RESTRICTED

Report No. PTR-94a

This report is for official use only by the Bank Gzoup and specifically authorized organîzationsor persons. It may not be published, quoted or cîted without Bank Group authorization. TheBank Group does not acoept responsbillty for the accuracy or completeness of the report.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

APPRAISAL OF

A SECOND HIGHWAY PROJECT

SYRIA

February 23, 1972

Transportation Projects Department

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Ourrency Eauivalents

Currency Unit = Syrian Pound (SL)US$1.00 = SL 3.82SL 1 = US$0.26SL 1 million = US$261,800

Fiscal Year

January 1 - Decomber 31

System of Weights and Neasures: Metric

Metric British/US

1 meter (m) = 3.28 feet (ft)1 kilometer (km) = 0.62 mile (mi)1 square kilometer (ko2) = 0.386 square mile (sq mi)1 hectare (ha) 5 2.47 acres (ac)l liter (1) = 0.22 British gallon (imp gal)

= 0.26 US gallon (gal)1 kilogram (kg) = 2.2 pounde (lb)1 metric ton (m ton) = 2,204 pounds (lb)

Abbreviations and Acroriyms

ADT - Average Daily TrafficCITE - Compagnie d'Ingenieurs et Techniciens d'Etudes (consultants, France)DHB - Directorate of Highways and BridgesIER - Internal Economic ReturnILO - International Labor OrganizationOPAS - Operational Assistance Program (UNDP-financed)SCET - Societe Centrale pour lEquipement du Territoire (consultants, France)UNDP - United Nations Development Programme

NOTE: This report takes into account the effects of the recent currencyparity changes.

APPRAISAL OF A SECOND HIGRWAY PROJECT

SYRIA

TABLE OF CONTENTS

Page No.

SIJMMARY AND CONCLUSIONS .......................... i

T. INTRODUCTION ..................................... 1

Il. BACKGROUND ................. 2

A. General ..................................... 2B. The Transport Sector ............... . ......... 3C. Transport Policy and Coordination .... ....... 5

III. TIE HIGHWAY SECTOR ...... ............... 7

A. The Highway Network and Its Traffic ......... 7B. Highway Administration ...................... 8C. Highway Financing and Planning .... .......... 8D. Highway Engineering ......................... 9E. Highway Construction ........................ 10F. Highway Maintenance ......................... 10

IV. THE PROJECT ...................................... il

A. General ..................................... ilB. Highways to be Improved and Constructed 12C. Consulting Services ......................... 13D. Cost Estimates, Financing and Disbursement .. 13E. Execution ................................... 15

V. ECONOMIC EVALUATION .............................. 16

A. Ceneral ..................................... 16B. Benefits from the Project ..... .............. 16C. The Project Roads ........................... 17

VI. AGREEM.NTS REACHED AND RECOMMENDATION ............ 19

This report was written by Messrs. R. Paraud (engineer) and N. Kanaan(economist) on the basis of an appraisal mission in May 1971.

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TABLES

1. Transport of Regional Transit Cargo on Syrian Highways - 19672. Freight Transport by Mode - 1965-69; Passenger Transport by Mode -

1965-693. Ports and Air Movements 1965-694. Vehicle Registration 1965-695. Highway Network 1966-696. Gasoline Consumption 1960-697. Estimates of Revenues from Road Users 1966-698. Highway Expenditures 1965-699. Design Standards for Project Highways10. Breakdown of Construction Cost Estimates11. Unit Vehicle Operating Costs (per km)12. Sensitivity Analysis of Internal Economie Returns13. Traffic on Project Roads - 1970

ANNEXES

A. Problems Encountered in the First Highway ProjectB. Schedule of Estimated Disbursements

CHART

Organization Chart of the Ministry of Communications and of the Direc-torate of Highways and Bridges

MAP

Highway System

APPRAISAL OF A SECOND HIGHWAY PROJECT

SYRIA

SUMMARY AND CONCLUSIONS

i. Syria's geographical location on the eastern shore of the Mediter-ranean sea and astride the main trade routes between Asia and Europe deter-mines its transport pattern. Syrian highways serve traffic between Jordan,Kuwait, Saudi Arabia, Iraq and other points to the east, as well as its ownand Lebanese ports. The highway system has served both the country and theregion reasonably well, but traffic increases and the development of neweconomic centers necessitate the upgrading of most of the main highway net-work and the construction of new roads.

ii. This will be the Second Highway Project in Syria. Under the FirstHighway Project (Highway Improvement Project, Credit 46-SYR, 1963), IDA pro-vided US$8.5 million equivalent for the improvement of the Damascus-Aleppo-Raqqa road, the purchase of maintenance equipment, and consulting servicesto prepare a program to reorganize the Department of Highways and Bridges(DHB), as well as for a survey of the Syrian road network and the detailedengineering of about 520 km of economically important roads. The proposedproject is based on these studies.

iii. Inadequate engineering preparation led to delays and problems inthe execution of the Firet Highway Project; much more extensive and costlyimprovements were needed than originally envisaged for the Damascus-Aleppo-Raqqa road, and design changes during construction caused additional delays.Works are now progressing well and are scheduled for completion by late 1973.It was after experience with this and other similar projects that the Bank in1964 adopted the policy of lending for highways only when detailed engineeringis well advanced.

iv. The consultants submitted their recommendations for DHB's organi-zation in 1967, but although important steps have been taken, implementationhas been slow. The formal establishment of a Central Maintenance Department,which will be a condition of credit effectiveness, la expected to take placeby mid-March 1972. Procurement of maintenance equipment under the FirstHighway Project was also slow, but invitations to bid for its supply havenow been issued.

v. In spite of the initial difficulties and delays, the Firet HighwayProject as a whole is now proceeding reasonably well; DHB has been receptiveto the Association's recommendations, and a basis exists for furtherlending for highways.

vi. The proposed project comprises: (a) the construction and/or im-provement of three high priority roads (totalling about 153 km) and (b) con-sulting services for supervising construction, for studies and detailedengineering of a main road and the bypasses for four major cities (totalling

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about 540 km), as vell as for a study of maintenance needs. The projectwill cost US$28.7 million equivalent, and an IDA credit of US$13.8 millionequivalent vill finance its foreign exchange component.

vii. Contracts vill be awarded on the basis of international competitivebidding, and construction supervision and other expert services will be car-ried out by consultants. The Ministry of Communications will be responsiblefor project execution.

viii. The internal economic returns (IER) from construction of individualroads vary between 12% and 22Z: for the construction work as a whole,the IER is 18%. Benefits to the economy are derived from road user savingsas a result of reductions in vehicle operating costs, and from the differencein maintenance costs between well constructed roads and the existing poorquality paved ones.

ix. The project is suitable for an IDA credit of US$13.8 million equiv-alent.

APPRAISAL OF A SECOND UIGIWAY PROJECT

SYRIA

I. INTRODUCTION

1.01 The Government of Syria has requested the Association to help fi-nance a project consisting of (a) the construction and/or improvement ofthree main roads totalling about 153 km, (b) consulting services for super-vision of construction, for feasibility studies and, if justified, detailedengineering for city bypasses and one main road totalling about 540 km, and(c) consulting services for a maintenance needs atudy. The total cost ofthe project is estimated at about US$28.7 million. An IDA credit of US$13.8million which would finance the foreign costs is proposed; local costs amount-ing to US$14.9 million equivalent will be financed by the Government.

1.02 The First Highway Project (Credit 46-SYR, 1963, US$8.5 million)provided for:

(i) improvement of the Damascus-Aleppo-Raqqa road, includingdetailed engineering (about 540 km);

(ii) reorganization of the Department of Highways and Bridges(DHB), including provision of maintenance equipment; and

(iii) a road network survey leading to the final survey and de-sign of about 520 km of priority roads.

