14 --> , " 1RESTR IC TEDReport No. 6717-FIJI

ASIAN DEVELOPMENT BANK This Report has been prepared forthe exclusive use of the Bank.

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APPRAISAL REPORT

FOR THE

ROAD UPGRADING PROJECT

IN FIJI

DECEMBER 1986

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CURRENCY EQUIVALENTS(As of 31 October 1986)

Currency Unit Fiji Dollar (F$)F$1.00 US$0.8555US$1.00 F$1.1688

The exchange rate of the Fiji dollar fluctuates daily. Forthe purpose of conversion in this Report, a rate of US$1.00 = F$1.11has been used, which approximates the average daily rate prevailingduring appraisal of the Project.

ABBREVIATIONS

CPO - Central Planning OfficeDEO - Divisiona: Engineer's OfficeDOT - Department of TransportDP8 - Eighth Development Plan (1981-1985)DP9 - Ninth Development Plan (1986-1990)FASU - Force Account Supervision UnitGDP - Gross Domestic ProductMBA - Master Builders AssociationMCTW - Ministry of Communications, Transport and WorksPWD - Public Works Department (within MCTWIR&A - Roads and Airfie!ds (section within PWD)RCU - Road Construction UnitSi - Sensitivity IndicatorTCB - Transport Control BoardVOC - Vehicle Operating CostVPD - Vehicles Per DayW&T - Works and Transport

NNOTE

The fiscal year of the Government coincides with the calendar year.

Covering Note

This ADB Appraisal Report has been used, with ADB's approval, as a source ofbasic appraisal data only for the revised project which is now being submittedto the Executive Directors for their consideration. The changes made to thescope of the original ADB project are as follows:

(a) The construction of the Sigatoka and Ba bridges has been excluded(ADB Appraisal Report, para 50).

(b) The related consulting services for supervision of construction ofthese two bridges have also been excltded; the consulting servicesfor detailed engineering of these two bridges have remained in therevised project (ADB Appraisal Report, para. 52); and the Governmentwill undertake studies on road user charges and on the domesticconstruction industry with funds out of its own resources oralternatively through grant financing. The Bank will assist theGovernment to review the terms of reference for these studies (seepara. 8 of the Memorandum of the President and ADB Appraisal Report,paras. 53-55).

(c) The condition that the Force Account Supervision Unit wil'l need tobe established in order to enable force account civil works tobecome eligible for disbursements under the loan (ADB AppraisalReport, para 94 (i)) is no longer needed. The Force AccountSupervision Unit is now being established within PWD.

August 4, 1987

Washington D.C.

PROJECT FOCIS, DESIGN AND RATIONALE

The Goverment's economic development strategy focuses onachieving economic growth while promoting more equitable distributionof development benefits, particularly In rural areas. This requires thatresources be utilized In a balanced mer to encourage the continuationof growth In relatively developed areas while promoting developmentelsewbere. To support Its objectives, the Government haa assigned highpriority to Improving the transport system, particularly land transport.Under i:s Ninth Development Plan, 1986-1990, the Government plans toupgrade about 86 km of main and 89 km of secondary roads tobitumen-paved standards and to construct about 350 km of rural accessroads.

The ,iroposed Project will assist the Government in meeting itslad transport objectives by upgrading ten stretches of main andsecondary roads on the islands of Viti Levu and Vanua Levu and byreplacIng tuo single-lane low-level bridges on Viti Levu. The tbreemain road stretches to be upgraded under the Project are part of theKin p o.4, tihlhb along with the Queens Road forms Viti Levu'scireminosular road. From this road other roads penetrate the island'siaterior. Five other road stretches on Viti Levu to be 'proved underthe Project connect to the circumiusular road. Four of these provideaccess to Intensively cultivated agricultural areas while the fifth, thePrinces Road, joins the capital, Suva, with the regional marketcenter at Nausorl. There are two Project road stretebes on Vanua Levu;one serves rural areas near urban Labasa and the other forms part of thetransinsQular road near the port of Savusavu. The Project will alsoprovide consultant services to assist the GoverDment in implementing theroad and bridge works and in helping improve planning, programming andimplementing road maintenance practices.

The total cost of the Project is estimated at US$48.8 millionwith a foreign exchange cost of US$31.8 million (US$27.2 millionexcluding an estimated US$4.6 million interest and other charges duringconstruction). The local currency component is US$17.0 millionequivalent. The proposed Bank loan of US$13.6 million from ordinarycapital resources will finance part of the foreign exchange cost. It isexpected that the remaining foreign exchange cost of US$13.6 millionexcluding interest and other charges during construction will beco-financed by IBRD.

The quantifiable benefits of the Project as a whole yield anestimated economic internal rate of return of 21 per cent andsensitivity tests indicate that the Project will remain viable evenunder assumptions of adverse changes in costs and benefits.Non-quantifiable benefits will accrue through increased mobility of theinhabitants served by the Project roads, therebv providing them withbetter access to social, adminlstrative and economic activitles.Replacement of the two bridges will remove serious bottlenecks to thefree flow of the large volumes of traffic using the bridges.Maintenance experts will assist the Government in road maintenance

planning and prograuuing and will be responsible for implementing theprogram. It is expected that these services will considerably improvethe cost-effectiveness of the maintenance program while training localstaff to eventually assuse maintenance responsibilities.

The Public Works Department (PND) will be the Executing Agencyfor the Project. While ND Lsa had considerable experience In preparingand lmplemeting road works that are internally funded and carried outby departmental forces (force account), PWD has lited experience withexternally funded projects. Consultants will be provided under theProject to prepare designs and contract documents and to superviseconstructilon of works to be undertaken by contract. For those works tobe accomplished under force account, consultants will be recruited toform a Force Account Supervision Unit * This unit will be responsiblefor reviewing the designs prepared by PND and for ensuring that theforce account works are implemented properly. The Project iseconoically viable and no unusual technical, economic or environmentalrisks are foreseen.

(1)

Table of Contents

Pase

MAP (11)

I. INTRODUCTION 1

II. BACKGROUND 2

A. The Transport Sector 2B. The Road Subsector 4C. External Financitg and Donor Assistance 7D. Administration of the Road Subsector 8S. The Project Area 10F. Traffic Trends and Forecasts 12G. Existing Road Conditions and Proposed 13

Improvements

III. THE PROJECT 15

A. Objectives 15B. Project Scope 15C. Project Description 15D. Advisory Technical Assistance 16E. Cost Estimates 17F. Financlng Plan 19G. Environmental, Road Safety and Energy Aspects 20

IV. PROJECT IMPLEMENTATION 21

A. Executing Agency 21B. Implementation Arrangements 22C. Consultant Services 23D. Procurement 24E. Implementation Schedule 25F. Land Acquisition 25G. Maintenance 25H. Accounting and Auditing 25I. Reporting 26J. Project Benefit Monitoring and Evaluation 26K. Technical Assistance 26L. Implementation of Previous Bank Projects 27

V. ECONOMIC EVALUATION 28

A. Objectives 28B. Benefits and Beneficiaries 28C. Estimation of EIRR 29D. Sensitivity Tests 30E. Project Risks 31

VI. CONCLUSIONS AND RECOMMENDATIONS 32

VII. APPENDIXES 34

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I. INTRODUCTION

1. Development strategies In Fiji focus on achieving economicgrowth while promoting a more equitable distributior of the benefits ofdevelopment and improving social conditions, especially in rural areas.Related to these alms are the neods of generating job opportunities andmaintaining greater financial stability. To facilitate meeting theseobjectives, the Government has given high priority to improving thetransport system, particularly land transport. The main tbrusts Inisproving land transport development are: (1) providing access toisolated and rural areas; (i1) Improving and upgrading roads and bridgesas necessary; (Ii1) adequately maintalning the existing road network;aud (iv) ensuring effective control and regulation of the publictransport system. External assistance In the past has been limited;this Project will be the Bank's first lavolvem~nt in the road subsectorIn Fiji.

2. In response to the Government's request for support Indeveloping its transport infrastructure, on 31 Januery 1985 the Bankapproved a technical assistance grant (TA No. 667-FIJ in the amount ofUS$150,000) to undertake feaibility studies for upgrading 173 lm ofroads and two sajor brilges on the islands of Viti Levu and Vanua Levu.'Tbe study confirmed the need for upgrading a total of 107 km of roadsand replacement of the owo major bridges. A Fact-Finding Missionvisited Fiji in January 1986 and after an in-depth review of the studyand consultations with the Government, which had requested Blank andWorld Bank co-financing for improvement of the roads and replacement ofthe two bridges, the proposed Project was formulated.

3. A lank Mission composed of T. F. Jones (Senior ProjectEconomist) as Mission Leader, F. Sharpley (Senior Project Engineer), P.Trillana (Senior Counsel), and K. K. Huh (Country Economist) visitedFiji from 27 May to 11 June 1986 to appraise the proposed Project. Thei.81sion was joined in the field by W. C. Hopper (Senior ProjectEngineer) of the Bank's SPRO and G. Trnka (Senior Transport Engineer) ofthe World Bank. This report is based on the feasibility study,discussions with Government officials and the findings of the Mission.

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11. BACKGROUND

A. Tbe ransport Sector

1. General

4. Fiji comprises 332 islands, about 105 of which are inhabited.The islands$ with a total area of 18,320 eq ka, are scattered over about150,000 sq km of ocean in the South Pacific. The two largest islands,Viti Levu (10,400 sq km) and Vanua Levu (5,500 eq ha), respectivelyaccount for 57 and 30 per cent of the land area and for 75 and 14 percent of FijI's total population of around 710,000.1/ The iands are ofvolcanic origin, and the larger islands have rain-forested mountainranges, narrow vafleya and lWited coastal plais. Although thepopulation growth rate Is a moderate 2 per cent, the population densltyIs above average for the South Pacific Region&, t 38 persons per eq km.About 35 per cent of the population (240,000) lives In urban areas, wtbthe remaining 65 per cent (460,000) living i rural areas and engagedmainly In agriculture. The capital, Suva, on the Island of VitI Low,is the country's major urban center, accounting for more tan 20 percent of the total population. Other urban centers include BS, Lautoka,NaHi Nausol and Sigatoka, on Viti Levu; and Lebasa and Savusavu, onVanu L,a.

5. The Fijian economy, while basically agricultural, Is morediversified than the economies of mny otber South Pacific developingmeber countris. Agriculture accounts for about 24 per cent of grossdomestic product and Is domimted by sugar, which has long been the mainsource of cash Income and export earnings. 2/ Tourism and relatedIndustries have been gaining importance since the uid-1960s and nowcontribute significantly to the economy, as does manufacturing.3/ Sugarand tourism account for about 66 and 25 per cent respectively of totalexport earnings . Other major foreign exchange earners are gold, tiaberand copra. lecent Government development objectives emphasize the needfor an efficient transport network to reduce the cost of transport, toassist in the equitable distribution of development benefits, and topromote tourism.

2. Transport Planning, Coordination and Policy

6. The Ministry of Communications, Transport and Works (MCTW) isthe agency primarily responsible for transport coordination andplanning. Overall planning coordination is undertaken by MCTW, theCentral Planning Office (CPO) of the Miaistry of Economic Development,Planning and Tourism (see para 23), and the Development Committee,comprising relevant permanent secretaries and ministers. Suchcoordination ensures that transport sector projects are appropriate in

1/ ?'d-1986 estimate.2/ Tree cropping is of less importance than elsewhere in the

South Pacific.3/ While some manufacturing, notably flsh canning, involves

export trade, recent Government policy has encouraged thedevelopment of domestic industry.

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size, ting and location with regard to the specific physicalinfrastructure needs and development goals of the Governent.

7 . The Public Works Department (PWD) within lCTN is responsiblefor planni, designitg constructing and maintaining about 95 per centof all reads.l! Proposls for transport infrastructure, particularlyroads, en be initiated at any level, from the Village Councilsupward. Proposals are collated and processed by CPO and theDevelopmet Comittee. All aspects of the transport infrastructureproposals are considered, including teebuical viability and priority forinclusion under a specific five-year development plan. The completedfive-year plan is submitted to the Cabinet for approval.

8. Sine the late 1960s, dexslopment of the transport sector hasbeen based maly on a program that was recomended in a studyundertaken from 1966 to 1968 with UNDP assistance. The recommendationsunder the program were largely implemented by the early 1980s. Recenttransport inestments have been confined mostly to existing facilities,whose need for improvement is readily evident. and to new road links,which are needed to provide access to areas displaying significantdevelopent potential. To maintain a proper mix of road upgradiug (onsections that yield high economic returns) and new country roads (whichprovide basic access and Increased rural welfare), the Government hasprepared a road developmet program for iuplementation under the NinthDevelopumt Plan (DP9) for 1986-1990. DP9 foresees the upgrading of 86km of main and 89 km of secondary roads to a bitumen-paved standard andthe constructio of about 350 km of country roads.2/ To prepare futuredevelopumt plan, the Government is considering coissioning a Com-prehensive study of trasport needs and priorlties. These studies wouldbe undertaken toward the end of the DP9 period.

3. Inestment

9. Finace for planning, designing, constructing and maintainingnational roads is provided through appropriations in the Government'sannual budget, which are coursed through PWID. In the case of ruralroads which do not meet PWD minimum design standards, funds are providedthrough the Ministries of Fijian Affairs and Rural Development.3/ Intowns and cities, funds for road works are allocated from internalrevenue sources and from grants provided by the National Government.

10. National Government expenditures for roads and road transportadministration between 1981 and 1986 are given in Appendix 1. Over thissix-year period F$125.8 million was spent by the National Government,averaging about F$21 million annually. By category of expenditure,

1/ These exclude special purpose roads such as those builtspecifically for logging purposes and village access andsome urban roads.

2/ The Government intends to finance the construction ofcountrv roads by external grant aid and fron its own resources.

3/ Except for speclal purpose roads such as forestry roads,which are funded by the authority concerned.

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10 per cent was for administration, 34 per cent for maintenance, 51 percent for capital works and 5 per cent for land transport functions.These proportions have remained relatively constant over the period,

II. Under DP9, about 19 per cent of total Government capitalexpenditure Is allocated to the transport sector,l/ compared witb 15 percent allocated under the Eighth Development Plan (DP8) for 1981-1985.Although detailed expenditures for other modes are not readilyavailable, the total expenditure for capital inestment XnInfrastructure and utilities ia expected to increase from about P$223illion under DP8 to F$234 million under DP9. The transport share wll

Increase from about 30 per cent of the total expenditure forInfrastructure and utilities under DP8 to about 38 per cent, or F$88million, of the planned capital expenditure under DP9. Roadconstruction and improvements alone account for about F$81 million, or93 per cent of the transport share under DP9, compared with 76 per centunder DP8. Since the Government continues to consider upgrading andprovision of transport infrastructure an important element In attainingIts social and economic objectives, it is envisaged that the proportionof the transport share allocated to roads under DP9 will remait at aboutthe sane level under succeeding development plans. Development of roaStrasport Infrastructure Is expected to continue to receive priorityattention.

B. The Road Subsector

1. The Road Network.

12. toads under the administration of PWD are those that wereconstructed to the specific minium FWD standard. These roads aresubdivided into four categories: main, secondary, country andresidential. in 1965, five years before tndependence, Fiji had 2,100 kmof roads of which 84 km were paved to a bitumen-surfaced standard.Since independevce, Government policy, under three successivedevelopment plans, has emphasized the need for roads to provide accessbetween commercial centers and developing areas and to open up otherareas with development potential. Considerable progress toward thisobjective has been achieved; by 1984, the country's road network hadincreased to 4,650 km, consisting of 1,260 km of main roads, 630 km ofsecondary roads, 2,410 km of country roads (rural access), 145 km ofresidential roads, and 205 km of other roads. About 680 km of thenetwork is paved So a bitumen-surfaced standard (see Appendix 3). Highpriority is still being given to the construction of new roads, whichwill provide basic access to isolated rural areas with potential fordevelopment. Development in areas served by a large number of existingroads has expanded with concomitant increases in traffic volumes; these

1/ In comparison, 26 per cent is allocated to agriculture,13 per cent to social and community development, 20 percent to utilities such as water, sewerage and telecom-munications, 3 per cent to energy and about 19 per centto other sectors.

2/ Information concerning other modes of transport is containedin Appendix 2.

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roads must now be upgraded to provide all-weather access, This willImprove transport reliability and decrease vehicle operating and roadmaintenance costs.

