Original: French INFRASTRUCTURE DEPARTMENT

Transcription

1 AFRICAN DEVELOPMENT BANK Language: English Original: French APPRAISAL REPORT ROAD PROJECT V REPUBLIC OF TUNISIA INFRASTRUCTURE DEPARTMENT TRANSPORT DIVISION II MARCH 2008

2 TABLE OF CONTENTS Page PROJECT INFORMATION SHEET, EQUIVALENTS, ACRONYMS AND ABBREVIATIONS, PROJECT MATRIX EXECUTIVE SUMMARY (i - viii) 1. PROJECT ORIGIN AND BACKGROUND 1 2. THE TRANSPORT SECTOR The Transport System Transport Sector Overview Transport Policy, Planning and Coordination 3 3. THE ROAD SUBSECTOR The Road Network Traffic, Motor Vehicle Fleet and Road Safety The Road Transport Industry Road Network Administration and Staff Training Road Maintenance Financing of Road Investments and Maintenance The Road Construction Industry 8 4. THE PROJECT Design and Formulation Project Area and Beneficiaries Strategic Context Project Objectives Description of Project Outputs Environmental Impacts Socio-economic Impacts Project Cost Source of Financing and Expenditure Schedule PROJECT IMPLEMENTATION Executing Agency Institutional Arrangements Implementation Schedule and Supervision Procurement Arrangements Disbursement Arrangements Monitoring and Evaluation Audit Reports Coordination with the other Donors Performance of the Bank s Portfolio and Lessons Learnt 17

3 TABLE OF CONTENTS (Continued) Page 6. PROJECT SUSTAINABILITY AND RISKS Recurrent Costs Project Sustainability Major Risks and Mitigation Measures PROJECT BENEFITS Economic Analysis Social Impact Analysis Sensitivity Analysis CONCLUSIONS AND RECOMMENDATIONS Conclusions Recommendations 21 This report was written by Messrs M. D. SANGARE, Chief Transport Engineer, and H. ABID, Consulting Transport Economist, following their mission in Tunisia in February J. FRANSSEN, Consulting Environmental Expert contributed the environmental section of the report. Any queries concerning the document should be referred to the Division Manager concerned, Mr. J. RWAMABUGA, OINF.2 (Extension 2181) or the Project Officer, Mr. M. D. SANGARE (Extension 2281). The Director of the Department is Mr. G. MBESHERUBUSUA (Extension 2034).

4 LIST OF TABLES No. TITLE 3.1 Road Budgets (10th and 11th Plans) 4.1 Summary Project Cost Estimates Net of Taxes 4.2 Financing Plan and Estimated Disbursement Schedule 4.3 Summary of Net of Tax Cost by Expenditure Category 7.1 Project Benefits over the period LIST OF ANNEXES TITLE Number of Pages 1. Map of Road Network and Project Areas 1 2. Organization Chart of the General Directorate of Highways (DGPC-MEHAT) 1 3. Summary of Environmental and Social Management Plan 7 4. Recommendations of the Study on Unit Costs for Road Construction Works in Africa 3 5. Procurement Arrangements 1 6. Implementation Schedule 1 7. Economic Evaluation (traffic and EIRR) 9 8. List of Ongoing Bank Group Operations in the Sector 1 9. List of documents used 1

5 i AFRICAN DEVELOPMENT BANK Temporary Relocation Agency (TRA) BP TUNIS BELVEDERE, TUNISIA Tel.: (216) / PROJECT INFORMATION SHEET Date: March 2008 The information given hereunder is intended to provide some guidance to prospective suppliers, contractors, consultants and all persons interested in the procurement of goods and services for the projects approved by the Boards of Directors of the Bank Group. More detailed information and guidance should be obtained from the Executing Agency of the Borrower. 1. COUNRY AND NAME OF PROJECT : Republic of Tunisia Road Project 1 of the 11 th Plan ( ). 2. LOCATION : All 24 of the country s Governorates, with the exception of Kasserine, Gafsa, Kebili, Tataouine and Tozeur 3. BORROWER : Republic of Tunisia 4. EXECUTING AGENCY : Ministry of Equipment, Housing and Regional Development (MEHAT), General Directorate of Highways (DGPC) Cité Jardins - Tunis 1002 Tel.: 216 (71) , Telex HABITA TN Fax: (216) (71) dirpc.mehat@gov.tn 5. PROJECT DESCRIPTION : The project comprises the following components A. Road Works A.1 Development road works (bypasses of the towns of Beja, Jendouba, Sidi Bouzid, M Saken- Est at Sousse and El Hamma at Gabes and modernization of the following sections: GP6D at Beja, GP2 between Enfida and Kairouan and GP3 Fahs to Zaghouan; A.2 Rehabilitation works on km of classified roads; A.3 Reinforcement works on km of roads; and A.4 Construction works on 14 highway structures.

