STAFF APPRAISAL REPORT REPUBLIC OF POLAND ROADS II … · framework; and (vii) advise on the operation, management, and administration of the road sector on road safety issues, and

Document ofThe World Bank

Report No. 17085-POL

STAFF APPRAISAL REPORT

REPUBLIC OF POLAND

ROADS II PROJECT

October 7, 1997

nfrastructure Sector Unit: urope and Central Asia Region

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CURRENCY EQUIVALENTCurrency Unit = Zloty (ZI)

(as of September 1997)

US$1.0 = Z13.5

WEIGHTS AND MEASURES

Metric System US System

I meter (m) 3.2808 feet (ft)I kilometer (km) 0.6214 mile (mi)I square kilometer (kM2 ) 0.3861 square mile (mi2 )I metric ton (m ton) 0.9842 long ton (Ig ton)I kilogram (kg) 2.2046 pounds (Ibs)

Poland: FISCAL YEARJanuary I - December 31

ABBREVIATIONS

AADT - annual average daily trafficABiEA - National Motorway Agency (Agencja Budowy i Exploatacji

Autostrad)BPRSD - Road Network Development Office (Biuro Planowania Rozwoju

Sieci Drogowej)COMECOM - Council for Mutual Economic AssistanceCEE - Central and Eastern EuropeCTC - centralized traffic controlDC - direct contractingDODP - Regional Administration of GDDP (Dyrekcja Okregowa

Drog PublicmychEBRD - European Bank for Reconstruction and DevelopmentEA - environmental assessmentEIA - environmental impact assessmentEIB - European Investment BankERR - economic rate of returnES - executive summaryEU/G24 - European Union/Group 24FA - force accountGDDP - General Directorate of Public Roads (Generalna Dyrekcja

Drog Publicznych)GDP - gross domestic productGOP - Government of PolandGUS - National Institute of Statistics (Glowny Urzad Statystyczny)HDM - Highway Design and Maintenance Standards ModelIBDiM - Institute of Road and Bridge Research (Institut Badawczy

Drog i Mostow)ICB - international competitive biddingIDA - International Development AssociationIFIs - international financing institutionsIMF - International Monetary FundIRI - international roughness indexIRT - International Road TransportIS - international shopping

This report was prepared on the basis of an appraisal mission to Poland in Septenmber 1997. The mission was led by LuisF. Revuelta (Transport Engineer; ECSIN). Mission members were Jagdish Jassal (Procurement Analyst, ECAVP), ElenaKastlerova (Program Assistant, ECSIN), Piotr Krzyzanowski (Environmental Specialist, ECSRE), and Andrei latsenia(Emergency Specialist, ASTEN). The Peer Reviewers are Messrs. Jacques Yenny (ECIIN) and Enrique Pinilla (OPRPR)and the Economist and Disbursement Officers Messrs. Graham R. Smith and Joseph P. Formoso. The Poland CountryDirector is Mr. Basil Kavalsky, Infrastructure Sector Director is Mr. Ricardo Halperin, and Transport Leader is Mr.Christopher Willoughby.

JSC - joint stock companyLIBOR - London interbank offered rateLOT - Polish Airlines (Polskie Linie Lotnicze)MIS - management information systemMTME - Ministry of Transport and Maritime Economym/mr - man/monthMW - minor worksNBP - National Bank of PolandNCB - national competitive biddingNEAP - National Environmental Action PlanNBF - not Bank-fmancedNGOs - non governmental organizationsNPV - net present valueNRN - National Roads NetworkNS - national shoppingPA - Port AuthorityPEKAES - International Road Freight Company (Panstwowa Komunikacja

Samochodowa)PIP - Project Implementation Planp-km - passenger-kmPKP - Polish State Railways (Polskie Koleje Panstwowe)PKS - Bus Transport Company (Panstwowa Komunikacja Samochodowa)PMS - Pavement Management SystemPMU - Project Monitoring UnitPOL - Polish Ocean LinesPOLKOMBI - Polish Combined Transport (Polski Tranport Kombinowany)PQ - prequalificationPSK - Polish Domestic Freight Shippers (Prezedsiebiorstwo Spedycji

Krajowej)QCBS - quality and cost-based selectionRIP - Road Investment ProgramRUC - road user chargesSA - Special AccountSME - small and medium enterprisesSOEs - statements of expenditureTA - technical assistancet-km - ton-kmTM - traffic managementTMIS - Transport Management Information SystemTOR - terms of referenceVAT - value added taxvoc - vehicle operating costsvpd - vehicles per day

POLAND

ROADS II PROJECT

STAFF APPRAISAL REPORT

Table of Contents

CHAPTER .................................................................. PAGE NO.

LOAN AND PROJECT SUMMARY .................................................................. (I)-(III)

I. THE ECONOMY AND THE TRANSPORT SECTORA. Economy ................................................................... 1B. The Transport Sector ................................................................... 1C. Previous IDA Involvement in the Transport Sector .................................... ..................5

11. ROADSA. Road Network and Traffic ................................................................... 6B. Administration and Organization ................................................................... 8C. Planning, Execution and Supervision ................................................................... 9D. Road Financing and Expenditures ................................................................... 9E.Taxation and Road User Charges .................................................................. 11F. Traffic Safety .................................................................. 13G Environmental Aspects .................................................................. 14

III. THE PROJECTA. Project Background and Objectives ...................................................... ............ 14B. Project Description .................................................................. 15C. Design and Engineering .................................................................. 18D. Cost Estimates .................................................................. 18E. Project Financing .................................................................. 20F. Implementation and Monitoring ................................ .................................. 21G. Procurement .................................................................. 22H. Disbursement .................................................................. 26I. Accounting and Auditing .................................................................. 28J. Environmental Impact .................................................................. 29

IV. ECONOMIC EVALUATIONA. Framework .................................................................. 29B. Cost-Benefit Analysis .................................................................. 30C. Project Risk Analysis .................................................................. 31

V. AGREEMENTS REACHED AND RECOMMENDATION ............................. ...................... 31

TABLES

1.1 EMPLOYMENT STRUCTURE IN TRANSPORT IN POLAND AND IN THE EU IN 1995 ........... ...........51.2 SHARE OF TRANSPORT INVESTMENTS IN TOTAL DOMESTIC INVESTMENTS ............. ................52.1 ROAD NETWORK IN POLAND ............................................................. 72.2 CHANGES IN GDDP STAFF ............................................................ 8

2.3 EXPENDITURES ON NATIONAL ROADS ................................................... 102.4 RETAIL FUEL PRICES ................................................... 123.1 PROJECT COMPONENTS AND COST ESTIMATES ................. .................................. 193.2 FINANCING PLAN ................................................... 203.3 PROCUREMENT ARRANGEMENTS ................................................... 233.4 DISBURSEMENT AND PERCENT OF EXPENDITURES TO BE FINANCED ...................................... 27

ANNEXES

1.1 STRUCTURE OF THE STATE RAILWAY SYSTEM IN POLAND2.1 TRAFFIC DEVELOPMENT2.2 EVOLUTION OF THE ROAD VEHICLE FLEET 1990-19952.3 INTENTIONS AND AIMS OF MTME WITH REGARD TO DEVELOPMENT OF ROAD

SECTOR IN POLAND2.4 GDDP GEOMETRIC STANDARDS2.5 NUMBER OF ROAD ACCIDENTS REPORTED, PERSONS INJURED AND KILLED3.1 LIST OF CONTRACTS3.2 LIST OF RESERVE TASKS3.3 CONTRACTS FOR EMERGENCY REHABILITATION OF FLOOD-DAMAGED ROADS AND

