Document of

The World Bank

FOR OFFICILL USE ONLY

Report No. P-3886-SW

REPORT AND RECOD91ENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPTENT

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$8.6 MILION

TO THE

KINGDOM OF SWAZILAND

FOR A

CYCLONE REE4BILITATION (ROADS) PROJECT

JANUARY 10, 1985

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents way not otherwise be disclosed without lWorld Banl; authorization.

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CURxECYc EQUIVALENTS

Currency Units Ealangeni (E) Rand (R) /1US$1.00 - E 1.90-E = USSO.526

WEIGHTS AND N.ASURES

1 meter (m) -3.28 feet (ft)1 kilometer (km) 0.62 wiles (mi)1 square kilometer (km 2 ) = 0.386 square miles (sq mi)1 hectare (ha) = 2.45 acres (ac)1 metric ton (m .on) 2,204 pounds (lb)1 kilowatt (kw) 1.341 horsepower (hp)

GLoSSARY OF ABBREVIATIONS

AfDF - African Development FundCTA - Central Transport AdministrationEEC - European Economic CommunitYxI'C - Ministry of Works and CommunicationsODA - Overseas Development AdministrationRDA - Rural Development AdministrationRSA - Republic of South AfricaSACU - Southern African Customs UnionUNDP - United Nations Development ProgramUSAID - United States Agency for International Developmentvoc - vehicle operating costsvpd - vehicles per day

K_NGDOM OF SWAZILANJD

Fiscal Year

April 1 - March 31

/1 The South African Rand is also legal tender in Swaziland.

FOR OFFICIAL USE ONLY

SIAZILAND

CYCLONE REHABILITATION (ROADS) PROJECT

LOAN AND PROJECT SUMMARY

Borrower: The Government of the Kingdc-* of Swaziland

Amount: US$8.60 million

Terms: Repayable in 17 years, including a grace period offour years, at the standard variab]e ILterest rate.

Project Description: The proposed project would support the Government'sroad rehabilitation program prepared fcllowing thedamage caused by Cyclone Domoina which struckSwaziland on January 29, 1984 and ravaged the countryfor two days. The resultant torrential rains causedextensive damage to the country's road network. Theproject will: {i) help finance a two yearrehabilitation program to repair about 700 km of mainroads and approaches to key bridges both by contractand about 500 km of district roads by force account;(ii) provide technical assistance to enable theCentral Transport Administration (CTA) tosuccessfully fulfill its responsibilities withrespect to above activities; and (iii) financestudies and detailed engineering for repair andstrengthening of high priority paved road sections.

Benefits and Risks: The main benefits would be prevention of furtherdeterioration of the road system and its restorationto precyclone levels of service, which in turn willcontribute, through reduced transport costs, to therestoration of the Swaziland economy. The principalrisk is that the condition of the road system willdeteriorate more rapidly than expected and thusproject costs will increase or the desired quality of

* rehabilitation will not be achieved. This risk hasbeen addressed by the inclusion of adequatecontingencies and adoption of a processing timetablewhich will enable work to commence after the 1984/85rainy season.

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

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SUunry ofProject Cast:

Local Forelgn TotalUSS Millions-

I. Two Year Road Rehabilitation Program

A. Rehabilitation of about 500 kmof District Roads by force account 0.77 2.53 3.30

B. Rehabilitation of about 700 kmof msin roads by contract 1.03 3.68 4.71

C. Rehabilitation of approaches tokey bridges. 0.11 0.28 0.39

II. Technical Assistance to CrA 0.06 0.45 0.51

III. Other Consulting Services 0.05 0.44 0.49

Base Cost 2.02 7.38 9.40

IV. Contingencies

A. Physical 0.25 0.75 1.00

B. Price 0.41 1.29 1.70

Subtotal 0.66 2.04 2.70

Total Project Cost 2.68 9.42 12.10

Total (Excluding Taxes and Duties) 1.90 9.42 11.32

V. Front-end Fee on Bank Loan - 0.02 0.02

Total Financing 1.90 9.44 11.34_ _ -

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Local Foreign Total-US$ million-

Flnancing:

Government 1.68 - 1.68USAID - 1.06 1.06Bank 0.22 8.38 8.60Total 1.90 9.44 Ii.3

Estimated Disbursements:

Bank FY FY85 FY86 FY87 FY88-- US$ million-------

Annual 0.54 2.89 3.98 1.19Cumulative 0.54 3.43 7.41 8.60

Rate of Return: Rehabilitation of Main Roads: 75 percentRehabilitation of District Roads:.> 16 percent

Appraisal Report: None

,ap: IBRD No. 18533

.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS

ON A PROPOSED LOAIN TO THE KINGDOf OF SWAZILANDFOR A CYCLONE REHABILITATION (ROADS) PROJECT

1. I submit the following report and recommendation on a proposedloan to the Kingdom of Swaziland for the equivalent of US$8.6 million tohelp finance a Cyclone RehabIlitation (Roads) Project. The loan would havea term of 17 years, including four years' grace, and standard variableinterest rate. Additional external financing of US$1.06 million equivalentfor the project would be provided by the United States Agency forInternational Development (USAID).

PART I - THE ECONOIIY

2. The most recent economic report entitled -Economic Memorandum onSwaziland- (No. 3028-SW) was distributed to the Executive Directors onApril 20, 1981. An updating economic mission visited Swaziland in December1984. Some findings of that mission have been incorporated in thisreport. Country data are shown in Annex I.

3. Swaziland is one of the smallest countries on the Africancontinent; located in southern Africa, it is surrounded by the Republic ofSouth Africa (RSA) and Mozambique. In 1982, its population was estimatedat slightly more than 641,000, including about 15,000 Swazis who liveabroad, mainly as migrant workers in South Africa. The population isincreasing rapidly at a rate of about 3.6 percent per annum. Relative toits size and population, the country is well endowed with natural resourcesand has good potential for development. It has some mineral deposits andits soil and climate are favorable to diversified agricultural production.

4. The economy is highly dualistic. The modern sector, which islargely foreign owned, consists of mining (asbestos, coal), large-scaleplantations of forestry, sugar, citrus and pineapples, and associatedindustries such as pulp, sawmilling, sugar and fruit processing. Themodern sector also includes hotels and other tourist-related activities.The traditional sector, on the otber hand, is based largely on cattleraising and subsistence agriculture (maize, groundauts, sorghum). The

* dualistic nature of the economy has limited distribution of benefits fromthe comntry's resources; while 1982 per capita GDP was estimated at US$940,incomes in the traditional rural sector that supports half the populationprobably averaged less than US$60. However, slightly over half of therural families receive regular remittances of about US$160 per capita perannum from family members employed in the wage earning sector.

5. This economic dualism is to some extent a reflection of thegovernment structure. The Queen Regent, who succeeded King Sobhuza II whodied in 1982, rules the modern Government through an appointed Cabinet of

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4inisters which manages the country's normal economic activities andprovides the bulk of services to the people. In traditional mattersconcerning Swazi Nation Land (this term refers to about 60 percent of theterritory of Swaziland which is held communally for the Swazi people by theQueen Regent), the Queen Regent relies on the advice of the Swazi NationalCouncil, a group cf senior Swazi chiefs and leaders. When the modernGovernment becomes involved in developing the Swazi Nation Land'sagricultural and mineral resources, coisiderablP deliberations by both theCabinet and Council are required. Consequently, economic change has beenslow on Swazi Nation Land in contrast to the modern agricultural sector'srapid development.

6. Swaziland's economic performance from 1977 through 1981 wassatisfactory, with real growth averaging about five percent per year,although with substantial year-to-year fluctuations, due in large part tothe impact of large investment projects in the sugar and chemicalindustries. In most years through 1981, fiscal policies were restrained,and the Government built up large credit balances with the banking systemthrough successive surpluses in the riscal accounts. However, in 19S1/82the Government ran a large fiscal deficit, equal to about nine percent ofestimated GDP, in part because of a reduction in Southern African CustomsUnion (SACU) receipts, but also because of a sharp increase in re-currentand capital expenditures, resulting in a decline in the Government'sdeposits with the banking system. 1981 was also the first year in whichthe country experienced a deficit in its overall balance of payments.Exports stagnated because of a sharp drop in international sugar prices,reflecting the beginning of a recession in that industry that continues tothe present.

7. Recession in the RSA, combined with the drought that affectedmaize output throughout the Southern African region, resulted in anestimated fall of real output of about one percent in 1982. In that year,an increase in the SACU receipts resulted in a decline in the fiscaldeficit to about three percent of GDP. Despite the difficulties of thesugar industry, the deficit on the current account of the balance ofpayments was reduced from US$72 million in 1981 to USS50 million in 1982,in part due to the sharp devaluation of the Rand to which the Swazicurrency is pegged. At the same time, the overall balance of paymentsdeficit was eliminated.

