ONE WEEK EFLE COPY Report No. PTR-105a

Transcription

1 Public Disclosure Authorized fzeturn TO IREPORTS DESK WITHIN RESTRICTED ONE WEEK EFLE COPY Report No. PTR-105a This report is for official use only by the Bank Group and specifically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMEAT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized APPRAISAL OF A THIRD HIGHWAY CONSTRUCTION PROJECT BRAZIL Public Disclosure Authorized February 29, 1972 Transportation Projects Department

2 Currency Eauivalents Currency Unit - Cruzeiro (Cr$) US$1.00 = Cr$5 (February 1971) Present Exchange Rate:US$ Cr$5.785 Cr$1 US$0.20 Cr$1 million = US$200,000 Fiscal Year 1E. RETar.i January 1 - December 31 Rj RO 007o 21 - Vi: ' System pf Weights and Measures: Metric Metrir: British/US Equivalent 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) mile (mi) 1 square kilometer (km2) square mile (sq mi) 1 hectare (ha) acres (ac) 1 metric ton (m ton). 2,200 pounds (lb) \ Abbreviations and Acronyms ADT - Average Daily Traffic CVRD, - Cia Vale do Rio DDee (a Government mining oompany) - Departamento de Estradas de Rodagem (State Highway Department) SfER - Departamento Nacional de Estradas de Rodagem (National Highway Department) LfNPN - Departamento Nacional de Portos e Vias Navegaveis (National Ports Department) GEIPOT - Grupo de Estudos para Integracao da Politica de Transportes %. (Transport Study Group) IUCL - Imposto Unico Sobre Combustiveis e Lubricantes PAl - (Federal Tax on Fuels and Lubri ants) PA-1 w - First Transport Plan of Action PA-2 - Second Transport Plan of Action RFFSA - Rede Ferroviairia Federal (National Railways) SUNAMAM - Superintendencia Nacional da Marinha Mbrcante (National Merchant Marine Superintendency) UNDP - United Nations Development Programme USAID - United States Agency for International Development USFWHA - United States Federal Highway Administration

3 BRAZIL APPRAISAL OF A nlird HIGHAY CONSTRUCTION PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS... i - ii 1. INTRODUCTION BACKGROUND... 2 A. General...,.,... 2 B. Transport Policy and Coordination.. 2 C. Hlighways.. 4 D. Railways.. 4 E. Ports and Coastal Shipping.. 4 F. Air Transport THE HIGHWAY SECTOR.. 5 A. The Highway Network - Traffic and Vehicle Fleet 5 B. Highway Administration. 6 C. Highway Engineering. 7 D. Highway Construction.. 8 E. Highway Maintenance. 9 F. Highway Financing G. Highway Planning THE PROJECT A. General Description B. Highways to be Constructed and/or Paved C. Consulting Services for Design and Construction Supervision D. Additional Consulting Services E. Cost Estimates and Financing F. Execution of the Project G. Disbursement ECONOMIC EVALUATION A. General.. 18 B. The Project Roads C. Benefits from the Project ACREEIIFNTS REACIHED AND RECOMMENDATION This report was written by Messrs. E. Schaefer (engineer) and N. Kanaan (economist) on the basis of appraisal missions in June/July 1971 and December 1971.

4 TABLE OF CONTENTS (Continued) ANNEXES 1. Transport Survey 2. PA-1 Progress of Implementation 3. PA-2 Progress of Implementation 4. Reorganization of Highway Administration 5. Status of Highway Maintenance in the Southern States and Minas Gerais Annex 5 - Attachment I Highway Maintenance - State of Rio Grande do Sul Annex 5 - Attachment II Highway Maintenance - State of Santa Catarina Annex 5 - Attachment III Highway Maintenance - State of Minas Gerais Annex 5 - Attachment IV Highway Maintenance - State of Parana 6. The Project Roads 7. Consultants Engaged in the Preparation of the Third Highway Project TABLES 1. Federal Investment in Transport by Mode 2. (a) Freight Transport by Mode, (b) Percentage Shares 3. Passenger-Kilometers, Percentage Shares, and Average Annual Growth Rates and Selected Items, by Mode of Transport, Classification of Highways 5. Development of National and State Highway Network, Relationship between Area, Population, and Length of Highways, Relationship between Area, Population, and Number of Vehicles, Vehicle Registrations by State, Vehicle Fleet, Increase of Vehicle Registrations, Highway Design Standards for New Roads 12. Highway Design Standards for Improvement of Existing Roads 13. Financing Plan for Federal and State Highways, List of Roads for Construction and/or Paving 15. List of Roads for Detailed Engineering 16. List of Roads for Feasibility Studies 17. Schedule of Estimated Disbursements 18. Average Daily Traffic on Selected National Highways, Average Daily Traffic on Project Roads 20. Vehicle Operating Economic Costs 21. Internal Economic Return for Roads Proposed for Construction and/or Paving

5 TABLE OF CONTENTS (Continued) CHARTS I Organization of GEIPOT II Organization of the National RHghway Department (DNER) III Organization of the State Highway Department of Minas Gerais MAPS 1. National Highway Network 2. Maranhao, Piaul and Ceara 3. Rio Grande do Norte, Paraiba, Pernambuco and Alagoas 4. Bahia and Sergipe 5. Eapirito Santo and Rio de Janeiro 6. Minas Gerais 7. Highway Maintenance in Mines Gerais 8. Mato Grosso and Goias 9. Sao Paulo 10. Parana 11. Highway Maintenance in Parana 12. Santa Catarina 13. Highway Maintenance in Santa Catarina 14. Rio Grande do Sul 15. Highway Maintenance in Rio Grande do Sul

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7 BRAZIL APPRAISAL OF A THIRD HIGHWAY CONSTRUCTION PROJECT SUMMARY AND CONCLUSIONS i. Since 1964 the Bank has had a continuing exchange of views with the Government of Brazil regarding the improvement and extension of the transport system. Following the Bank's recommendation, a Transport Survey was launched in 1965 with financial assistance by UNDP, USAID and the Bank, the survey was carried out in two stages. Based on the findings and recommendations of this Survey, the Bank is participating in the financing of two highway construction projects (567-BR, October 1968, US$26 million, and 676-BR, May 1970, US$100 million), a railway project (786-BR, August 1971, US$46 million), and a port project (756-BR, June 1971, US$45 million). Progress on the two highway projects is satisfactory; the railway project is progressing reasonably satisfactorily although some elements are delayed, and the studies which form the basis for implementation of the port project are proceeding. ii. Prior to Loan 567-BR in October 1968, the Government submitted a Plan of Action (PA-1) summarizing its transport objectives and giving schedules for action on highways, railroads and ports. Prior to Loan 676-BR in May 1970, the Government submitted another Plan of Action (PA-2) outlining the measures necessary to bring about further improvements in the transport sector. The progress toward attainment of the objectives in individual modes has been varied, with satisfactory results in highways (Annexes 2 and 3), and slower progress in railways and ports (para. 2.05). The activity of GEIPOT as transport coordinating agency has not been successful, but the Government has now confirmed to the Bank its intention to strengthen GEIPOT's operations and to adopt satisfactory transport coordination policies. iii. This report appraises a highway construction program consisting of: (a) construction and paving (and consultants for supervision) of 2,530 km of highways comprised of two Groups -- Group A of 1,849 km and Group B of 681 km, (b) consulting services for detailed engineering of 1,626 km and feasibility studies of 2,584 km of highways, and for further improving methods of construction supervision, and (c) international experts for the highway training center of the National Highway Department (DNER). The total cost of this program is estimated at US$350 million equivalent. The Government, with the agreement of the Bank, is examining the possibility of obtaining separate financial assistance from sources other than the Bank for construction works under Group B. iv. The project for which a Bank loan of US$89 m.illion is now proposed includes all the above program with the exception of the construction and corresponding supervision of Group B highways. The cost of the project is estimated at US$221 million equivalent, and the loan will finance 40% of

8 - ii - the cost of construction (including supervision) and consultants for engineering and studies, and the actual foreign cost of consultants and experts for improving construction supervision and for the highway training Center. The foreign exchange cost of the project is estimated at US$26 million equivalent; the loan will therefore finance about US$63 million of local expenditures. v. Execution of the project will be the responsibility of the National Highway Department. The loan will be made to the Federal Government, and DNER, as executing agency, will administer a revolving fund for payment to contractors and consultants. vi. Construction contracts will be let on the basis of international competitive bidding. The National Highway Department has prequalified contractors and is calling for bids. vii. Internal economic returns for the roads in the program range from 13% to 40%, with an average for the whole program of 19%. The range of internal economic returns for the project to be financed by the proposed loan is also 13% to 40X, with an average of 24% for the whole project. viii. The project provides a suitable basis for Bank lending of US$89 million equivalent. On the basis of the average useful life of road construction works and length of construction period, the appropriate term would be 25 years, including a four-year period of grace.

9 BRAZIL APPRAISAL OF A THIRD HIGHWAY CONSTRUCTION PROJECT 1. INTRODUCTION 1.01 The Government of Brazil has requested financial assistance for a program consisting of: (a) the construction and paving of 2,530 km of highways, (b) the supervision for the proposed works, (c) additional consulting services for detailed engineering of 1,626 km and feasibility studies of 2,584 km of highways, and for further improvement of DNER's supervision of construction, and (d) international experts for DNER's highway training center On the Bank's recommendation, a general Transport Survey was launched in 1965 with the assistance of foreign consultants (para. 2.04). Based on the findings and recommendations of the Transport Survey, the Bank is participating in the financing of the First Highway Construction Project (Loan 567-BR, October 1968, US$26 million) and the Second Highway Construction Project (Loan 676-BR, May 1970, US$100 million). The two projects cover about 2,600 km of construction and/or paving, 2,900 km of detailed engineering, and 3,100 km of feasibility studies. Both projects are progressing satisfactorily; as of November 30, 1971, the First Project was about 90% complete and the Second Project 31% complete Other Bank projects in the transportation sector included two railroad projects financed by Loans 65-BR and 92-BR (US$12.5 million each) in 1952 and 1953, covering the rehabilitation of the Central do Brasil facilities and the purchase of new rolling stock. A highway maintenance project was financed by Loan 75-BR (US$3 million) in 1953 covering the purchase of maintenance equipment for the State of Rio de Janeiro. All of the above loans have been fully disbursed. Loan 756-BR (US$45 million) was signed in June 1971; this loan is to assist in the financing of a five-year program for the improvement and expansion of the Santos port. A Federal Railway Project of US$46 million equivalent (Loan 786-BR) was signed on August 25, 1971; it covers the railway component of a mining complex for the exploitation and export of iron ore This report has been prepared by Messrs. Schaefer (Engineer) and Kanaan (Economist) who appraised the project in June/July and December 1971.

10 2-2. BACKGROUND A. General 2.01 With an area of 8.5 million km 2, Brazil is the fifth largest country in the world. Population in 1970 was 93.5 million, growing at about 2.9% p.a. which will mean a total of about 120 million in Overall population density is low, at about 11 per. km 2, but there are wide regional variations ranging from 3,000 per kmz in the coastal regions of the States of Guanabara and Sao Paulo to less than one per km 2 in the Amazonas. The vast natural resources which the country possesses make for great potential in agricultural and industrial growth Rapid economic growth is one of the Government's main objectives. Planners are working with rates of 8-10%, and the Bank's 1971 economic report concluded that an 8-9% level of growth is possible. If the present population growth trend is maintained, an 8.5% growth rate would permit a 5.5% rate of increase in per capita income. GDP would grow from US$37 billion equivalent in 1970 to US$83 billion equivalent in 1980, with per capita GDP increasing from about US$400 to over US$ The Government has emphasized transport development to go hand in hand with its economic growth targets. Efficient transport is needed to open up new lands and to move agricultural products from the interior to coastal consumption centers and ports of export; manufactured products need to be transported in the opposite direction. B. Transport Policy and Coordination 2.04 Since 1964 the Bank has had a continuing exchange of views with the Government of Brazil on improving and extending the transport system. In 1965 the Government started a Transport Survey which was carried out by consultants in two phases. Phase I, covering highway transport in four states, railway transport, coastal shipping, and port operations in the three main ports, was completed in 1967; a Bank grant of US$1.5 million shared the foreign exchange costs with the Government. Phase II, covering highway transport in fourteen states, was started in 1967 and completed in Phase II foreign exchange costs were financed by UNDP (US$1.4 million), USAID (US$1.0 million) and the Government (US$1.4 million). The Bank acted as executing agency for the UNDP. Local costs of both phases were financed by the Government. The main recommendations from these studies are summarized in Annex Both phases of the Survey were conditioned on the Government agreeing to Memoranda of Understanding on steps for improving transport services. Prior to Loan 567-BR, the Government submitted a Plan of Action (PA-1) summarizing its transport objectives and giving schedules for action on highways,

11 -3- railways and ports. This plan has now been implemented (Annex 2). Prior to Loan 676-BR, the Government submitted another Plan of Action (PA-2) outlining the measures required to bring about further improvements in the transport sector. Progress on implementing the objectives of this plan varies between modes. In highways, progress has been satisfactory and major achievements to date are reorganization of DNER, reorganization of a number of state highway departments (DERs), delegation of DNER's maintenance functions to the DERs in four states, strengthening of DNER's planning capacity, and improvement of construction supervision (Annex 3). The major changes that remain to be accomplished are further delegation of maintenance operations to the states, and progressive delegation of construction to those states where the delegation of maintenance has been completed. In railways, progress has been slower than expected, but the problems are complex and the Bank's involvement is relatively recent. Achievements are: reductions in the number of employees; closing of most of the uneconomic lines; preparation of corporate plans (to be ready in mid-1972); and consolidation of the Sao Paulo railway system (to be achieved by mid-1972). Major issues remaining are the integration of the Federal Railways System and the Sao Paulo State Railways, the restructuring of tariffs so as to reflect costs along the lines of the study recently completed, the closing of the remaining uneconomic lines, and the implementation of the corporate plans when they are completed. Progress in ports, where Bank's involvement is also recent, has also been slower than expected. The reorganization study which will be the basis for improvements in operations and planning and for establishing cost-based tariffs, started in December 1971 and, although several months behind schedule, is progressing satisfactorily. However, the international experts whose services have been financed under the Santos Port Project to help the Government in the preparation of an overall ports plan have not yet been employed. For the sector as a whole, the slowness of GEIPOT to address itself to the issues of transport coordination, which was the main task assigned to it after its reorganization in 1969, has affected all the modes. (para. 2.06) GEIPOT, a Government agency, was established in 1965 to provide counterparts and facilities, as well as to coordinate and supervise the Transport Survey. When the Survey was completed, GEIPOT was made a permanent agency within the Ministry of Transport. It is responsible for preparing national transport policy with a view to coordinating the various modes of transport and reducing overall transport costs (Chart 1). While GEIPOT has been doing varied work in the transport field (most of it in highways), it is only now addressing itself to the important function of transport coordination. The latter is urgently needed since the agencies responsible for planning and executing projects in the various modes - especially highways - have strengthened their planning capabilities and, in the absence of sectoral coordination by GEIPOT, are tending, individually, to make projections of transport demand and modal split for the whole sector. The Government has now confirmed to the Bank its intention that GEIPOT will increase its staff and will direct its efforts towards coordinating the various modes and integrating transport policy with national economic and social strategy.

12 There is no administrative allocation of traffic between modes, and users are free to select the mode of transport which best suits their requirements. Entry into the interstate road transport industry requires DNER approval, but the granting of licenses is practically automatic. Intrastate trucking operators are licensed by the DERs in the same way. Bus companies must apply to DNER or to DERs, prove public need, and file tariffs and timetables for each route. On the whole, road transport regulation is not unduly restrictive In recent years, about one-fourth of total federal fixed investment expenditures lias been in the transportation sector. In 1970 this represented about Cr.$ 2,600 million (US$563 million equivalent), of which about half was spent on highways (Table 1). At the state level, the share of transportation in total capital expenditure is about the same, and is almost entirely directed to road construction. C. Highways 2.09 Details of the highway sector are given in Chapter 3. D. Railways 2.10 The Brazilian railway network comprises about 30,000 route-km, of which 25,000 km are operated by a federal company (Rede Ferroviaria Federal - RFFSA) and 5,000 km by a state-coordinated group of companies (Sao Paulo State Company). In addition, about 600 km are owned and operated by a Government mining company (Cia Vale do Rio Doce - CVRD) and carry mostly iron ore traffic. About 90% of the network is meter gauge. Between 1961 and 1970 railway freight traffic, excluding CVRD, increased from about 11 to 15 billion ton-km, but passenger traffic declined from 18 to 13 billion pass-km. Over the same period, the rail share of total freight movements decreased from 19% to 17%, and passenger traffic from 22% to 7% (Tables 2 and 3) Because of the great distances in Brazil, the potential for efficient rail transport is favorable. Much of the traffic lends itself to efficient bulk transport in high capacity trains with mechanized loading and unloading. Forecasts of freight traffic growth indicate potential increases of at least 50% over the next five years, if the railways can be properly equipped, but capital investment has been extremely low for many years. Costs could be reduced by rationalizing the route system, by mechanizing track maintenance and freight handling, and by centralizing workshops, but tariffs must be raised to reflect costs and increase revenue. E. Ports and Coastal Shipping 2.12 There are 35 principal ports in Brazil. In 1969 total port traffic was about 73 million tons of dry and liquid cargo, including bulk. Santos, the largest port handling general cargo, moved a total of about 13 million tons. Rio de Janeiro handled about 21 million tons of which less than 10% was general cargo.