BRIDGES3.4 ROAD MAINTENANCE EQUIPMENT, VEHICLES AND MATERIALS3.5 ROAD SAFETY AND SIGNALIZATION EQUIPMENT, VEHICLES AND MATERIALS3.6 TECHNICAL ASSISTANCE AND TRAINING3.7 ROAD USER CHARGES STUDY - TERMS OF REFERENCE3.8 PROJECT IMPLEMENTATION PLAN3.9 PROCUREMENT PLAN AND SCHEDULE3.10 PERFORMANCE MONITORING INDICATORS FOR PROJECT ACTIVITIES3.11 SCHEDULE OF DISBURSEMENTS3.12 ENVIRONMENTAL ASSESSMENT TOR FOR THE CONSULTANT4.1 ECONOMIC ANALYSIS OF COST AND BENEFITS4.2 DOCUMENTS IN THE PROJECT FILE

CHARTS

1 ORGANIZATION CHART OF MTME2 ORGANIZATION CHART OF GDDP3 ORGANIZATION CHART OF THE COUNCIL OF ROAD SAFETY

MAPS

IBRD 28740 - PROGRAMMED WORKSIBRD 29040 - EMERGENCY WORKS

i

POLAND

ROAD II PROJECT

STAFF APPRAISAL REPORTLoan and Project Summary

Borrower: Republic of Poland

Beneficiary: Ministry of Transport and Maritime Economy (MTME); andGeneral Directorate of Public Roads (GDDP)

Amount: US$300 million equivalent in two Single Currency Loan (SCL) Tranchesof US$150,0 million and DEM270.4 million, respectively.

Terms: 15 years maturity including a 5-year grace period, at the Bank's LIBOR-based floating interest rate.

Poverty Category: Not Applicable

Project Objectives: The main objective of the proposed project is to support and speed up themodernization of the road sector operation along the lines of environmentand traffic safety policies initiated by the Government under the RoadsProject, Loan 3564-POL. Specifically, the project would: (i) improve themain national road network (highways, bridges, bypasses, intersections);(ii) urgently reconstruct and repair flood-damaged high priority roads andbridges; (iii) study and solve the rutting situation on the network; (iv)promote the competitive capacity of domestic contractors throughimprovement of their technical, managerial, and financial capacity; (v)improve the road safety situation; (vi) adjust road user charges fordifferent vehicle types to cover the economic costs incurred by each typeof vehicle, and to achieve a well balanced combined transportframework; and (vii) advise on the operation, management, andadministration of the road sector on road safety issues, and itscoordination with the National Traffic Police.

Description: The project would be fully part of an ambitious 1996-2000 RoadInvestment Program finalized by GDDP, to be implemented during 1998-2002. Specifically it would include the following three main areas ofPolicy, Institutional and Physical Investment:

1. POLICY: (i) adequate maintenance and strengthening of high priorityroads, including bridges, and winter maintenance, with adequate budgets;(ii) review and adjustment of road user charge levels and distributionbetween different user groups in order to achieve a reasonable balancebetween costs and revenues; (iii) further action on the road axle-loadpolicy, initiated under the Roads project in consonance with that inWestern Europe; and (iv) establishment of a leasing policy to enhanceand speed up privatization of local contractors.

2. INSTITUTIONAL: (i) further restructuring, privatization, and development ofthe road contracting industry, focusing on the improvement of itsmanagerial, financial and technical capacity, and on the establishment ofprofessional associations to enhance their competitiveness; (ii)improvement of the coordination, collaboration and operation of theAgencies (Transport, GDDP, Ministry of Interior, National Police) on theongoing road safety program; and (iii) assistance to the vehicleinspection center network as a part of road safety and environmentalmeasures.

3. PHYSICAL INFRASTRUCTURE: part of the agreed GDDP 1996-2000 RoadInvestment Program consisting of: (i) rehabilitation, upgrading,realignment, and resurfacing of priority roads sections and their crossingsthrough cities; (ii) reconstruction and upgrading of 2 bridges, andconstruction of 3 new major bridges; (iii) construction of 12 bypassesaround congested cities; (iv) emergency reconstruction of flood-damagedhigh priority infrastructure (roads and bridges); (v) acquisition of roadmaintenance equipment, vehicles and materials, and road safetyequipment, vehicles and materials; and (vi) technical assistance (TA) andtraining for the ongoing road safety program, and in the fields ofmanagement, planning, pavement and maintenance systems, protectionof the environment, modem design and construction techniques, andfurther privatization of local consultants and contractors.

Benefits: The project will reduce: (i) vehicle operating costs; (ii) futurereconstruction expenditures through timely and adequate maintenance;(iii) road accidents; and (iv) construction costs by introducing the localconstruction industry to open competitive bidding procedures. The ERRfrom the civil works included in the project has been estimated at 25percent.

Risks: The main project risks are: (i) the availability of adequate local funds;and (ii) the ability of the institutions to implement the project on time. Inorder to reduce these risks, the GOP agreed at negotiations to: (i) budgetlocal costs (US$240.0 million equivalent) and, if the case arises, any costoverrun; (ii) consult GDDP's budget with the Bank on an annual basis;(iii) progressively increase GDDP maintenance budget in order to ensureappropriate maintenance of the national road network; (iv) retain theexisting PMU for the project; (v) prepare first year's road/bridge/bypassworks program; and (vi) execute the Project Implementation Plan inaccordance with defined monitoring criteria, and reporting arrangements.

Project ID Number: PL-PA-8593

iii

POLAND

ROADS II PROJECT

Estimated Costs and Financing Plan(US$ million equivalent)

Component: Locall Foreign l TotalA. CIVIL WORKS(a) Rehabilitation, upgrading, realignment

and resurfacing of priority roads sections (522 km) 111.7 106.0 217.7(b) Reconstruction of 2 bridges, and construction

of 3 major new bridges 10.6 10.4 21.0(c) Construction of 12 new bypasses (61.7 km) 69.7 66.6 136.3(d) Emergency reconstruction and repair of flood-damnaged

high priority roads (300 km) and bridges (1.6 km) 26.2 39.2 65.4Su_bto d civil works 218.2 222.2 440.4B. GOODS(a) Equipment, vehicles, and materials for road maintenance 0.8 12.0 12.8(b) Equipment, vehicles, and materials for road safety 2.7 10.0 12.7Subtotal goods 3.5 :22.0 25.5C. TA and TrainingTA and Training - 1.7 1.7

(A+B+C) BASE COST 221.7 245.9 467.6D. Contingencies: Physical (10%) 22.1 24.6 46.7

Price 15.1 10.6 25.7TC COS .... iN. T 2 . F

Financing Plan(US$ million equivalent)

Component: Local Foreign TotalGOP 240.0 240.0IBRD 18.9 281.1 300.0

TOTAL FINANCING 258.9 281.1 540.0

Estimated Loan Disbursements (US$ million equivalent)

IBRD Fiscal Year 1998 1999 2000 2001 2002 2003Annual 20.0 40.0 80.0 80.0 50.0 30.0Cumulative 20.0 60.0 140.0 220.0 270.0 300.0

6.6 13.3 26.7 26.7 16.7 10.0

Economic Rate of Return (ERR): 25% (civil works)Map: IBRD 28740 - Programmed Works

IBRD 29040 - Emergency Works

-1-SAR Roads II Project. Poland

I. THE ECONOMY AND THE TRANSPORT SECTOR

A. Economy

1.01 Unparalleled by any other of the East European post-socialist economies, Poland hasentered its sixth consecutive year of fast economic growth (on average 6 percent in 1995-96).Against a background of sound fiscal and monetary policies (the fiscal deficit averaged 2.6percent of GDP in 1994-96), large internal and external imbalances have been avoided; thiscontributed to a gradual, albeit persistent reduction of inflation to 18.5 percent in 1996. Soundmacroeconomic policies and continued structural reforms (although implemented at a slowerpace than in the early 1990s) have gained the confidence of foreign investors with capital inflowsrepresenting over 2.1 percent of GDP in 1996. Sustained growth in the future will requiredeepening the structural reform agenda, particularly in those areas which will help to consolidatePoland's fiscal situation in preparation for European Union (EU) accession (pension reform, coalsector reform, specialized banks restructuring, faster privatization, tax administration reform),particularly, because of the stress that large investmenlt needs (for EU environmental compliance)will place on the budget.

