AFRICAN DEVELOPMENT BANK

ROAD PROGRAM PHASE I (RP1)

APPRAISAL REPORT

REPUBLIC OF GABON

DEPARTMENT OF INFRASTRUCTURE MAY 2007

TABLE OF CONTENTS

Pages PROJECT INFORMATION SHEET, CURRENCY EQUIVALENTS, WEIGHTS AND MEAURES, LIST OF TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, LOGICAL FRAMEWORK OF PROGRAM AND EXECUTIVE SUMMARY i-ix 1. ORIGIN AND HISTORY OF PROGRAM 1 2. TRANSPORT SECTOR 2 2.1 Background 2 2.2 Transport policy, planning and coordination 5 3. THE ROAD SUB-SECTOR 6 3.1 Road network 6

3.2 Vehicle population and traffic 6 3.3 Road transport industry 7 3.4 Road construction industry 7

3.5 Road network administration and staff training 8 3.6 Road maintenance 9 3.7 Financing of the road sub-sector 9 4. THE PROGRAM PHASE I (RPI) 12

4.1 Design and rationale of program 12 4.2 Program area and beneficiaries 15 4.3 Strategic context 17

4.4 Program objective 18 4.5 Program description 18 4.6 Impact on the environment 21 4.7 Road program costs 24 4.8 Financing sources and expenditure schedule 26 5. PROGRAM IMPLEMENTATION 27

5.1 Executing Agency 27 5.2 Institutional arrangements 27 5.3 Implementation and supervision schedule 28

5.4 Procurement arrangements 28 5.5 Disbursement arrangements 30

5.6 Monitoring and evaluation 30 5.7 Financial and audit reports 31 5.8 Coordination of assistance 31

6. SUSTAINABILITY AND RISKS OF THE PROJECT 31

6.1 Recurrent expenditure 31 6.2 Project sustainability 32 6.3 Main risks and mitigative measures 32

7. PROGRAM BENEFITS 33 7.1 Economic analysis 33 7.2 Sensitivity analysis 34 7.3 Social impact analysis 34 8. CONCLUSIONS AND RECOMMENDATIONS 36 8.1 Conclusions 36 8.2 Recommendations: 37 This report was prepared by Messrs. M. AMARA, Civil Engineer, OINF.1 (Extension 2497), Mission Leader, M. LEKE, Transport Economist, OINF.1 (Extension 2647), L. JOOTTUN, Environmentalist, OINF.1 (Extension 2256), J. MURARA, Socio-economist, OHSD.1 (Extension 3207), and J.F EDJODJOM’ONDO, Transport Engineer, GAFO, after their appraisal mission to Gabon from 26 March to 13 April 2007. Questions on this report should be referred to them or to Mr. A. KIES, Division Manager, OINF.1 (Extension 2282) or Mr. G. MBESHERUBUSA, Director , OINF (Extension 2034)

AFRICAN DEVELOPMENT BANK GROUP

P.O. Box 323 TUNIS 1002 - BELVEDERE Tel : (216) 71.10.28.40 / 71.10.33.12 Fax : (216) 71.25.33.04 / 71.33.36.80

PROJECT INFORMATION SHEET

Date: April 2007

The information given hereunder is intended to provide guidance to prospective suppliers, contractors and all persons interested in the procurement of goods and services for the projects approved by the Board of Directors of the Bank Group More detailed information and guidance may be obtained from the Executing Agency of the Borrower. 1. COUNTRY AND NAME OF PROJECT : Gabon: Road Program Phase I (RP1) 2. PROJECT AREA : Ngounie and Ogooué Provinces - Gabon 3. BORROWER : Republic of Gabon 4. EXECUTING AGENCY : Ministry of Public Works, Equipment

andConstruction (MTPEC) 5. PROJECT DESCRIPTION : The Program comprises the following components: A CONSTRUCTION AND RELATED ROAD IMPROVEMENT WORKS A.1 FOUGAMOU-MOUILA A.1.1 Road works A.1.2 Works control and supervision A,2 LA LEYOU-LASTOURVILLE A.2.1 Road works A.2.2 Works control and supervision A.3 NDENDE - LEBAMBA A..3.1 Road works A.3.2 Works control and supervision B STUDIES B.1 Libreville-PK 15 studies B.2 Mouila- Ndendé-Doussala/Ndendé-Tchibanga studies B.3 Reinforcement of the Libreville expressway C. INSTITUTIONAL SUPPORT C.1 Organisation of road maintenance C.2 Procurement and rehabilitation of traffic count stations C.3 Procurement of weighing stations C.4 Training of MTPEC staff C.5 Furnishing and equipment of the Archives + Library room C.6 Rehabilitation and Equipment of the Public Works Technicians’ School in Fougamou C.7 Procurement of office automation and computer equipment D. MANAGEMENT D.1 Technical assistance D.2 Technical and financial audit

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6. TOTAL COST : UA 246.56 million (i) Cost in foreign exchange : UA 176.27 million (ii) Cost in local currency : UA 70.29 million 7. BANK GROUP LOAN (a) Amount : UA 22.9 million or 256.27 million Euros (b) Terms

(i) Duration : 20 years incl. a 5-year grace period (ii) Currency and interest rate : Euro – fixed rate (iii) Reimbursement : In 30 (thirty) half-yearly installments

8. OTHER FINANCING SOURCES GOVERNMENT : UA 24.66 million 9. LOAN APPROVAL DATE : September 2007 10. ESTIMATED PROGRAM START-UP DATE: December 2007 END OF PROGRAM : December 2011 11. PROCUREMENT ARRANGEMENTS

- International competitive bidding for road construction and related works; - National shopping for small equipment (office automation and computer equipment); - International competitive bidding for the procurement of traffic counting and weighing

devices; - Shopping for consultancy firms, on the basis of a shortlist, for works control and supervision

services; - Shopping for consultants, on the basis of a shortlist for training, technical assistance and

project audit services; 12. CONSULTANCY SERVICES REQUIRED:

- Works control and supervision; - Technical assistance; - Organisation of road maintenance - Road studies; - training - Project audit.

13. ENVIRONMENTAL CATEGORY : The project is classified in Category I.

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CURRENCY EQUIVALENTS

(April 2007) UA 1 = CFA.F 743.816 UA 1 = €1.15487

FISCAL YEAR

1st January – 31st December

WEIGHTS AND MEASURES 1 kilogram (kg) = 2.205 lbs 1 meter (m) = 3.25 feet (ft) 1 kilometer (km) = 0.621 mile 1 square kilometer (km2) = 0.3861 sq mile 1 hectare (ha) = 2.471 acres

ACRONYMS AND ABBREVIATIONS ABEDA : Arab Bank for Economic Development in Africa AC : asphaltic concrete ADAR : Annual daily average rate ADB : African Development Bank AFD : French Development Agency BEAC : Bank of Central African States BSG : Bituminous sand gravel CEMAC : Central African Economic and Monetary Community CFAF : Franc of the African Financial Community CNI : Compagnie de Navigation Intérieure (CNI) CS : Construction sector CSG : Crushed sand gravel DEEP : Department of Studies and Project Appraisal DGEI : Directorate General for Infrastructure Studies DGERA : Directorate General for Road and Aerodrome Maintenance DGIT : Directorate General for Transport Infrastructure DP : Department of Programming DPA : Direct program area DPTP : Provincial Department of Public Works DS : Department of Standardization DTAR : Department of Road Improvement Works ECCAS : Economic Community of Central African States EDF : European Development Fund EPA : Enlarged program area ERR : Economic rate of return ESIA : Environmental and Social Impact Assessment ETTPF : Public Works Technicians’ School in Fougamou EU : European Union FEGASA : Federation of Gabonese Insurance Companies GDP : Gross domestic product GPRSP : Growth and Poverty Reduction Strategy Paper HDM : High Design Maintenance Model ICB : International competitive bidding IDA : International Development Association IMF : International Monetary Fund

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IRR : Internal rate of return IsDB : Islamic Development Bank ISRT : Inter-State Road Transit MPPD : Ministry of Planning and Development Programming MTPEC : Ministry of Public Works, Equipment and Construction NCB : National competitive bidding NEPAD : New Partnership for Africa’s Development OPRAG : Ports and Waterways Authority of Gabon PACT : Short-term Action Plan on infrastructure (NEPAD) PAPSUT : Urban and Transport Sectors Planning Adjustment Program PARR : Road Network Development Program PDIT : Intermodal Transport Master Plan (1997-2015) PW : Public works RBCSP Results-based Country Strategy Paper RDL : Road depreciation levy RMF : Road Maintenance Fund RMF2 : Road Maintenance Fund (second generation) SIGEPRAG : Ports and Waterways Investment and Management Company of Gabon SME : Small and medium-sized enterprises SOGATRA : Gabonese Urban Transport Company SONATRAM : National Maritime Transport Company TK : Tonne-kilometer TRMP : Three-year Road Maintenance Program UDEAC : Customs Union of Central African States Veh/d : Vehicles per day WB : World Bank

LIST OF TABLES No. Title Pages 4.1 Summary of costs by component for the Road Program Phase 1 (RP1) 25 4.2 Summary of costs by expenditure category for RP1 26 4.3 Financing sources for RP1 26 4.4 Expenditure schedule by category 26 4.5 Expenditure schedule by financing source 27 5.4 Procurement arrangements 29

LIST OF ANNEXES No. Title Number of pages 1 Country map and location of program 1 2 Organizational structure of MTPEC 1 3 Summary of program costs for the Phase 1 road program 1 4 Implementation schedule 1 5 Economic analysis 4 6 Summary of Bank Group operations 2

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ROAD PROGRAM PHASE I

Logical framework of Program HIERARCHY OF

OBJECTIVES EXPECTED OUTCOMES SCOPE

PERFORMANCE INDICATORS

INDICATIVE TARGETS AND

SCHEDULE

ASSUMPTIONS RISKS

Goal Consolidation of regional integration; increase of internal access roads and reduction of poverty by improving on the living conditions of the people.

Impacts 1. Increased trade with

ECCAS countries 2. Better internal transport

with improved paved roads

Beneficiaries: 1. All stakeholders in

the regional transport system

2. The population of Gabon

Impact indicators 1- Volume of trade 2- Percentage of paved roads

in good working order Sources: ECCAS-MTPEC statistics Methods: Surveys and studies

Expected outcomes and long-term schedule 1- 30% increase in trade between ECCAS

countries by 2015 2- The percentage of the functional paved

road network increases from 11% of the total network in 2006 to 30% in 2012

Assumptions 1. Continuation of

PARR implementation

2. Continuation of

PARR financing by donors

Project goal 1. Reduction of vehicle operating costs

and improvement of road transport safety

2. Improvement of access to socio-

economic and health infrastructure along program roads and in the provinces of NGOUNIE and OGOOUE.

Impacts 1. Reduction of VOCs on the

Fougamou-Mouila, La Leyou Lastoursville and Ndendé-Lébamba roads

2. Shorter travel time and

more safety enhanced on program roads

3. Improved road

maintenance and greater protection against overloaded lorries; more focused and efficient road maintenance

Community access to basic infrastructure and improvement of marketing

Beneficiaries: 1. Provinces concerned:

NGOUNIE and OGOOUE LOLO

2. Transporters 3. Farmers in the project

area 4. Women engaged in

subsistence agriculture and handicraft activities

5- Traders and users of

the project roads

Impact indicators 1- VOC 2- Travel time 3- Efficiency of maintenance 4- Rate of access to socio-

educational infrastructure and health centers

5- Teacher absenteeism rate 6- Health staff absenteeism rate Sources: Statistics and reports of

various ministries Methods: Surveys

Expected outcomes and medium-term schedule 1- 35% reduction in VOCs in 2010 as

compared to 2006; 2- As from 2010, reduction of travel time

from 4h to 2h on the Fougamou-Mouila road; 3h30 to 2h on the Laleyou-Lastoursville road; and 2h to 1h on the Ndendé-Lebamba road.

3. Greater protection of the road network

and enhanced efficiency in road maintenance

4. Community access to socio-

educational and health infrastructure increased by 30%

5. Teacher absenteeism rate declines from

30% in 2007 to 20% in 2010 6. The absenteeism rate of qualified

health staff declines from 35% in 2007 to 20% in 2010

Assumptions 1. Resources earmarked

for road maintenance are guaranteed and sufficient

Mitigation Institution of a 2nd generation Road Maintenance Fund and a good road network maintenance policy

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Activities/Inputs . Development of the Fougamou-Mouila, LaLeyou Lastoursville and Ndendé Lebamba roads Development and rehabilitation of the socio-educational, health and petty-trading infrastructure Studies on the Libreville-PK 15, Mouila-Ndendé-Doussala/Ndende—Tchibanga road stretches and on the Libreville express way Institutional support to MTPEC Technical assistance and program management Resources by expenditure category of the RP1

(in UA millions)

A- Works 138.33 59.26 197.59

B - Goods 2.73 0.30 3.03

C– Consul-tancy services 11.56 1.29 12.85

-Baseline cost 152.62 60.85 213.47

-Physical contingencies 15.26 6.09 21.35

-Price contingencies 8.39 3.35 11.74

Total contingencies 23.65 9.44 33.09

Net total: 176.27 70.29 246.56

Outcomes 1. The Fougamou-Moula,

La Leleyou-Lastoursville and Ndendé-Lebamba paved roads and bridges rehabilitated and constructed

2- Socio-economic and

health infrastructure rehabilitated

4- Technical studies

conducted on the PARR road stretches

5- Institutional capacity of

MTPEC developed

Beneficiaries: RP1 road project areas Job-seekers in the project area; Businesses (hotels, restaurants, various services and traders); The health and education sectors; Local communities, mainly farmers and rural women

Impact indicators 1- Length of roads and

engineering structures constructed

2- Number of Km of roads

studied and technical files produced

3- Number of staff members trained

4- Amount of socio-economic infrastructure developed

5- Number of Km of road

developed 6- Amount of agricultural

equipment provided 7. Number of persons

sensitized Sources: MTPEC, UEGP, FER Methods: Quarterly progress reports of the Executing Agency – Works acceptance reports Bank supervision reports; Mid-term review Technical and financial audit reports Method: reports

Expected outcomes and short-term schedule 1- 245 km of road built of asphaltic

concrete; 3 bridges rehabilitated (11ml, 46ml, 92 ml) and 6 reconstructed (20 ml, 40 ml and 60ml)

2- 272 km of road studied Corresponding detailed designs and BDs produced

3- 198 MTPEC staff members trained 4- socio-economic infrastructure

rehabilitated 4.1. 8 market stalls for agricultural produce

constructed 4.2 – 29 schools rehabilitated 4.3- 5 boreholes constructed and fences

built around 25 schools 4.4. - 28 dispensaries with solar panels,

rehabilitated 4.5 – two women’s centers in Fougamou and

Mouila rehabilitated 5 - 50 km of farm-to-market roads

constructed 6 – Farm equipment provided to 80 rural

women’s associations ( 1000 wheel barrows, 2 cane presses, 20 cassava mills)

7- 35000 persons sensitized on environmental hygiene and AIDS prevention

Assumptions 1. Timely payment of

counterpart contributions

Mitigation Counterpart funds paid into a special account (condition precedent to first disbursement)

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EXECUTIVE SUMMARY 1 Program History 1.1 In a bid to improve the country’s road infrastructure coverage, the Government launched a vast program in 2002 known as the Road Network Development Program (PARR) to pave and rehabilitate 2,579 km of road for the 2002-2012 period. The Bank has already participated in the financing of this program together with the European Union, the French Development Agency and the Arab Funds. With the implementation of this program, the percentage of paved roads within the network will rise from 11% in 2006 to 30% in 2012. 1.2 It is within the framework of this operational strategy that the Government sought the Bank's participation in the financing of road works on about 512 km. However, considering the scope of the works and the fact that studies have not yet been conducted on certain roads, it was agreed that the Bank’s intervention will be in two phases. The current program concerns the first phase known as Road Program Phase 1 (RP1), which entails the construction of three roads and the conduct of road studies preparatory to Phase II of the Program. It focuses on the following road stretches: Fougamou-Mouila, La Leyou- Lastourville and Ndendé-Lébamba. This phase also covers related construction works and some of the institutional support needs of the Ministry of Public Works, Equipment and Construction. 1.3 RP1 is in keeping with both the Bank’s operations strategy for Gabon and Government priorities defined in its Growth and Poverty Reduction Strategy Paper (GPRSP) for 2006-2008, adopted in April 2006, whose second pillar is the improvement of transport infrastructure including regional integration highways within CEMAC. The Fougamou-Mouila-Ndendé-Doussala road (Congo Brazzaville border) is one of these highways and is an important segment of the Ndjaména-Yaoundé-Brazzaville road corridor retained as one of the priority projects of NEPAD. Moreover, the program is line with Pillar II of the Bank’s RBCSP 2006-2010. 2 Purpose of the Loan The ADB loan will serve as its participation in the financing of Road Program Phase 1. 3 Program Objectives The sector goals of the program are: (i) the consolidation of regional integration; (ii) increase of internal access roads and; (iii) poverty reduction by improving the living conditions of the people. Its specific goals are: (i) the reduction of vehicle operating costs and improvement of road safety; and (ii) improvement of access to socio-economic and health infrastructure located along program roads in the provinces of NGOUNIE and OGOOUE LOLO. 4 Brief Description of Program Outcomes The expected outcomes of RP1 are: (i) construction of the Fougamou-Mouila road (112.4 km); La Leyou-Lastourville road (96.4 km); and Ndende-Lebamba (37 km) road; (ii) studies on 10 km of the RN1 (Libreville-PK 15), 231 km of the Mouila-Ndende-Doussala/Ndende-Tchibanga road, and 31 km of the Libreville express way; (iii) awareness-