6 ii B. Works Supervision Services B.1 Works supervision and coordination of project activities; B.2 Consultants assistance assignments for the inspection and monitoring of the development road works and highway structure works. 6. TOTAL COST : UA million i) Foreign Exchange Cost : UA million ii) Local Currency Cost : UA million 7. BANK GROUP LOAN ADB : UA million 8. OTHER SOURCES OF FINANCE Government : UA million (EUR million) 9. LOAN APPROVAL DATE : May PROBABLE DATE OF PROJECT START-UP AND DURATION : May 2008/60 months 11. PROCUREMENT OF GOODS AND SERVICES : Works 12. CONSULTANCY SERVICES REQUIRED AND STAGE OF SELECTION : None - International competitive bidding for the 5 developmental and road rehabilitation works ; - National competitive bidding in 2 successive phases for the strengthening works (314 km and km), 2 successive phases for the bridge construction works (2 x 7 units) and for the 2 developmental road works projects. 13. ENVIRONMENTAL CLASSIFICATION : Category II. UA 1 = SDR 1 UA 1 = TND UA 1 = EUR

7 iii EQUIVALENTS AND ABBREVIATIONS Currency Equivalents (February 2008) Currency Unit = Tunisian Dinar (TND) UA 1 = TND = EUR EUR 1 = TND = UA Fiscal Year 1 January - 31 December Weights and Measures 1 metric tonne = 2204 pounds (lbs) 1 kilogramme (kg) = lbs 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = inch (") 1 kilometre (km) = 0.62 mile 1 square kilometre (km 2 ) = 0.39 square mile 1 hectare (ha) = acres Acronyms and Abbreviations ADB = African Development Bank AFESD = Arab Fund for Economic and Social Development ANBEIC = National Association of Consulting Firms and Engineers ANPE = National Environmental Protection Agency BC = Bituminous Concrete BG = Bituminous Gravel CETEC = Construction Technical Testing Centre CG = Crushed Gravel DE = Directorate of Research DEER = Directorate of Road Operations and Road Maintenance DGAC = General Directorate of Civil Aviation DGMM = General Directorate of Merchant Shipping DGPC = General Directorate of Civil Engineering DGPE = General Directorate of Planning and Research DGT = Directorate of Major Works DGTT = General Directorate of Land Transport DM = Directorate of Plant and Equipment DP = Directorate of Project Programming and Monitoring DPT = Technical Upgrading Directorate DREHAT = Regional Directorate of Housing and Infrastructure EIB = European Investment Bank EIRR = Economic Internal Rate of Return EIS = Environmental Impact Study EMME2 = Equilibrium Model, Version 2 EPIC = Public Industrial and Commercial Establishment GDP = Gross Domestic Product GP (RN) = Trunk Road (national roads) HDM = Highway Design and Maintenance Model HDV = Heavy Duty Vehicle HRCG = Humidified Reconstituted Crushed Gravel

8 INS = National Institute of Statistics KDF = Kuwaiti Development Fund KT = Kilometric Tonne MAERE = Ministry of Agriculture, Environment and Water Resources MC (RR) = Secondary Roads MEHAT = Ministry of Infrastructure, Housing and Regional Planning MT = Ministry of Transport MUA = Million UA (Bank Unit of Account) OACA = Civil Aviation and Airports Authority OMMP = Merchant Shipping and Ports Authority PC = Private Car PK = Kilometre Point RL (RVE) = Tertiary Roads SD = Surface Dressing SNCFT = National Railway Company of Tunisia SNTRI = National Regional and Inter-urban Transport Company SRPC = Regional Civil Engineering Services SRT = Regional Transport Company SRTG = Regional Bus Transportation Companies UA = Unit of Account of the African Development Bank VOC = Vehicle Operating Costs WB (IBRD) = World Bank iv

9 v PROJECT LOGICAL FRAMEWORK HIERARCHY OF OBJECTIVES Goal Contribute to the upgrading of road infrastructure so as sustain growth and create favorable conditions which will strengthen the competitiveness of exports Project Objective Improve the level of service of the classified road network so as to intensify intra and inter regional trade and improve the accessibility of the country s principal development poles. EXPECTED OUTCOMES Impacts 1. National and international trade and socio-economic development 2. Inland areas served by more roads with adequate capacity Effects Capacity of rehabilitated roads built up in terms of condition of carriage way structures and their size, the main roads made secure in 11 Governorates with 14 appropriate crossing structures. REPUBLIC OF TUNISIA ROAD PROJECT 1 OF THE 11TH PLAN APPRAISAL REPORT SCOPE Beneficiaries : The entire Tunisian population Beneficiaries Population of 19 of the 24 Governorates of Tunisia PERFORMANCE INDICATORS Impact indicators 1. Increase in intra- and interregional trade and export growth 2. Number of paved roads with adequate capacity Sources: Report on Results of 11th Plan, National Statistics (employment, population, mobility and intra and interregional trade etc.) Indicators of effects 1. Network capacity constraints 2. Vehicle Operating Costs (VOC) 3. Travel time 4. Efficacy of road maintenance INDICATIVE TARGETS AND TIME FRAMES Expected progress and timeframes in the long-term 1. Increase in exports >10% from 2013 and increase in FDI 2. 85% or more of road infrastructure in good condition by 2016 and integrated with other transport modes All the regions linked with roads of appropriate capacities (main parts of the carriageways strengthened and width of carriageway >=7,6 m) Expected progress and time frames in the medium-term 1. Proportion of roads of width t <7 m falls from 40% to 25% by end 2013 and 640 km of roads strengthened 2. VOC reduced from 10 to 45% on rehabilitated roads in 2013; 3. Journey time reduced by over 30% on rehabilitated roads 4. Protection of national road assets by efficient and effective maintenance Source: DEER reports in 2013 on the roughness indicators of carriageways and the VOCs and maintenance of the network. ASSUMPTIONS/RISKS Assumptions 1. Sustained economic growth 2. Pursuit of upgrading programme in the transport and roads sector Assumptions 1 Effective implementation of planned investments 2 Effective budget allocations of TND 63 million in respect of road maintenance and effective implementation of road maintenance programmes and sensitization on road safety.