8. The balance of payments in 1983 is estimated to have shown afurther reduction in the current account deficit to US$42 million or 8percent of GDP, with most of the improvement coming from the non-dutyelements of SACU receipts, which were US$9.0 million higher than in 1982.Exports are estimated to have risen by only 2 percent, as an increase insugar and asbestos receipts was largely offset by a substantial drop infertilizer and other industrial exports. Imports, which are projected onthe basis of only first quarter data, are estimated to have risen by 2percent. The increase in food imports necessitated by the drought offset,to a large extent the decline in chemical imports, most of which are used

as inputs to fertilizer exports. Only partial information is available oncapital flows: there was little change in identified capital flows(primarily long-term capital and direct investment), which have been fairlysteady since about 1980. However, the short-term capital movementsincreased substantially in the last half of 1983, during which time netforeign assets of the banking system increased US$16 mdllion more thanmight be expected from normal seasonality. Part of these sharp changes incapital flows during 1983 probably represents changes in short-termborrowing by Swazi resident foreign firms induced by the substantialchanges which occurred in interest rate differentials between Swaziland andinternational capital markets, primarily London. Overall, there was asurplus of US$13.5million. At the end of 1983, net foreign assets wereE 105 million, or over two months of imports of goods and services.

9. During 1983 Swaziland accumulated about US$13 million in publicand publicly guaranteed external debt, bringing the total outstanding anddisbursed to US$192.2 million, equivalent to about 29 percent of GDP.Fifty-three percent of the total is from multilateral sources and 38percent from bilateral sources. Debt service payments in 1983 amounted toUS$11.2 million, or only about 3 percent of the exports of goods andservices.

10. In general, prospects for Swaziland's economy are, however, notvery favorable over the medium-term. After the rapid economic growthexperienced during the 1960's and 1970's, future growth appears constrainedmainly by the shortage of skilled manpower and the presence of unfavorableterms of trade prospects. The Government's efforts to diversify thecountry's export base, which have been only partly successful in the past,are the key to future economic development. The country"s creditworthinessposition is expected to deteriorate somewhat during the remainder of thedecade. However, if as pursued by the authorities, prudent debt managementis enforced, the debt service will remain within manageable limits.

The Cyclone

11. On January 29, 1984 Swaziland was struck by Cyclone Domoina whichravaged the country for two days. Extensive damage was caused throughout

* the country, not so much by winds, which were generally below 80 kph, butby severe flooding from the intense rainfall accompanying the cyclone.During the two day period the entire country experienced the highestprecipitation ever recorded. Although rainfall recorded at points acrossthe country has a return period of 100 to 200 years, the fact that it wasso widespread made the resulting floods a unique occurrence. Estimatesfrom South Africa, based on the river velocities recorded locally, put theflood return period at approximately 500 years.

12. The whole country suffered from the effects of the cyclone, withmost severe damage occurring to the roads and bridges, the railways and, toa lesser extent, the power distribution installations. Relatively minordamage was caused to telecommunications, water supplies particularly in the

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rural areas, rural health facilities and small scale irrigation works.Surprisingly little damage was done to crops. Fatalities caused by thecyclone totaled over 335.

13. A Ministerial Disaster Committee was appointed on February 6,1984 in the Ministry of Interior and Immigration, to assess the damage andtake immediate steps to avoid a breakdown in the economy. The Government,with the assistance of consultants and technical assistance financed bybilateral aid agencies, notably British ODA and USAID, estimated the damageat about E 58.3 million (US$30.7 million). Of this about E 43.0 million(74 percent) was estimated for rehabilitating roads and bridges, E 11.0million (19 percent) for railways, E 2.0 million (3 percent) for powerdistribution and E 2.3 million (4 percent) for other services. However,following a detailed inventory of damage to the road network, the estimateddamage to roads and bridges has been put at E 30.5 million (US$16.0million).

14. Four other committees were established to deal with the emergencysituation. A Donors' Committee was charged with the responsibility ofcollecting and disseminating information on affected areas and the mosturgent needs, and of coordinating the effort to provide food and shelterfor families rendered homeless by the disaster. A committee chaired by theMinistry of Works and Commanications (MWC) and comprising representativesof the Ministry of Natural Resources, Land Utilization and Energy, and theMinistry of Agriculture and Cooperatives was entrusted with theimplementation of the emergency program of clearing the roads and effectingshort term repairs. With the assistance of private commercial farmers whosupplied heavy equipment from their own resources, all areas of the countrywere made accessible by road. Many temporary bridges, culverts, fords anddetours were constructed.

15. During the period of emergency efforts, contributions in cash andkind totalling about US$1.8 million were received from the Goverrments ofthe United Kingdom, the USA, Italy, Belgium, Australia, the FederalRepublic of Germany, che EEC, the UN Agencies, the Swiss Red Cross,Lutheran World Federation and relief organizations from Canada, Denmark,the Netherlands, Norway, and the United States. The largest contributorsto the initial emergency relief effort were the United Kingdom (US$0.5million for Bailey Bridges and engineers) and the USA (US$0.4 million forhealth clinics and irrigation repairs). In addition, Soath Africa assistedwith two helicopters for relief work, tents, blankets and commercialcredits for emergency railway repairs and Israel provided medical supplies.

Rationale for Bank Involvement

16. Swaziland's economy is highly dependent on external trade. Formonths after the cyclone, main roads were cut and the rail links whichcarry most of the processed sugar traffic were inoperable. While thetemporary repair works carried out so far have enabled the main transportlinks to be reopened during the dry season, the onset of the wet season is

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bound to create bottlenecks in the free flow of commodities by rail androad. The economy could suffer lasting damage if the reconstruction of thecountry's vital transport system is delayed. The size of thereconstruction program and the speed with which it will be carried out willhave a major bearing on Swaziland's economic performance during the comingyears.

17. The Government has successfully reduced its budget deficit overthe past three yeats. By curbing new capital spending, the Governmentmanaged to reduce the overall budget deficit from E 48.0 million in

* FY81/82, 8.6 percent of GDP, to E 13.0 million in FY83/84, 2.0 percent ofGDP, but efforts to further reduce the deficit have been seriously hamperedas a result of the cyclone. The Government now plans to spend E 159million in recurrent expenditures, seven percent more than originallybudgeted, and E 97 million for investment programs, 24 percent more thanbudgeted. At the same time revenues are expected to increase by only fivepercent to E 209 million, representing a four percent shortfall on budgetedlevels which will result in a deficit of up to E 35 million or about 5percent of GDP. The budget for 1984/85 will be greatly affected by thecost of repairing cyclone damage, which must be the first priority forexpenditures. In order to finance cyclone rehabilitation projects, theGovernment intends to reallocate E 20 million which will cause temporarysuspension of capital investment in new road construction, as well ascapital investments in agriculture, health and education sectors. Theanticipated budget deficit in FY85/86 is expected to be on the same orderas that in FY84/85 (E 35 million). The borrowing requirements needed tofinance such deficits cannot be met by commercial borrowing without someadverse impact on developmental programs in Swaziland.

PART II - BANK GROUP OPERATIONS IN SWAZILAND

18. The Bank Group began operations in Swaziland in 1962 and hasapproved 11 loans, two credits and one IFC investment for a total of US$77million. These have helped finance three road projects, two powerprojects, three education projects, and projects for rural development,water supply and sewerage, a development finance company and an irrigated

* sugar estate and factory (IFC). Implementation of the on-going projects isproceeding satisfactorily.

19. In the transport sector the Bank provided a US$2.8 million creditto Swaziland in 1963 (Credit 20-SW) to assist in financing the constructionof 181 km of two-lane, all-weather highway across Swaziland. The projectwas completed satisfactorily at a cost very close to the appraisalestimate. The Second Highway Project, (Loan 1108-SW, US$7.0 million,1975), helped finance two paved roads, Tshaneni-Mlaula (39 km) andHelehele-Siphofaneni- Phuzumoya (43 km). The project was completed onschedule, and the Project Performance Audit Report of June 26, 1981concluded that the project was prepared and executed satisfactorily. TheThird Highway Project, (Loan 1619-SW, US$11.0 million, 1978), helpedfinance the construction and upgrading of the Manzini-Mhkondvo and the

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Big-Bend River Roads to paved standards and the strengthening of the RoadsBranch maintenance capacity. The project was completed satisfactorily inlate 1983, and a Project Completion report ls being prepared.Unfortunately, all roads completed under these three Bank-financed projectssuffered damage as a result of the cyclone.

