Republic of the Philippines: Road Sector Improvement Project (Financed by the Japan Special Fund)

Transcription

1 Technical Assistance Consultant s Report Project Number: February 2011 Republic of the Philippines: Road Sector Improvement Project (Financed by the Japan Special Fund) Volume 1: Prepared by Katahira & Engineers International In association with Schema Konsult, Inc. and DCCD Engineering Corporation For the Ministry of Public Works and Transport, Lao PDR and This consultant s report does not necessarily reflect the views of ADB or the Governments concerned, and ADB and the Governments cannot be held liable for its contents. All the views expressed herein may not be incorporated into the proposed project s design.

2 Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS OFFICE OF THE SECRETARY PORT AREA, MANILA ASSET PRESERVATION COMPONENT UNDER TRANCHE 1, PHASE I ROAD SECTOR INSTITUTIONAL DEVELOPMENT AND INVESTMENT PROGRAM (RSIDIP) EXECUTIVE SUMMARY KATAHIRA & ENGINEERS INTERNATIONAL in association with SCHEMA KONSULT, INC. DCCD ENGINEERING CORPORATION

3 TABLE OF CONTENTS Page EXECUTIVE SUMMARY 1. BACKGROUND OF THE PROJECT... ES-1 2. OBJECTIVES OF THE PPTA... ES-1 3. SCOPE OF THE STUDY... ES-2 4. SELECTION OF ROAD SECTIONS FOR DESIGN IN TRANCHE 1... ES-3 5. PROJECT DESCRIPTION... ES Contract Package 1... ES Lot 1.1: Bauang-Baguio Road... ES Lot 1.2 : Olongapo-Bugallon Road... ES Contract Package 2... ES Lot 2.1a : Palo-Carigara-Ormoc Road... ES Lot 2.1b : Daang Maharlika Road (Liloan-Naval Highway)... ES Lot 2.2 : Iloilo-Capiz Road... ES Lot 2.3 : Dumaguete North, 1 st District (Manjayod-La Libertad)... ES Lot 2.4 : Dumaguete North Road, 1 st District (La Libertad-Vallehermoso)... ES Contract Package Lot 3.1 : Dipolog-Oroquieta City Road... ES Lot 3.2 : Butuan-Cagayan de Oro City-Iligan Road (Misamis Oriental)... ES Lot 3.3 : Butuan-Cagayan de Oro City-Iligan Road (Agusan del Norte)... ES Lot 3.4 : Bukidnon-Cotabato Road... ES BRIEF PROFILE OF THE PROJECT AREAS... ES Lot 1.1 : Bauang-Baguio Road (Provinces of La Union and Benguet)... ES Lot 1.2 : Olongapo-Bugallon Road (Zambales and Pangasinan Provinces)... ES Lot 2.1a : Palo-Carigara-Ormoc Road (Leyte Province)... ES Lot 2.1b : Daang Maharlika Road (Liloan-Naval Highway) (Leyte Province)... ES Lot 2.2 : Iloilo-Capiz Road (Old Route), (Provinces of Iloilo and Capiz)... ES Lot 2.3 : Dumaguete North Road, 1 st District (Manjuyod- La-Libertad), (Province of Negros Oriental)... ES-31 i

4 6.7 Lot 2.4 : Dumaguete North Road, 1 st District (La Libertad- Vallehermoso), (Province of Negros Oriental)... ES Lot 3.1 : Dipolog-Oroquieta City Road (Provinces of Zamboanga del Norte and Misamis Occidental)... ES Lot 3.2 : Butuan-Cagayan de Oro-Iligan Road (Province of Misamis Oriental)... ES Lot 3.3 : Butuan-Cagayan de Oro-Iligan Road (Province of Agusan del Norte)... ES Lot 3.4 : Bukidnon-Cotabato Road (Provinces of Bukidnon and North Cotabato)... ES PAVEMENT DESIGN OF PHASE 1 OF THE PROJECT... ES Introduction... ES Design Approach for the Selected Road Sections... ES Base Data for Design... ES Design Considerations... ES Design Methodology... ES Design Plans and Typical Road Sections... ES Maintenance Options Considered... ES Recommended Maintenance Schemes... ES COST ESTMATION BY ROAD SECTION... ES Updated Unit Rates... ES Updated Unit Rates for Periodic Road Maintenance... ES Cost Estimates by Road Section... ES PROPOSED IMPLEMENTATION SCHEDULE... ES ECONOMIC EVALUATION METHODOLOGY AND RESULTS... ES Economic Evaluation Model... ES Economic Applications... ES Traffic Projection... ES Basic Vehicle Operating Cost Estimates... ES Cost Benefit Analysis... ES Economic and Shadow Pricing... ES Economic Evaluation Results... ES Sensitivity and Risk Analysis... ES Benefit Distribution Analysis... ES SUMMARY RESULT OF ANALYSIS OF EXISTING FINANCIAL MANAGEMENT SYSTEM OF DPWH... ES The Present Financial Management System... ES Result of Analysis... ES Recommendations... ES INSTITUTIONAL CAPACITY BUILDING (ICB) OF DPWH... ES Objectives of Analysis... ES-60 ii

5 12.2 Methodology... ES Status of ICB Efforts in DPWH... ES Proposed ICB Component of the Project... ES Identification Process... ES Proposed ICB Projects... ES RESETTLEMENT FRAMEWORK FOR TRANCHES 2 AND 3... ES Summary of Findings and Recommendation... ES Project Impacts... ES Impact on Gender and Other Vulnerable Groups... ES ENVIRONMENTAL ISSUES AND MEASURES... ES Introduction... ES Methodology... ES Screening Environmental Impacts and Mitigation Measures... ES Environmental Monitoring Plan... ES-73 iii

6 EXECUTIVE SUMMARY 1. BACKGROUND OF THE PROJECT 1. The Government of the Philippines requested the Asian Development Bank (ADB) during its 2007 Country Programming Mission for a Project Preparatory Technical Assistance (PPTA) to provide funds for a Road Sector Improvement Project (hereinafter referred to as RSIP). The PPTA was included in ADB s Country Operations Business Plan ( ), and in ADB s pipeline for nonlending products and services for The request was based on an outline concept paper for the RSIP, prepared by the Department of Public Works and Highways (DPWH) in July The concept paper envisaged a US$500M project, including a technical and financial assistance package comprising preventive maintenance and/or rehabilitation of selected national roads, as well as institutional capacity building components in support of its mandate and development objectives. 3. The National Economic Development Authority (NEDA) favourably reviewed the DPWH concept paper for the PPTA on 12 December ADB dispatched a Mission which undertook the fact-finding activities on March The PPTA will have a total cost of US$800,000. The Government of the Philippines requested ADB to provide US$660,000 equivalent counterpart amount. In turn, ADB requested that the PPTA should be financed on a grant basis by the Japan Special Fund, funded by the Government of Japan. The Government of the Philippines financed the remaining US$140,000 by providing the necessary office accommodation and services, remuneration, etc, mostly in kind. The Philippine Government was advised that the approval of the PPTA does not commit ADB to finance any ensuing project. 5. On 2 July 2008, ADB officially approved PPTA to the Government of the Philippines. Katahira & Engineers International (KEI) was selected in 29 August 2008 for undertaking the PPTA Project. KEI is being assisted by the national consulting firms SCHEMA Konsult and DCCD Engineering Corporation. The work started last 29 September 2008 and scheduled to be completed in June OBJECTIVES OF THE PPTA 1. The PPTA is making preliminary preparations for a project (RSIP) that will have the purpose of improving the Philippines national road network by carrying out periodic road maintenance/asset preservation, rehabilitation/improvement of selected national roads, and improve DPWH s institutional capability. 2. This is in accordance with ADB s general transport strategy for the Philippines, aiming to promote pro-poor economic growth and support Government s priority investment program in general. Not the least, the project would serve to maximize benefits from previous ADB financed projects focused on maintaining and improving existing Philippine road network. 3. The PPTA is the first step in the Road Sector Improvement Project as a whole, the main purposes are to: (i) select, design and evaluate suitable road projects for asset preservation to be implemented in the first Tranche during the years ; and (ii) select and tentatively evaluate other priority projects ES-1

7 for the intended, subsequent Tranches 2 and 3. The more precise designs and evaluations for the Tranches 2 and 3 are planned to be undertaken in parallel with the implementations of Tranches 1 and 2, respectively. As used here, evaluation includes the assessments of a variety of economic and social benefits of the projects, as well as possible environmental impacts, effects for ethnic minorities, possible needs for land acquisition and resettlement, etc. 4. The RSIP project is intended to be divided in three Tranches (Phases): Tranche 1: maintenance projects for asset preservation only, to be implemented in Tranche 2: maintenance projects including road improvements and rehabilitation, for possible implementation in Tranche 3: also including projects for road improvements and rehabilitation, for possible implementation in The contents and financing of each Tranche will be agreed separately between ADB and the Government of the Philippines. 5. Most of the work in the PPTA concerns the selection, design and evaluation of road sections for asset preservation in Tranche 1. Tranches 2 and 3 are further away in time and not yet formally committed. Some more open and approximate estimates were provided for tentative assessments for Tranches 2 and The other purpose of the PPTA is to assess the status of institutional capacity building (ICB) efforts in DPWH, including ongoing projects by different development partners, and recommend priorities for the continuation of ICB as part of the Project. The implementation of these priorities, if agreed with DPWH, could follow the implementations of the respective Tranches. Proposed issues to be tackled in the ICB are listed in Chapter 6 of the main report. 3. SCOPE OF THE STUDY 1. In agreement with its objectives and the Terms of Reference, the PPTA include the following activities by the Study Team: a. Preparation of the project design for the RSIP with a cost of US$500 Million in three tranches costing about US$50 Million, US$200 Million and US$250 Million, respectively; b. Preparation of Phase 1 (Tranche 1) of the project; c. Preparatation of the overall design for the second and third phases of the Project; d. Preparation of a draft report and recommendation to the ADB President; e. Definition of project implementation arrangements including institutional and management aspects; f. Assessment of financial management of the DPWH; g. Review of status of financing of road maintenance and Government financial forecasts and Philippine Road Sector development; h. Assessment of DPWH institutional capacity building efforts; i. Review of ADB s and other Development Partner s experiences in the Philippine Road Sector development; and ES-2

8 j. Preparation of a draft Transport Sector Roadmap for future transport sector operations in the Philippines. 4. SELECTION OF ROAD SECTIONS FOR DESIGN IN TRANCHE 1 1. In accordance with the Terms of Reference (TOR), which in turn is based on a previous concept paper by DPWH, the road sections to be selected for Phase 1 of the project should: (1) provide maximum economic return for the investment; (2) cause minimum negative environmental and social impacts; (3) be suitable for asset preservation without requiring significant repairs, improvements or rehabilitation; (4) be reasonably well distributed between Luzon, Visayas and Mindanao; and (5) result in a total cost of work in the order of US$50 million in Phase DPWH provided a long list of 28 candidate road sections for Asset Preservation, distributed within different regions of the country. The DPWH likewise provided the Consultant initial HDM-4 calculations for the same road sections which were used by the Consultant as basis for the first selection according to criteria (1) and (3) above, i.e., based on the results concerning preliminary estimated economic return and improvements and/or rehabilitation costs, respectively. 3. Maximum economic return means that the total benefits should exceed the total costs by as many percentage as possible. The benefits include reduced vehicle operating costs and time costs, as well as savings in maintenance costs and repairs during the remaining lifetime for the road. It could also include indirect benefits due to (for example) economic development or increased tourism in the area of the road. 4. The costs include materials, equipment, labour and supervision for the works, plus damages caused by indirect environmental or social impacts (if any). Such impacts are less likely for the asset preservation work in Phase 1 since this work should not affect either the road width or the road alignment. Only the work as such, and later perhaps an increasing traffic volume, could then have such effects. The costs for significant improvements, repairs or rehabiliation (i.e. other works than just the asset preservation) should be as low as possible. However, it could only be entirely avoided for a few sections, according to the estimates on which the HDM-4 calculations were based. 5. After discussions with representatives from DPWH and ADB, the Consultant set the maximum for such costs to twenty (20) percent of the total costs for the maintenance work on each individual road section. For some sections, the costs for repairs/rehabilitation based on initial HDM-4 calculations had to be adjusted after the result of Consultants inspections. 6. Based on the above evaluations and criteria, as well as a roughly estimated total cost and the distribution within the country, a total of 8 road sections were tentatively selected and subsequently inspected. After the inspections and their results, the proposed final selection was discussed and approved by DPWH s ES-3

