World Bank Document€¦ · · 2016-08-30BMS -Bridge Managment System BOT - build, ... Public Investment Plan PIU - Project Implementation Unit p-km - passenger-km ... C. Relation

Document of

The World Bank

Report No. 15464-ALB

STAFF APPRAISAL REPORT

ALBANIA

NATIONAL ROADS PROJECT

MAY 20, 1996

Energy, Environment and Transport DivisionCountry Department IIEurope and Central Asia Region

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CURRENCY EQUIVALENTCurrency Unit = Lek (Average Commercial Rates)

Avg. Avg. Avg. Avg. Avg. May1991 1992 1993 1994 1995 1996

USS1.00= 15.0 75.1 102.1 94.7 93.3 104.4 Leks

WEIGHTS AND MEASURESMetric System

ALBANIA: FISCAL YEARJanuary I - December 31

ABBREVIATIONS

BMS - Bridge Managment SystemBOT - build, operate and transferCA - Credit AgreementCEE - Central and Eastern EuropeEBRD - European Bank for Reconstruction and DevelopmentEA - environmental assessmentEIA - environmental impact assessmentERA - Enterprise Restructuring AgencyERR - economic rate of returnES - Executive SecretariatEU/G24 - European Union/Group of 24FYR - Former Yugoslav Republic (of Macedonia)FYRR - first year rate of returnGDP - gross domestic productGNP - gross national productGOA - Govemment of AlbaniaGRD - General Roads DirectorateHDM - Highway Design and Maintenance Standards ModelICB - intemational competitive biddingIDA - Intemational Development AssociationIFIs - intemational financing institutionsIMF - Intemational Monetary FundIRI - intemational roughness indexIS - intemational shoppingKF - Kuwait Fund for Arab Economic DevelopmentMCT - Ministry of Construction and TourismMETAP - Mediterranean Environmental Technical Assistance ProgramMITT - Ministry of Industry, Transport and TradeMLG - Ministry of Local Governmentm/m - man/monthMOF - Ministry of FinanceMPP - Mass Privatization PlanNCB - national competitive biddingNEAP - National Environmental Action PlanN.I.F. - non-IDA financedNPV - net present valueNRN - National Roads NetworkNS - national shopping

OMS - Organization and Management StudyPIP - Public Investment PlanPIU - Project Implementation Unitp-km - passenger-kmPMS - Pavement Management SystemRDB - Road Data BankRRD - Regional Roads DirectorateRUC - road user chargesSA - Special AccountSDR - Special Drawing RightsSME - small and medium enterprisesSOEs - statements of expenditureTA - technical assistancet-km - ton-kmTOR - terms of referenceUT - University of Tiranavoc - vehicle operating costsvpd - vehicles per day

This report was prepared on the basis of an appraisal mission to Albania in February 1996. The mission was led by Luis F.Revuelta (Transport Engineer; EC2ET). Mission members were Mr. Peter Parker (Transport Economist; EC2ET) and Ms.Elena Kastlerova (Program Assistant; Consultant). Special contributions were received from Messrs. Kanthan Shankar(Environmental Specialist, EMTEN) and Mr. Aymeric-Albin Meyer (Program Assistant, EC2ET). The Peer Reviewers areMessrs. Jacques Yenny (ECIIN) and Enrique Pinilla (OPRPR). The Division Chief is Mr. Hans J. Apitz (EC2ET), and theActing Department Director Ms. Jane Loos (EC2DR).

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ALBANIA



Table of Contents

Chapter Page No.

Credit and Project Summary .......................................... (i)-(iii)

1. THE ECONOMY AND THE TRANSPORT SECTORA. Economy ........................................... IB. The Transport Sector .......................................... 2C. Previous IDA Involvement in the Transport Sector ........................................... 4

11. ROADSA. Network and Traffic .......................................... 5B. Administration and Organization ........................................... 6C. Construction and Maintenance ........................................... 7D. Planning and Supervision ........................................... 8E. Expenditures and Financing .......................................... 9F. Road Safety .......................................... 13G. Environmental Aspects .......................................... 13

Ill. THE PROJECTA. Project Setup and Objectives .......................................... 14B. Project Description .......................................... 15C. Relation to Other Projects in the Sector .......................................... 19D. Status of Project Preparation .......................................... 19E. Cost Estimates .......................................... 19F. Project Financing .......................................... 21G. Implementation and Monitoring .......................................... 23H. Procurement .......................................... 251. Disbursement .......................................... 28J. Accounting and Auditing .......................................... 30K. Environment .......................................... 30

IV. ECONOMIC EVAILUATIONA. Framework ............................. .3 1B. Cost-Benefit Analysis ........................... 32C. Sensitivity and Risk Analysis ........................... 33

V. AGREEMENTS REACHED ANDRECOMMENDATIONS ........................... 34

TABLES1.1 Transport Expenditures (US$000 equivalent), 1992-1996 .42.1 Retail Fuel Prices, 1991-96 (in Leks) .102.2 Breakdown of Retail Fuel Prices, 1995-96 .102.3 Vehicle Registration/Control Fees and Receipts, 1995.I 13.1 Preparation Status . 19

3.2 Project Components and Cost Estimates (US$million) .......................................................... 203.3 Financing Plan (US$ million, including contingencies) .......................................................... 223.4 Procurement Arrangements (US$ million, including contingencies.) ............................................ 263.5 Disbursements and Percent of Expenditures to be Financed .......................................................... 29

ANN EXES

. I Transport Activity (public sector) .361.2 Evolution of the Road Vehicle Fleet 1990-95 .371.3 Air Transport Activity, 1993-95 .381.4 Transit Traffic in 1995 .392.1 Traffic Survey on Roads to be Improved under the Project .402.2 Separation of the former GRD Network into GRD and Local Administration .412.3 Administrative Classification of GRD Roads .422.4 Road Design Standards, 1996 .432.5 Road Investments, 1994-96 :..442.6 Road User Charges Model .452.7 Organization and Management Action Plan .532.8 Number of Road Accidents Reported, Persons Killed and Injured (1994-95). 543.1 Standard Cross Sections .553.2 Road Maintenance Equipment .603.3 Safety and Signalization Equipment, and Materials .613.4 Supervision of Road Works (TOR) .623.5 Road Data Bank (TOR) .733.6 Pavement Management System (TOR) .773.7 Bridge Management System (TOR) .823.8 Project Coordinator (TOR) .863.9 Technical Assistance and Training Program for GRD and RRDs Staffs (TOR) .913.10 Project Implementation Schedule .963.11 Project Implementation Plan .983.12 Monitoring Indicators for Project Activities .1013.13 Schedule of Disbursements .1043.14 Environment Assessment Summary .1054.1 Economic Evaluation of Project Roads .1135.1 Documents in the Project File .123

CHARTS

2.1 Organization Chart of MCT .................... 1182.2 Organization Chart of GRD .1192.3 Organization of RRDs 1202.4 Flow of Budget Proposals Funds for the NRN .1212.5 Organization Chart of National Roads Project .122

MAPS

IBRD 27624 - Project SectionsIBRD 27625 - Roughness in the Road NetworkIBRD 27626 - Traffic SurveyIBRD 27800 - Road Network under Administration of GRD

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ALBANIA



Credit and Project Summary

Borrower: Republic of Albania

Beneficiary: General Roads Directorate (GRD) in theMinistry of Construction and Toi'r !na (MCT)

Credit Amount SDR 17.4 million(US$25.0 million equivalent)

Terms: Standard IDA terms, with 40 years maturity

Project Objectives and Description: The main objectives of the project are to: (i)overcome a key infrastructure bottleneck toeconomic development by rehabilitating andconstructing national roads; (ii) improve themaintenance and safety of national roads; (iii)promote the development of the local contractingand consulting industries; and (iv) train GRD'sstaff and develop strong cooperation betweenGRD and the University of Tirana.

The project includes: (i) rehabilitation of about 90km of national roads in the East-West andNorthern corridors (US$45.0 million, exclu-ding contingencies); (ii) provision of roadmaintenance and safety equipment (US$7.0million); (iii) supervision of works (US$1.4million); (iv) establishment of a road data bank,pavement management system, and bridgemanagement system (US$2.0 million); and (v)employment of consultants to coordinate theproject and for TA and to train GRD and RRDexecutive staff in the management andmodernization of the road sector, includingcollaboration with the University of Tirana,Faculty of Civil Engineering (US$2.3 million).

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Benefits and Risks: The GOA has expressed a strong interest in theproject and considers it to be urgent. The projectis expected to play an important role in facilitatingeconomic development. The main quantifiedproject benefits include savings in vehicleoperating costs and in road maintenance costs.Unquantifiable benefits include the reductions inroad accidents, promotion of domestic contractingand consulting, institutional improvements,environmental improvemenits. and increasedcollaboration between GRD and the University ofTirana. The project is estimated to have an ERRof about 26 %.

The main project risks are that: (i) the projectwould exceed GRD and MCT' s institutionalcapacity; (ii) GOA might not hiave sufficientcounterpart funds for the project; (iii) GOA wouldnot be able to establish a system for administratingand financing non-GRD roads; and (iv) GRDmight undertake uneconomic investments. Inorder to reduce these risks, GOA agreed atnegotiations to (i) appoint a project coordinatorand adequately staff the Proiect ImplementationUnit (PIU); (ii) budget sufticient counterpart fundsfor the project and allocate funds first tomaintenance and thereafter to other roadexpenditures; (iii) implement an action plandefining every project action to be performed andthe latest date to start each action; and (iv) consultwith the Association on its transport investmentplans annually. Project risks are considered to beacceptable with these arrangements.

Project ID Number: 7ALBPA028

iiiEstimated Costs and Financing Plan

Estimated Project Cost Local Foreign Total(US$million) (US$million) (US$million)

A. CIVIL WORKS1. East-West Corridor:(a) Elbasan-Librazhd (30.5km) 3.7 6.8 10.5(b) Librazhd-Qukes (21.Okm) 4.6 8.9 13.5(c) Qukes-Qafe Thane (19.6km) 3.4 5.9 9.32. Northern Corridor:(a) Tapize-Fushe Kruja, 7.0 km 0.3 0.7 1.0(b) Miloti-Lezha, 12.0 km 1.2 2.7 3.9(c) Two bridges over the Matit (650 m) and

Drin (200 m) rivers 2 4.8 6,8SUBTOTAL 15.2 29.8 45.0

B. ROAD MAINTENANCE, SAFETY ANDSIGNALIZATION

(i) Maintenance Equipment, Vehicles and 4.0 4.0Materials

(ii) Equipment for Road Safety, including 1.9 1.9Police Equipment

(iii) Vertical and Horizontal Signalization 1I 1.1SUBTOTAL 7.0 7.0

C. TECHNICAL ASSISTANCE ANDTRAINING

(i) Supervision of Road Works 0.3 I .1 1.4(ii) Road Data Bank 0.1 0.4 0.5(iii) Pavement Management System 0.2 0.8 1.0(iv) Bridge Management System 0.1 0.4 0.5(v) Project Coordinator 0.2 0.6 0.8(vi) TA to GRD and RRD executive staff on

Management/Modernization of Road Sector 0.1 0.4 0.5(vii) Training of GRD and RRD staff 1.0 ].0

SUBTOTAL 1.0 4.7 5.7(A+B+C) BASE COST 16.2 41.5 57.7F. Contingencies: Physical (10%) 1.6 4.2 5.8

Price 0.8 1.7 2.5TOTAL PROJECT COST 18.6 47.4 66.0

FINANCING PLANIDA 4.5 20.5 25.0EBRD 3.8 8.2 12.0KF 2.1 5.9 8.0Italy 2.6 6.4 9.0European Union (Phare) 0.6 6.4 7.0Government 5.0 5.0

TOTAL PROJECT COST 18.6 47.4 66.0

ESTIMATED (USS million) IDA DISBURSEMENTS

IDA Fiscal Year 1997 1998___ 1999 2000 2001Annual 1.2 L 3.1 10.7 7.5 2.5Cumulative 1.2 4.3 15.0 22.5 25.0% 4.8 17.2 60 90 100

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I. THE ECONOMY AND THE TRANSPORT SECTOR

A. Economy

1.01 Albania is largely a rural economy, with agriculture generating 56 percent of output,and industry plus construction only 21 percent. After the economic collapse in 1990-91,output declined nearly 33 percent in real terms. In 1993, the new government initiated aprogram of macroeconomic stabilization and structural reforms with IMF and Bank support.As a result of firm commitment to the progi un by the Government, measured economicgrowth has been rapid, with output increasing 9.6 percent in 1993, 9.4 percent in 1994 and 8.6percent in 1995. Indications are that growth in the informal sector was substantially higher.Since the implementation of the stabilization of adjustment program in 1992, the country hasmade substantial progress in achieving macroeconomic stability. Inflation has fallen from226 percent per annum in 1992 to 6 percent by the end of 1995, which is substantially belowthe 10 percent targeted in the Government's program; in three months during the past year aprice deflation was observed. The currency has been freely floating since 1992, and theexchange rate has remained fairly stable in nominal terms. Economic recovery was also amajor factor in absorbing registered unemployment, which declined from a peak of 37 percentof the labor force in March 1993 to 13 percent in 1995. Despite these significant advances,however, the level of GDP in Albania is the lowest in Europe; its 3.2 million inhabitants hadan average annual income of $540 in 1995 (World Bank Atlas methodology).

1.02 Despite rehabilitation works carried out during the last two years, most of Albania'sinfrastructure is in poor condition. The main road network is in significantly worse conditionthan elsewhere in post-Communist Europe, as explained below. About one-third of thepopulation is effectively cut off from markets because rural roads are in such poor condition.The country's main airport and port both require rehabilitation. About 400 municipalitiescannot be reached by telephone. Electricity outages were frequent during the severe winter of1994-95, which put enormous strain on existing transmission and distribution networks, andwinter outages are still common. The water supply is unreliable, affecting production andpublic health. This project is consistent with the Bank's Country Assistance Strategy Paperwhich was discussed by the Board on March 8, 1994. The CAS identified infrastructurebottlenecks as a significant constraint to implementing the stabilization program andpromoting economic development. Improving the condition of the main road network is thefocus of the proposed project.

1.03 The government is also implementing a successful privatization program. Followingprivatization of state farms and cooperative land, the government focused on the sale of small-and medium-sized enterprises. Currently, only a few of these enterprises remain public, as over3,000 enterprises and asset units were sold by mid-1995. The Government created theEnterprise Restructuring Agency (ERA), which has been very successful in downsizing whatremains. Employment in 32 ERA enterprises dropped from 49,000 in 1992 to 6,500 by end-1995. Liquidation was initiated in six enterprises, the assets of twelve enterprises are currentlybeing sold, five enterprises have been auctioned off through the Mass Privatization Program, and

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the remaining nine companies are expected to be privatized during future rounds in 1996. Theproject would support privatization by contracting out maintenance activities.

B. The Transport Sector

1.04 System and Infrastructure. The transport system is based on: (i) a road network ofabout 16,000 km which is described in Chapter 11; (ii) a rail network of 543 km, of which 509km are standard gauge and 34 km are narrow gauge, and none are double track or electrified,(iii) the main port of Durres with 2,563 m of quays, and secondary ports of Vlora, Sarandaand Shengjini; (iv) inland navigation on the Drin river; and (v) an international airport atTirana (Rinas) with a 2,700 m runway The transport system is generally adequate in extent,but mostly in poor or fair condition.

1.05 Sector Transformation. Under the previous regime, the Government emphasizedtransport by railways, and goods were moved to or from the railhead by a fleet of small,publicly owned trucks. Private automobiles and commercial road transport were forbidden,and there was little international transport. Market reforms have had a dramatic effect ontransport demand. Railway freight traffic fell from 6.6 million tons in 1990 to 574,000 tons in1995 due primarily to the closure of uneconomic mines and heavy industries, and theliberalization of road transport. Railway passenger traffic declined from 12 million trips in1990 to 3.8 million in 1995 (Annex 1.1). Distances are relatively short in Albania, which,coupled with the development of small-scale agricultural and commercial activities andtransport deregulation, has favored the development of road transport. From a low base, thenumber of registered automobiles has grown 30-fold and the number of trucks and buses four-fold since 1990. The road fleet totaled 109,644 vehicles in 1995 (Annex 1.2). Evenconsidering the remaining public sector trucking fleet, seven times as much freight wasmoved by road as by rail in 1995 (Annex 1.1). Traffic at the port of Durres recovered to about1.0 million tons in 1995 (654,000 tons of conventional traffic plus 334,000 tons of rapidlygrowing ferry traffic), about the same total traffic as in 1992. The number of scheduled airlinepassengers at Rinas Airport has doubled since 1992, reaching 181,358 in 1995 (Annex 1.3).Transit traffic is also growing, with 391,468 road vehicles entering and leaving Albania in1995 (Annex 1.4).

1.06 Albania now has 21 passenger cars per 1,000 population, which is less than otherCentral and Eastern European (CEE) countries (e.g., 70 in Romania, 147 in Bulgaria, 169 inPoland). The present ownership rate is roughly consistent with other low and lower-middleincome countries (e.g., 15 in Thailand; 19 each in Bolivia, Egypt and the Philippines; 32 inEcuador). Future car ownership rates are expected to be similar to those of other lowerincome CEE countries because of Albania's location in Europe, the large supply ofinexpensive used vehicles available in nearby countries, and the rapid development of theeconomy from a low base. In order to catch up, Albania's automobile fleet would have togrow at double the rate of gross national product (GNP) during the next several years. Thiskind of growth has been observed in other parts of the world under similar circumstances.The Bank forecasts an increase in Albania's GNP of 6 percent per year during 1996-98, so the

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road vehicle fleet is forecast to grow around 12 percent per year during this period, which issimilar to the growth rates observed during the last two to three years.

1.07 The Governml1ent has taken a number of steps since 1991 to establish market-basedpolicies in the transport sector, with the objective of harmonizing transport regulations withthose of the European tJnion (EU). The road vehicle fleet, formerly owned almostexclusively by Ministry of Industry, Transport and Trade (MITT) and other ministries, is now90 percent privatized (Annex 1.2). Truck transport and interurban bus transport aresignificantlv dercgulated. Road transport issues which remain to be addressed include vehicleoverloading, high accident rates caused in part by unsafe vehicles, air pollution caused byroad vehicle emissions, and insufficient fees charged to transit vehicles to cover road damage.Other issues include strengthening the Albanian organization dealing with internationaltransport (ANALTIR), further reducing the regulations of interurban bus transport, andstrengthening MI'l'T to deal with these and other transport issues. Initial advice on thesematters wvas provided by a transport adviser financed under the Transport Project, Credit2499-ALB and this is bcing followed up in part by advisers financed by Holland. A roadsafety progranm and actions on road user charges were initiated under the Transport Project,and will be continued under the proposed project. Old trucks of Eastern European origin withhigh axle loads, fuel consumption and pollution are gradually being replaced with newer,more cfflicient vehicles. Intraurban buses are owned by the municipalities and subsidized bythe central government. Consultants have recommended clarifying the division ofresponsibilities between central and local governments, reorganizing the Tirana BusCompany. coincessioninlg soIIme operations, improving the remaining operations, andincreasing tarifls. MIl"ll is presenitly reviewing these options.

1.08 in thc port sector. conisultanlts financed under the Transport Project recommendedestablishing an autolnomous port at the main port of Durres. This would entail unifying portadministratiOnl under civilian control, privatizing remaining port operations and improvingoperational efficiency. 'I'he Government is taking steps to implement these recommendationsin parallel to preparinig a proposed port project. The Government also investigated the futurerole of the railways under the T'ransport Project. They have reduced railway staff, and arepresenltlI assessing the level of investment and subsidy that would be required to continuefreight and passeniger services. For two years, the Govermment has been discussingrehabilitation of' the main airport at Rinas under a build, operate and transfer (BOT)arTangement, and a final agreement vwas reached and signed in March 1996 with a GermanCompanyi.

1.09 Investments. The Government invested only around US$6.0 million per annum intransport and communications during 1986-90, and virtually no infrastructure maintenancewas carried out prior to 1994. As a consequence, most transport infrastructure is in poor orfair condition, and roads, ports and the Rinas airport in particular are not capable of handlingthe volunme of tral'ffc which is currently offered. The Government has addressed this problemby increasing transport investmiients beginning in about 1994, within the limit of its financialcapacity (see rable 1.1).

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Table 1.1 Transport Expenditures (US$000 equivalent), 1992-1996

1992 1993 1994 1995 1996 (projected)Road 1,750 1,530 7,700 19.270 _ 42,800Rail 260 290 447 5,120 I1,100Ports 700 970 I,010 2,290 13,980Airports --- - -0 _ 10 _ _ 300__Others 200 1,710 3,310 5,840TOTAL 2,710 2,990 1 0,867 30,000 64,020

1.10 The Bank has been assisting the Government to prepare a rolling Public InvestmentPlan (PIP) during the last three years. The 1996-98 PIP, currently under preparation, notesthat substantial increases in public sector investment are required to develop Albania'sinadequate infrastructure, which is an impediment to economic development. It notes thatexternal financing of the PIP is expected to become much more significant, as implementationgets under way on the large number of infrastructure projects for which financing has beenrecently secured. The PIP recommends total investments of US$1,191 million during 1996-98, of which US$896 million would be financed externally and US$295 million domestically.Based on an assessment of sectoral priorities, the PIP recommends that US$303 million (26percent) of this amount be allocated to transport during 1996-98. Considering the higheconomic rates of return (ERRs) currently estimated for most transport investments, and thefact that the actual pace of investments will be largely determined by the availability ofconcessionary foreign financing, the 1996-98 transport investment program is considered tobe reasonable and affordable. In order to help monitor transport investments, theGovernment agreed at negotiations that it shall consult with the Association on itsnational roads investment plan annually, and shall only undertake national roadsinvestments greater than equivalent of five million dollars (US$5.0 million) in value thathave an economic rate of return (ERR) not less than twelve percent (12%), as calculatedin accordance with a generally accepted methodology.

C. Previous IDA Involvement in the Transport Sector

1.11 The first project in Albania, the Critical Imports Project (Credit 2404-ALB, 1992),financed port equipment and spare parts, 20 urban buses, and a small amount of railwaycommunications equipment as an immediate response to critical needs. The Transport Project(Credit 2499-ALB, US$18.0 million IDA, US$8.0 million Kuwait Fund, 1993) seeks toaccomrnmodate the increase in road traffic, rehabilitate and commercialize the port of Durres, andassess the role of the railways. It includes the improvement of 84 km of main roads, equipmentfor the Tirana road maintenance district, repair of quays and port surfaces and provision ofequipment for the port of Durres, and technical assistance and studies. Project implementationto date is satisfactory, with some delays resulting from the transfer of the General RoadsDirectorate (GRD) from MITT to MCT and slow decision making by the Executive Secretariat(ES) of the Project Management Unit (PMU). The Government has significantly increased theroad maintenance budget as agreed under the project. An Albanian/Italian joint venture

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(Albinfrastrukture) resulting from the privatization of the state-owned National RoadsAsphalting Enterprise is working successfully under the project, competitive bidding proceduresfor the procurement of works and equipment are being applied with good results, and all buses(except urban lines) and most truck companies have been privatized with the assistance ofproject advisers.

1.12 The Rural Roads project (Credit 2732-ALB, US$15.0 million IDA, US$15.0 millionItaly, 1995), became effective on November 8, 1995. The project aims at promoting agriculturaldevelopment by rehabilitating and maintaining rural roads serving agricultural areas, and atimproving access to economic and social services for rural population centers. It also focuses onreducing poverty and increasing employment through the use of labor intensive methods. Itincludes rehabilitation and upgrading of 975 km of rural roads, improvement of rural roadadministration, provision of transport equipment, and a study of the future organization andmanagement of the rural roads network. Implementation has started well; US$1.0 million aredisbursed and US$5.0 million committed, and the Project Implementation Unit (PIU), staffedwith young and competent Albanians, is acting with dynamism and efficiency. The main lessonlearned from ongoing projects is the importance of keeping project objectives and compositionsimple so as not to exceed the limited absorptive capacity of Ministry and GRD staff.

II. ROADS

A. Network and Traffic

2.01 The Albanian road network totals about 16,000 km. Of these, 3,221 km comprise themain or primary road network, under the administration of GRD , some 12,000 km aresecondary and tertiary roads under local administration, and about 1,000 km are urban streets.About 47 percent of the main network is paved, 30 percent is gravel and 15 percent is earthroads. The condition of the network varies. Primary roads are generally in a poor but stablecondition, design standards are outdated, construction practices are poor, and the roads have notbeen well maintained. As a result, roughness indexes on the primary network generally rangebetween 4 and 10 rn/km (Map IBRD 27625). The secondary and tertiary networks have beenalmost totally neglected for a number of years. The basic structures of these roads are modestbut usable, and drainage varies widely, in some places requiring only the addition of a fewculverts, while in others full reconstruction is needed. Rural roads are being improved under theRural Roads Project (para. 1.12).

2.02 GRD now carries out monthly traffic counts on the main road network. The roadvehicle fleet has grown rapidly in recent years (para. 1.05). Traffic is now heaviest on themain roads linking Tirana to Durres, and Durres to the South (as far as Vlora), with trafficlevels ranging between 4,500 and 8,300 vehicles per day (see Annex 2.1 and Map IBRD27626). Traffic on the main road from Tirana to the North (Montenegrin border) ranges from

Before April 1, 1996, GRD administered 7,347 km.

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4,000 to 4,500 vpd, while traffic on the main road between Durres and the east (FYR ofMacedonia) ranges between 2,700 and 3,170 vpd. Traffic counts carried out by consultants(for the Rural Roads Project) on 40 sections of secondary and tertiary roads in 1994 rangedwidely, from 60 vpd to a high of 1,670 vpd (excluding agricultural and animal drawn traffic).

2.03 Truck loads have increased in recent years, from a typical five tons per single axle inthe 1980s to ten tons per single axle on paved roads at present (and often 11.5 tons aspresently authorized by the EU). Significant numbers of heavy, articulated trucks are also inuse, and these are seen at times on tertiary roads. MITT is currently drafting axle-loadlegislation with the assistance of Dutch advisors as part of a new Highway Code which isexpected to be proposed to Parliament for approval in 1996. The traffic police will beresponsible for enforcement of axle load limits, and will be assisted by the provision ofequipment to be financed under the project.

B. Administration and Organization

2.04 The administration of the road network is organized as follows: (i) MCT is in chargeof the GRD and the seven Regional Road Directorates (RRDs), and is responsible for 3,221km (Annex 2.2) of main or primary roads. The seven RRDs are located in Tirana (which alsoruns the central workshop), Diber, Fier, Gjirokaster, Korce, Kukes and Shkoder. (Annex 2.3and Charts 2.1 and 2.2); and (ii) the Ministry of Local Government (MLG) oversees themunicipalities responsible for about 1,000 km of urban streets, and local governmentorganizations responsible for the remaining 12,000 km of secondary and tertiary roads(including 4,126 km recently separated from GRD). GRD was transferred from MITT toMCT in December 1993 (Chart 2.3). The administration of main roads was investigated byconsultants under the Transport Project and their recommendations served as the basis for therecent reorganization of GRD.

2.05 Road maintenance activities are undertaken by the RRDs with a high degree ofautonomy. Each RRD has a workshop for regular equipment maintenance, while majoroverhauls are performed at the central workshop in Tirana. RRDs are composed of three to fivemaintenance units, called crews. Each crew is directed by an engineer or technician, and isresponsible for all routine and winter maintenance. The organizational structure for a typicalRRD is shown in Chart 2.3. In 1995, the RRDs employed 5,405 persons, including 36engineers, 327 technicians (often perforning engineer's functions), 70 administrative staff, and4,972 laborers. As of April 1, 1996, GRD's staff will be reduced to about 1,500, while about2,000 will be assigned to organizations under the responsibility of MLG (Annex 2.2). The workforce, all Albanian, is competent in traditional engineering disciplines. However, Albania wasisolated for more than 40 years, and road personnel require training in modern systems ofmanagement, operations, economics and enviromnent. Technical assistance and training inthese areas is being provided under the ongoing Transport Project, and will be continued underthe proposed project.

2.06 According to the Law No. 7572 on Local Government of June 10, 1992, theresponsibility for non-GRD roads lies with the 34 local, elected legislative bodies called district

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councils, with the possibility to delegate responsibility to a commune or baskia (town) council.Although the legal responsibility is clear, the system is not yet implemented. Most of theseroads were maintained by large state farms or cooperatives until these latter were dissolved.Neither the districts nor the communes have sufficient budgetary resources to assume thisresponsibility. In addition, they do not have sufficient technical capacity, and usually thecommune or baskia approaches the respective RRD for technical advice. The MLG will beprovided with some of the staff and budgetary resources formerly belonging to GRD as of April1, 1996 (Annex 2.2), but this is not likely to be sufficient to maintain the large network forwhich they are responsible. In order to address this issue, the Government will study andimplement an action plan based on study recommendations to improve the administration andmaintenance of non-GRD roads by July 31, 1997 under the ongoing Rural Roads Project.

C. Construction and Maintenance

2.07 New road construction, rehabilitation and upgrading are presently carried out by avariety of organizations. Large works are managed by GRD, while small and medium worksare under the control of the RRDs. The construction of the first section of the new Tirana-Vore (12.0 km) highway is directly administered by a special unit created within GRD. Theroad works under the two ongoing IDA projects are administered by GRD, with projectcoordination provided by two PlUs within MITT (for the Transport Project), and followingthe transfer of GRD, within MCT (for the Rural Roads Project). The MCT PIU will also helpimplement the proposed project.