20. A summary of Bank Group operations is given in Annex II. TheBank aims to continue assisting Swaziland with projects for education, roadrehabilitation and agriculture, particularly in smnall-scale farming.

21. Debt to the Bank as a percentage of total debt (disbursed andoutstanding) increased from 17 percent in 1975 to about 27 percent in1982. The Bank Group's share in total public debt service in 1983 amountedto 24 percent.

PART III - THE TRANSPORT SECTOR

General

22. The transport infrastructure comprises about 2,800 km of road,289 km of railway, a 20 km cableway, an international airport and severalairstrips. The road network carries most import traffic. The cableway,located in the northwest, transports asbestos over rugged terrain fromHavelock to a railhead in South Africa. There are no pipelines ornavigable rivers. Export trade and petroleum product imports are carriedby the railway which traverses central Swaziland and is linked with theMozambique railway and the port of Maputo to the north and the SouthAfrican railway and the port of Richards Bay to the south.

23. Development of road transport in Swaziland consists largely ofupgrading existing road links which generally provide good accessibility,but in many cases are of poor quality. The need for selective upgrading ofroads and improving road maintenance is recognized by the Government as ofhigh priority.

24. The Government 's present policy is to facilitate development,particularly in rural areas, by improving transport services, expanding thetransport network especially district roads in areas of high economicpotential, and reducing transport costs both within the country and betwe.-Swaziland and the neighboring countries. Investments in the transportsector have remained stable in recent years, amounting to E 25 million inFY79 and E 22 million in FY83 of which that on roads, account for abouthalf.

25. Virtually all of Swazilandts exports are carried by rail. In thepast this was through the Maputo port in Mozambique, but construction ofthe southern rail link to join the South African Railways now enablesrouting also through South African ports. The Government is presentlyconstructing a railway link with the South African railway network to thenorth where it will provide the means of reducing the transit distance from

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the Transvaal north of Swaziland to Richards Bay and Durban south ofSwaziland by over 200 km. Swaziland will benefit more from revenuegenerated by these transit activities than from expansion of domesticactivity. The Government formed the Royal Swaziland National Airline in1977 to counter Swaziland's existing dependence on foreign air carriers andthe existing routing of all international traffic through South Africanairports. The airline presently operates one B737, one F28 and one smalleraircraft to serve neighboring countries particularly countries in theregion.

26. The Department of Economic Planning and Statistics coordinatestransport planning, reviews all investment proposals and determinesrelative priorities. Proposals are put forward by the various ministries,most notably the Ministry of Works and Communications (MWC) which includesthe agencies concerned with road, rail and air transport. In order toensure that economic criteria are applied in selecting infrastructureprojects, the Government has established a planning unit in the MWC,staffed by Swazi nationals with a British financed adviser. In recentyears the Government has extended the Matsapha airport runway, extended therailway into RSA to the south, and is in the process of completing thefurther railway extension into RSA to the north. Thesse projects are cfdoubtful economic viability, but in the case of the tailway the Governmentwas under some regional pressures. Except in these cases, the Government'stransport infrastructure program has been economically justified.

Road Sector

27. The officially declared highway network totals about 2,800 km ofwhich 39 percent are earth roads, 43 percent have a gravel surface, 2percent have a low standard bituminous seal, and 16 percent are paved.About 1,500 km are classified as main roads and the balance, districtroads. Notwithstanding the low standard of much of the network, trafficvolumes are considerable and are growing rapidly. Traffic flows arehighest on Mbabane-Manzini Road which carried several thousand vehicles perday (vpd); other main roads carry traffic of 200 to 500 vpd while districtroads support less than 200 vpd. The exact composition of the truckingfleet operations in Swaziland is not available, but it is almost entirelywithin the private sector, and South African vehicles handle a substantialproportion of the traffic, particularly international.

28. The Roads Bra-uch of the MWC is responsible for the planning,construction and maintenance of all officially designated roads. The RoadsBranch headquarters in Mbabane handles planning, new construction andperiodic maintenance; routine maintenance is done locally by four regionaldistrict offices. Three of the five posts for engineers are filled bylocal Swazis who graduated recently from the American universities. TheBritish ODA had, until December 1983 financed expatriate staff to fill allengineering posts in the Roads Branch. Following the cyclone, ODA hasagreed with Government to continue to finance three engineers to work inthe Roads Branch, including a Senior Roads Engineer. Two more engineersfinanced by USAID will supplement Roads Branch resources to assist with theimplementation ofthe pcoposed project.

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29. The Central Tramport Adain stration (CMIA, also under the MIC,is responsible for buying, ma-Entaining and repairimg all clvilarngovernment equipment and vehicles, wbich are earmarked and hired otut touser agencies at established rates. CM suffers from poor management andas a consequence fleet availability and profitability have been poor inrecent years. For this reason, provisions are made in the project forthree advisors to work in CIA for a two year period (paras. 44, 49 and50). The Government intends to limit the demands on CTA in the future byentering into contracts with local garages for major vehicle repairs.These garages are associated with sain vehicle mnufacturers and have sparecapacity.

30. Road construction is carried out mostly by contract with alllarge contract works being carried out by foreign contractors. TheGovernment also maintains a register of contractors who are qualified tobid for Government contracts. This register comprises some 90 contractors,including 30 who are specially registered for civil engineering work asdistinct from buLlding work. Almost all the contractors are controlled andmanaged by expatrLates living in Swaziland. The MIC also has aconstruction unit which undertakes improvements to district roads and somerehabilitation work on unpaved main roads. Both contract and force accountworks are executed satisfactorily to a high standard relative to other EastAfrican countries.

31. While routine maantenance on roads is carried out entirely byforce account, periodic regravelling and resealing are shared between thelocally based contractors and the MUC's three regravelling units and onebitumen unit. The standard of road maintenance has improved followingprovision of technical assistance and training under the Third HighwayProject. Road maintenance funds are generally adequate.

32. Faced with an increasing requirement for road transport, theGovernment has devoted more public funds to the upgrading of highlytrafficked sections of the main road system. During the Third NationalDevelopment Plan (1978-82) seven major road projects were completed andtotal expenditure on highway development amounted to E 43 million. Inaddition, some district roads have been improved with assistance from theBritish ODA and other unclassified roads in the rural areas are beingconstructed under the Government's Rural Development Administration (RDA)Program. The Government historically has financed most of its highwayimprovements through loans and grants from external sources, but in recentyears it has allocated more locally-generated resources to roadconstruction. All recurrent and maintenance expenditures are financed frombudget sources. These expenditures have increased from about E 1.9 nillionin FY80 to E 3.5 million in FY83. Road users contribute to governmentrevenue through taxes and duties on vehicles, fuel, lubricants and spareparts and through licenses and registration fees. No precise data areavailable on total revenues collected from road users because all customsand sales duties on goods imported into the Customs Union area are paid

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into a common revenue pool, and are disbursed according to a complexformxla. Apart from license fees, transport fuel taxes are estimated toamount to approximately E 5.5 million-more than adequate to cover roadmaintenance expenditures and some of the capital investments. The licensefees, which are not paid into the common revenue pool, are set by theSwaziland Government; this source yielded about E 1.0 million in FY83.

33. The Bank's strategy in the sector is te support programs thatassist the Government in achieving its objectives of lowering transportcosts and improving accessibility. This includes strengthening theGovernment's capability to maintain its road network and improve itshighway administration. Due to employment opportunities in South Africa,wage rates in Swaziland are relatively high. Thus the Government has notexperimented with labor-intensive techniques in implementing its major roadconstruction and maintenance programs. However, where volunteer labor isavailable, attempts are being made to construct some rural roads usinglabor rather than heavy equipment.

Damage to the Transport Sector

34. An immediate consequence of the cyclone and the floods was thebreakdown of road and rail communications. Bridges, culverts and drainagestructures and bridge approaches suffered the worst damage with almosttotal destruction of several key bridges in the basic road network and therail links with Mozambique and the RSA.

Railways

35. Both the northern rail link to Mozambique and the southern linkto the RSA were severed. The sugar industry was seriously affected as allexports of sugar and molasses are transported by rail either to Maputo inMozambique or to Richards Bav in the RSA. Three bridges on the southernlink between Siphofaneni and Lavumisa were partially washed away andstretches of the rail track were damaged. Near the Mozambique border onthe northern link, extensive damage to the rail tracks occurred on bothsides of the border.

36. The Government has erected temporary bridges on the southern linkwhich is now operating at slow speeds. Permanent works are planned withconstruction assistance from the RSA. Mozambique had reopened the railaccess to Maputo harbor. The Government has not requested any assistancefrom the Bank for railroad rehabilitation.

