Document of

The World Bank

FOR OMCUIL USE ONLY

1,CAY 3 27S-- ..2A4 Report No. 890 1-IM

STAFF APPRAISAL REPORT

JAMAICA

ROAD INFRASTRUCTURE PLANNlING AND MATENANCE PROJECT

November 8, 1990

Department IIIInfrastructure and Energy Opera Operations DivisionLatin America and the Caribbean Region

This document has a res d disribtion and may be used by recipints only In the peforannce dtheir offiei dutis. ts contens may not oherwie be discsd whout Wodd ank authoraton.

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CURRENCY EQUIVALENTS

Currency Unit = Jamaican Dollar (J$)

April, 1990

US$1 = J$ 7.00J$ 1.0 US$ 0.14

FISCAL YEAR

April 1 to March 31

WEIGHTS AND MEASURES

Metric System

British/US Units Metric Equivalent

1 foot (ft) - 0.305 meter (m)1 mile (mi) = 1.609 kilometers (im)1 square mile (mi ) 2.589 square kilometers (km )1 pound (lb) = 0.454 kilogram (kg)

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

AADT Annual Average Daily TrafficCDB Caribbean Development BankCIDA Canadian International Development AgencyC'IF Cost, insurance and freightDC Directorate of Construction [MOC(W)]DEMS Directorate of Electrical and Mech. Services [MOC(W)]DM Directorate of Maintenance [MOC(W)lDMP Directorate of Major Projects (MOC(W)]DPB Directorate of Planning and Budgeting [MOC(W)]DTS Directorate of Technical Services [MOC(W)]EEC European Economic CommunityGOJ Government of JamaicaICB International competitive biddingIDB Inter-American Development BankIERR International Economic Rate of ReturnIRF International Road FederationKMR-UTP Kingston Metropolitan Region Urban Transport ProjectLGB Local competitive biddingMOC(W) Ministry of Construction (Works)HPUT Ministry of Public Utilities and TransportPSIP Public Sector Investment ProgramSFD Saudi Fund for DevelopmentSOE Statement of expendituresTSM Traffic Systems ManagementUS-AID United States Agency for International Development

FOR OFFICIAL USE ONLY

JAMAICA

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. LOAN AND PROJECT SUMMARY .................................

II. THE SECTOR ......................... 1..................... A. The Transport Sector ................................ 1B. Sector Organization ................................. 1C. Sector Issues ... ................................... 2D. Roads and Road Transport ............................ 2E. Road Transport Industry ............................. 3F. Pricing and Cost Recovery ........................... 4G. Investment in the Road Subsector ..... ............... 5H. Road Subsector Issues ............................... 6I. Government Strategy and Rationale for Bank's ........ 8

Involvement

III. THz PROJECT ............................................. 9A. Project Origin .......... ............................ 9B. Project Objectives .................................. 10C. Project Description ................................. 10D. Project Execution ................................... 11

Organization & Management ......................... 11Training ............ .............................. 12Implementation ......... ........................... 13Status of Project Preparation ..................... 14Monitoring and Reporting Requirements .... ......... 15

E. Project Costs ........................................ 15F. Financing Plan .......... ............................ 16G. Procurement ........... .............................. 16H. Disbursements .......... ............................. 17I. Accounts and Audits ................................. 18J. Economic Justificaiton .............................. 18K. Project Benefits ................ 19L. Environmental Impact ................................ 19M. Land Acquisition ......... ........................... 20N. Project Risks .......... ............................. 20

IV. AGREEMENTS REACHED .21

This report is based upon the findings of an appraisal mission that visitedJamaica in April, 1990. The mission comprised Messrs. John Flora (Principa'.Urban Transport Specialist), Stephen Pereira (Finance Specialist, Consultant)and Donald Stout (Economist, Consultant). The report was reviewed by

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

TABLE OF CONTENTS (cont'd)

Graham Smith (division chief), and Ping-Cheung Loh (director) and assembled byKeith Kehlbeck.

TEXT TABLES Page No.

I11.1 Sunmary of Costs .................................. 15II.2 Procurement Arrangements .......................... 17

ANNEXES

1 Five-Year Investment Program ........................2 Institutional Strengthening .........................3 Project Implementation Schedule .....................4 Project Cost Tables .................................5 Financial Assessment ................................6 Estimated Schedule of Disbursements .................7 Selected Documents and Data Available in the

Project File ........................................

MAP

1 Main Transport Network Map No. 22580

JAMAICA

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PR)JECT

I. LOAN AND PROJECT SUMMARY

Borrower: Government of Jamaica.

Beneficiaries: Ministry of Construction (Works).

Amount: US$ 35 million equivalent.

Terms: Repayment in 17 years including 5 years of grace, at theBank's standard variable interest rate.

ProjectObjectives: The objectives of the proposed project are to: (a)

strengthen the institutional capabilities of HOC(W) to plan,manage, and maintain the road infrastructure in a cost-effective manner; (b) improve the cost-effectiveness of theBorrower's public sector investments; and (c) improve roadsafety.

ProjectDescription: The proposed Road Infrastructure Planning and Maintenance

Project would finance managerial and technical strengtheningof the Ministry of Construction (Works) [HOC(W)J, and partof a US$ 302 million five-year infrastructure investmentprogram designed to upgrade and bring back to a condition ofmaintainability, and improve safety on, the nation's roadinfrastructure. Components to be financed by the proposedBank Project include: (i) reorganization of MOC(W),development and annual updating of the multi-year roadinfrastructure investment program, development of mechanismsto coordinate and expedite external funding programs,development of an environmental impact assessment process,technical assistance, training of staff, studies, andequipment to facilitate subsector management (62); (ii)design, construction, and supervision of selected civilworks including construction, rehabilitation and maintenanceof roads and drainage facilities, roadway geometricimprovements, and traffic and safety improvements (90?);(iii) measures to improve the management of MOC(W)'sequipment fleet, including equipment, spare parts and tools,and management systems (2I); and (iv) technical assistance,equipment, and other support necessary to develop acomprehensive road safety program (2?).

Benefitst The project will precipitate institutional improvements inthe operation of MOC(W) and more cost effective managementof a major portion of the PSIP. The useful 1'ife ofinfrastructure will be increased, and vehicle operatingcosts reduced. Efficient operations will encouragecontinued funding by external donors. Overall, theproject's IERR is in excess of 40X.

Riskst There is the risk that sufficient budget allocations and/ortimely authorization by the Ministry of Finance to spendallocated funds (warrants) will not be made consistentlyduring the life of the project. The annual reviewmechanisms will help assure that, if external factors doconstrain desirable funding levels, the core maintenanceprogram will remain and capital investments that are fundedwill be of the highest priority. The Government has,however, confirmed the priority of the program and itsfunding needs, and warrant releases have been changed to aquarterly rather than monthly basis. As part of macro-policy dialogue, Bank representatives will still need toreview and confirm periodically with Government thepriorities of this program.

Summary of Project Costs(US$ millions)

OOXPCPENS LOCAL FourWEN SCTWL UW2! lAST COST

Civll Wafks 13.0 10.9 33.9 32S 82S

Supegvsiton 2.? 0.4 3.1 132 8Z

4idp.Aet &Space Parts 0.1 0.5 0.6 63S 12

Tech. Asst.,Txaining & Studles 1.S _ 2.4 _J. _ SS 9Z

TOTAL BUSt COSTS 27.1 14.2 41.3 34Z lOOZ

PhysicalCoULeacles 2.6 1.1 3.7 s02 5z

PriceCoatLxingects 3.YS 1.8 , S 342 13Z

TOTALCCOVT BZIGKIrS 6.1 2.9 9.0 322 222

TOTAL 33.1 17.1 50.3 34Z 122Z

qj Total Costs lnclude app1ately USS 7.5 allen In ta* sad duties.

Financirg Plan

Local Foreign Total

Govt. of Jamaica 15.3 --- 15.3IBRD 17.9 17.1 35.0

33.2 17.1 50.3

ESTIMATED DISBURSEMENTS(US$ millions)

Bank Fiscal Year 1991 1992 1993 1994 1995

Annual 5.8 7.9 8.0 6.8 6.5Cumulative 5.8 13.7 21.7 28.5 35.0

Estimated Economic Rate of Return: > 40Z

2J In#t.udes retroactive financing and deposit to special account.

II. SECTORAL BACKGROUND

A. The Transport Sector

2.01 Comprising four subsectore - roads, rail, maritime, and air - thebasic transport infrastructure required to meet Jamaica' s economic developmentneeds is in place. The country's land transport system includes over 12,000miles of roads, about 85% of which is paved, and a railroad system ofapproximately 150 miles. Except for about 25 miles of track owned by the twobauxite companies, the railway is owned and operated by the Jamaican RailwayCorporation, a Government-owned company. With the exception of bauxiteindustry related exports and imports, however, all internal freight movementis by road transport, and practically all passenger traffic travels on theroad system. The maritime subsector operates through 11 ports, generallydescribed as Kingston and the Outports. Total traffic through Kingston in1989 was approximately 3. 1 million tons, about equally divided between generalcargo and bulks. Traffic through the Outports is primarily bulks and, in1989, was about 9 million tons, includtng 7.1 million tons of bauxite andalumina. The Jamaica Merchant Marine was established in 1975 and serves asthe national shipping company. Its fleet of two vessels is supplemented bychartered ships. There is also a private shipping company with two ships.The country has two international airportst one at Montego Bay, which servesthe north coast and the tourist traffic, and another at Kingston, which servesthe southern coast and caters mai-ly to business travel. There are alsoseveral small domestic airports and airstrips. Air service is provided by AirJamaica, the national airline, and several foreign carriers. There is a smallprivate airline offering domestic services.

B. Sector Organization

2.02 Except for the roads subsector, responsibility for transportadministration in Jamaica is with the Ministry of Public Utilities andTransport (MPUT). The Jamaica Railway Corporation operates the public railwaysystem, while the Port Authority of Jamaica controls the port of Kingston andsets port tariffs for the rest of the Jamaican ports. The Jamaica MerchantMarine, wholly government owned, is designated as the "national" shipping linebut they have no monopoly. Government regulations require that JHMM9 ratesand service be competitive with the private sector and Government agencies arefree to use whatever shipping line they choose. The Airport Authority ofJamaica is in charge of the country's public airports, and Air Jimaica is aGovernment-owned corporation. All are under the control of the Minister ofMPUT who generally appoints the members to the Boards of Directors of thevarious authorities.

2.03 The roads subsector is primarily under the control of the Ministryof Construction (Works) [MOC(W)I. Construction and maintenance of theisland's road and street network is the responsibility of MOC(W), and theIsland Traffic Authority which regulates trucking is chaired by the ChiefTechnical Director of MOC(W). Traffic engineering is also the responsibilityof MOC(W). Public transport, however, is provided by t*.e private sector underregulation of the Transport Authority, whose members and chairman areappointed by the Minister u' MPUT.

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C. Sector Issues

2.04 The Government of Jamaica (GOJ) faces severe economic problemsincluding a balance of payments deficit and heavy indebtedness. Likewisesocial problems partially stemming from poor health, illiteracy, andunemployment are major issues. Various programs are being proposed to addressthese issues. In varying degrees, their success will be dependent on aviable, efficient transport system. At the present time, the publicenterprises responsible for air and rail transport are operating at a deficit,requiring large government subsidies. Inefficient labor practices, inadequatemaintenance of infrastructure, bureaucratic rigidity, and poor investmentplanning and analysis keep these entities from performing at a level needed toadequately support economic reforms. The Jamaica Port Authority, which leasesmuch of Its operations to the private sector, does appear to cover its costs,but depreciation of its assets will present a problem in the future. Themajor issue facing the ports is a lack of volume. Capacity is much greaterthan traffic at the present time. The Ministry of Public Utilities ar.dTransport recognizes these deficits and is beginning discussions with theBank, and others, with a view to addressing the issues in these subsectors.

2.05 The roads subsector operates under a different ministry and, incontrast to the public sector enterprises under the aegis of MPUT, is viewedas a public service. Unfortunately the nation's road network, representing amulti-billion dollar asset vital to the performance of all productive sectors,is disintegrating. Over 60% is categorized as being in poor condition as aresult of inadequate and/or ineffective maintenance practices, poor investmentplanning and analysis, and a deficiency in staffing and organization.Planning and evaluation of investments is inconsistent and made more difficultby the multiplicity of donor agencies involved in the funding of the roadssubsector. Because of the different nature of the roads subsector from theothers, the involvement of a different ministry and the need for detailedreview of the organization and operation of MOC(W), and the impact of thissubsector on the public sector investment program as well as economic andsocial activity, the GOJ requested the Bank to concentrate this project onMOC(W) and the roads subsector. A description of the remainder of thetransport sector - rail, air, sea - is available in the project files.

D. Roads and Road Transport

2.06 Jamaica's road network is extensive, with almost 3000 miles of mainand secondary roads, 8200 miles of tertiary roads, and 900 miles of urbanroads. In addition, there are some 225 miles of roads that are maintained bythe Ministry of Agriculture (MOA) and used mainly for its Forestry DevelopmentProgram. There are some 900 bridges in the network, a majority of which arein need of repair; many have had to be closed and replaced with temporaryBailey bridges. With the exception of the forestry roads, MOC(W) isresponsible for the entire network.

2.07 A high proportion of the main road network was not originallyconstructed to specific engineering standards, much of it having been builtbefore the advent of the motorcar. There is considerable variation in the

3

standards of allgnment, construction, and drainage within comparatively shortlenq%hs. Because of these inconsistencies, many of the roads have beenmair ained on a piecemeal basis, further accentuating the uneven, fragmentednature of the network, particularly in regard to surfacing. In the past 20years improvements have been made to parts of the primary and secondarynetwork primarily as a recult of programs financed by the Bank +.d otherdonors. Much of the tertiary network continues to deteriorate, ijowever, andnow due to inadequate maintenance funding and organizational problems some ofthe reconstruction/resurfacing carried out ln these earlier programs isbeginning to show excessive deterioration.