1.03 The feasibility studies and detailed engineering of the threeroads now proposed for construction and/or improvement were financed underthe Firet Highway Project and carried out by the French consultants, SocieteCentrale pour l'Equipement du Territoire (SCET). SCET also carried out be-tween 1965 and 1969 the survey of the road network and the subsequent detailedengineering of selected roads. SAUTI (Italy) are supervising the civil en-gineering works. Between 1965 and 1968, the French consultants Compagnied'Ingenieurs et Techniciens d'Etudes (CITE) prepared the detailed engineeringfor the Danancus-Aleppo-Raqqa road beîng constructed under the Firet Righ-way Project, and studied IHB's reorganîzation.

1.04 The Association had appraised the First Highway Project on thebasin of quite inadequate engineering preparation. As a result, the Damascus-Aleppo-Raqqa road had to be redesigned and further economic studies under-taken. Construction works were therefore delayed and did not start on thefirst section until 1968. Tensions in the Middle East aleo had their effectupon international bidding for the remaining sections. Although slow instarting, works are now well under way and will be completed late in 1973(see Annex A). It WAs this and similar experiences elsewhere in the early1960's that prompted the Bank in 1964 to adopt the policy of requiringdetailed engineering to be well advanced before making loans for highway works.

1.05 In 1967, CITE made recommendations for reorganizing DHB in stages,proposing, among other things, the creation of additional Departments forMajor Works, Design, Maintenance and Training. These recommendations arebeing implemented gradually, and the proposed Departments, except Mainte-nance, have been created. DHB is now developing the organizational struc-ture of the Central Highway Maintenance Department following a new policythat DHB itself will be responsible only for the trunk routes, while dis-trict works organizations vill continue to maintain other roads (para. 3.21).In addition:

(i) a UNDP-financed vocational training program (for whichILO is the executing agency) is in operation (para. 3.08);

(ii) OPAS experts have been engaged (para. 3.09);

(iii) the soils and materials laboratory has been modernized andexpanded (para. 3.09); and

(iv) construction of a maintenance complex is underway (para. 3.21).

1.06 Invitations to bid have been issued for the purchase of mainte-nance equipment for which an allocation of US$1.2 million is available underthe First Highway Project. The creation of the Central Maintenance Depart-ment is expected to be formalized by mid-March 1972.

1.07 Although the Government must (with the consultants, contractors andeven the Association) bear its share of the blame for the slowness of imple-mentation of the First Project, most problems have nov been overcome. High-way administration still needs improvement, hut substantial institutionalprogress has been made, and there is now a suitable basis for financingfurther highway work in Syria.

1.08 The appraisal of the present project is based on economic and tech-nical studies prepared by consultants, and on the findings of the appraisalmission comprising Messrs. R. Paraud (engineer) and N. J. Kanaan (economist)which visited Syria in May 1971.

II. BACKGROUND

A. General

2.01 Located on the eastern shore of the Mediterranean, Syria straddlesthe historic trade routes between Asia and Europe; these routes lead fromIran, Iraq and other points east, across Syria's deserts, fertile plainsand coastal mountains down to the Mediterranean seaports. Trans-shipmentpoints developed in the narrow fertile plain between the mountains and thedesert, and eventually grew into the urban centers of Damascus, Homs, Hamaand Aleppo. Once these centers began to generate their own traffic move-ments, new routes developed connecting them to each other and to major

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cities in Asia Minor to the north and Arabia and Egypt to the south. Theseancient trade routes continue to be the main arteries in Syria's presenttransport network, and both the First and the proposed Second Highway Proj-ects aim at the reconstruction to modern standards of this basic network.

2.02 Much of the trade movement between Lebanon, Jordan, Iraq, Kuwaitand Saudi Arabia must pass through Syria. No detailed information on thisimportant movement is available, and the Government is conducting trafficcounts of trucks by national origin to ascertain the shares of national andinternational traffic. A survey of truck movements at the Syrian-Lebaneseborder in 1967 (Table 1) showed that about 75 heavy trucks (average load 12to 14 tons) crossed the border each day, and that about 30 of these trucks ofvarious nationalities had a Syrian destination, while 45 trucks were boundfor other countries in the Middle East. Total transit movements now farexceed the above figures, and the new counts will shed more light onregional traffic patterns.

2.03 A 1970 census gave Syria about 6.3 million people and a rate ofgrowth between 1960 and 1970 of 3.3% per annum. Most of the population isconcentrated in the narrow fertile plain between the mountains and the des-ert, in the coastal plain, and along the Euphrates Valley in the northernpart of the country. Per capita GNP in 1970 was estimated at about US$180.

2.04 Agriculture is the most important sector of the country's economy,employing about 60% of the labor force and accounting for about two-thirdsof total commodity exports. In the 1960's, the average share of agriculturefluctuated between 25% and 40% of national income depending on rainfall -80% of the cultivated area is rain-fed. The principal crops include cereals,vegetables, fruits, nuts and cotton, with the latter the most important ex-port product and source of foreign exchange. The Government gives highpriority to expansion of agricultural output, and plans large investmentsin irrigation to decrease the dependence on rainfall. This expansion willhave a strong impact on transport demand in the country's major agriculturalregions, particularly in the east and northeast.

2.05 Industry and mining employ about 11% of the labor force and con-tribute 13%0 of national income. Foodstuffs and textiles account for 40% and20% respectively of total industrial output. Petroleum production is themost important extractive activity and a substantial earner of foreign ex-change; exports of crude oil during 1969 totalled about two million tons.Oil output is rising and Syria is making large investments in this sector.

B. The Transport Sector

2.06 The two factors most influencing transport in Syria are: (a) thephysical setting of the country, and (b) the long and eventful politicalhistory which culminated in the partitioning of Greater Syria after WorldWar I. The coastal plain and mountains to the west, the narrow fertileplain in the center, and the desert to the east, have determined the locationof Syria's urban centers and the general orientation of its transport routes.

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North-south movement is limited to the central plains and is relatively easy,but east-west movement is made difficult by the coastal mountains and thedesert. The partitioning of Greater Syria after World War I, and thesuperimposing of international boundaries on a transport system that haddeveloped along a regional basie, made it necessary for Syria to undertakemajor construction projects to realign its network to meet its own needs.

Highways

2.07 Details of the highway sector are given in Chapter III.

Railways

2.08 The partitioning of Greater Syria seriously disrupted the railwaysystem; a section of the north-south line now passes through Lebanon, andmost of the east-west line in the north is in Turkey. The present systemis therefore composed of a number of disconnected lines totalling 1,040 km,cf which 735 km are standard gauge and 305 km narrow gauge. All the rail-roads are under the control of the Ministry of Communications. The standardgauge system extending from Damascus northward is operated by the SyrianRailways, and the narrow gauge system south of Damascus is operated by theDirectorate General of the Hijaz Railways. Between 1965 and 1969 railwayfreight traffic increased from 88 million to 123 million ton-km, and pas-senger traffic from 70 million to 96 million pass-km (Table 2). In rela-tive terms, the railways' share of total land freight and passenger traffici8 insignificant - about 4% and 2% respectively.

2.09 The Government is constructing a new line in the north to integratethe system. This 750 km line will connect Latakia, the main port, to Qamich-liye, the main urban center in the northeast, passing through Aleppo and cros-sing the best agricultural land of northern Syria. About 250 km of the west-ern portion have been completed and are in service primarily for movingconstruction supplies to the Euphrates (Tabqa) Dam. Before constructionof this line started, a study was carried out to determine the relative ad-vantages of transporting the cotton and cereal crop (about three milliontons) from the northeast to the port of export at Latakia by road or byrail. For bulk transport with an average haul over 500 km, rail transportwas shown to have the advantage over road transport, and the decision wastherefore taken in favor of a railroad which is now being built with Sovietfinancial and technical assistance.