9 Technical Work Group and by the Inter-Agency Steering Committee for the project. The selected 8 road sections and the comparison of Consultant s findings and the previous HDM-4 results are shown in Table ES Although the selection was intended to be considered as final and will be used as such for the design, it is based on approximate HDM-4 results and visual (although thorough) inspections. The final costs for the work on each section, and the total cost for all road projects were estimated based on the design results. To insure about the risk for large deviations, two other road sections have also been inspected and were kept as spare. 8. Out of the 28 long list of road sections for asset preservation, 11 were originally shortlisted under Tranche 1 (including one section from Dumaguete North Road) but later reduced to 8, after combining two road sections for Butuan-Cagayan de Oro City-Iligan Road and two road sections for Bauang- Baguio road and deleting the section from Dumaguete North Road. That would leave 18 remaining road sections in the long list. Out of those 18 road sections, however, 5 were excluded due to the resulting low rates of return. Another 3 sections that appeard to be suitable for asset preservation (which remains to be certified, however), were set aside in case more funds would be made available for Phase/Tranche 1. Thus, only 10 road sections for asset preservation were left as candidates for Tranches 2 and 3, where they would have to compete with other 22 road sections requiring improvement or rehabilitation. 9. Table ES-2 shows the long list of road sections for asset preservation distributed to Tranche 1 for priority projects and the remaining to Tranches 2 and 3. On the other hand, Table ES-3 shows the longlist of road sections proposed for improvement or rehabilitation. 10. However, in the later part of negotiation with ADB, after cost estimates were distributed by Tranche, three (3) additional roads were accommodated for Tranche 1 under the Design-and-Build scheme in view of the availability of excess programmed funds for Tranche 1 due to reduction of scope of civil works, since a significant length of sections (distributed among the 8 roads) were later found out to be already improved by the Regional and Disrict Engineering Offices of the DPWH. The additional three (3) road sections for asset preservation under Tranche 1 are: 1) Dumaguete North Road (Manjuyod-La Libertad Section); 2) Dumaguete North Road (La Libertad-Vallehermoso Section); and 3) Butuan-Cagayan de Oro City-Iligan Road (Agusan del Norte Section), which was later separated from the whole Butuan-Cagayan de Oro City-Iligan Road project. Therefore, the remaining roads for asset preservation as candidates for Tranches 2 and 3 were again reduced to 7 roads. The total 11 road sections under Tranche 1 was divided into three (3) contract packages. 11. The map showing the location of road projects under Tranche 1 is presented in Figure ES1-1. ES-4

10 Table ES-2 PROPOSED ASSET PRESERVATION PROJECTS HDM-4 Recommendation Projects Region Province Total Length (km) Asphalt Overlay Reconstruction Good NPV/C (km) (km) (km) Costs (PM) Ranking Remarks TRANCHE 1 1 Bauang-Baguio Road I La Union Bauang-Baguio Road CAR Benguet CP-1 2 Olongapo-Bugallon Road III Zambales CP-2 3 Palo-Carigara-Ormoc Road VIII Leyte Daang Maharlika Road (Liloan-Naval Highway) (Under Eastern Nautical Highway) VIII Leyte CP-3 5 Iloilo-Capiz (Old Route) VI Iloilo CP-4 6 Butuan-Cagayan del Oro City-Iligan Road X Misamis Oriental CP-5 Butuan-Cagayan del Oro City-Iligan Road (Agusan del Norte 1st Leg. District) XIII Agusan del Norte * Design and Built 7 Bukidnon-Cotabato Road XIII Cotabato CP-6 8 Dipolog-Oroquieta City road IX Zamboanga del Norte CP-7 Dumaguete North Road VII Negros Oriental Dumaguete North Road VII Negros Oriental Dumaguete North Road (Jct. Kabankalan- Negros) VII Negros Oriental CP-8 (Design and Built) T O T A L , TRANCHES 2 & 3 1 Bigaa-Plaridel via Bulacan & Malolos Rd III Bulacan Siquijor Circumferential Road VII Siquijor Sindangan-Liloy Road IX Zamboanga del Norte Daang Maharlika, (Sta. Elena- Daet- Pambuhan) (Lone District) V Camarines Norte Dipolog-Sindangan-Liloy Road IX Zamboanga del Norte Famy-Infanta-Dinahican Port Road IV-A Quezon Manila-Batangas (Malvar-Lipa Road) IV-A Batangas Iloilo-Capiz (Old Route) VI Iloilo Palico-Balayan-Batangas Road IV-A Batangas Toledo-Pinamungahan Road VII Cebu Gapan-Fort Magsaysay Road III Nueva Ecija Ormoc-Baybay-Southern Leyte Bdry. Road VIII Leyte Palompon-Isabel-Merida-Ormoc Road VIII Leyte Liloy-Ipil IX Zamboanga Del Norte Ormoc-Baybay-Southern Leyte Bdry. Road VIII Leyte T O T A L , ES-5

11 Table ES-3 LONGLIST OF PROPOSED ROAD IMPROVEMENT PROJECTS Projects Province Length (km) 1 Bagac - Mariveles Road Bataan Bacolod Circumferential Road Negros Occidental Caticlan - Malay - Libertad - Nabas Road Aklan Villaba - Tabango - Calubian Road Leyte Loay Interior Road, Loay-Carmen-Trinidad Road and Jct. Datam-Pilar-Alicia Road Bohol Wright - Taft - Borongan - Guiuan Road Samar Sto. Niño - Buluang Road Palawan San Nicolas - Natividad San Quintin - Umingan - Guimba Road Pangasinan / Nueva Ecija Guinhulngan - Isabela - Binalbagan Road Negros Oriental Bacolod - Murcia DS - Benedicto - San Carlos City Negros Occidental Bolinao -Bani - Alaminos Road Pangasinan San Carlos - Dumaguete Road Negros Occ. / Negros Or Guimaras Circumferential Road Guimaras Albay West Coast Road Albay Sto. Rosario - Matag - ob - Palompon Road Leyte Cervantes - Mangkayan - Abatan Road Ilocos Sur / Benguet / Mt. Province Mulanay - San Francisco Road Quezon Bagong Silang - Capalonga Road Camarines Norte Malinta - Baleno - Aroroy - Mandaon / Milagros - Balud Road Masbate Toledo - Tabuelan - San Remegio Road Cebu Mindanao East - West Lateral (Sta. Filomena - Ticlaan Section) Iligan / Bukidnon Bayawan - Bais - Dawis - Panyabonan Road Negros Oriental TOTAL 1, ES-6

12 Figure ES1-1: Location of Roads under Tranche 1 ES-7

13 5. PROJECT DESCRIPTION 1. The brief description of the 8 road sections subjected for detailed design under the PPTA and the 3 roads to be included in Design-and-Build scheme, all under Tranche 1, are presented below: 5.1 Contract Package Lot 1.1: Bauang-Baguio Road Bauang-Baguio Road (2nd DEO, La Union and Benguet District)- km to km , (Length = kms inclusive of bridges) 2. The kms road project, including exception sections, is located in the Province of La Union, in Region 1, and Benguet province, in Cordillera Administrative Region (Figure ES1-2). The road starts at Jct. Manila North Road in Bauang, La Union at km and ends in Sablan, Benguet at km The road traverses in a south-easterly direction passing the towns of Bauang, Naguilian, Burgos and Sablan. The first 15 km of the existing road project from Bauang passes through a flat terrain along Naguilian River with elevation ranging from 16 to 40m. The rest of the project road passes through a hilly to mountainous terrain with a gradual increase of elevation from 134 m to 1,472 m in Baguio. 3. The existing pavement comprises of predominantly asphalt concrete overlay surfacing on PCC pavement of 6.10 m width generally in bad to fair condition and needs mostly overlay and reconstruction of some badly damaged stretches. The 2 nd District Engineering Office of Benguet informed that improvement of the road section from km to km is being implemented by their office and therefore considered exception to this project. The project road will consist of km AC overlay, 80 m reconstruction at km and exception of 8.17 km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = km, Width = 6.10 m Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed Reconstruction: 50 mm thick AC overlay, 200 mm PCCP, 200 mm Aggregate Subbase; Length = 80 meters. ES-8

14 Figure ES1-2 ES-9

15 5.1.2 Lot 1.2: Olongapo-Bugallon Road Olongapo-Bugallon Road (Ist and 2nd DEO, Zambales) km to km (Length = kms including bridges) 4. The km road project is located in Central Luzon, Region III particularly in the Province of Zambales (Figure ES1-3). The road starts in the roundabout of Kalaklan, Olongapo at km traversing Zambales coastal in a northerly direction and ends at km at the provincial boundary of Zambales and Pangasinan. It is situated along the western shores of Luzon Island and passes through flat terrain with elevations ranging from 7 m to 54 m. 5. The first km road section is with PCCP surfacing with AC overlay in some isolated areas and the remaining sections comprise asphalt concrete surfacing with short sections of PCCP particularly at the town proper. The road carriageway width from the start at km 155 is 6.70 m with auxiliary lane in the Olongapo City center and the remaining section with 6.10 m width. The project road is under 1 st and 2 nd District Engineering Office of Zambales. It comprises of km for overlay and an exception of km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = 54.24km, Width = 6.10 m 100 mm thick AC overlay; Length = 2.94 km, Width = 6.70 m m 125 mm thick AC Overlay; Length = 8.37 km, Width = 6.70 m m Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed. ES-10

16 Figure ES1-3 ES-11

17 5.2 Contract Package Lot 2.1a: Palo-Carigara-Ormoc Road (1st DEO, Leyte, Region VIII) km to km , (Length= kms inclusive of bridges) 6. The km road project is located in Eastern Visayas, Region VIII, in the Province of Leyte under the 1 st District Engineering Office (Figure ES1-4). The road starts at km in Palo town T-junction with Daang Maharlika highway, traversing in a westerly direction passing the town of Santa Fe and ends at km in Alangalang municipality. The terrain of the project area is relatively flat to gently rolling with elevations ranging from 15 to 68 m. The existing pavement from start to km is PCCP overlaid with 50mm AC in bad condition. From km to km , it is PCCP surfacing and about a kilometer of the road section needs reconstruction. The road section from km to km was overlaid in 2006 observed to be in good condition and considered exception in the project. The remaining section from km to km is PCCP that requires AC overlay. Pavement width is 6.10 m in general. The project road will consist of km AC overlay, 960 m reconstruction at km and an exception of 1.62 km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = km, Width = 6.10 m Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed Reconstruction: 50 mm thick AC overlay, 200 mm PCCP, 200 mm Aggregate Subbase; Length = 960 meters. ES-12