2.08 Storm water drainage on the island, or lack thereof, is seriouslyaffecting the useful life of the road network. The original design of some ofthe roads did not include drainage facilities. As land use characteristicschange and water runoff increases, the road base is washing away. In othercases where drainage was provided many years ago, this is now inadequate andflooding frequently occurs. Though an obvious problem, many of the earlierexternally-funded projects precluded expenditures to address major drainageissues affecting road infrastructure.

E. Road Transport Industry

2.09 As already mentioned, all island-wide freight movement is handled bytruck with the exception of some materials related to the bauxite industry.There is little government regulation and most trucking companies are smallwith ten or fewer trucks. Government does not regulate tariffs, but does setbasic rates for government contracts. These rates are generally low andusually result in a scarcity of trucks avallable for government work. Thereis freedom of entry into the system, both legally and in actuality. Theexception to this free entry situation is in the hauling of petroleumproducts. The Haulage Contractors Association was formed by truckersoriginally in response to the petroleum industry arbitrarily setting rates.Rates between the Associatio.n and industry are now negotiated, but there arecomplaints that the Association restricts entry and imposes other restrictivepractices but enforces no standards for safety and reliability. In general,about 50% of the trucks using the road system are overloaded. These areprimarily in the construction industry, although beer dlstributors tend tocarry a 15% overload. Trucks hauling petroleum, and serving the ports andbreweries are generally not overloaded.

2.10 The other main commercial activity using the road network is thepublic transport system. Buses form the dominant mode for the movement ofpeople throughout the island. There are approximately 3,300 public transportbuses operating in Jamaica, of which about 1,200 operate in the KingstonMetropolitan Region and 44 operate in the Montego Bay area. The rest areconsidered inter-urban operatlons. All are privately owned and operated underllcense from the Transport Authority, created under the auspices of HPUT. Allelements of the public transport system are closely regulated includingroutes, frequencies, and fares. Both the public transport and truckingindustry cite the condition and traffic management of the road system ascontributing substantially to high vehicle operating costs, accidents, andunnecessary delays.

4

F. Pri:Ina and Cost Recovery

2.11 Revenues derived from the road transport subsect-r are not directlyearmarked for use within the sector; all enter the treas:.ry to be distributedin accordance with general budgetary practices. Revenues are sufficient,however, to cover not only present expenditures in the sector but thoseprojected for a balanced and cost-effective program of maintenance,investment, and technical assistance and training. GOJ agrees to maintainfull cost recovery in respect of the national road transport sector and willadvise the Bank of any changes of policy or actions which would adverselyaffect such cost recovery, and afford the Bank an opportunity to rpview andcomment on such 'hanges. Upon the Bank's request, QOJ will provide the Bankinformation, s9 -.sfactory to the Bank, indicating the level of cost recoveryin respect of the iector. ("National road transport sector" means allactivities pertaining to the movement by roads throughout GOJ's territory ofpeople and goods including planning, design, construction, acquisition,operation and maintenance of all road transportation equipment, material,facilities, infrastructure and operational systams.) Principal revenuesources are various duties levied on tubes and tires, vehicles and motor fuel.Motor fuel, sold at US$2.00 per gallon, is priced at or above internationalprices, and the Government agrees to maintain the wholesale prices (net oftaxes) of gasoline, diesel, lubricants, and bitumen at all times not less thantheir opportunity cost. For this purpose, "opportunity cost" means the C.I.F.(cost, insurance and freight) cost in Jamaica of the equivalent importedproduct. There has been a problem in the past .'ith adulteration of gasolinewith kerosene priced below border prices. It has been estimated that about 30%of total kerosene supply (some 147,000 barrels in 1988) ends up as anadulterant to gasoline. This Is not only a major tax loss and subsidy drainon the Treasury, but it causes damage to vehicle engines that results in lossof productive time and the use of foreign exchange to purchase parts. Thisissue has been addressed during discussions t.qtween GOJ and the Bank inconjunction with the Energy Sector Managemen: Assistance Program, and theprice of bulk kerosene used for non-domestic purposes has been laisedsubstantially to US$1.70 per gallon in a comprehensive revision of petroleumproducts pricing. Kerosene for domestic use (still sold at reduced prices butonly in small quantities and no longer available from service stations) willbe biue in color to reduce opportunities for dilution in gasoline. Acomprehensive discussion of the petroleum subsector is available in theproject files.

2.12 While road users taken together are paying in transport-relatedtaxes more than the Government spends on roads, the various road user chargeshave not been based upon clearly stated objectives or upon a comprehensiveanalysig of their impact on the transport sector. It appears, for example,that heavy vehicles are paying less than the cost of the wear and tear theyinflict on road infrastructure. Congestion is increasing in some parts ofKingston to the point that GOJ ought to be considering pricing as a mechanismto influence private vehicle demand and support public transport. Schoolchildren are often left behind at bus stops because current policy requireshalf-fare for children, to be subsidized by the private bus operator. Theissues of congestion pricing and the subsidy of school children are currentlybeing studied by MPUT, with Bank flnancing, as part of the Kingston

5

Metropolitan Region Urban Transport Project (Loan 2389); road user charges inthe trucking industry are the oubject of a study to be carried out as part ofthis proposed Road Infrastructure Planning and Maintenance Project.

0. Investment in the Road Subsector

2.13 Road expenditures are financed from annual budget allocations fromthe Ministry of Finance and from loans from international agencies. Ananalysis of revenues and expenditures is included in Annex 5. In 1990dollars, recurrent expenditures decreased from US$13.4 million to US$10.0million between 1984 and 1988, while capital investments increased fromUS$11.6 million to US$72.7 million during the same period. In 1989 thecapital expenditure was US$26 million. (1988 was an unusual situation wherebythe capital budget, which had been at about US$40 million the previous twoyears, suddenly went to US$72 million. Hurricane damage the previous year andthe demands of an election campaign appear to have prompted the abnormalfunding levels.) External financing has typically funded 19% - 44% of thecapital expenditures. Numez ous donor agencies in addition to the Bank havebeen active concurrently during the last four years including: IDB, CIDA, CDB,EEC, USAID, Saudi Fund, Canada, Great Britain, and Sweden. At the present timeothers are discussing funding proposals for specific projects in the sector.

2.14 While needed and appreciated, the Jamaican government has not hadthe local resources to support all of these programs. Quite often, someinvestments were made which were not necessarily the highest priority but wereundertaken to maintain activity in the donor's area of interest and utilizefunding with the best terms available. With little coordination among thedonor agencies and organizational problems witnln MOC(W), these numerousprograms competed for scarce human and financial resources, and oftenoverlapped or even had conflicting elements.

2.15 The '.)vernment has committed itself to the restoration andmaintenance of the road infrastructure system and the capital budget for1990/91 ts approximately US$47 million. Properly allocated, .his will providefor a reasonable roads subsector investment program devoted primarily tomaintenance, rehabilitation, and traffic management. A ptimary objective ofthis Project is the development of a multi-year investment program,prioritization of investments, and establishment of mechanisms to rationalizeand coordinate external funding. Government has agreed that this multi-yearinvestment program will form the basis for its Public Sector InvestmentProgram in the roads subsector, that GOJ will advise the Bank of any additionsor modifications to the Program as they may occur during the fiscal year, andthat the Government will conduct an annual review of the updated Program withthe Bank. This annual review will include not only the adequacy of evaluationand the relative priority of new in.estments, but the balance among newconstruction rehabilitation, and maintenance, and the continuance ofappropriate pricing and cost-recovery within the sector. In addition, GOJwill advise the Bank of any surface transport investment exceeding US$5.0million during the project implementation period, provide 'nformation on theimpact of such investment on the Bank project and give the Bank adequateopportunity to comment on such investment prior to its commencement.

6

H. Road Subsector Issues

2.16 The primary issue in the road subsector is Institutional. Duringthe past five years, the portfolio of MOC(W) has increased tremendously. In1984 they were essentially responsible for 2,900 miles of primary andsecondary roads. In 1985 all parish council roads were transferred to theMinistry (about 8,000 miles), as well as the 900 miles of urban roads in theKingston and St. Andrew Metropolitan Area. Economic austerity measures duringthis time precluded the transfer of funds sufficient to meet these newdemands, which had been aggravated by inadequate funding during the late 1970sand early 19809. Low salary levels made hiring and retention of qualifiedstaff difficult and, at any give, time, approximately 40% of the Ministry'sprofessional positions were, and still are, vacant. Some donor agencies, inan attempt to assure proper execution cf their project, insisted on thecreation of project units, often completely separate from the line agencynormally responsible for that type of program. For example, until recently,there were six road and bridge maintenance programs being carried outsimultaneously: five under the direction of four different directorates andone program reporting directly to the Permanent Secretary. There has been nosystematic evaluation of investments to establish priorities except withindonor programs and, essentially, priorities are established more according toeach donor't. perception of the needs than on economic and technical evaluationagainst all proposed sectoral investments. Scarce counterpart funding wasspread across as many programs as possible, with the result that there hasbeen no consistent, comprehensive approach to management of the island's roadnetwork.

2.17 Recognizing this problem, GOJ requested the Bank to assist indeveloping a five-year road sector investment program which prioritized allmaintenance and investment activities proposed in the sector according to atechnical, economic, and social evaluation. Government officials have metwith the various donor agencies and agreed on how the evaluated projects wouldbe financed, in what priority, and in what approximate time frame according tototal available funds. The result is the Five-Year Investment Program, shownin Annex 1. Annex 1 also includes a brief description of the variousexternally financed projects.

2.18 In conjunction with the Administrative Reform Program, theGovernment has substantially increased the salaries of senior level staff inMOC(W). This should enable them to keep experienced project directors as wellas attract junior engineers and technicians. The Ministry has agreed to, andbegun the process of reorganization, which will provide for planning andbudgeting, and direct functional responsibility and accountability (para.3.06).

2.19 Avallability and quality of MOC(W) staff is another issue affectingefficiency in the sector. In addition to a sheer deficiency in nu-bers oftechnical personnel essential to implement the program, there is a seriouslack of qualified middle management in the Ministry. Within the last threeyears, the Permanent Secretary, Chief Technical Director, Director ofMaintenance, Director of Construction, Highway Planning Engineer, and severalsuperintendents have retired or left the Ministry. Except for the Highway

7

Planning Engineer, these have been replaced, quite competently, from within.

With a few exceptions, however, this shuffling of personnel has left seriousvoids ln key senior positions below the Director level. As stated above,salary reform should improve recrultment of technicians and junior engineersin the future, and hopefully retain the existing staff to the degree possible.

The Ministry, meanwhile, is also instituting other initiatives to offset thestaffing issue, lncludlng: (i) identifylng and contracting out all activitieswhich can be done by consultants (privatizatLon is not an issue in Jamaica in

thls sector; the majority of construction and maintenance is done by contract,but the Minlstry wants to lncrease contracted labor in other areas such as

design, drafting, and supervision); (iL) developing and implementing short and

long-term tralning at all levels within the MLnistry; (ili) improvingefficiency through employment of appropriate technology; and (iv) employmentof technical assistance on a long-term basls (2 - 4 years) to assist with

development and implementation of programs durlng the period of transitlon

(para. 3.07).

2.20 Another major iesue is the lack of financial resources torehabilitate the sector infrastructure to brlng it back to a condition whereby

lt can be maintained effectively. The needs are such, particularly in theareas of drainage, that this will be a long process. This proposed project isa step in this process, developing the organizational and human resourcesnecessary to plan and implement highest priority investments within available

resources. Minimum investment needs of approximately US$302 million over thenext five years have been identified, evaluated, and prioritlzed. Commltted

financlal resources, both local and external, have been identlfled forapproxlmately 70% of these needs and financing gaps, primarily for projects in

t'he third through fifth year, have been noted. These gaps, totallingapproximately US$91 milllon, could be partially or completely covered through

additional external funding, as some donors are currently showing interest in

further participation in the program. Any continued shortfall would result in

the postponement of lower-priority projects to a later year, inasmuch as thisis a rolling 5-year program. A review in Annex 5 of past financialallocations indicates not only a serious lack of funding but grossinconsistencies in allocations from year to year. A viable program cannot be

carried out without some commitment to at least a minimum level of funding on

a rolling multi-year basis. In the development of their five-year maintenanceand investment program, goJ has identified a basic program of routine and

periodic maintenance (approximately US$20 million annually), to be funded fromcounterpart funds which will form the core of the budget. GOJ has agreed to

maintain as a minimum, in 1990 dollars, at least this level of core fundingdedicated to maintenance.

2.21 Road Safety is also an issue which is beginning to have seriouseffects on both the economy of the country and the quality of life of its

citizens. with an average of over one traffic fatality every day, Jamaica'sfatality rate (deaths per 10,000 vehicles ) is six-to-ten times that of theUnited States and European countries, and is increasing. The cost to societyis conservatively estimated at over US$31 million per year. Repalrs and

replacements require foreign currency that could be used for other urgent

economic investments. Moreover it often takes months to repair or replace a

damaged vehicle, which means a loss in transport capacity. Medical resources

8

needed for care and extensive rehabilitation of the injured could be devotedto the care and prevention of diseases. To address this issue, the proposedproject includes the development of a Road Safety Program. During projectpreparation the Government, with assistance from a consultant from the SwedishTraffic Safety Group, analyzed the traffic safety problem, and preparedrecommendations including terms of reference for development of acomprehensive program to approach thie problem from an educational,engineering, enforcement, and institutional etandpoint. A brief descriptionof this component as well as the schedule of other studies and technicalassistance to be carried out as part of this project is included in Annex 2.The Road Safety Study Report, including terms of reference, is available inthe Project Files.