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raising on environmental protection and AIDS/STD prevention ; and (iv) related works such as: Socio-educational and health infrastructure. Moreover, the program will provide the MTPEC with institutional support to enhance its efficiency. 5 Program Cost The estimated cost of the program, net of compensation and taxes, stands at UA 246.56 million, including physical and financial contingencies. This amount is broken down into UA 176.26 million as foreign exchange and UA 70.29 million as local currency. 6 Financing Sources RP1 shall be financed by the ADB and the Government. The ADB loan of UA 221.9 million, representing 90% costs, net of taxes, shall cover the total cost in foreign exchange and 64.92% of costs in local currency. The Government’s contribution shall be UA 24.66 million. 7 Program Implementation The program’s executing agency shall be the Ministry of Public Works, Equipment and Construction. For program implementation, the Secretariat General of the said Ministry shall be responsible for coordinating program activities and shall act through the Directorate General for Infrastructure Studies (DGEI) and the Directorate General for Transport Infrastructure (DGIT). The DGEI has a Department of Studies and Project Appraisal (DEEP), a Department of Programming (DP) and a Department of Standardization (DN) within which is found an environmental impact assessments service. The DGIT, for its part, works through its Road Construction Works Department (DTAR). Both directorates-general have about fifteen engineers. However, for reasons of efficiency, provision is made for technical assistance for the Secretariat General, the DGIT and DGEI. 8 Conclusions and Recommendations 8.1.1 The implementation of this program constitutes a crucial phase in gradual establishment of Gabon’s structuring road network under the PARR. The program was designed in collaboration with the donors intervening in the road sub-sector. By helping to open up access to all the provinces of the country, the program reinforces national unity and improves living conditions in rural communities by ensuring the regular supply of agricultural inputs and manufactured goods to the program area. 8.1.2 Technical, economic, environmental and social studies have been conducted under the program. Its design also took into account the lessons learnt from prospective analysis of previous projects. It is technically well-designed and economically viable. Environmental aspects were identified and during program formulation appropriate measures were taken into account to mitigate negative impacts on the environment. The economic study revealed an economic rate of return of 14.9%. This rate is higher than the opportunity cost of capital which is above 12%. Program sustainability is ensured through better protection of the road network by reinforcing axle load controls and setting up a 2nd generation road fund.

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8.1.3 The program’s design is in line with the Bank’s vision and tallies with the RBCSP which retains increased access to road infrastructure as one of its pillars for 2006 - 2010. 8.1.4 In light of the foregoing, it is recommended that a loan, not exceeding €256.27 million (UA 221.9 million), be awarded to the Republic of Gabon for implementation of the program described in the this report, subject to the specific conditions contained in the loan agreement.

1. ORIGIN AND HISTORY OF PROGRAM 1.1 Gabon experienced relative prosperity between 1980 and 1995 owing to the development of its mineral and energy resources. Such prosperity, which led to Gabon’s classification among middle-income countries, did not translate into a significant and sustainable improvement in the living conditions of the people, especially in rural areas. Overall, the very poor in Gabon made up more than 33% of the total population in 2006. One of the major causes of such poverty was extreme inaccessibility to many localities and farming areas which led to limited access to basic social services (administrative centers, schools, heatlh centers, local markets) and major difficulties in transporting farm produce, inputs and basic commodities. 1.2 In a bid to address this problem, the Government launched a vast program in 2002 known as the Road Network Development Program (PARR) to pave and rehabilitate 2579 km of road, including regional highways to Cameroon and Congo-Brazzaville. Given its scope, PARR is executed in successive phases, depending on the prevailing priorities. The first part was executed from 2002 to 2005 on 315.5 km of road, representing 19% of the program. The Bank participated in the financing of this part with the European Union, the French Development Agency and the Arab Funds. A second phase on 2260 km of road was launched in 2005 for an implementation period of 7 years (2005-2012). Completion of this segment should raise the paved road network to about 30% of the total road network. 1.3 For implementation of the current program phase (2005-2012), the Government submitted a financing request to the Bank. Considering the scope of works and the availability of studies, the Bank proposed to intervene in two phases on 512 km of road. The current program known as RP1 is Phase 1 and covers three road stretches, namely: Fougamou-Mouila, La Leyou- Lastoursville and Ndende-Lebamba, with a total length of 245.6 km. It also covers related works and institutional support. Phase II (RP2) will also cover road construction and shall be designed based on available studies and lessons learnt from RP1 implementation. 1.4 RP1 is in line with the Government’s priorities as defined in its Growth and Poverty Reduction Strategy Paper (GPRSP) for 2006-2008, adopted in April 2006, and whose second pillar is the improvement of transport infrastructure including regional integration highways within CEMAC. The Fougamou-Mouila-Ndende-Doussala stretch (Congo-Brazzaville border) which is 237 km long, is one such highway and constitutes an important segment of the Ndjamena-Yaounde-Brazzaville road corridor retained as one of the priority projects of NEPAD. Moreover, the program is in line with the Bank’s RBCSP 2006-2010 for Gabon, especially its Pillar II which lays emphasis on the improvement of road infrastructure. 1.5 This report was drafted based on summary and detailed project designs conducted by qualified consultancy firms. It also takes into account the results of preparation and appraisal missions conducted in the months of November 2006 and April 2007 respectively.

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2. TRANSPORT SECTOR 2.1 Background 2.1.1 Since gaining independence in 1960, and owing to its relative prosperity in the 1990s, Gabon gradually build up a rather modest transport infrastructure network, which currently comprises: (i) 9,170 km of road on the entire national territory; (ii) 658 km of railway linking the port of Owendo to Franceville (3rd biggest city in the country); (iii) 1 commercial port and 1 industrial port in Owendo and Port Gentil; (iv) 28 airports, 3 of which are of international standard; and (v) some summary facilities on about 600 km of navigable inland waterways. The major constraints plaguing the network are: (i) the limited proportion of paved segments in the national road network (11%); (ii) inadequate financial allocations for road network maintenance and rehabilitation; (iii) the Trans-Gabon railway line which, since its commissioning in 1989, is still struggling to break even owing to very heavy initial investments; (iv) institutional shortcomings; and (v) insufficient coordination of crossborder transport facilitation actions. 2.1.2 To address these constraints and improve overall sector performance, the Government is currently implementing serious measures such as:

(i) the creation and effective institution of a 2nd generation Road Maintenance Fund;

(ii) implementation of the 2002-2012 sector program (PARR) which covers the

roads of the current program; completion of the PARR by 2012 should make it possible to increase the proportion of paved roads in the national network by close to 30%.

(iii) the award of a concession for the operation of the Trans-Gabon railroad in

2003. 2.1.3 These measures should, in the long-run, give fresh impetus to the various modes of transport (road, rail, maritime, inland waterway and air) with a view to effecting a reconversion of the national economy. Such reconversion is based on the diversification of economic growth sources in response to the decline in oil production (from 1998) that had hitherto been the backbone of the Gabonese economy. Road Transport 2.1.4 Despite the generally unsatisfactory state of the network, road transport remains the main means of transport for goods and passengers in Gabon. Indeed, almost all manufactured products, general cargo, 1/3 of timber and 65% of passengers are transported by road. Hence, the main localities of the country are interconnected by structuring roads such as: the East-West (Franceville-Ndjole-Libreville which is 887 km long), North-West (Bitam-Libreville, 486 km long) and North-South (Libreville- Mouila-Tchibanga, 876 km long) roads. Roads also plays a central role in the multi-modal transport system between the country’s major economic centers.

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Rail Transport 2.1.5 Rail transport is based essentially on the TransGabonese railway which is 658 km long, crosses the country from East to West, connecting the towns of Franceville, Lastoursville and Ndjole and extending to the deep-water port of Libreville/Owendo. It is used essentially for transporting manganese and timber. Total goods traffic in 2006 for all products was 2.2 million tons, composed mainly of manganese (62.2%); timber (30.3%); general cargo (5.4%); oil products (1.2%); and clinker 1%. It also transports passengers, with 200,000 persons transported in 2005. 2.1.6 Due to the management problems that had plagued the line since its commissioning in 1989, a concession for its operation was awarded to private operators in 2003. This concession arrangement is helping to improve the operational and financial performance of railway transport although other unfavorable factors persist, such as difficulties in reaching several train stations by road. Such difficulties will be resolved in the short-term if PARR priority roads are developed according to the projected implementation plan (2002-2012). Air Transport 2.1.7 Gabon’s airport system, which is one of the densest in Africa, is composed of 28 public airports, three of which are of international standard (Libreville, Port Gentil and Franceville) and about 50 private aerodromes used by private timber, oil and mining companies. The international airports are in satisfactory operational condition. Having experienced poor management problems for a long time, the Libreville airport was entrusted to a private company in 1988 under a concession arrangement, which it possible to gradually curb the technical and financial difficulties and provide airport services that comply with international standards. In most of the secondary public airports, the quality of existing infrastructure, equipment and airport services is declining steadily. In 2006, all the airports registered close to 700,000 passengers, 15,000 tons of freight and 23,000 commercial aircraft movements. The national carrier, Air Gabon, which controlled 50% of international traffic and almost all domestic traffic was liquidated in February 2007. A new airline, Gabon Airlines, was set up with essentially private capital and has been operational for the past three months. In general, private national and international companies try to satisfy part of the demand for passenger air transport which has been rising over the last twelve years, at an average growth rate of 12%. 2.1.8 Given the important role played by air transport in linking up the many inaccessible socio-economic centers, the Government has undertaken to ensure maintenance of initial investments by embarking on the rehabilitation of airports and improvement of equipment. Several donors have expressed interest in the financing of these operations. Maritime transport 2.1.9 Gabon has a coastline that is 840 km long and equipped with two deep-water ports, one in Libreville/Owendo and another in Port Gentil. They constitute the main arena for Gabon’s foreign trade. Indeed, about 90% of such trade is conducted through maritime transport and transits through both ports. Each of them has a predominant activity: the Libreville/Owendo port is used

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mainly for the evacuation of manganese (46%), undressed and semi-processed timber (25%) and for receivng imports into the country (29%); while the Port Gentil port is used essentially for exporting Gabon’s oil (95% of goods traffic). In 2006, the maritime traffic for all products was estimated at 4,719,671 tons with 697 boat movements. 2.1.10 Gabonese ports experience major operational difficulties due to the obsolescence of the facilities and equipment. This situation has helped to push up insurance expenses for ships and the cost of goods transport from and to Gabon. To curb output losses and improve the operational performance of both ports, the Government entrusted port management to a specialized operator from May 2004. The operator has taken a medium-term commitment on an investment program of CFA.F 75 billion for the Owendo port. Two years after State withdrawal, the situation has stabilized on the whole and a sharp improvement is expected by 2012. Inland Waterway Transport 2.1.11 Gabon has a huge potential in this mode of transport that could be developed on the rivers Ogooue, Fernand Vaz, Komo and Banio for a total network of 3,300 km. At the moment, inland waterway transport is conducted on about 600 km only, and is used mainly for transporting timber to Port Gentil. The facilities are not very sophisticated and the only organized and structured operator who manages the waterways is Compagnie de navigation intérieure (CNI), even though local demand is significant. The CNI is currently undergoing restructuring because of financial difficulties and a project to develop the main navigable waterways is being prepared in order to boost the inland waterway sub-sector. Regional Integration Corridor 2.1.12 Gabon, like the other CEMAC member-states, participated in setting up the Consensual Transport Master Plan of Central Africa (PDCT-AC) adopted by CEMAC and ECCAS Heads of State. The Cameroon-Gabon-Congo corridor, which is one of the corridors retained, links up the capital cities of Yaounde, Libreville and Brazzaville and constitutes the backbone of Gabon’s priority network. Previous rehabilitation/development works have been conducted on the Cameroonian side of this corridor: (i) development of the Mbalmayo-Ebolowa road with Bank financing; (ii) paving of the Ebolowa-Ambam stretch with AFD funding; (iii) construction of the Ambam-Eking road, with Bank funding; and (iv) construction of a bridge over the River Ntem with EU funding to link up both sides of the border. On the Gabonese side, works have been conducted on the Eboro-Bitam-Oyem-Mitzic and Mitzic-Lalara stretches, with financing from the AFD and EU respectively. The AFD has continued financing the Lalara-Medoumane and Medomane-Djolé stretches. The Bank, for its part, has financed the Njole-Bifoun and Bifoun-Lambarene roads. Works are underway from Lambarene to Fougamou, with funding from the Spanish Government. The Fougamou-Doussala highway, covered under the current RP1, is the main missing link on Gabonese territory and was retained among the priority projects of NEPAD’s Short-Term Plan of Action. Gabonese and Congolese authorities are discussing on pooling their efforts and coordinating with CEMAC to continue this highway project right up to Dolisie in Congo.

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2.2 Transport Policy, Planning and Coordination 2.2.1 Gabon’s current transport sector policy was adopted by the Government in April 1998 for a period of 15 years. Its major outlines are contained in a document entitled “Transport Policy Declaration” that was drafted in a context of economic recession. Based on gradual State divestment from productive sectors and commercially-traded services, the transport sector policy has seven main objectives, namely to: (i) organize a transport system that can satisfy the needs of the population and the productive sectors; (ii) support the territorial development plan and contribute to national and sub-regional economic integration; (iii) protect existing transport infrastructure; (iv) rationalize investments in the transport sector in order to reduce their weight on the State budget; (v) reduce transport costs for the public while improving service quality and safety; (vi) facilitating goods and passenger transport between the country’s major cities; and (vii) building the managerial capacity of the institutions and companies in the sector. 2.2.2 Instituted since 1998, the sectoral policy first served as a basis for drafting the Inter-modal Transport Master Plan (PDIT) which focuses mainly on the definition of sector priorities and subsequent actions and for designing and launching of PARR which is the reference framework for donor interventions in the road sector. The current RP1 falls within this framework, just like all the interventions of the other donors like the European Union, Spain, AFD, World Bank, IsDB, ABEDA and the other Arab Funds. 2.2.3 The ministries intervening in the sector are:

(i) the Ministry of Public Works, Equipment and Construction and the Ministry of

Transport designated as the main entities responsible for the planning and coordination of transport. To that end, they act through central and regional technical departments;

(ii) the Ministry of the Economy, Finance, Budget and Privatization which is mainly responsible for mobilizing and managing resources allocated for project/program implementation and the functioning of the sector. It coordinates donors roundtables and assists technical ministries in preparing the privatization files of semi-public corporations;

(iii) the Ministry of Development Planning and Programming which aligns transport project and program proposals on national priorities defined through inter-sectoral dialogue.

2.2.4 In addition to these ministries, there is also the 2nd generation Road Maintenance Fund (RMF2). Placed under the dual authority of the Ministry of Public Works, Equipment and Construction and the Ministry of the Economy, Finance, Budget and Privatization, RMF2 is engaged in raising and managing resources for financing road maintenance. On the whole, the current coordination system, as presented, functions rather well.