13 There is a National Department of Ports and Waterways (DNPVN) within the Ministry of Transport. This organization is over-centralized and lacks the flexibility of operation which is essential in the maritime trade. The Government is aware of the need to improve DNPVN and port administration generally. As part of the loan agreement of 756-BR for the Santos port, the Government has embarked on a program to decentralize and reorganize the administration of the major ports -- specifically, under the Bank project, to improve administration, management, accounting systems, and planning in the port of Santos. Once the Santos improvements are effective, the new techniques will be introduced to other Brazilian ports Between 1961 and 1970, coastal shipping freight transport by public and private carriers increased from about 14 to 25 billion ton-km, while passenger transport remained negligible. In relation to total movements, coastal shipping freight transport decreased from 18% to 14% during the period (Tables 2 and 3). F. Air Transport 2.15 Because of increasing economic activity among the many large and widely separated urban centers, air transport is being used increasingly. The major commercial airline company (VARIG) has extensive national and international networks. Other airline companies of national importance are CRUZEIRO DO SUL, VASP and SADIA. Between 1961 and 1970, traffic increased from about 3 billion to about 4 billion pass-km, representing about 2% of total passenger transport (Table 3). Air cargo transport is negligible. 3. THE HIGHWAY SECTOR A. The Highway Network-Traffic and Vehicle Fleet 3.01 Brazil has a total highway network of about 951,000 km, of which 52,000 km are national and 121,000 km are state highways. The balance of 778,000 km, or 82% of the network, are provincial roads which are mainly earth roads or mere tracks. About 47% of the national and 18% of the state highways are paved (Table 4). During the last four years DNER, as well as most DERs, have put emphasis on paving their networks. Since 1967, an average of 2,300 km of national and 1,300 km of state roads have been paved annually (Table 5) Tables 6 and 7 show the relationship between area, population, motor vehicle registration and length of paved and unpaved highways in each state or federal territory. Except in the states of Sao Paulo and Guanabara, only a small percentage of the national and state highway network is paved. Nearly all unpaved roads show poor design characteristics, and paving them must almost always be combined with some improvement to alignment.

14 Road freight traffic grew between 1961 and 1970 at about 11% per annum, resulting in an increase of the share of roads in total freight movement over the period from 62% to about 69% (120 billion ton-km, Table 2). For the same period, the road share of total passenger traffic rose from 74% to 91% (170 billion pass-km, Table 3). Road traffic growth is expected to continue at present rates for a time (reflecting Brazil's sustained growth rate), but to taper off by the 1980's. The total vehicle fleet in 1970 was estimated at about 3.5 million, with about 83% cars and pick-ups, 15% trucks, and 2% buses (Table 8). About 62% of the truck fleet is 1- to 7-ton capacity and is gasoline-powered, about 35% is 4- to 14-ton capacity and diesel-powered, and about 3% is 2- and 3-axle tractor-trailer diesel-powered (Table 9). Growth of the vehicle fleet has averaged 13% per annum (Table 10). Practically all vehicle needs are met by domestic production, and future growth of the fleet will not have to be limited by productive capacity. B. Highway Administration 3.04 The National Highway Department (Departamento Nacional de Estradas de Rodagem - DNER), under the Ministry of Transport, administers the national highway network (Chart 2). Maintenance and construction is done through 20 district offices kone in each of the states, except Guanabara and Acre); roads in the three federal territories are administered from neighboring states. Each of the 22 states has a state highway department (Departamento de Estradas de Rodagem - DER) responsible for its highway network DNER's activities have in the past been too centralized, with wasteful duplication of services between the National and State Highway Departments, especially in the more developed states. Government policy is now to transfer maintenance and construction functions gradually from DNER to the DERs, thus enabling DNER to concentrate on planning and overall supervision Plans of Action PA-1 and PA-2, submitted by the Government prior to Loans 567-BR and 676-BR respectively, contained objectives regarding reorganization of highway administration. Considerable progress in reorganizing DNER has since been achieved. In 1968, Brazilian management consultants -- Getulio Vargas Foundation -- completed the first phase of a reorganization study, which resulted in recommendations being made for DNER's new administrative structure (Chart 2 and Annex 4); enabling legislation was passed in March The consultants are now developing the new administrative framework. Under a USAID loan, US Federal Highway Administration (FHWA) experts are assisting in the technical aspects of the reorganization of DNER To enable it to plan the development of the entire Brazilian highway network, DNER needed a competent planning division. Under the Second Bank Highway Project, teams of Brazilian and foreign transport economists were engaged, and considerable progress is being made in systematic planning and programming (including the updating of the original Master Plans), as well as in data processing and budget control (para. 3.30).

15 DNER is establishing a training center for its middle and upper level professionals, as well as for DER personnel. The center is expected to start operations by the end of 1972, and the Government is now preparing an organization plan and an operations program for the first two years; these will be agreed with the Bank before September 30, It is likely that the Brazilian Highway Research Institute (Instituto do Pesquisas Rodoviarias) will be incorporated into DNER to provide a nucleus for the training center. While most of the training will be done by Brazilians, DNER will secure the assistance of international experts in fields where Brazilian experience is not yet adequate; financing for these services is included in the project (para. 4.08). The main focus of training will be to expose staff to technological innovations introduced in Brazil during and since the Transport Survey. Training will be in the fields of administration, planning, project preparation, supervision of construction, bridge design, maintenance, programming and budgeting, and traffic engineering During the Transport Survey, reorganization studies were conducted for the main states in Brazil, with a view to increasing the efficiency of the DERs and thus preparing them for DNER's maintenance and construction functions to be gradually transferred to them. Under PA-1 and PA-2 the Government indicated that it would ensure that DERs would be gradually reorganized on the basis of Transport Survey recommendations Considerable progress has been made in reorganizing most of the DERs covered by the Transport Survey (Annex 4). The organization of the DER of Minas Gerais is shown on Chart 3 as a typical example of the new organizational structure Concurrent with the reorganization of DERs, DNER is gradually delegating to them responsibility for maintaining national highways, usually on the basis of pilot regions (paras and 3.23). This delegation of maintenance operations is progressing satisfactorily. C. Highway Engineering 3.12 The design standards used for the engineering of all highway works included in the program are shown in Tables 11 and 12. They correspond to the standards adopted for the Bank's First and Second Highway Projects, and conform with general design standards in Brazil. These standards are satisfactory The Bank's involvement in transport in Brazil has contributed to improved engineering practices. Foreign consultants employed during the Transport Survey introduced new standards and methods and initiated systematic economic evaluation of projects. Based on the new experience, national consulting firms are now established in nearly all the major states. While the First Highway Project was designed and is still being supervised by foreign consultants, all engineering for the Second Project (with the exception of two expressways in the States of Bahia and Rio de Janeiro) is being carried out

16 by Brazilian engineers. As a whole, the experience with the new consulting firms has been satisfactory; some of these firms have extended their activities to other Latin American countries The regulatory provisions for maximum motor vehicle weight and dimensions are satisfactory. The maximum axle load is 10 tons for single axles and 17 tons for tandem axles. The enforcement of weight regulations is improving on national roads, but is still unsatisfactory on state roads, except in the State of Sao Paulo. Twenty-six weighing stations have been installed by DNER, 37 stations are planned for 1972, and 71 for the period The Government has given assurances that weight regulations on the national system will be properly enforced. D. Highway Construction 3.15 Improvement of the quality of construction and supervision is one of the most important and most difficult problems in the highway sector. Ingrained malpractices will be eradicated only by continuous effort by DNER management. In the past, poor construction supervision resulted in poor quality work; long delayed payments to contractors made it impossible for DNER to enforce contractual work schedules. Although such bad practices are still found, adherence to proper practices on Bank projects has helped DNER to improve construction operations on all its highway projects in Brazil, as, for instance, in applying bidder prequalification to all DNER's projects, and adopting competitive bidding on unit price contracts for all major works Better construction supervision was one of the objectives of PA-2 (Annex 3), and contract administration has improved noticeably. Consultants are being employed for construction supervision. Five experts from INGEROUTE (France) are, under the Bank's Second Highway Project, assisting the construction division of DNER to establish proper controls for construction programs; they will be supplemented by additional experts for the proposed Third Project (para. 4.08). Operation manuals are being rewritten with assistance by FHWA advisors The Brazilian construction industry is competitive and there are a large number of well organized and experienced local contractors. Prequalification for the Second Highway Project showed the strength of the industry. There were 13 firms and joint-ventures qualified for works over US$20 million, 18 for US$10-20 million, 33 for US$4-10 million, 22 for US$1.5-4 million, and 19 firms for works less than US$1.5 million. For the proposed program, 147 Brazilian firms have been prequalified Local construction firms are carrying out about US$600 million worth of highway construction per year. Including the program appraised in this report, the Bank's highway program at its peak would add about 20% to this volume of work, an increase which can be easily absorbed by the Brazilian construction industry.

17 With the exception of the heaviest items (large tractors, scrapers and shovels), construction equipment is manufactured in Brazil. Equipment suitable for most road building operations - except heavy earth-work - is therefore readily available Road construction and maintenance figure largely in labor employment. A recent survey by the Institute of Economic and Social Planning in the Ministry of Planning showed that most road works are carried out by a mix of labor and equipment which varies among the regions in which they are executed. The highest ratios of labor to machinery are found in the north-east where labor is plentiful and relatively cheap due to scarcity of alternative employment opportunities; the lowest such ratios are in the south-east where labor is scarce and expensive because of the availability of alternative employment. The survey showed that in 1969, 0.5 million workers were directly employed in road construction and maintenance, equivalent to 20 percent of total employment in the manufacturing industries. In addition, a large but undetermined number of jobs will be generated as a result of road construction; this is especially so in the newly opened up areas where the government has initiated massive colonization programs to solve the unemployment problems which resulted from migration of farm labor away from the drought-affected agricultural areas of the north-east. It was estimated by the survey that Bank highway lending in Brazil (the First and Second Highway Projects under construction, and the proposed program) will provide direct employment for about 146,000 workers between 1970 and E. Highway Maintenance 3.21 Maintenance has been much neglected in Brazil in the past, but has now improved considerably, in part through USAID helping several states to buy new equipment. Under the Transport Survey, consultants carried out maintenance studies in 18 states, and made recommendations for improving maintenance methods and operations, listed equipment needs, prepared maintenance programs and advised on organizational changes Under the Loan Agreements for the First and Second Highway Projects (Loans 567-BR and 676-BR), the Government undertook to maintain the entire national network properly. Under the Agreement for Loan 676-BR, the Government stated that its maintenance functions would gradually be delegated (and necessary funds transferred) to those states where project construction works would be undertaken on state and/or delegated national roads (Minas Gerais, Santa Catarina and Rio Grande do Sul). Under PA-2, the Government declared its intention to extend such delegation gradually to all other main states Progress in the delegation of maintenance is satisfactory. Pilot regions have been established in the States of Minas Gerais (Map 7), Parana (Map 11), Santa Catarina (Map 13) and Rio Grande do Sul (Map 15). These states will maintain all national roads in the pilot regions, with the exception of one road in Rio Grande do Sul which is being maintained by the

18 Army, and four sections of interstate highways in Parana which will be delegated later. A more detailed description of the status of highway maintenance in the above states is given in Annex 5. Improvement of maintenance operations in these regions, with gradual enlargement of the respective areas, is under study by DNER, as is the establishment of new pilot regions in other states DNER's increased awareness of the importance of maintenance, the gradual delegation of maintenance functions to the DERs, and the provision of adequate resources by the Road Tax (para. 3.26) should lead to further improvement. The Government has confirmed that it will maintain the whole national network properly, and has given assurance that delegation of mainten-- ance functions will be extended to those states which demonstrate the ability to maintain and police their networks. F. Highway Financing 3.25 There are two main sources of road user charges in Brazil: the Federal Tax on Fuels and Lubricants (Imposto Unico Sobre Combustiveis e Lubricantes - IUCL) and the Road Tax (Taxa Rodoviaria Federal). Two other federal taxes, the vehicle insurance tax and a tax on inter-urban bus fares, are also levied on road users; states and municipalities also impose other charges but, compared with the IUCL and the Road Tax, total receipts from all such charges are small The proceeds of the Road Tax are earmarked for road maintenance. The tax, made uniform for the whole country in 1969, is an annual levy of about 2% of the assessed value of vehicles. It is distributed 40% to DNER, 40% to the states, and 20% to the municipalities. The Road Tax goes a long way toward meeting one of the recommendations of the Transport Survey that users be charged the short-run marginal cost. The exceptions are that passenger cars continue to pay more and tractor-trailers less than their corresponding shares. The higher charges on passenger cars are justified on the basis of redistribution of income, while the lower charges on tractortrailers do not cause a great deal of distortion in the overall picture due to their small proportion of the total fleet (para. 3.03) In 1972, proceeds from the IUCL are expected to reach about Cr$ 3,176 million, increasing at 8% per annum. The Road Tax will contribute about Cr$ 897 million in 1972 and is expected to increase at an annual average of 14% in , based on a vehicle fleet growth rate of 10% p.a. The IUCL will contribute an average of 37% of the total expenditures, and the Road Tax a further 11%. Other federal and state taxes, as well as state funds earmarked for highways, will contribute 25%; foreign loans and federal budgetary support will contribute 27% (Table 13). Revenues from road users cover about 70% of total expenditures on highways (including maintenance, administration and construction), and substantially exceed the cost of maintaining and administering the highway system alone.

19 G. Highway Planning 3.28 The 25-year National Transport Plan, originally published in 1964, is the basis for all investments in the sector; it is revised and updated every five years by the Ministry of Transport. The first revision concerning the highway sector was completed by DNER at the end of 1969 and forwarded to the Secretariat General of the Ministry of Transport for coordination with other modes and for approval by the National Council of Transport which is now examining the plan. Final approval must be given by the National Congress In order to determine annual expenditures for highways, a investment budget has been prepared (Table 13), the greater part of which is for projects selected from priority lists contained in the Transport Survey Master Plans. The balance is for low-cost penetration roads - the most important of which are the Trans-Amazon road and the Cuiaba-Santarem road - to open up virgin areas in the Amazon basin which were not covered in the Transport Survey. The three-year budget was passed by the National Congress and approved by the President in November DNER has continued updating and expanding the Master Plans to ensure that highway investment decisions are guided by economic priorities; its planning division has been expanded by additional permanent staff as well as by national and foreign advisors. Seven Brazilian economists and four foreign transport experts are now integrated into planning operations, the latter financed under the Second Highway Project. Dependable data are important for updating these Master Plans satisfactorily, and the Government has given assurance that it will continue to improve and refine its datagathering techniques. 4. THE PROJECT A. General Description 4.01 The program, identified on the basis of Highway Master Plans prepared during the Transport Survey, consists of: (1) the construction and paving of a total of 1,849 km of national highways (Group A) in the states of Piaui, Paraiba, Pernambuco, Alagoas, Minas Gerais, Goias, Mato Grosso, Santa Catarina and Rio Grande do Sul, and 681 km of national and state highways (Group B) in the States of Bahia, Minas Gerais, Espirito Santo, Parana, Santa Catarina and Rio Grande do Sul. (See Maps 1, 2, 3, 4, 5, 6, 8, 10, 12 and 14); 1/ 1/ The maps indicate all roads in the program, and do not separate out those to be financed under the proposed project. To identify the latter, refer to Table 14, Group A.

20 (2) consulting services for supervision of item (1); and (3) additional consulting services for: (a) detailed engineering of 1,626 km of selected road sections; (b) feasibility studies of 2,584 km of selected road sections; and (c) expanding the advisory services provided under the Second Highway Project for improvement of methods and procedures of construction supervision. (4) international experts for the highway ttaining center of DNER. The project for which a loan is now proposed consists of the program described above, excluding Group B of the construction and paving and the corresponding consulting services for its supervision. The Government, with the agreement of the Bank, is examining the possibility of obtaining separate financial assistance for Group B from other sources The lists of roads proposed for construction and/or paving, detailed engineering and feasibility studies, are shown in Tables 14, 15 and 16, respectively. Their regional distribution is as follows - (the first figure refers to the program, and the figure in parentheses to the proposed project): 23% (14%) in the south, where increasing agricultural production is handicapped by the lack of adequate transportation to markets; 22% (11%) in the south-east; 23% (32%) in the north-east where many priority roads are already being constructed under the Second Highway Project; and 32% (43%) in the center-west, a fast developing area where trunk roads are badly needed. B. Iiighways to be Constructed and/or Paved 4.03 The most important characteristics of the highways for construction and paving included in the project are given in Table 14. More detailed descriptions are given in Chapter 5 - Economic Evaluation - and in Annex 6. C. Consulting Services for Design and Construction Supervision 4.04 Detailed engineering studies for the roads proposed for construction and paving were carried out under the Second Highway Project. The studies, which are in accordance with modern engineering principles, are complete and the quality is satisfactory All detailed engineering was done by Brazilian consultants with the exception of the northern access to the city of Salvador - Highway BR for which a Brazilian-German joint venture was employed. The consultants are listed in Annex 7.