I. Government Strategy and Rationale for Bank's Involvement

2.22 As part of its continuing economic reform measures, GOJ recognizesthe need to improve resource allocation through its Public Sector InvestmentProgram (PSIP). The PSIP is targeted at: (i) promoting export earning sectorsthrough investments In economic infrastructure such as airports, water andsewerage, power, roads, and communications to support the recent economicrecovery and large expansion in tourism; and (ii) rehabilitating the socialinfrastructure, particularly in health and education. The Government hasidentified the roads subsector as a priority sector not only because of itsimportance in achieving these objectives, but because of its fiscal impact.Investments in this sector, managed by the Ministry of Construction (Works),comprise almost 50% of central government expenditure in the PSIP, and GOJ--ecognizes the need to improve the efficiency of the expenditure processthrough improved economic analysis, implementation, and monitoring. TheBank's country assistance etrategy is in full agreement with the Government'spriority in the roads subsector. At the present time, implementation of thePSIP is constrained by inadequate project evaluation and selection, and lackof proper management and implementation at the ministerial level. A severeshortage of competent staff further aggravates the issue. The Bank'sexperience in the sector (para. 2.22), and that of other donors, indicates aninability of MOC(W) to manage efficiently a cost-effective public worksinvestment program. The Bank's credibility with GOJ and external lendingagencies presents a unique opportunity for the Bank to take the lead, throughthis project, to assist GOJ to reorganize MOC(W) and develop the institutionalmechanisms necessary to manlage the program, including prioritization andcoordination of external funding. This objective is consistent with thethrust of the Bank's overall lending strategy for Jamaica and with thespecific objectives of Bank assistance in the sector.

2.23 Going back to 1965, the Bank has been involved in six projects inthe roads subsector in Jamaica. The First Highway Project (Loan 408-JM,US$5.5 million, April 1965) was for detailed engineering and construction ofmain arterial roads. The Second Highway Project (Loan 899-JM, US$9.3 million,May 1973) was for road maintenance. The Third Highway Project (Loan 1032-JM,US$13.5 million, June 1974) was for construction of about 20 miles of arterialroads. The Fourth Highway Project (Loan 1740-JH, US$16.0 million, June 1979)provided support for the Five-Year Road Maintenance Program 1979 - 1984. The

9

Highway Maintenance Project (Loan 2293-JM, US$15.0 million, January 1984) wasthe fifth project, and the Kingston Metropolitan Region Urban TransportProject (KMR-UTP) (Loan 2389-JM, US$16.0 million, September 1984) was the mostrecent. The Highway Maintenance Project was completed on June 30, 1989 aftertwo one-year extensions, and the KNR-UTP is on-going.

2.24 All of the projects experienced delays based on their schedules atappraisal, but they fall within the regional and sector profiles.Institutional issues were major problems in the first two projects includingunder-estimation of project costs, poor supervision, and unsatisfactorypreparatory activities. Labor disputes also contributed to neither projectfully achieving its physical objectives. The Third and Fourth projects showedimprovement in Ministry technical activities, but inadequate counterpartfunding and contractor failure caused long delays. Although specific physicalobjectives of the project were only partially achieved, substantial amounts ofunscheduled rehabilitation and resealing works were done which offset theseparticular project components. While never fully achieving all projectedphysical targets in these projects, it appears there was a continuousincrease in the Ministry's technical capability.

2.25 The Highway Maintenance Project suffered from a lack of counterpartfunding and competition with other externally-funded projects and, thoughcompleted in five years, it was still two years later than anticipated atappraisal. The significant objective not achieved was improvement in theacquisition of spare parts and maintenance of equipment. This issue has beenaddressed in the preparation of the present project. The KMR-UTP is underwaybut behind in achievement of its physical targets due to a lack of counterpartfunding. As in the case of the Highway Maintenance Project, these delays pointto the need for better coordination among all the different externally-fundedprojects. Several elements of the KMR-UTP were simply not as important ascomponents of other projects and have had to be deferred for lack ofsufficient funding. on the other hand, however, less important but morefavorably-financed projects have been included ahead of highly cost-effectiveKMR-UTP components such as intersection reconstruction. In general, pastprojects have improved the technical capability of MOC(W) to executemaintenance and rehabilitation works, and the KMR-UTP has positivelystrengthened its traffic engineering capability. However, the overallinstitutional ability to manage works - evaluation, planning, budgeting,control, supervision, and coordination - is still insufficient to carry out acost-effective public works program, especially in times of severe budgetconstraints and the interests of numerous external agencies. The proposedproject builds on the technical expertise developed in the past andconcentrates on developing the institutionial organization and ability tomanage a multi-year public sector Investment program.

Il. THE PROJECT

A. Project Origin

3.01 The proposed project was identified in July, 1988, to address issuesadversely affecting the management of investment in the road subsector in

10

Jamaica and the consequent social and econo>i)c impact on the country. Theproject was appraised April 9-20, 1990. Negotiations were held in Washington,D.C. October 9-12, 1990. The Government delegation was led by Mrs. GloriaGray from the Ministry of Finance.

B.* Project Objectives

03.02 The objectives of the proposed project are to: (a) strengthen theinstitutional capabilities of the Ministry of Construction (Works) to plan,manage, and maintain the road transport infrastructure in jamaica in a cost-effective marnner; (b) improve the cost-effecti-eness of the Borrower'sinvestmente in its road transport sector; and (c) improve road safety.

C. Project Description

3.03 The proposed Road Infrastructure Planning and Maintenance Project ispart of a US$302 million Five-Year Investment Program designed to upgrade, andbring back to a condition of maintainability, the nation's roadinfrastructure, including rural and urban roads, bridges, drainage facilities,and traffic signs, signals, and markings. The words "Program", "Project" and'Five Year Investment Program' will be used throughout this report todescribe, respectively: (i) the Ministry's total five-year Investment pl&n,which includes financing from the Bank and many other sources (Program), and(ii) those elements of the Program being financed by the Bank (Project). TheFive Year Investment Program is a rolling five-year plan; it will be re-evaluated annually, and components scheduled according to priority andavailability of funds. The proposed Project would provide overall supervisiondf the annual investment evaluation, prioritization, and implementationprocess, coordinate technical assistance, facilitate the coordination of thevarious externally-funded projects in MOc(W), and finance those priorityactivities for which there is no alternative funding. Specific components tobe financed by the Project are the followings

a. Institutional. (6% of project costs) Reorganization of MOC(W),development of mechanisms tv coor%.Inate the implementation ofexternally funded projects within MOC, technical assistance toassist with development, management and implementation of the five-year investment program during a transition period during whichstaff are being trained or hired, training of staff, studies, andequipment to facilitate subsector management. This component ismore fully described in Annex 2.

b. Infrastructure Improvements. (90% of project costs) Design,construction, and supervision of selected works included in therolling five-year investment Program. These works are identified inthe Five Year Investment Program provided in Annex 1 as those to befinanced by IBRD under this Loan and in the amounts thereinspecified, and include reconstruction, rehabilitation andmaintenance of roads, bridges, and drainage facilities, geometricimprovements, traffic and safety improvements, and equipment tofacilitate the implementation and effectiveness of these works. Thespecified investment amounts of Annex 1 may vary depending on

2

available qualified personnel, and focus on this importantactivity.

d) Concentration of all maintenance activities (except bridgemaintenance) within the Directorate of Maintenanceregardless of funding source. Bridge maintenance would bea function of the Bridges and Civil Works Branch withinthe Directorate of Highways.

e) Though individual capital projects may be executed from separateproject units for budgetary purposes, they would operate within, andreport for administrative purposes to, the appropriate linedirectorate. The Directorate of Technical Services, which is ofteninvolved in assignments overlapping the duties of otherdirectorates, will be eliminated and staff reassigned to theappropriate directorates.

f) The Directorate of Electrical and Mechanical Systems wouldbe eliminated. Maintenance of building-related electricaland mechat .cal equipment would be transferred to theDirectorate of Buildings. The management ofconstruction/maintenance vehicles and equipment wouldbecome the responsiblility of the Directorate of EquipmentManagement under an equipment management system developedduring preparation of this project.

Technical Assistance

3. Over the years, low salaries and the perceived lack of opportunity havecaused an erosion of qualified technical and managerial personnel within theMinistry. This has created a shortage of personnel which has been furtheraggravated by the retirement within the past three years of the Ministry'sfive most senior personnel. These top posts were adequately filled withpersonnel from within but this has further exacerbated the shortage ofqualified technicians charged with planning and executing the Ministry'sprograms. Recognizing this, several of the externally-funded programs haveincluded technical assistance, but this was typically restricted to thefunding agency's program, leaving gaps and inconsistencies in the remainder ofMOC(W)'s work. Recently, however, GOJ has restructured substantially thesalary scale for technical personnel and, with the reorganization of MOC(W),it appears it will be easier to attract and hold technical personnel. TheMinistry is shifting much of its design and supervision work from in-house tocontract, and therefore hopes to be able to operate more efficiently withfewer people. It will take several years to make this transition, however,and, on an interim basis, MOC(W) anticipates the need for substantialtechnical assistance to help administer the Five-Year Investment Program aswell as train counterpart staff to take over the functions.

4. At the present time the Bank is financing traffic engineering technicalass.:t'nce which is scheduled to continue for another year. This assistanceis not limited to the Bank's financed investments but is provided ascounterpart to assist and train Jamaican staff in development and

3

implementation of traffic management activities. An experienced expatriottraffic engineer works on a day-to-day basis with a trained but inexperiencedJamaican traffic engineer; various specialists i.e. traffic signalization arebrought in as needed. This same approach is being adopted for implementationof the Five-Year Infrastructure Investment Program and has been agreed to byall participating financing agencies. For example, CIDA has included severalstaff-years of technical assistance in bridge design and maintenance as partof their Jamaica/Canada Bridge Development Program. This staff will not belimited to working only on those bridges identified as part of the CIDA-financed project. Their terms of reference now include whatever assistance isneeded to help the Ministry's Bridge and Civil Works Branch develop andimplement a cost-effective bridge evaluation, design, and maintenance program.The same is true for the road design and maintenance engineers, andconstruction supervision personnel currently being financed by IDB and EEC.In addition, the proposed Bank-financed Infrastructure Planning andMaintenance Project, will finance several additional specialists to assistwith Program development and train counterpart staff to assume fullresponsibility for evaluation, planning, implementation, and monitoring.Attachment 2 indicates the technical assistance committed to the Program.Approximate cost figures are provided for the technical assistance($1,772,000) financed as part of the Project. Technical assistance beingprovided through other externally-funded projects, and which comprise anintegral part of the overall five-year investment program, are shown forreference.

Training

5. Extensive training of existing and newly hired MOC(W) personnel is thethird element of the institutional strengthening activities included as partof this project. The training will complement the reorganization of theMinistry and is an integral part of the technical assistance. The objectiveof this training is tot

a) strengthen the performance capabilities of MOC(W)personnel in the areas of (i) public sector infrastructureinvestment evaluation, planning, execution, andmonitoring; (ii) administration of public sectorinvestment programs: (iii) planning and administration ofinfrastructure maintenance. and

b) strengthen the training unit within MOC(W) to planorganize, coordinate, implement, and evaluate relevanttraining programs-

6. The training program would comprise four basic parts: (i) a series oftraining courses in Jamaica for MOC(W) staff, contractors, and consultants tobring their level of expertise up to the standard required to fulfill theirvarious functions; (ii) on-the-job training provided by the technicalassistance outlined in Attachment 2; (iii) study tours abroad for senior levelofficials in public administration, infrastructure planning, construction, andmaintenance, traffic management and road safety, and project management; and(iv) training through technical assistance for the training unit of MOC(W).

4

7. MOC(W) has a training unit and regularly presents training courses,primarily to administrative support personnel. Throughout this proposedtraining program, emphasis will be placed on widening the scope, and improvingthe quality, of the Ministry's own training activities. During projectpreparation, the training unit, with the collaboration of divisionalmanagement and consultant assistance, prepared preliminary estimates ofMOC(W)'s current and projected training needs, based on the reorganizedstructure. It was determined that MOC1W), over the next five years, will needto provide training to approximately 8900 participants (the actual number ofpeople is less; some trainees will participate in more than one course.)Attachment 3 provides an outline of the types of courses and participants bycategory anticipated for each course. This program will be finalized duringthe first three months of the project by the Training Unit with the help ofthe training consultant and other technical assistance assigned to thespecific directorates.

8. A large number of these participants (7000) will be private individualscontracted to work in the parishes maintaining segments of rural roads.Called the "lengthman" program, this was the subject of a pilot exercisefinanced by USAID during the past year. A private individual is contracted tocarry out routine maintenance (grass cutting, cleaning of drainage channels,filling of holes,) along short segements of rural roads, usually 2 to 5kilometers in length. He would be periodically supervised by HOC(W) fieldpersonnel. Preliminary results indicate the program can be successful andvery cost-effective if proper training is given to the lengthmen and thesupervisors.

9. As stated in paragraph 7, a key element in this training program isimprovement in MOC(W)'s in-house capability to provide efficient trainingactivities. During the first two years of the project, technical assistancewill be provided to assist the training unit to improve its skills inidentifying, organizing and evaluating skills development programs.Additional staff have been assigned to the Unit, and these "trainers" will betrained by the full time consultant technical assistance, as well as throughspecifically designated training programs. As an example, the InternationalRoad Federation (IRF), funded through the Project, will play a major role in.training Ministry personnel, contractors, and consultants in road planning,design, inspection, and maintenance, as well as routine equipment maintenance.In addition to providing this direct training to sector personnel, however,they will provide 45 video taped training modules for future use. Theircontract will include training MOC(w) trainers in the use of these materialsand conduct of the courses so that it can be an on-going activity in theMinistry's training program. Attachment 4 identifies each of these trainingmodules.

10. Overseas courses and study tours would be included in the project forsenior professional and management staff (twelve staff have been identifiedfor participation in this part of the program). Tentative schedules include:

a) Fourth International Conference on Road Management,sponsored by the International Road Federation; November 4-18, 1990; Phoenix, Arizona, U.S.A. Participants (3):

5

Director of Maintenance; Chief Maintenance Engineer(Urban); Construction Engineer.

b) Public Sector Administration, Royal Institute of PublicAdministration; dates to be selected; London, England.Participants (1): Permanent Secretary.

c) Traffic Management and Road Safety, cities to be identified duringroad safety study. Participants (3): Chief Inspector(Police); Chief Traffic Engineer; Director of Highways.

d) Proiect Management; this will involve sending tenengineering technicians/engineers overseas for shortcourses in civil works project management. The detailsand exact locations will be defined by the training unitonce the technical assistance for the training unit andother directorates have begun work.