10 vi REPUBLIC OF TUNISIA PROJECT LOGICAL FRAMEWORK ROAD PROJECT 1 OF 11TH PLAN APPRAISAL REPORT HIERARCHY OF OBJECTIVES Inputs and Activities i) Compensation for expropriation of land and implementation of works to move concessionary networks ii) Procurement of works (developmental road works, rehabilitation of classified roads and the construction of 14 highway structures on the classified road network. iii) Procurement of services for works control missions (developmental road works, highway structure works control) and supervision resources for MEHAT; and ii) geotechnical control of materials and works quality; Works supervision and project management and monitoring by the Administration Resources by expenditure categories EXPECTED OUTCOMES Outputs 1. 4 bypasses of towns (Beja, Jendouba, Sidi Bouzid, M Saken-Est at Sousse and El Hamama at Gabes) and modernization (dual carriageways) of the GP6D section at Beja, GP2 between Enfida and Kairouan and GP3 Fahs to Zaghouan km of rehabilitated and resurfaced roads with a carriageway width >=7.6 m ; km of reinforced, resurfaced roads; and highway structures totaling 1.73 lm built on the network SCOPE Beneficiaries Populations of 20 of the 24 Governorates Works contractors and Consulting firms PERFORMANCE INDICATORS Output indicators 1. Effective payment of compensation for expropriations 2. Completion of road works. control and supervision missions Sources : ADB project status, supervision and mid-term review reports, as well as project audit and completion reports INDICATIVE TARGETS AND TIME FRAME Expected progress and timeframes in the short-term 1. All compensation paid prior to the start of each series of road, rehabilitation and bridge construction works; 2. All contracts awarded before 2011, procurements made within the time frame and all works completed by 31 December ASSUMPTIONS /RISKS Assumptions 3.1 Compensatory measures implemented for the few expropriations of land. Moving of the concessionary networks prior to the road works. UA Million Components UA Mio Exprop + displacement of networks Works Supervision and inspection 3.49 Not Allocated Total excluding taxes

11 vii EXECUTIVE SUMMARY Project Origin and History For its 11th Economic and Social Development Plan ( ), the Tunisian Government retained a Road Infrastructure Investment Plan for a total amount of TND 5,594 million. This programme is consistent with the pursuance of the overall transport sector upgrade programme initiated during successive previous plans. The objective is to put in place an efficient high quality transport system, support economic growth, and contribute to the objectives of export competitiveness, with a view to speeding up the process of opening up the Tunisian economy. It should be emphasized that the implementation of this upgrade programme is based on a sector strategy initially prepared for the period, but refocused for land transport under the National Transport Master Plan for the period. Since 1995, the Bank has contributed to the upgrading of road infrastructure by financing 5 road projects for a cumulative loan amount of UA million. These projects have made it possible to rehabilitate almost 1,700 km of roads, reinforce 850 km of roads, and build 88 bridges across the classified road network. Two (2) of these completed projects were ranked in 2005 and 2006 among the best projects implemented by the Bank in the transport sector. Under the implementation of the investment programme of the 11th Plan, the Tunisian Government and the Bank discussed the financing of a road programme for a total cost of TND 1,087 million (EUR 620 million) concerning: (i) the implementation of 7 projects for developmental road works in the major towns, and the roads in Greater Tunis ( Grand Tunis ); (ii) the development of 1,252 km of classified roads; and (iii) the reinforcement of 1,332 km of classified roads; and (iv) the construction of 27 highway structures. This project constitutes the first component of this financing for an amount of UA million ( million). Its implementation is in keeping with the Bank s Operations Strategy for Tunisia for the period, which retained infrastructure modernization and strengthening of the productive sector as pillars of intervention as set out in the Country Strategy Paper (CSP) for the period. The official request for the financing of this first component of the operation was submitted to the Bank in January 2008, and the project was appraised following a Bank mission in February Purpose of the Loan The loan, in an amount of UA million, will be used to finance the foreign exchange costs of the road works retained. Project Objective The project aims to improve the level of service of the classified road network so as to intensify intra-and inter-regional trade, and improve accessibility to the country s principal development poles.