Ports

2.10 After the partitioning of Greater Syria, the main ports of the re-gion - Haifa, Beirut, Tripoli and Iskenderun - were beyond Syria's newborders, and the country had to develop two new national ports, Latakia andTartous, and reorient traffic to pass through them. General cargo movementsincreased from 1.6 million tons in 1965 to 4.6 million tons in 1969 (Table 3);passenger movements are negligible. The specialized petroleum port of Baniashandles about 30 million tons annually.

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2.11 Latakia and Tartous serve mainly the domestic market, but an at-tempt is being made to capture more regional trade by improving their roadconnections with the national system, and especially the links to Iraq andJordan. However, Beirut continues to play a dominant role in handling goodsfor other Middle Eastern countries, with Tripoli following. About 125,000tons of cargo went to Syria from Beirut in 1967, and about 238,000 tons toother Middle Eastern countries through Syria.

Air Transport

2.12 Air transport operations in Syria are centered on the new (1969)airport at Damascus. The only international airport in the country, it servesas an intermediate stop between Europe, Asia and Africa, it can accommodatethe largest jets in service. Traffic has, however, been low, increasingonly from 145,000 passengers in 1965 to 248,000 in 1969; cargo has remainedstable at about 1,500 tons per year (Table 3).

2.13 The national airline provides limited international service toArab, European and some Asian cities, using two Caravelles and three DC-6planes. Two more Caravelles are on order. The Syrian Arab Airlines nationalnetwork includes service to Aleppo, Deir ez Zor, Qamishliye and Latakia,utilizing DC-4 and DC-3 planes. Schedules are not very reliable and move-ments are light. Syrian Arab Airlines has broken even on its operations,but only because international operations have subsidized domestic ones.

Pipelines

2.14 Within the last fifteen years, oil has been discovered and exploit-ed in the northeastern part of the country. A 650 km pipeline vas built withItalian assistance to connect the oil fields to the refinery at Homs and tothe port of Tartous. Recent increases in oil production and in refining capac-ity at Homs, and prospects of lncreased export of oil, have prompted the Gov-ernment to plan expansion of the capacity of the pipeline and the port facil-ities at Tartous; these are now under way.

2.15 Two international pipelines cross Syria - one serving the Iraq Pe-troleum Company and the other the Arabian American Oil Company - which trans-port about 40 and about 15 million tons of crude oil a year respectively.Disputes between the producing companies and the various governments con-cerned have occasionally interrupted the flow of oil.

C. Transport Policy and Coordination

2.16 Three Ministries are concerned with transport: the Ministry ofCommunications controls road and rail transport, the Ministry of Defense isin charge of civil aviation, and the Ministry of Economy of the ports. Astudy is underway to turn over responsibility for ports to the Ministry ofCommunications. At present, the Directorate of Transport Planning in theMinistry of Planning coordinates both sectoral and intersectoral planning,but the proposed reorganization of the Ministry of Communications includedthe creation of a high-level committee that will be responsible for sectoralplanning.

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2.17 The Government's transport policy aims at improving road and railtransport so that each mode can play its particular role in serving thetransport demands of the country. For highways, the policy is to modern-ize the primary network composed largely of roads built over 30 years ago;the First and proposed Second Highway Projecta will go a long way in ac-complishing this. Railroad policies are: (a) to link the fertile areasof the north and northeastern areas, where most of the country's exportproducts (cotton and wheat) are grown, with Latakia, the port of export;and (b) to integrate the disconnected network (para. 2.08).

2.18 There is no administrative allocation of traffic between modes,and users are free to select the mode which best suits their requirements.Road transport is however subject to a degree of regulation, for instancein route limitation, but the extent to which such regulation is either ef-fectively enforceable or is economically damaging has not been established.Further Bank operations in highways will require an analysis of the effectof these regulations.

2.19 There are two truck tariff rates in the country - one for shipmentsby the private sector and another for the public sector. A recent Governmentstudy shows that rates paid by the private enterprise shippers cover operat-ing costs and provide a fair return to the truckers. However, the ratespaid by the public enterprise shippers - the largest truck users since theadoption of nationalization policies in Syria - are too low for most haulsta yield a reasonable profit. Requests to increase the rates to the publicsector shippers are now under consideration by the Covernment. Rail tariffsappear adequate for the present low level of operation, but a detailed re-examination will be needed when the northern line is completed and the rail-road's share of movements in the northern part of the country has increased.The feasibility study included in this project (para. 5.13) will include ananalysis by consultants of possible road-rail competition in northern Syria.

2.20 Under the First Highway Project, the Government agreed to ensurethat the types and load capacities of imported trucks would be technicallysuitable to the design standards of the country's highways, to permit thegradual import of trucks to satisfy growing demand, and to enforce trafficlaws that control overloading. Although the fleet has increased (Table 4),the problem of overloading continues and is aggravated by transit of heavyforeign-owned trucks (Table 1). During negotiations, assurances were ob-tained from the Government that vehicle weights and dimensions will besatisfactorily controlled. A new traffic law revising the controls and finesfor overloading of trucks is being drafted in consultation with the Associa-tion, and is expected to be put into effect by mid-1972.

2.21 Vehicle importation is restricted by the Government; imports arebased on demand studies made periodically by the Ministry of Communications.Competition in the trucking industry is keen, especially in internationalfreight movements, as the Syrians must compete with truckers from Lebanon,Jordan, Iraq, Kuwait and Saudi Arabia. The economic consequences to Syriaof having part of its cargo movement handled by foreign truckers as a resultof limited vehicle import have not been measured.

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2.22 In order to permit the development of a rational policy for inter-national trucking, and to provide a basis for evaluating transit agreementswith neighboring countries, a study is needed of national origin, size andaverage load of trucks, so as to determine the costs imposed by foreigntrucks on Syrlen roads. During negotiations the Government agreed that itwill undert,ke such a study and discuse its results with the Association.The consul1:cnts to be employed for the study of future maintenance needs(para. 4.07) -:nv assist in carrying out the above-mentioned study.

III. THE HIGHWAY SECTOR

A. The Righway Network and Its Traffic

3.01 Syria's highway network comprises about 8,100 km of primary (inter-national and national) roads, 1,600 km of secondary (provincial) roads and1,800 km of tertiary (feeder and rural) roads; about 60% of the total roadnetwork is bituminous paved. Table 5 shows the breakdown by type of surface.Roads were inventoried by the consultants SCET in 1966/67.

3.02 The main elements of the system are the roads from the JordanianBorder to Damascus (to be improved under the present project), from Damascusta Aleppo and Raqqa (being improved under the First Highway Project) and toDeir ez Zor on the bank of the Euphrates river. However, the road used mostbath by local and international traffic is the Damascus-Lebanese border road,to be reconstructed and improved under the present project. Some additionsto the present network are needed for further development of the country,in particular, (a) the Palmyra-Deir ez Zor road (the feasibility study anddetailed engineering were prepared under the First Highway Project) for theconstruction of which financing is yet to be arranged; and (b) the Aleppo-Manbij-Tall Tamir-Tall Kojak road which is to be studied under the presentproject.

3.03 In 1969, there were about 48,000 vehicles in Syria of which about61% were cars, 34% trucks, 4% buses, and 1% tractor-trailers (Table 4). Theaverage annual growth rate of vehicles between 1965 and 1969 was about 3%,with an uneven pattern of yearly growth due to Government's stop and startimportation policy (para. 2.21). Gasoline consumption grew at a rate ofabout 9% between 1960 and 1969 (Table 6). Relatively few vehicles usediesel fuel.

3.04 Most traffic is on the north-south road connecting the urban cen-ters in the interior plain, namely Deraa-Damascus-Homs-Hama-Aleppo road,the Aleppo-Raqqa-Deir ez Zor road, the coastal highway from Tartous to La-takia, and the three transversal roads: Damascus-Lebanese border, Homs-Tartous and Aleppo-Latakia. Accurate data on road traffic do not exist,but a calculation based on estimated fleet utilization and average lengthof haul shows freight traffic of three billion ton-km and passenger transportapproaching four billion pass-km in 1969.