18 Figure ES1-4 ES-13

19 5.2.2 Lot 2.1b: Daang Maharlika Road (Liloan-Naval Highway) (1st DEO, Leyte, Region VIII) km to km , (Length= kms inclusive of bridges) 7. The km road project is situated in Eastern Visayas, Region VIII in Leyte Province under the 1 st District Engineering Office (Figure ES1-5). The road section starts at km about 300 meters after the T-junction in Palo traversing in a due south direction passing the town of Tanauan and ends at km in Tolosa at the boundary of Leyte 1st DEO. The existing pavement is entirely PCCP of 6.70 m width. The road passes through a flat terrain with elevations ranging from 3 to 36m except the last 1.85km where it is abutted by hill and in rolling terrain. Scope of Civil Works Asset Preservation: 80 mm thick AC Overlay; Length = kms, Width = 6.70 m Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed Lot 2.2: Iloilo-Capiz Road (2nd DEO, Iloilo) km to km 55.96, (Length = kms inclusive of bridges) 8. The km road project is situated in Western Visayas, Region VI in Iloilo Province under 2 nd District Engineering Office (Figure ES1-6). The road starts in the DEO s boundary at km in Sta Barbara town traversing in a north direction passing the towns of Cabatuan, Janiuay, Badiangan and Lambunan, and ends at km in Calinog town. The road passes through a flat terrain with elevations ranging from 6 to 59 m. The first 5.50 kms was widened from 2-lane to a 4-lane road in The remaining section still has 2-lanes AC pavement except a short section of PCCP from km to km where reblocking is on-going and being implemented by the 2nd DEO. 9. It was later found that the section from Km to Km was under the on-going project, thus, this was treated as exception. Only the section from Km to Km was included in the design with some stretches under exception. The project road will consist of km AC overlay, 1.00 km reconstruction starting at km and an exception of km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = 7.32 km, Width = 6.10 m 80 mm thick AC Overlay; Length = km, Width = 6.10 m 100 mm thick AC Overlay; Length = 3.49 km, Width = 6.10 m Improvement of Shoulder, pavement markings, repair of distressed ACP/PCCP and miscellaneous works as needed. Reconstruction: 100 mm thick AC overlay, 200 mm PCCP, 200 mm Aggregate Subbase; Length = 1000 meters. ES-14

20 Figure ES1-5 ES-15

21 Figure ES1-6 ES-16

22 5.2.4 Lot 2.3: Dumaguete North Road, 1 st District (Manjuyod - La Libertad) (1st DEO, Negros Or.) km to km , (Length = kms inclusive of bridges) 10. The km road project is located in Central Visayas Island, Region VIII, in the Province of Negros Oriental under the 1 st District Engineering Office (Figure ES1-7). The road starts at km of the district engineering boundary in the town of Manjuyod, traversing in a northerly direction passing about four (4) towns and ends at km in La Libertad municipality before approaching Pisong Bridge. The terrain of the project area is relatively flat to gently rolling along the coastal of Tanon Strait. 11. The existing 2-lane pavement comprises of km PCCP with m width and km ACP having 6.10 m width. The DPWH s 1 st Engineering District has about 8.49 km on-going/scheduled road sections for improvement and which is considered an exception. The conceptual design of the project road will consist of km AC overlay, km reconstruction and an exception of km. Scope of Civil Works (Per Conceptual Design) Asset Preservation: mm thick AC Overlay; Length = km, Width = 6.70 m Improvement of Shoulder, pavement markings, repair of distressed ACP/PCCP and miscellaneous works as needed Reconstruction: 230 mm PCCP, 200 mm Aggregate Subbase; Length = km, width 6.70m Lot 2.4: Dumaguete North Road, 1 st District (La Libertad - Vallehermoso) (1st DEO, Negros Or.) km to km , (Length = kms inclusive of bridges) 12. The km road project is located in Central Visayas Island, Region VII, in the Province of Negros Oriental under the 1st District Engineering Office (Figure ES1-8). The road section is the continuity of Lot 2.3 at km passing La Libertad and Guihulngan towns and ends at km the provincial boundary in Vallehermoso municipality. It traverses in a northeasterly direction with relatively flat to gently rolling terrain. 13. The existing surfacing consists of about km PCCP with varying width of 6.10m-6.70m and about 5.96 km ACP of 6.10m width. The DPWH s 1st Engineering District has about 1.80 km on-going/scheduled road sections for improvement and which is considered exception. The conceptual design of the project road will consist of km AC overlay, km reconstruction and exception of 1.80 km. ES-17

23 Figure ES1-7 ES-18

24 Figure ES1-8 ES-19

25 Scope of Civil Works (Per Conceptual Design) Asset Preservation: mm thick AC Overlay; Length = km, Width = 6.70 m Improvement of Shoulder, pavement markings, repair of distressed ACP/PCCP and miscellaneous works as needed. Reconstruction: 230 mm PCCP, 200 mm Aggregate Subbase; Length = km, width 6.70m 5.3 Contract Package Lot 3.1: Dipolog-Oroquieta City Road Dipolog-Oroquieta City Road (Ist and 3rd DEO, Zamboanga Del Norte, Region IX) km to km (Length = kms including bridges) 14. The km road project is situated in the Island of Mindanao, Region IX, in Zamboanga del Norte Province under 1 st and 3 rd District Engineering Offices. The road section starts at km 1798 in Rizal municipality, 1 st DEO passing the towns of Pinan and Polanco, Dipolog city, and ends at km in Katipunan town, 2 nd DEO (Figure ES1-9). The project area consists mostly of rolling terrain with lowlands along its western coast. Elevations along the project road vary from 2 to 113 m. The existing pavement is entirely AC surfacing of 6.10 m width in fair to bad condition. The project road will consist of km AC overlay and exception of km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = 6.90 km, Width = 6.10 m 80 mm thick AC Overlay; Length = km, Width = 6.10 m Improvement of Shoulder, pavement markings, repair of distressed ACP and miscellaneous works as needed. ES-20

26 Figure ES1-9 ES-21

27 5.3.2 Lot 3.2: Butuan-Cagayan de Oro City-Iligan Road (Misamis Oriental) Butuan-Cagayan de Oro City-Iligan Road (Ist DEO, Cagayan de Oro) Km Km (Length = kms including bridges) 15. The kms road project is situated in the Island of Mindanao, Region X, particularly in Cagayan de Oro City (Figure ES1-10). The project road is located in a narrow coastal plain along the Macajalar Bay with elevations ranging from 2 to 18 m. The road section is under the Cagayan de Oro City Engineering Office that starts at km and ends at km The existing pavement is a four-lane PCC dual carriageway and some section of the inner lane with AC overlay. It is an undivided 2-lane each direction road except the section from km to km where a raised median island with varying width is installed. The project road will consist of km AC overlay and exception of 1.50 km. Two options are to be considered which are re-blocking or by using geotextile with AC overlay. The latter option has lower construction cost and connotes higher time saving as compared to re-blocking. The rest of the stretch is to be overlaid after resealing of joints. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = 2.33 km, Width = 6.70 m x 2 80 mm thick AC Overlay; Length = km, Width = 6.70 m x mm thick AC overlay; Length = 6.22 km, Width = 6.70 m x 2 Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed Lot 3.3: Butuan-Cagayan del Oro City-Iligan Road (Agusan del Norte) Butuan-Cagayan de Oro City-Iligan Road (Agusan del Norte) (Butuan City, CARAGA Region) Km Km (Length = kms including bridges, with exceptions) 17. The kms project road is situated in the island of Mindanao, Region XIII (CARAGA region) (Figure ES1-11). It starts at km in Butuan city junction with the Pan-Philippine Highway, now known as the Philippine-Japan Friendship Highway passing the towns of Buenavista and Nasipit, then ends at km in Aclan, Carmen. 18. The first road section of about kms with varying travel width from 6.10m to 12.60m, is envisaged as a 4-lane concrete pavement undivided dual carriageway in the city proper of Butuan. There are on-going road construction in this first section under the Butuan City Engineering District and therefore considered the first section as exception in the project. The remaining concrete surfacing in the outskirt of Butuan up to Carmen municipality under Agusan del Norte District Engineering Office is a 2-lane, 6.10m width carriageway and considered for AC overlay. The alignment traverses a westerly direction ES-22

28 Figure ES1-10 ES-23

29 Figure ES1-11 ES-24

30 in a relatively flat terrain. The project road will consist of km AC overlay and exception of km. Scope of Civil Works Asset Preservation: 80 mm thick AC Overlay; Length = km, Width = 6.70 m Improvement of Shoulder, pavement markings, repair of distressed PCCP and miscellaneous works as needed Lot 3.4: Bukidnon-Cotabato Road (2nd DEO, Cotabato Cotabato, Region XII) Km Km (Length = kms including bridges) 19. Road slip was observed at km which affect the shoulders on both sides of the road, but will eventually damage a portion of the pavement if not given attention. A portion of about 200 meters need reconstruction of the said area including the slope protection and the headwall of the drainage structure crossing the road. According to the DEO, proposal regarding the slip portion was already submitted to the DPWH Central Office through the regional office. Later, this was confirmed by the Regional Director of Region XII in his letter dated February 19, 2009 that the stretch between Km to Km is proposed for rehabilitation this CY 2009, thus, this was considered an exception to the project. 20. The km road project is situated in the Island of Mindanao, Region XII, in North Cotabato province under the 1 st District Engineering Office passing the municipalities of Carmen and Kabacan (Figure ES1-12). It starts at km in Carmen town adjoining Sayre Highway and ends at km in the T-junction connecting the Davao-Cotabato Rd (Jct Digos-Cotabato Sect) in Kabacan. It traverses in a south-westerly direction from the start up to km then turns in south-easterly direction up to the end. Terrain is rolling to hilly with elevations varies from 274 to 372m. The existing pavement in the first 4 kms is asphalt concrete and the rest is PCCP surfacing with some sections overlaid with AC. The pavement width is 6.70 m except for the 3 km of 4-lane between km and km , having a m width. The project road will consist of km AC overlay and exception of 9.50 km. Scope of Civil Works Asset Preservation: 50 mm thick AC Overlay; Length = km, Width = 6.70 m 50 mm thick AC Overlay; Length = 2.83 km, Width = m Improvement of Shoulder, pavement markings, repair of distressed ACP/PCCP and miscellaneous works as needed. ES-25

31 Figure ES1-12 ES-26

32 6. BRIEF PROFILE OF THE PROJECT AREAS 1. For reference in the analysis, the provincial socio-economic profiles of the different project areas of each road project under Tranche 1 on provincial level are briefly discussed below. The basic information on population and income class of each municipality within the road influence areas are summarized in Table ES Lot 1.1 : Bauang-Baguio Road (Provinces of La Union and Benguet) 2. La Union is located in the Ilocos Region in Luzon. Its capital is San Fernando City and borders Ilocos Sur to the north, Benguet to the east, and Pangasinan to the south. To the west of La Union is the South China Sea. La Union has a total land area of 1,504.0 sq. km. and is subdivided into 19 municipalities and 1 city, La Union, the province capital and seat of government. Like most of the region, the province is squeezed in by the Cordillera mountain range to the east and the South China Sea to the west. Yet, unlike other portions of Luzon and the Philippines' two other island groupings, the Visayas and Mindanao, La Union experiences a rather arid and prolonged dry season with little precipitation to be expected between the months of November and May. 3. As of census year 2007, the province was recorded to have a total population of 720,972. Ninety-three percent of the population is Ilocano and is overwhelmingly Roman Catholic. There are communities of Pangasinense in the south, Igorots in the Cordillera foothills, and Chinese in the city. La Union is highly literate, with San Fernando City as the administrative, educational, and financial center of the region. 4. The economy is diversified with service, manufacturing, and agricultural industries spread throughout the province. The Port of San Fernando operates as an increasingly active shipping point, and the former American airbase Wallace Air Station, having been converted into a business and industrial area, helps to facilitate such commercial activity. Tourism to the province is driven by airlines and passenger coach bus lines like regionally owned Farinas Transit Company and Partas. Tourists often flock to the beaches of Bauang, or to the more secluded ones further north for snorkeling, surfing or other water sports; the more northerly beaches near San Juan specifically cater to both local surfers as well as portions of the world surfing circuit. 5. Benguet is a landlocked province of the Philippines in the Cordillera Administrative Region in Luzon. Its capital is La Trinidad and borders, clockwise from the south, Pangasinan, La Union, Ilocos Sur, Mountain Province, Ifugao, and Nueva Vizcaya. Baguio City, a popular tourist destination in the country, is located in the interior of the province, however, the city is independent of the province. 6. Cordillerano, or Cordilleran, is an unofficial and relatively recent term for the people of the hill tribes of Luzon, who are residing in the Cordillera and Caraballo mountains. This term is an attempt at political correctness, since a current term, Igorot, has caused controversy due to its perceived negative stigma and by the ignorance of individuals who didn't really explore and study the area, which is incorrectly connected to backwardness and inferiority. ES-27

