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The World Bank

FOR OFFICIAL USE ONLY

GG Z, _

Report No. 8367-TA

STAFF APPRAISAL REPORT

THE UNITED REPUBLIC OF TANZANIA

INTEGRATED ROADS PROJECT

MAY 6, 1990

Infrastructure Operations DivisionSouthern Africa Department

This document has a restricted distribution and may be used by reipients only In the perfomnance oftheir offcial dudes. Its contents may not otherwise be disclosed without World Bank authorizaton.

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CURRENCY EQUIVALENT(as of March 31, 1990)

Currency Unit Tanzanian Shilling

SDR 1.0 = US$1.29US$ 1.0 = SDRO.78TSh 1.0 US$0.005US$1.0 TSh 200

FISCAL YEAR

July 1 to June 30

WEIGHTS AND MEASURES

1 meter (m) = 3.2808 feet (ft)1 kilometer (km) = 0.6214 miles (mi)1 metric ton (tonnes) = 1.023 short tons

GLOSSARY OF ABBREVIATIONS

ADT = Average Daily TrafficAfDB = African Development BankAGC = Attorney General's ChambersATC = Air Tanzania CorporationCML Central Materials LaboratoryCODAP Coordination Office for Donor Assisted ProjectsCRRP = Core Rural Roads ProgramCTB = Central Tender BoardDANIDA Danish International Development AgencyDCA Development Credit AgreementDCM = Construction and Maintenance DepartmentDE District EngineerDEM Electrical and Mechanical DepartmentDMDA = Manpower Development and Administration Dept.DPR Planning and Research DepartmentDSM = Dar es SalaamDSM Tech. Dar es Salaam Technical CollegeEEC = European Economic CommunityERP Economic Recovery ProgramERR Economic Rate of ReturnESAMI Eastern and Southern Africa Management InstituteFINNIDA = Finnish International Developmient AgencyFRG = Federal Republic of GermanyFY = Fiscal YearGDP = Gross Domestic ProductGOT = Government of TanzaniaHDM Model = Highway Design and Maintenance Standards ModelICB International Competitive BiddingIRP = Integrated Roads Project

MCTI MCW's Morogoro Training InstitutetCW - Ministry of Communications and WorksMLGC Ministry of Local Government and Cooperativesm-m Man-months

i MOF = Ministry of Finance -

MPTS - Manpower Training SectionN.A. = Not ApplicableNCC National Construction CouncilNIT National Institute of TransportNORAD = Norwegian Agency For Development CooperationNRSC National Road Safety CouncilNTC = National Transport CorporationODA-UK = Overseas Development Administration (U.K.)OED = Operations Evaluation DepartmentOGL = Open General License Facilityp.a. = per annumPMO = Prime Minister's OfficePPF = Project Preparation FacilityRE = Regional EngineerREO = Regional Engineer's OfficeRETCO Regional Transport CorporationRRD = Rural Roads DivisionSADCC = Southern Africa Development Coordination ConferenceSATCC = Southern Africa Transport and Communications

CommissionSIDA = Swedish International Development AuthoritySOE = Statement of ExpendituresTAC = Tanzania Audit CorporationTAfT = Technical Assistance ane TrainingTANZAM = Tanzania-Zambia HighwayTAZARA = Tanzania-Zambia Railways AuthorityTHA = Tanzania Harbours AuthorityTRC = Tanzania Railways CorporationTRE = Trunk Roads EngineerTRMD = Trunk Road Maintenance DepartmentUDA = Shirika la Usafiri Dar es SalaamUDSM - University of Dar es SalaamUNCTAD = United Nations Conference on Trade and DevelopmentUNDP = United Nations Development ProgrammeUSAID = United States Agency for International Developmentvoc = Vehicle Operating Costvpd = Vehicles per Day

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

UNITED REPUBLIC OF TANZANIA


STAFF APPRAISAL REPORT

Table of Contents

Page No.

Credit and Project Summary ......................................

I. Transport Sector Development Strategy

A. Introduction ................. ........... 0......................... B. Current State of the Transport Sector ......... O...* .....* 2C. Government Objectives and Policy in the Sector ........... . 4D. Strategy for Transport Sector Recovery .............. 5E. Resource Mobilization and Cost Recovery in the Sector ..... 9F. Previous Bank Group Involvement in the Sector . ............ 11G. Rationale for Bank Involvement . ........ ......... 12

II. The Roads Sector

A. Introduction................ 13B. Issues............. 14C. Diagnosis of the Problems.......... 15D. Strategy for Change .. 18

III. Strategy for Stabilizing Road Network Conditions

A. Obi( .ives ................................................ 23B. Re..ailitation of Trunk and Regional Road Networks ........ 24C. Road Maintenance Program .................................. 26D. Resource Mobilization ...... ............................. ........ 27E. The Role of IDA in the Integrated Roads Project .... ...... 28

IV. The Project

A. Project Scope and Objectives .... .......................... 29B. Project Description ....................................... 29C. Institutional Support ..................... * ............... . .... 31D. Vehicle Weight Control and Road Safety ...#...... ........... 33E. Revision of Procurement Regulations and Procedures ........ 34F. Road and Bridge Rehabilitation Program .. .................. 34G. Road Maintenance Program ....... ................... 35H. Freight Passenger and Air Transportation ........ ...... * 37I. Project Cost Estimates and Financing ..... ................. 37J. Implementation and Present Status of the Project .. ........ 39K. Procurement . ...................................... . 40L. Disbursements ................................................. 41

M. Reporting and Auditing ......................... .......... 43N. Environmental Impact and Involvement of Women .......... ... 43

V. Economic Justification

A. Project Justification ....... ............................. 44B. Project Benefits and Beneficiaries . .................. 45C. Economic Returns .......................................... 46D. Sensitivity Analysis and Risk ...... . ....................... 48

VI. Agreements Reached and Recommendations .......................... 49

r

Several preparation missions were fielded prior to appraising this project. Thisreport has been prepared by Messrs. M. Konishi (Sr. EconomistlTask Manager), P.Morris (Principal Transport Engineer), S. Berkman (Vocational TrainingSpecialist), Gopalkrishnan (Procurement Specialist), K. Rogers (EquipmentManagement Specialist -Consultant), B. Butcher (Organization Specialist -Consultant), 0. Ellevseth (Highway Engineer - Consultant), G. Wilson(Economist/Financial Analyst), Ms. A. Fantaye (Operations Assistant) and Ms.Alice Da Costa (Administrative Secretary) on the basis of their findings duringan appraisal mission in June/July 1989. Ms. Laura Selwold and Mrs. Hulda Hunterproduced the graphics and charts and Ms. Hanni Najar assisted in processing thisreport.

ANNEXES

1-1 Transport-Related Bank Group Projects in Tanzania2-1 Classification of Road Networks2-2 Chart ls MCW: Present Headquarters Organization

Chart 2: Proposed Reorganization at HQ: Roads End EngineeringChart 3As Organization of Model Regional Engineer's OfficeChart 3B: Model Roads Organizatior. in Regional Engineer's OfficeChart 3C: Interconnection Between Regional Engineer's Office and HQ

2-3 Establishment of Plant Pools for Road Equipment and Vehicles3-1 Annual Physical Targets - Trunk and Regional Roads3-2 Government Road Budget Requirement4-1 Summary of Technical Assistance to MCW4-2 Work Force Development and Training Program4-3 Outline of Procurement Changes4-4 Evaluation and Impact Criteria for Rural Roads4-5 Implementation Schedule for Road, Bridge and Ferry Works4-6 Tentative List of Equipment for Eight Local Contractors4-7 Equipment Rehabilitat. on Program and Tentative List of Equipment Required

for Private ar 1ICW Plant Pools4-8 Management Assiibtance to ATC4-9 Project Cost Estimates and Financing Plan4-10 Key Actions for Implementing IDA-Financed Components4-11 Estimated Disbursement Schedule4-12 Participation of Women in Road Maintenance - Recommended Guidelir.es5-1 Economic Justification: Trunk Roads5-2 Economic Justification: Regional Roads

MAP Integrated Roads Project

Documents in the Project File

1. Documentation for the Transport Sector Donors' Conference (December 1987 -Arusha, Tanzania)

2. Agricultural Feeder Roads Study (Cowiconsult, August 1987)3. Rural Roads Operations and Management Study (Cowiconsult, February 1989)4. Feasibility Study: Chalinze-Segera-Tanga-Moshi-Arusba Road (Norconsult

April 1989)5. Feasibility Study: Group 3 Roads (Gauff Ingenieure, August 1989)6. Feasibility Study: Group 4 Roads (Inter Consult/Mott, Hay & Anderson, June

1989)7. Feasibility Study: Group 5 Roads (Makconsult/John Burrow & Partners,

September 1989)8. Feasibility Study: Group 6 Roads (Howard Humphreys/M-Konsult, October 1989)9. Feasibility Study: Group 7 Roads (Howard Humphreys/M-Konsult, April 1989)10. Report on the 'Maintenance Management Workshop" (ESAMI, Arusha, September

1988)11. Labour-Based Contractor Training for Rural Roads in Tanzania - Project

Proposal - ILO (September 1989)12. Road Network Stabilization Program - A. Bandari (July 1989)13. Morogoro Training Project - Final Report (Crown Agents - 1988)14. National Institute of Transport - Study and Project Proposal (June 1989)15. MCW Materials Laboratory - Study and Project Proposal (February 1990)16. Morogoro Comworks Training Institute - Progress Report (April 1989)

17. MCW Headquarters Reorganization - Management Report (Barry Butcher -October 1989)

18. MCW Equipment Management - Management Report (Ken Rogers - February 1990)19. IRP Donors' Conference Documents (various dates)20. Tanzania - Financial Performance of the Public Transport Sector (Ian Heggie

- January 31, 1988)21. Air Tanzania Corporation: Strategic Evaluation and Corporate Restructuring

(Jamil Baz - April 1989)22. Survey Report on Public Sector Fleet to Determine Non-Operational Vehicles

in The Mainland of Tanzania (R.K. Singh - September 1988)23. Agricultural Supply to the Transport Sector in Tanzania (Kristy Cook -

December 1987)24. Facts and Figures in Transport and Communications (MCW - June 1989)25. IRP - Outline Terms of References for Technical Assistance to MCW26. Proposed Road Network Stabilization Programme 1989-1999 (MCW - June 1989)27. Working Paper on Work Force Development



CREDIT AND PROJECT SUMMARY

Borrower: United Republic of Tanzania

Beneficiary: Ministry of Communications and Works, Ministry of Finance, AirTanzania Corporation, National Transport Corporation, NationalInstitute of Transport, and National Construction Council

Amount: SDR 139.9 million (UlS$180.4 million equivalent)

Terms: Standard IDA Terms, with 40 years maturity

Cofinancing: The project, with a total cost of US$871.1 million, is expectedto be parallel financed by: IDA, DANIDA, Federal Republic ofGermany (FRG), Italy, FINNIDA, ODA (UK), NORAD, EEC, USAID.The Netherlands, Switzerland, Ireland, the African DevelopmentFund (AfDF), UNDP, and the Saudi Fund. Total externalfinancing amounts to US$790.6 million equivalert with afinancing gap of US$33.8 million; specific amounts from eachco-financier is shown in the financing plan on page (iii).The Government is expected to contribute US$80.5 million, plusannual road maintenance budgets, from its own resources; theannual budget requirements are within the ceilings set in therecent Public Expenditure Review (Report No. 7559-TA of May22, 1989).

Project The primary objective of the proposed project is to restoreObjective: Tanzania's trunk and regional road networks, which have become

an obstacle to the sustainability of the economic recoveryprogram, and to develop MCIW's institutional capacity toproperly manage the networks. In particular, the project willassist the Government in developing strong management andtechnical capacity to 'naintain the trunk and regional roadnetworks, and transform MCW from a construction-orientedministry to an administration/contract management-orientedministry. The physical target is to have, by 1966, 60Z oftrunk roads in good condition from current 15Z and toselectively rehabilitate the regional road network in elevenof the most agriculturally productive regions to have 502 ofthe network in those regions in good condition from the current102, and to install regular maintenance on 80S of the trunkand 60Z of the regional road networks.

Project The proposed project would consist of: (a) institutionalDescription: support to strengthen Tanzania's road management capacity,

including support to MCW management and the Regional EngineersOffices, domestic contractors, University of Dar es SalaamEngineering Faculty, Arusha Technical College, CentralMaterials Laboratory, technician training at the Morogoro

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Comworks Training Institute, road safety program, labor basedconstruction methods, revision of Government procurementregulations, and project coordination; (b) civil works programincluding rehabilitation of 1,080 km and resealing of 620 kmof trunk paved roads, rehabilitation of about 2,550 km ofunpaved trunk roads and upgrading to paved standard of about340 km, rehabilitation of 30 bridges and minor structures alongtrunk roads, improvements of about 10 vehicular ferrycrossings, rehabilitation of about 3,000 km of regional roadsin eleven core regions, renovation of MCW headquarters andREOs, and upgrading office technology and communications; (c)road maintenance support program including establishment andequipping of privately-operated plant pools, rehabilitationof existing equipment and establishing an autonomouscommercially-operated MCv plant pooL Lo manage the toadmaintenance equipment, rehabilitation of equipment by contract,road maintenance by contract, hiring of equipment from plantpools, and emergency road works; and (d) management assistanceto Air Tanzania Corporation, National Transport Corporationand Dar es Salaam bus companies.

Justification The main justification of the project is that Tanzania'sand Risks: economic recovery program cannot be sustained unless the

transport costs are reduced and accessibility to the primaryagricultural areas are improved. The rehabilitation works (83Zof project cost) are estimated to have an economic rate ofreturn of about 241. The success of the project hingesultimately on MCW's implementation capacity. The particularrisks include: (i) slow progress on privatization initiatives;(ii) failure to effect the agreed procedures to delegateexecutive authority for contracting goods, works and services;and (iii) failure to meet the agreed road budget targets. Toguard against these risks, experiences learned from pastprojects have been incorporated into the project design: (i)by undertaking the main institutional and policy changes priorto project effectiveness, including (a) changes in theprocurement regulations, (b) appropriation of the agreed roadbudget for the first year of project implementation, and (c)reorganization of roads administration; (ii) by conditioningthe approval of road work contracts financed by IDA on theGovernment appropriating the agreed annual road budget; (iii)by completing the engineering works for the first two yearsof the program prior to Board presentation; (iv) by developingcloser coordination amongst the Government, donors and IDA;and (v) by stationing in Tanzania an experienced highwayengineer from the Bank to assist the Government in coordinatingimplementation of the project.

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Estimated Costs Local Foreign Total(US$ Million)

Institutional Support 10.6 37.8 48.4Rehabilitation Program 141.8 436.3 578.1Ma_.r.tenance Program 22.8 46.2 69.0Freight and Passenger Transport 1.1 4.1 5.2

Total Base Cost 176.3 524.4 700.7

Physicdl Contingencies 19.4 59.6 79.0Price Contingencies 23.3 68.1 91.4

42.7 127.7 170.4

TOTAL COST 219.0 652.1 871.1

Financing Plan:

IDA 24.7 155.7 180.4DANIDA 11.4 45.6 57.0FRG 0.6 31.4 32.0ITALY 0.0 91.7 91.7FINNIDA 9.9 38.5 48.4ODA 1.8 11.8 13.6tJNDP 0.6 2.3 2.9NORAD 7.4 .29.1 36.5EEC 37.5 133.5 171.0USAID 32.3 0.4 32.7The Netherlands 4.0 14.0 18.0Switzerland 0.9 9.9 10.8Ireland 1.8 3.0 4.8AfDF 2.7 42.5 45.2SAUDI FUND 0.0 11.8 11.8Financing Gap 2.9 30.9 33.8GOVERNMENT 80.5 0.0 a0.5

TOTAL 219.0 652.1 871.1

Estimated Disbursement of IDA Credit:

IDA FY: 91 92 93 94 95 96 97 98

Amnual 12.9 28.2 34.2 38.4 28.2 21.4 12.0 5.1Cumulative 12.9 41.1 75.3 113.7 141.9 163.3 175.3 180.4

Economic Rate of Return: 242

Map: IBRD No. 22067

TANZANIA

INIEGRATED ROADS PROJECT

I. TRANSPORT SECTC1 DEVELOPMENT STRATEGY

A. Introduction

3 .01 L.1 1567, Tanzania's leadership introduced sweeping economic andsocial changes and embarked on an era of socialism. The new priorities of thecountry, as enunciated in the Arusha Declaration, were directed towards self-reliance, development of a system of basic education, and broad-based rural

; development. The public sector was viewed as the vanguard of development, withpublic expenditure as the principal means of transforming the economy. By theearly 1970s, the policy effects had led to a rapid growth in the public sectorthrough: (a) the nationalization of large scale indnistries and the financialsystem, the formation of Ujamaa (communal) villages, and the replacement offarmers' cooperatives with state-run crop marketing authorities; (b) dramaticincreases in the provision of social services; and (c) expansion of centrallymanaged activities.

1.02 By the end of the 1970s, the economy was faltering: industrial outputhad begun to decline, agriculture was stagnating, while the fiscal situationdeteriorated sharply with deficits averaging about 16Z of Gross Domestic Product(GDP). In agriculture, parastatal marketing monopolies dampened incentives forfarm output growth, and involuntary resettlement disrupted productiverelationships in rural areas. in industry, inappropriate project designs anda heavily protective environment resulted in an import dependent sector with,in many instances, an inefficient production structure. By this time, it wasclear that the Government was no longer capable of financir,g the extensiveservices which it had committed to delivering, and the poor performance of manyGovernment agencies constituted a bottleneck to economic growth.

1.03 The 1984/85 Budget represented a turning point, and provided thefirst indication of a new pragmatism in the Government's economic menagement.The Tanzanian Shilling (TSh) was devalued by one-third, parastatal subsidies werecut, an import liberalization program was initiated through the implementationof an "own-funds imports program", and restrictions on the movement of grain wereeased. Positive responses to these measures encouraged the Government toconsider a more comprehensive and systematic policy reform program to deal withthe economic crisis, and to mobilize external support to bridge the expectedfinancing gap. In 1986 the Government launched the Economic Recovery Program(ERP). The measures initiated at the time included: (a) significant exchangerate adjustments, moving towards an equilibrium rate; (b) adjustments in interestrates, which were aimed at achieving real positive rates; (c) increases inproducer prices in real terms for export crops; and (d) significant reductionin the number of price-controlled items. These actions were followed up with(i) trade liberali'ation measures including export retention accounts and theOpen General License Facility (OGL); (ii) gradual dismantling of administrativecontrols over prices and distribution: and (iii) progressive devaluation of thecurrency. The economic response to these reforms was positive, with GDP growing

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at between 4 and 52 p.a., sufficient to enable per capita income and consumptionto rise for the first time in several years. Agricultural production, helpedby good weather and stronger price signals, has increased substantially over thepast two years. Similarly, manufactured and other non-traditional exports, haveincreased by nearly 6O0 over the same period.

1.04 Unfortunately, although not unexpectedly, the recovery and the strongjump in the level c. economic activities have exposed how much the basic servicesand infrascructure have deteriorated over the past decade and a half of economicdecline. The banking system, with the majority of its funds tied up in non-performing loans to the Government and parastatals, is essentially bankrupt andis incapable of providing fresh capital for new investments. Farmers respondingto strong price signals have seen their efforts frustrated by inadequateprocessing facilities and marketing rigidities. Movement of goods and peoplethroughout the country is at a virtual standstill due to severe deteriorationin the country's transport network. These and other factors have made itdifficult, or impossible, for the country to capitalize fully on theliberalization policies adopted by the Government under the ERP. It isremarkable that, despite these difficulties, the economy still responded stronglyto the liberalization and adjustment efforts of the Government. How long suchrecovery can be sustained depends heavily upon fundamental changes in the roleof Government and how quickly some of the physical and institutional issues canbe addressed and rectified. The challenge for policymakers in the next stageof the recovery process is to effectively address the problems of the publicsector, to lift the burden of poorly performing state enterprises off theeconomy, to continue the shift from direct controls on economic activity toindirect levers working through macroeconomic policy and the market-orientedprice signals, to get the Goverrunent out of businesses that can be effectivelyand commercially delivered by the private sector and to improve the effectivenessof Government programs in areas such as physical and social infrastructure wherethe state is the main provider.

B. Current State of the Transport Secto:

1.05 A well functioning transport system is crucial to the sustainedeconomic recovery of Tanzania. The main linkages between transport and economicrecovery are evident in four key areas: (a) the size of the country, itsstructure of production and its population distribution; (b) the cost to theeconomy of an unreliable, deteriorated ne*work; (c) the fiscal implications ofinefficient transport operations; and (d) the sector's importance as a majorforeign exchange earner.

1.06 First, the pattern of settlement and economic activity in the cc mntrygives transportation an extraordinarily strategic role in economic development.Tanzania has a large territory (slightly smaller than France and Spain combined)with a widely dispersed population, mainly around its geographic periphery.Agriculture, accounting for 54X of GDP, is dominated by smallholders scatteredin small rural communities, while the major markets *and the processing andcollection centers for crops, as well as the distribution points for agriculturalinputs and fuel, are concentrated in urban centers located at considerabledistances from each other and from the major coastal seaport of Dar es Salaam.

Exports are dominated by primary agricultural commodities of high bulk but lowvalue. Growth in agricultural output, which will constitute the primary basisfor growth in the economy for the foreseeable future, is predicated on thetransport system being able to efficiently integrate the rural communities withthe urban centers and facilitate reliab.e and cost-effective transport of exportcrops from the major collection points to the port of Dar es Salaam. These tworoles have not been effectively performed by the transport system and, asdiscussed in the next paragraph, the cost to the economy has been enormous.

1.07 Second, Tanzania's road infrastructure, which is crucial to thelinkage of rural communities to the urban areas, has deteriorated markedly overthe last decade and a half and its coverage of rural areas is limited even byregional standards. The state of the roads, two thirds of which are impassableor unmaintainable, imposes significant penalties on aericultural activity throughits effect on vehicle operating costs, delayed evacuation and damage to crops.Losses imposed on the economy through higher vehicle costs alone are estimatedat up to US$150 million p.a., equivalent to about one-third of the country'sexport earnings. Tanzania's domestic railway system, which is strategicallylocated to serve most of the major urban centers, has been unable to meet thedemand for low-cost, long-distance transport of export crops and of criticalinputs such as oil and fertilizer in recent years, due to its poor operationalperformance. As a consequence, significant stockpiles of cotton - one ofTanzania's major export crops - for which road transport is inappropriate oncompetitive grounds, have built up over the last few years and a significantproportion of the other export traffic., as well as bulk inputs, have beendiverted to roads. The total cost to the economy of scockholding and diversionof traffic, that an effectively performing railway would have been able to handleis of the order of US$40 million p.a. For the ports, the long dwell time ofcontainers in the port, caused by the inefficiency of operations as well ascumbersome customs procedures to clear the cargo, costs the economy about US$10million p.a. in working capital costs and demurrage charges (assuming excessdwell time is 20 days pe_. imported comntainer). Based on these calculations, itis conceivable that the economy is losing nearly US$200 million p.a. in directeconomic costs due to the deteriorated transport infrastructure and itsinefficient operation. If the indirect costs such as loss of crop, theft, lossof export market, spoilage, etc, due to the current transport problems are takeninto consideration, it would be difficult, if not impossible, to see howTanzanian goods could be competitive in the world market, or how the cost ofliving could be held down. Without significant rehabilitation and actions torestructure the modes of operation and maintenance of the roads and rai'ways.these costs and physical impediments will constitute a major barrier to sustainedeconomic recovery.

1.08 Third, Tanzania's transport system is characterized by a significantdegree of public sector participation. The transport parastatals' financialperformance has deteriorated substantially in the last decade with most of themmaking losses or generating low returns on their assets as a result ofinefficient utilization of capacity, high fixed costs and sub-economic prices.In 1987, the combined losses of the transport parastatals amounted to US$55million. Government budgetary support of the transport parastatals' cash flowshortfall is small as most of it is financed by short-term borrowings from thestate-owned financial system or deferred payments to suppliers. Although not

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directly affecting the level of the Government's current account deficit, thismode of financing has significant and adverse implications on current levels ofdomestic credit creation and the future level of Government budgetary supportto restructure unsustainable levels of short-term indebtedness to the bankingsystem and suppliers. Addressing the underlying causes of the parastatals' poorfinancial performance will contribute to the maintenance of a sound macroeconomicclimate, which is a key basis for the incentive structures set in place by theERP. The Ministry of Communications and Works (MCW), in 1989, gave instructionsfor each entity to: (a) develo? a corporate financial strategy to make itfinancially autonomous; (b) develop an incentive scheme to increase productivityof its workers; and (c) the Board to take greater responsibility in ensuringfinancial and operational efficiency.

1.09 Finally, the transport sector has an important role to play in thegeneration of additional sources of foreign exchange for the country. Tanzaniaoffers the intrinsically lowest cost route to a seaport for Zambia, Rwanda, andBurundi; and is an important alternative route for the transport of Uganda's.Malawi's and eastern Zaire's foreign trade traffic, largely because of thepossibility of using the railways network for most of the distance, and becausethey can diversify their use of alternative transport corridors rather than beingheld hostage to one route. However, this potential has never been fully tapped,largely because the cost advantages have been significantly outweighed by theinefficiencies of the roads and railways leading to extensive detention oftraffic in transit. Improvements in the service reliability of the railways andthe operating capacity of the port of Dar es Salaam and a generally morecommercial orientation of financial management would allow Tanzania to increaseits net foreign currency earnings from the transport sector. Currently, the portsubsector is the second largest foreign exchange earner in the country aftercoffee, earning more than US$36 million p.a. Potentially, the transport sectorcan earn between US$55 and 75 million p.a. (equivalent to about 12-182 of totalexport earnings) in foreign exchange if the system were operated moreeffectively.

C. Government Objectives and Policy in the Sector

1.10 Given the critical state of the transport sector, the Governmentcalled a Transport Sector Donors' Conference in December 1987 in Arusha. Atthe Conference, a draft National Transport Policy document was presented alongwith a Conference document entitled "Programme for Transport Sector Recovery"which outlined the basic policy, institutional changes and rehabilitationrequirements of the sector in order to reestablish the transport infrastructureand services to cater to the requirements of the economy. As enunciated at theConference, the basic objective of the Government in the transport sector is togenerate immediate improvements in the supply of transport services in the firstinstance, followed by a more sustained growth in the capacity and the volume ofservices commensurate with the expansion taking place under ERP. As outlinedin the Conference document, sustained improvement in the delivery of transportservices will require major effort and change in the way transport has beenmanaged in the past. The basic reforms needed in the sector are outlined below:

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(a) deteriorated infrastructure requires a major shift in publicexpenditure towards the roads sector. Over the past decade and ahalf, there has been a precipitous drop in the funds allocated forrecurrent and development funding for the road sector: Tanzaniaspent only 3-6Z of its total public expenditures on roads, where 10-202 is normal for countries with far better maintained road networks;

(b) a more flexible and dynamic response to road infrastructuredevelopment requires a major institutional change to move away fromthe existing highly centralized administrative system to a moredecentralized system with greater delegation of authority;

(c) to improve the financial and operational efficiency of transportparastatals, commercially oriented pricing and management must beadopted, including cost-based tariff setting (taking intoconsideration proper depreciation of assets and improvements inoperational efficiency), bonuslincentive schemes to reward goodperformance, and a rigorous cost control systems. The enunciatedGovernment policy is for all parastatals to generate at least anoperating surplus;

(d) similar to the financial objectives for parastatals, cost recoveryfor the road sector must be improved, i.e. the revenues generatedfrom the road sector should cover at least the recurrent and periodic oroad maintenance cost;

(e) to improve provision of road transport services, all administeredtariffs for trucking and passenger transport sector should beremoved;

(f) to develop the local capacity in the transport sector morevigorously, private sector development should be promoted in theareas of civil works, engineering consultancy, mechanical services,truck and passenger transportation, and air charters; and

(g) to promote regional integration, customs procedures and transitarrangements should be simplified to improve the ease with whichtransit cargo can pass through Tanzania.

D. Strategs for Trananort Sector Recovery

1.11 To the Government's credit and owing to its willingness to undertakemajor reforms in the transport sector, the donor community responded positivelyto the recovery program presented at the Transport Sector Donors' Conference.In partnership with IDA, the Government has formulated three major programs toaddress the shortcomings of the transport sector: (a) the proposed IntegratedRoads Project; (b) the recently approved Port Modernization Project II; and (c)a proposed Railway Restructuring Project. With the majority of requiredfinancing secured or pledged, the investments in the transport sector, supportedby Bank Group operations, will total US$1,300 million over the next five to eightyears. The largest allocation is for the roads sector with US$980 million,

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followed by railways with an estimated US$200 million, and the port sector withUS$120 million. The magnitude of investment foreseen is consistent with therecommendation of the Public Expenditure Review (May 1989 Report No. 7558-TA),which suggests a major shift of public funds to the transport sector, increasingto over 202 of the total development budget expenditure. The following sectionsoutline the development strategy for each of the subsectors as formulated in theproposed projects.

1.12 Roads. The deterioration of the road networks has been causedprimarily bys (a) inadequate funding for road maintenance; (b) a cumbersome andinefficient institutional structure for road administration; (c) a highlycentralized and bureaucratic procurement and administrative decision-makingprocess; and (d) inadequate technical capacity to carry out maintenance andmanage contracts. Efforts to develop trunk road maintenance capacity under theFourth and Fifth Highway Projects (Credits 507-TA and 876-TA) failed to realizeany improvements in road conditions, and road rehabilitation under the on-goingSixth Highway Project (Credit 1688-TA) has been extremely slow in starting,mainly because of the institutional weakness of MCW and the protractedprocurement process caused by outdated government regulations.

1.13 The Government has recognized that a major restructuring of roadsadministration is necessary if road networks are to be maintained in goodcondition to serve their economic purposes. The primary objective of theGovernment in the subsector is to restore the country's essential roads and todevelop institutional capacity in MCW for their maintenance. The institutionalobjective will be to transform MCW from basicaLly a 'blue collar, constructionoriented ministry to a "white collar" administration/management orientedministry, with executive authority being delegated to MCW's 20 RegionalEngineer's Offices (REOs) for implementing road investments and maintenance.Details of the roads sector are provided in Chapter II; the strategy forstabilizing road network conditions is outlined in Chapter III; the proposedIntegrated Roads Project (IRP) to support the road stabilization program isdetailed in Chapter IV; and economic evaluation summarized in Chapter V.

1.14 Road Transport. The trucking sector plays a major role in thedomestic transport industry, carrying nearly 702 of the estimated 2.5 billionton-km of freight movement within Tanzania. The existing fleet size is estimatedto be about 14,000 trucks (over three-ton capacity), of which 782 is owi.ed bythe private sector, 42 by the 12 Regional Transport Corporations (RETCOs) underthe National Transport Corporation (NTC), and 18Z by other public sectororganizations (marketing boards, cooperatives, etc.). The main feature untilthe mid-1980s was chronic shortage of replacement vehicles, spare parts, fueland tires. Consequently, the vehicles were aged with very low availabiiityrates. Fleet replacement was only about 42 p.a., inadequate under Tanzanianconditions, when over 152 would be optimal because of the poor road conditions.Freight movement by road appears to have declined by at least 2t p.a. since themid-1970s but, as the overall level of economic activity had stagnated, this didnot result in persistent or widespread capacity shortage. Between 1985 and 1988,the situation changed dramatically with the revitalization of economic activityunder the ERP. Since the introduction of the 'own-funds imports program" anddonor assistance for the import support program, the sector is in the processof being revitalized to cater to the rapidly expanding demand. The economy,

however, continues to experience major problems in meeting the rapidly growingagricultural production and the economic activities in the rural areas. TheGovernment, realizing the distortional impact of tight administrative controls,has eliminated essentially all barriers to market entry and administratively-set tariffs. The trucking business is now on an upswing, but will continue torequire external assistance for procurement of spare parts and replacementtrucks. The magnitude of the annual foreign exchange requirement is estimatedto be in the order of US$80 million.

1.15 Passenger transport is served both Dy private and parastatal buscompanies; but due to the increased intercity mobility and high population growthrate in Dar es Salaam, as well as excessive regulation of public transport, thedelivery of services has been adversely affected and seriously hinders mobility.A Dar es Salaam Passenger Transport Study was recently commissioned by NTC whichis responsible for Shirika la Usafiri Dar es Salaam (UDA), the city bus company,to investigate the existing regulatory and institutional framework for managingpassenger transport in the Dar es Salaam area with a view to improving deliveryof services and efficiency of operations. Results of the study will be reviewedby IDA and presented to a transport donors meeting to agree on future actionsand assistance in the subsector.

1.16 Railways. In the railways subsector, the Tanzania Zambia RailwaysAuthority (TAZARA) operates a service that is principally dedicated to Zambiantransit traffic, although it is increasingly catering to local traffic in thesouthern part of Tanzania. The performance of TAZARA, in terms of freighttransported, improved significantly in 1987 and 1988 in spite of seriousconstraints on the availability of its locomotive fleet. However, a seriousdeterioration was noted in 1989 due to numerous accidents caused by relaxedoperational practices. Additionally, cost recovery is poor and TAZARA has beenunable to meet its debt-service obligations from its cash generation therebynecessitating a recent restructuring of its capital structure. TAZARA hasformulated a well-designed investment program to address the constraints onefficient operations which has attracted considerable donor support. Theeffective haul capacity of the Tanzania Railways Corporation (TRC) -- whichserves the central and northern parts of the country as well as transit trafficfrom Burundi, Rwanda, Zaire and Uganda -- has declined progressively from about1.0 million tonnes of freight in the first year of its establishment in 1978 to0.9 million tonnes in 1989, despite considerable additions to its asset base inthe intervening years. This decline has proved particularly serious in the lastthree years with the pronounced upsurge in domestic agricultural production andincreased diversion of transit traffic from other littoral countries to Tanzania.The decline in traffic moved has reflected (a) the poor availability of TRC'slocomotive and wagon assets as a result of limited access to spare parts,deficient maintenance systems ane skilled staff shortages; and (b) the poorutilization of assets when made available caused largel- by ineffectivemanagement of operatio..s and the unreliable condition of operational andinfrastructural assets. The chronic under-utilization of assets by TRC coupledwith regulatory restrictions on its ability to adjust its tariffs in line withcosts or to control the large labor component of its costs, has led to aworsening financial performance and a massive erosion of its financial position.As a commercial enterprise, TRC is currently a financially bankrnpt entity. AnEmergency Program (EP) for TRC was launched in 1987 with financing from IDA anddonors to stem & d reverse the deterioration in TRC's performance. The program,which is being implemented, has so far succeeded in stabilizing TRC's

performance. The Railways Restructuring Project (FY91) currently underpreparation, will address the restructuring of TRC's organization and operatingpractices and systems, the changes in the system of Government regulation of TRCand the investment requirements that are necessary to enable it to cater fullyand profitably to the demand for freight transport by rail.