12 viii Project Components: To achieve this objective, the project will focus on the implementation of works relating to the following components: (i) Development road works (by-passes for the towns of Beja, Jendouba, Sidi Bouzid, M Saken-Est at Sousse and El Hamma at Gabes, and modernization by creating dual carriageways on the GP6D section at Beja, on the GP2 between Enfida and Kairouan and the GP3 Fahs to Zaghouan); (ii) rehabilitation works on a total of km of paved roads; (iii) reinforcement works on km of paved roads; (iv) construction works on 14 highway structures on the classified road network. Project Cost: The estimated total cost of the project, net of taxes, is TND million (UA million), comprising TND million (UA million) in foreign exchange and TND million, equivalent to UA million, in local currency. Financing Source: The project will be jointly financed by the Bank and Tunisian Government; the Bank s financing will cover the foreign exchange costs of the works estimated at UA million representing 66% of the total project cost net of taxes and corresponding to 70% of the total cost of works net of taxes. The Government will bear the cost of the balance of the total local currency cost, i.e. 34% of the total cost of the project corresponding to: (i) 30% of the cost of works net of taxes, (ii) 100% of the cost of clearing the rights of way and moving the concessionary networks; and (iii) 100% of the cost of works supervision and inspection services, including the management and monitoring of all the related activities. Project Implementation and Monitoring: The project will be implemented over a 60-month period from the date of approval of the related Loan by the Bank. The project management will be entrusted to the Ministry of Equipment, Housing and Regional Development (MEHAT), in particular the General Directorate of Civil Engineering (DGPC) and its decentralized services in the regional directorates of MEHAT. Conclusion and Recommendations: It is recommended that a loan not exceeding UA million be granted to the Republic of Tunisia for the implementation of the project as described in the report. In addition to the usual Bank Group conditions, the Loan will be subject to the conditions specified in the Loan Agreement.

13 1. PROJECT ORIGIN AND BACKGROUND 1.1 In order to consolidate its socio-economic performance, Tunisia has opted for a strategy of gradual integration into the global economy, which is reflected in particular by the signing of the Free Trade Agreement with the European Union. In this agreement, Tunisia undertook to dismantle, as from 1996, on the basis of a twelve-year schedule, all its customs barriers on European industrial products. 1.2 In view of the important role of the transport sector in the economic and social development process and as support to the strategy for integrating the global economy, the Government, for the decade (covering the periods of the 9th and 10th Plans), embarked on an ambitious programme aimed at establishing an efficient transport system and high quality infrastructure. With regard to road infrastructure, major rehabilitation and modernization projects of the classified road network were implemented over the period for an amount of TND 2,654 million. These projects have made it possible to improve the level of service of the road network by building its capacity, thereby reducing the proportion of roads with carriageway widths of less than 7 m from 70% to below 40%. The Bank participated in the financing of these projects by granting 5 loans of a total cumulative amount of UA million, and thereby helped to rehabilitate 1,700 km of roads, reinforce a cumulative length of 850 km of roads, and build 88 highway structures spread over the classified road network. 1.3 Under the implementation of the investment programme of the 11th Plan ( ) in road infrastructure, the Tunisian Government and the Bank discussed the financing of a road programme for a total cost of TND 1,087 million (EUR 620 million) concerning: (i) the implementation of 7 projects for development road works in the major towns, and the roads in Greater Tunis; (ii) the development of 1,252 km of classified roads; (iii) the reinforcement of 1,332 km of classified roads; and (iv) the construction of 27 highway structures. This project constitutes the first component of this financing for a loan amount of UA million ( million). Its implementation is in keeping with the Bank s Operations Strategy for Tunisia for the period, which retained infrastructure modernization and strengthening of the productive sector as pillars of intervention as set out in the Country Strategy Paper (CSP) for the period. 1.4 Following the Government s official request for financing, this project was appraised during a mission in February This Appraisal Report is based on an assessment of the outputs of the road investments of the 9th and 10th plans, the Government s road infrastructure investment programme for the period of the 11th Plan ( ), the designs of the planned rehabilitation works, and discussions with the Tunisian Authorities. 2. THE TRANSPORT SECTOR 2.1 The Transport System: Transport plays a key role in the national economy, since it contributes around 6% to GDP and accounts for almost 140,000 direct jobs (i.e. over 4.5% of the work force) which are mainly concentrated in the road sub-sector (over 65%). The system comprises the following sub-sectors: roads, air, sea and rail with respective shares of 48%, 30%, 17% and 5%. To support the strong economic and social growth projected for the

14 2 country, infrastructure improvement actions are essential, and will revitalize trade, particularly by developing poorly served destinations, and contribute to lower transport costs. 2.2 Transport Sector Overview Road Transport: With an average density of 70l m/km² and 12,600 km of paved roads, the national classified road network serves all the Governorates of the country and provides links with the neighbouring countries. This network accounts for virtually all movements of persons and 80% of the transportation of goods with an annual average increase in traffic of 6.1% over the period. This situation indicates the importance of road transport among the existing modes of transport. Furthermore, daily demand for interregional transport by travellers reached around 361,000 passengers in 2006 compared to 290,000 in 2000, i.e. around 96% of interurban travel demand. With regard to freight, daily inter-urban tonnage transported also increased from thousand tonnes in 2000 to thousand tonnes in For the period, road transport activity, measured in vehicles/km, is expected to rise by 95.5% for goods and 92.0% for passengers Rail Transport: Rail traffic caters for 35 million passengers and 13 million tonnes of goods, i.e. respective market shares of 4.4% and 14.1%. This annual traffic has remained virtually unchanged over the last two decades to the benefit of the roads. In 2006, overall traffic rose to 1,407 million passengers/km and 2,173 million tones/km compared to 1,294 million passengers/km and 2,082 million tones/km in with a 5.7% increase over 2005, but only 0.3% over Revenue also increased to TND million in 2006 compared with TND million and million respectively in 2005 and The Bank and several other financial partners (EIB, IBRD, JIBC, and AFD) are providing support for the modernization of the rail network both in the areas of infrastructure and rolling stock Maritime Transport: Port infrastructure comprises 8 ports for international trade, the most important of which are: Bizerte, Rades, Sfax and Gabes. These ports handle the bulk of the international traffic with almost 67% of the freight traffic, totaling around 29 million tonnes in 2006 compared to 27.7 million tonnes in 2005, an almost 5% increase in traffic. The ports under the Merchant Shipping and Ports Authority (OMMP) handled freight traffic of 22.8 million tonnes also up by 5% on With a view to improving the quality of service and containing transport costs to strengthen competitiveness of the shipping sub sector, the following measures have been taken: (i) improved infrastructure and equipment; and (ii) increasing the participation of private enterprises in port development through concessioning. Thus the construction of a 2 nd generation port (deep-water port), mainly dedicated to transshipment is under study Air Transport is assured by 8 airports, three of which are international (Tunis, Monastir and Djerba). These airports are managed by a State structure, OACA (Civil Aviation and Airports Authority) which is also responsible for the construction, maintenance and supply of airport equipment, and provides air navigation safety assistance. Total traffic estimated at around 10 million passengers per year is generated mainly by these 3 airports. An estimated 85% of this traffic is tourist. Air freight is in the region of 3 million tonnes per year. The national air transport business is dominated by the national carrier, Tunisair, which accounts for an estimated 38% of the international air transport market and 62% of the international freight market. The BOT (Build, Operate and Transfer) construction of a new international airport at Enfidha with an initial capacity of 5 million passengers per year began in 2007.