33 7. Based on the May 2000 census, Benguet has a total population of 330,129, which makes it the most populous province in the region. This figure is up by 16,296 from 313,833 persons recorded in the 1995 census, giving an annual growth rate of 1.09% during the 5-year period much, much lower than the national average of 2.43%. If this growth rate were maintained, Benguet would double its population in approximately 64 years. The province registered at 63,123 households, an increase of 4,588 households over the 1990 figure. This gave an average household size of 5.2 persons, a little higher than the national average of Benguet is the homeland of several tribes, collectively referred to as the Igorot. Two of them, the Ibaloi in the southeast and the Kankana-ey in the northwest, are the dominant tribes of Benguet. In the 2000 census, 43% of the household population was Kankana-ey. About 29.2% were Ibaloi and 13.4% were Ilocano. Other ethnic groups included Ikalahan (3.7%) and Tagalog (2.4%). 8. Agriculture, mining, and tourism are the major industries in Benguet. Because of its temperate climate and high altitude, Benguet is an ideal place for producing vegetables. Benguet is often called the Salad Bowl of the Philippines. In February 2007, Benguet suffered crop damage due to freezing temperatures in the area, reaching as low as 5 Celsius and even lower in some areas, and important crops like cabbages were damaged. Major crops include potatoes, Baguio beans, peas, strawberries, cabbage, lettuce, and carrots. Other agricultural-related activities are monggo processing, fruit preservation, peanut brittle manufacturing, broom making, basket weaving, and flower growing. Apisang (scientific name: Pittosporum resiniferum), a plant endemic to the Philippines, is also being grown in Kapangan and Kibungan towns as a potential alternative source of fuel and energy, rivaling the overhyped jatropha biofuel plant. 9. Mining is another major industry of Benguet, which is one of the country's leading gold producers. Other mineral deposits are silver, copper, pyrite, and limestone. Silversmithing is a large industry in Benguet, and many entrepreneurs sell silver works at lower prices in Baguio City, compared to Manila. In 2006 alone revenues from mining reached a stunning four billion pesos, and yet this figure comes from just two - Lepanto Consolidated Mining Corporation and Philex Mines - of the many mining firms operating in the province. Nevertheless, the province's mining vigor has never translated into better quality of life of the Benguet people, simply because a bulk of the mining firm's taxes are not paid directly to the province. The two mining corporations, like many others around the country, have principal offices in the City of Makati, a set-up that makes Makati the prime mining tax beneficiary. The presence of Baguio City in Benguet draws a large number of tourists from the lowlands. Often, people who go to Baguio also explore the province, especially the strawberry and vegetable plantations in La Trinidad. 6.2 Lot 1.2 : Olongapo-Bugallon Road (Zambales Province) 10. The project area covers the Provinces of Zambales. 11. Zambales is located in the Central Luzon region. Its capital is Iba. Zambales borders Pangasinan to the north, Tarlac and Pampanga to the east, and Bataan to the south. The province lies between the South China Sea and the Zambales Mountains. With a land area of 3,700 km, Zambales is the second ES-28

34 largest among the seven provinces of Central Luzon. It has a population density of 170 people per square kilometer, one of the lowest in the country. The province is noted for its mangoes, which are abundant from January to April. 12. The Aetas of Mount Pinatubo were the earliest inhabitants of what is now the province of Zambales. They were later displaced by the Sambal, an Austronesian people after whom the province is named. Many Sambal still believe in superstitions and mysteries that have been handed down through the generations. The Sambal, the Tagalogs, the Ilocanos, and the Kapampangans today constitute the four largest ethnic groups in Zambales; these identities may and do, however, overlap with one another due to intermarriage and other factors. Most of the people of southern Zambales are migrants from different parts of the country owing to the influx of job opportunities brought on by the U.S Subic Naval Base (San Antonio and Subic) during the American regime of the country. Many people found jobs and permanently settled there. The presence of the Americans greatly influenced the inhabitants, from their tastes in food, clothing, and style. 13. Zambales is a rich source of nickel and chromite. Zambales hosts 173 kilometers of beaches, with coral reefs, dive spots, surfing areas, hotels and day-use beach huts. The province is approximately a 3 to 4 hour drive from Manila, though this can vary greatly with traffic. The "Fiesta Poon Bato," (literal translation is Feast of the Sacred Stone) held in January, is a religious festival that attracts over half a million people each year. The festival venerates Ina Poon Bato (literal translation is Mother of the Sacred Stone) also known as Nuestra Senora de la Paz y Buen Viaje (Our Lady of Peace and Good Voyage), the oldest known image of the Virgin Mother in Asia. The Barrio of Poon Bato located in the Botolan, that is host to the image and the fiesta, was completely destroyed during the 1991 Mt. Pinatubo eruption. The icon was saved and moved, along with the barrio inhabitants, to nearby Loob Bunga Resettlement Area. The "Mango Festival" is held in the provincial capital of Iba every April, and the "Domorokdok" (Sambal word for Dance) Festival is held each May in Botolan. These include street dancing, agricultural shows, competitions like sand castle building and "bikini open" beauty pageants. 6.3 Lot 2.1a : Palo-Carigara-Ormoc Road (Leyte Province) 14. The project area of the project road covers the whole Province of Leyte. Leyte is located in the Eastern Visayas region with a total land area of 5,901.5 sq. km. Its capital is Tacloban City and occupies the northern three-quarters of the island of Leyte. Leyte is located west of Samar, north of Southern Leyte and south of Biliran. To the west of Leyte across the Camotes Sea is the province of Cebu. 15. The total population of the province as of census year 2007 is 1,544,251. The people of Leyte are divided into two main groups, primarily by language. In the west and south are the Cebuanos, while in the north and east are the Waray-Waray. The Cebuanos have ties with Cebu, the most populous province in the Visayas; the Warays are more tied to Leyte and Samar. ES-29

35 16. Leyte is subdivided into 40 municipalities and three cities, two of which are administratively independent of the province. The municipalities are clustered into 6 congressional districts. Ormoc City is an independent component city, while the capital Tacloban was declared a highly-urbanized city in Both cities govern themselves independently of the province and their residents do not vote for elective provincial officials. Baybay attained cityhood in 2007 but reverted to its municipal status when the Supreme Court declared its city charter unconstitutional in 2008; however, Baybay would regain its city status following the reversal of the Supreme Court decision dated December 22, The economy of Leyte depends on agriculture. Rice is farmed in the lower flatter areas specifically those around Tacloban, while coconut farming, for coconut oil is the main cash crop of the more mountainous areas. Fishing is also a major source of livelihood among residents. The province is the site of the largest geothermal plant in Asia, making it one of the resource-rich provinces of the Philippines. 6.4 Lot 2.1b : Daang Maharlika Road (Liloan-Naval Highway) (Leyte Province) 18. The project road serves as a connecting link to Palo-Carigara-Ormoc road located at the south-eastern part of the Province of Leyte. Thus, the project area of the road project also covers the Province of Leyte. 19. The socio-economic profile of the Province of Leyte is as discussed above for Palo-Carigara-Ormoc road project. 6.5 Lot 2.2 : Iloilo-Capiz Road (Old Route) (Provinces of Iloilo and Capiz) 20. Iloilo province is located in the Western Visayas region. Iloilo occupies the southeast portion of Panay Island and is bordered by Antique to the west and Capiz and the Jintotolo Channel to the north. Just off Iloilo's southeast coast is the island of Guimaras, once part of Iloilo but now a province in its own right. Across the Panay Gulf and Guimaras Strait is Negros Occidental. Iloilo's capital is Iloilo City. The Province of Iloilo is the largest marshland in Western Visayas after the Sanderbans. The province is divided into two distinct geographic regions; the highlands of the Madia-as on the western border and the lowland plains which account for a larger portion of the province. Small islands east of its northernmost tip also dot the Visayan Sea - of these, Pan de Azucar and Sicogon are well-known. Iloilo is subdivided into 42 municipalities, 1 component city, and 1 highly urbanized city of Iloilo. 21. As of census year 2007, the province has a total population of 1,691,878. People from Iloilo are called Ilonggos. There are two local languages spoken in the province: Hiligaynon sometimes called Ilonggo, and Kinaray-a. Hiligaynon and variants of it are spoken in Iloilo city and a few towns of the province. Spanish is strictly a local language, at least in a historical way, but the number of natural Spanish speakers have declined strongly after WWII, and due to this, there are today many Ilonggos who do not consider it a local language. 22. Spanish architecture can be seen in old buildings in downtown Iloilo. Chinese Merchants and Indonesians were trading with the Ilonggos long before the Spaniards came. The ruling Spanish government encouraged these foreign merchants to trade in Iloilo but they were not given privileges like ownership of ES-30

36 land. The Mestizo a class eventually was born from the intermarriages of the locals and Chinese merchants, Spanish with the local Melayu people. They later emerged as the ruling class of the Ilonggos. 23. Capiz province is located in the Western Visayas region. Its capital is Roxas City and is located at the northeastern portion of Panay Island, bordering Aklan and Antique to the west, and Iloilo to the south. Capiz faces the Sibuyan Sea to the north. It is known for its mother-of-pearl shells that have the same name and are used for decoration, making lampshades, trays, window doors, etc. Capiz is known for a popular local myth of Aswang, a generic name for ghouls, monsters and witches. 24. Dubbed as the Seafood Capital of the Philippines, Capiz boasts of its 80- kilometer coastline and wide expanse of swampy lands easily converted into fishponds. It holds one of the richest fishing grounds and a major contributor in the aquamarine industry of the Philippines. Four big telecommunication companies offer telegraph, telex and telephone services. There are 33 banking institutions and 116 intermediaries operating in the province. 25. Farming and fishing are the primary sources of income of the people. The combined natural bounty of land and sea sustain a vibrant food industry. Primary agricultural raw products are rice, corn, coconut, sugarcane, banana and cut flower. Apart from a surplus of agricultural products, Capiz is also a major supplier of prawn and milk fish of the country. Other agro-industrial harvests include blue marlin, squid, oysters, shrimp, seaweed, squid and angel wings. Rich fish ponds attract investors to venture into prawn culture, prawn feed manufacture, seaweed farming and the distribution and processing of other marine products. A robust workforce of 445,246 operates with a literacy rate of 90.5%. The agricultural sector ensures the province as one of the wealthiest in the Western Visayas Region although progress is impeded by corruption. 26. Its relatively unexplored caves are said to have high deposits of mineral resources such as limestone, gold and metal. 6.6 Lot 2.3 : Dumaguete North Road, 1 st Disrict (Manjuyod-La Libertad) (Province of Negros Oriental) 6.7 Lot 2.4 : Dumaguete North Road, 1 st District (La Libertad-Vallehermoso) (Province of Negros Oriental) 27. Negros Oriental (also called "Eastern Negros") is a located in the Central Visayas region. It occupies the south-eastern half of the island of Negros, with Negros Occidental comprising the north-western half. It also includes Apo Island a popular dive site for both local and foreign tourists. Negros Oriental faces Cebu to the east across the Tañon Strait and Siquijor to the south east. The primary spoken language is Cebuano, and the predominant religious denomination is Roman Catholicism. Dumaguete City is the capital, seat of government, and most populous city. A chain of rugged mountains separates Negros Oriental from Negros Occidental. Unlike its sister province, which belongs to the Western Visayas region, Negros Oriental belongs to the Central Visayas region. Negros Oriental faces Cebu to the east across the Tañon Strait and Siquijor to the south-east. The Sulu Sea borders it to the south. ES-31

