services and Training (a) For GHA 10.70 100% (b) For MRIVNDPC 5.80 100% 4. Operating Costs 1/ (a) For GHA 1.00 100% until June 30, 1998 and 70% thereafter (b) For MRH 0.90 100% until June 30, 1998 and 70% thereafter 5. Refinancing of PPF 0.75 6. Unallocated (a) For GHA 7.15 (b) For MRH 0.40 TOTAL 100.00 1/ Recurrent costs related to supervision, vehicle operation, office supplies, and project related travel expenses, but excluding salaries of Government officials. 3.49 The estimated disbursement schedule (Annex 3-13) is based on the detailed project implementation plan (Annex 3-12). It reflects the advance actions taken to expedite contracting of works in anticipation of the IDA credit, and the improvements in institutional arrangements that are already in place or expected soon, which would allow more efficient implementation. 3.50 To facilitate project implementation and reduce the volume of withdrawal applications, Special Accounts will be opened in US dollars for MRH and GHA at a commercial bank on terms and conditions acceptable to IDA. The authorized allocations amount to US$250,000 (Mff1 and US$1,000,000 (GHA) and cover about four months of eligible expenditures payable directly from the Special Accounts. Upon effectiveness, an amount of US$125,000 (MH and US$500,000 (GHA), representing 50 percent of the authorized allocations, will be deposited in the special accounts. The remaining balances will be made available as needed. The special accounts would be used for all payments below US$50,000 (MH) and 31 US$100,000 (GHA). Replenishments would be submitted monthly. All replenishment requests would be fully documented except for: (a) contracts of less than US$300,000 for civil works and less than US$100,000 for goods and services (consulting firms); (b) contracts of less than US$50,000 for individual consultants; and (c) operating costs which would be claimed on the basis of Statements of Expenditure (SOEs). All supporting documentation for SOEs will be retained by MRH and GHA for review by periodic Bank supervision missions and external auditors. J. ACCOUNTING AND AUDITING 3.51 MRH have begun to improve financial control in the sector (paras. 1.12 and 1.13) through the establishment of the Accounting and Management Information System Unit (AMISU) in 1995 (para. 2.6). AMISU's role has currently been limited to the financial management of donor funded projects but this will be expanded to cover all road contracts. An in-depth analysis of all on-going contracts was commenced by the Ministry in December 1995 to identify future monthly commitments and this analysis will provide the basis for monthly monitoring of actual expenditures against future budgetary allocations. 3.52 The appointment of a qualified accountant to the Road Fund secretariat will enhance the accounting procedures of the Road Fund. Monthly accounts showing receipts and disbursements to and from the fund will be presented to the MRH Advisory Board. The secretariat will also carry out spot checks to verify that the maintenance works paid from the Road Fund have been carried out in accordance with the contracts. Government agreed at negotiations that an accounting consultant would be commissioned by June 30, 1996 to review the accounting systems of GHA and MRH and to establish procedures and practices for the Road Fund related accounts. 3.53 For the IDA credit, GHA and MRH will establish separate accounts, in accordance with acceptable accounting principles, to record all credit expenditures and to maintain records on commitments, reimbursements and the status of credit funds. Both organizations have already established appropriate accounting systems and auditing arrangements under previous IDA projects and these are considered satisfactory. With respect to the amounts withdrawn on the basis of SOEs, GHA and MRH will maintain records on contracts, invoices, and evidence of payments readily available for review. At negotiations, Government agreed to retain external auditors acceptable to the Association to carry out annual audits of the Special Accounts, project accounts, including SOEs, and GHA and MRH accounting records, and provide long form audit reports to IDA, including management letters within six months of the end of each fiscal year. GHA and MRH will maintain accounting, costing and procurement records and progress reports for their respective project components. Local banks are adequately audited by extemal auditors. K. REPORTING AND MONITORING 3.54 Government agreed at negotiations to a prograrn launch workshop, annual implementation reviews and a mid-term review. The launch workshop will be held in Accra 32 soon after the IDA credit becomes effective. All implementing and financing agencies will be involved and representatives of beneficiaries, including NGOs, will be invited to attend. The Bank will be represented by engineering, economic, social science, financial and procurement personnel. During the course of implementation, the project will be supervised by Bank staff from headquarters and the resident mission in accordance with the supervision plan given in Annex 3-14. Annual implementation reviews with MRH, the three road agencies, other donors active in the sector and representatives of road users will be carried out by November 30 each year to evaluate progress with the program and to reach agreement on the expenditure program for the following year. The timing of these reviews is such that it will be possible to incorporate any necessary financial adjustments into GHA's annual budget submission. A mid-term review of the IDA credit will be carried out not later than November 30, 1998. An assessment will be made as to whether any redesign and restructuring of credit components with implementation difficulties is required and agreement will be reached on a related action plan as necessary. A completion report will be prepared in accordance with Bank guidelines by MLRH and GHA within six months of the final disbursement. 3.55 It was agreed at negotiations that GHA and MRH will prepare and furnish to the Association quarterly reports, to be consolidated by MRH, on the status of. procurement and disbursements; commitments made under the project; progress on civil works, supply of goods, technical studies, and institutional accomplishments; trunk road sector related issues; progress achieved against development and implementation monitoring indicators (see Annex 3-1 5); and contributions made through the Road Fund and from the Government budget to program funding. Actual progress will be recorded against that planned on the baseline implementation schedule (see Annex 3-12) and reasons given for any shortfalls together with any necessary rectification measures. Government agreed at negotiations to the monitoring indicators. Where needed, baseline surveys and follow-up studies will be conducted by GHA and MRH (through AMISU). 33 4. BENEFITS, IMPACTS AND RISKS A. GENERAL 4.1 This chapter describes the economic and social benefits, poverty and environmental impacts, and the risks associated with the 1996-2000 Highway Sector Investment Program and the US$100 million IDA credit supporting the program. The basis of the benefits and impacts is essentially the same for both, though the range is wider in the program, reflecting the greater diversity of the network. Risks associated with the program are also higher because of the greater level of uncertainty of securing funding on the scale necessary. B. ECONOMIC BENEFITS 4.2 Introduction. The main economic benefits of the investments will be derived from savings in vehicle operating costs through the reconstruction, rehabilitation and maintenance of roads and bridges. This will promote increased agricultural production, stimulate exports and increase the mobility of people, particularly in rural areas. The program will also improve transport sector management, through increased reliance on market orientation, and help develop a more responsive institutional structure. The tangible benefits from road investments have been quantified using cost benefit analysis. The benefits arising from institutional strengthening and policy reform related components cannot be measured in monetary terms, but they are nevertheless critical to the long term sustainability of the physical investments. Social benefits are discussed in paras 4.8 and 4.9. 4.3 Economic Costs and Benefits. The economic costs of the road and bridge components comprise the investment costs of design, construction, supervision and physical contingencies (less price escalation, taxes and duties) plus the cost of routine maintenance. The investments will result in smoother and more regular road surfaces, which will produce reductions in the consumption of fuel, spare parts usage and other vehicle running costs. Operating speeds and vehicle reliability will increase and this will reduce travel delays and associated transport costs. The program will help the whole spectrum of society: low-income farmers will gain from improved access to markets and social services; the urban poor will secure better access to places of employment and other destinations; and the business community will enjoy lower transport overheads. Investments in urban roads will reduce traffic congestion and delay in major cities by better organizing and controlling the flow of buses, other motor vehicles and non-motorized transport, thereby reducing passenger and freight transport costs and enhancing the economic performance of Ghana's cities. 4.4 Analysis of Periodic Maintenance, Rehabilitation, and Reconstruction. Cost benefit analyses were carried out by consultants between 1990 and 1995 using the World Bank developed Highway Design and Maintenance Model (HDM). During appraisal, the results were verified independently by Bank staff using the latest version of the model HDM III on a representative sample of six different road sections totaling 386km with an estimated 34 cost of US$24 million. Calculations were based on vehicle cost coefficients derived in a 1992 study and assumed a traffic growth rate of 5.5 percent, which is considered conservative in the context of projected GDP growth of 5 percent. Improved roads normally generate additional traffic well beyond that which would be expected solely from increased economic activity. Benefits were derived on a "with and without" investment basis and ERRs and net present values (NPVs) at a discount rate of 15 percent derived for individual sections of road. Investments in bridge rehabilitation were found to give very high rates of return, often in excess of 100 percent. This is because once a bridge is closed, the added vehicle operating costs related to making use of the next best alternative route can be significant since the additional distance involved can be great. Highway Sector Investment Program 4.5 The overall ERR for the program is 35 percent. This was derived by cost weighting the average ERRs for each type of work (periodic maintenance, rehabilitation and reconstruction) on each type of road (trunk, feeder and urban). These are presented in Table 4.1. For trunk road periodic maintenance and rehabilitation, typical sections from each of the ten regions, totaling 3,500km with a combined value of US$179 million (47 percent of this component), were analyzed giving a cost weighted ERR of 30 percent. The ERR of 51 percent for the periodic maintenance and rehabilitation of urban roads was based on detailed analyses of typical road sections in Accra, Sekondi/Takoradi and Tamale. For feeder roads, the analysis carried out during appraisal of the on-going National Feeder Roads Rehabilitation and Maintenance Project (Report No. 9823-GH), which gave a composite ERR of 58 percent, was utilized. The cost weighted ERR of 30 percent for reconstruction of trunk roads is based on analysis of the 116km Accra-Yamoransa Road and the 25km Anwiankwanta-Kumasi Road costing an estimated US$120 million (25 percent of this component). Both are critical linkages in the trunk road system: the Accra-Yamoransa section being part of the main east/west coast route connecting Togo and Cote D'Ivoire and linking the harbors of Takoradi and Tema; and the Anwiankwanta-Kumasi section is on the route linking Kumasi with Takoradi, an important route for export from the Regions of Brong Ahafo and Ashanti. For urban road reconstruction, analyses prepared during appraisal of the Urban Transport Project for investments in Accra and Sekondi/Takoradi costing US$49 million (26 percent of this component), yielded a composite ERR of 39 percent. The validity of these calculations was verified by analysis carried out during appraisal of the 386km representative sample of roads referred to in para. 4.4. This produced ERRs ranging from 23 to 71 percent (cost weighted average 40 percent) and a net present value at 15 percent discount rate of US$70 million. The economic analyses are presented in more detail in Annex 4-1 and in the Project File. 35 Table 4.1. Economic Evaluation of the 1996-2000 Highway Sector Investment Program (US$1,481 million) Length Cost ERR Sub-Programs (km) (US$m) % Routine Maintenance I / 31,230 113 Rehabilitation & Periodic Maintenance Trunk Roads 7,960 378 30 Urban Roads 400 74 51 Feeder Roads 13,470 173 58 Sub-total 21,830 625 Reconstruction Trunk Roads 920 427 26 Urban Roads 134 148 39 Feeder Roads 89 12 na Sub-total 1,143 586 Administrative Costs (IncludingMRH) 83 Arrears 75 [Total Highway Sector Investment Program 1,482 351 1/ Lengths for routine maintenance are per annum For source, refer to Project Files (Annex 5-1) 4.6 Sensitivity analysis. The sensitivity of all investments was tested against higher construction costs and lower project benefits. Projected traffic volumes were tested in situations where these were thought to be significant and the effect of different maintenance regimes was also evaluated. Table 4.2 presents the resuits of increasing costs by 15 percent, decreasing benefits by 15 percent and for the increase and decrease happening concurrently, for various routes. On the sample 386km evaluated during appraisal the effect was to reduce the base case NPV of US$70 million to US$66 million and US$55 million respectively and the average base case ERR of 40 percent to 36 percent and 35 percent respectively. A combined increase of 15 percent and decrease in benefits of 15 percent reduced the NPV to US$52 million and reduced the cost weighted ERR from 40 percent to 32 percent. Individual investments remain above the threshold ERR of 15 percent (see Annex 4-1 for details). The ERRs of three other typical road sections for which periodic maintenance will be funded under the IDA credit are also presented in Table 4.2. Investments are more sensitive to a combination of reduced traffic volume and increased cost as indicated by analysis of the Elubo-Assemkrom road in Westem Region. This revealed that a reduction in traffic of 10 percent combined with an increase in cost of 20 percent would reduce the base ERR from 22.2 percent to 17.9 percent, close to the qualifying ERR of 15 percent. However, the average traffic growth assumption of 5 percent used in preparing the economic analyses is considered conservative when viewed in the light of projected GDP growth of 5 percent. Improved roads normally generate additional traffic beyond that directly associated from 36 increased economic prosperity. Evaluations carried out to test the effects of different road maintenance regimes confirmed that deferring maintenance would cause ERRs to drop below the 15 percent threshold, emphasizing the importance of effective routine and periodic maintenance. Table 4.2. Sensitivity Analysis of Selected Sections Proposed for Rehabilitation & Periodic Maintenance Routes [ Base case T +15 % -15 % +15% costs & ERR % costs benefits -15% benefits 386km of six road sections 40 36 35 32 Ho-Denu 32 30 29 27 Tamale-Karage 25 na na 18 Fian-Wahabu 67 na na 48 The IDA Credit 4.7 The IDA credit focuses on rehabilitation and periodic maintenance as a means of sustaining Ghana's long term investment in highway infrastructure. This reflects Government policy of giving highest priority to rehabilitation and maintenance. The results of analyses carried out on all sections of road to be funded under the credit are summarized in Table 4.3 (see Annex 4-2 for more detail). Bridge rehabilitation gives the highest rate of return (for conservatism 100 percent was adopted, though actual calculations yield rates in excess of this) followed closely by periodic maintenance, which yields a cost weighted return of 92 percent and a NPV at 15 percent discount rate of US$63.7 million for the resealing of 330km of paved roads. The cost weighted ERR of the road and bridge components is 58 percent. The NPV for the road components is US$218 million. The NPV for the bridge components is not available, however on the basis of the high rate of return, the NPV is expected to be high. Table 4.3. Economic Evaluation of the IDA Credit (US$ million) Length Cost | NPV I ERR Description I (km) |(USSm| 15% % A. Civil Works Rehabilitation Rehabilitation Central/Eastern Region ICB Lots I& 2 93 10.4 40.8 49 Rehabilitation & Reconstruction of Bridges ICB Lots 6 & 7 5.2 na 100 Periodic Maintenance Resealing of Paved Roads Eastern/Volta Region ICB Lots 3,4,5 330 12.3 63.7 92 Periodic Maintenance NCB Lots 772 46.2 113.7 47 I l___ 1,1951 74.11 218.21 58 For source, refer to Project Files (Annex 5-1) 37 C. SOCIAL BENEFITS AND POVERTY IMPACT 4.8 The 1996-2000 Highway Sector Investment Program and the IDA credit will deliver direct and indirect benefits to the poor. Direct benefits on poverty levels will arise from: (a) improved access of remote rural areas to social services such as health and education; (b) increased agricultural production through easier access to inputs such as fertilizers, pesticides, extension services and even credit; (c) a reduction in the need for head-loading, which will particularly benefit women; (d) employment opportunities in rural areas through the promotion of labor-based construction and maintenance; (e) provision of paved access roads to low income areas in the main cities to improve mobility thereby increasing employment and business opportunities; (f) NMV and pedestrian facilities in urban areas - the former will provide a lower cost alternative to public transport for goods as well as individuals and the latter will improve safety. 