Roads and Bridges

37. The entire road netvork was affected by the flood waters with theworst damage occurring in tie low veld. While most of the roads, apartfrom the structures, stood up to the ravaging waters, an 82 km section ofthe newly constructed Mhkondvo River - Mahamba road (financed by AfDF)which skirts the Mhkondvo River, collapsed through severe erosion and

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slippage of adjacent land. Surface damage, embankment failures, erosionavd silting of drains and damage to culverts and other drainage structuresoccurred over the entire road network. Six main roads were cut by failuresof bridges and bridge approaches at key points, in addition to thedestruction of the 82 km section of the AfDF financed Mhkondvo River -Mahabba road. The worst damage to Bank financed roads was to the NggwavumaRiver bridge on the Big Bend - Nggwavuma River road and the failure ofapproaches to the Lusutfu and Mhkondvo River bridges on theManzini-Mhkondvo River road and to the Mzimphofu River bridge on theRelehele - Big Bend road.

38. A crash program mounted by the Government has enabled most roads-o be re-opened to dry season traffic. The works were executed using localresources and equipment borrowed from a USAID agricultural project.However, much of the repair work is of poor quality and may last throughonly one rainy season. The British ODA has financed the erection of BaileyBridges at three important river crossings. Other river crossings,including a major crossing at Big Bend, can be traversed by reopeningexisting low level bridges to dry season traffic. Although the BaileyBridges are intended as temporary measures, they will last a few years ifthey are regularly inspected and properly maintained. Thus, the promptBritish intervention has eliminated the immediate need for bridgereconstruction in at least three key river crossings. Only one majorcrossing needs immediate attention, namely, the reconstruction of thebridge at Big Bend which will be financed by the British ODA.

Managing and Funding of Permanent Relief in the Transport Sector

39. The magnitude of damage to the transport sector and costestimates for construction of permanent works has compelled the Governmentto seek external financing and technical assistance. While repairs to theother sectors have been largely completed, the highest priority roadrehabilization works will take two years further to complete. Compressiosinto a shorter period is considered beyond the Government physical andabsorptive capacity. Following a Government request for assistance inproject preparation, a Bank mission visited Swaziland in February 1984 to(i) assess the damage and destruction; (ii) evaluate the irmediate actionrequired to restore the transp-rt network; aud (iii) determine a possiblerole for the Bank in the reconstruction process.

40. Soon afterwards, t:e Government, commenced preparation of a roadrehabilitation program using technical assistance financed by the BritishODA and USAID. This program preparation which was completed in July 1984is sound and has also received the endorseiezt of the AfDF, British ODA andUSAID. The capital expenditures planned before the cyclone has beenreduced to accommodate an adequate Government participation to therehabilitation work. Similarly about E 6.6 million of funds earmarked forrecurrent expenditures have been reallocated for road rehabilitation. Theoverall program, of which the proposed project will form a part, involves atotal expenditure of E 30.5 million over a five year period (see Annex IV).

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41. The importance of the project arises from the need to preventfurther deterioration of the road network by commencing the rehabilitationworks at the end of the 1984185 rainy season. The proposed Bank loan ofUS$8.6 million, USAID grant of $1.06 million, and the Governnentcontribution of $1.68 million would fund the project costs.

PART IV - THE PROJECT

42. The project was prepared by the MWC with the assistance ofengineers financed by the British ODA and USAID engineers working inSwaziland. A Bank appraisal mission visited the country from August 1 to17, 1984. Negotiations were held in Swaziland in December 1984. No staffAppraisal Report has been produced.

Project Objectives

43. The project objectives sre to (i) prevent further deteriorationof the road network; and (ii) restore the road network to the pre-cycloneservice levels. This will contribute through reduction of transport coststo the restoration of the economy of Swaziland. The proposed loan wouldsignificantly assist the Government in carrying out priority rehabilitationworks to repair damage on its road network over a two year period(FY86-87).

Organization and Management

44. The project would be implemented by the MWC using consultants andtechnical assistance financed by the British ODA and USAID. The MMC willundertake the works through its Road Branch in the normal course of itsduties with its own current establishment, supported by two civil engineersfinanced by USAID to direct force account works in the field. This willstrengthen the capacity of HWC to plan and execute the road rehabilitationprogram. The agreement between the Governmeat and USAID was signed inAugust 1984 and became effective soon afterward. Staffing in the RoadsBranch has greatly improved recently and is now generally satisfactoryfollowing the appointment of three graduate Swazi engineers and thetraining of 25 highway technicians at the Swaziland College of Technologyunder the Third Highway Project. The provision of three experienced roadsengineers, financed by the British ODA, to fill the post of Senior RoadsEngineer (Head of the Roads Branch) and other vacancies will enhance MWC'sability to implement the project.

45. The Government acknowledges the poor performance of the CrA--asemi-autonomous agency under the MWC, which is responsible for theprocurement, repair and service of equipment and vehicles used by thevarious government agencies. The project provides for the financing ofthree advisors to the CTA (one advisor to the General Manager, one to theSenior Mechanical Engineer and one to the Financial Controller) tostrengthen CTA and insure successful implementation of the project (pa-as.50 and 51).

- 12 -

Project Description

46. The project comprises:

(a) the implementation of a two year Program torehabilitate about 700 km of main roads bycontract, about 500 km of district roads byforce account, and reconstruction ofapproaches to the Mhkondvo, Lusntfu andMzimpofu River bridges by contract;

(b) provision of technical assistance to the CTAconsisting of three advisors; and

(c) other consulting services for (i) pavementtesting, feasibility and detailed engineeringstudies for the rehabilitation of thepavement structure of the Tshaneni-Nlawula(37 km) and the Big Bend-Helehele (70 km)roads, and (ii) construction supervision ofthe civil works in (a) above to be executedby contract.

Two Year Rehabilitation Program (FY86-87)

47. The project provides for the rehabilitation of high priorityroads in the district road network and the main road network. Side drainswill be cleared of all silt and deuris and reconstractcd !O -re severeerosion has taken place. The road formation will be restored andregravelled, culverts and drainage structures which have been destroyedwill be replaced and others will be cleared and rehabilitated. All minorbridges will be rehabilitated or reconstructed where necessary. Theoriginal drainage will be improved if found technically desirable and pooralignments will be redesigned.

48. The rehabilitation of the district roads will be carried out byforce account by four road rehabilitation units, one operating in eachdistrict. The units will be created from the existing three gravellinguuits and the construction unit of the Roads Branch of the MWC. Theproject will finance additional items of equipment and vehicles, includingtwo vibratory rollers, 4 trucks, one low bed truck and the operating costs,including fuel, for the four rehabilitation units over the two year projectperiod. The main roads will be rehabilitated by contract and Governmenthas commenced preparation of bidding documents.

49. In addition, the project provides for the reconstruction ofapproaches to three major bridges, which were washed away during thecyclone. The Mhkondvo and Lusutfu River bridges are located on theManzini-Mhkondvo River road which was financed by the Bank under therecently completed Third Highway Project. The Mzimpofu River bridge islocated on the Helehele-Big Bend road, financed under the Second HighwayProject.

- 13 -

Technical Assistance to CTA

50. The CTA suffers generally from poor management. Productivity hasdeclined sharply since British-financed technical assistance was terminatedin mid-1983. Although control systems exist to manage and administer thegovernment fleet, they have not been enforced vigorously and financialmanagement and accounting practices are unsatisfactory. There is noeffective fleet renewal policy and equipment failures have becomecommonplace with long delays in repair.

51. The German Agency for Technical Cooperation financed a consultantstudy to look into ways of improving CTA operations. The final report waspresented to the Government in October 1984. The report is satisfactoryand recommends that, in the short term, managment should be strengthenedand all control systems should be restored. Provisions are made in theproject to finance advisors to the General Manager, Senior MechanicalEngineer and Financial Controller to strengthen CIA management as quicklyas possible. This will enable CrA to repair and service equipment andvehicles to be used in the District Roads Rehabilitation Program by forceaccount. Agreement would be reached with the Government that theappointment of the three advisors will be made not later than July 1, 1985(Section 3.021b of the draft Loan Agreement). These Advisors would interalia assist in the training of national staff of CTA to ensure continuedprovision of adequate services after project completion.

Cc) Studies

52. Provisions have been made for the testing of the pavementstructure of the Tshaneni-Mlawula (37 km) and the Helehele-Big Bend (70 km)roads constructed with Bank financing under the Second Highway Project.There were indications of pavement distress before the cyclone. Followingthe cyclone, failures have occured at several points on the roads.Reconstruction of sections of the pavement are expected to be necessary andwould be carried out in the second phase of the rehabilitation program.Consultants will carry out feasibility studies and detailed engineeringincluding documentation for International Competitive Bidding.