1.02 The recovery has been broad-based, and important gains in productivity have been registeredacross sectors, with few (but significant) exceptions. Industrial production, led by strong growth inmanufacturing, has been steadily expanding for four years (1993-1996), and so have constructionand services (particularly in the private sector). Agriculture after being hit by a serious drought in1994, recovered and is estimated to have grown by 9 percent in 1995, and 2.4 percent in 1996. Thedynamism in the economy was entirely attributable to the expansion in the private sector, whichgrew at an estimated 15 percent annual pace in the industrial and service sectors. The economy hasbenefited from the positive impact of the resurgence of growth in Western Europe. Moderateaverage growth in the public sector reflects an overall good adaptation to the changing economicenvironment, particularly hard budget constraints. However, the public sector continues to beburdened with a number of large loss-making enterprises where restructuring, including furtherdownsizing of activities, is required (coal, steel, defense and railways). Recent July 1997 floodshave produced damages, preliminary assessed as 2 percent of GDP. This will represent anadditional constraint to the economy.

1.03 While on the supply-side the recovery has been broad-based, on the demand side there hasbeen a shift of pull factors from exports (in 1995) to domestic consumption (in 1996); investmentkept growing fast in both years (on average 24.5 percent growth). The external counterpart hasbeen a shift from a strong (and unsustainable) current account surplus in 1995 (3 percent ofGDP) to a small deficit in 1996 (1 percent of GDP). However, in view of strong capital inflows,foreign reserves kept growing during 1996 by $3.3 billion (they increased $ 8.9 billion in 1995).

B. The Transport Sector

1.04 System and Infrastructure. Related to country area, 313,000 km2, and population, 39million, transport densities are at an average European level. The system includes about (i) 372,479km of roads (Table 2.1), of which more than 65 percent are paved (119 km/l00 kmn2; CEE: 128km/lu 00 kin2), (ii) 24,000 km of railway lines (Annex 1.1), of which 48 percent are electrified (CEE:38 percent on average), (iii) seven major ports with international traffic (Gdansk, Gdynia, Szczesin,

-2-SAR Roads 11 Project. Poland

and Swinoujscie in the Baltic sea, and the river ports of Gliwice, Warsaw, and Wroclaw), (iv) 4,000km of inland waterways, navigated by regular transport services, mainly on the Vistula (60 percent)and Oder rivers connected by the Bydgoskim canal in north-central Poland, and (v) four airportswith scheduled international connections, as well as a large number (134) of domestic airports.Poland has about 6,800 km of oil and gas pipeline.

1.05 Sector Transformations. The present situation in the sector is shaped by two main factors:the legacy of the past and the ongoing restructuring of the economy. In Poland, as elsewhere inEastern Europe under the former (planned economy) system, there was a general lack ofcompetition, pricing was unimportant, and enterprises were vertically integrated, providing theirown technical and social services. There was a high degree of centralization in decision-making.In transport this led to a small number of very large organizations, some with more than a hundredthousand employees. A deep transformation of objectives, policies, structures and operations isnow underway to achieve important physical and institutional targets with due regard to quality,financial and other efficiency criteria. At the same time, modernization of certain parts of the sectorand a strategic geographic redirection of traffic (from former Soviet Union countries to EU andother Western countries), putting emphasis on closer integration with the economies of WesternEurope, are of high priority. Poland is expected to be in the first wave of former CEE countries tobecome members of the EU.

1.06 Foreign Trade and Freight Traffic. During the last six years, Polish exports (mainly coal,copper, sulfur, ships, foods and chemicals) reached a level in the range US$12.0 to 15.0 billion.Exports grew 9.3 percent from 1995 to 1996. More progressive imports of goods (mainly: crudeoil, fertilizers, machinery and electric equipment) increased sharply and reached in 1996 nearlyUS$16.0 billion, an increase of 120 percent compared with 1989 (and 29 percent from 1995 to1996). For the coming period till year 2000, it can be expected that Polish exports will focus onproducts which take advantage of its low labor costs, as in the textile and clothing industries. In theevent Poland becomes a full member of the European Union, export opportunities for agricultureand the metallurgical industries could grow. This trend is likely to continue, gradually making thedistribution of freight traffic between rail and road traffic in Poland more similar to that in WesternEurope, where it is about 25/75. In Poland, reflecting the growing importance of road transport,this ratio is currently 40/60.

1.07 Transport Sector Administration. The Ministry of Transport and Maritime Economy(MTME) has overall responsibility for transport sector policy and infrastructure within thegovernment structure. The Ministry's responsibility covers road, rail, air and maritime and rivertransport and infrastructure, plus some related activities, such as a few minor shipyards locatedwithin the port areas. The legal arrangements and actual operating arrangements between theMinistry and its department entities vary (Chart 1), covering the full range from fully autonomousadministrative agencies such as the General Directorate of Public Roads (GDDP - GeneralnaDyrekcja Drog Publicznych, Chart 2) to enterprises in which the Government retains control.MTME's main functions are: (i) policy formulation of all aspects of transport, including safety andenvironment; (ii) elaboration of sector budgets; (iii) allocation of budgetary subsidies betweensubsectors and enterprises; (iv) overall supervision of entities such as Polish State Railways (PKP -Polskie Koleje Panstwowe), GDDP, Bus Transport Company (PKS - Polska KomunikacjaSamochodowa) and Port Authorities; and (v) passenger tariff approval.


1.08 Sectoral Policy. The Transport Policy Paper issued by MTME in April 1996, andsubsequently approved by the Council of Ministers, spells out the priorities of the national transportpolicy. The main priorities are to: (i) remove bottlenecks in the transport system; and (ii) achievehigh economic, social and environmental effects, so as to strengthen the competitiveness of PolishTransport organizations, and hence of the national economy. The main issues still confronting thetransport sector are the restructuring of state-owned transport organizations and related employmentstructure, competition and modernization, and tariffs and cost recovery. An additional unexpectedissue is the repair of the damages to transport infrastructure through the recent July 1997 floods.

1.09 Restructuring of state-owned Transport Organizations. The restructuring process hasbeen underway for several years already, and many new independent enterprises have been set upout of former large state monopolies. The Bank's First Transport Project contributed to thisprocess, in railways (Loan 3194-POL) and roads (Loan 3193-POL). One common way of dealingwith public companies includes a two-step approach, whereby: (i) they were first converted(commercialized) into joint-stock companies, the shares of which remain fully owned by theMinistry of Treasury during a specified time period; and (ii) at the expiration of this transitoryphase, shares were to be sold in part or in full to internal and external investors. The second step ofthis process has proven more difficult than the first, and reaching agreement on the conditionsunder which investors will participate has not yet been fully achieved.

1.10 The five biggest road construction companies in Poland (GPRD Gdansk, Dromex, PPRMPlock, KPRM Kielce and WPRD Warszawa) have been converted into joint-stock companies,where less than 50 percent of the company value is owned by Government and the rest belongs toemployees. Furthermore, there are about 230 small construction companies in Poland, which wereconverted into joint-stock companies as well, where more than 50 percent of the company is ownedby the Ministry of Treasury. The restructuring of the Bus Transport Company (PKS) resulted in theemergence of 174 independent companies whose founding organ is the Ministry of Transport andMaritime Economy. The privatization program of these companies is based on the model used inthe Czech Republic and Hungary.