2. Vehicle Fleet and Traffic

13. All motorized vehicles in Fiji must be registered Initiallyand then licensed annually for use on the public road system. In 1984,the uumber of registered motorized vehicles was approximately 52,500,excluding specialized agricultural, Industrial and other vehicles.Registrations, however, Include vehicles that have been scrapped,otherwise rendered inoperative, or simply not licensed during aparticular year. Available data on vehicles licensed for use on publicroads, totalling about 37,200 In 1984, excluding specialized vehicles(see Appendix 4), Indicate annual growth of about 1.4 per ceat.Lieansing, howsver, partlcularly in rural areas, is not alvays adheredto; actual growth In the wmb'r of on-the-road vehicles may be somewhathigher. By type of vehicle, about 59 per cent of all registeredvahleles are carsa Includlag taxies 39 per cent are goods vehiclees andabout 2 per cent are buses. Based on Divisional I/ data, licensedvehicle ownership appears to vary slightly, ranging from about 41vehicles per thousand inhabitants In the Northern Division to 63vehicles per thousand Inhabitants In the Central/Eastern Division, whichincludes the capital at Suva (the center of licensing for Governmentvehicles). Aside from the bulk of Goverment vehicles being licensed inthe Central Division, the differences probably also reflect the level ofeconomic activity in FIji and the extent and condition of the roadsystem.

14. The traffic group within the Roads and Airfields (1A) sectionof PWD has been developing a systeawtic and periodic traffic countscheme since 1979. As well, special traffic counts and traffic surveysare taken for the study of roads being considered for upgrading and fordetermining appropriate design standards. Available count data showthat traffic levels are generally high (1,000 vehicles per day(vpd) orgreater) on roads near the cities and towns2/ and on main routes, butthat traffic levels tend to diminish in relation to distance from theurban areas. On roads serving intensively cultivated areas,particularly those areas growing sugar cane, traffic can exceed 1,000vpd during the harvest seasons, mainly consisting of heavy-goodsvehicles. Outside t1.e harvest seasons, the hea.y-goods trafficdiminishes and overall traffic volumes can fall to between 500 and 700vpd. On country roads, which is the largest component of the roadnetwork, volumes are generally low and although traffic volumes can varysignificantly among road stretches, volumes average about 100 to 150vpd.

1/ For admnirlstrative pur-)oses, Fiji is divided Into four Divisions:Northern, Central, Eastern and Western (see Map at page (ii)).

2/ Traffic volumes on some main city road links can average morethan 12,000 vpd.

3. Rod ransportIndustr

15. Public passenger transportation services are provided by aformal sector, consisting of privately operated buses and taxis (forwhich fares are rcgulated) and a less formal sector mainly using lightgoods vehicles, which are licensed to carry freight and passengers &tnegotiated fares. Passenger transport services are plentitul in thecities and towns and are provided on all main roads and most secondaryroads. Rural road passenger transport is commonly provided by lightgoods vehicles. There are about 2,500 taxis, ehich are mainlyowner/driver operations; a few moderately-sized companies run taxis Inthe towns and cities. In those towns and cities Where tourism issignificant, all taxis are metered; in the other towns and in ruralareas, taxis are unmetered and fares are negotiated based ondestination, likelihood of return fare, and road condition. TheGovernment sets maximum fares in such cases but adherence is nevermonltored. The Government plans to mandate metering nationwide over thenext few years.

16. Buses for public transport operate under regulationsspecifying routes, fares and timetables approved by the TransportControl Board (TCB), under the Department of Transport (DOT). withinHC'I. Adherence to regulations is spot checked by DOT and complaintsfrom patrons are investigated. Operators can request additional routesand fare adjustments, which must be fully justified; all such requestsare heard In an open forum, after which TCB renders a decision. Largelyas a result of such procedures, the quality and cost of passengertransport services, particularly in urban areas and between major townsand cities, is considered adequate. In rural areas, the need for theprovision of Improved passenger and goods transport was seen long ago.However, as passenger transport demand is limited in such areas, truckoperators were allowed to apply for a license to carry both passengersand freight. This arrangement has worked well, particularly for farmerswithout vehicles who wish to accompany their goods to market. Fares arenegotiated and there is generally adequate competition to ensure thatthe charges are reasonable. Recentlv, light goods vehicles have becomemore common and, while this has provided more opportunity andflexibility to rural transport operations, many light goods vehicleoperators are carrying passengers "for hire" in urban areas, to thedetriment of other licensed passenger transport services. DOT isconducting open meetings to determine the extent of such encroachment,with a view to formulating appropriate controls through changes in theTraffic Act, which regulates such transport.

17. Except for controls on dimensions, axle loads and licensingrequirements, goods transport throughout the countrv is unregulated.There are no route restrictions and freight rates are negotiated betweenthe user and the supplier. There are no Government owned or operated"for hire" transport com-panies and no apparent Governrent subsidies areprovided to the private sector. At present, the maximum allowable axleload is 8.2 tons and while overloading is not a common problem, itsometimes does occur, particularly in sugar-growing and logging areas.DOT is studying the possibility of raising the allowable axle load andimproving enforcement, in part through the use of permanentweigb-bridges located at strategic spots throughout the country.

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18. Trasuport services are regulated under the Traffic Act, whichwas last revised in 1978. This Traffic Act is now being reviewed by DOTwitb the intention of making appropriate amendments. The new Act willaddress and Improve such sector development issues as transportregulations, tariff eetting practices and procedures, licensing andvehicle inspection. and traffic law enforcement and safety. The new Actis expected to be flnalized in late 1987 and the Government has agreedto discuss this with the Bank.

4. Road Sector Revenues and Expenditures

19. Road construction, upgrading and maintenance is financedthrough general budgetary provisions, foreign loans and grants.Road-sector related taxes and fees are not specifically earmarked foruse in the road sector; revenues are derived mainly from fuel taxes,import duties, vehicle registration and other fees. Estimates ofrevenues and expenditures available for the period 1983 to 1985 showthat annual revenues from road users have averaged F$39 million (seeAppendix 1); annual expeuditures for roads during the same periodaveraged F$22 million, or 56 per cent of revenues. While revenues fromthe road sector are treated as a source of general revenue, the taxes onroad users vary considerably and the economic rationale behind thesecharges warrants detailed analysis. The Government recognizes the needfor a consistent relationship between revenues collected and road usesuch that charges be equitable for the various users, that revenuecollection is efficient, and that minimal distortion occurs to theeconomic development of transport services and road use.

20. A study covering various asnects of road user charges,including sources, rates applied, cost of collecting the variouscharges, impact on users, costs incurred by the Government to supplyroad transport infrastructure in relation to type of users, effect oncomposition of the vehicle fleet and related economic consequences, andadequacy of expenditure and alternative sources of revenue will becarried out under a proposed advisory technical assistance to be fundedby the Bank (see para 53).

C. External Financing and Donor Assistance

21. Most of the road network expansion has been funded internally,though some assistance has been received from external sources, notablythe World Bank and the EEC. The World Bank has provided two loans, onein 1971 directly to the road subsector, and one in 1980 indirectlythrough a cyclone relief project that included a road upgradingcomponent. Under these two loans the Queens Road along the south andwest coasts of Viti Levu from Nadi to Suva (140 km) was improved to abitumen-paved standard. EEC, through Lome I and II, provided funds forconstruction of 50 km of the circuminsular road on Vanua Levu and 22 kmof rural access roads to serve areas with agricultural developmentpotential in the interior of Viti Levu. _EC plans for the roadsubsector under Lome IT', which began in 1986, are currentlv beingformulated. Assistance for road works has also been received from NewZealand and Australia. The LK provides assistance to the Governmenttainly through the provision of professional staff cn a contractualbasis in various sectors, including roads. Aside from continuing staff

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support from the UK, further assistance to the road subsector during DP9has yet to be firmed up.

22, As external assistance to the road subsector In the past hasbeen limited, coordination with donor agencies was generally throughvisiting missions or by direct communication among agencies, a procedurewhich is generally followed with regard to most of the South PacificDMCs. Following the Governmente's decision in 1983 to seek significantBank and World Bank assistance for road development, meetings betweenthe Bank and the World Bank have been held. World Bank staff haveparticipated in most missions lvolved in formulating and preparing theProject, including Fact-Finding and Appraisal Missions. While in thefield, project preparatory missions contacted other aid agencies toapprise them of the Project and Its components; discussions withmembers of the Goverment's Aid Coordinating Committee have also beenheld.

D. Administration of the Road Subsector

1. Organizational Structure

23. Overall economic development planning Is the responsibility ofCPO, while planning, designing, constructing and maintaining publicroads and bridges are funct-ions of PWD. The former organization isbased solely in Suva while the latter has headquarters in Suva as wellas three Divisional Engineer's Offices (DEOs)l/ and 15 DistrictOffices.2/ Planning and designing road projects is the responsibilityof NWD Headquarters through the Director, Roads and Airfields (R&A),while the DEOs handle construction and maintenance functions.

24. The Ministries of Fijian Affairs, Rural Development, andPrimary Industries finance construction of rural development roads,upgrading of other minor roads, and bitumen surfacing of short stretcbesof roads through villages. Urban authorities3/ are responsible forplanning town and city roads, except those that form links in thenational road network, which are handled by PND.

2. Design

25. Design of roads and bridges is undertaken in-house by R&A atPWD Headquarters. The only exception to this was in relation to theWorld Bank-assisted upgrading of the two end sections, totalling 108 km,of the Queens Road between Nadi and Suva. In this case the detaileddesigns were prepared by a consulting firm. Vrban roads and bridges arealso usually designed by R&A on ar. agency basis.

1/ In the Western, Northern ar.c Central/Eastern Divisions.2/ Four in Western, three in the Northern, three in the Eastern

and five in the Central Division.3/ In the cities of Suva and Lautoka, and in the towns of Nadi,

Ba, Xausori, Sigatoka, Labasa and Savusavu.

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3. Construction

26. Construction of roads and bridges has always been undertakenby ND departmental forces through Its DEOs, apart from the wo endsections of the Queens Road, which were implemented througb IC1procedures. PWD has In recent yeairs undertaken road works ranging invalue from F$15 to F$22 million annually, including recurrentexpenditures. In 1985, PdD used departmental forces successfullyin completing the center section (32 Io) of the Queens Road, for whicbthe Iorld Bsnk provided asseitance under the cyclone relief project.PD also caries out construction of road works at the village level onan agency basis.

27. Because of the very difficult and costly mplementation of thetwo end sections of the Queens Road using en Internationally recruitedconsultant and a contractor selected through ICB proceures, theGoverment has been most reluctant to employ ICB procedures again andsince the mid-19709 has built up Its departmental forces to cary outall subsequent road works. Developmet of the local contracting Industrywith respect to major road works bas therefore not taken place althoughIt ha proved successful in other fields, particularly In relation tobuildin, subdivision and tourist facility construction.

28. About 30 of the civil works contractors In Fiji have formed aMaster Builders Association (N). Of these 30 contractors, eight areconsidered main contractors and the remaining 22 are consideredsubcontractors. The eiht main contractors comprise one forein-ownedfirm, two joint ventures of local/foreig firms and five firms that arpwholly owned locally. In addition, there are a furtber 30 to 40 smalcontractors that are not members of the NBA -- these firms are mailyearthovers for subdivision, forestry and agricultural developmnt -and about 20 plant hire firms. Technical assistance Is also to beprovided to also help the Government with the possible furtherdevelopment of the local construction industry (see para 54).

4. Maintenance

29. At present, maintenance of roads In Fiji is not entirelysatisfactory. This situation has arisen due to a number of factors,including emphasis being placed on upgrading works, insufficient numbersof properly trained road maintenance personnel, and inefficiency of roadmaintenance planning, operations and policies,l/

30. Maintenance of the road network is the responsibility of PWDand Is handled through the DEOs using funds allocated in the annualbudgets.2/ These allocations have remained at the same level over thepast two years, at about F$1,750 per km per year. Under DP9, while thelevel of maintenance allocation will be only marginally raised (to about

1/ These are the main findings of a review of PND's roadmaintenance activities which was carried out as part ofT. A. No. 667-FIJ approved on 31 January 1985 in the amountof US$150,000.

2/ The PND also handles maintenance of roads at the village levelon an agency basis.

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F$1,800 per km per year), measures to Improve the cost-efficiency ofmAintenance operatloans including programming, budgeting and accountingmethods, vlll be undertaken. With these Improvements, the proposedlevel of allocation for maintenance is expected to be adequate. Urbanroad maintenance Is the responsibility of town and city authorities.PND has no established organization or program of work specifically forroad maintenance. No positions in the DEOs are designated for roadmaintenace engineers and PND has been reacting mostly to emergency orobvious maintennsce needs oan an ad-hoc basis. Budgets are not based onroad standards, conditions or traffic, and current maintenaceexpenditures are not moultored against budgets or physicalaccomplishments; also, maintenance funds are often diverted toconstruction and upgradX.ng projects.

31. PD recognizes the deficiencies in its road maintenanceorganization and operation and is now setting up an elementarymaintenace activity planning and costing system as a first step towardestablishin an acceptable road maintenance regile that is to be fullyfunctional and effective by 1990. To assist the Government in achievingthis afi, the Project vill address the current deficiencies through theprovision of ;ionsultant services to Improve the road maintenanceorganization, operations ed practices and to train local counterpartengineers in the DEOs, as wall as to assist PWD in further developingand applying the Governmt's accounting system to maintenanceoperations (see pare 52).

E. Th 3rjctAea

32. In preparing DP9, the Government in 1984 identified 16high-priority rural road stretches, totalling about 175 km in length,for upgrading along with replacement of the two major bridges at Ba andSigatoka. The road stretches were selected on the basis of existing andprojected levels of traffic, existing road conditions, and theimp6rtance of providing all-weather access between major tows andthrough relatively more developed rural areas. The road stretches arelocated on tbe two main islands of Viti Levu and Vanua Levu. The twobridges are on the Queens and Kings Roads, which form the circuminsularroad on Viti Levu. The bridges, located near important towns, aresingle-lane and carry high traffic volumes and are in need ofreplacement by new two-lane bridges. In 1984, the Government recuestedBank assistance to undertake technical and economic feasibility studiesfor upgrading and replacing these road stretches and bridges.Accordingly, in early 1985 the Bank %pproved a technical assistancegrant l/ for feasibility studies, which demonstrated the viability ofupgrading ten road stretches totalling about 107 km and replacing thetwo major bridges. These are located in three of the four Divisions(Northern, Western and Central) and have been included in the scope ofthe Project (see para 48).

1/ T. A. No. 667-FIJ.

11

33. Two road sections totalling about 27 km are located on VaunLevu, which is part of the Northern Division. One of tbese, theNakoroutari Road (5.8 km)s is located on the north side of the Island inMacuata Province and serves traffic generated by the rich agriculturalhinterland near Labsa", which is the island's major market, comercilcenter and port. This province x8 the fourth largest In the country(2,000 sq ki) and bas a population of 80,000 (11 per cent of thenational total). The other road stretch is a 21.3 km portion of thetrasinsula road, which is the major cross-island route connectingLabasa on the north side of the island and Sausavu In the south.This road stretch cmtoncts the port and copra milling center atSavusavu with the circuminular road and provides access to theagriculturally ricb coastal areas on the southwestern part of theIsland. This part of the transinsular road in the southwestern part ofthe Island is located in Cakaudrove Province, which has a population of40,000 and Is the largest province in Fiji (Z,800 sq km). Most of theemployed populaton (69 per cent) Is In the primry sector, producingcopras, cocoa, beef and yaqona.lI Future developmet Is expected sainlyIn agriclture and fisheries, .-entered around the port and copra millinsfacilities.

34. Us other eight road stretches are on the main island of ViltiLws, two In the Central Dilvision and six In the Western Division. Thetwo major bri4ges to be replaced under the Project are both it theWestern Division. The two roads in the Central Division comprise an18.5 hk stretch of the Kins Road and 21.9 km of the Princes goad. TheKinss toad forms the eastern and part of the northern section of theViti Lovu cct ular road; the Queens Road forms the other part. ThePrinces toad connects Suva with the regional market center at Nausortand joins the Klngs load at that point. The Central Division, comprisingthe eastern third of Vitl Levu, contails half of the Island'spopulation. The Central Division is 65 per cent urban in terms ofpopulation and is considered the governmental, industrial and servicecenter of the nation. About 65 per cent of the employment in theCentral Division is outside the primary sector. The land varies fromflat, mostly deltaic areas along the coastline, to rolling hinterlandsand mountainous areas in the interior. Because of a plentiful supply ofwater and suitable land, rice is the dominant crop, followed by gingerand yams. Transport in the Central Division centers on Suva, which isthe largest city and is the location of the nation's main port. Roadsgenerally radiate from Suva, mostly following the coastline and rivervalleys.