Project Costs

53. The total cost of the project, is estimated at US$11.34 millionincluding physical and price contingencies and a capitalized front-end feeof US$21,446. Including taxes and duties,total project costs amount to$12.12 million. Base costs are in December 1984 prices (see Tablebelow). Total foreign costs amount to US$9.44 million or 83 percentContingencies for price escalation are based on rates of inflation for bothlocal and foreign currency of 14 percent p.a. in 1984 and 12 percent p.a.thereafter. The inflation rates are based on current and projectedescalation of construction costs in Swaziland which follow closely thecosts in the RSA. The cost estimates are based on an inventory of damagetaken on each road section. Detailed engineering will not be required asthe major part of the rehabilitation works will consist of restoration ofside drains and road formation, regravelling and repair to drainagestructures.

- 16 -

1hdm o1aec C mi mR!!M C Tt FataS2 w(-E PKL t-) ( MXS KmoIll>

T. 1Mm Ya Pld _]i_ttfmi Pz

(J) ReldU1rtiz oE &me 500 ' oE*bod I by fi :

(a) 2 F'b. CWIl Eimem (484 0.11 L.06 17 0a.6 0.56 0.2 90(b) 1o1adja1 Sezvlm CaCractx 0.m 0.9s 14 0.05 0.50 0.55 90

(fwlEbafg SPurasti/(C) E ad tdr.1em - 0.42 0.42 - 0.22 02 27D0(d) CLvil Wad 125 2.3 3. 06 I25 .91 65

Smac 1._6 4.81 6.Z OX7 253 3.0 76

(U) bLLtom f *tl mt E M0 km ofasda r r I1byL96 6.99 8.95 103 368 4.71 78

(tl) - -=u=.ai ef q to ticrgdMdva 1acfu ad ikLafu Rmrbcidw4s'~/ 0.17 025 04 011 0.2 03 72

SmbO (1) 3. 12.M33 1592 1.91 6.4 8.40 77

. Tedzd .stD t ral Tnoq=c A&fn

I Va. Aviwo t Cem lc 1.c r (24 0.04 0o3 O.2 0.IO 0S5 047 901 Ym AvLmr to tba S. idh. Frgiz.aw(24 Q O04 0.3 0.3 00 0.15 0.17 90I ro. blmr to the FiA GomUr (24) O0.0 0.S 0_V OM. 0.5 047 90

Sub1al (ED 0.12 0.8l6 096 0.06 0.45 0.5 90

C1) P_ czlzg, f rbItywd deaUd aleWtllg for

rdi1t-imz of Unw-4U4daw(37 1k) aod Hedmle-Eg BNd(70 k) r i (15 0.02 0.21 02 00 0.11 0.12 90

±) ntrucis M-evl-mE I (ii) awWi) o 5 (2 0.8 0.o3 0.71 0.04 0.3 0.3 90

S=bta (1ID) 00 0.84 O.9 0J1 0.44 0.49 90

Be Cmt (er. 1984) 3811 14.01 17.82 2.02 7.38 9.40 78

1V. r :tngne

CL) E 5pical5 / 0.4S 1.42 1.90 OZS 0.75 100 75(C) pd g 6 ;' 0.78 Z.45 323 0.41 L29 1.70 76

Subt (IV) 1.26 3.87 5.1 0.66 2.04 2.70 76

Totad Pkoje±t Ct 5.07 17.88 2Z.95 2.68 9.42 1210 78Toa Fkojer Ccwt (lE of Ta6s &1hies) 3.61 17.8 21.49 1.90 9.2 1132 83

V. From Fee a B Ik 0l0o 0J - 0.2 0.az 100

IUra. 3.61 17.2 21.53 1.90 9.44 11.34 83

,( 11.00 - E 1.907Z/ PAcd lc r byAiD (IluId pcL ad phsira

camezLqg.d.m at-i Sim~ulr camtomitaws (W.965.000).

3/ FP1id IY ISUAD (Ines pb ics d Owslcsl_ )atrwcm.

4, p,m=iv.e fflrmaq up to US430.000.I/ 2D .r am I (1)(c) ad (d). 10 I o I an I I(I). and IIL8V/ Icig ad foteigan mr to _acalate at 14 p

p.a. in 198 ad 12 prt p.mf dremd.

- 15 -

54. The project would be financed as follows:

Local Foreign Total x Participation

US$ Million

Government 1.68 - 1.68 15

USAID - 1.06 1.06 9World Bank 0.22 8.38 8.60 76

Total 1.90 9.44 11.34 100

Procurement and Disbursements

55. The following table indicates the procurement procedures andrespective amounts:

Procurement Table

Procurement Method 1;/ andEstimated Cost2/(US$ million)

Total CostIncluding Contingencies

Project Element ICB LCB Other N.A. 3 | (USS Million)

Civil Works byForce Account - - - 2.79 2.79

(2.10)4I (2.10)Mech. Services - 0.555/ - - 0.55Equipment and

Vehicles - - 0.28 - 0.28(0.28) (0.28)

Civil Works byContract 3.87 2.00 - - 5.87

(3.39) (1.73) (5.12)Technical

Assistance - - 0.65 0.625/ 1.27(0.58) (0.58)

ConsultingServices - - 0.56 - 0.56

- - (0.50) - (0.50)Total 3.87 2.55 1.49 3.41 11.320/

(Financed by Bank)(3.39) (1.73) (1.36) (2.10) (8.58)

1/ ICB: International Competitive Bidding; LCB: Local Competitive BiddingZ/ Net of duties and taxes and including contingencies.3/ N.A.: Not Applicable.1/ Figures in parentheses show amount to be financed by the Bank.5/ To be financed by USAII.6/ Excludes capitalized Front-End Fee of US$0.02 million.

- 16 -

56. Works: The rehabilitation of the main roads and the approachesto the Lusutfu, Mhkondvo and Nzimpofu bridges estimatd to cost aboutUS$5.87 million will be executed under unit price contracts to be bid inpackages to be determined by the Government during project execution.Altogether, 25 contracts are expected to be bid, including about 10contracts of over US$300,000 in value up to US$3.87 million, to be awardedafter international competitive bidding (ICB) in accordance with Bank GroupGuidelines. Because of the low technical requirements of therehabilitation works, there will be no contractor prequalification. About15 contracts of less than US$300,000 in value up to US$2.0 million will besubject to local competitive bidding (LCB) procedures acceptable to theBank (Section 2.03 amd Schedule 4, Parts A and B to the draft LoanAgreement). In the latter case, advertisements will be placed in theOfficial Gazette and local and regional daily newspapers with a note thatforeign contractors will not be excluded from the bidding.

57. Goods and Services: Procurement of equipment and vehicles up tothe value of US$280,00 will be procured through international shopping byinviting quotations from at least three suppliers. Consulting services andtechni.al assistance up to the value of US$1.21 million to be financed outof the Bank loan will be employed in accordance with the Guidelines for theUse of Consultants by World Bank Borrowers and by the World Bank asExecuting Agency.

58. Contract Review: The responsibility for reviewing and approvingcontracts would be with the MWC. However, all contracts for civil worksover US$100,000 would be subject to prior review by the Bank and will covernearly 90 percent of value of such works. Other contracts for civil worksand procurement of equipments and vehicles will be subject only toselective post-award review by the Bank. All bid documents, bid evaluationand contract awards will be available for inspection by Bank supervisionmissions.

59. Retroactive financing of up to US$430,000 (5% of the loan amount)would cover expenditures made after July 1, 1984 to reconstruct theapproaches to the Mhkondvo, Lusutfu and Mzimpofu River bridges (Schedule 2,para. 4 of the draft Loan Afreement). Completion of permanent repairs tothese bridge approaches prior to the onset of the rainy season was vital toallow the Helehele-Big Bend and Mkhondvo River Roads to remain open duringthe current rainy season. The contracts for the reconstruction of theapproaches to the Mhkondvo and Lusutfu River bidges were awarded as onepackage after LCB in accordance with procedures acceptable to the Bank.The contract for the approach to the Mzimpofu River bridge is expected tobe awarded shortly.

60. The Loan will be disbursed on the following basis:

(a) 100 percent of foreign expenditures for equipment andvehicles, and 90 percent if locally procured;

- 17 -

(b) 80 percent of total costs of all civil works executed bycontract;

(c) 75 percent of local expenditures for civil works executed byforce account; and

(d) 100 percent of foreign expenditures for technicalassistance and consulting services and 90 percent of localexpenditures.

(e) initial deposit to the Special Account (Revolving Fund)

(f) front-end fee (FEF)

61. All disbursements will be fully documented to the satisfaction ofthe Bank except disbursements for civil works to be executed by forceaccount, which would be made against statements of expenditures to becertified by the MWC and disbursements for contracts for goods and servicesvalued less than US$10,000. The documents supporting these certificatesand statements will not be submitted for review but will be retained by MWCfor inspection by Bank supervision missions. Disbursements are expected tobe completed by December 31, 1987.