1.17 Ports. The port of Dar es Salaam is a major regional port servingthe neighboring landlocked countries of Zambia, Malawi, Burundi, Rwanda, Uganda,and Zaire. The port throughput is the second largest on the eastern coast ofAfrica after the port of Mombasa, and is the second largest eaLner of foreignexchange in Tanzania after coffee. International traffic constitutes nearly 602of the total traffic throughput, and the efficiency and cost effectiveness ofport operations is of paramount importance to its users. In order to modernizethe port of Dar es Salaam, a major program was started in 1984 under the TanzaniaPort Rehabilitation Project (Credit 1536-0-TA). The project aimed to (a) expandthe container handling capacity of the port to meet the rapidly increasingcontainerized traffic; (b) rehabilitate the general cargo berths; (c) improveequipment maintenance; and (d) improve the management and skills level of theTanzania Harbours Authority (THA). Since 1984, the traffic volume, which hadfallen continuously since the mid-1970s, began to recover at a rate of nearly7% p.a. During the same period, THA's operating efficiency also showed gradualimprovements. However, it has become evident in the past two years that seriousbottlenecks were beginning to develop. First, physically (and perhaps mostseriously), the capacity of the newly constructed container terminal isinadequate, with the demand already exceeding technical storage capacity by over40Z. The second phase of terminal expansion must be started immediately if amajor disruption in traffic movement is to be avoided. Second, institutionally,inefficient customs procedures, inter alia, have contributed to the excessivecongestion in the container terminal thro-gh an unacceptably high dwell time ofcontainers in the port. Third, managerially, a shortage of trained middlemanagement and skilled workers continues to make management and operation of theport difficult. Better use of technical assistance and a more systematizedmanagement information system is required to improve management of operations.Fourth, operationally, equipment maintenance continues to be a major problem,especially with regard to the availability of dry cargo handling equipment.Fifth, financial management could be further improved to expand the profitabilityof port operations. And finally, a better incentive scheme is required toimprove output. The Port Modernization Project II, approved in February 1990,is designed to address these issues.

1.18 The project, with an estimated base cost of US$96 million, will: (a)execute the second phase container terminal expansion to handle 2.4 milliontonnes annually (2002 expansion in container terminal capacity); (b) change thefinancial management of THA in order to allow THA to (i) repay to the Governmentall debts incurred in the past, including grants and (ii) introduce anincentive/bonus scheme for workers funded from its own profits; (c) improveequipment availability; and (d) improve customs processing through adoption ofsimplified documentation and training for the customs officers. Given thestructure of the project, if successfully implemented, THA would be in a positionto move expeditiously all cargo on demand, contribute between US$25 and US$50million p.a. to the general revenues of the Government, continue to be one ofthe largest earners of foreign exchange in the country (between US$30 and 40million p.a.), and provide an incentive/bonus scheme of up to 100Z of existingsalaries to its workers which would improve morale and productivity.

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1.19 Civil Aviation. Given the substantial distance between majorpopulation centers, aviation is an important means of transport in the country.The available seat kilometers on Air Tanzania Corporation (ATC), the soleprovider of scheduled domestic services, has grown at an average of 142 p.a. fromabout 83 million in 1977 to about 363 million in 1987. The demand for ATC'sservices is high with average passenger load factor of 762 on all routes and 832in the domestic market, often resulting in a high turnaway rate for customers.Despite this favorable demand for its services, ATC's financial performance hasbeen characterized by growing deficits: in 1986 its operating deficit amountedto TSh 583 million (about US$17.8 million equivalent). ATC faces perennialproblems in acquiring minimum access to spare parts due to its inability togenerate sufficient foreign exchange to finance its own recurrent requirements;it also has constraints on fleet utilization due to lack of proper facilities(e.g. lack of night-landing facilities and poor maintenance of runways).Furthermore, ATC is unable to train its staff properly due to lack of foreignexchange for training abroad. Given these conditions, a systematic assessmentof ATC was carried out under a general civil aviation sector study funded by theIrish Trust Fund, and an issues-oriented report "Air Tanzania Corporation -Strategic Evaluation and Corporate Restructuring" carried out by the Bank (ReportNo. 7618-TA - April 1989), set a suitable strategy for the sector both in termsof improvements to the financial performance of ATC, improved cost recovery inthe civil aviation sector in general, and a least cost strategy to meet theunsatisfied demand in air travel.

1.20 In order to rectify the situation and to implement therecommendations contained in the restructuring study, ATC has: (a) increasedfares by 100-1502; (b) streamlined its operations through reorganization andstaff reduction; and (c) stopped operations on several uneconomic routes.Overall, with the actions being taken, ATC is expected to cover its operatingcost by 1991. ATC has also submitted a capital restructuring program which,inter alia, would make the airline self-financing by 1992. The proposal is beingconsidered by the cabinet. In order to support the restructuring beingundertaken by ATC, the project will assist ATC with management assistance andtraining, particularly in the areas of operational and financial management andcomputing.

E. Resource Mobilization and Cost Recovery in the Sector

1.21 As a follow-up to the Public Expenditure Review carried out inNovember 1987, a Bank study on revenue collection and funding needs in thetransport sector was undertaken and presented to the Government in September1988. The objective of the study was to investigate (a) how the transportsector, as a whole, including parastatals, was performing financially, and(b) how the increased requirements for the roads sector could be financed. Inessence, to finance the massive rehabilitation program and the necessary increasein the road maintenance budget, Tanzania needs to increase its budget allocationfor trunk and regional roads from the present 3-62 of total public expenditureto about ki2 at a stabilized level.

1.22 The study concludes that the overall revenue collected by theGovernment through road user charges and charges on civil aviation activitieswas TSh 4.9 billion (US$72.1 million equivalent) in 1986/87, accounting for about152 of the Government's total current revenue. On the other hand, the overall

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expenditure for the road and civil aviation sector amounted to TSh 2.5 billion(US$36.8 million equivalent), with a net contribution to general tax revenue ofTSh 2.4 billion (US$35.3 million equivalent). This contribution is roughly thesame as the total revenue raised from import duties in the same year and isequivalent in size to about 26Z of the Government's current account deficit.The net contribution made through the road user charges has, however, beennegated by the overall deficit of the public transport enterprises which amountedto about TSh 2.8 billion (US$41.2 million equivalent). The existing financialstatus of the transport sector, therefore, cannot accommodate the need toincrease the annual road maintenance requirements from the currernt level of US$5million to about US$26 million (para 3.11), without adversely affecting resourceallocation to other sectors.

1.23 The study, however, also concludes that the financial control ofroad user revenue collection and road expenditures is weak and the tax structureis too complicated for it to be effectively administered. The study estimatesthat due to administrative weaknesses, about 402 of the potential revenue iseither not collected or never reaches the Treasury. It recommends that financialcontrols be strengthened, the structure of taxes be simplified and that thepresent road toll tax rates be replaced by a tax on motor vehicle fuels whichwould raise their prices by 1.6Z in real terms. Since fuel prices in Tanzaniaare significantly lower than those in neighboring countries (particularly Kenya)and thus encourages smuggling which leads to a drain on foreign -xchange, it isalso suggested that fuel prices be raised by 7.5Z p.a. in real terms for eachof the next four years. The aim of the tax would be to mobilize extra revenuesto support road maintenance and rehabilitation. Implementation of this programwould allow the increases in road expenditures to be met. Revenue would riseunder the proposed program to TSh 11.7 billion p.a. (US$96 million equivalent)to enable the road sub-sector to continue making a substantial contribution tothe general Government revenue.

1.24 An overall strategy for improving financial performance will require:(a) institutional arrangements which provide incentives 'or revenue mobilizationand controlling costs (roads and civil aviation); (b) financial controls whichfoster a commercial outlook and facilitate timely decisions on importantfinancial matters (in relation to MCW's control of road expenditures andmanagement of public transport enterprises); (c) a framework of financial andperformance targets which promotes market discipline and encourages optimum useof existing assets; (d) introduction of appropriate monitoring mechanisms toensure that sector agencies meet established performance targets; and(e) selection of appropriate price and fiscal instruments which discoura-eavoidance/evasion and minimize leakages. The Government is currently reviewingthe various options open to it to generate sufficient revenues to finance themassive increase in public funding for road maintenance and rehabilitation. Inaddition to the above-mentioned study, a specific study of petroleum pricing wasundertaken in connection with the preparation of the proposed Petroleum SectorRehabilitation Project. Based on the study, the Government increased the baseprice and the tax element on petroleum products in February 1990 by 60-10OZ,which would increase the tax revenues from these products by at least US$16million per annum.

1.25 Apart from the resource mobilization program to be agreed with theGovernment in terms of road user charges (para 3.11), specific action programsare being prepared for each public transport enterprise: (a) a Bank study oi the

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financial performance of the civil aviation sector and ATC has been completedand some of its recommendations are already being implemented; (b) a Bank studyon financial performance of THA has been completed and will be implemented underthe Port Modernization Project II; and (c) a financial restructuring plan hasbeen formulated for TRC and will be implemented under the proposed RailwaysRestructuring Project. If the respective programs are successfully implemented.the overall effect would be: (a) ATC and TRC would begin to make modest operatingsurpluses (i.e. elimination of US$10 million p.a. - combined loss suffered bythe two parastatals); and (b) THA would increase its profitability and contributebetween US$25 to 50 million p.a. to the general revenue of the Government. Thetransport sector, therefore, would become a net contributor to the generalrevenues of the Government (US$75 to 80 million p.a., combining the THAcoatribution and the net contribution from the road user charges).

F. Previous Bank Group Involvement in the Sector

1.26 The Bank Group has extended credits and loans to help finance sixhighway projects, one trucking project, one railways project and three portprojects, totaling US$272.6 million since Tanzania became a Bank Group memberin 1964. During the earlier years of lending, the projects concentrated onfinancing of construction and equipment. The focus later shifted tostrengthening of local institutions with provisions for technical assistance andtraining, particularly for road maintenance and road transportation. Whileexperience with the execution of physical components has ger.erally beenacceptable, the objective of technical assistance and training have beendifficult to achieve mainly because of: (a) delays in appointment of technicalassistance staff; (b) cultural and language adjustment problems of technicalassistance staff; (c) lack of effective administrative commitment by Governmentagencies; (d) lack of suitable local counterparts; and (v) unrealistic targets.A more detailed assessment of past Bank Group involvement in the transport sectoris given in Annex 1-1.

1.27 These lessons have been confirmed by the eight Project PerformanceAudit Reports (PPAR)1, and have been highlighted in the comprehensive auditcarried out by the Bank's Operations Evaluation Department on all Tanzaniaprojects from 1964 to 1988. In the roads sector, the Trucking IndustryRehabilitation and Improvement Project (approved in October 1977) successfullyassisted the RETCOs to achieve satisfactory performance, considering theconstraints under which they operate, and the much poorer performance of otherparastatal transport operations. However this performance was consideredsustainable only with a significant input of technical assistance. Five of thesix highway projects financed by the Bank Group (approved in 1964, 1969, 1971,1974, 1979, and 1986) have been completed; the sixth is still ongoing. The firstthree projects primarily supported road investments, which were eventuallysatisfactorily completed; the fourth and fifth supported a two-phase effort toestablish a trunk road maintenance operation, which failed to meet its objectivesor to adequately train road personnel; and the sixth is primarily supportingrehabilitation of trunk roads and road equipment, and continuing the training

1 PPAR Nos 791 of June 26, 1975; 4029 of June 30, 1982; 4030 and 4031 ofJune 30, 1982; 4533 of June 3, 1983; 6483 of November 7, 1986; 6938 of September15, 1987; and 7571 of December 30, 1988.

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effort to provide sufficient number of qualified engineers and technicians forMCW, as well as training for local contractors. This project was slow in gettingunderway, due primarily to the institutional weakness of MCW and the protractedprocurement process caused by outdated and unfocussed government regulations.Since mid-1989, the Government has approved various contracts which have beenpending and this is resulting in satisfactory progress.

1.28 In addition to IDA, some 15 donor agencies have been involved inassisting the road sector i-i Tanzania. Many innovative approaches have beendeveloped, ranging from productivity-based incentive schemes to efforts toinvolve women in road works. Despite these efforts, donor assistance hassuffered from similar problems experienced ir. past IDA projects, namely: the lackof sustainability due to shortage of Government budget, inefficient and weakinstitutional structure, lack of coordination amongst the donor community tofocus available resources on the most critical areas; institutional and policyaspects not integrated with the physical rehabilitation efforts; and lack ofcomprehensiveness in the approaches. Since the initial meeting in December 1987,a number of meetings between the Government and donors have taken place withassistance from IDA. The joint effort has brought many of the issues to focusand the proposed project incorporates the lessons learn by many of the donorsinvolved in the sector, particularly regarding the regional roads subsector whereIDA had, hitherto, not been involved.

G. Rationale for IDA Involvement

1.29 The rationale for IDA involvement is a logical extension of its rolein assisting the Government to carry out its macroeconomic reform. In the lasttwo years, IDA's role has been deepened to include reform of Rectoralinstitutions and assi6.ance in removing sector-specific bottlenecks that haveemerged as obstacles to the sustainability of the recovery program. Thecomprehensive analysis of the road and transport sectors carried out by IDA inAugust 1987 formed the basis of the December 1987 Transport Sector Donors'Conference held in Arusha. Since then, IDA has taken the lead in working withthe Government to bring together a comprehensive rehabilitation and restructuringprogram for the transport sector of Tanzania. Nearly 20 donor agencies havemobilized over US$1.2 billion in their resources to join Tanzania in implementingthe ambitious sector programs. Specifically, IDA contribution includes: (a) avision of how the transport sector can operate in the future if specific actionsare taken to adjust the institutional and policy framework under which thetransport sector is managed; (b) technical expertise w-hich has analyzed thecomplex issues stifling the existing system and recommended options on how thesystem can be changed to improve the effectiveness of the Government's effort;and (c) supporting the changed attitude of Government officials towardsliberalization of transport operations, manifested in the following policyactions: (i) decentralization of decision-making authority; (ii) expansion ofprivate sector involvement and encouragement of parastatals to operate strictlyon commercial merits; and (iii) less cumbersome procurement and administrativepractices.

.

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II. THE ROADS SECTOR

A. Introduction

2.01 The strategic importance of road infrastructure to the economy is afunction of the size of the country and the structure of production andpopulation distribution. Tanzania's land area (945,000 sq km - slightly smallerthan France and Spain combined) is one of the largest in Sub-Saharan Africa witha widely dispersed population of about 24 million and a low density (25 personsper sq km). About 422 of the total land area is devoted to agriculture. Morethan 802 of the population lives in rural areas and is dependent directly orindirertly on agriculture. The agricultural sector accounts for over 45Z of GDP,902 of employment and roughly 852 of total foreign exchange earnings. Theseactivities are widely dispersed around the country and most areas are accessibleonly by road, Over 702 of the freight movement in the country is by road. Giventhe dispersed nature of business and economic activities, a well maintained roadnetwork is critical for internal distribution and marketing of food crops as wellas export of cash crops such as cotton, coffee, tea, sisal and sugar.

2.02 The total classified road network in Tanzania is about 55,500 km,of which 10,200 km are designated trunk roads which function as the primary roadsystem (3,600 km paved), 13,000 km of regional roads basically linking the trunkroads to regional and main district centers, and about 32,300 km of district(including feeder) roads which provide the inter-village tertiary road network.In addition, there are some 30,000 km of roads which come under agriculturalparastatals, the National Parks, or are unclassified roads managed by villagecouncils. Average daily traffic (ADT) on the roads is relatively light. Onthe paved trunk roads ADT generally ranges from 200-500 vehicles per day (vpd),except for the Himo Jct-Moshi-Arusha and Dar es Salaam (DSM)-Chalinze sectionswhich carry ADTs of about 1000-1500 and 1000 vpd, respectively. Traffic on theunpaved trunk roads varies considerably, but seldom exceeds an ADT of 200 vpd.ADT on regional roads is usually below 50 vpd, and on district, feeder andunclassified roads is minimal. Annex 2-1 shows the established criteria for roadclassification, and the target pavement design standards agreed at negotiations.

2.03 In comparison with its neighbors, Tanzania has the least developedroad network in terms of density per land area and one of the worst in terms ofroad conditions. Records of road conditions are either unreliable or non-existent; but it is estimated that only 25Z of the paved trunk roads, 10t ofthe unpaved trunk roads, and 82 of the regional roads are presently in goodcondition.

Trunk Road Conditions: Cross Country Comparison (X)

Paved Roads Unpaved RoadsGood Poor/Fair Good Poor/Fair

TANZANIA 24 76 10 90ZAMBIA 40 60 30 70KENYA 32 68 66 34MALAWI 50 50 30 70ZIMBABWE 70 30 50 50

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2.04 The implication of the production and population densitycharacteristics of Tanzania, as well as the low density of the road network andthe poor conditions of the infrastructure is that: (a) the country's economyincurs a high cost to conduct its economic activities due to poor road conditions(para 1.07); (b) certain parts of the country are cut off from the overalleconomic structure due to lack of adequate roads; and (c) the per capitainvestment in road infrastructure would be much higher than for a country withhigher population density, hence requiring a higher proportion of publicexpenditure to be devoted to developing and maintaining an adequate road system.

B. Issues

2.05 The problems faced by the road sector are numerous but can bedistilled as follows :

(a) road networks are deteriorating faster than the level ofinvestments to rehabilitate and maintain them;

(b) years of tight budgetary position of the Government have resultedin consistently inadequate allocation for maint_4nance (only aboutone-third of required level for most of the past 15 years);

(c) a weak revenue collection system has allowed about 40Z in leakages(revenue from road users not collected or lost), equivalent toabout the funds required for full maintenance of the trunk andregional road network (para 1.23);

(d) the institutional structure for roads administration which spreadsthe responsibility among three ministries and about 100 executingentities has not worked, and it would be impossible to make itfunction under the skilled work force constraints of the country;

(e) the administrative system for the roads sector is highlycentralized and uncoordinated, and has proven to be incapable ofproperly executing road and equipment maintenance, or managingcontracts;

(f) Government regulations for procurement of goods, works and servicesand its management of supplies are obsolete, making it difficultto increase force account productivity and to efficiently use localcontractors for works and equipment services; and

(g) the local construction industry is still in its infancy stage andit will take several years before local contractors can carry outa significant portion of road maintenance and rehabilitation works.

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C. Diagnosis of the Problems

2.06 The factors which have led to the road sector problems facingTanzania are basically three: (a) insufficient funding for road rehabilitationand maintenance; (b) inappropriate insticutional structures and inexperiencedpersonnel for road administration; and (c) obsolete procurement regulations andsupply management system. These are analyzed below.

Road Budget

2.07 In the years following independence and particularly during themid-1960s, expenditures for road infrastructure accounted for more than 10% oftotal Government expenditures. This proportion decreased abruptly to 4% in theearly 1970s, and has since remained between 3 - 6% of public expenditures. Thisis significantly lower than in the neighboring countries (Malawi, Zimbabwe andKenya) where the proportion to total Government expenditures ranges from 10% to30%.

_entral Government Expenciture on RoadsPercentage of Total Expenditures

19

17-

16-

C 15-

14-

C 13

123 1100

109

C7 _

6

5

4

2 W 68/69 70/71 72/73 74/75 76/77 78/79 80/81 82/83 84/85 86/87,

0 Inc. Public Debt + Exc. Public Debt2.08 As a result of the decline in public expenditures on roads,construction and maintenance expenditure per km has declined to a very low level.Once the roads have been restored to good condition, in order to prevent furtherdeterioration about US$1,700 per km of trunk road and US$1,250 per km of regionalroad, in real terms, are needed for routine and periodic maintenance per annum(p.a.) by mid-1996. As shown below, the budget allocation in 1988/89 was aboutone-fourth of trunk road requirements for normal maintenance and less than one-sixth of requirements for regional roads. Such low allocation for roadmaintenance over several years has resulted in severe deterioration of the roadnetwork in Tanzania.

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Road Maintenance Budget: FY1988/89

Maintenance Total PerTypes of Road Expenditure Kilometers Kilometer

(US$ million) (km) (US$)

Trunk 4.04 10,200 396Regional 2.52 13,000 194District 0.76 32,300 24

Total 7.32 55,500 132

2.09 In addition to the precipitous deterioration of the road condition,the lack of funds for so many years has had other detrimental effects. Mostimportantly, perhaps, is the decline in the morale of staff. The lack of fundsto carry out the planned works has made much of the staff idle, the low salarylevels have forced the staff to seek other means of income, and the few, h'.ghlyeducated, professionals have lost the motivation to lead and provide a visionof the future. Furthermore, lack of budgetary resources have hampered thedevelopment of sustainable training programs and limited the numbers of graduatesfrom engineering and technical colleges in Tanzania, thvs exacerbating thechronic shortfall of skilled workers.

Institutional Structure and organiwzation

2.10 The structure of road administration has been subjected to frequentand disruptive changes over the past two decades, as the political, economic andsocial philosophy of Tanzania evolved through the 1970s and 1980s. Afterindependence, most road construction and maintenance was conducted by theMinistry of Works. In 1972, road administration was decentralized with the 20Regional Administrations taking over tne full responsibility of regional anddistrict roads and the maintenance of trunk roads. The Ministry was requiredto second its professional s.aff to the regions, and this process effectivelydiluted the scarce technical skills available in the country and handed over therespont' _lity of road maintenance to institutions ill equipped to carry out sucha tas.^. Consequently, the quality of work declined sharply. In 1979, TheMinistry was once again made responsible for the maintenance of trunk roads; butin 1984, the Ministries of Works and Transport were merged to form the Ministryof Communicaticns and Works (MCW), and the District Councils, under the newlycr4-ated Ministry of Local Government and Cooperatives (MLGC), were maderesponsible for the development and maintenance of district roads. The PrimeMinister's Office (PMO), through the Regional Administrations, was given theresponsibility for re6ional roads. The resu.t of all these changes has beenconfusion, demoralization of staff, poorly organized planning and administration,and ineffective long-term institutional and work force development.

2.11 MCW manages trunk road development and maintenance through itsConstruction and Maintenance Department (DCM), which is also responsible forgovernment buildings and airports. The Electrical and Mechanical Department(DEM) manages and maintains the ministry's plant and equipment as well as theGovernment's vehicle pool, and the Supplies Department undertakes procurement,warehousing and distribution of all government supplies, including spare partsfor MCW's fleet. The Manpower Development and Administration Department (DMDA)

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handles all personnel matters in the ministry, and has a training section (MPTS)which manages internal and external training programs; its training center atMorogoro (MCTI) runs courses primarily for technicians. The above departments,together with separate divisions for Planning and Research (DPR), ContractsAdministration, Accounts, and Internal Audit, report directly to the PrincipalSecretary who has the main legal power to authorize contracts.

2.12 All trunk road contracts and distribution of funds for roadmaintenance are presently managed at DSM headquarters by DCM: road contractscome under the Construction Division, although consultants are usually engagedto carry out construction supervision; road maintenance under the MaintenanceDivision (TRMD), which has a resident trunk roads engineer (TRE) in each of thetwenty regions for managing trunk road maintenance; and the Design Division isresponsible for project preparation and bidding documents (usually undertakenby consultants). Thie linkages among the Design, Maintenance and ConstructionDivision of DCM and DPR have been slowly improving as DPR increases itscapability in defining overall priorities, preparing annual budgets, monitoringexpenditures, and approving budget releases. However, the administration processin MCW is very slow because of: (a) unclear functions and diffusion ofresponsibilities among the various divisions and departments; (b) shortages ofexperienced managers, engineers, accountants and technicians - only about 502of authorized positions are filled; (c) inefficient communications (primarilycarried out through written correspondence) between divisions and departments;and (d) the overly centralized decision-making tradition within MCW. Delegatingexecution of MCW's operations to the REOs will change the nature of business atMCW headquarters (para 1.13). A task force in MCW has reviewed the functionsat headquarters and in the Regions in light of the decentralization, and alsothe incorporation under MCW of the responsibility, through the new Rural RoadsDivision (RRD), for development and maintenance of regional roads (para 2.la).In Annex 2-2, Chart 1 shows MCW's present organizational structure, Chart 2 thechanges in the roads function within MCW, and Chart 3 the organization of modelREOs, and the linkages between headquarters and the regions (para 4.23).

2.13 The division of responsibilities for regional and district roadnetworks between PMO and MLGC, and their respective regional and districtadministrations has not proved effective for development and maintenance of thenetworks. Besides the inadequate budgets for rural roads, which are oftendiverted to other uses, none of the 20 Regions or 80 Districts in the mainlandhas sufficient planning and technical expertise to undertake the difficult taskof maintaining widely distributed networks. MLGC is represented at the regionallevel by a Regional Local Government Officer, and PMO coordinates developmentplanning of regional roads in the 20 Regions through a Regional Commissioner.MCW has seconded Regional Engineers (REs) and District Engineers (DEs) to therespective administrations. Although data available is incomplete, only fewdistricts have a qualified engineer; also, there appear to be only about 180technicians presently on RE and DE staffing lists.

2.14 The problems with the above institutional structure have beennumerosr<. but can be distilled into three basic factors: (a) regional anddistrict administrations do not have the technical capability required toadminister the road network; (b) the structure requires a much higher number oftechnical and skilled personnel than if the administration was concentrated inone ministry; and (c) the structure causes duplication of facilities (e.g.workshops, equipment) and requires higher numbers of technical and managerial

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staff than would otherwise be the case. Given the scarcity of skilled staff andlimited budget, it would be difficult, if not impossible, to make thisarrangement function efficiently.

2.15 An additional draw-back of a segmented structure for roadsadministration is the problem it poses for work force development: (a) a largernumber of engineers, technicians and managerial staff !J required; and (b) on-the-job training provided by experienced senior staff, which is critical toconvert trained personnel into seasoned professionals, is rarely available sincemany of the senior staff have been dispersed throughout the country. Under theseconditions, the external assistance provided to work force training andinstitutional development over the past decade has not had the expecced impact,and has not eased the extreme shortage of trained personnel.

Procurement Regulations and Supply Management

2.16 Experience from various projects in Tanzania indicates that theelapsed time for clearance of procurement documentatinn ard contract awardsconstitutes the most intractable constraint for timely project execution as wellas management of day-to-day Government operations. The reasons for the longclearance process are intricate. First, the procurement regulations are designedfor a past era of colonial government and have since been supplemented by variousGovernment circular on an ad hoc basis. The existing regulations do not allowa ministry to clear its own procurement, even those of minuscule size; thecurrent authorized limit for a Principal Secretary is only about US$20,000enuivalent. The existing limits cause the bulk of contracts to be approved bythe Central Tender Board (CTB), and prior to signing, all contracts have to becleared by the Attorney General's Chambers (AGC) and the Ministry of Finance(MOF), consequently placing excessive workload on these entities and causingprotracted delays in starting contracts. Second, the inherent institutionalweaknesses demonstrated in the delays could be attributed to (a) lack of trainedpersonnel to prepare bid documents and properly evaluate them; (b) lack offollow-up; and (c) lack of coordination between ministries, CTB and AGC. Third,the ad hoc policy guidelines which were added to the original regulations tendto be confusing and counterproductive. These include, inter alia: (i) demandfor "unlimited liability' in all consultant contracts; (ii) denial of localcontractors and consultants to receive foreign currency even when required forcarrying out works; and (iii) restrictions on contracts for piece (task) work,and unattractively low regulated daily wages for workers. While it is impossibleto identify all policy guidelines which need to be addressed, the above are thebasic ones which adversely affect implementation of road sector programs.

D. Strategy for Change

2.17 By the mid-1980s, it became evident that the deteriorated condit.uof the road infrastructure was becoming one of the most critical bottlenecks inthe Government's effort to revitalize the economy under the Economic RecoveryProgram. At the Transport Sector Donors' Conference in December 1987 (para1.10), the government presented, inter alia, the outline of a five-year CoreRural Roads Program (CRRP) which has the primary objective of assuring accessto key agricultural areas. Subsequently a Rural Roads Organization andManagement Study was undertaken. The principal recommendations of the study,

- 19 -

which were adopted by the Government in September 1989, and will be fullyimplemented starting in FY 1990/91, are as follows:

(a) MCW to take over the responsibility for managing road developmentand maintenance on all regional and essential district roads; otherdistrict roads to remain with the District Councils under the DEs;

(b) MCW to decentralize the execution of its operations to the REOs,with the RE reporting directly to the Principal Secretary of MCW;

(c) A Rural Roads Engineer (RRE) position to be created in the REOs forexecution of regional road development and maintenance, and to adviseand train DEs on district road matters;

(d1 A Rural Roads Division (RRD) to be established at MCW headquartersunder DCM with the responsibility for regional roads, includingnational planning, technical supervision of RREs, funds allocation,monitoring, standards setting and training;

(e) Planning and budgeting responsibilities for rural roads to remainwith Regional Administrations and District Councils, with technicalsupport from the REOs;

(f) The RE to reinforce linkages with regional administrations throughregular consultations, and quarterly reports on the implementationof budgeted road projects;

(g) Reorganization of regional roads administration to commence witheleven of the twenty regions under the five-year first phase ofCRRP, including unifying workshop management;

(h) Trunk road and regional road maintenance systems to be separatelymanaged, but compatible to enable integration in the future;

(i) Labor-based road rehabilitation and maintenance to be undertakensystematically in selected regions, with intensive training andmanagement assistance;

(j) Existing regulations impeding local procurement, task workcontracting and timely payments to be modified to permit efficientroad maintenance operations;

(k) Because of r-esent shortages of engineers and technicians in MCW,the vacant positions would be advertised and where necessary filledby expatriates; and

(1) The annual recurrent budget for maintenance of regional roads to beincreased about four-fold.

The basic strengths and weaknesses of MCW to takeover the responsibility formaintaining trunk and regional road networks, and its capacity to implement alarge rehabilitation program are discussed below.

- 20 -

Institutional Capacity of MCI

2.18 MCW has the requisite organization to manage the increased network(from 10.100 to about 30,000 km) comprising trunk roads, regional roads andessential district roads. Procedures for road and equipment maintenance arewell-established in HCW; however, MCW's past performance has been unsatisfactory,partly because of the factors outlined in Section C above, but mainly becauseof inadequate funding over a long period for road maintenance. With thedelegation of greater authority to the REOs, increased contracting of maintenancetasks, streamlined procurement procedures and adequate funding (Chapter III),MCW should gradually be able to manage the entire network. The present shortfallof engineers, quantity surveyors, techniciati, mechanics, supply officers andaccountants in MCW is being tackled through the ongoing concentrated effort toincrease the numbers through fellowships for graduate courses, upgrading skillsof MCW professionals through overseas courses, and increasing the output andquality of technicians graduating from the Dar es Salaam and Arusha TechnicalColleges. The shortfall of professionals should be eased considerably over thenext five years, provided that salaries and benefits for MCW staff are improvedto become more compatible with the private sector, which is expected to have anincreasing demand for skilled personnel as contracting of works and servicesexpands. In order to improve civil service salary scales a modest decompressionof salaries has already been undertaken, and the Third-Year Policy FrameworkPaper addresses pay reform issues. However, the acute shortage of techniciansin Tanzania will continue to adversely affect performance over the next decade.Paragraphs 2.22 - 2.24 outline the workforce development plan and trainingrequirements to overcome the critical human resource situation.

2.19 Road maintenance planning, execution and monitoring practices wereintroduced in MCW under IDA's Fourth and Fifth Highway Projects (Cr. 507-TA and876-TA), although performances fell far short of expectations (Annex 1-1). Inthe past, some TREs have shown that, when given funds and functioning equipment,they have the knowledge and capability to execute maintenance tasks. However,these two key ingredients have been generally lacking and even the meagerbudgeted funds, which are appropriated quarterly, are usually not received untilnear the end of the quarter because of unwieldy bureaucratic procedures. Annualmaintenance programs have been prepared and costed by the TRE, reviewed andadjusted by the TRMD in DSM and presented for budget allocations. However, withsevere budget shortfalls, these programs have not been revised to determine evenessential tasks, and road maintenance practices end up by being uncoordinated,ad hoc, interventions that are usually wasted and poorly executed becauseadequate equipment and transport to work sites are not available. Since the roadmaintenance budget is meant to include funds for spare parts and equipmentrepairs by DEM workshops, the TRE has usually been restricted to organizinglabor-intensive tasks which do little to maintain the road pavements. Centralcomputerized monitoring of road maintenance activities is being installed in TRMDunder the Sixth Highway Project (Cr. 1688-TA). The delegation of executiveresponsibility to the REOs, under the reorganized MCW, combined with increasedbudgets and greater use of contractors are expected to eventually improve roadmaintenance performance, although progress may be slow because of the time neededto train managers and technical staff, and to inculcate productivity-orientedattitudes.

2.20 Equipment Maintenance has been completely inadequate because of lowbudgets, compounded by shortages of foreign exchange for spare parts, since the

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completion of the Fourth and Fifth Highway Projects, and poor management.Presently, only 15-20? of MCW's fleet is functioning; some 265 units mainlypurchased under the above two projects have been identified for repairs, andabout 70 units are to be rehabilitated under the ongoing Sixth Highway Project,through seven zonal workshops and private garages. DEM, which is responsiblefor equipment repairs and maintenance, has been severely hampered in itsactivities through ineffective management and inadequate cash flow from the roadmaintenance budget allocations. Furthermore, the centralized procurementdecision-making has not permitted DEM to procure spare parts, in a timely manner,in order to repair equipment.

2.21 There are some 40-50 workshops under DEM and Regional Administra-tions throughout the country, few of which have adequate tools or machinery.Consolidation of workshops in the regions and concentration of equipmentoverhauls in the seven zonal workshops will eventually improve the services.However, contracting out of equipment repairs and maintenance needs to beundertaken on a regular basis; few government agencies in developing countrieshave proven capable of managing large fleets of heavy equipment (in industrial-ized countries most road equipment is hired from the private sector). Conse-quently, in an effort to raise the availability of equipment for road maintenanceactivities, MCW has reviewed various options for managing road equipment alongcommercial lines, and has decided that: (a) all road equipment presentlyallocated to MCW will be managed by an autonomous MCW plant pool, which wouldrent equipment to Government agencies and private contractors; and (b) most newequipment and vehicles required for road maintenance will come from the privateplant pools. A study for establishing the MCW and private plant pools isexpected to start shortly (para 4.18). During negotiations, agreement wasreached that MCW will prepare an action plan for establishment of private plantpools, and ensure that these will be autonomous entities, and enable them tocharge commercial rates for equipment hire (Annex 2-3).

2.22 Workforce Development and Training. Since independence, the Tanzanianworkforce has been faced with serious shortages of competent and qualifiedworkers at all managerial and technical levels within the economy. Theseshortages have placed severe constraints upon general productivity and workforceeffectiveness in all sectors and continue to impact upon the management,operation and maintenance of the road sector in particular. Despite extensiveefforts to improve this situation through technical assistance and a variety oftraining modes supported by many foreign donors over the years, the road sectorstill lacks a critical mass of managers, engineers, and technicians necessaryto carry out the Government's mandate to maintain the country's road infra-structure. A wide range of studies, previous project appraisal reports, projectcompletion reports and PPAR's (Annex 1-1) have all pointed to the pervasiveweaknesses in managerial and technical capability among public sector employeesand the non-existence of a viable private sector work force capable of meetingthe needs of the road sector. Beyond the more immediate aspects of workercapability and qualifications, it is recognized that other factors in thegovernance process (i.e. poor personnel management, lack of career planning,improper utilization of employees, lack of incentives, lack of supervision anddiscipline, and poor work place conditions) negatively impact upon the abilityof workers to be productive on the job.