1.11 In rail transport, PKP (Annex 1.1) is pursuing a restructuring program which separate trainoperations organizationally from infrastructure and create separate lines of business (profit centers)for freight and passengers, while preserving the integrity of the company as a whole. A lawrestructuring PKP was passed in July 1995, stipulating that PKP should be organized along lines ofbusiness, separating freight train operations, passenger train operations, rolling stock, andinfrastructure. The new organization is to be tested in PKP's Eastern Region during 1997 and to gointo effect nationally at the start of 1998. This may lead to privatization of several rolling stocksuppliers and specialized infrastructure companies, as well as non-transport enterprises which arefunctioning within the present structure of the PKP. PKP would sell off unnecessary or obsoleteassets, as far as possible. PKP restructuring in the short and medium term calls forcommercialization rather than wholesale privatization of the existing railways.

1.12 Polish Airlines (LOT; Polskie Linie Lotnicze) is the main Polish air carrier and is fullyowned by the State Treasury. In anticipation of the EU's policy of open skies among memberstates, LOT is already commercialized and profitable. It is soon to sell shares to private investorsfor the first time, and expects to strengthen its ties with a strategic partner, American Airlines (AA),


in order to improve its access to the American market and to AA's international ticket reservationsystem. Traffic to its main markets of Germany and other EU destinations has been growing since1993 at about 15 percent per year. LOT's fleet is exceptionally young as a result of the replacementof its entire Soviet aircraft fleet in 1993 and 1994 with a fuel-efficient Boeing fleet. The newairport in Warsaw, which has runway capacity for 10 million passengers per year, is somewhatlimited to the present 2.5 - 3.0 million passenger traffic by the capacity of the terminal building.Demand is growing for investment in regional airports to bypass Warsaw.

1.13 The Baltic ports of Gdansk, Gdynia, and Szczecin-Swinoujscie handle 95 percent of Polishmaritime traffic (about 52 million tons in 1994). They have been restructured since late 1991 intothree joint-stock companies. Each Port Authority (PA) became independent of MTME movingfrom operating companies under MTME to full-scale PAs. They have separated the operating unitsfrom the management bodies, setting up private commercial companies. The new draft Port Lawwould entrust the PAs with the authority to act as landlord ports, i.e., managing the publicinfrastructure assets, while endorsing the commercial activities to separate private operations fullyindependent from the PAs. In inland waterways transport the effects of restructuring have led to: (i)3 enterprises are owned by voivodships; (ii) 3 companies have been commercialized; and (iii) 2companies have been liquidated. River ports, as elements of the national infrastructure, are to betransferred to the control of local government entities. Some of them are to be used by ship-owningcompanies, others are to become the property of industrial firms. Inland waterways, because oftheir attributes and strategic importance, are to remain state owned.

1.14 The modernization of the transport system also requires better coordination between thedifferent transport modes. Combined road-rail transport has already met with some success inPoland, but the physical facilities need upgrading, and the organizational arrangements are not yetoptimal. The Bank's Roads Project (Loan 3564-POL) has begun addressing these issues through aPilot Program, still under preparation by the Polish Combined Transport Agency (POLKOMBI;Polski Transport Kombinowany). Combined transport can also include a better use of the waterwaynetwork.

1.15 Tariffs and Cost Recovery - Tariff controls have been abolished for freight transport both byrail and by road. For passenger transport the railway tariffs are government controlled and abouttwo thirds of all passengers pay a reduced tariff (only about 30 percent of costs in 1993). This isbeing changed gradually through sharply increased tariffs. While cross-subsidization from freightto passenger services is substantial, it has diminished since PKP passenger fares increased in realterms about 40 percent between 1993 and 1996. A contributing factor to the decrease in cross-subsidies has been the cessation of low volume services, both in rail and road, and the transfer ofvarious PKP and PKS services to the private sector.

1.16 Present shortcomings of the Polish transport system include excessive employment levels insome subsectors. Such a situation exists mainly in rail transport, but generally the employmentstructure does not fit the requirements of a modern transport system. Differences with theemployment structure in the EU are highlighted in the following table:


Table 1.1 Employment Structure in Transport in Poland and in the EU in 1995 (% of totalemployment in the Transport Sector)

Subsector EU PolandRailway Transport 16.1 51.4Inland Water Transport 0.4 0.6Road 45.1 27.8Sea 3.9 5.0Air 6.3 1.1Auxiliary Activities 28.2 14.1

Source: Transport Policy Paper, April 1996

1.17 Investments. A significant shortcoming of the sector in recent years has been the low levelof investment, from both public and private sources, compared with the total domestic investments.In 1995 the total national transport investments amounted to only 5.25 percent of the total domesticinvestments (Zl 3,068 million), even though transport assets accounted for 12.4 percent of thecountry's national assets. The following table illustrates the declining share of transportinvestments in Poland since 1986:

Table 1.2 Share of Transport Investments in Total Domestic Investments (%)(1986-1995)

198f 1987 1988 i1989 I1-990 191 1 12 19 1994 16.93 7.18 7.52 5.25 5.51 5.08 4.45 5.10 7 5.20 5.25

Source: Transport Policy Paper, April 1996

C. Previous IBRD Involvement in the Transport Sector

1.18 The Bank has been involved in the sector since the late 80's. The ongoing First TransportProject (Loan 3193-POL, US$4.8 for roads and Loan 3194-POL, $145.0 million for railways;1991) aims to support the restructuring of the sector through developing more efficient internalmanagement systems and maintenance procedures, together with the required financing support.This project has concentrated heavily on PKP, with a smaller component going to GDDP for theestablishment of a Pavement Management System (PMS; the base justification of every economicinvestment in the road sector) which includes the supply of field measurement equipment andcomputers as well as the supply of laboratory equipment for better on-site quality control of works.The project progressed well, with policy reform and restructuring being implemented faster thanforeseen and with disbursements on schedule. The project was closed on December 31, 1996. AnImplementation Completion Report (ICR) is under preparation.

1.19 The Roads Project (Loan 3564-POL, US$150.0 million; 1993) aims to speed up themodernization and transformation of the transport sector with special emphasis on the national roadnetwork and its administration, GDDP, to help improve the road network, to continue the Bank'ssupport started under the first Transport Project for development of modern management tools inGDDP, to introduce competitive bidding for road works and to improve the competitive capacity ofthe local construction and consulting industry, and to initiate the development of modem combinedtransport systems. The project is also implementing a comprehensive Road Safety Program in


close collaboration with the Ministry of the Interior and the National Police. About 70 percent ofthe project has been satisfactorily disbursed and executed.

1.20 Lessons Learned. Experience acquired in the preparation and implementation of theabove projects highlights the need to focus at an early stage on environmental issues to get timelyclearance from relevant authorities and avoid delays in project processing. The improvement inpublic procurement regulations owes much to the Bank's efforts in this area, and it is expected thatthe new procurement law recently enacted would make procurement management easier under theproposed project. Other main lessons learned from these projects are the importance of: (i) keepingthe project objectives clear and simple in order to facilitate implementation and monitoring; (ii)guaranteeing counterpart funds on time in order to avoid delays or even failures; and (iii) providingadvice on construction techniques to the domestic contractors to increase their competitiveness. Allthese lessons have been taken into consideration in designing the proposed project.