4.9 Indirect benefits on poverty levels will arise from the reduced cost of transporting goods and personnel on improved roads. In some cases the possibility of marketing a production surplus will become feasible for the first time, while in others, improved roads will result in lower transport cost through increased competition and/or better prices through access to more lucrative markets. The program will assist in creating employment both directly in road works, and indirectly through expansion of farming and other economic activities. Road safety improvements under the program will help reduce the high rate of road accidents and fatalities, which affect the poor disproportionately. 4.10 While the program does not include specific targeted interventions to reduce poverty, the 1995 Ghana Extended Poverty Study covering the period 1988 to 1992 revealed that improvements in transport infrastructure were a principal factor contributing to the reduction in rural poverty from 42 percent to 34 percent. Rural poverty accounts for 75 percent of all poverty in Ghana. The study concluded that the reduction was primarily due to growth in non- farm self-employment, mainly service-based wholesale and retail trading activity. This arose from the surge in imports and exports stimulated by the ERP and improved transport infrastructure, which enabled the benefits to reach rural areas. The continued focus on feeder and trunk roads in the Program is expected to alleviate poverty further. The results of on- going socio-economic studies on the impact of feeder road improvements will be utilized to reassess the criteria for prioritizing the selection of roads for rehabilitation and periodic maintenance and additional studies will be funded under the credit. 38 D. ENVIRONMENTAL IMPACT 4.11 The project has been rated category "A" and a full-scale Environmental Impact Assessment has been carried out by international consultants in association with local experts. A copy of the EIA report and mitigation plan is available to the public in the Bank's Public Information Centers in Washington and Accra and with MRH, GHA and GEPA. A copy of the executive summary of the report was submitted to the Bank's Executive Directors in March 1995. An acceptable mitigation plan was discussed and agreed during appraisal and the required additional costs have been reflected in the project. The EIA concluded that the project is unlikely to have any significant adverse effects on the environment as it mainly involves rehabilitation and periodic maintenance operations on existing trunk roads and no new construction is intended. Negative environmental impacts such as dust, noise, detours, traffic delays, spoil materials, fumes, etc. will relate to construction activities and will be of short term duration with adequate measures specified in the contracts to mitigate their adverse effects. Positive environmental impacts of a long term nature will be achieved by: improving safety through better maintenance and the elimination of hazardous road sections; paving (or tarring) gravel road sections through high density settlements to reduce dust pollution; and improving drainage which will reduce the exposure of nearby residents to water-borne diseases associated with standing water. Annex 4-3 gives a summary of the EIA and mitigation plan. At negotiations, Government agreed to adopt the mitigation plan and that GHA will appoint, or assign, to its planning division, three engineers, or technicians, to assist with environmental assessment and monitoring. E. RISKS 4.12 The main risks and the measures to be taken under the program to mitigate them are: (a) benefits arising from road improvements not sustained because of inadequate funding of maintenance - Government raised the levy on vehicle fuel from an average of US cents 1.5 to 4 per liter in 1996 and plan further incremental increases in subsequent years to meet the full cost of maintenance (estimated at US$132 million in 1995 prices) by 2002; (b) securing the necessary contributions from the national budget - Government's contribution to the Road Sector Investment Program as a percentage of the capital budget is projected to decline from 44 percent in 1996 to 8 percent in 2000 with the enhanced Road Fund providing the difference. Total annual expenditure on roads will however be above the 1995 level and this increase will have to be met from the public pocket. Shortfalls in funding would mean the impact of infrastructure constraints on economic growth would persist longer; (c) sub-optimal selection of roads for improvement - Government agreed at negotiations to a minimum qualifying ERR of 15 percent for roads to be included in the program and reinstatement of GHA's Board with representation 39 from private sector road users and local government. Economic analyses of almost 50 percent of the roads already selected for inclusion in the progran (almost 50 percent by value) reveal returns significantly higher than this; (d) delays in implementation - designs have already been prepared for 46 percent of the works (100 percent for the IDA funded roads), tender documents are available and prequalification proposals have been invited for the ICB works to be funded by IDA. The procurement process has been a major source of delays in past projects, but procedures have been streamlined over the past 18 months. Government has agreed to the appointment of an intemationally recruited Program Coordinator to assist manage the program; (e) increase in cost and/or decrease in benefits arising through higher than anticipated inflation and/or other unforeseen factors - sensitivity analyses verify the robustness of the investments. 40 5. AGREEMENTS AND RECOMMENDATIONS 5.1 In addition to standard covenants, Government agreed to the following at negotiations: (a) No project to be undertaken without detailed engineering studies, including the preparation of technical specifications, accurate bills of quantities and realistic cost estimates. The cost of any changes in the designs, specification and scope of works after contract award to be kept within 25 percent of the original contract value (para. 1.14); (b) Budgeting and accounting systems for monitoring contracts, acceptable to the Ministry of Finance and IDA to be implemented by MRH and the three road agencies by December 31, 1996 (para 1.14); (c) GHA to reduce the semi-skilled and unskilled labor force in the 1996-98 period to bring total personnel to about 3,100 by December 31, 1998. Furthermore,thereafter, the staffing situation will be jointly reviewed and an action plan agreed to reduce personnel further (para. 2.9); (d) The Road Sector Expenditure Program to be reviewed annually by November 30, by GOG jointly with IDA, other donor agencies and representatives of road users, to monitor progress and agree on the following year's expenditure (para. 3.6); (e) The minimum qualifyring ERR for investment in any road section to be included in the Road Sector Expenditure Program to be 15 percent (para. 3.6); (f) The proceeds of the Road Fund to be used exclusively to finance routine and periodic maintenance costs and the Road Fund management costs (para. 3.29); (g) Initial deposits of US$250,000 equivalent and US$50,000 equivalent to the project accounts of GHA and MRH respectively (para. 3.35); (h) Procurement arrangements: Bank standard bidding documents being used for works and goods procured under ICB and for consultants services; and all procurement of goods through ICB being exempt from pre-shipment inspection for price and standard procurement processing times for key activities. (para. 3.42); 41 (i) An accounting consultant to be commissioned to review the accounting systems of GHA and MRH and set up internal procedures and practices for Road Fund related accounts, (j) External auditors to be retained to: prepare annual long form audit reports of the special and project accounts which would include a management letter revealing any shortcomings (para. 3.52); (k) A program launch workshop, annual implementation reviews and a mid- term review to be attended by all donors active in the highway sector. Annual reviews to be held by November 30 each year and the mid-term review to be held by November 30, 1998 (para. 3.53); (1) MRH to present consolidated quarterly reports on the status of implementation of Bank funded components (para. 3.54); (m) Monitoring indicators for development objectives and implementation schedules (para. 3.54); (n) GHA to appoint (or assign) to its planning division, three engineers, or technicians, to assist with environmental impact assessments and monitoring within 4 months of credit effectiveness (para. 4.11); 5.2 Government has agreed to the following Conditions for Credit Effectiveness: (a) Inauguration of the MRH Advisory Board (para. 3.28); (b) Adoption of an environmental mitigation plan satisfactory to IDA and appointment of an environmental specialist to GHA (paras. 3.32 and 4.11); (c) Payment of initial deposits of US$250,000 equivalent and US$50,000 equivalent to the GHA and MRH project accounts respectively; and (d) Adoption of the implementation manual and the implementation schedule incorporated therein (para. 3.38). 42 Annex. 1-1 Page 1 of I REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM DONOR COMMITMENTS IN THE ROADS SECTOR (1988-94) Donor Commitments in The Roads Sector (1988-94) (USS million) D Donor I Agency Country GHA DFR DUR TOTAL IDA Multi 143.3 91.6 104.0 338.9 KfW Germany 53.2 - 5.3 58.5 OPEC Multi JICA Japan 18.6 2.0 0.7 21.3 ODA Britain 6.0 - - 6.0 USAID USA - 35.5 - 35.5 CIDA Canada 5.0 - - 5.0 DANIDA Denmark - 21.0 - 21.0 ADF/ADB Multi 16.8 4.3 - 21.1 NORAD Norway - - 2.0 2.0 IFAD Multi - 4.2 - 4.2 OECF Japan 130.0 7.0 - 137.9 BADEA Arab Countries 7.0 - - 7.0 EDF EU 88.6 - 88.6 Dutch Aid Holland 42.2 - - 42.2 Total Commitment 511.6 170.6 119.7 801.9 Total Disbursement _ 564.0 43 Annex 2-1 Page 1 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM ACCOUNTING AND MANAGEMENT INFORMATION SYSTEM UNIT (AMISU) I . The Ministry of Roads and Highways had in place a Project Management Unit (PMU) established in 1985 under the Road Rehabilitation and Maintenance Project (RRMP) also known as Highway IV to provide co-ordination between and assistance to the Road Agencies in the supervision of the various project elements as well as administer the procurement. In addition PMU supervised the operation of the revolving funds (Special Accounts) set up under the project and related disbursement requests from the agencies. 2. The PMU set up was continued under TRP- I and for part of TRP-2 and due to increased requirement for assistance in procurement, disbursements and progress reporting, the PMU could not provide enough support in the area of management information. 3. Accordingly, the PMU's scope of services was expanded during the later stage of TRP-2 and renamed as Accounting and Management Information Systems Unit (AMISU) and was structured to focus on financial information systems compatible with the overall MIS of MRH and its agencies. The procurement functions handled by PMU under RRMP, TRP-I and TRP-2 would henceforth be handled by the agencies' procurement staff who underwent training at PMU in the procedures set up by the PMU. 4. The objective under HSIP Project is to staff AMISU with local experts and to train MRH personnel in order to prepare and facilitate integration of AMISU functions with the MRH organization. For the expanded scope of work of AMISU, the project provides 628m/ms consisting of one accounting and management information systems specialist (51mnims); one financial and accounting specialist (51m/ms); disbursement/accountant specialists (l 02m/ms); short-term resource persons (I 6mI/ms); other staff (408 m/ms). The Unit will be provided with logistical support, office supplies and equipment and operations budget to carry out its functions. 44 Annex 2-1 Page 2 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM ACCOUNTING AND MANAGEMENT INFORMATION SYSTEM UNIT (AMISU) MRH/AMISU Technical Assistance Table 1. AMISU Technical Assistance October 1, 1996 to December 31, 2000 Personnel Description No. Source Person- Rate Total Month US$ US$ AMISU Specialist 1 Local 51 7,600 387,600 Financial Accountant I Local 51 3,700 188,700 Sector Accountants 3 Local 153 3,200 489,600 Planning Specialist 1 Local 51 3,200 163,200 Planning Analyst 1 Local 51 1,800 91,800 Disbursement Accountants 2 Local 102 2,200 224,400 Procurement/Operating I Local 51 2,200 112,200 Computer Specialist 1 Local 51 2,200 112,200 AMISU Accountant I Local 51 2,100 107,100 1,876,800 Short-term Consultants Various International 8 | 17,800 142,400 Short-term Consultants | Various Local 8 | 10,900 87,200 _2,106,400 Provision for possible 6 247,812 extension of AMISU services | [ l_ l Sub-Total 2,354,212 Contingency 145,788 Total 2,500,000 Of which IDA 2,500,000 Table 2. AMISU Operating Cost October 1, 1996 to June 30, 1999 Item Months Rate Amount l___________ US$ US$ Utilities 33 1,200 39,600 Communications 33 1,500 49,500 Office Support & Supplies 33 1,680 55,440 AMiISU vehicle fleet operating costs 33 1,680 55,400 Total 199,980 SAY 200,000 Of which IDA 100,000 45 Annex 3-1 Page 1 of I REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT CREDIT THE 1995-2000 DESIRABLE ROAD SECTOR EXPENDITURE PROGRAM (HIGH CASE) 1. MRH has formulated it's 1995-2000 desirable road sector expenditure program amnounting to US$2.32 billion on the basis of a program to stabilize the condition mix of the road network to 70 percent in good condition and 20 percent in fair condition by 2005. The program calls for an expenditure of US$1.03 billion in maintenance (routine and periodic) and rehabilitation works including bridges and culverts (45 percent), US$1.19 billion in reconstruction (51 percent) and US$0. 10 billion in administration expenditure (4 percent) (see table below). 