37 28. Negros Oriental's total population as of the 2000 census was 1,126,061, making it the 20th most populous province in the country. 34.5% of the population is concentrated in the six most populous component LGUs of Dumaguete City, Bayawan City, Tanjay City, Bais City, Canlaon City, and Guihulngan. The province's average population density is 208 persons per km², lower than the national average of 276 persons per km². Population growth per year is about 2.11%, higher than the national average of 1.92%. 29. With its vast fertile land resources, Negros Oriental's major industry is agriculture. The primary crops are sugarcane, corn, coconut and rice. In the coastal area, fishing is the main source of income. People are also involved in cattle ranches, fish ponds and logging. There are also mineral deposits like gold, silver and copper. Negros Oriental is emerging as a technological center in Central Philippines with its growing business process outsourcing (BPO) and other technology-related industries. Negros Oriental is also becoming a notable tourist destination in the Visayas. 6.8 Lot 3.1 : Dipolog-Oroquieta City Road (Provinces of Zamboanga del Norte and Misamis Occidental) 30. Zamboanga del Norte is located in the Zamboanga Peninsula region in Mindanao. Its capital is Dipolog City and the province borders Zamboanga del Sur and Zamboanga Sibugay to the south and Misamis Occidental to the east. The Sulu Sea lies to the northwest of Zamboanga del Norte. Zamboanga del Norte is the Largest province of Zamboanga Peninsula in terms of land area. 31. Zamboanga del Norte has a population of 823,130 according to the 2000 census. Its population density is 124/km². It is ranked 27th among the provinces both in terms of population and population density. The main language spoken is Cebuano. Zamboangueño/Chavacano, English and Tagalog are also spoken, indicative of a high level of literacy. The original and native Subanon language lives on, especially in the highlands. Zamboanga del Norte is subdivided into 25 municipalities and 2 cities. These are further subdivided into 691 barangays, and clustered into 3 congressional districts. 32. About half of the province's land area is devoted to agriculture. Corn, coconut, and rice are the major crops. The province being rich in marine and mineral sources, its fish production has accelerated through the development of fishponds. Commercial fishing has likewise steadily increased through the years, with the yellow fin tuna as the primary species. In 2006, a study by National Statistics Coordination Board (NSCB), found Zamboanga del Norte Province to be the Philippines's poorest with a poverty incidence rate of 64.6% in 2003, an increase from 47% in year 2000 statistical figures. 33. Misamis Occidental is located in the Northern Mindanao region. Its capital is Oroquieta City. The province borders Zamboanga del Norte and Zamboanga del Sur to the west and is separated from Lanao del Norte by Iligan Bay. ES-32

38 34. The dense population along the coast consists mainly of migrants from Cebu and Bohol, thus the major dialects are Cebuano and Boholano. The native Subanons live in the interior uplands. As of 2007, the total population of Misamis Occidental province is 531,680 with an average population density of per sq. Km. 35. The province economy depends firstly on fishing, secondly on coconuts, thirdly on rice. The province has 169 kilometers of coastline fronting the rich fishing grounds of Panguil and Iligan bays. It also has the biggest area of brackish-water fishponds in the region. Tangub City is a fishing port on Panguil Bay famous for seafoods. Coconut is the chief crop. This is processed into oil, desiccated coconut, and coir, most of which are shipped to Cebu. Coconut processing is the main industry in Oroquieta City. Other crops grown are rice, corn, abaca, coffee, cacao and rubber. 6.9 Lot 3.2 : Butuan-Cagayan de Oro-Iligan Road (Province of Misamis Oriental) 6.10 Lot 3.3 : Butuan-Cagayan de Oro Iligan Road (Province of Agusan del Norte) 36. The Province of Misamis Oriental is one of the five (5) provinces of Northern Mindanao situated along the northern coast of the resource-rich Mindanao Island. It is bounded on the north by Macajalar Bay, on the west by Iligan Bay; on the east by Agusan del Norte; and on the south and southwest by the provinces of Bukidnon and Lanao del Norte respectively. 37. The province has two (2) cities: its capital, the charter city of Cagayan de Oro and its component city of Gingoog. It has 24 municipalities: 14 on the eastern side and 10 on the western side. The farthest municipality on the western side is Lugait and on the eastern side is Magsaysay. Misamis Oriental has a total of 422 barangays. 38. The province has a total land area of 3, square kilometers. Claveria, the only land-locked municipality, has the largest area at square kilometers while the smallest municipality is Binuangan with an area of square kilometers. 39. The province is generally classified into forestland (47% of land area) and 53% are alienable and disposable lands. But as of 1996, DENR-10 reported that forestland now occupies only an area of 6,243 hectares. 40. For censal Year 2000, the province registered the largest population at million people among the five (5) provinces of Northern Mindanao, with more or less 41% recorded as Cagayan de Oro s population. The residents of the province are a mixture of Maranaw, Spanish, American and Chinese blood. 41. In 2000, Misamis Oriental has an average annual family income and expenditure of PhP89, and PhP70, respectively. Being the region s educational center, one of the major assets of the province is its human resource. Highly educated and trainable labor force composed of young professionals, technical people and skilled workforce are readily available in the area. ES-33

39 42. Misamis Oriental is self-sufficient in some agricultural crops. Almost half (43%) of the province's total land area is planted to various crops like industrial and non-food, cereal, fruit and vegetable and rootcrops. The top five (5) agricultural products are coconut, banana, corn, rice, papaya and cassava. The province is also one of the country's major producers of coconut. This explains the presence of coco-based processing plants in the province such as Pilipinas Kao, Inc., Fiesta Brands, IndoPhil Oil Mills, Limketkai and Sons Milling Corporation, Pacific Activated Carbon Company. The hog population remains the highest among the livestock, comprising 72.25%, in 2002 while poultry production is showing an increasing trend brought about by the entry of leading multi-national food processors promoting contract-growing schemes. 43. Agusan del Norte is located in the Caraga region in Mindanao. Its capital is Cabadbaran and it borders Surigao del Norte to the north, Surigao del Sur to the east, Agusan del Sur to the south, and Misamis Oriental to the west. It faces Butuan Bay, part of the Bohol Sea, to the northwest. 44. The population of Agusan del Norte (excluding Butuan City) was 314,027 at the 2007 census, making it the country's 64th most populous province. The population density is 115 per km². Agusan del Norte is divided into 10 municipalities and one component city. The highly-urbanized city of Butuan, being geographically located in Agusan del Norte, is traditionally grouped with the province, although it is governed independently from it. 45. The economy of Agusan del Norte is dominantly agricultural, and it is the nation's leading producer of rice. The province of Agusan del Norte is said to have many beautiful beaches such as in the town of Carmen, Buenavista, Nasipit, Cabadbaran City and all other towns in the province. It also has the majestic Mount Hilong-Hilong in Cabadbaran, one of the tallest in Agusan del Norte Lot 3.4 : Bukidnon-Cotabato Road (Provinces of Bukidnon and North Cotabato) 46. Bukidnon is a landlocked province located in the Northern Mindanao region. Its capital is Malaybalay City. The province borders, clockwise starting from the north, Misamis Oriental, Agusan del Sur, Davao del Norte, Cotabato, Lanao del Sur, and Lanao del Norte. There are no seaports in the province, although there is an airport in Malaybalay City. The airport is currently closed. To get to Bukidnon, one must travel by land from Cagayan de Oro City in Misamis Oriental Province. 47. Bukidnon is a landlocked plateau in North Central Mindanao. It is bounded on the north by Misamis Oriental and Cagayan de Oro City; on the south by North Cotabato, Davao del Sur and Davao City; on the east by Agusan del Sur and Davao del Norte; and west by Lanao del Sur. It lies between parallels 7 25' and 8 38' North latitude and meridians ' and ' East longitude. Malaybalay City, the capital town, is about 850 kilometers by air from Manila and 91 kilometers by road from Cagayan de Oro City. It has two important landmarks, Mt. Kitanglad and Pulangi River. Mt. Kitanglad is 2,955 meters above sea level. Pulangi River, on the other hand, traverses through the northeastern and southern part of the province towards the Rio Grande of Mindanao. ES-34

40 48. The province's total land area is 829,378 hectares (8, square kilometers). It accounts for 59% of Northern Mindanao. Thirty-eight percent (38%) is alienable and disposable. The rest is classified timberland. It also accounts for 80 percent (80%) or 34 million metric tons of the region s nonmetallic mineral deposits which include high grade white and red clay, gold, chromite, copper, serpentine, manganese, quartz and limestone deposits can also be found in the province. 49. Based on the National Statistics Office (NSO) Census last 2000, Bukidnon has a total population of 1,060,415. Males slightly edge the females with 546,234, accounting for about 52% of the province s total population while females, with 514,181, account about 48%. It is expected that by 2010, the province of Bukidnon will have a total population of 1,344, Bukidnon is an agricultural economy, it is a major producer of rice, maize, sugar, coffee, rubber, pineapple, tomato, flowers, cassava, and other fruits and vegetables. Bukidnon is considered by Filipinos to be the food basket of Mindanao. It is the major producer of rice and corn in the region. Plantations in the province also produce pineapples, bananas and sugarcane. As one of the major anchors in crop production, Bukidnon is moving forward towards establishing its position as a principal trader of rice, corn, sugar, potato, tomato and many other commercial and industrial crops. As the second largest producer of corn in the country, it reached a total production of 481,370 Mt. In year 2000, vast tracks of cornfields, rice paddles and sugar plantations are distributed all over the province. It is also a major producer of chickens, hogs and cattle. Almost all large firms operating in the province are into production or processing of these agricultural products. 51. Del Monte Philippines, Inc. (DMPI), Lapanday Diversified Products Corp. and Mt. Kitanglad Agri-Development Corporation are engaged in pineapple production. Dole Philippines (Skyland) and Mt. Kitanglad Agri-Ventures, Inc. are into banana production. DMPI is also engaged in cattle fattening. Bukidnon Sugar Milling Corporation (BUSCO) and Crystal Sugar Milling are into sugar milling and refining. Phil-Agro Industrial Corporation is in starch production. Menzi Agricultural Development is in cacao production. Agaropyta Phils. Inc., Bukidnon Greens Inc., FP Obrero Farms and ARDEM, Inc. are in cutflower production. Food manufacturing giants, San Miguel Foods Corp. (SMFI-PFC), Monterey Farms Corp., Swift Foods, Inc. have intensified their contract breeding and growing operations in the province. Valencia Rubbertex, Inc., an Japanese-Filipino joint venture produces rubber boots and rubber shoes for Japan. 52. Bukidnon has already assumed its role as producer and supplier of fresh fruits and vegetables. These produce are either sold in domestic markets or exported to Japan and other neighboring countries. Fresh pineapples, banana, sugarcane and cutflower grown over the years are among its exports. New agribusiness industries are still growing. Even export of rubber boots and shoes, an infant industry in the province is increasing tremendously. A wide variety of resource-based handicrafts is extensively produced from rattan, bamboo and wood. San Fernando is known for its rattan furniture. Bamboo baskets, wood wares and carvings, mats and other handmade products are ideal souvenir items. ES-35