II. ROADS

A. Road Network and Traffic

2.01 The national network (see map IBRD 28740 -Poland; and Table 2.1) consists mainly ofundivided 2-lane roads. There are about 1,216 km of four-lane divided highways, of which 252 kmare motorways with controlled access and grade separated intersections. In addition, there are 257km of two-lane roads with restricted access (called expressways in Poland). The rest is made up oftwo-lane roads with varying standards and conditions. Most of the road network consists of a 6 or7 m single carriageway with or without hard shoulders. In light of the increasing traffic volumes,the mixture of traffic found on Polish roads, and the fact that budget constraints have slowed downroad improvement efforts, certain road sections are experiencing increasing capacity and safetyproblems, especially in areas close to urban or industrial centers, and the resurfacing cycle islengthening. Few major cities have bypasses, and in many urban areas, traffic capacity isapproaching its upper limit. New bypasses, and roads and railroad grade separations along theseroads, should eliminate point impediments to traffic-flow capacity. In selected locations, a secondcarriageway is needed.

2.02 Almost the entire National Road Network (45,635 km, Table 2.1) is paved, along with 86percent of voivodship roads and 43 percent of the local road network. This implies that 65 percent(243,150 km) of the entire Polish network is paved. The 45,126 km under GDDP jurisdictionconstitute the National Road Network administered through a central administration in Warsaw andseventeen regional administrations (DODP) to implement the investment and maintenanceactivities (Chart 2). In April 1996 the Road Network Development Planning Office (BPRSD)prepared a report on Pavement Technical Condition on the National Road Network based on themeasurements for the road strengthening and maintenance programs under the new PavementManagement System (paras. 1. 18, and 2.08). According to this report, only about 27 percent of thenational road network (11,900 km) was in good condition, whereas 6,510 km require resurfacing,10,540 km rehabilitation, and 13,920 km strengthening. As axle loads increase because of heaviertrade and traffic with the EU, this figure will rise. There are about 29,000 bridges located inPoland, totaling some 520 km. Around 180 bridges are more than 200 m long. Some 45 km ofbridges are still wooden and 78 km do not meet current standards for clearance or loading. Repair

-7-SAR Roads II Project, Poland

and replacement of deteriorated and inadequate bridges, as considered under the proposed project,is important and urgent. Table 2.1 shows the road network structure in Poland in 1995:

Table 2.1 Road Network in Poland, 1995(km)

RQOACATEGORY -:--PAVED EARTH. TOTI. NATIONAL ROD -___-_

(a) Motorways 252 252(b) Expressways 257 - 257(c) Other roads 45,126 42 45,168

v ~~~~~~~~~~~~~~~~~~~~~~~~~~............................ .w.S..

II. VOJIVODSHJP ROADS - - -- -: - 1'10,91'3: ' . 17,711 '. ':'128,624 -III.. COMUALAN LOCALURA ROAS 8 . '0-605 100 lO,179- 1 '80,78IV. JL)STIAL ROADS: 5,997 1139 17,394

Source: GDDP, Februaty 1997

2.03 About 10,300 km of the National Road Network are being strengthened from a 8-ton to 10ton single axle load standard and eventually to a 11.5-ton single axle load design. These are roadscarrying heavy international and inter-regional traffic, particularly traffic from the EU with 11.5-tonstandard single axle loads. To monitor this situation and provide data for policy change a networkof 24 fixed and 20 mobile weighing/counting/classifying stations was established by GDDP underthe First Transport and Roads projects. These data are being used under the proposed project. Allmotorways and expressways are designed with 11.5-ton single axle-load pavements.

2.04 Traffic. Poland, as a country situated at the geographic center of Europe, provides thelogical land transport route between Western Europe and the vart markets in Russia, Ukraine,Belarus and Lithuania. It also provides the transit route between northern European countries andthose of the Mediterranean basin. Rapid improvements to Poland's highway system are critical tothe future of this trans-European trade, as well as to the economic health of the country itself.Traffic data are obtained through annual traffic counts and through a nationwide traffic census heldevery five years (the last one in 1995). The average annual traffic growth in Poland over the pastfew years has been 4.5-5.5 percent, resulting in heavy trafficked roads throughout the country'sroad system (Annex 2.1). Annex 2.2 shows evolution of the road vehicle fleet.

2.05 The greatest increase in traffic volumes has taken place on the roads (4,000 kin) carryingheavy international traffic, which has increased more than 100 percent since 1985 to 10,000vehicles per day (vpd). Trafffic on the main roads (10,000 kin) has also grown by 80 percent since1985 to about 6,000 vpd. The rest (about 31,000 km of the National Road Network) carries trafficunder 2,000 vpd. Problems are particularly acute at the international border crossings. More than150 million people crossed the country's border with Germany last year, 50 percent more thanprojected for the year 2005. Congestion is so great that heavy-truck border crossing can sometimestake a day or even longer. Therefore one critical element calls for upgrading Poland's bordercrossings and improving the customs procedures at crossings on the main roads systems. Thisincludes work on 18 border crossings to Germany; 22 border crossings to the Czech and Slovakrepublics; 18 border crossings to Ukraine, Belarus, Lithuania and Russia; and three Baltic Sea


ports. Presently, Poland has a program of modernization of access roads to the border-crossingsfinanced from national funds and PHARE funds. Modernization of port access is designed in theBank Port Access and Management Project (Loan 4080-0 and 4080-1 POL). This situation isalso taken into consideration in the design of road works under the proposed project.

B. Administration and Organization

2.06 National roads are administered by GDDP. The organization consist of a centraladministration in Warsaw and 17 regional administrations (DODP) to implement the investmentand maintenance activities. Each of the DODP is defined geographically, and comprises one ormore of the 49 nationwide voivodships. The local administration and execution of DODP'sactivities is carried out by district road units of which there are a total of 171. The voivodship alsouse the services of the DODPs for maintenance and construction works on major rural voivodshiproads and then compensate GDDP from their own budgets. GDDP involvement is thus greater thanindicated by the length of the National Road Network. Roads and streets in certain major urbanareas, which are not a part of the state or voivodship networks, are administrated by city councils.

2.07 Before 1991, Poland's road and bridge construction industry consisted of nine majornational enterprises together with a network of smaller enterprises, which were part of the 17DODPs. At each DODP, there were usually three or four road construction enterprises and onebridge enterprise, which executed contracts according to negotiated unit rates, although in practicemost rates were taken from a public list. In 1991, all 238 enterprises formerly part of and within thestructure of GDDP were transformed into enterprises to be developed with full independence fromGDDP. The enterprises are therefore fully commercialized and will be progressively privatized.Thus, no salaries are being paid by GDDP, and all are dependent on winning contracts, for whichthey are free to bid anywhere in Poland. Assistance to the enterprises has been and is beingprovided under the Privatization and Restructuring Project, and also through specific execution ofcontracts and TA and training under the Roads project, and further on under the proposed project.Creation of joint ventures with foreign firms, and subsequent partial or total privatization, is takingplace particularly among the largest firms. The proposed project would promote the establishmentof professional associations to enhance the enterprises' competitiveness (para. 3.04). The changesin GDDP staff since the change to the free market economy system are as follows:

Table 2.2 Changes in GDDP Staff

....I...199 1992 1996

GDDP, headquarters 130 213 311Bureau of Planning 50 99 12317 Regional Offices (DODPs) 57,220 12,669 11,836

Source: GDDP, September 1997

The organizational set up of GDDP is shown in Chart 2.


C. Planning, Execution and Supervision

2.08 Highway sector policy in Poland is set by MTME, which in 1993 promulgated a Statementof Aims and Intentions (Annex 2.3). The objectives of the proposed project are guided by thisstatement, which pledges the Government's best efforts, inter alia, to arrest the decline of themaintenance budget and to increase road user charges to promote a fuller shouldering of thefinancing burden by the road user, to introduce economic evaluation as a criterion in investmentproject selection, and to improve road safety. The statement also promises to give priority tomaintenance, strengthening, and modernization, over new construction. The task of translatingpolicy into planning is the responsibility of the Road Network Development Office (BPRSD -Biuro Planovania Rozwoju Sieci Drogowej), which is in permanent contact with the Road andBridge Research Institute (IBDiM - Institut Badawczy Drog i Mostow) for the latest technicaldevelopments. It functions as GDDP's planning department, and has a staff of about 70, consistingmostly of engineers, economists and planners. It has good contacts with the DODPs and areasonable database is maintained on road conditions, bearing capacity, traffic, and accidentsthrough contacts with other agencies and institutes. The development and establishment of aPavement Management System (PMS), under the First Transport Project, has considerablyenhanced planning capacity, facilitating the economic justification of every investment.