11. Estimated costs for the five-year training component are as follows:

Preparation and Presentation of Courses $375,000Per Diem/Transportation for Participants/Instr. $292,000Teaching Equipment and Supplies $ 50,000Overseas Study $120,000Planning and Evaluation $ 40,000

Total $877,000

Studies

12. Three studies are included in Project funding:

a) Road User Cost Allocation Study. This study will examinethe cost responsibility for the transport system of thevarious user groups and compare those costs with theamount of taxes and user fees paid by those same groups.The study shall present a base year (actual expenditure)analysis and an analysis based on projected roadexpenditures and revenues. Based on analysis, the reportshall contain recommendations for changes in roadfinancing taxes and user fee structure which would makepayments of the various vehicle classes or user groupsmore representative of their respective responsibilitiesor, more compatible with Governmental economic/socialpolicy.

b) TSMlRoad Safety. This study, based on the preliminaryinvestigations carried out during project preparation,will develop a comprehensive programme of countermeasuresto improve road safety on the Island. It will includerecommendations for organization, training, legislation,enforcement, education, and engineering measures to reducethe traffic accident and fatality rate in Jamaica.

6

c) Flood Water Control. This study involves a comphrehensivestudy and recommendations for flood water management inflood-prone areas. The work will consist of upgradingexisting information, supplementing as necessary with newinvestigations. The study will produce specificrecommendations regarding development criteria, policy,and physical investment necessary to mitigate the economicand personal losses as a result of flooding in the area.

13.Basic data regarding the scheduling, level of effort, and costs of these

studies is as follows:

STUDIES

Tayrgt Oates for Program laplmentation

Review Submit Est.with Action Staff- Months Costs Financing

Activity Begin Complete I8RD Plan Loc. For. USS Agency Project

Studies

Road User Cost 12/92 9/93 12/93 2/94 6o 200000 1USD IPUP

TSM/Road Safety 12/91 12/92 3/98 6/93 1S 1S 390000 IBRD/CTF IPMP

Flood Water Control 8/92 8/98 6/98 a/98 6o 1S 460000 1USD IPMP

TOTAL 1,040,000

PROPOSED REORGANIZATION STRUCTURE

HOC(W)

*t;trt of1 Piottt |ietwt otr Gietzt rtetrt Dt. |ofne_ otman P r_lte of |ilwy oliswi rtagu of Bultng C.t.D |taie

Of flroan", lco

I , I _ I ,1 _ I.

.~~~~~~~~~~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~ ioa - itg. -

0owes-uctoen Coast. S Htde

1.14 lead"t afety 1.3.-5.n

T.9.1. "attic Onsimtrtie StenchPi.f.8.8. basggt m.t ntfose_tton Sat. Section R. S. S tetyD.A. Dtretorate of Aministrattion 't:A. Inlad trI fttle AuthortyD.D. (Deputy Director)D.P. DSrectote ef PItUInoe P.t.D- laut ng tnatieatise DWA ginD.P. hirectorate of P.r_oui 3.3 C.V.W. Dridg and Civil latingering VorksD.P. Directorrtt of Pisltg 1.5 t.5. ttef end Road SaetyD.ll. Direotorat et nitwaa

D.t.lt. tirectorate of g4eut4 t 11-a4get0.D. Diroctorrt. of BuildLngs

.n0df. DirerStota ot HaintWIiuOC... Cbiet Technical Director

P.p.C. Projets Flaming unitP.C., N.V. Project. coetol sb Monitoring UnItP.4.0. Fleming Adtmistrative Dntt

ft

go

(0

Annex 2Attachment 2

TECHNICAL ASSISTANCE

Target Dates for Program Tplmentgtion

Revie7 wSat.with Staff- Months Co.t. Finaneing

Activity Begin Complete IBRO Le. For. US9 Agency Project

Road Design Engineer 1/91 12/94 42 TDB/GQJ RRIP Ii

Construction Engr. 1/91 12/94 42 108/00.1 RRIP II

Engr. Supervision 9/90 12/94 100 0OJ RRIP It

Engr. Specialists 1/91 12/94 12 IDB/COJ RRIP It

Project Engineer 4/90 3/91 12 EEC RRBHP

Project Director 1/91 12/98 as 21zOo IBRO/o W IPMP

Mgmt. Systems Spec. 4/91 10/91 a 72000 IBRD/cOi TPU

Transport Economist 1/91 6/93 24 26t0K0 IWR0/0QJ JPMP

Hghwy. Planner/Engr. 1/91 6/93 24 288000 TBRO/00J IPMP

Project Engineers 2/91 12/98 48 12 194000 8RD/00.1 IP-P

Bridge Constr. Engr. 7/90 12/98 18 CIDA J/C90P

Bridge Struc. Engr. 7/90 12/93 t6 CIDA J/CBDP

Soils Engineer 7/90 12/93 9 CIDA J/CDBP

Hydraulics Engineor 7/90 12/98 24 CIDA J/CDBP

Bridge Maint. Engr. 7/90 12/93 12 CIDA J/CDBP

Equip. Mgmt. Spec. 2/91 3/92 12 12 204000 IBROIO/Q TPMP

Training Specialist 1/91 6/93 24 12 264000 1IRO/0OJ IPUP

Environ. Specialist 8/91 2/92 12 144000 1860/00.1 IPMP

Institutional Spec. 2/91 8/92 24 10*000 TBRD/GOJ IPHP

TOTAL * 1772000

1J Review periodically as needed. After lst qusrter and at maid-tenm as a

!LeXi

Key:

IPMP = IBRD's Road Infrastructure Planning and Maintenance ProjectJICBDP = CIDA's Jamaica/Canada Bridge Development ProgramRRBHP = EEC's Rural Roads and Bridges Rehabilitation ProgramRRIP II = IDB's Second Rural Road Improvement Program

tAnnex 2Attachment 3

CATEOORY AND NUER OF PMOst8L TO it TRAItNO BY CWORSE TYE

COWO ' 'IRI OF PART1CIPANTS

1 2 3 4 S 0 7 8 t o* TOTAL

arsanent S-cta rieoI a a a a a 0 a 1 2

>1trctors to o o o 0 0 a 0 1 0o 20

Architect* 0 0 0 6 10 O a 0 6 a la1kroject, ma"ago}t 4 4 4 6 0 4 12 32Efnoifteare 20 5O 20 20 106 a 0 7 *2S

EconomistS a a a a a a e 0 o

technians 0 ISO 20 tO 30 a 0 a 0 20 2seConstruction P*'sonnel 20 0 314 a 0 a a a 0 40 374laint. Supervisort (In Kingston) O O 2 a0 2

Iaint. Supervisors (In parishes) o 0 4 4 0

Langthen (in Kingston) O 0 0 0 0 O 0 0 6 6 0Longthen (in parishe") o 0 0 7000 0 0 6 e 6 7000Adainistrators 10 0 0 0 0 0 a 40 9 20 ToAccountaots 0 a 0 O So a O 12 d8Int.rn*l Auditors 0 6 0 a a 1 0 a 1 2

System Anelysts a 6 9 2 1 0 a O 0 3Uotaptoc- %ors ° * O a 20 to O O O 3e

secretaries t *I"* ° o o o e o 0 ISoClerical o o o o o o a e 3CO O SORecpt'sOft I o o o o 2 0 2

Phone Operators 0 0 0° 0 a 5 0 5OfficeAttendants 0 0 ° a 0 0 °)riser/Nach. Oreratorm O O O e 0 0 a a 0 0 oConsultants 20 2 a 0 0 20 20 a 6 6 20 lee

Contractors 0 0 49 10 26 20 0 0 0 20 t10

tOTAL TRAINEES BY CWONENT es 227 31 7066 120 165 73 44 607 234 6919

COWPONENt 1.10ENO

Techniquos for Organ. Effectivelnss 7 FINANCEEssentials of Managemnt Bailc AccountAng t

sup orvtsry llgnegnt Bs-ic Accounting trProject Nonagomnt Adunced Accounting IEquipment Usnagaont Advanced Accounting ItPer-formasce Budgeting

2 ROAO PLANNI ANO DES14N Budget Prc-ration and AdministrationTraffic Survey*Road Inventory/Condition Survey 8 ADMINISTRATIONRoad Plan a OtSeig tal drain Env. Public Sector AdministrotIonSoil a material evaluation PIn-srial Rang~tPavement Design tdvra eainRood Msintenance Training of Training OfficersEconomic Evoluatton Basic Administrative Stills

sevluottson/Rokitng of ProJ ? Peormane onegsnt * EvaluationCounter SkIilla

3 ROAD CONSTRUCTIONContractor Prequollfication 9 CLIfACALBidding and Awad Office Methods atd SlkhillsRoad Construction Induction snd OrientationConstruction Supervson RegistryCronstrctCiaon t SuperIIonPeroon-nl Procedurs

4 ROAD ii14*ENAINCE SuperannuastionRoutine MaintenancePeriodic Maintenance 10 CowtIETARY WUIECTSReobabiitstion/Reconstruction Tniraf Isl tMnctEquipment Mel ntenenco Road Sf ety

6 lRtOCE 0StCli, CONSTRUCTION AME MAINTEN"CE Effective Writing (All Components)Design International Training CoursesConstruction Seminars,HydrauIics Others to be Developed mas NemedeCeotechnicalBridge tnnvntory/Condition Suve"yMlintenance

6 COWUTER tCQOLOOYApplication ProgressOperating SystemsPrograming LonguagoComputer Hardware

Anext 2Attacbment 4

IRF VIDEOTAPE TRAINING MODULES

45 MOOULES

So"e 01-oad Manrtn: 1811. Common Mainte Problem and Cw~2 TrnloWo Control Owing Mantenaca Pothole Repar In Asphaft Concrete Paentd4. Pothole Repair in Surface Treahuent PVeMen. CrAc Repair In Asphalt Pavement

6. Repair of DepressIons, RuUlng nd ComAgates7. Bas and Subas Repair. Single and Muliple Surface Treslet_

9. Slumn Seal10. Patching Unpaved Roads11. Smoofing and Rashaping of Ear nd Gravel Reeds12. Regraveling13. Reshaping Earth and Gravel Shoulder14. Replenishing Earth and Gavel Shoules15. Mechanical Cleaning of Unlined Ditce16. Cleaning of Uned Ditches. Cuwt ond Catch Badns17. Cleaning and Clearing of Bridges1A. C;onrete Bridge Deck Repir

S. fis 02-EcuiDment Maintensne/lOoeratln: 18 _odle1. Operator Daily Maintenance of Motofgrades2. Motorgrader Operation, Pai I3. Motorgrader Operaton Pa*t 24. Articulated Motorgrader OpratinS. Operaor Daily Mainenanc of FroEdW Loade6. FrontmEnd Loader Operation. Pt 17. Fron-End Loader Operaton, Pet 28. Optor Daily Maintnance of CraeNr Tneate9. Crfwler Tractor Opeton. Pat t-0 Crawer Tractor Operaion Pait 211. Operator Daily Maintnano of RolUr12 Ropler Operation. Part 113. Roler Operation, Pat 214. Operator Daily Mainteranes of Asphalt Dlutra_S. Asphlt DbtriWor Opeaon

16. Opetor Daiy Maidntae of Ownp trucks17. Dump Truck OperatonIS. Driver Dail Mainteance of Uigh Vehicle

Sere oS-Cenetuote Ineoe s S M up odu.1. Asphalt Conet Plat ibnpecL Asphalt Conrt Paing bopeo. Field Sampling an Testing for ibA Conatu

4. ChIp Seal. Pfrm. Plush an Tack Coat inspedm& inpectg Pavemen ReccigS. Coneret Paving npdcon7. Major Stctures Ipeetion. Incdenal Concrete Suctns inpecdon

5 Feld Sanpling and Tesing for Conetb Co _tucio

I

ANNEX 3

JAMAICAMINISTRY OF CONSTRUCTION (WORKS)

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PROJECTPROJECT IMLEMEATION SCHEDULE

FINANCIAL YEARI 990/91 1991/92 1992/93 1993/94 1994/95X j2411211 21112 112

A. CONSTRUCTION AND UPGRADIkG I I I I

Washington Boulevard I _ I iLances Bay Bridge ApproachesAgualta Vale - Dover j _ _Kingston - Morant Bay I l-Carey Park - F lmouth I Land AcquisitionFeasibility Studies -l I I

S. REHABILITATION - - - - I-1

C. PERIODIC MAINTENANCE I |

New Periodic Programme I - - -I -IICRD Kingston Resurfacing - - I

0. ROUTINE MAINTENANCE

Road and Bridge Mainten4ece…- I-E. FLOOD WATER CONTROL

Send Gully A Tributar es Flood Studies A Mapping j _ I

F. TRAFFIC MANAGEMENT A ROAD SAFETY - - - j --

G. INSTITUTIONAL TRAINtNG. TECHNICALASSISTANCE A EQUIPMENT

M. PLANT A EQUIPMENT MANAGEMfENT j I I I

Equipment A Tech. Aust. I - -i1- i I i

Annex 4Table 1

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PROJECT

SUMMARY OF COST(USS Nillions)

Local Foreign 2 % ofSub-Proiects Currency Exchange Total Foreign Base Cost

A Construction 2.53 2.02 4.55 44.42 li.O%& Upgrading

B Rehabilitation 0.00 0.00 0.00 0.02 0.0%

C Periodic 8.67 6.42 15.10 42.5% 36.5%Maintenance

D Routine 13.92 0.82 14.74 5.6% 35.7%Maintenace

E Flood Water 1.03 0.49 1.52 32.12 3.7%Control

F Traffic Mgmt. & 0.85 1.95 2.79 69.7% 6.32Road Safety

G Institutional 0.11 2.29 2.40 95.22 5.8%Training, TIAand Equipment

H Plant and Equip. 0.00 0.22 0.22 100.02 0.52Management

Total Base Cost 27.12 14.20 41.31 34.42 100.0%

Physical Conting. 2.61 1.12 3.73 30.02 9.0%Price Contingencies 3.48 1.80 5.28 34.12 12.32

TOTAL 33.21 17.12 50.32 34.02 121.8%

Annex 4Table 2

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PROJECT

COST TABLE BY CATEGORY(US$ Millions)

Tech.Asst.Civil Design & Training & Land

Sub-Proiects Works Eouiment Suirvan. Studies Acauis. Total

A Construction & 2.93 0.00 0.78 0.84 0.00 4.55Upgrading

B Rehabilitation 0.00 0.00 0.00 0.00 0.00 0.00

C Periodic 13.91 0.00 1.18 0.00 0.00 15.10Maintenance

D Routine 13.90 0.00 0.83 0.00 0.00 14.74Maintenance

E Flood Water 0.95 0.00 0.12 0.45 0.00 1.52Control

F Traffic Mgmt. & 2.25 0.00 0.15 0.39 0.00 2.79Road Safety

G Institutional 0.00 0.57 0.00 1.83 0.00 2.40Training, TIAand Equipment

B Plant and 0.00 0.00 0.00 0.22 0.00 0.22Equipment Mgmt.