62. Project disbursements for fuel and materials for force accountworks and payments to contractors engaged on a large number of smallcontracts are expected to be in small recurrent sums. In order tofacilitate prompt payments to suppliers and contractors the Government hasestablished a Special Account (Revolving Fund) in the Central Bank ofS-waziland. An initial deposit of US$1.0 million would be made from theLoan Account to cover the initial four months of Bank disbursements. Thefunds in the Special Account will be designated for expenditures on civilworks, equipment, vehicles and consultant services for the project.Further deposits by the Bank from the Loan Account for the purpose ofreplenishing the Special Account would be made against withdrawalapplications supported by appropriate documents.

Accounting, Auditing and Reporting

63. Project accounts will be maintained by the MWC with separateaccounts for each component. In addition, a separate account will be keptfor the rehabilitation works to be carried out by force account. The MWC'saccounting system and staff are adequate to maintain satisfactory projectaccounts. Auditing of the MWC is the responsibility of the AuditorGeneral. The Auditor General or an independent auditor appointed by himwould audit the project accounts annually including those for statements ofexpenditures and Special Account (Revolving Funds), and not later than sixmonths after the end of each fiscal year, the Bank would be furnished witha certified copy of the project accounts and an audit report of sufficientscope and detail.

- 18 -

64. The MWC would also be responsible for project reporting whichshall consist of monthly progress reports giving the status of physicalexecution of each component, contracts signed and their amounts, summary ofproject problens and steps being taken to resolve them. In addition, theMKC would submit a quarterly progress report which would include thefollowing: (a) progress on execution of each component compared with theprogram to include an explanation of delays encountered; (b) projectexpenditures and loan disbursements for each quarter and the cumulativetotal to the end of the reporting quarter with a breakdown for each projectcomponent (separating rehabilitation works by force account); (c) projectedestimates of final costs; and (d) a qualitative description of overallprogress. Upon completion of the project, the MWC would prepare a ProjectCompletion Report in a form satisfactory to the Bank within six months ofthe termination of disbursements.

Project Benefits and Economic Justification

65. The main economic objective of the project is to restore as muchof the road network as possible to pre-cyclone conditions. The benefits ofthe road rehabilitation program are two-fold: to avoid longer traveldistances due to detours and deviations caused by road closures, and toreduce vehicle operating costs. In the long term, road administration andmaintenance would benefit from the strengthening of the Roads Branch of MWCand the CTA.

66. It is impossible to predict accurately the effect of the rainyseason on roads should culvert rehabilitation and minor bridge repairs notbe undertaken. However, if the assumption is made that 50 percent of themain gravel roads would become impassable for an average of half of therain season, the cost of traffic diversion would be near E 30 million peryear.

67. The regravelling is an integrated part of rehabilitation as it isvita: that once the drains, culverts and base and formation are restored, aprope; surface that can withstand the relatively high traffic volumes isprovided. Without regravelling and other repairs, vehicle operating costs(voc) would increase by an estimated 30 percent. Based on current trafficvolumes and characteristics, and with continued modest traffic growth rateof six percent p.a. during a five year period for all vehicles, the sainroad rehabilitation program is expected to yield an economic rate of return(ERR) of 75 percent. If only a 20 percent increase in voc was assumed, theERR would still be over 40 percent.

68. With regard to the district roads, economic data is limited andunreliable. The USAID and Government have carried out an economic snAlysisencompassing an adequately wide range of traffic and cost assumptions,under which the ERR is expected to be at least 16 percent. Furthermorerehabilitation of the main and district roads is interdependent for therestoration of production and income in the rural areas, and moreover, thedistrict roads provide the rural population with access to social,educational and health facilities.

- 19 -

Risks

69. The first risk is that the standard of the road system willdeteriorate more rapidly than expected, resulting either in higher projectcosts or poorer quality rehabilitation. The second risk is thatimplementation will be slower than expected and the third that costs willbe higher than forecast. These risks have been addressed by inclusions ofgenerous physical and price contingencies and the adoption of a processingtimetable which enables work to commence at the beginning of the next dryseason, and is consistent with experience in contract execution inSwaziland. The fourth risk is that there will be little or no trafficgrowth. On that basis the ERR on the main road program would stillapproach 50 percent.

PART V - LEGAL INSTRUMENTS AND AUTHORITY

70. The draft Loan Agreement between the Kingdom of Swaziland and theBank and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement of the Bank are being distributed to theExecutive Directors separately.

71. There are no special conditions for the project.

72. I am satisfied that the proposed loan would comply with theArticles of Agreement of the Bank.

PART VI - RECOMMENDATION

73. I recommend that the Executive Directors approve the proposedloan.

A.W. ClausenPresident

Attachments

January 10, 1984

-20- ANNEX ITANLE3A Page 1 of 5

NWAZIUIID - locim lucATc VTa motsuazxwmn mm~~~RF=nnCZ GRaUS Cunmun AVERACEE) Ia

MHOT (MOT RECENT ESTIATE) lb uncut NIDLK INCOUS HIDDEN iTem

1 gaJb!! 1 9 7 CL/b uSTIA& mCA S. OI SAIASA *- V. AFiCA M ID EAST

MORND Sl-a 0)TOTAL 17.4 17.4 17.4AGRICULTURAL 14.7 14.9 12.9

cu P CAIT (D50) 130.0 330.0 940.0 1112.9 1149.6

-31 omsmwruau a cairn(KILOGRAMS OF OIL EQUIVALT) 139.0 238.0 283.0 529.0 622.1

UATION A VITAL STLTISTCSP0PULATION.NID-YEAR (TOWUSANDS) 345.0 £52.0 664.0URBAN POPUIATION (Z OF TOTAL) 3.9 7.5 15.0 29.7 4U.2

POPUlATION PROECTIONSPOPULATION 1N YEAR 2000 (HILL) 1.3STATIONARY POPULATION (HILL) 4.6POPULATION MIOENTUM 2.0

POPULATION DENSITYPEA sq. M. 19.9 26.0 36.9 55.1 36.3PER sq. Dl. AGRI. LAND 23.4 30.3 49.7 111.5 461.7

POPULLATION AGE STRUCTURE (Z)0-14 YUS 43.2 4.5 45.6 45.4 43.6

15-64 YRS 54.0 52.7 51.6 51.7 53.165 AND ABE 2.6 2.9 2.8 2.9 3.3

POPULATION GHOSrS RATE (I)TOTAL 2.0 2.7 3.2 2.8 2.8URBN 12.4 9.3 8.9 5.2 4.5

CRUDE BIRTH RATE C(EP T100S) 52.1 52.1 51.1 47.0 40.4CRUDE DEATH RATE (PE THOUS) 21.3 18.4 12.9 15.2 11.5GROSS REPRODUCTION RATE 3.4 3.4 3.2 3.2 2.6

FAMILY PLANINGACCEPTORS, ANINAL (THOUS) .. .. 4.2 /cUSERS (X OF RRIED WMN) .. .. .. .. 22.2

INDEX OF FOOD PROD. PER CAPITA(1969-71-100) 68.0 104.0 107.0 91.6 97.3

PER CAPITA SUPPLT OFCALORIES (2 OF REQUIREMENTS) 81.0 86.0 98.0 98.2 110.8PROTELIS (GRAMS PER DAY) 54.0 54.0 57.0 56.7 70.1

OF WHICH ANIMAL AND PULSE 23.0 20.0 21.0 /d 17.0 17.8

CHILD (AGES 1-4) DEATH RA&E 33.2 31.4 27.0 18.7 14.6

LIF EXPECT. AT BIRTH (YEARS) 43.9 47.7 54.8 51.7 57.5INFA - HORT. RATE (PER TliO85) 152.0 145.5 130.4 102.7 101.5

ACCESS T0 SAFE hATER (%POP)TOTAL .. .. 37.0 le 35.6 59.7URBAN _ _. 3.0 7; 5&.1 us5RURAL .. .. 29.0 7 27.3 36.4

ACCESS TO EXCRETA DISPOSAL(Z OF POPULATIOS)

TOTAL .. .. 36.0 IeURBAN .. .. 99.0 .-RURAL .. .. zs.O 7.