15 Multimodal Transport remains little developed in Tunisia. At the national level, the SNCTF carries out a few combined rail-road operations. International road transport (IRT) of goods is also weak due to the fact that transport companies are small and Tunisian drivers face difficulties in finding work and return freight for Europe. 2.3 Transport Policy, Planning and Coordination The country s transport policy aims at putting in place an efficient transport system providing high quality, least cost services. The expression of this policy is reflected in the major orientations of the Government since the 9 th Plan namely: (i) modernization of transport capacities and increase in capital productivity; (ii) reduction of the scope of public regulations to allow operators greater freedom to optimize combinations of factors; and (iii) promotion of multi-modal transport as well as the integration of Tunisian transport operators into international networks. This policy has been implemented through different actions taken since 1997 in terms of investments made and ongoing institutional reforms Responsibility for the organization, management and coordination of the activities of the transport sector lies with the Ministry of Transport through the General Directorates of Merchant Shipping, (DGMM), Civil Aviation, (DGAC) Land Transport (DGTT), Planning and Research (DGPE) as well as the Merchant Shipping and Ports Authority (OMMP) and Civil Aviation and Airports Authority (OACA). The DGTT oversees the management and operation of land transport. The DGPC of the MEHAT is in charge of the programming, implementation and monitoring of road infrastructure works. With the effective implementation of the institutional reforms identified. MT s role is to reduce the control and regulation of the transport market by opening it up to the private sector. 3. THE ROAD SUBSECTOR 3.1 The Road Network The classified road network is considered modern and in good condition. Apart from communal roads, it consists of a total of 81,000 km made up of around 19,117 km of classified roads, 66% of which are paved (12,547 km), 359 km of motorway and 60,000 km of earth roads, including a major network of 5,500 km. The average density is 70 lm/km², but this figure masks an uneven distribution among Governorates, with disparities in the West- Central and South regions where the density ranges from 3 to 7.4 lm/km². In addition to internal urban roads and motorways, the classified road network comprises three categories, namely: (i) national roads (RN) or trunk roads (GP); (ii) regional roads (RR) or secondary roads (MC) and (iii) local roads (LR) or tertiary roads (RVE). National roads link the borders of the country; regional roads link two or more regions whereas local roads link local or farming communities. Motorways are classified among the national roads (RN). Express roads, which are roads or sections of roads that are only accessible at points that have been developed for the purpose, are classified as State public roads in one of the three categories mentioned above Despite its considerable paved length, the road network does not provide a level of service considered adequate in terms of capacity in relation to traffic flows. Indeed, the roads which seem to be better adapted to traffic needs (for they have graded carriageways with 2 or more lanes or 2 separated carriageways) currently total less than 50% of the paved network (6,000 km), whereas a little over 50% (6,890 km) requires capacity building works.