2.08 Prior to 1991, construction was done exclusively by three state-owned enterprises: (i)the National Road Asphalting Enterprise (NRAE) under the jurisdiction of the predecessor toMITT; (ii) the National Bridge Construction Enterprise, and (iii) the Highway and RoadConstruction Enterprise under the jurisdiction of the then MOC (now MCT). The threeenterprises have been commercialized, and are in an advanced status of privatization. NRAEhas formed a joint venture (Albinfrastrukture) with an experienced foreign construction firm.A small-scale private construction industry has also appeared, already with some managementand contracting skills, mostly in private building construction. While experience in roadconstruction in the emerging private sector is limited, many of their key staff have extensiveexperience in road works from their former employment in the public sector. In addition, asignificant number of Albanians have practical construction experience from working in othercountries, mainly Italy and Greece. Moreover, through the ongoing road projects in Albania,local companies are learning to manage road construction. For example, Albinfrastrukture,thanks to its joint-venture status, is taking part in the Transport Project and would be able tocompete for some contracts within the proposed project.

2.09 The RRDs execute all the maintenance works on the main road network. Maintenanceworks are undertaken by crews which are each responsible for 30 to 50 km of road. Thecrews' headmen have long experience and are skilled in the definition and supervision of roadmaintenance, which is generally labor intensive. RRDs' maintenance equipment, e.g. trucks,compactors and asphalt mixing plants, is mostly very old and largely unusable, and theongoing Transport Project is financing new equipment for the central workshop of the Tirana

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RRD. Additional maintenance equipment for other RRDs is being financed under the RuralRoads Project, while US$4.0 million, excluding contingencies, would be provided for thispurpose under the proposed project.

2.10 While many of GRD's roads are continuously maintained, the quality of work is notalways satisfactory and work efficiency is low, mainly because of lack of equipment (e.g., forcompacting) or of proper supervision. Bituminous roads are repaired with asphalt concrete,penetration macadam or low quality natural bituminous sand. Major repairs are done usingasphalt concrete prepared at a private asphalt batching plant, but no more plants are in workingorder. Bituminous sand is frequently used to fill potholes, but compaction is left to the traffic,which is unsatisfactory. Repair of gravel roads is done sometimes with river gravel but mainlywith crushed gravel, which often is transported over long distances. Grading is generally donemanually, and compaction is left to the traffic. In the lowest level roads, significant problemarises because of the standard design of stone-pitched roads. Poor bonding between the stonebase and the gravel surface results in the gravel being quickly lost, especially when placedwithout compacting. This problem is addressed in the Rural Roads Project with the assistanceof advisors. Periodic maintenance, e.g., road strengthening and resurfacing, is presentlycarried out by foreign contractors or local/foreign joint ventures under competitive biddingprocedures. It is expected that a significant volume of routine maintenance will continue to becarried out by force account for some time because the works are less defined, less appealingto large contractors, there is little purely local contracting capacity, and the works need to becarried out on a continuous rather than periodic basis. A step by step approach to privatizingadditional maintenance activities is required.(para 3.08). Technical assistance provided underthe Transport Project will be continued under the proposed project to assist in implementingthis plan.

D. Planning and Supervision

2.11 The MCT, through GRD, is responsible for planning the main road network, subject toapproval by the Ministry of Finance (MOF) and Parliament. GRD prepares most engineeringdesign work with the collaboration of the Institute for Studies and Projects No. 2, which recentlyhas been commercialized and partly (60 percent) privatized. Lately, engineering and economicsstaff are leaving the government to become private engineering consultants, mostly on anindividual basis. Road designs follow those applied in Italy, and are appropriate to forecasttraffic flows and physical characteristics (Annex 2.4).

2.12 Road works were formerly supervised by the state enterprise that implemented them.There are currently eight engineering companies registered with GRD to provide design andsupervision services. Of these eight companies, seven are small independent consultants,consisting of one to two engineers and employing additional staff for specific projects. TheInstitute No. 2, operating under the new name ICP (Infrastructure Consulting Projects), alsoprovides supervision and consulting services. Three laboratories currently provide test services:(i) the Institute for Construction Technology, mainly for construction materials; (ii) the Hydro-Geotechnical Institute for earthworks and road base materials; and (iii) the Technical Universityof Tirana, for a limited number of tests.

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E. Expenditures and Financing

2.13 Expenditures: Road expenditures averaged about US$10.0 million per annum duringthe 1980s, based on the official exchange rate, which must be interpreted with caution becauseof distortions in statistics and the economy. About 70 percent of this amount was spent onGRD roads, and 30 percent on the balance of the network. Around US$6.5 million of the totalamount was spent on maintenance with the objective of keeping the roads passable atminimum cost. Maintenance expenditures then fell in the late 1980s and early 1990s due tobudgetary constraints, reaching a low of US$3.2 million in 1992. The GOA then increased itsmaintenance expenditures above the level agreed under the Transport Project, spending aboutUS$8.0 million per annum in 1994 and 1995, and budgeting the same amount in 1996, whichis adequate as discussed below (para 2.22). GRD proposes to retain 75 percent of its 1996budget after April 1, 1996, and to allocate the balance to local roads through the MLG,following the reduction of its network to 3,221 km (para 2.01 and Annex 2.2).

2.14 Almost all of GRD's paved road network (about 2,500 km, Annex 2.2) is in poor or faircondition (para. 2.01 and Map 27800). Rehabilitation of almost all of these roads is likely tobe economically justified, considering that most carry over 2,000 vpd (Map IBRD 27626),traffic is growing rapidly and axle loads are increasing. This would require an investment ofsome US$250.0 million (about $100,000/km). In addition, some paved roads requireinvestments to strengthen them or increase their capacity (town bypasses, climbing lanes,some four-lane construction), some local roads need to be improved, and all roads need to bemaintained. Many other countries spend around one percent of their GNP on their roadnetworks, while some spend two percent. Considering Albania's substantial needs, and thatmost roads investment will be done with concessionary financing, it is reasonable for Albaniato spend perhaps 2.5 percent of GNP on their road network during the next several years(about US$58.0 million in 1996). This would permit them to carry out one cycle ofrehabilitation on GRD's paved roads in 10 years, budget US$8.0 million per annum for roadmaintenance and spend US$24.0 million per annum on other road improvements. TheGovernment increased its road expenditures significantly, from US$7.7 million in 1994 toUS$19.3 million in 1995 (Table 1.1 and Annex 2.5). GOA also expects to invest US$42.8million in roads in 1996, subject to the timely availability of foreign financing, which isconsistent with this approach.

2.15 Financing: All road expenditures are financed from the budget. The RRDs preparerequests for road funds, which are assembled and vetted by GRD, and a combined road budgetis then submitted by GRD through MCT to Parliament for approval (Chart 2.4). Followingadoption of the Government budget, Ministry of Finance (MOF) sends funds for most RRDsthrough a District Authority Bank. In the case of non-GRD roads, municipalities, baskiasand communes presently receive funds which are budgeted through MLG.

2.16 The GOA collects revenues from road users in the form of fuel taxes, taxes on foreignroad users, vehicle registration/control fees and vehicle import duties. Road fuel wassignificantly subsidized until 1992. The GOA then increased the retail price of gasoline and

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diesel fuel to prices at or above the amounts agreed under the Transport Project (US$0.45/1including taxes for 85-95 octane gasoline and diesel fuel):

Table 2.1: Retail Fuel Prices, 1991-96 (in leks)2

Category 1991 1992 1993 1994 1995-96 (Feb.)

70-85 octane 6 18 34 46 6085-95 octane --- --- 50 65 75

>95 octane --- 40 62 82 90Diesel 6 12 25 38 45

2.17 The GOA also collects customs duties, production taxes, and a road tax on road fuel asfollows:

Table 2.2: Breakdown of Retail Fuel Prices, 1995-96

Tax Rate(%) 85-95 octane >95 octane DieselCIF Price (in Lek) --- 15.09 24.48 18.43Custom Duty (on CIF price) 7 1.05 1.71 1.29Production Tax (on CIF price)

85-98 octane 50 7.54 12.24Diesel 40 --- --- 7.37

Other Taxes (in Lek) 30, 17 35.00 35.00 9.00Subtotal (in Lek) --- 58.68 73.43 36.09

Road Tax (on subtotal) 16 9.38 11.75 5.77Total (in Lek) --- 68.06 85.18 41.86

Retail Price (in Lek) --- 70-75 85-90 40-45

It is estimated, based on the size and utilization of the vehicle fleet, that the Governmentcollected around US$153 million in fuel taxes in 1995, including US$53 million from the"Road Tax" (Annex 2.6). All fuel taxes are treated by the GOA as sources of general revenue,including the "Road Tax".

2.18 Foreign road users crossing Albania are taxed as follows: trucks US$0.02/t-km, buses$0.002/p-km, and cars US$1/day. In 1995, US$2.2 million was collected from foreign roadusers. The GOA also collected US$2.14 million in vehicle registration/control fees in 1995,based on the following rates:

2From 1993 onward, the maximum allowed price is shown, with the minimum being 5 leks less.

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Table 2.3: Vehicle Registration/Control Fees and Receipts, 1995

Vehicle type Registration/Control Fee (US$)Car 35Van 65Bus 100

Truck 100Trailer 100

2.19 The GOA also collects an estimated US$44.7 million in vehicle import duties in 1995,based on the following rates:

(i) duties on new vehicles: 40 percent of CIF price for cars and vans, 25 percent forbuses, and 7 percent for trucks.

(ii) duties on second-hand vehicles: US$1,500 on cars, US$3,000 on vans andbuses weighing less than three tons, US$5,000 on buses and trucks over threetons.

Import duties are not strictly a road tax since duties are collected on most other imports aswell.

2.20 System of Road User Charges: Economic efficiency is maximized when road usercharges cover road maintenance and investment expenditures, and each vehicle class covers atleast its variable road costs, as explained in Annex 2.6. Albania's levenues from road usercharges are compared with the optimum level of road maintenance expenditures plusinvestment expenditures, using the Bank's HDM III model, in Annex 2.6. The optimummaintenance expenditure is that which minimizes the discounted sum of road costs andvehicle operating costs. Separate estimates are made for each vehicle class and road surface,for the main rural (GRD) network, local rural network and urban streets.

2.21 There are three conditions which must be taken into account in assessing the system ofroad user charges in Albania. First, the Government, following the transition, uses the fueltax as a major source of general revenue because it is easy to collect, impacts the wealthymore than the poor, and because this is common practice in most European countries. Theretail price of normal gasoline in Albania (US$0.70-75/1, Table 2.2) ranks 24th among 35representative European countries, while diesel fuel (US$0.40-45/1) ranks 25th. Second. theroad network is mostly in poor or fair condition (para. 2.01), requiring rehabilitation before itis capable of being maintained (particularly periodic maintenance). The HDM III model, onthe other hand, assumes that the road network is in sufficiently good condition that it can bemaintained through normal maintenance procedures. Third, a significant part of the localrural road network was built for farm cooperatives which have since disappeared, or for

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military purposes. Many of these roads are little used at present, are not maintained, and maywell be abandoned in the future. Under these circumstances, the model is most useful inindicating the funds which will be needed to maintain the main rural network (and urbannetwork) after most roads have been rehabilitated, which will take a number of years. Themodel is also useful in pointing out the importance of reducing the local road network to asize which Albania can reasonably afford to maintain.

2.22 It is estimated that GRD should spend about US$9.0 million per annum to maintain itsmain rural road network (page I of Attachment to Annex 2.6). This compares with US$6.5million per annum which they spend at present (para. 2.13). Considering that more than halfthe maintenance budget whould be spent on periodic maintenance that currently cannot becarried out, the ongoing rehabilitation program that is being implemented with concessionaryfinancing, and the low efficiency of present maintenance activities, the present GRD budget(US$1 ,800/km) is considered to be satisfactory until most roads are rehabilitated andequipment is replaced. Following this, it should be increased to the recommen ded level(US$2,500/km). The GOA agreed at negotiations that it will: (a) beginning January 1,1997, provide equivalent of six million dallars (US$6.0 million) on an annual basis toGRD for road maintenance; (b) beginning January 1, 1998, provide adequate roadmaintenance budget for secondary and tertiary roads, (c) allocate road funds first tomaintenance and thereafter to other road expenditures, and (d) consult annually withthe Association concerning its road maintenance budget.

2.23 It is also estimated that about US$3.3 million per annum should be spent to maintainthe urban road network and about US$20.7 million per annum to maintain the local rural roadnetwork (page I of Attachment to Annex 2.6). Almost no funds were budgetci for thispurpose in recent years, and these amounts appear to be beyond Albania's budgetarypossibilities. This emphasizes the importance of reducing the size of the local rural roadnetwork to what Albania can reasonably afford to maintain in the future.

2.24 Present fuel taxes and registration fees cover the optimum level of road expenditures(including those recommended for the present non-GRD network) if just the "road tax" istaken into account, and exceeds it by a factor of three if all fuel taxes are taken into account(page 4 of Attachment to Annex 2.6). The aggregate level of taxes on road users is thus morethan adequate. In addition, the current high level of taxation does not appear to adverselyaffect the road transport sector, given recent high traffic growth rates (para. 1.05). Eachvehicle class is also estimated to cover its variable road costs even if only the "road tax" istaken into account (page 4 of Attachment to Annex 2.6). The degree of coverage varieswidely, from a low of 1.6:1 in the case of articulated trucks, to 4-7:1 for the light vehicleclasses, to a high of 10:1 for buses.

2.25 The GOA will carry out an Organization and Management Study (OMS) under theongoing Rural Roads Project, and implement an Action Plan to improve the administrationand maintenance of non-GRD roads. This task has taken an increased importance because ofthe recent separation of additional roads from GRD (para 2.01) and the need to reduce the sizeof the road network to be maintained (para. 2.23). The terms of reference for the OMS were

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revised to take these factors into account and agreed at negotiations. The GOA agreed atnegotiations to (i) not later than July 1, 1997, complete an Action Plan, and carry outsuch a Plan to improve the maintenance and administration on non-GRD roads; and (ii)provide an adequate maintenance budget for non-GRD roads from 1998 onwards(Annex 2.7).

F. Road Safety

2.26 Road safety is a serious problem, with the number of reported traffic fatalitiesincreasing from 145 in 1990 to 411 in 1994. and then declining to 306 in 1995 (Annex 2.8).The 1995 fatality rate is by far the highest in Europe, amounting to 2,782 deaths per millionvehicles in 1995 compared to 377 deaths per million vehicles in the European Union (EU) andan average of 909 in six Central and Eastern European countries in 1992. Reducing roadaccidents requires a multidisciplinary approach, including identifying and correcting unsafeplaces on the roads (black spots), introducing and enforcing a vehicle inspection system,preventing drunk driving, improving the enforcement of traffic regulations, improving accessto medical help, and education and publicity campaigns. The GOA is aware of this issue, andhas already taken some steps to improve safety, resulting in a 24 percent reduction in fatalitiesfrom 1994 to 1995. The police report that they have stepped up their enforcement of traflicregulations. New drivers are gaining experience. A pilot vehicle inspection center has beenestablished in Tirana withEuropean Union (Phare) financing, and additional centers areplanned. A road safety adviser is being provided, and safety considerations were taken intoaccount in planning road improvements under the Transport Project. A Highway Code basedon Italian standards is expected to be submitted to Parliament for approval in mid.-1996. Thecode establishes safety standards for vehicles and roads, driving regulations and policecontrols procedures. The proposed project provides for the continuation of the road safetyprogram, including road improvements, safety equipment for the police and technicalassistance as described in Chapter 3.

G. Environmental Aspects

2.27 The Government of Albania is making rapid progress over the last couple of years inestablishing a national environmental policy framework and strategy. The NationalEnvironmental Action Plan was prepared with assistance from the World Bank in 1993 andadopted by the Government in January of 1994. On the basis of the NEAP, severalenvironmental projects and programs are now being undertaken in Albania with assistance ofinternational institutions such as the European Union (Phare) Program, UNDP and World Bankexecuted Mediterranean Environmental Technical Assistance Program (METAP). Despite therapid progress, the country is far from an efficient system of environmental management andsustainable development. There is a lack of institutional capacity, the legal framework suffersmajor gaps and the enforcement systems are still very weak. The proposed National RoadsProject consisting of major rehabilitation works provides an opportunity for the Governmnent ofAlbania to integrate environmental concerns into the design and implementation stages of theproject in order to make the project both, socially and environmentally sustainable. Steps in thisdirection are already being taken by GOA in the road sector, as for example, policy decisions to

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promote the use of unleaded gasoline by providing price incentives to reduce the effects ofvehicular pollution, and the establishment of ten vehicle inspection centers.

III. THE PROJECT

A. Project Setup and Objectives

3.01 Setup. Strong growth in road transport in Albania (registered vehicles increased morethan sixfold during the last five years. Annex 1.2, para 1.05), and a deficient institutional,managerial and budgetary response to this growth have created key infrastructure bottlenecks.This situation has increased road deterioration and restricts ongoing development. Evenmore, traffic accidents are now a serious problem, and environmental issues may become anadditional problem if not anticipated in time (para 2.26 and 2.27) because of the fleetexpansion and the upgrading works required on the infrastructure. To overcome theseimpediments to a sustainable and systematic development, the National Roads Project (theproject) has been established.

3.02 The project will foster a national institutional and managerial improvement of the roadsector. It will also continue and complement the ongoing physical improvements under theIDA's Transport and Rural Roads projects (paras. 1.11 and 1.12), and the planned partialrehabilitation of the East-West Corridor from Durres to Elbasan, (81.0 km), financedbyEuropean Union (Phare) and the European Investment Bank (EIB). The East-WestCorridor (Durres-Qafe Thane, at the Macedonian border, 152.1 km) is part of the TransEuropean Network Corridor Nr.8 and, subsequently is eligible for financing by institutions ofthe European Union. Its first partial rehabilitation (upgrading of eight bridges east of Librazhdunder the Transport Project) will be completed in early summer 1996, and complemented bythe EIB/PHARE financing and the proposed project.

3.03 Objectives. The project supports the Country Assistance Strategy for Albania(reviewed by the Board on March 8, 1994) by rehabilitating and expanding the transportsystem, which has deteriorated to the point where it constitutes a major impediment to privatesector development, as well as to foreign direct investment. The main objectives of the projectare to:

(i) accomodate expected traffic growth by rehabilitating and constructingnational roads;

(ii) improve the maintenance and safety of national roads;(iii) promote the development of the local contracting and consulting industries;

and(iv) train GRD's staff and develop strong cooperation between GRD's staff

and activities and the University of Tirana (UT).

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B. Project Description

3.04 The proposed project is based on the main priority needs established by GRD's 1996-1998 Public Investment Plan (PIP). Specifically, the project includes the followingcomponents: (i) civil works on about 90 km of national roads in the East-West and Northerncorridors (US$45.0 million, excluding contingencies); (ii) provision of equipment andmaterials for road maintenance, road safety and signalization (US$7.0 million); (iii)supervision of road works (US$1.4 million); (iv) establishment of a road data bank, apavement management system. and a bridge management system (US$2.0 million); and (v)employment of consultants for TA and training on project coordination, continuation of theongoing road safety program, project implementation, management and modem engineeringtechniques, including collaboration with the University of Tirana's Faculty of Civil Works(US$2.3 million).

3.05 Rehabilitation and Construction of National Roads. This component includes 90.1km of road works, divided into five sections covered by separate contracts, together with asixth contract for two important new bridges over the Matit and Drin rivers. The requiredfeasibility studies, engineering designs, and donor financing for these works are alreadyavailable, with some completion work still required for the East-West Corridor (para 3.15)expected by May 6. 1996. The design standards (i.e. the standard cross sections) of the fiveroad sections and two bridgs are satisfactory, and are shown in Annex 3.1. The works arelocated in two of the three main road corridors of Albania. Three consecutive sections are inthe East-West Corridor, which links Albania to the Former Yugoslav Republic (FYR) ofMacedonia and to Greece. and which also links the main port and second most populous cityof Durres to the capital, Tirana. Two nonconsecutive sections plus the two bridges are in theNorthern Corridor, which starts in Tirana. and leads to the northwestern region of tihe country,where the important cities of Lezha and Shkoder are located. It also connects Albania toMontenegro and Serbia, and this corridor is the only road link between Albania and Centraland Northern Europe. All these roads are in poor condition and are overloaded where theypass through towns.

3.06 The road works planned for the East-West Corridor total 71.1 km in length; trafficvolume on this part of the road network varies from 2,200 to 3,170 vpd. and high propc;rtionof this traffic (30 to 35 percent) is heavy, international vehicles. An important goal of theworks in these sections is to improve the drainage system, which will require reconstructionof drainage structures including bridges. Also, road alignment will have to be upgraded tomodern standards. Like the rest of the road works in the project, the variable structure ofexisting pavements will be strengthened to support modem traffic loads (11.5 tons per singleaxle in the EU) and they will be topped with a 5 cm asphalt concrete wearing course. Allongoing works (para 3.02) are obviously excluded from project works described here:

(i) Elbasan-Librazhd (30.5 kim). This section will be upgraded to a 7.5 mcarriageway with a 5 cm asphalted concrete wearing course and two 1.5 mgravel shoulders (Annex 3. 1, page 1). The gravel bypass of Elbasan, Albania'smain metallurgical center, which is hardly usable at present, will be also

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asphalted.

(ii) Librazhd-Qukes (21.0 km). A similar carriageway upgrade (Annex 3.1,page 1) will be done on this section, together with the construction of a newbypass for the city of Librazhd to be put in on government-owned land.

(iii) Qukes-Qafe Thane (19.6 km). This mountainous section will require upgradeto a 7.0 m asphalted carriageway with a 4 cm asphalted concrete wearingcourse and two 1.0 m gravel shoulders (Annex 3. 1, page 2), and new con-struction will be needed on section totalling 3.2 km to create climbing lanesfor heavy vehicles on gradients steeper than 7 percent.

3.07 The road works planned for the Northern Corridor total 19.0 km in length:

(i) Tapize-Fushe Kruja (7.0 km). The road between Tirana and Fushe Kruja isalready being upgraded under the Transport Project, but this 7.0 km sectionwas not included in those works. Traffic volume on this section is 4,500 vpd,with 30 percent heavy vehicles. Works to be carried out under this project willbe the asphalting of its 7.5 m carriageway and improvement of the two 1.5 mwide gravel shoulders (Annex 3. 1, page 3).

(ii) Miloti-Lezha (12.0 km). Works are already underway under the TransportProject to connect Fushe Kruja to Miloti; this section of new road constructionwill complete the route from Tirana (through Fushe Kruja) to Lezha. Trafficvolume on this route is 4,500 vpd with 20 percent heavy vehicles(Annex 3. 1,page 4). This new route will be 6.1 km shorter than the existing route.

(iii) Bridges over the Drin and Matit rivers. In order to complete the new routebetween Miloti and Lezha, two rivers must be crossed: a 650.0 m bridge willbe built over the Matit river at km 1+357, and a 200.0 m bridge will be builtover the Drin river at km 10+300. Both bridges are designed to be on piledfoundations over solid gravel soil and the girders (most of which will be the20.0 m standard lenght) and the deck slabs will be prefabricated (Annex 3. 1,page 4). The structures are designed to withstand earthquake shocks up to 7on the Richter scale, consistent with the seismic characteristics of the area.

3.08 Road Maintenance and Safety Equipment and Materials. Road maintenanceequipment is already being provided to the central workshop of the Tirana RRD under theTransport Project. The other six RRDs still have only a few old, and mostly obsolete, piecesof equipment. They would be furnished with new, basic road maintenance equipment(US$4.0 million, excluding contingencies) under the project. This equipment would allowRRDs to achieve sound maintenance with modern equipment and technology. Particularlyimportant is the establishment of a radio communication system for nationwide coordinationof the maintenance system and permanent contact with GRD's headquarters at Tirana.Acquisition of the equipment would not interfere with the pilot contracting program (about 20

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percent of road maintenance needs) of the Transport Project, which will be continucd underthe proposed project. A list of maintenance equipment to be acquired and related estimatedcosts are shown in Annex 3.2.

3.09 Urgently needed improvement of road safety would be achieved through acquisition ofspecific equipment, such as speed control radars, alcoholimeters and vehicles for the NationalTraffic Police (US$1.9 million, excluding contingencies), and vertical and horizontalsignalization equipment and materials (US$1.1 million, excluding contingencies) for theGRD. A list of the safety and signalization equipment and materials to be acquired, andrelated estimated costs, are shown in Annex 3.3.

3.10 Supervision of Road Works. Given the significant investment involved in the sixroad contracts (US$45.0 million, excluding contingencies) and the increasing but still limitedexperience of GRD staff and local consultants in supervision, an international consulting teamwill be hired (US$1.4 million) for supervision of works. The team will be seconded bycompetent GRD staff designated for every contract. The consultant team will include, atminimum, a Resident Team Leader (Highway Engineer with experience on conventionalbridges), a Materials Engineer and an Inspector/Surveyor for 96 man-months (m/m). Themain tasks of the team would include:

D define contract packages- review prequalification and bidding documents* advise on evaluating prequalifications, bids and on contract negotiations* review, and if necessary change, designs and confirm traffic on roads to be

improved* prepare construction drawings with the contractors* supervise construction works, including quality control, cost control,

measurement and progress control* assist contractors in preparing bills and certifications of bills, if necessary* report to the PIU within the GRD

Further details are contained in the terms of reference (TOR) for the above supervisionservices (Annex 3.4). Hiring of the international consultants team of supervisors will bea condition of Credit effectiveness.

3.11 Establishment of a Road Data Bank, a Pavement Management System and aBridge Management System. These three important institutional operational systems forroad administration, management and budgeting will be introduced for the first time inAlbania under the project. They are essential to achieving any satisfactory maintenance andimprovement plan for the national road network (NRN) and all subsequent action. Theywould be established and implemented by GRD staff under the advice and coordination ofthree teams of international consultants. The road data bank (RDB; US$0.5 million excludingcontingencies, 32 m/m) will be a general information system for GRD, producing systematicand timely statistics on the NRN and traffic conditions, and will be used for the daily

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administration of the NRN, as a planning tool and as a source of basic data for the pavementmanagement system (PMS) and the bridge management system (BMS). The PMS (US$1.0million, 66 m/m) will be a systematic approach to planning and budgeting of NRN'smaintenance and, specifically, for pavement maintenance and rehabilitation. The BMS(US$0.5 million, 31 m/m) will be a systematic approach to bridge maintenance andreconstruction, and would be introduced, as the PMS, a year after the RDB, when most of theRDB's data would become available. Details on the rationale and description of the threesystems are provided in the respective TORs for the selection of each preparation team inAnnex 3.5 (Road Data Bank), Annex 3.6 (Pavement Management System), and Annex 3.7(Bridge Management System).

3.12 Project Coordinator. Successful implementation of the project requires strongleadership based on a deep understanding of the issues involved. It includes numerous workssites and contractors and consultants, and difficult questions of road management andadministration, traffic safety and environmental issues. Consequently, a deep and consistentcoordination among all project components is essential. A Project Coordinator (US$0.8million excluding contingencies, 54 m/m) with experience in contract management andprocurement will provide a single channel of coordination for the project, ensuring that an up-to-date focus of knowledge and management experience is available for appropriate planning,financial monitoring, satisfactory progress of works and progress reporting to theGovernment, IDA and other project donors. During a six-month inception period (July-December 1996), following scheduled approval of the project in June 1996, the ProjectCoordinator will prepare and coordinate the physical implementation of the project (scheduledto start in January 1997), focusing on the prequalification and bidding processes for roadworks contractors. Details of Project Coordinator activities are provided in the TOR, Annex3.8. Appointment of the Project Coordinator is a condition of Credit effectiveness.

3.13 Technical Assistance (TA) and Training. Besides the technical assistance providedin para 3.10 through 3.12 above, an important and extensive program of TA (US$0.5 millionexcluding contingencies, 28 m/m), and of training (US$1.0 million, 340 m/m of GRD staff) isrequired for the GRD's and the RRDs' executive staff in order to manage the organizationaladjustments required by the project and the modernization of the road sector. The main tasksof the program are to assist and train:

* GRD, in improving its capability in project management, planning, monitoring,budgeting and accounting

* GRD and RRDs, in strengthening their skills on road safety and environmentalissues for planning, managing and supervising road projects

* RRDs' technicians and road workers. in improving their proficiency in vehicleand equipment repair, and on maintenance of road works

* RRDs, in designing and implementing a maintenance plan and managementsystems

* local consultants and local contractors (mainly acting as subcontractors),in supervision, contract management and business management (administration,

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cost calculation and control, quality assurance)GRD in establishing bilateral relations (including twinning) between its staffand activities, and other road related institutions such as UT.

The TA and training program would be developed by teams of international consultants.Details of activities are provided in the TOR for the selection of consultants, Annex 3.9.

C. Relation to Other Projects in the Sector

3.14 Other World Bank Group projects with road sector components are also operating inAlbania. namely the: (a) Rural Poverty Alleviation project (RPAP); (b) IrrigationRehabilitation project (IRP); (c) International Fund for Agricultural Development (IFAD)projects; (d) Rural Roads project (Credit 2732-ALB); and (e) Transport Project (Credit 2499-ALB). The RPAP and IFAD projects have objectives more directed to immediate socialsupport and their roads programs are focused on small tertiary (local) roads within communes,as is the IRP, effective since November 1994, which is financing some machinery for accessroads and equipment for irrigation works. The Rural Roads project's main target is therehabilitation and maintenance of rural roads. Since these projects operate entirely on thesecondary and tertiary road networks, no special coordination with the National Roads Projectis required. Concerning the coordination with the Transport Project, the proposed NationalRoads Project is a continuation of the rehabilitation process on the East-West and NorthernCorridors. No specific coordination is required, except for the uniformity of geometricdesigns and signalling.