41 53. North Cotabato, is a landlocked province located in the SOCCSKSARGEN region in Mindanao. Its capital is Kidapawan City and borders Lanao del Sur and Bukidnon to the north, Davao del Norte and Davao City to the east, Davao del Sur and Sultan Kudarat to the southeast, and Maguindanao to the south and west. It lies on the eastern part of Region XII and is strategically located in the central part of Mindanao. It is bounded on the north by the provinces of Lanao del Sur and Bukidnon, on the east by Davao City and Davao del Norte, on the west by Maguindanao and on the southeast by Sultan Kudarat and Davao del Sur. North Cotabato is strategically linked to the major "Arterial Road System" that traverses and connects the province to Davao City - SOCCSKSARGEN - Cotabato Corridor. The Cotabato via Kabacan - Maramag - Kibawe, Bukidnon Sayre Highway meanwhile serves as its link to the Cagayan de Oro-Iligan City Corridor. 54. North Cotabato, with an area of 656,590 hectares representing 45.06% of the whole regional area, stretches west from Mt. Apo, which separates it from Davao, to the Piapayungan Range on its boundary with Lanao. In the midst of these uplands is the basin of the Pulangi or Rio Grande de Mindanao, the second longest in the Philippines at 300 km, which rises in Bukidnon and flows south to Maguindanao and Illana Bay. The province s fertile plains are traversed by tributaries of this great river. Typhoons do not pass through North Cotabato and rainfall is evenly distributed throughout the year. 55. The first Visayan settlers reached the town of Pikit in 1913, and since then, Christian migrants have moved and lived in Cotabato, cohabitating the province with the local indigenous groups. 71% of Cotabato s population are migrants from Luzon and the Visayas, while the remaining 18% belong to the indigenous communities Manobo, T'boli, and Maguindanao. The major languages spoken are Hiligaynon or Ilonggo (43%), Cebuano (31%), Maguindanao (16%), and Ilocano (10%), but a local spanish based creole, chavacano, is spoken. 56. Over the last nine years, North Cotabato has graduated from being a basket case to one of the Philippines most vibrant economies. In 1998, Cotabato was listed as the 5th poorest province in the country. Early in 2006, the National Statistics Coordination Board ranked it 39th among the countries more progressive provinces based on the results of its most recent survey on poverty incidence. 57. The province, since 2004, has become Region XII s favorite investment area. The province registered a total of P million worth of investments in 2004, ranking second (2nd) only to General Santos City. This meant a 113% leap in investments, the biggest in the region as of February 2005 according to DTI-12. The Cotabato Province Investment Promotion Center (CPIPC) has recorded total investments made in the province from 2000 to 2004 at P901 million. Leading investments is the continuously expanding banana industry with DOLE-Stanfilco standing as the biggest player, having a total investment of P200 Million. Lapanday Global Fruits in Dallag, Arakan has a P50 million investment, while new player AJMR promises to put in P3 billion. 58. This influx of investments has consequently opened more job opportunities for our workers in the province. Dole-Stanfilco opened 6,346 jobs for residents of Makilala, Magpet, and Kidapawan City, while Lapanday has provided employment to 167 local residents. Some 3,000 jobs will meanwhile be ES-36

42 generated by AJMR s operation. New jobs generated by these investments from 200 to 2004 reached 68,595 new, and making Cotabato the leading province in job generation in the region, according to DOLE These developments have also ushered in added benefits- improvement of road networks, conversion of grasslands into productive areas, increase of micro-business establishments in the investment areas thus improving the quality of life of residents, and increased real property tax collection. It has also affected the age-long insurgency problem in areas like Makilala and Arakan, where the availability of a more stable source of income and better living conditions have somehow weakened the influence of Communist guerillas. Much of this phenomenon could be credited to the rediscovery of the New Cotabato by both local and foreign investors. While the province has had its share of bad publicity due to wars in the past, Cotabato is making a mark as a province that can offer a positive investment climate and sound business opportunities. 7. PAVEMENT DESIGN OF PHASE 1 OF THE PROJECT 7.1 Introduction 1. In accordance with the Terms of Reference (TOR) of the Technical Assistance (TA), the Consultants study team selected and designed eight (8) national road sections for specific periodic maintenance works and three (3) national roads for design-and-build scheme based on maximum economic return and minimum negative environmental and social impacts. The road sections were selected from the long list provided by the DPWH. Periodic maintenance, as defined in the concept paper prepared by DPWH, involves asphalt overlay and re-blocking of cracked concrete pavement. 7.2 Design Approach for the Selected Road Sections Base Data for Design 2. On the basis of the updated traffic data provided by Planning Service of DPWH, the pavement investigation conducted by independent Geotechnical companies hired by the Consultant and other relevant surveys, the Consultants have designed the most cost-effective type of periodic maintenance works following the HDM-4 guidelines in Table ES-4. ES-37

43 Table ES-4: Classification and Description of Road Works in HDM-4 Works Category Work Class Works Type Works Activity Asset Preservation Network Development Routine Maintenance Routine (Pavement) or Surface Drainage Routine Miscellaneous Preventive Treatment Resurfacing Periodic Maintenance Rehabilitation Special Improvement Construction Reconstruction Emergency Widening Realignment Off-carriageway Upgrading New Section Patching, edge-repair, crack sealing, spotregraveling, shoulders repair, etc. Culvert repairs, clearing side drains, etc. Vegetation control, line-markings, signs, etc. Load transfer, dowel retrofit, joint sealing, etc. Surface dressing, slurry seal, regraveling, slab replacement, diamond grinding, etc. Asphalt concrete overlay, mill and replace, bonded concrete overlay, un-bonded concrete overlay Partial reconstruction, full pavement reconstruction Clearing debris, repairing washout/ subsidence, traffic accident removal, etc. Partial widening, lane addition Horizontal and vertical geometric improvements, junction improvements Shoulders addition, shoulders upgrading, lane addition, side drain improvement, etc. Upgrading by changing the surface type Dualization of an existing section, new section (link) 3. It was concluded that the most cost-effective approach for asset preservation was to optimize the use of existing pavement structures by adding layer (AC overlay) to increase its structural strength and to remedy functional deficiency. This approach requires the evaluation of the existing pavement and determining (a) the section for reconstruction and (b) the overlay section. 4. As part of the Philippine Government s assistance to the TA, the Planning Services extended their full assistance in gathering related documents and the respective District Engineering offices furnished the Consultants substantial data of the existing roads which was reflected in the contract drawing. 5. The Consultants hired the services of Renardet S.A Consulting Engineers for the roughness survey at 100 meters interval on both direction of the travelway which was completed on March 12, The roughness index has been used in the economic evaluation of each road. Pavement investigation at 500 meters interval involving measurement of pavement layer thicknesses, determination of subgrade CBR and taking core samples of ACP/PCCP for strength test was carried out by three (3) independent geotechnical companies to complement available information already provided by the DPWH. The investigation was completed on March 7, 2009 and the results were used in the pavement analysis. The traffic data obtained from DPWH s Planning Services have been used to estimate the amount of traffic and the cumulative number of equivalent standard axles that will pass through the road over the 10 years design life. 6. All the data collected was tabulated and analyzed for each project road to depict the variation in conditions along the project roads. Homogenous sections within which the various parameters are relatively uniform have been identified and defined the specific pavement treatment. ES-38

44 7. A separate report for roughness survey, pavement investigation and pavement design will be submitted to the Bureau of Design (BOD), DPWH and the ADB Design Considerations 8. Two major types of pavement common in the Philippines are: (1) Rigid Pavement, usually consisting of a prepared roadbed/subgrade underlying a layer of subbase and a concrete pavement slab, and (2) Flexible Pavement, generally consisting of a prepared roadbed/subgrade underlying layers of subbase, base and a bituminous surface course (see Figure ES7-1 below). Figure ES7-1: Two Types of Pavement in the Philippines 9. The essential difference between the two types of pavement is the manner in which they distribute the load over the subgrade. Rigid Pavement, because of concrete rigidity and stiffness, tends to distribute the load over a relatively wide area of subgrade. Flexible pavement, inherently built with weaker and less stiff material, does not spread load as well as concrete. It usually requires more layers and greater thickness for optimally transmitting load to the subgrade. 10. The major factor in the design of rigid pavement is the structural strength of concrete. For this reason, minor variations in subgrade strength have little influence upon the structural capacity of the pavement. Rigid pavement carries loads primarily by flexure of pavement slab and reaction of the subgrade. In flexible pavement, the major factor in the design is the combined strength of the different layers. It carries loads by spreading stresses through successive layers of decreasingly selected materials until the stresses have alternated to levels which can be tolerated by the in-situ soil Design Methodology 11. The detailed design methodology and pavement design for the eight (8) road sections which forms part of the pavement design report mentioned in paragraph 112 will be submitted separately. ES-39

45 7.2.4 Design Plans and Typical Road Sections 12. The asset preservation plans is presented in a straight line diagram showing the existing road conditions and the proposed periodic maintenance as shown in Figure ES7-2 while the typical road section for reconstruction and rehabilitation of the existing pavement is shown in Figure ES7-3. The plans was presented and discussed with the Bureau of Design and the Technical Working Group of the DPWH on Dec.16, 2008, and found acceptable. The arrangement of the title block shown in the plans is in accordance with D.O. No. 50, series of The complete set of contract plans which forms part of the Bidding Documents will be submitted to ADB and DPWH as separate document. Together with other reports such as a) unit price analysis b) roughness survey c) pavement investigation d) pavement design e) other supporting related documents. 7.3 Maintenance Options Considered 14. The following maintenance options are shown by comparisons, in order to choose from which option is the most cost-effective. The comparisons are intended to apply to one and the same road section. (a) Concrete Pavements: Concrete re-blocking and AC overlay. The work will consist of breaking and removing the damaged blocks, then placing a new PCC pavement before AC overlay. The scope of this work may consist of the following: (1) Breaking the affected concrete blocks into pieces. (2) Removing the broken pieces and disposing the debris. (3) Replacing the existing sub-base if they failed to meet required tests. (4) Subgrade preparation if sub-base passed the required tests. (5) Paving with new concrete for the removed portion with provision of steel bar ties between the new and the old pavements. ES-40