21 To establish continuity of responsibility, the Government has agreed that consultants who carried out the detailed engineering for highways proposed for construction and paving should also be employed for construction supervision. Signing of the consultants' contracts for supervising Group A will be a condition for loan effectiveness. D. Additional Consulting Services 4.07 With a view to preparing further highway construction projects for future Bank financing, provision has been made in the project for detailed engineering of 1,626 km and feasibility studies of 2,584 km of highways. (Tables 15 and 16). All detailed engineering and feasibility studies, with the exception of the detailed engineering for the access to Rio de Janeiro of Highway BR-135, will be carried out by Brazilian consultants Under the Second Highway Project, five international experts from INGEROUTE (France) are assisting the construction division of DNER to establish appropriate supervising procedures and to coordinate the various consultants supervising construction (para. 3.16). In order to strengthen DNER's construction division further, three additional experienced construction experts will be provided by the same firm during construction of the project roads. In addition, international experts will be employed to assist DNER in the formation of a training center for professional personnel both of DNER itself and of the DERs (para. 3.08). E. Cost Estimates and Financing 4.09 The total cost of the program is estimated at US$349.8 million equivalent, including allowances for quantity and price contingencies; the total cost of the project to be financed from the proposed loan is US$221.4 million equivalent. A summary of costs of the program (defining project costs and Bank participation) follows:

22 - 14-1JS,$ (Ml, 1iir, Bank Participation Cr $(Millions) Equivaler:. _ "3$ (Millions) ' t:i a- % Local Foreign Total Local Forei -7 _. _lent 1. Construction & Paving Group A: 1,849 km , -, Quantity contingencies (1Qb) _6'.,7.9 Price contingencies: us$ (10) 1V4.8 2.? 17, Cr$ (63%) , , ' '1.7 Group 3: 681 km ? / Quantity contingencies (1o%) S.3 3< 9.5 V )4.5 Price contin encies: Us$ (11%e i.5 V Cr$ (72%) , 'LS.0 Sub-total Item 1 1, , ? Consulting Services for Supervision of Item 1 Group A: Quantity contingencies (10%) Price contingencies: US$ (13%) Gr$ (68%) Group B: l/ 2 Quantity contingencies (10%) Q / 50, Price contingencies: ujs$ (15%) Cr$ (76%) / o Sub-total Item Additional Consulting Services a)detailed Engineering for 1626 km of highways / b)feasibility Studies for 2774 km of highways c)improving DNER's Construction Supervision (72 manmonths) o F.E. d)highway Training Center F.E. Y Price contingencies: US$ (177M Cr$ (59%) Sub-total Item T 0 T A L 2, , TOTAL (Bank Project) 1, , * M These items are not included in the project to be financed under the proposed loan. / For item 2, the foreign exchange costs relate only to the supervision of the Northern Access to Salvador for which foreign consultants will be employed. For item 3 (a), the foreign exchange costs relate only to the studies of the road Rio-Juiz de Fora for which foreign consultants will be employed. / F.E. = foreign exchange cost (rounded to 69.0)

23 The estimates of construction costs are based on February 1971 estimates converted at the then official exchange rate (Table 14). A 10% contingency has been added to the construction and supervision costs to allow for quantity increases. It is estimated that about 20% of the construction cost represents taxes A major problem in estimating the equivalent U.S. dollar cost of the project is the relationship between internal inflation of highway construction and engineering prices, and the exchange rate policy of the Government. Since the Government has adopted a flexible exchange rate policy, the risk is small that costs expressed in U.S. dollars would be greatly out of line. For this project, the Bank's usual loan disbursement procedures will be followed, and not the procedures adopted for the First and Second Highway Loans. 1/ A study of trends during the last two years shows a 22% average yearly increase in highway construction prices. During the same period, the U.S. dollar exchange rate increased only 16%, the difference being mainly due to the reduced buying value of the dollar. Based on these trends, price contingencies have been computed separately for cruzeiro costs and for equivalent U.S. dollar costs, taking into account the following: a) cost estimates were made in February 1971, while the bid dates for Groups A and B will be in April 1972 and July 1972 respectively, and the commencement of detailed engineering and feasibility studies will be in June 1972; b) cash flow estimates are based on a 32-month period for construction and a 14-month period for studies; and c) the Brazilian law specifies that price revision starts at the date of the proposal, but that prices cannot be escalated by more than 35% from the date of authorized commencement of work The foreign exchange component for construction has been estimated on the basis of contract awards to (a) local firms and (b) foreign firms. The range is from 13% of the total construction cost if local contractors using primarily local equipment were employed, to 39% if all work were carried out by foreign contractors using foreign equipment. Under the First Highway project, several foreign contractors showed interest, and one contract was awarded to a joint venture with a foreign partner. Under the Second Highway Project practically no interest was shown by foreign construction firms, in spite of the size of the program, the introduction of packaged lots, and the wide international advertising of the project; this has also proved to be the case for this proposed program, and only one foreign firm has been prequalified together with 147 Brazilian firms. It would be unrealistic to expect that this single firm could undertake a significant part of the program, and consequently the foreign exchange component for construction has been estimated at about 13%. 1/ Under Loans 567-BR and 676-BR, although contract prices and payments were in cruzeiros, for loan disbursement purposes contract unit prices were equated in the US$ equivalent at the exchange rate pertaining at bid opening.

24 The cost of construction supervision has been estimated on the basis of the arrangements described in para The foreign exchange costs are for foreign consultants for the supervision of construction in Group B of the northern access to the city of Salvador (paras and 4.09) The costs of the additional consulting services have been estimated on the basis of: (a) contracts recently awarded in Brazil for feasibility and detailed engineering, and (b) costs of recent Bank contracts for international experts Bank participation will be 40% of expenditures for construction included in Group A and its supervision, and for feasibility studies and detailed engineering; and the actual foreign costs of consultants and international experts for improving DNER's construction supervision control and for the highway training center. The foreign cost of the project is estimated at about US$26 million equivalent; the loan of US$89 million will therefore finance local expenditures of about US$63 million equivalent. F. Execution of the Project 4.16 The execution of the program as a whole will generally follow the pattern outlined in the remainder of this chapter which is devoted solely to the execution of the proposed Bank project. The construction and paving to be financed under the proposed project (Group A) is, however, limited to national roads, while Group B includes a number of state roads, which will involve additional agreements among the authorities involved. (Table 14 shows the highway department responsible for each road). In addition, to facilitate contract administration, the bid date for works in Group B will be about three months after that for works in the project. Execution of the project will be the responsibility of DNER for national highways, and of the corresponding DER for the feasibility studies and detailed engineering on state highways Subsidiary agreements will be concluded between the DNER and the DERs of those states where feasibility studies or detailed engineering are to be made for state highways. Satisfactory conclusion of these subsidiary agreements will be a condition for loan effectiveness Contracts for construction and paving works will be let on the basis of international competitive bidding in accordance with the Bank's guidelines. Consultants have prepared bidding and contracting documents, and will assist the Government in analyzing bids and in supervising construction (para. 4.06). The Government has completed prequalification.

25 For contract purposes, construction works in the project have been divided into 52 lots. Sizes of contracts for road works will range from US$1.5 million to US$7.6 million, and individual bridge contracts start from a minimum of US$0.2 million. To take advantage of economies of scale through the use of larger contractors, and at the same time to allow small firms to compete, construction lots were packaged, where possible, to enable prequalified bidders to bid on packages and/or single lots. There are two packages of US$6.6 million and US$7.7 million During the First and the Second Highway Projects, difficulties were created by delays by the Central Bank of Brazil in registering foreign consultants' contracts. Since registration is legally required before any payments in foreign currency can be made under a contract, satisfactory conclusion of registration procedures in respect of the foreign consultant advising on supervision (para 4.08) will be a condition for loari effectiveness In connection with the First Highway Project, legislation has been made effective regarding (a) the duty-free import of construction equipment for the contractual period of construction, (b) the price escalation formula, and (c) bidding and contracting documents. No further action on these matters is required The Government is proceeding with the acquisition of right-of-way, and construction contracts will not be awarded prior to legal expropriation. During loan negotiations the Government provided assurance that right-of-way will be acquired expeditiously. After some difficulties in the First Highway Project, experience in this matter has been satisfactory. G. Disbursement 4.23 Disbursement for the project will follow the usual loan disbursement procedures (para. 4.11) The loan will be to the Federal Government. DNER will administer a revolving fund for payments to contractors and consultants. The Federal Government will finance the cost of all construction and consulting services, and the states will reimburse such amounts as are expended on feasibility studies and engineering related to state highways. The revolving fund will be replenished with the Bank's reimbursement for payments made, and with the contributions of the Federal and State Governments. The government has agreed that DNER will make deposits in the revolving fund as required, so that at the beginning of each calendar month the amount in the revolving fund will be at a level sufficient to cover one month of forward project cost, in accordance with work schedules. A revolving fund with an initial deposit by DNER of US$2.5 million equivalent will be established in a blocked account at a suitable Brazilian bank, and its establishment will be a condition for loan effectiveness. Experience with the revolving funds for the first two projects has been satisfactory.

26 Construction is expected to corience during the third quarter, and is to be completed in about 32 months. Feasibility and detailed engineering studies will be started in about June 1972, and completed in about 14 months. The schedule of disbursements (Table 17) was estimated on this basis Legislation regarding payment of foreign experts and repatriation of profits and overheads of contractors and consulting firms, provides for levies on contractors' profits - including retention for remittances abroad - corresponding to about 50% of profits, which is in line with corporate tax rates in most developed countries. Retention on profit remittances could have the effect of favoring local bidders by about 2.5% of bid prices. However, neither the 50% tax rate nor the slight advantage given to local bidders should deter participation of foreign bidders. In addition, a flat 25% retention in lieu of income tax is applied to remittances abroad by consulting firms. This retention is covered in local currency payments to foreign consultants. Prior to the Second Highway Project, a legal opinion was provided by the Government confirming the interpretation of the relevant legislation Any surplus of funds remaining in the loan account on completion of the project should be cancelled. 5. ECONOMIC EVALUATION A. General 5.01 Large increases in highway transport volumes - passengers and cargo - have resulted in pressures to improve and extend the highway system. This growing demand for transport is the result of three main factors: (a) the opening up of vast areas in the interior and the beginning of their economic development; (b) rising trade and interaction in general among tne cities located in the more developed eastern states; and (c) increased interaction and exchange of products between the developing agricultural interior and the developed industrial coastal areas and the ports of export To permit priority ratings among alternative investments, Highway Master Plans were prepared during the Transport Survey (Annex 1), and are being updated and expanded by DNER to ensure that highway investments are guided by priorities. This is done on the following bases: (a) estimating traffic between major zones based on production analyses, consumption patterns, traffic counts and origindestination surveys; (b) projecting traffic to 1976 based on projectad production and consumption patterns, and extrapolation of past trends for passenger traffic;

27 (c) allocating traffic to modes in the light of relative costs, taking into consideration expected operational improvements in railway transport and coastal shipping; (d) estimating costs of necessary new construction and improvements to satisfy projected demand; (e) calculating benefits derived from the proposed improvements through lower vehicle operation and highway maintenance costs, taking into account traffic generation through induced production, where appropriate; and (f) listing investment priorities and optimum years of opening of the roads The roads included for construction in the proposed program were selected from a high priority list. Consultants studied alternative alignments wherever warranted, and final selection was based on economic considerations. The economic case for construction of roads in the project to be financed from the proposed loan does not depend on the completion of the roads in Group B for which financing may be provided from other sources. Roads proposed for detailed engineering under the project (Table 15) were selected from the Master Plans and from feasibility studies, and those for feasibility studies (Table 16) were also selected from the higher priority listings in the Master Plans. B. The Prolect Roads 5.04 Following are regional descriptions and characteristics of the most important roads in the program; a detailed description of each road is given in Annex 6. In the North-East Region With a population density above the national average (31% of the population for 18% of the national area), the North-East Region is one of the poorest in Brazil; the per capital income is one-fourth that of the South-East. Its economy is based on low-yielding agriculture and on animal husbandry, but these are hampered by difficult natural conditions. To promote regional growth, the Government created in 1959 a development agency (Superintendencia do Desenvolvimento do Nordeste-SUDENE) which administers fiscal incentives for industrial development, and federal appropriations to provide infrastructure. As a result of SUDENE's activities, and also through efforts 1/ The North-East Region includes the following states: Maranhao, Piaui, Ceara, Rio Grando do Norte, Paraiba, Pernambuco, Alagoas, Sergipe and Bahia.

28 of other Government agencies (e.g. Banco do Nordeste), industrial growth has accelerated in the north-east, especially in the vicinity of the city of Salvador where an important industrial park (Aratu) has been constructed. Industrial production in the region is focussed on the processing of foodstuffs, textiles, and metallurgical and chemical products. The main agricultural products in the region in 1969 were: sugar cane (27 million tons), manioc (13 million tons), corn (1.5 million tons), and rice (1 million tons). Timber products reached 43 million m 3 in 1969, and cattle, pig, goat and sheep herds numbered 20 million, 17 million, 11 million, and 9 million head respectively. The State of Bahia is an important producer of cocoa - 96% of national production - and high grade tobacco Two road sections, BR-316/232 and BR-104, are proposed for construction in this region. Highway BR-316/232 plays an important role in regional integration in the north-east by connecting Teresina, Sao Luis and Belem to Recife, one of the major regional growth poles. It also forms a section of the Trans-Amazon Highway which starts in Recife and will eventually cross the Amazon Basin to Rio Branco near the Bolivian border (Map 1). Highway BR-104 serves the productive agricultural interior of the north-eastern states, and provides a north-south alternate route to BR-101. In the South-East Region - 1/ 5.07 Although only one-tenth of Brazil's area, the South-East Region contains 38% of the total population. It is well endowed with natural resources. The fast-growing economy is based on modern agriculture and a dynamic industry which is the main supplier of industrial products processed in Brazil. The main agricultural products in 1969 were: sugar cane (41 million tons), manioc (5 million tons), corn (4.3 million tons), citrus (3 million tons), rice (2 million tons), and coffee (1 million tons). Timber products in 1969 were 30 million m 3. Cattle and pigs numbered 35 million and 17 million head respectively. The main industrial products are steel, chemicals, electrical appliances, and processed foods and textiles. The most important mining operations are in the state of Minas Gerais where 25 million tons of iron ore were extracted in 1969, and where half of the country's steel was produced One of the important trunk roads in this region is BR-381/354 connecting Sao Paulo with the center of Minas Gerais (Map 6). One section of BR between Lagoa Formosa and Estalagem - is being constructed under the Second Highway Project. It is now proposed to continue it to Perdoes, i.e. to the intersection with BR-381. Another very important trunk road which is to be detail engineered is BR-135 which links Minas Gerais to Rio de Janeiro. (Map 5). Under the Second Project, the feasibility was demonstrated of improving this highway from outside Rio de Janeiro to Juiz de Fora (up to 20,000 ADT in some sections, Table 18); a feasibility study is now being 1/ This region includes the States of Minas Gerais, Espirito Santo, Rio de Janeiro, Guanabara and Sao Paulo.

29 carried out under the same project to determine what improvements are required to ensure adequate connection of the highway with the city of Rio de Janeiro. In the Center-West Region 1/ 5.09 This region is sparsely populated (22% of the country's area and 5% of its population), but is well endowed with agricultural lands, and attracts an increasing number of settlers coming from overpopulated and poor areas, especially the north-east. The main products in 1969 were: sugar cane (2 million tons), manioc (2 million tons), rice (1.5 millio tons), and corn (1 million tons). Timber products amounted to 11 million m, and cattle and pig herds were 19 million and 8 million respectively. This region is a net exporter of agriculture and animal products The proposed construction of the Guapo-Jatai section of Highway BR-060 will improve the connection between Brasilia, Goiania and Cuiaba; the Government is building the Jatai-Cuiaba section. Highway BR-163 from Bandeirantes to Campo Grande, included for construction, and from Dourados to Pontal do Tigre, included for feasibility study, form the main northsouth axis in the State of Mato Grosso, along with the Cuiaba-Rondonopolis- Bandeirantes section to be built and financed fully by the Government. Together with Highways BR-487 or PR-4, and BR-373 (both included for feasibility study in the Southern Region) this route will connect the heart of the Center- West Region to Curitiba and its port at Paranagua. In the Southern Re ion / 5.11 Containing 7% of the area of Brazil and 17% of the population, this region has important agriculture, cattle raising, lumbering and wood processing activities. Agricultural production in 1969 consisted of: sugar cane (5 million tons), rice (2 million tons), and wheat (1.5 million tons). Other important products are grapes, tobacco and citrus fruits. Pigs, cattle, and sheep number 22 million, 19 million, and 14 million head respectively. The region exports part of its agricultural and animal products mainly to the metropolitan areas of Sao Paulo and Rio de Janeiro Most of the roads included in the program are important on the regional level and carry heavy traffic, as do most of the main roads in the south (Table 19). As already discussed in para. 5.10, BR-487 and BR-373, both included for feasibility study, have national importance. 1/ This region includes the states of Goias, Mato Grosso and the federal district of Brasilia. 2/ This region includes the States of Parana, Santa Catarina and Rio Grande do Sul.