2.23 Private sector participation in equipment services and road workshas been very limited because of the traditional reliance on force account

- 22 -

operations. International contractors, consultants and suppliers carry outdonor-funded projects, and some donors have teams of experts directlyrehabilitating and maintaining some roads, with participation of localtechnicians. Tanzania's dire shortage of expertise has been caused byinsufficient emphasis being placed by Government policy makers on technicaleducation in the pasts only 60 students annually enter the Civil EngineeringFaculty of the DSM University (UDSM) and 75 students in the civil stream of theDSM Technical College (DSM Tech); a program to increase the DSM Tech output to100 students is being supported by the Sixth Highway Project. In addition, acrash program fund, i under the Fifth and continued under the Sixth HighwayProjects, provided fellowships for about 200 students to obtain engineeringdegrees at three Indian universities, as well as short-term specialized coursesoverseas. All graduates will have returned from India to MCW by mid-l990, butpresent institutional and logistical constraints need to be overcome, andsystematic internal training established, before benefits can be fully realized.

2.24 The Rural Roads Organization and Management Study (para 2.17)undertook a survey of existing road sector personnel ind training needs.Subsequently, MCW has prepared a detailed workforce development plan coveringall grade levels from senior cadres to unskilled workers, in parallel with therestructuring of roads administration, based on the strategy of transferring roadmaintenance operations to the REOs, with increasing participation of the privatesector, and with MCW headquarters maintaining ar. administrative, planning andcoordinating role. It is estimated that approximately 10,700 skilled workerswill be required by the mid-1990s to meet road sector objectives. Recognizingthat existing numbers of qualified workers are insufficient to meet these needs,end that present projections of properly trained entrants into the labor marketwill also be insufficient, the workforce development plan has been designed to:(a) strengthen and expand in-country training capability; (b) improve the qualityand scope of on-the-job training activities; (c) improve terms of reference andmonitoring of technical assistance with special emphasis on transfer of expertiseand nationalization of critical job positions; (d) enhance conditions ofrecruitment and employment; (e) institute an incentive scheme based onproductivity against pre-established targets; and (f) improve conditions in thework place through better personnel management, planning and the provision ofmeans to carry out job assignments. These activities are defined in detail ina related Working Paper, and are supported by the proposed project (paras 4.09and 4.10).

Government Procurement Regulations and Procedures

2.25 The Government is aware that changes need to be made in itsprocurement regulations and procedures if the road condition problem is to beresolved (para 2.16). For the implementation of the proposed project, a taskforce has prepared proposals to streamline procurement procedures forimplementation by MCW, and to permit contract award decisions, at realisticmonetary levels, to be delegated to the Principal Secretary, the REs anddepartment directors of MCW. Standard model contracts for works, goods andservices will be agreed with CTB, AGC and MOF for use of MCW, thus eliminatingthe need for ex-ante approvals of individual contracts that comply with thesestandards. Futthermore, the Government will undertake a complete revision of itsprocurement regulations and supply management procedures, with the intention ofhaving the revised system functioning by end-1993 (para 4.13).

- 23 -

III. STRATEGY FOR STABILIZING ROAD NETWORK CONDITIONS

A. Obiectives

3.01 In the medium to long term, Tanzania's economic growth will continueto rely essentially on agriculture. The performance of agriculture and thesustainability of the existing economic recovery program will greatly depend onthe condition of the road network to keep the basic economy in motion.Improvement in the condition of road networks will be determined by:(a) increased budgetary allocations and reorientation of public investmentpriorities to road rehabilitation and maintenance; (b) improved management,combined with restructuring of the institutional framework for planning, managingand maintaining the road network; (c) increased revenues, partly through improve-ment in revenue collection and partly through increaser. in fuel taxes; and(d) improved execution capacity for maintainin'- the road network through basicchanges in the Government's procedures for contracting out road works andequipment servicing.

3.02 To achieve these goals, the Government has formulated a comprehensiveRoad Network Stabilization Program with the prime objective of bringing 702 ofthe trunk road network and 50X of the regional road networks, including allessential rural roads, to good condition by the year 2000. The first phase ofthe program, up to 1996, will be supported by the proposed project. The strategyto implement the program consists of an integrated package of investments andmajor policy reforms whose main objectives are to:

(a) rehabilitate and improve priority trunk and rural roads which areessential for evacuati3n of agricultural products;

Cb) strengthen the administration and management of trunk and regionalroads in order to maintain the networks in satisfactory condition;

(c) enhance the road maintenance capacity in the country throughpromotion and use of local contractors;

(d) improve the availability of road maintenance equipment through theestablishment of commercially-operated plant pools;

(e) improve resource mobilization and allocation in order to providefor adequate maintenance of the trunk and regional road networks;and

(f) reorient the public expenditure to increase the overall size of theroad budget and allocate adequate funds for road maintenance andrehabilitation.

3.03 The investments and policy reforms included in the proposed projectneed to be carried out concurrently, since a partial implementation would failto yield the full extent of potential benefits. Rehabilitation investments andprovisions of funds for maintenance alone will not ensure sustained protectionof the trunk and regional road networks. Without investments in roadrehabilitation and maintenance, vehicle operating costs will remain high, and

- 24 -

evacuation of agricultural products will continue to suffer from inaccessibilityto transport, when needed, and high transportation costs. Organizational chaugesin administration of road networks are essential for the Government to prop*rlyexecute road maintenance, and to ensure that funds are allocated to priorityactivities and are spent according to annual programs. Without the foste:ingof local contracting capacity to carry out maintenance and rehabilitation works,the country will continue to face capacity constraints in executing roadprograms. Without greater resource mobilization, the Government will continueto have budgetary constraints to funding the required level of maintenance.

3.04 All the above factors are essential for the road network conditionto be stabilized to satisfactory levels, thus enabling the country's economy tofunction and grow. Past assistance by various donors to strengthen the roadnetwork has fallen short of their objectives, mainly because the institutionaland policy aspects were not integrated with the physical efforts to rehabilitatethe network and lacked comprehensiveness in their approach. The failure of pastBank projects to attain appraisal targets attests to this point (Annex 1-1).

3.05 The proposed project is an ambitious one, particularly regardingthe amount of road and bridge rehabilitation required to tackle thoroughly theroad deterioration problem and to bring essential roads to maintainablecondition, as well as the comprehensiveness of the institutional and policychanges to be implemented. But the pace of eccnomic recovery of the country andthe critical role which the road sector plays in the sustainability of thjrecovery makes the program for stabilizing road conditions essential, timely andnecessary.

3.06 The Road Network Stabilization Program entails extensive expendituresand foreign exchange support in: (a) upgrading, rehabilitation, resealing andregraveling trunk and regional roads; (b) road maintenance activities; (c)technical assistance and training for MCW and its REOs to undertake the vastlyincreased road management responsibilities; and (d) logistic support, includingrenovation of dilapidated facilities, and upgrading office technology andcommunications systems. Donor meetings have been held regularly since theDecember 1987 conference, and 15 of the 25 international and bilateral agencieswhich participated in the initial conference have committed or pledged supportfor the proposed project, which includes all internationally financed roadprojects managed by MCW. Most importantly, the donor meetings have allowed allagencies to be fully informed of, and comment on, the institutional and policychanges being brought about under the project. The following paragraphs outlinethe scope of the Road Network Stabilization Program and the related actionsrequired to be taken by the Government to implement it. Annex 3-1 shows theannual physical targets for improving trunk and regional road conditions.

B. Rehabilitation of Trunk and Regional Road Networks

3.07 Through analyzing available studies and ongoing projects, a programto improve the trunk and regional road networks has been defined and costestimates determined. The objective of the trunk roads program under theproposed project is to have 902 of the paved trunk road and 48? of the unpavedtrunk road networks in good condition by 1996. This will require rehabilitatingor improving about 4,600 km (or 40?) of the trunk road network. In addition,about 50 bridges and over 300 culverts and structures need to be rehabilitated,

- 25 -

replaced or repaired. The objective of the Core Rural Roads Program (CRRP) underthe project is to rehabilitate about 3,000 km (or 21X) of roads in the regionalaetworks, with the objective to have in good condition by 1996 about 502 of thesenetworks in eleven of the most agriculturally productive regions (core regions).CRRP vill concentrate on these regions over the first five years; during thisperiod, rural road rehabilitation programs will be developed for th0 remainingnine regions. About 6000 km ofregional and district roads in eight *Ei3WATM AND UPO_ RADOF

regions have been identified as being pm}essential for access to key 80agricultural areas. Some 1300 km of &rm"oMsZ.a COM 7 71

these roads have been selected for a 17" -

improvement, and contracts have been _ ror t s

awarded for rehabilitating about half eaL -n : 1 1

of them. A further 500 km are to be wo TOAL0 0 9 S

selected by Regional Administrations _ \? 414

in the core regions (para 4.15). 4W - UTOre1A67 - -V

Bilateral donor programs would finance 1sorehabilitation of about 1200 km of x\

rural roads in the core regions that nothey are supporting under this _ d \ _project. lo0

0 009 0 0

1900/91 1991192 199293 1993/94 1994195 1995/96

3.08 The Sixth Highway Projectis covering part of the trunk road R EGANIUTATNAD UPORADNS OF

rehabilitation program, and IDA- ,financed feasibility studies have been W

undertaken to identify road sections *and bridges for the stabilization Gr"fr r 0

program. Several donors are also ,, rora* GR l

funding feasibility studies and TOTAL n e

detailed engineering for trunk and armr* 13ElTOTAL *0 kmft

rural road rehabilitation. MCW and OS|

IDA have agreed on priority 4a I TOTAL275 47s

investments and have prepared anachievable implementation schedule, xIbased on public and private sectorcapacity, realistic donor financing f ,,3 176 Kand local budget levels, to reach the j M |

objectives of the road network '' 0 0 o 0 otoo °o 0 | -

stabilization program (para 4.22). 0 g 0000 "2 19929 19904 19405 19S6

- 26 -

C. Road Maintenance Program

3.09 MCW. with IDA support, has TnmkuftglkWRDonR-MM'U"SMS

prepared a systematic road maintenance 0 .

program based on the above rehabil- ChPd0000

itation program. A detailed study has N00ruPI0^

been carried out to set annual targets 7000

for maintenance requirements up to r**mid-1996. The strategy is to: (a) 8000

clearly delineate annual maintenance swoneeds; (b) estimate the physical requirements and agree on targets for ._using local contractors and force Om * ____

account brigades to carry out the 3X0 -- ,,-,,,,-,..,,,,,., 41, -----------

required maintenance works; (c) matchthe funds required for maintenance 2with the resource mobilization effort; ,O-

and (d) agree with the Government'sPlanning Commission and MOF on the 0e 191 19 1992193 1993 *M4

estimates for annual maintenancebudgets until completion of the Co"R"lRoKs- PkNicMalnanxproject. During negotiations '-.oagreement was reached on the road .,A

maintenance strategy and annualphysical and budget targets, based on B .- *r. .

the expected financial support by IDAand other donors. These targets will _

be updated during the annual reviews °00of the road network stabilization -program (para 3.13). The agreedannual road maintenance targets are < _

shown in the graphs. 300.

200

¶00

oo1990/91 1991/92 199293 1993194 19195 1999

Trunk Acaje P,,td Metsow"

600 _ p^}Nin.Cooe Rqolat ROadi Psl*o Maintenance

IG --- S W X

I , ~~~~~~~~~~~~~~~~~~~~~~~ooo 300

00 - - - - - 00 _noe -- _ -

_00.-. 300

-__ --------

I0 0 * - -.…

. . . . . . .

o .- .2001990191 1991192 19&5;" 19996 199/9 19

100

1990191 1991192 1992/93 1993194 1994195 1995/96

- 27- _

3.10 Sustained improvements in road conditions will not eventuate withoutactive participation of local contractors in road rehabilitation and maintenanceworks. MCW, with the assistance of the National Construction Council (NCC), hasprepared a national strategy for developing the local construction industry,containing declarations by the Government on its understanding, commitment andspecific steps to be taken to expand the capacity of contractors to undertakebuilding and civil works, and their maintenance. The delegation of contractingauthority to the REOs, together with increased availability of road equipmentfor hire or leasing, and ready access to foreign exchange are essential for localcontractors to participate more effectively in the project (para 2.17).Expansion of NCC's ongoing training activities will be supported by the project(para 4.10). The National Construction Industry Development Strategyunderpinning this commitment was agreed at negotiations, and its adoption by theGovernment will be a Condition of Effectiveness.

D. Resource Mobilization

3.11 The total resources required to finance the project (including theSixth Highway Project) is about US$980 million of which Government contributionis expected to be US$66.7 million (from the development budget) plus aboutUS$92.9 million for maintenance costs through FY1995/96. The resourcemobilization objective under the project is to improve cost recovery from roadusers in order to make the sector financially self-sufficient in terms of: (a)covering the recurrent costs of road maintenance operations; and (b) making netcontributions to the Government's general tax revenues which would more thancover budget requirements for road development and rehabilitation. The averageannual revenue which needs to be generated to meet the above requirements isabout US$62.0 million (US$26.6 million for road investments and US$35.4 millionfor contribution to the general revenues). The estimated revenues generated in1988/89 is about Tsh 6.5 billion or about US$54.2 million equivalent, with:(i) motor vehicles licenses and road tolls generating about US$3.8 million (72of total); (ii) gasoline tax of about US$20.6 million (38Z of total); and (iii)import duties and sales tax of about US$29.8 million (55% of total). The addi-tional revenues that need to be generated, therefore, is about US$8.0 million.

3.12 There are essentially four instruments to generate the additionalrevenues necessary: (a) improve collection of motor vehicle license fees/roadtolls from the existing level of 60Z collected; (b) charge the same level oftaxes on diesel as gasoline; (c) simplify and reduce the charges on import dutiesand sales tax to improve collection and compliance; and (d) increase the net con-tribution of transport parastatals to the general revenues. The Government, inlate 1989, formed a Presidential Commission on Taxation and a Task Force on RoadUser Charges to formulate an overall program to increase revenues. Duringnegotiations, it was agreed that the Government shall increase its revenuecollection, primarily through revenue intake from road users, with a view tofunding the increased costs of road maintenance, while maintaining the presentlevel in real terms of net contributions to the Government's general revenues.Furthermore, agreement was reached on the Government's annual contribution tofunding road maintenance, through its recurrent budget, with the objective ofprogressively increasing the budget allocations in order to fully cover roadmaintenance requirements by FY1995/96. The estimated development and recurrentbudget requirements are shown below.

- 28 -

TOTAL GOVERNMENT BUDGET REQUIREMENTS FOR IRP 11(US$ '000 - March 1990)

FY90191 FY91/92 FY92/9; FY98/94 FY94/9S FY96/96

TOTAL BUDGET REQUIREMENT:DEVELOPMENT 11,000 16,809 21,269 14,460 4,222 0RECURRENT 18.634 16,112 16.009 18.888 26.119 82.661

TOTAL 29,064 81,921 87,268 82,688 29,841 32,661

RECURRENT BUDGET REQUIREMENT:TOTAL RECURRENT REQUIREMENT 16,684 16,112 16,009 18,888 26,119 82,681(M GOVERNMENT CONTRIBUTION) (40) (50) (60) (76) (86 (100

TOTAL GOVERNMENT CONTRIBUTION 7,454 8,058 9,806 18.791 21,861 32,661

REQUIRED DONOR CONTRIBUTION:RECURRENT 11,180 8,056 6,404 4,597 8,768 0

TOTAL GOVERNMENT BUDGET:DEVELOPMENT 11,000 15,809 21,259 14,460 4,222 0RECURRENT 7.4S4 8.068 9.605 18.791 21.351 82,661

TOTAL 18.464 2386 ao.864 28.241 25.578 82.661

1/ detoils in Annex 8-2

E. The Role of IDA in the Integrated Roads Project

3.13 The main focus of IDA missions in the preparation of the projecthas been to tackle the institutional, procurement and local funding problemswhich have adversely affected performance of donor-financed highway projects and,if unresolved, will undermine the sustainability of the road networkstabilization program. The proposed IDA project will support the program byproviding financial assistance for investments to be initiated between FY1990/91and FY1994/95 and contracts for road maintenance activities up to mid-1995, andwill provide the main support for technical and training assistance to MCW andits agencies. IDA participation will be closely coordinated with other donors'funding of project components. Besides financial assistance for the project,TDA's main role will be (a) coordinating the donor assistance to execute theproject, (b) supporting the institutional strengthening of MCW both atheadq6arters and in core regions, and (c) reviewing annual and multi-yearinvestment and maintenance programs in the road sector, in order to provide asustainable effort in achieving the objectives of the road network stabilizationprogram. Because of the size and complexity of the project, IDA has agreed tothe Government's request to station in Tanzania for about three years anexperienced highway engineer, partly funded by UNDP, to assist in the overallcoordination of the project. During negotiations agreement was reached thatthe Government will review vith IDA and participating donors, by March 31 of eachyear: (i) the performance under the road network stabilization program; and(ii) proposals for the next three fiscal years of road investment and maintenanceactivities, including physical, financial and training aspects; and reachagreement with IDA on the budget estimates for the following fiscal year forrehabilitation and maintenance of the trunk road network, and regional roadnetworks in, at least, the core regions (para 4.33). Furthermore, it was agreedthat any proposed investment in the road sector, estimated to cost over US$3.0million equivalent will have an estimated economic rate of return of at least12S, taking into account socioeconomic criteria acceptable to IDA.

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IV. THE PROPOSED PROJECT

A. Project Scone and Objectives

4.01 The strategy and scope of the Government's road network stabiliza-tion program under the project are outlined in Chapter III and are based on thetransport sector recovery initiative presented at the Donors' Conference inArusha in December 1987 to sustain the momentum of Tanzania's economic recovery.The proposed project will support the program by: (a) removing bottlenecks tothe expansion of exports, farm production and business mobility through betterroad infrastructure and road transport services; (b) reducing roae transporta-tion costs for both freight and passengers; (c) increasing involvement of theprivate sector in road rehabilitation and maintenance tasks, and road equipmentmanagement; (d) improving transport planning, budgeting and revenue collectionprocedures; and (e) strengthening Government institutions and private enterprisesinvolved in the roads sector, by providing well-focused training, at all levels,to operate, maintain and manage road infrastructure and transport services.

4.02 The project's components, which were prepared during 1988 and 1989with financial assistance from several donors, cover requirements forrehabilitating and maintaining the trunk and regional road networks, and forimproving the efficiency and safety of road transportation. The main objectivesof the project are to strengthen the capability of MCW to manage road maintenanceprograms, and to execute, with financing from several donors, an integratedpackage of road rehabilitation and upgrading investments to be initiated beforeFY1993/94. The agreed target is to have about 90Z of paved trunk road and 48Zof unpaved trunk road networks and 50Z of the regional road networks in theeleven core regions, in good condition by mid-1996.

B. Project Description

4.03 To assist in fulfilling the objectives, the proposed project willprovide financial assistance for the following components:

(a) Institutional Support

(i) strengthening MCW departments and divisions involved incontract administration, road and equipment maintenance andmanagement, planning, budgeting and monitoring of trunk andregional roads programs, as well as policy, feasibility andengineering studies in the transport sector;

(ii) instituting procedures in the REOs, in at least the elevencore regions, for administration of trunk and regional roadrehabilitation and maintenance programs;

(iii) renovation of facilities, provision of training equipment andimprovement of civil engineering courses at UDSM EngineeringFaculty, as well as an increase in the number of students;

(iv) renovation of facilities, provision of training equipment andimprovement of highway technicians courses at Arusha TechnicalCollege;

- 30 -

(v) re-equipping MCW's Central Materials Laboratory (CML) andprovision of training and technical assistance to its testingand research program, including soil testing assistance toREOs;

(vi) training in highway management, and road and equipmentmaintenance, including ex.ansion of MCTI's facilities andtraining programs;

(vii) formulation and implementation of a road safety program.including vehicle weight control, and traffic management;

(viii) coordination of project implementation and establishment ofa management information system for the monitoring ofactivities at headquarters and the REOs;

(ix) renovation of MCW headquarters, CML and REOs, construction ofhousing for REO staff, and upgrading office technology andcommunications;

(x) revising the Governmenrt's procurement regulations,reorganizing materials supply management, and training inprocurement for staff of MCW, Attorney General's Chambers andTender Boards;

(xi) continuation of assistance to domestic contractors toundertake an increasing share of road rehabilitation andmaintenance works, including development of labor-basedtechnology; and

(xii) conversion of NIT's vocational training programs into morepractical and shorter courses to satisfy the demand of thetransportation industry.

(b) Rehabilitation Program

(i) rehabilitation of about 1,080 km and overlay or resealing ofabout 620 km of paved trunk roads; rehabilitation or improvingof about 2,550 km of unpaved trunk roads, and upgrading topaved road standards of about 340 km with bridges andstructures;

(ii) rehabilitation or replacement of about 30 other bridges, andrepair of minor structures along trunk roads;

(iii) improvements to about 10 vehicular ferry crossings; and

(iv) rehabilitation of about 3,000 km of regional roads,principally in the core regions.

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(c) Maintenance Program

(i) acquisition of equipment, vehicles, initial stock of spareparts, and workshop items for privately operated plant pools;

(ii) acquisition of equipment, vehicles, initial stock of spareparts, and workshop items for the MCW plant pool;

(iii) acquisition of spare parts and materials for, andrehabilitation of, road maintenance equipment;

(iv) equipment hire for road maintenance undertaken by theREOs; and

(v) contracted road maintenance and emergency works.

(d) Freight, Passenger and Air Transportation

(i) strengthening ATC's management capability; and

(ii) strengthening the management capability of NTC and itsaffiliates - RETCOs and UDA.

C. Institutional Support

4.04 Because of the vast increase in MCW's activities under the project,combined with the general lack of experience of the Ministry's engineers andtechnicians in effectively managing road networks, support to MCW headquarterswill be concentrated over the first three years of the project period in orderto assist in execution of: (a) procurement management; (b) road maintenanceprogramming, cost accounting and guidance of REOs; and (c) planning, budgetingand monitoring of trunk and regional road programs. During the project period,MCW will be administering: (d) about 35 major civil works contracts as well asan increasing number of small contracts managed by REOs for road, bridge andculvert works and maintenance; (e) equipment repair contracts, and spare partsand other purchases through a procurement agent; (f) consultant contracts fortechnical assistance, transport studies, road engineering and works supervision;(g) IDA and donor-supported assistance to core REOs; and (h) workforcedevelopment and training programs. In order to coordinate the above activities,MCW has expanded the scope of the Sixth Highway Project Coordination Unit tocover implementation of the proposed project. The renamed unit, CODAP(Coordination Office for Donor Assisted Projects), which presently consists ofthree full-time staff under thie unit's coordinator, will be assisted by ahighway engineer and an accountant (80 m-m). In addition, about 60 m-m ofconsultant assistance would be provided to support MCW's senior management in:(i) facilitating administrative (registry) and management procedures andpractices; (ii) monitoring the effectiveness of technical assistance and theworkforce development and training program; and (iii) setting up and monitoringa management information system for activities at headquarters and the REOs.The Planning and Research Department (DPR) in MCW will also receive about 80 m-m of assistance comprising an economist, engineer, analyst and short-termspecialists. MCW headquarters and REOs will be renovated, office technologyupgraded, housing constructed for REO staff, and communications systems improved

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to enable more effective interchange of information between headquarters andregional units.

4.05 Under the project a strong emphasis will be given to activeparticipation of the technical assistance in MCW and REO functions during theinitial period, including formal and on-the-job training of the Ministry'spersonnel, which will be coordinated with MPTS. Terms of Reference for thetechnical assistance to MCW and its REOs, and associated MCW staffingrequirements, were agreed at negotiations. It was also agreed that key MCWstaff associated with the project will not be reassigned in such a manner as tobe detrimental to project implementation. The summary of technical assistanceand associated staff under the project is provided in Annex 4-1.

4.06 The proposed project will also support MCW's efforts inestablishing management and operational systems in the REOs. In particular,technical assistance will be provided directly to REOs in preparing, budgeting,executing and monitoring trunk and regional road development, rehabilitation andmaintenance programs under their responsibility. Six bilateral donors (FINNIDA,GTZ-FRG, Ireland, NORAD, ODA-UK, Switzerland), UNDP and IDA have agreed tosupport the eleven core regions by providing the necessary technical assistance,as well as renovation of facilities, staff housing, and logistic support. IDAwill support two adjacent REOs - at Mwanza and Shinyanga Regions - by providingabout 220 m-m of technical assistance. In each region there will be a highwayengineer primarily to assist the Regional Engineer and a road maintenancetechnician to assist the TRE and the RRE and, between the two regions, aprocurement specialist and an accountant. UNDP is expected to finance technicalassistance to the Kagera REO. Full-time assistance will generally cover thefirst two to three years, after which short-term visits, until end-1996, willassist the REOs in preparing programs and budgets, and in monitoringperformance. One of the first tasks in each region will be to carry out aphysical and condition inventory of the trunk, regional, district and feederroad networks.

4.07 Under the project, procurement, management and operational systemsto be used by the REOs will be established by MCW Headquarters. About 40 m-mwill be provided for establishing road maintenance standards and reporting, andabout 70 m-m of technical assistance is expected to be funded by the AfDB forsetting up and monitoring procurement procedures. Ongoing USAID assistance toRRD in contract management of rural road works will be complemented byassistance for establishing labor-based methods (about 36 m-m to be provided byboth NORAD and USAID), in conjunction with the REOs and Regional Administra-tions. Also, about 50 m-m of technical assistance will be provided to MCWheadquarters for undertaking periodic supervision of the REOs, and in assistingthose REOs that are not receiving donor support. The technical teams in thecore REOs will not only assist in the implementation of the new systems but,through regular meetings, will provide feedback and suggest modifications toimprove them. In particular, annual workshops will be held among REO and MCWheadquarters staff and participating consultants to review and recommendmodifications to management and technical practices (para 4.25).

4.08 MCW's Central Materials Laboratory (CML) will be equipped toprovide soils testing assistance to MCW field units, engineering staff and REOsas well as to private contractors and consultants, who pay for such services.CML will also be supported (about 36 m-m expected from ODA-UK) to undertake: (a)

i

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an inventory of, and essential research on, naturally occurring road materialsin Tanzania; and (b) pavement performance monitoring and condition surveys. Astudy will also be undertaken for CML to provide better services to the privatesector and to eventually evolve into a financially autonomous unit.

4.09 The workforce development and training program will be managed byMPTS, and will expand on activities initiated under previous projects with theobjectives of: (a) providing well-focused internal and external training for MCWemployees to better carry out their functions and for career development;(b) improving personnel administration in MCW by enhancing career planning,office technology and discipline in order to create a better workingenvironment, staff morale and productivity; (c) providing a greater number andbetter prepared graduates from professional and technical colleges andinstitutes who would be available to fill vacancies at MCW headquarters and REOs(and also at District Engineer's Offices); and (d) increasing the number andcapacity of domestic contractors to undertake road works and maintenance.

4.10 In order to fulfill the above objectives, the project will support:(a) MPTS in managing the work force development and training program, includingabout 24 m-m of technical assistance; (b) MCTI to expand its facilities andtraining programs, including about 24 m-m of instructors over short assignments,for MCW staff and, increasingly, for technicians from the private sector; (c)UDSM Engineering Faculty (GTZ-FRG), including about 51 m-m of technicalassistance, to increase the intake of civil engineering students from 60 to 80,and to upgrade highway engineering and planning courses; (d) NIT to convert itsvocational courses into more practical oriented and shorter courses to bettersatisfy the demand of the transportation industry (by establishing a twinningarrangement with a similar institute - 12 m-m); (e) Arusha Technical College(GTZ-FRG), including about 36 m-m of technical assistance to establish a highwaytechnicians course for 25 graduates per year; and (f) NCC for training (90 m-mof technical assistance) of about 15 domestic contractors in undertaking roadworks; in addition about 6 small firms will receive training in labor-basedtechniques (about 80 m-m of UNDP-funded/ILO executed assistance), as well asabout 36 m-m of a specialist to assist NCC's Research Unit. Furthermore, theproject will support seminars and workshops (some to be managed by ESAMI, theEastern and Southern Africa Management Institute, at Arusha) and selectedoverseas fellowships to upgrade professional expertise. MPTS will alsocoordinate assistance to the Tanzanian Institute of Engineers and the EngineersRegistration Board, in order to enhance professional status and exchange ofexperience between engineers in the private and public sectors. Details of theworkforce development and training programs are provided in the project file andare summarized in Annex 4-2.

D. Vehicle Weight Control and Road Safety

4.11 Regulations covering maximum weight of vehicles under the RoadTraffic Act (1973) were amended in 1987 to relate better to existing roadtransport conditions and to update fines for overloading. There are eight fixedweighbridges in the country which are manned by the road traffic police, andassisted by MCW personnel Wio operate the scales. MCW has prepared a programto install six more weighbridges, mainly at border crossings, and to upgradeexisting scales, as well as to purchase two weigh-in-motion units for traffic

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monitoring by MCW, and portable scales, communications, and speed measuringsystem equipment for the road traffic police.

4.12 Road safety campaigns have been poorly coordinated and implementedin the past because of lack of leadership. The National Road Safety Council(NRSC), comprising twelve members appointed by the Prime Minister from thepublic and private sectors, provides mainly an advisory role, but has a specialresponsibility for education and training; in practice this has been limited toarranging an annual Road Safety Week. The secretariat to the Council isprovided by the Commander of the road traffic police who is also responsible forimplementing the Council's decisions and programs. Under the proposed project,MCW has prepared a three-phase road safety program covering road accidentrecording, analysis and research, information and education, driver training ardlicensing, traffic law enforcement, vehicle testing and control, and roadinfrastructure and environment. NORAD is expected to provide about 36 m-m oftechnical assistance for this component. Because of the need to clearly defineinstitutional responsibilities, it was agreed at negotiations that the vehicleweight control and road safety programs will be formulated by July 1, 1991,including a definition of responsibilities for implementation, and promptlythereafter to commence the implementation of the programs. Consequently, roadtraffic and safety specialists will be engaged initially to prepare details ofthe programs and draft necessary Government directives for their implementation.

E. Revision of Procurement Regulations and Procedures

4.13 Besides the need to obtain agreement for changes in procurementpractices and procedures for the implementation of the proposed project (para2.25), a team of experts will be engaged under the project (about 190 m-m) toreview the procurement regulations of the Government with a view to:(a) executing an overall revision of existing regulations and proceduresappropriate to the changing needs and economic environment; and (b) assistingto implement the revised regulations and procedures, as well as improvements tothe Government's supply management system until the process is well established.In March 1990 the Government approved the interim procurement regulations andcontracting thresholds for delegated decision-making authority in MCW, to beused for implementing the proposed project, until the new procurementregulations are effective. During negotiations, agreement was reached ondetails of the interim procurement regulations and draft standard procurementdocuments. Also, agreement was reached on terms of reference for engaging Uconsultants to undertake a general revision of Tanzania's procurementregulations, including assistance in implementing new supply managementprocedures, and that the new system will be functioning by December 31, 1993.Finalization of procedures and documentation for the interim procurementregulations, and selection of consultants for undertaking the ProcurementRegulations and Supply Management Study, will be Conditions of Effectiveness.Annex 4-3 provides key features of the interim procurement regulations.

F. Road and Bridge Rehabilitation Program

4.14 The trunk road rehabilitation program will build on the start madeunder the Sixth Highway Project and ongoing donor-financed projects which arerehabilitating or upgrading some 800 km. Under the proposed project, about 1080

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km of paved roads will be rehabilitated and 620 km overlayed or resealed, 340km upgraded to paved road standard, 2090 km of gravel roads rehabilitated, andsections improved along a further 460 km. The project also includes repair,reconstruction or replacement of about 30 bridges, and minor structures alongtrunk roads, and improvements to vehicular ferry crossings including ferryrepairs or replacement. Wherever possible bridges and structures will beincluded in road rehabilitation contracts. The above works will be contractedout; some donors intend using management contracts, incorporating MCW staff andprivate individuals or firms in the operations. For IDA-financed works,detailed engineering for contracts scheduled to begin during the first two yearsof the project has been completed under the Sixth Highway Project; other designwork and all supervision of construction will be financed under the proposedproject. Consultants undertaking the detailed engineering will also beresponsible for works supervision.

4.15 About 3,000 km of rural roads are expected to be upgraded orrehabilitated under the proposed project. Feasibility studies were completedin 1987 for rehabilitating 1300 km of Phase I rural roads in seven of the coreregions, and detailed engineering for 620 km have been completed with DANIDAfunds. Short-listed local consultants have been invited to prepare detailedengineering for the remaining 680 km. Four lots totaling about 300 km under thePhase I are being contracted out to local firms participating in the NCMtraining program. About 120 km of rural roads, mainly in the KilimanjaroRegion, will be rehabilitated by labor-based methods, under NCC's trainingprogram with ILO (para 4.10). Contracts for detailed engineering and works(including supervision) will be funded by the Government from TSh generatedthrough the USAID Commodity Support Program, which are earmarked for rural roadrehabilitation; over 50? must be undertaken by domestic private contractors.IDA will support the rural roads rehabilitation program through provision ofequipment and spare parts for domestic contractors through NCC. Detailedengineering for a further 500 km in core regions, will be constructed by RRD forroads selected by Regional Administrations with assistance of REOs and DPR,through screening and evaluation procedures prepared by consultants and adoptedby MCW. During the project period, a further 1,200 km of rural roads areexpected to be rehabilitated in core regions receiving direct support frombilateLal donors. During negotiations agreement was reached that rural roads tobe improved under the project will be selected by applying evaluation criteriasatisfactory to IDA (Annex 4-4). Details of road, bridge and ferry works underthe project, as well as works to be included in the second phase of IRP, areprovided in Annex 4-5.

G. Road Maintenance Program

4.16 Road maintenance activities will gradually increase over theproject period as REO staff and local contractors gain in competence, equipmentbecomes available, and budget levels increase. MCW staff involved in pasthighway projects have generally adequate experience in road maintenancemanagement, but most REQ staff have little practical experience in managing roadnetworks. Because of the considerable length of trunk road network that willbe rehabilitated under the proposed project by contractors (between 30 and 50Zof the network will be annually under contract from FY90/91 through FY94/95),the direct maintenance obligations of MCW and its REOs for these roads will berelatively light until 1996. Furthermore, it has been agreed with theGovernment and donors that, where practical, road rehabilitation contracts will

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include a three-year maintenance period. Consequently the main focus of theREOs will be on managing maintenance of the regional road networks, withparticular emphasis on the eleven core regions. Considerable assistance fromMCW and REO consultants will be needed in setting up road maintenance standardsand procedures as well as training of head office and regional staff. Prioritywill be given to maintenance of roads already in good and fair condition, andto rehabilitated roads. The pace of implementation of road maintenance willdepend to a great extent on the ability of local contractors and communities toundertake labor-based maintenance tasks. In order to facilitate execution ofroad maintenance programs and to ease the budgetary burden, IDA will partlyfinance contracts for maintenance works and equipment hire (para 4.31).Furthermore, because only seven local contractors have reasonably adequateequipment for undertaking road maintenance works, IDA will finance basicequipment and vehicles for the eight contractors undergoing training at NCC andthe six contractors to be trained by ILO in labor-based road works. Theequipment will be purchased by MCW and transferred to the contractors throughhire-purchase agreements. A tentative list of equipment for the eightcontractors is provided in Annex 4-6).