D. Status of Project Preparation

3.15 Project preparation status is shown in the following table:

Table 3.1: Preparation Status

Section Feasibility Engineer Design Detailed Designs and Environmental StudyStudy Bidding Documents

1. East-West Corridor:(a) Elbasan-Librazhd (30.5km), OK Preliminary Under OK(b) Librazhd-Qukes (21 .Okm), OK designs preparation OK(c) Qukes-Qafe Thane (19.6km) OK available OK2. Northern Corridor:(a) Tapize-Fushe Kruja, 7.0km OK OK OK OK(b) Miloti-Lezha, 12.0km. OK OK OK OK(c) Matit (650 m) and Drin (200 m) OK OK OK OK

river bridges (2)

E. Cost Estimates

3.16 The estimated total cost of the project, including taxes and physical and pricecontingencies. amounts to US$66.0 million equivalent, with a foreign component of about

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US$47.4 million equivalent or 72 percent of the total project cost. The cost of the differentproject components. based on May 1996 prices and a US$1=Lek 104.4 exchange rate, aregiven in Table 3.2 below.

Table 3.2: Project Components and Cost Estimates(in US$ million)

Estimated Project Cost Local Foreign Total F.C.(US$million) (US$million) (US$million) %

A. CIVIL WORKS1. East-West Corridor:(a) Elbasan-Librazhd (30.5km), 3.7 6.8 10.5 65(b) Librazhd-Qukes (21 .Okm), 4.6 8.9 13.5 66(c) Qukes-Qafe Thane (I 9.6km) 3.4 5.9 9.3 63

2. Northern Corridor:(a) Tapize-Fushe Kruja, 7.0 km 0.3 0.7 1.0 70(b) Miloti-Lezha, 12.0 km 1.2 2.7 3.9 69(c) Two bridges over the Matit (650 m) and

Drin (200 m) rivers 2.0 4.8 6.8 70SUBTOTAL 15.2 29.8 45.0 66

B. ROAD MAINTENANCE, SAFETY ANDSIGNALIZATION

(i) Maintenance Equipment, Vehicles and 4.0 4.0 100Materials

(ii) Equipment for Road Safety, including 1.9 1.9 100Police Equipment

(iii) Vertical and Horizontal Signalization 1.1 I.[ 100SUBTOTAL 7.0 7.0 100

C. TECHNICAL ASSISTANCE ANDTRAINING

(i) Supervision of Road Works 0.3 1.1 1.4 80(ii) Road Data Bank 0.1 0.4 0.5 80(iii) Pavement Management System 0.2 0.8 1.0 80(iv) Bridge Management System 0.1 0.4 0.5 80(v) Project Coordinator 0.2 0.6 0.8 80(vi) TA to GRD and RRD executive staff on 0.1 0.4 0.5 80

Management/Modernization of RoadSector I JQ 1.Q I0(vii) Training of GRD and RRD staff 1.0 4.7 5.7 83

SUBTOTAL

(A+B+C) BASE COST 16.2 41.5 57.7 72F. Contingencies: Physical (I0%) 1.6 4.2 5.8

Price 0.8 1.7 2.5TOTAL PROJECT COST 18.6 47.4 66.0 72

3.17 Construction cost estimates for civil works (US$45.0 million, excludingcontingencies) are based on quantities from preliminary designs (East-West Corridor), from

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final engineering designs (Northern Corridor), and on Institute No.2 estimates of February1996 unit costs. The foreign component is estimated from a breakdown of cost elements.Costs of road maintenance and safety equipment and materials (US$7.0 million) are based onthe latest and most recent acquisitions under the Transport Project, and in similar deliveries inthe region. Supervision of civil works would require 96 m/m of international consultants atUS$14,500 per m/m equivalent, amounting to a reasonable and usual 3.1 percent ofconstruction cost or US$1.4 million. The TA by consultants for the road data bank (32 rn/m;US$0.5 million), pavement management system (66 m/m; US$1.0 million) and bridgemanagement system (31 m/rn; US$0.5 million) have been estimated on the basis ofUS$16,000 per m/m in consonance with comparable services being provided in the region.The 54 m/m manpower required for the important job of Project Coordinator have beencalculated at the usual rate of US$15,000 per m/m (total US$0.8 million) for experts withsimilar competence and experience. The TA and training program for GRD and RRDexecutive staff (28 m/m of consultants for US$500,000; and 340 m/m of GRD staff trainingfor US$1,000,000) have been calculated based on the price of US$16,000 per r/m forconsultants and US$3,100 per rn/m for training, as is being presently incurred in Albanianprojects. The time-based rate for consultants, i.e., the man-month, includes salary, socialcosts, firm's overhead, travel costs, fee or profit, and overseas allowance. Costs for trainingof GRD staff take into account that the most expensive item in international training, travel,would mostly take place inside Europe, and would be relatively inexpensive. All technicalassistance, training and related materials and equipment are exempted from taxes and duties.

3.18 A physical contingency of 10 percent has been included for all components, to coverfor a possible increase in quantities. This amount is appropriate given the precise engineeringdesigns already available for the road works. Price contingencies have been applied to basecost plus physical contingencies, expressed in US$, in accordance with Bank guidelines, foreach year mid-1996 through end-2000, as follows: 3.3, 2.3, 2.5, 2.5, and 2.5 percent.

F. Project Financing

3.19 The borrower would be the Republic of Albania. The Association would provide acredit of SDR17.4 million or US$25.0 million equivalent (37.9 percent of total project costincluding contingencies). The European Bank for Reconstruction and Development (EBRD),would provide a US$12.0 million equivalent loan (18.2 percent of total project cost) on aparallel financing basis for the Elbasan-Librazhd, (30.5 km) road works in the East-WestCorridor, and also would provide part of the supervision. Similarly, the Kuwait Fund (KF),would provide a US$8.0 million equivalent loan (12.1 percent of total project cost) on aparallel financing basis for the Qukes-Qafe Thane, (19.6 km) road works in the East-WestCorridor, and also would provide part of the supervision. The Government of Italy, on aparallel financing basis, would provide an ITL 14.5 billion or US$9.0 million equivalent loan(13.6 percent of the total project cost) for the financing of the Tapize-Fushe Kruje (7.0 km)road works, and construction of two bridges spanning the Matit river (650 m long). and theDrin river (200 m long), on the Miloti-Lezha road on the Northern Corridor. The Governmentof Albania would contribute US$5.0 million equivalent, a contribution slightly below themaximum 10 percent of total cost considered as the limit of its budgetary possibilities. It is

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expected that the US$7.0 million financing gap (10.6 percent of total project cost) for thefinancing of an important share of TA, training and equipment, would be covered by a grantfrom European Union (Phare). The Government confirmed at negotiations that it wouldmeet these US$5.0 million local costs as well as, if the case arises, any cost overruns. TheGovernment also confirmed at negotiations the financing arrangements with EBRD, KF,Italy and European Union (Phare). A financing plan, based on the above assumptions, andconfirmed with the Government at negotiations, is shown in Table 3.3 below.

Table 3.3: Financing Plan(US$ million, including contingencies)

EuropeanGOA Italy EBRD KF Union IDA Total

(Phare)

A. CIVIL WORKS

1. East-West Corridor:(a) Elbasan-Librazhd (30.5 km), 0.4 l.5 11.9(b) Librazhd-Qukes (21.0 km), 2.3 12.7(c) Qukes-Qafe Thane ( 19.6 km) 1.6 7.9 15.0

9.52. Northern Corridor:

(a) Tapize-Fushe Kruja, 7.0 km 0.1 1.1(b) Miloti-Lezha. 12.0 km, 0.3 4.4 1.2(c) Two bridges over the Matit (650 m) and Drin 4.7

(200m) rivers 0.3 7.9 8.2SUBTOTAL 5.0 9.0 11.5 7.9 17.1 50.5

B. ROAD MAINTENANCE AND SAFETY

(i) Maintenance Equipment, Vehicles andMaterials 4.8 4.8

(ii) Equipment for Road Safety, including Police 2.0 0.3 2.3(iii) Vertical and Horizontal Signalization 1.0 0.3 1.3

SUBTOTAL 3.0 5.4 8.4C. TECHNICAL ASSISTANCE AND

TRAINING

(i) Supervision of Road Works 0.5 1.2 1.8(ii) Road Data Bank 0.1 0.6 0.6(iii) Pavement Management System l.2 1.2(iv) Bridge Management System 0.6 0.6(v) Project Coordinator 1.0 1.0(vi) TA to GRD and RRD Executive Staff on

management/modernization of road sector 0.6 0.6(vii) Training of GRD and RRD Staff I 1.0 0.3 1.3

SUBTOTAL 0.5 0.1 4.0 2.5 7.1TOTAL PROJECT COST 5.0 9.0 12.0 8.0 7.0 25.0 66.0

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G. Implementation and Monitoring

3.20 The proposed IDA Credit of SDRI7.4 million (US$25.0 million equivalent), theEBRD loan of US$12.0 million equivalent, the KF loan of US$8.0 million equivalent, theItalian Government loan of ITL14.5 billion or US$9.0 million equivalent, and the (potential)European Union (Phare) grant of US$7.0 million equivalent (para.3.19) would be made to theGovernment of the Republic of Albania. The General Road Directorate in the Ministry ofConstruction and Tourism will be responsible for the overall implementation of the projectthrough a five-member Project Implementation Unit (PIU) already established in GRD underthe chairmanship of H.E. the Minister of Construction and Tourism (Chart 2.2) for theimplementation of the ongoing Rural Roads Project. PIU members include theaforementioned Chairman, GRD's Director General, and a representative from the Ministry ofFinance, from the MITT and from the Ministry of Agriculture. The PIU will review andfollow up on procurement and bidding documents related to the project, monitor andcoordinate the implementation in every project component, assemble a quarterly report of allinformation related to project implementation, and liaise and establish direct contact with theIDA's and cofinanciers' supervision missions. All project policy issues will be discussed and,in principle, decided by the PIU Board. On road safety issues, the PIU would coordinate andagree with the Project Management Unit established in the MITT for the Transport Projectand its road safety component. GOA agreed to retain the PIU of the Rural Roads Projectfor the implementation of the proposed project.

3.21 The PIU will be assisted in its day-to-day implementation work by an ExecutiveSecretariat, in the GRD Foreign Aid Department (where space and secretarial services areavailable at no extra cost to the project), which will be responsible for the preparation andprocessing of all project documentation. The Secretariat will include a Chief Secretary (civilengineer) assisted by a Secretary (economist) and an Accountant, all from GRD's staff. Animportant fourth member of, and adviser to, the Secretariat will be the Project Coordinator.He should be a contract management and procurement expert who, along with the othermembers of the Executive Secretariat, will be supported by GRD specialists from otherdepartments and by the international supervision consultants. The Project Coordinator willwork and report on a day-to-day basis within the Secretariat to the Chief Secretary but willeventually be responsible before GRD's Director General. The main tasks and responsibilitiesof the Project Coordinator and the PIU Executive Secretariat will be:

* project coordination, liaison to Government, IDA, cofinanciers, andconsultants

* planning of works and budgeting* resource allocation* selection, negotiation/award of contracts to the international consultant

teams and assistance to the consultants in administrative matters* finalization of prequalification and bidding documents* issuing of guidelines for prequalification and bidding

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* preparation of overall project accounts* monitoring of progress, quality and financial performance* reporting (quarterly) to the Government, IDA, and cofinanciers* technical services to GRD

The PIU's Executive Secretariat will be deeply involved in the six-month (July-December1996) inception period, before commencement of the physical implementation of the project,currently scheduled for January 1997 (para 3.23). The establishment and staffing (exceptProject Coordinator) of the Executive Secretariat was discussed and agreed at thenegotiations. The conditions of employment and related terms of reference (Annex 3.8) forthe Project Coordinator was also discussed and agreed with the Government duringnegotiations. The appointment of the Project Coordinator will be a condition of CreditEffectiveness.

3.22 GRD will be responsible for the implementation of all project components throughthe direct involvement and coordination of the PIU Executive Secretariat and the ProjectCoordinator. International consultants will be employed to assist GRD in constructionsupervision (TOR in Annex 3.4) under terms and conditions acceptable to IDA. Acquisitionof equipment and materials for road maintenance, road safety and road signalization, togetherwith selection of experts for TA and training (road data bank, pavement and bridgemanagement systems, TA and training program for GRD and RRD executive staff) wouldtake place following submission to IDA, for review and approval, of the related documentsand evaluation of the proposed experts. During negotiations agreement was reached withthe Government on the terms of reference for (a) supervision of road works, Annex3.4; (b) road data bank, Annex 3.5; (c) pavement management system, Annex 3.6; (d)bridge management system, Annex 3.7; and (e) technical assistance and trainingprogram for GRD and RRD executive staff, Annex 3.9.

3.23 A six-month project inception (preparatory) phase will be implemented June-December 1996 before physical execution of the road works starts in January 1997. It willinclude operational start of the PIU and its Executive Secretariat with the Project Coordinatorin July 1996, followed by procurement and mobilization of the consultants engineeringsupervision team, and preparation of documentation for prequalification of contractors andbidding of the road works.

3.24 The late initiation (1994) of IDA transport activity in Albania implies lack of transportsector implementation profiles in the country. However, on the basis of past achievements onsimilar projects under similar conditions in Albania and in the region, it is expected that theprequalification and bidding documents process needed to complete project setup and beginmobilization of road works would require a period of six months (July-December 1996).Intense involvement of the PIU and the Project Coordinator,and of the consultants'supervision team will be necessary. The six road-works contracts will be carried out over afour-year period, with some beginning in 1997 the rest in 1998; completion will require fromone to two years for each contract. Each contract will include an one-year guaranteed

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maintenance period following completion. Acquisition and delivery of GRD and Police(maintenance and safety) equipment would be completed during the first two years of projectimplementation, and completion of signalization would occur in the third year. The road databank and the pavement and bridge management systems will all take three years toimplement; the road data bank will begin in 1997, and the other two in 1998, with completionexpected in 1999 and 2000, respectively. The technical assistance and training program forGRD and RRD staff would take place throughout the entire four-year project implementationperiod in order to provide steady advice to GRD, the RRDs and UT's students, and to avoiddisruptions in project implementation due to excessive staff diversion resulting from fasttraining.

3.25 The implementation schedule for project activities is shown in Annex 3.10. A ProjectImplementation Plan defining the actions to be performed under the project, the agencies,department or units responsible for the execution of each action and the latest date to starteach action, is shown in Annex 3.11. Credit effectiveness is expected in early fourth quarter1996, start of project preparation and mobilization is planned for July 1996, physicalimplementation would begin in January 1997, and the project would be completed onDecember 31, 2000, with the proposed credit closing six months later on June 30, 2001. PIUwould submit quarterly reports to the Association during the implementation of every projectcomponent activity on the basis of the monitoring indicators detailed in Annex 3.12. Duringnegotiations, agreement was reached with the Government on the projectimplementation schedule, Project Implementation Plan, monitoring criteria andreporting arrangements.

H. Procurement

3.26 The project elements, their estimated costs, and the procurement arrangements for thecomponents to be financed or co-financed by IDA, are summarized in Table 3.4 below. Eachother cofinancier will have its own requirements of procurement; these costs are shown underN.I.F. (non-IDA financed). Project launch workshop will be held in July 1996. The GeneralProcurement Notice shall be issued in June 1996 and will be followed up by IndividualSpecific Notices (ISN) in Development Business for contracts estimated to cost US$10.0million or more.

m:\albania\sar\albania\sar2 I .doc

-26-Table 3.4: Procurement Arrangements(US$ million, including contingencies)

Procurement MethodProject Element ICB** NCB** OTHER N.1.F.* Total

A. CIVIL WORKS1. East-West Corridor: I)

(a) Elbasan-Librazhd (30.5 km) - - 11.9 11.9

(-)(b) Librazhd-Qukes (21.0 km) 15.0 - - 15.0

(12.7) 2) (12.7)(c) Qukes-Qafe Thane (19.6 km) - - 9.5 9.5

(-)2. Northern Corridor: 3)

(a) Tapize-Fushe Kruja, 7.0 km - - - 1.2 1.2

(O)(b) Miloti-Lezha, 12.0 km, 4.7 - - 4.7

(4.4) 3) (4.4)(c) Two bridges over the Matit and Drin rivers - - - 8.2 8.2

(O)SUBTOTAL 19.7 - - 30.8 50.5

(17.1) (- i -0 (17.1)B. GOODS(i) Maintenance Equipment, Vehicles and Materials 4.8 - - - 4.8

(4.8) 5) (4.8)(ii) Equipment for Road Safety, including Police - 0.3 2.0 2.3

Equipment (0.3) (0.3)(iii) Vertical and Horizontal Signalization - 0.3 - 1.0 1.3

(0.3) (0.3)SUBTOTAL 4.8 0.3 0.3 3.0 8.4

(4.8) (0.3) (0.3) (5.4)C. CONSULTANCIES 1)

(i) Supervision of Road Works - - 1.2 0.6 1.8(1.2) 4) (1.2)

(ii) Road Data Bank - - 0.6 0.64) (-)

(iii) Pavement Management System - - 1.2 1.24) (-)

(iv) Bridge Management System - - - 0.6 0.6

(-)(v) Project Coordinator - - 1.0 - 1.0

(1.0) 4) (1.0)(vi) TA to GRD and RRD Executive Staff - - - 0.6 0.6

4) (-)(vii) Training of GRD and RRD Staff 0.3 1.0 1.3

(0.3) (0.3)SUBTOTAL - - 2.5 4.6 7.1

._...... X

Note: Figures in brackets are the respective amounts financed under IDA credit.*N.I.F.-non IDA financed **ICB-Intemnational Competitive Bidding ***NCB-National Competitive Bidding

I) Parallel financing by EBRD (US$12.0 million eq.) 4) European Union (Phare) financed (US$7.0 million eq.)2) Parallel financing by KF (US$8.0 million eq.) 5) International Shopping (IS):50% (US$150,000)3) Parallel financing by Italy (US$9.0 million eq.) National Shopping (NS): 50 % (US$150,000)M:\albania\sar\albania\procarr.doc

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3.27 The road works contracts, under IDA financing, (Librazhd-Qukes, US$15.0 million;and Miloti-Lezha, US$4.7 million) would be procured through international competitivebidding (ICB) procedures in accordance with the Bank's "Guidelines for Procurement underIBRD Loans and IDA Credits" dated January 1995, following prequalification of contractorsfor each contract. The prequalification process would be in accordance with the Bank's"Standard Prequalification Documents for Procurement of Works, and Major Equipment andIndustrial Installations", dated April 1993. The few domestic contractors, proceeding fromrecently commercialized. state-owned companies, namely those forming joint ventures withwell-experienced and capitalized foreign companies, would be highly competitive, given theircountry experience, low wage costs and new financial status. The provision of training forGRD, RRD and local contractors and consultants will further enhance their experience,efficiency and competitiveness. Moreover, at the request of the Borrower, and underconditions to be agreed under the credit agreement and set forth in the bidding documents, a7.5 percent margin of preference for domestic contractors would be applied on bid evaluation.The Bank's standard bidding documents for works shall be used and the domestic preferencesshall be applied in accordance with Bank's guidelines. Every contract for road works wouldbe subject to prior review and approval by IDA.

3.28 Maintenance equipment, vehicles and materials (Annex 3.2) would be procured underICB with post qualification of bidders (for US$4.8 million), and in accordance with theBank's guidelines for procurement. The Bank's "Standard Bidding Documents forProcurement of Goods by ICB", dated January 1995, will be used. Furthermore, at the requestof the borrower, and under conditions to be agreed in the credit agreement and set forth in thebidding documents, equipment nationally manufactured and/or assembled inmanufacturing/assembling facilities operating in Albania at least since the time of bidsubmission would be granted a preference of 15 percent or exemption from related duties,whichever is less, provided that the value added (labor, raw materials and components) withinAlbania will account for more than 30 percent of the EXW (ex works, ex factory or off-the-shelf) price of the product offered. Vertical and horizontal signalization goods (US$0.3million, Annex 3.3) would be procured under national competitive bidding (NCB) proceduresin accordance with the Bank's "Standard Bidding Documents for Procurement of Goods underNCB", dated July 1995. as in this case of easy acquisition at national level, the advantages ofICB are clearly outweighted by the administrative burden involved. The remainingequipment and materials for road safety (US$0.3 million) would be procured underinternational/national shopping (IS/NS). The US$150,000 maximum aggregate under each ISand NS vwould permit a quick procurement process for small contracts and would promote(especially NS) the local new micro-industries. IS would apply for contracts estimated belowUS$50,000 and would require at least three quotations from three different suppliers from atleast two countries. NS would apply for contracts estimated below US$30,000 and wouldrequire a minimum of three quotations from three different suppliers. All contracts estimatedto cost US$50,000 equivalent or more would be subject to IDA's prior review and approval ofprocurement documentation. These limits would result in prior review of contractsrepresenting 90 percent of the IDA credit component. The other contracts would be subject toex-post review after award of the contract.

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3.29 Consulting services, TA and training will be carried out by qualified and experiencedconsultants selected in accordance with the Bank's "Guidelines for the Use of Consultants",dated August 1981. Consulting services for supervision of construction works (US$1.8million) will be carried out by an international consulting firm. All TA (US$3.0 million) andtraining (US$1.3 million) services will be contracted on the basis of a selected list (short-listing) of qualified consulting firms. Short listing of consulting firms will be applied in theselection of the project coordinator (US$1.0 million). The TOR documents related toprocurement of consulting services (Annexes 3.4 through 3.9) would be subject to priorreview and approval by the Association. Consultants' contracts exceeding US$100,000equivalent for firms and US$S50,000 equivalent for individuals will be subject to priorreview and approval. This was discussed and agreed at negotiations.

3.30 A Country Procurement Assessment Report has not been completed because thePublic Procurement Law of Albania has just come into force, but one is planned for April1996. However, for the IDA-financed portion of the project, the borrower would followprocedures consistent with the Bank's procurement guidelines. The project implementationschedule (Annex 3.10) includes a procurement plan indicating major items' costs, method ofprocurement and a time schedule for all major procurement activities.

3.31 Procurement would be a main responsibility of the PIU (para 3.21) and the ProjectCoordinator (Annex 3.8) financed under the project. Procurement information to be providedto IDA would include: (a) prompt reporting of contract award information; (b)comprehensive explanation of revised cost estimates for individual contracts and the totalproject; (c) revised timing of procurement action (including advertising, bidding, ..ontractaward and completion time for individual contracts); and (d) compliance with aggregatelimits on specified methods of procurement. During negotiations, agreement was reachedwith the Government on all procurement arrangements.

I. Disbursement

3.32 The proposed IDA Credit, SDR17.4 million or US$25.0 million equivalent, would bedisbursed against the project components as follows:

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Table 3.5: Disbursements and Percent of Expenditures to be Financed

CATEGORY DESCRIPTION Amount PERCENT OF EXPENDITURES TO BEUS$/(SDR)(Million eq.) FINANCED

I CIVIL WORKS 17.0 80%(11.8)

2 GOODS 5.2 100% of foreign expenditures, 100% of(3.6) local expenditures (ex-factory costs) and

80% of local expenditures for otheritems procured locally

3 CONSULTANTS:(a) Supervision of Road 1.0 100%

Works (0.7)(b) Project Coordinator 0.8 100%

(0.6)(c)TA and Training for Road 0.2 100%

Safety Program and GRD (0. 1)and RRD Staff

4 UNALLOCATED 0.8(0.6)

TOTAL 25.0_ _ _ _ _ _ _ _ _ _ a__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |(17 .4 )

3.33 Contracts for works, contracts for goods exceeding US$50,000 equivalent, andcontracts for consulting firms and individuals exceeding US$100,000 and US$50,000equivalent respectively, would be fully documented. Disbursements against contracts notrequiring prior review would be made on the basis of statements of expenditure (SOE).During negotiations, agreement was reached with the Government that documentationto support expenditures financed under SOEs would be maintained by the Borrowerand made available for review by IDA supervision missions. In addition, they should beaudited annually by auditors acceptable to the Association.

3.34 Retroactive financing up to a total of US$200,000 would be available for paymentsmade by the borrower after May 1, 1996, but before the date of credit signature. This wouldallow an early start on some critical items, such as hiring of the Project Coordinator and othertechnical assistance services.

3.35 To facilitate disbursements and reduce the volume of withdrawal applications, IDA'sshare of the project would be financed through a special account (SA, or revolving fund)which would be opened by the borrower in a commercial bank acceptable to IDA. Theauthorized allocation for the SA would be US$1.8 million, equivalent to about four months ofproject expenditures financed by IDA during the four and-one-half year disbursement periodfor the project. However, unless the Association shall otherwise agree, the authorizedallocation shall be limited to US$800,000 until the aggregate amount of withdrawals shall be

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equal to or exceed the equivalent of SDR3,000,000. Funds for equipment, vehicles andmaterial would be withdrawn by the borrower from the SA after approval of the ICB, NCB,international or national shopping, and related contract awards by the Association.Replenishment for technical assistance and for consultants for construction supervision wouldbe made on the basis of appropriate documentation. Replenishment of the SA would followIDA procedures. The SA would be audited annually by independent auditors acceptable toIDA. During negotiations, agreement was reached with the Government on theestablishment and operation of the SA in accordance with Albanian Treasuryregulations, as agreed with IDA, which require the establishment of the SA in the Bank ofAlbania by the Treasury, the Treasury authorizing any payment into a commercial bankaccount managed by the PIU upon PIU's request to pay the expenditures under the project.

3.36 A schedule of disbursements, based on the project implementation schedule (para3.24) is given in Annex 3.13. Albania is a new IDA member. with only the Transport Projectand the Rural Roads Project yet under implementation in the transport sector. Thus, there areno sectoral disbursement profiles available. However, the interest demonstrated by theGovernment and GRD in the project, the urgency of the need for the works, equipment, TAand training, and the actual disbursement under the two ongoing projects indicate a reasonableproject implementation period of 54 months. With an early fourth quarter 1996 crediteffectiveiiess date, a July 1-December 31, 1996 project preparation (inception) phase and aJanuary 1, 1997 through December 31, 2000 project physical implementation period (para3.25 and Annex 3.10), the proposed credit would be fully disbursed six months later on June30. 2001.

J. Accounting and Auditing

3.37 Starting in July 1996, GRD would establish separate project accounts through its PIUin accordance with acceptable accounting principles, record all project expenditures, andmaintain records on commitments, reimbursements, and the status of project funds on thebasis of the accounting done and released by every RRD. With respect to the amountswithdrawn on the basis of SOEs, GRD would maintain records on contracts, invoices andevidence of payments readily available for review. All records should also reflect adequatelythe different contributions from the cofinanciers and the Government. GRD would submit toIDA a brief update of these accounts in the quarterly reports (para.3.25). The PIU Secretarywould have the project accounts, including SOEs, and the special account (para. 3.35), auditedby an independent auditor (likely together with other IDA projects in order to achieve loweraudit costs) acceptable to IDA, and would submit annually to IDA such audit accountswithin six months of the end of each fiscal year. These requirements were agreed withthe Government at negotiations.

K. Environment

3.38 The project mainly consists of rehabilitation of existing national roads on theNorthern Corridor (para.3.07) and on the East-West Corridor (para.3.06) requiring only alimited environmental review. In addition, the project includes construction of a new

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Miloti-Lezha road (12.0 km) with two important new bridges over the Matit and Drin rivers.Consequently, the project, in accordance with OD 4.01, has been placed under category "A",requiring borrower's preparation and submission of an environmental impact assessment(EIA) to the Bank.

3.39 GRD has prepared an EIA report submitted to the Board of the Bank on February 7,1996. Review of the EIA report took place in accordance with terms of reference prepared bythe Bank. This review within the Bank warranted further work to strengthen the report in anumber of areas: (i) description of the environmental policy, (ii) legal and institutionalcontext, (iii) inclusion of a mitigation management and monitoring plan, (iv) identificationof training needs, (v) cost of mitigation measures, and (vi) responsibilities forimplementation.

3.40 The Environmental Assessment (EA) for the three road sections from Elbasan to QafeThane on the East-West Corridor, which include some realignments, has been satisfactorilycompleted by consultants employed by GRD and submitted to the Bank.

3.41 As the proposed routes for the new road and realignments of existing roads on theNorthern Corridor traverse unpopulated areas and some agricultural land, the environmentalimpact is limited to encroachment on agricultural land, soil erosion, pollution at the Matit andDrin rivers and air and water pollution from the construction activities (mainly quarries andasphalt mixing plants). The environmental study prepared by GRD identifies these impactsand proposes a mitigation and monitoring plan. Annex 3.14 summarizes the environmentalassessment report prepared by GRD.

IV. ECONOMIC EVALUATION

A. Framework

4.01 The project derives from the Bank's Country Assistance Strategy, which concentrateson the removal of infrastructure bottlenecks that are a significant constraint on implementing thestabilization program and on economic development (para. 1.02). Road investments wereidentified by the Natiornal Road Investment Plan prepared by GRD, and the PIP prepared by theGOA with Bank assistance (para. 1.10). The project follows on to the 1993 Transport Project,which is 31 percent disbursed and is being implemented in a generally satisfactory manner, andthe Rural Roads Project, which became effective November 8, 1995, has started well and isalready disbursing. The main lesson leamed from ongoing projects was the importance ofkeeping the objectives and composition of the project simple so as not to exceed the limitedabsorptive capacity of GRD and MTC staff; this was taken into account in the project design(paras. 1.I1-1.12).