30 C. Benefits from the Project 5.13 Most of the quantified benefits are derived from road user savings accrued to generated as well as normal or diverted traffic. During the preparation of the Highway Master Plans, estimates were made of benefits as a result of upgrading earth and gravel roads to paved roads. They were based on theoretical computations checked against trucking companies' records, and test runs of typical Brazilisar vehicles over different types of roads. The estimates were updated by GEIPOT in 1971 (Table 20). In the case of heavy traffic routes with large percentages of urban commuting traffic, benefits were also derived from reduction in congestion, as well as time savings reflected in the wages of drivers of commercial vehicles and travellers on business trips. Other quantifiable benefits accrue from the difference in maintenance costs between well-constructed paved roads and existing gravel and earth roads A number of benefits that are diffcult to quantify but that are also attributable to the proposed road improvements are the general reduction in travel time and increased comfort, lowering of inventory costs, and less spoilage of fresh fruits and vegetables. In addition, some of the improved roads reaching into the frontier areas will facilitate migration from the densely populated areas along the coast to newly opened agricultural lands in the interior, where potential for growth is high but where human resources are lacking Net benefits resulting from the proposed road works, discounted over a 20-year economic life of the roads, give internal economic returns ranging from 13% to 40% for Group A (to be financed under the proposed loan), and from 13% to 34% for Group B (to be financed separately from the proposed loan); the IER is 19% for the program as a whole, and 24% for the project to be financed by the Bank. A sensitivity analysis indicates that reasonable variations in vehicle operating and maintenance costs - the inputs most likely to vary from the estimates - have little effect on IER (Table 21). 6. AGREEMENTS REACHED AND RECOMMENDATION 6.01 During loan negotations, agreement was reached with the Government on the following principal matters: (a) the enforcement of weight regulations on national roads (para. 3.14); (b) the maintenance of national roads and the policy of delegation of maintenance functions (para. 3.24); (c) the collection of data for highway planning "?ara. 3.30);

31 (d) the employment of consultants for supervising construction (para. 4.06); (e) the registration of the contract for additional construction experts (para. 4.20); and (f) the acquisition of right.of-way (para. 4.22) Conditions for loan effectiveness will be: (a) the signing of supervisory consultants' contracts (para. 4.06); (b) the conclusion of subsidiary agreements between the Federal Government and the DERs (para. 4.17); (c) the registration of the foreign consultant's contract (para. 4.20); and (d) the establishment of a revolving fund (para. 4.24) The project provides a suitable basis for a loan of US$89 million equivalent. On the basis of the average useful life of road construction works and length of construction period, the appropriate term for the loan would be 25 years, including a four-year period of grace. February 29, 1972

32

33 ANNEX 1 Page 1 BRAZIL TRANSPORT SURVEY 1. Main 'Recommendations Transport Coordination 1. The consultants made general recommendations which, if adopted, would go far to ensure the movement of traffic by that mode of transport which incurred the least cost to the economy. it was recommended that investments be made according to economic criteria, that there be free user choice of mode of transport, that government policies should not unduly favor or discriminate between modes, and that users be charged in proportion to the costs of resources consumed in the provision of the services. Railways 2. An extensive analysis of the Federal and State railways was made and the main recommendations included: Ports (a) the merger of al'l railways into one system, controiled by a Board with Managing Director responsible to the Minister of Transport; (b) a program of abandonment of uneconomic lines; (c) improvement in equipment, signalling and operations; (d) reduction of personnel; (e) adoption of cost-based tariffs; and (f) "normalization" of accounts (writing of concessionary Government traffic at full commercial rate). The ports of Rio de Janeiro, Santos and Reci-e were studied in detai; with a view to providing guidelines for the improvement of administration and to prepare master plans for investrernt. The s_tua_ion in the?orts was unsatisfactory in almost every respec-, tne prlncipa! cause bein-, overcentralization. IE was proposed that the National Porr Organizazion be

34 ANNEX 1 Page 2 responsible only for rational planning and coordination, and that individual ports should be transformed into largely independent port authorities. For the port of Rio de Janeiro, the Survey recommended extensive rehabilitation and expansion of facilities, including new wheat and dry bulk terminals, and new general cargo berths. In Santos, new facilities, including a container berth, were recommended to handle increasing traffic. In Recife, replacement of almost all equipment was recommended as well as the rebuilding of sheds. Coastal Shipping 4. The consultants were asked to identify major shortcomings and to recommend any new investment in ships that may be required. A major finding was that the present fleet was much too large for the available cargo, and extensive scrapping was recommended. Fixed sailing schedules were suggested, as were the consolidation of shipping companies and the decrease in the role of the regulatory body, the Merchant Marine Commission. Highways 5. The highway studies covered the following states: Phase I Phase II Minas Gerais, Parana, Santa Catarina and Rio Grande do Sul Region A Region B Region C Region D Region E Sao Paulo Rio de Janeiro Bahia Alagoas Ceara Mato Grosso Espirito Santo Sergipe Pernambuco Piaui Goias Paraiba Maranhao Rio Grande do Norte The studies concluded with the listing of priorities for investment on national and state networks, forecasts of financial expenditures on highway investment, maintenance equipment, and maintenance and administration. They also recommended improvements in organization and maintenance, financial programs and user charges.

35 ANNEX 1 Page 3 II. Consultants Engaaged in the Transport Survey Consultants and Nationality Duties Phase I (1) Coverdale and Colpitts (USA) Coordinating consultants and railway studies. (2) INGEROUTE (France) Highway Master Plan and Organization Study, and Feasibility Studies in the State of Minas Gerais. (3) KAMPSAX (Denmark) Highway Master Plans and Organization Studies, and Feasibility Studies in the States of Parana, Santa Catarina, and Rio Grande do Sul. (4) NEDECO (Netherlands) Study of the Ports of Rio de Janeiro, Recife and Santos, and of coastal shipping. Phase II (1) KAMPSAX (Denmark) Coordinating cor.sultants. (2) Parsons, Brinkerhoff, ) Highway Haster Plans and Feasibility Quade and Douglas (USA) ) Studies in the States of Sao Paulo, ) Mato Grosso and Goias. Edwards and Kelcey (USA) ) ) Highway Organizat on Stucies in the ASPLAN (Brazil) ) States of Mato Grosso and Goias. MONTOR-MONTREAL (Brazil) ) (3) NORCONSULT (Norway) ) P.ighway!-S. s.t anr and Organization ) Studies ir. r-.tas c_ i'.o de Servicos do Planejamento ) Janeiro and Espir1c3 Santo. (Brazil) ) (4) Xaver Dorsch (German) Highway'r 'ster Plani. and Organization Studies, and Feasibility Studies in the States of Bar.ia and Sergipe.

36 ANNEX I P age 4 (5) Louis Berger (USA) Highway Master Plans and Organization Studies in the States of Alagoas, Pernambuco, Paraiba, and Rio Grande do Norte. (6) SAUTI (Italy) Highway Master Plans and Organization Studies in the States of Maranhao, Piaui, and Ceara.

37 ANNEX 2 Page 1 BRAZIL FIRST PLAN OF ACTION (PA-1) Highway Sector Progress of Implementation (December 1971) ITEM STATUS 1. Reorganization of Highway Administration: (a) Completion of DNER's Achieved. New organization legalized reorganization study by by Decree No of March 21, the end of (b) Gradual transfer of DNER's Experts of FHWA started in July construction and maintenance functions to the DERs. Construction functions are being delegated to states on a road by road basis. Maintenance - New Road Tax is earmarked for maintenance purposes. In ~the-case of delegated national roads, states receive funds out of DNER's share of new road tax. All new agreements regarding delegation of construction of national roads by DERs now specify that such roads will later be maintained by respective DERs. (c) Reorganization of DERs GEIPOT reorganization studies comppleted in '. Restructuring of road user charges: New uniform Road Tax, decreed in October 1969 and put into effect in January 1970, raises additional funds from roac users. Toll charges will be started in 1972 for roads with ADT greater than 10,000.

38 ANNEX 2 Page 2 (The first roads with toll charges will be Rio-Sao Paulo, Rio-Petropolis and Sao Paulo-Santos). By 1975 total road user charges will be paying for maintenance and administration of the existing network, and for 70% of costs of expanding the network. 3. Preparation of investment budgets to be based on Transport Survey priorities: Three-year investment budget was essentially based on survey priorities. The new three-year investment budget ( ) is based on survey priorities. Exceptions are lowcost feeder roads for agricultural development, and penetration roads to open up virgin territories.

39 ANNEX 3 Page 1 BRAZIL SECOND PLAN OF ACTION (PA-2) Highway Sector Progress of Implementation (December 1971) 1. Reorganization of Highway Administration (a) Implementation of DNER's Four experts of FHWA are assisting reorganization with assis- DNER. Additional experts will be tance of FHWA experts. called on a temporary duty basis as needed. (b) Gradual delegation of Pilot regions have been established DNER'a maintenance and in Rio Grande do Sul, Santa Catarina construction functions to and Minas Gerais. Maintenance of all the DERs. national roads in these regions has been delegated to DERs. In the State of Parana, all national highways have been delegated to the State, except for four sections of interstate highways which will be delegated later. DNER is now preparing a program for the establishment of pilot regions in the States of?ernambuco and Bahia. (c) Reorganization of DERs. Reorganization coapleted in Rio de Janeiro, Goias, Sao Paulo, Mato Grosso, Pernambuco and Minas Gerais. Reorganization (based on Transport Survey recommendations) progressing in Bahia, Rio Grande do Sul, Parana and Santa Catarina. U.S. consultants a-.a assisting the State Highway Department of Rio Grande do Sul in the implementation of reorganization.

40 ANNEX 3 Page 2 2. Planning (a) Strengthening of INER's INER has retained the services of planning capacity. Brazilian transport economists (TRANSPLAN) and four foreign transport experts (SYSTAN, U.S.). (b) Establishment within DNER A separate division has been estabof a central investment lished and is working in coordination review mechanism for na- with the TRANSPLAN and SYSTAN experts. tional and state projects. 3. Supervision (a) Improvement of construction INER has organized a specialized supervision. staff of construction engineers and inspectors; writing of operation manuals has been started with assistance by FHWA advisors and central group for coordination of supervision. (b) Employment of consultants Consultants for construction superto assist DNER's supervisory vision (Second Highway Project) are staff. in the field. Cc) Creation within DNER of a A team of five foreign experts central group for coor- (INGEROUTE, France) and Brazilian dination of supervision. counterparts is assisting the Construction Directorate of DNER.

41 ANNEX 4 Page 1 REORGANIZATION OF HIGHWAY ADMINISTRATION 1. The main purpose of reorganization of the Brazilian highway admi'nistration is to reduce the centralization of highway activities in DNER, and to eliminate duplication of services between the DNER and the DERs. To accomplish this target, the Government decided to gradually transfer maintenance and construction functions from DNER to the DERs. This will enable DNER to concentrate on planning and supervising the national and state highway systems and to be specifically responsible for: (a) planning and regulatory functions; (b) (c) financing of road programs and supervision of utilization of resources; overall supervision of physical operations and financial activities; (d) supervision of the application of legislation and rules; and (e) statistical data. The DERs will ultimately be responsible for the executive aspect of highway activities, including all national and state roads. Reorganization of DNER 2. During the Transport Survey reorganization, studies were made for the DERs of the main states of Brazil. The resulting recommendations were conditioned by DNER's reorientation of objectives and reorganization of its administrative structure. Plan of Action PA-1 was submitted by the Government to the Bank in August 1968, and Plan PA-2 ia Eabruary Both Plans contained definite objectives regarding reorganization of highway administration. During the first phase of reorganizacion, a study of the general administrative structure of DNER was made by the Getulio Vargas Foundation. This study was completed in The resulting recommendations were reviewed by the Bank and approved by the Government, and were legalized by Decree No of March 21, Tne consultants are now working on the second phase of this study, developing new regulartons and operational procedures, and writing administrative, operational, and technical manuals. The Vargas Foundation is assisted by four U.S. FdWA experts provided under a loan from JSAID for technical assistance. Tne internal ret;ulations of DNER have been re-writter. and were legalized by Decree No of March 25, The first manuals were published in 1971.

42 ANNEX 4 Page 2 3. Under the Bank's Second Highway Project, the services of consultants are being provided for the strengthening of DNER's planning and construction divisions. Seven Brazilian transport economists (TRANSPLAN) and four foreign transport experts (SYSTAN, U.S.) are assisting the planning division. Five foreign construction experts (INGEROUTE, France) are working within the construction division, together with their Brazilian counterparts. Reorganization of DERs 4. Under PA-1 and PA-2 the Government indicated that it will ensure that DERs will be gradually reorganized in accordance with the recommendations of the Transport Survey. Reorganization has progressed in all of the more important states covered by the Survey as follows: Rio Grande do Sul: Since 1970, foreign consultants (Frederic Harris, U.S.) provided by a USAID loan have been assisting the State Highway Department in organizational changes. Enabling legislation is expected to be passed in Santa Catarina: The draft law concerning organizational changes has been submitted to the State Government and approval is expected in Parana: The new State Government wishes to accelerate the reorganization process. The proposed new organization corresponds closely with the Transport Survey recommendations. The draft law regarding reorganization is expected to be submitted to the State Government for approval in Sao Paulo: Reorganization has been completed. Required legislation was passed in Minas Gerais: Reorganization has been approved and legislation was passed in August Goias: Reorganization has been approved and legislation was passed in June Mato Grosso: Reorganization has been approved and legislation was passed in March Rio de Janeiro: Reorganization has been approved and legislation was passed in March Bahia: First reorganization was carried out in 1969 and required legislation was passed in June Revision of reorganization is being studied. Pernambuco: Reorganization has been approved and legislation was passed in March 1971.

43 ANNEX 5 Page 1 STATUS OF HIGHWAY MAINTENANCE IN THE SOUTHERN STATES AND MINAS GERAIS 1. Since October 1970,Bank supervision missions have been carrying out a detailed evaluation of operating results in the maintenance field. So far, missions have assessed the maintenance organizations and operations in the States of Rio Grande do Sul, Santa Catarina, Parana and Minas Gerais. Rio Grande do Sul 2. The State has 12,297 km of national and state highways (Attachment I, MIap 15). In June 1971, an agreement was signed between DNER and the State Highway Department (Departamento Autonomo de Estradas de Rodagem - DAER) establishing a pilot region in the northwestern part of the State. All national roads in this pilot region, with exception of one road which is being maintained by the Army, are delegated to the State for maintenance. The pilot region comprises about 40% of the entire area of the State and 37% of the road network (Map 15). A committee consisting of DNER and DAER officials and a U.S. FEWA advisor, determined (a) the funds required for economically justified improvements of delegated roads, based on the findings and recommendations of the Transport Survey, and (b) the funds required for maintenance of the delegated roads. Santa Catarina 3. The State has 6,768 km of national and state highways (Attachment II, Map 13). In August 1971, an agreement was signed between DNER and the DER of Santa Catarina, establishing a pilot region in the western part of the State. All national roads in this pilot region are delegated to the DER/SC for maintenance. The selected region comprises about 20% of the area of Santa Catarina and 18% of the road network (Map 13). As in the State of Rio Grande do Sul, a committee consisting of DNER and DER/SC officials, as well as a U.S. FHWA advisor, has made a study regarding required funds, and its report was used as the basis for agreement between DNER and DER/SC. Parana 4. The State has 10,227 k:. of national and state highways (Attachment III, Map 11). In Seitember 197' an agreement was signed between DNER and DER/PR delegating all national roads in t.ae State of Parana to the DER/PR, with the exception of: BR from the wa w_z.. Santa Ca.arina to the border w:;_ Sao 'au_o; 3R iron Cur > ':; Para,.ragua and from P.elogio to Foz do 7guacuaC;

44 ANNEX 5 Page 2 BR BR from Ponta Grossa to Relogio; from Curitiba to the border with Santa Catarina. These four road sections will be delegated to the State as soon as existing repair contracts are finished and the State has proved its capability to efficiently maintain and police high-traffic interstate highways. 5. As in the other states, a committee has been formed to determine the required funds, and its report was used as the basis for agreement between DNER and DER/PR. Minas Gerais 6. The State has 20,575 km of national and state highways (Attachment IV, Map 7). An agreement,between DNER and DER/MG was signed in August 1971, establishing a pilot region in the northern part of Minas Gerais. All national roads in this region are delegated to the DER/MG for maintenance (Map 7). 7. Experience gained in this pilot region will greatly contribute to the improvement of national and state roads in the State, which eventually will be the sole responsibility of DER/MG. The region comprises about 42% of the entire area of the State and 24% of the road network. 8. As in the other states, a committee studied the maintenance situation and determined the required funds, and its report was used as the basis for agreement between DNER and DER/MG.