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B. Highway Administration

3.05 The Ministry of Communications is responsible, through its Director-ate of Highways and Bridges (DHB), for the design, construction and mainte-nance of primary and secondary highways. Except for major construction workswhich are carried out directly by DHB, operations are handled by the 13 dis-trict offices. Secondary roads are also built by the semi-autonomous agen-cies in connection with major irrigation and power projects, and then trans-ferred to DHB for maintenance. The district offices also construct and main-tain feeder and rural roads.

3.06 Under the First Highway Project, CITE studied and made recommenda-tions on DHB's organization, with special emphasis on maintenance. The con-sultants' recommendations are being gradually implemented, but budgetaryconstraints (reflecting heavy military expenditures and concentration onother sectors such as mining and agriculture) have prevented DHB from re-cruiting qualified personnel and achieving full reorganization. With prevail-ing salary scales, DHB is unable to compete with private industry or with theattraction of jobs abroad, and a Government committee is studying and willmake recommendations on this problem. The present organization of the Ministryof Communications and of DHB is shown in the Chart. A new organizationalset-up including, among other items, a Central Highway Maintenance Department,is expected to become effective by mid-March 1972.

3.07 CITE also recommended and initiated training programs for techni-cians, supervisors, mechanices, operators, etc.; these programs are progress-ing satisfactorily under DHB and ILO supervision. Scholarships are alsoprovided for training engineers abroad, but low salaries induce few traineesto remain in DHB's service any longer than legally bound. The Government hasconfirmed that salary scales for lower level personnel will also be studiedby the committee (para. 3.06).

3.08 The Plan of Operation of the UNDP-financed four-year vocationaltraining program, for which ILO is executing agency, was signed in June 1969.The cost of this program is about US$600,000. It includes comprehensivevocational training for engineers, technicians and skilled workers for roadand bridge construction, and fellowships abroad. Administrative problemsand difficulty in finding suitable experts delayed the ILO program one year,but five of the six experts budgeted are now in Syria.

3.09 UNDP has financed laboratory equipment for DHB's central soils andmaterials laboratory, and has also financed two OPAS experts in DHB - onefor road design and construction, and the other for administration and or-ganization. One of the OPAS experts has now completed his tour of duty.

C. Highway Financing and Planning

3.10 Revenues from road users increased by 60% between 1966 and 1969,an average annual increase of about 19% (Table 7). These revenues come fromimport duties on vehicles and spare parts, taxes on gasoline and diesel oil,and vehicle registration fees; they are not earmarked for highway purposes,but go into general Government revenues. Revenues from road users more

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than covered actual expenditures on administration, maintenance, improve-ment and construction of highways; in 1969, for instance, these revenueswere about twice total road expenditures (Tables 7 and 8). Although rev-enues fluctuate a great deal from year to year reflecting variations in thenumber of imported vehicles (one of the main revenue sources), the averagerevenues over 1966-69 were about 40% above average total road expendituresin the same period. The Government imposes on road users higher taxes thanneeded to finance expenditures in the highway sector; this high taxation isaimed mainly at improving the balance of payments, redistributing income,and controlling private consumption.

3.11 Most highway works are financed through budgetary allocations.A breakdown of total expenditures for highways from 1965 and 1969 is givenin Table 8. It shows a moderate but steady increase of yearly highway ex-penditures, with a jump in 1969 when construction of two major roads wasstarted (Homs to the phosphate mines close to Palmyra, and Damascus to theIraqi border).

3.12 The Third Five-Year Plan (1971-75) provides SL215.0 million(US$56.3 million equivalent) for improving and constructing roads, andSL 18.0 million (US$4.7 million equivalent) for studies, training, purchaseof maintenance and laboratory equipment, and other miscellaneous expendi-tures. The Plan is based on the recommendations on "Development of theHighway System" made by SCET under the First Highway Project; it providesboth for completing works on the First Highway Project and for expenditureson the proposed Second Highway Project up to 1975. Although the thrust ofthe Plan is satisfactory, further engineering preparation is needed.

3.13 Collection of data for highway planning is limited to trafficcounts on the main routes; other important data (such as axle loads andnumbers of foreign vehicles in transit) are not systematically collected.During negotiations the Government agreed that appropriate procedures willbe established for collecting data needed for highway planning.

D. Highway Engineering

3.14 Because of staff limitations, DHB carries out design work only on alimited scale. Major projects are designed by local or foreign consultants.Two local consulting firms are active in the highway field; no restrictionsare placed on foreign consultants in Syria.

3.15 Geometric design standards prepared by the consultants CITE havebeen accepted by DHB, and the decree approving them is expected to be issuedin 1972. The design standards proposed for the project highways (Table 9)are similar to those proposed by CITE and are acceptable.

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E. Highnay Construction

3.16 Major highway construction is normally carried out under unit pricecontracts awarded on the basis of competitive bidding. There are only threelocal contracting firms (two private and one public) capable of carrying outmajor highway works (the public firm is now carrying out major railway con-struction works, and will probably seek to prequalify for works under theproposed project); there are also about six medium-sized Syrian contractorswho could undertake sub-contracting, of earthworks for instance, and about50 minor contractors specializing mainly in construction of drainage struc-tures. All contractors are registered by the Ministry of Finance and alsoby the particular Ministry for which they work. Because of the 1967 crisis,few foreign firms showed interest in bidding under the First Highway Project,and since few local firms were qualified at that time to bid for the works,getting suitable contractors caused delays. However, two of the four contractshave been awarded to foreign firms, and, barring a resurgence of the Middle-East crisis, this problem is not expected to be encountered under the pro-posed project. The foreign contractors already working are interested inbidding for further works.

3.17 Because of shortage of staff, supervision of construction for IDA-financed works has been and will continue to be carried out by consultants;wholly Government-financed construction works are however normally supervisedby DHB staff.

3.18 Experience under the First Highway Project has shown that theperiod between award of a contract and approval by all Government authori-ties concerned is about six months, which delays projeet execution. It willobviously take some time to reform the cumbersome administrative structure,and it is therefore unlikely that the Government will be able to reducesubstantially the approval period for the proposed project.

F. Highway Maintenance

3.19 All routine highway maintenance is now carried out by force ac-count through the 13 district offices (para. 3.05 and Chart); repaving,resealing and aggregate supply are usually by contract. As indicatedbelow, after the establishment of the Central Maintenance Department,the district offices' executive responsibilities in maintenance will belimited to secondary and tertiary roads (para. 3.21).

3.20 Maintenance expenditures for the primary and secondary system al-most doubled from 1965 to 1969 (Table 8). The primary road system is fairlywell maintained, but maintenance operations are generally inefficient because(a) maintenance equipment is very old and of many different makes, and (b)funds to replace worn-out units are limited. The present project providesfor a study of future maintenance needs in equipment, workshops, spare parts,etc. (para. 4.07).

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3.21 The Central Maintenance Department is expected to be created bymid-March 1972, but construction of the main maintenance complex nearDamascus is already underway. It is Government policy to decentralize manyof its responsibilities (including DHB's present responsibility for second-ary and tertiary roads) by turning them over fully to provincial govern-ments. An organizational structure for the Central Maintenance Departmentto meet the needs of this policy, and a corresponding maintenance programhave been developed by DHB with the advice and assistance of OPAS and ILOexperts. The Department will be responsible for trunk roads - essentiallythose roads either improved under the First Highway Project or to be im-proved under the proposed project. This division of responsibility willsimplify DHB's operations, and also reduce the problem of diversion of DHB'sequipment by district governments. The formal establishment of this CentralMaintenance Department is a condition of credit effectiveness. During nego-tiations, the maintenance program was discussed and assurances obtained fromthe Government that it will provide the necessary funds and facilities tomaintain the primary network properly.