35. In the Western Division, two stretebes of the Kings Road(totalling 23.1 km) are Included for upgrading under the Project; thesetwo stretches are unpaved gaps in the Kings Road on the northern coastof the Island. The other four road stretches are short, averaging about4 km, located in the towns of Ba and Nadi and serving the high trafficvolumes generated by the intensively cultivated sugar cane growing areasthey traverse. The Western Division, covering about 60 per cent of Viti

1/ Yaqona is a root crop used for the preparation of apopular local beverage.

12

Lawn's land area, Is topographically flat to rolling in coastal areasand is mountainous Inland. The main economic pursuit is agriculture,vbich accounts for about 54 per cent of employment. With the exceptionof the circiuinsular road, most roads directly support agriculture ortourism. The major towns, all located on the coast along the Kings andQueew loads, are Lautoka, the major port and sugar willing area on thenorthern side of the island and Ba, Nadi and Sigatoka.

F. Traffic Trends and Forecasts

36. Since 1979, PO has taken traffic counts on most main andsecondary roads and on selected country roads on Viti Levu and VanuaLevu. These counts are In addition to traffic counts for specificstudies or projects. Traffic growth at those count locatlons at whichcomparable data are available has varied considerably, from virtually nogrowtb to annual rates exceading 16 per cent.. Outside the larger townsad urban areas, rural traffic volues have increased at annual ratesrQangig froa 1 to 5 per cent. On secodaruy roads serving Intensivelydeveloped agricultural areas, traffic has been groving at about 2 percent per amunm while to and near the urbau areas, traffic growth hasbeen considerably higher, rangitg from 5 to 16 per cent per annum.

37. Traffic volume on the Kings toad near Suva reflect urbancmuting and commrclal Evemnts which total about 10,000 vpd; inrural areas north of Nasori, the volume falls to between 500 and 600vpd. On the Princes load, traffic volumes vary from aore than 7,000 vpdin the suburban area near Suva to about 550 vpd In the sparsely settledmiddle section. On the seondary roads, traffic volumes varyconsiderably depending on the season but range from about 400 to 1,000vpd. The two ajor single-lane bridges, being near urb&n areas, carrysubstantil traffic - the Ba Bridge carries 9,200 vpd and the SigatokaBridge 3,700 vpd. Traffic volumes on the two bridges have been grovingrapidly in recent years, at more than 5 and 8 per cent respectively.Current and forecast traffic volumes for each of the Project roadstretches and the two major bridges are given in Appendix 5.

38. As comprebonsive traffic surveys on the Project roads andbridges have not been carried out on a regular basis, a specific programof data collection was undertaken during the feasibility studies.including traffic volume counts, origin and destination surveys,axle-load studies, and counts of the number of passengers using theroads. Analysls of the data collected Indicates that about two-thirdsof the traffic is comercial and that overloading of trucks carryingsugar cane and logo occurs on some roads. In addition to providingbasic data for the economic evaluation, these data were also used inpreparing preliminary designs and cost estimates.

39. Traffic forecasts for the Project roads and bridges have beenbased on past trends in traffic growth correlated with economicindicators sucb as population growth, per capita income growth andeconomic development potential in the areas served by the roads. Asdescribed in para 36, traffic volume growth has varied considerably,with the highest growth being on stretches near urban areas.Significantly lower growth has been observed in intensively cultivatedagricultural areas and on other roads serving rural areas. In rural

13

areas, statistics indicate a strong correlation betveen the growtb oftraffic and the growth of population, gross domestic product (GDP) andlicensed vehicles. Since 1979, rural traffic has on average grown at 2per cent per anum; this Is very close to anual growth of population(1.97 per ceot), GOP (2.3 per cent) and number of licensed vehicles (1.4per cent). As no large developments are expected in the influence areasof the Project roads and as agricultural growth In adjacent areas willbe realized from marginal increases in yield and cultivated area,traffic growth on all Project roads has been conservatively estimated at2 per cent per antE throughout the evaluation perlod.l/

40. The two major bridges are located In towns and the amount oftraffic using these bridges has been growing at considerably higherrates. Past growtb of traffic on the Ba Bridge, historical development,and expected future development In the area indicate that a trafficgrowth rate of 5 per cant would be appropriate. The Sigatoka Bridge isthe only one across the Sigatoka River. The bridge Is located avar themouth of the river and is adjacent to the fertile Sigatoka Valley.Traffic on the bridge has been growing recently In excess of 10 per centper amum, reflectin the growth of the town and Its hinterland,lucluding the Sigatoka Valley and earby tourist facilities. In1986, the ank approved a loan for the 81gatoka Valley Rural DevelopmentProj ect from which agricultural output growth of more then 15 per centannually in expected over the next few years. In view of past trendsand ezpected future development, an annual traffic grovth rate of 8 percet bas been assmd for traffic using this bridge.

C. RzistIM Road Conditios and Proposed Iprovemnts

41. The main and secondary road stretches to be upgraded and thetwo major bridges to be replaced under the Project are inadequate forpresent and forecast traffic. Road widths are insufficient to cater toeven the present levels of traffic; this deficiency Is aggravated by thelack of adequate shoulders. The structural strengths of the roads arealso inadequate for current and future traffic and surface conditionsare such that vehicle speeds are slow and operating costs high.Although the horizontal alignments are generally acceptable,Improvements are needed to ease curves on most road stretches and somerealigoment is necessary along the Nadaro Bridge to Korovou stretch ofthe Kings load and on the central stretch of the Princes Road; bothstretches are in very hilly terrain. Vertical alignments will also beImproved to enhance sight distances and, for some roads, embankmentlevels in flood prone areas will be raised. Another importantdeficiency of the existing roads relates to drainage

1/ Under DP8, GDP growth was forecast at an annual rate of 4.7 percent compared with an actual growth of 1.4 per cent. Under DP9,GDP is expected to grow at 5 per cent annually and, if this isachieved, traffic growth could be higher than the 2 per centassumed. In that event the road improvements, as proposed,would still be adequate to cope with the increased traffic,and the economic viability would be enhanced.

2/ Loan No. 781-FIJ for US$4.4 million approved on 29 May 1986.

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facilitles; side drains are non-existent along may of the roadstretches and cross-drainage is often inadequate, exacerbating floodingof the road during the rainy seasons. In addition, existing bridges onthe Project road stretches are mostly temporary, usully of timberconstruction, and In a poor state of repair.

42. The two existing major bridges, at Da and Sigatoka, aresingle-lase and carry traffic of more than 9,200 vpd and 3,700 vpdrespectively. These two bridges, of 220 u and 180 a in length, werebuilt at relatively low levels and during the rainy season arefrequently overtopped by floods. In addition, the bridge at Sigatoka isstructurally suspect, havin had its foundations damaged on severaloccasions during floods. With high current traffic volumes andrelaitvely high traffic growth rates anticipated in these two areas,disruptions to traffic are substantial and Increasing.

43. As a result of these deflilencies, the Project roads andbridges am need to be upgraded. After heavy rains, mny areas normallyserved by the Project roads are ccmpletely Isolated by flooded sectionsand coLlapsed or overtopped bridges, and normal traffic flow isdisrupted. Under the best conditions, vehicle speeds are low andoperatin costs high; this results In losses from umearketed produce,delayed delivery of production inputs, and disrupted normalransportation of people and goods. Alternative seans of transport are

not available and therefore the inadequate state of the Project roadsaets as a constraint to the further Improvement of the econmicconditio of the local population.

44. All the Project road strezches and major bridges are importantlinks In the road network. Upgrading of these, which Is urgentlyneeded, will include only essential works carried out to appropriatestandards to enable the roads to cater to forecast traffic. These workswill comprise provision of adequate side and cross-drainage,construction of permanent bridges, raising of embankments, widening andstrengtbening of pavements, provision of shoulders, and laying ofbitumen-paved surfaces. In addition, the major bridges to beconstructed will be two-lane high-level structures which will obviatedelays to traffic and ensure all-weather, reliable and safe accessacross these rivers. Such improvements will facilitate provision oftransport services at lower costs and encourage economic expansion andmore efficient use of resources.

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.II. HE PROJECT

A. Objectives

47. The Project will support the Goverment0s strategy ofachieving economic grovtb, promoting a more equitable distribution ofbenefits from development to the population, and improvitg socialconditions, especially in rural areas. To facilitate meeting theseobjectives, the Government has given high prlority to improviag thetransport system, particularly land tranport. The Project willcontribute toward lovering transport costs by decreasing vehicleoperating and road maintenatce costs, and increasing transportreliability.

B. PLroect SEco

48. The Project consists of:

1. gods: upgrading of ton stretches of main andsecondary roads, totallng about 107 ki, from apoor gravel or deteriorated bitumen surface toa bltumn-paved standard (see Map on page (i));

2. Bridges: replacement of the two low-level sigle-lanebridges at Ba (220 a) and at Sigatoka (180 a) with nowtwo-lane high-level bridges (see Map on page (ii));

3. Construction/Maintenamce Equipment: procurement ofplant, equipment, vebicles and initlal spare partsfor executlng road works proposed to be Implementedthrough force account, and saintensnce of roads aftercompletion of the Project;

4. Construction Materials: procurement of constructionmaterials for road works proposed to be implementedthrough force account; and

5. Consultant Services: provision of consultant servicesto assist the Executing Agency in implementing the Project(including design and construction supervision) and toundertake on-the-job training of Its staff, particularlyin the field of road maintenance operations.

C. Project Description

1. Roads

49. Under the Project, stretches of main and secondary roadstotalling about 107 km (see Appendix 6) will be upgraded fromgravel-surfaced to bitumen-paved standards.l/ Improvements proposed to

1/ Except for a 7.3 km length of the Princes Road whlch alreadyhas a 'hitumen-paved surface; this is in very poor condition,is nearing the end of its economic life and will be reconstructed.

16

these roads comprise properly designd vertical and borlsontalalignments. raised embankuents and adequate drainage facilities,suitable pavements and shoulders with adequate thicknesses of subbaseand crushed stone basecourses, and bituemn pavl" of the surfaces witheither a double bitmn surface treatment or, as approprlate, an aspbaltconcrete surface.

2. Bridge

50. The existg single-lae low-leel bridges at Ba and Sigatokaare to be replaced with two-lane bridge. constructed at hbuer leve1l.Various design options for the bridges, examined under the feasibilitystudy, wil be further reviewed by the consltsnts to be engaged fordetailed design and construction supervision; the nost appropriatedesign alternative In each cse will be selected for construction.l/

3. Construction/Maintenance Plant. Equipmnt and Vehicls

51. Ruch of the plant and equipment cmprising the Government'splant pool Is nearin the end of Its useful Ife and needs replacemet.Construction plant. equipmet and vehiles required to ca rry out troad work using force account wl, therefore, be provided as part ofthe Project.2/ A tentatlve list of equipment3/ to be procured is sbonIn Appendix 7. Thbi equipmet wll be suitale road maintenace worlsfolloing completion of the Project.

4. Consultats

52. Consultant services are to be provided to assist the ExecutingAgency In implementin civil works under the Project and to providerelated training for its staff. Consultant services will also beprovided to help strengthen and enhance the Executing Agency's costaccounting and uamagement reporting functions. A major input ofconsultant services will be strenthening of the Executing Agency's roadmaintenance organization and improvement of its road maintenanceplanning, policies, programs and practices. especially through stafftraining. Broad terms of reference for consultant services are given InAppendix 8.

D. Advisory Technical Assistance

53. In conjunction with the Project, it is proposed that the Bankprovide technical assistance to the Government to undertake a study ofroad user revenues and expenditures and a review of the domestic civil

17 The cost estimates for the bridges were based on the mostappropriate design option recommended by the feasibility study.

2/ In addition, the Government intends procuring a furthersubstantial amount of equipment using its own resources forother works under DP9.

3/ Including spare parts needed for initial operation of theequipment; other spare parts which will be required duringconstruction will be procured and their cost reimbursed underthe civil works.

17

works contracting industry. Although more revenues appear to berecovered from road users than expeanded for roads (see pare 19), theGoverment considers that there is a need to determine. totalexpenditures more precisely, lncluding the level of capital andmantenance expenditures. With regard to revenues, there Is a ueed toevaluate the efficiency of collection. efficiency with regard tooptimizing vehicle usage and equity in terms of recovering the costsImposed on the Govrment by providing infrastructure and services tovarious users. A study of these aspects will provide guidance to theGovernment concerning both revenues and expenditures and will provideInformation useful for the preparation of a new Traffic Act (see para18).

54. With regard to the domestic civil works contracting industry,the Goverment has receatly been giving serious consideration toprivatizhig more public sector activities;l/ .in some Instances this islikely to prove more efficient than undertaing such works through forceaccount.2/ At the sen timse, the Government recognizes that tiedomestic contracting industry Is particularly weak with regard toexperienes In road construction (see para 27). Under the tecbnicalassistance, a review wil be wade of the domestic contracting industrywitb a view to identifying its strgths and weakneses and constraintsto further development. The revIew will also recomnd ways tostreogthen the industry.

55. The total cost of the techndcal assistance is estimated atUS$170,000, including a foreig exchange component of US$150,000. TheGovernment will provide the local currency component equivalent ofUS$20,000, whicb includes the provision of conterpart and supportingstaff services, office facilities and domestic travel. The foreignexchange cost of the technical assistance is proposed to be financed ona grant basis. This tecbnical assistance will be charged to the budgetprovision for "Services to Member Countries."

E. Cost Estimates

56. The total cost of the Project is estimated at US$48.8 millioninclusive of taxes and duties. Of this, US$31.8 million, or 65.0 percent, is the foreign exchange cost (including interest and other chargeson the loans during construction of US$4.6 million). The local currencycost is US$17.0 million equivalent, or about 35.0 per cent. Theestimates are summarized in Table 1.

1/ Construction of public buildings is mostly carried out by theprivate sector.

2/ Mainly for this reason, the Government prefers to have thecivil works for the most expensive road stretch (Nadaro Bridgeto Korovou) undertaken through a contract awarded following ICBprocedures.

1B

Table 1: SUMar of Project Costs -

Foreign LocalItem Currency Currency b/ Total

I. Base Cost

1. tod Works 7.922 10.244 18.1662. Major Bridges 3.267 1.400 4.6673. Plant/Equipment/Vehicles 6.924 - 6.9244. materials c/ 1.358 - 1.3585. Consultant Services 1.706 0.569 2.2756. eIght-of-Way - 0.110 0.110

Subtotal 21. 177 123T3

II. Continaencies

7. Physical d/ 2.138 1.850 3.988S. Price Escalatlon e/ 3.885 2.827 6.712

Subtotal 6.023 4.677 10.700

I11. Interest and Other Chargesduring Construction

9. IDC on Bank loan f/ 2.200 2.20010. IDC on World Bank loan 2i400 2.40

Subtotal 4.600 - 4.600

Total Project Cost 31.800 17.000 48.800

a7 Base costs are at December 1985 prices.b/ Inclusive of duties and taxes estimated at US$3.9 million.c/ The foreign exchange cost includes materials such as bitumen,

guardrails, gabions etc. Locally produced materials are includedin the civil works c"at.

d/ At 15 per cent for Items 1, 2, 4 and 5, as cost estimates are basedon preliminary designs.

e/ Price escalation is applied to Items 1 through 5 at the followingestimated annual percentage rates:

1986 1987 1988 1989 1990Foreign Costs 7. 7.0 7.77Local Costs 5.0 5.0 5.0 5.0 5.0

f/ Interest on the Bank loan of 7.65 per cent per annum and commitmentcharge of 0.75 per cent per annum.

jl Interest on the World Bank loan at 8.23 per ceant per annum andcommitment charge of 0.75 per cent per annum.

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57. The estimtes of quantities and costs of civil works.comprising the road stretches and major bridges, have been derived frompreliminary designs. These cost estimates have been compared withsimilar items of work in the country and in other :ountries in the SouthPacific Region. The cost of plant, equipment and vehicles forconstruction tbrough force account reflects December 1985 market pricesaud has been included as a separate item in Table 1. The local cost ofcivil works comprises labor, locally produced materials, overheads,taxes and duties. Laud acqulsition costs are expected to be ma1?. Theestimated forelgn excbhge cost of consultant services includesremuneration, international travel and other expenses, and takes intoaccount the duration and costs of similar services in the Region.