45 HIGHWAY MAITENNCE ANx STAT: OF RIO GRIUMS DO SUL Attachment M June 1971 Highwa,s Maintained by the State Iiizhway Department (DAMR) State Highwa;ys D legated National HiUhway7s km Ng l-i Residency ipaved1gravellearth Total ipavedigravel EarthITotall Total 1 Xsteio Bonto Gongalves S.Crus do Sul _ Santa IV.aria _ Cruz Alta *28 6 Passo Fundo _ 158 6,K)' 7 Pelotas Bage _ Aleerete _ Caohoeira do Sul _ Lajeado _ Santiago _ Erechim S. Rosa S. Francisco do Sul _ 710 Total maintained by DAIR 807 5,971 2s406 9, _ 418 9,602 kmn Highways Maintained by the National Highw!k Department D _ER and the Army National Highways Residency Paved Gravel Rarth Total Osorio 100 _ S, Leopoldo S. Gabriel Pelotas Livramento Uruguaiana Cruz Alta _ 264 Vacaria 150 _ Total Maintained by DNER 1, ,303 Total Maintained by A1my Total Maintained IUetwork I= Paved 'Gravel larth Tot al State Highway Department 941 6,255 2,406 9,602 Niational Highwey Department 1, ,308 Army ,439 7,423 2,435 12,297

46 HICIWAI AIlNTUANCE STATE OF SANTA CATARINA June 1971 Highways Maintained by the State Highway Departzent (DER/SC) N2 BeoidencY IPavedlGrevellEarthl Total ANNEX 5 State Highva.y Delegated National Highways mn AttacbMent II Tot al,pav.djgrave1earth Tot a km 1 Joinrile Blumenau Lages _ Joaoaba Tubarao Canoinhas Curitibanos Chapeco Florianopolis A 10 Rio do Sul C1 11 S.Joaquim Caoador Ararangua _ S.liguel do Oesto _ S. Aiaro dc. Iporatriz A 193 _ _ Brusqua _ S.Bento do Sul Vidife4ra _99 19 PalmJtes Criciuma _ Conoordis _ Total maintainod by DIZRAC 36 4, , _ 498 5,533 National Highways laintalined by the HighwayZ Department (DMBI) Nat ional Highays km N3 Residency Paved Gravel Uarth Total R116/1 Tubarlo R.16/2 Joinviloe /3 Lajes R-16/4 Joagaba IRF_ Itajai ' 1?-16/1 Xanxere - V-116/2 Pinhalzinho _ - EF-16/3 Lieuol do Oeste - - Total maintained by DINER _ 1i7 Total iaintained Yetwork km Paved Gravel Earth Tot al Stato Highway Department 189 4, National Highway Department -I 1,185 1,029 5, ,768 -

47 ANNEX 5 Attachment ITI SUZIL STATE OF PAEA HXMaNVAIMINTDWICE July 1971 HighMs Maintained bq the State HighwVay Departmt (DR/PR) State leehss km Delegated National Highways ~~~~~~~~km Total No Reidweies Paved Gravel Earth Total Paved Gravel Earth Total km 1 Curitiba (north) Ponta Grossa Firai do 9ul uniao da vitoria Guasrpuava Tacarezinho a Iondrina Cascavel Curitiba (mouth) Marinag Sao Mateua Pato Branco Campo Meurao Parsnavai Irati Ibeiti Cruteiro do Owte Axucarasal _ Francico Beltra Total Maintained by DzR/PR 610 3,228 3,893 7,731 1, ,402 9,133 HighWaYs Maintained by the National Highway De%artment (DNER) National HRighway. km No Residacies Paved Gravel Earth Total 1 Curitlba Mafra Ponta Groooa sao Jose doe Pinhido Fos do Iquacu ?6 TPa1 Maiutained by DMIR ,094 Total Maintained Networks km Paved Gravel Earth Total StAte HighlW Department 1,636 3,417 4,080 9,133 Natioal HiamW Department ,094 2,613 3,534 4,080 10,227

48 ANME 5 UWAr -LTNTED" STATE OF JAINAS Om( Attachment IV JuIM 1971 Highyaws Maintained bythe State Eighwa7 Departmnent (DIL4V) State HiChwvsa Delegated National lliehwav's IP Reosidencies Paved Gravel EMart h Tot al Paved Cravel 'Mart h Tot al Tot al 1 Belo Horizonte _ Guanhaos - ' _ Par& de Minas Barbacena '0 5 Uba Niontes Claros a ' 7 Arama ill , Diamantina _ Curvelo / 2 A Varginha Uberlandia Itabira Brasilia da Ninas Patos de Minas ' 7 15 Po 9 os de Caldas Oliveira _ Ponte Iova Monte Carmelo _ Itajubl Formiga _ Jeguitinhonha _ Araauari _ Gov,aladares Passoes tuberaba _ Parsaatu _ Pedra Azul _ Teofilo Otoni _ Ianhumirim Juis de Fora Total l;aintained by DER 1,918 5,418 7,894 15, ,947 Highways 13aintained b_y the National Hijhwa6y Department (D1ITl) lit o.a ighways N9 O Residency Peved Gravel a.rth Total RL6/4 Juiz de Fora /5 C.Ir.dustrial '46 R_6/6 Bet im /7 Pouso "logre /8 Oliveira 12C B-6/1 Uber1India /11 Set e Lagoas R-6/12 Paraoatu F;F6/1 Prata C - 5;51 FF_6/2 Patos do Minas F6/J3 Teofilo Otoni _ 402 lf-6/4 CaratinCa EF-6/5 Araxa EF_6/6 Leopoldina EF-6/7 Casambu HF-6/8 Bom Despaoho V-6/9 Rio Casoa 231 lol E-6/1C Uberaba ZF_6/11 Campos Altos C Total Maintained 0, DIMR 3, ,,628 Total Maintained Networ1, Pavod Gravel!arth Total Stato Highway Department 2,95 5,456 7,894 15,947 ]Jationarl Hihwve Department 3,9& ,628 Total 6,580 6,101 7,894 20,575

49 Annex O Page I THE PROJECT ROADS The principal economic characteristics of the regions in which roads are located are presented in Chapter 5 - Economic Evaluation. The essential technical characteristics of each road, including description of existing conditions and proposed standards, are found in Tables Quantification of economic benefits is given in Table 21. Description of each road follows: A. ROADS PROPOSED FOR CONSTRUCTION AND/OR PAVING GROUP A In the North-East Region 1. Route BR-316/232 (300.5 km, Maps 2 and 3). This road plays an important role in integrating various parts of the north-east by linking Teresina, Sao Luis and Belem on the one hand, to Recife, the major growth pole of the region, on the other. In addition it provides a major link between the proposed Trans-Amazon Highway and the north-eastern urban centers. The traffic is predominantly long distance. The 1970 ADT was 345 vehicles of which 65% were trucks, and the annual growth rate is estimated at 10%. 2. Route BR-104 (282 km, Map 3). This highway serves two functions - inter-connecting the productive agricultural interior of the north-eastern states, and providing an alternate route to BR-101 between Natal and the other important urban centers of northern Brazil, and Salvador, Rio de Janeiro and Sao Paulo in the south. The 1970 ADT on these road sections varied from a high of 750 to a low of 225 vehicles, with heavy vehicles varying from 75% to 45%, and the traffic growth rate increasing between 6% and 10% per year. In the South-East Region 3. Route BR-354 (211.4 km, Map 6). This road is a continuation of the section of BR-354 included for construction in the Second Highway Project. Together they form a part of the direct route from Patos de Minas, an important agricultural area, to Sao Paulo, via Route BR-381. The 1970 ADT was about 350 vehicles with 40% trucks, growing at an average of 10% per year. In the Center-West Region 4. Route BR-60 (2S!.6 i&-. 3) is a link in the hi!hwav that connects Brasilia and Goiania to Cuiaba, via Route BR-364. It also connects at Rio Verde with Route BR-L52 included for construction in the Second Highway Pro-ect. These two roads zogether link the region which they serve to Sao Paulo. The 1970 ADT was 955 vehicles with 60% trucks, and the annual growth rate is about 10%.

50 ANNEX 6 Page 2 5. Route BR-153 (236.2 km, Map 8). This is a part of the highway between Brasilia and the central regions of Brazil on one hand, and Belem and the northern regions of the country on the other. Since its construction ten years ago, this road has played an important role in opening up the interior which has good agricultural and cattle raising potential. The 1970 ADT was 510 vehicles with 60% trucks, and the growth rate of vehicles is about 10% per year. 6. Route BR-050 (218.2 km, Map 8) is the only missing link in the most direct route between Brasilia and Sao Paulo, decreasing travel distance between these two centers by about 100 km compared to the present route via BR-153. The most important flows are of manufactured products and fuels from Sao Paulo to Brasilia. On the regional level, this route connects Brasilia to the cattle-and wheat-producing areas around Uberlandia and Uberaba. The 1970 ADT was about 115 with about 50% trucks, growing at an annual rate of 10%. The diverted traffic due to the shorter distance is expected to be about 700 vehicles per day in the first year after opening. 7. Route BR-163 (65.5 km, Map 8). This is a link in the highway connecting Guiaba, the capital of Mato Grosso, to Campo Grande, the major growth pole in the southern part of the state where agriculture and cattlegrazing are important. Detailed engineering for the Bandeirantes-Cuiaba section of BR-163 is being carried out with special funding by the Government. The 1970 ADT was 370 vehicles with 50% trucks, and the annual rate of growth of the vehicles is 6%. In the Southern Region 8. Route BR-386/158 (186.2 kin, Maps 12 and 14). This link completes the "Kennedy Highway" which connects the western part of Santa Catarina and Northern Rio Grande do Sul to Porto Alegre. The last 54 km outside Porto Alegre were constructed under the First Highway Project. The 1970 ADT was 510 vehicles with about 60% trucks, and average annual rate of vehicle growth was 12%. 9. Route BR-158 (67.2 km, Map 14) is a continuation of Route BR-158 now being constructed under the Second Highway Project. It links the northcentral parts of Rio Grande do Sul to Santa Maria, an important regional center. The 1970 ADT was 340 with 45% trucks, and the average annual rate of growth was 10%. GROUP B In the North-East Region 10. Route BR-324 (11.6 km_, Map 4). This is an extension of Route BR-324 included for construction in the Second Highway Project, and forms the major access route to the northern section of the city of Salvador. It is expected to relieve the congestion at the entrance to the city, as the ADT in 1970 was 16,000 vehicles (23% trucks) and the traffic growth rate per year is estimated at 6%.

51 ANNEX 6 Page 3 In the South-East Region 11. Route MG-174/168/28/157 (292.4 km, Map 6). These routes form an efficient regional network in southern Minas Gerais, and serve one of the important agricultural areas of that state. The 1970 ADT varied on the various links from a high of 275 vehicles to a low of 260 vehicles, and the truck composition varied between 25%-30%. Annual traffic growth is estimated at 10% throughout. 12. Route ES-37/36 (61.6 km, Map 5). This road is of regional importance in the north-central part of Espirito Santo, and connects Nova Venecia and Sao Domingos, twqo regional centers, to Vitoria, the state capital, via Routes ES-2 and BR-259 (both under construction and paving). The 1970 ADT was 260 vehicles of which 60% were trucks, and the estimated vehicle growth rate is 9% per year. In the Southern Region 13. Route PR-12 (45.3 km, Map 10) is a link of regional importance which connects the fertile agricultural area in northern Parana to the eastwest-oriented transport system of the state via Route BR-369. The 1970 ADT was about 655 with 47% trucks, and the average annual growth rate was about 10%. 14. Route BR-153 (247 km, Maps 10 and 12) forms an important regional highway in the center of the three southern states, linking these production areas to the consumption centers to the north. It connects with the Sao Mateus-Uniao da Vitoria section of Highway BR-476 which was constructed under the First Highway Project. The 1970 ADT was 675 vehicles of which 57% were trucks, and the average annual growth rate was 13%. 15. Route RS-19 (23.6 km, Map 14). This road north of Porto Alegre is of regional importance and connects via Route BR-116 the agricultural area which it serves to the rest of the state. The 1970 ADT was 805 vehicles of which 25% were trucks, and the average annual rate of growth was 10%. B. ROADS PROPOSED FOR DETAILED ENCINEERING In the North-East Region 16. Route BR-412/110 (77 km, Map 3). These two road sections have the highest priority in the route which provides a diagonal connection in the central part of Paraiba and?ernambuco between two important east-west highways, namely BR-232 originating in Recife and BR-230 starting in Joao Pessoa. The 1969 ADT was estinated at 320 vehicles, of which about 40% were trucks; the estimated annual traffic growth is about 10%. 17. Route BR-3U/BA-630 (232 km, Map 4J. This route plays an important role in eas,-west transport in the southern part of Bahia, connecting the

52 ANNEX 6 Page 4 area of Bacm Jesus de Lapa on the Sao Francisco river to BR-116, the major north-south axis between the north-east and the center-east. The estimated 1969 ADT is 300 with 50% trucks, and the average annual traffic growth rate is 9%. 18. Route BR-101 (137 km, Map 4) is a missing link of the important north-south coastal route which will significantly lessen the travel time between the north-east and the center-east by providing an alternative route to the present one which goes through Salvador. The 1969 ADT was 750 vehicles with 70% trucks, and the rate of traffic growth is estimated at 10% per year. In the South-East Region 19. Route BR-135 (215 km, Map 5) is the main road connecting Rio de Janeiro to Belo Horizonte, as well as the access to Rio de Janeiro from the north via Route BR-464, and from the south via Routes BR-462 and BR-116, the latter being the principal route to Sao Paulo. In 1969, ADT on this road varied from 5,500 on the section farthest from Rio de Janeiro, to a high of about 21,000 in the section nearest Rio de Janeiro, with about 30% trucks. A number of alignments to connect this route to the urban system of Rio de Janeiro are being studied, and the best alternative will be included for detailed engineering under the present project. 20. Route MG-10 (137 km, Map 6) links Pirapora on the Sao Francisco River, to Corinto in the central part of Minas Gerais, and from there via Routes BR-135 and BR-40 to Belo Horizonte. The 1969 ADT was about 200 vehicles with 33% trucks, and the average annual traffic growth was about 10%. 21. Route MG-23 (144 km, Map 6). The completion of this road will provide a connection between four important national routes, BR-135, BR-381, BR-262 and BR-040. In addition, this road provides a direct link between the steel plants located in Divinopolis and the coal-producing areas to the north. This coal movement alone provides about 100 trucks per day in ADT expected to be about 300 vehicles. In the Center-West Region 22. Route BR-364 (197 1.m, Map 8) is the major road connection between Cuiaba, southern Goias and western Minas Gerais connecting, at Canal Sao Simao on the Goias-Minas Gerais border, with Route BR-365 which is being constructed under the Second Highway Project. The 1969 ADT was 300 vehicles, with 50% trucks; the traffic growth rate is 7% annually. In the Southern Region 23. Route PR-13 (176 Icm, Map 10) including a link to Nova Esperanca, is of regional importance in the agricultural north-central part of the state of Parana, linking a number of regional centers to Route BR-376, the

53 ANNEX 6 Page 5 main diagonal highway in the state. The 1969 ADT varied between 400 and 2,100 vehicles on the various sections, and truck percentage varied between 40 and 60; average annual growth rate was 12%. 24. Route RS-12/50 (274 km, Map 14) forms a small network in the northern part of Rio Grande do Sul, connecting the agricultural centers of Santa Rosa and Ijui to Route BR-386 included for construction in this project. The 1969 ADT varied from 150 to 350 with about 60% trucks, and average annual rate of vehicle growth was 15%. 25. Route BR-158 (37 km, Map 14) is a continuation of BR-158 from Cruz Alta included in this project for construction (described above in para. 9). C. ROADS PROPOSED FOR FEASIBILITY STUDY In the North-East Region 26. Routes BR-316/110 (409 km, Map 3). These routes, together with the section of BR-316 included for construction in the proposed project, and the southern part of route BR-110, form an important regional network serving both local and long-distance traffic in the north-east, and connecting the north-east with the central part of the country. In addition, they provide access to the hydro-electric complex at Paulo Alfonso which at present is quite isolated, but which will contribute greatly to the development of the region. In the South-East Region 27. Route MG-4/ES-39 (132 ki, Maps 5 and 6) forms an important link between the Governador Valadares area in Minas Gerais and the coastal network of the state of Espirito Santo, and from there to the port city of Vitoria. 28. Route MG-8 (117 km, Map 6) forms an important regional link between the agricultural area of Patos de Minas (cereals, dairy products and cattle) and Belo Horizonte via BR-354 and BR Route MG-58 (59 km, Map 6) links the south-eastern part of Minas Gerais with northern Sao Paulo, and plays an important role in the movement of the regional products and especially coffee, sugar cane, dairy products and cereals. 30. Route BR-331 (76 km, Map 9) forms a part of the most direct route between the city of Sao Paulo and Belo Horizonte. It carries very heavy traffic at present and will require new alignment and additional lanes.

54 ANNEX 6 Page Route SP-89 (60 km, Map 9) is the missing link between the city of Sao Paulo and the newly reconstructed port of Sao Sebastiao where cargo movements have increased significantly in recent years. In the Center-West Region 32. Route BR-163 (183 km, Map 8) is a section of the road from Dourados in southern Mato Grosso to the port of Paranagua in the state of Parana (described in para. 33). Together with another section north of Campo Grande, for which detailed engineering is now being carried out by DNER, this continuous route will connect the center-west part of Brazil to the southern states and especially to the ports of export. In the Southern Region 33. Routes BR-487 (502 km), BR-373 (376 km) and BR-277/376 (81 km), (Map 10) are alternative routes from which one will be selected. That route, together with Route BR-163 described above in para. 32, will provide an alternative export route through the port of Paranagua for the products of the central part of Brazil, thus relieving the pressure on the port of Santos. In addition, it will provide access to the central part of the state of Parana where potential for development has been limited by lack of efficient transport. 34. Route BR-467/163 (217 km, Map 10). Two alternative routes are to be evaluated to link the regional centers of Toledo and Guaira in western Parana in which large increases in agricultural production (soybeans, wheat and dairy products) are taking place. 35. Route BR-158 (175 km, Map 10) is a system connecting south-eastern Parana with Santa Catarina. The continuation of BR-158 to Rio Grande do Sul is proposed for construction under this project. This is a region of active colonization where agricultural production (corn, wheat, soybeans) as well as pig-raising is increasing rapidly. 36. Route RS-19 (103 km, Map 14) will provide an alternative access route from Porto Alegre to BR-101, the major north-south axis, and from there to the rest of the country. In addition, it provides reliable transport to an area with a strong tourist potential. 37. Route RS-3 (94 km, Map 14) is a section of one of the most important east-west highways in Rio Grande do Sul linking Argentina and Porto Alegre. This road serves one of the best agricultural areas in the state, and will complete an improved link between the two important centers of Santa Maria and Santa Cruz. The adjacent section is being constructed under the Second Highway Project.