3.22 Under the First Highway Project, US$1.2 million was provided formaintenance equipment, and invitations to bid for the purchase of thisequipment have been issued. This equipment will be the responsibility ofthe Central Maintenance Department. During negotiations the maintenanceprogram was discussed, and the Government gave assurances that it will pro-vide the necessary funds and facilities to maintain the primary networkproperly.

IV. THE PROJECT

A. General

4.01 The project consists of:

1. Highways to be improved and/or constructed:

(i) the improvement or construction of sections of theDamascus-Lebanese border highway, about 40 km;

(ii) the improvement of the Damascus-Jordanian borderhighway (Kisswe-Jordanian border section), about 85km; and

(iii) the construction of 28 km of the Homs-Tartous highway(Tall Kalakh detour).

2. Consulting services for:

(i) supervision of the above;

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(ii) feasibility studies and, if justified on the basis ofthese studies, detailed engineering for:

(a) bypasses for the cities of Homs, Hama, Aleppoand Deraa (about 70 km); and

(b) the Aleppo-Manbij-Tall Tamir-Tall Kojak Highway(about 470 km); and

(iii) a study of maintenance needs.

4.02 The project roads have been selected by the Government in agree-ment with the Association as having high priority within the national high-way system. These works will constitute about 35% of the Government's high-way construction and improvement program for the 1971-75 period.

B. Highways to be Improved and Constructed

4.03 The design standards for project roads are shown in Table 9. Eco-nomic aspects of project roads are described in Chapter V. A description ofphysical characteristics follows:

(i) Damascus-Lebanese Border - 40 km

The first section (about 7 km) of the existing roadwithin the urban limits of the city of Damascus, is locatedalong a narrow corridor bounded by a dense urban area on oneside and the Barada river and the Damascus-Beirut railway onthe other, leaving no room for widening or improving theroad except at exorbitant cost. In addition, there is asubstantial amount of local traffic, the horizontal and ver-tical alignments are deficient, and the road crosses the rail-way line three times. A new 21.3 km alignment through thehills to the north of Damascus avoids this difficult section,but the remaining 18.7 km follows the present alignment; theexisting road will however continue to take some traffic, andfor 5 km beyond its junction with the new alignment, the newroad will have four lanes.

(ii) Damascus (Kisswe)-Jordanian Border - 85 km

The road is adequate to Kisswe, 17 km south of Damascus,butfrom there to near Deraa (80 km) this two-lane road wasdeveloped from a track and now needs to be improved and paved.The topography is flat or rolling, and horizontal and verti-cal alignments are generally satisfactory; realignmentstotalling about 5 km, and pavement-widening through villagesare proposed.

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(iii) Homs-Tartous (Tal1 Kalakh detour) - 28 km

A 28 km two-lane realignment, located entirely in Syrian ter-ritory, is proposed, replacing an equal length of the presentroad which is in poor condition and of which a 5 km sectiongoes through Lebanese territory. Two sections on steep gradestotalling about 4 km will be provided with climbing lanesfor heavy truck traffic.

C. Consulting Services

Supervision of Construction

4.04 Consultants acceptable to, and under terms and conditions satisfac-tory to the Association will be engaged to help prequalify contractors, analyzebids and supervise project highway works. The Government is now preparing alist of firts which might be suitable for this work.

Feasibility Studies and Detailed Engineering

4.05 It is proposed to study the bypasses of the congested cities ofHoms, Hama, Aleppo and Deraa; the first three cities are along the Danascus-Aleppo-Raqqa road being improved under the First Highway Project. Deraa ison the Damascus-Jordanian border road which is to be improved under the pro-posed project.

4.06 The Aleppo-Manbij-Tall Tamir-Tall Kojak road proposed for feasibil-ity study runs along the northern part of the country, approximately paral-leling the Turkish border. This road would open up a region not nov servedby any land transport means.

Study of Maintenance Needs

4.07 CITE's maintenance study was completed in 1967, but the highwaymaintenance reorganization is expected to be effective only by mid-March1972. The recent administrative decentralization (para. 3.21) and the timeelapsed make it necessary to review and update the consultants' recommenda-tions, and to determine future maintenance needs with more precision (para.3.20). The project makes provision for consultants to assist the Govern-ment in this task.

D. Cost Estimates, Financing and Disbursement

4.08 The total cost of the project is estimated at US$28.7 million equiv-alent, including contingency allowances. Table 10 shows the breakdown ofconstruction cost for each highway by major items (earthworks, drainage,etc). A summary of the project costs (based on 1970 cost estimates) and theforeign exchange component to be financed by the credit follows:

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SL Millions US$ Million Equivalent ForeignLocal Foreign Total Local Foreign Total Exchange

1. Highways to beconstructedand/or lmproved 30.11 32.62 62.73 7.88 8.54 16.42 52

2. Consulting Servicesfor:

i) supervisingconstruction 0.65 2.61 3.26 0.17 0.69 0.86 80

ii) feasibilitystudies anddetailed engi-neering 1.16 4.65 5.81 0.30 1.22 1.52 80

iii) maintenance study 0.16 0.64 0.80 0.04 0.16 0.20 80

Sub-total 1.97 7.90 9.87 0.51 2.07 2.58

3. Contingencies(on Item 1)

Physical, about 10% 3.01 3.26 6.27 0.78 0.86 1.64 52

Escalation, about 20% 6.02 6.52 12.54 1.56 1.72 3.28 52

Uncertainty, about 7% 2.11 2.28 4.39 0.54 0.61 1.15 52

Sub-total 11.14 12.06 23.20 2.88 3.19 6.07

TOTALS 43.22 52.58 95.80 11.27 13.80 25.07

4. Right-of-way 13.90 - 13.90 3.63 - 3.63 0

GRAND TOTALS 57.12 52.58 109.70 14.90 13.80 28.70 54

4.09 Estimated costs are based on SCET's completed detailed engineering.The roade have been designed for two lanes, which is adequate for present andforeseeable future traffic; the exceptions are one difficult section of about10 km of the Damascus-Lebanese border highway, where it is economic to buildearthworks and drainage for four lanes now, although only two will be paved;and 5 km on the same road where the traffic la heaviest. The cost estimateof the 10 km of additional earthworks has been prepared by DHB on the basisof quantities derived from SCET's designs; detailed engineering for thissection is being completed by DHB. Cost estimates reflect the effect ofrecent currency parity changes.

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4.10 A physical contingency allowance of about 10% of the constructioncost has been included to cover possible quantity increases. The 20% esca-lation contingency to cover price increases has been estimated on the basisof an average increase of about 5% per annum from preparation of the esti-mates (1970) to completion of construction. A further 7% contingency allow-ance is provided because of the political uncertainty in the Middle Eastwhich may induce contractors to hedge against the risks involved. If bid-ding shows that such problems have not materialized, the corresponding con-tingency would be cancelled.

4.11 The consultants SCET have estimated the foreign exchange componentof cost at 52%, on the basis of an analysis of the unit prices for each typeof work; although it is possible that local firms could get one contract(they are busy now on other projects), the assumption is made that construc-tion will be carried out by foreign contractors which sub-contract a substan-tial part of the earthworks and drainage structures to local firms. Theestimate is reasonable. The foreign cost of supervision of constructionand other consulting services is estimated at 80% based on experience withsimilar services in Syria.

4.12 The proposed roads will cross some agricultural areas, and no dif-ficulties or delays are foreseen under the existing laws in acquiring thenecessary private land. The credit will not finance right-of-way costs.

4.13 Local costs will be met by the Government from whom assuranceswere obtained during credit negotiations that appropriate budgetary alloca-tions will be made. There have been no problems under the previous projectwith regard to provision of local funds.

4.14 Disbursements from the credit account will be on the basis of 52%of the cost of construction (the estimated foreign exchange component) andthe actual foreign exchange cost of consulting services. The schedule ofestimated disbursements is given in Annex B.