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3. THE ROAD SUB-SECTOR 3.1 Road Network 3.1.1 The road network is 9170 km, of which 1055 km is paved (about 11% of the national network), and 8115 km is unpaved. Administratively, it is classified into three categories, namely: (i) national roads, which constitute the basic network of 3368 km, of which 842 km are paved; (ii) provincial roads totaling 1527 km of which only 70 km are paved, linking departmental headquarters to provincial capitals; and (iii) departmental roads totaling 3008 km, of which 143 km are paved, connecting the districts to the departmental headquarters. In addition to this network, there are 1267 km of unclassified rural dirt roads that lead to the countryside, plantations, farming areas and village markets. 3.1.2 Technically speaking, Gabon’s road network is broken down into seven categories of service levels: dirt roads, developed or improved dirt roads (breadth of 5m), ordinary laterite roads (breadth of 6m), modern narrow laterite roads (breadth of 7m), modern wide laterite roads (breadth of 9m), ordinary paved roads and modern paved roads (breadth of 7m and a sidewalk of 2 x 1 m). 3.1.3 The entire network is composed of 86% of unpaved roads, 11% of paved roads and close to 3% of roads under construction. Network density is only 3.4 km per 100 km². It is considered low, as compared to other countries in the Central African region: 4.5 km/100 km² for Cameroon and 10.3 km/ km² for Equatorial Guinea. The average density for CEMAC countries is 1.8 km/km². 3.1.4 A substantial part of Gabon’s road network is characterized by degradation which slows down passenger and goods transport. The proportion of lorry traffic and non-respect of the maximum axle load limit are considered to be the main causes of network degradation. This is compounded by highly unfavorable climatic conditions, with abundant rains for 9 months of the year. Moreover, 80% of the bridges are provisional. This situation leads to frequent traffic interruption on the network and exorbitant vehicle maintenance costs. Close to 60% of the network is in poor condition compared to only 20% which can be considered to be in good condition. 3.2 Vehicle Population and Traffic Vehicle Population 3.2.1 Data collected from the National Road Safety Center and crosschecked against vehicle registration statistics indicate that in 2006, the vehicle population was a total of 156,000 vehicles, of which 56% are light vehicles, 15% are public-transport vehicles (intercity buses, minibuses) and 30% are heavy road vehicles. During 1995-2005, the vehicle population more than tripled from 34 vehicles per 1000 inhabitants in 1995 to 110 vehicles per 1000 inhabitants in 2005. This trend can be attributed to the high urban population growth rate (2.5%) and the economic needs of Gabon which is ranked among middle-income countries. The general state of vehicles is deemed average, due to the influx of imported second hand vehicles, most of which are 5-10 years old. 3.2.2 For reasons of safety and environmental protection, technical controls are mandatory: every 4 months for taxis, every 6 months for heavy road vehicles and every year for private cars.

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However, in practice, more than a quarter of the motor vehicle population fails to comply each year. To improve on the overall management of road transport, the Directorate General for Road Transport is being restructured. It provides for, inter alia, the review of statutory texts and reinforcement of the role of the Directorate General in the regulation land transport and road control. Road Traffic 3.2.3 Demand for road transport in Gabon is highly diversified, focusing on passengers, general cargo, mineral ores and undressed and semi-processed timber. Over the last five years, the traffic recorded on the entire national network for all vehicles is estimated at 229,000 vehicles per day on average. The geographical distribution of current traffic is very uneven and presented as follows: North-West region (93%); North-East region (2.3%), South-West region (1.3%) and South-East region (3.4%). The high traffic concentration in the North-West region stems from the fact that it has Gabon’s four major development centers, namely Libreville, Port Gentil, Ndjole and Ntoum. 3.2.4 The program roads are located in the South-West and South-East regions, with a total traffic of 10 775 vehicles/day on average, or 4.7% of the national total. Hence, demand is low here compared to the North-West region, mainly because almost the entire network in these regions is composed of earth roads that are in a state of advanced degradation. Nevertheless, there is huge potential demand in both regions because of their agroforestry and mining resources that are still underexploited. The choice of the program roads is justified by the reference situation which is unfavorable to development in this part of the country that has several attraction centers such as Franceville (South-West), the country’s 3rd biggest city, and Mouila (South-West), an evolving regional center. 3.3 Road Transport Industry According to the texts in force, the road transport market is free and open to competition. Access to the profession is subject to the issuance of a license. However, licensed transporters have to pay an annual tax whose amount varies with the type of license they hold. Owing to the relative simplification of access and traffic conditions, the market currently has a multitude of private operators, including a large number of small transporters with only one ore two vehicles. For intercity transport, the license indicates the relevant itinerary on an indicative basis, but operators prefer to ply the routes that offer more opportunities. The rates applied generally reflect competition on the market. For highly degraded roads, the rates are quite high and could attain five times the standard rate paid on roads that are in good condition. 3.4 Road Construction Industry 3.4.1 Until 2000, the road industry was in its embryonic stage. Indeed, almost the entire network was constructed under State supervision. From 2001, privatization of the road network encouraged the emergence of many economic operators in the road construction sector. The procurement of road works through competitive bidding and an improvement in the management of road fund resources boosted the private sector, especially SMEs. Indeed, the number of small enterprises that bid for roadside maintenance works rose from 15 in 2003 to 76 in 2006.

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3.4.2 About ten SMEs involved in the road maintenance sector are experiencing a shortage of competent technical staff as well as material and financial means. Access to bank credits remains very unpredictable and the supply of leasable public works equipment is well below demand. Current experience with multiyear road maintenance contracts could constitute the initial solution to the consolidation and reinforcement of local SMEs. The recent institution of the 2nd generation road maintenance fund by the Government will make it possible to consolidate this trend. Under the global capacity-building program, the EU has just financed support to SMEs that will essentially benefit from training of their managerial staff (responding to invitations to tender, project site management, financial management, etc.) and the organization of experimental project sites. This action is supported by the current program through rehabilitation of the Training School for Public Works Technicians in Fougamou (ETTPF) which shall be the main host structure for these training activities. For the moment, new road construction works remain the preserve of six major foreign enterprises. 3.4.3 In general, consultancy services such as road studies and works supervision are usually entrusted to four major international firms and some three main national firms of average size. Meanwhile, the fresh impetus generated by the award of maintenance works to enterprises has spawned small local consultancy firms which focus on providing road maintenance support services. Quality control in the road sub-sector is mainly provided by the State-owned laboratory. 3.5 Road Network Administration and Staff Training Road Network Administration 3.5.1 In Gabon, the Ministry of Public Works, Equipment and Construction (MTPEC) implements Government policy on transport infrastructure, equipment, construction, road network, drainage and public sanitation in conjunction with other ministries and competent bodies. 3.5.2 The MTPEC, exercises its responsibility over road network development and maintenance mainly through: (i) the Directorate General for Infrastructure Studies, responsible for road studies and programming; (ii) the Directorate General for Transport Infrastructure (DGIT), responsible for transport infrastructure development and control. At the request of local councils, it intervenes on their behalf in works and assessment of transport infrastructure and bridges; and (iii) the Directorate General for Maintenance of Roads and Aerodromes (DGERA), responsible for (a) the execution of road and aerodrome maintenance programs, (b) the management, maintenance, conservation and protection of national roads, (c) assessment and maintenance works on municipal road networks at the request of the councils, and (d) the promotion and guidance of small and medium-sized enterprises in road maintenance sector. The technical departments, notably the DGIT and DGEI, have about fifteen engineers to implement PARR. Their number is insufficient and therefore needs to be reinforced.

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Training 3.5.3 The MTPEC has a Public Works Technicians’ School (ETTPF) in Fougamou whose vocation is to train public works technicians and provide further training. The current state of this infrastructure does not enable it to fully play its role and address sector needs. The complexity and scope of studies and infrastructure works under the Ministry of Public Works, Equipment and construction requires skilled staff and more advanced training. The MPTEC has a coherent training program whose implementation requires support from development partners. 3.6 Road Maintenance 3.6.1 Maintenance works on the earth road network were generally executed under State control by DGERA through the Provincial Departments Public Works. Road maintenance in logging areas was the responsibility of logging companies which are supposed to ensure acceptable levels of repair and maintenance of the network. 3.6.2 Lack of road maintenance is one of the major problems plaguing road transport in Gabon. Indeed, only about 20% of the entire network is in fairly good condition (26% of national roads, 16% of provincial roads and 19% departmental roads). The rest of the network is composed of earth roads with mud holes in places and makeshift bridges which cause very frequent traffic interruptions, especially during the rainy season. Non-respect of the maximum axle load limit is also a major cause of road network degradation. The RMF2 study estimated needs in terms of counting and weighing stations, some of which are covered under the proposed program. 3.6.3 The privatization of 80% of road maintenance and the recent setting-up of the 2nd generation road fund are key measures that should substantially raise the implementation rate of maintenance programs and the general output of works. To carry through this major reform, the program intends to conduct a study on the organization of road maintenance that will mainly concern the deconcentration of activities at the regional level and human resource development (staff training and reconversion). 3.7 Financing of the Road Sub-sector Financing of Road Investments 3.7.1 A retrospective analysis of transport sector financing shows that between 1980 and 1980, Gabon allocated close to half of its public investment budget to this sector, and mainly to the railway sub-sector to the detriment of the road sub-sector. Consequently, paved roads currently represent barely 11% of the national network despite catch-up efforts initiated over the past ten years. It was only from 1998 that road investments were ranked among leading national priorities. The Government, with donor support, is trying to rationalize such investments by including them under PARR. 3.7.2 A review of the 2002-2005 period shows real road investments of CFA.F 118.41 billion for the paving of 318.5 km of road, with an estimated Government contribution of CFA.F 12.51 billion, or 10.57% of investments made during the period under review. The donors involved are:

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the African Development Bank (15.96%), the European Union (20.27%), the French Development Agency (35.89%) and Spain (17.31%). Donors have expressed their intention to continue with financing. Under PARR 2002-2012, the resources already raised or currently being mobilized are presented below:

Table 3.1 Financing by source (in CFA.F million)

Sources Amounts

Spain 235 300

EU 24 000

AFD 105 645

IBRD 20 000

ADB 165 075

IsDB 162 179

GAUF-Germany 37 700

EXIMBANK 49 490 Organization of Road Maintenance 3.7.3 To finance road maintenance, Gabon set up a first generation Road Maintenance Fund (RMF1). The main characteristics and shortcomings of RMF1 were the following: (i) overdependence on the State budget for its resources; (ii) insufficient annual resource allocation in relation to maintenance needs; and (iii) the often major disparity between the expenditure schedule and available budget resources. For example, priority network maintenance needs were covered only up to 74% in 2003, 72% in 2004 and 80% in 2005. Meanwhile, the Government made special efforts in 2006, by addressing all the needs expressed by RMF1. However, the regularity of resources received by RMF1 is not guaranteed. The results of the RMF1 are presented below:

Table 3.2 RMF1 results (in CFA.F million)

2003 2004 2005 2006 Budget estimate 30 865 24 372 35 309 24 159 Budget made available 22 863 17 578 28 256 24 584 RMF1 coverage rate 74% 72% 80% 102% Resource utilization rate 99% 81% 99% 100%

3.7.4 Financing needs for satisfactory maintenance of the priority road network for 2007-2010 are as follows:

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Table 3.3 Projected road maintenance expenditure needs (in CFA.F million)

2007 2008 2009 2010

Paved roads 12 000 13 000 14000 15 000

Earth roads 12 000 10 000 8 000 6 000

Urban roads 6 000 6 000 7 000 8 400

Total 30 000 29 000 29 000 29 400 It should be noted that from 2008, financing needs for maintaining earth roads are scaled down while needs for paved roads have been increased. Indeed, the first road stretches currently being paved shall be completed from 2008. 3.7.5 The issue of road maintenance has been the focus of discussions between donors, especially the EU, WB, AFD and the Bank. Accordingly, donors have made the regular and sustainable defrayment of road maintenance expenditure a precondition for their future intervention in the road sub-sector. To that end, a consultant was recruited on EU financing to study the establishment of a second generation fund (RMF2). The conclusions of this study endorsed by all donors who then urged the Government set up RMF2. 3.7.6 Hence, the Government had to set up a 2nd generation Road Maintenance Fund (RMF2) by Law No. 004/2006 of 9 February 2006. Placed under the authority of the Ministry of the Economy, Finance, Budget and Privatization and the Ministry of Public Works, Equipment and Construction, RMF2 is endowed with a legal personality and managerial autonomy. It was officially set up in April 2007 with the installation of its Directorate General and Board of Administrators. 3.7.7 RMF2 resources come from the yield of the road user charge (RUC) which is directly deposited by SOGARA into a special account opened to that end in BEAC. The yield of the RUC tax is composed of levies on petroleum product sales as follows: (i) CFA.F 53.20 per liter of premium gasoline; (ii) CFA.F 47.08 per liter of gas-oil; and (iii) CFA.F 24.51 per liter of kerosene. Proceeds from tollgates, other levies (technical inspection of vehicles; vehicles registered abroad; special transport authorizations; etc…) and taxes (axle, insurance, and levies on vehicles, tyre and spare part imports, etc…) shall also be paid to RMF2. RMF2 budget estimates for 2007-2010, based on authorized levies and taxes, are presented below:

Table 3.4 Budget estimates of RMF2 (in CFA.F million)

2007 2008 2009 2010 Road User Charge (RUC) 20000 21000 21 500 22 000 Other levies 4000 4000 4500 5 300 Taxes 2000 2000 2000 2000 Total 26 000 27 000 28 000 29 300

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It should be noted that from 2010, these resources, which shall no longer transit through the Treasury, will be sufficient and regular to ensure adequate road network maintenance and cover most road repair needs. 3.7.8 The recent creation of RMF2 as an autonomous financial entity will also eliminate disbursement delays, which were one of the causes for suspension of activity on projects executed by several private enterprises. It is projected that 20% of the works will be executed under State control and 80% by the private sector. State-managed works will essentially be emergency interventions (mud holes, structures built with makeshift material, etc.) which are still too frequent due to the state of earth roads which make up 86% of the network. A road maintenance assessment report shall be forwarded to the Bank at the end of each fiscal year. This shall be one of the loan conditions. 4. ROAD PROGRAM PHASE I (RP1) 4.1 Design and Rationale of Program Program Design Regional Integration 4.1.1 Central African States have decided to pool their efforts, essentially their economic and human resources, to build a viable and competitive regional market. One of the best ways of effecting such integration is to modernize and protect transport infrastructure. Hence, the technical ministries of Central Africa adopted a Consensual Transport Master Plan for Central Africa (PDCT-AC) in December 2003 that was later validated by CEMAC and ECCAS Heads of State. It was on this occasion that the notion of transport corridors was raised. 4.1.2 RP1 is part of this regional effort because it intervenes on the Fougamou-Doussala road, which is an important segment of the Ndjamena-Yaounde-Brazzaville corridor that forms part of the Tripoli–Windhoek Trans-African Highway. The objective of this corridor, which features in the NEPAD's Short-Term Action Plan, is to connect Yaounde, Libreville and Brazzaville. Some construction work has already been done on it from Mbalmayo in Cameroon right up to Lambarene in Gabon. Works are currently underway on the Lambarene-Fougamou stretch with financing from the Spanish Government. Through RP1, the Government of Gabon hopes to continue with such gradual construction works right up to Doussala (Congolese border). Given the financial efforts made to build the Gabonese segment of the corridor, Gabon is making a substantial contribution to the realization of NEPAD actions in Central Africa. 4.1.3 RP1 components are: (i) the paving of 245.6 km of earth roads, namely the Fougamou-Mouila (112.4 km), La Leyou-Lastoursville (96.2 km) and Ndendé-Lébamba (37 km) stretches; (ii) the construction of related structures; (iii) the conduct of studies on 272 km of roads; (iv) institutional support; and (v) program management.

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4.1.4 The current program was preceded by feasibility studies as well as summary and detailed designs. The new alignment plan of program roads practically follows the alignment of existing roads. Indeed, the new alignment is modeled 98% on the existing layout, thus limiting destruction of plant and animal life or the property of local communities. The basement soil of the roads is generally characterized by a high plasticity index and a low load bearing capacity. Apart from the intrinsically poor characteristics of the soil, the roads are situated in areas with very high rainfall and heavy traffic dominated by timber trucks. These aspects were taken into account in the relevant studies, especially those on drainage and pavement design. A multi-criteria analysis based on technical, economic and environmental aspects, was conducted that led to the selection of the most adapted pavement structure. The thickness of the various pavement layers of was determined and adapted to the various types of basement soil and traffic, assessed in axle load equivalent terms at 13 tons for a duration of 20 years. 4.1.5 During the conduct of studies as well as program preparation and appraisal, there was information-sharing and sensitization activities conducted with all project stakeholders and beneficiaries. This participatory approach made it possible to take stock and give consideration to the concerns and needs of local communities, in the presence of local officials. In a bid to enhance its contribution to poverty reduction, the program has planned related activities while ensuring that they are coherent with the programming in corresponding sectors. Lastly, sensitization actions on environmental protection, STD/AIDS prevention and road safety have been planned in response to the increased mobility of persons that will result from road development. 4.1.6 The impact of the program on the management of Gabonese forests was studied with the competent services. Timber production is governed by a forestry law adopted recently and based on the concept of development and sustainable resource management. The said law should make it possible to: (i) guarantee the rational management of all forest concessions in the country; (ii) ensure environmental protection; (iii) reduce undressed timber exports by promoting primary and secondary processing of timber before exportation; (iv) ensure harmonization with the forestry and tax policies of the sub-region; (v) see to ecosystem development, reforestation, biodiversity conservation; and (vi) set up innovative mechanisms on financing, capacity-building, cooperation and partnerships. Previous Experiences 4.1.7 As a reminder, the Bank has financed 3 (three) road projects in Gabon, namely: (i) the road maintenance project, approved in 1989 for the sum of UA 25.74 million and completed in 1993; (ii) the road rehabilitation and development project approved in 1993 for the sum of UA 72.55 million and completed in 1997; and (iii) the project to rehabilitate the Franceville-La Leyou road and develop the La Leyou-Lastourville road, approved in December 1995 for the sum of UA 53 million. As concerns the last project, works have been completed on the Franceville-La Léyou road. Meanwhile, the sum of UA 31 million for development of the La Leyou-Lastourville road was cancelled because of additional geotechnical and drainage studies that proved necessary. These studies were conducted and they made it possible for the La Leyou-Lastourville stretch to be retained for this program.