F. Financin Plan

58. The total foreign exchange cost of the Project is estimated tobe US$31.8 aillion (US$27.2 million excluding US$4.6 million forinterest and other changes on the loans during construction (IDC)). TheGovernment has requested that the Bank provide a loan from its ordinarycapital resources in the amnt of US$13.6 million to cover part of theforeign exchange cost of the Project. It is expected that the balanceof the foreign exchange cost (excluding IDC) amounting to US$13.6million will be provided by the World Bank oan a co-financg basis. 1/The Goverment will keep the Bank fully informed of all developmentswith regard to ce-financing of the Project. Arrangements satisfactoryto the Bank with regard to the provision of the World Bank loanwil1 be a condition of loan effectiveness.2/ It Is proposed that a loanof US$13.6 million be provided from tbe Bank's ordinary capitalresources to cover part of the foreign exchange cost of the Project. Anamortization period of 24 years, including a grace period of four years,is considered appropriate for the proposed loau in view of theimplementation period of four years for civil works and the assumedeconomic life of the roads of 20 years. The Borrower will be Fiji andthe Government has assured the Bank that it will make the proceeds ofthe loan available to the Executing Agency on a timely basis throughbudgetary appropriations. The Government has also assured the Bank thatfunds in addition to the loan proceeds and co-financing required toimplement the Project in accordance with the agreed implementationschedule will be provided by the Borrower.3/ Based on the foregoing,the financing plan will be as in Table 2.

1/ The World Bank is expected to approve its loan in December 1986.2/ Loan Agreement, Section 6.01. The standard agreements between

the Bank and the World Bank with regard to the Bank beingresponsible for administration of Projects in the South Pacific,including the Bank's procurement procedures with the exceptionof eligibility requirements, will be followed.

3./ Agreement, Section 4.02(a).

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Table 2: Fnc im

Foreign Local PerSource Currency Currency Total Cent

Bank 13.6 - 13.6 28IBRD 13.6 - 13.6 28Goverment 4.6 17.0 21.6 44

Total 31.8 17.0 48.8 100

aI Represents Interest and other charges on the Bank and World Bankloans, hich wil be financed by the Governmnt from its owmreources.

C. Environmental, Road Safety and Energ Aspects

59. Upgrading of the Project roads and construction of the twomaJor bridges are not expected to hame any significat adverse impactupon the er t. The road upgrading will generally follow existtigalignts, thog some realignment will be necessary whlch wiln entallthe use of additional land. Raising embankments and constructingadequate drainage facilities will alleviate problems associated withperiodic flooding. Areas will be designated for the duping andspreading of any surplus earth materials from roadway excavations; thiswinl minimise adverse effects on vegetation. Areas from which naturallyoccurring construction materials are extracted will be shaped, providedwith proper drainage and grassed as necessary on completion of the work.Upgrading of the roads from gravel-surfaced to bitumen-paved standardswill eliminate problems associated with dust, which is severe in the dryseason; road safety will be enhanced as the dust seriously reduces sightdistances and Is hazardous to traffic. The minimization of possibleenvironmental damage will be among the responsibilities of theconsultants assisting the Executing Agency with Project implementation.In addition, improved alignments, sight distances, carriageway andshoulder widths and road surfaces tend to reduce the frequency ofaccidents. With improved alignments and road surfaces, fuel consumptionwill decrease; however, the expected increase in vehicle speeds willrender such savings low in magnitude.

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IV. PROJECT IMPL1EMNTATION

A. ExeS_atin .. z

60. The Public Works Department (PWD) within MCTW li be theExecuting Agency for the Project. PWD has a Permanent Secretary, Vork.and Transport (WT), assisted by a Deputy Secretary (W&T). PWD'sstructure of iaadquarters and three Divisions, further subdivided IntoDistricts. is vell established. The Permanent Secretary is responsiblefor desig work through three Directors: Roads and Airfields (t&A),uildlng and Architecture, and Water and Sewerage. Three DivilionalEngineers (Western, Northern and Central/Eastern) are responsibletbrough the Deputy Secretary to the Perment Secretary for operationalmatters. Each Divisional Engineer handle# all construction and

ai'tenamme activities related to roads. water supply, sewerage, publicbuidlws and rual electrification, as well as management and controlof plant and equipment, workshop facilities and personnel within therespective Divisions (see Appendix 9 for the Project OrganiatioChart) . At present, PUD ba an established staff strength of 767,Includlg 28 engineers, 11 of whom are expatriates. The remainingestablied staff is largely composed of architects, supervisors,technical officers, forema, surveyors and clerical and administrativepersonnel. Tuporary employees, numbering about 2,000, maily compriseeadin bands, operators, drivers, laborers and some clerical and

administrative personnel. PUD's organizational structure has beeneffective, but because many young,9 qualified, trained local staffcoutinue to seek employment abroad, it is expected to be several yearsbefore an established positions can be filled by qualified local staff.

61. Within PWD, R&A undertakes the survey and design of roads andbridges. Construction and maintenance of roads is normally carried outthrough the DEOs and their depots in the Districts. In the case ofmajor road works, Road Construction Units (RCUs) have been establishedwithin the DEOs, responsible for operational, technical andadministrative matters. These RCUs are formed by using some establishedstaff, recruitlng staff nn a contract basis, directly employinglaborers, purchasing new equipment, renting some existing equipment fromthe Government plant pool, and hiring other equipment from the privatesector. Routine and preventive maintenance for plant and equipment arecarried out in workshops established on site by the RCUs while majorrepairs are undertaken in Divisional workshops.

62. In each Division a Mechanical Engineer is responsible to theDivisional Engineer for the maintenanct, and operation of all PWD plant,equipment and vehieles assigned to that particular Division. Divisionalworkshops and plant pools operate independently of each other, under theMechanical Engineers. The plant pools are responsible for administeringthe hire of all plant, equipment and vehicles to the field operationsections, while workshops handle all plant, equipment and vehicle repairand maintenance. The workshops are well-equipped and the workshop staffhave been trained to handle all major repairs and plant rebuildingneeds. An established procedure exists for training professional and

22

subprofesAional staff (including overseas degree and diploma courses)and an apprenticeship scheme is operpted for employees in the mechanicaltrades.

B. mpleamentation Arr rgments

63. Within PND the overall responsibility for implemnutlng theProject will rest with the Permanent Secretary (W&T), while day-to-daydirection of all Project components vill be bandled by the DeputySecretary (WT) who will be assisted by consultants to be engaged underthe Project. The Dlrector (R&A) iill be responsible for design andnecessary documetation for all road works to be carried out throughforce account.11

64. Because of size and location near Suva, the main road stretchfrom Nadaro Bridge to Korovou, wbich is 18.5.bm long and estimated tocost US$6.4 million, Is suitable for upgrading by a contractor selectedthrough ICB procedures. A consulting firm will be engaged to undertaedetailed deslg and supervie construction of thli road stretch. Thermining road works, scattered throughout the two main islandst areacre suitable for Implemtation by force account although two of thesstretches am longer than the Nadaro Bridge to Korovou stretch, i.e.,the Priuces toad on Vitt Lvu (21.9 hk), costing US$6.3 million, and thetrausinsular road on Vanu Levu (21.3 km), costing US$2.3 million. ThePrinces Road passes through built-up areas of Suva but plans showing thelocation of undergroud services are not available; these undergroudutility hUes will have to be located and moed during constructIon.This would cause extenslve disruptions to construction operationas,leading to substantial additional costs if undertaken by a contractor.This work, therefore, would best be met and costs minimized through theflexibility provided by force account operations whereby constructionpersonnel and equipment can be easily re-assigned until full-scaleoperations can be resumed following disruptions. The transinsular roadis relatively isolated, being on Vanua Levu; the cost of upgrading thisroad Is low, as the majority of earthworks and drainage structures werecompleted by PWD within the past few years. This component, therefore,would not be suitable for international bidding. The remaining roadstretches to be upgraded are short, scattered and of low cost, whichagain would not be attractive to international contractors.

65. The design, contract documentation and constructionsupervision of the works to be implemented through ICB procedures willbe undertaken by consultants (see para 68) who will be responsible tothe Director (R&A) for the design phase of their services, and to theDeputy Secretary (W&T) for preconstruction at.ivities and constructionsupervision. The design and documentation of the works to beimplemented through force account is being undertaken in-house and willbe the direct responsibility of the Director (R&A). For planning andimple'menting force account work, RCUs will be established in each DEObefore the start of the work in the respective Divisions.2/

1/ Loan Agreement, Schedule 6, para 1.f/ Loan Agreement, Schedule 6, para 2.

23

66. Each RCU will be headed by a suitably qualified ProjectEngineer who will report to the Deputy Secretary (W&T) through itsDivisional Engineer. Furthermore, each RCU will be staffed by asufficient number of qualified engineers, tecbnicians, surveyors andforemen, some of whom will be recruited from the private sectorsboth locally and from abroad.l/ Plant, equipment and vebicles will behired by the kCUs from the FM plant pools and some from the privatesector, the latter particularly at the peak of the construction seasons.As the plant, equipment and vehicles available from the plant poolsare generally searing the end of their economlc lives, now items will beprocured under the Project to be assigled through the plant pools to theRCUs. After copletion of the Project, the plsat and equipmet will beavailable to help boost FWD's road maintenance capability, includingthat on the Project roads. In addition, necessary constructionmaterials viU be procured under the Project and made available to theRCUs. Workshops wil be established on site. by the RCUs; these willundertake routin and preventive maintenance on the plant, equipment andvehicles while major repairs will be carried out In the three Divisionalworkshbops.

67. A Force Account Supervision Unit (PASU), reporting directly tothe Deputy Secretary (W6T), will be established within PND and ill beadequately staffed to enswe that the force account works are

lnplemnted efficiently and to normally accepted standards witb regardto the quality of costruction work, measurement and cost monitoring ofwork performed, and accouting procedures.2/ In addition, PASO willcarr out two other important functions - evaluating the relativeeffectiveness of contracting and force account work In Fiji, andassisting ND In further developing and implementing accounting andmanagement reporting measures on a department-wide basis. In comparingcontracting and force account, FASU will work closely with thecsultant engaged for the design and construction supervision of theNadaro Bridge to Korovou road stretch and the RCUs to establishbenchmarks (sueb as unit costs, production rates, and duration andquality of construction) by which to monitor and evaluate the relativeadvantages of both methods. The Government has adopted andinstalled a sophisticated computerized accounting package throughoutall departments. At present, this is being used to a degree thatpermits overall costs of a particular job to be determined, but does notcost individual units of work or their composition. In this regard,FASU will assist in further developing the use of the package in PWD andwill also assist in amending and revising management reporting systemsas necessary.

C. Consultant Services

68. Consultants will be provided to assist In implementing theProject. The consultants will be engaged to review and revise designsand contract documents as necessary, to assist PWD in prequalifying

1/ Loan Agreement, Schedule 6, para 2.2/ Establishment of the FASU will be a condition to enable force

account civil works to become eligible for disbursements underthe loan (Loan Agreement, Schedule 6, para 3).

24

contractors, tendering and awarding contracts, and to supervise civilworks coustruction on the Nadaro Bridge to Korovou stretch of the KingsRoad and on the Sigatoka and Ba Bridges. These services will beprovided by flrms experienced in the design and construction of roadsand bridges. Four individual consultants will also be egaged by theGovermwnt to staff FASU, which will provide overall constructionsupervision of force account works, improve sanagement reporting andcost accounting systems, and evaluate the relative merits of forceaccount and contracting methods of undertaking construction in Fiji. Inadditio, three Individual consultants experienced in road maintenancemanagement, programing and operations will be engaged and will beattached, one eacb, to the Western, Central/Eastern and Northern DEOs,to lprove the country's road maintenance capabilities. The maintenanceengineer attached to the Central/Eastern Division will act as thePrincipal Road Maintenance Engineer and will be responsible to theDeputy Secretary MT). These consultant road malntenance, eineerswill be assiged counterpart engineers who will be suitably trained bythe conslatants to take over road maintenance responsibilities at theexpiration of the consultants' engagement.l/ To ensure that civil worksunder the Project ay be fully iaplementet witehi the period of DP9 andto mazimize the services of the road minteance consultants inmprovig the road maitenan ce capabilities of ND, the Bank has agreed

to the Govermenat's request for advance action to recruit consultantes.2/All consultants will be engaged In accordance with the Bank's Guldelineson the Use of Consultants.3/

D. Procuremnt

69. Procurement will be carried out in accordance with the Bank'sGuidelines for Procurement.4/ In this regard, civil works contracts forthe construction of the Nbdaro Bridge to Korovou stretch of the KingsRoad and the major bridges at Ba and Sigetoka will be awarded throughinternational competitive bidding (ICB) procedures followingprequalification of contractors, These contracts will be based on unitrates and the contractors will provide the plant, equipment, materialsand manpower necessary to execute the works. Procurement of plant,equipment, vehicles and materials (except minor items) needed toundertake road works through force account will also be through ICB orinternational shopping procedures, as appropriate. In this respect, theBank has agreed to the Government's request for advance action toprocure plant, equipment and vehicles;5/ this will save about fourmonths In implementing the Project.

1/ The two road maintenance consultants in the Northern and WesternDivisions would have a term of about two years each, while theone assigned to the Central/Eastern Division would have a termof about four years, the last two years covering all Divisions,to ensure continuity in the implementation of the maintenancesvstem.

2/ Doe IN. 133-86 dated 22 August 1986.3/ Loan Agreement, Schedule 5.4/ Loan Agreement, Schedule 4, para 2.5/ Doe. IN. 134-86 dated 22 August 1986.

25

S. Implementation Schedule

70. The Project will be implemented aver a perod of four yearsand three month with completion envisaged by December 1990. The firstsix to seven mooths, comencing September 1986, will be devoted topreparatory works, including engagement of consultants and procurementof plant, equipment and vehicles. Construction of road works by forceaccount ts envisaged to emence in March 1987, using the resources ofthe plant pool pending delivery of plnt and equipmt to be procuredunder the Project, and to be finbshed by September 1990 after a periodof three yers and six months. Civil works for the road stretch to beimplemented through 1GB procedures is expected to take 15 moths,commencing In August 1988 and finishing In October 1989. 1We the twomajor bridges are anticipated to be built over a 24-moth periodstarting In September 1988 and finishing In August 1990. FI?lly, theservices of the road maintenance consultants atce sehduled to finlse byDecamber 1990 after a period of three years ad mine moths. A detailedimlementatlon schedule for the Project is presented In Appendix 10.

F. Land Acquistion

71. Since the propoed Improvements wil genraly be confined tothe existing rights-of-way on all but two stretch" of roads inluded Inthe Project, land acquisition will be minimal. Tbe two excptions arethe 1adaro Bridge to Korovou stretch and the center section of PrincesRoad. In both cases, the existlig alignments are tortuous and, forthese to be iproved, sonc additional lend wll be required. In thisconnection, the Government has assured the Bank that it will take allnecessry actions to acquire or make available in a timly mmner thelad, rights-of-way and access to lands as wi be required forimpleentation of the Project.1/

C. Maintenance

72. Maintenance of the Project roads will be the responsibility ofPWD through the DEOs, using funds provided from PND's maltenamcebudgets. The Government has assured the Bank that the Project roadswill be properly maintained after their improvement.2/ In view of theGovernment's awareness of the current unsatisfactory state of roadmaintenance and the reasons for this, and the villingness of theGovernment to take positive steps to address the present situat.on andimprove maintenance standards (see para 31), it is considered that theGovernment will be able to fulfill this commitment.

B. Accounting and Auditing

73. The Government will establish and maintain separate accountsfor all expenditures under the Project. These accounts and relatedfinancial statements, which will be audited annually in accordance withsound auditing standards bv an auditor acceptable to the Bank, will befurnished to the Bank no later than nine months after the end of each

1/ Loan Agreement, Section 4.02(b) and Schedule 6, para 7.2/ Loan Agreement, Schedule 6, para 6.