1995-2000 Desirable Road Sector Expenditure Program (US$ million) Trunk Roads Feeder Roads Urban Roads TOTAL Sub-program MRH (GHA) (DFR) (DUR) %age Km USS m Km US$ m Km USS Km US$T m Routine Maint'ce 12,800 80 18,800 34 16 130 p.a. p.a. Periodic Maint'ce 8,940 360 9,300 92 530 77 452 19 Rehabilitation 600 81 9,300 157 315 14 Reconstruction 1,842 868 325 20 272 300 1,188 51 Bridges + Culverts 91 42 133 6 Administration 1 74 10 6 6 102 4 Total 12 1,554 355 399 2,320 101 Percentage 67 15 1 7 100 Financing plan: Extemal (secured 404 117 145 666 and in pipeline) Road Fund 274 95 86 455 Consol. Budget 12 332 43 46 433 Financing Gap 544 100 122 766 Total 12 1,554 355 39 2,32 2. The details of donor and GOG financed reconstruction projects included under this program are given in MRH's report on the 1995-2000 road sector program and strategy. When taking into account the external financing likely to be available and the constraint on local budgetary resources, the program faces a financing shortfall of about US$ 766 million. As a result of this financing gap, MRH has agreed to adopt a reduced fall back program of US$1.55 billion which would also be adopted in the medium term under the HSIP. 46 Annex 3-2 Page I of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) 1. Table 1 below gives a summary of the reduced expenditure program (US$ 1.48 billion) adopted by MRH under HSIP as a fall back to the desirable expenditure program due to resource constraints. The reduced program is obtained by basically maintaining the outlay for maintenance expenditure and cutting back on the reconstruction and rehabilitation sub- programs. It calls for an expenditure of US$738 million in maintenance and rehabilitation works including bridges and culverts (50 percent), US$586 million in reconstruction (40 percent), US$83 million in administration expenditure (6 percent) and US$75 million in the payment of arrears (5 percent) due to contractors. Table 1: 1996-2000 Reduced Road Sector Expenditure Program (US$ million) I! | Trunk Roads Feeder Roads Urban Roads Sub-program MRH (GHA) (DFR) (DUR) TOTAL %age Km USS m Km USSm Km USS m Km US$n Routine Maintenance (pa) 11,600 69 18,800 31 830 13 31,230 113 8 Periodic Maintenance 7,600 330 8,490 89 400 74 16,490 493 33 Rehabilitation 360 48 4,980 84 0 5,340 132 9 Reconstruction 920 427 89 12 134 148 1,143 586 40 Administration 1 5 9 5 83 6 Arrears 53 4 18 1 75 5 Total 10 20,480 986 32,359 228 1,364 258 54,203 1,482 100 Percentage 0 67 15 17 100 Flnancing Plan: nor Secured 388 63 90 541 Donor Projected 150 45 5 200 Road Fund 263 71 41 376 &OG Capital Budget 125 40 117 282 OG Recurrent Budget 10 59 1 9 5 83 Total 10 986 | 228 = 258 1,482 The following tables give details of the annual budget estimates, financing plan and list of donor and GOG financed reconstruction projects to be included under this program. 47 Annex 3-2 Page 2 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 2: 1996-2000 Reduced Road Sector Expenditure Program (USS million) A. TRUNK ROADS (GHA) Sub-Program Total 1996 1997 1998 1999 | 2000 1996-20001 Routine Maintenance (GOG) 68.6 12.4 13.3 14.0 14.4 14.5 Periodic Maintenance 330.2 50.2 64.6 72.1 72.5 70.8 Secured External Donor Financing 129.0 19.5 28.5 26.0 30.0 25.0 Projected External Donor Financing 45.0 0.0 7.5 12.3 12.6 12.6 GOG Counterpart funds (1) 17.4 2.0 3.6 3.8 4.3 3.8 Fully GOG Funded Projects 138.8 28.8 25.0 30.0 25.6 29.4 Rehabilitation 48.0 13.6 12.7 6.8 7.5 7.4 Secured External Donor Financing 25.0 10.5 7.5 2.0 2.5 2.5 Projected External Donor Financing 15.0 0.0 2.5 4.1 4.2 4.2 GOG Counterpart funds (1) 4.0 1.1 1.0 0.6 0.7 0.7 Fully GOG Funded Projects 4.0 2.1 1.7 0.1 0.1 0.0 Reconstruction 426.5 74.5 89.9 110.3 75.0 76.8 Secured External Donor Financing 234.0 53.0 55.0 63.0 30.5 32.5 Projected External Donor Financing 90.0 0.0 15.0 24.6 25.2 25.2 GOG Counterpart funds (1) 32.4 5.3 7.0 8.8 5.6 5.8 Fully GOG Funded Projects 70.1 16.2 12.9 13.9 13.7 13.3 Development Budget 873.3 150.7 180.5 203.2 169.4 169.5 Secured External Donor Financing 388.0 83.0 91.0 91.0 63.0 60.0 Projected External Donor Financing 150.0 0.0 25.0 41.0 42.0 42.0 GOG Counterpart funds (1) 53.8 8.3 11.6 13.2 10.5 10.2 Fully GOG Funded Projects 281.5 59.4 52.9 58.0 53.9 57.3 Recurrent Budget 59.2 10.1 10.8 11.6 12.3 14.4 (Administration) Arrears 53.0 28.0 10.0 5.0 5.0 5.0 TOTAL BUDGET 985.5 188.8 201.3 219.8 186.7 188.9 Financing: Extenal Sources 538.0 83.0 116.0 132.0 105.0 102.0 Road Fund 263.3 31.9 41.7 52.1 63.2 74.5 Government Budget 184.2 73.9 43.7 35.8 18.5 12.4 - Capital 125.0 63.8 32.9 24.2 6.2 -2.0 - Recurrent 59.2 10.1 10.8 11.6 12.3 14.4 Note 1: Government's share of donor financed projects (typically 10%) 48 Annex 3-2 Page 3 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 3: 1996-2000 Reduced Road Sector Expenditure Program (US$ million) B. FEEDER ROADS (DFR) Sub-Program Total 11996 11997 1998 1999 2000 11996-2000 l = j Routine Maintenance (GOG) 30.5 4.4 5.5 6.8 6.9 6.9 Periodic Maintenance 89.2 14.9 15.4 17.9 20.9 20.0 Secured External Donor Financing 23.7 9.0 10.2 4.5 0.0 0.0 Projected External Donor Financing 18.0 0.0 2.0 3.6 7.2 5.2 GOG Counterpart funds (1) 4.2 0.9 1.2 0.8 0.7 0.5 Fully GOG Funded Projects 43.3 5.0 2.0 9.0 13.0 14.3 Rehabilitation 83.9 22.9 19.4 15.1 14.9 11.6 Secured Extemal Donor Financing 33.0 16.3 11.1 5.6 0.0 0.0 Projected External Donor Financing 27.0 0.0 3.0 5.4 10.8 7.8 GOG Counterpart funds (1) 6.0 1.6 1.4 1.1 1.1 0.8 Fully GOG Funded Projects 17.9 5.0 3.9 3.0 3.0 3.0 Reconstruction 11.5 4.5 4.0 2.0 1.0 0.0 Secured External Donor Financing 6.3 2.7 2.7 0.9 0.0 0.0 Projected External Donor Financing 0.0 0.0 0.0 0.0 0.0 0.0 GOG Counterpart funds (1) 0.7 0.3 0.3 0.1 0.0 0.0 Fully GOG Funded Projects 4.5 1.5 1.0 1.0 1.0 0.0 Development Budget 215.1 46.7 44.3 41.8 43.7 38.5 Secured External Donor Financing 63.0 28.0 24.0 11.0 0.0 0.0 Projected External Donor Financing 45.0 0.0 5.0 9.0 18.0 13.0 GOG Counterpart funds (1) 10.9 2.8 2.9 2.0 1.8 1.3 Fully GOG Funded Projects 96.2 15.9 12.4 19.8 23.9 24.2 Recurrent Budget 8.6 1.4 1.5 1.7 2.0 2.0 (Administration) Arrears 4.0 2.0 2.0 0.0 0.0 0.0 TOTAL BUDGET | 227.71 50.1[ 47.8j 43.5 45.7 40.5 Financing: External Sources 108.0 28.0 29.0 20.0 18.0 13.0 Road Fund 71.5 8.7 11.3 14.1 17.2 20.2 Government Budget 48.2 13.4 7.5 9.4 10.6 7.3 - Capital 39.6 12.0 6.0 7.7 8.6 5.3 - Recurrent 8.6 1.4 1.5 1.7 2.0 2.0 Note 1: Government's share of donor financed projects (typically 10%) 49 Annex 3-2 Page 4 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 4: 1996-2000 Reduced Road Sector Expenditure Program (US$ million) C. URBAN ROADS (DUR) Sub-Program j Total 1996 1997 1998 1999 2000 11996-2000 Routine Maintenance (GOG) 13.4 2.6 2.7 2.7 2.7 2.7 Periodic Maintenance 73.9 18.0 18.0 14.7 11.6 11.6 Secured External Donor Financing 0.0 0.0 0.0 0.0 0.0 0.0 Projected External Donor Financin 0.0 0.0 0.0 0.0 0.0 0.0 GOG Counterpart funds (1) 0.0 0.0 0.0 0.0 0.0 0.0 Fully GOG Funded Projects 73.9 18.0 18.0 14.7 11.6 11.6 Rehabilitation 0.0 0.0 0.0 0.0 0.0 0.0 Secured External Donor Financing 0.0 0.0 0.0 0.0 0.0 0.0 Projected External Donor Financin 0.0 0.0 0.0 0.0 0.0 0.0 GOG Counterpart funds (1) 0.0 0.0 0.0 0.0 0.0 0.0 Fully GOG Funded Projects 0.0 0.0 0.0 0.0 0.0 0.0 Reconstruction 148.0 46.6 49.3 30.2 8.2 13.7 Secured External Donor Financing 90.0 33.0 37.0 20.0 0.0 0.0 Projected External Donor Financin 5.0 0.0 0.0 0.0 0.0 5.0 GOG Counterpart funds (1) 9.5 3.3 3.7 2.0 0.0 0.5 Fully GOG Funded Projects 43.5 10.3 8.6 8.2 8.2 8.2 Development Budget 235.3 67.2 70.0 47.6 22.5 28.0 Secured Extemal Donor Financing 90.0 33.0 37.0 20.0 0.0 0.0 Projected External Donor Financing 5.0 0.0 0.0 0.0 0.0 5.0 GOG Counterpart funds (1) 9.5 3.3 3.7 2.0 0.0 0.5 Fully GOG Funded Projects 130.8 30.9 29.3 25.6 22.5 22.5 Recurrent Budget 5.0 1.0 1.0 1.0 1.0 1.0 (Administration) Arrears 18.0 10.0 5.0 3.0 0.0 0.0 TOTAL BUDGET 258.3 78.2 76.0 51.6 23.5 29.0 Financing: External Sources 95.0 33.0 37.0 20.0 0.0 5.0 Road Fund 41.4 5.0 6.5 8.2 9.9 11.7 Government Budget 121.9 40.2 32.5 23.4 13.6 12.3 - Capital 116.9 39.2 31.5 22.4 12.6 11.3 - Recurrent 5.0 1.0 1.0 1.0 1.0 1.0 Note 1: Government's share of donor financed projects (typically 10%) 50 Annex 3-2 Page 5 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 5: 1996-2000 Reduced Road Sector Expenditure Program (US$ million) D. TOTAL = GHA+DUR+DFR Sub-Program Total 1996 1997 1998 1999 2000 1996-2000 Routine Maintenance (GOG) 112.5 19.4 21.5 23.5 24.0 24.1 Periodic Maintenance 493.3 83.1 98.0 104.7 105.0 102.4 Secured External Donor Financing 152.7 28.5 38.7 30.5 30.0 25.0 Projected External Donor Financing 63.0 0.0 9.5 15.9 19.8 17.8 GOG Counterpart funds (1) 21.6 2.9 4.8 4.6 5.0 4.3 Fully GOG Funded Projects 256.1 51.8 45.0 53.7 50.2 55.3 Rehabilitation 131.9 36.5 32.1 21.9 22.4 19.0 Secured External Donor Financing 58.0 26.8 18.6 7.6 2.5 2.5 Projected External Donor Financing 42.0 0.0 5.5 9.5 15.0 12.0 GOG Counterpart funds (1) 10.0 2.7 2.4 1.7 1.8 1.5 Fully GOG Funded Projects 21.9 7.1 5.6 3.1 3.1 3.0 Reconstruction 586.0 125.6 143.2 142.5 84.2 90.5 Secured External Donor Financing 330.3 88.7 94.7 83.9 30.5 32.5 Projected External Donor Financing 95.0 0.0 15.0 24.6 25.2 30.2 GOG Counterpart funds (1) 42.6 8.9 11.0 10.9 5.6 6.3 Fully GOG Funded Projects 118.1 28.0 22.5 23.1 22.9 21.5 Development Budget 1323.7 264.6 294.8 292.6 235.6 236.0 Secured External Donor Financing 541.0 144.0 152.0 122.0 63.0 60.0 Projected External Donor Financing 200.0 0.0 30.0 50.0 60.0 60.0 GOG Counterpart funds (1) 74.2 14.4 18.2 17.2 12.3 12.0 Fully GOG Funded Projects 508.6 106.2 94.6 103.4 100.3 104.0 Recurrent Budget 82.8 12.5 13.3 14.3 15.3 17.4 (Administration) Arrears 75.0 40.0 17.0 8.0 5.0 5.0 TOTAL BUDGET 1471.5 317.1 325.1 314.9 255.9 258.4 Financing: External Sources 741.0 144.0 182.0 172.0 123.0 120.0 Road Fund 376.2 45.6 59.5 74.4 90.3 106.4 Government Budget 354.3 127.5 83.6 68.5 42.6 32.0 - Capital 281.5 115.0 70.3 54.2 27.3 14.6 - Recurrent 72.8 12.5 13.3 14.3 15.3 17.4 Note 1: Government's share of donor financed projects (typically 10%) Note: Excludes MREH 51 Annex 3-2 Page 6 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 6: 1996-2000 Reduced Road Sector Expenditure Program (US$ million) Sub-Program Total 1996 1997 | 1998 1999 2000 __1996-2000 DEVELOPMENT EXPENDITURE 1,398.7 304.6 311.8 300.6 240.6 241.0 GHA 926.3 178.7 190.5 208.2 174.4 174.5 DFR 219.1 48.7 46.3 41.8 43.7 38.5 DUR 253.3 77.2 75.0 50.6 22.5 28.0 RECURRENT EXPENDITURE 82.8 14.5 15.3 16.3 17.3 19.4 GHA 59.2 10.1 10.8 11.6 12.3 14.4 DFR 8.6 1.4 1.5 1.7 2.0 2.0 DUR 5.0 1.0 1.0 1.0 1.0 1.0 MRH 10.0 2.0 2.0 2.0 2.0 2.0 TOTAL EXPENDITURE 1,481.5 319.1 327.1 316.9 257.9 260.4 GHA 985.5 188.8 201.3 219.8 186.7 188.9 DFR 227.7 50.1 47.8 43.5 45.7 40.5 DUR 258.3 78.2 76.0 51.6 23.5 29.0 MIRH 10.0 2.0 2.0 2.0 2.0 2.0 FINANCING PLAN A. EXTERNAL SOURCES 741.0 144.0 182.0 172.0 123.0 120.0 GHA 538.0 83.0 116.0 132.0 105.0 102.0 DFR 108.0 28.0 29.0 20.0 18.0 13.0 DUR 95.0 33.0 37.0 20.0 0.0 5.0a B. ROAD FUND 376.2 45.6 59.5 74.4 90.3 106.4 GHA 2633 31.9 41.7 52.1 63.2 74.5 DFR 71.5 8.7 11.3 14.1 17.2 20.2 DUR 41.4 5.0 6.5 8.2 9.9 11.7 C. GENERAL REVENUES 364.3 129.5 85.6 70.5 44.6 34.0 GHA 184.2 73.9 43.7 35.8 18.5 12.4 DFR 48.2 13.4 7.5 9.4 10.6 7.3 DUR 121.9 40.2 32.5 23.4 13.6 12.3 MRH 10.0 2.0 2.0 2.0 2.0 2.0 D. TOTAL BUDGET 1,481.5 319.1 327.1 316.9 257.9 260.4 Capital 281.5 115.0 70.3 54.2 27.3 14.6 Recurrent 82.8 14.5 15.3 16.3 17.3 19.4 52 Annex 3-2 Page 7 of 7 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM (BASE CASE) Table 7: Secured Donor Financing (US$ million) Period 1996 1997 1998 1999 2000 Total GHA KFW - Highway Sector Investment Program 1996-2000 5 10 10 10 5 40 * IDA - First Transp. Rehab. Project 1988-1995 0 OECF - Highway Sector Investment Program 1996-2000 10 15 21 28 30 104 * OECF - Tamale-Paga 1995-1998 20 20 20 60 EU- Awaso-Nobekaw 1996-1999 5 5 6 16 EU - Nobekaw-Bediakokrom 1996-2000 3 5 5 13 KFW - Tema-Akosombo 1996-1998 3 5 9 17 * KFW - Lower Volta Bridge 1995-1996 8 8 * Dutch - Mampong - Ejura 1994-1996 0 Dutch - Ejura - Gyato Zongo 1995-1997 3 3 6 * BADEA - Bridge Rehabilitation 1995-1997 3 3 6 IDA - Highway Sector Investznent Program 1996-2000 10 20 20 25 25 100 IDA - Second Transp. Rehab. Project 1991-1996 13 5 18 Total GHA 83 91 91 63 60 388 DFR * IDA - National Feeder Roads Rehab. & Mtce. Proj. 1992-1998 7 10 8 25 * OPEC - National Feeder Roads Rehab. & Mtce. Proj. 2 3 5 DANIDA - National Feeder Roads Rehab. & Mtce. Proj. 4 4 8 * USAID - National Feeder Roads Rehab. & Mtce. Proj. 5 5 3 13 * ADF - Cocoa Roads Project 1988-1996 2 2 EU - Stabix 1996-1997 8 2 10 Total DFR 28 24 11 0 0 63 DUR IDA - Urban II 1991-1996 5 2 7 * IDA - Urban Transport Project 1993-1998 13 20 15 48 ODA-NsawamrRoad 1996-1999 5 5 5 15 COFACE - Kanda Interchange 1996-1998 10 10 20 Total DUR 33 37 20 0 0 90 Total On-going Projects 144 152 122 63 60 541 Projects marked * are underway. The other projects have been appraised by donors and will commence in 1996. 53 Annex 3-3 Page 1 of4 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM THE 1995-2000 TRUNK ROAD ROUTINE MAINTENANCE PROGRAM Routine Maintenance 1. Background: Ghana has 14,750kms of trunk roads, 2,140kms of urban roads and 22,000kms of feeder roads. About 6,000kms of the trunk roads are bitumen surfaced and the remaining 8,750kms of the trunk roads are laterite/gravel surface. By the end of 1993 after a road condition survey on the trunk roads, the condition mix of the network was 40% Good, 27% Fair and 33% Poor. The amounts approved for routine maintenance in the past have been continually subject to the constraints of the overall budget situation and have consistently been much less than what is required. The funds provided for routine maintenance are provided as part of recurrent budget that includes administrative costs, salaries, wages, etc. The recurrent budget in 1992 was US$17.6 million, in 1994 the amount has reduced to US$8.8 million with less than 50% of these amounts expended on routine maintenance. The annual routine maintenance requirements range from US$11 to US$15 million in the medium- term (1995-2000). 2. Organization: The routine/recurrent maintenance operations are presently carried out through the 10 regional offices, 32 districts across the country, two mobile maintenance units and two bridge maintenance units. Each of the regions and districts has equipment maintenance workshops and stores' operation. The maintenance department at the GHA headquarters is headed by a Deputy Chief Executive (Maintenance) and assisted by directors at the regions and director of maintenance at the HQ. The districts are responsible for both the routine maintenance by contract and direct labor. In each district, there is an engineer assisted by one works superintendent, one mechanical superintendent and some administrative staff. At the moment, 50% of routine maintenance is done by contract through the Single Man Contractors (SMC) and Local Private Contractors (LPC) and the remaining 50% by direct labor. The supervision of routine maintenance works is done by the foremen located in the district offices. The regional offices are run by regional directors and a maintenance engineer. The district engineer visits the districts in their region regularly to monitor progress and measure actual work done before recommending payment approval to the director. 3. GHA plans to do more routine maintenance by contract, i.e., 90% by contract and 10% by direct labor over a six year period (1995-2000). It has started the restructuring exercise and will put more emphasis on contract management and supervision. The multi-year (1995-2000) routine maintenance by contract program planned by GHA establishes a direct link between expenditures and physical outputs. The change in policy to do more routine maintenance by contract will require a comprehensive review of the skilled and unskilled workforce, reduction or total elimination of equipment, equipment operators and equipment maintenance facilities and personnel at the regions and districts. 