4.17 Because of the present poor condition of many roads in Tanzania,and the lengthy period needed to rehabilitate roads and bridges, IDA willfinance contracted emergency works along short road sections that have failedand are causing severe traffic bottlenecks, and which cannot be adequatelyrepaired by road maintenance brigades. Priority will be given to road failuresaffecting movement of agricultural supplies and produce.

4.18 The program for rehabilitating road maintenance equipment, whichwas started under the Sixth Highwfay Project, will cover about 260 additionalunits with about 260 m-m of assistance from master mechanics who will alsocontinue training of MCW mechanics in the seven zonal workshops in preventiveand corrective maintenance. About 350 units will be scrapped or auctioned. Thereconditioned units will be consigned to MCW's plant pool for hire bycontractors and the REOs. MCW will engage plant specialists (about 40 m-m) toset up its plant pool over the first year of operation. IDA will financesupport equipment for MCW's plant pool and acquisition of equipment, vehiclesand workshop items for competitively selected private plant pools that will berequired to provide guaranteed services to MCW during the project implementationperiod. The study (para 2.21) to determine the details of the MCW and privateplant pools, will include preparation of bidding documents and draft contractfor procuring and hiring equipment, as well as a questionnaire for prequalifyingprivate companies. The objectives and scope of the equipment repair andscrapping program, and tentative equipment requirements for the plant pools(Annex 4-7) were agreed at negotiations. Preparation of regulations forestablishing MCW's plant pool, and bidding documents and the list ofprequalified companies for private plant pools, all to the satisfaction of IDA,will be a Condition of Effectiveness.

I~~~~~~~~~~~~~~~~~~~~~

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H. Freight. Passenger and Air Transportation

4.19 NTC and RETCOs will receive technical assistance up to 1993 (about500 m-m), as a continuation of the successful component for freight transportunder the Sixth Highway Project (para 1.27), and UDA about 50 m-m for managementof passenger transport in Dar es Salaam; details will be determined by theongoing Dar es Salaam Passenger Transport Study. It was agreed at negotiationsthat a plan of action to improve the delivery of urban passenger transportservices, including institutional reorganization and pricing policy, will befurnished for IDA review by December 31, 1990. This will be presented to adonors meeting to agree on the follow-up action plan.

4.20 ATC, with assistance of MCW, has prepared a restructuring plan,which is being implemented. Furthermore, Government approval is expected to beobtained for ATC to operate with adequate business freedom for the airline tobecome financially self-sufficient; these freedoms include the ability to inviteexternal equity participation in the airline. Management assistance to ATCamounting to about 150 m-m over two to three years will be provided under theproject in the fields of cost accounting and pricing, marketing, computing andhuman resource management. Annex 4-8 provides details.

I. Proiect Cost Estimates and Financing

4.21 The estimated total cost of the project, including contingencies,is US$871.1 million equivalent. Duties and taxes are expected to amount toabout US$20 million or about 2.3Z of the total cost. Base costs have beenestimated at March 31, 1990, prices. Physical contingencies average about 112of base cost: 10 - 152 for road and bridge rehabilitation and emergency works,depending on the stage of preparation; and 52 for equipment and spare parts,building renovation, consulting services, and training. No physicalcontingencies have been provided for road maintenance contracts and equipmenthire because the estimates are based on agreed annual budget allocations fortrunk and regional road maintenance. Price contingencies averaging about 122have been applied to the base costs plus physical contingencies, and are basedon estimated foreign inflation of 4.92 p.a. through 1994, and 3.72 thereafter.This assumes that the exchange rate (taken as US$1.0 = TSh 200 at March 31,1990, - for base cost estimates) will be adjusted for divergences betweenforeign and local rates of inflation. Overall, about 254 person-years ofmanagement, technical and training assistance will be provided under theproject. Consultants will also prepare detailed engineering and supervise civilworks contracts, averaging about 52 of construction costs, and will carry outprocurement regulations and transport sector-related studies.

4.22 The project is expected to be externally financed by: IDA (US$180.4million equivalent); DANIDA (US$57.0 million equivalent); FRG (US$32.0 millionequivalent); Italy (US$91.7 million equivalent); FINNIDA (US$48.4 millionequivalent); ODA-UK (US$13.6 million equivalent); NORAD (US$36.5 millionequivalent); EEC (US$171.0 million equivalent); USAID (US$32.7 million in TShgenerated from its Import Support Program); The Netherlands (US$18.0 millionequivalent); Switzerland (US$10.8 million equivalent); Ireland (US$4.8 millionequivalent); AfDF (US$45.2 million equivalent); UNDP (US$2.9 millionequivalent); and Saudi Fund (US$11.8 million equivalent) amounting to US$756.8million equivalent. There is a financing gap of US$33.8 million (42 of the

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total project cost), specifically for part of the Kibiti-Somonga road

rehabilitation scheduled for the Second Year Program (FYl990/91), and for TANZAMHighway Section VI Rehabilitation and TANZAM Reseal, both in the Fourth YearRehabilitation Program (FY1992/93). It is expected that this gap will be filledthrough future donor coordination meetings. The Government will provide US$80.5

million equivalent through budget appropriations, as well as the annual budgetallocations for road maintenance (para 3.12). External financing is expectedto cover 912 of total project cost. Details of project cost estimates and

financing plan are shown in Annex 4-9. A susmary of the project costs is shownbelow.

TANZANIAINTEGRATED ROADS PROJECTSUMMARY OF PROJECT COSTS

TOTAL

COMPONENT LOCAL FOREICN TOTAL

(US '6O6)A. Institutional Support

(1) MCW Management A Tech. Development 4,7608. 21,196.2 25,96.60(ii) Transport Studies and Assistane 2,0n).S 8,060.0 5,660.0lii) DSM Engineering Faculty . 1,246. 1,6960.(lv) MCTI Training Program 21.4 1,566.6 1,078.0(v) MCW Manpower Planning and Training 453.6 1,654.4 2,488.0(vi) Renovation Of MCI and REO Facility ,000.0 1,660.0 2,660.6(vil) National Construction Council 266.0 1,624.0 1,286.0(vill) Labor-8 ssd Works Training 189.6 1,421.0 1,616.0

(ix) Notional Institute of Transport 196.0 1,316.0 1,566.6(x) Procurwoent Regulations Study 456.6 1,324.0 2,286.0

(xi) Arusha T ehnieal College 246.0 96.60 1,195.6(xii) Communications A Office Technology 6.6 1,206.0 1,26.6

Subtotal Part A 10,641.8 87,796.2 48,487.0

B. Rehabilitation Program

(i) Paved Trunk Roads 75,496.8 848,067.6 418,564.8(ii) Unpaved Roads 86,460.7 71,070.8 101,520.9(lil) Trunk Road Bridges 1,5600. 4,5600.0 6,6.6(iv) Regional Roads 84,26060 16,600.6 60,666.0(v) Ferry Crossings 126.0 1,87.60 2,600.0

Subtotal Port B 141,786.4 486,812.8 678,69986

C. Maintenance Progr&A

(i) Road Msintenance Equipment 6.6 16606.6 16,66.6(ti) Equipment Rehabilitation 80W.6 8,2006. 4,606.6

(ill) Equipment Hire to mid-1996 18,666.6 7,0006. 20,6006.(Iv) Contract Maintanane to mid-1995 6,666.6 14,600.0 20,000.6(v) Emergency Works 8,666.0 7,600.6 16,6e6.6

Subtotal Part C 22,806.0 40,206.0 69,666.6

D. Freight, Passenger and Air Transportation

(I) Managemnt Assistane to ATC 460.0 1,800.0 2,256.6(ii) Assistance to NTC, RETCO's 460.0 1,840.0 2,860.6(il) Assistance for DSM Passenger Trans 126.0 480.6 6e6.6

Subtotal Part D 1,686.0 4,120.0 5,156.0

TOTAL BASE COST 176,252.2 624,428.0 766,686.2TOTAL PHYSICAL CONTINGENCIES 19,486.2 69,660.9 79,649.1TOTAL PRICE CONTINGENCIES 28,266.4 68,188.4 91,468.8TOTAL COST 219,665.8 652,127.8 671,138.1

s _ _ =

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J. Implementation and Present Status of the Project

4.23 Project preparation is well advanced for IDA-financed componentsbeginning in the first two years of the project period. Detailed engineeringfor rehabilitating about 760 km of trunk gravel roads, which were transferredfrom the Sixth Highway Project, have been completed and bids were invited inMay 1990. Detailed engineering for rehabilitating a further 460 km of gravelroads is underway. A contract for a comprehensive pavement management study ofthe 990 km TANZAM highway has been awarded; the study will include detailedengineering for about 70 km of paved road rehabilitation, and identify stretchesrequiring asphalt overlays or resealing. Feasibility studies for trunk roadbridges and ferry crossings have been completed, and proposals for detailedengineering and constructiorn supervision were invited in May 1990. The four-month plant pool study started in April 1990. The training program has beensubstantially prepared for MCW staff, including MCTI requirements. IDA hasgranted PPF advances of US$600,000 in February 1989, and US$900,000 in October1989 for feasibility studies and detailed engineering. MCW is activelyundertaking its reorganization to include management of regional roads, and keystaff have been appointed for the RRD and all REOs. Structural changes to MCW'sinternal organization were agreed at negotiations, and will commence by thebeginning of FY1990/91 (Annex 2-2).

4.24 MCW, through the Principal Secretary, will be responsible forexecuting the project, and CODAP will coordinate project implementation withinMCW, with other government agencies and parastatals and with the 15 donors(including IDA) financing the project. Project coordination under the SixthHighway Project, notwithstanding delays in approving contracts, has beensatisfactory and preparation of the proposed project has proceeded well.However, successful implementation of the proposed project will depend greatlyon the caliber of technical assistance; MCW headquarters and the core REO's areexpected to have up to 20 and 40 specialists, respectively, at any one time.The project was appraised in June and July 1989, and negotiations were held inApril 1990. The IDA Credit is expected to become effective by October 1, 1990.The project should be physically completed by December 31, 1997. Key actionsfor implementing the IDA-financed components were agreed at negotiations(Annex 4-10).

4.25 Because of the complexity of the project and the number of donorsinvolved in its financing, a Project Launch Workshop will be held in Tanzaniaonce the IDA Credit is declared effective. MCW directors and RegionalEngineers, together with senior representatives from the Attorney General'sChambers, the Planning Commission, MOF and the regional authorities will havethe opportunity to review, in detail, all the project components together withthe participating donors, and agree on an action plan for implementing theproject. In addition to annual donor conferences on IRP, a comprehensive reviewwill be carried out by November 30, 1992, on progress in implementing theproject, which will be concluded with an Implementation Review Workshopinvolving the same participants as above. As indicated in paragraph 4.07, MCWwill also conduct annual workshops covering internal management and technicalmatters. During negotiations agreement was reached that the Government willconduct the following workshops and conferences on project implementation: theProject Launch Workshop, annual workshops involving REO staff and MCWheadquarters staff, annual donors conferences, and, by November 30, 1992, anImplementation Review Worlshop.

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K. Procurement

4.26 Procurement arrangements are summarized as follows:

Amounts and Methods of Procurement al(US$ millions)

TotalItems to be Procured ICB LCB Other NA b/ Project Cost

1. Equipment, Spare Parts, '7.1 1.6 0.6 29.3Vehicles and Materials (27.1) ( ) (1.6) ( - ) (28.7)

2. Equipment Repairs 1.3 5.4 6.7Including Spare Parts ( 1.3) ( ) ( 5.4) ( ) ( 6.7)

3. Equipment Hire 11.8 11.8 23.6(4.2) ( ) (4.1)( ) ( 8.3)

4. Civil, Buildings and 338.7 59.9 10.0 335.9 744.5Maintenance Works ( 73.2) (25.4) ( 8.5) ( - ) (107.1)

5. Consulting Services, 39.4 27.6 67.0Training, (Including Re- ( ) ( ) (29.6) ( - ) (29.6)financing of PPF)

Total 378.9 59.9 68.2 364.1 871.1(105.8) (25.4) (49.2) ( - ) (180.4)

a/ Figures in parentheses indicated financing by IDA.b/ Not applicable (includes bilateral donors).

4.27 Procurement of civilworks, equipment, vehicles, and non-proprietaryspare parts will be carried out under ICB in accordance with Bank guidelines.Firms will be prequalified for civil works procured through ICB and LCB, and forestablishing private plant pools (ICB). To the extent possible, contracts forgoods and materials shall be grouped into bid packages estimated to costUS$200,000 or more. Contracts for supply of goods and materials (includingrepair contracts) estimated to cost less than US$200,000, up to an aggregate ofUS$7.0 million may be procured through shopping. Equipment and spare parts ofa proprietary nature or subject to standardization may be procured, with priorIDA agreement, through international shopping or directly where there is nocompetition because of the proprietary nature of the goods. Direct contractingwould be permitted for components critical for private or MCW workshops toguarantee performances in equipment repairs and servicing. Equipment hire rateswill be established through ICB for private plant pools; MCW plant pool will useequivalent rates.

4.28 Civil works and building contracts estimated to cost up to US$3.0million up to an aggregate of US$30 million may be carried out by LCB procedureswhich will include local advertising, prequalification, public bid opening,

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specific criteria for bid evaluation ani award to the lowest evaluated bidder;foreign firms, if interested, would not be precluded from bidding. For emergencyroad works and for NCC's training progra.- for domestic contractors on roadrehabilitation and maintenance operations, wherever possible, contracts will beawarded through LCB; but, in emergencies or when domestic contractors areundergoing initial training, contracts estimated to cost less than US$1.0 millionup to an aggregate of US$10 million, may be awarded to firms based on unit ratesestablished with assistance of consultants and with prior IDA agreement. Inthese cases the reference unit rates will be specified in the bidding documentsand the bidders will be invited to bid by way of discount or increase to thereferenced rates. This procedure will particularly encourage, wvth assistanceof NCC consultants, the development of domestic firms. The ov-i 11 amount ofcivil, building and maintenance works contracted out through local proceduresunder the project is expected to aggregate about US$70 million.

4.29 Consultants for techn3cal and managerial assistance, and for studieswill be appointed in accordance with Bank guidelines. Because of the need tomaintain continuity, the ongoing technical assistance to CODAP may be extendedto support coordination of the proposed project, and consultants engaged underthe Sixth Highway Project for rehabilitation of road equipment, fcr detailedengineering and supervision of trunk road rehabilitation, and for trainingdomestic contractors may complete these assignments which will be expanded underthe proposed project. Generally, consultants undertaking detailed engineeringwill also supervise the works.

4.30 All procurement under the project will be reviewed by CODAP forcompliance with the provisions of the IDA Credit Agreement and relevant IDAGuidelines. All procurement packages above US$500,000 equivalent will besubjected to prior review by IDA. This is expected to cover 85Z of IDAfinancing. Goods manufactured locally will be given a preference margin of upto 15Z or applicable import duty whichever is less. Local contractors will beeligible for a preference of 7.5Z for contracts under ICB. No special preferencewill be permitted for parastatal companies. The procurement packages financedby various cofinanciers will be prepared according to the respective donorpractices or guidelines.

L. Disbursements

4.31 Disbursements are expected to follow the historical disbursementprofile for IDA-financed highway projects in Tanzania, i.e. eight years. Initialdisbursements will be greater than historic levels due to refunding of the PPFadvance and the initial deposit into a special account (para 4.32). In orderto ease the Government's increasing budgetary burden for road rehabilitation andmaintenance (para 3.11), IDA will partly finance, road maintenance contracts,and equipment hired by the REOs for road maintenance tasks, at rates establishedthrough competitive bidding, by the plant pools. The Credit is expected to befully disbursed by June 30, 1998. The IDA Credit will be disbursed against thefollowing categories, and on the basis of the estimated disbursement scheduleshown in Annex 4-11.

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Allocation and Disbursement of IDS Credit

IDA Amount PercentCategory Description (USS Millions) Financed

1 Trunk road rehabilitationand upgrading:(a) FY1990191 Program 29.7 1002 foreign(b) FY1991192 Program 20.6 and 50Z local(c) FY1992/93 Program 19.6 expenditures

2 Other roads, bridges, buildings 37.2 852and road maintenance works

3 Equipment for road contractors 5.7 100? foreignexpenditures

4 Equipment, vehicles, spare parts 8.9 100? foreignand materials and 802 local

expenditures

5 Equipment, vehicles and spare parts 14.1 1002 foreignfor private plant pools expenditures

6 Equipment hire for road maintenance 8.3 35Zby REOs.

7 Equipment and ferry repair contracts, 6.7 1ooZincluding transportation

8 Consultants' services: 24.2 902

9 Training, seminars, fellowships 3.9 1002and workshops:

10 Refunding of PPF Advance: 1.5 Amounts due

TOTAL 180.4

4.32 Disbursements for procurement of goods and works costing less thanUS$50,000 equivalent will be made against statements of expenditures (SOE).Other disbursements will be made against standard documentation. A revolvingfund will be established for IDA funds in a Special Account opened in foreigncurrency in the Central Bank in the name of MCW. An advance of US$8.0 millionfrom IDA funds into the Special Account will be made after Credit effectiveness,to cover about four months of project expenditures eligible for IDA financing.The Special Account will be replenished following applications for reimbursementby MCW, together with appropriate supporting documentation or SOEs, as well asbank statements. Reimbursement applications will be submitted to IDA wheneveraccumulated withdrawals amount to US$200,000. The amount of IDA replenishmentwill not exceed the authorized allocation.

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4.33 Counterpart funds will be made available by the Government throughits budgetary allocations. MCW, through CODAP, will manage all accountingrecords and will prepare supporting documentation and SOEs. Conditions ofDisbursement for the Second Year (FY1991/92) and the Third Year (FY1992/93) TrunkRoad Rehabilitation Programs (Annex 4-9, B) will be: (i) the Government hasapproved the agreed annual budget allocations for those years: and (ii) adequateand timely releases of funds from the previous fiscal year's budget for roadrehabilitation and maintenance of all trunk and regional roads have been made.In particu!ar, approval by the Government of the agreed budget estimates for roadrehabilitr ion and maintenance for FY1990/91 will be a Condition of Effectiveness(para 3.12).

M. Reporting and Auditing

4.34 CODAP will prepare brief monthly reports for MCW management andcopied to all participating donors, tabulating physical and financial progressduring the previous month and accumulated against agreed targets, andhighlighting areas and aspects which are causing problems, with recommendationsfor solving them. These monthly reports will be distributed by the last day ofeach month and should be the subject of the following week's management meeting;minutes of these meetings are to be attached to the following monthly report,with comments on actions taken in resolving previous recommendations. CODAP willalso prepare quarterly progress reports on the project :;)r all participatingdonors, to be sent within two months of the end of each reporting period. Thesereports will summarize the status of the various components, highlighting issuesrelated to IDA and the other donors. Within six months of closure of the IDACredit, CODAP will prepare a report on implementation of the project, withparticular emphasis on the IDA-financed components.

4.35 Annual audits will be carried out by auditors acceptable to IDA onthe project accounts, ir.cluding the Special Account and SOEs, and the MCW PlantPool. Each audit report, together with a management letter for the agenciesreceiving assistance under the project, will be sent to IDA within six monthsof the end of the fiscal year. The management letter will include observationsand suggestions of the auditor regarding possible improvements of accounting andfinancial practices, internal financial management and control and operatingprocedures. In addition, MCW will prepare internal audits at the end of eachquarter on expenditures incurred by the REOs for road maintenance and works undertheir authority, and for MCW's Plant Pool, with comparisons made betweenproduction targets and achievements during the quarter. These audits are to besent to IDA and donors assisting the REOs within one month of the end of eachquarter. During negotiations agreement was reached on reporting and auditingrequirements.

N. Environmental Impact and Involvement of Women

4.36 A substantial segment of the project is devoted to roadrehabilitation which, per se, will have no adverse effect on the environment;although special care needs to be taken during execution of road works andmaintenance to ensure that environmental hazards are not created, even if ofshort duration. In particular, pollution from equipment emissions, camp sites,workshops, road spoil and stagnant water in borrow pits, as well as off-road

- 44 -

traffic can cause adverse environmental effects if not properly controlled.Also, health hazards need to be averted, because of the concentrations of workersduring construction and their inevitable close contact with local inhabitant^.During negotiations agreement was reached that specific aspects affecting theenvironment will be included in the terms of reference for studies and conditionsof contract for procurement of works and goods. In particular, all terms ofreference and contract documents will include specific reference to any aspectsof the studies, installations, equipment or works which may have adverseenvironmental impact. Attention will be given to including appropriate measuresfor off-road traffic, roadworks deposits, camps and workshops, especiall- innational parks and wetlands. Contractors will also be required to provideappropriate immunization and health services to workers and families. Disposalof waste from camps, workshops, and worksites will be regulated: borrow pits anddrainage works must be free draining, erosion controls properly designed; plant,equipment and vehicles equipped and maintained with adequate noise and pollutioncontrols; road traffic diversion and safety measures properly installed andmaintained, and camps and workshops must have adequate sanitary facilities andincorporate measures for dealing with contaminated run-off and waste.

4.37 Under NORAD-funded rural road maintenance programs in Tanga and MbeyaRegions a concerted effort has been made in recent years to increasing employmentof women in road maintenance tasks; in several districts, this nas led to about30% of the contracted work fotce being women. Recommendations, prepared by NORADconsultants, based on experience obtained under these programs will be built onduring the project; in particular, during negotiations it was agreed that theGovernment will increase the opportunities for employment of women in rural roadmaintenance programs, and facilitate the improvement in their work conditions.Terms of reference for consultants assisting the REOs will include therecommendations outlined in Annex 4-12.

V. ECONOMIC JUSTIFICATION

A. Project Justification

5.01 The IRP is an integrated package of investments, sectoral policyreforms and institutional reorganization as described in previous chapters.The project is justified by (a) the contribution it makes to the overallperformance of the economy through reduction in the cost of economic activityand improvement in access throughout the country; (b) the depth and Dreadth ofpolicy reforms and institutional changes which are being undertaken by theGovernment as a precondition to project implementation; and (c) the high economicbenefits generated by the individual investments to be undertaken in the project.As detailed in Section C of this chapter, the project can be justified on thebasis of the high returns on physical investments alone. Overall ERR isestimated to be about 24% with an average annual savings on vehicle operatingcosts of at least US$80 million or a little over 10X of total physicalinvestment. However, the main Justification of the project is based on thepolicy and institutional reforms that will make the investments sustainable inthe long term, particularly in terms of proper maintenance of the road network.More specifically, the proposed project is justified in thats

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(a) The Government has reorganized the structure of roads administration,charging MCW with the responsibility for managing essential rural roads,and altering the role of the Government from doing the work itself, tocontracting the works to the private sector and concentrating its effortson policy framework and supervision of implementation (para 2.17);

(b) The Government has increased the budget allocation to the rolds sector,per the recommendation of the Public Expenditure Review of 1989. andchanged its investment policy to concentrate on road rehabilitation andagreed to meet 1002 of road maintenance budget requirements by FY1995/6(para 3.11);

(c) To finance the i,;reased budget allocation for the roads sector,Government has formulated a plan to increa,-- the revenue intake fromroad users through streamlining of user charges and improving revenuecvllection (para 3.11);

(d) The Government vill institute interim procurement guidelines forimplementation of the project, which will simplify and standardize thedocumentation required for contracts and delegate to MCW the authorityto award contracts, and will commission a study to review its procurementprocedures (para 2.24);

(e) The Government will institute a new policy for the local constructionindustry which, inter alia, promotes the expansion of local contractorsto carry out increasing percentage of road works (para 3.10); and -

(f) The Government has initiated actions to establish privately operatedplant pools to manage road maintenance equipment (para 2.20).

B. Proiect Benefits and Beneficiaries

5.02 The composite impact of the integrated package being implementedunder the project will be felt by the mid-1990s. Tanzania will have a roadnetwork in good condition which satisfies the basic requirements of the economyand the capacity to maintain the network in stable good condition. Specifically:(a) MCW headquarters would be transformed into a smaller policy, advisory andsupervision-orierted ministry with physical works being managed by the REOs, muchof which will be carried out by contract; (b) necessary routine and periodicmaintenance being carried out as required with sufficient funding; and(c) significant improvement will be achieved in the movement of goods and peoplethroughout the country with parallel reduction ir cost cf transport.

5.03 The direct project benefits from the rehabilitation and maintenancecomponents will be a reduction in vehicle operating costs (voc). The forecastsof voc reductions were obtained based on feasibility studies using commonassumptions on the vehicle operation data, cost of inputs and a common analyticalmodel (Highway Design and Maintenance Standards Model - HDM Model - developedby the Bank). The reduction in voc will be translated into lower tranepeort zostsfor the movement of agricultural products and inputs.

5.04 There are ancillary benefits which have not been taken into accountin the economic analysis. These are the benefits from improved access and

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mobility, which would contribute to stimulating production in areas which hadlimited access prior to rehabilitation, provide year round access in areas whichcurrently are shut off during the rainy season, and reduce spoilage and lossescaused by lack of transport being available at the right time. Additionally,since road maintenance and rural road rehabilitation is by nature laborintensive, the project will generate substantial employment opportunities duringthe construction period and provide a steady flow of income to the localinhabitants engaged in road maintenance activities. Given that an average of502 of maintenance and 15? of rehabilitation costs are in labor cost, the projectwill generate employment equivalent to about US$85 million under rehabilitationwork over a five-year period and US$6 million annually in maintenance work.Since the road works are spread widely throughout the country, most parts of thecountry will benefit from the employment generated from the project. Thesebenefits have not been included in the economic analysis.

C. Economic Returns

5.05 For the purposes of economic analysis, the project has been separatedinto three components: (a) paved trunk road rehabilitation; (b) unpaved trunkroad rehabilitation; and (c) regional road rehabilitation. In these threeanalyses, routine and periodic maintenance activities have been included ascosts, and therefore, a separate economic analysis of the maintenance budgetsupport has not been carried out. Technical assistance and training are expectedto have a generally beneficial effect on all MCW activities, and the qualitativebenefits have not been analyzed. The three components which have been analyzedaccount for 82Z of the total project.

Methodology

5.06 There have been two basic methodologies used for evaluation ofvarious road sections for their economic feasibility. First, for the trunkroads, the HDM model was used as the primary model for economic analysis andcommon data for voc and input prices used by consultants. Second, for theregional roads, TRRL III model in combination with production surplus model hasbeen used to carry out the economic evaluation. In both cases, the primarybenefit is the voc savings derived from the road rehabilitation, and in allcases, the analysis includes routine and periodic maintenance costs in theevaluation to assume proper maintenance of the rehabilitated. road sections.

5.07 In selecting the relevant road sections to be rehabilitated, priorityhas been given to the estimated economic rate of return (ERR) of the individualsections. In addition, however, prioritization of the relevant economicallyjustified road sections has been done based on the strategic importance of eachroad section to the economic activities in the country. For the trunk roads,priority has been given to rehabilitation of three main transport corridorsradiating from the city of Dar es Salaam. These are: (a) TANZAM corridor toZambia and linking Malawi; (ii) Dar es Salaam-Chalinze-Tanga-Himo Jct.-Arushacorridor (to Kenya); and (iii) Dar es Salaam-Morogoro-Dodoma-Singida-Mwanza-Kagera corridor (to the landlocked countries of Uganda, Burundi and Rwanda).These three corridors transit the majority of the regions with high agriculturalpotential and provide the main road arteries for the neighboring landlockedcountries. In addition, a southern corridor extending from Lake Nyasa (Malawi)through Songea to the port cities of Lindi/Mtwara has been included. This part

- 47 -

of Tanzania has very low road network density despite its production potentialfor cashew nuts (export commodity) and recurrent problems with famine due to widefluctuations in basic food production. For the regional roads, a study has beencarried out on the major agrichltural production regions in the country, andwithin these selected core regions, the most critical road sections for movementof agricultural produce have been selected for rehabilitation (IBRD Map 22067).

Paved Trunk Road Rehabilitation

5.08 The total length of paved trunk roads to be rehabilitated or resealedunder the project is 1,700 km. In addition, 370 km of TANZAM highway is beingrehabilitated under the on-going Sixth Highway Project financed by IDA. NORADand AfDF. The total rehabilitation works to be carried out on the paved trunkroads over the next eight years will thus be 2,070 km or 702 of the total pavedtrunk road network. Feasibility studies have been carried out for all the roadsections and the traffic growth rate varies from 3.52 to 7.02 p.a. The estimatedERR ranges between 122 to 3502 with a weighted average of 242 (ignoring the highERRs). The rates on individual sections are satisfactory and relevant data areshown in Annex 5-1.

Unpaved Trunk Roads Rehabilitation

5.09 The total length of unpaved trunk roads to be rehabilitated underthe project is 2,550 km. In addition, 130 km of gravel roads are beingrehabilitated under the on-going Sixth Highway Project financed by IDA. Overthe next eight-year period, 2,680 km of unpaved trunk roads will berehabilitated (41? of the gravel road network), and 340 km will be upgraded topaved standards. Feasibility studies have been carried out for all the roadsections and the traffic growth rate varies from 3.52 to 5.02 p.a. The estimatedERR ranges between 152 and 2102 with a weighted average of 192 (ignoring the highERRs). The rates on individual sections are satisfactory and relevant data areshown in Annex 5-1.

Regional Roads Rehabilitation

5.10 The total length of regional roads to be rehabilitated under theproject is 3,000 km in eleven regions. This is equivalent to 302 of the regionalroad network in the eleven core regions, or 23Z of the total regional networkin the country. Feasibility studies have been carried out for the first 1,300km to be rehabilitated and the estimated ERR averages about 37Z. Methodologyfor economic analysis has been agreed and the standardized format will be usedfor screening the selection of the remaining 1,700 km to be rehabilitated underthe proposed project. In any case, rehabilitation will not be carried out forroad sections with less than 122 ERR. The rates on individual sections andrelevant data are shown in Annex 5-2.

Total Project Cost, Benefits and ERR

5.11 The distribution of project economic costs is shown below togetherwith the relevant ERR. The estimated ERR on the total project, excludingtechnical assistance and studies, is 242, covering 832 of the total project cost.The overall ERRs and the individual ERRs are satisfactory.

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Summary of Economic Rate of Return

Trunk Trunk Total Road Tech.Paved Gravel Regional Roads Maintenance Assist. Total

2 of TotalProject Cost 61 15 7 83 10 7 100

ERR (2) 24 19 37 24 N.A. 24

*** = included in the road economic analysis

D. Sensitivity Analysis and Risks

5.12 The three main variables which would affect the economic benefitson the road rehabilitation and maintenance components of the project are: (a) afailure of the economy to continue its recovery, hence for traffic to increaseas estimated; and (b) rehabilitation costs to exceed estimates. To test theeffect of these variations, the following assumptions were employed for eachcategory of road rehabilitation: (a) rehabilitation costs increased by 252; (b)zero traffic growth; and (c) a combination of the two. The effects of thesealternative assumptions on the ERR are still within an acceptable range of 12Xto 37Z. The results are shown below.

Summary of Economic Rate of Return(Z)

Trunk Trunk TotalPaved Gravel Regional Roads

Base Case 24 19 37 23Costs +25Z 19 16 32 19Zero Traffic Growth 18 14 29 18Combined Effect 16 12 25 16

5.13 The success of the project, however, hinges ultimately on MCW'scapacity to execute the program. The particular risks include: (i) slow progresson privatization initiatives; (ii) failure to effect the agreed procedures todelegate executive authority for contracting goods, works and services; and (iii)failure to meet the agreed road budget targets. To guard against these risks,experiences learned from past projects have been incorporated into the projectdesign: (i) by undertaking the main institutional and policy changes prior toproject effectiveness, including (a) changes in the procurement regulations, (b)appropriation of the agreed road budget for the first year of projectimplementation, and (c) reorganization of roads administration; (ii) byconditioning the approval of road work contracts financed by IDA on theGovernment appropriating the agreed annual road budget; (iii) by completing theengineering works for the first two years of the program prior to Creditapproval; (iii) by developing closer coordination amongst the Government, donorsand IDA; and (iv) by stationing in Tanzania an experienced highway engineer fromthe Bank to assist the Government in coordinating implementation of the project.

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VI. AGREEMENTS REACHED AND RECOHENDUTIONS

6.01 During negotiations, agreement was reached or confirmed on thefollowing points:

(a) Target pavement design standards (para 2.02);

(b) MCW to prepare an action plan for establishment of private plant pools,and ensure that these will be autonomouu entities and enable them tocharge commercial rates for equipment hire (para 2.21);

(c) Road maintenance strategy and annual physical and budgetary targets,based on the expected financial support by IDA and other donors (para3.09);

(d) The National Construction Industry Development Strategy (para 3.10);

(e) The Government shall increase its revenue collection, primarily throughrevenue from road users, with a view to funding the increased costs ofroad maintenance, while maintaining the present level, in real terms,of net contributions to the Government's general revenues (para 3.12);

(f) The GoverDment's annual contribution to funding road maintenance, withthe objective of fully covering road maintenance requirements from theGovernment's own resources by FY1995/96 (para 3.12);

(g) Annual reviews with IDA and other participating donors, by March 31 ofeach year of: (i) the road network stabilization program; and(ii) proposals for the next three fiscal years of road investment andmaintenance activities, including physical, financial and trainingaspects; and reach agreement with IDA on the budget estimates for thefollowing fiscal year for rehabilitation and maintenance of the trunkroad network, and regional road networks in, at least, the core regions(para 3.13);

(h) Any proposed investment in the road sector, estimated to cost overUS$3.0 million equivalent to have an estimated economic rate of returnof at least 122, taking into account socioeconomic criteria acceptableto IDA (para 3.13);

(i) Terms of reference for technical assistance to MCW and its REOs, andassociated MCW staffing requirements; key MCW staff associated with theproject will not be reassigned in such a manner as to be detrimental toproject implementation (para 4.05);

(j) Vehicle weight control and road safety programs to be formulated by July1, 1991, including a definition of responsibilities for implementation,and promptly thereafter commence implementation of the programs(para 4.12).

(k) Details of the interim procurement regulations and draft standardprocurement documents (para 4.13);

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(1) Terms of reference for undertaking a general revision of Tanzania'sprocurement regulations, including assistance in implementing supplymanagement procedures, and that implementation of the revised regulationsand procedures will commence by December 31, 1993 (para 4.13);

(m) Rural roads to be improved under the project will be selected throughapplying agreed standard evaluation criteria satisfactory to IDA(para 4.15);

(n) Objectives and scope of the equipment repair and scrapping program, andtentative equipment requirements for the plant pools (para 4.18);

(o) Plan of action to improve the delivery of urban transport services,including institutional reorganization and appropriate pricing policy,will be furnished for IDA's review by December 31, 1990 (para 4.19);

(p) Structural changes to MCW's internal organization, which will commenceby the beginning of FY1990/91 (para 4.23);

(q) Key actions for implementing the IDA-financed components (para 4.24);

(r) Government to conduct the following workshops and conferences on projectimplementation: the Project Launch Workshop; annual workshops involvingREO staff and MCW headquarters staff; annual donors conferences; and,by November 30, 1992, an Implementation Review Workshop (para 4.25);

(s) Reporting and auditing requirements (para 4.35);

(t) Specific aspects affecting the environment to be included in terms ofreference for studies and conditions of contract for procurement ofworks and goods, in particular those aspects that may have adverseenvironmental impact (para 4.36); and

(u) Increase the opportunities for employment of women in rural roadmaintenance programs, and facilitate the improvement in their workconditions (para 4.37).