55 Annex 7 Page 1 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Consultants Engaged in the Preparation of the Third Highway Project 1. Detailed Engineering Carried out under Second Project for construction and/or paving under the Third Project. Consultants and Nationality State Road Number Sondotecnica (Brazil) Piaui and Pernambuco BR-316/232 Astep/H. Santana (Brazil) Piaui and Pernambuco BR-316/232 Tenpo (Brazil) ) Dorsch (Germany) ) Bahia BR-324 Proenge/Etapa/Lasa (Brazil) Minas Gerais BR-354 Consol/Espa (Brazil) Minas Gerais MG-174/168/28 and BR-267/MG-157 Euler (Brazil) Goias BR-060 Asplan/Planta (Brazil) Goias BR-060 Etel (Brazil) Parana PR-12 Proenge (Brazil) Parana-Santa Catarina and Rio Grande do Sul Enecon/Asplan (Brazil) Rio Grande do Sul and Santa Catarina BR-153 BR-386/158 Planisul/Projesul (Brazil) Rio Grande do Sul RS-19 Planisul/Projesul (Brazil) Rio Grande do Sul BR-158 Astep (Brazil) Paraiba, Pernambuco, and Alagoas BR-104 Tecnosolo/Berger (Brazil) Espirito Santo ES-36 and ES-37

56 Annex 7 Page 2 Hidroservice (Brazil) Goias BR-153 Astep/Transcon (Brazil) Mato Grosso BR-163 Hidroservice - Asplan/Planta - Proenge-Euler-Enecon/Espa (Brazil) Goias BR-050 1/ 2. Feasibility Studies Carried out under Second Project, for detailed engineering studies under the Third Project. Consultants and Nationality State Road Number Astep (Brazil) Paraiba and Pernambuco BR-412/110 Transcon/Tenpo (Brazil) Bahia BR-030/BA-630 H. Santana/Orplan (Brazil) Bahia BR-101 Euler (Brazil)/Dorsch(Germany) Guanabara, Rio de Janeiro and Minas Gerais BR-135 Etuc (Brazil) Minas Gerais MG-10 State Highway Department- Minas Gerais Minas Gerais MG-23 Etel (Brazil) Parana PR-13 and unnumbered road Enecon/Etel (Brazil) Rio Grande do Sul RS-12/50 Planisul/Projesul (Brazil) Rio Grande do Sul BR-158 Enecon/Espa (Brazil) Goias BR-364 1/ This study was not included in the Second Highway Project; it was carried out by DNER.

57 TABLEi 1 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Federal INvestment in Transport by Mode (In millions of June 1970 Cr$) Railways Highways , , ,366.4 Maritime Airport TOTAL 1, , , , ,0o48.7 2,591.5 Sources: Anuario Bstatistico dos Trarsport.s Assessoria do Ministerio da Aeronautica Aasessoria de Planejanento do Ministerio dos Transportes Febrauy3jwr2397i2.

58 TABLE 2 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT a) Freight Transport by No, (billions of net ton-km) Railways Coastal Air Year TOTAL Total Federal State CVRD Shipping Highways Transport a o L /L b) Percentage Shares Coastal Air Year TOTAL Railways Shipping Highways Transport / Estimates. Sources: Railways - FRRSA CVRD Dados Estatisticos das Ferrovias de Administracao Direta e Indireta do Estado de Sao Paulo Coastal Shipping - Brazil Transport Survey - SUNAMAM Highways - Brazil Transport Survey, and DNER estimates Air Transport - Directoria de Aeronautica Civil February 23, 1972.

59 B R A Z I L THIRD HIGHWAY CO9STRUCTION PROJECT Passen_er-Kilometers, Percentage Shres, and Average Annial terates and Se ete by" Mcde of- Transport Passenger r- o eter P a s s e n g e r - K i I o m e t e r s Mode of Transport & Item Billions Percent Shares Average Annual Growth Rate _ Highways Medium and long traffic; distance Bus n.a. n.a. n.a h Automobile n.a. n.a. n.a Subtotal n.a. n.a. n.a L/ h Local traffic: Bus.10.9 n.a. n.a. n.a / Automobile n.a. n.a. n.a , h Subtotal n.a. n.a. n.a. 36.o 4o h Total 59.5 n.a. n.a. n.a / Railways Interior traffic h Commuter traffic Total Coastal Shipping o Airways Total.80.6 n.a. n.a. n.a / Estimates. 7/ Includes international travel, since figures for domestic travel are not available separately. Sources: GEIPOT Railways - RFFSA and CVRD, and Railways, State of Sao Paulo /69. Coastal Shipping - SUNAMAN /69 Airways - Diretoria da Aeronautica Civil /69 Highways - DWER n.a. = not available.

60 TABLE 4 B R A Z I L THIRD HIGBWAY CONS TRUCTION FROJECT Classification of Highways lo gths According to Type of Jurisdiction, December 1970 State or Territory TOTAL National Hhways h_ State Hh I/ Provincial Highways Total Unpaved Paved Total Unpaved Paved Total Unpaved Paved Rondunia ,517 1,210 1, Acre _ Amazonas... 2, Roraima Para.18, ,741 6, ,680 9, Amapa.1, Maranhao. 24,242 2,109 1, ,296 1, ,837 20, Piaui.22,259 1,549 1, ,754 1, ,956 18,956 - Ceara.47,996 2,158 1,155 1,003 14,199 3,153 1,036 41,639 41, Rio Grande do Norte.9, ,484 2, ,177 6,177 - Paraiba... 24, ,067 3, ,000 20,000 - Pernambuco.17,380 1, ,065 2,391 1, ,000 13,000 - Alagoas... 11, ,418 2, ,400 8,400 - Fernando de Noronha Sergipe.4, ,324 1, ,249 3,249 - Bahia. 64,582 4,437 2,602 1,835 6,245 4,998 1,247 53,900 53, Minas Gerais ,826 7,242 2,324 4,918 17, ,639 2, , , Espirito Santo.16,649 1, ,556 3, ,987 11,987 - Rio de Janeiro.19,457 1, ,293 4,508 2,909 1,599 13,317 13, Guanabara.1, , Sao Paulo.170,125 5, ,520 14,926 5,221 9, , ,000 3,000 Parana.83,958 2, ,963 8,004 6,868 1,136 73,446 73, Santa Catarina... 32,067 1, ,498 5, ,044 25,044 - Rio Grande do Sul.171,154 3,098 1,314 1,784 9,797 8, , , Mato Grosso. 34,076 6,227 5, ,337 9, ,512 18, Goias.35,907 3,321 2, ,586 12, ,000 20,000 - Federal District, Brasilia TOTAL 950, ,395 24, ,626 98,892 21, , ,828 3,752 l/ As of / As of Source: National Highway Department - July February 23, 1972.

61 TABLE 5 BRAZIL THIRE HIGHWAX CCNSTRUCTION PROJECT Development of National and State Higzhway Network, (in kilometers) National Highways State Highways Year Total Unpaved Paved Total Unpaved Paved ,670 23,716 14, ,183 94,909 19, ,852 27,500 19, ,918 95,878 20, ,482 28,087 22, ,626 98,892 21, ,540 27,395 24, ,3341/ 101,9061/ 24,476I' 1/ Estimated. Source: National Highway Department - July February 23, 1972.

62 B R AZ I L TBIRD HIGHWAY CCNSTHIITION PHIJECT Relationship between Area, Population and Length of Highways Area in Population Paved Highways Total Higbways km Pved 2 km Total 2 km Paved k. Tetal State 'ooo sq.km. in '000 in km g in km 2/ RiMoways/t000 kmo Higways/'000 kmho Hiohwavs/1000 Inhab. Highwavs/1000 InhabS."/ Rondmnia , Acre Amazonas i, , Roraina Para 1,248 2,048 1,202 8,378 o Amapa Maranhao 329 3, , Piaui 251 1, , Ceara 148 4,440 2,039 6, Rio Graide do Norte 53 1, , i Paraiba 56 2, , Pernambuco 98 5,208 1,655 4, o.84 Alagoas 28 1, , Sergipe i, Bahia 561 7,421 3,082 10, Rinas Gerais ,280 7,531 24, Espirito Santo 46 1, , Rio de Janeiro 43 4,694 2,892 6, Guanabara 1 4, , , Sao Paulo ,716 14,225 20, o.8o 1.14 Parana 200 6,742 3,099 10, o Santa Catarina 96 2,911 1,107 7, Rio Grande do Sul 282 6,653 2,641 12, Mato Groese 1,232 1, , Goias 642 2,989 1,080 15, Distrito Federal (Brasilia) 6 5), Lu.O TOTAL 8,507 93,531 45, , LJ Length of State Highways for Excliding Municipal Highways Source: DNER: July 1971 December 27, 1971

63 TABLE 7 BRAZIL THIRD HIGHWA CONSTRUCTION PROJECT Relationship between Area, Population and Number of Vehicles Area in Population Vehicles/ State Thousand in Total/ 2 Vehicles/ '000 Sq. Km Thousands Vehiclet '000 Sq.Ku Inhab. Rondo nj , Acre _ Amazonas Y 1, , Rorai4a,Y/ Para Y 1,248 2,o48 20, Amapa , Maranhao V 329 3,776 l1, Piaui 251 1,736 9, Ceara 148 4,440 47,, Rio Grande do Norte 53 1,603 18, Paraiba 56 2,384 25, Pernambuco 98 5,208 80, Alagoas 28 1,606 15, Sergipe , Bahia 561 7, , Mina Gerais , , Espirito Santo 46 1,597 34, Rio de Janeiro 43 4, ,154 3, Guanabara , , Sao Paulo ,716 1,1493,Q70 6, Parana 200 6, ,629 1, Santa Catarina 96 2, ,122 1, Rio Grandl qo,sul 282 6, ,907 1, Mato GrossoY 1,232 1,518 37, Goias 642 2,989 55, Distrito Federal ,722 5, Total 8,507 93,52 3,451, V/ Statistical Abstracts of Brazil (Population Estimates as of July 1). P/ Estimates. Source: Brazilian Institute of Geography and Statistics: Demographic Ceosus of Preliminary Results. September 17, 1971.

64 TABLE 8 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Vehicle Registrations by State, 1970 d State Cars Buses Pick-Ups 2 Trucks Total Distribution ) Rondonia 1, , Acre Amazonas 7, , Roraima Para 15, ,674 20, Amapa ,o Maranhao 8, ,726 11, Piaui 6, ,712 9, Ceara 37, ,089 7,407 47, Rio Grande do Norte 12, ,047 3,656 18, Paraiba 18, ,606 4,652 25, Pernambuco 61,341 1,887 4,110 12,664 80, Alagoas lo, ,780 15, Sergipe 6, ,118 10, Bahia 67,685 1,839 6,535 15,618 91, Minas Gerais 212,825 5,523 30,715 55, , Espirito Santo 21, ,811 8,137 34, Rio de Janeiro 103,452 5,136 4,973 31, , Guanabara 321,789 13, , , Sao Paulo 1,228,433 15,154 43, ,574 1,493, Parana 133,103 2,267 16,484 52, , Santa Catarina 67,280 1,282 9,538 25, , Rio Grande do Sul 260,357 4,721 15,687 49, , Mato Grosso 23, ,952 8,360 37, Goias 37, ,700 9,565 55, Distrito Federal 28, ,657 32, TOTAL 2,694,479 58, , ,401 3,451, / Estimate 2/ Pick-ups and vans. Sourcesi: Brazilian Institute of Geography and Statistics GEIPOT. Seotember 17, 1971

65 TABLE, 9 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Vehicle Fleet, 1970 I - CARS 2,695,000 II - PICK-UPS 159,000 Sub-Total 2,854,O00 III - BUSES a) Gasoline 18,000 b) Diesde 41,000 Sub-total 59,000 IV - TRUCKS a) 2-axle gasoline (I-4.5 tons) 35,000 b) 2-axle gasoline (4.5-7 tons) 300,000 c) 2-axle diesel (4.5-7 tons) 50,000 d) 2-axle diesel (7-9.5 tons) 26,000 e) 3-axle diesel (8-14 tons) 15,000 f) 2-axle truck-trail.er (10-15 tons) 11,000 g) 3-axle truck-trailer (over i5 tons load capacity) - 3,000 Sub-total 440,000 TOTAL 3,353,000 / Estimates. Source: GEIPOT September 17, 1971

66 TABLE 10 BRAZIL THIRD HIGHWAY CONSTRCTION PRDJCT Increase of Vehicle Registrations Cars and Pick-ups Trucks Buses Total Year Unita Units % Units % Units % ,914, , , ,396, ,008, , h 55, ,499, ,505, , , ,061, ,853, , , ,451, Source: Brazilian Institute of Geography wnd Statistics and 1968 Estimated for 1969 and September 17, 1971.

67 TABLE 11 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT _ighway Deaign Standards for New Roads Class of Highway 0 I II IIT Design Speed, flat km/h rolling mountainous Minimum Horizontal Radius, m flat rolling mountainous Maximum Grade, % flat rolling mountainous Sight Distance for Stopping, m flat rolling mountainous Sight Distance for flat Passing, m rolling mountainous Pavement Width, m flat rolling to to mountainous Shoulder Width, m flat rolling mountainous to 2.50 to 2.00 to 1.20 very mountainous Right-of-Way, m flat rolling mountainous Source: DNER - July 1971 September 17, 1971

68 TABLE 12 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Higfhway Deei.zn Standards for Iprovement of 2xisting Rbads Class of Highway 0 I II III Design Speed, flat km/h rolling mountainous 60 so Minimum Horizontal flat Radius, m rolling mountainous Maximum Grade, % flat rolling mountainous Sight Distance for flat Stopping, m rolling mountainous Sight Distance for flat Passing, m rolling mountainous Pavement Width, m flat rolling to to mountainous Shoulder Width, m flat rolling mountainous very mountainous Right-of-Way, m flat rolling mountainous Source: DNER - July 1971 September 17, 1971

69 TABLE 13 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Financing Plan for Federal and State Highways, (in Cr$ millions) Revenues Road Fund (IUCL) 3,176 3,430 3,704 10,310 Road Tax 897 1,023 1,166 3,086 Others 2,262 2,384 2,529 7,175 Expenditures Total 6,335 6,837 7,399 20,571 Construction 4,333 4,639 5,224 14,196 Maintenance Equipment Maintenance and Administration 4,318 4,549 L,677 13,544 Total 8,738 9,281 9,999 28,018 Surplus (Deficit) (2,403) (2,444) (2,600) (7,447) US$ Equivalent (millions) h ,h32 Average Annual Deficit US$477 million equivalent. 1/ Includes State contributions. Source: DNER January 10, 1972

70 R2AZIL THIRD RIGEJAY CONSTOUCTION PROJECT List of Roads for Constrootioo ad/or P-ving Soad Noob-r Iongth TyPo of Work - K. Type of Terrain - S Typo of Total Cost 2/ stato Reeon.P. Lgt Rrfaciog - Ar0l0ay section E C T I o N and SOd - folorol Itato Conotr. 11~~~~~~~~~~~d inlpror. and flat Ralliog Rooot. Clans ~~~~~~~~~~~~~~~~~~ Cr $f OS US$ Federal. im f-to Pving Pavmg Flat Rdlig Mout. Ra Road I/ Million Million pa'i. g' P-i~~~~~~~~~~~~~~~~~~~~~g' E~~~~~qolval. PI/PE BR-316/232 DNER Pi-oo-Moraia I GOO DST-C PI/PE 8R-316/232 INER Horais-Salguciro DST-I PB/PE/AL BR ER CInpoina GrSOda - Junction BR AC/D3T-I/II MG BR ER Etla.go--Perdoeo DAT-r GO BR-060 D1IER G.apo-Rio Verdao DST-I GO BR-060 DNER Rio Verdao-Jatai _ D3T O BR-153 D11E0 CRrno-Porsogato AC-C GO BR-050 1i3ER Cri.tallna-Llmit GO/`MG AC MT BR-163 T12ER C-mpo Grod.-Band- d-t.irnt AC-I RS/SC BR-386/158 DBrER Sarandl-Irai-Cunhapora (Joooti.o 3R-282) Z AC-I RD B0-158 EVER Julio de Ca-tilhlo-Cr- Alt AC-I TOTAL GROUP A 1, , (6 Inso)) BA BR-324 D}3ER Northorn A... n to Saljnadr AC-S ) (2 Io..) AC-0 MG MG-174/168/28 DER/MG Sao Ssbantiao do Pnrani.-Pooo. de Caldas D3T-I MG BR-267 MG-157 DER/MG P.oos de Cnlda.-Parag...o DST-I F'S 11.36/37 DERA/S Nv -vnen -it S.o Dlooigon D1T-II PR PR-12 DER/PR Cornelio Prooopio-Con.e.niah AC-I PR/8C/RS 8R ER Unian de Vitoria-Erechim AC-I RS RS-19 DABER/S Taq-rn-5pi-prng _00 - AC-I TOTAL G_GEOUP B G R A N D T o T AL 2, , , O =.==....=..... == / DST - Donble S-rfove Tr0atment AC - Asphalt Cooorote o _Cl- o - Clano I II CC 2/ Estimates on of FPbroary 1971 end ronvertod into US S at thi the- valid -hrlgaor rate Of US$ 1.00 Cr8$ 5.0) Decembor 27, 1971