54 Annex 3-3 Page 2 of 4 4. Planning: Presently, at the beginning of each year, the district engineers prepare the routine maintenance needs and work programs in their districts, and forward the information to the regional offices. The regional offices review the maintenance programs and send the programs and cost estimates to the maintenance department. After reviewing and consolidating the work programs from the regions, GHA presents a formal request to MRH for funding. Experience from the past shows that GHA gets less than 50% of what they need. The districts and the regions revise their work programs and schedules based on actual funds provided. Starting from 1995, MRH has decided to include routine maintenance needs and programs in the capital budget. NIRH and GHA have given top priority to routine maintenance and multi-year (1995-2000) programming and budgeting cycle in other to ensure a steady flow of work for private contractors and avoid delays in payment for completed works. However for 1995 GHA proposed US$11.35 million for routine maintenance but received approval for only US$4.52 million leaving a funding gap of US$6.83 million. The program of phasing out routine maintenance by direct labor, auctioning of equipment and closure of district and some regional workshops was done in such a manner that starting from 1996, GHA will be able to meet 100% of the funding for routine maintenance. 5. Implementation: The district engineers prepare the revised implementation schedule in line with actual fund available. Copies of the revised schedule are made available to the regional offices and GHA headquarters for information and monitoring. The foreman at the districts supervises and quantifies the actual work done by both contract and direct labor to ensure quality and compliance with specification. The district engineer applies cost to the actual work done and forwards same to the regional engineer who again reviews the payment certificate and requests the regional director to approve for payment. On monthly basis the district engineers meet with foremen to review implementation schedule and prepare progress report that is forwarded to the regional offices. At the end of each quarter, GHA prepares a quarterly progress report and presents it to the MRH. Mobile Maintenance Units 6. GHA established two Mobile Maintenance Units (MMU) and two Bridge Maintenance Units (BMU) with a project engineer at the head of each unit and reporting directly to GHA headquarters. The MMUs and BMUs are primarily concerned with performing periodic maintenance and emergency repair works. The HSIP will strengthen the MMJUs and BMUs by replacing and rehabilitating some of its vehicles and equipment and tools, for effective performance. The equipment to be financed by the project for the MMUs and BMUs are listed below. Annex 3-3 Page 3 of 4 Table 1. Equipment for MMUs and BMUs Description Quantity Unit Amount Rate US$ MMU and BMU Vibratory Roller 10/12 T 4 91,000 364,000 Pneumatic Roller 10/12 T 4 62,000 248,000 Steel Wheeled Roller (Static) 10/12 T 2 52,000 104,000 Self Propelled Chipping Spreader 2 100,000 200,000 Bulldozer 2 137,500 275,000 Agric. Tractor with Power Broom 4 20,000 80,000 BMU Equipment & accessories (LS) 100,000 SUB-TOTAL _ 1,361,000 The Contracting Industry 7. The contracting industry in Ghana has reached a sufficient level to handle routine maintenance works. At the moment MRH has a system of classification and registration of contractors in categories and classes (see Project Files). Each year the contractors are required to renew their registration and new contractors apply and are evaluated by MRH. The following table shows the present number of registered contractors as of end December 1994 according to class and category: Table 2. Number of Contractors in Categories and Classification [| Class Category A Category B Category C Category S lI 4 54 188 0 0 3 68 127 0 0 2 9 16 0 0 1 6 8 0 0 Annual Work Program 8. The tables below show respectively, a summary of the 1995-2000 annual routine maintenance work program and the schedule for reduction of staff associated with phasing out of routine maintenance by contract. 56 Annex 3-3 Page 4 of 4 Table 3. 1995-2000 routine maintenance work program (Costs are in Thousand US$) SMC SMC LPC LPC ROADLINE TRAFFIC DIR LABOR Totl YE!LAR (Paved) (Gravel) (Paved) (Gravel) MARKING SIGNS WORKS Eadhsi Km Cost Km Cost KM cost Km Cost Km Cost No Cost Km Cost Comt 1-5 5,863 1,571 S,8S6 649 1,756 2,119 8,795 4,01'2 551 1,653 2,09 272 4,107 2,09- 12,37- 1996 5,863 1,571 3,826 649 1,756 2,119 8,795 4,012 551 1,653 2,098 272 4,107 2,09 12,37 1997 5,863 1,571 8,886 649 2,336 2,843 8,795 4,012 621 1,864 2,098 272 3,507 2,06 13,275 199S 5,863 1,571 8,886 649 3,001 3,658 8,791 4,011 691 2,076 2,698 272 2,832 1,761 13,99 1999 5,863 1,571 8,886 649 3,031 4,740 8,i03 3,69 702 2,287 2,098 272 2,832 1,354 14,570 2000 5,863 1,571 8,886 649 3,928 4,7 8,103 3,698 821 2,461 2,698 272 1,935 1,354 14,745 Table 4. Program for phasing out routine maintenance by direct labor PHASING OUT COMPONENTS PHASING OUT PERIOD 1995 1996 1 1997 1998 1999 2000 A. Labor for Works Supt. 53 39 32 30 30 3 Road Foremen 150 150 155 155 155 155 Works Road Overseers 140 56 14 0 0 Laborers 600 402 303 290 270 27 B. Laborfor Mech. Supt 16 16 16 16 16 1 Mechanical Chargemen 56 40 35 30 30 3 Works Mechanics 173 118 91 82 82 82 Electricians 13 6 5 2 0° Auto Electricians 26 20 18 18 18 18 Black Smith 9 4 2 1 1 1 Panel Beaters 7 4 2 2 2 2 Vulcanizer 22 17 15 14 14 14 ________| Welding 321 16 10 8 6 6 C. Equipment Flat Truck 34 30 28 26 26 26 Tractor Trailer 80 36 15 11 99 Ped. Roller 34 30 28 26 26 2 Cold Emulsion 66 42 30 28 26 2 Sprayer Vibratory Tamper 23 20 20 201 201 2 _______ _ llPick-up 132 132 132 132 132 132 Source: Ghana Highway Authority 57 Annex 3-4 Page 1 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUMMARY OF VEHICLES AND EQUIPMENT TO BE PURCHASED GHA I (a) MMU, BMU, RTPU Vibratory Roller 10/12 T 4 91,000 364,000 Pneumatic Roller 10/12 T 4 62,000 248,000 Steel Wheeled Roller (Static) 10/12 T 2 52,000 104,000 Self Propelled Chipping Spreader 2 100,000 200,000 Bulldozer 2 137,500 275,000 Agric. Tractor with Power Broom 4 20,000 80,000 BMU Equipment & accessories (LS) 100,000 RTPU Equipment & accessories (LS) 50,000 SUB-TOTAL _ 1,421,000 (b) SUPERVISION VEHICLES Pickup Double Cabin Vehicle (2x4) 55 17,000 935,000 Pickup Double Cabin Vehicle (4x4) 20 20,000 400,000 Cross Country Vehicle (4x4) 15 25,000 375,000 Motorcycle 50 3,000 150,000 Bicycles 2,500 70 175,000 SUB-TOTAL 2,035,000 2 SPARE PARTS Spare Parts & Supplies 1,000,000 3 LAB EQUIPMENT | 600,000 4 ROAD SAFETY PATROL, TRANSPORT & COMMUNICATION & ACCESSORIES Cross Country Vehicle (4x4) 3 25,000 75,000 Pick-up Double Cabin Vehicle (2x4) 7 17,000 119,000 Safety Equipment (Miscellaneous) 150,000 SUB-TOTAL _ 344,000 5 AXLE LOAD CONTROL WEIGH BRIDGE STATION ETC. Weigh Bridge 6 200,000 1,200,000 Mobile Weigh Pads 10 20,000 200,000 Spares & Accessories LS 400,000 SUB-TOTAL 1,800,000 6 DRAFTING & SURVEY SUPPLIES LS 300,000 TOTAL GHA I I7,500,000 58 Annex 3-4 Page 2 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUMMARY OF VEHICLES AND EQUIPMENT TO BE PURCHASED Description Quantity Unit Amount l_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ rate (U S $) MRH 1. VEHICLES & OFFICE EQUIPMENT Cross Country Vehicle 6 (1) 37,000 222,000 Pickup Vehicle (4x4) 8 30,000 240,000 Pickup Vehicle (2x4) 3 25,000 75,000 Saloon Car 12 (5) 25,000 300,000 Standby Generator (250 kVA) 1 60,000 60,000 Overhead Projector & Tripod Stand 1 1,200 1,200 Airconditioner (split unit) 16 (6) 4,000 64,000 Dictaphone 6 250 1,500 Dictation/Transcription Set 4 600 2,400 Fax Machine 2 1,500 3,000 Shredders 10 400 4,000 Binding Machine 4 (2) 500 2,000 . Miscellaneous Spares LS 150,00 150,000 Miscellaneous Supplies LS 50,000 50,000 GhEE Support LS 140,00 140,000 Trimmer and Guillotine 2 330 660 VCR & Conference Screen 1 6,000 6,000 Office Furniture LS 30,000 30,000 SUB-TOTAL 1,351,760 2. COMPUTERS HARDWARE AND COPIERS Desktop Computers, Printers & 26 (6) 12,000 312,000 Accessories Notebook Computers 5 6,500 32,500 Colour Copier & Accessories 1 20,000 20,000 Photocopier & Accessories 4 (2) 15,000 60,000 External Computer Monitor 1 5,000 5,000 Scanner (OCR) 1 5,000 5,000 LAN installation LS 26,000 26,000 Miscellaneous Software LS 20,000 20,000 SUB-TOTAL 480,500 CONTINGENCY 167,740 GRAND TOTAL 2,000,000 Quantities shown are total quantities out of which AMISU requirements are shown in brackets. 59 Anne 35 Page 1 of 1 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUtMMARY OF TECHNICAL ASSISTANCE TO GHA AND MRH I Person-Months I US$ million TA Purpose/Name |Local Foreignl Total I Local |Foreignl Total GHA 1. Installation of MIS and Training 12 24 36 0.1 0.4 0.5 2. Toll Road Feasibility Study 18 18 0.0 0.4 0.4 3. Accounting and Audit Staff 165 0 165 0.9 0.0 0.9 4. Bridge Condition Survey & 12 6 18 0.1 0.1 0.2 Maintenance Specialist 5. Environmental Specialist 24 0 24 0.2 0.0 0.2 6. RoadSafetyExpert 12 0 12 0.1 0.0 0.1 7. Bituminous Surface Dressing Specialist 24 24 0.0 0.5 0.5 8. Various studies on privatization of 12 42 54 0.1 0.9 1.0 services, staffing needs, axle load control, training needs assessment and facilities,etc. Total GHA 237 114 351 1.5 2.3 3.8 Of which IDA 3.8 MRH 1. AMISU 620 8 628 2.4 0.2 2.6 2. Claims & Legal Specialist 0 12 12 0.0 0.2 0.2 3. Socio-economic studies on the impact 36 12 48 0.3 0.2 0.5 of roads on poverty reduction 4. Monitoring and Evaluation Studies 24 0 24 0.2 0 0.2 5. NDPC Development Specialists 0 24 24 0.0 0.5 0.5 Total MRH 680 56 716 2.9 1.1 4.0 Of which IDA 4.0 TOTAL TECHNICAL ASSISTANCE 917 170 1,087 4.4 3.4 7.8 Of which IDA 7.8 60 Annex 3-6 Page 1 of I REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUMMARY OF TRAINING AND MANPOWER DEVELOPMENT FOR GHA/MRH (1996-2000) Division - GHA Local training | Overseas training | Total Uptolwk Upto12wks Uplo24wks Up to 4wks Up to 12wks Up to 24 wk Up to 4wks Amount @5500 @55.000 @510.000 @10.000 @S15,000 @S20,000 @S30.000 (US$) Legal Services 5 3 1 4 4 0 0 127,500 Survey and Design 6 1 1 0 3 2 5 253,000 Stores and Supplies 10 9 1 2 4 0 0 140,000 Plant and Equipment 0 7 1 10 7 0 0 226,000 Planning 6 1 1 31 16 0 2 628,000 Public Affairs 2 2 1 0 6 0 1 141,000 Materials 6 1 1 21 4 0 3 383,000 Contracts 81 I 1 1 14 4 2 415,500 Bridges 4 1 1 2 8 0 2 237,000 Internal Audit 5 3 1 0 8 0 0 147,500 Finance 4 11 3 0 10 1 1 287,000 Road Maintenance 6 2 2 21 13 0 6 618,000 Training and 2 3 1 0 5 0 4 212,000 Development Total 69,500 201,000 165,000 920,000 1,550,00 140,000 770,000 3,815,500 IDA Financing 0 120,000 80,000 400,000 650,000 50,000 300,000 1,600,000 Staff- MRH Duration Number Estimated Local International of Staff Cost _____ (m-wks) (m-wks) (US$) Directors and Top Level Management 28.6 33.0 35 114,500 Senior and Middle Level Management 55.6 59.0 44 248,000 Supervisors 37.6 23.0 29 96,000 Secretarial, Receptionists, Telephonists & Clerical 5.6 0.0 10 6,000 Security Officers 2.0 0.0 3 1,500 Executive Officers 7.0 0.0 4 2,500 Local Contractors 5.8 0.0 240 188,000 TOTAL 656,500 IDA Financing 500,0001 61 Annex 3-7 Page 1 of 3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM TRAINING NEEDS AND FACILITIES FOR GHANA HIGHWAY AUTHORITY PERSONNEL Background 1. Training programs in the roads sector have, in the past, been provided locally at four main locations, namely: (a) Shai Hills Training Center (b) Koforidua Training Center (c) Road Training and Production Unit (RTPU), and (d) Mechanical Training and Production Unit (MTPU), as briefly outlined below. 2. Shai Hills: The Shai Hills center, located about 52 km from Accra, was established in the mid fifties by the Public Works Department. The buildings had been put up as a temporary camp for quarry laborers during the construction of the Tema harbor. It was taken over for use by the Military before being passed on to the Public Works Department, from which GHA was created. In the early years, it served as the backbone of all training activities of the Ghana Highway Authority and other road agencies. However the structures deteriorated rapidly, due to lack of maintenance, and worsened by the nature of the terrain on which the buildings were sited - expansive clay foundation and earthquake zone. Serious cracks developed in floors, walls and ceilings, leading to prohibitive maintenance cost. Very little effort went into improving the center until July 1992, when the Military stepped in and re-established it as a center for training new military recruits. 3. Koforidua Training School: The Koforidua training school was set up under the pilot Feeder Roads component of the RRMP (Cr. 1601 -GH) to train DFR staff and selected Contractors in labor based technology. Training in labor based technology had began in 1987 at Sefwi Wiawso for contractors on some 40 km of roads in the Sefwi-Wiawso district, with assistance from the ILO. Three successful training programs were run there between 1987 and 1989. In May 1989, the program was formalized and moved to Koforidua, to take advantage of proximity to Accra, availability of land and labor as well as a network of Feeder roads for field training. The school initially operated from rented classrooms, temporary accommodation and inadequate training equipment. Despite these constraints, the school achieved excellent results. Under the NFRRMP (Cr-2319GH) therefore, the school was given support for the construction of permanent classrooms, dormitory and training equipment, estimated at US$1,277,298 and jointly funded by Danida (47%), USAID (26%) and GOG (27%) Being the only major school of its kind in the sub-region specializing in labor based technology, the school is gradually gaining recognition among donors and other African countries as a model training school. Given this state of affairs it would not be appropriate, at this time, to expand its activities to cover both GHA and DUR field training needs. 4. RTPU: The RTPU, located within the GHA district Yard at Nsawam, was first established under the IDA supported RRMP (Cr.1601-GH) in 1987, to provide field training 62 Annex 3-7 Page 2 of 3 for road supervisors, equipment operators and tipper truck drivers by adopting a system of training through production, that is, conducting training while at the same time carrying out maintenance/rehabilitation on specific gravel road sections within GHA's annual maintenance program. Effectively, the RTPU is a smaller version of the mobile maintenance unit (MMU). After initial delays, the unit became operational in mid 1987, supported by an Internationally recruited consultant. The unit achieved good results in the 1987-89, but due to severe budgetary constraints, only managed to achieve 8% of its 1990 training target. The unit's present premises - within the GHA district yard at Nsawam - has constrained its operations. Classrooms, material storage, office and accommodation facilities are not adequate for the programs offered. The proposal to eventually move the unit to Koforidua is aimed at addressing these issues. The unit will however continue to be run independently of the Labor based training school, which is receiving support for improvement under the ongoing NFRRMP (Cr.23 1 9-GH). 5. MTPU: The MTPU was also established under the IDA supported RRMP (Cr. 1601 GH) to conduct training of Mechanics mainly in the Central Mechanical Workshop/Stores in Accra. The training programs focused on the repair of broken equipment under the supervision of experienced mechanical instructors. The unit became operational in May 1987 following training programs prepared by consultants. The unit was supported under TRP 1 (Cr 1 858GH) with the renovation of a hostel and mechanics training shed, and further supported under TRPII (Cr 2192 GH) with about US$0.4m worth of equipment and Technical Assistance. The unit has hostel facilities to accommodate 30 participants and a classroom for 20 trainees. The unit operates successfully and would continue to be supported under the HSIP. Assessment of Needs and Options for Training 6. The development of a human resource center for GHA is required to bring staff up to speed with and keep them abreast of new trends and technologies in road maintenance, contracts administration, materials quality control etc. This can only be achieved through carefully planned and regular training programs. Most of the Ministry's agencies have relied on institutions overseas to provide this essential training, in addition to what used to be available at the Shai hills Training center. 