16 4 Moreover, nearly 2,500 km (21%) of roads are threatened with degradation, as a result of: (i) the increase in heavy traffic at a higher rate than the average traffic for all types of vehicle; (ii) the age of carriageways (over 40 years old) which are structurally undersized in relation to current traffic flows; and (iii) inadequate drainage systems of the road platforms making them highly vulnerable to flooding. The outputs of the 2 previous Plans have helped to remove these constraints by lowering the proportion of less-than-7m-wide roads from 70% to 50%. Investments planned under the 11 th Plan will make it possible to bring this proportion down to almost 25%. 3.2 Traffic, Motor Vehicle Fleet, and Road Safety Traffic: Vehicle counts are conducted every 5 years. The 2007 counts are not yet available. The last counts, dating from 2002, indicate an annual average growth rate of 6.1% on the entire classified network compared to 1997 and 6.5% compared to Light vehicle traffic grew by 6.2% and 6.6% in 2002 in relation to 1997 and 1992 respectively, compared to 5.5% and 6.3% for heavy vehicles. The share of light vehicles in overall traffic has virtually stabilized since 1992, at around 86.5%, albeit with an increase in the distances of private cars and a decrease in that of vans (P<1.5t) and light trucks (P<3.5t). With regard to heavy vehicles (whose share has stagnated at 13.5% of the overall traffic since 1992), their structure has evolved with an increase in the proportion of articulated vehicles (trucks + trailers and tractors + semi-trailers). This increase has resulted in a reduction in the capacity of roads, acceleration in the deterioration of the structure of carriageways and increased risks of accidents as well as their gravity. The detailed structure of the traffic in interurban area on the various trunk roads of the national network, based on the 2002 counts, is as follows: private cars (including hired cars): 52%, vans: 27%, light trucks: 8%, heavy trucks: 6%, articulated trucks: 5% and public transport 2%. The results of the 2002 survey indicate that average daily traffic is higher than 3,000 vehicles/day for 41.5% of the road network and is lower than 750 vehicles/day on 16.1% of the network. Average daily traffic on the entire network is 4,539 vehicles, and the highest traffic is recorded on the trunk roads of the Governorates of Tunis (42,460 vehicles/day on average), Ben Arous (17,289 vehicles/day), Ariana (16,460 vehicles/day) and Sousse (9,581 vehicles/day) The Motor Vehicle Fleet: Data from vehicle registration records indicate that there were 993,000 vehicles (excluding 2-wheel vehicles) at the end of 2002, whereas the fleet of vehicles on the road stood at 824,000 vehicles (that is, 83% of the registered fleet) two-thirds of which, that is, 552,000 vehicles, were used for the transportation of passengers (private cars, shared taxis and coaches) and 272,000 for the haulage of goods (vans, trucks and agricultural tractors). The vehicle fleet grew at an annual average rate of 7.4% over the period, thus reflecting the policy of modernization of the fleet pursued by the Government (liberalization of imports and reduction of customs duties) which also contributed significantly to its rejuvenation (average age between 6 and 8 years) Road Safety: Accidents on Tunisian roads have a very high economic and social cost (fatalities, temporary and permanent impairment as well as material damage) estimated in monetary terms at around TND 200 million/yr over the last five years. The preliminary analysis of the causes of accidents pointed to the behaviour of users (95.5%) followed by the condition of vehicles (3.5%) and the state of the roads (0.7%). Several measures have been taken by the authorities and Tunisian associations to reduce traffic accidents (awareness campaigns on roads and in the mass media, systematic speed checks and enforcement of the Highway Code, etc.). Under the ongoing Road Project IV the Bank proposed to finance with

17 5 a grant from the Technical Assistance Fund for Middle Income Countries (MIC-TAF), a study on road safety whose findings and recommendations will be discussed in a national seminar aimed at drawing up a plan of action. Consultation meetings have already been held at government level for the preparation of the study terms of reference. Concrete proposals have been drawn up regarding the effective approach to be adopted for this study. 3.3 The Road Transport Industry Inter-city public passenger transport is provided by coaches on regular inter-city routes and shared taxis. Regular inter-city coach services are run by 14 public operators and one private operator. The public operators are: (i) the National Inter-city Transport Company (SNTRI), for long distance inter-city transport (> 40 km), in particular between Tunis and the capitals of the Governorates; and (ii) 12 Regional Transport Companies (SRT), covering 20 out of the 24 Governorates which, apart from urban transport within the communes or Governorates, provide inter-city services on routes linking neighbouring Governorates. Since the beginning of 2004, a private company has been operating 5 routes 1 following concessionary rights granted on a competitive basis by the SNTRI. The experience of concessioning intercity coach routes will be pursued by the Government during the Plan in order to foster ever higher participation in interurban transport of persons and the strengthening of the 12 RTC to facilitate their specialization in urban, sub-urban and school transport Freight transport is fully liberalized to the extent that currently there are over 250 transport companies (individual and structured companies) operating on behalf of third parties. This activity is currently characterized by: (i) predominance of low tonnage vehicles (71% of vehicle traffic for 18% of T/K transported) to the detriment of heavy tonnage vehicles (29% of vehicle traffic for 82% of T/K transported); (ii) a fairly balanced distribution of road transport demand (expressed in terms of tonnes/kilometres) between selfowned transport and third party-owned transport (49% and 51% respectively of the total demand) 2 ; (iii) high deadhead rates (46% for trucks and articulated trucks). The authorities recently took several measures to reorganize the sector and improve its performance, in particular by: (i) the encouragement of private operators to put in place freight centres to optimize the journeys of trucks and thereby reduce deadhead rates; (ii) an in-depth discussion on the setting up of logistical platforms in the main regions of the country; and (iii) the initiation of discussions on the restructuring of port infrastructure required by the Government s policy on the granting of concessions for terminals and the introduction of transshipment in the country. 3.4 Road Network Administration and Staff Training Road Network Administration The State classified road network administration is the responsibility of MEHAT through a central directorate, namely the General Directorate of Civil Engineering (DGPC) in charge of the design, programming, implementation of the national strategy and policy on infrastructure, as well as the maintenance and operation of the road network. The DGPC is organized into central services headed by directors; namely the Directorate of Research (DE), 1 Tunis-Kalaa Khasba, Tunis-Djerba, Tunis-Nefta, Tunis-Medenine and Sfax-Kasserine 2 Including 5% for international traffic.