26

related filoal year. In addition, the Governuetat has agreed to furnishthe Bank uaudited fimanclal statements relating to the Project withinsix moths of the and of each fiscal year. I/

I. Reportin

74. The Government has agreed to furnish the Bank mouthly progressreports concerning designs preconstruction activities and constructionof all roads and bridges under the Project. In addition, the Governmentwill furnisb the Bank witb quarterly progress reports concerning theactivities ad accomplisbments of the road maintenace consultants.Also, to facilitate post-evaluation of the Project, the Government basagreed to prepare nd furnish the Bank, within three months of physicalcompletion of the Project, a project completion report which willcomprehensively cover, inter alia, details of Project Implementation,costs and ay other informtion that nay be requested by the Bankconcerning the Project.2/

J. Project Benefit Monitoring and Evaluation

75. To facilitate monitoring and evaluation of the Impact of theroad and bridge prvets, the Government has agreed to cwtplle andanalyze necessar traffic data and to record the operational efficiencyand condition of the road stretches and major brldges upon completion ofthe civil wrko. PWiD wil be responsible for carrying out the trafficsurveys and analyzing their reslts, and will incorporate thepreliminary fidilgs In the project completion report. A complete

nalysis of these data ill be submitted to the Bank within one year ofphysical completion of the Project. The nature of the data to becollected and the methodology for analysis will be agreed upon by theGovernment and the Bank.3/

K. Technical Assistance

76. The MiAistry of Finance will be the Executing Agency for thetechnical assistance (see paras 53 to 55). Recruitment of consultants(one each for the study of road user revenues and expenditures and forthe review of the domestic civil works contracting industry) will beundertaken by the Bank in accordance with the Bank's ruidelines on theUse of Consultants. The technical assistance is expected to commence inApril 1987 and be completed in August 1987. Broad terms of referencefor the consultant services are given in Appendix 11. The Governmentand the Bank have agreed to discuss a program of action that way beneeded as a result of the recommendations of the studies.

1/ Loan Agreement, Section 4.05(b).I/ Loan Agreement, Section 4.06(b) and (c).3/ Loan Agreement, Schedule 6, para 8.

27

L. IMplementation of Previous Bank Projects

77. This will be the first Bank-finmaccd Toad project In Fiji.The only project to be approved so far by the Bank for the transportsector In Fiji vas for the Improvement of the port at Suva.l/ The portproject bas been completed satisfactorily, though about one yer behindthe appaised schedule. The delay In implementing the port project vaspartly the result of inexperience of the executing agency with regard tothe Bank's procedures for procurement and engagement of consultants andpartly bause of difficulties In making necessary design adjustments.

78. Such delays are not expected during implementation of theProject as advance action for recruitment of consultants ad forprocuremt have been approved. Invitations for proposals were issuedto consdtants In September 1986 and tender documents for procurement ofequipment have been finalized.

79. Thus far, three transport sector projects bave beenpost-evaluted In the South Pacific Region 2/ under whicb severalaspects were identified as requiring improvemenit In the future. TheseInclude project preparations, institutional capabilities of impleentlnagencies, type of pavement, consultant arrangements, road maintenance,quality eotrol, and overloading of vehicles. Each of these aspects basbeen address"d In formulating the Project. Specifically, the Projectbas been prepared based on feasibility studies and preliminary designs.These prelimnary designs, Including pavement design which will cater toanticipated overloadin of vehicles, will be reviewed and finlized byconslttat to be eaged under the Project. With regard to theIMplmenting capabilities of the Executing Agency concerned, these willbe strengthened by the recruitment by PWD of suitable management andtecnbical personal for the Project. Also, consultants are to beengaged for design, construction supervision and, in particular, qualitycontrol of the works. In addition, consultants are to be engaged toaddress road maintenance aspects by being Initially responsible forundertaking road maintenance planning and execution, and to train localstaff to take over these functions. Further, the equipment to beprovided under the Project will be suitable for road maintenanceoperations following completion of the civil works. The ExecutingAgency has considerable experience in undertaking force account work;the magnitude of work under the Project is similar to that accomplishedsuccessfully in the past. Overloading of vehicles In Fiji is associatedmainly with sugar-cane and logging trucks; the Government is nowreviewing its axle-load regulations with a view to improving control andenforcement. In the meantle pavements will be designed to cater toexpected overloading.

1/ Loan No. 411-FIJ: Suva Port Project, for US$7.0 millionapproved in September 1979.

2/ Loan No. 25-SAM(SF): Faleolo Airport and Road Project,for US$2.4 million approved in December 1969; Loan No.116-PNG(SF): Road Project US$9.8 million approved inDecember 1972 and Loan No. 327-PNG: Highland RoadImprovement Project for US$15.0 million approved inDecember 1977.

28

V. ECONOMIC EVALUATION

A. Objectives

80. The Project will support the Government's developmentobjectives under DP9, paeticularly the promotion of a more equitabledistribution of the benefits of developmeut and improved socialconditions, especially in rural areas. The Project specificallyaddresses the Government's land transport objectives to Improve andupgrade major roads carrying high traffic volumes and to adequatelymaintain roads and bridges. The Project also supports the Goverment'sother land transport goals (see para 1). Upgrading of the Projectroads, whicb have been identlfied under DP9 and are accorded highpriority by the Government, vwil provide more reliable all-weathertravel, and less costly transport, and will allow for the more efficientdistribution of goods, agricultural inputs and produce. The mobility ofthe Inhabitants served by the Project roads will be improved, therebyproviding -better access to social, administrative and economicactivities. Replacment of the two major low-level single-lane bridgeswith high-level two-lane bridges will remove serious bottlenecks to thefree flow of large volumes of traffic In the towns of Ba and Sigatoka.The road maintenance experts being provided under the Project willconsiderably Improve the cost-effectiveness of road maintenanceplaning, programin and iuplmentation.

81. The ten road stretches and two bridges selected forWiprovaemnt/replacemat under the Project are accorded high priority by

the Government and are included tn DP9. At present, vehicles using theProject roads operate at high cost due to a combination of deterioratedroad surfaces, low embankments (which are overtopped during floods),,narrow pavement widths, lack of shoulders and inadequate drainage. Thetwo existing major bridges are also overtopped during floods and becomempassable. Upgrading the road stretches and replacing the bridges willenhance the efficiency of the transport links between rural agriculturalareas and between towns and to the major markets, agriculturalprocessing and administrative centers. Also, improved access to areaspopular with tourists will enhance the attractiveness and viability ofthe tourism industry.

B. Benefits and Beneficiaries

82. Benefits from the road upgrading and bridge replacementcomponents of the Project will accrue mainly to road users in the formof vehicle operating cost savings and to the Government as roadmaintenance cost savings. The reduction in vehicle operating costs willbenefit vehicle operators, owners and users; these cost reductions havebeen estimated based on the Road Investment Model for DevelopingCountries, prepared by the Transport and Road Research Laboratory in ther.K. A brief description of the model and details of the economicevaluation are given in Appendix 12. Operators and owners will benefitfrom reduced operating costs which, since the transport industry (withthe exception of scheduled bus services and some taxi operators) isunregulated, are expected to be passed on to transport service users inthe form of reduced passenger fares and freight charges. Benefits to

29

users of scheduled bus services will probably be passed on in the longerterm in the form of deferred increases in passenger fares. The largestportion of the benefits will be realized by commercial vehicles, most ofhich are light trucks owned mainly by small-scale operators who providevital short-haul passenger and freight services, linking ruralcommunities with commercial and marketing centers. This type of vehicleconstitutes about one-third of the traffic flow on the Project roadstretches. The distribution of benefits accruing to heavy goodsvehicles, since they are generally controlled by owner-operators andmanll concerns, will probably also be passed on fairly quickly to the

users given the competitive character of the transport service industryin general.

83. The maintenance experts to be retained for the road maintenancecomponent under the Project will Introduce measures for planning,programing and lmproving implementation of road maiutenance. Althoughthe benefits from this component have not been quantified, botb roadusers and the Government will benefit substantially. Road users willbeneflt from using roads that are better maintained and thus lses costlyto operate on, while the Government will benefit from the morecost-effective use of its saintenance funds and, through improvedmaintenance of existing facilities, reductions in future capitalexpenditure for rebabilitation.

84. The Project, In addition to benefitting the rural populationin the influence area of the roads, as well as local traffic, ill alsobenefit through traffic on the road stretches. The civil works areexpected to involve about 1,600 ran-years of labor force employment. Asthere is a good pool of both skilled and unskilled labor available inFiji, access to labor is not expected to be a problem.

C. Estimation of EIRR

85. The economic evaluation of the Project roads and bridges wasundertaken by estimating the cost and quantifiable benefit streams overa 20-year operation period from the expected end of construction. Thecosts include civil works, consultant services for design andconstruction supervision for the Nadaro Bridge to Korovou stretch andthe two major bridges to be undertaken through ICB, constructionsupervision costs for the roads undertaken through force account,l/acquisition of rights-of-wav, and physical contingencies. The economiccosts are net of transfer payments such as direct and indirect taxes.There are no discernable subsidies to the road subsector.

86. Vehicle operating costs (VOC) were estimated for four types ofvehicles that represent the characteristics of existing traffic onthe Project roads. Descriptive characteristics of the vehicle fleet,together with the unit costs by vehicle type, are given in Appendix 12.Future levels of traffic movement with and without the Project wereassessed by applying the assumed growth rates to the base year traffic(paras 39 and 40). Traffic volumes for each Project road stretch andfor the two major bridges, both present and forecast, are given in

i/ Designs have already been completed by KID and are thereforeconsidered a sunk cost. Their review and revision by FASUare considered in the Project costs.

30

Appendix 5. Most of the Project road stretches are gravel-surfaced andin poor coItdition.1/ serving rural areas and carrying traffic volumseranging from 230 to 2*400 vpd. Because of the relatively high level oftraffic and its deteriorating effect on road surfaces, VOCs are high andproper road maintenance costly. High VOCs are especially reflected Inthe individual VOC components of tires, spare parts, vehicle aintenanceand depreciation. Appendix 12, Table 4 illustrates VOC savings, bycomponent, for each of the vehicle types used In the aalysis for atypical road section. Savings in vehicle operating costs vary anngvehicle types, averaging about 48 per cent.

87. With respect to road maintenmnce, It was assumed for thepurposes of economic evaluation that the road stretches would bemaintained In their current condition with regard to surfacecharacteristics. Maintenace costs were estimated based on PSD'sexperience with road maintenance requirements on the existlggravel-surfaced roads and economic unit rates have been applied to thework quantities. A simllar process was followed for estimatingmaintenance oan the road stretches following upgrading to a bitumen-pavedstandard. loutine and recurrent maintenance savings account for about 2per cent of total Project benefits.

88. The streams of economic costs and benefits in terms of annualconstruction costs, maintenace and VOC savings for each road stretchand each of the two major bridges, as well as for all road stretchescombined, are tabulated In Appendix 12, Table 5. Based on a 20-yearlife for the Project roads following the completion of upgrading, theEIRRs range from 14 to 33 per cent. EIRRs for the Ba and Sigatokabridges are 22 and 14 per cent respectively. The EIRR for all roadstretches combined is 22 per cent and for the Project as a whole, 21 percent.

D. Sensitivity Tests

89. The sensitivity of the EIRRs was analyzed with respect tochanges in the cost and benefit parameters. The base case EIRRs,together with those resulting from adverse changes to the costs andbenefits, are shown in Table 3 and include the respective sensitivityindicatcrs2/ where applicable. The result of this analysis indicatesthat an adverse change of 15 per cent in the costs or benefits or acombination of the two do not reduce the EIRRs to unacceptable levels(also see Appendix 12, Table 6 for details by road stretch and for eachof the bridges).

1/ Except for a 7.3 km stretch of the Princes Road which has abitumen-paved surface In very poor condition.

2/ The sensitivity indicator (SI) represents the quotient of thepercentage change of costs or benefits with regard to the basecase values and the tested alternative values. For example,if the SI is 0.5, then an increase in the cost of 10 per centwill reduce the EIRR bv about 5 per cent in comparison withthe base case.

31

Table 3Sensitivity of EIRRs to Cost and Benefit Chanes

(1) (2) (3) (4)Base 152 Cost 152 BenefitCase Increase Decrease (2) and (3)EIRR EIRR SI EIRf SI Combined

A. Main Roads 17 16 0.39 14 1.17 12B. Secondary Roads 25 22 0.80 22 0.80 19C. Bridges 18 17 0.37 17 0.37 16D. Project 21 19 0.63 18 0.95 16

E. Project Risks

90. Project risks have been mini ed to the sitent possible. TheProject has been formulated taking into account the lessons learned onsidilar Bank-assisted projects in the SPDKCs; civil works costs havebeen estimated with care; a realistic period of time has been allowedfor implemtatlon, taking into accout the effect of weather and timerequired for land acquisition; and adequate provision has been made forcontingencies. Benefits have been estimated conservatively and neitherdevelopment benefits nor benefits to generated traffic bave been takeninto account. Possible adverse variatione in costs and benefits havebeen tested In the sensitIvity analysis. Further, to ensure that thecivil works are undertaken in a cost-effective mnner, services ofconsultants will be provided under the Project.

32

VI. CONCLUSIONS AND RECOMMENDATIONS

91. The proposed Project comprises upgrading of about 107 km ofmain and secondary roads and replacement of two bridges on the islandsof Viti Levu and Vanua Levu. The Project also Includes provisions forplant, equipment, vehicles and materials for the works to be undertakenthrough force account. Consultant services are to be provided to assistND to prepare the designs and supervise construction of the works to beundertaken through ICB and to monitor, cost manage, account for, andcontrol the quality of the civil works undertaken through force account.Consultants will also help PD in strengtheoning Its planning,programming, Implemeting and cost monitoring of road saintenanceoperations. The Project Is aimed at supporting the Goverment's socialand economic development objectives by assistlg In the provision of anadequate road network suitable for current and future traffic demnds.The proposed road ilmprovemts will facilitate better transport servicesat reasonable costs and Increase the nobility of the population withinthe influence ares of the Project roads; major bottlenecks to trafficimposed by the two existing low-level single-lane bridges at Ba andSigatoka will also be relieved. The quantified economic benefitsresultin from improvements to the roads range from 14 to 33 per centand are 14 per cent and 22 per cent for the two major bridges. Asimprovements are confined mostly to existing rights-of-way, landacquisition is not expected to be significant. Appropriate steps willbe taken during detailed design and construction phases to ensuremninal enviro ontal disruption.

92. The total cost of the Project is estimated to be US$48.8million, including a foreign zbchange component of US$31.8 million(US$27.2 million excluding interest and other charges duringconstruction). It is proposed that a loan of US$13.6 million beprovided by the Bank from its ordinary capital resources to finance partof the foreign exchange cost of the Project. It is expected that theWorld Bank will jointly co-finance the Project. Funds in addition tothe loan proceeds required to implement the Project will be provided bythe Borrower. The repayment period of 24 years including a grace periodof four years is considered appropriate for the proposed loan. TheBorrower will be Fiji and the Public Works Department within theMinistry of Communications, Transport and Works, will be the ExecutingAgency.

93. Technical assistance will be provided to undertake a study ofroad user revenues and expenditures with a view to analyzing theefficiency of collection, efficiency with regard to optimizing vehicleusage, equity in terms of cost recovery, and adequacy of expenditures.Also, under the technical assistance, the local contracting industrywill be reviewed with regard to its strengths and weaknesses andmeasures necessary to improve its effectiveness. The total cost of thetechnical assistance is estimated to be US$170,000, including a foreignexchange component of US$150,000. It is proposed that a grant ofUS$150,000 be provided by the Bank to finance the foreign exchange cost

33

of the technical assistance; the local currency requireaent will beprovided by the Government. The Executing Agency will be the Ministryof Finance.

94. In addition to the standard provisions and arrangementsembodied in the Bank's loan documents, specific assurances have beenrecelved from the Borrower with regard to the following:

(1) FASU will need to be established to enable force accountcivil works to become eligible for disbursements under theLoan (Loau Agreement, Schedule 6, para 3);

(ii) concurrent with the commencement of services of the threeroad maintenance engineers (consultants), counterpart roadmaintenance engineers will be assigned to the DEOs(Loan Agreement, Schedule 6, para 5); and

(iii) arrangements satisfactory to the Bank with regard to theprovision of the World Bank loan will be a condition ofloan effectiveness (Loan Agreement, Section 6.01).