7. But given the status of the Shai Hills center outlined above, it is clear that the center would need replacement. Under the ongoing TRP II a central Training Center was to be designed in-house and built to replace the facility at Shai Hills, using GHA's own funds. However severe budgetary constraints prevented GHA from making any progress, except for efforts to acquire about 5 hectares of land in East Lagon, Accra, about 15 km from GHA's present head office building. 8. Building a dedicated training facility is however only one option. A study will be carried out to assess the training needs of all road sector staff over the next five years, taking account of the continued move away from force account operations to contracting out. The study will assess the capacity within existing training institutions in Ghana. If this reveals that insufficient capacity is available, the options of providing the necessary capacity at an 63 Anfnex3-7 Page 3 of 3 appropriate existing institution will be compared against GHA building and operating a dedicated facility. Economic analyses of the options, which take account of operating as well as capital costs, will be carried out to deternine the optimum choice. Detailed Description and Cost estimates 9. It is assumed that the study will reveal that additional facilities are required. Essential facilities to be provided would include (a) a conference hall (b) Classrooms - to cater for survey, design, computer services and Audio Visual Facilities (c) materials laboratory (d) office block for general administration (e) a reference library (f) Dining and Kitchen facility (g) Residential accommodation - dormitory and limited single units. Table 1 . Cost estimates for basic civil works for these facilities Description Approx. Floor Unit cost Total Cost area (sq.m) (US$/sqm) (USS) Conference Hall 250 400 100,000 Classrooms 4x50 =200 300 60,000 Materials Laboratory 180 300 54,000 Reference library 100 300 30,000 Office block for Instructors and general admin. 12x10 +30x10 300 126,000 Dining Room and Kitchen 400 400 160,000 Trainees Accommodation (30 single rooms) 600 300 180,000 Trainees Accommodation (2 No Dormitory blocks) 1000 300 300,000 Training Staff Residential Accommodation 180x10+100x20 300 1,140,000 Sub total l I | 2,200,000 Table 2 . Equipment and facilities to be provided with each unit Description Equipment/facilities to be provided Cost (US$/sqm) Conference Hall Furniture, fittings and fixtures 30,000 Classrooms Fittings and fixtures, including 160,000 computers & Audio Visual equipment Materials Laboratory Testing equipment, fittings & fixtures 800,000 Reference library Fittings, fixtures and books 200,000 Office block for Instructors & general admin Office equipment, fittings and fixtures 80,000 Dining Room and Kitchen Kitchen/dinning facilities and fittings 100,000 Trainees Accommodation (30 single rooms) Fittings and fixtures 100,000 Trainees Accommodation (2 No dormitories) Fittings and fixtures 80,000 Staff Residential Accommodation Fittings and fixtures 100,000 Indoor Recreational Facilities rooms 35,000 Sub total 1,685,000 64 Annex 3-8 Page 1 of 3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUPPORT TO NDPC 1. The National Development Planning Commission (NDPC) has been established by the 1992 Constitution of Ghana to advise the President of the Republic of Ghana on national development planning policy and strategies. Accordingly, the mandate of NDPC covers all aspects and sectors of the economy. 2. In order to achieve its purpose, the NDPC is to carry out studies and make strategic analysis on all aspects of national development, and make proposals on structural options for the development of the economy. Among its other main functions, the NDPC is also to issue broad national development policies for the guidance of all sectors of the economy as directed by the President. 3. In line with this, the Ghana-Vision 2020 (First Step: 1996 - 2000), which was prepared by the NDPC and presented to Parliament in January 1995 by the President, makes proposals for establishing the necessary conditions for achieving accelerated growth and development of the economy which will lead to the transformation of Ghana into a high-end middle-income country by the year 2020. The Ghana-Vision 2020 is a comprehensive programme of policies for the preparation of medium-term plans by sectors and districts for the 5-year period 1996-2000. It focuses on five development themes, namely: (1) human development, including poverty reduction, gender issues and employment generation; (2) economic development, including production, economic infrastructure and private sector development; (3) rural development; (4) urban development; and (5) enabling environment, including public administration and decentralization. 4. As part of its mandate, the NDPC is also responsible for coordinating sectoral and district development planning activities necessary for the implementation of the Ghana- Vision 2020 concept. This implies that NDPC will have to build capacity in policy planning and coordination to ensure that appropriate policies and programmes are formulated for the development of the transport sector such that roads, highways and other transport services do not only serve the urban areas but also rural areas where poverty in Ghana is mostly concentrated. Such policies and programmes will considerably improve transport infrastructure, particularly in the rural areas, reduce the drudgery of head porterage of agricultural produce by rural women to neighbouring markets, and facilitate income generation activities among the rural poor. 65 Annex 3-8 Page 2 of 3 5. On account of this, NDPC will require assistance in the following areas: (1) Technical assistance in the form of two foreign and three local experts for (i) economic infrastructure policy planning and programming, including transport, telecommunications and energy development; (ii) Science and technology policy development and planning; (iii) quantitative economic policy analysis and forecasting; (iv) development planning administration (2) Field studies and research in the areas of human development, especially (a) food security and nutrition; (b) export-oriented production and economic infrastructure development; (c) rural development and poverty reduction, i.e. rural infrastructure development for increased food production and income generation, provision of rural service centers, etc. (3) Staff development, training and Operational workshops for development planners at district and sectoral levels. (4) Logistic support for the coordination of the preparation (as well as monitoring and evaluation of the implementation) of this district and sectoral plans. Development Specialists 6. Development Specialists are required to provide technical expertise for in-depth analysis of technical data and information, as well as for policy analysis and planning. The Specialists will also be required to develop, in-house, the technical capacity of NDPC professional staff for policy analysis and planning. 7. Development fields identified for technical assistance include: -- economic infrastructure; -- quantitative economic policy analysis; -- science and technology development policy; and -- development planning administration. Field Studies and Research 8. The field studies and research are designed to provide primary data for policy analysis and formulation. Various research projects will be undertaken in phases for the 4-year period. The following areas have been identified to receive focused attention: -- food security and nutrition -- infrastructure development -- development of Service Centres 66 Annex 3-8 Page 3 of 3 -- rural infrastructural development for increased food production and income generation. Operational Workshops 9. Coordination between sectoral ministries, regions and districts needs to be further strengthened. NDPC has plans to continue to build the planning capacity of development planning authorities through technical workshops using gaming and other techniques. Similar operational workshops organized in the past have proved successful for purposes of coordination and syntheses of the development plans. Consultants are required for organizing and moderating the workshops. Staff Development and Training 10. There is need to enhance the skills of NDPC staff in policy analysis, formulation and planning in certain critical areas such as economic infrastructure, production, social, spatial organization and the environment. A programme of short courses and other formal courses have, therefore, been planned. This will enable staff to effectively assist in the evaluation and review of development plans. 11. A comprehensive training programme for planning staff at the district and sectoral levels has also been planned. Logistics 12. NDPC is in the process of providing planning guidelines to sectoral Ministries and districts for the preparation of medium-term (five years) plans. The Commission is required by law to monitor and coordinate the entire process of plan and programme preparation in the implementation of development policies, programmes and projects. Effective monitoring and coordination of all these activities require adequate logistical support. Funding required for NDPC USS million US$ million Project components Local |Foreign I Total Local I Foreign I Total _______ _ _ Base Cost Including Contingencies 1. Development Specialist(s) 0.1 0.4 0 5 0 1 0.4 0.5 2. Field Studies and Research 0.1 0.5 0.6 0.1 0.5 0.6 3. Operational Workshops 0 0.1 0.1 0 0.1 0.1 4. StaffDevelopment & 0 0.5 0.5 0 0.5 0.5 Training 5. Logistics 0 0.1 0.1 0 0.1 0.1 TOTAL COMPONENT F 0.2 1.6 1.8 0.2 1.6 1.8 67 Anncx 3-9 Page 1 of3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM RESTRUCTURING PLAN FOR MANAGEMENT OF THE ROAD FUND I. Introduction 1. A special account, referred to as the Road Fund, was established under an Executive Decree in 1985. The Fund derives its revenues from a levy on fuel (petrol, diesel, kerosene and refined fuel oil); bridge, ferry and road tolls; and the vehicle inspection fee. The Fund is administered by the Ministry of Roads and Highways (the Ministry) who decide, on an annual basis, how much of the Fund to allocate to the Ghana Highway Authority, Department of Feeder Roads, and Department of Urban Roads. The revenues from the road fund are used to partly finance periodic maintenance works carried out by contractors and the Ghana Highway Authority's mobile maintenance units. The Fund is audited each year by an independent firm of auditors. II. The Road Fund 2. The Ministry intends to continue using the Road Fund to finance road works, subject to the following amendments: (a) in future, the fuel levy will only be applied to petrol and diesel fuel and will be known as the "road levy"; (b) bridge, ferry and road tolls shall continue to be paid into the Road Fund, but shall be passed on to whichever road agency, or other competent body, is responsible for operating the facility; (c) vehicle license fees, as determined by Parliament, shall be paid into the Road Fund; and (d) international transit fees, collected from foreign vehicles entering the country and using the road network, shall also be paid into the Road Fund. 3. The first charge on the Road Fund shall be the preservation of existing road assets, namely for routine and periodic maintenance. The second charge shall be for rehabilitation, followed by upgrading and new construction. III. The MRH Advisory Board 4. The Ministry has in place a MRH Advisory Board to be charged with the responsibility of setting up the Road Fund Secretariat and overseeing the management of the Fund. The proposed Roads and Highways Act will clearly state the role of the MRH 68 Annex 3-9 Page 2 of 3 Advisory Board. The Board consists of nine members and three co-opted additional members for its deliberations. Membership of the MRH Advisory Board: Nine members of the MRH Advisory Board: I. Minister for Roads and Highways Chairman 2. Deputy Minister for Roads and Highways 3. Chief Director (MRH) 4. Representative of Ministry of Finance 5. Representative of Ministry of Transport and Telecommunications 6. Representative of Ministry of Local Government 7. Representative of GPRTU 8. Representative of GRCA 9. Representative of Ghana Institution of Civil Engineers Three co-opted members of the MRH Advisory Board to deal with Road Fund issues: 10. Representative of Ghana Chamber of Commerce 11. Representative of Ghana National Farmers Association 12. Representative of Ghana Haulage Association 5. Members of the Board shall hold office for three years and shall be eligible for reappointment. The Board shall meet at least once per month and the quorum of the Board at any meeting shall be six. IV. Terms of Reference of the MRH Advisory Board 6. The functions of the MRH Advisory Board shall included administration and management of the Road Fund according to sound commercial principles. In particular, it shall: (a) Arrange for all funds assigned to the Road Fund to be collected and deposited into the Road Fund account, which may be held at the Central Bank and one or more commercial banks in Ghana; (b) Review the annual expenditure programs put forward by the various road agencies and decide, in light of these requests and in consultation with the Ministers, how much of the overall road expenditure program can be financed through the Road Fund; (c) Based on the revenues requirements of the Road Fund, recommend to the Ministry of Finance, the desired level of the road levy and other user charges paid into the road fund; 69 Annex 3-9 Page 3 of 3 (d) In consultation with the Ministry of Finance, tentatively sub-divide the revenues between the various road agencies, taking due account of the decentralisation law; (e) Once the various road agencies have finalized their road expenditure programs, and the final allocation of funds has been agreed, the approved expenditure prograrns will define which items qualify for financing through the Road Fund; (f) Prepare and publish procedures for disbursing funds to finance the approved expenditure program, and the nature of the certification required to ensure that the work has been completed according to specification; (g) Prepare and publish audited annual accounts for the Road Fund within three months of the end of each financial year showing, among other things, (i) whether all funds assigned to the Road Fund were collected; and (ii) whether funds disbursed were spent on approved road programs and whether the work was done according to specification. The audit shall include a full financial audit and a selective technical audit; (h) Publish an annual report within six months of the end of the financial year, dealing generally with the policies and activities of the Board during the year, and including a copy of the audited accounts and the auditors report on the accounts. V. Road Fund Secretariat 7. The Road Fund Secretariat will have a Director and up to four additional staff who will be appointed by the MRH Advisory Board. In the first instance, the Director and other staff, shall be recruited as consultants to be financed under the Highway Sector Investment Programn expected to be approved during 1996, and will be accommodated in offices to be provided by the Ministry. The Road Fund Secretariat will include accountants, road specialists and supporting staff. 70 Annex 3-10 Page l of3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM IDA CREDIT- DETAILED PROJECT COSTS (US$ million) Project Components Local I Foreign I Total Local I Foreign I Total Base Cost Incl. Contingencies GHA A. Civil Works 1. Rehabilitation (a) Rehab. of 93 km in Central/Eastern Region (ICB Lot 1 & 2) 2.7 6.4 9.1 3.1 7.3 10.4 (b) Bridges (ICB Lot 6 & 7) 1.4 3.3 4.8 1.6 3.6 5.2 2. Periodic Maintenance (a) Resealing of 330 km of Paved Roads in Eastern/Volta Region (ICB Lot 3, 4 & 5) 3.2 7.5 10.7 3.7 8.6 12.3 (b) Periodic Mtce. of 772 km of Roads (NCB) 20.8 20.8 41.6 23.1 23.1 46.2 3. Improvement of Hazardous Road Sections 0.3 0.6 0.9 0.3 0.6 1.O (NCB) 4. Building Works (a) Training Center (ICB) 1.2 2.8 4.0 1.4 3.3 4. (b) StaffHousing Units - 25 (NCB) 0.5 1.0 1.5 0.6 1.1 1.7 (c) Extension of Central Laborato_ (NC 0.2 0.3 0.5 0.2 0.4 0. B8ASE COST 30.4 42.7 73.1 tPhysical Contingencies 1.7 2.6 4.3 Price Contingencies 1.9 2.8 4.7 TOTAL COMPONENT A 34.0 48.1 82.1 34.0 48.1 82.1 B. Design and Supervision 1. Engineering Design and Feasibility Studies (a) Construction of 4 Roads - 600 km 0.6 1.6 2.2 0.6 1.7 2.3 (b) Periodic Maintenance - 2,000 km 1.4 0.0 1.4 1.5 0.0 1. 