Total Base Cost 33.95 0.57 3.07 3.72 0.00 41.31

Physical Contin. 3.42 0.00 0.31 0.00 0.00 3.73Price Contingencies 4.38 0.07 0.40 0.44 0.00 5.28

TOTAL 41.75 0.64 3.78 4.16 0.00 50.32

Annex 4TabLe 3

RDOD INFRASTRUCTPU PLANNING AND MAlZAJNCE PROJECT

TOTAL CO:TS BY SEMESTER(US$ millions)

Category \ Year 1990191 1991192 1992)93 1993194 1994195 Total Local Foreign1 2 1 2 1 2 1 2 1 2

Design 0.14 0.13 0.33 0.26 0.00 0.00 0.00 0.00 0.09 0.08 1.02 0.92 0.10Expropriation 0.00 0.00Civil Works 2.94 2.90 3.15 3.13 4.14 4.01 3.69 3.54 3.31 3.14 33.95 23.04 10.90Supervision 0.18 0.18 0.19 0.19 0.25 0.24 0.22 0.22 0.20 0.19 2.05 1.74 0.32

Subtotal 3.25 3.20 3.67 3.58 4.38 4.25 3.91 3.76 3.60 3.41 37.02 25.70 11.32Equipment 0.00 0.00 0.29 0.29 0.00 0.00 0.00 0.00 0.00 0.00 0.57 0.11 0.46Tech. Assistance 0.26 0.29 0.17 0.15 0.45 0.44 0.02 1.80 0.18 1.62Studies 0.14 0.13 0.18 0.17 0.19 0.19 0.18 0.18 1.35 1.07 0.28Training 0.00 0.00 0.14 0.14 0.14 0.14 0.57 0.06 0.51

Subtotal 0.40 0.42 0.78 0.75 0.78 0.77 0.20 0.18 0.00 0.00 4.29 1.42 2.870.0o

Total Base Cost 3.65 3.63 4.46 4.33 5.17 5.02 4.11 3.94 3.60 3.41 41.31 27.12 14.190.00

Phys. Contingency 0.33 0.32 0.37 0.36 0.44 0.43 0.39 0.38 0.36 0.34 3.73 2.61 1.12Price Contingency 0.05 0.10 0.24 0.35 0.57 0.69 0.70 0.79 0.84 0.90 5.28 3.48 1.80

Subtotal 0.38 0.42 0.61 0.71 1.01 1.12 1.09 1.17 1.20 1.24 9.01 6.09 2.920.00

TOTAL COSTS 4.03 4.05 5.07 5.04 6.18 6.14 5.20 5.11 4.80 4.65 50.32 33.21 17.11

Annex 5

Financial Assessment

Road Sector Finances

1. Road transport revenues derived from this sector are not directlyearmarked for use within the sector; all enter the treasury to be distributedin accordance with general budgetary practices. Nonetheless there issufficient surplus generated within the sector to cover all existingexpenditures plus additional capital outlays and debt service resulting inthis project and the projected 5-year Infrastructure Investment Program. (SeeTable 1).

2. The principal revenue sources are various duties levied on tubes andtires, vehicles and motor fuel. Import duty on vehicles, tires and tubes andmotor fuel constitute an important source accounting for over 402 in 1988. Ofthese, the import duty on motor vehicles account for over 75Z of total importduty collected. It has been progressively increasing in real terms with anaverage annual growth rate of nearly 24? and amounted to over US$ 105 millionin 1988. Import duties on motor fuel and tires and tubes account for the restand have been increasing at an average annual growth rate of 30.51 and 28.5?,respectively.

3. Next in importance is the stamp duty on vehicles, motor fuel and tiresand tubes. Together they constitute over 382 of the revenues collected in1988. Of these, stamp duty on vehicles accounted for over 70? of the revenuesderived from this duty; with the other two making up the rest. However,information on motor vehicles is not complete for all years and there are widefluctuations from year to year.

4. Capital revenues are a secondary source and have hovered around 3.52 oftotal revenues since 1985. In 1989, financing through loans accounted for USS11.6 million. %

5. The principal application of the above-mentioned sources has been torecurrent expenditures of the Ministry of Construction (Works) and capitalinvestments including road maintenance. Historically, recurrent expenditureshave progressively declined from over 612 of total expenditures in 1984 to 132in 1988. In absolute terms they have declined from some US$ 13 million to 10million during this period. Capital investments have increased at an averageannual growth rate of over 362 during the same period. In 1988, however, theypeaked at an estimated 74 million dollars (85? of total expenditures) due tothe damage causec by Hurricane Gilbert.

Financial Impact

6. As stated in paragraph 1, duties, fees and other charges levied on roadusers are collected by the Ministry of Finance and redistributed to thedifferent sectors in annual budgetary allocations. The financial analysis has

therefore centered on the financial requirements and capability for supportinga 5-year rolling investment program. Table 2 indicates the projected annualfinancing requirements for the Five-Year Infrastructure Investment Programshowing IBRD, GOJ, and other donor participation.

7. Table 3 provides greater detail with regard to this proposed financing.Line item 1, Table 3 indicates the projected total annual investment program,conservatively based on historic investment levels. Line item 2 shows theannual sources of foreign funding which have already been committed and areon-going. Line item 3 indicates the schedule of annual financing from therecently-signed IDB project (April, 1990) and this proposed Bank project. GOJfunds, shown in item 4, have been based on historic levels and what canrealistically be anticipated under current financial conditions. Item 5,consequently, indicates financing gaps between the projected program (Lineitem 1) and projected total available funds (the sum of Line items 2,3, and4).

8. The Government is currently discussing with several interested sources(Japan, EEC, IDB) additional loans/grants to fill these gaps, and theliklihood is favorable. Should additional financing not be forthcoming,however, GOJ has several options:

(1) Request the Bank and IDB to advance their schedule of disbursementsto cover the gaps in the earlier years (assuming projects areready);

(2) Increase the level of GOJ financing; or

(3) Defer the lowest-priority projects to later years.

Under any circumstances, the primary objective of the Bank project would bemet.

9. In view of serious macro financial constraints, conservative assumptionshave been used to assess the financial prospects of MOC(W) during projectimplementation. On this basis, the projections indicate MOC(W) would be ableto absorb project components and sustain additional investments at levelscomparable to the mid-eighties, and the potential exists for greater leveragein investment financing. Table 4 provides details on the financial situationassessment showing historic and projected trends.

NATIONAL ROAD TRANSPORT SECTOR ANALYSIS - (US 81000'S)

| 1984/861986/88 1988/87 1987/F3 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/951l _ _ _ - - - -_______…----------…-…-…--- - -- - ---------------- I- - - - - -- - -…-------------…---- --l …

I REVNUES I I l I l l I I l l l I

a) Current I I I I I I I i I- Import Duty -Tyres and Tubes I 3a88 10294 I 8462 I 134u88 16212 I 19616 I 23492 2a492 1 23492 I 28279 I 28279-Import Duty - Road-Motor Vehicles 128139 1 44690 1 37389 1 88172 1106574 1130782 1130782 1130782 1130782 1130782 1130782-Import Duty - Motor Fuel 3 55665 10015 I 8177 7 13216 I 16786 18734 I 22308 I 28669 1 31622 3766 1 376S1 - Excise Outy - Motor Fuel (a) 2724 20a9s 63088 2S901 3 730 26901 26901 26901 26901 2S901 2 Zv901 l -E£xcise Duty - Tubes and Tyree 2618 199,4 62655 4277 18107 17311 less 200S 21641 23321 23321l - Driver's Licence Fees etc. 8 6a7 1 U80 7276 6900 7619 7 7?4 903O8 8311 8593 18884 8 8841-Stamp Duty - Tubes and Tyres I (b) I 12210 1 12130 I 19158 20713 1 22396 I 24489 I 28777 I 29278 3 32014 I 32014l M- otor Fuel (b) l 10711 l 10507 l 17484 18647 I 19909 I 21267 I 22696 I 24233 I 26874 I 25874l - Motor Vehicles I (b) | 43208 I (118418J7 90285 I 90286 1 90286 1 90286 1 90285 | 90286 1 90286 1- Consumption Duty - Tubes and Tyree l 2281 I 831 1400 I 2000 3 3283 | 3743 I 4268 e 4888 I 6549 I 8327 68327

- Motor Fuel 348 7 748 1375 1983 3271 4530 I 6276 I 8891 .12038 18674 18674- Motor Vehicles 94w7 I 13897 I 14952 I 28204 I 37102 I 39919 42949 4 48210 49718 63a493 6349? Ib) Capltal l I I I I l l- Financing Loans - MDC(W) I 0 8194 10835 13747 I 11771 11608 27438 818356 I 36951 41678 6223t

- RPUT |-I-I -I I 266 1 613 -- I- 01 01 01I -OCronts -NDc(W) 1C1 - 18 694 117981- - I - O 0 1 01I - MPUT _ I_ I - I - _ I _ I _ I _ I _ I _ I-| c) Total Revenues 57281 1180649 l18eOS1 1394824 1337769 1396829 1429343 1447916 1470808 1500074 1611131

2 EXPENDITURES I I I I I Ia) Recurrent I I I I I I I I I i iI - Ministry of Construction (M) 113448 1 14390 1 10729 1 9460 1 10028 1 8810 I 9609 1 10726 1 11600 1 12196 13147 1

- Ministry of Transport l-I - l - I _ I _ I _ I _ l Ib) Capital

- Ministry of Construction MW). 111216 1 21038 1 37727 1 42424 | 72867 1 26164 46096 11 28356 58861 1 88178 1 78436- Mlinistry of Transport* l- l I - 266 113 1-I - II~~ ~~ ~~ ~~ ~~ ~~ ~~~ .I 1 I I I I - - - Ic) Total Expenditures 124884 1 36428 1 48466 1 S2129 I 83208 1 34984 1 55606 183080 1 70461 1 78373 1 91682 |II I I I I I I I l I IINET FUNDS FOR DEBT SERVICE & ADDITIONAL 132597 1145123 1132159 1342495 1264552 1361065 1373738 1384865 1400167 1421701 1419549 1CAPITAL OUTLAYS II___ _________ -_-_-_____________-------------_____________________________________________________________-_-_________________________ x

(a) - Excludes the figures for April, Msy & August 1989 for Gasolene. *(b) Data not available4 - Includes Capital A & 8.

IBRD ProjectMOC(W) - Ministry of Construction (Works)MLG - Ministry of Local GovernmentMPUT - Ministry of Public Utilities & TransportSource - Statistical Institute of Jamaica

- Internal Revenue Dept.

11

relative priority and availability of other sources of funds duringproject implementation. The Bank would approve any such changesduring the annual re-evaluation of the rolling five year Program tobe reviewed with the Bank. In the initial development ofmaintenance activities and/or the removal of backlogs of work, alltypes of maintenance are to be financed by the Bank. However, GOJhas agreed to provide counterpart funds annually (S20,000,000 forfiscal year 1991/1992; $21,000,000 for fiscal year 1992/1993:$22,000,000 for fiscal year 1993/1994; $23,000,000 for fiscal year1994/1995; and $24,000,000 for fiscal year 1995/1996) to carry outan adequate routine and periodic maintenance program. Thiscommitment should provide a discipline to promote sustainability tothe maintenance activities, once the project is complete.

c. Equipment Maintenance Program. (2% of project cost) MOC(W) hasdeveloped and adopted a new system for managing the vehicles andconstruction/maintenance equipment used in carrying out the Ministryactivities. To facilitate implementation of this system, Projectfunds will be used to assist with financing technical assistance tohelp set up and implement a new equipment management system and helpdevelop contracts for equipment rental and lease, and purchase spareparts, equipment, and tools to facilitate maintenance of thatequipment which it is more cost-effective for MOC(W) to maintain.

d. Road Safety Program. 12% of project costs) This component providesfor technical assistance to carry out the necessary study (definedin Annex 2) to develop, and assist with implementation of, acomprehensive road safety program. It also includes equipment,materials, and other support (media, printing, public relations)necessary to develop/promote the road safety program.

3.04 The remainder of the Five Year Investment Program, including some ofthe technical assistance, training, and studies, would be financed from othersources including external agencies. In addition to their own funds, theGovernment of Jamaica has secured agreements with CIDA, IDB, CDB, USAID, theSaudi Fund, and EEC to finance portions of the five-year Program. (Details ofthese agreements are included in Annex 1.) While providing only about 12% ofthe financing needed over the five-year period, the proposed Bank Project actsas a catalyst, helping to initiate, coordinate and validate the process ofProgram development and maintenance.

D. Project Execution

3.05 Organization and Hanagement. The Governmentes representative foradministration of the Project will be the Ministry of Construction (Works)(MOC(W)). Within MOC(W), the Directorate of Planning and Budgeting (DPB) willbe responsible for administration of the proposed loan, including disbursementapplications, operation of the Special &ccount, preparation and remittance ofprogress reports to the Bank, coordination with the Auditor General. andgeneral project coordination. DPB would also be responsible for the annual

12

re-evaluation and upgrading of the Five-Year Investment Program and liaisonwith the Ministries of Finance, and Production, Development, and Planning.Coordination of all projects, particularly those funded by external agencies,would be carried out by the Projects Control and Monitoring Unit within DPB.To facilitate coordination, GOJ has agreed to have a meeting of the activeexternal funding agencies with HOC(W) not later than November 30th of eachyear to discuss project progress, delays and or problems that may necessitatereallocation of funds or rescheduling, issues such as procurement or workquality, and generally provide a synergistic rather than a competitiveapproach among the different funding agencies (para. 4.01(g)). Implementationof civil works would be the responsibility of the appropriate linedirectorates, i.e. (i) routine and periodic maintenance activities:Directorate of Maintenance; (ii) rehabilitation and construction: Division ofRoads within the Directorate of Highways; (iii) traffic management and roadsafety components: Division of Traffic and Road Safety within the Directorateof Highways. Road safety activities will be implemented by several entities(police, schools, licensing groups, public transport operators, et al, butthey will all be coordinated through the Division of Traffic and Road Safety;(iv) equipment management: Directorate of Equipment Management; and (v)training: Training Division of the Directorate of Personnel. An organizationchart is shown in Annex 2.