34

APPENDIES

Aamx !MPage

1 Expenditure and Revenue In the load Sector 35

2 Non-Hlghway Modes of Transport 36

3 The Road Network 38

4 Licensed Motor Vehicles 39

5 Existing and Forecast Traffic onProject toads and Bridges 40

6 List of Project toads and Bridges 42

7 Tentative Equlpment List 43

8 Broad Terms of Reference for ConsultantServices Under the Project 44

9 Organization Chart 50

10 Implementation Schedule 51

11 Broad Terms of Reference for ConsultantServices Under the Technical Assistance 52

12 Summary of the Economic Evaluation 55

35

Expenditure and Reenue In the Road Sector(FS ullion, current prices)

1981 1982 1983 1984 1985 19861'

1. Eapenditure!'

Admlnistration 1.46 1.95 2.04 2.25 2.38 2.20maintenance 5.93 6.43 7.19 8.00 7.76 7.80Capital c 11.08 12.80 11.50 11.31 9.51 7.58toad Transport- 0.70 0.87 1.31 1.12 1.29 1.33

Total 22.05 20 268 20.24 9

2, Relnelene

a ld Oer fe- 3.57 3.67 3.75 3.92 3.86 MAFuel Taxes- NA NA 15.76 21.60 22.93 NAImport Duties

Motor Vehicles NA MA 11.35 12.21 10.80 MASpare larts NA NA 1.08 1.38 1.29 NATiresA NA NA 1.86 2.56 1.98 NA

33.80 41.67 4.86t

a/ Estimated by the Mission from budget documents.b/ Budget estimates.c/ Administrative and regulatory functions of road transport.d/ Based on data from the Department of Transport and the Ministry of

Finance.e/ Excludes traffic related judicial fines.T/ Includes gasoline, diesel fuel and lubricants.j/ All types of tires including those for non-road vehicles.

Source: Ministry of Finance

Reference in text: page 3, para 10.

36

Aippendix 2Pa-ge I

Non-Hih8ay Nodes of Transport

A. General

1. Fiji's location in the South Pacific on a ilne ofcommunications between the continents of Australia and Nortb Amerlcaallows it to provide convenient Intermediate ports for shipping andairlines. Foreign-registered shipping handles almost all freightarrivin In and departing from FijI. Coastal shipping Is limted bycoral reefs surrounding the islands, althougb Interisland sh9pping Isthe major mode for transporting passengers and freight ithin thecountry.

B. Civil Aviation

2. Air transport Is the principal means by which tourists enterand leave FiJI. In 1983, 222,000 persons arrived In the country by airthrough Nadi, which is the main international airport. This airport lscapable of serving wide-bodled aircraft and is a convenient refueltingstop for trans-Pacific flights. The second largest airport Is atNausori, which, because of Its location close to the capital at Suva, isthe main domestic airport and caters to a few international flights.There are, In addition, 18 other airports In Fiji served by regularscheduled air services.

3. Scheduled international air transport services are provided bynine airlines Including the domestically incorporated Air Pacific. Withregard to domestic air services, Air Pacific and Fiji Air Liulted arethe principal scheduled operators. Three other operators also offerscheduled domestic services and there are a number of charter servicesavailable, providing services to about 25 airports and airfields.

C. Railways

4. The railway network in Fiji is owned and operated by the FijiSugar Corporation (FSC) and is exclusively a freight transport facilityserving the sugar cane growing areas. On the island of Viti Levu, thene.,-ork runs throughout the flat coastal areas close to the north andwest coast. In VanuS Levu, the railway lines spread in severaldirections along the coast and inland, but center on Labass.cheduled air services.

Reference in text: page 4, para 12.

37

pevndix 2

5. nThe total length of permanent mainline (0.32 u gauge) is 660ki, of which 510 km is on Viti Lev. In addition, about 330 km ofportable lines, owned by FSC, are used for transporting cane to deliverypoints on the ainline.

D. ShipRi and Ports

6. Shipping in Fiji can be subdivided into the categories ofoverseas shipping and Interisland shipplng. Ships of various types andaizes call at Fiji from overseas ports throughout the year. In addition,

about 200 Interisland vessels provide a vital link between the two mainIslands of Viti L"u and Vanua Levu and the many scattered islands ofthe FIJI group.

7. There are three official ports of entry In Fiji: Suva andLautoka, oan Viti Leaut and Levuka, on the island of Ovalau.International sblpping to Fiji manly calls at the two principal portsof Suva and Lautoka. Levuku Is primarily an export port for fresh,frozen and cned tuna. Suva specializes in fertillizer imports as well,

The Road Network - 1984(E)

Divislon Main Secondary Country Residential Subtotal Other Total

Central/Enstern 370.50 56.01 910.35 111.85 19448671 77.99 1,526.70Western 321.31 330.42 825.48 8.Y- 1.4S5.? 116.46 1,602.21Northern 570.30 239.80 667.59 24.85 1,512.54 10.62 1l523.16

Total 1,262.11 626.23 2,413.42 145.24 4,447.00 205.07 4,652.07Paved 454.35 68.89 24.13 125.00 672.37 - 672.37

Percent 36 11 1 86 15 - 14Unpaved 807.76 557.34 2,389.29 20.24 3s774.63 205.07 39979.70

Percent 64 89 99 14 85 100 86

Source: Public Works Department selected reports and Mission estimates.

Reference in tezt: page 4, pars 12.

39

Apendlx 4

Licensed Motor Vehicles

Light Heavy Sub- OtherYear nd Division Cars Trucks Trucks Buses Total Vehicles!, Total

1982

Central/Eastern 9,656 4,621 862 449 15,588 1,034 16,622Western 9,875 4,594 1,301 404 16,174 1,970 18,144Northern 1,598 2,096 529 102 4,325 1,732 6,057

Total 2.129 2369 3n &A08Z 4M§2 382

1983

Central/Estern 10,636 4,805 926 492 16,859 1,548 18,407Western 9,262 4,101 969 347 14,679 1,273 15,952Northern 1,716 2,242 568 93 4,619 1,819 6,438

Total 21&.614 11 163 932 a 157 4 64.0 40797

1984

Central/Eastern 11,189 5,213 809 427 17,638 1,424 19,062Western 8,846 4,120 1,270 376 14,612 1,214 15,826Northern 1,825 2,382 601 102 4,910 1,903 6,813

Total 21,860 11 715 2 680 905 37.160 4 541 41 701

a/ Includes agricultural tractors, trailers, cranes and other constructionequipment.

Source: Department of Road Transport

Reference irn text: page 5, para 13.

40

AppendLx 5Page 1

ExistiQg and Forecast TrafficCOn Proect Roads and Bridg'&esG

VehicleRoad Stretch Tb 1985 1987 1997 2007

Radaro Bridge toRorovou (18.5 km) Car 78 82 100 110

Light Truck 226 236 288 318Heav Truck 142 148 180 199Bus 49 51 62 69

Total 495 517 630 696

tabula to Narea Car 104 108 132 161(13.0 hk) Ligt Truck 161 167 204 249

e"a Truck 236 245 299 364fus 44 46 56 68

Total 545 566 691 842

Rakiraki to Car 128 133 162 196Ell1ugto8 (9.1 km) Light Truck 144 176 215 262

Heavy Truck 224 234 285 347B" 45 47 57 69

Total 541 590 719 874

Sabeto Road Car 184 191 233 284(4.0 im) Light Truck 177 184 224 273

Heavy Truck 123 128 156 190Bus 51 53 65 79

Total 535 556 678 826

Koronubu Road Car 160 166 202 246(6.5 km) Light Truck 194 202 246 300

Heai-v Truck 185 192 234 285Bus 72 75 91 111

Total 611 635 773 942

Moto Road Car 305 317 386 470(4.0 km) Lirttt Truck 316 328 400 488

Rea-.v Truck 215 224 273 333Bus 105 109 133 162

Total 941 978 1,192 1,453

Reference in text: pages 12 and 30, paras 37 and 86.

41

&ppendix SPage 2

VehicleRoad Stretch Type 1985 1987 1997 2007

Nadi Back Road Car 267 278 339 413(3.3 km) Light Truck 157 163 199 243

Heavy Truck 154 160 195 238Bus 17 18 22 27

Total 595 619 755 921

Nakoroutarl Road Car 458 476 580 707(5.8 kh) Light Truck 29 30 37 45

Heavy Truck 85 88 107 130Bus 40 42 51 62

Total 612 636 775 944

Transinsular Road Car 130 135 165 201(21.3 km) Light Truck 35 36 44 54

Heavy Truck 48 50 61 74BUS 15 16 20 24

Total 228 237 290 353

Princes Road Car 1,415 1,472 1,794 2,187(21.9 kh) Light Truck 732 761 928 1,131

Heavy Truck 202 210 256 312Bus 154 160 195 238

Total 2,503 2,603 3,173 3,868

Ba Bridge Car 6,835 7,177 11,700 19,069(220 a) Light Truck 840 882 1,438 2,343

Heavy Truck 247 259 422 688Bus 1,258 1,321 2,153 3,510

Total 9,180 9,639 15,713 25,610

Sigatoka Bridge Car 3,094 3,342 7,215 15,576(180 a) Light Truck 390 421 909 1,962

Heavy Truck 24 26 56 121Bus 177 191 412 890

Total 3,685 3,980 8,592 18,549

a, Bridge traffic shown for 1985 represents 1986 traffic

Source: Consultant's estimates.

42

Appendix 6

List of Project toads and Bridges

Adolnotralfvetoad/Bridge Section DaIistria- Lnetb (km)

A. Main Roads

1. Radaro Bridge-Korovou C 18.52. Rabulu-Ntreva 13.03. akfiraki-Elllngton W 9.1

Subtotal (A) 40.6

B. Secondary toads

4. Sdbto Rod 4.05. Koronubu toad V 6.56. Moto toad v 4.07. Nadi Back goad v 3.38. Nakoroutarl Rod N 5.89. Transinsular toad N 21.310. Prilnces toad C 21.9

Subtotal (B) 66.8

C. NaJor Bridges

1. B& bridge V 0.222. Sigatoka Bridge W 0.18

Sv'itotal (C) 0.40

TOTAL (A+B+C) 107.80

a/ The Administrative Divisions are: Northern (N); Eastern (E);Central (C); and Western (W).

Reference in text: page 15, para 49.

43

Appendlx 7

Tentative Equipmnt List

Item Unit TotalNo. Descrption Quantity Cost Wt

1 Crawler tractor, 140 kw W/angle blado 2 0.190 0.3802 Crawler tractor, 100 hi Wangle blade 7 0.130 0.9103 Crawler tractor. 60 kw v/angle blade 5 0.050 0.2504 Grader, 90 kw 7 0.073 0.5115 Frot-end loader, ubeeled, 1 cu.m. 9 0.070 0.6306 Wheel-ounted backhoe/loader, 45 kw 2 0.050 0.1007 Crawler backboe/excavator, 45 kw 2 0.040 0.0808 High sped tampfig compactor, 15 t 2 0.120 0.2409 Vibratlng roller wlintercb'ble drun, 9 t 8 0.070 0.560

10 Extra padfoot drum for item 9 1 0.015 0.01511 Pomatic tired roller, 7/15 t 4 0.040 0.16012 Tipper trucks, 6 cu.s. 22 0.021 0.46213 Tipper trucks, 8 cu.m. 15 0.033 0.49514 Flat-top truck, 7 t w/lifting arm 6 0.022 0.13215 Flat-top truck, 9 t 2 0.018 0.03616 Service truck 5 0.043 0.21517 Bitumen sprayer, 6000 lt 2 0.044 0.08818 Chip spreader 6 0.007 0.04219 Screening plant, 100 tph 3 0.040 0.12020 Crushing plat, 100 tpb 2 0.350 0.70021 4VD LB station wagon 16 0.011 0.17622 4WD LWB pick-up 8 0.009 0.07223 4WD twin-cab pick-up 13 0.009 0.11724 Concrete mixer, 400/300 lt 8 0.012 0.09625 Concrete mixer, 150/100 lt 7 0.002 0.01426 Asphalt concrete plant 60 tph 1 0.400 0.40027 Compressor, 120 it/sec 4 0.016 0.06428 Miscellaneous workshop tools/equipment 0.15029 Initial spare parts 0*500

&/ Decez'ber 1985 prices.

Reference in text: page 16, para 51.

44

Appendfix 8PgeI

Broad Terms of ReferaceFor Consultnt Services

Under The Project

FORCE ACCOUNT SUPERVISIOK UNIT:

The Public Works -Departmet (ND) within the Ministry ofComunications, Transport and Works (MCTW) will establish a ForceAccount Supervision Unit (FASU), reporting directly to the DeputySecretary, Works and Transport to ensure that works to be Implementedthrough force account are carried out with due diligence and efficiencyand In conformity with sud administrative, financial, engineeritg andbighway practicess particularly with regard to normlly acceptablstandards of quality of construction work, easurement and costin ofworks, nd accounting procedures. In addition, FASU will carry out twoother important functitns: evaluating the relative effectiveness ofcontractin and force account works in FIji, and assisting PD indeveloping and Implamenting proper costing and smaagement accounting andreporting procedures on a department-wide basis. In comparingcontracting and force account methods for Implementing civil works, FASUwil work closely with the consulting firm to be engaged for the designand construction supervlslon of the Nadaro Bridge to Korovou stretch ofthe Kings Road which is to be Implemented by contract followingInternational competitive bidding procedures. FASU will comprise thefollowing:

Construction Management Engineer:

The Construction Management Engineer will be the Team Leader ofFASU and will, inter alla:

(i) review the prelilmiary designs of the roads to be implementedthrough force account, prepared by NWD; and assist PWD indetailed designs as necessary, including minimizing adverseenvironmental Impacts;

(iI) assist PWD in the overall planning and organization of thework to be undertaken through force account;

(iii) provide assistance to PWD in determining optimum designsolutions to problems which may arise during construction,and determite appropriate specifications for alternativedesigns and materials as necessary;

(iv) in conjunction with other staff of FASU, establish properquality, quantity and cost control regimes and procedures;

Reference in text: page 16, para 52.

45

Appendix 8Page 2

(v) together with the consulting firm supervising constructionof a road section through contract under the Project, estab-lish benchmarks, such as unit costs, unit production times.period of implementation and quality of construction by whiebto sonitor and evaluate the advantages and disadvantages ofboth methods;

(vi) prepare guldelines for and establish suitable managementreporting systems and procedures for constructio projectsand trla PND staff in the use of thesa;

(vil) prepare sontbly reports In formats acceptable to the Govern-sent and the Bank, fully describl progress of work includingquality and cost control; and

(fr) assist ND In the preparation of a Pioject Completlon Reportwithin three months of completion of the Project.

Soils/Materils Engineer:

The Soils/Materlals Engneer will, ilnter ala:

(i) establlsh a comprehensive quality control and testing progsrfor force account works to ensure com,)liance with norualyaccepted standards;

(it) assist PWD in.establishing the system in (i) throughout theDivisions;

(iii) assist ND In locatin and detemining the suitability ofconstruction materials both at source and on incorporationin the works;

(iv) select alternative materials specifications as necessary;

(v) revise, inter alia, pavement designs if required bycircumstances during construction;

(vi) provide assistance to PWD as required in organizing,equipping, staffing and operating PtD's main soils/materialslaboratory and the site laboratories;

(vii) establish material quality control reporting procedures; and

(viii) train counterpart staff in both laboratory and field testingof soils/materials and quality control reporting.

46

tpeneldlx 8Page 3

Surveror/Measurement Engineer:

The Survey/Measurement Engineer will, inter alia:

(1) prepare guidelines for, and establish, a survey and quantitycontrol system to accurately determine quantities of worksundertaken through force account and provide assistance tothe Mangent Cost Accountant in FASU in determining unitcosts of work performed Including a breakdown of equipment,saterials, labor and overhead costs, etc;

(it) assist XD In establiRhing the system in (i) throughout theDivisions;

(iii) train and supervise associated PND staff in quantity surveyingand quantity calculation,

(iv) provide Inputs to the Conatructlon Management Engineer In PASUto establish benchmarks by which to monitor and evaluate theadvantages and disadvantages of liplementing works througbforce accout and contracting.

aemet Cost Accountant/Cost Control Specialist:

The Goverament has adopted and installed a sophisticatedcomputerized accounting package (Digital Equipment Corporation (DEC):Software International General Ledger System) throughout alldepartmeots. At present, the system is being used to a degree thatpermits overall costs of a particular job to be determined, but does notcost individual units or other components. The Management CostAccountant/Cost Control Specialist must be thoroughly familiar with theabove software package and will, inter alia:

(i) prepare guidelines as necessary and train PWD staff in the useof the accounting system, software application and manage-ment reporting requirements;

(ii) establish an appropriate costing system suitable for the worksto be implemented through force account and implement theaccounting system mentioned In (i) above for the works;

(iII) assist the Construction Management Engineer In establishingbenchmarks by which to monitor, evaluate and compare therelative advantages of undertaking civil works construction inFiji through force account and contracting; and

(iv) assist PWD in establishing a plant replacement scheme byestablishing plant and vehicle hire rates, including recoveryof capital costs, in conjunction with the PWD plant pool, suchthat the riant pool is self-financing.