4.02 The Government has made substantial progress in adopting market-based transportpolicies since the start of the economic transformation in 1991, and there are no major policydistortions that will affect the implementation of the project (paras. 1.05-1.08). The project willcontinue policy initiatives begun with technical assistance and studies carried out under ongoing

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projects in the areas of improving road maintenance. road safety and the system of road usercharges. The project is expected to have a further impact in each of these areas. The project isalso expected to encourage further privatization of road contracting, maintenance and planning,complementing privatization efforts undertaken in other sectors with the support of the Bank.

4.03 The project is expected to facilitate the activities of virtually every sector of theeconomy, so that benefits are likely to be dispersed, as is the case with most transport projects.Savings in vehicle operating costs will accrue initially to internediate users (trucks, buses andbusiness users of passenger cars) and final consumers (private cars). Because the road transportsector is now competitive, most of these savings should be passed on to final users of the goodsand services transported, which are distributed among all income groups. The environmentalimpact of the project is also expected to be positive (reduction of vehicle emissions, improvedpreparation of environmental assessments for road projects (paras. 2.27, 3.40 and 3.41).

4.04 GRD will monitor the impact of the project, both during implementation, with theassistance of the PIU, and thereafter through regular traffic counts on project roads. GRD reportson road maintenance activities, and the collection of road accident statistics by the traffic police.

B. Cost-Benefit Analysis

4.05 Economic rates of return (ERRs) and net present values (NPVs) were estimated for theroad improvement components of the project which comprise 79 percent of project cost. Theestimates were based on savings in vehicle operating costs and road maintenance costs. Theproject is expected to have other benefits which are difficult to quantify, including improving theorganization and funding of road maintenance, promotion of privatization, reduction in roadaccidents and environmental improvements. Moreover, the road maintenance component (13percent of project cost) is expected to have a high ERR and NPV based on experience in othercountries. The estimates of economic viability are, therefore, considered to be conservative.

4.06 Costs and benefits were estimated using the Bank's HDMIII model as summarized inAnnex 4.1 and detailed in the Project File. Costs and benefits were converted to economic termsby deducting indirect taxes. Cost estimates include physical contingencies (10%) and the cost ofsupervision (3%). The cost of improving bridges on the Elbasan-Qafe Thane road under theTransport Project (US$3.0 million) was also included for purposes of the economic evaluation.Current traffic levels were estimated based on counts carried out by GRD in December 1995(Annex 2.1). Albania's low motorization rate, current high traffic growth rate (about 17 percentper annum) and prospects for the future, are discussed in para. 1.06. Traffic on project roads isexpected to grow. Vehicle operating costs were based on international normns, reduced by 25percent (except fuel) to compensate for costs in lower income countries, e.q. the higherproportion of older vehicles in the fleet (page 2 of Annex 4. 1). Congestion effects were takeninto account. Roughness indices were based on a visual road condition survey carried out in1995 by GRD.

4.07 Based on these assumptions, reconstruction of the two-lane Elbasan-Qafe Thane road(71.1 km) is estimated to have an ERR of 24 percent and an NPV of US$19.5 million (Annex

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4.1). Reconstruction of the two-lane Tapize-Fushe Kruja road (7.0 km) is estimated to have anERR of 87 percent and an NPV of US$3.7 million due to the poor condition of the existingroad. Constructing a new two-lane road from Miloti to Lezha (12.0 km) is estimated to have anERR of 44 percent and an NPV of US$21.0 million. This option was also compared withrehabilitating the old road, and is estimated to increase the NPV by US$13.2 million (marginalERR 28 percent) due primarily to the 6.1 km distance saving with the new road. The weightedaverage ERR for these road improvements. and hence the project, is estimated to be 30 percentwith an NPV of US$45.7 million.

C. Sensitivity and Risk Analysis

4.08 There are f'ew risks which would affect the economic evaluation. If traffic were togrow only 10 percenit per annum during 1996-2000 and 5 percent per annum thereafter, projectbenefits would be reduced by about 11 percent. If traffic grew only 8 and 4 percent per annumduring these periods, project benefits would be reduced by about 21 percent. Vehicle operatingcosts, which were based on international norms, could be overestimated. If unanticipatedconstructioni difficulties are encountered, costs could be higher than expected. If either projectcosts are increased by 25 percent, or benefits are decreased by 25 percent, the project ERR isestimated to be 21 percent or 20 percent respectively. The NPVs for all project roads remainpositive, and the ERRs are 19% or greater (Annex 4.1). The economic feasibility estimate forthe project is therel'ore considered to be robust.

4.09 The more significant risks are of a broader institutional nature:

(a) GRD and MC"''s institutional capacity is limited, and this is the third IDA transportprorect to be under simultaneous implementation. To reduce this risk, the PIU will beadequately staf'fed and supported by consultants (para.3.21).

(b) 'I'he GOA could fail to provide sufficient counterpart funds for the project, orcotinancinig could fail to materialize (para 3.19). In this event, the scope of the projectwould be reduced.

(c) Thle GOA could fail to establish an adequate system for administering and fundingnon-GRD roads (para. 2.25). However, the Government has already implementedsignificant sector reforms under difficult economic conditions, supported in part bythe Association. The momentum for reform is considered to be sustainable.

(d) There is a risk the Government might undertake uneconomic investments if financingwere offered. This will be mitigated by the annual GOA/IDA consultations on thetransport investment plan (para. 1. 10).

With the arrangements and assurances provided under the project, project risks are considered tobe acceptable.

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V. AGREEMENTS REACHEDAND RECOMMENDATIONS

5.01 During negotiations, the following matters were discussed and agreed with theBorrower:

(a) GOA shall consult with the Association on its national roads investment plan annually,and shall only undertake national roads investments greater than the equivalent of fivemillion dollars (US$5.0 million) in value that have an economic rate of return (ERR)not less than twelve percent (12 %), as calculated in accordance with a generally acceptedmethodology (para 1 .10 and Credit Agreement (CA) 4.02);

(b) GOA will (a) beginning January 1, 1997, provide equivalent of six million dallars(US$6.0 million) on an annual basis to GRD for road maintenance; (b) beginningJanuary 1, 1998, provide adequate road maintenance budget for secondary and tertiaryroads, (c) allocate road funds first to maintenance and thereafter to other road expenditures,and (d) consult annually with the Association concerning its road maintenance budget (para2.22 and CA 4.03).

(c) GOA will (i) not later than December 31, 1997, complete an Action Plan, and carry outsuch a Plan to improve the maintenance and administration on non- GRD roads; and(ii) provide an adequate maintenance budget for non-GRD roads from 1998 onwards(para 2.25, Annex 2.7 and CA 3.05 (e)).

(d) GOA will contribute US$5.0 million equivalent in local costs to the project as wellas,if the case arises, any cost overruns (para 3.19);

(e) financing arrangements with EBRD, KF, Italy and European Union (Phare) (para 3.19)

(f) financing plan (para 3.19 and Table 3.3);

(g) Retention for the project of the established five-member Project Implementation Unit(PIU) in GRD, including the Minister of Construction and Tourism (as chairman), theGRD's Director General, and one representative from each of the Ministries of Finance, ofIndustry, Transport and Trade, and of Agriculture (para.3.20 and CA 3.06); and

(h) Establishment and staffing of PIU's Executive Secretariat with a Chief Secretary (a GRDengineer) responsible for the preparation of all project documentation, assisted by anEconomist (GRD Financial Department), an Accountant (GRD), and a Project Coordinator

(para.3.21 and 3.06);

(i) Conditions of employment and related TOR for the Project Coordinator (para.3.21; Annex3.8; and CA 3.06; 6.01; Schedule 3, section II)

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(j) TOR for the following consultants (para 3.22 and CA 3.06; 6.01; Schedule 3, section II):

(i) Supervision of roads works (Annex 3.4);

(ii) Road data bank (Annex 3.5);

(iii) Pavement management system (Annex 3.6);

(iv) Bridge management system (Annex 3.7); and

(v) TA and training program on management and modernization of the roadsector for GRD and RRD executive staff (Annex 3.9).

(k) Project implementation schedule, Project Implementation Plan, monitoring criteria, andreporting arrangements (para.3.25 and CA 3.03);

(1) All procurement arrangements (paras.3.29, 3.31 and CA Schedule 3, section 1, 11);

(m) Documentation to support expenditures financed under SOEs (para.3.33 and CA 4.01);

(n) Establishment and operation of the Special Account (SA) in accordance with the AlbanianTreasury regulations (para.3.35 and CA 2.02, Schedule 4); and

(o) PIU's Secretary would have the project accounts, including SOEs, and the special accountaudited by an independent auditor acceptable to IDA, and would submit to IDA such auditreports within six months of the end of each fiscal year (paras.3.33, 3.37 and CA 4.01);

5.02 Appointment of the Project Coordinator will be a condition of Credit Effectivenes (para3.21). Hiring of the international team of consultants for supervision of road works will be a

condition of effectiveness of the credit. (para.3.10 and CA 3.06; 6.01; Schedule 3, section 11).

5.03 By reaching the above agreements, the project would be suitable for a SDRI7.4 million(US$25.0 million equivalent) credit under the standard IDA terms, with 40 years maturity,to the Government of Albania.

m: \albania\sar\albania\procur.doc

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Annex 1.1ALBANIA


Transport Activity (public sector)

Designation Unit 1993 1994 1995(thousands)

Transport of Goods

Total tons 8,420 4,540 3,978t-km 146,926 115,216 113,261

of which:1) Railways tons 539 522 574

t-km 53,989 52,662 52,7932 )Roads tons 7,881 4,018 3,404

t-km 92,937 62,554 80,468Volume of loading

and unloadingTotal tons 1,095 972 1,640

3) PortsDurres tons 774 662 988Viora tons 15 78 236Saranda tons I1 20 30Shengjini tons 28 33 59

2) Railways tons 267 179 327

Evolution of Freight (in 000tons) Evolution of Railway Passanger TraMc(Railways. Roads and Port of Durres) (millions)

8000 12

7000

6000 ~ ~ ~~~-4-Railways B0

5000 -0-- Port of Durres

4000 ~~~- -Roads6

1000 2

0 0

1990 1991 1992 1993 1994 1995 1990 1991 1992 1993 1994 1995

Source: INSTAT (Instituti i Statistikes), Tirana, AlbaniaDate: February 1996.

m:\albania\sar\albania\annex I .doc

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Annex 1.2ALBANIA


Evolution of the Road Vehicle Fleet 1990-1995

Cars Buses, Tractors, Light Medium Heavy Grandmini- Pickups Trucks Trucks Trucks Trailers Totalbuses (0.8 t) (2.0 t) (5.0 t) (12 t)

1990 (public) 2,362 1,798 984 5,573 5,543 831 540 17,631

1992 (Nov.) 18,942 3,819 10,440 7,663 5,620 924 711 48,1191994 (April):-public 7,586 2,500 860 1,452 1,518 96 786 14,798-private 53,935 4,298 11,132 5,226 4,628 1,150 274 81,243Total 61,521 6.798 11,992 6,678 6,146 1,246 1,060 95,4411995 (Dec.):-public 5,865 977 893 821 1,086 66 1,340 11,048-private 62,828 5,955 11,211 6,888 7,559 1,584 2,571 98,596Total 68,693 6,932 12,104 7,709 8,645 1,650 3,91 1 109,644

70000 -

60000.

50000 t---Cams

40000 -6-S Buses

- - Trucks

-- Trailers30000 . utility

20000.

10000

1990 1992 1994 1995

Source: INSTAT (Instituti i Statistike), Tirana;February 1996.m \albania\sar\annex I 2.doc

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Annex 1.3

ALBANIA


Air Transport Activity at Rinas Airport, 1993-95

1993 1994 1995Number of flights:

Domestic Company: 647 287Foreign Companies: 2,014 2,147 2,474Total: 2,661 2,434 2,474

Number of Passengers:Departures: Domestic company 11,767 4,921

Foreign Companies 54,243 75,888 92,226Sub-Total 66,010 80,809 92,226

Arrivals: Domestic Company 10,688 5,110Foreign Companies 53,425 72,273 89,132Sub-Total 64,113 77,383 89,132

Total: 130,123 158,192 181,358

Note: in 1995, the joint venture formed to run the Albanian Airlines broke up.

Source: INSTAT (Instititi i Statistikes), TiranaDate: February 1996.

m:\albania\sar\albania\annex 13.doc

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Annex 1.4

ALBANIA


Transit Traffic in 1995

Cars Buses and Empty LoadedVans Trucks Trucks TOTAL

National Transit

Foreign vehicles: -entering 34,994 7,508 2,254 49,648 94,404-leaving 28,918 3,634 17,972 46,648 97,172

Local vehicles: -entering 48,780 5,178 4,824 12,518 71,300-leaving 53,816 1,622 27,988 13,582 97,008

National Transit Total:-entering 83,774 12,686 7,078 62,166 165,704-leaving 82,734 5,256 45,960 60,230 194,180

International Transit

-entering 3,256 850 162 12,110 16,378-leaving 1,064 376 2,618 11,148 15,206

Graad TIta: entOing 7,63O 13,53 J 7 4Q . 7 _4.-. .le*iving ~83,79-. : 63. 4.,57;8 7I. Z09. .6- . . . . . .......... . . . ... .........- .. _

TOTAL. entenng+leaving 17MA828 M55818 14&54 1

Source: INSTAT (Instituti i Statistikes), Tirana, AlbaniaDate: February 1996.

m -\albania\sar\albania\annex 14

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Annex 2.1

ALBANIA


Traffic Survey on Roads to be Improved under the Project(estimated vehicles per day in December 1995)

VehiclesCorridor and Direction Cars/Vans < Vans/Trucks Trucks Trucks with Semi- Buses Total