18 6 the Directorate for Project Programming and Monitoring (DP), and the Directorate for Major Projects (DGT), the Directorate for Road Operation and Maintenance (DEER), the Directorate for Plant and Equipment (DM) and the Directorate for Technical Upgrading (DPT) The DE is in charge of the formulation and monitoring of project designs, up to the award of the different related contracts. The DP sees to the programming of road investments, coordination with donors, administers tender contracts and oversees their financial monitoring with the DGT, which supervises works in liaison with the different Regional Directorates (DREHAT). To facilitate the management and monitoring of projects financed by the principal financial partners, the DGPC has project implementation units created for that purpose and headed by Project Managers. DEER defines the general maintenance framework, makes budgetary allocations for maintenance among the DREHATs and carries out an analytical monitoring of expenditure as well as the inspection of the works. The DM manages the plant pool needed for the implementation of works through its central workshop of Tunis (for major repairs of equipment and other plant) and its regional workshops (for periodic maintenance). The DPT is responsible for the upgrading, retraining and improvement of the technical and manual personnel Staff and Training: MEHAT has a total staff of 6,291 made up of 2,271 civil servants and 4,020 workers distributed in the central administration as follows: 1,099 staff and 5,192 staff for the regional directorates. The staff complement of the DGPC is 375 and over half of those assigned to the management and maintenance of the road network are labourers. The staff is recruited on a competitive basis in order to maintain a satisfactory overall and professional standard. The engineers and other supervisory staff come from institutes of higher learning and the national engineering college of Tunis or recognized foreign universities or institutions. Training activities, which are in the form of seminars and short courses both in Tunisia and abroad, are financed either through the DPTs own allocations or from grants awarded by the different development partners. 3.5 Road Maintenance: The maintenance of the classified network (19,000 km) and major agricultural feeder roads (5,500km) as well as 26/26 feeder roads (4,146km) is the responsibility of MEHAT through the DEER to the DGPC and the regional civil engineering services of DREHAT. The operations cover routine maintenance works (local maintenance of paved roads, realignment of shoulders of paved roads and roadways of unpaved roads, clearing of sand from Southern roads, cleansing of ditches, structures, etc.), periodic maintenance (resurfacing of unpaved roads and shoulders of paved roads, resurfacing of carriageways) and various operations relating to road operations (maintenance of equipment, signs, elimination of death traps and areas prone to flooding, etc.). Routine maintenance operations are conducted on force account but, some tasks (realignment of shoulders of paved roads, roadways of unpaved roads) are increasingly being carried out on a contract basis. A review of the annual assessments of works over the period shows that maintenance was of good quality, more regular and with greater coverage of the rural network. The maintenance budget for the period rose from TND 33.4 to 41.0 million or an average annual rate of 2.4%.

19 7 3.6 Financing of Road Investments and Maintenance The financing of road investments and maintenance of infrastructure is covered from the road budget under the national five-year plans. The road budget comprises 2 parts, namely Chapter I containing allocations for infrastructure maintenance and Chapter II (or capital budget) whose resources come from road investment financing, in particular the road network development, rehabilitation and modernization works as well as major road strengthening works. Road investment expenditure reached a cumulative amount of TND 2, million during the 10 th Plan ( ). Table 3.1 below summarizes the budget allocations for road infrastructure and their breakdown by financing source for the 10th and 11th Plans. Table 3.1a: Road Budgets Actual (million TND) Description 10th Plan ( ) Total Share 1.) Chapter I : Infrastructure Maintenance % Allocation 2) Chapter II: Capital Budget Budget % Off Budget (external financing) % Chapter II Total (current 2000 TND million) % Source: DGPC, MEHAT Table 3.1b: Road Budgets (million TND) Description 11th Plan ( ) Total Share 1.) Chapter I : Infrastructure Maintenance % Allocation 2) Chapter II: Capital Budget Budget % Off Budget (external financing) % Chapter II total (current 2006 TND million) % Source: DGPC, MEHAT For the period of the 11th Plan ( ), the road budget stands at TND 2,375 million, i.e. an increase of around 47.3% compared to its 10 th Plan level. The share of external financing (non-budget) is expected to rise from TND million to TND 1, million with a proportion stabilized at 47.3%. This programme covers the same principal components as those of the 10th Plan, namely: (i) improvement (rehabilitation and widening) of 1,900 km of classified roads; (ii) strengthening of 2,000 km of classified roads; (iii) regional development (400 km of rural roads); (iv) construction of 66 highway structures; (v) development of urban roads; (vi) the Greater Tunis road network; (vii) improvement and surfacing of agricultural feeder roads; and (viii) extension of the motorway programme. The Bank s assistance in this programme will cover all the components with the exception of components (iii) and (viii) Allocations for road maintenance (excluding wages and wage expenses) under the 10th Plan amounted to TND million, that is 11.7% of the total capital budget. In relation to the 9 th Plan, allocations show a 52.6% increase, but the proportion remains stable compared to the level of the capital budget and the total road budget. During the period, annual allocations grew by 2.4%/yr. However the sharp rise in the cost of works