46 Figure ES7-2 ES-41

47 Figure ES7-3 ES-42

48 (6) Application of Tack Coat. (7) Paving of AC for the whole section scheduled for AC overlay. 15. Using paving fabric and AC overlay - for a stretch of existing concrete pavement with longitudinal and transverse cracks but no base failures, provision of paving fabric instead of re-blocking, has a lower construction cost, less traffic congestion and has higher time savings. Fracturing PCC pavement before doing AC overlay. The following are the recommended techniques in fracturing PCC pavement: Break and Seat. Consists of breaking a Jointed Reinforced Concrete Pavement (JRCP) into pieces larger than about one foot (0.30m), rupturing the reinforcement or breaking its bond with the concrete and seating the piece firmly into the foundation. Seating typically consists of several passes of a 35 to 50 tones rubber-tired roller over a broken slab. Crack and Seat. Consists of cracking a Jointed Plain Concrete Pavement (JPCP) into pieces typically one to three feet (0.30 m to 0.91m) in size and seating the pieces firmly into the foundation. Seating typically consists of several passes of a 35 to 50 tones rubber-tired roller over a crack slab. Rubblized and Compact. Consists of completely fracturing any type of PCC slab (JRCP, JPCP, or CRCP) into pieces smaller than one foot (0.30m) and then compacting the layer, typically with two or more passes to be undertaken before placing the AC overlay. The scope may consist of the following: (1) Removing and replacing areas that would result in uneven support after fracturing. (2) Making subdrainage improvements, if any. (3) Breaking and seating, crack and seating or rubblizing the PCC slab and rolling to seat or compact. (4) Constructing widening, if needed. (5) Applying a tack coat or prime coat. (6) Placing the AC overlay (including a reflection crack control treatment, if needed 16. The objective of fracturing PCC slab by break and seat, crack and seat and rubblizing techniques are used to reduce the size of PCC pieces to minimize the differential movements at existing cracks and joints, thereby minimizing the occurrence and severity of reflection cracks. b) AC Pavements: Reconstruction of existing pavement consists of breaking and removing of existing pavement by using mechanical equipments and disposing the debris or removing the desired depth of layer by use of roto milling machine. Using Paving Fabric with leveling course and AC overlay. ES-43

49 17. The maintenance options for Asset Preservation are determined and presented in the Main Volume of this report. To arrive at the costs it is determined by using the corresponding unit cost of the option and multiplied by the area of the road in consideration. 18. This manner of estimating, however, is only for approximation to obtain the total cost of the project and probably for evaluation purposes. For detailed cost estimates as basis of bidding, it is the standard way to calculate the quantities of the pay items and the corresponding unit prices to arrive at the construction cost of the package. The unit prices estimated as mentioned in the following Section 8.1 are used for the cost estimation of the corresponding road packages. 7.4 Recommended Maintenance Schemes 19. The different maintenance schemes by type of existing pavement, considered for the 8 road sections under Tranche 1, and the sample unit costs for each maintenance schemes are herewith summarized in Table ES-5 below: Table ES-5: SUMMARY OF SCHEMES Scheme A2 A3 Description PCCP Reconstruction with AC Overlay, 50mm thick AC Overlay 50 mm thick with Paving Fabric Cost/sq.m. Remark (PhP) 2, Existing PCCP for Bauang-Baguio Road Existing PCCP, Bauang-Baguio Road A3-1 Crack and Seat and AC overlay, 50 mm thick Existing PCCP, Bauang-Baguio A5 AC Overlay on existing PCCP, 50mm thick Existing PCCP, Bauang-Baguio B1 Reconstruction of existing AC Pavement, 50 mm thick 1, Existing ACP, Iloilo-Capiz Road B4 AC Overlay, 50mm thick On existing ACP Existing ACP, Iloilo-Capiz Road 20. From the above schemes considered, the following options depending on the existing condition of pavement, are recommended: Scheme A2 - PCCP Reconstruction with AC Overlay when the pavement upon investigation shows severe deterioration, severe cracking and settlement. Reconstruction for asset preservation is limited only to 20% in cost of the total project cost. Scheme A3 - AC Overlay with Paving Fabric AC Overlay. To be used when longitudinal and transverse cracks are appearing but no base failure. AC Overlay with Paving Fabric As mentioned in the pavement design is one of ES-44

50 the measures in controlling reflective cracking. It mitigates surface reflective cracking problems at the same time the fiber acts as waterproofing membrane in sealing crack areas against possible water intrusion which will weaken the road foundation. Installation is faster and that overlay can be done even in lean hours in the night to avoid traffic problems. Scheme A3-1 - Crack and Seat and AC overlay Cracking and seating is another way of preventing reflective cracking in the hot mix asphalt concrete overlay over the concrete pavement. The existing characteristic of the pavement determines the required impact energy for a particular cracking pattern. The said characteristics may include the strength of the slab, the joint spacing, extent of the damage or disintegration, and joint condition. Scheme A5 - AC Overlay on existing PCCP - when the existing condition is fair, that is when alligator cracking is low to medium, no rutting which indicates that the existing pavement is still stable. Scheme B1 - Reconstruction of existing AC Pavement - It is dictated by the following conditions: High severity of alligator cracking, stripping of the surface, excessive rutting and base deterioration. Scheme B4 AC Overlay on existing ACP when the pavement condition is still fair, low to medium alligator cracking and the base shows no deformation or rutting. 8. COST ESTIMATION BY ROAD SECTION 8.1 Updated Unit Rates 21. The unit rates (refer to Table ES-6) are based on the material cost for the first quarter of The methods adopted and the bases how these unit costs were arrived at are discussed below: Bituminous Concrete Surface course a. The unit cost of the processed material, that is the material processed by the contractor at quarries and delivered to project site is first determined considering the components such as asphalt cement Pen , crushed aggregate, fine aggregate, filler, etc, considering the equipment and their rental rates so with manpower and their corresponding hourly rates as presecribed by law. b. The direct unit price of the item is then determined by using the processed unit cost of the material for a certain quantity per tonne. The equipment and manpower to be used is determined to produce an output per square meter to arrive at the direct unit cost. c. The total unit price of the pay item is determined by adding to the direct unit price, the indirect cost that comprise the contractor s profit, overhead, contingency and miscellaneous plus the 12% vat and dividing the sum by the total quantity of the item. ES-45

51 TABLE ES 6: UPDATED UNIT RATES FOR THE EIGHT PROJECTS OF ASSET PRESERVATION (Total Unit Cost) PAY ITEM DESCRIPTION UNIT CP 1 Baguio Road CP 2 Bugallon Road CP 3A Bukidnon- Olongapo- Palo-Carigara- Ormoc Road CP 3B Daang Maharlika Road CP 4 Iloilo-Capiz (Old Route) CP 5 Butuan-Cagayan de Oro City Road CP 6 Bauang- Cotabato Road CP 7 Dipolog-Oroquieta City Road 101(3)a REMOVAL OF EXISTNG AC PAVEMENT sq.m (3)b REMOVAL OF EXISTNG PCC PAVEMENT sq.m (3)c CRACK AND SEAT OF EXISTING PCCP (with asphalt leveling course) sq.m SUBGRADE PREPARATION sq.m AGGREGATE SUBBASE COURSE cu.m CRUSHED AGGREGATE BASE COURSE cu.m. 1, (2) AGGREGATE SURFACE COURSE cu.m , (1) BITUMINOUS PRIME COAT, CUT BACK ASPHALT MC 70 tonne 61, , , , , , (2) BITUMINOUS TACK COAT, EMULSIFIED ASPHALT SS 1 tonne 60, , , , , , , , (1)a 310(1)b 310(1)c 310(2) BITUMINOUS CONCRETE SURFACE WEARING COURSE, HOT LAID (50mm thick) BITUMINOUS CONCRETE SURFACE WEARING COURSE, HOT LAID (80mm thick) BITUMINOUS CONCRETE SURFACE WEARING COURSE, HOT LAID (100mm thick) BITUMINOUS CONCRETE SURFACE (LEVELING) COURSE, HOT LAID (50mm thick) sq.m sq.m. 1, , , , sq.m. 1, , sq.m (1)b PCC PAVEMENT (PLAIN), 200mm thick sq.m. 1, , SPL 312 SEALING OF CRACKS AND JOINTS ON EXISTING PCCP l.m SPL 313 PATCHING OF POTHOLES sq.m. 1, , , , , , , , (1) REFLECTORIZED THERMOPLASTIC PAVEMENT MARKING (White) sq.m ES (2) 715(8)1 REFLECTORIZED THERMOPLASTIC PAVEMENT MARKING (Yellow) GEOTEXTILE PAVING FABRIC WITH GLASS REINFORCEMENT sq.m sq.m ES-46

52 8.2 Updated Unit Rates for Periodic Road Maintenance 22. The following are the basis for derivation of updated unit rates for periodic road maintenance by item of work: Crushed Aggregate Base and Surface Courses a. The unit cost of the processed material is first determined, considering the location as provided by the material source map. b. The cost of processing using the necessary equipment and manpower including the cost of the hauling distance from the quarry to the project site is determined. c. The total unit price is determined as in paragraph 119c above. Removal of Existing AC Pavement a. The unit price is determined by considering the cost of equipment rental based on the Association of Carriers and Equipment Lessors, (ACEL), Inc., Year And the labor rates which comprise basic wage and monthly fringe benefits based on the respective Regional Wage Orders under the National Wages and Productivity Commission of the Department of Labor and Employment (DOLE). b. The unit price of the pay item is arrived at by adding the total cost of equipment rental corresponding to their hourly rental rates and the total cost of manpower with their corresponding hourly rates by dividing it with the targeted output per hour. c. The total unit price is as in paragraph 119c above. 8.3 Cost Estimates by Road Section 23. On the basis of the above unit cost estimates by type of maintenance works and design considerations, the total cost estimates by road section under Tranche 1 is summarized in Table ES-7 below. 9. PROPOSED IMPLEMENTATION SCHEDULE 24. The corresponding proposed implementation schedules for each road section under Tranche 1 are presented in Annex 6 of the main volume report. The proposed overall implementation schedule for the whole RSIP project is presented in Figure ES9-1. ES-47

53 ACTIVITY Loan Processing EA's recruitment of supervision consultants AP-1 Supervision Consultants Services Procurement of Tranche 1 Civil works Implementation of CW Tranche 1 Recruitment DE Consultants for Tranche 2 Asset Preservation and Road Improvement Detailed Engineering Asset Preservation and Road Improvement Phase 2 Tendering for AP and RI for Phase 2 Prepare ICD documents Procure ICD Implement ICD Tranche 2 Processing Recruitment of Tranche 2 Supervision Consultants Supervision Consultants Services Implementation of Civil Works Recruitment of Tranche 3 DE Consultants Detailed Engineering - Tranche 3 Tendering for Phase 3 ICD Procurment and Implementation Tranche 3 Processing Recruitment of Tranche 3 Supervision Consultants Supervision Consultants Services Implementation of Civil Works ICD Procurment and Implementation Figure ES9-1: Implementation Schedule Philippine Road Sector Project ES-48

54 10. ECONOMIC EVALUATION METHODOLOGY AND RESULTS 10.1 Economic Evaluation Model 1. In the economic evaluation process, the Study Team adopted the internationally accepted road evaluation model which is also being used by DPWH in the selection, prioritization, fund allocation and scheduling of Pavement Management projects and in preparing asset preservation programs, i.e., the Highway Development and Management Tools (HDM-4). The Study Team utilized own program of the same version as DPWH, but data and parameters were updated for The DPWH have HDM-4 results for the project roads under Tranche 1, however, the study team undertook the re-evaluation since DPWH version was only based on visual estimates on road roughness and the cost estimates have to be updated to the latest price level. The latest roughness values in terms of International Roughness Index (IRI) are based on actual measurement conducted in the field. 2. The analytical framework for HDM-4 employs the concept of pavement life cycle analysis, which is applied to predict various factors over the life cycle of a road pavement, which is typically 15 to 25 years, such as: road deterioration, road work effects, road user effects, and socio-economic and environmental effects. Once constructed, road pavements deteriorate as a consequence of several factors, most notably: traffic loading, environmental weathering, and inadequate drainage. The rate of pavement deterioration is directly affected by the standards of maintenance applied to repair defects on the pavement surface over time to preserve the structural integrity of the pavement, thereby permitting the road to carry traffic in accordance with its design function. The impacts of the road condition and design standards on road users are measured in terms of road user costs and other social and environmental effects. Road User Costs in HDM-4 are calculated by predicting physical quantities of resource consumption and then multiplying these quantities by the corresponding user specified unit costs, known as basic Vehicle Operating Costs. 3. HDM-4 determines the economic benefits from road investments by comparing the total costs for various works and construction alternatives against a base case (without project or do minimum) alternative, usually representing the minimum standard of routine maintenance. This tool is designed to make comparative cost estimates and economic analyses of different investment options. To make comparisons, detailed specifications of investment programs, design standards, and maintenance alternatives are needed, together with unit costs, projected traffic volumes, and environmental conditions. To determine the cost-effectiveness of investment options, the objective function is to maximize the NPV/capital cost (CAP). The incremental NPV/CAP ratio satisfies the objective of maximizing economic benefits for each additional unit of expenditure (i.e., maximize net benefits for each additional peso of the available budget invested). 4. The HDM-4 model was utilized mainly for economic evaluation of the different maintenance work alternatives for the roads proposed for asset preservation under Tranche 1. However, for the preliminary evaluation of roads proposed for the succeeding phases of the project under Tranches 2 and 3, considering the limited time available, the more simplified spreadsheet model known as ES-49