2. Supervision 0.9 1.4 2.2 1.0 1.6 2. BASE COST 29 3.0 5.9 Physical Contingencies 0.1 0.1 0.2 Price Contingencies 0.2 0.2 0.4 l TOTAL COMPONENT B 3.1 3.3 6.4 3.1 3.3 6.4 Note: Discrepancies may occur due to rounding 7 1 Annex 3-10 Page 2 of 3 Project Components Local I Foreign | Total Local I Foreign I Total Base Cost Incl. Contingencies C. Equipment, Spare parts, Vehicles & Materials 1. Road Maintenance Equipment & Vehicles 0.3 3.0 3.4 0.4 3. 2 3.5 2. Tools and Spares 0.1 0.9 1. 0.1 0.9 1.0 3. Lab Equipment 0.1 0.5 0.6 0.1 0.5 0.6 4. Road Safety Patrol, Trans. & 0.0 0.3 0.3 0.0 0.3 0.3 Communication 5. Axle Load Control, Weighbridges etc. 0.4 1.3 1. 0.4 1.4 1.8 6. Drafting and Survey Supplies 0.0 0.3 0.3 0.0 0.3 0.3 BASE COST 1.0 6.3 7.3 Physical Contingencies 0.0 0.0 0.0 Price Contingencies 0.0 0.2 0.3 TOTAL COMPONENT C 1.0 6.5 7.5 1.0 6.5 7.5 D. Institutional Support I. Technical Assistance (a) Installation of MIS & Training 0.1 0.4 0.5 0.1 0.4 0.5 (b) Toll Road Feasibility Study 0.1 0.3 0.4 0.1 0.3 0.4 (c) Accounting and Audit Staff 0.8 0.0 0.8 0.9 0.0 0.9 (d) Bridge Condition Survey & Mtce. Specialist 0.1 0.1 0.2 0.1 0.1 0.2 (e) Environmental Specialist 0.2 0.0 0.2 0.2 0.0 0.2 (f) Road Safety Expert 0.1 0.0 0.1 0.1 0.0 0.1 (g) Bituminous Surface Dressing Specialist 0.0 0.5 0.5 0.0 0.5 0.5 2. GHA StaffTraining 0.2 1.3 1.5 0.2 1.4 1.6 3. Local Transport Studies and Short-term TA 0.1 0.5 0.6 0.1 0.6 0.7 BASE COST 1.7 3.1 4.8 Physical Contingencies 0.0 0.0 0. Price Contingencies 0.1 0.1 0.21 TOTAL COMPONENT D 1.8 3.3 5.1 1.8 3.3 5.1 E. Incremental Operating Cost 1.1 0.0 1.1 1.2 0.0 1.2 TOTAL G H A BASE COST 37.0 55.1 92.1 TOTAL PHYSICAL CONTINGENCIES 1.8 2.7 4. TOTAL PRICE CONTINGENCIES 2.3 3.3 5.7 _ TOTAL G HA COST 41.1 61.2 102.31 41.1 61.2 102.j Note: Discrepancies may occur due to rounding - 72 Annex 3-10 Page 3 of 3 Project Components Local Foreign I Total Local I Foreign I Total Base Cost Incl. Contingencies M R H/NDPC F. Institutional Support - MRH 1. Technical Assistance (a) AMISU 2.3 0.2 2.5 2.4 0.2 2. (b) Claims and Legal Specialist (short-term) 0.0 0.2 0.2 0.0 0.2 0.2 2. Training (MiRH) (a) MiRH Staff Training 0.0 0.5 0.5 0.0 0.5 0.5 (b) Training of Local Contractors 0.0 0 2 0 2 0.0 0.2 0.2 3. Studies (a) Socio-economic studies on impact of roads on poverty reduction. 0.3 0.2 0.5 0.3 0.2 0.5 (b) Monitoring and Evaluation Studies 0.2 0.0 0.2 0.2 0.0 0.2 Institutional Support - NDPC 4. Support to NDPC (a) Development Specialist(s) 0.0 0.5 0.5 0.0 0.5 0.5 (b) Field Studies and Research 0.1 0.5 0.6 0.1 0.5 0.6 (c) Operational Workshops 0.0 0 2 0 2 0.0 0.2 0.2 (d) Staff Development and Training 0.0 0 5 0 5 0.0 0.5 0.5 (e) Logistics 0.0 01 01 0.0 0.1 0.1 BASE COST 2.8 3.0 5 8 Physical Contingencies 0.0 0.0 0.0 Price Contingencies 0.2 0.1 0.3 TOTAL COMPONENT F 3.0 3.1 6.1 3.0 3.1 6.1 G. Vehicles and Office Equipment 1. Office Equipment & Transport Vehicles 0.1 1.3 1.5 0.2 1.4 1.5 2. Computer Hardware/Software & Copier 0.1 0.5 0.6 0.1 0.5 0.6 BASE COST 0.2 1.8 2.0 Physical Contingencies 0.0 0.0 0.0 Price Contingencies 0.0 0. 1. 0.1 l l TOTAL COMPONENT G 0.2 1.91 2.1. 0.21 1.9 2.1 H. Incremental Operating Cost 0 0.s9 0.01 0.o.[ 1.0] 0.01 1.0 TOTAL M R H BASE COST 4.01 4.81 8.S TOTAL PHYSICAL CONTINGENCIES 0.01 0.01 0.0 TOTAL PRICE CONTINGENCIES 0.21 0.21 0.4 TOTAL MRH/NDPC COST | 4.2J 5.0o 9.2][ 4.21 5.0] 9.2 TOTAL BASE COST 41.0 59.9 100.9 TOTAL PHYSICAL CONTINGENCIES 1.8 2.7 4.5 TOTAL PRICE CONTINGENCIES 2.61 3.5 6.1 TOTAL PROJECT COST 45.31 66.2 111.S| 45.31 66.21 111.' Note: Discrepancies may occur due to rounding 73 Annex 3-11 Page I of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM IDA CREDIT - DETAILED PROJECT FINANCING (US$ million) Project Components Credit Ghana (IDA) Govt Total GHA A. Civil Works- GHA 1. Rehabilitation (a) Rehab. of 93 km in Central/Eastern Region (ICB Lot I & 2) 9.4 1.0 10.4 (b) Bridges (ICB Lot 6 & 7) 4.7 0.5 5.2 2. Periodic Maintenance (a) Resealing of 330 km of Paved Roads in Eastern/Volta Region (ICB Lot 3, 4 & 5) 10.9 1.4 12.3 (b) Periodic Mtce. of 772 km of Roads (NCB) 39.7 6.5 46.2 3. Improvement of Hazardous Road Sections (NCB) 0.8 0.1 1.0 4. Building Works (a) Training Center (ICB) 4.2 0.5 4.7 (b) Staff Housing Units - 25 (NCB) 1.5 0.2 1.7 (c) Extension of Central Laboratory (NCB) 0.5 0.1 0.6 TOTAL COMPONENT A 71.9 10.2 82.1 B. Design and Supervision - GHA 1. Engineering Design and Feasibility Studies (a) Construction of 4 Roads - 600 km 2.3 0.0 2.3 (b) Periodic Maintenance - 2,000 km 1.5 0.0 1.5 2. Supervision 2.6 0.0 2.6 TOTAL COMPONENT B 6.4 0.0 6.4 C. Equipment, Spare parts, Vehicles & Materials 1. Road Maintenance Equipment and Vehicles 3.2 0.4 3.5 2. Tools and Spares 0.9 0.1 1.0 3. Lab Equipment 0.5 0.1 0.6 4. Road Safety Patrol, Trans. & Communication 0.3 0.0 0.3 5. Axle Load Control, Weighbridges etc. 1.6 0.2 1.8 6. Drafting and Survey Supplies 0.3 00 0.3 TOTAL COMPONENT C 6.8 0.8 7.5 Note: Discrepancies may occur due to rounding Annex 3-1 1 Page 2 of 2 Project Components Credit [ Ghana [ (IDA) Govt Total D. Institutional Support -GHA 1. Technical Assistance (a) Installation of MIS & Training 0.5 0.0 0.5 (b) Toll Road Feasibility Study 0.4 0.0 0.4 (c) Accounting and Audit Staff 0.9 0.0 0.9 (d) Bridge Condition Survey & Mtce. Specialist 0.2 0.0 0.2 (e) Environmental Specialist 0.2 0.0 0.2 (f) Road Safety Expert 0.1 0.0 0.1 (g) Bituminous Surface Dressing Specialist 0.5 0.0 0.5 2. GHA Staff Training 1.6 0.0 1.6 3. Local Transport Studies and Short-term TA 0.7 0.0 0.7 TOTAL COMPONENT D 5.1 0.0 5.1 E. Incremental Operating Cost- GHA 1.1| 0.1 1.2 TOTAL G H A COST 91.21 11.11 102.3 M R H/NDPC F. Institutional Support - MRH I . Technical Assistance (a) AMISU 2.6 0.0 2.6 (b) Claims and Legal Specialist (short-term) 0.2 0.0 0.2 2. Training (MRH) (a) MRIH Staff Training 0.5 0.0 0.5 (b) Training of Local Contractors 0.2 0.0 0.2 3. Studies (a) Socio-economic studies on impact of roads on poverty reduction. 0.5 0.0 0.5 (b) Monitoring and Evaluation Studies 0.2 0.0 0.2 Institutional Support - NDPC 4. Support to NDPC (a) Development Specialist(s) 0.5 0.0 0.5 (b) Field Studies and Research 0.6 0.0 0.6 (c) Operational Workshops 0.2 0.0 0.2 (d) Staff Development and Training 0.5 0.0 0.5 (e) Logistics 0.1 0.0 0.1 TOTAL COMPONENT F 6.1 0.0 6.1 G. Vehicles and Office Equipmentl 1. Office Equipment & Transport Vehicles 1.3 0.2 1.5 2. Computer Hardware/Software & Copier 0.5 0.1 0.6 TOTAL COMPONENT G 1.8 0.3 2.1 H. Incremental Operating Cost 0 9 0.1 1.0 TOTAL MRH/NDPC COST 8.8 0.4[ 9.2 TOTAL PROJECT COST 100.0| 11.5 111.5 Note: Discrepancies may occur due to rounding - Anne 3-12 a a a 0 . .................... ............ ....................a........................... m, -0 N C 0 .1 a .... .. r..U... .. .. ............ . .. ...... .. . ..... . ......... .. .. .... .. . . . .. . . .. . . ... . . . . . . . . . . . .. .. . . . . . . . . . aI .. ......... . .. . . In 0 j 5 5~~ ~ r - L. op- p u -4u w 5L~~~~~5S .1 A ~ A a~~~~~ R.-I 111ii-M~~ 0 LI,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~L A. PJ......................... .. .. ... .. . .......... .... ........... .... ........... .. .... .... 2. 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 M~~~~~~~~~~~~~~~~~~~~~~~~ 40 ~~~~~~~~~~................... .. .......... ........ I~ ~~~~~~~~...... ....................... . ... . .. ....0 ......... . ...... xauuv JD~~~~~~~~~~~~~~~~~ zi 9t~~~~~~~~~~~~~~~~~~~~ 0 77 Annex 3-13 Page 1 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM DISBURSEMENT SCHEDULE Appraisal Estimate Standard Cumulative Disb. Profile Amount Amount for Transp. FY Qtr. (USS million) (US$ million) Percentage (%) FY96 Dec-95 0 0 0% 0% Mar-96 0 0 0% 0% Jun-96 2 2 2% 2% FY97 Sep-96 2 4 4% 3% Dec-96 6 10 10% 9% Mar-97 6 16 16% 14% Jun-97 7 23 23% 20% FY98 Sep-97 7 30 30% 26% Dec-97 7 37 37% 30% Mar-98 10 47 47% 34% Jun-98 10 57 57% 38% FY99 Sep-98 10 67 67% 42% Dec-98 10 77 77% 50% Mar-99 8 85 85% 58% Jun-99 5 90 90% 64% FYOO Sep-99 3 93 93% 70% Dec-99 2 95 95% 74% Mar-00 2 97 97% 78% Jun-00 1 98 98% 80% FYO1 Sep-00 1 99 99% 82% Dec-00 1 100 100% 86% Mar-01 90% Jun-01 90% FY02 Sep-01 90% Dec-01 93% Mar-02 96% Jun-02 96% FY03 Sep-02 96% Dec-02 97% Mar-03 98% Jun-03 99% .FY04 Sep-03 100% 78 Annex 3-13 Page 2 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM DISBURSEMENT SCHEDULE COMPARATIVE DISBURSEMENT PROFILE 100% 90%/* 80% 70% 60% r 500// , 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Quarters -- SAR Estimstes -U- Transport Profle (Gh.n.) 79 Annex 3-1A Page 1 of I REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM PROJECT SUPERVISION PLAN Approximate Date Expected Skill Staff of Input (mo/yr) Activity Required Weeks 6/96 Project Launch Task Manager 10 Workshop Training Specialist Procurement Specialist Socio-Economist Financial Analyst 10/96 Supervision Task Manager 8 Mission/ Transport Engr./Ecn. Annual Review Financial Analyst Environmental Specialist 2/97 Supervision Mission Task Manager 4 Transport Engr./Ecn. 6/97 Supervision Mission Task Manager 5 Transport Engr./Ecn. Institutional Specialist 10/97 Supervision Task Manager 8 Mission/ Transport Engr./Ecn. Annual Review Financial Analyst Environmental Specialist 2/98 Supervision Mission Task Manager 4 l____l____ |___ Transport Engr./Ecn. 5/98 Supervision Mission Task Manager 5 Transport Engr./Ecn. Institutional Specialist 9/98 Supervision Mission Task Manager 12 Mid-tern Review Transport Engr./Ecn. Training Specialist Institutional Specialist Financial Analyst Environmental Specialist 1/99 Supervision Mission Task Manager 5 Transport Engr./Ecn. Training Specialist 5/99 Supervision Mission Task Manager 4 Transport Engr./Ecn. 10/99 Supervision Mission Task Manager 6 Annual Review Transport Engr./Ecn. (ICR) Financial Analyst 80 Annex 3-15 Page I of 3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM MONITORING INDICATORS Objective Performance Indicator Unit At Start Cumulative 1996 1997 1998 1999 2000 Program Objectives 1. Clear backlog of Percentage condition maintenance of trunk roads-GHA Good % 43 45 47 49 50 52 Fair % 26 25 25 24 24 24 2. Preserve investment in roads Level of allocation of funds for maintenance GHA Routine Maintenance US$ m 69 12.4 13.3 14 14.4 14.5 kn 9,920 10,640 11,200 11,520 11,600 Periodic Maintenance US$ m 330 50.2 64.6 72.13 72.5 70.8 km 7600 1,155 1,487 1,660 1,669 1,629 Rehabilitation USS m 48 13.6 12.7 6.8 7.5 7.4 km 360 102 95 51 56 56 DFR Routine Maintenance US$ m 31 4.4 5.5 6.8 6.9 6.9 km na Periodic Maintenance US$ m 89 14.9 15.44 17.91 20.92 20.02 km 8490 1,418 1,470 1,705 1,991 1,906 Rehabilitation US$ m 84 22.9 19.4 15.1 14.9 11.6 km 4980 1,359 1,152 896 884 689 DUR Routine Maintenance USS m 13 2.6 2.7 2.7 2.7 2.7 Periodic Maintenance USS m 74 18.0 18.0 14.7 11.6 11.6 Total USS m 87 20.6 20.7 17.4 14.3 14.3 3.Improve financial Outstanding arTears to management contractors & creditors USS m 75 75 75 35 18 10 5 4.Reduce damage from Overloaded vehicles overloaded vehicles by identified by enforcing axle load control monitoring of major % 25 20 15 10 10 5. Develop & implement cost US cents recovery - user charges (a) fuel levy equivalent 4.0 5.0 6.0 7.0 8.0 (b) Road Fund US$ m 376.2 45.6 59.5 74.4 90.3 106.4 6.Reduce transport costs Reduction in freight costs from specific points for identified April 1996 commodities USS prices Kumasi-Yamoransa 200km Baseline identified Construction 17 16 15 Aflao-Eludo 560km work 17 16 15 Winneba-Swedru-Akim Oda Reduction in baseline % in progress 17 16 15 81 Annex 3-15 Page 2 of 3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM IDA CREDIT - IMPLEMENTATION INDICATORS Objective Performance Indicator Unit At Start Cumulative 1996 1997 1998 1999 2000 A. CIVIL WORKS Rehabilitation Roads (ICB Lots 1 & 2) Contract award Target date Oct-96 Construction % complete 18% 88% 100% Bndges (ICB Lot 6) Contract award Target date Apr-97 Construction % complete 32% 80% 100% Bridges (ICB Lot 7) Contract award Target date Jan-98 Construction % complete 48% 100% Periodic Maintenance Roads (ICB Lots 3, 4 & 5) Contract award Target date Jan-97 Construction % complete 71% 100% Roads (NCB Lots) Phase I Contract award Target date Sep-96 Construction % complete 23% 100% Phase II Contract award Target date Jan-97 Construction % complete 92% 100% Phase m Contract award Target date Sep-97 Construction % complete 23% 100% Building works - Design. Supervision & construction Training centre Contract award Target date Nov-97 Construction % complete 4% 52% 100% Staff Housing Units Contract award Target date Sep-96 Construction % complete 29% 100% Extension of Central Lab Contract award Target date Mar-96 Construction % complet 71% 100% 82 Annex 3-15 Page 3 of 3 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM IDA CREDIT - IMPLEMENTATION INDICATORS Objective lPerformance Indicator Unit At Start Cumulative 1996 1997 1998 1999 2000 B. DESIGN Engineering design & feasibility studies (a) Construction of four roads Contract award Target date Jun-98 600 km Consultant services % complete 50% 100% (b) Periodic maintenance Contract award Target date Jun-98 200 km Consultant services % complete 41% 100% C. VEHICLES, EQUIPMENT, TOOLS & SPARES (GHA) Vehicles, Road Maintenance Equipment, Spares Contract award Target date Sep-96 Delivery Target date Sep-97 D. INSTITUTIONAL SUPPORT (GHA) 1. Technical Assistance Negotiate & sign Installation of MIS & Training contract Target date Feb-96 Duration % complete 40% 88% 100% Bridge Condition Survey & Negotiate & sign Maint. Specialist contract Target date May-96 Duration % complete 37% 100% Negotiate & sign Road Safety Expert contract Target date May-96 Duration % complete 14% 38% 62% 86% 100% 2. Staff Training Road Maintenance Local training months 20 4 4 4 4 4 lOverseas training months 132 26 26 26 27 27 F. VEHICLES, EQUEPMENT, TOOLS & SPARES (MRHt) (a) Transport Vehicles & Spare Parts Contract award Target date Jul-96 Contract Implementati Target date Jul-97 G. INSTITUTIONAL SUPPORT (MRH) 1. Technical Assistance (a) AMISU Duration 33m/m Oct-96 Jun-99 (b) Program Coordinator Duration 36m/m Jun-96 Jun-99 2. Training Senior & Middle Level (a) MRH Staff training Management Number 44 11 11 1 1 1 1 (b) Training of local contractors 6 m-weeks of training Number 240 60 60 60 60 83 Annex 4-1 Page 1 of 6 REPUBLIC OF GHIANA HIGHWAY SECTOR INVESTMENT PROGRAM ECONOMIC ANALYSIS OF 1996-2000 ROAD SECTOR EXPENDITURE PROGRAM 1. This annex presents analyses of typical periodic maintenance, rehabilitation and reconstruction works and summaries of the urban and feeder components included in the Highway Sector Investment Program. A. PERIODIC MAINTENANCE AND REHABILITATION 2. A sample of six typical sections of road totaling 246 km to be rehabilitated at an estimated cost of $24 million were analyzed by Bank staff during appraisal using the Highway Design and Maintenance Model III to cross check analyses carried out for GHA by various consultants between 1990 and 1995. The treatments include regravelling, resealing with a single surface dressing and resurfacing with double surface dressing and are representative of the type of works to be undertaken in the program. Table 1 summarizes the road characteristics. 