20 8 inputs over the past three years has impacted negatively on outputs in respect of maintenance since the price increases were not reflected in the actual allocations over the period under consideration. Thus the actual level of the budget no longer makes it possible to ensure normal maintenance of the road network. In fact, in relation to the total value of the reconstruction work on the paved network alone and excluding the motorways estimated at a little over TND 3,800 million, the maintenance budget remains far below the average ratio of 3 to 4% generally accepted as the standard. Consequently, the Government is invited to make a further effort to increase the annual maintenance budget to TND 63 million by 2012, corresponding to a ratio of around 1.5% in relation to the value of the paved network. A Government undertaking to annually increase road maintenance budget allocations to TND 63 million by 2012 is a loan condition precedent. 3.7 The Road Construction Industry The building and public works (BPW) industry including the road construction industry constitutes a key strategic sector for the Tunisian economy, in view of its induced effect on economic growth. Indeed, with an annual turnover of over TND 3 billion and estimated 250,000 jobs 50,000 of which are permanent, it ranks as the fourth largest sector of the economy after textiles, industry and agriculture The number of approved firms is about 2,000 of which 121 are large (Category 5), 200 medium-sized (category 3 and 4) approved by the national commission, and the remaining 1700 approved at regional level. About 50 category-5 Roads and Structures firms have an unlimited authorization ceiling, and nearly 500, including all trades, have a recognized ceiling higher than TND 2 million. They are mostly purely national and their spatial distribution reflects the economic weight of the regions (36% located in the Tunis Region, 26% in Sousse, Sfax and Bizerte and 19% in Nabeul, Mahdia, Monastir and Gabes and 19% in the remaining 15 Governorates.) In the area of road design services, there are a number of national and foreign consulting firms affiliated to the national association of consultants (ANBEIC). In general, these firms have good professional references and their annual turnover averages TND 50 million 25% of which is from exports. Furthermore, they provide jobs for nearly 2,000 persons including 900 consulting engineers and 750 technicians. 4. THE PROJECT 4.1 Design and Formulation This project was designed to address the capacity constraints (width of carriageways and their structural condition) of the classified road network which does not at present provide an acceptable level of service in respect of traffic volumes and the rapid growth of heavy traffic, which is responsible for the deterioration of the carriageway structures and a heightened risk of accidents. Indeed, the sections retained under the project were identified on the basis of the mismatch between their current level of service and traffic demand and /or the need to reduce congestion in town centres by creating by-passes. The technical and economic feasibility studies and the different preliminary designs have been reviewed to confirm the viability of the works to be carried out. Their technical design is in conformity with recognized international standards. The geometric characteristics of the developmental road works comply with the standards and the National Instruction on Technical Design Requirements for Urban

21 9 Express Roads (ICTAVRU). All the technical and economic feasibility studies and bidding documents for the project are available and have been examined to ascertain the viability of the project. The engineering designs chosen were based on international standards; the sizing of the carriageways was based on the method developed by the Directorate of Roads and Road Traffic in France (DRCR) for the various categories of traffic and a range of carriageway structures of the DGPC for the classification of supporting soils. Diagnoses of the carriageways were carried out based on on-site geotechnical studies aimed at determining the characteristics of the supporting soils and the structures of the carriageways. Road roughness measures were conducted to obtain data on the condition of the surfaces. The highway structure works aim to waterproof the classified roads on routes which can be impassable in bad weather conditions The project has received the backing of the inhabitants of the Governorates concerned and is an integral part of the investment programme of the 11 th Plan for Road Infrastructure. Its implementation is in keeping with the Bank s operations strategy for Tunisia for the period. Furthermore, its implementation does not raise any technical and management problems in view of: (i) its similarity with previous projects in the sub-sector which in 2002 and 2005 were ranked by the Bank among its best projects implemented; (ii) the experience and competence of the executing agency in project monitoring and management; as well as its familiarity with the Bank s procedures However, the lessons learnt from the most recent project which is ongoing include the increasing number of works contracts terminated or the withdrawal of firms from participation in bidding for road works because of the spiraling prices of works inputs (asphalt, iron, and fuel, etc.). To mitigate the negative impact of these terminations on project implementation, the Bank agreed to modify the specifications by introducing a price adjustment clause for all future contracts of the project whose implementation periods exceed 12 months instead of 18 months as previously. The advantage of this modification is to: (i) ensure greater transparency in the prices applied by firms; (ii) prevent them from having to bear additional unforeseen costs; and (iii) to harmonize the Bank s specifications with those of the Government which are accepted by the other financial partners in the sector (EIB, AFESD, JBIC, etc..). With the current surge in the cost of works inputs, this provision has been discussed and will be applied to contracts relating to this project. 4.2 Project Area and Beneficiaries Project Area The project area covers 19 of the country s 24 Governorates including 11 Governorates in the northern region (Bizerte, Tunis, Ariana, Ben Arous, Nabeul, Manouba, Zaghouan, Beja, Jendouba, le Kef, and Siliana), 5 Governorates in the central region (Sousse, Monastir, Mahdia, Kairouan and Sidi Bouzid) and 3 in the southern region (Sfax, Gabes, Medenine). Most of Tunisia s population lives in the northern and central regions. The Northern region has a total of km of roads to be modernized and strengthened (47%) and 9 highway structures to be built (64%) followed by the southern region with 497 km (36%) and 3 highway structures (21.4%) and the central region with km (17%) and 2 highway structures (14.3%). The climate is of the Mediterranean type in the north and centre and of the desert type in the south with annual mean temperatures varying between 4 C and 38 C. Average annual rainfall varies from 900mm to 600mm in the north and gradually declines towards the south to between 250mm and 80mm. Vast plains interspersed with