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4.1.8 The problems encountered in the implementation of these projects and identified by the Bank, mainly through the project completion reports, essentially relate to: (i) shortcomings in technical, accounting and financial management because managerial staff is lacking in number, experience and qualification; and (ii) unsatisfactory programming of investments which made the availability of local counterpart funds very chancy. Hence, to address these problems, the RBCSP recommended, inter alia: (i) sustained assistance to build the capacity of executing agencies; (ii) more intensive technical and financial monitoring of projects by the national party; and (iii) the pursuit of sustained dialogue with the Government so that State counterpart contributions to project financing can be effectively mobilized. 4.1.9 The design of the program took into account the lessons learnt from these experiences as well as RBCSP measures to improve the performance of Bank projects. Indeed, the program retained the organization of technical assistance for the Secretariat General, DGTI and DGEI. Measures that ensure the availability and regularity of local counterpart contributions have also been provided for. 4.1.10 To address the training deficit, provision is made for participation in the conduct of the training program prepared by the MTPEC to improve the performance of its managerial staff. The program provides for short seminars and training modules especially in the areas of programming; technical, financial and environmental management of road projects; as well as bridge construction and maintenance techniques. As for the training deficit, it shall be partly addressed by the program through rehabilitation of the ETTP in Fougamou. Rationale of Program 4.1.11 The RP1 is in line with the Bank’s vision and is in keeping with the RBCSP which has made access to road infrastructure one of its two pillars for 2006-2010, in order to improve economic competitiveness and open up access to farming areas. RP1 was designed mainly to: (i) support the revival of agricultural production whose share in the GDP plummeted from 16% in 1964 to 4% in 2004; (ii) promote local industry, in particular timber, which is one of the country’s key resources; and (iii) develop tourism, especially ecotourism. The ultimate goal is to encourage diversification of the national economy in preparation for the “post-oil boom period”. Currently, oil still accounts for 75% of export earnings, 60% of budget revenue and 44% of GDP. This predominance of a single depletable product makes the Gabonese economy very vulnerable. Hence, diversification is a medium-term imperative, which is underpinned by the full implementation of the Road Network Development Program (PARR) 2002-2012 of which the RP1 is an integral part. Indeed, the plan is that upon completion of the PARR, Gabon will be endowed with a main road network of which 30% will be paved by 2012, as compared to 11% in 2006. It should be noted that all the roads retained under RP1 feature among the leading national priorities and justify an economic rate of return that is above 12%, which is equivalent to the opportunity cost of capital in Gabon. 4.1.12 This program will efficiently contribute to poverty reduction by improving the living conditions of local communities. In fact, it also includes related works such as: (i) the construction of farm-to-market roads or access roads to social infrastructure; (ii) the rehabilitation or reinforcement of socio-educational and health infrastructure in villages of the

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project area; (iii) the building of farm-to-market roads to facilitate the transportation of food-crops to various markets; and (iv) sensitization actions on environmental protection, STD/AIDS prevention and road safety. 4.2 Program Area and Beneficiaries Scope and Characteristics of the Project Area 4.2.1 The program covers 2 of Gabon’s 9 provinces: NGOUNIE and OGOOUE LOLO. The total surface area of the project area is 63,130 km², or close to 24% of the national territory. It also makes it possible to connect the southern part of the country to the railway (Transgabonais). The project area has an equatorial climate with high rainfall (2000mm per year). It rains virtually the whole year round, although there is a short dry season from December to February and a long rainy season from August to October. It is situated in the Guineo-Congolese and Afro-mountainous region with a vegetation characterized by the predominance of the Atlantic forest and has a post-forest savannah zone with a highland-type vegetation. The hydrographic network is dominated by the Ngounié and its tributaries, and is relatively dense as attested by the relatively high number of water management facilities and bridges on these roads. Population and Poverty Profile of the Area 4.2.2 Analysis of the geographical scope of the planned works reveals the influence of the program on 5 of the 11 Departments, namely the Departments of Dola, Tsamba-Magotsi, Louesti Wano, Ogoue-Lolo and Lolo-Bouenguidi. The zone thus defined, covers a surface area of 35,000 km², or about 11% of the national territory. In 2006, it had a population of 125,000 inhabitants, representing about 9% of the national population. The population density is low and hardly exceeds 2 inhabitants per km². With respect to the Millennium Development Goals, the project area presents indicators that are very low and well below the national average: (i) the poverty incidence is 54%, (national average is 33%); (ii) close to 50% of the households surveyed in this region are described as poor. 4.2.3 Health data for the project area shows an average ratio of one physician for 15,000 inhabitants, one nurse for 4,000 inhabitants and a bed for 250 inhabitants. According to information collected from the project area, 1 out of every 3 nurses does not report to her/his service station because of access difficulties. Despite the efforts made to improve the quality of care, the infant mortality rate is 90 per 1000 while under-five mortality is almost 100 per 1000. Water-borne diseases (typhoid, diarrhea and malaria) account for more than 40% of hospitalizations. The AIDS prevalence rate is high among youths aged 15-24 and is reportedly higher than the national average (8%) because of early sexual activity, laxity in family guidance and household poverty. Such high mortality partly stems from low vaccination coverage (less than 60%), lack of medicines and a shortage of health staff. The evacuation of patients is very difficult and risky, all the more so because existing roads are in a very poor state and run through thick forests. 4.2. 4 The net primary enrolment ratio in the project area is about 94%. However, in certain rural areas, the repeater rate is close to 30% in some schools of the project area because of a lack of teachers. The teacher absenteeism rate in certain school districts exceeds 40%. The secondary

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enrolment ratio is the lowest in the country (44%) because of difficult access to these schools which are located at an average of 30 km (for colleges) and 77 km (for high schools). Hence, some parents hesitate to send their children, especially the girls, to schools that are far from the village. Some students live in rented rooms near their schools and only return home on weekends, a situation which exposes them to early pregnancies. 4.2.5 The most vulnerable groups are: young children, single women (widows, teenage mothers) with a high number of dependents, retirees and communities living on the urban fringes in absolute poverty. These groups are affected by the degradation of the Fougamou-Mouila-Ndéndé road during the rainy season (9 months of the year) and frequent traffic interruption on the road especially between Ndendé-Lebamba and Mbigou which often cuts off and isolates the region from the rest of the country for more than 8 months. They constitute the target groups and main beneficiaries of this project. 4.2.6 Despite government efforts, the social and human development of the area is usually snagged by a lack of transport infrastructure which undermines staff deployment, the conveyance of equipment and the supply of drugs. The shortage of managerial staff, the precarious nature of school and health infrastructure as well as the poor state of roads justifies the priority given by the Government to transport infrastructure development in order to improve on the living conditions of the people. Furthermore, discussions with local authorities have revealed that transportation difficulties are among the main factors that undermine regional economic integration, especially trade with Congo Brazzaville. Gender Situation 4.2.7 In education, parity in enrolment has been attained in primary schools while wide disparities persist in secondary schools with only 22% enrolment for girls, which is about half the rate for boys. The school drop-out rate is high in secondary schools because of early pregnancies. On account of the prolonged absence of men and family breakups, women are highly vulnerable, all the more so because there is no gainful employment especially for teenage mothers. The main constraints faced by women, especially those in the project area are: a shortage of economic and social infrastructure and health staff; the lack of agricultural implements and intermediate means of transport; and the poor state and/or absence of passable roads for evacuating patients and produce. Difficulties in processing and marketing agricultural produce have transformed these activities into major time-consuming concerns for women. Production and Marketing 4.2.8 The economy of the project area is based essentially on subsistence farming, fishing and logging which is controlled by large corporations. Food production accounts for 8% of national production. An analysis of the employment structure in the region shows the dominance of forestry activities which account for 76% of all employment, excluding public service jobs and self-employment.

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4.2.9 The evacuation of products is heavily undermined by the advanced degradation of roads, a situation that is compounded by an uneven topography and high annual rainfall. Almost all the villages surveyed in the project area have no local markets and the people usually have to travel to other localities procure to various items or sell their produce. The average distance to the markets most frequented by the project villages is rather long and evaluated at more than 37 km; hence, the need to build access roads to the area. Implementation of the project will ensure timely evacuation of produce from the area. 4.3 Strategic context 4.3.1 Faced with a steady decline in oil production, the country's main source of revenue, since 1995, Gabon adopted a strategy in 2002 aimed at making a gradual transition towards a diversified economy that is based on agriculture, rational forest management, medium-sized industries and tourism, especially ecotourism. The development of these production and service sectors hinges on the construction of good transport infrastructure that: (i) links up the provincial capitals; (ii) opens up access roads to many farming and forestry areas; (iii) promotes territorial development; and (iv) opens up access to neighboring countries, namely Cameroon and Congo-Brazzaville. Hence, RBCSP 2006-2010 gives utmost priority to transport infrastructure and the national road network in particular. Indeed, infrastructure improvement which is the second pillar of the RBCSP is aligned on Pillar 2 of the GPRSP and is aimed at boosting economic competitiveness and opening up access to farming areas, with a view to diversifying the economy to facilitate access to internal markets and contribute to the sub-regional integration process. 4.3.2 According to Government estimates, this strategy should help to increase the share of agriculture in GDP, with a view to attaining the target of 10% in 2015 compared to 4% in 2004. To that end, emphasis is laid on the promotion of family farms, support to small and medium size industries and a gradual transition from extensive to intensive farming which contributes to forest protection and raises productivity. On this last point, the first phase of the road program provides for sensitization actions for rural farmers, especially women's farming groups in the project area that are used to practising extensive farming,while abandoning arable savannah areas. 4.3.3 As concerns forest management and the timber industry, the strategy opts for very gradual logging and reinforcement of the measures in force, namely: (i) consolidation of the modalities for efficient forest resource management; (ii) intensive sensitization on rational forest management; (iii) raising of the tax on timber trucks from 20% in 2006 to 30% in 2008; (iv) low taxation of primary timber processing and tax exemption for secondary processing carried out by local investors involved in the timber industry. In tourism, the strategic guidelines lay emphasis on opening up access to major sites like coastal sites with tourism potential and national parks with animal and plant life which make up 11% of national forest reserves. This measure and the interest rate subsidies that could accrue to sector enterprises would make it possible to increase accomodation capacity from 3000 rooms in 2005 to over 5000 rooms by 2010. Lastly, implementation of this program will substantially help to reduce poverty and unemployment by supporting national economic development through road infrastructure improvement which is one of the pillars of GPRSP 2006-2008.

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4.4 Program Objectives 4.4.1 The sector goals of the program are: (i) consolidation of regional integration; (ii) increase of internal access roads and; (iii) reduction of poverty by improving on the living conditions of the people. The specific goals of the program are: (i) reduction of vehicle operation costs and improvement of road transport safety; and (ii) improvement of access to socio-economic and health infrastructure along program roads in the provinces of NGOUNIE and OGOOUE LOLO. 4.4.2 The major program implementation outcomes are: (i) a 35% reduction in VOCs on program roads; (ii) travel time reduction from 4h to 2h on the Fougamou-Mouila stretch, 3h30 to 2h on the LaLeyou-Lastoursville stretch and 2h to 1h on the Ndende-Lebamba stretch; (iii) improved efficiency in road maintenance and greater protection against overloaded heavy-duty vehicles; and (iv) the improvement of community access to basic infrastructure. 4.5 Program Description Program Outputs 4.5.1 To attain program objectives, the following needs to be achieved:

(i) paving of the Fougamou-Mouila (112.4 km), La Leyou-Lastourville (96.2 km)

and Ndende-Lebamba (37km) roads with asphaltic concrete; (ii) studies on RN1 (Libreville-PK 15) (10km), the Mouila-Ndende-

Doussala/Ndende-Tchibanga road (231km); and the Libreville expressway (31km) fully conducted by 2009;

(iii) sensitization actions on environmental protection, AIDS and STD prevention

conducted according to schedule; (iv) ancillary works conducted along the program roads, namely the rehabilitation

of socio-education and health infrastructure and the construction of small markets for petty traders;

(v) institutional support given to MTPEC; and (vi) technical assistance for monitoring and coordination of the implemented

program.

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Detailed Description of Components A. Construction Works 4.5.2 The road works concern the development and paving of three earth roads. These works essentially entail initial preparation of the ground, general excavation, the construction and rehabilitation of bridges, and construction of the pavement. As concerns the La leyou-Lastoursville road, the pavement structure will essentially be composed of a surface course (5cm thick) in asphaltic concrete (AC 0/10), a base course (10cm thick) in bitumen sand-gravel aggregate (BSA 0/14), a subbase course (25cm thick) in crushed sand-gravel aggregate (CSA 0/25) and an improved subgrade (30cm thick) in laterite gravel (LG). The Fougamou-Mouila and Ndende-Lebamba roads will have a surface course in AC 0/10mm (5cm thick); a base course in BSA 0/14mm (9cm thick); a subbase in CSA 0/25mm (15cm thick); and an improved subgrade in laterite gravel (25cm thick). 4.5.3 Geometrically speaking, 98% of the horizontal alignment shall be maintained. However, selective rectifications can be made to improve the visibility and safety of road users. The reference average speed shall be 80 km/h. The road surface shall be 7m wide with shoulders of 1.5m on each side. Appropriate road signalling shall be done and roadside rest areas created for timber trucks whose circulation time is regulated. In certain areas characterized by major fills and cuts, special techniques shall be used because of the instability of the earth banks, especially on the La Leyou-Lastourville stretch. The drainage component of the roads has been reinforced to take into account the local climatic conditions. In longitudinal section, it is necessary to raise the altrimetrical level of the platform in certain flood-prone areas between Fougamou and Mouila. 4.5.4 In bid to improve the living conditions of local communities and efficiently contribute to the attainment of the Millennium Development Goals, especially those related to universal primary education, gender equality and women’s empowerment, transmissible disease control and AIDS prevention, the project shall carry out the following activities: (i) the construction of 8 market stalls with an area of 120 m² each to promote produce marketing under ideal conditions in villages of Mandilou, Yombi, Guidouma, Bembikani, Fougamou, Mouila, Ndende and Lastoursville; (ii) the construction of latrines in 25 schools (3 per school ) and 15 wells in villages located along project roads, connection of the Lebamba primary school to the pipe-borne water network; the rehabilitation of 28 dispensaries and equiping them with solar pannels for lighting; (iii) the rehabilitation of schools and equipment of 29 classrooms and 2 headteacher’s offices in the villages of Lebamba et Ndoumbo; (iv) the construction and equipment of a community social center in Yombi, the rehabilitation of a youth center in Lebamba and the renovation of 3 women’s centers in Fougamou, Mouila and Lastourville for the guidance and training of more than 4600 women grouped into more than 80 associations; (v) support to agricultural production through the supply of 1000 wheelbarrows to women’s groups for the transportation of produce from the farm or to the market; (vi) boosting of income-generating activities through the procurement of 20 cane presses for farmer’s associations; (vii) the procurement of 20 cassava mills for farmers groups in Fougamou and Mouila ; and (viii) the procurement of 10 chain saws and 20 sewing machines. Some of this equipment (5 chain saws, 10 sewing machines, 10 cassava crushers and 25 wheelbarrows) shall be granted to associations

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of widows and teenage mothers in Lastourville. The revenue generated by these associations shall increase and will serve to pay school fees for abandoned children and AIDS orphans living in the project area; and (ix) the construction of 25 boreholes, including 2 in Ngouassou village for about 5000 persons and all schools along the project road. 4.5.5 Besides, protective fences shall be built around schools situated along the project road to protect children from accidents. Close to 50 km of rural roads shall be constructed to open up access to forest zones located in inaccessible areas. This will facilitate the transportation of goods, persons and basic necessities between the villages and areas with high agricultural potential. 4.5.6 A sensitization program on environmental hygiene, AIDS prevention and sanitation shall be organized for all villages along the road and shall target 35,000 persons. The topics shall relate to latrine use, early pregnancies, water conservation and child vaccination. Such actions will lead to a 10% reduction in water-borne diseases such as malaria, diarrhea and typhoid which are very prevalent in the region. Apart from the mitigation works which shall be included in the works contracts, sensitization campaigns shall be organized on protection of the forest environment and road safety. B. Studies 4.5.7 RP1 provides for the conduct of studies on second phase program roads (RP2), namely: (i) studies on 10 km of RN1 (Libreville-PK 15); (ii) studies on the Mouila-Ndende-Doussala/Ndende-Tchibanga (231 km) roads; and (iii) studies on the reinforcement of the Libreville expressway. C. Institutional Support 4.5.8 The ETTPF shall be rehabilitated, a conference hall shall be constructed and equipped and an IT center shall be rehabilitated and equipped. In a bid to improve the performance of MTPEC technical departments, office automation and computer equipment shall be procured, and an archives room and library set up and equipped. The program shall finance the rehabilitation of the three traffic counting stations, the procurement of 6 mobile counting devices and 3 weighing stations. Training shall be organized for the engineers and technicians of the DGIT, DGEI and DGERA, and also for staff from provincial departments. Such training shall focus on project management, road project programming and technical aspects like the pathology of bridge structures. D. Project Management Technical Assistance 4.5.9 Technical assistance shall be financed for monitoring and management of the program. Such assistance shall entail: (i) posting a road expert to the DGIT and another to the DGEI and an engineer as mission leader for program monitoring and coordination at the Secretariat General; and (ii) recruiting an accountant to handle the accounting of the program. The technical assistance team shall implement the training program, ensure monitoring and evaluation of program impact and review road studies by approving the various stages.