6.02 The Conditions of Effectiveness are:

(a) National Construction Industry Development Strategy has been adopted bythe Government (para 3.10);

(b) Procedures and documentation for the interim procurement regulations havebeen finalized (para 4.13);

(c) Selection of consultants, by MOF, for -ndertaking the ProcurementRegulations and Supply Management Study (para 4.13);

(d) Preparation of regulations for establishing MCW's plant pool, and biddingdocuments and the list of prequalified companies for private plant pools,all to the satisfaction of IDA (para 4.18); and

i

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(e) Approval by the Government of the agreed budget estimates for roadrehabilitation and maintenance for FY1g9O/91 (para 4.33).

6.03 The Conditions of Disbursement for the Second Year (FY1991/92) andthe Third Year (FY1992193) Trunk Road Rehabilitation Programs will be that:

(a) the Government has allocated the agreed annual budget allocations forthose years; and

(b) adequate and timely releases of funds from the previous fiscal year'sbudget for road rehabilitation and maintenance of all trunk and regionalroads have been made (para 4.33).

6.04 Subject to the above agreements and conditions, the project issuitable for a Credit to the Government of Tanzania in the amount of SDR 139.9million (US$180.4 million equivalent), on standard IDA terms.

- 52 - Annex 1-1

Page 1 of 6


PORT MODERNIZATION PROJECT II

Past Lending in the Transport Sector

PROJECT NAME First Highway Projects(Cr. 48-TA/Cr. 115-TA for US$17.0 million)

PPAR NO. 791 of June 26, 1975

1. The US$14 million credit (48-TA) of February 1964 was to finance theforeign exchange cost of engineering and construction of eight road sections.Shortly thereafter, most expatriate staff in the Roads and Aerodromes Division(RAD) of the Ministry of Communications and Works left the country. RAD'sprofessional manpower was depleted and project implementation seriously delayed.In addition, the work quantities of the project, based on preliminary engineer-ing, had been underestimated, and prices had escalated. IDA reappraised andrevised the project, and provided a US$ 3 million supplementary credit (115-TA) in March 1968. The revised project was to: retain detailed engineering andconstruction of 533 mi of six of the eight road sections, extend detailedengineering of the section of the Tanzam Highway between Morogoro and Iringafrom 104 mi to 142 mi but omit construction; include detailed engineering offeeder roads (110 mi of four secondary roads and 98 mi of tertiary roads) on theGeita Peninsula as well as a five-year program of staffing and training for RAD;and omit construction of the Musoma-North Mara road section.

2. Road construction was completed satisfactorily by 1970, and thedetailed engineering work was carried out as envisaged. Engineering of theMorogoro-Iringa section was subsequently implemented under the Second HighwayProject. Engineering of the Geita Roads, after further revision, became thebasis for their upgrading under the Third Highway Project. The staffing andtraining program was carried out to a limited extent because of slowness inrecruiting expatriates and shortage of African staff to be trained. The actualcost of the revised project was US$ 22.2 million, or 32 less than estimated.The Project was completed in July 1973.

PROJECT NAME Second Highway Project(Ln. 586-TA/Cr. 142-TA for US$22.5 million)


3. The project approved in February 1969 assisted the construction oftwo difficult sections, aggregating 499 km, of the Tanzam Highway. The goalof providing Zambia with a reliable outlet to the sea was effectively achieved,contrary to appraisal expectations, Zambia traffic did not abandon the highwaywhen the TAZARA railway was opened in 1975. The actual cost of the project was E

US$35.2 million, or 7 2 less than estimated. The Project was completed inDecember 1978.

- 53 -Annex 1-1Page 2 of 6

PROJECT NAME East Africa CommunitySecond and Third Harbour Project(Loans 638 and 865-EA for US$61.5 million)


4. The two projects approved in July 1969 and January 1972 were to helpimplement the East African Harbours Corporation (EAHC) 1969-72 and 1972-74development programs. In addition to various smaller modernization andimprovement works, the program included, at Mombasa, the construction of aspecialized wharf to handle bulk cement, two deep-water berths, a single buoytanker mooring, and the completion of three berths started under a previousBank-financed project. In addition, at Tanga the programs included improvementof lighterage facilities.

5. Completion of the civil works significantly increased the capacityof these ports and assisted the East African Community, until its demise in1977, in expediting its foreign trade. Without the projects the economies ofKenya and Tanzania, but also of Uganda, Zambia, Rwanda and Burundi, would havefaced serious constraints, and congestion at both Mombasa and Dar es Salaamports would have reached levels well beyond the proportions which prevailed inthe early 19708. The two projects had joint cost overruns of about 30Z countingonly the items which were completed by December 31, 1981. The actual projectcost was about US$136.7 million.

PROJECT NAME East Africa CommunityThird Railway Project(Lns. 638 and 865-EA for US$42.4 million)


6. The project was approved to assist East African Railways (EAR) inimplementing a policy package designed to streamline the Railway's tariffstructure and bring down its costs to allow it to recoup profitable businessit had lost to road transport and effectively compete with trucking in thefuture, while at the same time remaining a commercially viable operation. Theproject involved actions on two fronts: realignment of tariffs, and implemen-tation of an investment and cost reduction program.

7. On completion the project had failed to achieve full implementationon either objective. Full implementation of a cost-based tariff structure wasnot achieved, because the economic, political and operational consequences ofimplementing the new tariff were not foreseen. Full implementation of theinvestment and the cost reduction programs failed to materialize because of theBorrower's financial troubles, caused by political differences among the MemberGovernments in the East African Community. The estimated project cost wasUS$90.8 million; the actual cost is unknown.

- 54- Annex 1-1Page 3 of 6

PROJECT NAME Third Highway Project(Cr. 265-TA/Ln. 586-TA for US$6.5 million)

PPAR NO. 4031 of June 30. 1982

8. The Third Highway Project, approved in July 1971, was latersupplemented by a transfer of a USS 1.9 million surplus from Loan 586-TAoriginally approved for the Second Highway Project. These funds were to helpfinance: the construction of 200 km of the Mtwara-Ningoyo-Masasi road insouthern Tanzania; the improvement and maintenance of 475 km of feeder roadsin Geita district (310 km) and Mara region (165 km): and preinvestment studies,consultant costs for supervision, technical assistance and training.

9. The project was not a success, although two of its components (pavingthe road between Mtwara and Masasi and carrying out preinvestment studies) wererealized. However, the first was accomplished with significant cost overruns(215Z). and the second with significant qualifications. Improvement of feederroads in the Geita peninsula and the Mara region were short-lived. Training ofTanzanian engineers met limited success, and the staffing program was notcarried out. The actual cost of the project, which was completed on December1978, was US$25.2 million, 265Z above estimates. The project closed in December1978.

PROJECT NAME Fourth Highway (Maintenance) Project(Cr. 507-TA for US$10.2 million)

PPAR NO. 6483 of November 7, 1986

10. The project approved in September 1974 was the first of a two-phaseeffort to establish a trunk road maintenance organization. The first phasecovered about 3,300 km of trunk roads in the southern half of the country andthe second phase, which was financed under the Fifth Highway Project (Credit876-TA), covered about 5,100 km of trunk roads in the northern half of thecountry. The project was the outcome of a "Tanzania Highway Maintenance andOrganization Study' which was carried out in 1972 by consultants financed bythe United States Agency for International Development.

11. Little progress was achieved over the first six years because of theinability of COMWORKS to utilize adequately the technical assistance. COMWORKSproposed a recasting of the project which was eventually approved by IDA in1981. The final agreement called for the procurement of spare parts, few piecesof equipment and technical assistance. COMWORKS undertook to execute a highwaymaintenance program consisting of resealing 214 km, regravelling 186 km,pavement repairs for 840 km, and routine maintenance of a network which hadexpanded from 3,300 km at the beginning of project in 1974 to 4,900 km in 1979with the incorporation of more roads into the network to be maintained byCOMWORKS. The project was closed on December 31, 1982 with US$ 0.86 million ofthe original Credit of US$ 10.2 million cancelled. There was little improve-ment in routine maintenance and standards of resealing and regravelling.

- 55 - Annex 1-1Page 4 of 6

12. COMWORKS had an inadequate implementation capacity and found itdifficult to fill vacant positions, particularly engineers. Senior staff wereengaged in the day-to-day running of the ministry with not much time left toadminister and attend to the requirements of the technical assistance stafffinanced by the project. The actual project cost was US$10.5 million, 84Z ofestimates. The project closed in December 1982.

PROJECT MAME Trucking Industry Rehabilitation and ImprovementProject (Cr. 743-TA for US$15.0 million)

PPAR NO. 7571 of December 30, 1988

13. The Trucking Industry Rehabilitation and Improvement Project approvedin October 1977 was to finance the foreign exchange costs of trunks, technicalassistance and workshop facilities for selected public companies, provideforeign exchange to Government in support of the liberalization of spare partsimports and provide assistance to a transport industry training institute.

14. The project was to support Government's efforts to reverse the deter-iorating trend in truck transport, to be achieved mainly through assistance tothe public sector segment of the industry: (i) to strengthen the operatingcapability of selected companies in regions where agricultural activity wasseverely constrained by inadequate truck transport services through procurementand rehabilitation of trucks and through strengthening of management andmanagement information systems; and (ii) to put these trucking companies on asound financial footing through both operating improvements and covenantedrequirements for adequate rates to ensure that they can be self-financing.

15. Project components included: (i) provision of trucks and spare partsfor the rehabilitation of trucks and for five selected RETCOs; (ii) technicalassistance for management operations and training of staff of the selectedRETCOs; (iii) provision of workshop equipment for the selected RETCOs; (iv)strengthening of the recently-established National Institute of Transportthrough the provision of instructors, teaching aids and equipment; (v)replenishment of the country's inventory of spare parts; and (iv) provision oftechnical assistance to the project implementation agency, NTC, for projectcoordination, monitoring and policy advice.

16. The project represented the Bank Group's first direct assistance tothe Tanzania trucking industry. As such, it was a logical extension of itsclose involvement in the development of Tanzania's road network. Assistanceto the industry was provided in the context of strong Government commitment tothe development of the regional trucking companies (kETCOs) whose operatingperformance has been satisfactory, given the constraints under which theyoperate. However, this performance has been attained and is, at least for thenear future, sustainable only with a significant input of technical assistance.Nonetheless, given the much poorer operating performance of other parastataltransport operations, the assistance to the RETCOs has been a satisfactory useof the Association's resources. The actual project cost was US$21.4 million,17X above estimates. The project closed in June 1985.

- 56 - Annex 1-1

Page 5 of 6

PROJECT NAME Fifth Highway Project(Cr. 876-TA for US$20.5 million)

PPAR NO. 6938 of September 15, 1987

17. This project, approved in January 1979, was the second phase of theeffort to establish a trunk road maintenance organization in the country. andthe Fifth Project included the establishment of routine maintenance capabilityfor about 5,100 km of primary roads in the northern half of the country, therehabilitation and regravelling of about 2,040 km of trunk roads, procurementof road maintenance and rehabilitation equipment, construction of roadmaintenance camps, workshops, and housing and technical assistance and training.

18. Procurement of equipment, vehicles, and spares was affected by initialdelays due to differences of views between the Government and IDA over thesufficiency of notification for ICB. When this was resolved and delivery wasdue, the 1983-1984 suspension of disbursements by IDA for all projects in thecountry caused further delays and most of the items of equipment did not arriveuntil late 1984. Two advisors were appoint on an individual basis and two keyadvisors were provided by a consulting firm. They all arrived separately overa period of two years. Thus, from the beginning it was difficult to adopt acoordinated approach.

19. The project fell short of completing its physical objectives and someof the works carried out have fallen into disrepair due mainly to the poorquality of the original works. Maintenance of roads has been instituted, butthe quality of the work still does not keep the road in acceptable condition.Training at the Highway Authority's facilities at Morogoro improved, but localpersonnel were not yet able to take over as instructors at the end of theprogram. About 120 students graduated as engineers at Indian universities.

20. A major disappointment was that the quality of the roads did notimprove as expected although the funds were spent. What went wrong was thata few critical elements needed to actually perform the maintenance work weremissing. When the labor and material were available, the equipment was notoperational for lack of spare parts or fuel or tires, etc. As a result, someof the roads have crumbled to the point where reconstruction at a high cost isrequired. The actual cost was US$22.5 million, 882 of estimate. Thet projectclosed in December 1985.

PROJECT NAME Port Rehabilitation Project(Cr. 1536 TA for US$27.0 million)

PLANNED COMPLETION December 31, 1989

21. The project approved in was is designed to provide for therehabilitation and modernization of the port of Dar-es-Salaam which, besidesbeing Tanzania's major port, also serves as an important regional port forBurundi, Malawi, Zaire, Rwanda and Zambia. The project would provide specialcontainer handling facilities and equipment, replace some deteriorated generalcargo equipment, modernize grain handling facilities rehabilitate lighteragefacilities and the petroleum jetty, repave sections of berths, and provide fora review of additional rehabilitation requirements, technical assistance,training and consultancy services.


PROJECT NAME Sixth Highway (Rehabilitation) Project(Credit 1688-TA for US$50 million)

PLANNED COMPLETION December 31, 1991

22. The project, approved in May 1986, is to reduce constraints bytransport on the economy by rehabilitating the most important sections of thehighway network. An important project objective is to improve the system ofroad maintenance works by contract rather than by force account, by increasingthe capabilities of the local contracting industry. The project also providesassistance to expand the capacity and efficiency of the trucking industry, andto increase the availability of trained engineers in Tanzania. The ExecutingAgencies are the Ministry of Communications and Works, the Ministry of Educa-tion, the National Construction Council, and the National Transport Corporation.Cofinancing from DANIDA (US$ 2.0 million equivalent), NORAD (US$ 6.9 millionequivalent) and a loan from the AfDF (US$ 19.4 million equivalent).

23. The appraised project consisted of: (a) a road rehabilitation programconsisting of the rehabilitation of about 295 km of the TANZAM Highway, and 700-1000 km of gravel roads; (b) an equipment rehabilitation program; (c) amaintenance spares supply program to the trucking industry; (d) assistance tothe local contracting industry; (e) TA and consulting services for constructionsupervision, agricultural feeder roads study and feasibility studies anddetailed engineering; and (f) training.

24. Execution of the main project components: trunk road rehabilitationand equipment rehabilitation have started slowly. For the roads works, detaileddesigns had to be updated, and the resulting costs were well above appraisalestimates. Consequently, the project scope was amended and the roadrehabilitation was concentrated on the TANZAM Highway which was expanded toabout 370 km (NORAD also provided an additional NK 60 million); most of thegravel road sections have been transferred to the proposed Integrated RoadsProject. Contracts have been awarded for three of the five TANZAM roadsections, and wnrk is commencing.

25. The equipment rehabilitation program has made negligible progress,primarily due to weak management in the Electrical and Mechanical Department ofMCW, and to the cumbersome and inefficient procurement procedures of theGovernment. MCW contracted in early 1990 a task manager to expedite theprogram, setting targets for equipment rehabilitation and preventivemaintenance.

26. The training programs have been progressing steadily, ulthough on-the-job training of domestic contractors (130 km of gravel roads have beenselected) has yet to start because of inaction by MCW to finalize contractdocuments and the special conditions needed for training small inexperiencedcontractors.

27. Overall, despite the slow start, rapid progress is expected over thenext three years, now that most of the procurement bottlenecks have beenovercome.

AF61NMarch 1990

- 58 - Annex 2-1

Page 1 of 2

TANZANIAINTEGRATED ROADS PROJECT

Classification of Road Networks

TRUNK ROADS Target Dimensions (m)

Class A: International through routeshandling significant proportionof international traffic. 9.t0.00

Passes through several regions,starts and terminates at border -1s 1, 0.v. o 1,. -Kentry/exit points or at ports. '1Usually on the other side of the MU ,CwGST

border there is a road ofsimilar class, thus enhancing .its status or potential status ___as interregional or continentalhighway.

1M..

Class B: Main links to the Class A roads 7m l I - ' Vand often traverses throughseveral regions. Carries ___----____ osignificant internationaltraffic or internal long / distance traffic.

1- 8.w-09.0 A .

Class C: Main internal routes, often 1 .confined within one region. I l, . 1 Connects or links higher classroads to minor border posts, os DST

towns, industrial and commercialmining, and agricultural / centers.

9.50.10.00

Class D: Urban through roads. Normallycontinuation of Class A roads ,0.6-7.00

or links from Class A roads to ACMDST

city/municipality town center,international ports and major 1W

national airports.

- 59 Annex 2-1Page 2 of 2

REGIONAL ROADS Target Dimensions (unpaved)

Class E: Main regional roads, carryingmainly interregional traffic,connects regional headquartersnand district headquarters.Connects or links Class A and 50

B roads to important agricul- -__,__1___

tural, mining and miningcommercial/market centers. 225 D

Class F: Links district headquarters tohigher class roads or connectsimportant locations in the .50.

district to the district -C

headquarters.

FEEDER ROADS

Class G: These are village access roads | 410

important for evacuation ofcrops from farm gate to marketor godovns.

Note: The design pavement dimensions will depend on traffic volumes,topography and economic feasibility.AC: Asphalt concrete pavementDST: Double surface treatment pavement

Source: MCW and missionAF6IN March 1990

.............. .... ...... .......... .. . .. . ............. .... ...... ... .... ...... ..... ........... .....----------T--:

M~~~i i i t!i lii X i'3'

.__ s00

~iIi-- =i iIIIi _i III

09 _ I

z_z , ~~- 09 -

TANZANIA: INTEGRATED ROADS PROJECTMINISTRY OF COMMUNICATIONS AND WORKS (MCW)PROPOSED REORGANIZATION AT HEADQUARTERS AFFECTING

THE ROADS FUNCTION

DEPUTYf

PRI"¢IPAL 8~~ECRErARYSECRETARY

cow AND

*W-

PM WS5OCTOTE

= _ DKF NWE~~~~~~~~~~OCTOFIpom

1 1 I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

LASOftTOM~~~~~~~~~~~~f

(FUTURE STATUS TO BE STUDIED)

tlBD5 _ Rt=DS . _~~~~~~~~~~~~~~~~~~~tR 21EL~~~~~~~~~~~~~

TANZANIA: INTEGRATED ROADS PROJECTMINISTRY OF COMMUNICATIONS AND WORKS (MCW)

ORGANIZATION OF MODEL REGIONAL ENGINEER'S OFFICE

PRINCIPALSECRETARY

REGIONAL DEVELOPMENT PLANNING AND BUDGETING TECHNICAL ADVICEDIRECTOR --------------------------------------- REGIONAL ------------------------ DISTRICT ENGINEER

(COORDINATION) ADVICE ENGINEER

C%

FINANCE ADMINISTRATION TRAININGPERSON NLL

WORKS AfN.OFCRTRAININGIACCOUNTANT ADI.OFCROFFICER

RURAL ROADS TRUNK ROADS& PLANNING MATERIALS ELECTRICALAND

AERODROMES PROGRAAMING LABORATORY BUILDINaS MECHANICAL REGOtAL

& DESIGN ~~~~~~~~WORKSHOPS STORES

RURA.. ROADS TRUNK ROADS PLANNING MATERIALS ENGINEER1 E& N E EER REGIONAL

ENGINEE (RRE)I ENGINEER (TRE) I NIER IENGINEER ARCNITECT E&MGNERSTORES OFFICER

Detalls below this level shownIn chart 3B c

>,x

mm~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:


TYPICAL ROADS ORGANIZATION IN REGIONAL ENGINEER'S OFFICE

REGIONALENGIEERL

TRUNKFMDGA ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~DSRCAERODROMEO RUPAL ROAD

TRUNK ROADS RURAL ROADSENatNEER (TRE) ENGINEER (RRIE DISTRICT

_ REHABILITATION ENGINEER'S

¢ON8TRUCTION OFFICE~~~~~~~~

CONTRACT ARACONTRACT AREALABOUR ~~~~~~~~~~~BRIDGES & CONTRACT LABOUR BASED MAINTENANCE

MAINTENANCE LABOUR BASED FORCE ACCOU CULVERTS SUPERVISION LINKOMAN UNIS

TECHNICIAN TECHNICIAN ENGINEER ENGINEER ENGINEER ENGINEER TECHNICIAN TECHNICIAN

NUMBER NUMBER NOT ALL REGIONS WILL HAVE NUMBER NUMBER

AREA BASED AREA BASED FOUR TYPES OF UNITS AREA BASED AREA BIASED(t TO UNITS) UNDENTAKING ROAD (I TOB UNITS)

REHABILITATIONCONTRACT - FOREMAN & CONSTRUCTION _ CONTRACT FOREMAN

HEADMAN HEADMAN

CONTRACT FOREMAN CONTRACT I FOREMANN EADMAN _-HEADMAN l


INTERCONNECTION BETWEEN THE REGIONAL ENGINEER'S OFFICE AND HEADQUARTERS

PRINCIPALSECRETARY

TECH NICAL TECH ICL ELECTR ICAL MACC WER

PLANT POOL TRUNK ROADS RURAL ROADS SERVICES SERVICES MECHANICAL SUPPLIES DEVELOPMENT & HEADQUARTERS(ROADG) (BUILDINGM A~DMINISTRATIONp

REGIONS

. ---- ------ ---------, ,", ,, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ REGIONAL

ENGINEER

Fi, ANCE,TRUNK ROADS PLANNING MATERIALS&A BUILDINGS WORKSHOPS & STORES ADMINISTRATION&AERODROME| RURAL ROADS PROGRA|M | LA8RATORY FERRIES PERSONNE

& DESIGNPESNLTRAINING

MANAGE?eNT RESPONSIBILITYAND ACCOUNTABILITY LINK

TECHNICAL LINKrt

La

-- U~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~l

- 65 -

Annex 2-3Page 1 of 4

TANZANIA


Establishment of Plant Poolsfor Road Maintenance Equipment and Vehicles

Background

1. The total fleet of road equipment and vehicles assigned to trunk andregional roads amounts to some 700 units. Of these, about 350 units (excludingagricultural tractors and trailers, and suppert equipment) are functioning orrepairable for road works and maintenance. About 265 of these have beenidentified for repairs, and there is an ongoing exercise to prepare a masterequipment register of all road maintenance equipment, which is available fortrunk and regional road works, and to evaluate its condition with a view toestablish its suitability for road maintenance works. Under the Sixth HighwayProject about 70 units are scheduled to be repaired in FY 1990191. with ODA-UKfunding, about 22 Aveling Barford graders and wheel loaders have been repairedand a further 15-20 units could be included in this program. 15 Champion gradershave been identified as suitable for repairs under a CIDA funded program. NORAD,Swiss and Irish teams are also maintaining equipment for regional and districtroads at Mbeya, Tanga and Morogoro, and KfW (FRG) maintains a force account unitalong the Mombo-Mkwmasi road.

2. There are some 40-50 MCW and regional workshops throughout thecountry, each with its own stores, but none are fully functional. Under theSixth Highway Project, seven zonal workshops, including the Central Workshop atMorogoro, are being retooled and preventive maintenance practices establishedin the regions. These workshops are designated to be the principal centers forrepairing MCW equipment.

3. The present organization, management and technical capability of MCW,considering past performance, leaves little confidence that equipment maintenancewill become efficient or that the present fleet availability of about 15-20?will improve. All unserviceable units should be auctioned or scrapped as soonas practical.

4. In order to undertake effective maintenance of the 10,000 km of trunkand 19,000 km of regional and essential rural roads under the Regional Engineer'sOffices (REOs) in mainland Tanzania, about US$15 million of new equipment andvehicles will have to be brought into the country over the coming three years,for primary use of MCW force account brigades and local road contractors. Itis not expected that international contractors for donor financed roadrehabilitation and upgrading works will have a demand for this equipment sincethey bring their own fleet with them.

- 66 -


Proposed Solution for Managing Road Equipment

A. Existing Equipment and Vehicles

5. The seven zonal workshops are to become the principle centers of anautonomous MCW plant pool which will be responsible for managing and maintainingthe existing road equipment and vehicles, and for charging full hire rates fortheir use. For administrative purposes, some light vehicles and supportequipment would be allocated directly to the REOs, in accordance with theirneeds. But for the purposes of operations maintenance and repairs all MCWequipment used for road maintenance would be under the jurisdiction and directionof the relevant zonal workshop through the respective Regional MechanicalEngineer. The Morogoro Central Workshop will double as a zonal workshop, as wellas provide specialized work for zonal workshops on machines transported toMorogoro. Zonal workshop managers will also have the authority to contractrepair work to private garages. The present system for charging REOs for repairwork will be modified to cover full hire charges. The MCW Plant Pool operationwill be monitored initially by the Task Manager (TM); but this would later bereorganized to be an autonomous corporation whose establishment is under study.TM will also monitor the MCW Plant Pool's ordering of spare parts through MCW'sprocurement agent or directly. However, the MCW plant pool, through each zonalworkshop, will operate imprest account (amounts to be established) and theauthority to make direct purchases and to contract services.

B. New Eauipment and Vehicles

6. New light vehicles and small supporting equipment for REO staff willbe assigned to the REOs and maintained by them. They are not expected to comeunder the MCW Plant Pool.

7. New equipment and heavy vehicles used for road works would not bepurchased by MCW but be purchased by private companies for primary use of REOsand local road contractors, under arrangements outlined below for creation andfunctioning of private Plant Pools.

8. An estimate will be made under the Plant Pool Study of vehicle andequipment requirements for MCW to carry out its annual road programs. Takinginto account existing MCW and bilateral donor managed fleets, and roadcontractors' equipment (registered by NCC), the Government will provide fundsfrom IDA under IRP (with an agreement to repay funds at an established interestrate and time frame) for procurement of new equipment and vehicles which willbe identified under the ongoing study as needed for MCW to undertake its roadmaintenance program.

9. MCW will package the new road equipment and vehicles into one or twolots, based on recommendations of the study. These lots will be large enoughto attract interest from international dealers and manufacturers who couldassociate with established local firms to form plant pool companies (thecompanies). The conditions for the establishment and functioning of thecompanies are expected to be as follows:

- 67 -


(a) Companies will establish service centers at recommended locationsthroughout the mainland, as well as provide supporting mobileworkshops and lubrication units to service the equipment whereverused by REOs or contractors under hire arrangements. Cost ofestablishing the service centers would be detailed by companies intheir bids.

(b) Companies will purchase (under IRP) a specified amount of equipment,and will be obliged to guarantee a minimum availability for hiredequipment over a predefined period (about eight years, or areasonable period for amortizing the loan).

(c) Companies will provide, at no extra cost to the hirer for theequipment: operators, assistants, mechanics and all support servicesand parts to keep equipment running, or replace broken down unitswith others within an established time frame.

(d) MCW will indicate the number of days per year for hire of theequipment and vehicles operated by the companies, based on plannedannual road programmes over the next decade. This information willbe provided to prequalified companies, based on the plant pool studyrecommendations, which will take into account the capacity of MCWbrigades and local contractors to undertake road maintenance works,and expected levels of annual funding from donors and the Governmentbudget.

(e) Companies will determine in their bids the hire rates and pricevariation formulae for each type of equipment, and percentages inlocal and foreign currency (US dollars or currency of equipmentsource) in which payments are to be made.

(f) MCW will indicate facilities available at MCW workshops which couldbe leased to the companies (rates and adjustment formulae to beprovided to prequalified firms).

(g) Prequalified companies will be provided with a schedule forrepayments, over about eight years, for the cost of equipment andinitial stock of spare parts (about 5Z of equipment value), as wellas workshop equipment and service vehicles which the companiesrequire to be purchased with the road equipment. The amount and costof workshop equipment and plant pool service vehicles to support thehire operation will be indicated in the companies' bid. Any .thercost in the establishment of service centers in addition to thosedetailed above could also benefit from this financing.

(h) Companies will have complete freedom, after fulfilling therequirements of MCW's road programs, to hire equipment to otherusers (public and private), to replace equipment and add furtherunits to the plant pools, and to expand the business to lease buy-back arrangements with the private sector.

- 68 -


(i) The companies will be registered as Tanzanian firms, and will havethe freedom, at any time, to include other investors in the plantpools in accotiance with the laws of Tanzania. The companies willbe able to exchange local currency earnings into foreign currencythrough the OGL system in order to run the business efficiently andwill be able to employ expatriates without constraint but withadequate justification.

(j) Companies will meet the hiring requirements of equipment and servicesdesired by HCW, and failure to meet the guaranteed availabilityrequirements will incur penalties to be met by the companies asmutually agreed in the contract.

(k) Companies will be liable to pay personal income taxes for their staffin Tanzania in respect of their salaries and wages chargeable as perlaws and regulations of Tanzania, and the companies shall arrangefor deductions as may be imposed by such laws and regulations. Thecompanies are also liable to pay taxes and other charges imposed bythe Government of Tanzania for materials and supplies furnished underthe contract, as well as services performed under the contract.

- 69 - Annex 8-1

TANZANIAINTEGRATED ROAD PROJECT

ROAD CONDITION TARGETS (Km AND X)

18egining Year Asphalt Concrete Surface Dressed Crovel EarthI----- --- ---- -----------------------------------------------……-I I Good Fair Poor Good Fair Poor Good Fair Poor Good Fair Poor

--- … -___ ---- ---- ---- ---- ---- ---- --jA. Trunk Road Network

;FY 90/91 I Km 884 289 882 622 784 1806 288 1148 1429 878 1397 2002X 85 25 40 2080 50 10 40 60 10 87 63

IFY 91/92 Km 884 289 882 522 784 1806 286 1143 1429 878 1897 2002I X 85 26 40 20 30 60 10 40 50 10 40 s0IFY 92/93 I Km 498 206 260 801 728 1083 344 1136 1398 876 1390 1991i 5 X 62 22 28 81 28 41 12 89 49 10 37 63IFY 93/94 I Km 651 176 128 1188 648 766 666 1129 1833 862 1801 1864I X so 16 15 40 26 29 21 s8 48 10 37 63IFY 94/95 I Km 784 159 62 2109 605 192 1912 934 790 286 1054 1610I | X 7717 6 756 18 7 68 26 22 10 37 53IFY 96/98 j Km 954 0 0 2474 437 0 2457 826 436 268 990 1418

X 100 0 0 85 15 0 86 22 12 10 37 53

1B. Core Regional Road NetworkI IFY 90/91 Km 8 10 20 574 1721 8448 698 2094 4189

X 10 8o 60 10 30 6o 10 80 60IFY 91/92 Km 8 10 20 674 1721 8448 698 2094 4189I 1 10 X 8060 10 80 6o 10 30 6o'FY 92/93 I Km 14 a 11 1119 1672 8247 688 2004 4009j | X 43 28 38 19 28 63 10 30 605FY 93/94 I Km 88 0 0 1951 1599 2964 1088 1771 336e

X 100 0 0 30 26 45 17 29 54IFY 94/96 Km 88 0 0 2270 1571 2840 1067 1721 3261

X3 100 0 0 34 24 42 17 29 64IFY 95/98 I Km 38 0 0 s31 1448 2349 1674 1358 2259I 13 100 0 0 49 19 32 82 28 42

IC. None-Core Regional Road Network

IFY 90/91 Km 832 996 1993 406 1218 2436I 10 80 so 10 30 60

IFY 91/92 I Km 832 996 1998 406 1218 24381X 10 80 60 10 30 80

IFY 92/93 1 Km 832 9 96199 406 1218 2436I I X 01 30 60 10 30 60IFY 93/94 Km 569 976 1907 393 1179 2658

5X 18 28 56 10 30 6oIFY 94/96 I Km 669 976 1907 393 1179 2368I I 16 28 56 10 30 80IFY 96/98 I Km 669 976 1907 393 1179 2368I IX 16 28 56 10 30 60

_______________________________________- -_ -__- -______________________________________________

- 70 -Annex 8-2


GOVERNMENT WHDaET REQUIREMENTS

(UhS '600 - March 1990)

90/91 91/92 92/98 98/94 94/95 96/98

A. MAINTENANCE BUDGET REQUIREMENTTRUNK ROADS

Routine 8,468 2,679 2,602 2,864 4,687 6,622P-riodic 6,126 4,675 4,527 4,774 9,028 12,076

Subtotal 9,698 7,864 7,029 7,428 18,610 16,098

REGIONAL ROADS (CORE)Routine 1,757 1,758 1,729 2,225 2,876 8,800Periodic 8,878 8,861 8,495 4,678 5,071 7,201

_ - -- -_- - -- _ _ -- --- _ - - - -- _

Subtotal 6,186 5,114 5,228 6,898 7,447 10,601

REGIONAL ROADS (NON-CORE)Routine 1,848 1,251 1,282 1,386 1,866 1,886Periodic 2,568 2,898 2,476 2,696 2,696 2,696

Subtotal 8,911 8,644 8,757 4,062 4,082 4,062

REGIONAL ROADS SUBTOTALRoutine 8,100 8,604 8,010 8,691 8,742 4,686Periodic 5,941 6,764 6,976 7,869 7,767 9,897

Subtotal 9,041 8,758 6,980 10,960 11,569 14,688

TOTAL MAINTENANCETRUNK 9,698 7,854 7,029 7,428 13,810 18,608REGIONAL 9,641 8,758 8,980 10,960 11,5609 14,568

TOTAL 16,684 16,112 16,669 18,888 25,119 82,681

B. TOTAL BUDGET REQUIREMENTDEVELOPMENT 11,600 15,909 21,259 14,460 4,222 0RECURRENT 18,684 16,112 16,009 18,888 26,119 82,661

Subtotal 29,684 81,921 87,268 82,886 29,841 82,881

C. MAINTENANCE BUDGET SUPPORT PLANBUDGET REQUIREMENT

TOTAL 18,684 16,112 16,009 18,888 25,119 82,661S CONTRIBUTION 40 5t 6o 75 86 166

Subtotal 7,464 8,056 9,605 l,791 21,861 82,661

DONOR CONTRIBUTION 11,180 8,066 8,404 4,697 8,768 6

D. PROPOSED GOVERNMENT ROAD BUDGETDEVELOPMENT 11,000 15,809 21,259 14,460 4,222 0RECURRENT 7,464 8,066 9,605 13,791 21,861 32,661

TOTAL 18,464 28,866 80,864 28,241 26,578 32,661

- 71 - Annex 4-1

TANZANIA

INT, SIATSD ROADS . aOJZCT

Sunmary of Technical Assistance (T.A.)

|°acriptien of T.A. Donor. T.A. Requirement I|l_entatien Period Wnin Government

| c it, It4t | OOIFV90/91 IP"1/92 JFVQ2/9a 1 FY93/94 JFY94/9 Aaaocieates

IMC headesuart r | | |

ICODw DA Eno. Account 0 e-1l I I I I---------11 Coord.. 2 Prof.. Account I

iTrsnan. A Opor. Planneng MA 1 Eng, A Econ. I aps 8o I | 1 I---I--- -------- I, t En.e Plan * Econ, 4 Tr. Opa- I

|Contract- Admin. AfDF 2 Special lots 70 I | | I | 1 Lawyer. 4 Ing. 2 Proc Office,al

1lCi Management DA Vrtiu 60 |1- -I- … ------- |-------1 2 flnagaaent Systema Officers

Rod Inactoatee IDA 1 H;int. En. 40 I ---- |--- ID 2 RRD * 2 TFD Eng.