3. Costs were considered both in financial and economic terms (after adjusting for taxes, duties etc.). Estimates of traffic growth based on recent surveys range from 5 percent for cars and utility vehicles to 10 percent for buses and trucks. Table 2 shows a summary of the NPV at 15 percent discount rate and ERRs. As seen from the table an investment of about $24 million in periodic maintenance produces a NPV of $70 million and ERRs that range from 23 percent to 71 percent, giving a weighted average ERR of 40 percent. A sensitivity analysis of the NPV and ERR was made by increasing the investment cost by 15 percent and also by reducing benefits by 15 percent. The effect was to reduce the NPV to $66 million and $55 million respectively and the average ERR to 36 percent and 35 percent respectively. The combined effect of increasing the cost and reducing benefits by 15 percent simultaneously was to decrease the NPV to $52 million and the average ERR to 32 percent. REPIBLIC OF GHANA HIGHWAY SECTOR IVEST4ENT INVESTMENT PROGRAM TABLE 1: ROAD UNK CHARACTERISTICS ROAD NAME ULk L..th 6mbe P,oe-d Cm ADT Swimc PAagh RoWel Altihkd R+F Cuv. &bW. SN Gimid ID Ibn Typ Tumahmmt lvpdl Coed. W lnm/mo) Iml Im/brm lo/kbm CSR(%) 1ni) PAVED ROADS MS PACKAGE J 1 1. Wincwba-Swednu-Akin Oda RT l6 93 ST 160lmm+DSD m4.s.c. 1503 F 6.4 0.1300 120 50 50 12 2.5 ICS PACKAGE * 2 2. Ho-Dnu RT 1t 101.2 ST SSD ma.b.c. 640 a 6.0 0.1207 100 26 50 15 1.733 3. Kofogidus-Asomews RT 43 46 ST SSD mia.soc. 293 a 4.0 0.1397 500 55 90 6 1.132 LCOS PACKAGE 000 4. Bolia-Sawku RT7 40 ST lS0mmn+DSO Pimuy 219 P 8.5 0.1016 220 20 40 9 1.32 X 5. Kuma*B.rSk." RT 6o1 24 ST SSD min... 619 F 4.2 0.1490 230 55 70 11 1.72 GRAVEL ROADS T. Pro-Dunkw RT 181 81.6 OR Regravul min. se 125 P 9.1 0.1651 130 50 80 9 100 SSD -Reseal with Single Cost Suuface Dreesnn DSO * Resea with Two Coat, of Surwie Dresag TABLE 2: SuinmwY of ERR's md Sen kty Analysi ROAD NAWE Ur* Sungib mr Pi Ad To TeO om cm. 1%C % 15% cow S * bnl T Tyt rlmeemS Rn. Cot eCes I | .15% Smelt . NWe 0%vMon IWVO 15% %I MW 15% m% N w9115%% E%1 VW 15s% W% PAVW ROAD MR PACKAG I 1 1. M b-Swodu.Akim Oda RT 16 93.0 ST NRflck' $10.51 58.96 220 40.5 49 39.4 45 33.2 44 31.5 40 KC PACKAGE # 2 2. Hooewnu RT 11 101.2 ST RIbld t3.04 $3.19 of 10.6 32 9.8 30 9.2 29 7.4 27 3. Kofatiru-Aamuwa RT 43 4e.0 ST Resl 11.65 41.44 22 2.8 28 2.4 26 2.0 25 1.7 23 P- . LCC PACKAGE 000 OQ 4. Solg"a wku RT 7 40.0 ST R.stwci.u 14.40 $3.75 22 2.3 23 1.7 20 1.3 20 0.7 17 DX S. Kwnsmi-SBr.k.. NT 601 24.0 ST RPAl 10.56 10.77 Be 10.7 71 10.6 66 8.8 a6 0.7 go ORAVEL ROADS 01 6. T. Prmo-Dur*w RT 151 81.6 on RPgravel $2.69 $2.30 13 2.7 43 2.1 34 1.7 33 1.2 26 Total Senple 385.8 $23.76 419 69.8 40 65.8 36 65.4 36 61.6 32 85 Annex 4-1 Page 3 of 6 B. RECONSTRUCTION 4. The 116 km Accra-Yamoransa Road and the 25 km Anwiankwanta-Kumasi Road are representative of trunk roads that will be reconstructed. Both are critical linkages in the trunk road system, the Accra-Yamoransa being a section of the Pan-African Highway which links Accra to Cape Coast and an important connection between the harbors of Takoradi and Tema. Anwiankwanta-Kumasi is a section on the route linking Kumasi with Cape Coast and as such is an important route for export from the regions of Brong Ahafo and Ashanti. Analysis of these sections yield ERRs of 25 percent and 40 percent respectively. The following paragraphs outline the analysis of the Accra-Yamoransa Road. 5. The civil works required and the benefits derived therefrom are considered typical. The project involves work to expand roadway capacity, strengthen existing pavements, preserve investment in existing assets, and realignments to remove serious geometric deficiencies impacting on both safety and capacity. Benefits are captured through measurement of reduction in vehicle operating costs and travel time. 6. Traffic volumes were measured in 1993 through one week of automatic counting, supplemented in particular locations by 10 hour manual counts to determine vehicle type, distribution, and peak hour factors. Where appropriate, seasonal adjustments have been made. Traffic forecasted to Year 2011 assumes an average annual growth rate of 5 percent. This compares with a forecast of GDP growth made in a World Bank report, Ghana Progress on Adjustment, 1991 of 4.9% for 1990-95 and 5.2% 1996-2000. Since growth in the transport sector normally is somewhat greater than GDP growth, the forecast assumption is considered conservative. Diverted traffic was not assumed, given the absence of roads with service characteristics competitive to the existing road in this corridor. Generated traffic was included only for the section closest to Accra. 7. The design criteria and standards for alignment design have been selected from the Ghana Highway Authority "Road Design Guide", 1991, with minor adjustments to conform with the guidelines of the AASHTO, "A Policy on Geometric Design of Highways", 1990, where considered appropriate because of the international importance of the project road being a link in the Pan African Highway. The road is a National highway classified as primary road, class A. The proposed reconstruction includes expanding a short 16.4 km section to dual-carriageway, widening other sections to a uniform standard, which would provide design speeds for 100km/hr on all but one 16 km section through hilly terrain, where an 80km/hr design is acceptable. Climbing lanes are also provided to increase capacity on steep grades (4- 5%), where the speed of a loaded truck is expected to be reduced by more than 16 km/hr below average travel speeds and where total traffic and the percentage of trucks warrant their use. Table I indicates characteristics of each section of the Accra-Yamoransa Road. 8. Roadway capacity analysis has been carried out using the Highway Capacity Manual, Special Report 209, TRB, 1985. As a result, a four lane cross section was proposed for the 16 km link closest to Accra and two lanes for the remaining sections. The economic assessment employed the RODEMAN program, which is a slightly simplified version of the World Bank HDM-III model. The ERRs for each of the six sections are presented in Table 3. 86 Ann 4-1 Page 4 of 6 The vehicle cost coefficients used were derived from a Bank funded study performed in 1992. Pavement parameters needed for the RODEMAN calculations were obtained from a condition survey. These benefits covered savings in Vehicle Operation Costs (VOC), savings on maintenance on the existing road, and time savings for the trucks relative to the base strategy, which comprised resealing and preventative maintenance. Table 3: Characteristics of the Accra-Yamoransa Road AADT Est. AADT Lanes Length Terrain ERR Section 1993 2011 Proposed (km) % Existing Accra (Malarn)- 5500- 21500- 2 x 2 16.4 Flat/Roling 30 Oduponkpehe 5000 16300 Oduponkpehe-Awutu 3200 8500 2 10.2 Hilly 30 Awutu-Winneba Jct. 2900 7700 2 20.9 Hilly 32 Winneba Jct.-Apam Jct. 2550 6800 2 14.2 Flat 22 Apam Jct.-Mankesim 2150 5700 2 30.7 Rolfing/Hilly 8 Mankesim-Yamoransa 2750 7300 2 23.9 Various 33 TOTAL 116.3 25 C. URBAN ROADS General 9. The urban roads component of the 1995-2000 Road Sector Expenditure Program comprises periodic maintenance and rehabilitation of key arterial roads. Economic evaluation has been carried out for the civil works elements of the road improvement sub-program, including the rehabilitation of pavements and drains, and traffic management improvements. 10. Economic costs include the investment costs of final design, construction, supervision and physical contingencies (less price escalation, taxes and duties). The costs of routine and periodic maintenance associated with the project roads have been costed separately and then aggregated to arrive at total costs for the Accra and Takoradi road rehabilitation components. Urban Road Rehabilitation 11. The rehabilitation of the CBD and main radial roads in Accra, and the CBD roads in Takoradi and Sekondi, would reduce traffic congestion in the central areas of these cities and on the surrounding road network. The primary economic benefits of these investments will be savings in vehicle operating costs for the traffic using the affected portions of the urban road network in comparison to the costs for a do-nothing scenario. In quantifying these benefits, a priority sub-network of urban roads was identified. This sub-network consists of eight high priority sub-projects with a total length of 18.1 km in Accra, and an additional seven roads totaling 10.4 km in Sekondi/Takoradi. 87 Annex 4-1 Page 5 of 6 12. Forecast traffic volumes for the road rehabilitation sub-projects were prepared using various estimation techniques. Traffic forecasts were developed for three classes of vehicles: light vehicles (cars and taxis); light commercial vehicles; and heavy vehicles (trucks and buses). A conservatively low traffic growth rate of 3.5% per annum was used in the analysis. This rate reflects the effect of road capacity constraints on future traffic volume levels. Since traffic volumes already are high on many links, generated and diverted traffic was not included in the analysis. 13. Vehicle operating cost estimates prepared by the Ghana Highway Authority were developed for the three representative vehicle types. Adjustments to the GHA's estimates were made to reflect the different operational and physical characteristics encountered in urban areas, particularly with regard to average speed and stop and go traffic cycles. In order to simulate with and without project conditions, several key analysis parameters were established, including: flat and rolling road alignments; road surfaces with IRI measurements ranging from 2,000 to 10,000 mm/km; and car speeds of between 16 (very poor surface condition) to 35 kph (fair condition). The resulting VOCs for the with and without project cases were compared to arrive at total VOC benefits. Net benefits were calculated by deducting road maintenance costs. The composite ERR for this component is 29% as shown in Table 4. Table 4: Economic Analysis - Summary of Economic Returns for Accra and Sekondi/Takoradi Road Rehabilitation and Trafric Management Improvements Road & Trafirc Management Sub Projects Economic Returns (ERR, %) ACCRA A. Nkrumah/K. Thompson 25 B. Castle/Adama 23 C. Liberia/Graphic 18 D. Kinbu Road 10 E. Selwyn Market Street 22 F. Derby Avenue 12 G. Graphic Road 33 H. Barnes Road 32 Sub total 23 TAKORADI TA. Market Circle 19 TC. Cape Coast 11 TD. Liberation 26 TF. John Sarbah 45 TG. Oheneba Mensah 36 TH. Axim 60 TI. Sekondi 70 I Sub total 39 Notes: Excludes time savings benefits 88 Annex 4-1 Page 6 of 6 D. FEEDER ROADS 14. Feeder Roads are an important part of Ghana's road network, serving an estimated 70 percent of the population who live in rural areas and depend on agriculture for their livelihood. Feeder roads provide rural settlements with access to social services and economic opportunity otherwise only available in larger centers. Most importantly, feeder roads connect rural settlements to market centers. The poor condition of feeder roads in Ghana has been a serious constraint on agricultural production and marketing, discouraging farmers from producing beyond the subsistence level. Feeder roads in good condition are a prerequisite for increased agricultural production. They also (i) ensure increased accessibility to extension services; (ii) foster development of markets; (iii) lead to a reduction in transport cost and storage losses; and (iv) enable intensified cultivation, and/or an increase in land area cropped. 15. Economic Rates of Return (ERRs) were calculated for 1600 km of roads to be rehabilitated under the National Feeder Roads Rehabilitation and Maintenance Project. Quantifiable benefits include: (i) increases in agricultural production, and (ii) reduction in transport costs on existing production. Estimated ERRs are high; an average of 47 percent reflecting the inherently high return in this type of investment, as well as the fact that economic return criteria were used systematically to select feeder roads for rehabilitation. 16. The evaluation methodology adopted a producer surplus approach with two major benefit streams: (i) increases in agricultural value added due to increases in production, and (ii) reduced transport costs or savings accruing to transporters on existing production. The analysis of these two major benefit streams indicates that the increases in value added are far more important than savings accruing to transporters. Increased value added is due to the intensification of agriculture rather than expansion in area cultivated or due to improved technology. Details of the evaluation methodology are contained in the appraisal report of the NFRRM. 17. The estimates of benefits for each phase- I feeder road were based on field data provided by consultants from a study of four project zones in Accra/Volta, Salaga/Bimbilla, North Western and Ejura/Kintampo. In each zone, feeder roads were selected representing various levels of accessibility. In all, 1,200 households in 24 road corridors were interviewed. Similarly, the estimates of benefits for the second phase feeder roads were based on field data collected in the following road areas: Mampong, Sunyani, Techiman, Bekwai, Cape Coast, Hohoe, Yendi, Tamale and Tumu. About 1,500 households living along both accessible and inaccessible feeder road corridors were interviewed. REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM ANALYSES OF ROAD INVESTMENTS IN THE IDA CREDIT The economic analyses of each of the road sections to be funded under the credit, which were prepared for GHA between 1990 and 1995 by a number of consultants, are summarised in the following tables. The consultant's reports are available for reference on the project file. The road investments provide high rates of return ranging from 49 percent for rehabilitation to 92 percent for periodic maintenance (resealing) works. SUMNARY Length COST NPV ERR ERR Data Cost/km ERR DESCRIPTION km US$m @ 15% % Mo/Yr Source (OOOs) Cost wt. A. Civil Works Rehabilitation Rehabilitation in CentraVEastem Region ICB Lots I& 2 93 10.4 40.8 49 May-95 World Bank HDM III 112 49 Rehab.& Reconstruction of Bridges ICB Lots 6 & 7 5.2 100 Sheet 1 100 Periodic Maintenance Resealing of Paved Roads in Eastern/Volta Region ICB Lots 3, 4 & 5 330 12.3 63.7 92 Various Sheet 2 37 92 Periodic Maintenance NCB Lots 772 46.2 113.7 47 Various Sheet 3 _ 60 47 Total Project Cost 1,195 74.1 218.2 _ 62 58 REHABILITATION - ICB Lots 1 & 2; 6 & 7 Lot Improve Length COST NPV ERR ERR Report AADT AADT Cost/km ERR No. REGION DESCRIPTION ment km US$m @a 15% % j Mo/Yr Source Source 1994 (000s) Cost wt. Central Winneba-Swedru-Ak.Oda ICB Lots I & 2 P/S 93.0 10.4 40.8 49 May-95 World Bank HDM III 1503 2450 112 49 Various Rehab.& Reconstr. Bridges ICB Lots 6 & 7 5.2 100 100 Totall 15.6 40.8 66 66 0w REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM ANALYSES OF ROAD INVESTMENTS IN THE IDA CREDIT PERIODIC MAINTENANCE - ICB Lots 3,4 & 5 Lot Improve Length COST NPV ERR ERR Report AADT AADT Cost/km ERR No. REGION DESCRION |ment km USSm @15% % MoNr Source Source 1994 (000s) Cost wt Resealing of Paved Roads-ICB Lots 3. 