2T. 2-6T. >6T. trailer trailers..... ~~~~~~~... ...... .. igg... i

~~~~~~~~~~~~~~~...,,........_ .- S.... .. W .....

1)Tapize-Fushe Krujasection:

Tapize-Fushe Kruja 1,020 500 270 100 90 240 2,220Fushe Kruja-Tapize 1.040 460 28 120 90 29 2.280

Total (vpd) 2,060 960 550 220 180 930 4,5002)Miloti-Lezhe section:

Miloti-Lezhe 983 607 255 58 88 288 2,279Lezhe-Miloti .993_ 550 50 80 90 2.2NiTotal (vpd) 1,976 1,205 505 108 168 578 4,540

, ,~~~~~~~~~~~~~~. .,,. .. ... -. .

1) Elbasan-Qafe Thanesection:

Elbasan-Librazhd 579 250 300 215 141 65 1,550Librazhd-Elbasan 580 265 321Q 150 60 LIQ

Total (vpd) 1,159 515 615 425 291 125 3,130Librazhd-Qafe Thane 695 300 250 123 182 68 1,613Qafe Thane-Librazhd 695 290Q 288 130 18 69 1.557

Total (vpd) 1,390 590 538 253 262 137 3,170

Source: INSTAT (Instituti i Statistike), Tirana, Albania.

Date: February 1996

m:\albania\sar\albania\annex2 .doc

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Annex 2.2

ALBANIA


Separation of the former GRD Network into GRD and Local Administration

(Effective April 1, 1996)

Road Network (km)Personnel Budget

Paved Gravel Earth Urban TO 'T'A'L (No.) (IV.-XII.streets 1996)

GRD____ _ _______ - ;_____ _______ ______. . millionUS$GRD

(main road 2,500 721 -3,221. 1,500 18.8 (70%)network)

Local _Administration 5,056 4,1l0 2,400 1,000 2,56 2,003 8.1 (30%)

: -.TOTA. . ............. -7- I- 4A1 2 - M 3,503 26.9

I)

GRD proposal (millions of US$ excluding salaries)

Source: GRD, February 1996.

m:\albania\sar\albania\annex22.doc

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Annex 2.3

ALBANIA


Administrative Classification of GRD Roads

GRD Roads (km)

Regional Road National Tourist Mining Strategic T L ...Directorate . .....

(RRD) D)___ ___...

DIBER 182 -33 0 - 21-5-:-

Fl ER 428 144 7 13 5-2. ;--5X

,--. -. ....-...,.,..;.'.,:,-,.

GJIROKASTER 366 54 - . 42.

KORCE 330 46 47 42-$ .

KtUKES 40 31 19= - J44

SHKODER 289 186 35 - . . -,' ..

S:.-;........:.. .. i......

TIRANA 350 68 59 130 607

Source: General Roads Directorate, Tirana, February 1996.

m :\aibania\sar\aibania\annex23.doc

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Annex 2.4

ALBANIA


Road Design Standards, 1996

Design Element Unit Type of TerrainFlat Hilly Mountain

Design Speed km/h 100 70 60

Width of Carriageway m 7,5 7,5 7,0

Width of Shoulder m 1,5 1,5 1,0

Min. Horizontal Radius m 250 150 100

Min. Horizontal Tangent m 200 150 50

Crossfall % 2,5 2,5 2,5

Max. Superelevation _ 6 8 10

Min. Parameter of Clothoide m 150 80 50

Min. Radius, without Transition Curve m 2.000 1.500 800

Max. Gradient % 4 8 12

Min. Radius of Crest Curve m 5.000 3.000 800

Min. Radius of Sag Curve m 4.000 1.500 500

Min. Length of Vertical Curve m 320 240 120

Stopping Sight Distance m 150 100 50

Source: GRDDATE: Februarn 1996

m \albania\sar\albania\annex24 doc

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Annex 2.5

ALBANIA


Road Investments, 1994-96(US$ million)

GRD Other I)1994 Roads Roads Asphalting Bridges Other TOTAL

Local Part 2.1 1.3 2.7 0o4 0 6.5

Foreign PartEC 0 0 0 1.2 1.2

Total 2.1 1.3 2.7 0.4 1.2 7.7

GRD Other 1)1995 Roads Roads Asphalting Bridges Other TOTAL

Local Part 4.8 1.2 2.4 1.1 0 9.5

Foreign Part I = = ==

WB 6.4 2.0 8.4

EC 1.4 1.4

Total 11.2 2.6 2.4 1.1 2.0 19.3

(Forecast) GRD Other 1)

1996 Roads Roads Asphalting Bridges Other TOTAL

Local Part 5.0 1 7 2.0 1.9 2.4 13.0

Foreign Part

WB 8.8 6.0 _ 14.8

EBRD,PHARE 15.0 15.0

Total 28.8 7.7 2.0 1.9 2.4 42.8

i) Other includes: equipment, studies.

Source: INSTAT (Instituti i Statistikes), Tirana, AlbaniaDate: February 1996m:\albania\sar\albania\annex25 .doc

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Annex 2.6Page I of 2

ALBANIA


Road User Charges Model

1. The Road User Charges (RUC) Model is currently under development by the WorldBank. The objective is to estimate road user charges required to ensure that: (i) the cost ofoperating and maintaining the rnain interurban road network is fully funded, and (ii)budgetary transfers to road agencies managing local rural roads and urban roads are sufficientto ensure their maintenance programs are also fully funded, and (iii) sufficient funds areavailable to finance investments in main interurban roads, to support investments in localrural roads and urban roads, and to meet debt service obligations. Maintenance cost estimatesare based on the Bank's Highway Design and Maintenance Standard Model (HDMIII).

2. In order to optimize the use of the road network, and thereby maximize net economicbenefits to the country, road user charges should be set equal to the cost of the resourcesconsumed when using the road network. There are two costs to be considered:

(i) the damage done to the road surface by passage of (especially heavy) vehicles,

(ii) the additional costs that each road user imposes on other road users and onthe rest of the society (congestion costs).

However, since less than half of the costs of operating and maintaining the road network varywith the traffic, and roads in most developing countries do not experience sufficientcongestion to cover fixed costs, prices set equal to short-run marginal costs will result inlarge financial deficits. It is reasonable to assume that these deficits should be financed byroad users (or those who benefit from road access in the case of local access roads) since theyare among the wealthiest members of society. Although the poor depend heavily on publictransport, it is better to assist the poor by providing other forms of income support, possiblyincluding subsidizing selected transport services.

3. The model assumes that:(i) the total cost of operating and maintaining the interurban road network will

be financed through road user charges,

(ii) only the variable cost of operating and maintaining local rural roads andurban roads will be financed through road user charges, and

(iii) the balance of the required expenditures for local rural roads and urban roads

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Annex 2.6Pagu 2 of 2

will be financed by local taxes (e.g. parking charges, local property taxes.market taxes).

In addition, the model allows, through the iterative adjustment of road user charges, to assurethat each vehicle class (notably heavy trucks), covers at least its variable costs.

4. Model inputs and calculations are shown in the Attachment to this Annex. The lengthof the main rural, local rural, and urban road networks in Albania for each surface type andestimated traffic level (reference main text) are shown on page I to the attachment. T hevehicle fleet is shown on page 3, together with the estimated kilometers driven per year byeach vehicle class, adjusted for conditions in Albania. The weight and fuel consumption ofeach vehicle class were also estimated based on international norms. Unit road maintenancecosts, shown on page 6 to the attachment, were adjusted to Albanian conditions based on theexperience of GRD maintenance engineers. Investments in the main rural road network in1995 are shown on page 2, together with estimated budgetary allocations by the centralgovernment for local rural roads and urban roads. Local governments are not believed tohave any other source of revenue for roads in 1995. Expenditures on traffic police (whichshould also be covered by road user charges) were estimated based on international norms asshown on page 2 to the attachment. Current road user charges are shown on page 4,comprising fuel taxes and vehicle registration fees as discussed in the main text. Customsduties on fuel, which apply to all imports, were not considered to be fuel taxes. The modelwas tested with two assumptions: (i) all fuel taxes are included (page 4 of Attachment to thisAnnex); and (ii) only the portion of the fuel tax which is called a "road tax" is included (page5 of Attachment to this Annex).

5. Using the above inputs, the model computes the annual routine (e.g. patching andgrading) and periodic (overlay and regraveling) maintenance costs needed to maintain thenetwork which minimizes economic costs, defined as the sum of road expenditures plusvehicle operating costs. The model divides total costs into variable (those which change withtraffic and axle loading) and fixed costs (those which are independent of road utilization, seefootnotes to the attachment). The model then calculates the funds which should optimally bespent on the main rural road network, as well as on the local road network and urban roadnetwork (page I to the attachment). It also calculates which agency should finance theseexpenditures (page 2), the road user charges required to cover the variable costs of eachvehicle class (page 3), and the revenues collected from each vehicle class (page 4). It thencompares revenues to costs for each vehicle class, as well as in aggregate (page 4 to theattachment).

6. Results are discussed in paras. 2.20-2.24 of the main text.

March 13. 1996c:\data\annex 26.doc

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Costs of Maintaining the Road Network on a Sustainable Basis Annex 2.6Attachment I

Routine Maintenance Periodic Maintenance Page l of 6Road Road Traffic Length Fixed Varable Total Fixed Variable TotalNetwork Type (veh/d) (km) (MS/yr) (MS/rr) (MS/r) (MS/r) (MS/yr) (MS/rr)Main Rurai Roads Paved 300 200 026 0 02 0 11 0 05 0.16

600 500 0 64 0 11 0.75 0.35 0 30 0.651.000 500 0 64 0.19 0 83 0.43 0 45 0 88

3,000 500 0 64 0.56 1 20 0.48 0 48 0.966.000 300 0 38 0.68 1 06 0.30 0 33 0.63

10,000 0 0 00 0.00 0.00 0.00 0 00 0 00Total 2,000 2.55 1.56 4 11 1.66 1 62 3.28

Gravel 50 0 0.00 0.00 0 00 0.00 0.00 0.00150 521 0 04 0.26 0.30 0.43 0.34 0.76300 200 0 02 0.13 0.15 0.16 0.23 0.39

Total 721 006 0.39 045 0.59 0.56 1 15

Earth 25 0 0.00 000 0 00 0 00 0 00 0 0050 0 0.00 0 00 0 00 0 00 0.00 0 00

Total 0 0.00 0.00 0 00 0 00 0.00 0.00

Total 2,721 2.61 1.95 4 56 2.25 2.18 4.43Local Rural Roads Paved 300 2,55 3.26 0 29 3.55 1.39 0 63 2.02

600 2,000 2.55 0.45 3.00 1 40 1 19 2.591,000 300 0 38 0 11 0.50 0.26 0.27 0.533,000 200 0.26 0.23 0.48 0.19 0.19 0.386,000 0 0.00 0.00 0.00 0.00 0.00 0.00

10,000 0 0.00 0.00 0.00 0.00 0.00 0.00Total 5,056 6 45 1 08 7.52 3 24 2.28 5.52

Gravel 50 2,000 0 13 0 67 0.80 1 65 0 33 1.97150 2,000 0 15 1.00 1 15 1 65 1 29 2.94300 110 0.01 0.07 0.08 009 0 12 0.21

Total 4,110 0.28 1.74 2.03 338 174 512

Earth 25 2,400 0 08 0.41 0.48 0.00 0.00 0.0050 0 0 00 0.00 0.00 0.00 0.00 0 00

Total 2,400 0.08 0.41 0.48 0.00 0.00 0 00

Total 11,566 681 3.22 10.03 6.62 4.03 10.64Urban Roads Paved 300 2 0.32 0.03 0.35 0 14 0 06 0.20

600 200 0.26 0.05 0.30 0 14 0.12 0.261,000 300 0.38 0.11 0.50 0.26 0.27 0.533,000 200 0.26 0.23 0.48 0.19 0 19 0.386,000 S0 0.06 0.11 0.18 005 006 011

10.000 0 0.00 0 00 0 00 0 00 0.00 0 00Total 1,000 1 28 0.52 1 80 0.77 0.70 1.47

Gravel 50 0 0.00 0.00 0.00 0.00 0.00 O.W150 0 0.00 0.00 0.00 0.00 0.00 0.00300 0 0.00 0.00 0.00 0.00 0.00 0.00

Total 0 000 000 0.00 0.00 0.00 0.00

Earth 25 0 0.00 0.00 000 0.00 0.00 0.0050 0 0.00 0.00 0.00 0.00 0.00 0.00

Total 0 0 00 0.00 0 00 0.00 0.00 0.00

Total 1 000 1 .28 0 52 1 80 0.77 0.70 1.47Total 15.287 10.69 5.70 16.39 9.65 6.91 16.55

Main Rural Roads: Trunk roads managed by the main road agencyLocal Rural Roads: Rural roads managed by rural distnct councilsUrban Roads: Urban roads managed by the municipalities

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Annex 2.6Attachment I

Page 2 of 6

Annual Expenditures on Roads Subdivided into Main Cost Components

Annual Expenlitures Needed Finrnced User Charge Fisnce

Recurrent lnvest_ To Recurrenm Invl t Toat by

Fixed Variable merits Fbid Variable manb Disdricts

Costs Cost Coas Counciis

(MYyr) (MWSW) (MYyr) (MS/VT (MS/) (MSNtW) (MS/Vr) (MSYy ) (MYyr)Recurrent Mun Rural Roads Routine Maintenance 2.61 1 95 4.r 2.61 1.96 4.56

Costs Peridic Maintennce 2.25 Z18 4.43 2.25 2.18 4.43

Pdking' 0.43 0.21 0.70 0.49 0.21 0.70Administration2

0.15 0.06 0.20 0.15 0.05 0.20

Interest Charges3 0.00 0.00 0.00 O.00 0.00 0.00Total 5.50 4.39 9.89 5.50 4.39 9.89

Local Rural Roads Grants for Maintenance'Routine Maintenance 5.78 3.05 8.83 5.78 3.05 8.83 0.00Periodic Maintenance 6.62 4.03 10.64 6.62 4.03 i06.4 0.00

Tobl 12.39 7.08 19.47 12.40 7.08 1947 12.39

Urban Roads Grants for Maintenance'Routine Maintewance 1 07 0.44 1.51 1.07 0.44 1.51 0.00Periodic Maintenance 077 0.70 1.47 0.77 0.70 1.47 0.00

Tobl 1.84 1.14 2.98 1.84 1 14 Z98 1.84

Total 19.73 12.62 32.35 19.74 12.61 32.35 14.23

Investments Main Rural Roads 11.19 11.19 11.19 11.19

Deb Servimce /

Repayment 0.00 0.00 0.00 0.00

Grants for

Local Rural RoadS' 320 3.20 3.20 3.20 0.00

Grants for

Urban Roads' 2.JO 2.10 2.10 2.10 0.00

Total 16.49 16.49 16.49 16.49 0.00

Total 19.73 12.62 16.49 48.84 19.74 12.61 16.49 48.84 14.23

Variable costs which vary with vehce utilization (routine maintenance, policing, and administration) 5.70

Variable costs which vary with ad loading (penodic maintenance) 6.91

12.61

1 fr thbs case, an astae 70M pest df ttes cosb are frxed2 r this case fid cot incbadl spenditures on bulding end- 70 pe t o hedquater a i3inthIscaser IteRest 4anwe :11udnbwra le ftdcosts4 In this case. usr chargs oveir al vrsbl cosa and dbb)ct council coWe eWI fbd rosht51n thi case, dialot cournl cover W pefwat of the grat for locAM rland urban rods

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Characteristics of Vehicles Using the Road Network Annex 2.6Attachment I

Kilometers Equivalent Vehicle Loading Page 3 of 6Number of Dnven Standard Axle Fuel Utilization Impact

Vehicle Type and Vehicles per year per vehicle Consumption Veh-kmlyr ESA-kmryrPayloaa (tons) (veh) (km/yr) (ESA/veh) (1/ veh-km) (million) (million)

Car Gasoiine 32,560 20,000 0.00 0.07 651 0Car Diesel 36,133 20,000 0.00 0.09 723 0

Utility (0.8) 12,104 30,000 0.01 0.18 363 3

Light Truck (2.0) 7,709 50,000 0.09 0.20 308 35

Medium Truck (5.0) 8,645 50,000 0.58 0.30 432 251Heavy Single-axle Truck (12.0) 1,150 50,000 2.60 0.45 83 215Articulated Truck (25.0) 3,91t 50,000 6.80 0.55 196 1.330Bus 6,932 50,000 0.49 0,45 347 170

Total 3,102 2,003

Road User Charges Required to Cover Variable Costs

Vanable Costs Requirements Vehicle Charges to Cover Vanable CostsVehicle Loading Utilization Vehicle Loading

Vehicle Type and Related Related Total Vehkrm/yr Related Redated TotalPayload (tons) (MSiYr) (MSJYr) (MSdr) (million) (c/ veh-km) (c/veh-km) (c/veh-km)

Car Gasoline 1.15 0.00 1.15 651 0.18 0.00 0.18Car Diesel 1.27 0.00 1.27 723 0.18 0.00 0.18Utility (0 8) 0.67 0.01 0.68 363 0.18 0.00 0.19Light Truck (2.0) 0.57 0.10 067 308 0 18 003 0.22Medium Truck (5.0) 0.79 0.87 1.66 432 0.18 0.20 0.39HeavySingle-axleTruck(12.0) 0.15 0.74 0.89 83 0.18 0.90 1.08Articulated Truck (25.0) 0 36 4.58 494 196 0 18 2.34 2.53Bus 0.64 0.59 1.22 347 018 0.17 0.35

Total 5 70 6.91 12.49

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License Fees, Truck Charge, and Fuel Levy Annex 2.6Attachrment I

(based on total fuel taxes) Page 4 of 6

Standard Heavy Vehicle Charge Equivalent Heavy

License ($/ESA/yr) Standard Vehicle

Vehicle Type and Fee Axle Fee

Payload (tons) (SNeh-yr) 0 (ESAlveh) (Slveh-yr)

Car Gasoline 35

Car Diesel 35 Medium Truck (5.0) 0.58 0

Utility (0.8) 65 Heavy Single-axle Truck (12.0) 2.60 0

Light Truck (2.0) 65 Articulated Truck (25.0) 6.80 0

Medium Truck (5.0) t00

Heavy Single-axle Truck (12.0) t00

Articulated Truck (25.0) 100

Bus 100 Fuel Levy for all vehicles ($/I) 0:2

Unit Road User Charges and Road User Revenues

Unit Road User Charges RevenuesHeavy Heavy

Standard Vehicle Vehicle Standard VehicleFuel License License Utilizaion Fuel License License

Vehicle Type and Levy Fee Fee Total Veh-km/yr Levy Fee Fee TotlPayload (tons) (c/ veh-km) (cl veh-km) (cl veh-km) (c/ veh-km) (million) (MSNYr) (MSlYr) (MS(Yr) (MSlYr)

CarGasoline 1.54 0.18 0.00 1.72 651 10.03 1.14 0.00 11.17Car Diesel 1.98 0.18 0.00 2.16 723 14.31 1.26 0.00 15.57Utility(0.8) 3.96 0.22 0.00 4.18 363 14.38 0.79 0.00 15.17LightTruck(2.0) 440 0.13 0.00 453 308 13.55 0.40 0.00 13.95Medium Truck (5.0) 6.60 0.20 0.00 6.80 432 28.53 0.86 0.00 29.39Heavy Single-axle Truck (12.0) 9.90 0.20 0.00 10.10 83 8.17 0.17 0.00 8.33Articulated Truck (25.0) 12.10 0.20 0.00 12.30 196 23.66 0.39 0.00 24.05Bus 9.90 0.20 0.00 10.10 347 34.31 0.69 0.00 35.01

Total 146.94 5.71 0.00 152.64

Check Variable Costs Check Total Costs

Charges Proposed Proposed Total RevenuesNeeded Und User Financing Total >to Cover Road Charges Needs Revenues FinancingVariable User > (MSyr) (MY/yr) Needs

Vehicle Type and Cots Charges ChargesPayload (tons) (chveh-km) (c/veh-km) Needed 48.84 152.64 Yes

Car Gasoline 0.18 1.72 YesCar Diesel 0.18 2.16 YesUtility (0.8) 0.19 4.18 YesLight Truck (2.0) 0.22 4.53 YesMedium Truck (5.0) 0.39 6.80 YesHeavy Single-axle Truck (12.0) 1 08 10.10 YesArticulated Truck (25.0) 2.53 12.30 YesBus 0.35 10.10 Yes

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License Fees, Truck Charge, and Fuel Levy Annex 2.6(based on the "Road Tax", i.e. omitting other fuel taxes) Page 5 of:

Standard Heavy Vehicle Charge Equivalent Heavy

License ($IESA/yr) Standard VehicleVehicle Type and Fee Axle Fee

Payload (tons) ($/veh-yr) 0 (ESA/veh) ($/veh-yr)

Car Gasoline 35

Car Diesel 35 Medium Truck (5 0) 0 58 0

Utility (0 8) 65 Heavy Single-axle Truck (12 0) 2.60 0

Light Truck (2 0) 65 Articulated Truck (25.0) 6 80 0Medium Truck (5 0) 100

Heavy Single-axle Truck (12.0) 100

Articulated Truck (25.0) 100

Bus 100 Fuel Levy for all vehicles (S/I) 0.07

Unit Road User Charges and Road User Revenues

Und Roao User Charges RevenuesHeavy Heavy

Standard Vehicle Vehicle Standard VehicleFuel License License Utilization Fuel License License

Vehicle Type and Levy Fee Fee Total Veh-km/yr Levy Fee Fee TotalPayloaa (tons) (c/ veh-km) (c/ veh-km) (c/ veh-km) (c/ veh-km) (million) (MSIYr) (MSlYr) (MS/Yr) (MSfYr)

Car Gasoline 0 49 0.18 0 00 0.67 651 3 19 1 14 0 0 4 33Car Diesel 0.63 0.18 000 0.81 723 455 1 26 000 5.82Utility (08) 1 26 0.22 0.00 1.48 363 458 079 000 5.36Light Truck (2 0) 1 40 0 13 0 00 1 53 308 4 31 0 40 0.00 4 71Medium Truck (5 0) 2 10 0 20 0 D 2.30 432 9 08 0 86 0 00 9 94Heavy Single-axle Truck (12 0) 3 15 0.20 0 00 3.35 83 2.60 0 17 000 2.76Articulated Truck (25 0) 3 85 0.20 0.00 405 196 7 53 0 39 O.00 7.92Bus 3 15 0.20 000 3.35 347 10.92 0.69 0O0 11.61

Total 4675 5 71 0 00 52.46

Check Variable Costs Check Total Costs

Charges Proposed Proposed Total RevenuesNeeded Unit User Financing Total >

to Cover Road Charges Needs Revenues FinancingVariable User > (MS/yr) (MSyr) Needs

Vehicle Type and Cots Charges ChargesPayload (tons) (clveh-km) (c/veh-km) Needed 48.84 52.46 Yes

Car Gasoline 0.18 0 67 YesCar Diesel 0 18 0 81 YesUtility (0 8) 0.19 1 48 YesLight Truck (2 0) 0 22 1 53 YesMedium Truck (S 0) 0 39 2 30 YesHeavy Single-axle Truck (12.0) 1 08 3 35 YesArticulated Truck (25.0) 2.53 4 05 YesBus 0 35 3 35 Yes

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Annex 2.6Attachment I

Page 6 of 6

Unit Annual Maintenance Needs Cost Factors

Pavea Roads Traffic Fixed Variable CostRoutine Maintenance (veh/d) S/km-yr S/km-yr per veh/d FactorUnit Costs

Ail 1 ,7DW 0.50 0.75

Variable = Costs are a function of Traffic (veh/d)

Fixed = Costs are independent of Traffic (veh/d)

Total = Fixed + Variable ' ADT

Gravel Roads Traffic Fixed Variable CostRoutine Maintenance (veh/d) 5/km-yr S/km-yr FactorUnit Costs

0.6350 100 536

150 120 S0W

300 140 1,074

Variable = Grading costs (@S88/km/grading)

Fixed = Other routine maintenance costs

Earth Roads Traffic fixd Variable CostRoutine Maintenance (veh/d) S/Am-yr S/km-yr FactorUnd Costs

0.5325 50 268 _ _ _ _ _ _ _ _

50 100 536

Variable = Grading costs (@588/km/gading)Fixed = Other routine maintenance costs

Paved Roads Traffic Fixed Variable CostPeriodic Maintenance (veh/d) S/km-yr S/km-yr FactorUnit Costs

300 862 392

600 1,112 9421.000 1,362 1,442

3,000 1,511 1,531

6,000 1,570 1,77210,000 2,106 1,852

Based on 4cm overlays at 85 per m2

Gravel Roads Traffic Fixed Variable CostPeriodic Maintenance (veh/d) S/km-yr S/km-yr FactorUnit Costs77

50 823 164 [150 823 645

300 823 1,126

Variable = Regravelling (@S71cu m)Fixed = Other routine maintenance costs

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Annex 2.7Page I of I

ALBANIA


Organization and Management Action Plan

Step Action Responsibility Date

I As required, expand the terms of reference forthe Organization and Management Study GRD 5/31/96(OMS) being carried out under the Rural RoadsProject to ensure that all non-GRD roads areinventoried, the network to be maintained isidentified, and required maintenance budget andadministrative arrangements are defined.

2 Carry out the OMS Study in accordance withthe RRD Action Plan, and discuss the results GRD 12/31/97with the Association.

3 Provide an adequate maintenance budget from1998 onwards. MCT 12/31/97

SOURCE: GRD and appraisal missionMarch 1996

M:\albania\sar\albania\annex2.7

-54-

Annex 2.8

ALBANIA


Number of Road Accidents Reported, Persons Killed and Injured, 1994-95

Total95

4th.Qtr95 d

3rd.Qtr95 1Re,orted ___________ ________ _ __O NoAnjured

l * No.Ki 41159739579 306lled

2nd.Qtr95 . No.Accidents

NoAcidntse 536 78 195 770 673 333

Source: INSTAT, (Instituti i Statistikes), Tirana, Albania

Date: February 1996

c:%data\afnnex27.doc

-55-

Annex 3.1Page 1 of 5

ALBANIA


Standars Cross Sections

1. EAST-WEST CORRIDOR

a) ELBASAN-LIBRAZHD (30.5 km).

Improvement. enlargement and rehabilitation of the first 30.5 km of the route fromElbasan to Qafe Thane at the Macedonian border (71.1 kim). The upgrading includesimprovement of drainage, enlargement (when required) of the road to a 7.50 m wideasphalted carriagewav and two 1.50 m wide gravel shoulders, strengthening of thepavement with a 5 cm asphalt concrete overlay, and completion of the bypass to the cityof Elbasan. Flat terrain (10 kmn), the rest undulated. Estimated traffic: 2.200 to 3,100v.p.d with a high incidence (30 to 35%) of trucks. Starting construction: 1997.Construction period: 18 months. Contractual maintenance period: 12 months. Thetypical cross section is shown bellow:

-r~~~~~~~~~1C

1.AI I 242.

b) LIBRAZHD-QUKES (21.0 kin).

The upgrading includes improvement of drainage, enlargement (when required) to a7.50 m wide asphalted carriageway and two 1.5 m wide gravel shoulders, andstrengthening of the pavement with a 5 cm asphalt concrete overlay. It also includes anew bypass at the citv of Librazhd. The terrain is heavily undulated with at least ten kmin mountainous terrain requiring the beginning of a climbing lane to be constructed in thenext road section. Estimated traffic: 2,200 to 3,100 v.p.d with high incidence (30 to 35%)

-56-

Annex 3. 1Page 2 of 5

of trucks. Starting construction: 1998. Construction period: 24 months. Contractualmaintenance period: 12 months. Presence of the river is shown bellow:

j5t ,\5rnL ,17,,5m

oF pF tL 7 W +w,,

c) QUKES-QAFE THANE (19.6 km).

Improvement. enlargement and rehabilitation of the final20 km of the road link to theMacedonian border at Qafe Thane. The upgrading includes improvement of drainage,enlargement (when required) of the road to a 7.00 m wide asphalted carriageway and two1.0 m wide gravel shoulders, improvement of the intersection diverting traffic to QafeThane and Pogradec. and about 3.2 km of a climbing lane on various segments withgradients exceeding 7%. The terrain is mountainous. (see the cross section (i) bellow),except the last 4.0 kmn running on a 800 m high plateau near the Ohrid lake. Estimatedtraffic: 3.100 v.p.d. with high incidence of trucks (40%) mostly intemational traffic fromF.Y.R. of Macedonia and Bulgaria. Therefore this section in some places includes thirdline for heavy vehicles and trucks (see cross section (ii) bellow). The whole 19.7 km roadsection area is sparsely populated but for a few small villages. Starting construction:1998. Construction period: 24 months. Contractual maintenance period: 12 months.

(i):

,',RI I

P a,5rn 1 ,-rm ,, n

I,.

H ~ ~ ~ ~ ~ ->a <

--.e .qo

rovbr sQow- L toc

-57-


(ii):

I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

r-n4

2. NORTHERN CORRIDOR

a) TAPIZE-FUSHE KRUJE (7.0 kin). -

Rehabilitation of a 7.0 km road section between Tirana and Fushe Kruje (missed underthe Transport Project) with improvement of drainage, uniformn 7.50 m wide carriagewayand two 1.50 m gravel shoulders (when required), and a 6 cm asphalt concrete overlay(see Standard Cross Section bellow). Flat terrain. Estimated traffic: 4,500 v.p.d with 20% of trucks. Starting construction: 1997. Construction period: 12 months. Contratualmaintenance period: 12 months.

bwwh'A Ocm

L__ _ _ ~~~~~~~~~~~~;t Mbaz' cm ; -;.

-58-


b) MILOTI-LEZHA (12.0 kin).

Construction of a new 12.0 km road section (7.50 m wide asphalted carriagewav andtwo 1.50 m wide gravel shoulders) shortening the trip between Miloti and Lezha by 6.1km. and avoiding traffic congestion through the two cities. The road will pass through anuninhabitated area requirinSg expropriation of 15 ha of land. The terrain is flat. Estimatedtraffic: 4,540 v.p.d with 20 % of trucks. Starting construction: 1997. Construction period:24 months. Contractual maintenance period: 12 months.

"~v 447 4I

.r~~~~~~-7\IP,v Iubw -5 tt

-~ ~ Kwr. nS czbure. 6 crn

c) MATIT and DRIN Bridges.

Completion of the new road from Miloti- Lezha (12.0 km) requires construction of twoimportant new bridges. One over the Matit river. starting at km 1+357 of the new roadand 650 m long; the other over the Drin river. starting at km 10+300 and 200 m long.Both bridges are designed to rest on piled foundations over solid gravel soil (as shown theCross Section bellow), and are calculated tor stresses at the base and along the shaft, withthe exception of the precast (bored type, 1.200 mm in diameter) piles. The girders (mostof them 20 m standard length) and deck slabs will be prefabricated. and the whole designof the structures takes into account the seismic characteristics of the area (level 7 on theRichter scale). The live load with which both bridges are calculated is N-30 and T-80(Albanian standards KTP 22 and 23). Estimated traffic: 4.550 v.p.d. with 20% of trucks.Starting construction: 1998. Construction period: 24 months. Contractual maintenanceperiod: 12 months.

-5.

3

3

I0 -

3 1 3~~~~~~~~~~~~~ A I

Is

0~~~~

-60-

Annex 3.2Page 1 of I

ALBANIA


Road Maintenance Equipment

Unit Price TotalITEM Unit (US$000) (US$000)

A. GENERAL ROADMAINTENANCE EQUIPMENT

l. Pick-up Trucks 1.5 ton 4 25 1002. Service Car 4W/D (second hand) 14 7 983. Backhoe Loaders (0.25 m3) 7 70 4904. Wheel Loader l0 80 8005. Sweeper Truck 1 80 80Sub-Total 1,568B. ASPHALT EQUIPMENT

1. Roller 15 15 2252. Self-Propelled Bitumen Sprayer 8 50 4003. Road Marking Machine 3 15 45Sub-Total _ _l _670

C. LABORATORY, RADIO ANDCOMPUTING EQUIPMENT

=. Mobile Laboratory 1 200 2002. Mobile Weight Scales 5 1 8 903. Mobile Traffic Counters 20 4 804. Radio Communication System 1 700 7005. Computers / Printers 10 4 406. Mobile Worksops 3 100 300Sub-Total 1,410TOTAL 3,648Spare Parts (about 10%) 352

TOTAL (excluding contingencies) ___ 4,000Contingencies 800Grand Total 4,800

Source: Date: February 1996,GRD and Mission Estimates

m:\albania\sar\albania\annex32.doc

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Annex 3.3Page 1 ..f I

ALBANIA


Safety and Signalization Equipment and Materials

Unit Price TotalITEM Unit (US$000) (US$000)A. ROAD SAFETY EQUIPMENT FOR

TRAFFIC POLICE

1. Laser Speed Indicators 60 8.5 5102. Testers for Alcohol (breath analyzers) 72 1.2 863. Lamps, Lights and Warning Equipment 3004. Computers 25 4.0 1005. Motorcycles 20 6.0 1206. Service Cars 4W/D 15 15.0 2257. Spare Parts (about 10%) 130

Sub-Total ' _B. SPECIAL CLOTHES FOR TRAFFIC

POLICE1. Leather Jackets - 1,100 0.15 1652. Special Uniforms 1,100 0.20 2203. Leather Gloves 1,100 0.02 224. Handle "Stop Circulation" Panel 1,100 0.02 22

Sub-Total 429

C.VERTICAL AND HORIZONTALSIGNALIZATION

1. Equipment for Signalization 200 2002. Guard Rails (5,000 m) 5,000 60 3003. Traffic Signs, 6,000 75 4504. Paints (kg) 15,000 10 150

Sub-Total _,100

TOTAL ______._ 3,000

Contingencies 600GRAND TOTAL (including contingencies) 3,600

Source: Ministry of Internal Affairs and Mission EstimatesDATE: February 1996

m:\albania\sar\albania\annex33 .doc

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ALBANIA


Road Works ProgramSupervision of Road Works

TERMS OF REFERENCE

A. SCOPE OF WORKS

1. The Government of Albania (GOA) has requested assistance from the World Bank,International Development Association (IDA), and other donors for a program of newconstruction, rehabilitation, strengthening, and completion of unachieved works of selectedpriority sections of the National Road Network. The General Roads Directorate (GRD) ofthe Ministry of Construction and Tourism (MCT) will be responsible for the supervision ofthe works to be carried out by prequalified contractors selected through InternationalCompetitive Bidding (ICB) procedures. -

2. The works to be carried out include, besides construction of 12 km of a new road(Miloti-Lezha) with two new 650m long (Matit river) and 200m long (Drin river) bridges,under two separated contracts, road improvements such as pavement reconstruction,pavement overlays, widening, shoulder strengthening, drainage structures, retaining walls,new base and sub-base, in the six road sections specified in the Attachment 1 to theseTerms of Reference (T.O.R.). The reconstructed pavements consists of gravel sub-base,crushed rock base course, binder and asphalt concrete wearing course. The length,estimated cost, starting construction year, and period of construction are detailed in theAttachment 1. The total implementation period of the whole program would be forty eight(48) months with individual contractual periods varying between twelve (12) and twentyfour (24) months. The maintenance period for each contract would be twelve (12) months.

3. On behalf of the GOA, the GRD proposes to invite technical and financialproposals from shortlisted Consultants to assist the central and regional units of GRD inbid evaluation, construction supervision, and maintenance services of the works on thebasis of the available designs and bidding documents prepared by GRD. One team wouldbe selected to carry out the supervision of the seven works contracts of the East-West (3contracts) and North (4 contracts) Corridors. The Consultants' team will be assisted by aGRD team designed for supervision of each contract.. Details of the invitation/evaluationof proposals are given in Attachment 2 to these T.O.R.

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4. The supervision team and man-months (m/m) for the supervision of all road workscontracts, would be proposed by the Consultants on the basis of the contracts'characteristics and construction periods, and would include, at least, a chief Resident(Highway with experience on construction of conventional bridges) Engineer, a MaterialsEngineer, and an Inspector/Surveyor. The Consultants would indicate the support requiredfrom GRD's staff for each contract. The invited Consultants should submit their offer forthe works contracts mentioned in the letter of invitation.

B. DUTIES AND RESPONSIBILITIES OF THE SUPERVISIONCONSULTANT.

5. The Supervision Consultant will administer the works contracts and ensure thatcontractual clauses, whether related to quality or quantities of work, are respected. It willmake the necessary measurements and control the quality of works, and will make allengineering decisions- including improvement of designs, if necessary-required for thegood implementation of the contract. However, the Supervision Consultant will seek priorapproval of the GRD to:

(a) issue any variation order with financial implications, except in anemergency situation, as reasonably determined by the SupervisionConsultant;

(b) issue variations in work quantities;

(c) sanction additional items, sums or costs;

(d) approve the subletting of any part of the works; and

(e) approve any extension of the Time for Completion.

6. The Supervision Consultant will carry out the following tasks:

(a) issue the order to commence the works;

(b) administer the civil works contracts, approve the materials andquality of the works in accordance with the contractualspecifications;

(c) approve the Contractor's work program and the source ofmaterials;

-64-


(d) approve the Contractor's working drawings including variationsthereof, approve the setting-out of the works and, give instructionsto the contractor in this regard;

(e) ascertain and determine by measurement the value of the works inaccordance with the Contract;

(f) issue interim certificates for monthly payments, and certifycompletion of parts or the totality of the works;

(g) order tests of materials and of completed works, and order theremoval of improper or substandard works

(h) ensure that traffic operational safety is met before commencing theworks, and issue any work plan or drawing in that respect;

(i) inspect the works during the maintenance period, and issue themaintenance certificate in consultation with GRD;

(j) provide on-the-job trailing to all seconded GRD personnel; and

(k) advise GRD on all matters related to the execution of the contractsincluding processing of the Contractors' claims.

C. DUTIES AND RESPONSIBILITIES OF THE RESIDENT ENGINEERAND ITS STAFF

7. The Resident Engineer and its staff are under overall control of the SupervisionConsultant (the Engineer's Representative), and shall carry out such duties and exerciseauthority as may be delegated to him by the Engineer. The main responsibilities of theResident Engineer are to:

(a) inspect performance of works in compliance with specifications,order, supervise or perform tests on materials and approve ordisapprove the contractor's plant and equipment;

(b) check systematically the progress of the work, examine and attendthe measurement of any work that is about to be covered, andorder, if required, uncovering of unsatisfactory works and itssatisfactory reconstruction;

-65-


(c) check Contractor's invoices, claims and other statements withrespect to arithmetical errors and compliance with the contract;

(d) supervise the contractor in all matters concerning safety and care ofthe works, and direct operations in case of an emergency situationaffecting the safety of life, of the works, or of adjoining property;

(e) verify and, if necessary, correct the "as built" drawings supplied bythe contractor;

(f) carry out, at least, three maintenance inspection visits during theDefects Liability Period (equivalent to the one-year contractualmaintenance period): and

(g) carry out such duties, as may be delegated in writing from theConsultant, under the terms of the contract

D. ADDITIONAL CLAUSE