I MA 2 Rood Inapect. 50 i I | I---I-n--- ----- 1|I2Engineers

[Rural Roads ISAID Contract. s | | I | | 2 Engineer*

I AD Labor-baoad S6 I I W I I | 1R Eno and RREn

liquipment Hanaelet WA 8 Plant Specialista 40 II-|-I I I I 1 Mach. Eng, 1 Store.. 1 Fin.

I WA t mte echanics 260 aee|--- 1 I I I | I loMechanic

|Central Laboratory tlDA- as I I-|------|------I a Mater;al Enginears

or I I I I I I IIl6onza & Shinyanga WA 6 Specialista 220 | I | | |----i I | 12 profaaaional staff

Iogere LWP 8 Spaceali;ta 110 | | | | 6 professional staff

jTangea A Ib.ya NR 220 - -I I--|-- I | 12 profesional staff

IKilimanjaro QTZ-FR 110 I I I 1 I---iI 6 prof.aional staff

lIrings A Ruvum CDA-U 220 I I I I I---_-I | 12 profaaional ataff

|Lindi A Htwra FPINMA 220 I - 12 professional staff

jMeroeore Swias/Iraland 110 1 I 6 profasional *taff

INN Trainina I I I I I

IMPTS DA 1 Huan Re. Spec. 24 *ee | I I I 2 MHean Ra urcee Specialiatas

IMCTI MA Various Inatructora 24 | --- |-----|-----|-1I|-| 4 ICTI Instructor.

IContrect Managaent DA 2 Eno, IIS 1 H. Eng 90 eeIe **Iee e ll-| 11 1 | 2 Eng., 1 (.S.. I Mach. Eng.

ILabor-baed Worka WIP/IL Trng. SpaCe. sO I I I I a-----------12Lbor-Basd Engineara

Research 71w% 1 Specialist S8 11 1 1 1 1 1 2 Reaarchers

IVonational Institutes

IlWSi Engin-ering Faculty DTZ-0 8 Specialiato 61 3 I I I I I 8 Teaching Staff

INIT IDA Tw inning 12 1 T__I__-hII I 6 Teaching Staff IlArusha Tech. a-RzO Specialist 8s | i I I I 4 Teaching Staff

IRoad Safk N RA0 2 Specialist& so jI-II I 1 I I 2 Traf. 0ff. 1 Eng. 1 Trp. Off.

|Procurement Reoulations WA special ate 190 -- ---- NW. CT8, AM A MOF Stff

ITraneort Agencie- I I I I I IINTC A RETCD. IDA 19 Specialist& 500 0 eeeI-j--1 | I| I I I 18 Hch. A Accocntants. 1 Econ.

|UDA mA to b decided 60 I I- - - I I | To Bo Dacided

IATC WA 4Specialiats -J i I I I I I I | 6Accountants . Triners

8277 1 I I I I Systems Analyst* + Marketing

00 SIxth Highway Projoet I t fi part t I I Ime*en Siuth Highway Project full ti_s ----- pert time

- 72 - Annex 4-2

Page 1 of 7

TANZANIA


WORK FORCE DEVELOPMENT & TRAINING COMPONENT

1. As part of the overall project objective of strengthening the variousinstitutions within the roads sector, a number of project subcomponents will beimplemented to achieve measurable increases in work force productivity throughimprovements in manpower planning, personnel management, work force supervision,and occupational training at all levels o.Z employment. In addition, greateraccountability and management of technical assistance will be an integral partof all project operations to ensure a measurable transfer of expertise andnationalization of key job positions within the sector. It is expected thatthese efforts will be reinforced by changes in Government policies that willencourage greater worker motivation and commitment through improved incentiveand reward systems for public employees and the increasing use of privatecontractors to carry out road maintenance works.

2. Support to the MCW Manpower Planning and Training Section. As part ofthe Institutional support under the 6tkh Highway Project, Technical Assistancewas provided for the MPT section including a TA Training Adviser (44 m-m),overseas training for the Counterpart Head of Manpower Planning and TrainingSection (HMPT), and provision of computing and office equipment for personneldata base management. Support to MPTS will be continued under the proposedIntegrated Roads Project (IRP) as follows:

a. Technical Assistance. The services of a manpower development andtraining specialist will be needed to finish tasks begun under the 6thHighway Project including: (i) ccmpletion and continued updating of theMCW manpower inventory; (ii) establishment of improved personnelmanagement and training policies; (iii) est._blishment and implementationof annual training programs; and (iv) coordination of training activitiescarried out by TA specialists assigned to other project components (aspart of terms of reference shown in the Project Working Papers -Attachment 3). Working closely with the HMPT, this assistance will beprovided (totaling 24 mm) over a period of four years according to termsof reference as shown in the Project Working Papers - Attachment 4.Total cost of this component will be US$288,00O.

b. In-Country Seminars and Workshops. As a continuation of the trainingactivities begun under the 6th Highway Project, the IRP will providefinancing for a variety of management and technical subject seminars andworkshops for MCW, REO's, NCC, NTC and private contractor personnel.Incorporated into MCW's annual training program, these activities willbe conducted in-house and at institutions such as ESAMI, UDSM, and NIT.Present estimates call for approximately 12 senior level seminars and24 mid-level workshops during the life of the project at a cost ofUS$480,000.

c. Overseas Training and Study Tours. MCW receives extensive support foroverseas training from a large group of donors. To avoid duplication


of effort and the misapplication of training grants, all overseastraining will be coordinated by MPTS through its annual training program.To supplement training grants from other donors, the project will financeshort-term training and study tours for MCW, REO, NCC, and NTC personnelaccording to the criteria shown in the Project Working Papers -Attachment 5. These criteria will ensure the relevance of overseastraining to institutional objectives, equitable selection of candidates,and measurable return on the training investment both for the employeeand the employer. Emphasis will be placed upon practical work-orientedtraining exercises with organizations involved in actual road andequipment maintenance operations rather than &ttending theoreticalcourses at academic institutions. While costs will vary for differentactivities, an average cost per course/tour has been calculated atUS$6,000 bringing the total for 120 persons to US$920,000.

3. Support to MCTI. Under the 6th Highway Project, MCTI has receivedtechnical assistance (continued from the 5th Highway Project) and funding fortraining equipment in order to improve road maintenance training operations.Although measurable improvements began to show during 1989, the Institute isstill a long way from reaching acceptable levels of efficiency. 1/ While 630employees were targeted for training during the past two years, only 214 (34z)actually received training due to budgetary shortfalls, shortage of lodging andcatering facilities, and indifference on the part of managers and employees inresponding to course offerings. The most notable progress made during the 6thHighway Project includes the recruitment of Tanzanian instructors, improvementsin facilities and equipment, further development of the training program,establishment of a workshop annex, and the final stages of planning for mobiletraining units.

4. Work force analysis and manpower planning carried out by MPTS under the6th Highway Project indicates a need to increase MCTI training outputs toapproximdtely 1200 employees per year by 1995. The present maximum capacityis about 900 x 45 days trainee/places per year. Given that the center isoperating at about 11? of capacity, attempts to achieve the goal will requireextensive improvements in management performance and of the Institute, andacceptance of the need for this kind of training by employers. For this reason,the project focus on achieving 10O capacity utilization of the presentfacilities before any attempts at further expansion is recommended. As part ofthis effort, and in conjunction with the objectives of the road maintenanceprogram, MCTI will provide training to other government organizations, as well~as to contractors and workers from the private sector. The project will supportMCTI in the following areas:

a. Technical Assistance. The services of a training specialist will berequired to finish the tasks carried out under the 6th Highway Project.As shown in the Project Working Papers -At.`achment 6, these tasks willinclude: (i) course material development; (ii) increases and improvements

1/ Not counting the costs of technical assistance, the average unit costsper trainee are roughly 100,000 Tsh (US$650). If MCTI were operating atnear full capacity, these ccsts would be reduced to about 16,000 Tsh(US$110) per trainee.


in practical job-oriented instruction; (iii) job description and tradetesting standards; (iv) facility and equipment planning, (v) stafftraining; (vi) establishment of mobile training units; and(vii) establishment of an Equipment Operators/Drivers Training Programme.Working closely with the administration and faculty of MCTI, and underthe coordination of MPTS, the training specialist inputs (totaling 24man/months) will comprise a one-year advisory by a Mechanical Engineerfollowed by a series of short advisory visits spread over the followingthree-year period. Every effort will be made to ensure that the Center 'straining operations will be completely nationalized by the end of theproject. The cost of this component will be US$288,000.

b. Training Facilities. While the last three projects 'Highways 4,5, and6) have provided technical assistance to strengthen MCTI, only minorinvestments have been made in improving tile .hysical aspects of trainingoperations (primarily the procurement of -raining aids and equipment).Although the Center has been grossly underutilized, if it is toeffectively handle the full capacity enrollment (600 trainees) and toprovide the quality of practical instruction needed to achieve projectobjectives, it will be necessary to carry out some rehabilitation andminor expansion of: (i) the mechanical workshop; (ii) the electricalworkshop; (iii) the material testing lab; (iv) two classrooms; (v)trainee hostels; (vi) catering facilities; and (qii) faculty livingquarters. The cost of this component is estimated at US$275,000.

C. Training Equipment. As noted above, some training equipment has beenacquired under the previous highway projects, but is still insufficientto conduct all of the practical instruction incorporated into the revisedtraining program. For this reason, it is proposed to purchase additionaltraining aids and equipment for: (i) the mechanical workshop; (ii) theelectrical workshop; (iii) the material testing lab; and (iv) thecatering (kitchen) facilities, five mobile training units comprisingtents, cooking equipment, training aids, and light transport vehiclesto permit extended training operations in the field. In addition, theproject will finance the acquisition of equipment for the establishmentof a equipment operator/driver training programme. The cost of thiscomponent is estimated at US$1,190,000.

d. Instructor and Trainee Allowances. One of the major problems in runningthe MCTI program has been the lack of incentives to attract instructorsand trainees to the Center. In general, employees are not motivated toparticipate in training activities when they incur loss of extra income(from overtime and outside work activities) and additional livingexpenses while at Morogoro. In parallel with locsl management reluctanceto lose key workers for periods of time, this factor h-s beeninstrumental in keeping trainee enrollment figures well below fullcapacity, and in getting MCW higher level staff to serve as adjunctinstructors in their areas of expertise. Because MCW is unable toallocate sufficient funds for trainee allowances, the project willfinance a training allowance budget for a five-year period to create thenecessary motivational momentum for the I4CTI program. This component

-75 - Annex 4-2Page 4 of 7

will cost US$125,000 and will be graduated downward 2/ so that MCW willbe funding this budget item by the end of the five-year period.

5. Support to NIT. Although NIT had received some technical assistanceunder the Trucking Industry Rehabilitation Project, there has been little outsidesupport to the institution during the past several years. As a result, thequality of training outputs has remained at a low level due to deterioratingfacilities, underqualified instructors, lack of equipment, and insufficientoperating budgets. In addition to serious deficiencies in practical trainingcapability, with an instructor/student ratio of less than 1:5 and a totalpersonnel/student ratio of 1:1, unit costs of training are highly excessive andcould be reduced considerably through better management of existing resources.Following an evaluation of NIT operations 3/ carried out by local consultants,a proposal has been made to strengthen NIT by improving both the quality and costeffectiveness of its training operations in the following areas:

a. Staff Training. One of the major weaknesses in NIT's training capabilityis the lack of practical experience among the faculty. Because NITsalaries are not competitive with the private sector, it has greatdifficulty in attracting instructors with suitable qualifications. Inmany cases, instructors are recruited from among former students who lackthe practical knowledge and skills required for the job. To address thisproblem, a staff training program will be financed under the project withthe objective of upgrading job skills in their respective areas ofinstruction. This program will encompass local in-plant training, short-term work attachments with appropriate enterprises outside the country,and in-house training conducted by technical assistance (see below).This component will cost US$750,000 and will be implemented during thefirst three years of the project according to a staff development planprepared by NIT management.

b. Technical Assistance. In order to improve the efficiency of NIToperations and the relevance of instruction to employer needs, NIT willrequire outside assistance in school administration, curriculummodification, and modern teaching methodology. To accomplish this, NITwill seek a technical cooperation arrangement with a similar traininginstitution having an ebtablished reputation for quality trainingservices. Under this arrangement, the partner institution will provideadministrative and subject matter experts as needed over a three-yearperiod. The agreement will permit an exchange of personnel between thetwo institutions on a periodic and "as needed" basis according to thedraft terms of reference shown in the Project Working Papers - Attachment7. Estimating about 30 to 40 short-term exchange visits between NITstaff and the host institution, the cost of this component is US$150,000.

c. Training Facilities. A major factor affecting the quality of practicalinstruction is the poor condition and limited available space in thetraining and service workshops. Presently, average workshop space is

1 100?, 802, 60?, 40?, 20? respectively for each of the five years.

3/ Financed under the 6th Highway Project.

4 4


only 1.2 m2 per student which is unsafe and insufficient to meet normalworkshop requirements. NIT has prepared a rehabilitation and expansionplan that would maximize existing space and add 165 m2 to the presentworkshop building bringing available space to 2 m2 per student. Thiscomponent will cost US$400,000.

d. Training Equipment. Lack of training equipment coupled with instructorinexperience has resulted in a heavy emphasis on theoretical instructionwhich has not been effective in producing occupationally qualifiedgraduates. 4/ As part of an integrated effort to correct this situation,the project will finance the procurement of training aids and equipmentto bring all workshop areas up to the required standards of the program.In addition, two mini-buses and a light truck will be procured for thetransportation of students to field work sites. This component will costUS$200,000.

6. Labor-Based Works Training. In an effort to increase employment, reduceroad maintenance costs and to compensate for endemic shortages of equipment andspare parts, the Government has established labor-based road maintenance (LBRH)operations in Mbeya and Tanga regions on a pilot basis. Funded by UNDP andimplemented by ILO, these operations are proving to be successful in developinglocal capability in road maintenance works. In coordination with MPTS and theNCC Training Section, this pilot program will be expanded to include LBRM withinthe Core Regional Roads Program (CRRP). The present proposal calls for thetraining and deployment of 10 to 15 local contractors in the Kilimanjaro regionduring the period 1990 - 1995 with the following inputs:

a. Technical Assistance. Two full-time LBRM implementation and trainingspecialists will be required for the first three years of the exercisewith follow-up visits during the remaining two years (totaling 80man/months). Working with local counterparts, the specialists will: (i)develop training methods and materials for road rehabilitation works(versus road maintenance) including technical, managerial, andcontractual aspects of the subject; (ii) train future trainers of LbRMmethods; and (iii) conduct training activities according to the termsof reference shown in Attachment 6. The success of this component willbe measured by the ability of local staff to assume full responsibilityfor LBRM implementation and training functions by the time of thespecialists' departure. The cost of this component is estimated atUS$1,260,000.

b. Training and Support Equipment. Equipment needed for actual roadrehabilitation activities (i.e. tools, wheelbarrows, carts, etc.) willbe provided for the training program through the CRRP. Training aidsand administrative support equipment (i.e. office machines, audio-visualaids, manuals, etc.) will however, be provided under the trainingcomponent. In addition, four light vehicles will be provided for

4/ Roughly 17Z of the three year curriculum calls for practicalinstruction yet even this small percentage is not realized in actualpractice. Tc produce employable graduates, NIT must achieve a 402 to 602ratio of theoretical to practical instruction.


transport of personnel, tools, and equipment to the'various job sites.The cost of this component is estimated at US$350,000.

c. Operating Costs. In order to reduce the risk of operational delays dueto budgetary shortfalls, the project will also finance localadministrative and operating costs including local salaries, officesupplies, fuel, building and vehicle maintenance, local travel, andmiscellaneous training expenses. These costs will be covered 1002 duringthe first two years of the project and will be graduated downwards by33Z each year for the remaining three years so that MCW can adjust itsfuture budgetary planning to cover LBRM training bevond the life of theproject. The cost of this component is estimated at US$200,000.

7. Support to NCC. Under the 6th Highway Project, 90 man/months oftechnical assistance was provided to strengthen the delivery of training servicesto the construction industry. In addition, financing was provided for theacquisition of training equipment, vehicles, and training for NCC personnel.After experiencing start-up delays, the contractor training progzam has beenprogressing with the execution of various courses in contract management andimplementation. Although it was intended to follow-up the training exerciseswith the award of contracts (to successful bidders), this has yet to occur dueto delays on the part of Government. If the strategy of developing theconstruction industry is to be successful, it is essential that this matter beresolved before the proposed project is implemented.

8. Assuming the resolution of the contract awards issue, the proposed Hproject will provide continued support to NCC for the development andimplementation of the contractor training program. This support will primarilyfocus on the continuation of a Construction Management Training Specialist anda Road Construction Training Specialist for a period of two years followed byperiodic follow-up visits through 1994 for a total of 60 man/months. The primaryobjective of this TA continuation will be to ensure the successful training andaward of contracts to 15 local contractors by the end of 1994. The success ofthis activity will also be measured by NCC's ability to carry out similaractivities with its own personnel. The cost of this component is estimated atUS$1,080,000.

9. Support to UDSM. Based upon engineering manpower projections carriedout by MPTS under the 6th Highway Project, it has been estimated that UDSM wouldneed to increase its civil engineering graduate outputs from 60 to 80 per yearin order to provide sufficient numbers of qualified professionals for the roadssector. GTZ has offered to provide assistance to UDSM FOE in the followingareas:

a. Technical Assistance. A short-term expert (3 m-m) to contribute to theongoing curricitlum revision in the field of Road Engineering.Furthermore, experts for counterpart training and teaching (48 m-m).The cost of this component is estimated at US$730,000.

b. Buildings. Soils laboratory building, road materials laboratorybuilding, computer laboratory building and two classrooms. The cost ofthis component is estimated at US$230,000.


I.

c. Equipment. Soils laboratory equipment, roads materials laboratoryequipment, surveying equipment, teaching aids (including computerequipment) and textbooks. The cost of this component is estimated atUS$340,000.

d. Staff Training: Overseas fellowship training and study tours for facultystaff. The cost of this component is estimated at US$200,000.

10. Support to Arusha Technical College (TCA). One of the majorbottlenecks in appropriate staffing of the roads sec*-or is the shortage ofeducated technicians. Under the 6th Highway Project, a Full TechnicianCertificate (FTC) Highway Technician course was established at Dar es SalaamTechnical College. The GTZ has agreed to establish a similar track at TCA. Thenumber of FTC highway technicians to be educated annually will be 25. Theassistance will be provided in the following areas:

a. Technical Assistance. A short-term expert (3 m-m) to contribute to theongoing curriculum revision in the field of Road Engineering.Furthermore, an expert for counterpart trait ng and teaching (36 m-m).The cost of this component is estimated at US$510,000.

b. Buildings. Soils laboratory building, two classrooms, staff housing andstorage area. The cost of this component is estimated at US$315,000.

c. Equipment. Soils laboratory equipment, bitumen laboratory equipment,surveying equipment, camping equipment, teaching aids and vehicles. Thecost of this component is estimated at US$240,000.

d. Staff Training. Overseas fellowship training and study tours for facultystaff. The cost of this component is estimated at US$130,000.

*0

- 80 -

Annex 4-2Attachment 1Page 1 of 4

TECHNICAL ASSISTANCE

TRANSFER OF EXPERTISE GUIDELINES

1. Introduction.

The primary reason for employing technical assistance (TA)personnel is to compensate for gaps or shortages in expertise to achieveproject objectives. To ensure project sustainability, institutional andlocal personnel performance improvement and, therefore, effectiveness of TA,it is essential that the expertise brought in by the TA is systematicallytransferred and imparted to the local associate personnel during the day-to-day operations of project implementation involving the TA. This, in turn,requires a well-defined, executed and monitored/evaluated TA component withall involved (i.e. TA personnel, local associate personnel, supervisors andsponsors/donors) having the same understanding and appreciation of the roleand responsibilities of all the main players, particularly the TA and localassociate personnel. Therefore, the TA components need to be well-designedto ensure that the Terms of Reference adequately cover the aforementionedelements necessary to ensure effectiveness of TA. To assist in such designof TA components in the Integrated Roads Project (IRP), the followingguidelines are presented.

2. Objectives.

(a) Global Obiectives of TA. TA is generally employed to provide thelocal associate and institution personnel with new or improvedsystems and methodologies to enable improved and efficientperformance during and after the time of TA. Thus the general roleof TA personnel is to:

(i) develop efficient and effective management andinformation/reporting systems for execution ofresponsibilities of the institution or department atwhich the TA is employed;

(ii) impart to the local associates new or improvedmethodologies;

(iii) put into operation the new or improved methodologies andmanagement and information/reporting systems and obtaindesired results. This should be done in such a way thatthe local associates are fully involved and are, beforethe end of the TA engagement, able to continue theapplication of the systems and methodologies.

(b) Terms of Reference. Terms of Reference specific to the area ofrequirement of TA must be prepared and agreed by the contractingparties before the engagement of the TA personnel. In addition toclearly defining the specific responsibilities of the concernedinstitutions/departments as well as TA and local personnel, the

- 81 - Annex 4-2

Attachment 1xPae 2 of 4

Terms of Reference must fulfill the global objectives of TA asdescribed in paragraph 2 (a) above.

3. Implementation of TA Programme.

Transfer of expertise from TA personnel to local associates is bestachieved through a team work or participatory approach in which the TApersonnel work closely with and through the local associate personnel toimplement or accomplish the different specific tasks. It is thereforeimportant to ensure that the TA personnel and local associates are able toactually work together. In order to make sure that this is so, the followingimplementation guidelines are provided to be used for TA programmes.

(a) Local associates. Each TA expert should be assigned to work withand tLrough one or more local associates. The associates assignedto work with the TA expert should have basic knowledge and capacityto understand and absorb the expertise made available by the TApersonnel. These local associates mtst be assigned and made awareof their roles prior to the arrival of the TA expert. Thedesignated local associates should be available at all times duringthe TA programme. However, in cases where personnel reassignmentis necessary (for example, important transfers or necessary studyleaves), it is necessary to ensure that the local associatepersonnel situation is maintained at a level that is required toenable achievement of the projected results as defined in the termsof reference.

(b) The TA experts. Prior to engagement, the TA experts must be giventhe terms of reference and show clear understanding andinterpretation of the terms of reference, particularly regardingroles and responsibilities, working relationships, reporting andaccountability. In this regard, the TA experts should have thesame understanding and interpretation of the terms of reference asthe employers.

(c) Phasing out of TA personnel. It is imperative that all partiesagree to a program of gradual phasing out of TA responsibility.Too often, TA contracts are geored to a time frame such as two orthree years, without any substantive provision for target dates forfull assumption of job responsibilities by local staff.

(d) Operational guidelines. In order to facilitate continuousassessment of the performance of the TA program, the followingoperational actions need to be taken:

Ci) Immediately upon arrival to the project, each TA expertshould prepare:

- a list of specific tasks that are required to carry outthe job assignment as generally defined by the terms ofreference-,

- a detailed work plan or action program (with monthly orweekly activities) to implement tasks, and specifying

4

- 82 - Annex 4-2

Attachment 1* ,*age 3 of 4

dates of completion of the tasks and the outputs thereof;and

- a description of the roles of the local associates vis-a-vis those of the TA expert in carrying out .hespecified tasks. The TA expert should also indicate howhe/she intends to work with the local associates toimplement the work plan.

(ii) The list of tasks and the associated plan of actionshould be reviewed and approved by the Supervisor of theparticular TA program. This supervisor will normally bethe Head of the department or institution receiving theTA, and will supervise both the TA expert and the localassociates.

(iii) The list of tasks and the plan of action may be modifiedfrom time to time in accordance with changes in thedemands and the working environment, but they shouldalways provide opportunities for attaining realisticprogress in the transfer of expertise.

4. Evaluation

As noted above, a program of transfer of expertise by the TA expertmust be clearly defined. This transfer of expertise shall be given equalconsideration along with technical and professional factors in evaluating theperformance of each TA expert. In order to facilitate the necessaryevaluation, the 'llowing actions will need to be taken.

(a) periodic progress reports (monthly/quarterly) will be prepared byTA experts to indicate:

(i) status of implementation of the specific tasks;

(ii) results or outputs in accordance with the work plan;

(iii)role of personnel (TA experts and local associates) incarrying out specific tasks;

(iv) ability of the local associates to perform job tasksefficiently and without supervision of the TA experts;

(v) specific expertise imparted and the level at which it wasunderstood by the local associate;

(vi) specific problems or experiences relevant to theimplementation of the work plan.

(b) The supervisor will review the reports, verify contents and takenecessary actions, including measures to improve or consolidate theworking relationships between the TA expert and local associates.

4~~~~~~~~~~~~~~

- 83 - Annex 4-2

Attachment 1Page 4 of 4

(c) The supervisor will transmit to higher management the TA expert5sreport and his comments regarding progress of implementation of theTA pregram.

(d) Higher management will issue a brief annual evaluation of each TAexpert's performance which will be sent to the respective fundingagency and the parent company/agency of the expert.

. ~~ : 4

- 84 - Annex 4-3

* , s * w Page 1 of 9

TANZANIA


Interim Procurement Regulations - Key Features

Scope

1. Whereas it is expedient to have procedures for purchasing,contracting for works and the engagement of consultants under the IntegratedRoads Project, the Ministry of Finance hereby lays down the followingRegulations. The objective of these regulations is to provide guidance to theMinistry of Communications and Works on the policies applicable to procurementof works, goods and services.

2. These regulations shall be called "Regulations of Ministry of Financeto MCW on purchasing, contracting for works and engagement of consultants, underthe Integrated Roads Project.

3. The Principal Secretary MCW shall, on behalf of the Ministry ofFinance, be in charge of these regulations in as far as implementation withinthe Ministry of Communications ard Works.

Application

4. These regulations shall apply to:-

(a) Government agencies entering into transactions in purchasing,contracting for works and engagement of consultants.

(b) in purchasing, contracting for works and employment of consultants,the local products and materials, Tanzanian enterprises or Tanzanianconsultants, as the case may be, shall be encouraged, except wherethe guidelines and conditions set by the funding sources provideotherwise.

(c) the head of a Ministry's department shall be authorized to act underthese regulations in the capacity of the head of a government agency,and shall refer to his superior office such cases which are beyondhis authority.

(d) Persons authorized to act under these regulations may delegaL -heirauthority in writing, to persons holding any position provides. that,positions, duties and responsibilities of persons so empowered, arethe primary consideration.

Purchasing and contracting for works procedure:

5. Purchasing or contracting for works may be conducted in any of thefollowing methods:-

(a) direct contracting

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Page 2 of 9

(b) competitive bidding

6. The method of purchasing or contracting for works by directcontracting method shall apply in the case of a single contract of not more thanUS$ 500,000 or within the amount provided by the loan/credit/grant agreement.

7. The methed of purchasing or contracting for works by competitivebidding shall apply in the case of a single contract of more than US$ 500,000or within the amount provided by the loan/credit/grant agreement.

8. Provided that the purchasing or contracting for works shall not bedivided in order to make the amount of money lower than that prescribed in anyother method.

Direct contracting

9. In the purchasing or contracting for works by direct contractingmethod the responsible office shall negotiate and agree on the price with thesupplier or contractor and proceed with the purchasing or contracting within thebudget (money) limits as approved by the head of the govern-sent agency under para6 herein.

Competitive bidding method

10. Purchasing or contracting for works in the case of local competitivebidding the head of the government agency concerned shall, not less than 30 daysbefore the closing date of sealed bids, put up a notice inviting the sealed bidsat conspicuous place in the office of such government agency and shall giveannouncement thereof in mass media. If considered proper, copies of the noticemay be sent directly to the professional supplier or contractors, or may alsobe advertised by other means. In the case of the international competitivebidding, the government agency concerned shall follow the guidelines set up andagreed by the loan/grant source.

11. Bid documents shall be made in accordance with the standard bidding(tender) documents attached to these Regulations. In case where the saiddocuments :sre inapplicable, the bid documents shall at least contain thefollowing:

(a) The details, specifications and quantities of materials to bepurchases or wor-C(s) to be contracted;

(b) The qualifications of the bidders (tenders) who must professionallybe in the business of supplying the materials required or carryingout the works(s) required under (a) above and must not be a personenjoying a privilege or immunity who may refuse to be underjurisdiction of the Tanzania court, except where the government ofsuch a person has ordered such privilege of immunity waived;

(C) Stipulations governing evidence which bidder must present inconnection with their qualifications under (b) above and evidencewhich certifies the bidders' authorized signatire;

(d) Place, date, and time for the acceptance of bids and the closing datethereof, and for the opening of the bids;


(e) The amount of money fixed for the bid security, the place where thebid security will be received, and there shall be conditions thatif the bidder should withdraw his bid or fail to enter into anagreement or contract with the government agency within the timespecified, or fail to provide the performance security, thegovernment agency will confiscate the bid security or lodge a claimwith the guaranteeing bank or insurance. The government agency alsoreserves the right to hold the person failing to enter into thecontract with the agency to have abandoned work(s).

(f) Percentage of advance payment (if any);

(g) Stipulations regarding the performance security to be submitted bythe successful bidder;

(h) Tender form(s);

(i) Validity period of the bid price and bid bond of necessary lengthto the government agency;

{i) Tender price shall be given in figures and letters, in the case theprices given in figures are different, the ones in letters shallprevail;

(Ik) Instruction on the bid price that the tender shall be on a fixedbasis or price with adjustment. In case the bid is on a priceadjustment basis, a formula for price adjustment shall also bespecified;

(1) Stipulations on the place and time of delivery of the materials orcompletion date of work(s) and the rate of penalty thereof;

(m) In case of necessity, for the purchasing of the materials, the biddershall be required to forward samples, catalogues or drawings anddetails with the bid;

(n) For materials purchasing, should a testing be considered necessary,adequate number of samples shall be stipulated for the testing aswell as for attachment to the contract to be executed. Provided,however, that there shall be a further stipulation that theGovernment agency shall not be held responsible for an) damage causedto the samples forwarded for testing;

(o) For materials purchasing, details of tests to be carried out at thefactory before shipment and at the site after installation, ifapplicable;

(p) For contracting for works, conditions of inspection and acceptanceof the contracted works.

(q) Necessary criteria for the comparison of bids with due considerationto the advantages and disadvantages regarding the costs ofoperations, durable life, maintenance, complexity in acquiring spareparts and services and period of delivery which shall be calculatedin terms of money;

-87- Annex 4-3Page 4 of 9

(r) Currency or currencies in which bidltender prices should be stated,the rate of exchange to be used in comparison of tenders, if any,shall be based on the Tshs selling rate as published by the Bank ofTanzania thirty (30) days before the last day of tender submission;

(s) Reservation(s) that the purchaser or employer has 'he right not topurchase or employ, or to purchase or employ, without having alwaysto purchase or employ from the lowest bidder;

(t) Source of funds and eligible source countries;

(u) Form of contract.

(v) Provision for works contractors to post bonds to cover import dutiesand taxes for imported construction equipment; the bonds to be cashedin full if the equipment remains in Tanzania after completion of thecontract, or a prorated amount cashed, based on depreciation ofequipment, if exported after completion of the contract.

(w) Provision for contractors to receive payments in foreign exchange,or guarantees of access to foreign exchange, for imported goods,materials and services needed to carry out the contract, asdemonstrated by the contractor.

(x) Provision for contractors to pay labour rates based on the openmarket supply, but not restricted to minimum rates.

12. In any bidding, if there is no bidder submitting the bid, the headof government agency shall be urged to cancel that bidding in order to have anew bidding. In case there is only one bidder, or there are several bidders butonly one of them submits properly in accordance with the details and conditionsstipulated in the bid documents, the normal bid evaluation proceedings willapply. If the price is considered appropriate, the head of the government agencyshall act in accordance with paragraph 18, so that an order may be placed withthe bidder. But, if the head of the agency considers it inappropriate, thatparticular bidding shall be cancelled in order that a new bidding may be calledor the purchasing or contracting for works by other method may be applied.

13. After the bidding, out a notice on purchasing or contracting forworks has not been awarded to any bidder, if it is imperative to alter theessential details or conditions contained in the bid documents for the ultimatebenefit of the government, the head of the government agency concerned shallrequest the authorities, who are vested with the power to place order, to cancelthat particular bidding. If there is a new bidding, the former bidders have theright to receive the new drawings and details (if any) from the agency concernedfree of charge.

14. Cancellation of any bidding is the authority of the head of theagency, except where the loan/creditlgrant agreement shall stipulate otherwise.

15. For any contracted work which the head of the government agencyconsiders necessary to have a supervisor specifically or in case the workinspection committee reports its inability to closely supervise the work, agovernment official under jurisdiction of the government agency whom the headof the agency considers suitable, or an official of the department responsiblefor works or the unit or body which is responsible for the design work of the

- 88 - Annex 4-3

Page 5 of 9

contract and whose head of government agency has consernted thereto, or acon.ultant to be employed, shall be appointed as a supervisor.

16. Any contracted works whereby the government agency deems it necessaryto engage the services of a consultant as supervisor the consultant may also becharged with duties of the work inspection committee. The services of aconsultant as supervisor, the consultant may also be charged with the duties ofthe works inspection committee.

17. In the evetnt that the consultant is assigned with duties of the workinspection committee, the head of the government agency shall appoint at leasttwo government officials of high qualifications and professicnal experience tooversee the consultant's performance and shall report the same to the head ofthe government's agency.

Authority to place order or to award a contract

18. Except by special method and special cases that may be directed bythe government, the authority to place order or to award contract shall be thatof the persons holding tile following positions, and within the followingpurchasing power limit:

Authorization Category Limit

Regional Tender Boards (RTBs) works l.Om TJS$(with Regional Engineers as goods 0.5m US$Secretaries to RTBs) consultancy 0.25m USS

National Committee works 5.Om US$(with Principal Secretary goods 3.Om US$MCW es Chairman) consultancy l.Om US$

Central Tender Board - All levels above the National Committee authorization.

19. No advance paynent may be made to the supplier contractor, exceptotherwise specified in the contract and the head of the government agencyconsiders necessary where rayment may be made as part of the cost of thematerials or the work as follows:

(a) Not more than 25 percent of the contract value may be paid in caseof purchasing from or contracting with a government agency,government body established under the law on local administration,other units set up by the law with the status of local administrationor state enterprises;

(b) In a direct purchasing of the materials where the contract value isnot more than US$200,000, and a draft has to be sent to the supplierdirectly, full payment of the materials purchased may be made.Purchases exceeding US$200,000 must have prior approval of thePrincipal Secretary MCW.

20. The following cases are not regarded as advance payments:

(a) payment made to the supplier or contractor in accordance with theinternational trading practice by issuing the letter of credit or

- 89 - Annex 4-3

Page 6 of 9

draft; pursuant to the payment clause provided for in the contract;

(b) payr.ent to the supplier in accordance with the international tradingpractice after delivery of the materials on board or paymentaccording to the progress of procuring the materials ordered as shallbe specified in the contract. I

Engagement of consultants

21. Consultants may be engaged by either of the following methods:

(a) direct negotiations;

(b) selection method.