2.09 Annex 2.4 details the set of geometric standards applied by GDDP in its road network.Construction is carried out by contractors who have been awarded contracts on a competitive basis,as introduced under the Roads project. Supervision is provided monthly by DODP's staff,sometimes by new private consultants, with some shortcomings in laboratory facilities which arebeing addressed under the proposed project. All operations of routine maintenance, includingwinter maintenance, are directly executed and supervised by the respective DODP. Although theprofessional skills are available for developing a national (construction and maintenance) road plan,this has been hampered by the unpredictability and sharp reduction of the road budgets duringrecent years (para. 2.10). A recently enacted law is aimed to the solution of this budgetary issue(para 2.1 1).

D. Road Financing and Expenditures

2.10 Road Financing. The public roads are financed from the central budget and GDDP has theresponsibility to plan, supervise and provide funds for construction and maintenance of the publicroad network. Table 2.3 shows the development of funds in real terms (1989-1996) and forecast for1997:

-10-

SAR Roads II Project Poland

Table 2.3 Expenditures on national roads 1986-1997(in US$ million equivalent)

. . . . . .- .. .. . .. .EE

EXPENDITURES 1989 1990 1991 1992 1993 1.94 1.9. 1996 1 9.

Total Exp. from allsources_____________(a) Routine maintenance of roads 387.8 263.4 235.5 181.8 176.0 180.1 179.2 197.0 194.5an bridges and road networkmanagement____(b) Periodic maintenance 281.7 320.5 117.7 87.1 72.0 118.2 167.4 186.1 197.0(modernization andrehabilitation) of roads andbridges__ _ ___ _ _ _ _ _ _

(c) Investments: 173.1 136.2 92.0 68.0 86.4 78.4 89.1 141.1 190.4- Construction of roads and

bng~upes;~ usti 143.0 108.5 72.2 62.2 80.6 70.8 80.2 125.6 178.4- oos,eqipen, cqistin. 30.1 27.7 19.8 5.8 5.8 7.6 8.9 15.5 12.0

-4 - - - - -X- -. .......... ,...... ... ....... .......... ...

Exp from state budget _________

(a) Routine maintenantce of roa ds 387.8 263.4 235.5 181.8 176.0 180.1 179.2 197.0 194.5an bridges and road networkmanagement(b) Periodic maintenance 281.7 320.5 117.7 87.1 67.6 82.8 104.8 91.6 96.7

3(modernization andrehabilitation) of roads andbridges ____ ___

(c)Investmnents: 173.1 136.24 92.0 |35.1 34.0 59.5 50.1 52.5 60.1- Construction of roads andl l

-bridges; 143.0 108..5 l72.2 | 29. 4 28.2 52.0 41.2 36.6 48.1- Goods, equipment, acquisition. 30.1 27.7 |19.8 5.7 5.8 7.5 8.9 15.9 12.0

..... . .- - - - - ..--.

SUWEOTA 1 $X42.60 ~70.1l l 44--3.2 304.0 277.6 322.4 33. 34. 3 +t-I .$0Txp.from external sources I

iWorldiBank - -T - - 1.6 1i6.2| 31.7| 43.7| 32.7 (Phare leeo 3 2 25 r1 16 0 1.i2 12.2 129.9 164.6

|EBRD - 0.7 | 6.3 |15.8 | 13.4|B IB Tdges- a - 1 42.4l

|IRT* l l l |32.9 |55.2 |36.2 |61.4 |93.7 | 77.5

SUBT eroTi aLneac 8. 2. 1 32.9 76.8 114.2 101.6 183.1 23706

Source: GDDP, Warsaw, February 1997

The total level of funds available for national roads has declined during the past 10 years.Expenditures in 1993 only amounted to about 39 percent of the 1989 expenditure level, but in 1997allocated budget, in real terms, amounts to 70 percent of the 1989 expenditure level. Since then,despite the improvement of the situation, a lot remains to be done. For periodic road maintenance,GDDP is expected to spend around US$197.0 million (and US$194.5 million on routinemaintenance) on the National Roads Network in 1997.

IRT - International Roads Transport (Funds deposited in GDDP IRT account from fees paid by foreigntrucks).

SAR Roads II Project, Poland

2.11 The trend in maintenance expenditure is improving but is still of special concern. There isno doubt that there is an urgent need to secure increased funds for maintenance activities, not onlyto be able to restore roads that have already deteriorated, but also to prevent further deterioration ofroads presently in good condition. If budgets are not increased, structural deterioration will takeplace which in the long term will require funds substantially higher than levels needed today. It isestimated that the long term average need for merely maintaining the existing national road network(42,500 km), excluding expenditures on administration, is US$450 million per year, i.e., 15 percentmore than the 1997 budget. This is based on the findings of a study of the Polish National RoadNetwork carried out by the Danish Road Directorate in 1992, and it agrees with the findings ofBPRSD's own recent study under the PMS. Of this amount, about half should be allocated tocurrent road maintenance, a third to rehabilitation, about 10 percent to winter maintenance androughly 10 percent to bridge maintenance and rehabilitation. Although these figures are subject tosome degree of uncertainty because unit price levels have not yet stabilized, they reflect aconsensus of various approaches and professional opinions on maintenance of the National RoadNetwork. A new law, the Road Funding Law of August 29, 1997, will (starting on January 1,1998) earmark 30 percent of excise taxes on fuel for the National and Voivodship Road Networkpermitting a progressive solution of this budgetary issue. During negotiations, agreement wasreached with the GOP on a progressive increase of the GDDP budget, through the RoadFunding Law of August 29, 1997, in accordance to the economically and technicallyappropriate maintenance needs in real terms per year.

E. Taxation and Road User Charges

2.12 Road users in Poland pay various taxes associated with road use. The revenues directlylinked to road use and vehicle operations are:

- turnover tax on vehicles;- vehicle registration fees;- drivers licensing fees;- fuel taxes; and- fees from international road transport concessions.

All revenues from these sources go to the state budget except the registration fees and vehicle driverlicensing fees, which are levied by the local authorities (voivodships). The total 1996 revenue tothe state budget amounted to about US$2.500 million. Around a quarter (25 percent) of thisamount is allocated to the road sector.

2.13 Taxation. More than 90 percent of the road user taxation comes from the fuel tax. Theretail prices are shown below:


Table 2.4 Retail Fuel Prices, 1995-97 (in Zloty/liter)

Category 1995 1996 1997 of which tax:UNLEADED

Gasoline '94 1.3 1.51 1.75 0.86Gasoline >'98 1.4 1.65 1.88 0.85LEADEDGasoline '93 1.25 1.49 1.75 0.85Gasoline '95 1.55 1.68 1.78 0.77Diesel 1.2 1.30 1.41 0.59

The tax share (70 percent) amounts to about half of the average Western European structure with

tax rates of around 140 percent. Although prices are lower than in Western Europe, they are well

above border prices. During the last 5 years, the government has consistently been raising the taxes

on vehicle fuels towards West European levels, in accordance with Bank advice. In February 1997,

the government has introduced market prices for fuel all over Poland. The new Road Funding Law

concerming financing of the public roads will become effective on January 1, 1998 and will earmark

30 percent of excise taxes on fuel for the National and Voivodship Road Network (para. 2.11).