71 BRAZIL THIRD HIGH'WAY CONSTRUCTION PROJECT List of Roads for Detailed Engineering Road Number Type of Work Estimated Construction Estimated Cost of 3/ Cost 2/ Detailed Engineering Preparatory STATE SECTION Length kms Federal State Studies Existing Proposed Cr$ US$ CrS U0$ Conditions Standards Million Million Million Million Consultarts Equivalent Equivalent PB/FE BR-412/110 Farinha-Boa Vista 19 IE-IV DST-I Junction BR-232-Monteiro 58 IE-IV DST-II ASTEF BA BR-030 BA-630 Caetite-Brumado-Vitoria da Conquista 232 IE-II DST-I TRANSCON/TENPO BA BR-101 Feira de Santana-Esplanada 137 NE DST-I H.SANTAHA/ORPL8FN MGIRJ/GB BR-135 Rio de Janeiro-Juiz de Fora 185 AC-I AC-I EULER RJIGB BR-135 Access to Rio de Janeiro up to 30 AC-C AC-C EULER/DLRSCH (4-lane) ( 6 -lane) MG MG-10 Corinto-Pirapora 137 IE AC/DST-I ETUC MG MG-23 Divinopolis-Junction SR E DST-I DER/MG PR PR-13 Maringa-Colorado-Santo Inacio road and Nova Esperanzaurnumbered Colorado Paranacity- 176 NE/IE DST-I ETEL RS RS-12 Santa Rosa-Palmeira das Missoes 274 NE/IE AC-I ENECON/ETEL v85-50 Ijui-Tres Passos RS BR-158 Cruz Alta-Junction BR IF AC-I PLANISUL/PHOJESUL GO BR-364 Jatai - Canal Sao Simto 197 E AC/DST ENECON/ESPA TOTAL 1, / IE - Improved Earth 2/ Estimates as of July 1970, converted into US dollars at the then valid G - Gravel - exchange rate of US$l.O= Cr$ NE - Non-existing DST - Double Surface Treatment 3/ Estimates as of February 1971, converted into US dollars at the then valid AC - Asphalt Concrete - exchange rate of US Cr Class 0 I - Class I II - Class II III - Class III IV - No Class n-eember 27, 1271

72 BRAZ C T THIRD HIGHWAY COCSTRTICEIEN PROJECT listo sf Roads for FeasibiIitv Rooidios Estimated Co-struoti-o Estimated Cost of Road NRmber Costs Fe-sibility Studies STATE SECTTIOD km istin gpoprd_ / FPdoral State Conditions - Standards Cr5 RS$ Cr$ LIS$ Million MEilliE Million Milliom EqA ut aer!. NRieuivlorp PP BR-316/110 Ralgoeiro-PerrolamdEa-Paolo Alfo-so 186 C/NC DST-I Parnamirim-Cobrohb-Belem do S.Fruamisoo 115 NE DST-I ) 0.51 AL BR-316 Pulmeira dos Imdios-Junctio- BR E DST-I ES/MG MG-47/S.3 GCovernador Valsdares-M-ut-m-Lm.iEt MC/ES Limit MC/ES-Barra SEFronci-o 132 E/C R)SE-I Mc LG-8 Patrooinio-iSeor do Salitir Serra do Salitr-Junction BR-3I4 117 C/C DST-TI / 3/ Mc MG-58 Ita- Limit MG/SP 59 E DST O.10 SP BR-381 SP-8 Sue Paulo-Limit SP/MR on-Pave A lacs-ac-o R SP SP-89 Salesorolis-P-rto SBo Sebastiao 6E NS DST-II MT BR-163 Doirados-Pomtal do Tigr- 183 E/C DST-I PR ( BR-487 (PR-4 Posts Grosso-Campo Moorao-Pontal do Tigre ( 502 P/C DST-I ) 6.75 ) 1.35 (and BR-373 (PR-4 and P.Grossa-Relogio-Campo Mo-re-P.do Tigre ( 376 E/G DST-I PR BR-467/163 ( Toledo-MNr Candido-Porto Me-des-C-aira ( 127 E AC-I I.40 ) 0.28 (and Toledo-Mar Comdido-Guaira ( 90 E AC-I PR BR-277/376 Compo l.arge-ponta Crossa a Pa.od 4 1a-sr-AC PR/SC BR-158 Coromel Vivida-Campo Err 91 NE AC-I ) 1.50 ) 0.30 Campo tre-.u-otien Rr E/G AC-I RS RS-IS Taquara-EolanLe- oopcioo BR-101 1R3 F/G DST-I RS RS-3 Santo Coon-Coe- ChRto 94 C AC-I b16 TOTAL 2,5o4 1,24S.0 2h9.B h.o7 1/ C - PErth 2/ Tta-tS as of February 1971, -onoerted into US dnlors at thr thre C - Graoel -olid oo-lenge rate of USC1.00 Cr$ 5.00 RET -Double S-f-ar T-osmrt AC - Asphalt Conro1t, e /.roility.. StDdy to br de RD bry-min Gerais C - Class C - Class I IT - Cles- 1I H NE -.os-ointio,g 8ecomhbr 21, 1971

73 TABLE 17 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT Schedule of otmatte,d Disbursements IBRD Fiscal Tear Cumulative Disbursement and at End Of Quarter End of Quarter (US$ ' 000) 1971/72 June 30, /73 September 30, ,300 December 31, ,,000 March 31, 1973 li,qoo June 30, , /74 September 30, ,000 December 31, ,000 March 31, ,500 June 30, , /75 September 30, ,000 December 31, ,500 March 31, ,000 June 30, , /76 September 30, ,500 December 31, ,000 March 31, ,500 June 30, ,000 February 10, 1972

74 TABLE 18 BRAZL THIRD HIGHWAY CONSTRUCTION PROJECT Average Daily Traffic (ADT)? on Selected National Highways A D T Highway Number ot % BR State Vehicles Trucks C50 Minas Gerais 1, Goias 2, Paraiba 2, Espirito Santo l, Santa Catarina 3, Ceara Pernambuco 6, Minas Gerais 3, Rio de Janeiro 9, Sao Paulo 17, Santa Catarina 3, Rio Grande do Sul 13, Minas Gerais 7, Rio de Janeiro 19, Goias 1, Rio Grande do Sul Ceara 1, Paraiba 1, Pernambuco 1, Minas Gerais 2, Minas Gerais 1, Minas Gerais 1, Minas Gerais 6, Rio de Janeiro 25, Santa Catarina Rio Grande do Sul 1, / ADT at selected counting stations Source: DNER - July 1971 September 17, 1971

75 BRAZII, THIRD HIGHWAY CONSTRUCTION PROJECT Average Daily Traffic on Project Roads 1/ ACTUAL TRAFFIC E S T I M A T E D T R A F F I C Total Grand Normal Traffic Generated and Diverted Traffic Road Numober Road Section Vehicles Cars Buses Trucks Total Total Cars Buses Trucks Total Cars Buses Trucks GROUP A BR-316/232 Picos - Morais - Salgueiro BR-104 Campina Grande - Junction BR BR-354 Estalagem - Perdoes BR-060 Guapo - Rio Verdao - Jatai BR-153 Cores - Porangatu )0 BR-050 Cristalina - Limit GOING BR-163 Campo Grande - Bandeirantes C BR-386/158 Sarandi-Irai-Cunhapora (Junction BR-282) BlR-158 Julio de Castilhos - Cruz Alta C GROUP B DR-324 Northern Access to Salvador 16,000 10,720 1,600 3,680 25,920 25,920 17,850 2,400 5, MG-17 4 /168/28 Sao Sebastiao do Paraiso - Pocos de Caldas MG-157 Pocos de Caldas - Paraguacu A ES-36/37 Nova Venecia - Sao Domiingos PR-12 Cornelio Procopio - Congoinhas , BR-153 Uniao da Vitoria - Erechimo , RS-19 Taquara - Sapiranga ,430 1,430 1, / Traffic voluesi shown in this table are averages over the whole road sections. Source: DNER February 17, 1972

76 B R A Z I L THIRD HIGHWAY CONSTFIUC TION PROJECT Vehicle O0erating Eoonomic Costsjl' (in Cr$/km of June 1970) Paved Gravel Earth Type of Vehicle Flat Rolling Mountainous Flat Rolling Mountainous Flat Rolling Mountainous 0 tans Truck 7 tons Semi-trailer 15 tons tons tons Heavy Truck 5 tons tans tons tons Medium Truck 5 tons tons tons Passenger Car Bus / Free flow condition. Source: TRANSPLAI September 17, 1971

77 TABLE 21 BRAZIL TIIIRD HIGHWAY CONSTRUCTION PROJECT Internal Economic Return for Roads Proposed for Construction and/or Paving Increase Decrease Increase Beomfits Decrease Benefits Benefits from Becafits from from Vehicles from Vehicles Road Number Read Section Best Estimate Maintenance 20% Maintenance 20% Operating Costs 20% Operetic4 Casts 20% GROUP A BR-316/232 Picos - Morais - Salgueiro BR-1C4 Ca-pina Grande - Junction BR ?i 23 3R- '54 Estalagem - Perd-o lb BR-lOG Gasps - Rit berdao - Jatai dr-152v Ceres - oraongatu 4C m BR-'?3 CrIstalina - Limit GO/MG 1P li 14 BR-I'- 3 Campo Grande - Bandeirantes Y 32 BR-_68/153 S-rarii-Irai-Cunhapora (Junction BR-262) BR-158 Jalio do Castilhos - True Alte 13 i GROUP B BR-JO. Nsrthern Access to Salvador MG-'h4/160/2H S.c Sebastiec do Paraisa-Pecos de Caldac MGl_i5/ Fcos do Caldac - Paraguacu 1b ES-3/3/, Nova Venecia - Sao Doringos FR-12 Cornelio Procopio - Congoinhas i BR-153 Uniao da Vitcria - Erechin RSd-i" Taquara - Sapiranga February 17, 1972

78

79 CHART I BRAZIL: THIRD HIGHWAY CONSTRUCTION PROJECT ORGANIZATION OF GEIPOT PERMANENT PLANNiNG COMMITTEE Pres,dent Me-bers Secret-ry General of the Ministry of Tr-nsport Superintendent of GEI POT (Cl,ir"onl - N.tiortl High-oy Deparroent - Nti-nol Rbil-ood Department - National Department of Ports and Worerwoys - Federal Roilroad Company - Merchant Mcrine A.thkrity ADVISOR I ~~~~I SPRINTENDENT DEPARTMENT OF SUPPORTING TECHNICAL ADMI NISTRATION SERVICES DEPARTMENT PINANCE DGMNAINECONOMIChIWA DOCUMENTATION ~~~~~~~STUDIESSTDE PERSONNEL RESEAR RAILWAY PE~~~~ICN`NEI~~~~~~~~ ASSISTANTS STUDIES NVGTO GENERAL SERV ICES PUBLICATIONS SC A AND SUPPLIE5 STUDIE PROCESSING DRAFTING JJIY 1971 WORLD bank ,RI

80

81 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT CHART 2 ORGANIZATION OF THE NATIONAL HIGHWAY DEPARTMENT (DNER) ADMINISTRATIVE COUNCIL... GENERAL DIRECTOR SECURITYN COMMI T~TEE 1 -`P DIRECTOOTHEDIRCTO T-Y DEPUTY DIECO SECURlfY COMMITTEE l ~ ~ ~ ~ ~ OMMTTE LEG LADMINISTRATIONPESNELPLANNING WORKS ONER ;~~~~~~~~~~~El:.I I.l-N - MATERIAL l -{ ~~~~~~~~~PLAGNN NG AD l - CONSTRUCTION j MAINTENANCE - COORDINATION l - ~~~~~~BDGE AONDRL BRIDGES AND j HIGHW/AY EQUIPMENTj - FINANCE l L ~~~~~~~~~~ENGINEERING l RECONSTRUCTION TRAFFIC AND DESIGN AND BETTERMENT DATA PROCESSING TRANSPORT - RESEARCH July 1971 Joly DISTRICT OFFICES (One in encl Stote, 1 ~~~~~excepl Acre and Gannoboro WOCRLD RANK 'R,

82

83 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT ORGANIZATION OF THE STATE HIGHWAY DEPARTMENT OF MINAS GERAIS (DER-MG) S TA SE GOV,RNORS,~lOhWAY COUNCIL CENERA )RECTOT SECRETARI1AT LEGAIL D)EPU'Y DIRECTOR L'---' ' OORDINATICN XCONI ROL PROSIANG INRORMATON AUDTTOR A EDOIN DES ON -AINTENANCE CONSTRUCTION 5U_O u 'R~~~~~~~TAES.C SERYICE tcontrol = ACCGUNTNO CONRO ECLO( C5 V'RAPFFCFr ATTISTANCT TO P RJECT OIES CO PEREONN T T LEER LC kc MUNICIPAL N Sl. TRAINI DES ON SJPPEL IL OFICES_ F INANCE_ SEE Cl. ECESI EMEN S.ESION.L OFFIE LITAS 3 REElh EL _E

84

85 NOTE ON MAPS The naps indicate all roads in the program, and do not separate out those to be fi;nced under the proposed project. To identify the latter, refer to Table 14 - Group A.

86

87 (~~~~ 6 < -- fi1 V E N E Z U E L A r ~~~~~~~~~~~~~~~~~~r C O L OMAA B'I A / (. o 1 / / *OAV1';, R.-.5/\i r>'sp 'T~~. ~ / h \ SA t ~ ---- */ --. _.,,sp w r. GwA ik']i S r AR. K /// 1K A.1. ', - _ Al AS _'',z ;E/oy j vn ' * ' 5 ' j V.0 rf 0E0 /-K-- j,pc * KIN ;t'- i,. K ;. V; r>q'i - 0 (g tt-/11 L 7Xf tts X D/ t V 7 W x,^ _X4S,~~~~~~ "K t1ri/ K $ 9M\ t \. ~ ~~. Z ~~~~~~~~~~~.-.. ; -4!! ; Ls t 0 O. < z O / G~~~~~~~~~T R O S S 0., /A. ; ' ' w vo 1970~ ~~ THIRD HIGHWAY CONSTRUCTION PROJECT Ko TID HIGHWAYs CONSTRUCE EThION PROJECT..g< _ NA er de9ne n. odgd..... osrcei.. nlnmen.. NSTHI2Z 1a T11 1sO P.-I sde rs ;a Ai ;g S X Tc Gl U ) R t A. n R AJ A e N t SRW L, t& / ig, {V.- g~~~~~~~~~~~~~~~~~~~~~~~~0

88

89 MAP 2 AZ 0-1 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~. ceritoro 0 s *gxf T A A~~~~~~~~~~~~~~~~~~~~~~ cpod.s,rr,o 4..d. 0% ~ ~ ~ ~ 0 '4 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~X S- -fs ss es30ssin WSE I M A~-'R A N HDA - O D-S 3++ Peirr + r <1S Bonobol 'nt sios Uh egt 0~~~~~~~~~~~~~~~~~~~~ >e i t Gertolimo > 12 \>^ Cotodo c >!!tmlogresr~ ~~~~~~~~~~ ~ k ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~6 c. > A-rr DtrTo9 ^- r, ^ -CU7Nt/\. ATATES MARANHAO, 5 POrF o Jtorrir^; N t+ PIAU AR A I A t. CMBIA VE 'UEL -, ARUGU^Y headqucrters s DE + Rctield t m3intenonce B AUH IT A 6 HIUHWAY BRZLU PROJECTB + + t < THuRD HIGHWAY N COEINSTRUETHI PROJECT + P R A M I~~~~~~~~ ~ rk Rcnds t Boiceo,> +rs*,v J fi_j.. A-- d,de Borncln MoroedJo- 6r STATES OF MARANHAO, PIAUI AND CEARA + PNB CUOOONY\ CHILE/ f IP4RAGAYb ++++ Plnned rorxds t 5 orri 4'n i, At 0 R..& ~~~~~~~d., -,t-t-~ 45 - PERUl.,~~~~~~~ UAY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*$/ PavE feld rods tofialdeninerin stnars 0 ehtd o 1 ~Swr I~~OCTO3ER e rs1l 1 HIGHWAYS INCLUDED IN PREVIOUS PROJECTSA( 0 E NTINAProntetocadnpaig1o e e 15 00AC A- eiuhways INCL.UDED IN TIHE THIRD PROJECT ' /A' Fee -on-oti-e ned/or pian-g ' /nleee/ r Store bo-dary 0-T08R 1971 lone 3rc4

90

91 T Stete BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT A t 0 STATES OF RIO GRANDE DO NORTE, PARAISA, / a A 2 c PERNAMBUCO AND ALAGOAS Mascara Mreuw A3 _ Pated rends B / ¾ stedndos d t....pane. s grade caoitruated Pa tirn engineerig 4 Unpaved reeds X' - - Reeds under senerruatran / X _ -4 3 r \ Jade Cdmrgene ++++-a-i Planned reads 4. 3,)I Ceend-cinim A DNER field mointenence heedquorters A rbe au at U DER field moienteese. heedqgerlere... HIGHWAYS For aenstreatise R INCLUDED IN THE THIRD PROJECT \ Se IPfl NATAL ed/oa peeg Cr Far detniled engineering Pe. dee *,r a, A *.t.... Far fe.sibility chdy a, F.errer o bendeny a.. tt.g A an A,- x GU~~~~~~~~~~~~~~~~~~~~as er S fxx~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1 SOLIVIA~~~~~~~~ ECUAOORI\ C We~ ~~~ 'K Prnnainn~ BRAZILpa,2i - a P.ree,ebece~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~ESO ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~-b6 5fX~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~aa PERUl -a- A/eject -,~ <50 7CI UCAC R7 P 155D A5 )\ ; v I B A ~~~~H e Ars-= A 1 AR ENTINA~~~~~~~~~~~~~~~~~~~~~~~~~~~~Rc VXARENEZUEA I +( BRAZIa-NTA ~~~ERUT A~~CTsE 17 J