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Audit 4.5.10 The program’s accounts shall be audited annually by a qualified audit firm. An auditor shall be recruited at the beginning of the program to prepare a manual of administrative, accounting and financial procedures for the program. Technical audits shall also be conducted every six months by an experienced consultancy firm. 4.6 Impact on the Environment 4.6.1 From the environmental standpoint, the program is classified in Category 1, considering its location in an environmentally sensitive area, the nature of road works to be done with asphaltic concrete, the national and sub-regional scope of the project and the potential direct and indirect impacts it may have on the physical and biological environment. In accordance with the Bank’s environmental policy and in reference to the environmental policy and national legislation in force, an environmental and social impact assessment (ESIA) was conducted by an experienced consultancy firm, and a summary of that study was published at the Bank's Public Information Center (PIC) on 10/05/2007. It should be noted that most of the road’s alignment follows the initial itinerary, apart from rectifications in specific cases for reasons of safety, environmental protection and improvement of community living conditions. The environmental and social impact assessment was conducted through a participatory approach in accordance with the regulations in force in Gabon. The ESIA was made available to the public by the competent Ministry for information and comments. Positive impact 4.6.2 The socio-economic impact of the road will be quite substantial. The greatest positive effects shall be: (i) improvement of the quality of life in local communities; (ii) business opportunities for local firms which can provide sub-contracting services to the enterprises conducting the works; (iii) employment for local communities and the local youth in particular; (iv) increased demand for restaurant services, home-made or brewery beverages, food and manufactured products, housing and transport in the program region; (v) regular supply of various products to the community by local traders and evacuation of farm produce to various markets; (vi) appreciation of the value of land in the program area; (vii) development of ecotourism and cynegetic tourism (mountains, waterfalls, rivers, lakes, caves, rocks, Birougou national park and Mount Iboundji, etc.); (viii) increased production and marketing of agricultural and handicraft products; (ix) more efficient control of wanton deforestation and poaching. On the whole, the program will help to reduce poverty and improve the living standards of the people. Negative Impacts 4.6.3 The program roads run through several ecological zones such as forests, savannah, plains, hills, rivers, farms, towns and villages. While its impact on the environment will be non-negligible, it shall be controllable through implementation of appropriate mitigative measures and stringent monitoring. During the conduct of works and the operational phase of the program, there may be negative effects such as: (i) risk of damage to private (crops, houses, graves, etc.) or public (markets, water or electric distribution systems) property; (ii) traffic interruption during

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the works that will limit the fluidity of local traffic, with temporary consequences on the transportation of goods and services; (iii) higher risk of road accidents; momentary disruption of access to socio-educational and religious facilities; (iv) high risk of spread of sexually transmitted diseases (STIs) and AIDS due to the presence of unsensitized workers; and (v) possible disruption of the traditional thought patterns, mores and customs, as well as cultural and moral values. The impacts and mitigative measures are presented in detail in the ESIA summary. The planned works could also lead to: (i) a deterioration in the quality of surface and ground water through contact with bituminous material and hydrocarbons products; (ii) a temporary deterioration in surface water during transportation of fine particulate; (iii) the modification of natural water drainage systems; and (iv) the ultimate disruption of potable water sources. 4.6.4 For road development needs, the program shall expropriate the following property on the three road stretches: (i) on the Fougamou-Mouila stretch, 10 houses, most of them built of semi-permanent material and belonging to 10 persons; 1.5 ha of land and 1000 banana trees; (ii) on Ndende-Lebamba stretch, 21 houses, 5 shops, and 2650 banana trees; (iii) on the La Leyou-Lastoursville stretches, 3 houses and 1 grave. The owners shall be displaced 25 to 100 meters away from the right-of-way. The communities in the project area are very attached to their native land. Hence, it is not going to be a mass displacement of several families, but rather limited and localized individual displacements. Mitigative Measures during the Construction Phase 4.6.5 With regard to vegetation cover, Gabon belongs to a vast swathe of the Congo Basin with 20 million ha of its territory is covered by forest. To protect this heritage, about 10% of the forest is classified into protected territories and the country has passed a forestry law that is based on the concept of sustainable resource development and management. Amongst other things, it makes it possible to ensure rigorous monitoring of timber extraction. Other initiatives are underway in application of the forestry law and policy, and as part of the sub-regional Congo Basin preservation drive. These initiatives focus on the rational management of the country’s forest, environmental protection, harmonization of the forestry and tax policies of the region, and biodiversity conservation. They also aim at setting up mechanisms for financing innovative activities, capacity-building, cooperation and partnerships. 4.6.6 Furthermore, to involve the communities in forest management in accordance with the new forestry policy, the State initiated actions to identify community forests that shall be managed by the people with technical support from the Government. Development and management plans are also requested for all forestry concessions in order to ensure sustainable forest manangement. As concerns the management of authorized quotas, the quantity of timber exported is controlled in advance in each concession. All these measures are contained in the Forestry and Environmental Sector Plan which is currently being implemented. In the light of the foregoing, program implementation will not lead to wanton destruction of the forest. 4.6.7 Bidding entrepreneurs shall be required to include in their bids a proposal for ESMP implementation and site restoration upon completion of works. The works site team shall include an environmentalist in charge of ESMP. During the guaranteed period, provision shall be made for routine maintenance of the constructed infrastructure and mitigation of any negative effects

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noted. Environmental aspects are also covered under this guarantee period. The obligations of the entrepreneur shall be binding right up to the final acceptance of works, which shall take place only after completion of the environmental improvement works provided for in the contract and manifest revival of the vegetation and/or farms. During contract execution, he shall have to establish and submit a works organization plan to the representative of the principal contractor for approval. Such a plan should include all the information requested in the relevant environmental clauses. 4.6.8 Before the start of works, mitigation measures shall consist of the organization of information and awareness-raising campaigns to sensitize technical services, communities, traditional rulers and road users to problems of safety, risk, hygiene, health (STI/AIDS prevention) and the preservation of natural resources, sites, monuments and cultural values. Before the installation and establishment of living quarters and works sites, the enterprises shall submit to the control mission for prior approval, a works site installation plan and a mitigation plan that is in accordance with ESIA provisions. During the works, the information and awareness-raising campaigns shall continue, in order to avoid artificial obstacles to wildlife movements, apply bushfire and poaching prevention measures and techniques, ban hunting and consumption of game, control the use of wood fuel and sensitize the community on forest preservation, etc. To ensure consideration of the mitigation measures, environmental clauses shall be included in the works bidding documents (BD), whose main prescriptions shall be aimed at optimizing protection of the physical, biological and socio-economic environments. Mitigative Measures during the Operational Phase 4.6.9 Impact mitigation measures during the operational phase shall mainly focus on the following aspects: periodic maintenance, implementation of mitigative measures, application of legislative and safety measures and actions aimed at facilitating transport and transit. The maintenance program shall be implemented by the ministry concerned, which shall mainly ensure regular inspection and, if need be, the cleaning of all ditches and gutters. The material and financial means needed for these activities shall be provided for the annual budgets of these ministries. To maximize its positive effects, the project shall encourage the recruitment of workers from the region, in priority, especially women and youths. The institution of mechanisms for sensitization, information and controls (technical, road, highway code, forestry and other controls) should make it possible to address such potential effects. 4.6.10 The program has made provision for sensitization campaigns targeting school children, communities along the project roads, village chiefs, local and government authorities, economic groups and transport sector operators. Four sensitization campaigns shall be organized per year for the entire duration of the program. Such campaigns shall be conducted through schools, print media, radio and television and shall focus on health, STI/AIDS, water-borne diseases, environmental protection, land management, bushfires, deforestation, good agricultural practices, soil conservation, road safety, preservation of local mores and customs, cultural values and morals, civic rights, early pregnancies, the use of latrines, water conservation and child vaccination, etc. Seminars shall be organized by specialized NGOs recruited for that purpose.

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4.6.11 An Environmental and Social Management Plan (ESMP) was prepared which presents all the actions to be implemented to limit, mitigate or eliminate the potential negative impacts identified, and defines responsibilities with regard to the application and control of these measures during the construction and operational phases. These actions relate to the mitigative measures to be applied, control and monitoring measures and the relevant attendant measures for improving the living conditions of the communities. The measures outlined in the ESMP shall be included in the BDs for implementation. Implementation of the environmental measures shall be monitored by an environmentalist from the control mission, in collaboration with the Environment Service of the Department of Infrastructure Programming in the Ministry of Public Works, Equipment and Construction. It shall be responsible for monitoring ESMP implementation, conducting specific environmental works and addressing certain environmental problems. The monitoring indicators of the biological and abiotic environment, as well as pollution indicators shall be defined in detail by the environmentalist from the control mission. Furthermore, the Ministry of Forstry, Water, Fisheries and the Environment in charge of Nature Protection (MEFEPE) shall ensure control and supervision of the ESIA, ESMP and RP1. 4.6.12 The main objectively verifiable indicators that shall be used for impact monitoring shall be: the regeneration rate of deforested areas; the success rate of planted species; the number of tests and quality of water; the number of socio-sanitary infrastructure constructed and operational; the number of families expropriated and compensated (including compensation deadlines and commensurability of the compensation received with the value of the expropriated property); disease prevalence rates as related to dust and gas emissions, the number of water-borne disease or STI/AIDS and other infectious disease cases registered by the health centers from the start of the program and their treatment; the number of accident cases, the number of reported collisions with wildlife, etc. 4.6.13 The costs of the program’s environmental protection, expropriation and compensation measures are: (i) CFA.F 200 million for monitoring implementation of the environmental measures included in the works monitoring costs; (ii) CFA.F 435 million for environmental works (preservation of natural resources, embellishment of village entrances and exits, general improvement of the landscape), and the sensitization program; (iii) CFA.F 199 million as compensation for expropriated property to be defrayed by the State. In addition, there are costs related to the rehabilitation of quarries and borrow pits; the restoration of areas used as living quarters and works sites; signaling appliances, etc. Such costs are included in the cost of works. 4.7 Road Program Costs 4.7.1 The estimated cost of the program, net of compensation and taxes, stands at UA 246.56 million, including physical and financial contingencies. This amount is broken down into UA 176.27 million as foreign exchange and UA70.29 million, as local currency. These cost estimates are based on detailed pre-project studies on the three program roads and on the unit prices that emerged from the results of the bidding process launched in 2005 and 2006 for the same types of works. Physical contingencies are estimated at about 10% of baseline costs. Price contingencies were evaluated at about 5% of baseline costs and physical contingencies. The summaries of cost estimates by component and by category are respectively presented in Tables 4.1 and 4.2 below:

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TABLE 4.1 SUMMARY OF RP1 COSTS BY COMPONENT

In CFA.F million (in UA millions) COMPONENTS F.E LC Total cost F.E LC Total cost

A – CONSTRUCTION A.1 - FOUGAMOU-MOUILA A.1.1 – Road works 51 450 22 050 73 500 69.17 29.64 98.81

A.1.2 – Related works 1 020 437 1 457 1.37 0.59 1.96

A.1.3 - Works control and supervision 1 692 188 1 880 2.27 0.26 2.53

Total A.1 54 162 22 675 76 837 72.81 30.49 103.30

A.2 - LALEYOU-LASTOURVILLE A.2.1 – Road works 28 310 12 133 40 443 38.06 16.31 54.37

A.2.2 – Related works 350 150 500 0.47 0.20 0.67

A.2.3 - Works control and supervision 1 130 125 1 255 1.52 0.17 1.69

Total A.2 29 790 12 408 42 198 40.05 16.68 56.73

A.3 - NDENDE - LEBAMBA A.3.1 – Road works 20 734 8 886 29 620 27.88 11.94 39.82

A.3.2 – Related works 443 190 633 0.60 0.25 0.85

A.3.3 - Works control and supervision 918 102 1 020 1.23 0.14 1.37

Total A.3 22 095 9 178 31 273 29.71 12.33 42.04

Total A 106 047 44 261 150 308 142.57 59.50 202.07

B - STUDIES B.1- Libreville-PK 15 Studies 360 40 400 0.48 0.06 0.54

B.2 – Mouila-Ndendé-Doussala/Ndendé-Tchibanga studies 1 643 182 1 825 2.21 0.24 2.45

B.3 - Reinforcement of the expressway 765 85 850 1.03 0.11 1.14

Total B 2 768 307 3 075 3.72 0.41 4.13

C – INSTITITIONAL SUPPORT C.1 - Organisation of road maintenance 270 30 300 0.36 0.04 0.40

C.2 - Procurement and rehabilitation of traffic count stations 900 100 1 000 1.21 0.13 1.34

C.3 - Procurement of weighing stations 1 080 120 1 200 1.45 0.16 1.61

C.4 - Training of MTPEC staff 180 20 200 0.24 0.03 0.27

C.5 - Furnishing and equipment of the archives room 123 53 176 0.17 0.07 0.24

C.6 – Rehabilitation and Equipment of the Fougamou Training Center 455 195 650 0.61 0.26 0.87

C.7 - Procurement of office automation and computer equipment 54 6 60 0.07 0.01 0.08

Total C 3 062 524 3 586 4.11 0.70 4.81

D - MANAGEMENT D.1 Technical assistance 1 202 133 1 335 1.62 0.17 1.79

D.2 – Technical and financial audits 450 50 500 0.60 0.07 0.67

Total D 1 652 183 1 835 2.22 0.24 2.46

BASELINE COST = A+B+C+D 113 529 45 275 158 804 152.62 60.850 213.470

Physical contingencies 11 353 4 527 15 880 15.26 6.09 21.35

Price contingency 6 244 2 490 8 734 8.39 3.35 11.74

Total/Contingencies 17 597 7 017 24 614 23.65 9.44 33.09

Net total cost (excluding compensations) 131 126 52 292 183 418 176.27 70.29 246.56

Compensations 0 199 199 0.00 0.27 0.27Total cost, including compensations 131 126 52 491 183 617 176.27 70.56 246.83

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Table 4.2 SUMMARY OF COSTS BY EXPENDITURE CATEGORY FOR RP1

In CFA.F million (in UA millions) CATEGORIES

F.E LC Total F.E LC Total

A- Works 102 885 44 094 146 979 138.33 59.26 197.59

B – Goods 2 034 226 2 260 2.73 0.30 3.03

C– Consultancy services 8 610 955 9 565 11.56 1.29 12.85

Baseline cost 113 529 45 275 158 804 152.62 60.85 213.47

Physical contingencies 11 353 4 527 15 880 15.26 6.09 21.35

Price contingency 6 244 2 490 8 734 8.39 3.35 11.74

Total/Contingencies 17 597 7 017 24 614 23.65 9.44 33.09

Net total cost: 131 126 52 292 183 418 176.27 70.29 246.56

4.8 Financing Sources and Expenditure Schedule

4.8.1 RP1 shall be financed by the ADB and the Government. The ADB loan of UA 221.9 million, representing 90% of net total costs, shall cover the total cost in foreign exchange and 64.92% of costs in local currency. The Government’s contribution shall be UA 24.66 million. The financing plan by source is given in Table 4.3 below:

Table 4.3 FINANCING SOURCES

In CFA.F million (in UA millions) % SOURCE

F.E LC Total F.E LC Total ADB 131 126 33 949 165 075 176.27 45.63 221.90 90.00%

GVT : 0 18 343 18 343 0.00 24.66 24.66 10.00%

Net total cost: 131 126 52 292 183 418 176.27 70.29 246.56 100.00%

4.8.2 Table 4.4 below presents the expenditure schedule by component.

Table 4.4 RP1 EXPENDITURE SCHEDULE

In CFA.F million (UA million)

COMPONENTS 2 008 2 009 2 010 2 011 Total 2 008 2 009 2 010 2 011 Total A – CONSTRUCTION A.1 – Fougamou - Mouila 26 623 26 623 26 623 8 876 88 745 35.790 35.79 35.79 11.94 119.31

A.2 – La Leyou - Lastoursville 14 622 14 622 14 622 4 873 48 739 19.66 19.66 19.66 6.55 65.53

A.3 - Ndendé – Lebanba 10 836 10 836 10 836 3 613 36 121 14.57 14.57 14.57 4.85 48.56

B - STUDIES 0

B.1- Libreville-PK 15 Studies 139 139 139 45 462 0.190 0.190 0.190 0.050 0.620

B.2 – Mouila-Ndendé-Doussala/Ndendé-Tchibanga studies 632 632 632 212 2 108 0.850 0.850 0.850 0.280 2.830

B.3 - Reinforcement of the expressway 295 295 295 97 982 0.40 0.40 0.40 0.12 1.32

C – INSTITITIONAL SUPPORT 1 243 1 243 1 243 413 4 142 1.66 1.66 1.66 0.57 5.55

D - MANAGEMENT 636 636 636 211 2 119 0.86 0.86 0.86 0.26 2.84

NET TOTAL 55 026 55 026 55 026 18 340 183 418 73.97 73.97 73.97 24.65 246.56

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4.8.3 The expenditure schedule by financing source is summarized in Table 4.5 below:

Table 4.5 EXPENDITURE SCHEDULE BY FINANCING SOURCE

In CFA.F million (UA million)

SOURCE 2 008 2 009 2 010 2 011 Total 2 008 2 009 2 010 2 011 Total

ADB 49 523 49 523 49 523 16 506 165 075 66.57 66.57 66.57 22.19 221.90

GVT : 5 503 5 503 5 503 1 834 18 343 7.40 7.40 7.40 2.46 24.66

NET TOTAL 55 026 55 026 55 026 18 340 183 418 73.97 73.97 73.97 24.65 246.56

5. PROGRAM IMPLEMENTATION 5.1 Executing Agency The program’s executing agency shall be the Ministry of Public Works, Equipment and Construction, which shall also be the project owner. It shall manage the program through the Secretariat General (SG) which shall be responsible for coordinating program activities. The SG shall work through (i) the Directorate General of Infrastructure Studies (DGEI) as concerns the execution of road studies; and (ii) the Directorate General of Transport Infrastructure (DGIT) for the conduct of road works, the procurement and installation of equipment. For the conduct of the studies component, the DGEI has a Department of Studies and Project Appraisal (DEEP), a Department of Programming (DP) and a Department of Standardization (DN) within which is found an environmental impact assessment service. The DGIT shall work through its Department of Road Development Works (DTAR) to implement the components under its responsibility. The DGEI and DGIT have only seven and eight engineers respectively for implementing all studies and new works programs of the MTPEC throughout the national territory. To ensure regular and satisfactory monitoring of the RP1, the current capacity of the Executing Agency shall be reinforced. The provisions provided to that end are presented in Paragraph 5.2.1 below. 5.2 Institutional Arrangements 5.2.1 Under the authority of the Secretary General, each Directorate General shall be responsible for the daily management and monitoring of program components. In a bid to encourage implementation of the program, technical assistance shall be recruited and shall include 3 road experts and 1 accountant. A road infrastructure expert shall be posted to the SG who shall be responsible for coordinating all program activities and work under the authority of the SG. A road works expert shall be posted to the DGIT. He shall work under the DGIT, monitoring works and providing support to the other engineers posted to each road program. For daily monitoring of works, the Government shall designate for each of the three road programs, a counterpart in the consultancy firm that shall be responsible for control and supervision of works. Considering the lessons learnt from previous experience, an accountant shall be put at the disposal of the program to keep and manage the accounts of all RP1 activities. The CVs of the accountant and counterpart engineers shall be submitted to the Bank to secure its “no-objection” approval before they are appointed. This shall be one of the loan conditions.

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5.2.2 Counterpart funds shall be deposited in a special account opened in a commercial bank and provisioned every six months in accordance with the annual expenditure schedule. The Government shall provision this account with an initial amount corresponding to one quarter of the counterpart for the first year. At the request of the Borrower, a readjustment may be made depending on effective project progress after the prior approval of the Bank. This shall be one of the loan conditions. 5.3 Implementation and Supervision Schedule 5.3.1 The project implementation schedule, based on the elementary duration for each component, shows that project execution will be spread over 48 months from the date of loan approval by the Bank. It is projected that activities will be completed at the end of December 2011. The program implementation schedule is presented in Annex 4. 5.3.2 Upon approval of the loan, the program shall be monitored by the Bank according to a schedule contained in the implementation document. It shall mainly entail launching the program and then conducting half-yearly supervision missions and one completion mission. 5.4 Procurement Arrangements 5.4.1 All procurement of goods and works financed with ADB resources shall be made in accordance with the Bank’s relevant rules of procedure on procurement. Services shall be procured in accordance with the Bank’s rules of procedure for the recruitment of consultants. In all cases, the Bank’s standard bidding documents shall be used. On 11 April 2007, the Bank authorized the Government to resort to anticipated procurement of works and services and the Board of Directors was informed on 28 May 2007. The corresponding public procurement notice was published in the UN "Development Business" of 16 June 2007. Procurement arrangements are summed up in Table 5.4 below.

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Table 5.4 Procurement Arrangements In UA million

Categories ICB NCB Other Short list Non-ADB Total

A- Works

A.1 - Fougamou-Mouila

-Lot1 Fougamou-Guidouma 59.70 [47.19] 59.70 [47.19]

-Lot2 Guidouma - Mouila 57.97 [45.82] 57.97 [45.82]

A.2 - La leyou-Lastpoursville

-Lot1-La Leyou-Manamana 33.40 [33.40] 33.40 [33.40]

-Lot2-Manamana-Lastoursville 30.20 [30.20] 30.20 [30.20]

A.3-Ndendé-Lebamba 46.97 [46.97] 46.97 [46.97]

B - Goods

B.1-Counting stations 1.55 [1.55] 1.55 [1.55]

B0.2- Weighing stations 1.86 [1.86] 1.86 [1.86] B.3-Procurement of office automation and computer equipment 0.09 [0.90] 0.09 [0.90]

C – Services

C1-Control on Fougamou mouila 2.92 [2.92] 2.92 [2.92]

C.2-Control on Laleyou Lastoursville 1.94 [1.94] 1.94 [1.94]

C.3-Control on Ndendé Lebamba 1.58 [1.58] 1.58 [1.58]

C.4- Libreville-PK 15 Studies 0.62 [0.62] 0.62 [0.62]

C.5-Mouila- Ndendé-Doussala studies 1.51 [1.51] 1.51 [1.51]

C.6 – Ndendé-Tchibanga 1.32 [1.32] 1.32 [1.32] C.7-Studies on the reinforcement of the expressway 1.32 [1.32] 1.32 [1.32]

C.8-Study on the organization of road maintenance 0.46 [0.46] 0.46 [0.46]

C.9- Training 0.31 [0.31] 0.31 [0.31]

C.10- Technical assistance 2.07 [2.07] 2.07 [2.07]

C.11 -Audit 0.77 [0.77] 0.77 [0.77] NET TOTAL 231.65 [206.99] 0.09 [0.09] 14.82 [14.82] 246.56[221.90]

NB: The figures in parenthesis indicate the amounts defrayed by the ADB. Works 5.4.2 The procurement of road works and related works shall be done through international competitive bidding (ICB). Works, amounting to a total of UA 231.65 million shall be broken down into five contracts as follows: La Leyou-Lastoursville : Lot 1 - La Leyou - Manamana

Lot 2 - Manamana - Lastoursville Fougamou- Mouila : Lot 1 - Fougamou – Guidouma Lot 2 – Guidouma – Mouila Ndende – Lebemba : Single Lot

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Goods 5.4.3 The counting and weighing equipment shall be procured through international competitive bidding. The corresponding contract amounts shall be UA 1.55 million and UA 1.86 million, respectively. Office automation and computer equipment shall be procured through national competitive bidding for the sum of UA 0.09 million.

Consultancy Services 5.4.4 The estimated cost of consultancy services in UA 14.82 million. Control and supervision services for construction work on the La Leyou-Lastourville, Fougamou – Mouila and Ndende-Lebamba roads shall be conducted under three different contracts, which shall be awarded on the basis of a shortlist. Services related to technical assistance, road studies, audits and training shall be procured on the basis of shortlist. Road studies shall be conducted under four different contracts. The procedure for selecting consultants shall be based on the combined assessment of technical and financial bids (price is a factor in the selection). General Procurement Notice 5.4.5 The text of the general procurement notice was prepared and discussed with the Gabonese Government. It was published on 16 June 2007 in “Development Business”.

Review procedures 5.4.6 For all procurements, the following documents shall be submitted to the Bank for prior approval: (i) special procurement notices; (ii) bidding documents, consultancy documents, terms of reference and invitation letters to consultants; (iii) evaluation reports on the bids of enterprises or proposals of consultants containing recommendations on contract award; and (iv) draft contracts if those included in the bidding or consultancy documents have been modified. 5.5 Disbursement Arrangements The direct disbursement method has been retained for works, consultancy services and the procurement of goods. If need be, other disbursement methods shall be negotiated and featured in the disbursement letter. 5.6 Monitoring and Evaluation 5.6.1 Monthly and quarterly works status reports shall be drafted by the consultant in charge of works control and supervision. The SG of MTPEC shall forward a program implementation report in the appropriate format to the Bank on a quarterly basis. Supervision missions shall ensure that there is conformity in project implementation in all aspects. The technical assistance team shall, on a quarterly basis, provide the Bank with a report drafted according to the appropriate format on program implementation in general and RP1 activities in particular. The works control mission shall submit a report every month. Upon completion of works, it shall prepare a works completion report and submit it to the executing organ three months after provisional acceptance of the works. Later on, within six months after project completion, the Borrower shall prepare, according to the appropriate format, the program completion report to be submitted to the Bank.

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5.6.2 At the end of RP1, technical assistance team shall measure input indicators (short-term results) defined in the logical framework of the current report. The indicator effects (medium-term impact) shall be measured by the competent services of the Gabonese government (the Directorate General for Road Maintenance and Airports, the Directorate General for Land Transport, the Directorate General for Statistics and the Health and Education Services). The impact indicators shall be determined within the framework of surveys and studies conducted periodically by MPTEC and ECCAS. 5.7 Financial and Audit Reports The project’s accounting shall be handled by the executing agency according to a private accounting plan. It shall keep a separate accounting for all operations financed by the Bank. Project accounts shall be audited by an external audit firm financed with loan resources. Audit reports shall be submitted to the Bank at most 6 months after the end of the fiscal year. During the projected implementation period of 48 months, four audits shall be conducted annually. The program shall also be subjected to a half-yearly technical audit. 5.8 Coordination of Assistance 5.8.1 In general, the aid shall be coordinated by the Ministry of Finance. In the transport sector, the donors represented in Gabon instituted periodic consultation meetings which the Bank attended regularly from March 2006. Such coordination was reinforced by meetings of all donors organized periodically by the MTPEC. This mechanism made it possible to develop synergy between the different partners and, among other things, led the Government to transform the existing Road Maintenance Fund into a 2nd generation road maintenance fund. 5.8.2 For the present program, the Bank met the main donors, especially the World Bank, the French Development Agency, the Islamic Development Bank and the European Union. Emphasis was laid on the complementarity of the interventions being prepared by donors. As concerns the Libreville-Ntoum-Nsile highway, the World Bank reiterated its interest in participating in the financing of the Libreville-PK 15 stretch. Hence, it requested the Bank to include the financing of studies on this stretch under RP1. 6. SUSTAINABILITY AND RISKS OF THE PROJECT 6.1 Recurrent Expenditure 6.1.1 The recurrent costs relate to the routine and periodical maintenance costs of roads and related program infrastructure. According to the strategy in force, routine maintenance of paved program roads shall comprise road patching operations (filling of potholes and repair of degraded areas of the paved surface) and maintenance of related structures (maintenance of the pavement, cleaning and repair of bridges and culverts, replacement of defective vertical road signs, etc.). This shall be done once a year. Periodical maintenance shall be done every 10 (ten) years and shall include the rehabilitation of the road shoulder, renewal of the asphaltic concrete on the surface course and restoration of related structures (bridges and culverts, horizontal and vertical road signs, etc.). Routine and periodic maintenance, thus defined, shall generate

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recurrent costs estimated at CFA.F 2,700,000/km and CFA.F 60,000,000/km, respectively. Financial needs during the next three years are estimated at CFA.F 670 million per year. The estimated resources of the 2nd generation Road Maintenance Fund indicated in Paragraph 3.7.7 are at a sufficient level to cover the recurrent expenses of RP1 roads. 6.1.2 As for the socio-educational and cultural infrastructure funded under this program, the related recurrent expenditure is included under the Government’s social and cultural development programs for the next three years, notably school mapping, health coverage and women’s empowerment. Hence, the relevant ministries have made provision for the financing or recurrent expenditure in their respective budgets. 6.2. Project Sustainability 6.2.1 Appropriate studies were conducted on the program by qualified consultancy firms. The studies took into account the high rainfall in the project area. Hence, special emphasis was laid on the design of bridges and culverts and the choice of construction material. The technical study examined various types of pavement structure. The structure retained is designed to last for 20 years and takes into account the local constraints, climate, the load-bearing capacity of the soil, and the high proportion of timber trucks in the traffic on program roads. 6.2.2 Civil engineering works shall be executed by enterprises selected through international competitive bidding. Moreover, the said works shall be controlled by specialized consultancy firms which shall use certain laboratories to ensure the quality and use of material. 6.2.3 A 2nd generation Road Maintenance Fund has just been set up. Its resources should stand at about CFA.F 27 billion in 2008. There is need, therefore, to ensure the regularity and sustainability of resources needed for maintenance of program roads. The Government recently opted for the privatization of road maintenance works which should amount to 80% of works in the next three years. The capacities of SMEs are being reinforced through a major training program and improvement of the financial environment. 6.3 Main risks and Mitigative Measures 6.3.1 The main risks relate to: (i) shortcomings in the technical and accounting management of projects; (ii) problems in mobilizing local counterpart funds; and (iii) inadequacy and irregularity of resources allocated to road maintenance. 6.3.2 To mitigate the first risk, the program has provided for technical assistance and institutional support to ensure works management and execution as well as the quality of studies conducted under the program. An accountant shall be recruited to keep program accounts and a counterpart engineer shall be appointed to monitor the execution of each of the three road projects. 6.3.3 The unavailability of counterpart funds is a recurrent problem that has often led to the suspension of projects for several months. To mitigate this second risk, counterpart funds shall be deposited into a special account opened in a commercial bank and provisioned every six months in accordance with the annual expenditure schedule.