47

~de8Page 4

Road Maintenance Engineers

Three individual consultants experienced In road sainteancemanagement, policies, practices, programs and operations are to beengaged by the Public Works Department (PWD) within the Ministry ofComunications, Transport and Works (MCTW) anc' will be attached, oneeach, to the Western (two years), Central/Eastern (four years) andNorthern (two years) Divisional Engineer's Offices to assist Inilproving the country's road maintenance capabilities. The three roadmaintenance engineers will act as Divisional Road Maintenance Engineer'sresponsible to the Divisional Engineers; in: addition, the DivisionalRoad Maintenance Engineer attached to the Central/Eastern Division Willact as Prlncipal Road Maintenance Engineer responsible to the DeputySecretary, Works and Transport. The scope of the services will includebut not necessarily be limited to the following:

(1) assist PND in establishing a suitable road maintenanceorganization;

(ii) review existing policies and practices with respect toplanning, schedullig activities, budgeting and performancemanitoring;

(i) train staff within PND in proper road maintenance policiesand practices;

(iv) develop appropriate road maintenance programs in eachDivision, and for the country as a whole, based on demons-trated need;

(v) schedule road maintenance activities, frequencies and budgetsand develop techniques for monitoring physical and costperformance against activity schedules and budgets;

(vi) prepare, introduce and train staff in the use of appropriateroad maintenance manuals;

(vii) prepare quarterly reports in formats acceptable to the Govern-ment and the Bank, describing progress, problems and solutionsin developing an appropriate road maintenance regime for thecountry.

BRIDGE DESIGN AD CONSTRUCTION (MAJOR BRIDGES)

Based on feasibility studies, replacement of the existingsingle-lane bridges at Ba and Sigatoka is warranted. Civil works willbe undertaken through a contract awarded in accordance withInternational competitive bidding procedure. To prepare for this, theGovernment proposes to engage a consulting firm to undertake detaileddesign, prepare contract documents, supervise construction and assist

48

Appendix 8Page 5

the Government in prequalifying contractors, tendering, and awarding acontract for the works. The Executing Agency for the Project will be thePublic Works Department (PED) within the Miistry of Communications,Transport and Works. For the Ba and Sigatoka Bridges a consulting firmwill be eugaged and wll, inter alia:

(i) review existing designs and subsurface data, as-builtdrawings of the existing Ba and Sigatoka Bridges, and anyother available information to determine the most appropriatedesigns;

(ii) recommend additional data colle-tion and foundationinvestigations If required and supervise the additional datacollection;

(Ili) prepare designs, specifications and contract documents for thetwo bridges;

(iv) assist PWD in prequalifying contractors and tendering for thebridges;

(v) assist PWD in evaluating tenders and make recouiendations foraward of contract;

(vi) with the assistance of staff assigned from PND, supervise theconstruction;

(vii) assist PWD in administration of the contracts;

(viii) provide training to PWD staff in the various aspects ofbridge construction; and

(ix) prepare monthly reports covering progress of the majorbridge works.

DESIGN AND CONSTRUCTION SUPERVISION OF THE NADARO BRIDGE-KOROVOL' STRETCHOF THE KINGS ROAD

Based on feasibility studies, upgrading of about 18 km of theKings Road between Nadaro Bridge and Korovou will be undertaken througha contract awarded In accordance with international competitive biddingprocedures. To prepare for this, the Government proposes to engage aconsulting firm to undertake detailed deslgns, prepare contractdocuments, assist the Government in prequalifying contractors, tenderingand aui.rding a contract, and supervise construction. The ExecutingAgency for the Project will be the Public Works Department (PST) withinthe linistrv of Communications, Transport and Works. The consultingfirm will, inter alia, undertake the following:

49

Appendix 8Page

(i) carry out detailed topogrophic, geotechnical and hydrologicalsurveys including an environmental assesoment;

(ii) conduct traffic and axle-load surveys as needed;

(iii) prepare detailed designs suitable for the works to beundertaken by a contractor selected through Internationalcompetitive bidding procedures;

(iv) prepare detailed cost estimates for the works;

(v) prepare necessary documents for the tendering and award ofcontract for the civil works, including contract drawings,bills of quantities. general conditions of contract,conditions of particular application, specifications andspecial provisions;

(vi) assist PWD in prequalifying contractors, evaluating tendersand awarding a civil works contract;

(vil) supervise civil works construction and administer the civilworks contract;

(viii) furnish monthly reports to PWD and the Bank concerningprogress of the works; and

(ix) assist PWD in the preparation of a Project Completion Reportto be furnished to the Banks on completion of construction.

50Appendix 9

ul~~~~~~~~~~~~~~~

a~~~~~~~~~~~~~~~~

Refeenc in Txt page m 21 par 60 m

A InnI

E3IX

Refrecein ex: ag 21 pra60

51Fiji ioAo uPGnAoiNG PRoAEC1

IMPLEMEN4TATION4 SCHIOUL9 Appendix 10

Uu0ww of £Eaqmvu

FOUtO A=161111MRUCIORCU W.UNM

Rbam-#.iamp"oe

Nap. 110*Ne

iEdO....t flow

FOndA ACCOUNT suftloISLsm

4noi. C&anI.duIt

Ps.pw* Cewuot Onwnar 7

ICU MAX)ht UN(OCL"

Row*.d Cu,anw,L mml

Tm .jAand of CoenUeMcse

mowu-O aIt II mI!

C.9uacasc.e

ROAD MAINTINAfECI

lina MWOsos I#Wo.~'

l.iemn'Smn

AOVISURY TTCKNICAL A$SSIST^ft

a Rod Row% I9loom0on

aI4w Canwoitaw

Reference in Text: page 25, para 70.

52

PgeI

Advisory Technical Assistauce

Broad Terms o-f Reference for consulin services

Road Revenues and Expenditures Study

During recent years the Government has beep adjusting Its roaduser revenue measures with the result that revenues appear to exceedboth annual recurrent (maintenance) and capital expenditures on the roadsystem. The various taxes and duties and the rates belig charged havegenerally evolved over time on an ad hoc basls and do not necessarilydistinguisb among the various road users or vehicle ty-pes, withregard to either the revenues generated or the cost of providing andmaintaining roads for the various users. Under its Nlnth DevelopmentPlant 1986-1990 (DP9), the Government is addressing this Issue andwishes to rationalize its system of road user charges and look into thedesirability and feasibility of possibly introducing tolls as anadditional revenue generating measure. The main purposes of the studyare to: (i) recommend the appropriate policy for road user costrecovery; (1i) identify the various classes of road users; (1ii) developan efficient and practical scheme to provide for more equitable taxationof road users; (iv) recommend a longer-term strategy of road user costrecovery; and (v) evaluate the general adequacy of road relatedexpenditures. The brief terms of reference are given below:

(i) analyze the overall balance between revenues and expendituresrelating to usage of the road network; the analysis shoulddistinguish between capital expenditure, maintenance,administration and indirect costs/revenues; it shouldalso, as far as practicable, distinguish between costsof main, secondary, country and urban roads;

(ii) assess costs currently incurred in maintaining the roadnetwork and estimate the appropriate level of maintenanceexpenditure; combine these with the cost of providing theroad network and separate these into their variable andfixed components and allocate all variable costs to thetype of vehicle responsible for incurring these costs;

(iii) compare, for each type of vehicle, the relationship betweenroad user revenues and their variable and fixed costs withregard to road maintenance, and identify inequities in thelevels of road user charges and recommend revisions;

(iv) review the sources and methods of collecting road userrevenues and the cost of their collection and, with a viewtoward improvlng cost ef.ectiveness, make appropriaterecommendations;

Refererce in text: page 2'o, para 7E.

53

Appendfix 1 1Page 2

(v) revie the various fiscal instruments currently used tocollect road user charges and considering (i) througb (iv)above, make recommendations to Improve collectionefficiency, the efficient use of vehicles, equity In termsof cost recovery, and adequacy of expenditures;

(vi) analyze the possible use of tolls (on roads or bridges), Inthe context of Fiji either as a road user charge or as agenerator of general revenue keeping in mind the cost ofcollection and possible effects on transport efficiency;

(vii) at the end of the second month prepare an inception reportoutlining initial findings, details of remainin work and aprogram to complete the study; and

(vill) prepare a draft final report by the end of the study periodand a final report within one month of receiving coments from theGovermet and the Bank.

Domestic Construction Industry Study

The Government of Fiji relies mainly on its own forces toundertake construction of roads and other public works. A privatecontractin Industry has developed, however, which has catered mainly toprivate sector needs. The Government has recently taken the view thatfor economy and efficiency it may be desirable to further develop theIndustry with regard to its ability to undertake both public and privateworks. As a basis for assessing ways to strengthen the industry and tomake it more effective, data concerning the size, capability, potentialand constraints affecting its development must be collected. The briefterms of reference for the study are given below:

(i) conduct a survey of the size and composition of the domesticcivil works contracting industry by type of works undertaken;

(Ii) estimate its capabilities with regard to professional,entrepreneurial and management skills; availability ofskilled, semi-skilled and unskilled labor; and availability ofcommon and specialized equipment for undertaking various typesof civil works;

(iii) review the rules, regulations, policies and practices underwhich the Industry has been established and operates:

(iv) identify constraints to the further development of theindustry considering technical capability, financialcapability, domestic and international opportunity forcontracting and local practices;

54

Appendix 11Page 3

(v) recouend legal, practical and other measures whicb would needto be pursued to further develop the industry;

(vi) within six weeks of the couDencement of services prepare anInception report outlining initial findings and details ofremainig work program; and

(vii) prepare a dr2ft final report by the end of the study periodand a final report within one month of receiving comenta fromthe Government and the Bank.

55

Page I

SuMMr of the Economic Evaluation

A. General

1. The economic evaluations of road upgradlag 4ed replacement oftwo bridges under the Project were based on the TiL-z Road InvestmentModel for Developing Countries (RT1M2)s developed in collaboration withthe World Bank and the Massachusetts Institute of Technology. Theempirical research used in developing the model vas carried out inconjunction with research institutions in the United Kingdom, UnitedStates and Prance, and Initial in-depth field lnvestigations wereundertaken In Kenya and the Carribbean, supplemented by the results ofother studies to test the original Kenya .relationships and theirappllcability to other situations. These lnvestigations resulted In theRighway Desig and Maintenance (HDM) Standards Model. 9DM is a highlyInteractive model and suitable only for computer applications. RTIM2&usitg the UDK relationships, is a simplified form that may be usedmnually or with micro computers and io more suitable in developingcountries wbere computer facilities are limited and access difficult.

B. Basic roject Data Used for ILput to the Model

(1) Construction Costs

2. s.ed on preliinary designs, quantities of work wereestimated and financial unit costs applied to deternine total financialcost of construction. Each of the major construction components, suchas steel, cement, fuel, bitumen and equipment, was analyzed with regardto Its tax (transfer payments) components and adjusted to reflect theeconomic cost. Labor costs and the foreign exchange components ofconstruction were analyzed and it was determined that their shadowpricing would not be appropriate. Financial and economic constructloncosts for each road stretch and bridge as well as the Project as a wholeare given in Table 1.

(2) Maintenance Costs

3. Maintenance costs for the existing road stretches with andwithout upgrading were used in the economic evaluation. In the case ofthe unimproved road, It was assumed that the road would be maintained Inits existing condition, i.e., no further deterioration in the roadsurface would be allowed to occur. Similarly for the upgraded road,proper maintenance was assumed. As cost data for various maintenance

1/ Transport and Road Research Laboratory of the U'nited Kingdom.

Reference in text: pages 28, 29 and 30, paras 82, 86, 88 and 89

56

Ap4endx 1 2

Pae

Table 1

Estimated Financial and Economic Proect Coats8'(US$ million)

Fiancial Economletoad Section Lenth Cost Cost

A. Main toads

1. Wadaro Bridge-Korovou 18.5 6.40 5.522. Rabulu-Nareva 13.0 3.17 2.753. Rakiraki-Ellington 9,1 1.87 1.62

Subtotal (A) 40.6 11.44 9.89

D, Secondary toads

4. Sabeto Road 4.0 0.76 0.675. Koronubu Road 6.5 1.65 1.446. Moto toad 4.0 1.01 0.887. Wadi Back Road 3.3 0.70 0.618. Nakoroutari Road 5.8 1.65 1.449. Tranainsular toad 21.3 2.31 2.02

10. Princes Road 21.9 6.33 5.53

Subtotal (B) 66.8 14.41 12.59

C. Najor Brldges

1. Ba Bridge 0.22 3.10 2.832. Sigatoka Bridge 0.18 2.60 2.34

Subtotal (C) 0.40 5.70 5.17

Subtotal (A+BtC) 107.80 31.55 27.65

D. Residual Value of Equipment 1.95 1.95

E. Contingencies

a) Physical 3.99 2.12b) Price Escalation 6.'1 0.00

Subtotal (E) 10.70 2.12

F. Interest and Other Charges duringConstruction 4.60 0.00

Tctal (A thru F) 107.80 48.80 31.72Mmi==== 8minm mmemm

a/ Includes right-of-way and consultant services.

57

Appendix 12Page 3

operations were not directly available from PID records, these costswere built up from basic data and are shown in Table 2. Routinemalntenance includes grass cuttlug, drain clearing, recutting ditches,culvert maintenance, and bridge and road sign maltenace. Recurrentmaintenace Includes repairing potholes and grading gravel-surfacedroads, repairing potholes, and undertaking surface patching and edgerepairs on bitumen-paved roads. Periodic maintenance includesregravelling of gravel roads and resealing bitumen-paved roads,Including regravelling of shoulders, and is required at intervals ofseveral years.

Table 2Economic Costs of Road Maintenance

(F$ per Gi)-

Road Routine Recurrent PeriodicExisting - 1,362 -Upgraded 856 251 10,214

Source: Consultant's estimates.

(3) Vehicle Operating Costs

4. Vehicle operating costs (VOC) comprise components such asfuel, oil, tires, maintenance (parts and labor), depreciation, and tinecosts (overhead and interest on the investment in the vehicle). Fourdifferent vehicle types that represent the traffic flows on the Projectroads and bridges were identified; their general characteristics aregiven in Table 3. Unit costs of operation for each vehicle costcomponent were worked out and are shown for typical vehicles for theaverage road condition in Table 4. From Table 4, it can be seen thatthe VOC savings from upgrading vary according to vehicle type, rangingfrom 43 to 53 per cent of the costs of operation on the unimproved road.For the bridges, vehicle operating costs were estimated based on vehicleoperating characteristics on approaching or leaving the bridge. Astraffic volumes increase, the smooth flow of traffic Is interrupted moreoften on single-lane bridges with a consequent increase in operatingcosts. Vehicle operating cost savings were thus estimated from acomparlson of operating costs with and without the new bridges.

58

A.pidx 12Page 4

Table 3Typical Vehicle Caracteristics

(F$ economic coats)

C,Vehicle Descriptions a/ Ligbtk' H1vY7 d/car!/ Truck Truck BuD-

A. Vehicle Characteristics

Gross Vehicle Weight (tons) up to 1.5 1.5 to 4.0 11.5e1 11.5

S. Economic Unit Costs

NMew Veicle 5,500 10,120 19,100 39,490Tires 30.65 48.77 167.10 200.00Fuel Costs (F*/liter)

Petrol 0.34 0.34 0.34 0.34Dieel 0.33 0.33 0.33 0.33

Labor Maintenance (F$/hr) 2.40 2.40 2.40 2.40Crew Costs (F$/hr) / 1.78 2.00 2.00Anual Overhead Costs ()- 10.00 10.00 15.00 15.00Interest Rate (Z) 10.00 10.00 10.00 10.00

C. Operqting Characteristics

Annual kM 10,000 17,500 45,000 62,500Vehicle Life (years) 10 12 12 14

a/ Includes private cars, taxis, rental cars, minibuses and plckups.b/1 Light commercial vehicles having gross vehicle weights ranging

from 1.5 to 4.0 tons.c/ Goods vehicles whose gross vehicle weights exceed 8,5 tons.dl All regular passenger service vehicles.el Gross vehicle weights of 13.5 tons used for trucks carrying

sugar cane.f/ As a percentage of operating costs.

Source: Consultant's reports.