4.15 Any surplus remaining in the credit account on completion of theproject should be cancelled.

E. Execution

4.16 Execution of project works will be the responsibility of the Min-istry of Communications through its Directorate of Highways and Bridges.Construction will be by unit price contracts awarded after internationalcompetitive bidding following normal Bank procedures.

4.17 One contract will be awarded for works on each of the three proj-ect roads. The sîze of any of these three contracts should attract foreignbidders or the larger local firms, and smaller and more specialized localfirms are expected to participate extensively as subcontractors. The Gov-ernment will start prequalifying contractors during 1972. Work is expectedto start towards the end of 1973 and to be completed by late 1977.

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4.18 Consultants to supervise construction, to study maintenance needsand to prepare feasibility studies and detailed engineering for the citybypasses and the Aleppo-Tall Kojak road should be acceptable to, and engagedunder terms and conditions satisfactory to the Association. This was dis-cussed and agreed during negotiations.

4.19 The labor force in Syria comprises about one-quarter of the popu-lation, of which about 5% i8 unemployed. In order to create opportunitiesfor unskilled workers, the Government carries out a permanent program ofminor public works (such as small irrigation schemes, feeder roads, schools,etc.) in the districts. There does not appear to be an underemploymentproblem which merits specific attention in respect of the proposed project,and for this reason the Syrian authorîties have prepared the project forconventional construiction methods.

V. ECONOMIC EVALUATION

A. General

5.01 The total effect of the First and the Second Highway Projectswill go a long way toward modernizing the primary network of Syria to meetexisting and forecast traffic demands. The roads included in the proposedproject were selected from among hîgh priority roads identified in 1967 bythe French consultants, SCET. For detailed description of these roads, seeparas. 4.03 and 5.06 through 5.11.

B. Benefits from the Project

5.02 About 80% of the quantifiable benefits attributable to the proj-ect roads are road user savings from lower vehicle operating costs on re-constructed roads. Reductions in operating costs, calculated by the consul-tants during the feasibility study, are: for cars, about 10%, for buses,about 12%, for trucks under 7 tons, 10%, and for trucks over 7 tons, 12%(Table 11W. These calculations are on the conservative side. Because ofthe multi-narional composition of the vehicles in circulation in Syria,benefits from road improvements will not accrue only to Syria, but alsoto other countries in the region. However, Syria will benefit most, sincemost of the vehicles on the project roads are Syrian ones handling domesticcargo. In movements that originate and/or terminate in Syria - althoughthey mav be carriled by non-Syrian trucks - improvements in the system willbe reflected in decreased cariffs due to the stiff competition betweentruckers (para. 2.21). In the case of purely transit movements, the roadimprovements will lead to better conditions for intra-regional trade move-ments, particularly since the regional network outside Syria is being im-proved, and since reciprocal agreements on transit are in force.

5.03 Additional benefits (about 15%) were derived from the differencesin maintenance costs between well constructed paved roads and existing poorquality ones. Unquantified but important benefits attributed to the project

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are time savings for passengers on business and other trips, încreased com-fort to the users of the roads, as well as faster turnover of shippers'capital. The Tall Kalakh detour will provide a road connection entirelywithin Syrian territory to the increasingly important port of Tartous.

5.04 Military traffic - estimated at about 15% of total traffic on theDamascus-Lebanese border and Damascus-Jordanian border roads - was excludedfrom the economic analysis. However, the design standards of the proposedroads are not affected.

5.05 For the roads included in this project, the estimated net benefits,iiscounted over a 20-year economic life of the roads, give internal economicreturns varying between 12% and 22%, and for the whole project the IER is18%. A sensitivity analysis (Table 12) indicates that reasonable variationsin construction costs and in traffic growth, the two major inputs in theanalysis, have little effect on the IER. Thus it is very unlikely that theIER would fall below 10% on the Damascus-Lebanese border and Damascus-Jordanianborder roads: it could conceivably fall slightly below 10% on the Tall Kalakhdetour, but only if construction costs increase by 20% above the estimate,and if the anticipated traffic growth falls some 10% below the expectedgrowth, which is most unlikely.

C. The Project Roads

(M) Roads Proposed for Construction and/or Improvement

Damascus-Lebanese Border Road

5.06 This 40 km road is the Syrian section of the Beirut-Damascus high-way: the Lebanese section has been studied by consultants following termsof reference agreed with the Bank. The importance of this road to Syriais a result of the growth of agricultural and industrial activity in Damascusand its vicinity, and of the important inter-regional trade between Beirut,the major port in the Middle East, and Syria, Iraq, Jordan, Kuwait and SaudiArabia (Table 1).

5.07 In 1970 ADT was about 9,000 vehicles on the section close to Damas-cus, decreasing to about 3,000 vehicles near the Lebanese border. The pres-ent two-lane road is inadequate to handle this heavy traffie. Traffic is ex-pected to grow at an average rate of 13% per year for the first ten years,decreasing to 7% in the second ten years, with the largest growth occurringin the passenger vehicle category of commuters who live in outlying dormitoryareas and commute to Damascus. 1/ Traffic on the first section of the roadis projected at 16,000 ADT in 1980 (Table 13), by which time two additlonal

1/ Traffie growth estimates were derived from comparisons of trafficcounts carried out in 1968 when the feasibility studies were made, andfrom 1970 traffic counts.

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lanes will be needed; this future cost was allowed for in the economic eval-uation. The IER based on quantifiable benefits is 22% over the 20-year eco-nomic life of the road.

Damascus (Kisswe)-Jordanian Border Road

5.08 This road connects Damascus to the important agricultural regionof the Houran, and is a section of the inter-regional link between SaudiArabia and Jordan and Lebanon (via the Beirut-Damascus road). Damascus,Deraa, and Amman in Jordan fall within the zone of influence of the road.

5.09 The present condition of this road is inadequate for present heavytraffic; 1970 ADT was about 2,000 vehicles, of which 51% were passenger carsand the rest trucks and buses. Traffic is expected to grow at an annual rateof 8% during the first ten years, decreasing to about 5% per year in the sec-ond ten years (Table 13). Quantifiable benefits are expected to yield a15% rate of return over the 20-year economic life of the road. This roadwill also help promote tourist activity centered on the Roman ruins atBosra.

Homs-Tartous Road (Tall Kalakh detour)

5.10 A 28 km realignment located entirely in Syrian territory is pro-posed to replace an equal portion of the present road between Homs and Tar-tous which is in poor condition. All the traffic which uses this route hasto check through two Lebanese border stations, since 5 km of the presentroute lie within Lebanese territory. This road is important since it con-nects the important agricultural and industrial center of Homs and the portof Tartous.

5.11 In 1970 AIT was about 2,000, of which 50% were passenger cars andthe rest trucks and buses. The average annual traffic growth is expected tobe about 9% during the firet ten years, decreasing to about 8% during thefollowing ten years (Table 13). In addition, the newly discovered phosphatedeposits in the Palmyra area which are beginning to be exploited will generatetruck traffic on this road. However, if the Government's expectations mate-rialize that by 1978 two million tons of phosphate will be exported throughthe port of Tartous, a decision may be made to transport this large volumeby railroad, and to build a spur from the mines to connect with the lineat Homs. The possible effect of this was taken into consideration in theeconomic evaluation. The quantifiable benefits are expected to yield arate of return of 12% over the 20-year economic life of the road. Unquan-tified benefits result from the decrease in travel time on this road forboth passenger and cargo movement.

(ii) Roads Proposed for Feasibility Studies and Detailed Engineering

Bypasses for Homs, Hama, Aleppo and Deraa

5.12 Three of the four bypasses included in this study serve the citiesof Homs, Hama and Aleppo, the major urban centers traversed by the Damascus-Aleppo-Raqqa road (financed under the First Highway Project). The fourth is

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for the city of Deraa located on one of the roads included in the proposedproject. The total length of these bypasses is estimated at 70 km; theyare expected to have favorable rates of return due to the high volumes ofthrough traffic on these routes.