POPULATION PER PNTSICIAS 10150.0 6690.0 7670.0 If 11948.3 4345.1POP. PER !MRSIXG PERSON 3710.0 Ig 910.0 1010.0 7; 2248.9 1831.1POP. PERt HOSPITAL BED

TOTAL 540.0 320.0 310.0 Ic 986.9 632.9URBAN 30.0 4 40.0 70.0 7; 368.7 545.5RURAL 12380.01 2110.0 760.0 7;& 4012.1 2513.5

ADhISSIOXS PER HOSPITAL BED .. 17.6 24.7 lc ,, 26.2

AVERASE SIZE OF HOUSEHOLDTOTAL .. .. 6.1/cURBAN .. .. 5.7 7RURAL .. .. S.8s7;7 ..

AVERASE NO. OF PERSONSIROOHTOrAL .. . .URBA .. ..

RURAL .. ..

ACCESS TO ELECT. (Z OF DWELLINGS)TOTAL 5.0 9.0 4. . 6.2URBN .. .. .. .. 77.7

RURAL .. .. .. . 16.1

ANNEX 1-21 - Page 2 of 5

TABLE 3D.

SUAZILN - SOCOAL C DICAroRS DATA SIEETSMAZILAND - IWERERCEI GROUPS (OIEICIWED AVERAGS) /a

mmST (ST RbCElT ESTIIMTE) /bRECENT MIDDL EINCOME MIDDLE INCOME

196OLb- 1 9 7 0/1b rST, 1 Tb ARCA S. OP SAMA S. AFRICL & IUD AST

ADJSTD EN 8OLEM RATIC.SPRIMARY: TOTAL 58.0 89.0 110.0 91.0 88.3

HALE 58.0 91.0 111.0 90.5 I02.5FEMALE 58.0 86.0 109.0 73.6 73.6

SECONDARY: TOTAL 5.0 19.0 40.0 17.4 43.0MALE 5.0 21.0 41.0 23.7 52.3FEMALE 4.0 16.0 40.0 14.8 33.0

VOCATIONuAL (C OF SECONDArY) 4.7 2.3 0.8 5.3 10.3

PUPIL-TEACHER RATIOPRIKARY 37.0 40.0 33.0 38.6 30.3SECONDARY 13.0 18.0 19.0 /d 24.3 23.1

ADULT LITERACY RATE (Z) .. 29.2 lh 65.0 35.6 43.5

PASSENGER CARS/THOUSAND POP 10.0 If 9.7 19.0 /f 20.7 17.8RADIO RECEIVERSITEUSAND POP 5.2 66.4 131.1 100.8 138.8TV RECEIVERSITNOUSAND POP ,, ,, 1.6 18.5 46.1NEVSPAPER (DAILY GENERAL

INTEREST-) CIRCULATIONFER THOUSAND POPULATION .. .. 13.4jj 17.2 31.2

CINEMA A:NNAL ATTENDANCE/CAPITA 0.3 0.2 G.2 /e 0.3 1.7

LAOM mTOTAL LABOR FORCE (THOUS) 176.0 219.0 297.0

FEIALE (PERCENT) 46.9 46.4 45.5 33.8 10.8AGRICULTURE (PERCENT) 89.0 81.0 74.0 57.1 42.4INDUSTRY (PERCENT) 4.0 6.0 9.0 17.4 27.9

PARTICIPATION RATE (PERCENT)TOTAL 51.1 48.5 44.7 36.3 26.2MALE 55.5 52.9 49.7 47.6 46.4FEMALE 47.0 44.2 40.0 25.1 5.8

ECONOMIC DEPENDENCY RATIO 0.9 1.0 1.1 1.4 1.8

incoM DISTIRXUrIDOPERCENT OF PRIVATE INCOMERECEIVED By

HICHEST 5Z OF HOUSEHOLDS ..HIGHEST 20Z OF HOUSE8OLDS --LOCEST 20Z OF HOUSEHOLDS ..LOIEST 40Z OF HOUSEHOLDS ..

PO-E! TGET GROUPSESTIKATED ABSOLUTE POVERTY INCOMELEVEL (USS PER CAPITA)

URBAN .. .. 281.0 525.3 274.8RURAL .. .. 228.0 249.0 177.2

ESTIMATED RE1ATrVE POVERTY INCOMELEVEL (USS PER CAPITA)

URBAN .. .. Z26.0 477.4 402.6

RURAL .. .. 226.0 186.0 284.9

ESTIMATED POP. BELOW ABSOLUTEPOVERTY INCOME LEVEL (:)URBAN .. .. 45.0RURAL ,, ,, 50.0

NOT AVAILABLENOT APPLICABLE

N O T E S

/a The group averages for each Indicator cre population-weighted arithmetic means. Coverage of countries aeong thelodicators depends on availability of data and is not uniform.

lb Unless otherwiue noted, -Data for 1960- refer to any year between 1959 and 1961; -Data for 1970- between 1969 and1971; and data for Moast Rcent Eatimate- between 1980 and 1982.

/c 1976; /d 1977; /e 1975; If 1978; /A 1 9 62

; lh 1966; It 1965; a 1979.

JUNE. 1984

*--~~~~~~~~-is.in *-xl ii.Az

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t.3 en ;.a tice ain in_ 1i-* - ~w~s- - zx _.Y -_bv ~ _ -__.....:-:t3_13 _i 1l ........t...........-_ a __fl 3* t5 - _3 _53 _5 Ii, _,a.......................... _...

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- - _ _.. e:- it'. t r 333J3- -= tiit .- a - - 3a Ja - .. s. .. t 3. YSsn .3_____- ri............ _ _.: -. 3. .-. :- *- - ._ _ sJ la..v z:~e_

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-23-

A1NEX IPag 4 of 5

mi nu

mm E wM . Bw 3M 11 A,L RAI G . =s, )

c( 1inte dm 662.8) lS lUn. Z 197-8 198

GM at !'bat Pricse 6U.6 0O.0 5.0 L6ccnw. Eic: in 176.0 28.7 0.3 4.9

cms .1tza.l sarh -LI 8.2 - -OQcs Oxsi rnusxm

cztzt A~zo Rol -60.2 9.8 - -

ra f Co E 3 7 6(\4 12.0 02lag sof doos, NVS 3.4 951 6.2 4.7

C-

arEP, TAM FaE AID

I r 'r tI 2982

Value labw Famte 2/ V A. Per 1WxI.eIaS2 P%ns. £ 13S S

A1rn1nse 109.0 25.1 .197 78 554 32.4r=M=y 131.1 31.2 .025 ID 5M9 313.8SeLV4S 186la 43.4 .03 12 65 371.5

TaCa/e 429.5 100.0 -IlQO

CO-ER£M FNEEK

c in.) Z of Glop Saml. ) z of GP197 197 196 -7 1938 19 88 B-m - 538

(tazrrm !0Ce12C3 190.0 29.5 29.0Cuent Fq3i 133.0 2&.0 D2Qwrez Surpis -37i- -8:9Capital E ,ir 75.6 11.7 16EateL _sitm (nC) -0_5 -01 0.6

MOEY, ; Cm= m 1979 191W 1981 1982 1983(Lion a1. -zscaxffc -m! -RO -

?tMY aid Q -IB 118 136 162 16t 198Balk Greaft to t -51 -65 -52 -35 -16

dr C edit t Privae Seccro 85 98 133 141 154

f ~~~~~~~~~~~~~~~~~~~~~~(Peramna of Trd N P

Mau anx Qtmdiiy as Z 31.P6 28.8 25.6 2iL2 30.7Gra. Paice p 1 T (197.10M)3/ 152.4 181.6 216.7 243.6 292.0asmi pmiem duqps 1n

eml Ptice 1 5.1 19.2 19.3 12., 15.8Blak Crt to PabUc Badc alir to Privte S.Ctor4 13.9 15.3 35.7 6.0 9.2

XYMES- AL :ke to dblaz in this table ae at the averax pEmlbg

I/ Estt inda ms!

2f fTe m c Is deWas pew eqplaymn tie w'tsecCOr pbs I Stibe uinoar'- is in the tralltinm sectr ewhdes 25.000 ae em in Saith Africa.