3.06 MOC(W) is in the process of reorganization to facilitate operationas described above. This reorganization involves restructuring the number andtypes of administrative and operative units in the Ministry, theirresponsibility and accountability functions, and transfer of personnel. TheMinistries of Finance and Public Service have given their preliminary approvale'o the reorganization, and the latter is assisting with development of unitand individual task descriptions, the final step to obtaining formalGovernment approval. This reorganization is essential to improving efficiencyand quality in the Ministry's work. Initial steps have already been taken,including assignment of all project units to report directly to linedirectorates. External agencies whose projects were affected have agreed tothese changes. Features of the re-organization are more fully described inAnnex 2, along with details regarding the technical assistance necessaryduring the Ministry's transition to a more efficient organization.

3.07 Training. Although implementation of civil works comprises themajority of project costs, success in meeting project objectives depends onthe capacity of MOC(W) to efficiently plan and manage its annual work program.Training components have been formulated to overcome the problems described inparagraph 2.16 by: (a) emphasizing managerial training as well as that ofprofesslonals and technicians through seminars, postgraduate courses,technical short courses, and on-the-job instruction; (b) stimulating the useof external training courses already available in Jamaica; and (c)strengthening the existing MOC(W) training unit so as to enable it to providetargeted, viable programs in support of Ministry activities.

3.08 The training program would be an integral part of the Five-YearInvestment Program, with portions funded locally and others included invarious externally-funded projects. Financing would be provided under theproposed loan for: (a) studies of training needs, lncluding training

13

evaluation and followup; (b) contracting courses wlth local and internationalinstitutions; (c) strengthening the MOC(W) unit in charge of training; (d)consultant services to assist MOC(W) in planring, implementing, and monitoringthe training; and (e) funds to prepare and Implement specific portions of theoverall training program identified in the Five-Year Investment Program.Details of the training to be included in the proposed Bank Project areincluded in Annex 2.

3.09 Implementation. The Project would be implemented over a five-yearperiod. Though 12 months shorter than the regional profile, it is inaccordance with experience in Loan 2293-JM (Highway Maintenance Project) andcoincides with the Five-Year Investment Program based on projections ofavailability of local counterpart funds and involvement and cooperation of thedifferent external funding agencies. The Project Implementation Schedule isincluded as Annex 3. Specific components have been identified for inclusionin each year's program. The Five-Year Investment Program, however, is arolling plan, re-evaluated each year, and there may be some variation in theexact timing of component implementation based on the priority assignedthrough re-evaluation each year. The timing of the proposed studies andtechnical assistance, however, is critical to achievement of projectobjectives regardless of the civil works implementation schedule. Thefollowing Action Plan has therefore been agreed:

(a) Unless otherwise agreed by the Bank, the following shall be theschedule for implementation of the following activities:

Commence Furnish ReviewImplementation Recommend. Recommend.of Study by to the Bank with

Activity -(date) (date) IBRD by

StudiesRoad User Costs 12/31/92 9/30/93 12/31/93Road Safety 12/31/91 12/31/92 3/30/93Flood Water Control 3/31/92 3/31/93 6/30/93

Tech. Assistance Appointment ByProject Director 1/1/91Transport Econ. 1/1/91Highway Plan/Engr 1/1/91Proj. Engineers 2/28/91Equip. Mgmt. Spec 2/28/91Institutional Specialist 2/28/91Environ. Specialist 3/31/91

(b) With regard to the Road User Cost Allocation Study referred toin paragraph (a), it is further agreed that, based on the results ofthe study and recommendations to the Bank, the Borrower will developand carry out actions necessary to implement the recommendations,revised to take into account the Bank's comments.

14

(c) The borrower will prepare and provide to the Bank no laterthan within 30 days of the end of each quarter ending December 31,March 31, June 30, and September 30, of each year until the ClosingDate, a written report an the progress achieved in the execution of,inter alia, the physica), financial, and institutional aspects ofthe Project. Each such report shall be of such scope and detail asthe Bank shall reasonably request and shall include inter alia,information indicating progress achieved, measured against keymonitoring and evaluation indicators acceptable to the Bank. Thereport covering the period ending March 31 of each year shouldinclude the adopted (or proposed) budget for the following fiscalyear.

(d) Not later than October 1 each year, the borrower will provideto the Bank a written report on the progress made during theprevious year in the implementation of the Five Year InvestmentProgram including other e2.ternally-funded projects. Each such reportshall be of such scope and detail as the Bank shall reasonablyrequest and shall include inter alia, information indlcatingprogress achieved, measured agalnst key monitoring and evaluationindicators acceptable to the Bank.

(e) Durlng the annual review of the updated Five Year InvestmentProgram, GOJ will present to the Bank evidence that any landnecessary for construction activities proposed for the succeedingyear has been acquired. Land acquisition would be done inaccordance with policies, rules, and criteria acceptable to theBank. Should implementation of the proposed project requiredisplacement or resettlement of population, GOJ would notify theBank thereof, and upon the Bank's request would present aresettlement plan, satisfactory to the Bank, prlor to anydisplacement or resettlement.

(f) The borrower will Implement the plan of reorganization as perthe provisions of the schedule agreed to with the Bank dated October10, 1990.

(g) The borrower will implement the equipment maintenance systemas per the provisions of the schedule agreed to with the Bank datedOctober 10, 1990.

3.10 Status of Project Preparation. MOC(W) has prepared and recommendedto the relevant Government agencies its Five-Year Investment Program, and theBank's proposed Project components have been identified, evaluated, andscheduled. Agreements have been reached with external financing agencies asto the relative scheduling of their projects and on the reorganization of theMinistry. MOC(W) has agreed on the elements of its reorganization, hasreceived prelLmLnary approval from approprlate Government officials, and hasbegun implementation of the proposals, including identiflcation and placementof key staff. With the exception of routine and perlodic maintenance,engineering designs of all civil works to be started during the flrst year of

15

implementation are complete. Terms of reference for all studies andtechnical assistance are complete.

3.11 Monitorinq and Reporting Requirements. MOC(W) would furnish projectprogress reports to the Dank within 30 days of the end of each quarter. Thesereports will focus on physical, financial, and Institutional aspects of theproject in accor:'nce with agreed indicators. In addition, prior to Octoberlot of each year, MOC(W) will provide to the Bank a progress reportsummarizing activity on all projects, both locally and externally-funded,administered by MOC(W).

E. Project Costs

3.12 Total costs of the proposed Bank-funded project are estimated to beapproximately USS50 million, including taxes and duties of about US$7.5million. Foreign exchange costs represent approximately 34% of the totalcosts. Costs are based on actual prices at the time of preparation,projected to September 30, 1990. Coets for civil works construction are basedon contractors' unit prices for e4milar works; equipment prices are based onmanufacturers' quotations and recent purchases. Fees for technical assistanceand other profrzsional services are based on Jamaican and Bank experience withsimilar locally and internationally recruited experts in Jamaica. Physicalcontingencies of 10% were included for all civil works. Price contingencieswere calculated with anticipated international inflation rates of 4.9% perannum for the period 1990 - 1995. The project cost summary is shown in TableI1.1; detailed cost tables are provided in Annex 4.

Table 1I11l Suomary of Costs(USS lllts)

C-OMPONENS LOCAL PORE1N TTAL FC UXU2N BASS COST

Civil Works 23.0 10.9 33.9 32S 82S

Design &Supervision 2.7 0.4 3.1 13S 8S

Equipmeat &Spare Parts 0.1 0.5 0.6 831 it

Tech. Asst.,Training & Studies 1.3 2.4 3.S 63S 91

TOTAL SA COSTS 27.1 14.2 41.3 341 1001

PhysicalContingencies 2.6 1.1 3.7 301 9S

PriceContingencies 3.5 1 8 5.3 34Z 13S

TOTALCONTINGENCIES 6.1 2.9 9.0 321 22S

TOTAL COSTS 33.2 17.1 50.3 342 122Z

16

F. Financing Plan

3.13 The Bank loan of US$35 million would finance approximately 70% oftotal Project costs: 100% of foreign exchange costs and about 54% of localcosts. Financing of local costs is justified based on the urgent need forlarge expenditures in the sector to arrest deterioration of the road network,to support the reorganization and renewed institutional policies of MOC(W),and to facilitate the most cost-effective use of Bank funding in coordinationwith other existing external funding arrangements which are typically 70% -100%. The loan would be made to the Government of Jamaica at the standardvariable rate for 17 years, including a 5-year grace period. The beneficiarywould be the Ministry of Construction iWorks), which vould receive the fundsin fiscal appropriations from the Ministry of Finance. Counterpart fundingwould be provided by the Government of Jamsica.

3.14 The specific elements of the Government's Five-Year InvestmentProgram to be funded by the Loan will be coordinated with the projectedavailability of other funds based on existing and proposed external fundingagreements and projected local revenues. The proposed loan would financeapproximately 12% of the projected five-year Program costs of USS302 million,the Government of Jamaica would finance approximately 37%, and other externalfinancing the remaining 51%. The financing plan for the Project and Programis provided in Annex 5, along with a discussion of the financial impact of theProject.

G. Procurement

3.15 International competitive bidding (ICB) following Bank Procurementguidelines, would be used for all civil works contracts in excess of US$2.0million and the purchase of goods costing over US$100,000. This includesapproximately 15% of the civil works procurement and 67% of goodspurchases. Local shopping, with at least three quotations, would be used forprocurement of civil works and goods costing less than US$SO,000 for civilworks and US$25,000 for goods, but not exceeding an aggregate of US$750,000and USS100,000 respectively. Local competitive bidding (LCB) would be usedfor all other contracts for civil works and goods. LCB procedures werereviewed and are satisfactory to the Bank. Civil works for routinemaintenance of road infrastructure, and civil works for construction of newroad infrastructure not to exceed in the aggregate US$500,000 equivalent, maybe carried out by force account under procedures and unit costs acceptable tothe Bank. Force account procedures and unit costs have been reviewed and areacceptable. Periodic review will be made during project supervision. Allprocurement for studies, technical assistance, and training would be done inaccordance with the Bank's guidelines for the use of consultants. Procurementarrangements are summarized in Table 111.2.

3.16 The relatively small amount of ICB is because most procurementrelates to small maintenance and rehabilitation works scattered throughout thecountry and spread over a five-year period. Jamaican experience in thesector in the past indicates little or no interest from foreign bidders forthis type of project, due to the difficulty in competing successfully with thelocal contracting industry. Jamaica presently has numerous small contractors

17

and three large companies, including one foreign firm, capable of heavyoverlay work. In an effort to stimulate interest, projects wlll be packagedwhere feasible to make them more attractive to foreign companies and allprocurement for both civil works and goods under LCB would be open to foreignbidders. This would be facilitated by a direct announcement to all officialforeign representatives in Jamaica (embassies, consulates, commercialattaches, etc.) prior to January 30th of each year advising them of thetentative scope and content of the Ministry's public investment program forthe next fiscal year and advice as to qualification/bidding procedures andwhom to contact. This would be in addition to the Bank's required GeneralProcurement Notice to be published in Development Business.

3.17 Prior Bank review and approval would be required of all IC8, and ofall procurement documents related to the first two contracts each of civilworks and goods procured under LCB procedures. All other procurement would bereviewed ex post on a sample basis. All procurement for studies, technicalassistance, and training would require prior Bank review and approval.

Table 111.2 PROCUREHENT ARAAGI"ZNSS 11(US$ millions)

PaoJScT ELME El PROCUREM? HETMODICs LCS 0o7t. TOTAL

21Civil Works 6.3 32.2 3.3 41.8

(4.3) (21.7) (2.3) (26.3)

3'Equipment & Spare Parts 0.4 0.1 0.1 0.6

(0.2) (0.1) (0.1) (0.4)

41Technical Assistance. Training, Studies. 7.9 7.9Design 6 Suiervision (6.3) (6.;)

TOTAL 6 7 32.3 11.3 50.3(4.5) (21.8) (8.7) (35.0)

Notes 11 Including taxes and contingenciest amounts in brackets showallocations from loan proceeds.

21 Local Shopping and force account.

3/ Local Shopping.

41 Studies, technical assistance, training, design andsupervision, procured in accorance with Bank guidelines.

H. Disbursements

3.18 The loan would be disbursed over a five-and-one-half year period asfollowss {i) Civil Works: 68% of total expenditures; (ii) Equipment and spareparts? 100% of foreign and 70% of local expenditures; and (iii) Studies,Technical Assistance, and Training: 80% of total expenditures. Only thoseinvestments included in the Five-Year Investment Program and approved forfunding by the Bank would be considered eligible civil works for disbursementfrom the loan.

3.19 Disbursement for eligible expenditures for civil works contractsvalued at under USS500,000, and goods contracts valued at under US$100,000,

18

and training expenses included in the annual training plan, would be madeagainst Statements of Expenditures (SORE). Supporting documentation would beretained by MOC(W) and available for review during supervision missions.Retroactive financing of all eligible expenditures, not exceeding US$3.5million, would be provided ior expenditures approved by the Bank and incurredafter April 1, 1990. Eligible expenses would include training, technicalassistance, and studies, equipment necessary to carry out the studies andinstitutional strengthening, and civil works. A projected disbursementschedule is provided in Annex 6.