Aleppo-Manbij-Tall Tamir-Tall Kojak

5.13 This new route will be a basic factor in the development of richagricultural areas in northern and northeastern Syria to which the Governmenthas assigned high priority for agricultural development. The extent ofthe direct influence area of this road is estimated at 60,000 km2 - aboutone-third of the national territory - and its population is close to 2.0 mil-lion - also about one-third of Syria's population. In 1969 this area producedabout 1.7 million tons of cereal (two-thirds of national production), about600,000 tons of cotton and other industrial crops (about one-third ofnational production) and about 500,000 tons each of vegetables and fruits.Sheep, goat and poultry production are also important. The proposed roadwill also provide a direct connection between Hassake, the major center inthe Jezireh area, Aleppo, the major industrial and service center in northernSyria, and from there to Latakia, the major port of export; this new connec-tion will be 140 km shorter than the present route through Deir ez Zor.

VI. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During negotiations, agreements were reached with the Governmenton the following principal points:

(a) the control of vehicle weights and dimensions (para. 2.20);

(b) the study of foreign truck traffic (para. 2.22);

(c) the collection of data for highway planning (para. 3.13); and

(d) the proper maintenance of the primary network (para. 3.22).

6.02 The formal establishment of the Central Maintenance Departmentwill be a condition of effectiveness of the proposed credit (para. 3.21).

6.03 With the agreements and conditions indicated above, the proposedproject constitutes a suitable basis for an IDA credit of US$13.8 millionequivalent.

TABLE 1

SYRIA

SECOND HIGHWAY PROJECT

Transport of Regional Transit Cargo on Syrian Highways - 1967

(Counting Station Syrian-Lebanese Border)

Origin of Truck Destination Trucks Tons

Syria Syria 700 7,700Region 4,200 669500

Iraq Syria - -

Region 4,900 58,500

Saudi Arabia Syria - -Region 3,900 66,500

Jordan Syria 2,1400 27,300Region 3,400 44.,100

Kuwait Syria 1,600 23,800Region 230 2,600

Lebanon Syria 5,300 66,500Region - -

Sub-Total Syria 10,000 125,300Region 16,630 238,200

Total 26,630 363,500

AADT Syria 30Region 45

Total 75

Average truck load Syria 12.5 tonsRegion 14.3 tons

Source: Directorate of Highways and Bridges, Ministry of CoemmuicationsAppraisal Mission, May 1971.

July 1971

TABI&2

SYRIA

SECOND HIGHWAY PROJECT

Freight Transport by Mode - 1965-69(million ton-km)

1965 1966 1967 1968 1969

Road 2,400 2,500 2,700 2,700 3,000

Rail 88 85 95 123 123

PassenRer Transport by Mode 1965-62(million pass-km)

Road 3,500 3.,400 3,600 3,700 4,000

Rail 70 68 78 85 96

Source: Roads Data: Directorate of Highways and Bridges,Ministry of Commaunications, May 1971.

Railroad Data: Statistical Abstracts, 1966 and 1969.

July 1971

TABLE 3

SYRIA

SECOND HIGHWAY PROJECT

Ports and Air Movements J2965 1969

Ports (except Banias) Banias (petrol ep,ort)

(million tons)Year Passengers Cargo tonsn

(el,lion tons)

1965 2,700 1.6 26.2

1966 3,000 1.9 24.5

1967 2,900 1.7 20.6

1968 2,800 2.8 29.5

1969 3,600 4.6 30.3

Air TransPort

Year Passengers Cargottons)

1965 145,000 1,600

1966 192,000 1,600

1967 1h8,000 1,200

1968 212,000 1,200

1969 248,000 1,500

Source: Port Data: Statistical Abstracts, 1966 and 1969.Air Transport Data: Civil Aviation Department, 1970.

July 1971

TABLE 4

SECOND HIGHWAY PROJCCT

Vehicle Registration 1965 - 1969

Year Cars Buses Trucks Tractor-Trailexe Total

1965 27,237 1,609 12,763 244 41,853

1966 26,497 1,613 13,308 229 41,647

1967 28,564 1,406 14,644 160 44,774

1968 28,466 1,557 13,866 384 44,273

1969 29,379 1,720 16,012 696 47,807

Source: Directorate of Highways and Bridges, Ministry of Comaunications,May 1971.

July 1971

TABLE 5

SflIA

SECOND HIGHWÂY PtOJECT

Highway Network 1966-69

BituminousYear Paved Gravel Barth Total

-(km) (km) () (km)

1966 5,995 1,296 1,915 9,206

1967 6,350 1,370 1,985 9,705

1968 6,600 1,200 2,700 10,500

1969 6,930 1,300 3,270 11,500

Source: Directorate of Highwa:ts and Bridges, Ninistry of Communications,May 1971.

July 1971

TABLE 6

STRIA

SECOND HMNHAY PROJECT

Gasoline Consuuption 1960 - 69(ii.lions of liter.)

_ar Gamoline

1960 87

1961 83

1962 88

1963 111

1964 154

1965 175

1966 166

1967 167

1968 168

1969 182

Average Annua Increase 1960-69 8.5%

Source: Directorate of Highways and Bridgez. Ministry of Communications.May 1971.

July 1971

TABLE 7

SYRIA

SECOND HIGHWAY PROJECT

Estimatesof Revenues from Road Usera 1966-69(SL millions)

1966 1967 1968 1969

Gasoline tax 37.9 35.0 36.3 39.5

Import duty onvehicles 13.9 47.4 2.2 67.3

Import duty on spare parts 20.5 24.3 25.4 28.9

Import duty on tires 2.5 2.7 3.0 3.3

Registration fees 23.0 20.0 22.0 26.0

Totals 97.8 129.4 88.9 165.0

Average Annual Revenue for 1966-69 - SL120.3 million

Source: Directorate of Highways and Bridges, Ministry of Coimwiications.Appraisal Mission, May 1971.

July 1971

TABLE 8

SYRIA

SECOND HIC}HWAY PROJECT

Hioway Espenditures 1965-69(SL millions)

1965 1966 1967 1968 1969

Adlministration 4.6 6.4 8.6 7.6 9.6

Maintenance 8.7 10.5 11.5 14.3 16.0

Construction 1/and Improvement 3.4 8.5 11.3 15.4 48.4

Construction ofFeeder Roads - - 9.9 9.9 11.8

Totals 16.7 25.4 41.3 47.2 85.8

Average Annual Highway Expenditure for 1965-69 - SL 49.9 million.

2 Includes expenditures for constructing the Homs-phosphate minesand Damascus-Iraqi border roads which vere started in 1969.

Source: Directorate of Highways and Bridges, Ministry of Comnmunications,May 1971.

February 1972

TABLE 9

SYRIA

SECOND HIGHWAY PROJECT

DesigRn Standards for Project Highways

DamascusDamascus- (Kisswe) Homs-TartousLebanesç Jordanian (Tal Kalekh

Rail Border 1- Border Dotour )_ _

1. Design Speed km/h 80 100 80

2. Width of Roadway m 11.50 to 13.25 13.50 13.50

3. Width of Surfacing m 7.40 7.40 7.40

4. Width of Shoulders m 3.00 3.00 3.00

5. Minimum Radius of Curvature m 200 300 200

6. Maximum Grade % 7.0 3.5 7.0

7. Passing Sight Distance m 500 750 500

8. Type of Surface Asphaltic Asphaltic AsphalticConcrete Concrete Concrete

9. Axle Load m tons 13 13 13

1/ For sections with climbing lanes (about ll km) the total width of roadway is increasedto 14.50 m, the width of pavement to 11.10 m and the vidth of shoulders reduced to1.70 m.