Furthermore, in order to fulfill one of the conditions of its accession to the European Union, Poland

is willing to increase the fuel tax up to the level of EU members. This will increase the level of the

budget allocated to the public roads by 20 percent yearly, and will double the present budget within

five years.

2.14 System of Road User Charges. Economic efficiency is maximized when road user

charges cover road maintenance and investment expenditures, and each vehicle class covers at

least its variable road costs. The optimum maintenance expenditure is that which minimizes the

discounted sum of road costs and vehicle operating costs. Separate estimates are made for each

vehicle class and road surface, for the main national road (GDDP) network, local road network

and urban streets.

2.15 There are three conditions which must be taken into account in assessing the system of

road user charges in Poland. First, the Government, following the transition, uses the fuel tax as

a major source of general revenue because it is easy to collect, impacts the wealthy more than the

poor, and because this is common practice in most European countries. The retail price of

normal gasoline in Poland (US$0.50-0.53 equivalent per liter, Table 2.4) ranks 24th among 35

representative European countries, while diesel fuel (US$0.40 equivalent per liter) ranks 25th.

Second, the national road network is mostly in poor or fair condition (para. 2.02), requiring

rehabilitation before it is capable of being maintained (particularly periodic maintenance). The

PMS (following Bank HDM III), on the other hand, assumes that the road network is in

sufficiently good condition that it can be maintained through normal maintenance procedures.

Third, a significant part of the local rural road network was built by cooperatives which now

have disappeared. Many of these roads are not maintained, and part of them may be abandoned

in the future. Under these circumstances, the PMS model is most useful in indicating the funds

which would be needed to maintain the main rural network (and urban network) after most roads

have been rehabilitated, which will take a number of years.


F. Traffic Safety

2.16 The number of road accidents in Poland is very high; some 57,911 accidents with 6,359fatalities and 71,419 serious injuries were recorded in 1996 (Annex 2.5). The economic cost of thishuman tragedy is also high, amounting to 7 percent of the state budget and 2 percent of the GDP(ZI 7.5 billion, or US$2.5 billion). This rate is quite disproportionate with the country's volume oftraffic, putting Poland among the worst performers with respect to road safety in Europe. About 13fatalities occurred per 100 road accidents while the European Union average is slightly over 3.Usually, the following are found to be the main causes of the high severity indicators in Poland:

* speeding;* consumption of alcohol;* poor drivers' training;* poor construction of some type of cars that are numerous on Polish roads;* black spots and hostile surrounding of the road (trees, poles without protective barriers);* low level of traffic law enforcement;* a long period of time elapses from the moment of the accident until rescue and

medical services arrive.

The Road Safety Program (GAMBIT), implementation of which is included under the proposedproject (para. 3.12) takes into consideration improvement of these important aspects of road safety.

2.17 Before the Bank's involvement in the transport sector, there were few administrativeentities involved in road safety in Poland, lacking coordination among themselves and with noauthority responsible for an overall approach to road safety; each entity only dealt with part of theproblem. There was no road accident prevention plan. Under this situation, there were twoadministrative changes which were prerequisites for effective action to improve road safety: (a) thecreation of a supra-ministerial National Road Safety Council responsible for road safety policy; and(b) a Road Safety Unit, led by a Road Safety Coordinator within the MTIE in charge of andresponsible for developing, supervising and coordinating government policy and for establishingadministrative and coordinating structures. The Government was aware of the problem and hadindicated its willingness to proceed along the lines recommended by a Bank/EU Road Safety Studyin the Roads Project. Through Resolution 92/93 of the Cabinet dated Oct. 21, 1993, theGovernment has established the National Road Safety Council, chaired by the Deputy PrimeMinister (Chart 3). Its establishment, with the collaboration of the Road Safety Unit (June 1994) inMTME, has been a landmark in the development of road safety measures. Road Safety Councilshave been appointed by all voivodships. The use of seat belts is now compulsory, as is the use ofdaytime running lights in winter. The Council has also generated guidelines (Traffic Code, willbecome effective in January 1, 1998) for the operation of the traffic police. The speed limit in built-up areas would be lowered to 50 km/h and an improvement of the license points system isunderway. The sharp decrease in the number of fatalities (6,359 in 1996 compared to 6,900 in1995) is a result of the actions taken. However, lack of funding for the numerous agencies involved- including the National Council itself and the poorly equipped National Traffic Police - hasprevented a more efficient enforcement of regulations and achievement of desired goals on thereduction of accidents and fatalities to a western European level. Further action is required throughTA and training, the procurement of road safety equipment for the Police, and adequate prevention


signalization and elimination of individual black spots. The proposed Roads II project includesfunding for road safety activities (paras. 3.11, 3.12, and 3.13) to achieve the above objectives.

G. Environmental Aspects

2.18 Poland suffered from the environmental negligence under the central planning system'semphasis on development of heavy industry and construction. After the changes at the end of the1980's, the significant damage inflicted on water, air, and soil over the last 40 years becameevident. This damage was mostly concentrated in the Upper Silesia and Krakow region. Inaddition, three ecological disaster zones in other parts of the country were identified by theGovernment. An additional environmental problem is the contamination caused by the Sovietmilitary installations, which were returned to Poland in 1991. Over the past seven years,considerable environmental improvements were achieved through new environmental policies,but also through the decline of heavy industries, which were and are the major reason for theenvironmental problems of the country.

2.19 One reason for the improvement in the environmental sphere is the strengthening of theMinistry of Environmental Protection and National Resources, which was founded, as one of thefirst Ministries of Envirom-nent in Central and Eastern Europe, in 1985. In the 1990s, theMinistry as well as regional authorities were supported by international donors like the EuropeanUnion (EU) and also by a loan from the World Bank. Under the leadership of the Ministry,Poland wants to legally adopt EU environmental standards before the end of the decade andimplement them within the next 10 years. The Ministry is starting to recognize the importantrole of non governmental organizations (NGOs) in environmental policy making, and follows theenvironmental regulations on road works established under ongoing Bank projects.

2.20 The Ministry, as in other sectors, has established strict and adequate procedures forreviewing the environmental impact of the transport sector projects, in general, and of the highwayprojects, in particular. The legislation establishes levels of review appropriate to the class of workproposed, ranging from a review of the design and drawings for rehabilitation works to a fullEnvironmental Assessment (EA) Study for works developing through new alignments as the caseof bypasses and new bridges (paras. 3.34 through 3.36, and Annex 3.12). In fact, the environmentalrequirements - which usually are enforced and controlled by the voivodships during construction -are very similar to those required by the Bank and will not present any special obstacle for thenumerous works under the proposed Roads II project. Furthermore, the proposed project providesan opportunity for the Government to integrate its environmental concerns into reality and todevelop and update its environmental system into sustainable development.

III. THE PROJECT

A. Project Background and Objectives

3.01 Background. Strong growth in road transport in Poland (34 percent increase in number ofregistered vehicles during the last five years; para. 2.04, and Annex 2.2), and a deficientinstitutional, managerial and budgetary response to this growth have created key infrastructurebottlenecks. This situation has increased road deterioration and restricts development. Even


more, traffic accidents continue being a serious problem, and road safety and environmentalissues may become an additional problem if not anticipated in time (para. 2.16 and 2.17) becauseof the fleet expansion and the upgrading works required on the infrastructure. To address theseproblems, Poland has implemented a two-pronged highway-improvement strategy. The firstphase, to provide immediate relief at a relatively low cost, is a 1993-2010 program to improvesome 3,000 km of Poland's existing national roads system. It would cost an estimated US$1.5billion and would upgrade portions of the existing national roads system into high-capacity, two-lane highways. Phase two calls for construction of a system (2,600 km) of new four-laned,limited-access toll motorways, called the Autostrada system, which will form the backbone ofPoland's portion of the trans-European road network. This system would be funded almostexclusively by build-operate-transfer (BOT) concessional financing.