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6.3.4 The guarantee of funds for maintenance of the priority road network, as defined by the Government, is a risk that has always been a concern to the Bank and other partners that intervene in the road sector. This risk is mitigated by the setting-up of the 2nd generation Road Maintenance Fund. 7. PROGRAM BENEFITS 7.1 Economic Analysis Quantifiable and Unquantifiable Benefits 7.1.1 In the "non-project" situation, the roads retained under this program are earth roads characterized by very high roughness or degradation indices ranging from 12m/km to 16m/km. Driving conditions are highly dangerous with long periods of traffic interruption during the rainy season. Travel time is very long because of the low reference speed which varies from 30 km/hour to 45 km/hour on average. Analysis of the "project situation" shows that the level of development retained (paved roads with good characteristics) matches the current and future volume of traffic which is dominated by heavy road vehicles. The roughness index is reduced to 3, the reference speed is raised to 80 km/hour on average with appreciable time gains, and vertical and horizontal road signaling is optimized to reduce the risk of road accidents. 7.1.2 A comparison of the “project” and “non-project” situations shows that the program will generate many economic and social benefits which include: (i) a substantial increase in traffic on the three program roads (5%); (ii) a reduction in vehicle operation costs (35%); (iii) a reduction in routine maintenance costs (46%); (iv) time gains in the transportation of perishables and road users from certain socio-professional categories; and (v) more value-added in agro-forestry as a result of the program. In addition to these quantifiable benefits, there is a residual value estimated at 60% of investment costs and the opening-up of access roads that will translate into an increase in agricultural income and an improvement in the living conditions of communities in the project area. Lastly, with the development of the Fougamou-Mouila road, which is a major component of the Ndjamena-Yaoundé-Brazzaville trans-African highway, the program will help to boost trade with neighbouring countries, namely Cameroon and Congo-Brazzaville. Analysis of current and future traffic 7.1.3 The baseline traffic figures are those of 2006 and come from counts conducted by Gabonese authorities and adjusted with the results of the origin-destination study conducted in the first quarter of 2007 by the consultant. For this base year, and despite their state of advanced degradation, the program roads registered normal traffic estimated at 214 vehicles/day on the Fougamou-Mouila road, 162 vehicles/day on the La Leyou-Lastoursville road and 91 vehicles/day on the Ndendé-Lébamba road, representing a weighted average of 175 vehicles/day on all program roads. These traffic levels are relatively high when compared to the reference situation (degradation index of 12 to 16). Current demand for transport is fuelled essentially by rapid population growth and the agro-forestry and mining potential of the project area. The

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observed traffic can be classified into four categories of vehicles: private cars (16%), pick-up trucks (56%), light trucks (20%) and heavy-duty trucks (8%). Traffic estimates by vehicle category were prepared in accordance with base year figures from road counts and origin-destination studies, population growth (2.5%), economic growth (4.5%), timber production trends (13%) and agro-food trends. The combination of all the above parameters gives a projected annual average growth rate of 5% for future traffic. 7.2 Sensitivity analysis 7.2.1 The economic rate of return (ERR) was determined through the HDM IV model. Apart from the baseline traffic figures, the main elements taken into account by the model are: future traffic trends, vehicle operation costs, net project costs, the road maintenance strategy, the length and roughness/degradation index of program roads, the pavement life (20 years), time gains for a certain category of road users, a road investment residual value of 60%, a discount rate of 12%, etc. 7.2.2 The ERR obtained from the HDMIV model stands at 14.9% with a net present value of about CFA.F 25.7 billion. The program roads therefore respond to the investment criteria retained during preparation of the PARR, namely a positive net present value and an economic rate of return that exceeds 12%. Hence, the project is economically justifiable. 7.2.3 In case of a 10% in investment costs, the ERR declines by 13.7%. In case of a 10% decrease in expected economic benefits, the ERR declines by 14.5%. The results of the sensitivity test show that the ERR is relatively stable. Hence, the project remains economically viable even under these unfavorable assumptions. 7.3 Social Impact Analysis 7.3.1 The regions crossed by the program roads, namely Fougamou-Mouila, Ndende-Lébamba and La Leyou- Lastoursville, are among the most inaccessible areas of Gabon. These regions have enormous agricultural, forestry and mining potential that provides the right conditions for local socio-economic development. These highways contribute to regional integration, increase road connections between the Northern, Southern and Eastern regions of the country and reduce poverty. Indeed, they play a major role in agriculture, the supply of farm inputs and manufactured products to rural areas and the evacuation of produce to urban areas. The project area accounts for about 20% of the country’s food production and trade is currently conducted under dangerous and costly conditions because of the poor state of roads. This affects household income levels in the project area where 30% of incomes is spent on transport, according to the conclusions of a report on surveys conducted in 2006. Investigations and discussion held with the Departmental delegations of Fougamou, Mouila, Lébamba, Ndendé, Mbigou, Lastoursville, road users, traders and local communities highlighted the very high cost of transport on project roads, which represents about 50% of the direct marketing costs of products. This cost doubles during the rainy season. Uninterrupted traffic throughout the year will lead to a 70% reduction, or elimination, of losses and damage to harvests and a reduction in transport costs that will enable farmers to sell their produce more easily and generate maximum returns from their farms. It will also shorten the period of absence of family members who migrate to the cities of Libreville, Koulamoutou and Ndendé, thereby strengthening family bonds within households.

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7.3.2 The program will also help to improve the quality and living conditions of poor communities by: (i) facilitating access to markets for the sale of produce at remunerative prices and the provision of supplies to the area; (ii) providing access to healthcare and education by increasing infrastructure and improving learning conditions for the young; (iii) promoting hygiene and sanitation in primary schools situated along project roads. It will reduce the time needed for evacuation of patients to health centers and promote staff redeployment to basic social services of the project area; (iv) improving study conditions for children and teaching conditions for teachers by facilitating traffic movements. This will reduce the absenteeism rate of health workers in health institutions of the project area by about 30% and ensure quality healthcare throughout the year. Execution of the project will boost teacher deployment in these remote areas by reducing the absenteeism rate, raise their motivation and increase the quality of teaching thereby contributing to the attainment of a net primary enrolment ratio of close to 100%; (v) promoting social reintegration by enabling natives of the area who are resident in Libreville, Lambaréné, Koulamoutou and Lastourville to make more regular trips home and connecting these cities to other parts of Gabon; (vi) developing tourism in the regions traversed by the road as well as ancillary activities in the accommodation and restaurant industry; (vii) preventing water-borne diseases, HIV/AIDS, early pregnancies and STDs that are prevalent in the region; and (viii) increasing the under-five vaccination coverage rate which stagnates at about 56% because the poor state of roads makes these areas inaccessible during immunization campaigns. 7.3.3 The program reinforces current health actions by upgrading health institutions located along the program roads. It will help to improve marketing conditions by building market stalls, wells and water drainage systems. By building latrines in schools along the road, the project will reduce the incidence of water-borne diseases prevalent in Koulamoutou (800 cases of diarrhea among under-five children for a total population of 10,000 inhabitants) by about 10%, as well as intestinal parasites and typhoid. Many other induced effects are expected from the development of the agricultural and mining potential which will be facilitated by the program. The project will reduce the risk of poor sales and production losses which discourages operators interested in investing in the region. The road will also provide support to micro-enterprises by encouraging the emergence and development of individual transport enterprises and small-scale enterprises engaged in road maintenance and the processing of agricultural produce. The road will contribute to the development of landlocked regions in the Departments of Dola, Louesti, Ogoulou, Ofoué-Noye and lolo-Bouenguidi, which have great agricultural and forestry potential which is largely under-expolited for want of adequate road infrastructure to open up access to these areas and connect them to the major consumption centers. Furthermore, the landlocked nature of this region creates a feeling of frustration and marginalization in the local community. Hence, construction of this road will permanently connect this region to the rest of Gabon, thereby acting as a real catalyst for greater integration. Impact on Women 7.3.4 As indicated in Paragraph 4.2.1, women constitute a huge proportion of the population in the project area and hold two-thirds of informal sector jobs. In this area, 22% of households are headed by women. They produce about 90% of the staples grown in the area and are heavily involved in agriculture, especially food-crop production, vegetable gardening,

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processing of farm produce (cassava flour, groundnut, etc), fish production (smoking and drying of fish), stockbreeding, handicrafts and trade. They usually finance these activities with their own savings. Women have set up operational associations (100 associations and groups). Their economic activities, especially the sale of produce, expose them to various traffic-related inconveniences on the current unpaved road (Ndende-Mbigou-Koulamoutou and Lastoursville-Laléyou highways), namely: insecurity, dry season dust raised by vehicles plying the laterite roads, mud, risk of accident from landslides and erosion during the rainy season. Implementation of the project will curb such inconveniences. As traders, women will also benefit from gains in travel time and a substantial reduction in transport costs. Current transport costs on the project road are excessive. For example, the fare on the Ndende-Mbigou road, which is 121 km long is CFA.F 6,000 during the dry season, while the transportation cost for merchandise is CFA.F 800 for a bunch of plantain. Since the roads are impassable during the rainy season, the area receives no supplies and this leads to a shortage in basic goods. This situation which lasts for close to 6 months doubles the abovementioned prices. Between Libreville and Mbigou, the transportation cost for non-perishable products varies between CFA.F 800,000 and CFA.F 1,000,000, representing CFA.F 70/kilometric ton, whereas it is CFA.F 25 for Libreville - Fougamou. Furthermore, the project will facilitate the evacuation of patients to health centers and reduce the time for evacuating patients to the Bongolo regional hospital which is situated more than 50km away. Indeed, in this health area, 60% of cesarean birth cases are evacuated to Mouila, Ndende and Mbigou with more than 8 hours of travel under difficult conditions. The project will improve the health condition and supervision of pregnant women and reduce the risk of maternal and infant deaths from home deliveries and evacuations done under difficult conditions. 7.3.5 Through improvement of road transport, the project will develop trade locally as well as petty trades, by facilitating the sale of goods produced by women’s associations and the supply of agricultural inputs. It will therefore constitute a strategic lever in the poverty reduction process at the household level, because of the responsibilities devolved on women and their role as promoters of income-generating activities. Moreover, women, children and youths are those most solicited for the transportation of farm produce. The construction of farm-to-market roads will reduce their hardship and facilitate access to farms. The travel time on the Ndende-Mbigou road is about 12 to 18 hours with the risk of non-arrival at destination because of mudslides or getting stuck in mud. Women will devote the time gained (about 8 to 12 hours) to other activities such as literacy or child upbringing. 8 CONCLUSIONS AND RECOMMENDATIONS 8.1. Conclusions 8.1.1 The implementation of RP1 is a crucial phase in the gradual establishment of Gabon’s structuring road network under the PARR. The program was designed in consultation with donors intervening in the road sub-sector and took into account the guidelines of the Growth and Poverty Reduction Strategy Paper (GPRSP) for 2006-2008 as well as lessons learnt from previous Bank interventions in the road sub-sector. It also contributes to regional integration and will facilitate the development of trade with neighbouring countries like Congo-Brazzaville and Cameroon.

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8.1.2 By helping to open up access to all the provinces of the country, the program contributes to economic growth and improves living conditions in rural communities by facilitating the regular supply of agricultural inputs and manufactured goods to the program area. It will promote the development of tourism, industry, trade in food crops and stockbreeding. It will substantially improve access to basic socio-educational and health services. 8.1.3 The technical and geometrical characteristics retained and the maintenance strategy which is based on a 2nd generation Road Maintenance Fund (RMF2) make it possible to ensure the sustainability of the road infrastructure to be constructed. RMF2 was designed to cover the routine and periodic maintenance costs of the priority road network which includes the program roads, thereby helping to bring about a substantial reduction in general transport costs. Moreover, measures shall be taken to protect the roads against overloaded heavy-duty trucks. This program will contribute to that effort by supplying weighing stations that shall be installed on the road network. In summary, the managerial autonomy of RMF2 and the sustainability of its resources, the installation of axle scales and institutional support as well as planned training will help to improve the programming of road maintenance and optimal utilization of RMF2 resources. The program is technically well-designed and economically viable with a 14.9% economic rate of return. This rate is higher than the opportunity cost of capital which is above 12%. 8.1.4 Lastly, the program’s design is in keeping with the Bank’s vision and with the guidelines of the GPRSP which has retained the improvement of access to road infrastructure as one of its pillars for 2006-2010. 8.2 Recommendations: 8.2.1 In light of the foregoing, it is recommended that a loan, not exceeding €256.27 million (UA 221.9 million), be awarded to the Republic of Gabon for implementation of the program described in the this report. Apart from the usual terms and conditions of the Bank Group, this loan shall be subject to the following specific conditions: A. Conditions Precedent to Loan Effectiveness 8.2.2 The loan agreement shall become effective subject to the Borrower’s fulfillment, to the Bank’s satisfaction, of the conditions provided for in Section 5.01 of the General Conditions for Loan Agreements and Guarantee Agreements B. Conditions precedent to first disbursement 8.2.3 Apart from the entry into force of this Loan Agreement, a first disbursement of the loan resources shall be made only if the Borrower fulfils the following conditions to the satisfaction of the Bank:

i) Provide the Bank with proof of designation of the three counterpart engineers and the accountant whose CVs should have been approved in advance by the Bank (Paragraphs 5.2.1 and 6.3.2);

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ii) Provide the Bank with proof of (a) the opening of an account in a commercial bank to receive Government counterpart funds; and (b) the initial provisioning of this account with an amount corresponding to ¼ of the counterpart funds for the first year (paragraphs 5.2.2 and 6.3.3); and

(iii) Provide the Bank with proof of payment of compensation to communities

affected by expropriation (paragraph 4.6.13). C. Other conditions Moreover, the Borrower shall:

Forward to the Bank, by 30 June of each year latest, all budgets approved by the 2nd generation Road Maintenance Fund (RMF2) as well as a status report on maintenance works conducted during the preceding year (paragraphs 3.7.8 and 6.3.4).

ANNEX 1

NB: The staff of the ADB Group have provided this map for the exclusive use of readers of this report to which it is appended. The

appellations and the demarcations on this map do not imply any judgment on the part of the ADB Group and its members concerning either the legal status of a territory or the approval or acceptance of its boundaries.

ANNEXE 2

ORGANIZATIONAL STRUCTURE OF THE MINISTRY OF PUBLIC WORKS, EQUIPMENT AND CONSTRUCTION

MINISTER

SECRETARY GENERAL

DIRECTORATE GENERAL FOR

TRANSPORT INFRASTRUCTURE

DIRECTORATE GENERAL FOR CONSTRUCTION

MAIL SERVICE

DEPARTMENT OF ACCOUNTING AND

STATISTICS

DEPARTMENT OF HUMAN RESOURCES

DEPARTMENT OF IT AND INFORMATION SYSTEMS

DEPARTMENT OF CONTRACTS AND LITIGATION

PUBLIC WORKS TECHNICIANS SCHOOL IN FOUGAMOU

COMMUNICATIONS SERVICE

DEPARTMENT OF STATISTICS

DIRECTORATE- GENERAL FOR

INFRASTRUCTURE STUDIES

DIRECTORATE GENERAL FOR MAINTENANCE OF ROADS & AERODROMES

ANNEXE 3 Summary of program costs for the RP1 (in UA millions)

ADB GVT TOTAL COST

COMPONENTS F.E LC Total F.E LC Total F.E LC TT A - CONSTRUCTION

A.1 - FOUGAMOU-MOUILA

A.1.1 – Road works 69.17 8.71 77.88 0.00 20.93 20.93 69.17 29.64 98.81

A.1.2 – Related works 1.37 0.17 1.54 0.00 0.42 0.42 1.37 0.59 1.96

A.1.3 - Works control and supervision 2.27 0.26 2.53 0.00 0.00 0.00 2.27 0.26 2.53

Total A.1 72.81 9.14 81.95 0.00 21.35 21.35 72.81 30.49 103.30

A2 - LA LEYOU-LASTOURVILLE 0.00 0.00 0.00 0.00 0.00 0.00

A.2.1 – Road works 38.06 16.31 54.37 0.00 0.00 0.00 38.06 16.31 54.37

A.2.2 – Related works 0.47 0.20 0.67 0.00 0.00 0.00 0.47 0.20 0.67

A.2.3 - Works control and supervision 1.52 0.17 1.69 0.00 0.00 0.00 1.52 0.17 1.69

Total A.2 40.05 16.68 56.73 0.00 0.00 0.00 40.05 16.68 56.73

A.3 - NDENDE - LEBAMBA 0.00 0.00 0.00 0.00 0.00 0.00

A.3.1 – Road works 27.88 11.94 39.82 0.00 0.00 0.00 27.88 11.94 39.82

A.3.2 – Related works 0.60 0.25 0.85 0.00 0.00 0.00 0.60 0.25 0.85

A.3.3 - Works control and supervision 1.23 0.14 1.37 0.00 0.00 0.00 1.23 0.14 1.37

Total A.3 29.71 12.33 42.04 0.00 0.00 0.00 29.71 12.33 42.04

Total A 142.57 38.15 180.72 0.00 21.35 21.35 142.57 59.50 202.07

B - STUDIES 0.00 0.00 0.00 0.00 0.00 0.00 0.00

B.1- Libreville-PK 15 Studies 0.48 0.06 0.54 0.00 0.00 0.00 0.48 0.06 0.54

B.2 – Mouila-Ndendé-Doussala/Ndendé-Tchibanga studies 2.21 0.24 2.45 0.00 0.00 0.00 2.21 0.24 2.45

B.3 - Reinforcement of the expressway 1.03 0.11 1.14 0.00 0.00 0.00 1.03 0.11 1.14