}. Accounts and Audits

3.20 To reduce the interval between payments made by the beneficiary andreceipt of reimbursements from the Bank, a Special Account would beestablished in the Central Bank of Jamaica. The Special Account would bedenominated in US dollars and would be established with an initial deposit ofUS$2.3 million, the average four-month requirement. Project expenditureswould be monitored by the Planning and Budgeting Directorate, which wouldrequest replenishment on the basis of the Bank's standard disbursementprocedures. Present budgetbri and accounting systems appear adequate torecord the transactions and verify the levels of expenditures for variousactivities, including routine and periodic maintenance disaggregated betweenthe urban and interurban areas.

3.21 The Government of Jamaica would arrange for independent auditorsacceptable to the Bank to provide to the Bank, within four months of the closeof the fiscal year, annual audit report(s) (i) reflecting the financialperformance of the project based on an adequately prepared Statement ofSources and Application of Funds and related project accounts; (ii) regardingthe SOEs; and (iii) on the transactions and availability of funds in theSpecial Account. These report(s) would include opiniors on the adequacy ofthe accounting systems and internal controls, and compliance with loancovenants. Audits would be performed in conformity with accepted auditingstandards under terms of reference satisfactory to the Bank.

J. Economic Justification

3.22 In addition to technical, financial, and environmental analysis, thebasis upon which this Project has been prepared is the development of anannual investment program using socio-economic evaluation to establishpriorities. Only expenditures which are economically justified (IERR inexcess of 12%) are included for consideration, and these are then scheduledaccording to a priority based on their economic ranking. (Experience dictatesthat there will be the necessity to advance projects in priority based onsocial and/or political benefits, but the proposed system will make this theexception to be justified, rather than the rule with no scrutiny.) Detailedeconomic examination has been carried out of the components proposed for thefirst two years of the Program (not just the proposed Bank project) and willbe continued as the project progresses as part of the annual update of theFive-Year Investment Program. These evaluations are compiled in two volumesin the project files. The evaluation was done by the Projects Planning Unit(formally the Road Planning Unit) with technical assistance financed by USAID

19

and the Bank. This Unit will become a part of the newly organized Planningand Budgeting Directorate in MOC(W) and will be responsible for evaluating allproposed expenditures by MOC(W) as an lnput to development of the annualinvestment programs. Technical assistance will be continued as part of theproposed Project for 24 months to train MOC(W) staff recently transferred tothe Unit. Evaluation methodologies used by the various lending agencies, aswell as those used in the Bank's urban project (Ln. 2389-Ji), were reviewedand reconciled to assure validity and comparability across the variousprograms. Procedures and values have been agreed upon and are acceptable tothe Bank. Overall, the Project's IERR is in excess of 40%.

K. Project Benefits

3.23 The Project will precipitate institutional improvements in theoperation of MOC(W) and more cost-effective management of a major portion ofthe PSIP. The useful life of infrastructure will be increased, and vehicleopetLting costs reduced. Efficient operations will encourage continuedfunding by external donors. Due to the broad sectoral nature of the Project,it is not possible to quantify with any degree of accuracy the percentage ofproject benefits that will accrue directly to the poor. It is possible,however, to conclude that the poor will benefit in several ways:

(1) Public transport is usually the only means of access to educational,social, and employment benefits for lower-income groups. The costand reliability of this transport is directly related to thecondition of the road network.

(ii) Freight costs and damaged goods have a higLer proportional impact onlower-income groups than on higher.

(iii) The small farmer's access to market is a function of the reliabilityof the road network.

(iv) Establishment of a stable, annual road infrastructure investmentprogram will improve employment opportunities for unskilled labor.

L. Environmental Impact

3.24 Typically, the types of activities included in the Project will notproduce adverse environmental effects if they are properly carried out. Theseare primarily maintenance and rehabilitation works implemented within existingrights-of-way. The potential exists, however, for serious environmentaldamage as a result of improper disposal of waste material, changes of drainagechannels, dredging of fill material, and improper construction methods.Consequently, as part of the Project, a format for environmental analysis ofall proposed HOC(W) investments will be developed. This analysis will be theresponsibility of the Planning and Buigeting Directorate (Projects PlanningUnit) and will be a part of each project's evaluation similar to that of theeconomic and technical evaluation. This would allow mitigating measures to beincluded in the project design, and specific clauses would be included incontract specifications to preclude construction practices which lead toenvironmental degradation. Technical assistance (approx. 12 mm) would be

20

provided to the Projects Planning Unit to evaluate all current proposals anddevelop Immediate mitigation measures, as well as a long-term strategy.Training would be provided to the members of the Unit as well as to engineers,technicians, and on-site inspectors (including consultants and contractors) inthe environmental issues and a range of solutions related to highway design,construction, and maintenance.

M. Land Acquisition

3.25 Land acquisition is minimal in this project inasmuch asmaintenance/rehabilitation activities would generally take place withinexisting rights-of-way. No relocation of families or businesses isanticipated. Project selection criteria will seek to minimize propertyacquisition. However, inasmuch as this is a rolling Five Year InvestmentProgram in which projects are re-evaluated annually and priorities are subjectto change, it is possible that some acquisition of land may be necessary,particularly for widening of intersections or to improve sight distance. Inthose cases, any potential property acquisition and/or relocation would bereviewed by the Bank during its annual review of che proposed investmentprogram, and projects would not be included in a subsequent year'sconstruction program until rights-of-way had been acquired. Land acquisitionwould be done in accordance with policies, rules, and criteria acceptable tothe Bank. Should implementation of any proposed project require displacementor resettlement of population, the Government would notify the Bank thereof,and upon the Bank's request would present a resettlement plan, satisfactory tothe Bank, prior to any displacement or resettlement. tpara. 4.01 1.

N. Project Risks

3.26 The lack of counterpart funding and the institutional inability ofMOC(W) to carry out its responsibilities on a timely basis in the past haveresulted in numerous delays and generally poor performance in respect ofexternally-funded projects. Recognizing this, MOC(W) began reorganization inmid-1990 to facilitate better planning, budgeting, and coordination ofprojects and improve the responsibility and accountability of its lineagencies. Salary levels of key personnel have been increased, which shouldresult in improved retention of existing staff and attractiveness to newtechnicians. The staffing issue is also being addressed by increased use ofexternal services for tasks such as design, drafting, and supervision, thusenabling a few qualified technicians to manage a larger work program.Mechanisms have been put in place to coordinate the various externally-fundedprograms to provide complementarity and synergism rather than competition forresources. The Five-Year Investment Program has been developed for the firsttime based on technical/economic evaluation of projects and realisticallyprojected budget allocations. This five Year Investment Program would bereviewed annually in a joint meeting of the Government of Jamaica, the Bank,and other donors in light of a re-evaluation of projects and newly projectedbudget allocations. It is still not certain, however, that sufficient budgetallocations and/or timely authorization by the Ministry of Finance to spendallocated funds (warrants) will be made consistently during the life of theproject. The Government has agreed to the priority of the program and Itsfunding needs, and warrant releases have been changed to a quarterly rather

21

than monthly basis. As part of macro-policy dialogue, however, Bankrepresentatives will still need to review periodically with Government thepriorities of this program.

IV. AGREEMENTS AND RECOMMENDATIONS

4.01 During negotiations, agreement was reached on the following:

(a) GOJ will maintain full cost recovery in respect of the national roadtransport sector and will advise the Bank of any changes of policyor actions which would adversely affect such cost recovery, andafford the Bank an opportunity to review and comment on such changes(para. 2.11]

(b) GOJ will maintain wholesale prices for gasoline, diesel, lubricantsand bitumen which, net of taxes, shall be at all times not less thanthe opportunity cost of the products in question. For this purpose,"opportunity cost" means the C.I.F. (cost, insurance and freight)cost in Jamaica of the equivalent imported product. lpara. 2.11].

(c) GOJ will advise the Bank of any additions or modifications to theFive Year Investment Program as they may occur during the fiscalyear (para. 2.151;

(d) annual review with the Bank of GOJ's proposed updated FiveYear Investment Program including adequacy of evaluationand relative priority of new investments, balance amongnew construction, rehabilitation, and maintenance, as wellas appropriate pricing and cost recovery in the sector(para. 2.151;

(e) GOJ will advise the Bank of any surface transportinvestment exceeding US$5 million during the projectimplementation period, providing information on the impactof such investments on the Program and the Project andgiving the Bank adequate opportunity to comment on suchinvestment prior to its commencement. [para. 2.15];

(f) funding of an annual core maintenance program of approximately US$20million (1990 dollars) (para. 2.20);

(g) an annual coordination meeting of all internal and external agenciesfinancIally active in the sector [para. 3.05).

(h) an Action Plan, including target dates for implementation of variouskey activities (para. 3.09).

4.02 Subject to the above conditions and assurances, the project issuitable for a Bank loan of US$35.0 million to the Government of Jamaica, tobe repaid over a period of 17 years including five years of grace.

22

4.02 Subject to the above conditions and assurances, the project issuitable for a Bank loan of US$35.0 million to the Government of Jamaica, tobe repaid over a period of 17 years including five years of grace.

3

Annex 1

Five-Year Infrastructure Investment Program

1. The preparation of the Infrastructure Planning and MaintenanceProject has resulted In the development of a Five-Year InfrastructureInvestment Program. Infrastructure investment needs have been identified andprioritized according to socio-economic evaluation and projected for Inclusionin annual programs over the next five years based on projected financialresources. Counterpart funding has been a major issue in the past in thescheduling and implementation of projects and, therefore, the proposed Programhas been developed using historical levels of annual counterpart funding as aconstraint. The remaining financial requirements would be met from externalsources. GOJ has signed agreements with numerous external donors to assistwith financing the proposed Program, however, there will be financial gaps Inthe latter years if additional financial aid cannot be secured. In thesecases, GOJ will have to increase its own allocations or defer the lowestpriority projects to a later time. Currently, several donors are discussingwith GOJ the possibility of participating in the unfinanced portions of theProgram (IDB, USAID, Japan, EEC) and, if the projects were ready and capableof being lmplemented, the proposed Bank financing could be advanced from thelatter to earlier years. What is important, however, is that GOJ hasdeveloped a system of planning and evaluation that will enable it to make themost cost-effective investments with available financial resources. There isnothing magic about a five-year projection; GOJ recognizes the degree ofuncertainty that far in the future. Civil works often take five years toconceive, design and implement, however, and external agencies often use thistime horizon. By having a rolling five-year investment plan, re-evaluatedevery year, the annual program can expand or contract as conditions dictate.When additional resources do become available, investments consistent withGoverament's public sector investment policy can be readily identified.

2. The initial Five-Year Infrastructure Investment Program is shown inTable 1. The following paragraphs summarize the existing agreements GOJ haswith external agencies that will form part of the financing of this Program:

Canadian International Development Agency (CIDA) -Jamaica/Canada Bridte Develoyment Program. Project Cost:J$128 million. Approved: 9/30/87; expected completions3/31193. Project Description: Design and reconstruct 35bridges, develop a bridge inspection and maintenancesystem, and provide technical assistance and training forlocal staff.

U.S. Agency for International Development (USAID) - RuralRoads Rehabilitation Program. Project Costt J$99.4million. Approveds 6/29/86; expected completions121/31/90. Project Description: Finance therehabilitation of tertiary roads and bridges in ruralareas, purchase of hand tools and spare parts formaintenance equipment, and technical assistance.

2

Interamerican Development Bank (IDB) - Rural RoadsImprovewent Program II. Project Cost: J$298 million.Approved 1216/89; expected completion: 6/15/94. ProjectDescription: Rehabilitation, improvement, and maintenanceof roads in rural areas, purchase of equipment, training,and technical assistance.

Caribbean Development Bank (CDB) - Road Improvement andMaintenance Prosram III. Project Cost: J$209 million.Approved 7/1/83; expected completion: 7/1/91. ProjectDescription: Periodic maintenance of main roads,procurement of vehicles and other maintenance equipment,and technical assistance. (This is part of the RIMP IIIproject (Ln. 2293-JM) co-financed with the Bank. TheBank's portion of the project was closed 12131189).

Caribbean Development Bank (CDB) - Rehabilitation ofHurricane Damate. Project Cost: J$58.5 million.Approval: 1/23/89; expected completion: 3/31/92. ProjectDescription: Rehabilitation of infrastructure damaged byHurricane Gilbert Including river training and sea defenseworks, and repairs to gullies, roads and bridges.

Saudi Fund for Development (SFD) - Highway MaintenanceProiect. Project Costs J$37.4 million. Approved:12/29184; expected completion: 7/31/91. ProjectDescription: Periodic maintenance of approximately 75miles of main roads, and procurement of mainter _ceequipment and associated spare parts.

European Economic Community (EEC) - Rural Roads andBridtes Rehabilitation Program. Project Cost: J$68.5million. Approved: 1/20/89; expected completions 3131191.Project Description: Rehabilitation of roads and bridgesin South Central Jamaica which were affected by severeflooding in 1986.

International Bank for Reconstruction and Development(IBRD) - Kingston Metropolitan Reiion Urban TransportPro1ect. Project Cost: J$157.3 million. Approved:9/17/84; expected completion: 9/30/91. ProjectDescription: Maintenance and improvements to urban roadsand intersections in the Kingston area, trafficengineering, rehabilitation of traffic signals,procurement of equipment, training, technical assistanceand studies.

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Annex 2

Institutional Strentthenina

Reorganization. Technical Assistance, Training and Studies

1. As described in para.2.14, institutional issues are majorimpediments to MOC(W)'s Implementation of a cost-effective investment program.As a result, the major thrust of this project is not so much theimplementation of works, but the develoment of the capabilities and processesto improve the cost-effectiveness of this investment. Implementation of worksis a vital part of the proposed project and will provide large economicbenefits, but the institutional changes brought about by this project throughreorganization, technical assistance, training, and studies will have the mostfar-reaching effects.