8. The Consultant, in the person of the Resident Engineer should advise and helpGRD in the prequalification of Contractors and in the evaluation of bids for each of theseven contracts. He will, if and when required by GRD, visit Tirana for as many days asrequired, and advise the procurement/selection team established for the prequalificationprocess and for the evaluation of bids. He would take an active and important role in thepreparation of the bids evaluation report. The fees for this service should be specified in theConsultant's offer duly separated from those of supervision of works (for which theseT.O.R. are mainly meant) on the base of daily fees. Therefore, the Resident Engineer (or,as an exception, any other member of the team and/or of the Consultants' firm) shouldhave significant experience in procurement under International Competitive Bidding(I.C.B.) according to IDA procedures.

E. REPORTS AND DOCUMENTS

9. The Consultants shall furnish to the GRD the following reports and documents in:English:

(a) Monthly Progress Reports (5 copies) commencing at the end of themonth following the date of agreement signed between theContractor and GRD for construction of works, and ending at theend of the month in which the issue of the provisional cormpletion

-66-


certificate, i.e., the starting date of the one-year contractualmaintenance period, takes place;

(b) Completion Report (10 copies) at the time of the final completionof works (Final Completion Certificate issued at the end of thecontractual maintenance period);

(c) Built drawings (one original and five copies) of the project as soonas possible after completion of the project; and

(d) Maintenance Inspection Reports (10 copies) after each maintenanceinspection.

10. The Consultant should carry out, at least, three maintenance inspection visits duringthe one-year maintenance contractual period to be established for the maintenance of worksafter completion.

11. The Contractor shall provide the Consultant furnished office and residential space,and transportation free of charge as per bidding documents. The Contractor shall alsoprovide additional technical services duly justified.

12. The Consultant and its expatriate staff shall be exempt from payment of incometax. The GRD shall assist the Consultant in obtaining any entry/exit visa, or other officialformalities required to satisfactorily fulfill their work. However, the cost of the same shallbe borne by the Consultant.

13. Any reports, documents, drawings, and in general, any available information relatedto the design and execution of the works shall be made available by the GRD to theConsultant.

14. All documentation related to works is, and will remain after completion of works,GRD's property. The Consultant can not use or dispose of this documentation withoutprevious written consent.

F. ESTIMATED MANPOWER

15. An initial estimate of required Consultants' manpower (48 m/m Resident Engineer;24 m/m Materials Engineer; and 24 m/m Inspector/Surveyor) amounts to 96 m/m. TheConsultants should provide an estimate of the local manpower (in m/m and qualifications)required from GRD.

mr:\albania\sar\alban ia\superv.doc

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Annex 3. 4Attachment I

Page 1 of 3

ALBANIA


Road Work Program

LIST OF ROADS FOR THE PROJECT

EAST-WEST CORRIDOR

CONTRACT No. I ELBASAN-LIBRAZHD (30.5 km). Improvement, enlargementand rehabilitation of the first 30.5 km of the route from Elbasan toQafe Thane at the Macedonian border (71.1 km). The upgradingincludes improvement of drainage, enlargement (when required) ofthe road to a 7.50 m wide asphalted carriageway and two 1.50 mwide gravel shoulders, strengthening of the pavement with a 5 cmasphalt concrete overlay (see Standard Cross Sections in Annex3.1, page 1),and completion of the bypass to the city of Elbasan.Flat terrain (10 km), the rest undulated. Estimated cost: US$10.5million. Estimated traffic: 2,200 to 3,100 v.p.d with a highincidence (30 to 35%) of trucks. Starting construction: 1997.Construction period: 18 months. Contractual maintenance period:12 months.

CONTRACT No. 2 LIBRAZHD-QUKES (21.0 km). The upgrading includesimprovement of drainage, enlargement (when required) to a 7.50 mwide asphalted carriageway and two 1.5 m wide gravel shoulders,and strengthening of the pavement with a 5 cm asphalt concreteoverlay (see Standard Cross Sections in Annex 3.1, pagel),. It alsoincludes a new bypass at the city of Librazhd. The terrain isheavily undulated with at least ten km in mountainous terrainrequiring the beginning of a climbing lane to be constructed in thenext road section. Estimated contract cost: US$13.6 million.Estimated traffic: 2,200 to 3,100 v.p.d with high incidence (30 to35%) of trucks. Starting construction: 1998. Construction period:24 months. Contractual maintenance period: 12 months.

CONTRACT No. 3 QUKES-QAFE THANE (19.6 kin). Improvement, enlargementand rehabilitation of the final 20 km of the road link to theMacedonian border at Qafe Thane. The upgrading includes

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Annex 3. 4Attachment I

Page 2 of 3

improvement of drainage, enlargement (when required) of the roadto a 7.00 m wide asphalted carriageway and two 1.0 m wide gravelshoulders (see Standard Cross Sections in Annex 3.1, page 1),improvement of the intersection diverting traffic to Qafe Thane andPogradec, and about 3.2 km of a climbing lane on varioussegments with gradients exceeding 7%. The terrain ismountainous, except the last 4.0 km running on a 800 m highplateau near the Ohrid lake. Estimated contract cost: US$9.3million. Estimated traffic: 3,100 v.p.d. with high incidence oftrucks (40%) mostly intemational traffic from F.Y.R. ofMacedonia and Bulgaria. The whole 19.7 km road section area issparsely populated but for a few small villages. Startingconstruction: 1998. Construction period: 24 months. Contractualmaintenance period: 12 months.

NORTHERN CORRIDOR

CONTRACT No. 4 TAPIZE-FUSHE KRUJE (7.0 km). Rehabilitation of a 7.0 kmroad section between Tirana and Fushe Kruje (missed under theTransport Project) with improvement of drainage, uniform 7.50 mwide carriageway and two 1.50 m gravel shoulders (whenrequired), and a 6 cm asphalt concrete overlay (see Standard CrossSections in Annex 3.1, page 2). Flat terrain. Estimated contractcost: US$1.0 million. Estimated traffic: 4,500 v.p.d with 20 % oftrucks. Starting construction: 1997. Construction period: 12months. Contractual maintenance period: 12 months.

CONTRACT No. 5 MILOTI-LEZHA (12.0 km). Construction of a new 12.0 km roadsection (7.50 m wide asphalted carriageway and two 1.50 m widegravel shoulders) shortening the trip between Miloti and Lezha by6.1 km, and avoiding traffic congestion through the two cities. Theroad will pass through an uninhabitated area requiringexpropriation of 15 ha of land. The terrain is flat. Completion ofthis new road requires construction of two important new bridges,over the Matit and the Drin rivers, which are the object of ContractNo.7 below. Estimated contract cost: US$3.9 million. Estimatedtraffic: 4,540 v.p.d. with 20% of trucks. Starting construction:1997. Construction period: 24 months. Contractual maintenanceperiod: 12 months.

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Annex 3. 4Attachment 1

Page 3 of 3

CONTRACT No.6 MATIT and DRIN Bridges. Completion of the new road fromMiloti-Lezha (12.0 km; contract No.6 above) requires constructionof two new important bridges. One over the Matit river, starting atkm 1+357 of the new road and 650 m long; the other over the Drinriver, starting at km 10+300 and 200 m long. Both bridges aredesigned to rest on piled foundations over solid gravel soil (seeStandard Cross Sections in Annex 3. 1, page 3), and are calculatedfor stresses at the base and along the shaft, with the exception ofthe precast (bored type, 1.200 mm in diameter) piles. The girders(most of them 20 m standard length) and deck slabs will beprefabricated, and the whole design of the structures takes intoaccount the seismic characteristics of the area (level 7 on theRichter scale). The live load with which both bridges arecalculated is N-30 and T-80 (Albanian standards KTP 22 and 23).Estimated cost: US$6.8 million. Estimated traffic: 4,550 v.p.d.with 20% of trucks. Starting construction: 1998. Constructionperiod: 24 months. Contractual maintenance period: 12 months.

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Annex 3.4Attachment 2

Page I of 3ALBANIA


Road Works ProgramSupervision of Road Works

INVITATION FOR PROPOSALS

Sample Letter

Dear Sirs:

We are pleased to informn you that your firm of Consultants has been shortlisted by usfor submission of Technical and Financial proposals for construction supervision of (names ofthe related contracts in Attachment 1) approximately (number) km. Terms of reference forconstruction supervision services are enclosed herewith for your study and information.

The bids for construction works are being issued to the interested prequalifiedcontractors and shall be opened on (Opening Date). The project has been designed by theGeneral Roads Directorate (GRD).

Technical and financial proposals are required to be submitted in separate covers(three copies to GRD and one copy to World Bank, IDA). The technical proposal shouldinclude names and CV's of the proposed members of the supervision team. The financialproposal shall contain all inclusive man-month rates for each category. Man-month rates arepaid according to the actual presence at site. The financial proposal shall be split into twoparts, namely, Construction Supervision and Maintenance Period services.

Evaluation of the technical proposals of the firms invited (minimum of three andmaximum of six firms to be invited) will take into consideration (a) the firm's generalexperience in the field of the assignment, (b) the adequacy of the proposed work plan andapproach in responding to the Terms of Reference, and (c) very specifically, the qualificationand competence of the personnel proposed for the assignment.

Price will also be used as a selection factor but it should never undermine the qualityof the Technical Proposal. The technical evaluation will be undertaken independently and freefrom the influence of price. A two-stage procedure will, therefore, be adopted with thetechnical and financial proposals submitted separately in sealed envelopes, as mentionedabove. The technical evaluation will be completed before the price proposal is reviewed.

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Page 2 of 3

Technical evaluation will be made on the basis of a 100 points ceiling, consisting ofExperience in the relevant field 15 points, Technical Proposal 35 points, and CV's ofSupervision team 50 points. Financial proposal should be given 20 percent weight. To thateffect, results of technical evaluation should be converted into 80 points by multiplying by afactor of 0.80 to which results of financial evaluation should be added to arrive at finalfigures. Only firms scoring 64 points or more in the technical evaluation process, will betaken into price consideration and final selection. Maximum of 20 points should be given tolowest price offered. The financial score (points) of the other offers will be proportionatelylower according to the formula:

Price of Lowest BidScore (points) = x 20

Price of Bid to the Considered

The selected Consultant shall be one which has highest added score from Technicaland Financial Evaluation. The time allowed for submission of proposals is (minimum 45days) after the date of this letter of invitation. The period for which each Consultant'sproposal will be held valid, and during which the Consultant will undertake to maintainwithout charge the proposed staffing (including named Personnel) and the proposed price, is120 days after the above closing date for submission of proposals. If contract award is delayedbeyond the original bid validity period, the successful bidder's bid price will be increased foreach week of delay by two correction factors (to be discussed with and acceptable to IDA),the first one to be applied to all foreign currency components and the second one to the localcomponent of the bid price.

The contract to be signed with the selected Consultant firm will be a time-based rate(man-month) contract. The time-based rate, which is the man-month, includes salary, socialcosts, firm's overhead, travel costs, fee or profit, and an overseas allowance.

In principle, the estimated day by which the selected Consultant is expected tocommence the assignment, is (Day, Month, Year).

The Technical and Financial Proposals, marked on the envelope as proposals forConsultancy Services (Name of the Road Contract), shall be submitted on or before (Hour,Day, Month and Year of Submission Deadline) to the following addresses:

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Page 3 of 3

1. General Roads DirectorateRruga Sami FrasheriTIRANA, AlbaniaPhones: 355-42-25206/42926Fax : 355-42-23600(Three copies to be sent)

2. International Development AssociationThe WorLd BankAttention: Task Manager/Energy, Environmentand Transport Division, EC2ET1818 H Street, NWWashington, D C 20433, U. S. A.(one copy to be sent)

Bidding documents can be seen in the GRD, Technical Department, during officehours, if desired. They can also be acquired through mail after payment of US$(number), ifotherwise desired.

Please, acknowledge receipt of this letter of invitation and state whether or not youwill submit a proposal and, when submitting a proposal, the date and mode of shipmentshould be given.

Sincerely,

Signature(GRD Director)

c.c: H.E. Minister of Construction and Tourismc.c: The World Bank

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ALBANIA


Road Data Bank

TERMS OF REFERENCE

A. INTRODUCTION

I . During the last three years, the macroeconomic stabilization of Albania has met andeven exceed the fixed performance targets. The number of registrated vehicles has grownsevenfold during the last five years, and it is expected to continue growing rapidly andsignificantly.

2. The tremendous growth in road transport has created key infrastructure bottlenecks,which can be restrictive in relation to ongoing development, and it has created thedeterioration of the national road network, which presents a major impediment to privatesector development and to foreign direct investment.

3. The scarce and imprecise existing road data make extremely difficult to estimateand plan any needs and required investments, as well as to achieve a satisfactory roadpolicy. In order to meet these needs, the National Roads Project would introduce a newmanagement system, namely a Road Data Bank, which will be the basis and will befollowed, once sufficiently developed, by a Pavement Management System and a BridgeManagement System.

B. CONCEPT OF A ROAD DATA BANK

4. The Road Data Bank (RDB) would be a general information system for the GeneralRoads Directorate (GRD) producing systematic and timely statistics on road and trafficconditions of the National Road Network (NRN; 3,221km) under GRD's jurisdiction. Thisinformation would be kept and compiled in computers and used as data base formanagement systems. At present there is no RDB in the GRD.

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C. OBJECTIVES

5. The main things that the RDB is to be used for are:

-daily administration of the NRN;-planning;-road maintenance management;-traffic management;-provision of basic data for a Pavement Management System; and- provision of basic data for a Bridge Management System

D. SCOPE OF WORK

6. In order to secure its sustainability, the full development of the RDB should becarried out in three phases over a period of three years which respectively will (i) establishthe reference system and definitions and procedures for data collection, (ii) establish ageographic information system and modify and accommodate the system for moreadvanced applications as the Pavement Management System and the Bridge ManagementSystem, and (iii) undertake (GRD and Consultants) a thorough quality control of the RDBand minor modifications required. The services to be provided by the Consultant for theRDB during the three phases, are described below.

PHASE I

7. Analysis and Specification. Consultants will assist GRD in setting up theorganization to manage and monitor the establishment and implementation of the RDB.The organization shall include task groups GRD/Consultants which would participate inanalysis, specification and implementation phases, and would be responsible for thefunctionality of the RDB.

8. The RDB shall have a modular structure enabling modules to the developedindependently. The content of each module, their interconnection, and the data structureshould be described. The Consultants shall also recommend the type of hardware to beused for RDB operation, and shall prepare the required procurement documentation andassist GRD in the procurement process of this hardware.

9. The Analysis and Specification component would require four man-month (m/m)of consultant manpower and would be finished six months after RDB start. Outputs are adetailed description of the RDB and procurement documents for hardware.

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10. Reference System. The Consultants should suggest a reference system, and afterGRD's approval, set up a plan for its establishment. A system based on kilometermarkings, in accordance with European Union standards, is suggested. The Consultantsshall assist in procurement of markings and on training of local staff for establishing thereference system in the field.

11. This component is estimated to require 3m/m (Consultant) and 6m/m (local staff),and to be completed in 8 months after RDB start. The output is a reference system in thefield and in the RDB.

12. Basic Modules. The basic modules as described in the above specificationcomponent should be developed and implemented. They should include registration ofdata, system and operation software for a high quality RDB, and registers for road, trafficand bridge data. The registers should be developed in cooperation with the Consultantsresponsible for the development of the Pavement Management System, and of the BridgeManagement System. Documentation, manuals and computer programs should be preparedin English and Albanian.

13. The basic modules should be developed and implemented 12 months after RDBstart and would require about 15 m/m of Consultancy.

14. Training. GRD staff shall be trained by the Consultants in the field and throughlecturing. A plan for the training (in a mere cost estimate way) is part of the overalltraining component of the National Roads Project. However, a Plan for Training withspecific targets to be achieved, must form part of Consultants' proposal.

15. Handling Over and Description of Later Phases. The Consultant at the end ofPhase I should (i) carry out an overall control of the whole Phase I of the RDB, and hand itover to GRD's responsible staff, and (ii) apply experience acquired in Phase I forconforming the contents of Phase II and III. All these activities would not require morethan I ni/m (Consultant).

PHASE II

16. In Phase lI the Consultants shall evaluate the experience of running the RDB andidentify modifications required. Furthermore, the Consultants will continue thedevelopment of the RDB by introducing a simple geographic information system.Preparation of a reference map system should be included in their activity. This systemwould be operational in a multi-user environment. The Consultants manpower for Phase 11is estimated at 8 m/m.

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PHASE III

17. The third and last phase of the establishment of the RDB includes an overall qualitycontrol of the already set up RDB. The Consultants, systematically and thoroughly, willexamine and propose subsequent remedies (e.g., minor modifications and further activitiesrequired), if any, the RDB organization, data collection and updating procedures, andapplication programs, and interfaces with other management systems, as the PavementManagement System and the Bridge Management System. Consultants manpowerrequired for Phase III is estimated at 1 m/m.

E. REQUIREMENTS TO THE CONSULTANT

18. The Consultant shall prove its experience in the development and operation ofRDB's in order to qualify for the contract, and shall also provide full CVs of staff proposedand duration of their presence in Albania during the RDB project. Proven similar previousexperience for working in Albania should be positively considered.

F. REPORTING

19. An Inception Report specifying the framework for the RDB should be providedafter four months of RDB start. The Consultant would also write a Progress Report at theend of each Phase detailing the problems encountered, issues raised and targets achieved,including the efficiency (in qualitative and quantitative terms) of the training provided toduly identified GRD staff in the use, maintenance, and development of the RDB. TheProgress Report at -the end of Phase III would be a comprehensive Final Report of theestablishment of the whole RDB system in GRD. Five copies of each report, in English,will be provided to GRD and two to IDA.

G. ESTIMATED MANPOWER

20. The total estimated Consultants mi/m for the R.D.B., as detailed in the aboveT.O.R., is 32 m/m. The Consultants' proposal should include an estimate of the localmanpower (in m/m and qualifications) required in GRD.

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ALBANIA


Pavement Management System

TERMS OF REFERENCE

A. INTRODUCTION

1. The National Road Network (NRN; 3,221km) under the juridiction of the GeneralRoads directorate (GRD) in the Ministry of Construction and Tourism (MCT) carries outmore than 80 percent of the whole road traffic in Albania. The status of such an importantand valuable national asset is deficient with most pavements not suited to modem traffic.GRD lacks a detailed inventory of the NRN including pavement age (most pavements arebeyond their design life), and main topographical, geological, structural, safety andenvironmental characteristics of any road section.

2. The condition of most pavements is cause of concern, not only structurally andeconomically (high vehicle operating costs damaging the efficiency of the transport sector)but also for safety of a traffic which has increased sevenfold during the last five years and isexpected to continue growing rapidly and significantly. A detailed knowledge andexamination of the present situation is an urgent need in GRD. Considering the abovecircumstances, the National Roads Project includes, as one of its components, theestablishment of a Pavement Management System in Albania.

B. CONCEPT OF A PAVEMENT MANAGEMENT SYSTEM

3. A Pavement Management System (PMS), consists, basically, on the design of asystematic approach to road maintenance and, specifically, to pavement management. ThePMS evaluates the present condition of road surfaces and optimizes expenditure onmaintenance from a GRD's as well as from a socio-economic and a traffic safety point ofview. Input is obtained through a field inventory of functions and structural pavementcondition data and traffic load data. These data are then processed by means of pavementperformance models. Inventory data, and necessary road information, are stored in the RoadData Bank (also being established under the National Roads Project), and the PMS is linked tothe Road Data Bank as an application program. The PMS receives data from the Road DataBank when they are needed for PMS processing.

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C. OBJECTIVES

4. The PMS, basically a tool with the overall purpose to enable GRD to ensure that roadmaintenance is carried out in the optimal way, aims at the objectives of (i) obtaining the mostprecise view of the road network condition, (ii) assessing the best strategy to calculate theoptimum maintenance budget, and (iii) providing the inforrnation required for roadconstruction.

5. In order to secure the sustainability of the project, the development andimplementation of the full system shall be carried out in three phases over a period of threeyears. The first phase will deliver a simple pilot PMS to be developed and tested in a specificarea. On this basis, the pilot PMS should be modified and applied to the whole NRN. Asecond phase will include further data collection and the introduction of economic evaluationmodels. During the third and last phase, the Consultants will undertake a thorough qualitycontrol of the PMS and introduce minor modifications, if required.

D. SCOPE OF WORK

PHASE I

6. Initial Activities. The first Consultants' activity should be an analysis and detailedwork plan of the PMS. The Consultants will also assist GRD in setting up the PMSorganization (Consultants/GRD staff) which will manage and monitor the entire developmentand operations of the PMS. The organization groups will participate in the analysis,specification and implementation phases and will be responsible for decisions on PMS'functionality. These initial activities will be detailed in an Inception Report to be deliveredtwo months after commencement of works. The report will be reviewed, commented, andeventually approved, by GRD and IDA within a month after delivery. Estimated Consultantmanpower: 8 man-month (m/m).

7. Organizational Setup. On the basis of the likely development of the road sectoradministration in Albania, the Consultants should clarify the present organization in GRD andspecify the setup for the PMS organization in GRD. This task, to be completed within onemonth after approval of the Inception Report, is estimated to require 2 m/m of Consultants'services.

8. PMS Analysis and Program Specification. The PMS to be delivered will bespecifically in accordance with Albanian condition. It will be based, preferably, on anexisting PMS already developed and proven on a national road network similar on size ancharacteristics to the Albanian network. The PMS should provide flexibility on the

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amount of data required and will allow introduction of a simple version in the first phase. TheConsultants will carry out an analysis and specification in which the PMS modules andfunctions are defined and decided. Important elements to be specified are repair alternativesand unit prices. This task will be completed four months after the previous task, and wouldrequire about 12 m/m of Consultants' manpower. Output is a tailor-made PMS.

9. Data Needs. The PMS will mainly use data provided by the Road Data Bank(RDB). However, the PMS also needs important condition data. The Consultants will analyzethe minimal data requirements and procure equipment for data collection. In the first stage,the PMS will require general visual condition information, and information on evenness(roughness) and traffic volume. This task would require 16 m/m of Consultants' manpowerand about 20 m/m of local staff. The output are data for testing the PMS.

10. Testing of the PMS. The accuracy of the design of the tailor-made PMS, andsubsequent modifications, if any, found necessary by the Consultants, will be tested with thedata from the pilot area. The output of this task, estimated to require 4 m/m of Consultants'manpower, will be the establishment of a working PMS in GRD.

11. Supplementary Data Collection. Now is the time of starting condition datacollection for the rest of the network. This task will be carried out by GRD counterpart staffunder Consultants' supervision. Estimate of Consultants' manpower for this task is 4 in/m.

The output is the availability of a PMS with condition data for the entire NRN.

12. Preparation of a Maintenance Plan. Ending Phase I, GRD, with the assistance ofthe Consultants (estimated 4 m/m manpower), and on the basis of the PMS, will set up theplan for the following fiscal year. The plan should include a ranking of repair works matchingthe budget.

13. Manuals and Training. Manuals for the implementation of the designed PMS willbe written, in English, by GRD staff but under Consultants' supervision and full responsibilityfor correctness. GRD will be responsible of manuals' translation into Albanian. TheConsultants will select a GRD group (at least three persons) and train them on the full use ofthe PMS. This group will be trained in such a way to be able to train future GRD groups inthe use of PMS.

PHASE II

14. Additional Data Elements. Further to GRD's capability to run the PMS, dataelements for bearing capacity and traffic loads should be supplemented. Consultants willprovide specifications for the software modules and shall assist GRD on the procurement

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of required equipment (at least, one falling weight deflectometer, and two permanent ormobile weigh bridges). Estimated Consultants' manpower: 8 m/m. Output: a modified PMStaking structural pavement properties into account.

15. Economic Evaluation and Deterioration Models. Consultants should introduce andadjust deterioration and economic models to Albanian conditions. With these models in place,it will be possible to deternine the future budget needs for pavement maintenance. This taskwill be carried out over a period of 12 months to allow for seasonal variations in thedeterioration models. Estimated Consultants' manpower: 6 rn/m. Output are projections ofmaintenance needs.

PHASE III

16. The phase III will include an overall quality control of the PMS. Consultants willassess PMS' organization, data collection, updating procedures and application programs,carrying out minor modifications, if required, and suggesting further activities, if appropriate.Phase III will extend for 12 months beyond completion of Phase II, requiring 2 rn/m ofConsultants' manpower.

E. TRAINING, MANUALS, AND FINAL REPORT

17. GRD should be trained by the Consultants in the field and through classroomlecturing. A plan for the training (in a mere cost estimate way) is part of the overall trainingcomponent of the National Roads Project. However, a plan for training, with specific targetsto be achieved, must form part of Consultants' proposal.

18. During the implementation of the PMS, GRD staff will participate in the writing ofPMS user manuals under the lead and full responsibility, for their correctness, of theConsultants. GRD would be responsible for the translation into Albanian of the originalEnglish version.

19. At the end of Phase III, the Consultants should prepare a Draft Final Reportsummarizing the whole PMS establishment process in GRD, and describing PMS maincomponents and operational characteristics. The draft (five copies to GRD, two copies toIDA) should be reviewed and commented by GRD and IDA within the next month after itsdelivery. Subsequently, GRD's and IDA's comments should be included in the final versionof the report.

20. The Draft Final Report should include a list of GRD identified trainees explaining typeof proficiency achieved in the use and operation of the PMS and its differences with thetraining plan proposed in para. 1 7 above.

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20. The Consultants total estimate manpower, as detailed in the above text, is 66 m/m.The Consultants' proposal should include an estimate of the local manpower (in m/m and inqualifications) required in GRD.

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ALBANIA


Bridge Management System

TERMS OF REFERENCE

A. INTRODUCTION

1. The National Road Network (NRN 3,221 km), under the jurisdiction of the GeneralRoads Directorate (GRD) in the Ministry of Construction and Tourism (MCT), includes avast and indispensable network of about 1,200 bridges of more than 10 meter length. Thestatus of such an important and valuable national asset is deficient. GRD lacks aninventory of the bridges and, obviously and consequently, a detailed knowledge of theirage (most of them beyond their design life) and main topographical, geological, structuraland environmental characteristics.

2. The condition of many bridges is cause of concern not only structurally but also fortraffic safety, given the sevenfold growth of traffic during the last five years. It is expectedto continue growing rapidly and significantly. A detailed examination and knowledge ofthe present situation appears as an urgent need to be considered in the GRD. Consideringthe above circumstances, the National Road Project includes as one of its components theestablishment in Albania of a Bridge Management System.

B. CONCEPT OF A BRIDGE MANAGEMENT SYSTEM

3. A Bridge Management System (BMS) is a systematic approach to bridgemaintenance. The BMS evaluates the present condition of the structures on the roadnetwork and optimizes expenditure on maintenance from the GRD's as well as from asocio-economic and safety point of view. Input is obtained through inspection of thestructures by well-trained bridge experts. Inventory data and necessary traffic informationare to be stored in the Road Data Bank (also being developed as a specific component ofthe National Roads Project) to which the BMS should be linked as an application program.

C. OBJECTIVES

4. The main objectives of the BMS are to (i) secure that resources for bridgemaintenance are spent in the best way providing the best operational and safety trafficconditions, and (ii) calculate the optimum budget level for bridge maintenance.

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5. In order to secure the sustainability of the BMS, its establishment, development andimplementation shall be carried out in three phases over a three-year period. The firstphase will consist in the development and testing of a basic BMS version. The secondphase would examine the results achieved in the first phase and should further develop theBMS with specific modules. The third and last phase will consist of a thorough qualitycontrol of the BMS and carry out minor modifications required.

D. SCOPE OF WORK

PHASE I

6. Initial Activities. The first Consultants' activity should be an analysis anddetailed work plan of the proposed BMS. The Consultants will also assist GRD in settingup the BMS organization (Consultants/GRD staff) which will manage and monitor theestablishment, development, and implementation of the BMS for the estimated 1,200 (paraI above) bridges of the National Road Network. This figure shall be verified and adjustedaccording to BMS plan. The Consultants will also inspect a number of representativebridges to obtain an overview of construction practices and condition levels. Descriptionof all these initial activities should be contained in a draft Inception Report to be delivered(three copies to GRD; two copies to IDA) two months after commencement of work. Thereport will be reviewed and commented by GRD and IDA within a month after delivery ofits draft version. Estimated Consultant manpower: 2 man-month (m/m).