31 o mwrA, Pdic im is availale; I relate to ice m fIls in tie ais dtisof Mbbo aid Mui

41 end 0:ter... nr smaJab

nlot Wplcable

ue 19S8

24

A2 IPage 5 of 5

RasIE ELW5 AD CARE F

UAT*RE cF ME PELADEEM (Averag 1981-83)1981 1S92 1983

QfflIlm s W) ,SMln. Z

Exports Ef Qo l, NS 391.4 322.5 3.1 Saw 116.9 33.9lprt aE Cois, IES 531. 453.3 499.8 Wood kad 1Vak&xcts 59.1 17.2

de Bal2 -3M.7 -13.D8 -1I.7 afcal Fetfli e 42.9 12.4Nmr-fMCb3r Serviaes (Cn) -44.3 -17.8 -180 Fzuits (ruly dtrus) 27.5 8.0

}Al a 1 8wm (re) 07 0Q7 -1.8 Adat 15 5.4ers' *i 21.6 25.9 26.9

Otfr Facwr so- (t) -19.0 4.7 -3.6Nert Tazsfezs 24.3 39.6 4L6 An ae UO&Ix 79.7 23.1

na2c Oas re A a -126.4 -87.1 -77.6 Toal 379C6 100.0

EM M, Dc 31, 13

mtect Fnre#g Iwst 34.4 24.4 12.4r- MX Boruwim RM4c D1b, l. g 192.2

as rqp r - -21.5 3D.4 32.6 M mate D.hanmwIix -7.7 -10.2 -10.7 Tta 0d±sta g & Mabused

Subtotal 13.8 2D.2 21.9Capiral 26.1 26.0 30.6Ig-teu Capital (net) 59.7 -0.7 7.9 S SEE= R CR 1982/Otberc ne.1s 23.7 17.5 19.6Inzease tI Rservs -31.3 -0.3 -14.8 Public Debt, tl. g4.9

S%fGr M sAsiate Deblt *

Gkoss Reser, (end year) 101.2 77.6 U18.4 Tot1 (.stAnig & Ud rs d

Fl ai R P elat MatetalsT1ot clzf.

of %Wd&: 1troleu 76.1 68.7 67.2Eqs f o.b. - - -

of iaEl: tr m- - -

nzrect A/C Bal. as Z DP I }M I)ING, Mbrdh 31, 1984Offiliot 13$)

RAIES aF EMMME in D n1

nezmh - - 1976-78 L979 1980 1981 1982 1983 Q±Stmftbg & Ilbe 44.4 7.9US $ 1.0 - E 0.87 0.83 0.78 0.87 1.08 1.11 Uhishmed 6.1 0.0

1.00 - S $ 1.15 I.20 1.28 1.15 .9228 .8991 outstanzli rga.Endishus8l 50.5 7.9

I Fatmt/ Ratoof J-t SeVioe D eCPOCt of gob and e ices.

.. avilabe

. t p

- 25 -

ANNEX IIPage 1 of 2

STATUS OF BANK GROUP OPERATIONS IN SWAZILANL

A. STATEMENT OF BANK LOANS AND IDA CREDITS a/(As of September 30, 1934)

No. Year Borrower Purpose Bank IDA Undisbursed

Eight loans and two credits fully disbursed 35.5 8.3

1375-SW 1977 Kingdom of Rural Development 4.0 - 1.1Swaziland

1619-SW 1978 Kingdom of Highways III 11.0 - .2Swaziland

1792-Sg 1980 Kingdom of Education III 9.9 - 4.0Swaziland

2009-1-SW 1984 Sw.Elect.Brd. Power III 5.6 _ 5.6

Total 66.0 8.3 10.9of which has been paid 11.1 0.6

Total now outstanding 54.9 7.7

Amount sold US$2.2 millionof which US$2.2 million has beenrepaid 0.0

Total now held by Bank & IDA 54.9 7.7f

of which is undisbursed 10.9 0.0 10.9

a/ Prior to exchan&e adjustment.

- 26 -

ANNE IIPage 2 of 2

B. STATEM5 OF IFC INVESTMENT(As of September 30, 1984)

Investment CUSS million)No. Year Type of Business Loan ty Total

388-Se 1978 The Rcyal SwazilandSugar Corporation Ltd. 8.0 0.5 8.5

Total gross comtments 8.0 0.5 8.5

Less: Cancellations,terminations,repaymnts andsales 2.0 - 2.0

Total now held by IFC 6.0 0.5 6.5

Total mAd sbursed 0.0 - 0.0

- 27 -

ANNEX III

SWAZILAND

CYCLONE REHRBILITAIION (ROADS) PROJECT

Supplementary Project Data Sheet

I. Timetable of Key Events

a) Time from project identification toappraisal 6 months

b) Preparation by GovernmentUKODA - USAID & Bank

c) First Bank mission to considerthe project February 1984

d) Appraisal mission departure July 28, 1984

e) Negotiations December 10-14, 1984

f) Planned date of effectiveness April 1985

TI. Special Bank Implementation Action

NONE.

fIII.Special Conditions

A. The Government would ensure that the experts to assist CTA areemoloyed and have taken up their posts by not later than July 1, 1985(para. 51).

B. There is no condition of effectiveness.

- 28 -

AN IV

SwAZAND

Proposed Cyclone Rehabilitation (Roads) Project

Five Year Road Rehabilitation Program (FY84/85 - FY88/89

Cost Estimates (E '000)

FY84/85 FY85/86 FY86/87 FY87/88 FY88/89 Total

T.A. to Roads Branch 220 200 200 200 - 820

Reconstruction ofof Mkhnodvo-Mahamba Road - 1,500 3,500 - - 5,000

Reconstruction of Big Bend Bridge - 500 2,500 1,500 - 4,500

Reconstruction of Nsoko Bridge 300 150 - 1,000 1,000 2,450

Rehabilitation of Paved Roads 500 200 - 1,000 550 2,250

Rehabilitation of Gravel Roadsand Minor Bridges

(a) By force account 500 3,050 3,050 - 6,600*(b) By contract - 4,200 4,500 - 8,700

Rehablitation of RuralFoot Bridges 200 200

Total 1,720 9,800 13,750 3,700 1,550 30,520

* Budgetted as recurrent expenditures out of funds allocated for road maintenance.

- 29 -

ANNEX V

SWAZILAND

Proposed Cyclone Rehabilitation (Roads) Project

Government's Proposed Financing Plan ForFive Year Road Rehabilitation Program (E'000)

Government Bank ODA AIDB USAID DANIDA Total

T.A. to Roads Branch - - - - 820 820

Reconstruction ofof Mkhnodvo-Mahamba Road 1,000 - - 4,000 - 5,000

Reconstruction of Big Bend Bridge 500 - 4,000 - - 4,500

Reconstruction of Nsoko Bridge 2,310 - - - - 140 2,450

Rehabilitation of Paved Roads 2,060 190 - - - 2,250

Rehabilitation of Gravel Roadsand Hinor Bridges

(a) By force account 1,400 4,600 - - 800 6,800(b) By contract 1,400 7,100 - - 8,500

Rehabilitation of Rural Foot Bridge 200 - - - - 200

Total 8,870 11,890*4,000 4,000 1,620 140 30,520

* Excluding TA to CTA for E 0.94 million

- 30 -

ANNEX VI-XV

Documents in Project File

The main documents in the project file are:

1. First Report of the Cyclone Committee for the Reconstruction of

Communications, February 1984

2. Cyclone Domoina - Report on damage to the transport sector by

Mr. T.E. Farrand, February 1984

3. Final Report of the Feasibility Study for the Central Transport

Administration by GOPA Consultants, October 1984

4. Rural Reconstruction Project Paper, USAID, August 1984

5. Government of Swaziland -Register of Approved Building

Contractors-

6. Typical Bid Documents - Regravelling and Minor Improvements to the

Road from Mankayane to Sicunusa.

7. Government of Swaziland -Report by the Auditor General 1982-

IBRD 18533

SWAZILANDPREVIOUS BNK PRQJECIS CYCLONE REHABILITATION (ROADS) PROJECTCocaction to STainmia,

in Pdd Ur i9W T3ANSPFUTATION NETWORKConvsucton U>to Biunwas P,nd

........ S A- Und- T Kaoonw.n TO 0 20 50

Cinmut in to AR - W /Wgonw 0 oo 20 30ERSGrm.e Standad Undler First KCILOMTESHi*w.3r Pyape ICrudat 20-SW M ____LES______

) CrA B. W eWp t No3 CrA Difirt Worksha, To -C= tt \,oa

A 0Oe amruc Otmc Ocoots

A t acd Maiotwna, Crasp

- + - @Siu s C-v jL'--a sha T/MAain Roeeds- Greed M

Distri-c ROmui

.4 Iiwn.teatna Awpiort Aerial Cablewav Cr"

- -Ro--a ur Com-ucbon iGw -. el_ I-

P;*"Xi: ;! Pin e *nW G.- Fort /3 .,r SRe __ > ,Momsm ~F~bsReef

|- SC ',-CI_OAr M f(- Intliatuonlw.ndanes

To Joaomiesbarg J liOMhlunmenr

_ -,_ Xt 1~~~hl l _ AeANEzln

,. ,-.- -a. IN11 j _jIStk j\ !lain aot viwn

S~~~~~~~~~~~~~~~~~~~~~~~~~S

a~~~~~~~~~~~~~~~~~~~~~~14 AM t tek / i---fse

,A6sw^ZlaD | ;ogl J

b~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Lb

,) _0 *.- 0 200 00/

SEPTEMBER 1984