Reorganization

2. The current organizational structure of MOC(W) has been in place for30 years and, as often happens, has been patched and modified to meet variousdemands imposed by lending agencies, governmental restructuring, inadequatefunding, and staffing constraints. As a result, responsibility for someprograms is fragmented, authority is often unclear, and the limited number ofqualified managers and technicians are scattered among numerous project units.The Ministry's annual investment program did not develop from a systematicevaluation of all proposals, but resulted from local pressures and the offersand requirements of external funding agencies working within specific areas ofinterest. Recognizing the problems this was creating, the Ministry hasreorganized, as shown in Attachement 1. The most salient features includes

a) Re-creation of appropriate line agencies (directorates)which represent the mission and focus of the Ministry.This has resulted in the elimination of variousindependent project entities, often with similarobjectives (i.e. road maintenance) but which operatedoutside the normal chains of command or responsibility.All programs have now been consolidated within theappropriate diroctorate, with clear objectives,management, and lines of authority and responsibility.

b) Creation of a Directorate of Planning and Budgeting withresponsibility for evaluating (technical, economic,financial, and environmental) public sector investmentproposals, developing and maintaining a rolling multi-yearinvestment program based on these evaluations commensuratewith available financing, and monitoring programperformance. A major role of this new directorate will bethe responsibility to coordinate the various externallending programs among the lenders and with Jamaica'spublic sector investment priorities.

c) Creation of a Traffic Engineering and Road Safety Branchwithin the Directorate of Highways so as to concentrate

Annex 5TabLe 1.1

NOTES TO TABLE 1

NATIONAL ROAD TRANSPORT SECTOR ANALYSIS - (US S'000)

I I _ t { ~~~~~~~~A S S U M P T I 0 N S

I 1 REVENUES II~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I

I a) Current- Import Duty -Tyres and Tubes M Minimum growth rate for 1990 and constant till 94

I - Import Duty - Road Motor Vehicles lAverage growth rate of 23% and constant thereafter I- Import Duty - Motor Fuel IProjected to increase at minimum growth rate of 19%. I- Excise Duty - Motor Fuel IUaintained constant at 1987/88 level.- Excise Duty - Tubes and Tyres lAverage growth rate of 7.7%.- Driver's Licence Fees etc. lAverage growth rate of 3.4%- Stamp Duty - Tubes and Tyres lProjected to increase at minimum growth rate of 8.1I.

- Motor Fuel lProjected to increase at minimum growth rate of 6.8% 1- Motor Vehicles IMaintained constant at 1988/89 levels

I - Consumption Duty - Tubes and Tyres lAverage growth rate of 14%I - Motor Fuel lAverage growth rate of 38.6%

- Motor Vehicles lProjected to increase at minimum growth rate of 7.6X lb) Capital I I

- Financing Loans - MOC(W) IData provided by Ministry of Construction (Works) II I

I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I2 EXPENDITURES

a) Recurrent- Ministry of Construction (W) lData provided by Ministry of Construction (Works)- Ministry of Transport INot Applicable

I Ib) Capital I

- Ministry of Construction (W). IData provided by Ministry of Construction (Works) i- Ministry of Transport INot Applicable I

II______ __ __ - -_______ -_ - -- --------___________ …___ _ _ _ _----

Annex 5Table 2

FINANCING PLAN: FIV A jtHfEN& T

IBRO ROAD ST"' 9. MAINTENANCE PROJC

FISCAL YR 1990191 | 1991/92 1992/93 1993/94

;~~~~~~.AR e OT OR 0 L, HE. 0 -. H

g_njq&. JJ.gfDQOR _ .. L_RR jIp _ LQA O LQ

IsRD awi low 004 1OJ 0sR OiRD 004 074OHER O04 IBM 00 O4

A. INSTII4T'ONAL 0.75 0.34 1.8$ 1.38 1.85 0.82 2.50 1.83 1.83 0.64 2.72 1.79 0.71 0.31 3.02 1.88

8. INFRASTRUCTURE 4.18 1.89 20 06 14.63 4.74 2.11 21.01 15.62 6.s9 2.5S 23.77 15.b7 5.69 2.50 27.85 17.78IMPROV8BIers __ _____

C. EQUIPMENT l4AIt- 0.13 0.07 0.12 0.64 0.42 1. S9 0.79 3.56 1.76T841NcE PROORAM __.

D. ROAD SAFETY 0.48 0.22 0.41 0.19 0.62 0.29 0.77 0.36IMPROVEMNTS

TOTAL 5._6 2.32 21.91 16.11 7.00 3.12 24.3s 17.87 8.84 3.48 28.08 18.4S 7.17 3.47 34.43 21.42

FISCAL SW 1094195 M TOTAL I TOTAL PROORAN

1080 LOAN OTtER DONOR I18RD LOAN OTH0R DONOR FOREION 00J TOTAL

. Fue~~~~~~~~~~~~~~~~~PNS FUNDSI

IRD CO OT8R 00J o8w 0OJ OTBR aOJ TOTAL

A. INSTITUTIONAL 0.61 0.29 3.70 1.83 S.55 2.40 13.79 8.69 30.43 19.34 11.09 30.43

S. INFRASTRUCTURE 5.82 2.73 36.54 18.06 (. 2 11.78 129.23 61.96 249.99 136.25 93.74 249.99IMPROVEMSNTS .

C. EQUIPNT MAIN- 3.74 1.64 0.15 0.07 9.73 4.93 14.68 9.88 5.00 14.86TENANCE PROGRAM

D . ROAD SAFETY 2.18 1.08 2.28 1.06 2.18 1.08 6.60 4.46 2.14 6.60IMPROVE3 iSI4s_ _ _ _ _ _ _ _ _ _ _ _

TOTAL 6.43 3.02 46.10 22.81 35.00 15.32 134.93 96.66 301.90 189.95 111.97 301.90

IJ ~ ~~~~~ 1 . . ,=5_

Annex 5Table 3

6 YEAR INFRASTRUCTURE AND MAINTENANCE PROGRAMFINANCING PLAN

(US3 Milions) TOTAL1990_91 1991t92 1992f93 n 99 81 1994/9J4TOTAL6

I. CAPITAL INVESTMENT PROGRAM 40.10 52.34 68.85 68.18 78.43 301.90

II. ONGOING DONOR INVESTMENTS

USAID-RRRP 4.91 4.91CDB-HURRICANE 1.97 1.61 3.68EEC-ROADS A BRIDGES 3.85 3.85CIDA-BRIDGES 2.92 3.96 4.66 11.62SOF-HWY MAINTENANCE 1.97 0.56 2.68COB-RIMP 2.83 6.32 8.161D8-FLOOD DAMAGE 1.88 1.88

SUBTOTAL 20.83 11.44 4.66 86.42

III. NEW PROJECTS

IOENTIFIED DONORS

IDB-RRIP II 1.67 3.69 8.86 13.48 27.67IORD 6.65 7.00 8.84 7.17 6.43 36.00

SUBTOTAL 7.13 10.69 17.69 20.63 6.43 82.67

IV. GOJ FUNDS PROORAMMED 1/ 18.64 20.99 21.98 24.59 26.84 111.99

V. REQUIRE FINANCING 2/ 0.00 9.22 14.68 20.98 48.16 90.92

1/ QOJ funds Include Capital A project financed exclusively by OOJ funds *nd Capital 8projects co-financed by Institutional donor agencies.

2/ Required Financing refer* to foreign donor fund, needed to be obligated to the Program.

Annex 5TabLe 4

MINISTRY OF CONSTRUCTION (WOBKSI

SITUATION ASSElENT (IN C,'lNT USW IN 100 5o

1984-85 1985-06 1986-87 1S7-8 1988- 199-90 1922-91 1991-2 lIg;-93 1993-9 1994-:

ACTUAL BUOGETED PROJECTEDCONSOLIDATED BUDGET <- ---------------------------------------------- ><

1. EXPENDITURES

CURRENT

PERSOtNNEL 9.834 10.162 5,883 6.246 6,293 5,943 6,631 7,040 7,475 7,532 7, 590 A H 3,258 2,9f1 3,392 2,098 2,581 2,413 2,403 2,7513 3,154 8,613 4,139SUPPI_IES 35S 1,276 1.4S4 1.106 1,13 455 474 494 815 537 560SUBTOTAL 13,448 14,390 10,729 9,450 10,020 8,810 9.509 10,288 11,144 11.682 12,289NEW 5A&M 250 261 293 306

TOTAL RECURRiNT 13.448 14.390 10,729 9,450 10.028 8,010 9.509 1O,537 11,405 11,975 12,595

INVESTHENTS

BASELINE 11.216 21,036 37.72? 42,424 72,667 26,134NEW PROJECTS 38,016 42,218 46,527 55,639 65,978I}RI PROJECT 8,079 10,117 12,324 103,39 9,4585 YER CIP 11,216 21,036 37,727 42,424 72,667 26,154 46,096 52,335 58,851 66,170 7e,435

TOTAL EXPBEDITIRES 24,664 35,427 48,455 51,874 82,695 34,964 55,604 62,872 70,256 78,153 91,00

II. REVENUES

FISCAL APPROPRIATIONS 13,448 14,390 10,729 9,450 10,028 8,810 9,509 10,537 11,405 11,975 12,595

CAPITALFISCAL APPROPRIATIONS 3/ 11,216 14,843 27,091 27,983 39,097 14,546 18,660 21,000 21,900 24,600 25,e00

EXISTIHO FINAlCUIM 0 6,194 10,635 14,441 13.569 11,608PROPOSED FINANCINO 2/

loRD 5,560 7,000 8.840 7,170 6,430w08 1,546 3,700 8,600 13.500 0OTHER I/ 20,830 10,68 19,511 20,908 46,205

SUB1TOTAL FINANCINO 0 6,194 10,635 14,441 18,569 11,608 27,436 31,35: 36,951 41,578 52,635SlBTOTAL CAPITAL 11,216 21,036 r,r727 42,424 72,667 26,154 46,096 52,335 58,8S1 66,178 78,488

TOTAL REYENIES 24,664 35,427 48,455 51,874 82,695 34,964 55,603 62,872 70,256 78,153 91,03O

I/ Other includes CIDA, USAID, CDB *nd SDI *nd *e-uaee the financing ape w;Il be filled.2/ Propoced finacin 9 , in addition to proposed I8R projoct includ. spproed 108 pro;ect.3/ F;ael Avproprietiona include Capital 'A end Capital *8 progreos in MOCtW).

Cap'tol 'Al refers to OOJ financed projects and Capital *'e refers to projects co-financed by international donorsand OOJ.

Table 4.1Notes to Table 4

A. EXPENDITURES

1. CURRENT EXPEDITURES:

Current expenditures for FY 1990 are based on Ministry of Finance estimatesbudgeted for this year. For the rest of the years, current expenditures havebeen projected to increase at the minimum growth rate observed over the lastfive years. Of these, personnel expenditures have been projected to increasein accordance with MOC(W) estimates and Ministry of Finance approval.Operation and maintenance cost and material and supplies have also beenprojected at levels ratified by MOC(W). Additional levels of operation andmaintenance are based on Ministry estimates.

2. INVESTMENTS

1990 estimates are based on Ministry of Finance budgetary allocations of US$46 million for 1990/91 and an overall investment package of US$ 301 million.

B. REVENUES

1. FISCAL APPROPRIATIONSt

Based on decided levels of MOC(W) investments and corresponding obligationsfor recurrent expenditures and 1990 appropriations as uthorized by theMinistry of Finance. Subsequent years are projected at less than the observedminimum growth rate in view of macro financial constraints.

2. BORROWINGS:

As determined under existing and proposed loan agreements and implementationschedule provided by MOC(W).

Annex 6

JAMAICA

ROAD INFRASTRUCTURE PLANNING AND MAINTENANCE PROJECT

Estimated Schedule of Disbursements(USS millions)

IDRDFISCAL YEAR ANNUAL CUM. CUM. %

199112/31/90 2.3 2.3 706/30/91 3.5 5.8 17

1992 12/31/91 3.5 9.3 2706/30/92 4.4 13.7 39

1993 12/31/92 4.4 18.1 5206/30/93 3.6 21.7 62

1994 12/31/93 3.6 2S,3 7206/30/94 3.2 28.5 81

1995 12/31/94 3.2 31.7 9106/30/95 3.3 35.0 100

NOTE: Disbursement durLng the lst semester of 1991 includes USS2.3 million

for establishing a Special Account.

Annex 7

Selected Documents and Data Available in the Proiect File

A. Selected Sector Documents

A.1 Energy Sector Strategy Review Mission (1989)Draft Consultant Report.

A.2 Memorandum on Transport Public Sector Enterprises (1986)Report No. 6178-JM.

A.3 Public Sector Investment Program Analysis (1987)Report No. 7020-JM.

A.4 Jamaica Country Brief (1990)A.5 Jamaica: Adjustment Under Changing Economic Conditions (1989)

Report No. 7753-JM.

B. Selected Proiect-Related Studies

B.1 Five-Year Infrastructure Investment ProgramVolume 1

B.2 Five-Year Infrastructure Investment ProgramVolume 2

B.3 Government of Jamaica Road Safety Study Report (1989)B.4 Jamaica: Second Administration Reform Project (ARP II)

Pilot Management Improvement Program.B.5 Review of Hire Fund Scheme/Evaluation of Alternatives

Volume 1B.6 Review of Hire Fund Scheme/Evaluation of Alternatives

Volume 2.

C. Selected Pro3ect-Related Working Papers

C.1 Government of Jamaica: Terms of Reference and Budget forPreparation of Five Year Infrastructure Investment Program andMaintenance Project (1989).

C.2 Training Program Personnel and Course TablesC.3 Manpower Requirement TablesC.4 Directorate of M.I.S.S. Request for Technical AssistanceC.5 Integrated Financial and Maintenance Management SystemC.6 Employment Agreement, Project DirectorC.7 Rural Road Rehabilitation Improvement and Maintenance Program

Terms of ReferenceC.8 Job Description, Construction Maintenance EngineerC.9 Terms of Reference, Consultant Project EngineerC.10 Job Description, Construction EngineerC.ll Terms of Reference, Task Force of the Planning CommitteeC.12 Terms of Reference, Road Safety Improvement ProjectC.13 Road User Cost Allocation Study/Request for ProposalC.14 Job Description, Transport EconomistC.15 Terms of Reference, Environmental Impact Assessment SpecialistC.16 Employment Agreement, Project DirectorC.17 Jamaican Training Seminar Programs and Budget EstimateC.18 Project Summary and Status of Externally Financed ProjectsC.19 Review of Hire Fund Scheme (MOC(W) Task Force, 1990]

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