92

93 PAE R N A M 8 U CA A I A U I PrX 4 'A r dlor. aras I^ S - xa Pord At ulo A ' Fe A H / Pr ra > *e^fffi ERU P BvCd $cods r J t... XMoou \\fi Nov N Beigado ARAC~~~~~~~~~~~~~~ A /_$,; F ~~~~~ l Conujdom h*j b O O *a... 6, 4 ~ ~~~~~~~~~~ THRoIHA OSRCTO RJC {j! CCUAOROR-X\,,>t'i'S'~~~~~ BRAZL s i STAES OF DAIA 0 AND SRGIPE S+ CEuoprroro. Ft,> A Pr ~ ;7-0 Unpov BBOLIVI,A ~ ~ ~~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I" I.!..,ArI d et r36 0 t.sg pwninrgdnod 1} flrouy * DE fild *eduotr oit nna BC Itbrtomrih stl h PRVOG A PRJcsU TPers COL GUIANA BRAZIL ~~Oo Sern'BRO r~~~~~~~~~~9~ ;AR2,ENTINA/ CTd cuk 1 )BRAZL s. STATES OF BAHIA AND SERGIPE F d~ ALDE ~~~~~~THIRD HIGHWAY CONSTRUCTION PROJECT A A-A S Pood rod, grode oon-nnoed.rood. nt. ro er-irrngnoddo4po.s UnIpavd rods S9 o Is s CHILE / Pl.d 1--4 "+ rood, S, NERI fied n-irteono reod,-onroai- r++ rd OAYsi DEN Braid -aiten-- Ne,dqu,anten,,1- HIGHWAYS INCLUDES IN PREVIOUS PROJECTST. ENIA NA _ p. p _oru-o and/or pa/,,g 0 HIGHWAYS INCLUDED IN THE THIRD PROJECT OCTOOO 194- Eon Od.le d _ng n-aing'rsron'' -~~.- SMta b-udary SUAISO ritdo nr OBRO 3580

94

95 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT STATES OF ESPIRITO SANTO AND RIO DE JANEIRO Paved roads/r oada grade constructed -t foal engineering etanrdaa.p CJd Urpased roads 00' TA* - R oads coder coostreonior A) Ecooir0' *c -s--a+-a--a- Pla.d roads A DNER ild _ea-n-erarc headgudq te-te- As o d, deau DER fheld rairteos.ee headquartere. Vo ada Fr..ci-co * S HIGHWAYS INCLUDED IN PREVIOUS PROJECTS - SVesec. at _ For coetrjctio- and/or pocing i HIGHWAYS INCLUDED IN THE THIRD PROJECT Fen orat-uti-o and/ct Ptei9 A 0 00 _.For detailed srgireerrg T/ D y f ya I cci... F., fesiait study / State bounda:y LrtArms k~ ~ ~ ~ ~ ~~~cce / civ c0 / d tl i $ V I T~~~~~~~ORI A A~~~~~~~~~~~~ 1 ~6 d1 9' Mrtsf, - I g J I t > k T 6 _ T x T AI,G t P:r 'z, / \ C99 p \~~~~~~- T F EGIUS Iht IGSOdF9 rquentoi FEBr UR 12

96

97 BRAZIL <, B k A THIRD HIGHWAY CONSTRUCTION PROJECT i ' '/f TA & STATE OF MINAS GERAIS IiA Po,ed rodo4,, Fr T t ~ A ' RAo.s grod. oasfruofedaof.ool eg.n.droosfordord f c ' Unp.V d k / / * - / Plned rood. i I t '' A ONER field m.-t... h..dq.rt.. r o\ * DER fo.ld moinenn... oodouooteos F ANHA HIGHWAYS INCLUDED IN PREVIOUS PROJECTS " - dr 4 A ' \ Coansroonond/or povlg -A< \_, N t 0aoDer (0As,O H-00000A0 rer FO6or$ HGHWAYS INCLUDED IN THE THIRD PROJECT A 4 A MA In,.\, I 4- s 0 0 ', Fr constquocsonond/or poong OofrAlodoog,ooor,rg For s"' q~ N w -\/IomsXX For I.osibilfy SIAdy MbAAAAo 51t to bo...dorf NA 0,~~~~~~~~~~~~~~~~~~k ~A;MMA '' A ooi 0A" ' ooie4g t MS 6A00 AArp 0... o-o- - 6M Ao0A006 oga A N.A00000 AM ' SAfe A FAIOOo 4 NM A~~~~F, -p. 0 JAtl UARY 1972 I RR D-aSdd0 H' 2 HOE 5~~~A FIJo pp ARARAN C'OL MElBIoA _ Q S 1$ P AMMo '~%'o T. VENEZUELA F~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A"''k- FR.SUIANJA LERASOFOPA A' CA' S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~PIA { tbraziln E 0' AW CHILE C!ARENTIN IC p~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

98

99 BRAZIL B o-t n,jal HIGHWAY MAINTENANCE IN THE 'a -. STATE OF MINAS GERAIS, / Poana roods 'a 4-f aav t at/.s / grodncons,ut,a Infdffnaltag,nten.n ttandaad..loans _ > a.s A, qt ap/ a /te a> g-d, x~~~~~~~~~~ arlaok P ~~~~~~~.d - Laapaaed noads a ft If iiif/ es a Raoqdsunder nanstncat,an P O K v d j f,aa rt a-.e- Planned.aade j x v A DNERA,edaantenanne - headajarters t. U DER t.elainted onae aadqla-ters Fa..aaa -- Itbe.anar t 4 Paint anannenanne region \V at5v at 4 'aa a'j/ _ h-jonnl haghaaos -n-oared ba DNER a - Pa-aherna P% Sa = 'a Ntaooq highaeyn ana-tand by DER 'e r '0' ; n a a a A State ba-ndany la' A ' - a Y 4 >) bs > ~~~~~\,~ 'Y q at d a,aan a_ -+- _t' a a-'.- Nt I N t A -~~~ ~~,aaa a-a 1t -Al - j, a-a- PI PIL AlAS OI O- 100 '"ann oaan,a>.-.a.af as-ab *AAREtaa..a...d n a-. In 0 aa 0 a a * l hl. Q - a a D Caa ;' alaaeer $aalta A0 tao.aisca MIS o> <* n' Ata 4 F at %aan.ala 1 /~~~~~~~~~~~

100

101 BRAZIL THIRD HIGHWAY CONSTRUCTION PROJECT STATES OF MATO CRDSSO AND GOIAS goode.rwds OR.,,C.O,RO fd. oimolgr,og.iondo,os Onpoocd roods PIRROSO roods I A DOER IeId mainta.nce heod,,a,t-ae U DER V1, mcintepno. headauaat..e RURoOo HIGHWAYS INCLUDEC IN PREVIOUS PROJECTS y hn FpT PRROhOHOC$I RR5/WRRoymg Rum s HIGHWAYS INCLUDED IN THE THIRD PROJECT ~~~~~Fp RwRSOtRHRRIRRROC tn/d0m r Y2 MA AN H A 4 K A M A Z O N A S -.adeped O _CM A R A N Ht \ 1 IS T PT n OR S dy, std1w 0.g dd F State RURARt- - - ' _' T I Intennatoe,O boondpro U~~~~~~~~~~~~~~~~~~~~I 9 I T _, t / v t '/ ROND I "I H m n +2:0 To P4/o fi t L^t v * HeXho \ s.f > \I+ A \~ ~~~~~~~~~~~~~~o / *'j- -- s Y,y jd+ p *r-/ofomi ' / ++ 0msos + ++A -s > + R3 o \ M A T O G R /X O S S Ot \-. YWrr*sS to/.01t MA 0 CR0850 ~~~~~~~~~~~~~~ + H AloAHo51 v d ttx ey6 of #o,aoo H~~~~~~AI L~ ~ *In6po21s t+ ^'6> 1ssr { ~:/ S M I N A S ~ ~~~~~~~~~~~~~~~~~~~~~~~~~Oonn h f d Rodoo A/ V RGUIANA~~~~~~~~~~~~~~~~~~~~~~~~~~~o + o IA B O L I V I A X 2 os 559 tt t t ++\ tt ; Coau d 09 GU P^R%EhTINA A R A -bs H t?~~~~~~~~~~~~~~~~~~~~~~~~~~ws.a f5 SaRO:mp wmr R. K:on 95 PARAGUAY~~~~~~~~~~~~A,,,anN COL~rJ R14 FNSAIAN MBA$ juz DU 4 O~A absp6 A

102

103 MAP 9-2'aM ATO GROSSO \/ ~ /BKF-u.el t j6. \ fsgrjnd P bewbbrazil THIRD HIGHWAY CONSTRUCTION PROJECT r. F' Fj dvs.i1 Fd rda STATE OF SAO PAU LO di ~~~~ nj lis roaxds isgwt N.,oWl ~ / HIGHWAYS X ~4 Joaquim INCLUDED SFFrowa IN 1 THE 1r\$> THIRD PROJECT < A < \-o M < ri > Itusessa 0 > -Pa~~~~~~~~~~~~~~~~~~Pvedd G-'ladi ".1 tala T-rbt... For feasibility stdy - - A.1-9o-&-o; \ u,o rrulurv - -State boundaries F '< uncueimbu _ < \<:Pmmissw 1\ S MATA0 W S d~~~~~~~~ Vi1-ot ~ _ ~~~~~~~o MI N AS G E R A I S mi-d E7A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CMIO P'v s.n< davt IGrd Et\P;,SU / (' \ M.po Tve \, 9.r JaMb dorba Ba\ ouv t~ ~ ~ ~~~~~~~nriv sninm; P~~~~~~~~~~~~~~~~~~~~o os.p Pv,ulit C rwr \g WWI i. ~ ~ ~ ~ ~ ~ ~~~~~~~~~L~in yva ~na4 1 )9Civs Mor-aPAnorlo a.i- 12~~~~~~~~~~~~~~~~~~~~~~~~~~ K coo ' - -f; ECOPn 159 ovr CJ Rir-,D Cvrirlbo ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - D-.1-d~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~'e 972~ ~... ~~~~ ~~~~~~.6 0 i 6 ~~ ~ ~~~~ JANUARY %R -N litw no rrc ~PARANA Ypu ^\Xnd 26LOs Atlantic Oceanx nanua'y 1972 G I'a dr. 30

104

105 BRAZIL T/ u,- Pt.. S A 0 P A U L- 0 THIRD HIGHWAY CONSTRUCTION PROJECT STATE OF PARANA ~~~~~~~~~~~~Paved roads pl. P Rods grade constructed to final engineer-g 0 / cvnvv NOe 7$L-d. standrd CAMBARA ~~~~~~~Unpaved roads,45 PARANA'Al ~~~~~~~~~~~~~~~~~~~~~~~~~~~- -Roads sder conlstruct on v~~i ~~ JAq, 0 p,,v 4 MPAA nn~~l- vor-,,nho.. s---- Planned roads Tc DAd/AJAr A~~ A'4 ~ ~ ~ Anl i noi D NER field mraistenance headcvarters 0 I~~~~~~ ~ ~~~~~~~~~~ b-6onno ~ ~~~~~~~~ ~ ~~~~~~~b,p' 0 'S ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~NRA'l,~d,I HIGHWAYS INCLUDED IN PREVIOUS PROJECTS Pi.tn. DE R livid maintnonana headqarter a ~~~~~~~~~~.n~~~ Condida Icpncv +A RPOGA 6 Fo o.,cto,adorp.. %BRAZIL ~~~~ordt,ldegiern 00015dM r CV -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Frosruto ndo wn COL MBIA( t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ PROOtOSO~~~~~~~~~~~ ECOAOORI\ CV s4 Pvrq~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~n laccionvi~~~~~...fl esbiiy td N~~~~~~~~~~~~~~~~~~~~~~~~~~.01t ttebudr PER5\X~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Itrainlbudr BOLIVIA~~~~~~~~~~~~~~~~~~~~~~~~~~~~+-1 Paroad -Olqr Thk~~~~~~~~~~~--- CHILE { '-p ~~~~~~~~~ '' E 0/FAA~G OMSGUAT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ [~~~ENflNA ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ bgid.su A Al C CO,R6. ~ A t. ~ ~ ~ ~ ~ ~ ~ 00351

106

107 *,/ T Sampoio PtoC S A O P A U L O BRAZIL MAP 11 HIGHWAY MAINTENANCE THE STATE OF PARANA Paved roads L ~~~~~~~~~~~~~~~~~~~~~~~~~~~* Roads grade constrcted to flina engineerng standards P... I. ~~~~~Unpaved roads PARANAVAI ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~ -- Roads under co-otrci,an v 9 aaeir, -4---f-- Planned roads ~ ~ ~ ~ ~~~maraso ncoa DNER fi eld mwaitnonc heaodlqafer,0- ~ a Piarirj a * DER field maintenance headqteafrs 'r 9edo -W + _LONDFINA \s \d penal National highway ma 1teeance by DNER D.4A MAR15V J e, ARAPONGAS - N Fatimao J State highway mainenance by DER \S c I bogy m - Natiana highway mntenanc by DER tt=~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~n C.n\g. nh\ I D t~~~~~~~~~~r, O, g. -- o<d d. o O,t. x tc astro jvp o A to aemo ArulOacl- ~~, 7" ~ 05 '0 ot 05Ro-dt V j ~ ~ 'cieve lardic -e r +or tieie VE9 ZEL J '- i / /----'A-LAo w CCL MBIA L-np- S ANS.T AN PUAIVN FRia U^Y IA VIA h 0. toanicaralei Bronco '$5 t OCE EGUA5 R\ -,f EgN C'ur / To EeAs 7 - llhrs <CiIdLES IR7 CCL~~~~~~,. RINAM A unalae SPv-OOt PEU S- A( lt R I N A :IR_5 VENEZUELA ~~~~~ ~N ATAOA

108

109 N <. P A A N L'SC"- L k'. ~'* X I *oo' "S ; 5oFL odo2 z o1 M /GUEL CAD0 \00 COLOMBIA ~~ 4~~~~ ELMODR/\ -s--f-*--r- Planned reads E~-b,d - "< A T-U-OORAAC VEEZUELA... Roads grade oonatnruted to final engineeringstandards... s_v/- O COLOMBIAt s4ln AM Unpased roadspdcd > _ r s r- 47 '/ '* ZI * DR ER t sid rna'rrenanoe B AZIL headgjaptprs J U * DE R tiald erairterap,e headguartera t tg oc m n. '2U HIGHWAYR INCLUDED IN PREVIOUS PROJECTS f,bolpiv A Po ogrons,ruat,ar and/ar peoleg jx Meo //o } i 94_ \ ~~~~~~~~HIGHWAYS INCLUDED IN THE THIRD PROJECT t \/ CHILE/ IMMAR G_Seats Fpor nansepos lion and/sr pasing )2*>v '7 Cao/^-Corsn Pa... teasibillty...- Fr stodp I A A A N U vx turuguay T,- - Dtate beandary V G-d. ",;AHINA~~~~~~~~~~ -- teneatianal basedarynn9 y,/ Ci 0q AErosna 1071 Po r/o A /eg6 n ED39

110

111 .AP 13 4 B-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 d " P ~ ~A R A N A FMafro - X N ACANOINHAS ' Rt '.,, W I - - %ao F~ano4co do So. 14 $~~~~~~~~~~~~~~~~~~~~~~1 4QESTE t.tarau kunso tcocador P. G E. )f X P. T.t _ %_ I SAOoz JOAQUb.see -5 A N.. D r G loran. d.p Upaved rxads s. - -Roads under construction doeo=53 -t-4+++-e Plaonna roads 4.S7 A OSNER tield mainfernnonc Seadgoarfers \4{ Y octo3er 1971~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ * be R field maintenance headquarters c,u o r PIlot noinfenonos regior 4 ~ierc S_ O_g_ S t / rrid Notional bigtowoyo m:intodned by DNER Ira /ct 0 Stooe liigtouryn nrointoinnd by DIER Nhotnol bigrovyn muintoined by DIER -. rrv Stoto boundary RA G A, - nfernofinosl boundory ORORYfGOA o~ ~ ~~cioone _r ( no bo dosul OcyobEy loll to ao,er/ t - i

112

113 1,~~~~~~~~~~~~~~~~~~~~~~~~~~~o i.o. 4Y.4' 's JAN LARY \ 7,>++ Ro + t o ti 197> ~ ~ ~ ~ ~ ~ " VEZ~UELA BRAZIL TH t+t+ N. I 2 ROROCOE O CO MEUlAf - FR96UA THIRD HIGHWAY CONSTRUCTION PROJECT CCLAO/ M61 vi 1'oen/? F.GIN STATE OF RIO GRANDE DO SUL ' / 7 X ( S SE2'>'5 2~ ~ ~~~~~~~Hod gpoded crorrore t frlorgl noolngorogsc4rdordo/ BRZI ++++ pooned oode 2X / CHlLEl!~~~~~~~~~~~~~~~ IJ OtOf#e* ER field rro.nto nooe hoodqoorrer. -ova,uao For oonorot.ruion rdforoer tng ii( fjf (tar >ENTI NA Itc.. For tedlb.iiry td / qtk i./ '-Sroreboordoe F or d9ret,uor,oron qd/oc p000ng A t~~~~~~~~~~~~~ ---- Inrrorrolonol boordoro RD39

114

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