Source: Directorate of Highways and Bridges and Consultants' Reports, May 1971.

February 1972

SYRIA

SECOND HIGHTdAY PROJECTT

Breakdown of Construction Cost Estimates(in SL millions)

- - Contingencies - -

Base Major Physi- Esca- Uncer-Length Earth- and Masonry Miscel- S&b- cal lation taintykm _ works Surface Drainage Works laneous Total 10% 20% 7% Total

1. Damascus-LebaneseBorder 40 9.38 7.57 6.31 3.60 3.57 30°43 3.O4 6.08 2.13 41.68

2. Damascus(Xisswe)-JordanianBorder 85 0.82 16.62 0.71 0.21 3.47 21.83 2.18 4.36 1.53 29.90

3. Homs-Tartous (Tall Kalakh)Detour) 28 2.86 5.01 1.17 0.82 0.61 h7 .05 2.10 0.73 >. 3

Totals 153 13.o6 29.20 8.19 4.63 7.65 62.73 .2 12 /a

(uS$ 22.49millionequivalent

/a Does not include right-of-way costs; total including right-of-way is SL 99.83 million.

Note: Estimates are based on 1970 prices.

Source: Directorate of Highways and Bridges and Consultants' Reports, May 1971.

February 1972

TABLE

SYRIA

SECOND HIGHWAY PROJECT

Unit Vehicle Operating Costs (Per km)

(SL net of taxes)

Existing Road New Road

1. Damascus-Lebanese Border

i. Damascus-Zabadani

Passenger Car 0.140 0.132BUS 0.660 0.600Light Truck (under 7 tons) 0.h80 o.435Heavy Truck (over 7 tons) o.550 o.500

ii. Zabadani-Lebanese Border

Passenger Car 0.140 0128Bus 0.660 0.,565Light Truck (under 7 tons) 0.480 0.415Heavy Truck (over 7 tons) 0.550 09475

2 . Damascus-Jordanian Border

Passenger Car 0.131 0.128Bus 0.499 0°439Light Truck (under 7 tons) o.385 0.373Hea'vy Truck (over 7 tons) 0.416 0.379

3. Tall Kalakh Detour

Passenger Car 0.128 0.120Bus 0.603 0.51Light Truck (under 7 tons) 0.431 0.339Heavy Truck (over 7 tons) 0.503 0,h61

Source: Consultants' Report, May 1971.

July 1971

SYRIA

SECOND >{IGHWAY PROJECT

Sensitivity Analysis of Internal Economic Returne

(1) (2) (3) (4) (5)Decrease Increase

Decrease Increase Expected Expected Combination CombinationBest Construction Construction Traffic Traffic of of

Road Estimate Cost by 20% Cost by 20% Grogth 10% Growth 10% (3) and (4) (2) and(5)

---------------------------- (Percent) -------------------------… -----…-__---------_

1. Damascus-Lebanon Border

a) Section 1Damascus-Zabadani Junction 2h 26 22 23 25 21 27

b) Section 2Zabadani Junction

- Lebanese Border 18 20 16 17 19 15 21

c) Average for both sections 22 24 20 21 2h 19 25

2. Damascus-Jordanian Border 15 17 13 14 16 12 18

3. Tall Kalakh Detour 12 14 10 il 13 9 15

TOTAL PROJECT 18 20 16 17 19 15 21

Source: Appraisal Mission, May 1971.

February 1972

TABLE 13

SECOND HIGHWAY PROJECT

Traf.f1c on ProJect Roada - 1970(AMT)

Trucks Trucks AverageUnder Over Rate of

Section Car Bus 7 tons 7 ton8 Total Growth

1. Damascus-Lebanese Border

i.) Damascus-ZabadaniJunction section 6,750 3é0 1,35O 540 9,000Rate of Growthist ten yrs.(%) 15 6 10 5 13.32nd ten yrs.(%) 7 4 8 4 6.8

ii) Zabadani Junotion-Lebanese BorderSection 2,080 166 320 582 3,1148Rate of Growthlst ten yrs.(%) 15 6 10 5 12.22nd ten yrs.(%) 7 4 8 4 8.9

2. Damascus-JordanianBorder 1,020 80 640 260 2,000Rate of Growth

ist ten yrs. (%) 10 5 5 6 7.72nd ten yrs. (%) 6 h 4 5 5.2

3. Homs-Tartous(Tall-Kalakh Detour) 1,045 146 84 815 2,090Rate of Growth

ist ten yrs.(%) 10 4 10 8 9.02nd ten yrs.(%) 8 4 8 7 7.5

Source: Directorate of Highways and Bridges, Ministry of CommunicationsMay 1971

July 1971

ANNEX A

PROBLEMS ENCOUNTERED IN THE FIRST HIGHWAY PROJECT

1. The appraisal of the improvement works of the Damascus-Aleppo-Raqqa road was made on the basis of very inadequate engineering preparation.Substantial further engineering studies were needed before construction couldstart. It took about 15 months for the credit to become effective, afterwhich disagreements between DHB and the French consulting firm CITE on thescope and quality of the studies for the improvement work caused furtherdelays. From the results of the preliminary engineering studies, it becameevident that the originally envisaged level of improvement of the existingDamascus-Aleppo-Raqqa road would not be adequate to meet increased trafficdemands, and that full reconstruction, including realignments, should beundertaken. This revised scope of work, as well as the need for a realign-ment of about 90 km along the Euphrates river (where by 1975 the existingroad will be submerged by the reservoir to be created by the Tabqa Dam), ledto: (a) cost increases from US$8.5 million to about US$25.0 million, (b)the need for a full review of the economic evaluation of the road, and (c)additional delays in the engineering preparation. A few months after com-pletion of the new economic and engineering studies, the Middle-East crisisdiscouraged prospective bidders and necessitated new prequalification ofcontractors and rebidding.

2. On the basis of the revised engineering studies and new cost es-timates, the Government proposed and the Association agreed to the followingchanges in the project:

(a) to include two major realignments ïn the Damascus-Aleppo-Raqqa road;

(b) to confine credit financing to three contracts (the sectionunder the fourth contract will remain in the project, butwill be financed entirely by the Government);

(c) to revise the List of Goods; and

(d) to reduce the Association's participation from 50% to 30%.

3. Construction works started in early 1968; contracts have beenawarded for works on the four sections into which the road was divided andworks are now well under way; they are scheduled for completion by late 1973.

AhNEX B

SECOND HIGHWAY PROJECT

Schedule of Estinated Disbursemente

IBRD/IDA Fiscal Year Cumulative Disbursementand Qarter Ending at end of Quarter

(US$ '000)

Decamber .31, 1973 500Harch 31, 1974 1,300June 30, 1974 2,300

1

Septeaber 30, 1974 3,000December 31j 1974 3,700March 31, 1975 4.,400June 30, 1975 5e200

September 30, 1975 6,000Decembbr 31, 1975 6,800

March 31, 1976 7,600June 30, 1976 8,400

1976/77

September 30, 1976 9,200December 315 1976 10,000March 31, 1977 11,000.une 30, 1977 12,000

September 30, 1977 12,500December 31, 1977 13,000March 31, 1978 13,500

June 30, 1978 13,800

Source: Directorate of Highways and Bridges - Nimistry of Conmunicationsand Appraisal Nission, NaY 1971.

February 1972.

SYRIASECOND HIGHWAY PROJECT

ORGANIZATION CHART OF THE MINISTRY OF COMMUNICATIONS AND OF

THE DIRECTORATE OF HIGHWAYS AND BRIDGES

| MINISTER OF COMMUNKCA7,N 1, 1 SPCA 'GNCIES

G E N E R A L D I R E C T O R A T E S

|PLANNING | | VRANSPORT ANO HIGHWAYS AND ADMINISTRATION ACCOUNTING

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ADVISERS-

D I R E C T O R A T E S

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TRAFFIC COUNTS DISTRICT

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