7. Organizational Setup. On the basis of the likely development of the road sectoradministration in Albania, the Consultants should clarify the present organization andspecify the setup for the BMS organization in GRD. This task, to be completed one monthafter approval of the Inception Report, is estimated to require 2 m/m of Consultants'services.

8. BMS Analysis and Program Specification. The BMS to be delivered will bespecifically in accordance with Albanian condition. It will be based, preferably, on anexisting BMS already developed and proven in a national road network with similarcharacteristics to the Albanian network. The first BMS phase would establish modules forinventory, principal inspection, ranking of repair works, and budget and cost control. GRDcounterpart staff will receive (in the field and classroom) training in carrying out theprincipal inspections supervised by the Consultants. The output shall be a BMS capable torank bridge repair works on the basis of principal inspections. The estimated Consultants'manpower is 7m/m.

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9. Bridge Maintenance Plan. The Consultants will assist GRD in setting up thebridge maintenance plan based on the Phase I of the BMS. The plan will rank the repairworks matching the budget for the next fiscal year. Consultants' manpower is estimated at2 m/m.

PHASE II

10. Adjustment of Bridge Management System. Once GRD has gained experiencefollowing Phase I of the BMS, the Consultants shall provide modules to improve BMSresults and GRD work on bridge management. The Consultants shall prepare thespecifications for the software modules and shall assist GRD in the procurement ofequipment required. The following actions should be implemented (i) OptimizationModule, (ii) Repair Catalogue, (iii) Remedial Works, (iv) Routes for Special Transports,(v) Archive System, and (vi) Special Inspections. The Special Inspections, at leastinitially, would be carried out by specialized expert(s). Training to GRD staff will beincluded as part of the Training Program Component under the National Roads Project.

11. The output of Phase II will be a BMS capable of optimizing resources spent onbridge maintenance, and to identify the best routes for special transports on the NRN.Consultants manpower estimate: 16 m/m.

PHASE III

12. The third and last phase consists of an overall control of the BMS. The Consultantswill assess the organization, data collection and updating procedures, and applicationprograms, and will also define minor modifications and further activities required for thebest operation of the established BMS. Phase III will be carried out twelve months aftercompletion of Phase II and would require 2m/m of Consultants' manpower.

E. TRAINING, MANUALS, AND FINAL REPORT

13. GRD staff shall be trained by the Consultants in the field and through classroomlecturing. A plan for the training (in a mere cost estimate way) is part of the overalltraining component of the National Roads Project. However, a plan for training, withspecific targets to be achieved, must form part of Consultants' proposal.

14. During the implementation of the BMS, GRD staff will participate in the writing ofBMS user manuals under the lead and full responsibility, for their correctness, of theConsultants. GRD would be responsible for the translation into Albanian of the originalEnglish versions.

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15. At the end of Phase III, the Consultants shall prepare a draft Final Reportsummarizing the whole BMS establishment process in GRD, and describing BMS maincomponents and operational characteristics. The draft (five copies to GRD; two copies toIDA) should be reviewed and commented by GRD and IDA within the next month after itsdelivery. Subsequently, GRD's and IDA's comments should be included in the finalversion of the report.

16. The Draft Final Report will include a list of GRD identified trainees explainingtype of proficiency achieved in the use and operation of the BMS and its differences withthe training plan proposed in para. 13 above.


17. Consultants' estimated manpower, as detailed through above T.O.R., amounts to 31m/m. The Consultants' proposal should include an estimate of the local manpower (in rn/mand in qualifications) required in GRD.

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ALBANIA


Project Coordinator

TERMS OF REFERENCE

A. INTRODUCTION AND BACKGROUND

1. The National Roads Project will operate through a four-year implementation period(1997-2000) of construction and will provide for rehabilitation (including 12.0 km Miloti-Lezha of new construction with two important bridges) of about 90.1 km of national roadsin the East-West and Northern Corridors. In addition, it will assist in the development ofthe National Road Maintenance and Safety Programs dispersed over the national roadnetwork (3,221 km) in the seven new Region Roads Directorates (RRDs: Diber, Fier,Gjirokaster, Korce, Kukes, Shkoder and Tirana), in the establishment of a Road Data Bank,and a Pavement and a Bridge Management Systems, and in the development andmodernization of the technical and managerial capabilities of the General RoadsDirectorate (GRD), and of the emerging private construction and consulting industries.

2. Road works will be undertaken under FIDIC organization with the GRD as the"Employer," international consultants in collaboration with local engineers/consultantsacting as the "Engineer," providing adaptive designs, if required, and constructionsupervision, and private contractors responsible for detailed implementation. The wholeproject construction period will include about six construction sites and related contractsvarying from about US$1.0 million to about US$10.0 million per contract. It is expectedthat one supervision consultants team would be required for the six East-West andNorthern Corridors road works contracts.

3. Successful implementation of the project requires understanding of its vast scope,including the large works sites and numerous contractors to be involved, and the widerange of objectives of the project. All this will be addressed by providing a ProjectCoordinator, using an experienced international consultant and commencing with a six-month inception phase immediately following approval of the project scheduled in June1996. During the inception phase, the Project Coordinator will prepare and coordinate thephysical implementation of the project, which is scheduled to start in January 1997,focusing on the execution of road works, including the prequalification and biddingprocesses for the selection of contractors.

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4. On the basis of the above, the Project Coordinator will be an internationalconsultant with wide knowledge and experience in project management and procurement.The duration of services would be 54 months.

B. OBJECTIVES

5. The Project Coordinator will provide a single channel of command for the projectto ensure that an up-to-date focus of knowledge and managerial experience is available forappropriate planning, financial monitoring and progress reporting to the Government ofAlbania (GOA) departments, to the World Bank (IDA), and to other project donors. TheProject Coordinator will expand GRD's capacity to manage the project, whilst remainingwithin GRD's established structure. An important responsibility of the Project Coordinatoris to ensure that the funds provided are utilized so as to maintain the proper balancebetween project beneficiaries and maximize overall benefits.

C. SCOPE OF WORK

6. The Project Coordinator will be responsible to the GRD's Director General throughthe chief of the Project Implementation Unit (PIU) Executive Secretariat (of which theProject Coordinator is a member) established in the GRD Foreign Aid Department. He willbe supported by professional/supporting staff and the specialists of other departmentswithin GRD, and he will work closely with, and receive support from, the internationalconsultants in charge of the supervision of road works. He will be required to work for aperiod of 54 months (para 4 above), and during the six first months of this period he willact with reduced support. His main responsibilities during this period will be organizationof the project, and selection of the required project support. The main tasks of the ProjectCoordination are described below.

7. Project Coordination. The Project Coordinator, through the PIU, will beresponsible for liaison between GRD and other Government ministries, departments anddistrict authorities, with IDA, and project cofinanciers, and with the internationalconsultants. He will ensure that an official, practical and efficient liaison is maintainedwith other responsible entities for Government programs, in particular the management ofthe other road works in the Northern, East-West, and Southern Corridors, and thoseinvolved in the Road Safety and Training Programs.

8. Planning and Budgeting of Works. The Project Coordinator will be responsiblefor the development of annual work plans, as required by the IDA. He will providedetailed plans for implementation and ensure that the GRD, the consultants and any otherproject-related bodies are fully involved and provide all required basic information. He willcoordinate preparation of the project budget, and ensure that any administrative procedurefor both budget, preparation and expenditures are in compliance with prevailing Govern-

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ment and IDA regulations.

9. Resource Allocation and Release of Funds. The project budget will be containedin the investment budget for roads of the Ministry of Construction and Tourism (MCT) butwill be clearly separable since the IDA credit and cofinanciers' participations (Italy,PHARE, Kuwait Fund-KF, and European Bank for Reconstruction and Development-EBRD) will flow through a special account operated at a commercial bank in Tirana. TheProject Coordinator will be expected to:

(i) provide documented submission of withdrawal applications to IDA andother cofinanciers to permit this account to be replenished in time to ensure that paymentsto contractors are not delayed, and that the progress of works and services are adhered to;and

(ii) arrange provision of letters of credit to pernit the consultants to undertakethe international procurement required by the project, and to make payments to theconsultants in accordance with their contract.

10. Selection of International Consultants Services and Equipment Required forthe Project. An early and urgent task of the Project Coordinator will be to advance theselection, and negotiation/award of contract to the international engineering (supervision ofworks) consultants team. Following this award, he will provide assistance to theconsultants in all matters connected with relations with Government, and ensure maximumutilization of the consultants in accordance with consultants' Termns of Reference.

11. He will assist the consultants in defining items requiring international procurement,including vehicles and equipment for use by GOA personnel and the consultants during theimplementation of the project. He will arrange letters of credit following IDA approval ofthese items, and create and maintain an assets register for all Government equipment andgoods procured under the project.

12. Issue of Guidelines for and Finalization of Pre-qualification and BiddingDocuments. The Project Coordinator is responsible for the rapid and correct appointmentof contractors. He will, with the supervision consultants, finalize the pre-qualification andbidding documents, after issuance of related procedures in accordance with IDAguidelines. He will provide the advice and support required such that GRD is able torapidly and effectively undertake the above pre-qualification and bidding processes.

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D. REPORTING, MONITORING OF PROGRESS, QUALITY ANDFINANCIAL PERFORMANCE

13. Reporting. The efficient disbursement of project funds to the Government ofAlbania by the IDA and cofinanciers depends upon proper reporting to them of physicalprogress, development of institutions, quality of works, and financial performance. It is theresponsibility of the Project Coordinator to provide such reporting on time, and to meet thecontent requirements as may be required from time to time by IDA.

14. Monitoring. The Project Coordinator wilf be responsible for providing financialmonitoring of all expenditures under the credit and for requesting such assistance from theconsultants and the GRD to ensure this occurs. This includes, among other requirements,quarterly and annual progress and financial reports to the GOA, IDA, and cofinanciers, inaccordance with their reporting requirements.

15. Quality Performance. The Project Coordinator will also provide comprehensiveinformation on rehabilitation and new construction works, including the extent of workprogress, labor involvement, work quality and payments due and made to contractors, andthe overall situation. He will include progress reports on institutional developments,including consultant and contractor support and performance of consultants, and RegionalRoad Directorates (RRDs) staff, including any improvement (or desimprovement)introduced in road maintenance and road safety. He will provide copies of any amendeddesign proposals, consultants construction manuals and road performance studies. Thebasic monitoring framework will be as provided in the Annex 3.11, Project MonitoringIndicators, but will be supplemented and, if required, improved in cooperation with theconsultants.

16. Financial Performance. Another responsibility of the Project Coordinator will beto prepare and provide to GOA, IDA, and cofinanciers, monthly statements on all financialrecords including (i) withdrawals from IDA credit, Italy, PHARE, EBRD and GOA'sparticipation with copies of disbursement requests and related documentation, (ii) recordsof transactions of the Project account including copies of bank statements and balances,and (iii) information on any outstanding claims to IDA and to the Project by contractors orarising from procurement.

E. TECHNICAL SERVICES TO GRD

17. The Project Coordinator will provide to GRD any details of technical standardsrequired, results of any technical audits such as evaluation of gravel, bitumen or concrete,which have not been conducted locally, and, in general, information of any importantaspect of the project.

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18. Preliminary-estimate of Project Coordinator's manpower amounts to 54 rn/m.

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ALBANIA


Technical Assistance and Training Programfor GRD and RRDs Staffs

TERMS OF REFERENCE

A. INTRODUCTION

I. The last three years, in consonance with a successful macroeconomic stabilizationof the Albanian economy, have witnessed an extreme growth of traffic - more thansevenfold in five years - which is expected to continue for several years. The results areinfrastructure bottlenecks which restrict ongoing development, increase the deterioration ofthe road network, and present a major impediment to the development of the Albanianprivate sector and to direct foreign investment. Traffic accidents are a serious problem,and environmental issues resulting from an extremely rapid traffic increase will becomesevere if no adequate action is taken in time.

2. To meet the above impediments to sustainable development, the National RoadsProject has been established with the main purpose to overcome key infrastructurebottlenecks, improve the maintenance and safety of the National Roads Network (NRN),and train the General Roads Directorate (GRD) and Region Roads Directorates (RRDs)staffs to improve management and operation of the road sector. A vital component of theNational Roads Project is the Technical Assistance (TA) and Training Program, reachingmost of the road managerial and operational aspects, and the subject of the present Termsof Reference (T.O.R.).

B. OBJECTIVES

3. The objectives of the TA and Training Program are to:

(i) provide skills and attitudes to the General Roads Directorate (GRD) and itsRegional Road Directorates (RRD) executives to manage the neededorganizational adjustments required by the National Roads Project and themodernization of the Road sector;

(ii) enable GRD to design, implement, and apply a Road Data Bank, a PavementManagement System, and a Bridge Management System;

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(iii) strengthen GRD's and RRDs' staffs, as well as domestic private consultants'and contractors' management skills on maintenance and construction projectsunder competitive bidding;

(iv) improve GRD's and RRDs' capability in project management, planning,monitoring, budgeting and accounting;

(v) strengthen GRD and RRDs staff skills on Environmental and Road Safetyissues for planning, managing and supervising road projects;

(vi) improve skills of technicians and road workers on vehicles, on equipment, andon rehabilitation and maintenance of road works;

(vii) establish training programs in cooperation with the University of Tirana,Faculty of Civil Engineering, Ministry of Transport, Ministry of Interior, and theMinistry of Construction and Tourism to ensure the required improvement of thegeneral educational level on Road Administration and Maintenance; and

(viii) establish close bilateral relations between road managers, engineers andeconomists in Albania with those from close related countries.

C. TWINNING

4. The road work force in Albania is competent in traditional road disciplines,however, the isolation of Albania for more than forty years and lack of interaction withforeign organizations has strongly reduced its capability. Training is urgently required inmodem management systems, economics, environment, safety, legal, and practically in allmodem technological developments. The need of TA and training at all road sector levelscalls for a Twinning Arrangement between a mature Road Administration - preferablyWestem European with similar country and road network size to Albania - and GRD andRRDs. This will permit the creation of a strong technical platform within GRD andsubsequent benefits for the entire Albanian road sector. We estimate 50 m/m of GRD stafftraining, atUS$2,000 per m/m or US$100,000.

D. ACTIVITIES

5. The following activities, led to achieving the above objectives, will be carried outunder the National Roads Project by the selected Consultants:

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(a) Management Training in GRD and RRDs. The organizational changes andapplication of maintenance management systems require a severe strengthening of GRDand RRDs executive staff capability. A first phase will identify, through a Training NeedsAssessment, the performance gaps of executive staff, and on these bases, would designindividual training programs. A period of training abroad should be included forfamilization of the, in general, high level staff of the courses, with the Western roadadministration standards. We estimate 2 m/m of Consultants' lecturing at US$20,000 perm/m or US$40,000; and 40 m/m of executive staff training at US$5,000 per m/m orUS$200,000.

(b) Training of Maintenance Engineers, Systems and Planning Experts. Theapplication and operation of a Road Data Bank (RDB), a Pavement Management System(PMS), and a Bridge Management System (BMS), are important elements of RoadManagement, and of the National Roads Project. GRD capability on the management ofthe issues relating to the systems as (i) data collection for RDB, (ii) visual inspection forPMS and BMS, (iii) inventory, (iv) routine and special bridge inspections, (v) repairmethods, (vi) operation of every system, and (vii) quality control, would require trainingfor the groups working with and using the systems. We estimate 10 m/m of Consultants'lecturing at US$20,000 per m/rn or US$200,000; and 200 rn/m of staff training atUS$2,000 per rn/m or US$400,000.

(c) Training in Civil Engineering. Appropriate performance of GRD's andRRD's staffs as that of private contractors and consultants, call for intensive trainingcourses matching the fast development of Albania to a market and privatized economy.The many skills still needed are on (i) Project Management, (ii) Supervision of Works,(iii) Cost/Benefit Analysis, (iv) Bidding Procedures, including Prequalification, (v)Quality Control and Quality Assurance, and (vi) Laboratory Testing. We estimate I rn/m oflecturing by Consultants at US$20,000 per m/m or US$20,000; and 20 mlm of stafftraining at US$5,000 per m/m or US$100,000.

(d) Training on Road Safety and Environmental Impact Assessment. Severallaws and regulations have been passed in Albania during the last forty years relating toroad safety and environmental issues. However, enforcement has been poor, and little hasbeen achieved in practice. Continuation of the Road Safety Program under the NationalRoad Project would consider effective action mainly through the Road Safety Program(already started under the ongoing Transport Project), and it would include provision ofequipment to the Traffic Police, and related training to achieving efficient enforcement oftraffic regulations.. Also, project designers and planners of the ministries involved andGRD will have to carry out the Environmental Impact Assessments (EIA) required infuture road projects. This calls for development of EIA's guidelines and screeningprocedures in Albania. The Road Safety and EIA requirements will be

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considered under the project, and Consultants will provide special courses on Road Safetyand EIA to specific target groups of GRD, and of the National Traffic Police. We estimate5 m/m of Consultants lecturing at US$20,000 per m/m or US$100,000; and 30 m/rn of stafftraining at US$3,000 per m/m or US$90,000.

(e) Training of Technicians and Road Workers. The quality of present roadmaintenance and rehabilitation works should be improved through programs prepared byConsultants for technicians and road workers. Training on, and use of modem technologyand equipment should be emphasized, and a review and critic of present practices shouldtake place. After completion of training, the participants should be able to carry out allrepair road work according to modem standards. With private contracting of worksadvancing in the public sector, a reduction of the about 3,500 workers in GRD and RRDsin a medium term future is inevitable. However, a parallel increase of jobs should takeplace in the private sector to absorb these jobs. In order to ensure benefits for all of them,the program will be set up as a Training of Trainers program. In a first phase, Albanianinstructors with required language proficiency will attend the courses, and with theknowledge acquired and the course training manuals, will run the second phase of thetraining program reaching the whole work force. Intense on-site and hands-on training willbe applied in all courses. We estimate 10 m/m of Consultants for training at US$20,000 perm/m or US$200,000.

(f) Educational Activities with University of Tirana (UT). The National RoadsProject presents important and interesting opportunities to transfer know-how and toprovide practical experience to future road staff. To ensure a sustainable development ofthe general educational level in Albania and to ensure cohesion between the road sectorand the institutions providing employees to the sector, the Consultants will ensure thatessential knowledge transferred to GRD and RRDs (new construction techniques, modemequipment, new laboratories, implementation of a Road Data Bank, a PavementManagement System, and a Bridge Management System) is also available to UT's studentsof Civil Engineering and staff from the Ministry of Transport. The Consultants shalloutline a specific plan on how to benefit these specific groups from the TA and trainingprovided under the National Roads Project. These activities are part of the project andshould not imply any extra cost than that-of providing assistance to GRD.

(g) Bilateral Cooperation. Besides the Twinning Program (para. 4 above) as themost important bilateral cooperation under the TA and Training Program, the Consultantsshould also look at the additional bilateral cooperation opportunities which are available.Since GRD is adopting Italian design standards, transfer of experience from Italy (e.g.,through the Italian Association of Road Engineers) to Albania could be a relevant subjectof the TA and Training Program. We estimate a lump sum of US$100,000 for this item.

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E. SCHEDULE AND REPORTING

6. The services under the present T.O.R. should be provided within the 48 monthduration period of the project. The experts to be supplied by the Consultants will bemostly based in Albania. Particular attention should be paid to the compatibility of serviceduties and training requirements among GRD and RRDs staffs. Fulfillment of staffservices should take priority over training.

7. The Consultants firm (s) for each 5 (a) through 5 (g) activity will report to GRD(five report copies) and to IDA (two copies), in English, as follows (i) Inception Report,with an overall training needs assessment and an update of the initially proposed plan,three months after mobilization, (ii) for each subcomponent (i.e., activity), a ProgressReport every six months after issue of the Inception Report, on the timely planned duedate, (iii) Draft Final Report, including an Executive Summary, for each subcomponent onthe timely planned completion date, and (iv) Final Report, for each subcomponent,incorporating comments of GRD and IDA on the respective Draft Final Report, within onemonth after delivery of the Draft Final Report.

18. Tne Draft Final Report will include, as an important part of the report, a summaryof the problems encountered, issues raised, and targets achieved including the efficiency(in qualification and quantitative terms) of the training provided to GRD and RRDs staffsin each activity of the program. The identification of every trainee, training followed, andresults achieved should appear in the Final Report duly explained and justified.

F. ESTIMATED MANPOWER AND BUDGET

19. The Consultants total estimate manpower, as detailed through the above text, is 28in/m of Consultants and 340 m/m of staff (GRD and RRDs) training. The total plannedTA and Training Program cost should not exceed US$0.5 million for the TA Consultants'component, and US$ 1.0 million for the Training component.

m:\albania\sar\albania\TA.doc

ALBANIA, NATIONAL ROADS PROJECTProject Implementation Schedule

Preparation 1 st Year Construction. 2nd Year Construction 3rd Year Construction 4th Year Construction Closing

ACTIVITY i1996 1997 1998 1999 2000 2001J A S O N D J F MA MJ J A S O N D J F MA MJ J ASON_ DJ F MA MJ J A S O N D J F MA MJ JASON_ DJ F MA MJ

Project Inception Phase

Date of credit Agreement __ ___ I I7IIII-

Establishment of PIU(I) 4/96 t

Hiring of Project Coordinator (t) 7/9t () 796 t -:4-

Procurement Supervision Consultant (I) _ i- | -- tMobilization of Supervision Consultant T-

Finalization Prequalification/Bidding Documents 1 t Supervision of Works Contracts for 1997

Road Works Contracts for 1997

Prequalification -iI 1 I

Bidding --.-.

Evaluation/Award

Mobilization Cotractors t T .4 tC&onstruction Works: 4 --- .-

Eibasan-Librazhd (EBRD,30 5km, US$10 5 million) _ONOt: . .. --- . .,, .,- -----.... a e , LTapize-Fushe Kruja(ltaly;7.0km,US$1.0 million) consl maintenan : :i

Miloti-Lezha (IDA;12 Okm; US$39 milion) . .. m..............ienance ::.Road Works Contracts for 1998

Prequalification

Evaluation/AwardMobilization Contractors T- -I t -Construction Works:

Librazhd-Qukes(IDA:21 Okmn.US$13 5 million) 7 rm-nt- 0 enaneQukes-Qafe Thane(KF 19.6km,US$9 3 mill'on) . maintenance

Matit,Drin bridges(lta1y,650m,200m:US$6 8 mil , - . -aintenan"e

Road Maintenance and Safety Equipment and Signalization

Bidding -

EvaluationiAward -|Delivery/instalation .:... .... ........ ... tiTechnical Assistance and Training Program I_

Road Data Bank. ISlc. 7....<::. ........-- :-:-....Paveet llManagemen Sysle~- |l etA , ........

| B rid q eMa n age n sJ1+Svs:e,: | | |elect.:':':--':.':.:.:- .:.:-. -.............it:i2g::: . .. ....... .. ..... .....:. .......Bridq aagen ,in' Syster7 ......... .. n .... ~::..:.... : .

ITA to (3RD. RRDs on Mangt /Mod'n Rd.Secl'or Select ........... 3Training for GRD and RRDs Executive Staffs | ; . ... -- '..

.Credit Disbursement Period Sign.7/ x x Effect. 10/96 Closing 6830/2001 x

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ALBANIA - NATIONAL ROADS PROJECT

Implementation Schedule

Estimated Annual Contractual and Other Payments(US$ million equivalent)

7/96 PROJECT YEAR 6/2001 TOTALPROJECT ELEMENT PRE- I------I-----------I-----------I----------I----------I PAYMENT REMARKS

PROJECT 96 97 98 99 2000CREDIT rIMINGSign./Eflect /Close **7/1996 1*1/97 6/2001'*AProject Inception Phase

(a) Establishmieni oll'liI *4/96 I------------I------------I------------I------------I------

Ib) Hirinig of Project Coordinator **7/96 0.2 0 24 0 32 0 24 1 0 (I 0) SLF(0.2) (0 24) (0.32) (0.24)

l---------------I-l-----------I------------Il------------l

(c) ProcUr Slup Consul./ Mobil S. ------IC /I'requalilica[./Bidding

(d) Superv olFWorks Contracts for 0.15 0.2 0 8 0.6 1.8 (1.2) SLF1997 (0 1) (0 1) (0.6) (0.4)

B. Road Wortrks Contracts for 1997(a) Prequlalif/ [liddilg/ Eval

Award ! Mobil. C'ontractors 1------I(b) ConstrUtion1 Works 4.0 5 1 2.8 11.9 EBRD

(i ) Elba,sar-Librazhd …------------…------------…-------

0 7 0.5 1.2 Italy(fi) 'I apize-Fushe KrUa …------------…------------I

1 6 19 1 2 4.7 (4.4) ICB(iii) Milotl-l eota ( 5) (I 8) (1.1)

l------------ ------------ I------------l

C. Road Works Contracts for 1998(a) Prcquliaf!. D3iddin'/ Fval

Award / Mobil Contractors I------I(b) Construction Works 50 7.0 3.0 15 0 (12 7) ICB

(i) l.ibrazld-Qukes (4 2) (5.9) (2.6)I------------i------------I------------i

(ii) O)ukes-QaIte Thanc 3.0 4.5 2.0 9.5 KF…- - - ---

(liii) Matit. Driri bridges 2.5 38 1.9 8.2 Italy

D. Maint. Equip. and Signaliz. Bid/Eval. 2 5 3.2 2.7 8.4 (4.8) ICB,(1.6) (2.1) (1.7) (0.6) NCB, IS,

…---------I------------I------------I------------ INE TA. and Training SC. 0 i 0 25 0 2 0.6 PHARE

(a) RDB I---- ----------- i---------I

Sel. 0.3 0.45 0.45 1.2 PHARE(b) 'NI'S I---I…------------ ------------I------------

Se] 0 17 0.2 0.23 0 6 PHARE(c) BMS I---- ---- ---------I------------

Se] 0 1 0.16 0.18 0.16 06 PHARE(di VA o C,RD.. RRDs on Manag. --------- I------------ ------------ I------------

(0.3) IC,0 2 0.35 0.38 0.37 1.3 Cofin'd

(e) Training (0.1) (0.1) (0. 1) PHARE

TOTAL.S 7.1 22.17 25.08 11.65 66.0(IDA linanced) (1.8) (8.04) (10.12) (5.04) (25.0)

Note: SIF = Slort l.isting of Firms: IC = Individual Consultants.

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ALBANIA Annex 3.11NATIONAL ROADS PROJECT Page 1 of 3

Project Implementation Plan

ACTION RESPONSIBLE DATE

1. PROJECT INCEPTION PHASE(i) Retention of (Rural Roads Project) Project Implementation MCT May 6, 1996

Unit (PIU)

(ii) Establishment and Staffing of PIU Executive Secretariat (ES) MCT/GRD May 6, 1996

(iii) Selection and Hiring of Project Coordinator. ES member of MCT/GRD July 31, 1996PIU

(iv) Finalization of Prequalification Documents for 1997 Road PIU August 30, 1996Works Contracts under responsibility of ES ProjectCoordinator, after approval by PIU and IDA (same processrepeated one year later for 1998 road works contracts)

(v) Prequalification of Contractors for 1997 Road Works Contracts PIU September 30, 1996(same process one year later for 1998 road works contracts)

(vi) Selection and Hiring of International Supervision Consultants GRD October 1, 1996Team (ISC) (Estimated Credit Effectiveness

Date)

(vii) Finalization of Bidding Documents for 1997 Road Works PIU September 1, 1996Contracts, under responsibility of ES Project Coordinator,

after approval by PIU and IDA (same process repeated one yearlater for 1998 Road Works Contracts)

(viii) Selection of Contractors for 1997 Road Works Contracts PIU October 31, 1996(same procedure one year later for 1998 Road WorksContracts)

(ix) Appointment of GRD/RRDs staff and/or local consultants as GRD December 1996 through Decembercollaborators and counterparts with the ISC for supervision of 2000Road Works Contracts

(x) Establishment of Special Account MOF/MCT/GR October 1996D/PI U/ES

(xi) Effectiveness of Cofinancing participations (a) EBRD loan MOF/MCT January 31, 1997(b) KF loan(c) Italy loan(d) European

Union (PHARE) grant

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(CONTINUED)Project Implementation Plan


(xii) Supervision of Road Works Contract including timely GRD/ISC January 1997 through Decembermobilization and start quality control, control of cost, 2000measurements and scheduled progress under ISC and localcounterpart staff

(xiii) Quarterly Progress reports to GOA. IDA and Cofinanciers PIU First Progress Report for periodending December 31, 1996

2. REHABILITATION OF NATIONAL ROADS 1997-2000

(i) Definition of Road Works Contracts 1997 (same process one GRD July 1997 (and July 1998)year later for 1998 Road Works Contracts)

(ii) Bidding under advice [SC GRD November 1997 (and November1998)

(iii) Evaluation and Award under advice ISC GRD December 1997 (and December1998

(iv) Construction and Guarantee (maintenance) period GRD January 1,1997-December 31,2000

3. SUPERVISION CONSULTANTS FOR ROAD WORKS

(i) Selection and Hiring (Inception Phase) GRD October 1, 1996

(ii) Advice on Prequalification and Bidding GRD October 1-December31, 1996

(iii) Supervision of Road Works Contracts GRD January 1, 1997 through December31, 2000

4. ROAD MAINTENANCE AND SAFETY EQUIPMENT.AND MATERIALS

(i) Bidding GRD April-August 1997

(ii) Evaluation Award GRD September-December 1997

(iii) Delivery/ Installation GRD January 1, 1998-December 31,2000

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Annex 3.11AttachmentPage 3 of 3

(CONTINUED)Project Implementation Plan


5. TA and TRAINING

(i) Road Data Bank GRD/RRDs Selection of ConsultantsOctober-December 1996

Establishment and ImplementationJanuary 1997-December 1999

(ii) Pavement Management System GRD/RRDs Selection of ConsultantsOctober-December 1997


(iii) Bridge Management System GRD/RRDs Selection of ConsultantsOctober-December 1997


(iv) TA and Training to GRD and RRD staff (periods ofexecution are partial)