55 ECOVAL, the earlier developed economic evaluation tool during the conduct of road feasibility studies in DPWH, was used Economic Applications Traffic Projection 5. The study team established the base year traffic by road project, the source of data of which mainly came from the DPWH central database. However, the available traffic data from DPWH is as of 2008, this was then projected to 2009 base year estimates by applying the established traffic growth rates. The equivalent standard axle load (ESAL) factors utilized are likewise those established by the DPWH as a result of loadometer surveys undertaken in Traffic growth rates previously estimated for the Project Management System (PMS) developed for DPWH under the newly operational Road Information and Management Support System (RIMSS) were utilized in this study on regional basis as presented in Chapter 11 of the main volume report. These traffic growth rates were estimated utilizing the model frequently used in various DPWH project evaluation considering the factors such as population growth, real per capita income growth and the income elasticity of demand for transport Basic Vehicle Operating Cost Estimates 7. As one of the inputs to the HDM-4 model, the updated basic vehicle operating costs (VOC) by type of representative vehicle are necessary. The DPWH has available updated estimates of basic VOCs as of July 2008, which were likewise utilized for this study. The breakdown of costs includes the new vehicle price of representative vehicle, tire prices, fuel and lubricating oil prices, maintenance labor costs, crew costs, annual overhead costs per vehicle, passenger time costs per person and cargo inventory costs. The different characteristics of each representative vehicle are also inputs to the model to estimate the cost consumption such as the number of wheels, number of axles, type of tires, annual vehicle-kilometers, annual working hours, passengers per vehicle, etc. The estimated basic VOCs, both in financial and economic prices, and vehicle characteristics as of July 2008 are shown in Annex 6 of the man volume report Cost-Benefit Analysis 8. The purpose of an economic appraisal of road projects is to determine how much to invest and what economic returns to expect. The size of the investment is determined by the costs of construction and annual road maintenance. The economic returns are mainly in the form of savings in road user costs due to the provision of a better road facility. 9. The economic evaluation process in HDM-4 is based on generated annual cost streams for road construction, road maintenance and road user costs. The cost streams will usually begin in a specified base year, onwards throughout the entire analysis period usually chosen to equal the design life of new road pavements. ES-50

56 10. The cost of new road construction is calculated from the sum of site preparation, earthworks, pavement construction, bridge and drainage structures, and overheads. The annual cost of road maintenance works depends on the maintenance policy or specified standard and the predicted pavement condition. The applied maintenance may range from routine maintenance to full reconstruction. Routine maintenance includes activities which are required regardless of the overall condition of the road or the traffic level, i.e., grass cutting, road sign repairs, drainage clearance, etc. and maintaining localized failures. HDM-4 calculates the quantities of the various work activities which are multiplied by the specified unit cost of each activity, in either economic or financial terms to derive the maintenance costs. 11. Road user cost may be defined as costs incurred by vehicle operators and by the traveling public, which are specified in HDM-4 as economic rather than financial costs. Road user costs consist of vehicle operating costs, time costs and accident costs. 12. The economic analysis was performed on with and without project scenarios. The difference in vehicle operation costs between these scenarios is the expected benefits accruing from the road investment. Basically HDM-4 model normally quantifies the road user cost savings to normal traffic. Normal traffic is referred to as the traffic demand, which results from the natural growth in population and economic activities within the influence area of each project road. Other types of quantifiable benefits, which are separately inputted to the model after separate manual calculations, include generated traffic benefits as a result of the opportunity for faster, cheaper, more comfortable and reliable transport between the areas served; diverted traffic benefits or the savings realized by the traffic that is presently using other roads or other modes of transport upon diversion to the improved project road; and development benefits which may be in the form of net value added in agriculture or induced production increases. However, for the analysis of the project roads under Tranche 1, only the road user cost savings to normal traffic was calculated Economic and Shadow Pricing 13. Financial costs represent the actual investment and road user costs. Economic costs represent the real cost to the economy of this road investment and ownership and operation of vehicles, where adjustments are made to allow for market price distortions such as taxes, subsidies, foreign exchange restrictions, labor wage laws, etc. For the VOCs economic costs are estimated by deducting the tax component that varies by item of costs, while for the road construction and maintenance including other indirect costs tax component is generally estimated at an average of 18%. 14. The opportunity cost of capital, or the discount rate considered was at 15% as the rate of opportunity cost of capital established by NEDA. 15. On the other hand, the overall shadow pricing factors considered by NEDA based on the national situation is 0.8 for costs of skilled labor and 1.2 for foreign cost component of civil works costs. These factors were likewise applied in estimating total economic project costs. ES-51

57 10.3 Economic Evaluation Results 16. The result of economic evaluation for the most cost-effective maintenance works for the 11 project roads under Tranche 1 is summarized in Table ES-8. This table shows that the resulting average Economic Internal Rate of Return (EIRR) for each road project range from a low of 16.3% for Dumaguete North Road (La Libertad-Vallehermoso Section) to a high of 112.2% for Butuan- Cagayan de Oro City-Iligan Road (Misamis Oriental Section). In terms of NPV/C, the lowest average is also for Dumaguete North Road (La Libertad- Vallehermoso Section) at while the highest is Daang Maharlika Road (liloan-naval Highway) at The detailed economic evaluation results by road section for the best/ recommended alternative maintenance works are presented in Annex 9 of the main volume report. Table ES-8: Results of Economic Evaluation for Tranche 1 Project Description 1. Butuan-Cagayan de Oro-Iligan Road (Misamis Oriental Section) Length HDM-4 Evaluation Results (km) ENPV EIRR NPV/C , Iloilo-Capiz (Old Route) , Bauang-Baguio Road , Olongapo-Bugallon Road Dipolog-Oroquieta City Road Bukidnon-Cotabato Road Palo-Carigara-Ormoc Road Daang Maharlika Road (Liloan-Naval Highway) 9. Dumaguete North Road (Manjuyod-La Libertad Section) 10.Dumaguete North Road (La Libertad- Vallehermoso Section) 11.Butuan-Cagayan de Oro City-Iligan Road (Agusan del Norte Section) Sensitivity and Risk Analysis 18. Sensitivity and risk analysis has been undertaken for this project to help identify the key variables that can influence the project cost and benefit streams. It involves recalculating the project economic evaluation results for different values of major variables or key factors, which are the key determinants of project outcomes to which the project s returns may be sensitive or unacceptable because of the effects of the identified key risk factors. In general, the principle of risk analysis is to provide analysis of project implementation risks so that the concerned parties can best manage or mitigate the identified risks to projects. ES-52

58 19. For this project, considering the nature of the project which asset preservation of existing national road network and based on previous experiences of the executing agency in the implementation of similar projects in the country, the identified project risks are the probable decrease in actual traffic growth rates than what was estimated during the study, the delay in the implementation of the project, and the cost-overruns incurred by construction contractors due to various constraints. 20. Based on actual experiences in some road projects, most often experienced is that traffic growth are not realized during the actual operation as what were expected during the study, some are lower than the estimated growth while others are significantly higher. For this study, since all the project roads are already existing, a probable risk of 20% decrease in traffic growth rate is assumed. 21. Several times that delay in the implementation of road projects were experienced in the past due to longer time spent in preparation and negotiation (the most of which is 2 years), thus, this factor is foreseen as one of the major project risk. For this study an average of 2 years delay in implementation is considered as the probable risk. 22. Likewise, based on past experiences most project construction incur cost overruns due to variation orders, it is estimated on the average that about 20% additional cost from the original estimates was incurred as cost overrun. This is one of the risk in project implementation that has to be addressed also. 23. Sensitivity and risk analysis was performed considering the above risk factors. The sensitivity indicator (SI), summarizing the effect of change in a variable on the project NPV, and the switching values (SV), showing the percentage increase in a cost item required for the NPV to become zero, were also calculated. 24. The result of sensitivity analysis performed is summarized in Table ES-9 below Benefit Distribution Analysis 25. Benefit distribution analysis was carried out in order to evaluate the impact of the project among major beneficiaries and stakeholders. The distribution of benefits was identified based on the composition of road users as indicated by the composition of vehicles on the total AADT of each project road. The identified major project beneficiaries include: (i) users of passenger transport vehicles, (ii) users of freight transport vehicles, (iii) vehicle owners/operators (iv) labor sector, and (v) the Government and economy of the Republic of the Philippines. The distribution of benefits is shown in Table ES As shown in the said Table, the users of passenger transport vehicles will receive about 10%, users of freight transport vehicles will receive about 78%, vehicle owners/operators will receive about 5%, the labor sector (both vehicle crews and construction workers) will also receive about 5% and the Philippine economy will receive about 3% of the total net benefits accruing from the project implementation. ES-53

59 11. SUMMARY RESULT OF ANALYSIS OF EXISTING FINANCIAL MANAGEMENT SYSTEM OF DPWH 11.1 The Present Financial Management System 1. The current financial management system is guided by the internal control policies and procedures of government, which are contained in several documents, particularly in the electronic-new Government Accounting System (e-ngas) developed and issued by the Commission On Audit (COA) and Government Accounting and Auditing Manual (GAAM). 2. The FM system of DPWH consists of one main system supported by a subsystem for foreign-assisted projects (e.g. NRIMP-I and 2). The main FM system is used to maintain the books of accounts, monitor the Designated Accounts (DA) and prepare the required Project Financial Reports. The sub-system under the Project Management Offices (PMO s) conducts initial screening of transactions, prepares disbursement vouchers, Statement of Expenditures (SOEs) and Withdrawal Applications for the DA, manages DA and prepares other financial management reports. 3. To ensure efficient monitoring and financial management of DPWH in handling and managing different stages of infrastructure development, different services and divisions are involved. The Comptrollership and Financial Management Service (CFMS) is responsible for financial systems procedure and control and handles the main FM system while the Internal Audit Service (IAS) is responsible in the conduct of management and control audit. ES-54

60 4. The Internal Audit Service (IAS) is mandated to advise the DPWH Secretary on all matters relating to management control and operations audit; conduct management and operations audit of department activities; review and appraise systems and procedures, organization procedures, assets and management practices, accounting and other records, reports and performance standards such as budgets and standard costs of the departments central and regional offices; analyze and evaluate management deficiencies and assist top management in solving problems by recommending realistic courses of actions. 5. IAS has three divisions namely: Financial Audit Division, in charge of overall financial aspects of the Department, Operations Audit Division A, in charge of the technical aspects of operations such as engineering and civil works, and Operations Audit Division B, in charge of administrative aspects such as the procurement of goods, contractors and consultants. 6. Other related divisions, directly involved in the different stages of such infrastructure development tasks by DPWH that require financial management, have the following functions: the Bidding and Awards Committee (BAC) and the ES-55