Total B 3.72 0.41 4.13 0.00 0.00 0.00 3.72 0.41 4.13

C – INSTITITIONAL SUPPORT 0.00 0.00 0.00 0.00 0.00 0.00 0.00

C.1 - Organisation of road maintenance 0.36 0.04 0.40 0.00 0.00 0.00 0.36 0.04 0.40

C.2 - Procurement and rehabilitation of traffic count stations 1.21 0.13 1.34 0.00 0.00 0.00 1.21 0.13 1.34

C.3 - Procurement of weighing stations 1.45 0.16 1.61 0.00 0.00 0.00 1.45 0.16 1.61

C.4 - Training of MTPEC staff 0.24 0.03 0.27 0.00 0.00 0.00 0.24 0.03 0.27

C.5 - Furnishing and equipment of the archives room 0.17 0.07 0.24 0.00 0.00 0.00 0.17 0.07 0.24 C.6 – Rehabilitation and Equipment of the Fougamou Training Center 0.61 0.26 0.87 0.00 0.00 0.00 0.61 0.26 0.87

C.7 - Procurement of office automation and computer equipment 0.07 0.01 0.08 0.00 0.00 0.00 0.07 0.01 0.08

Total C 4.11 0.70 4.81 0.00 0.00 0.00 4.11 0.70 4.81

D - MANAGEMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00

D.1 Technical assistance 1.620 0.170 1.790 0.000 0.000 0.00 1.62 0.17 1.79

D.2 – Technical and financial audits 0.600 0.070 0.670 0.000 0.000 0.00 0.60 0.07 0.67

Total D 2.220 0.240 2.460 0.000 0.000 0.00 2.22 0.24 2.46

BASELINE COST = A+B+C+D 152.620 39.500 192.120 0.000 21.350 21.35 152.62 60.85 213.47

Physical contingencies 15.260 3.950 19.210 0.000 2.140 2.14 15.26 6.09 21.35

Price contingency 8.390 2.180 10.570 0.000 1.170 1.17 8.39 3.35 11.74

Total contingencies 23.650 6.130 29.780 0.000 3.310 3.31 23.65 9.44 33.09

Net Total, excluding compensation 176.270 45.630 221.900 0.000 24.660 24.66 176.27 70.29 246.56

ANNEX 4 ROAD PROGRAM PHASE I (RP1)

Implementation schedule

ID Task Name

1 IMPLEMENTATION OF THE PROGRAMME 2 1-Preliminary activities

3 Approval of AAAs

4 Approval of loan

5 Loan signature and effectiveness

6 Publication of General Procurement Notice

7 Launchingg of project

8 2-Program implementation

9 2.1 Road construction and related works (33 months)

10 Selection of enterprises and approval and signature of contracts

11 Start of road construction works

12 End of road works on lot 1

13 2.2 Works control and supervision (35 months)

14 Selection of consultants – Approval and signature of contracts

15 Start of control services

16 End of services

17 2.3-TECHNICAL ASSISTANCE (40 months)

18 Selection of consultants – Approval and signature of contracts 19 Start of services

20 End of services

21 2.4- PROJECT AUDIT

22 Selection of consultants – Approval and signature of contracts 23 Start of services 24 End of services

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 2007 2008 2009 2010 2011 2012 20132007 2008 2009 2010 2011 2012 2013

ANNEXE 5 Page 1 of 4

ROAD PROGRAM PHASE I (RP1)

ECONOMIC ANALYSIS Methodology 1. Economic assessment of the rehabilitation and development of the three Fougamou–Mouila, Ndendé–Lébamba and La Leyou–Lastoursville roads, which are the focus of the road infrastructure development program in Gabon, was conducted using the HDM (Highway Design and Maintenance Standards) model which has the advantage of assessing annual vehicle operation costs based on the state of the road surface, which in turn is determined by the level of degradation caused by traffic and taking into account any maintenance work done. Hence, the model makes it possible to link the vehicle operation costs to the degree of road degradation and take into account the transport cost benefits that result from maintenance expenditure. The parameters needed for the functioning of the program were deduced from the technical study or collected from the various stakeholders. 2. The internal rate of return (IRR) and the net present value (NPV) were used to appraise the economic viability of the project. These criteria result from a comparison, from the community’s standpoint, of costs and benefits between the “non-project” situation (i.e. maintaining the existing level of service) and the project situation. The time horizon of the study is 20 years from the time the road infrastructure is commissioned. The implementation period will be three years, 2008, 2009 and 2010. 3. The economic costs considered are as follows:

i) For the project situation: all expenses inherent in the rehabilitation and upgrading of the three roads in terms of construction works, control and supervision of works, physical contingencies and maintenance costs to ensure the sustainability of investment benefits.

ii) For the non-project situation: given the strategic importance of the project

roads, it was retained that maintenance of the current level of service requires minimal interventions, consisting mainly of localized regravelling and selective intervention on certain structures. Such interventions, conducted in the first year and evaluated at 10% of the total investment amount, shall be followed by periodic maintenance actions.

4. The quantifiable benefits considered in the analysis are:

i) savings in vehicle operation costs resulting from the difference in costs in the current level of service and costs in the project situation;

ii) savings in maintenance costs resulting from a comparison of needs between the

current situation and the project situation; iii) benefits related to the impact of the project on the economy of the project

area, which mainly include: - the elimination of traffic interruption costs, especially during the rainy

season;

ANNEXE 5 Page 2 of 4

Considering that the merchandise transported on the roads goes into a continuous cycle of production, processing and consumption, the cost of traffic interruption is equal to the monetary value of the transported merchandise, multiplied by the interest rate for the duration of traffic interruption.

- additional value-added for the timber sector (forestry and primary processing), resulting from the improvement of supply circuits and the sale of produce. Development of the road should, indeed, provide permanent access for sector operators and consequently boost forestry activities and primary processing.

5. The average weighted traffic using all the project roads stands at 184 vehicles/day in 2007. Traffic projections have retained a normal traffic growth rate of 5% per year and taken into account induced traffic. 6. The internal rate of return and the net present value were calculated based on the abovementioned costs and benefits. Economic calculations for the entire program put the IRR at 14.9%. The ERRs per stretch are presented as follows:

i) Fougamou – Mouila : 14.1 % ii) Ndendé – Lébamba : 16.9 % iii) La Leyou – Lastoursville : 14.5 %

The tables below present the baseline evaluation results for each of the three roads and for the entire program.

ANNEXE 5 Page 3 of 4

HDM -4- Economic indicators: Summary Currency : CFA.F thousand (million)

Discount rate : 12,00% A : Gabon: Study on Road Program Phase I: Entire Program Option Real

administrative cost total (RAC)

Real administrative & investment costs

(CAP)

Additional administrative

costs ©

User cost savings

(B) ©

External benefits

(E)

Discounted earnings

(NPV= B+E-C)

Cost/benefitratio

(NVP/RAC)

Ben/invest ratio

(NVP/CAP)

Internal rate of return

(IRR)

Non-project situation: Earth road maintenance Project situation: asphaltic concrete on GB

4.177 102.014

1.093 101.986

0.000 97.837.

0.000 44.060

0.000 79.451

0.000 25.674

0.000 0.252

0.000 0.252

0.000 14.9 (1)

The number in parenthesis indicates the number of solutions between -90 and +900 B : Study on the Fougamou – Mouila stretch Option

Real administrative

cost total (RAC)

Real administrative & investment costs

(CAP)

Additional administrative

costs ©

User cost savings

(B) ©

External benefits

(E)

Discounted earnings

(NPV= B+E-C)

Cost/benefitratio

(NVP/RAC)

Ben/invest ratio

(NVP/CAP)

Internal rate of return

(IRR)

Non-project situation: Earth road maintenance Project situation: asphaltic concrete on GB

2.666 48.883

1.093 48.883

0.000 46.217

0.000 21.513

0.000 33.046

0.000 8.342

0.000 0.171

0.000 0.171

0.000 14.1 (1)

The number in parenthesis indicates the number of solutions between -90 and +900 C : Study on the Ndendé - Lébamba stretch Option

Real administrative

cost total (RAC)

Real administrative & investment costs

(CAP)

Additional administrative

costs ©

User cost savings

(B) ©

External benefits

(E)

Discounted earnings

(NPV= B+E-C)

Cost/benefitratio

(NVP/RAC)

Ben/invest ratio

(NVP/CAP)

Internal rate of return

(IRR)

Non-project situation: Earth road maintenance Project situation: asphaltic concrete on GB

1.512 28.586

0.000 28.559

0.000 27.074

0.000 15.324

0.000 23.497

0.000 11.746

0.000 0.411

0.000 0.411

0.000 16.9 (1)

The number in parenthesis indicates the number of solutions between -90 and +900 D : Study on the La Leyou- Lastoursville stretch Option

Real administrative

cost total (RAC)

Real administrative & investment costs

(CAP)

Additional administrative

costs ©

User cost savings

(B) ©

External benefits

(E)

Discounted earnings

(NPV= B+E-C)

Cost/benefitratio

(NVP/RAC)

Ben/invest ratio

(NVP/CAP)

Internal rate of return

(IRR)

Non-project situation: Earth road maintenance

Project situation: asphaltic concrete on GB

0.000

24.545

0.000

24.545

0.000

24.545

0.000

7.223

0.000

22.908

0.000

5.586

0.000

0.228

0.000

0.228

0.000

14.5 (1) The number in parenthesis indicates the number of solutions between -90 and +900

ANNEXE 5 Page 4 of 4

Economic comparison for the entire program

In CFA.F billion

Additional administrative cost Economist cost in External Total net Year Investment Operation VOC Time Benefits Benefits

2007 0,00 0,00 0,00 0,00 0,00 0,00 2008 38,66 -0,40 -0,86 -0,1 0,00 -39,21 2009 39,36 -0,40 -2,49 -0,29 15,70 -26,03 2010 52,48 -0,40 -3,23 -0,39 5,47 -50,22 2011 0,00 -0,40 5,49 0,50 5,73 12,12 2012 0,00 -0,40 5,82 0,53 9,23 15,97 2013 0,00 -0,40 6,23 0,57 9,64 16,84 2014 0,00 -0,41 6,68 0,62 10,58 18,28 2015 0,00 -0,40 7,16 0,67 11,05 19,98 2016 0,00 -0,40 7,44 0,69 11,54 20,07 2017 0,00 -0,40 8,00 0,75 12,06 21,21 2018 0,00 -0,40 8,55 0,80 12,61 22,35 2019 0,00 -0,40 9,12 0,86 13,18 23,56 2020 0,00 -0,40 9,71 0,93 13,79 24,82 2021 0,00 -0,31 10,33 0,99 14,42 26,05 2022 14,28 -0,40 10,97 1,06 15,08 13,24 2023 0,00 -0,40 11,82 1,12 15,70 29,04 2024 0,00 -0,40 12,68 1,21 16,34 30,63 2025 0,00 -0,40 13,53 1,29 17,02 32,24 2026 0,00 -0,40 14,43 1,31 17,73 33,95 2027 0,00 -0,40 15,39 1,48 18,48 35,75 2028 0,00 -0,40 16,77 1,61 19,26 38,04 2029 0,00 -0,40 17,66 1,71 20,08 40,54 2030 -62,57 -0,30 18,39 1,79 20,94 104,00

IRR 14,9%

7. In a bid to test the sensitivity of these results to variations in the parameters and decisive indicators two

tests were conducted: the first entailed raising investments by 10% the second consists in reducing traffic by 10%.

Entire Program

Scenario IRR NPV (at 12%) in CFA.F billion

1. Baseline 14.9% 25.7 2. 10% increase in investment 13.7 % 16.1 3. 10% reduction in traffic 14.5 % 21.3 4. 10% increase in investment and 10% decrease in

traffic 13.3% 11.7

8. Critical values for an IRR of 12%

Entire Program

1. Investment 27 % 2. Traffic 59 %

ANNEXE 6 Page 1 of 2

SUMMARY OF BANK GROUP OPERATIONS COMPLETED OR CANCELLED PROJECTS

Operations

Approval date

Date of

Signature Effective date

Completion date Loan amount Amount

disbursed Completion

report Retrospective

assessment Observations

AGRICULTURAL SECTOR Cocoa plantation in Wolen-Ntem I Cocoa plantation in Wolen-Ntem II Rice development in N’Dende Rubber Plantation in Mitzic Stockbreeding in the Nyanga and Lebaki ranches Rubber cultivation program I Stockbreeding Project II Rubber cultivation program II Feasibility study on stockbreeding in the Northern provinces TRANSPORT SECTOR Telecommunications and signaling on the TransGabonese railway Road Maintenance Fund Road rehabilitation and development project Franceville-La Leyou-Lastourville road COMMUNITY FACILITIES SECTOR Water supply in Port-Gentil Extension of the Libreville electric power grid Telecommunications in Port-Gentil and eight internal centers Extension of the Libreville electric power grid SOCIAL SECTOR Education project study Education I Development of socio-economic activities for women Education II Ebola fever prevention project Pilot public interest project to promote entrepreneurship and employment MULTISECTOR Structural adjustment program Economic recovery program SAP III INDUSTRIAL SECTOR Production of salt and salt derivatives Development of SMEs/SMIs TOURISM SECTOR Tourism master plan

18/11/75 24/04/79 29/08/79 19/09/81 23/08/83 29/08/85 17/10/89 26/02/92

19/06/74

23/08/89 06/05/93 19/12/95

19/12//76 08/06/78 19/09/78

17/06/80

14/05/90 26/08/91 29/04/94

01/12/92 09/10/02 08/08/98

23/06/88 20/09/94 30/06/04

01/12/92 06/05/93

02/10/92

16/03/76 09/01/80 09/01/80 26/10/81 17/11/83 25/02/86 30/01/90 13/05/92 13/05/92

21/02/75

11/10/89 13/05/93 15/01/96

19/01/77 04/12/78 04/12/78

27/06/80

12/06/91 13/09/91 10/05/94

07/01/93 03/02/03 29/05/01

10/08/88 21/06/94 12/07/04

-

13/05/93

07/01/93

Dec. 1976 1981

Dec. 1981 Feb. 1982 Feb. 1984 May 1986 April 91 Nov. 92

August 1976

Oct. 1990 Nov. 1993 15/07/97

Oct. 1977 March 1981 Dec. 1980

April 1981

July 1991 17/06/92 30/01/96

06/09/94 10/10/03 09/09/02

Jan. 1989 Sept. 1994 26/10/04

-

May 1994

Nov. 93

1983 1983 1983 1991 1988 1992 2000 2001

1978

1993 1996

30/06/07

1979 1983 1987

1983

1995 1998

-

2002 2005

31/12/06

1990 1995

31/12/06 - -

1995

4.00 2.00 8.00 9.10 18.60 40.17 18.3 40.00 0.980

4.00

25.74 72.55 21.75

5.00 5.00 5.00

5.30

1.57 24.00 5.79

13.20 0.38 0.07

45.00 50.00 76.25

22.00 28.00

0.74

4.00 1.85 0.28 7.80 18.41 40.17 15.91 31.18

4.00

25.59 71.60 20.07

5.00 4.99 4.99

5.24

1.57 22.76

0.143

0.38

0.07

45.00 50.00 76.25

0.00 18.78

0.68

Yes Yes S.O. Yes Yes Yes Yes

Underway

No

Yes No No

Yes No Yes

No

S.O. Yes

No

No No No

Yes Yes No

S.O. No

S.O.

No No

S.O. No No No No No

No

No No No

Yes No Yes

No

S.O. No No

No No No

No No No

S.O. No

S.O.

Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled Balance cancelled. Balance cancelled

ANNEXE 6 Page 2 of 2

SUMMARY OF BANK GROUP OPERATIONS PROJECTS UNDERWAY AS OF 30 June 2007

(in UA million)

Operations Approval date

Date of

Signature

Effective date Completion date Loan/grant amount

Amount disbursed Disbursement rate

(%)

AGRICULTURAL SECTOR Support to the fisheries and fishfarming sector SOCIAL DEVELOPMENT Development of health services Education III Total MULTI-SECTOR Support to the privatization program Support to the PNBG Support to the DGMP Total Total

27/07/05

29/04/94 11/12/95

22/04/98 03/08/04

05/05

28/10/05

10/05/94 13/01/98

28/05/98 18/01/05

06/05

-

29/06/95 01/10/98

18/05/99 28/07/05

06/05

31/12/11

30/06/06 31/12/06

31/12/06 30/09/05

12/06

14.75

5.49 16.11

21.60

7.26 0.10

0.197.55

43.90

0.11

4.223.13

7.35

1.530.100.001.63

9.09

00.75

76.87 19.43

34.03

21.07 100.00 00.00 21.59

20.71