22. Before proceeding with engagement of a consultant, the off cialresponsible shall submit to the head of the government agency concerned a reportwhich shall contain, inter alia, the following particulars:

(a) reasons and needs for engagement;

(b) details of the services to be contracted;

(c) estimated cost;

(d) period of engagement;

(e) method of engagement and reasons thereof;

(f) other pertinent particulars (if any).

Once the official responsible has obtained approval from the head of thegovernment agency, he may proceed with the engagement of a consultant.

Contracting

23. A contract and documents relating to the purchasing of materials,contracting for works or engagement of the consultants shall be made inaccordance with the samples attached hereto either in Kiswahili or in Englishlanguage.

24. At the discretion of the purchaser or employer, excluding inter aliapayment in advance a written agreement is permitted under the following:

(a) Purchasing or contracting for works by negotiations;

(b) Where the delivery of materials or completion of work(s) is withinfive official working days starting from the day following the dateof such an agreement.

25. If it is necessary for a contract and related documents to differfrom the attached sample in versions or particulars while the principal substanceof the sample is maintained and the government is not put in a disadvantageousposition, such a contract and related documents shall be permitted. However,if the purchaser or employer considers the contract and related documents to bedisadvantageous to the government or is loosely written, a draft of the contract

-90 - Annex 4-3Page 7 of 9

and related documents shall be sent to the MCW (Contracts Control Unit) forprior review.

26. Where the attached sample (standard) documents cannot be followedand an entirely new version has to be drawn up, a draft of such a contract andrelated documents shall be sent to the MCW (Contracts Control Unit).

Alterations

27. Once signed, the contract or written agreement may not be altered,except when an alteration does not put the government in a disadvantageousposition. The head of the government agency concerned shall be responsible forpermitting any alteration.

28. Alteration of the signed contract or written agreement which shallcause an increase in the contract sum, the Principal Secretary shall beresponsible for approval of such alterations. However, where the amount ofcounterpart fund has been increased above budget allocations, prior agreementof the Treasury shall be obtained in accordance with the regulations of thebudget.

29. An extension of the contracts may be approved by the head of thegovernment agency concerned if the contract prices fall within his purchasingor contracting authority, otherwise it has to De approved by the NationalCommittee or the Central Tender Board as the case may be.

30. The contract extension, which includes the abstention or reductionof penalties in favor of the supplier or contract, shall be permitted only inthe case of "force majeure" or default or shortcoming of the part of thepurchaser or employer.

Penalties

31. Penalty rates per day to be imposed on the supplier or contractorfor undelivered materials/goods or delayed works shall be as follows:

(a) In the case of purchasing for goods or materials the penalty shallbe imposed at 0.10 - 0.20 percent of undelivered materials/goodsvalue, up to a sum equivalent to the amount of the performanceguarantee;

(b) In the case of contracting for works, the penalty shall be imposedat 0.10 - 0.15 percent of the contract value, up to a sum equivalentthe amount of the performance guarantee.

The penalty rates shall be specified in the inquiry notice or the biddingdocuments, and also in the contract.

Penalties for person abandoning the work

32. Where a successful supplier, contractor or consultant fails toexecute the contract or agreement within the specified time or fails to comply

- 91 -


with the contract or agreement without an acceptable reason which results in thetermination of such contract or agreement, the head of the government agencyshall refer the matter to the Principal Secretary concerned for consideredaction. When the Principal Secretary rules that any person has been regardedas abandoning work, the name of such person shall be forwarded by the Ministryto the person taking charge and control of the execution of these Regulationsin order to inform the various government agencies of it.

33. A government agency shall not purchase from, contract with or employa person or firm abandoning work, except where the Principal Secretary-MCW orhead of Government agency orders otherwise.

- 92 -


LIST OF STANDARD PROCUREMENT DOCUMENTS

1. Bidding Documents for:

(i) International Competitive Bidding-Works(ii) Local Competitive Bidding-Works(iii) International Competitive Bidding-Goods(iV) Local Competitive Bidding-Goods(v) Draft Purchase Order for International Shopping(vi) Prequalification Documents for Works

2. Contract for Consultancy Services

3. Contract for Small Value Consultancy Services

4. Contract for Piece Work

5. Documents for Procurement of Services for Equipment Rehabilitation

6. Document for Selection of Procurement Agents

- 94 _ Annex 4-4Page 1 of 3

TANZANIA


Evaluation and Imnact Criteria For Rural Roads

1. The proposed evaluation and impact assessment criteria for ruralroads involves a three-stage approach comprising initial screening, finaleconomic evaluation, and monitoring and post evaluation.

Screening

2. Proposed criteria to be used for initial screening of ruralroads earmarked for rehabilitation include cost and benefit relatedcriteria based on social and agricultural output considerations as detailedin Appendix 1. The proposed factors to be used have been chosen with theaim of capturing all necessary factors and keeping the methodology assimple as possible without the need to apply detail data.

3. The methodology to be used is based on a simple system ofassigning points to indicate the score of an individual road for eachfactor. The factors are given weights in accordance with their presumedimportance. In this respect the total agricultural output value factor ofthe road catchment area is given the maximum weighting of 30 percent toreflect the importance and current focus of directing investment toprojects that support agricultural production. Population density,considered as the most important representative of social factors, and thecondition of the road under consideration are each assigned a weighting of15 percent. The remaining factors are all given a weighting of 10 percenteach.

4. The Regional Engineer will be responsible for processing theresults .tained at the Screening Stage. The reliability of themethodo -,gy can be analyzed with the results of final economic evaluation.Any changes necessary must be made following such analysis.

Final Economic Evaluation

5. Ranking of the preselected roads by screening will be made usingthe simple economic evaluation methodology given in the attached roadproject selection manual (Appendix 2). The method primarily considers theprojected increase in agricultural output (as a result of the investment)as the major component of benefit.

6. Given the difficulties associated with adequate selection ofsupply response coefficients, the evaluation data of the ongoing firstphase should be used as inputs in this exercise.

7. The Regional Engineer will be responsible for the evaluation.The results will be sent to the MCW Headquarters Planning and ResearchDivision and the Rural Roads Division for final decision.

- 95 -


Monitoring and Evaluation

8. As a feedback to planning, monitoring and evaluation of roadprojects will be carried out after 1-2 yea:s of project completion. Themajor aim of the evaluation is to compare the actual results with theassumptions and projections made during planning and to provide betterestimates of supply response coefficients for the final evaluationexercise.

9. The Regional Engineer will be responsible for carrying outmonitoring and evaluation of selected rural roads projects. He will getassistance and guidance from the Y.CW headquarters Planning and ResearchDivision and the Rural Roads Division. Ir addition, short-termconsultants, predominantly local, will be used particularly during theearly stages of development of the system.

10. The methodology for evaluation should be general enough to makeit applicable to various project components funded by different donors. Inthis respect, existing studies by USAID, NORAD, SDC, SIDA and ILO should beconsulted.

Aplication of the Criteria

11. The criteria will initially be used to select rural roads forrehabilitation during the second phase of the Core Rural Roadsrehabilitation programme. The criteria will later on be used in otherdistricts as a basis of rural roads investment planning in the country.


IRP Rural Roads Screening Methodology

POINTS WEIGHTS WEIGHTED MEANMHn.Max. Points Percent

COST FACTOR2

Engineering Factors

Gravel Source 1 = distance over 2 kms 1 2 2 a 1O.X£ a distarce loss than 2 kms

Special Problems I = rocky, swampy, mountainous barriers 1 2 2 3 1OOX2 = otherwise

Sub-Total 2 4 8 20.0%

BENEFIT FACTORS

Access Effects

Connectivity 1 = bad state of links to trunk roads 1 2 2 a 10.0X2 = otherwise

Access to Services 1 = no access to schools and health 1 2 2 3 10.0X2 = provides access to school, health

Condition of Road 1 = all-weather 1 a 2 4 15.OX2 = reliable (dry s*ason only)3 = no access

Sub-Total 8 7 10 85.0%

Imoact

Total Crop Value 1 = below district average 1 3 4 8 80.0Xper Km (TSH/Km) 2 = equal to district average

8 above district averagePopulation Density 1 = above district average 1 3 2 4 15.0O(person/square-k.) 2 = equal to district average

8 = above district average

Sub-Total 2 0 12 46.0%

TOTAL Minimum Score 28 100.0%

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- 9- - Annex 4-6

TANZANIA


Tentative List of Equipment for Riaht Local Contractors

Unit TotalType of Equipment No. Cost Cost

(US$9ooo) (US$0ooo)

Motorgraders (120 hp) 8 100 800Tractor (60-90 hp) 16 20 320Tandem roller (7-1OT) 8 50 400Towed rollers (3T) 8 10 80Flat-bed trucks 8 30 240Dump truck (7T) 24 35 840Pickup (4 x 4) 8 20 160Backhoe (0.5 cu m) 8 50 400Site dumper (0.5 ctl m) 8 20 160Concrete mixer (200 1) 8 5 40P'edestrian roller (5 hp) 8 10 80Vibratory tamper (3 hp) 8 3 24Water tanker (8000 1) 8 45 360Water pump (2-3 inches) 16 6 96Service trunk 8 50 400Fuel tanker 8 15 120Workshop tool set 8 15 120Trailers for tractors 16 5 80Hand tools 8 5 40

Sub-total 4,760

Initial stock of spare parts (52) 240

TOTAL 5,000

- to1 - Annex 4-7

Page 1 of 2

TANZANIA


A. Equipment Rehabilitation Program

1. Total MCW road fleet available for trunk and regional roadmaintenance is estimated at 700 units, of which 502 or some 350 units areestimated to be working or repairable. Presently about 185 of these unitsare in good or fair working order. About 350 units wll need to be auctionedor scrapped.

2. The 350 available units will be transferred to the MCW Plant Poolonce they are in good condition. About 260 of these units are to be repairedunder IRP, the remainder are either in good condition or are included underongoing projects.

3. MCW has the capacity to repair in its sevan zonal workshops about20-30 units p.a. Private worksnops should be able to repair some 90 unitsp.a. Consequently, in addition to the ongoing repair programs which shouldbe completed by mid-1991, the equipment repair program under IRP will takeabout 24 months and be completed by mid-1993; however, a further six monthsof repair work is planned for repairing equipment presently working whichcould break down in the future. The breakdown cost estimates up to end-1993are shown below.

Units Unit Cost Total Cost(No.) (US$) (US$ '000)

Private garage repairs, incl. spares:- heavy equipment 45 25,000 1,125- heavy vehicles 80 17,500 1,400- light vehicles 75 9,000 675

Spare parts for MCW workshops 60 12,500 750

260 3,950(say 4,000)

B. Work Output of MCW Equipment

4. From FY1991/92 MCW should have about 2;20 units working, which arecapable of earning about US$2.6 million (452 ownership and 552 operatingcosts) for road works (regravelling, reshaping and rehabilitation of unpavedroads) per year. It is estimated that with regular additions of therehabilitated equipment, the maximum service level for the 350 units shouldbe reached by mid-1993. Therefore, from FY1993/94 onwards, MCW Plant Poolsshould earn about US$4,300,000 per year in hire charges (assuming 502availability in all years).

- 102 - Annex 4-7

Page 2 of 2

5. The earnings of MCW Plant Pool under TEP is suumarized as follows:

FY91192 FY92/93 FY93/94 FY94/95Number of units functioning 220 280 350 350Hire earnings (USS millions) 2.6 3.3 4.3 4.3Hire cost to MCW budget li 1.8 ?.3 3.0 3.0

6. From end-FY1990/91, when the MCW Plant Pool should be functioning.through FY1994/95, the period when funding assistance from IDA is available,the total amount of hire cost to HCW budget would be about US$10.0 million(of which 352 would be financed by IDA).

C. Output of Private Plant Pools

7. Based on the estimated amount of equipment required for the privateplant pools (Attachment), the annual earnings from hire charges should beabout US$4.0 million per year (60: availability). The private plant poolsshould be fully functioning by end-1991. Therefore, the total amount of hirecost to MCO budget (considering 70? hiring by REOs) through FY1994195 wouldbe about US$10.0 million (of which 352 would be financed by IDA).

8. The estimated amount of equipment needed to be purchased under IRPfor Private and MCW Plant Pools is shown in the attachment. The actualrequirements will be determined by the ongoing plant pool study, andfinalized by Credit Effectiveness.

1/ Assuming that about 70? of MCW Plant Pool hiring will be to REOs and302 to contractors.

- 103 - Annex 4-7

Attachment

TANZANIA


Teistative List of Equipment Required for Private and MCW Plant Pools

Unit Total

Private Plant Pools No. Cost Cost(USt'OOO) (US$'000)

Crushing/screening plant 2 400 800Bulldozers (160 hp) 5 140 700Wheel loaders (2 cu m) 5 110 550

Backhoes (0.5 cu m) 10 50 500Pneumatic rollers (15T) 10 80 800Tandem rollers (7-lOT) 10 50 500

Towed rollers (3T) 8 10 80

Pedestrian rollers 35 15 525

Compressors (600 cfm) 4 50 200Airtrack drills and bits 4 100 400Dump trucks (710T) 20 45 900

Flat-bed trucks 30 34 1,020

Water or fuel tanker Lrucks 20 55 1,100Bitumen distributors 2 110 220Fuel trailers 20 14 280Workshop trailers 15 50 750

Tractor, low loaders 2 160 320

Generator sets (30kw) 10 10 100Pumps (2-3 inches) 40 6 240Patching units 5 15 75Workshop equipment and tools 2 800 1,600

Subtotal 11,660

Initial stock of spare parts (5X) 585

TOTAL Private Plant Pools 12,245

MCW Plant Pools and R$08

Bitumen sprayers 5 3 15Chip spreaders 5 5 25Mechanical brooms 2 5 10

Towed graders 24 15 360Motorbikes (150cc) 100 2 200

Bicycles 300 0.15 45Water trailers (1000 1) 20 2.5 50

Concrete mixers (200 1) 20 5 100

Hand tampers (vibratory) 20 1 20Camping equipment 30 5 150

Set.-ice trucks 19 50 950Workshop tools 7 100 700

Subtotal 2,625

Initial stock of spare parts (5Z) 130

TOTAL MCW Plant Pool 2,755

TOTAL PRIVATE & MCW PLANT POOLS 15,000

-105- Annez-4-8Page 1 of 3

TANZANIA

INTEGRATVD ROADS PROJECT

AIR TANZANIA CORPORATION

Introduction

Air Tanzania Corporation (ATC), the state-owned airline, has a fleet ofeight aircraft which it flies on routes within Tanzania, within the regionand also to Dubai and Muscat. Since its found_..g, following thedissolution of East African Airways in 1977, ATC has been profitable injust one year (1983). In each of the last two years, the company has lostUS$8-10 million despite high load factors. The major reasons for ATC'sfailure to break even are: low yields; high operating costs; low equipmentavailability; government interference in operating decisions; and,recently, a foreign exchange mismatch in its financial structure.

Restructuring Plan

In October/November 1988, the World 'lank, Scanavia of Sweden and Aer Lingusof Ireland carried out a strategic evaluation of ATC and put forward thefollowing restructuring plan:

(i) Fares to be increased by 100-1502 on domestic routes.

(ii) Organization structure to be streamlined.

(iii) Staff to be reduced by 20S.

(iv) Newly-designed financial and performance reports to be introduced.

(v) Remuneration policy to be studied with a view to increasingproductivity incentives.

(vi) Uneconomic routes to be suspended unless the Government identifiessocial or political benefits, in which case a subsidy should be paid to ATCfor operating the route.

(vii) Headquarters office space to be reduced.

(viii) Government to provide ATC with basic business freedoms, such assetting tariffs, choosing which routes to operate etc.

(ix) Since ATC faces nearly US$20 million in short-term cash outflows(which is greater th."a the Company's total assets) either it must receii-an immediate capita] infusion from the Government, or it must sell andlease back one or both of its two Boeing 737 aircraft.

- 106 - Annex 4-8

Page 2 of 3

Actioons To Date

Since the restructuring plan was put forward in November 1988, thefollowing steps have been taken:

(i) Domestic fares were increased by 60% in February 1989 and 50Z in April1989 on average, with low yielding routes experiencing the largestincreases and non-residents having to pay in foreign currency. Loadfactors in April/May 1989 were a fraction lower than in April/May 1988,indicating low elasticity. The fare increases will reduce ATC's losses byabout US$4 million per annum.

(ii) The Standing Commission on Parastatal Organizations (SCOPO) hasapproved a new organization structure, albeit one different from the oneproposed by ATC, which closely resembled the Bank9s advised structure.Some but not all of the recommended streamlining has taken place.

(iii) The staff reduction program has been implemented. A hiring freezehas been in place for over a year (except for pilots for whom the rate ofturnover is very high). A overall reduction of 24% has been achieved. Thisshould save ATC about US$300,000 per annum.

(iv) The new MIS forms have been introduced.

(v) Clearly uneconomic routes to Seychelles, Kigali, Shinyanga and Masaaihave been discontinued. A route profitability analysis is underway toidentify and suspend additional uneconomic routes. This exercise, ifcarried to completion, should save ATC about US$2 million per annum.

(vi) The third floor of ATC House has been leased out (bringing in aboutUS$200,000 per annum) and staff relocated in Tancot House and at theairport.

(vii) ATC has obtained insurance quotations from international companiesand has consequently been able to renegotiate its insurance contract withNational Insurance Corporation, saving about US$700,000. ;

(viii) A Cabinet Paper has been drafted by a joint team from MCW and ATCrequesting various business freedoms for ATC.

(ix) The Government injected 565 million Tanzanian Shillings (US$4 millionequivalent) in March 1989. If a further infusion is not forthcoming, ATCmust adopt some a sale-leaseback transaction using its Boing 737. Acapital restructuring paper has been presented to the interministerialcommittee of permanent secretaries prior to going to Cabinet.

Technical Assistance

Subject to the condition of negotiation defined below, the project wouldinclude technical assistance to ATC. The resource mobilization objectiveof the project goes beyond increased revenue intake from road users toimproved cost recovery in the transport sector as a whole. Reducing and

- 107 - Annex 4-8

Page 3 of 3

preferably eliminating ATC's operating losses is one component of thisobjective. The Bank has identified four fields in which foreign expertscould play a critical role in helping to turn around ATC's performance.Each expert would spend about two to three years working in one of thefollowing fields:

(i) Cost Accounting and Pricing. He/she would be responsible forrecommending restructuring of the route network based upon the routeprofitability analysis and for optimising the schedules and for proposingtariff changes.

(ii) Marketing. He/she would deal with cargo and passenger marketdevelopment, reservation systems and sales force productivity.

(iii) Computing. He/she would be responsible for the development andupgrading of computerised systems for commercial and technical activities,the implementation of such systems and the training of ATC systems staff.

(iv) Human Resource Management. He/she would be responsible for the -

Company's more general training needs and for specific studies relating toremuneration, performance targets etc.

(v) Corporate Restructuring. ATC has submitted to the Government forconsideration a n4sw corporate restructuring plan which would, inter alia,make the airlines self-financing by 1992. Plan is being discussed by theinter-ministerial committee.

- 109 - Annex 4-9TANZANIA Page l of 6

INTEGRATED ROAQS PROJECTPROJECT COST ESTIMATES

COST TABLE

Date Printed:20-Apr-O6

TOTAL X OF COST____ ___- _ _____ _THAT IS:

COMPONENT LOCAL FOREICF TOTAL QTY. unIt LOC FOR DONOR

(USe 'OSOA. Institutional Support

(i) MCW Management *nd Technical D v-lopmnt(a) Rural Roads Division 144.6 576.0 726.0 72 mu 20X BOX NORAD/USAID(b) Contracts Administration 230.6 952.0 1,106.6 7e M 206 8ox AfDF

tc) Road Inspectorate 27.6 1,68.6 1,86U.O 9s M 20X 8ox IDA

td) Regional Engineers Off Ices 2,964.6 11,616.6 14,526.6 1,216 MM 26x 8X DONORS

(t) Equipment Mangenment 824.0 1,296.6 1,620.0 W WMM 20X sox IDAt) Manament and Adinistration 144.6 576.0 720.6 e mm 20X 86X IDA

(9) IRP Coordination (CODAP) 272.0 1,668.6 1,80.6 of MM 260 sox IDA

(h) Planning and Operations Mgat 246.0 960.e 1,200.6 66 M 26X 8ox IDA

(I) Contral Materials Leborntory- Management Assietance 86.4 845.6 482.6 s6 mm 26X 86X ODA- Resarch and Exchange Vislts 62.0 268.0 260.6 206 86X WA

- Laboratory Equipment 6.0 1,548.0 1,548.0 ox 1OOX IDA

(3) Road Satety/Welght Control Program- Manegment Assistance 86.4 845.6 482.6 86 MM 26! sox NORAD- Equipment 0.0 604.0 6"4.6 ox 16X IDA

(11) Transport Studies and Assistance(a) Project Preparation 6606. 0668. 1,566.6 46X 606 IDA

(b) Other Studies 1,866.6 1,96.0 8,260.0 46! 6ox IDA/AfDF(c) Zanzibar 120.0 186., 86.0 401 66X IDA

(iii) OSM Engineering Faculty(a) Training Facilities 92.0 188.0 280.0 40X 66! fRO(b) Training Equipmnt 17.0 828.6 84 0.0 SX 9sx FRO(c) Managoment Support 146.0 584.0 780.0 61 M 26! S8X FRO(d) Staff Training 6.6 200.0 200.0 166X FRO

(Iv) MCTI Training Program(a) Training Facilities 116.0 165.6 276.6 46X 66! IDA

(b) Training Equipment 6.6 1,190.6 1,1906. ox 1006 IDA

(c) Instructors 86.4 201.6 288.6 24 M 86X 76X IDA

Cd) Trainee Allowance 125.6 0.0 125.0 166X 6X IDA

cv) MCW Manpower Planning and Training(a) Technical Assistance 57.6 286.4 208.0 24 M 26X sox IDA

(b) Seminar and Workshop 96.6 O 84.6 486.6 206 8X IDA

(e) Overseas Training 6.0 920.0 920.0 O6 166X IDA

td) Local Training 8060.6 .0 666.6 160X 6X IDA(vI) Renovation Of MCI and REO Facility 1,600.0 1,660.6 2,600.6 46X 6eo IDA

(vii) National Construction Council(a) Contractor Training A Management 216.0 864.0 1,86.0 90 mm 26x 8.S IDA

(b) Construction Reserch 40.0 100.6 200.0 so M 260 660 IDA

(viii) Labor-Based Works Training(a) Trainers 189.0 1,071.0 1,266.0 60 MM 15X s8x UNDP(ILO)

(b) Training Equipment 6.6 86s.6 860.6 ox 166! IDA

(ix) National Institute of Transport(a) Training Facilities 16.6 240.0 466.6 46! 66! IDA

(b) Training Equipment 0.0 200.0 200.0 6X 1006 IDA

(c) Management Assietance 86.6 120.0 160.0 12 MM 206 86! IDA

(d) Staff Training 060 756.0 760.0 OX 166X IDA(x) Procurement Rogulations Study 456.0 1,024.0 2,260.0 190 MM 26X 80 IDA

(xI) Arusha Technical College8(a) Building Renovation 124.0 I89.0 614 6!X FRO

(b) Equipment Materials 12.0 228.0 240.0 5S 95! FRO(c) Management Support 102.0 408.0 510.6. S mm 261 8!X FRO

(d) Short-term fellowships 6.0 186.6 186.0 6X 16O6 FRO

(xii) Comunication and Office Technology 60. 1,200.0 1,200.0 6! 16NS IDA

Subtotal Part A Base Cost 10,641.8 87,795.2 40,487.0Physical Contingencies 582.1 1,889.8 2,421.9Pric ContIngencies 1,168.1 4,047.6 5,26.8

Subtotal Part A Total Cost 12,832.0 48,782.6 56,O64.6

B. Rehabilitation Program 1/ Annex 4-9(I) Paved Trunk Roads - 110 - Page 2 of 6I First Yoer Program (FY90)

(1) Chalinze-Segern 5,766.1 28,664.0 26,89.0 98 KM 293 6OX DANIDA(2) Segera-Tange 4,622.1 16,088.4 20,110.6 71 KM 209 893 DANIDA(3) Segero-Same 5,828.0 28,292.2 29,115.2 179 K14 20h 693 FRO

II Second Year Program (FY91)(1) Ibanda-Uyole 4,812.0 17,246.6 21,566.6 96 KM 209 893 NETHERL'D/EEC(2) Same-Him. Jct, 1,649.8 14,847.8 16,497.6 82 KM 19X 963 NORAD(3) Lindi-Mingoyo-Mtsara 0,00.6 26,490.6 88,966.6 l1 Km 263 603 FINNIDA(4) Kobero-Nyaksaanza 4,200.6 16,800.0 21,000.0 6o KM 20X 60h EEC(6) Kibiti-Somong 4,89o.0 19,260.0 24,600.0 6O KM 263 SOX SAUDI FUND/?(6) Bukombe-louok (upgrade) 0,000.. 82,696.6 4e,0a.6 118 KM 20X 609 EEC(7) Dodoma-Mtera (upgrede) 4,676.8 42,666.0 46,78e.9 126 KM 193 98X ITALY

III Third Year Program (FY92)(1) Uwanza-Nyanguge 1,477. 65,911.8 7,889.2 84 KM 20X 69X EEC(2) Mlngoyo-MLoosi 299.7 1,19t.9 1,496.6 116 KM 293 693 FINNIDA(8) Musoma-Sirari (upgraed) 7,in.0 28,00. 15,66.6 96 KM 29x 693 EEC(4) Himo Jct-Arusho 6,689.1 82,288.6 87,927.0 164 KM 165 65X AfOF/NORAD(5) DSM-Bagamoyo 6,064.6 20,019.2 26,024.6 68 KM 29X 693 ITALY

IV Fourth Year Program (FY98)(1) TANZAM - Section VI 8,109.6 12,400.0 16,606.0 74 KM 20t 69X UNFINANCED(2) TANZAM Reseal 2,096.6 8,9o9.0 16,666.0 560 KM 20Y 6X OCDA/UNFINANCE(3) Muania-Ussgara 1,662.5 4,821.8 5,412.8 22 KM 29X 60X IDA

(ii) Unpaved RoadsII Second Year Proora (FY91)

(a) Lusahung. Bihoramulo Jct-Ulsagr 2,587.5 6,037.6 6,626.0 280 KM 893 7?0 IDA(b) Tundum4-Lutche 2,642.5 6,932.6 6,476.0 226 KM 806 761 IDA(c) Shelul-Singida-Babati-Sereku 83,49.6 8,259.9 11,799.6 810 KM 80X 7t IDA(d) Songea-Mbinga 8,666.6 6,496.0 12,600.0 96 KM 89X /6X EEC(e) Njombe-Mulangsli-Madeba 2,598.0 0,627.0 8,619.0 196 KM 893 70X EEC

IIr Third Yes- Program (FY92)(a) MikuMi-Ifakara 2,629.5 6,186.5 6,765.6 164 KM 893 76a SWISS(b) Dodoma-Singide 2,988.9 6,974.1 9,963.0 248 KM SO6 763 IDA(e) Tabora-Nzega-Singida Border 2,568.8 65,06.8 8,682.5 228 KM 893X 7? IDAIV Fourth Year Program (FY98)(a) Mtera-Iringa 1,440.0 8,866. 4,866.6 126 Km S89 7?3 ITAL!(b) Minjingu-Dabati- ereku-Kondoo 2,709.8 6,821.7 9,081.0 166 KM 89X 763 ITALY(c) Songea-Mascei 1,803.0 3,227.0 4,810.0 401 KM 30X 70X IDA(d) Unagara-Nzega 1,868.9 4,8 1.2 4,467.6 174 KM 86S 763 IDA

(iii) Trunk koad Bridges(a) Phase I 1,600.0 4,S00.0 o,0a0.0 20 NO. 25X 76X IDA

(iv) Regional Road1(a) Phase I 27,600.0 0.0 27,000.9 1,890 KM 1663 ON USAID(b) Contractors' Equipmnt 0.0 56660.0 5,666.6 63 1606 IDA(c) Bilateral Donor Programs 7,200.6 10,800.0 19,00.6 1,20O KM 40X 60X DONOR$

(v) Ferry Crossings(a) Civil Works 125.0 875.0 160.0 265 75X IDA(b) Overhaul Equipment and Spares 0.0 1,566.6 1,599.6 OX 16X IDA

Subtotal Part B Baso Cost 141,780.4 488,812.8 578,098.8Physical Contingencies 16,824.2 60,890.7 74,715.0Price Contingencioe 18,161.0 57,605.7 75,726.6Subtotal Part B Cost 178,265.6 5G0,269.8 726,584.9

1/ includes supervision and engineering

C. Maintenance Program - 11 -PPa~ge3 3f 6

(1) Road Maintenance Equlpment *.0 1S,6m.S 15,666.G OX 1IM5 IDA(ii) Equlpment Rehabilitation U60.0 J,200.6 4,600.0 261 80h IDA

I ill) Equipment Hire to mid-1995 18,665.0 7,600.0 20,eoo.0 65 852 IDAiv) Contract Maintenance to mid-1995 0,0M.0 14,666.0 20,61W.0 8eb 70X IDA(v) Emergency Works J,OOO.6 7,0.0 16,66.0 J0h 70h IDA

Subtotal Part C Saoe Co t 22,100.0 46,200.0 09,61W.GPhysical Contingenclo 681.9 1,280.4 1,912.2Price Contingencioe 8,861.4 6,185.6 10,047.0Subtotal Part C Cost 27,293.8 6,86J6.0 80,969.8

D. Freight, Passenger and Air Transportation

(I) LManagement Assistance to ATC 456.0 1,860.0 2,2560.0 1N Mi 261 691 IDAVI1) Asaistance to NTC, RETCO'o 460.0 1,940.0 2,86.0 6 5 MM 205 8OX IDA(1ii) Aslsstance for DSM Passenger Trans 120.0 486.9 660.6 so MM 2ex 8ex IDA

Subtotal Part D Bass Cost 1,860.6 4,120.0 5,156.OPhysical Contingencies 0.6 0.6 0.0Prico Contingencloo 84.9 889.4 424.8Subtotal Part D Cost 1,114.9 4,459.4 6,674.8

TOTAL BASE COST 176,252.2 524,426.0 70066,6.8TOTAL PHYSICAL CONTINGEhCIES 19,488.2 69,569.9 79,649.1TOTAL PRICE CONTING£NCIES 28,265.4 68,188.4 91,488.8TOTAL COST 219,665.3 652,127.8 371,188.1 6 a

0.1. f 337ECT FPMMll TA.BLE

20- -90 ------ -- --

(UN '000)

ctew tMAL U0K 08W3 89 ITALY PDUUA ODA Wm "W WILNOU* 18620 D *I am WADI f*e an t we

A. Us;"4a SoWf

NM t b t_-t o To. Dwlo.(.3 ..s* isd 02.2.2.. ti.4 *.i$(I) Iat.,.fam Diii 10m.4 418.7 426.7(b) Used 6t. Atw.isl,4 1,3 3.9 1 .

(4) Usgl.g bgI..w.. l ,.l,tssse s ,t. .l oewsiiw t(0)t seiom l Gool "?s ;so nt s 16.764 8 2,718.0 i.8 S.0 6, 1 .6 8017.6 1,Ois.s 8.017.0 ga'sm , 7.

( ) swipme Obruma 1,ti7D.4 I,0t.4w.tf) _ swwo NW Aftwoorsti M.3 7511.9 t

(d) M COotdis.t2 (A) 1,874.4 2,427.0 u.4

(8) Pf.siss mad %*"*;M* I 1,3".2 I.=.S IS?

(I) Camta, Usteilss w.sttw,- .me8mn AssIst.* 6am I 80O.1 0.

- _.s.s.c2, A Cad,,.g. VI.2$t 8DI.0 801.0 0.0

- L-te.,ts.p t st 1,812S.61.6 1.812,.(I) 94. Osftj9h Csst..I P.sg

-_^* 948u8A.1ts. 2.731.- isIp._se 706.9 706.9

0.0

(2a) T_o73 8_02 d Ass.(3 P roJ.e8 tPe.ps.ia 1,878.0 I,876.0(8) Otb.r StWies 8,906.4 I'.

1e3.6 870

(e) aibe 312.6 817.8 *

( aii ) S soe g P& C M 6 4 0 0 O(.3 T.si.2,.1 r .ilii.e 2i7.6 33.8 "'.'

(b) TrO.2ss 8prw s 9I. I 871.6 .6

t w.sst sp.t ON.8 748.6 i.6

(st) mff Traiss 23.9 2e0.9(2.) MTt Tr iW"q Pt4wr

(.3 T.si.s pe 2282".. 821.6 274.2 47.

(8) T.sis2a IW .,t 1,89.7 1,6601.7

(V)Ws 02.. Allooomee 4. S147.2(M) am laPse Pis..a2 _d Trvaieg

(.3 Tocb.i..2 AssIsse. 888.4 SD.2 I8.8

(t) $9m... NW Var40 676.5 576.8()0...... Vol 2..Ohio. 2,M33 1,089.8 0.0 0.0

(c) Dr si _.F *;is 942.0 941.0 0.0 0.0

(.2 Usms.ticaort O af NM Fqifi 21,948 a 2.3.t1 4o1e.7

( ;) obietl< _ z cftt"o w;Is

(s) Cs.t.sectw Tr*ifti2s A 00.s_.1, 1,808.0 1.171.2(b) C.atva Ms.ch O.9 9 2D7 a

ue.o

(a") Tio 148t.2 41.(8) Ttel.si., &Wit 394.2 94.2 1,4.2

(. Ustiasel n"Itute of Y ".s-tsp.(8) T.in,t. Fecsis.I 1 457.2 108.8 0 t7.7

tb) Usi.ing Ei;b_% 22Zi.3 22ti.S °

(e) Okovemat Aos;t... 178.6 186.8 1

(4) SW#f Tspi.. 188 1 me.1 0.0

(.) P _ UgistIs. 8dy 2,t07.8 2,846.7 2N.?

(.2) A.wsb T.dnc.S tall.(3 ibildp a .8;e 838.1 2i2.S 70.6

t') Fv ,pus,,t vUst.iss 269 0 261 8 ' 7

(a) 3s.t .wt, 877 4 8ll.? 87.7

(4) Sh..t-t... fsis.11 iWp 210 I 180.1 (.21) Ctt _ 5 0 t2s.o A 0tff;e i.a$,noIsg0, 1,872.4 1.372.4

0.0

ASbt%t.I P., A 86,064.6 JO,ltS.0 0.0 4,2S.9 .0 8o,017.4 8,626.7 2,940.0 8.e42.0 0.0 418.? 0.0 6M8.2 tn.2 .064 8 0.0 2,740.8 0.0 t

0 I

_ _ ._ - ______ ---- --- -- - - ----- ----- _ ---- ......

*. " VW s -1_ _

en _<_a voi Pool7 OM

&ANI )b ("rl10 0,R.414U,.11.@ 1_

in ^ @; o4o (PM,onaer4bo_ .

's f:: w_b w,e". ,#.

011m, JsbZ --rA S.n. *.*..te 1 _ 11.917- ,wt..IV l_ t r,_"M

*.us-* t twisamblT . VI 91.10.5 I .