(a) Twinning GRD 1998-1999(b) Project Management GRD 1998-1999(c) Maintenance Engineering RRDs 1998-2000(d) Civil Engineering including management of Contracts, GRD/RRDs 1998-2000

cost/Benefit Analyzing, Quality Control and QualityAssurance, Laboratory Testing

(e) Road Safety and Environment GRD 1997-1998(f) Technical and Road Works RRDs 1997-1998(g) Transfer/Collaboration with UT GRD 1997-2000

Abbreviaions:

E.S. = Executive SecretariatGOA = Governrment of AlbaniaGRD = General Road DirectorateMCT = Ministry of Construction and TourismMOF = Ministry of FinancePIU = Project Implementation UnitRRD = Region Roads Directorate

m:\albania\sar\albania\annex3 1Odoc

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ALBANIA


Monitoring Indicators for Project Activities(to be covered in progress reports)

Reasons (if ActionsProject Component Estimated Actual Actual % of any) for to be

Estimated Difference TakenA. PROJECT INCEPTION

PHASE(i) Establishment of PIU(ii) Establishment of PIU Executive Secretariat(iii) Appointmenit of Project Coordinator(iv) Start of Project Coordinator(v) Selection of Supervision ConsultantsB. CIVIL WORKS(i) Invitation(ii) Prequalification(iii) Bidding(iv) Evaluation(v) Contract award (date)(vi) Contract Signature and Mobilization

(dates)(vii) Earth works completed (m')(viii) Retaining walls (ni)(ix) Drainage structures, culverts (units)(x) Sub-base completed (m')(xi) Base completed (m')(xii) Shoulders completed (kin)(xiii) Resealing (km)(xiv) Asphalted concrete paving (km)(xv) Signs (units)(xvi) Painting (ni)(xvii) For Bridges:

(a) Foundations (ml)(b) Piles (m' of reinforced concrete)(c) Girders (m' of prestressed concrete)(d) Deck slabs (rn2 of reinforced concrete)(e) Sidewalks (ni)(f) Guard rails (m)

(xviii) Construction work completed(date)(xix) Maintenance work completed (date)(xx) Completion certificate

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(CONTINUED) Annex 3.12Monitoring Indicators for Project Activities Page 2 of 3

(to be covered in progress reports)

Actual % Reasons (if ActionsProject Component Estimated Actual of any) for to be

Estimated Difference TakenC. SUPERVISION OF WORKS(i) Selection of Consultants (Inception Phase)(ii) Start of supervision(iii) m/m for each expert(iv) m/m for counterpart Albanians(v) Training received by counterparts(vi) Final cost of supervisioniD. ROAD MAINTENANCE AND SAFETY

EQUIPMENT, AND MATERIALS(i) Invitation(ii) Bidding(iii) Evaluation(iv) Award (date)(v) Delivery(vi) Spare parts(vii) Assistance Service providedE. TA to GRD and RRDsTA items: (a) road data bank, (b) pavementmanagement system, (c) bridge managementsystem, (d) TA to GRD and RRDs staffs onmanagement/modernization road sector.For each item:(i) short listing(ii) Invitation(iii) Selection and award(iv) Start of work(v) Experts by skill, rn/m and department

attached to(vi) Albanian counterparts by skill, m/m and

department(vii) Achievements on each item, including on

Albanian counterparts(viii) Final cost of each item

F. TRAINING OF GRD AND RRDS STAFFS(i) Selection of trainees(ii) Albanian under training by skill in Albania(iii) Albanian under training by skill overseas(iv) Training by twinning(v) Examination of training targets achieved(vi) Completion and final cost of each training

component

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NOTE: The quarterly progress reports will give for all the project components, and on thebasis of the above monitoring indicators: (a) statement of all work performed andprogress made in the scheduled work program during the progress period, (b) schedule ofthe work program for the next reporting period, (c) forecast completion stages of the workprograms covering the implementation of approved recommendations, (d) list ofproposals, plans, programs and recommendations awaiting approval, and (e) summary ofinterim findings.

m:\albania\sar\albania\annex3 12.doc

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Annex 3.13ALBANIA Page I of I


Schedule of Disbursements*(US$ million)

IDA Fiscal Year Estimated Disbursement Schedule(July I-June 30) (Cumulative %) Quarter Cumulative

FY 1997September 30, 1996December 31, 1996 3.2 0.8 0.8**March 31, 1997 4.0 0.2 1.0June 30, 1997 4.8 0.2 1.2

FY 1998September 30, 1997 5.6 0.2 1 .4December 31, 1997 7.2 0.4 1.8March 31, 1998 11.2 1.0 2.8June 30, 1998 17.2 1.5 4.3

FY 1999September 30, 1998 27.2 2.5 6.8December 31, 1998 40.0 3.2 10.0March 31, 1999 50.0 2.5 12.5June 30, 1999 60.0 2.5 15.0

EY 2000September 30, 1999 70.0 2.5 17.5December31, 1999 80.0 2.5 20.0March 31, 2000 86.0 1.5 21.5June 30, 2000 90.0 1.0 22.5

EY 2001September 30, 2000 94.0 1.0 23.5December 31, 2000 97.6 0.9 24.4March 31, 2001 99.2 0.4 24.8June 30, 2001 100.0 0.2 25.0

* Credit Effectiveness estimated in early-fourth quarter 1996 (para.3.25)** Initial Deposit of US$0.8 million to a Special Account (para.3.35)

m:\albania\sar\albania\an3 13.doc

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ALBANIA


Environmental Assessment Summary

1. Background

1. The improvement of the National Roads Network is an importantcomponent of the government of Albania's Investment Plan. It is also the basis forthe proposed "Road Network Development Strategy of Development in theRepublic of Albania," August 1995. The project components proposed for WorldBank funding include the rehabilitation of national roads in the Northern and theEast-West Corridors, namely:

a) Elbasan to Qafe Thane (71.1 km)a) Tapize-Fushe Kruja, 7.0 km andb) New section Miloti-Lezha (12.0 km)d) Two bridges over the Matit (650 m) and Drin (200 m) bridges

2. According to World Bank Operational Directives 4.01, as the projectinvolves the construction of new roads, it is rated category "A", requiring theborrower to prepare an environmental impact assessment (EIA). The purpose of theEIA is to improve decision making and to ensure that project options areenvironmentally sound and sustainable. ElAs also identify ways to improve projectsenvironmentally and socially by preventing, minimizing or mitigating adverseimpacts.

3. The General Roads Directorate (GRD), using ICP consultants(Albanian/Italian joint venture) prepared the Environmental Assessment Report forthe Miloti-Lezha road. After reviewing the report, World Bank specialist visitedAlbania to assist ICP in strengthening the report to satisfy Bank guidelines. The EIAfor the Milot-Lezha road has since been revised and submitted to the Bank. GRD isstill working on the environmental assessment of sections along the Elbasan-Progadec corridor.

4. The initial EIA report prepared by ICP required strengthening in thefollowing areas: (i) description of the environmental policy, (ii) legal andinstitutional framework (iii) preparation of mitigation, management and monitoringplan, (iv) identification of training needs (v) approx. costs for the mitigationmeasures, monitoring and training components and (vi) responsibilities for

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implementation. The summary of the revised report for Milot-Lezha prepared byICP on behalf of GRD is given below. The report is in two volumes and areavailable on request.

II. National Environmental Policy and Legal Framework

5. Albania has made good progress during the past 2-3 years towards theformulation of an environmental strategy and policy and a system of protection andmanagement of the environment. The first environmental strategy study wasprepared in 1993 in cooperation with the World Bank and formned the basis for theNational Environmental Action Plan which was approved by the Government inJanuary 1994.

6. The national policy of Albania to protect the environment comes under LawNo 7664, dated January 21, 1993. The law establishes the Committee forEnvironmental Protection and Preservation (CEP) under the Ministry of Health(MOH) as the authority to implement the national environmental policy. CEP isheaded by a chairperson and has three main departments: Water and Air; Forestry;and Environmental Economics, each headed by a Director. Twelve regional officesof CEP are located in capital towns of each of the national districts. At present,capacity within CEP is limited and will need strengthening especially in the areas ofenvironmental impact assessment, environmental monitoring and enforcement.

7. Environmental Impact Assessment is a major component of the Law 7664.Chapter II, Articles 8 and 9 spell out the requirements for an EIA and the authoritiesresponsible (CEP and MOH) for the implementation of the law. Articles 12 and 15also highlight the public disclosure requirements during the EIA process. Anotherrecent legislation, Law 7848, dated 25 July, 1994 relates to social impacts. The lawaddresses the rights of the citizens to appeal expropriation of private land anddemand fair compensation.

III. Identification of Environmental Impacts and ProposedMitigation Measures

8. SoilImpacts: The proposed realignments along Tirana -Vora and the new roadat Milot -Lezh mainly cross agricultural land and potential impacts willinclude soil erosion, unstable slopes, side-tipping of spoil material whichcould encroach on adjoining agricultural land and soil contamination due toroad runoffs.

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Mitigation: The road passes for most part, through flat plains and impactsdue to unstable slopes will be limited. Exposed soil on the embankmentswill be revegetated using the top soil taken from the excavations. Soilcontamination due to road runoffs will be mitigated by the use of sidedrains.

9. WaterImpacts: As the new road passes over two rivers, there is the possibility ofpolluting both the Mat and Drin rivers. If the water is not properly drained itcould contaminate the adjoining agricultural lands. Direct impacts frommotor vehicles could be solid particulates (from corrosion, wear and tear oftires, road surface, etc.). lead, organic compounds (grease, lubricating oils).Accidental spillage of hazardous substances could present the mostdangerous impact to the surface and ground water, especially the Mat andDrin rivers. Furthermore, road construction is likely to change existing waterdrainage patterns - causing flooding or water stagnation. The widening ofthe road along the Tirana-Vore section, could result in the contamination ofthe adjoining green houses due to road runoffs.

Mitigation: Road runoffs will be collected by drainage systems and thespeed of the polluted water will be reduced by increasing the turfing of theembankment slopes. Water drainage patterns would be modified so that thepolluted runoffs do not run into irrigation channels. Its proposed to designthe road drainage channels at a lower elevation than the adjoining irrigationchannels to prevent cross contamination. In the case of the Mat and Drinrivers provisions will be made to collect the road runoff through side pipesand will be then dispersed through infiltration pits on either side of thebridge. Furthermore Reno type mattress and gabions are to be used in theembankments for the protection of the rivers from soil erosion of the riverbanks. Realignments and widening of the road in the Tirana-Vora, Tapize-Fushe and Elbasan sections also generate similar impacts as construction ofnew roads and hence mitigation measures will need implementing along thelines described above.

10. AirImpacts: The road route avoids populated areas and hence impacts due to airpollution will be limited. However the road does pass close to few farmhouses and a village school (at Milot) located less than 50 meters from thehighway.

Mitigation: It is envisioned that measures will target both site specific andpolicy issues at the national level to control air pollution in the highwaysector. Site specific measures include using vegetation screens to filter TSPs

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and dust from the road traffic. It also proposed to elevate the road close tothe school and provide an underpass for safe access and protection againstrelated impacts such as air and noise pollution. No new quarries are plannedand construction material will come form existing quarries which aresituated outside the project area and no major impacts are foreseen.Additionally, new quarries and asphalt plants will be required to have dustreduction measures such as bag houses, mechanical cyclones, etc. At thenational level the Government of Albania is moving towards the use ofunleaded gasoline and has recently provided price incentives to promoteunleaded gasoline.

11. Flora and FaunaImpacts. The roads for the most part, pass through agricultural land and theimpacts on the flora and fauna will not be as severe as passing throughvirgin forests. Nevertheless, the lack of knowledge of the existing flora andfauna in the area may contribute to possible negative impacts on some rarespecies. Furthermore the construction activity and storage of materials andthe construction of access roads could affect the flora and fauna in theadjoining areas.

Mitigation: Providing safe animal crossings (provision of underpassesconnecting both sides of the roads, fencing in sensitive areas ) is envisaged.Underpasses are designed at an interval of 3 km along the road, this designcriteria will be revisited, and if necessary, the number of underpasses will beincreased depending on the height of the highway and the groundwaterlevel. Drainage ditches of 1.5 to 2 m deep on either side of the road will bea further deterrent to trespassing. In regards to assessment of flora, fauna andbiodiversity, the Committee for Environmental Protection and Preservationwill work closely with GRD to identify sensitive areas where additionalmeasures for the protection will be taken.

12. NoiseImpacts. As the proposed road does not pass through populated areas, theextent of noise pollution will be limited to few farm houses and a villageschool in Milot which are closer than 100 meters from the axis of thehighway. The noise levels generated from fairly busy highway(7500/veh/day) will be in the order of 60 to 90 decibels (dbA). Noise levelsover 55 (dbA) could be disruptive. The farm houses and school located lessthan 50 meters from the highway could be subjected to noise pollution in thefuture. The quarries and crushers during the construction phase could also bea source of noise pollution if located close to residential areas.

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Mitigation. Mitigation measures could be taken in pavement design andmaintenance of the road such as using graded asphalt and avoidance ofsurface dressing close to sensitive areas. Other measures will include theconstruction of embankments/barriers and mounds to suppress the noisepollution close to houses and schools. The barriers proposed will be acombination of mud barriers and restricted dampers such as shrubs andbushes. Furthermore, according to design drawings the location of the roadat a higher elevation, close to the school, would contribute to dampening thenoise pollution.

13. Land Acquisition and ResettlementImpacts: There will be no instances of destruction of dwellings, or anymajor resettlement involved in the proposed project. The roads mostly passthrough agricultural lands which are not all under active cultivation. Thearea which would be occupied for the new road in the Milot-Lezha section isaround 27 hectares, however, the surface area lost to agriculture is approx.12 hectares.

Mitigation: The Albanian Government is implementing legislation onexpropriation of land and related compensation issues. Law 7848 on "Expropriation for Public Purposes and Temporary Use of ImmovableProperty and Law 7698 for " Requesting and Compensating Former OwnerProperty" will ensure that impacts derived from expropriation are handledfairly. According to Article 14 of Law no 7848, " Immovable property iscompensated by the entity for the full market value, in favor of the entity forwhom expropriation is being carried out". In addition to compensation, sitevisits showed that the farmers and other stakeholders are supportive of theroad project because they feel the project will contribute to their well beingand provide them with better business opportunities to sell their produce.

14. Cultural HeritageImpacts: Damages to historical and cultural sites are possible during roadconstruction and related works such as development of quarries and burrowpits. Road construction could also damage the atheistics of cultural andarcheological monuments.

Mitigation: Preliminary investigations do not foresee any impactson cultural and archeological sites. The archeological sites of Kruja arelocated far away from the Tapize - Fushe rehabilitation component. However,further investigations of inventories of cultural and historical sites along withbibliographic searches will be necessary. GRD will work closely withCommittee of Environmental and the Ministry of Culture to check for

-1 10-


possible impacts of the proposed route on cultural and historical monuments.If the road does pass close to cultural and historical monuments then the

contracting agencies should be made aware of safety precautions to be takenwith regards to proper disclosure and protection of sites and artifacts.

15. Road SafetyImpacts: Traffic has risen more than ten fold in Albania over the last fiveyears and with it the potential for traffic accidents which will become amajor public health problem for the country. New roads will help inreducing accidents, but increase in speeds results in more fatalities. Inaddition to road user safety, construction workers at site are also at the riskof accidents.

Mitigation. Analysis of traffic accidents is essential for the developmentof mitigation measures. Information on the number of deaths , injuries, andlocation of the accidents are used to identify road black spots where physicalroad safety improvements will have maximum impact in reducing thenumber of accidents. The road safety components proposed in the project willaddress road safety issues. Mitigation measures will include traffic signs,markings, proper intersection layout, presence of road barriers such as trees,poles, walls. Policy issues such as speed limits, and vehicle inspectionscontribute to reduction in traffic accidents. Furthermore, measures topromote worker safety in the road construction needs to be addressed. Safetymeasures including wearing of helmets, signs to reduce speed in workerareas, etc. In addition to a separate safety component in the project, EU willbe also providing grant funding for national road safety measures.

IV. Rehabilitation Works

16. In general, road rehabilitation works generate positive environmentalimpacts, such as reduction in road accidents, erosion and flooding control, noisereduction. In addition, they provide opportunities to further improve theenvironment. The indirect impacts generated through rehabilitation mainly relate toconstruction activities involving quarries, concrete and asphalt plants which couldresult in air and noise pollution if not properly located and controlled. Apart fromtaking mitigation measures against soil, water and air pollution, as described above,tender documents and worker contracts would be provided with environmentalclauses related to: origin of quarry material, location of borrow sites, pollutioncontrol in quarries and asphalt plants, location of worker camps, storage, handlingand disposal of hazardous wastes, occupational safety issues for workers. Portionsof the rehabilitation works do involve broadening of roads (Tirana-Vora) and


correcting alignments and building small new bridges (Elbasan-Progradec sections).Environmental studies for the realignment sections of the Elbasan-Progradecsections are being prepared and will be submitted to the Bank by end of March,1996.

V. Environmental Training:

17. The Committee for Environmental Protection and Preservation (CEP) will bethe central authority on environmental policy and monitoring issues. However,environmental capacity should also be built in the sectoral ministries, which areultimately responsible for implementing environmental mitigation measures. Henceit is proposed to establish a small unit in the GRD to address environmental issuesfrom transport projects. It is envisioned that the TA component would assist theestablishment of the unit to prepare and implement appropriate environmentalmanagement plans for the highway sector. Training will be required inenvironmental management, preparation and review of EIAs, social assessments,environmental health assessments. and environmental economics. Funds havealready been identified in the project for training as shown in the cost tables.

VI. Implementing and Monitoring of Mitigation Measures

18. The Italian Partners of ICP will be in charge of designing the environmentalmitigation measures in close cooperation with CEP. Additionally tender documentsproduced will include the environmental mitigation measures proposed. Thesupervision and monitoring of the proposed mitigation measures will be theresponsibility of CEP and GRD.

m :\aA bania\sar\a1 bania\environ doc

Vil. Environmental Mitigation and Monitoring Plan

Impacts Mitigation Design /and Implementing Monitoring Mitigation CostsAgency Agency

Soil Erosion Proper drainage of runoffs and planting of ICP & CEP CEP 27,000vegetation

Water Pollution Bridge Drainage pipes, Embankment ICP & CEP CEP 195,000drainagc canals, infiltration pits

Air Pollulion Vegctativc scrccns and polic) io pronmolc ICP, Mnistiry of CEP 17,000unleaded gasoline Transportalioii, CEP

Flora and Fauna Provision of uinderpasses and fencing in ICP & CEP CEP included insensitive areas construction cosls

Noise Pollution Vegetative screens and wooden barriers ICP & CEP CEP S 150,000Quarries - dust reduction devices such as dry scrubbers contractor $200,000

- worker safety precautions

Asphalt Mix - dust reduction deviccs Sl00,000Plants - restoration plan for asphalt planl areas after

road works

Land Proper enforcement of laws nos 7848 and Ministry of Construction and CEP Approx.Acquisition 7698 Tourism $3000/hcclarcDamage to Though no impacts are anticipated, ICP & CEP CEPCultural contractors will be made familiar withHeritage procedures

Traffic and Speed limits, road signs and other safcty ICP, GRD, Minisiry of Ministry of Health, Project ComponentWorker measures Inicrior CEP, Ministry of (S3 million)Accidents

Interior

Training EIA, Environmental Management, GRD, CEP and Training CEP 1S20,000Environmental Economics Consultant _ .

oow00 t3

o N

oo.A

ALBANIANational Roads Project

Economic Evaluabon of Project Roads

Distance Project | Existing NPV ERR (%)Length Saving Cost 1995 Roughness @ 12% Base Costs Benefits

ROAD (Krn) (Km) Type (US $ MM) AADT (M/km) (US S MM) Case +25% -25%

Elbasan - Quaftana ') 71.1 0.0 2-Lane Reconstructon 40.6 3150 8 19.5 24.3 19.7 18.5

Tapize - Fushe Kruja 7.0 0.0 2-Lane Reconstructon 1.2 4500 7 3.7 67.1 55.5 52.5

Milot - LezhaOption 1: Reconstruct Old Road 17.5 0.0 2-Lane Reconstructon 4.7 4500 8 13.2 63.1 52.2 49.4Opton 2: Build New Road 11.7 6.1 New 2-Lane 12.1 45003) 21.0 43.9 34.5 32.2Compared with Base Case2).

Opton 2: Build New Road 7.8 27.5 21.2 19.7Compared with Opbon 1

Total 4) 53.9 44.2Weighted Average 4) 26.0 20.8 19.5

1) Total length 71.1 Km. Eight bridges are already being improved under the Transport Project at a cost of US$3.0 million,which is included in the cost estimate for the purposes of the economic evaluabon

2) Base case for all projects includes 100% patching and reconstructon at roughness 10 M/Klm3) 20 % of traffic assumed to remain on old road r

4) Adoptng opton 2 for Miloti-Lezha JQ ;0c

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Annex 4.1ALBANIA Page 2 of 5

Natfonal Roads ProjectTypical Unit Road User Costs ($ per vehicle-km)

Vehicle ClassRoughness Light Medium Heavy Articulated(M/km) Car Pickup Bus Truck Truck Truck Truck

2 0.09 0.10 0.31 0.14 0.21 0.38 0.563 0.09 0.10 0.32 0.14 0.22 0.39 0.574 0.09 0.10 0.32 0.16 0.24 0.43 0.625 0.09 0.11 0.33 0.17 026 0.45 0.656 0.10 0.12 0.35 0.18 0.29 0.50 0.727 0.11 0.13 0.36 0.19 0.31 0.52 0.768 0.12 0.14 0.37 0.21 0.34 0.57 0.839 0.12 0.15 0.39 0.22 0.35 0.59 0.87

11 0.13 0.16 0.39 0.22 0.36 0.61 0.90

HDhM Manage - Pwoject Sumunmr

Run Name Albenba - Nallnal Roads Projet

Run Dala: 03d019

Road Nam Elb2san - OuaStans Seciton

Road Length: 71. I

Cuffency: MIlon US DOLLARS

WITHOUT PROJECT CASE WITH PROJECT CASE ECONOMIC COMPARISON WITH PROJECT CASE

Do Minimum 2-Lane Reconslucllon 2-Lane Reconstnhcuion

ECONOMIC ECONOMlC ECONOMIC ECONOMIC ECONOMIC ECONOMIC DECREASE DECREASE ECONOAC FINANCIAL FINANCIALYEAR ADT OPER IRI AGENCY USER TOTAL ADT OPER IRI AGENCY USER TOTAL AGENCY USER NET CAPITAL ECURRENT

COSTS COSTS COSTS COSTS COSTS COSTS COSTS COSTS BENEFITS COSTS COSTS

1996 3150 83 0021 21.031 21053 I 3150 RECO 25 34451 21031 55.482 j -34430 0000 -34430 40506 00251997 3528 87 0021 24.003 24024 I 3528 2.7 0021 18038 18060 I 0000 5965 5964 0000 00251998 3951 9.? 0023 27.472 27.495 I 3951 28 0.021 20.224 20.246 I 0002 7.248 7.249 o 000 00251999 4425 95 0 024 31.459 31.483 I 4425 29 0 021 22.668 22.690 0 003 8.791 8 793 0.000 0 0252000 I 4691 99 0.025 34.105 34.130 I 4691 30 0021 24.049 24069 0W04 10057 10061 I 0.000 00252001 I 4972 103 0026 36.965 36991 I 4972 31 0021 25.567 25589 0005 11398 11402 I 0000 00252002 I 5270 RECO 25 34 451 40.054 74 505 I 5270 32 0 021 27 263 27 284 34 430 12.791 47 221 a0 000 0 0252003 5587 27 0.021 28567 28589 I 5587 34 0.021 29090 29.111 I 0.000 -0522 *0523 0000 00252004 I 5922 2.8 0.021 30315 30.337 I 5922 35 0.021 31070 31.091 I 0.000 -0755 -0754 0000 00252005 6277 29 0.021 32161 32.182 I 6277 37 0021 33229 33250 I 0000 -1068 -1068 0000 00252006 I 6654 30 0021 34.119 34.141 I 6654 39 0021 35587 35609 0000 -1.46 -1 467 I 0000 00252007 I 7053 32 0021 36.337 36358 7053 OVER 25 3284 38172 41457 j -3263 -1.835 -5099 j 3839 00252008 I 7476 33 0 021 38.773 38 795 7476 26 0 021 38 229 38 251 0 000 0 544 0 544 0 000 0 0252009 I 7925 3 4 0.021 41.404 41425 I 7925 2.7 0 021 40.553 40 574 I 0 00 0 851 0 851 0000 0 0252010 I 8400 36 0021 44.263 44285 I 8400 2.9 0021 43.021 43042 0000 1243 1243 I 0000 00252011 I 8905 38 0021 47.390 47412 I 8905 3.0 0021 45641 45662 0000 1749 1 749 0000 00252012 I 9439 4.1 0.021 50.819 50840 I 9439 31 0021 48520 48542 I 0000 2298 2298 I 0000 00252013 I 1005 4.4 0.023 54.653 54 676 I 10005 3.3 0.021 51.832 51854 I 0.001 2.821 2.823 0 000 0 0252014 I 10606 4.7 0.024 68.857 58.881 I 10606 3.5 0.021 55.450 55.472 0002 3.407 3.409 I 0.000 00252015 I 11242 5.0 0025 63.474 63.499 11242 3.7 0.021 59.421 59.442 | 004 4.053 4056 | 0000 0025

Average 5.3 3.1

TaIl(undascounred) 34.173 776221 811.101 38.113 708.655 746.777 -3242 67564 84.322 44.345 0500

Total (at 2.00%) tt.629 276.321 293.953 35.544 238.940 274.487 -47.915 37.379 19.464 41.610 0209

Proect NPV at 12.00% Otaeomi Rale: 19.46

P.ad 1mie Rae d Relunt (s): 24.3 00 A

O IX

H1DM Manager - Project Summary

Run Name Albania - National Roads Prolect

Run Date: 03iU56

Road Nam Tapkze - Fushe Krula Secion

Road Length: 7.0

Cunency Million US DOLLARS

WITHOUT PROJECT CASE WITH PROJECT CASE ECONOMIC COMPARISON WITH PROJECT CASE

Do Minimum 2-Lane Reconstruction 2-Lane Reconstruction

ECONOMiC ECONOMtC ECONOMIC ECONOMIC ECONOMIC ECONOMIC DECREASE DECREASE ECONOtMC FINANCiAL FINANCIALYEAR ADT OPER IRi AGENCY USER TOTAL ADT OPER IRI AGENCY USER TOTAL AGENCY USER NET CAPITAL ECURRENT

COSTS COSTS COSTS COSTS COSTS COSTS COSTS COSTS BENEFITS COSTS COSTS

1996 4500 7.2 0.002 2.177 2.179 1 4500 RECO 2.5 1.014 2.177 3.191 I 1.012 0.000 -1.012 1 1.191 00021997 1 5040 7.5 0.002 2.471 2.473 I 5040 2.7 0.002 1.947 1.949 0.000 0.524 0.524 0.000 0.0021998 I 5644 7.8 0.002 2.809 2.811 5 5644 2.8 0.002 2.183 2.185 0.000 0.626 0.627 0.000 0.0021999 1 6322 8.1 0.002 3.200 3.202 I 6322 2.9 0.002 2.448 2.448 1 0.0w 0.754 0.754 0.0w 0.0022000 6701 8.4 0.002 3.457 3.459 1 6701 3.0 0.002 2.595 2.597 I 0.000 0.861 0.862 1 0000 0.0022001 1 7103 8.8 0.002 3.749 3.751 1 7103 3.1 0.002 2.757 2.759 0.000 0.992 0.992 1 0000 0 0022002 1 7529 9.2 0.002 4.075 4.077 1 7529 3.2 0.002 2.939 2.942 0.000 1.135 1.135 1 0000 0.0022003 1 7981 9.7 0.003 4.438 4.440 7981 3.3 0.002 3.136 3.138 0.000 1.302 1.302 1 0000 0 0022w4 1 8460 RECO 2.5 1.014 4.836 5.850 8 s460 3.5 0.002 3.348 3.350 9 1.012 1.488 2.500 0000 00022005 8968 2.7 0.002 3.464 3.466 8968 3.6 0002 3.578 3.580 1 o.ow -0.114 -0.114 00wo 00022006 I 9506 2.8 0.002 3.676 3.678 1 9506 3.8 0.002 3.830 3.832 0.000 -0.153 .0.153 I 0000 0 0022007 10076 2.9 0.002 3.900 3.902 I 10076 OVER 2.5 0.323 4.105 4.428 I -0.321 .0.205 -0.526 1 0.378 0 0022008 10681 3.0 0.002 4.138 4.139 I 10681 2.5 0.002 4.123 4.125 I 0.0o 0.014 0.014 I 0.000 0.0022009 11322 3.1 0.002 4.403 4.406 j 11322 2.6 0.002 4.373 4.378 0.0w0 0.030 0.030 0.0W 0.0022010 1 12001 3.3 0.002 4.699 4.701 I 12001 2.7 0.002 4.639 4.641 0.000 0.059 0.059 0.000 0 0022011 1 12721 3.4 0.002 5.017 5.019 12721 2.8 0.002 4.921 4.923 I 0.000 0.096 0.096 a 000 0.0022012 I 13484 3.6 0.002 5.363 5.365 I 13484 3.0 0.002 5.221 6.223 0.000 0.142 0.143 0000 00022013 I 14293 3.8 0.002 6.742 5.744 1 14293 3.1 0.002 5.545 5.547 0.000 0.197 0.197 I 0000 0 0022014 1 15151 4.0 0.002 6.157 8.159 1 15151 3.3 0 002 5.924 5.927 0.000 0.233 0.233 1 0000 0.0022015 16060 4.3 0.002 6.628 6.630 1 16060 3.4 0.002 6.340 6.342 0.000 0.287 0.288 0.000 0002

Aveage 5.3 3.0

ToWt (undiscounted) 1.053 84.399 85.451 1.373 76.127 77.503 -0.321 8.272 7.951 1.569 0.040

TotI(a 12.00%) 9.426 30.034 30.460 1.121 25.648 26.770 -0.696 4.387 3.691 1.300 0.017

Pnrot NPV a112.0% Oktacur Rate: 3.69

Pi1cd hiene Rdi d Return (%): 7.1t67.1 Cs~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~..1

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ALBANIA


Organization Chart of Ministry of Construction and Tourism MCT)

Secretary for Water Secretary for Dams an CabiAdvisTechnologies and Advice Hydropower

eneral Road Underministry of Underministry ofDirectorate Construction Tourism

Coordination and Territorial Investments Department for Marketing ForeignDevelopment Planning Department Promotion of Tourism Department AidDepartment Department Investments Department

DeateX Deprten Depar ment |

r- I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Executive Agency Public Services

for Heating Department

- - - - - - - - - --

Personnel Privatization and Reconstruction ontrol and RevisionDepartmenten!JDepartment Department

Date: February 1996

ALBANIA


Organization Chart of General Roads Directorate (GRD)

Ministry of Construction and Tourism

General Director of Roads

ecet |Project Implcmentation Unit

Rural RoadsI . ', ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ProjectSecreta ~ ~ ~ ~ ~ ~ ~ ~~~~~eeo

Foreign Relation Juridical National RoadsDepaitment F s',cIo rPrjc

Economic Maintenance Planning & Development Tehnical i PersonelDe aimnt Department Department Depailment m~n Depailment

Lmaintenance of -programming sector '-design & technical sector i-design, procurement, L accountingbridges & roads i-economic & development Ntender supervision i surveying, implementation I service

-winter service sector -supervision of foreign aid programs l-administrationi-maintenance '-road planning & inventory i-laboratory I and project 0Iegislationmanagement -coordinalion of external I-training

I aid Lgencral servicesector

r - -…-… - -

Trasport Pro3ject , R-ial Roads Nati'ai'' Roads: Date: February 1996 tRoa dsa& C Pr*ct Frqectm :\albania\chanl22 .doc t'J

-120-Chart 2.3

ALBANIA


Organization of Regional Road Directorates (RRDs)

Minister of Constructionand Tourism

, ~~~~~~~~~IGeneral Roads

Directorate

Region Roads Region Authority/Directorate I (informal advice,

minor road works)

Planning Fiac an Tehia3rnpr nSection I FAcut eto F qimn eto

^=tc. IHeadman 2 Headman I

II

Labor Gang/ Labor Gang/lenlgthmen lengthmen

Note:Each headman is responsible for 30-50 km of roadsdepending upon road type and construction.

Date: February 1996c:\data\char23.doc

-121-Chart 2.4

ALBANIA


Flow of Budget Proposals Funds for the National Roads Network (NRN)

Foreign finance:Budget Proposals.:.Budgeted Funds:

Ministry of Construction andLoa

I ~~Touris m_Authri t iesSecretaiat

General Roads Directorate District Council

Supervisio|Directortes|(RRD)Commun. BuildingSector

Lo . . . .. . . orEI Mintenance eloF gR r

rD Contractorscto

:c:\data\char24.doc I

L~~~~~~

ALBANIA


Organization Chart of the National Roads Project

National Roads Project|

. .P.LU. |Executive

Secret.ary

Supervision |

Date: February 1996||m:\albania\sar\aloania\char25.doc |Contractors |

-123-


ALBANIA


Documents in the Project File

1. .Road Component

EAST-WEST CORRIDOR:

- Rehabilitation and improvement of Elbasan-Qafe Thana (border) Road(Engineering Designs, Technical Report and Environmental Impact Reportby ICP S.I.A Infraproject Consulting, March 1996)

NORTHERN CORRIDOR:

- Rehabilitation of T apize-Fushe Kruja Road (Engineering Designs,Technical Report and Tender Documents by ICP S.I.A. InfraprojectConsulting; February 1995)

Construction of Miloti-Lezha Road (E. Designs, Technical Report andTender Documents by ICP S.I.A Infraproject Consulting; September 1995,and Environmental Impact Report by ICP S.I.A Infraproject Consulting;February 1996)

2. Bridge Component

Construction of bridges over Matit and Drin rivers (E. Designs, TechnicalReport and Tender Documents by ICP S.I.A. Infraproject Consulting;September 1995)

3. General

Statistical Yearbook of Albania by INSTAT (Instituti i Statistikes, 1995).

Computer Printouts of Road User Charges Model as a part of HDM III(economic evaluation for project rehabilitation works).

m \albania\sar\albania\anex5l.doc

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CJEECA~~ TURKEY b .. dor,~1~~~~~~~~0- ~ ~ ~ ~ ~ ~ ~ ~ 1020~00- 2030 21500

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TRAFFIC SURVEY P KU9 .* ' PesIop F..h. Ku; E*o \t

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19 DISTRICT CENTERS )to,. 1 Errol t Lrbroohd ,

6 NATIONAL CAPITAL hX5 ! 1' 1 / W\oS.9

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A100 I 41100'--- INTERNATIONAL BOUNDARIES Lo,Ilnnd

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-- NATONAK ROADS a onora R0 rro

SCENIC ROADS < r hU t

41 ]0 ~~~~IlNE AND INDUSTRIAL ROADS,)Fh KueSrl- Bqic9 ,d, FYR oFOREST ROADS N I A 1MACEDONIA4STRATEGIC ROADS S R k

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Mo REG IONAL CENTERS AND .1 F Y RSRAEGIONA ROADS DRCOAE

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fTIALY. '5AANDE n, _n Ih6World 04' y~~~~~~~~~~~~h. Wa,Id RA-1 G-op.

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TUEyF RKREO bond.,,.,

10o > Ct, rURKEr , 1 30R 2 _° 20;30' 2 L '00 r

IMAGING

IReport No: 15464 ALEType: SAR