59

Appendix 12Page 5

Id& 4

_mud Cael ani rsoA a b Sl119

Cot item ._ MRS

hAu 3.18 2.83 6.34 5.I 10.60 9.01 11.32 9.18

au 0.40 o.20 0.60 0.30 1.34 0.6 1.34 0.67

TM 1.86 0.48 2.96 0.76 3.49 2.16 4.17 2.58

SIPM Paru 5.m9 1.14 14.37 2.79 2?LC 9.55 13.57 2.14

13Ste Imb 0.38 0.33 1.30 0.44 6.96 3.35 1.79 0.32

.72 6.43 8.29 5.81 6.09 4.23 8.40 6.10

Ovedua LI2 1.14 3.39 1.60 7.60 4.33 6.09 3.15

1Ta Qotp.hI 23.13 12.55 37.25 17.58 SL26 33.32 46.68 24.14

Ss1s per in 10.58 19.67 24.94 22.54

Vdce 8wat per bow) 29.9 57.9 22.5 53.8 17.5 35.4 15.3 29.6

amS46 53 43 48

60

eeIndfr12

D. EconomIc Internal Rate of Return and Sensitivity Tests

By comparing construction costs, net maintenance costs andvebicle operating cost savings derived over the analysia period1/ fromup2rading the roads and replacing the bridges, the stream of coss andbenefits cax be calculated for each road stretch and for each bridge.The cost/benefit streams are presented In Tables 5.1 to 5.12; a sumaryfor road stretches is given In Table 5.13.

7. Seoditivity tests were undertaken in terus of unexpectedincreases In costs, decreases In benefits and a combination of the two.The result. of these tests for each road stretch, the bridges and forthe Project as a whole are given In Table 6.

17 The analysis period comprises the construction period and theeconomic life of the upgraded roads and bridges. The constructionperiod for each of the roads and bridges varies. The economic lifeof the upgraded roads is assumed as 20 vears; Fridges have aneconomic life exceeding 20 years but for analytical purposes the20-year period was used.

61

4ppndix12Page

Table 5.1Ev8luation of EZUR

'oad Stretch : Nade Brldge to KorovouLangth : 18.5 InE I t a : 14

Constrctio Maintenance VOC NetTaar Cost Savinss Savings Beneflts- (Fs am'

1987 158.00 (158.00)a 19769.00 (1,769.00)89 3,591.00 (3,591.00)

1990 7.10 797.46 804.5691 7.10 813.40 820.5092 7.10 829.67 836.7793 7.10 846.27 853.3794 7.10 863.19 870.2995 7.10 880.46 887.5696 (186.50) 898.06 711.5697 7.10 916.03 923.1398 7.10 934.35 941.4599 7.10 953.03 960.13

2000 7.10 972.09 979.1901 7.10 991.53 998.6302 7.10 1011.36 1018.4603 (186.50) 1,031.59 845.0904 7.10 1,052.23 1,059.3305 7.10 1,073.27 1,080.3706 7.10 1,094.74 1,101.8407 7.10 1,116.63 1,123.7308 7.10- 1013S.96 1,146.06

2009 7e10 19156.68 1,165.78

62

kA edlx 12Page a

Table 5.2Evaluation of EIUR

Road Stretch : Rabulu to NarevaLength : 13.0 kmE I tt : 19

Constructioa Maintenance VOC NetYear Cost Sav!n;. SavLngs Benefits

(*000)

1987 1,761.00 (1,761.00)a8 990.00 (990.00)89 4.60 563.18 567.78

1990 4.60 574.45 579.0591 4.60 585.93 590.5392 4.60 597.65 602.2593 4.60 609.61 614.2194 4.60 621.80 626.4095 (179.20) 634.23 455.0396 4.60 646.92 651.5297 4.60 659.86 664.4698 4.60 673.05 677.6599 4.60 686.52 691.12

2000 4.60 700.25 704.8501 4.60 714.25 718.8502 (179.20) 728.54 549.3403 4.60 743.11 747.7104 4.60 757.97 762.5705 4.60 773.13 777.7306 4.60 788.59 793.1907 4.60 804.36 808.960o 4.60 820.45 825.05

63

^Mendlx 12page 9

Table 5.3Evaluation of EIER

toad Sttetch : Rabkraki to EllingtonLength : 9.1 kE I R R : 23

Construction Mainteoance VOC Netyear cost Say!ln; Savinse Denef its-ear (F$ 000)

1988 1,038 (1,038)1989 584 (584)

90 5.70 401.74 407.4491 5.70 409.78 415.4892 5.70 417.97 423.6793 5.70 426.33 432.0394 5.70 434.86 440.5695 5.70 443.56 449.2696 (224.10) 452.43 228.3397 5.70 461.48 467.1898 5.70 470.71 476.4199 5.70 480.12 485.82

2000 5.70 489.72 495.4201 5.70 499.52 505.2202 5.70 509.51 515.2103 (224.10) 519.70 295.6004 5.70 530.09 535.79

2005 5.70 540.69 546.3906 5.70 551.51 557.2107 5.70 562.54 568.2408 5.70 573.79 579.49

2009 5.70 585.26 590.96

64

Awpeudix 12Page u0

Table 5. 4Evaluatio of flU

Road Stretch : Sabeto osadLength s 4.0 kl RI : 21

Construction Mainteance VOC NetTar Cost sa&vis Sav1ns Benefits

1987 380.00 (380.00)88 286.00 (286.00)89 1.10 148.24 149.34

1990 1.10 151.21 152.3191 1.10 154.23 155.3392 1.10 157.32 158.4293 1.10 160.46 161.5694 1.10 163.67 164.7795 (p.80) 166.95 122.1596 1.10 170.29 171.3997 1.10 173.69 174.7998 1.10 177.17 178.2799 1.10 180.71 181.81

2000 1.10 184.71 185.4201 1.10 188.01 189.1102 (44.80) 191.77 146.9703 1.10 195.61 196.7104 1.10 199.52 200.6205 1.10 203.51 204.6106 1.10 207.58 208.6807 1.10 211.73 212.8308 1.10 215.96 217.06

65

Appendix 12Page I I

Table 5.5Evaluation of EIRR

load Stretch : Korwombu RoadLength : 6.5 k

I RR : 19

Constructlou Maintenance vOC Netyear Cost SavIngs Savins Benefits

(F$ 000)

1988 589.00 (589.00)89 589.00 (589.00)

1990 258.00 0.95 149.57 (107.48)91 1.90 305.15 307*0592 1.90 311.25 313.1593 1.90 317.48 319.3894 1.90 323.83 325.7395 1.90 330.30 332.2096 1.90 336.91 338.8197 (74.70) 343.65 268.9598 1.90 350.52 352.42

1999 1.90 357.53 359.432000 1.90 364.68 366.5801 1.90 371.97 373.8702 1.90 379.41 381.3103 1.90 387.00 388.9004 (74.70) 394.74 320.0405 1.90 402.64 404.5406 1.90 410.69 412.5907 1.90 418.90 420.8008 1.90 427.28 429.1809 1.90 435.83 437*73

2010 1.90 444.55 446.45

66

ERendIz 12

Table 5.6Evaluation of EIRR

toad Stretch: Noto loadLength : 4.0 k

I R t: 28

Construction Maintenance VOC Netear Coat Savings Savis Benefits

(F 000)

1988 360.00 (360.00)89 360.00 (360.00)

1990 159.00 0.75 136.88 (21,37)91 1.50 279.24 280.7492 1.50 284.82 286.3293 1.50 290.52 292.0294 1.50 296.33 297.8395 1.50 302.26 303.7696 1.50 308.30 309.8097 (56.70) 314.47 257.7798 1.50 320.76 322.2699 1.50 327.17 328.67

2000 1.50 333.72 335.2201 1.50 340.39 341.8902 1.50 347.20 348.7003 (56.70) 354.14 355.6404 1.50 361.23 304.5305 1.50 368.45 369.9506 1.50 375.82 377.3207 1.50 383.34 384.8408 1.50 391.00 392.5009 1.50 398.82 400.32

2010 1.50 406,80 408.30

67

Appendix 12Page 13

Table 5.7Evaluation of EIRR

Road Stretch : Nadi Back RoadLength : 3.3 kmE I R R : 22

Construction Kaineenance VOC NetYear Cost Savings Savings Benefits

(F$ 000)

1988 608.00 (608.00)89 0.90 126.42 127.32

1990 0.90 128.95 129.8591 0.90 131.53 132.4392 0.90 134.16 135.0693 0.90 136.84 137.3494 0.90 139.58 140.4895 (32.80) 142.37 109.5796 0.90 145.22 146.1297 0.90 148.12 149.0298 0.90 151.08 151.9899 0.90 154.10 155.00

2000 0.90 157.19 158.0901 0.90 160.33 161.2302 (32.80) 163.54 130.7403 0.90 166.81 167.7104 0.90 170.14 171.7105 0.90 173.55 174.4506 0.90 177.02 177.9207 0.90 180.56 181.4608 0.90 184.17 185.07

68

0aPPediX 12Page 14

Table 5.8Evaluation of ElIR

Road Stretch : Nakoroutarl RoadLength : 5.8 inE I R U : 14

Construction Maintenance VOC NetYear Cost savings Savings Benefits

(F$ 00)

1988 675.00 (675.00)89 460.00 (460.00)90 301.00 (301.00)91 1.50 225.04 226.0492 1.50 229.54 231.0493 1.50 234.13 235.6394 1.50 238.81 240.3195 1.50 243.59 245.0996 1.50 248.46 249.9697 (57.70) 253.43 195.7398 1.50 258.50 260.0099 1.50 263.67 265.17

2000 1.50 268.94 270.4401 1.50 274.32 275.8202 1.50 279.81 281.3103 1.50 285.40 286.9004 (57.70) 291.11 233.4105 1.50 296.93 298.4306 1.50 302.87 304.3707 1.50 308.93 310.4308 1.50 315.11 316.6109 1.50 321.41 322.91

2010 1,50 372.84 374.34

69

opedix 12Page i5

Table 5.9Evaluation of EIRR

toad Stretch : Transinular RoadLength : 21.3 kmE I R R : 14

Construction Maintenace VOC NetYear Cost Savinl Savins Benefits

(F$ 000)

1987 446.00 (446.00)88 667.00 (667.00)89 667.00 (667.00)

1990 244.00 5.65 153.71 (84.64)91 11.30 313.57 324.8792 11.30 319.84 331.1493 11.30 326.23 337.5394 11.30 332.76 344.0695 11.30 339.41 350.7196 (138.70) 346.20 357.5097 11.30 353.13 214.4398 11.30 360.19 371.4999 11.30 367.39 378.69

2000 11.30 374.74 386.0401 11.30 382.23 393.5302 11.30 389.88 401.1803 11.30 397.68 408.9804 (138.70) 405.63 266.9305 11.30 413.74 425.0406 11.30 422.04 433.3207 11.30 430.46 441.7608 11.30 439.07 450.3709 11.3C 447.85 459.15

2010 11.30 456.81 468.11

70

Appendix 12Page 16

Table 5.10Evaluation of EIRR

Road Stretch : Princes RoadLegth : 21.9 IaE I R R: 33

Constructlon Maintenance VOC Netyear Cost SavinAs Savigs Benefits

(F$ 000)

1987 1,106.00 (1,106.00)e8 1,826.00 (1,826.00)89 1,830.00 (1,830.00)

1990 770.00 3.15 1,221.22 454.3791 6.30 2,491.28 2,497.5892 6.30 2,541.11 2,547.4193 6.30 29591.93 2,598.2394 6.30 2,643.77 2,650.07

1995 6.30 29696.65 2,702.9596 6.30 2,750.58 2,756.8897 (246.00) 2,805.59 2,559.5998 6.30 2,861.70 2,868.0099 6.30 2,918.94 2,925.24

2000 6.30 2,977.31 2,983.6101 6.30 3,036.86 3t043.1602 6.30 3*097.60 3,103.9003 6.30 3,159.55 3,165.8504 (246.00) 3,222.74 2*976.7405 6.30 3,287.20 3,293.5006 6.30 3,352.94 3,359.2407 6.30 3,420.00 3,426.3008 6.30 3,488.40 3,494.7009 6.30 3,558.17 3,564.47

2010 6.30 3,629.33 3,635.63

71

Appndisl2

Page i1e

Table 5.11Evaluation of EIRR

Bridge : BaLength : 220 aEIRt : 22

Construction maintenance VOC NetYear Cost Cost SaviIs Benefits

(Fs 000)

1987 72.00 (72.00)88 486.00 (486.00)89 1,460.00 (1,460.00)

1990 612.00 (812.00)91 23.30 185.78 162.4892 23.30 200.21 176.9193 23.30 214.77 191.4794 23.30 229.76 206.4695 23,30 244.28 220.9896 23.30 384.84 361.5497 23.30 515.56 492.2698 23.30 656.43 633.13

1999 23.30 797.47 774.172000 23.30 948.68 925.38

01 23.30 19346.60 1,323.3002 23.30 1,744.71 1,721.4103 23.30 2,143.02 29119.7204 23.30 2,541.55 2,518.2505 23.30 2*940.29 2,916.9906 23.30 6,133.01 6,109.7107 23.30 9,325.97 9,302.6708 23.30 12,519.18 12,495.8809 23.30 15,712.67 15,689.37

2010 23.30 19,720.80 19,697.50

72

Aipadfr12

Table 5.12Evaluation of EIUa

Brid8e : SigatokaLeugth : 180 aI I I : 14

Construction Maintence VWC Netyear Cost Cost SaVinGs Benefits

(VI 000)

1987 72.00 (72.00)88 400.00 (400.00)89 1,201.00 (1,201.00)

1990 667.00 (667.00)91 18.82 11219 93.3792 18.82 126.73 107.9193 18.82 14140 122.5994 18.82 152.22 137.4095 18.82 171.18 152.3896 18.82 209,68 190.8697 18.82 248.35 229.5498 18.82 287.22 268.41

1999 18.82 326.31 307.492000 18.82 365.62 346.8001 18.82 556.33 538.0202 18.82 748..:1 725.5003 18.82 940.68 921.2704 18.82 1,132.10:i 19113.3505 18.82 1,334.59 1,315.7706 18.82 1,528.17 1,509.3507 18.82 1,722.20 1,703.3808 18.82 1,916.73 1,897.9209 18.82 2,111.79 2,092.97

2010 18.82 2,280.73 2,261.91

73

Appendix 12

Table 5.13Evaluation of EIRR

Road Stretech : All road stretches combined.Length : 107.8 hkE I R R : 22

Castrmutiou Malnteance VOC Notyear Cost sav!gge SEE LLgs Benef its

($000)

1987 3,851.00 (3.851.00)88 8,808.00 (8,808.00)89 8,081.00 6.60 837.84 (7,236.56)

1990 1,732.00 29.90 3,715.18 2,013.0891 41.90 5,709.15 5,751.0592 41.90 5,823.33 5,865.2393 41.90 5,939.80 5,981.7094 41.90 6*058.60 6,100.5095 (221.50) 6,179.77 5,958.2796 (381.50) 6,303.37 5,921.8797 (554.40) 7,385.40 5,875.0398 41.90 7,533.10 6,599.92

1999 41.90 7,683.77 6,731.082000 41.90 7*837.44 6,864.8701 41.90 7,994.19 7,001.3202 (221.50) 7,098.61 6,877.1103 (381.50) 7,240.59 6,859.0904 (554.40) 7,385.40 6,831.0005 41.90 7,533.10 7,575.0006 41.90 7,683.77 7,725.6707 41.90 7,837.44 7,879.3408 41.90 7,994.19 8,036.0909 35.30 6,909.09 6,944.39

2010 22.50 5,265.32 5,287.82

74

Aaedix 12Pag 20

Table 6

Sensitivity of EIRRa to Cost and Benefit Changes

(1) (2) (3) (4)

Base 15X Cost 15S BenefitCase Incre"e Decrease (2) and (3)EIRR EItR SI . EIRR Combined

A. Main Roads

1. Nadaro Bridge-Korovou 14 12 0.95 12 0.95 102. tabula-Nareva 19 17 0.70 16 1.05 143. Rakiraki-Ellington 23 20 0.87 19 1.60 17

B. Secondary toads

4. Sabeto toad 21 18 0.95 18 0.95 165. Koroaubu Road 19 17 0.70 17 0.70 136. Noto toad 28 25 0.71 24 0.95 217. Nadi Back Road 22 19 0.91 19 0.91 168. Nakoroutari Road 14 11 1.43 11 1.43 109. Transiaular Road 14 12 0.95 11 1.43 1010. Princes Road 33 30 0.67 30 0.67 27

C. Najor Bridges

1. Ba Bridge 22 21 0.32 21 0.32 202. Sigatoka. Bridge 14 13 0.48 12 0.95 11

D. The Project

1. Main Roads 17 16 0.39 14 1.17 122. Secondary Roads 25 22 0.80 22 0.80 193. Bridges 18 17 0.37 17 0.37 164. Project 21 19 0.63 18 0.95 16