Lo T _mp-l 1O.M. * . -S "W.

td) _4|110 t$,@1w.00.2 "Z.( ) i-1 1 1 _ "~~~~~~2.8w 0.1111.11

~~~~~~~~~~~~.00 111.1111- &s.e 4n.4¢.> _ s.1 ~~~~~J.6.4e 0 ".s .4

bd m w&_*ffiw O _.1 _sst. ,. 1. 9a.??sW M" .. op c _ .e

"weej _ . S.04.6 _ t_. 0. z*

W*l@ ,1"~~~~~l . "90". T.2§,§41,* *. ee""1"e. it."". T Z s*" s ".e i

tb) cowwo"ioo owlsomb &.=.I G.M.2~~~~~~~~~~^ (a) slootmo somw proorme, 21.0m.1 1.1".0 1.00.6 0.4".7 1.00.0 *.M.?~ ~ ~ ~ ~ ~~~~a

cnSet TOTAL 1MA 06614 "0 tM.V FP36M W1 A Wmt r 1IPAe WnD N 1Th.MS B SD AM WM t C T

C. Shintosuw P_o.'u

(I) 81-_ md. 4wl.41 17.142.0 4,780.6 0.0(|1) 1 t iliXrtler ~4,TC0. 4.7tlO.

(Ill) sqolps. N.W" to .1696s 26,64.2 6.274.6 8 .4(It) COmbKt ObSI.t to id-1.... o81-8 22.676.0 1 6..( G) .?rgC W.*. 12.647.2 10,663.1 1,08.1

S..btout P.,4 C 80.9893 60,276.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 W.UI.0 0.0

D. F, 1^* h_I Tr 9morw"C

(I) _ t A; st 0 . toATC 2.421.1 2.I166..(ii) An; sso oNTC, MEMO'S 2.496.1 2.24.8 249.6(iii) Amist. fto 0S" ps wr Tf.wp. 680.2 MiA 6.0.

&Ab*Ul P,t 0 6.674.8 6,016.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0o. 0 0. 0 0. 0 0. 0 0.0 o.4 0.0

TOTAL T COsT 871,1.1 010,424. 669.81.7 81.968. 91,6M2.2 46*S e.o t18i460 2,960.0 6,64.0 1,965.6 O,9tt.0 170,97.5 0,6.0 4,76.9 4,1.4 fl.. 65,661.4 66.1

(D XD

0%

- l115

Annex 4-9B


IDA FINANCED ROAD REHABILITATION PROGRAN

FY 1990/91

* Lusahunga-Biharamulo Jct.-Usagara 230 km* Tunduma-Luiche 226 km* Shelui-Singida-Babati-Bereku 310 km

FY 1991/92

* Tabora-Nzega-Singida Border 223 km* Dodoma-Singida 243 km

FY 1992/93

* Mwanza-Usagara 22 kmU usagara-Nzega 173 km

- 117 - Annex 4-10

Page 1 of 5TANZANIA


Key Actions for ImPlementing IDA-Financed Components

TargetComPonent Action Date

INMTITUTIONAL SUPPORT

CODAP and MCW Management, Training:Technical assistance for 1 civil engineer Prepare TOR May 1990- 36 mth, 1 accountant - 36 mth, plus Select individuals Jul 19908 m-m unallocated - 80 m-m for CODAP Sign contract Sep 1990

1 human resources specialist - 24 mth Prepare TOR May 1990for MPTS Select individual Jul 1990

Sign contract Sep 1990

MCTI Instructors (various short-term Prepare TOR May 1990specialists) - 24 m-m Select individuals Jun 1990

Sign contracts Oct 1990

Short-term specialists for MCW management Prepare TOR Jun 1990and mor.itoring functions - 60 m-m Select individuals Open

Assistance to Inst. of Engineers' Prepare TOR Jul 1990Registration Board and the Institute Invite proposals Aug 1990of Engineers Sign contract Jan 1991

Assistance to NIT through twinning Shortlist & TOR Jun 1990with similar institution - 12 m-m Invite proposals Jul 1990

Sign contract Dec 1990

MCW Roads Inspectorate:Technical assistance for 1 road maintenance Shortlist & TOR Apr 1990planning and programming engineer - Invite proposals May 199036 mth, 2 roads engineers(inspectors) - Sign contract Oct 199048 mth, plus 6 m-m unallocated 90 m-m

Transport Planning and Operations Management:Technical assistance for 2 economists Shortlist & TOR Apr 19901 transportation engineer - 72 m-m, Invite proposals May 1990plus 8 m-m unallocated - 80 m-m Sign contract Oct 1990

- 118


Core REOs (Mwanza & Shinyanga):Technical assistance from a consulting Shortlist & TOR Apr 1990firm or a highway agency for 2 highway Invite proposals May 1990engineers - 72 m-m (full time) + 8 m-m Sign contract Oct 1990(part time), 2 road maint. technicians- 72 m-m (f.t.) + 8 m-m (p.t.),1 procurement specialist - 24 m-m,1 accountant - 24 m-m, plus 12 m-munallocated (part mechanical) - 220 m-m

Equipment Management and Maintenances1 plant manager, 1 maintenance specialist, Short list & TOR Jul 19901 equip. & stores specialist to set up MCW Invite proposals Sep 1990Plant Pool over first year - 40 m-m Sign contract Feb 1991

Rehabilitation of MCW road fleet and Shortlist & TOR Jul 1990training in preventive maintenance by Invite proposals Aug 19908 master mechanics - 260 m-m Sign contract Jan 1991

NCC for Contractor Training:Technical and training assistance Short list & TOR Mar 1991for 4 specialists - 90 m-m Invite proposals Apr 1991

Sign contract Sep 1991

Research specialist - 36 m-m Select specialist CompletedSign contract Jun 1990

Procurement Regulations Study;Multidisciplined team of procurement Shortlist & TOR Apr 1990specialists for revising regulations and Invite proposals May 1990supply management procedures - 190 m-r Sign contract Oct 1990

NTC and RETCOssContinuation of ongoing assistance Sign contracts Openthrough individual contracts - 500 m-m

UDA:Assistance to be defined through ongoing Shortlist & TOR Nov 1990study - 50 m-m Invite proposals Dec 1990

Sign contract May 1991

ATC:Management assistance for ATC's operations Shortlist & TOR Apr 1990in cost accounting and pricing, marketing, Invite proposals May 1990computing and training - 150 m-m Sign contract Oct 1990

- 119 -


STUDIES & VORKS SUPERVISION

Tanzam pavement management and detailed Invite proposals Completedengineering for Section VI, including Sign contract Apr 1990works supervision

Plant pool study to determine requirements Invite proposals Completedfor establishing MCW and private plant Sign contract Apr 1990pools, including prequalification andbidding documents

Trurk road bridge and ferry crossings Shortlist firms Apr 1990detailed engineering - 2-3 packages, Invite proposals Apr 1990including works supervision Sign contracts Sep 1990

Mwanza - Usagara - Nzega detailed Shortlist firms Apr 1990engineering, including works Invite proposals Apr 1990supervision Sign contract Sep 1990

Supervisiot of third year trunk Shortlist & TOR Apr 1991gravel road rehabilitation program Invite proposals May 1991


Building renovation and housing Shortlist & TOR May 1990Invite proposals Jun 1990Sign contracts Nov 1990

Office technology and communications Shortlist & TOR May 1990Invite proposals Jun 19903ign contracts Nov 1990

CML financial autonomy study Shortlist & TOR Mar 1991Invite proposals Apr 1991Sign contract Sep 1991

Other transport sector studies Shortlist & TOR Open

120 -


CIVIL AND BUILDING WORKS

Trunk Road Rehabilitation and Upgrading:Second year program: Prequalification CompletedLusahunga - Usagara, Tunduma - Luichi, Bidding documents Mar 1990Shelui - Bereku (ICB) Invite bids Apr 1990

Sign contracts Jan 1991

Third year program: Prequalification Nov 1990Dodoma - Singida, Tabora - Singida border Bidding documents Dec 1990(ICB) Invite bids Jan 1991


Fourth year programt Prequalification Nov 1990TANZAM Section VI and reseal, Bidding documents Oct 1991Mwanza - Usagara - Nzega (ICB) Invite bids Nov 1991

Sign contracts Aug 1992

Trunk Road Bridges and Ferry Crossings:Packages regionally grouped (ICB) Prequalification Nov 1990

Bidding documents Oct 1991Invite bids Nov 1991Sign contracts Aug 1992

Building renovations and housing Prequalification Mar 1991Bidding documents May 1991Invite bids May 1991Sign contracts Nov 1991

MaINTENANCE PROGRAM

Procurement Arent:Spare parts pIrchases for MCW equipment Invite proposals Completedrehabilitation and maintenance Sign contract Apr 1990

Road Equipment for MOW Plant PoolsProcurement of support equipment Bidding documents Aug 1990and vehicles (ICB) Invite bids Oct 1990

Sign contracts Apr 1991

Road Equipment for Private Plant Pools:Procurement of equipment, vehicles and Prequalification Aug 1990workshop iteme, including establishment Bidding documents Aug 1990o.2 hire rates (ICB) Invite bids Oct 1990

Sign contracts Apr 1991

MCW Road Equipment Rehabilitation:Procurement of spare parts and contracts Parts shopping Openwith private garages, as continuation Contracting Openof program started under Sixth Highway

- 121

Annex '-l0Page 5 of 5

Contracted Road Maintenance & Emergency WorkstREO contracting up to USS1.0 million and Prequalification Jun 1990MCW contracting up to US$3.0 million, for Bidding documents Jun 1990works and maintenance, including consultants Invite bids Jul 1990services for detailed engineering and works First contracts Nov 1991supervision (LCB); continuous Implementation

EQUIPMENT PROCUREMENT

Laboratory equipment for CML Bidding documents Jun 1990Workshop service vehicles for MCW regions Invite bids Jul 1990Road equipment for 8 local contractors First contracts Nov 1991Road equipment for 6 labor-based contractorsRoad equipment for MCTI trainingCommunications and office equipment for

MCW headquarters and REOsVehicle weighing and road safety controlTraining equipment for NIT

Source MCW and MissionAF6IN

- 123 -Annex 4-11


ESTIMATED SCHEDULE OF DISBURSEMENTS

IDA Fiecsl Year Quarterly Cumulativeand Quarter Ending Disburements Dieburnemente

FY1990/91

December 81, 1990 1.50 1.60March 81, 1991 8.00 9.60June 80, 1991 8.48 12.93 12.98

FY1991/92

September 80, 1991 8.48 18.88December 81, 1991 8.68 24.94March 81, 1992 8.58 88.61June 80, 1992 7.72 28.80 4.28

FY1992/98


FY1993/94

September 80, 1998 9.48 84.96Decaumber 81, 1998 10.29 96.26March 81, 1994 10.29 106.64June 80, 1994 8.57 88.69 114.12

FY1994/96


FY1995/96

September 80, 1996 7.72 150.18December 81, 1995 5.16 156.28March 81, 1996 6.14 160.42June so, 1998 8.48 21.44 168.85

FY1998/97

September 86, 1098 8.48 167.28Decivwber 81, 1996 3.48 170.71March 81, 1997 8.48 174.14June 80, 1997 1.72 12.00 175.86

FY1997/98

September 80, 1997 1.72 177.67Docember 81, 1997 1.72 179.29March 81, 1999 1.72 5.16 181.00

Closing Date: June 80, 1998

Source: Standard Disbureemnt ProfTle, April 22, 1999

- 125 -

Anes 4-12Page 1 of 2

TANZAIIA

INTEGRATED RoADS PROJECT

PARTICI'ATION OF WOMEN IN ROAD MANNENUANCERecommended Guidelines

The following recommended guidelines are extracted from a study preparedby IDSWSG for NORAD in March, 1987, based on Rural Roads Maintenance Program(RRMP) in Mbeya and Tanga Regions. Implementation of these guidelines will beincluded in Terms of Reference for technical assistance to all RegionalEngineer's Offices.

A. Those related to recruitment

1. Women should be recruited as road-attendants.

2. A quota system of 50Z should be adopted in the employmelt process to makethe ratio between males and females l1l. The situation in Tanga during 1988189showed that female employment on RRPM had increased to about 35%, a notableincrease over the 62 in early 1987.

3. Efforts should be made to involve female representatives during therecruitment process.

4. Village leaders should be involved during the recruitment exercise.

5. Before recruitment, general regulations and terms of employment should beexplained to the potential road attendants.

B. Those related to orUgnizgtion of work

6. The work should be organized in groups, but each village should beapproached to express its own preference as to what type of groups is moreappreciated.

7. Women should be allowed to participate in group leadership.

8. A part-time female coordinator should be employed at the REO to deal withthe affsirs of female employees on road maintenance.

9. Arrangements should be made for married women to work within their villageof residence and if it absolutely necessary for them to work outside the village,transport should be provided to ferry them to and from the work-sites.

- 126 -


10. Women should be given opportunity to choose whether to work part-time orfull-time, although the majority are expected to prefer to work full-time (inorder to get the full pay).

11. Payment should be direct to the employee without using a middle man/woman,and it should be paid on a monthly basis.

C. Those related to social services

12. Day-care centres/nursery schools should be established in every villageto cater for the REO employees and other villagers, and both the REO and theemployees should contribute to the running costs. The REO for instance couldassist in erecting the building. Such centres should operate the whole day tothe convenience of the working mothers.

13. Assistance for the provision of clean and safe water should be renderedto those villages which are desperately in need, and appropriate technologyshould be adopted in this respect.

14. The REO should try to see how it can best offer medical services toemployees. First-aid boxes or small 'treating centresl could be established ata central part to offer medical services to REO employees.

15. REOs should assist in transporting essential commodities to the establishedUWT and other shops in the villages.

16. Workshops, seminars and study tours between districts and regions shouldbe arranged for REO employees and women in particular to enhance exchange ofexperiences and ideas.

17. Boots, rain-coats and whenever necessary bicycles, should be provided toroad-attendants, and efforts should be made to provide female road-attendantswith the aipropriate bicycles.

- 127 - mm8-I

T/ IG Pae of SDfEWATW ROADS ttECT

ANALYSIS OF etttIC FEMIUILIM

SGIT?mV1Y ANALYSISLtTH WE6lC COST tFIRT YR LAST VR 9 Cont Coat b Traffic

ROAD AMIE ROAD SWTION 00 (rSh ell) (US$ '00) ADOT A4AtT ( *) 2t Growh Com inod

PAVED TRt ROADS

1. Frert Year Program(1) cho.ins-Segers Chatinie - bnga 9e.0 2,660.e 22,004.8 28 640 d16.0 11.0 11.4 9.6

hng - sg 60.9 2.9m6.8 22,=0.0 169 480 19.1 11.2 11.? 9.8- - - --- -- -- --- -- -- ---

178.9 8.77.4 44,884.6

(2) S.gor. - Tong. Seg' - *hoi 84.9 1,8t.8 14,878.1 76T 460 12.s 8.8 14.1 12.8tihe - Tangs 86.7 1,660.4 12,928.2 442 1t00 16.8 18.8 8.9 7.8

71.8 8,48.9 27,299.2

(8) Soo* - Mimo Jct. Some - Hanea 88.6 870.9 6,899.2 241 600 22.8 14.7 14.9 12.9"Senga - H;.o Jet. 28.9 1122.9 8.687.7 486 1080 16.8 18.2 18.8 11.7

81.7 1.998.8 18,=88.9

(4) Segara - See Segre - Kerogr 20.7 696.4 8,S72.8 280 600 20.8 1.3 13.7 11.9Kcraqw* - m.bo 42.8 1,864.2 14,493.8 2 8 S0 21.2 11.9 12.6 10.6htabo - se 116.6 1,228.2 9.447.7 204 800 1s.7 12.9 18.0 it U

_-- - - -- -- -- --- -- -- ---

179.6 8,610.6 29,818.8

(6) 6,jhoba - leak* ukab - ek. t 118 0 40,000.0 ?(6) Oodme - Mtera Dodtn - tar 1.0 8,4.9 12,600.0 1o 87 14.8 11.9 11.6 10.2(7) Songee - Makeakbo Saneg. - 1kaabako 298.0 2,c00.8

It. Secod Yeaor Prog,rm(1) TANZAt - Section VI 74.0 1.8,00.0 208 e80 28.0 16.9 18.4 16.1(2) TANZAN R*-al T7WtM Reea I 8O.0 10,000.0 t(3) Ibanda - Uyole Ibends - tyole 96.0 1,608.8 13,910.0 1d.0 10.7 10.4 9.1

(4) Mim Jet - KIA Jet Hi No Jet. - wash; 22.2 998.1 7,07.7 1066 2480 24.6 20.2 19.7 17.2:-; - KIA Jct. 88.8 1,464.6 11,266.2 los1 28S0 28.7 21.1 20.6 18.0

87.8 2,482.7 18,948.6

(s) KIA Jct - Ameaha KIA Jet. - Ar,ah 41.8 1,740.0 18,884.6 1244 2700 26.8 28.4 22.8 20.0(6) Man.. - USager. W.nza L Uagare 22.8 708.6 86,412.8 826 1S0 28.8 28.4 22.8 20.0

(7) L;nd;-iMngoyo-Mtmora ltare - M;tknd*n; 14.9 260.0 1,928.1 686 6le9 19.8 16.0 18.6 13.7Mikindani - Mingoo 68.1 898.0 4,600.0 286 782 8.0 6.6 6.4 8.6Mingaoy - Lindi 28.0 420.0 7.076.9 S07 m76 14.1 11.6 11.8 9.9

108.0 1,768.0 18,600.0

(6) Kobero - Me k.enze Kobero -he.Lks.nzs 60.0 21,000.0 7(9) Kib;ti - -monga, Kibiti - sog 68.0 24,000.0 t

(10) osh - Segaeyo Kanyatta o,. - LWI Jc 9.8 888.0 4,115.4 16680 82000 198.0 41.0 40.0 40.0WlSN Jct. - Kunduchi 7.6 244.0 1,876.9 s806 2S000 8s8.O 41.0 40.0 40.0Kunduchi - suniu 17.1 161.0 1,288.8 6O 4490 61.0 80.0 48.8 42.73unju - Dagams 88.6 819.0 2,488.6 400 1780 61.0 80.0 46.8 42.7

_-- -- -- _- -- -- -_- -

67.6 1,289.0 9,684. 6

III. Third Year Program(1) Himeo Jet - To-eta Tvaeta Jct. - Mime 8.7 182.0 1,018.4 1888 4881 11.9 9.8 9.8 8.8

Nimo - Kenya srd 10.6 260.4 2,008.1 9e2 268? 16.7 15.8 18.0 18.1

14.8 892.4 8,018.5

(2) Mingeyo - KWei mingoy.o - ei 1168.8 820.0 2,481.8 888 968 16.6 18.0 18.4 11.8(8) H.**t - Si r;r Mumome - Sir nl 114.0 8,480.0 8,o000.0 225 628 25.9 21.2 20.7 16.1(4) OSA - K.;iti K;b.da Jct - Kibiti 119.2 I,868.0 10,668.6 201 070 W8.2 29.7 29.0 28.3

(8) Klrogoro - Dodod_ Norogoro - Negate 80.6 188.0 1,176.9 S16 2601 26.0 21.8 20.6 16.2"Bgole - Omiro 69.4 168.2 1,270.6 871 8901 29.0 28.6 28.2 20.8Cairo - Konee 62.0 198.0 1,800.0 267 186S 26.1 28.0 22.8 19.7Kong.. - Oodod. 68.7 218.0 o 1,688.6 494 2668 41.6 84.8 88.4 29.3

218.7 726.2 8,801.8

IV. FourtI Year Proram(1) Nhn:. - Ntangugr Mwen.. - 1b ngue 84.0 960.6 7,869.2 1011 S006 56.7 48.6 45.4 39.7

(2) Nutukula-Bukct-bNleba ltutkule - Kj,sks 26.8 200.1 909.8 26 54 7.9 6.5 6.8 S.SKyak --ukoa 80.0 1,419.4 0.451.8 177 82 22.6 18.8 18.1 18.66ukabe - bulae 66.0 1,228.0 8.890.8 s86 698 29.s 24.4 28.6 20.9

__- _------- -------

148.3 2,849.4 12,981.6

(3) Aruaha - Nnemnga Aruoha - 0beti Jct. 9.2 277.7 2,186.2 2888 10218 26.0 21.8 20.8 18.23abati Jct. - Arush 9e8.6 198.8 1,802.8 268 1048 18.8 18.4 18.0 18.2

100.0 478.0 8,68s.8

ItI@ffD AVEAOE Dwt 28.8 16.6 18.8 16.0

mm~ 8-1

- 128 - PgoafS

66fIYITVrY ANALYSISLENTH ilU4C COST FIMT YR UST VR iR Canet Cost Nlo Traffic

ROaD AME ROAD SECIO 001) (Ik ell) (OM3 t00) ADT AAT (S) +255 Oraeth Combined

C0RAVB 7RU"t ROADS

l. First Year Program(1) Lueuhunta - Umugara 6iherauulo - Luashunfga 89.6 240.1 1.091.4 S1 98 86.1 E.7 28.2 24.2

Ibitu - Umagara 100.9 80.8 1,680.8 172 26.0 22.1 20.0 17.4

140.8 27.9 2.971.9

(2) tundua - Luich* Tundum - Su mbanga 287.0 8,848.0 0,478.0 72 2M 20.8 17.7 16.2 15.9

(8) ShBlui-Snlgde-Oererou Shelui - SWnaide 11S.4 t 4,816.4 106 9.1 7.7 7.1 6.1Singida - Aruaha Ord 16.5 t 2,180.6 tAruseh Brd - Baati 14.S t 8,977.7 107 22.0 16.7 17.2 14.7eubItl - DOdu_ Ord 8.0 t 1,85.1 214 18.0 12.8 11.7 10.1

810.0 t 11,7".8

(4) Usagars - Neea Nae_ - Shinyauga 77.0 8,003.0 2,134.S 209 819 26.4 22.4 20.6 17.7Shinymnas - Imanza 157.0 6,487.0 4,062.7 192 477 24.7 21.0 19.8 1.S

Z84.0 9,44O.0 6,407.8

IU. Scd Year Prorea(1) Dodea-Itigi-Sinagda DOdaes - Sngida 248.0 9,968.0 lS 270 9.1 7.7 7.1 6.1

(2) Taboa-#a-Slngida I4ea - Slgeida Ord 106.8 2,106.1 8,978.9 1ss 8M 211.4 42.5 89.0 Ws.8Nzeg - Tabora 117.8 t 4,8S.6 ? t

-24.0 2,108.1 S,862.5

(8) Sung.. - Namie N e - Nuo a6.7 2.7 194.8 78 148 14.6 12.8 11.8 9.9Nknuanb - Neatu40@ 848.2 101.9 1,728.8 20 87 0.8 0.7 0.6 0.6Nhsluemb - Sang 77.1 87.0 886.9 92 171 10.9 16.0 14.7 12.6

469.0 141.6 2,808.0

(4) Song" - binga S_ne- - Ninbr 96.0 477.6 8,675.0 ? t

(8) NJoehb-wulesngelt-dba NJaub*-"wlangal-Nd.bs 91.0 448.6 6,412.8 t T

SII. Third Year Program(1) NinJinmu-3.bati-Kendon Ninjlngu-batli-Kndae 107.0 621.6 4,012.8 t t

(2) Nikuil - Ilt.kra Hikum; - liakara 104.0 1,910.0 0,681.6 241 251 21.1 17.9 16.8 14.1

IV. Fourth Year Program(1) Itera - 1reings Nera - Iringa 128.0 1,910.0 4,800.0 t t

(2) boys - Nakongolowl "WY* - Nea&gaoai} 101.2 2,498.1 11,882.8 149 407 56.2 49.5 46.4 39.0

(8) Mnuleba - biharamulo Hwlb* - ibaraeula 96.s 818.7 2,868.0 10 84 4.4 8.7 8.4 2.9

8964.6 88.0 108.8 18.6 14.3 12.80

VEIGHTED AVE338E 12: 10.0 18.6 14.8 12.3

x4" 8-1

- 129 - Pos a of a

SoENrXrVm LYUSZiBFi ENltl1C COST F12 R VA 'yR It Cons Ceot No Traffic

ROAD NAME ROAD S m (oF0 (TSh oi) (USN 'OOM) AOT A4W (5) .265 Gram" Combined

fTHER STUDIEAND THIM RESILTS

Mtwara - Songoa ltwure - Mingoio 81.0 682.1 182 281 14.4Mingoyo - Heai le.8 815.4 224 415 14.4

199.8 467.8

Dodoms - Mvenah Singida - NZOga 216.0 8,748.0 176 484 11.9

Nyakanzazi - Kigos Nyakanaul - Kaulu 262.0 468.6 2,10.s9 12 21 11.9Ktaulu - Kioua 91.1 2,0654.8 9,888.6 18 229 15.8

828.1 2,828.8 11.489.5,

Mpanda - Sumbawangs nymnda - Chate 171.2 844.1 1,864.1 1s S8 14.8Chalt - Sumbawanga 91.1 241.2 1,096.4 aS 90 28.1

262.8 585.8 2,t6so.

Kakonglolmi - Runga Ibkongolo i - Rung.. 181.2 8,967.4 I0.' 18.6 S2 loo 8.8

Rungus-Ipole-Tabort Rungo - lpole 166.7 8,206.0 14,572.7 24 79 2.6Ipola - Tubora 92.8 1,761.8 6,08.8 44 60 t 11.0

281.0 4,987.8 22,669.5

Rung. - Itigi Rungu - Itigi 194.8 8,612.7 16,421.4 17 6t 0.4

Shinyangs - Tabora Shinyangn - Tabora 48.6 944.4 4,279.1 248 614 400.0

Makuyuni - Otdeani Hlkuyuni - Oldeeni t2.0 8,787.0 17,077.a 429 4t9 19.0

Nangurukuru - Lindi Nangunukuru - Lindi 16. 1 516.0 2,848.8 77 81 11.7

Kilindoni-Mafia Lodge Kitlindon-Mefias Lodge 14.2 160.0 727.8 70 78 3.?

Lunahunms - Ruoumo Luaahungp - Rwuwo 91.6 a10.8 1,866.9 119 865 15.0

DSH - Kibiti Bandari Str.Port ac., 8.1 78.0 876.9 S80 1SO00 84.7Port Acceso - Kibada Jc :.I.4 872.0 2,861.8 8900 18000 146.0

.4.8 447.0 8,486.8 61.4

- 131 ANNEX 6-2

Pagg 1 of 2


ECONOMIC JUSTIFICATION: REGIONAL ROADS…_________ _ -_ _-- -… -___…-____ ___

COST OF COST OF SENSITIVITY ANALYSISLENGTH REHAB REHAB IRR Const. Cost No TrafficREGION DISTRICT ROAD § (KU) ('000 TSh) ('000 TSh) (X) +25 Growth Combined

--- ----- - ---- ----- - ----- -- - -- - -- ----- -------

KAGERA Karagw. 1 61.8 14,049 746 49.8 42.8 88.8 33.46 47.1 16,156 878 49.6 42.2 a8.7 88.2Bukoba 2 58.2 18,828 809 48.2 41.0 37.8 32.3a 44.7 15,820 492 48.3 88.0 83.8 29.05 14.0 4,876 168 51.1 48.4 89.9 84.2Muloba 4 8.4 4,133 121 45.7 38.8 85.6 80.67 2.8 833 17 64.6 46.4 42.6 36.68 24.7 6,971 858 46.4 89.4 86.2 81.1Biharamulo 8 18 6,210 137 48.0 40.8 87.4 32.2MWANZA Kuimba 1 85.1 17,600 s8e 20.0 17.0 16.8 13.42 48.8 18,206 515 41.8 35.4 82.4 27.95 28.4 12,854 812 31.6 28.9 24.6 21.2Sa 6.8 2,529 75 25.1 21.8 19.6 16.83+4 81.2 11,649 281 48.8 87.2 84.2 29.3i5Sa 85.2 165,83 317 80.7 26.1 28.9 20.6SHINYANGA Kahama 1 29.0 8,768 819 87.1 81.5 28.9 24.96 9.7 8,600 87 28.2 24.0 22.0 18.98 6.8 2,595 57 86.3 80.9 28.8 24.3Shinyanga 1 S8.0 17,801 396 28.0 28.8 21.8 18.82 27.8 28,307 898 21.1 17.9 16.5 14.1s 53.8 17,886 586 48.0 U8.6 88.5 28.89 37.4 16,199 411 80.6 28.0 23.9 20.58+4 72.2 27,276 794 84.2 29.1 26.7 22.92 79.1 26,093 870 29.1 24.7 22.7 19.67 51.2 19.895 568 23.8 20.2 10.6 16.99 17.9 10,280 197 26.4 22.4 20.8 17.71+7 78.2 28,654 805 29.0 24.7 22.6 19.4KILIMANJARO Hal 1 18.8 6,194 448 44.1 87.5 34.4 29.52 7.9 2,841 3860 51.6 48.9 40.2 84.68 3.1 2,851 919 52.9 45.0 41.8 85.44 12.4 8,284 518 55.1 48.8 48.0 86.9Moshi 1+2 19.7 11,718 595 49.8 42.8 a8.8 83.45 4.4 2,817 595 41.0 84.9 82.0 27.56 6.2 4,440 718 44.4 87.7 84.6 29.77 8.7 2201 594 46.8 389. 88.5 81.48 10.4 4,320 415 39.7 88.7 81.0 26.611 7.8 2,659 860 47.3 40.2 Bs.9 31.713 8.7 2,684 297 49.8 41.9 86.5 33.01S 1.4 670 478 49.8 42.8 88.8 33.416 2.7 1,460 687 48.8 89.8 86.5 31.417 2.5 521 209 568.1 47.7 43.8 37.618 2.8 818 292 60.2 42.7 89.2 83.6Rambo 1 4.9 1,279 261 49.3 41.9 38.6 88.02 2.4 1,711 713 47.3 40.2 88.9 81.74 1.4 884 275 60.1 51.1 46.9 40.36 1.6 829 208 68.8 58.1 58.8 45.87 4.5 38,18 697 48.4 88.9 88.9 29.1Uwanga 2 5.4 4,008 741 29.3 24.9 22.9 19.6

- 132 -

ANNEX 6-2==Pae. 2 of 2

COST OF COST OF SENSITIVITY ANALYSISLENGTH REHAB RENAS IRM Const. Cost No Traffic

REGION DISTRICT ROAD (Ki) ('M TSh) ("Om TSh) (N) *26 Growth Combined

UDEYA bowxi I 5.0 1,429 45 49.0 84.0 81.2 26.82 11.4 8,847 1UN 29.2 24.6 22.8 19.6

to 8 Oslo 72 2.0 26.2 28.1 19.8a 1.9 769 17 49.4 42.0 88.6 88.14 4.2 I,6m4 88 46.5 89.5 8.8 31.2

la 4.6 180S 41 48.6 41.8 87.9 32.66 7.8 1944 56 68.5 46.5 41.7 86.8

8.9.10 27 "69 243 89.0 88.2 ao.4 28.111.12.12. 14.2 8,157 210 44.7 88.6 a4.9 29.9

14 4.8 2667 89 84.6 29.4 27.0 23.21S 8.6 1,492 27 46.8 89.4 U8.1 31.017 6.7 8,686 51 84.6 29.6 27.1 23.8

20.21+22 18.8 16,226 16 8.9 28.8 26.4 22.728.24.27 88.7 16,686 812 44.6 87.4 u4.8 29.5

26 7.1 2,888 04 87.6 81.5 28.9 24.8Ky*ia 2 7.4 7,774 68 12.8 16.9 10.0 8.8

4 8.4 1,S85 81 21.1 17.9 16.5 14.17 14.0 8,268 126 29.0 26.2 28.1 19.8

iRINA liiutIndi 1 18.0 8,462 162 S4.6 40.8 42.6 36.64 5.9 1,291 58 62.6 44.2 46.6 34.8

Njambe 5 7.0 2,245 68 46.4 89.4 86.2 81.16 10.0 4,60W 98 45.1 88.8 86.2 80.2

9.8 2,120 88 46.9 89.9 86.6 81.411. 2.6 922 28 49.2 41.0 86.4 33.0

RUVUMA Song. 2 9.4 2,830 96 45.8 86.9 86.7 80.78 10.5 2,700 95 88.6 82.8 80.1 25.96 24.0 6,712 216 81.8 80.4 27.9 24.07 8.0 2,278 9# 87.8 81.7 29.1 25.6

14 10.9 4,672 9s 81.8 28.6 24.4 21.6Mbinge 2.2*/b#S 42.6 18,178 469 41.9 85.0 82.7 28.1

so 10.4 6,209 114 88.8 88.0 86.8 26.9S8+b 86.6 20,958 402 89.0 88.2 86.4 26.1

6 20.7 16,444 228 41.7 86.4 82.5 27.9Sc 4.4 2,688 48 47.0 40.6 86.7 81.5Sd 2.6 G66 22 61.6 48.4 89.8 84.2

TOTAL 1,484,8 689,868 26,184

WEIGHTED AVERAGE LRR: 87.1 81.5 26.9 24.8

- =~~~~~

M

MAP SECTION

%. To Ki'i"iT os'k

K_36, T K y r UGANDA

r Kyobo * RUKORA OMA M FJROBI /KENYA

'AN DA MAI |WA DA

/ ~ ~ ~ ~ ~ ~~d N l o < / 2gtjnu\k

N ERUN DI,'

KENYA /IO A < UH \ TANZANIA

/N,ohItan.a~~~~~~~~~~S 09 di ES Ut

11*101, d.o OSHI =T_Sl ZAMBIA -,

RuIet on \ gs/ SHINGIDG To /olndi MZ ABIQU0E

fyElbWA ; ondo a S e EAM'-

0 H91TTO/PRD

/IKIGOMA ~~~~~~~~~~~~~~~~~~~~TANZANIAINTEGRATED

ROADS PROJECTKoRogose QTANGA CORE REGIONS

j:M8A 8 iA ZONE WORKSHOPS

lpole ltigi ISLAND FIR~~~~~~~~~~~~~~~~~~~~~SECN YEAR PROGRAM&

Z ) \ 2 J MBEYA / y okoro / NyomwIB>MA REHAILITATION/LIPGRADE

THIRD YEAR PROGRAM:

RUKWA IA ~S SALAAM REHABILTATIONBUPGRADEMeek 4~~~~~~ RESEAU/IMPROVE

FOURTH YEAR PROGRAM;

I R E ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~ ~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~C~ REHABILITATION/UPGRADE

GA !bltl ~~~~~~~~~~~~~~~~PAVED TRUNK ROADS

sums. L.iche ~~~~~~~~~~~~~~~~~~~~~~~~~~~~____UNPAVED TRtUNK RCADS

BEYA ~~~~~~~~~~~~~~~~~~~~~~~MAFFA -+----RAILROADS

4ako.901i Mon, PORTS

CZ4 AIRPORTS0io K40e E O t20IdOLAKE SERVICES [FERRIES)

o SELECTED TOWNS

* REGION HEADQUARTERtS* NATIONAL CAPITALS

REGION BOUNDARIES

--- INTERNATIONAL BOUNDARIES

OooT /r >-_' A I O Z A M B I Q U E o MAY

L I I~~~~~~~~~~~~~~~~~~I-

MAY