4 & 5 1 Volta (i) Ho-Denu S 101.2 3.77 12.53 32 May-95 World Bank HDM HI 385 37 2 Volta (ii) Ho-Anyirawase S 20.0 0.75 3.85 98 Feb-90 Twum Boafo-Report I 743 708 37 3 Volta (iii) Anyirawase-Asikuna S 23.8 0.89 5.35 114 Feb-90 Twum Boafo-Report I 782 584 37 4 Eastern (iv) Asikuma-Adomi S 26.5 0.99 8.60 160 Feb-90 Twum Boafo-Report I 999 37 5 Eastern (v) Adomi-Akosombo S 9.5 0.35 1.18 56 Feb-90 Twum Boafo-Report I 838 949 37 6 Eastern (vi) Kpong-Adomi S 10.0 0.37 5.70 170 Feb-90 Twum Boafo-Report I 1942 37 7 Eastern (vii) Kpong-Trom S 16.0 0.60 9.71 391 Feb-90 Twum Boafo-Report I 1503 37 0 8 Eastern (viii) Trom-Nkurakan S 36.0 1.34 9.30 175 Feb-90 Twum Boafo-Report I 488 37 9 Eastern (ix) Koforidua-Mamfe S 30.0 1.12 3.71 56 Feb-90 Twum Boafo-Report I 752 37 10 Eastern (x) Koforidua-Asesewa S 46.0 1.71 3.33 28 May-95 World Bank HDM 1II 378 37 1 Eastern (xi) Mamfe-Adukrom S 11.0 0.41 0.42 32 Feb-90 Twum Boafo-Report I 567 1643 37 Total 330.0 12.3 63.69 _ 37 92 U-Regravelling S-Resealing P-Resurfacing R-Rehabilitation PERIODIC MAINTENANCE NCB Lots Lot Improve Length COST NPV ERR ERR Report AADT AADT Cost/km ERR No. REGION DESCRIPTION ment km US$m @15% % Mo/Yr Source Source 1994 (000s) Cost wt. Phase I (1996-97) I Upper East Bolga-Bawku (km 0-10) R 10.0 1.670 1.02 23 May-95 World Bank HDM II 433 167 2 Upper West Fian-Wahabu (km IO48) U 38.1 1.257 2.36 66 Dec-92 RITES 39 33 3 Upper West Wa-Sombo (km 7-17) p 10.0 1.100 1.47 41 Dec-92 RITES 206 110 4 Northerm Bole-Chache (km 10-35.6) U 25.6 1.280 15 Dec-92 RITES 12 so 5 Ashanti Anwiankwanta-Manso-Abore (km 8-18) p 10.0 1.100 0.39 22 Mar-95 Conterra Limited 346 262 110 6 Central Mankessim-Ajumako S 15.0 0.550 35 Mar-96 GHA 1102 37 7 Central Ajumako-Bobikuma-Swedru p 11.3 1.243 4.44 67 Apr-94 ABP Consult 235 179 110 8 Western Diaso-Humjibre-Sefwi Bekwai R 5.0 0.805 1.51 55 Apr-94 ABP Consult 120 414 161 x 9 Westem Tarkwa-Bogoso-Bawdie S/P 18.8 0.982 8.50 60 Apr-94 ABP Consult 647 862 52 4- 10 Western Alabokazo-Tikobo No.l (km 10-23.5) U 13.5 0.540 2.72 220 Apr-94 ABP Consult 321 466 40 " t l 11 Eastem Akim Oda-Amanfopong S 24.0 0.864 6.01 113 Feb-90 Twum Boafo-Report 1 502 178 36 | 12 Eastem Asamankese-Kade (km 0-20) S 20.0 0.720 1.83 67 Feb-90 Twum Boafo-Report I 332 1219 36 13 Eastem Adeiso-Asamankese (km 10-25.3) S 15.3 0.551 0.74 35 Feb-90 Twum Boafo-Report 1 301 574 36 14 Volta Kpando-Gbefi-Golokwati R/S 10.0 0.665 2.43 53 Feb-90 Twum Boafo-Report 1 265 255 67 15 Volta Asikuma-Kpeve S 39.0 1.404 30 Mar-96 GHA 895 36 16 Volta Hohoe-Jakisan S 30.4 1.095 25 Mar-96 GHA 894 36 17 Volta Jasikan-Worawora (km 0-10) R 10.0 1.100 2.71 20 Mar-93 Twum Boafo-Report 11 106 209 110 Sub Total 306.0 16.93 36.15 55 49 Phase H (1997-98) I Upper East Bolga-Bawku (kmn 10-30) (2 lots) R 20.0 3.300 2.02 23 May-95 World Bank HDM II 433 165 2 Upper West Tumu-Welembele Phase II U 10.0 0.330 0.31 37 Dec-92 RITES 54 33 3 Upper West Wa-Sombo P 10.0 1.100 1.47 41 Dec-92 RITES 206 110 4 Northem Tamale-Karaga P 18.1 1.991 0.79 25 Dec-92 RITES 193 110 5 Northern Nakpanduri-Gushiegu-Yendi (km 10-60) U 50.0 1.650 2.53 55 Dec-92 RITES 48 33 6 B. Ahafo Sunyani-Buoko Junction S 28.4 1.133 22 Mar-96 GHA 588 40 7 Central Mankessim-Abura Dunkwa P 3.4 0.374 2.38 99 Apr-94 ABP Consult 478 110 8 Central Ajumako-Bobikuma-Swedru P 10.0 1.100 3.93 67 Apr-94 ABP Consult 235 179 110 9 Westem Diaso-Humjibre-Sefwi Bekwai (kmn 0-9.2) p 9.2 1.012 1.89 55 Apr-94 ABP Consult 120 414 110 10 Westem Tarkwa-Bogoso-Bawdie S/P 23.0 1.201 10.39 60 Apr-94 ABP Consult 647 862 52 11 Western Alabokazo-Tikobo No. I U 13.0 0.520 2.62 220 Apr-94 ABP Consult 321 466 40 12 Gr. Accra Dome-Kitase (km 0-6) R 6.0 0.900 5.57 38 Mar-93 Twum Boafo Report-Il 248 3221 150 13 Eastern Asainankese-Kade (km 2040) S 20.0 0.720 1.83 67 Feb-90 Twum Boafo-Report 1 332 1219 36 14 Eastem Somanya-Asutsuare S 26.1 0.940 14.00 227 Feb-90 Twum Boafo-Report 1 663 866 36 15 Eastern Koforidua-Bonsu S 36.6 1.318 35 Mar-96 GHA 1746 36 16 Eastern Koforidua-Suhum S 25.0 0.900 22 Mar-96 GHA 789 36 17 Eastern Odumase-Oterkpolu R 10.0 1.200 4.09 25 Mar-93 Twum Boafo Report-Il 205 121 120 18 Volta Jasikan-Worawora (km 10-17.4) R 7.4 0.700 1.72 20 Mar-43 Twum Boafo-Report 11 106 209 95 Sub Total 326.2 20.389 55.56 = 63 52 Phase HI (1998-2000) I Upper West Tumu-Welembele Phase III U 20.0 0.660 0.61 37 Dec-92 RITES 54 33 2 Northern Nakpanduri-Gushiegu-Yendi (km 60-91) U 31.0 0.930 1.43 55 Dec-92 RITES 48 30 3 Western Diaso-Humjibre-Sefwi Bekwai (km 9.2-25) P 15.8 0.933 0.38 55 Apr-94 ABP Consult 120 414 59 4 Western Tarkwa-Bogoso-Bawdie S/P 5.0 0.261 2.26 60 Apr-94 ABP Consult 647 862 52 5 Gr. Accra Dome-Kitase (km 6-23) Phase 111 ( 2 lots) R 17.0 2.805 17.36 38 Mar-93 Twum Boafo Report-lI 248 3221 165 6 Gr. Accra Kaseh-Ada S 13.0 0.468 25 Feb-90 Twum Boafo-Report I 332 1198 36 7 Eastern Suhim-Asamankese S 38.0 1.368 16 Mar-96 GHA 303 36 8 To be agreed _ 1.462 _ _ Sub Total 139.80 8.887 22.04 64 32 Q x 45 TOTAL FOR PHASE 1,11 & III NCB Lots 772 46.20 113.74 47 60 47 U-Regravelling S-Resealing P-Resurfacing R-Rehabilitation - 92 Annex 4-3 Page I of 4 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM SUMMARY OF ENVIRONMENTAL IMPACT ASSESSMENT AND MITIGATION PLAN 1. The methodology utilized to conduct the site-specific environmental impact surveys of the road sections included in HSIP was based on guidelines in the World Bank Environmental Assessment Sourcebook. 2. EIA field observations of HSIP road sections indicate that impacts will be fairly benign and limited to local areas where road works will be carried out. Severe environmental impacts necessitating resettlement of communities, or causing damage to fragile ecosystems, will not occur as a result of the project. 3. As no new road alignments are envisaged, direct negative impacts of HSIP will be limited to soil erosion which may be due to improper designs of embankments or side drains; scouring of the landscape due to opening of borrow pits; destruction of vegetation due to clearing rights-of-way and a lack of adequate provisions for revegetation; dust, fumes, noise, and vibrations during road work; increased sediment loads in streams and rivers where road crossings occur; and safety hazards created by increased traffic flows and speed. 4. Secondary impacts from the HSIP reconstruction will also occur. Prominent among them is the possibility of induced development along more accessible road corridors and opening up areas to exploitation of natural resources. Examples of the latter include easing access to protected areas or forest reserves, thereby increasing the chances of over- exploitation of wildlife, timber and fuel wood. HSIP road rehabilitation may also cause land use changes and affect land ownership systems as improved roads may increase market opportunities and, therefore, the value of land. 5. Positive impacts from HSIP road improvement activities occur and indeed provide the rationale for the project. Example include increase in value of agricultural products due to improved access to markets, enhanced roadside commerce and increases in social mobility. 6. GHA is giving increasing attention to strengthening its capabilities in the area of environmental management of road projects including the production of EIAs. Plans are underway to develop an environmental unit within the Planning Division of GHA. 7. Recommendations to mitigate and monitor adverse environmental impacts of HSIP are divided into the following categories: i) on-site maintenance; ii) institutional strengthening and training; iii) environmental management of road construction and 93 Annex 4-3 Page 2 of 4 maintenance actions; and iv) compliance with environmental requirements by rehabilitation contractors. 8. Major recommendations in the mitigation plan include: (i) hiring an environmental specialist for 24 months (spread over the four year HSIP implementation period) to assist the fledgling environmental unit of GHA in implementing environmental management aspects of HSIP; (ii) to alleviate chronic road dust problems in settlements, road stretches through busier towns and villages should be tarred; (iii) to reduce accidents the road corridor in the vicinity of settlements, speed limits should be clearly posted and rumble strips and pedestrian crossings provided; (iv) GHA should establish an environmental unit in the Planning Division to oversee environmental management of trunk roads in concert with finalizing and implementing a training plan to ensure that environmental management is institutionalized into GHA work; (v) public hearings should be used to provide a forum for local communities to discuss their concerns about environmental aspects of upcoming road rehabilitation activities with staff from GHA; (vi) GHA should develop plans to undertake an awareness campaign for communities on environmental aspects of road works so that the public can provide inforrned input to the EIA and environmental monitoring processes; (vii) strengthened institutional coordination and interagency arrangements are necessary at district and national levels to ensure effective mitigation of road work on the surroundings, and the impacts of other activities on the roads themselves; (viii) environmental protection clauses should be included in construction bid documents with clear penalties for non-compliance. 9. Table I below lists specific mitigation recommendations including who should carry them out and when, and implications for project costs. Further details are available in the Draft Final Report of the Environmental Impact Assessment Study by ARD, INC., March 1995. 94 Annex 4-3 Page 3 of 4 Table 1 . Mitigation Plan for HSIP TASK WHO | WHEN COST' 1.1 Hire Environmental GHA Within 4 months of 2 years consultant Specialist (Consultant for project start-up salary, vehicle, 24 m/m over 4 years) running costs, office equipment, secretarial support: $125,000 1.2 Road sections in Contractors supervised Throughout project Absorbed as part of settlements are tarred by GHA/World Bank implementation overall construction consultants cost of the Project 1.3 Public hearings GHA District offices in Throughout project No additional project conducted conjunction with long- implementation prior cost, part of TOR of term environmental to rehabilitation of long-term GHA consultant and each road section environmental Environmental Unit (EU) consultant staff 1.4 Road-specific EIA GOG EPA in conjunction By end of 1995 Production and Guidelines developed with GHA long-term distribution costs environmental consultant and EU staff 1.5 Gravel pits Contractor supervised by Throughout project Absorbed as part of rehabilitated GHA/World Bank implementation construction cost of consultants Project 1.6 Landscape Contractor supervised by Throughout Absorbed as part of rehabilitated GHA/World Bank implementation construction cost of consultants Project 1.7 Road section- Long-term environmental Throughout Absorbed in cost and specific ElAs conducted consultant and EU staff implementation prior TOR of GHA long- with GHA/World Bank to rehabilitation of tern environmental consultants each road section consultant 1.8 World Bank and Long-term environmental First quarter of Expectation is that other environmental consultant and EU staff project documents can be guideline documents implementation obtained free of cost collected and used 1.9 Drainage design Contractor in Throughout project No additional cost specifications finalized consultation with long- implementation (i.e., absorbed as part and implemented term environmental of construction cost) consultant and EU staff with GHA/World Bank consultants 1.10 Road safety Contractor in Throughout project Absorbed as part of measures designed and consultation with long- implementation construction cost implemented term GHA environmental consultant and EU staff with GHA/World Bank consultants 95 Annex 4-3 Page 4 of 4 TASK WHO WHEN COST' 2.1 Environmental Unit GHA in conjunction with By the second Cost of 3 full time (EU) established MRH and GOG EPA quarter of project professional staff and implementation support staff will be borne by GHA; provision of additional equipment and supplies to be agreed upon between GHA and HSIP staff 2.3 Mobile Public GHA, long-term Throughout Video production, Awareness seminars environmental consultant implementation, but fielding of mobile organized and EU staff in prior to rehabilitation unit, dissemination of collaboration with Ghana of each road section materials Information Services and Ghana Education Service 3.1 Fully operational EU GHA Six months prior to Absorbed as part of end of two year training plan and cost tenure of long-term of establishment of GHA environmental EU (i.e., 2. 1) consultant 3.2 Legal compliance EU staff Throughout In accordance with with compensation implemen-tation, but legal compensation regulations prior to rehabilitation regulations for Ghana of each road section 3.3 Road-related Long-term environmental During first two No additional Project environmental policy consultant and EU staff years of Project cost developed in collaboration with implementation EPA and other appropriate GOG line agencies 3.4 Inter-agency Long-term environmental Prior to and during No additional Project coordination consultant and EU staff rehabilitation of each cost with local GHA office road section and other GOG line agency representatives 4.1 Environmental Long-term environmental Prior to issuing Absorbed as part of protection clauses in consultant in conjunction rehabilitation Project construction rehabilitation contract with HSIP Project contracts costs Management Unit (PMU) 4.2 Clauses for non- Long-term environmental Prior to issuing Absorbed as part of compliance penalties consultant in conjunction rehabilitation Project construction included in rehabilitation with HSIP Project contracts costs contract Management Unit (PMU) Breakdown of costs is provided in Project Files. 96 Annex 5-1 Page 1 of 2 REPUBLIC OF GHANA HIGHWAY SECTOR INVESTMENT PROGRAM DOCUMENTS AVAILABLE IN THE PROJECT FILE 1. The Budget Statement and Economic Policy of the Government of Ghana for the Financial Year 1995, Presented to Parliament by Dr. Kwesi Botchwey, Minister of Finance, (February 1, 1995) 2. Ghana - Vision 2020 (The First Step: 1996-2000), Presidential Report to Parliament on Coordinated Programme of Economic and Social Development Policies, (January 6, 1995) 3. Public Expenditure Review 1993, The Government of the Republic of Ghana, Ministry of Finance, (March 1994) 4. National Development Policy Framework, Volume I - Long-Term Development Objectives, The Republic of Ghana, by National Development Planning Commission, (May 1994) 5. National Development Policy Framework, Volume II - Current Level of Development in Ghana, The Republic of Ghana, by National Development Planning Commission (February 1994) 6. 1994 Estimates, The Government of the Republic of Ghana, Ministry of Roads and HIighways, (January 10, 1994) 7. Road Sector Strategy and Programme 1995-2000, The Government of The Republic of Ghana, Ministry of Roads and Highways, (June 1995) 8. Summary Report of the Environmental Impact Assessment Study, by Associates in Rural Development, Inc., (February 1995) 9. Public Expenditure Review (Draft), Effective Planning and Execution of the Development Budget, Republic of Ghana, Ministry of Finance, (May 13, 1995) 10. Report on the Organizational, Management, and Institutional Capacity Assessment Study of the Ghana Highway Authority, by Public Administration Service, (July 1994) 11. 1995-2000 Strategic Plan, Ministry of Roads and Highways, Ghana Highways Authority, Department of Feeder Roads, Department of Urban Roads, (December 1995) 12. Organisation and Management Study of the Ministry of Roads and Highways (Final Report), by Dar Al-Handasah, Shair and Partners, (June 1995) 13. Summary of 1995 Estimates, Ministry of Roads and Highways 97 Annex 5-1 Page 2 of 2 14. Proceedings of the First Roads Sector Seminar, Republic of Ghana, Ministry of Roads and Highways, (November 1993) 15. Public Investment Programme, 1993-95, Volume 2.7, Project Profiles and Summary Tables, Roads and Highways, Republic of Ghana, Ministry of Finance and Economic Planning, (June 1993) 16. Urban Road Maintenance: Financing Sources and Mechanisms Study (Draft Final Report), Government of Ghana, Department of Urban Roads, by Delta Technics, Accra (January 1993) 17. Road User Charges and Axle Load Study, Ministry of Roads and Highways, Government of the Republic of Ghana, Final report prepared by TecnEcon Economic and Transport Consultants in association with Asafo-Boakye & Partners, Ghana (May 1994) 18. Toll Road Seminar, (June 1995) 19. Engineering & Design Studies Trunk Roads Rehabilitation & Maintenance Project (TRP2) Final Report and Appendices Zone I Northern. Upper East & Upper West Regions, RITES, India in association with Design Consultants, Ghana, Final Report (January 1993) 20. Engineering & Design Studies Trunk Roads Rehabilitation & Maintenance Project Final Report Parts 1 and 3; Zone 2 Brong Ahafo & Ashanti Regions, Engineering & Economic Studies, Conterra Limited, Ghana in association with Stanley Associates Engineering Limited, Canada (March 1993) 21. Engineering & Design Studies Trunk Roads Rehabilitation & Maintenance Project Final Report and Appendices Engineering Zone 3 Western & Central Regions, Asafo-Boakye & Partners (February 1994) 22. Engineering & Design Studies Trunk Roads Rehabilitation & Maintenance Project Final Report and Appendices Engineering Eastem. Volta & Greater Accra Regions Asafo- Boakye & Partners (February 1990) 23. Engineering and Design Studies for Rehabilitation and Maintenance of Trunk Roads by Contract Zone 4, Executive Summary, Final Report and Economic Evaluation, Twum Boafo & Partners, Ghana in association with Rendel, Palmer and Tritton, England (March 1993) 24. Reconstruction of Accra-Yamoransa Road Consulting Services for Engineering & Design Studies Draft Final Report Kampsax International in association with Stresscon Engineering Consultancy (January 1994) 25. A series of documents relating to the Economic Analysis of the HSIP. 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