3.02 The proposed project, which is part of the first phase of the above strategy, would foster anational institutional and managerial improvement of the road sector. It would also continue andcomplement the ongoing institutional and physical improvements under the Bank's FirstTransport and Roads projects (paras. 1.18 and 1.19), and the planned partial rehabilitation of themain road network. Furthermore, in order to resume operation of major road network affected byrecent floods in north, west and south of Poland, the project will also include an emergency roadand bridge reconstruction subcomponent.

3.03 Objectives. The main objective of the proposed project is to support and speed up themodernization of the road sector along the lines of the enviromnental and traffic safety policyinitiated by the Government under the Roads Project. In particular, the project would:

(i) improve the priority national road network sections with traffic volumes of atleast 6,000 veh./day;

(ii) reconstruct and repair high priority flood-damaged roads and bridges;(iii) study and solve the rutting situation on the network;(iv) promote the competitive capacity of domestic contractors through

improvement of their technical, managerial, and financial capacity;(v) improve the road safety situation;(vi) adjust road user charges for different vehicle types to cover the economic

costs incurred by each type of vehicle, and to achieve a well balancedcombined transport framework; and

(vii) advise on the operation, management, and administration of road safetyand its coordination with the National Police.

B. Project Description

3.04. Project Composition. The project components would cover the three main areas (policy,institutional, and physical investments) of the GDDP's 1996-2000 Road Investment Program (RIP),as agreed and detailed under Government Decision 16/96 of July 15, 1996 as follows:

i. POLICY: (i) adequate maintenance and strengthening of high priority roads, including bridges,and winter maintenance, with adequate budgets; (ii) review and adjustment of road user chargelevels and distribution between different user groups in order to achieve a reasonable balance


between costs and revenues; (iii) further action on the road axle-load policy, initiated under theRoads project in consonance with that in Western Europe; and (iv) establishment of a leasingpolicy to enhance and speed up privatization of local contractors.

2. INSTITUTIONAL: (i) further restructuring, privatization, and development of the road contractingindustry, focusing on the improvement of its managerial, financial and technical capacity, and onthe establishment of professional associations to enhance their competitiveness; (ii) improvementof the coordination, collaboration and operation of the Agencies (Transport, GDDP, Ministry ofInterior, National Police) on the ongoing road safety program; and (iii) assistance to the vehicleinspection center network as a part of road safety and environmental measures.

3. PHYSICAL INFRASTRUCTURE: part of the agreed GDDP 1996-2000 Road Investment Programconsisting of: (i) rehabilitation, upgrading, realignment, and resurfacing of priority road sectionsand their crossings through cities; (ii) reconstruction and upgrading of 2 bridges, andconstruction of 3 new major bridges; (iii) construction of 12 bypasses around congested cities;(iv) emergency reconstruction of flood-damaged high priority infrastructure (roads and bridges);(v) acquisition of road maintenance equipment, vehicles and materials and road safetyequipment, vehicles and materials; and (vi) technical assistance (TA) and training for theongoing road safety program, in the fields of management, planning, pavement and maintenancesystems, protection of the environment, modern design and construction techniques, and furtherprivatization of local consultants and contractors.

3.05 Rehabilitation, upgrading, realignment, and resurfacing of priority road sections.This component includes 522 km of road works, divided into four groups totaling 42 separatecontracts to be bid in late-1997, -1998, -1999, and -2000. Selection was based on economiccriteria, requiring a minimum ERR of 12 percent (the opportunity cost of capital in Poland), andon traffic criteria, requiring about 6,000 vpd minimum, provided that other criteria regarding thepolicy component statement and the environment and road safety requirements were met. Keysections of principal national roads will be strengthened or improved, by pavement reinforcementand asphalt concrete overlays, with associated widening or shoulder improvement wherejustified, and in certain cases, bypassing congested urban areas. Elimination of accident blackspots, and difficult passages through towns will be included. Annex 3.1* shows the GDDP's listof four groups of proposed selected tasks for the 1998-2002 execution period with estimatedeconomic rates of return (ERR), number of vehicles per day (vpd), type of works, estimated cost(prices of September 1997), and localization by DODP. Annex 3.2 includes a list of reservetasks, to be executed in the event some savings and/or unexpected situations occur. GDDP hasbeen developing its capacity for economic, environmental and safety analysis of projects,adapting its methods to the Bank's requirements. The procedures, presentation and the firstyear's program (including bridge and bypasses, Group I, Annex 3.1) and the timing ofbidding was discussed and agreed during negotiations. The following years' programs willbe agreed on during the annual budget reviews.

*

This Annex includes also proposed tasks of rehabilitation and construction of bypasses and bridges.This Annex includes also reserve tasks of rehabilitation and construction of bypasses and bridges.


3.06 Bridges. There is a serious backlog of major bridges repairs due to poor quality materialsused in the original construction and, often, because of the age of the structure. The project willinclude the reconstruction of two high priority bridges, and construction of three new permanentstructures. Initial selection was discussed and decided using GDDP's bridge managementsystem, with final selection based on danger of collapse or closure, lengths of detours to nextcrossing points, load restrictions, traffic levels, and percentage of heavy vehicles. An ExecutiveSummary of Environmental Impact Assessment was prepared and approved for every bridgedemonstrating the advantages of the construction and including all measures required to integrateany environmental impacts. An ERR was calculated for each bridge, and selection was done onthe basis of a minimal ERR of 12 percent.

3.07 Bypasses. In order to eliminate congestion in urban areas, the project will includeconstruction of twelve new bypasses (61.7 km long). Similarly to the selection process forrehabilitation of roads, selection was based on economic criteria, requiring a minimum ERR of12 percent, and on traffic criteria requiring more than 10,000 vpd. As in the case of new bridges,every bypass was subject to a comprehensive and exhaustive Environmental Impact Assessmentstudy to be reviewed and approved by the Government and the Bank. Each study identifies andanalyzes the environmental and road safety impact of the bypass on the related urban area, and itincludes the measures required to appropriately mitigate any adverse environmental and roadsafety impact.

3.08 Emergency reconstruction and repair of flood-damaged high priority roads andbridges. The proposed project include those sections of priority roads, their retaining walls, andslopes where mostly a minimal to medium level design work is required. The total length ofroad sections to be reconstructed is approximately 300 km, consisting of 61 contracts. Selectionwas based on criteria of priority and the proposed selection program will be subject to detailedreview with consequent possible revisions.

3.09 About 1.6 km of flood-damaged concrete and steel/concrete bridges (consisting of 18contracts) are included for emergency reconstruction or repair under this subcomponent. For themost part, bridges will be reconstructed similar to the original bridge designs, provided thatinitial standards and construction process were adequate. List of the roads sections and bridges tobe repaired under this emergency subcomponent of the proposed project is shown in Annex 3.3.

3.10 Supervision of Works. Supervision of the above civil works contracts (rehabilitationand reconstruction of roads, bridges and bypasses) would be carried out mostly by competentGDDP staff teams financed under the GDDP recurrent budget. In specific cases, where externalconsultants might be required, financing of their services would be under the TA and Trainingcomponent of the project.

3.11 Road Maintenance Equipment, Vehicles and Materials. Small quantities of roadmaintenance equipment and materials are already being provided under the ongoing Roadsproject. However, the scarcity of the maintenance budget (para 2.11) requires the additionalprovision of maintenance equipment - and also materials - on a continuous and progressive basis.Particularly important is the provision of winter maintenance equipment to prevent or to repairthe heavy damage inflicted on the roads by the severe Polish winters. A list of maintenance


equipment, vehicles, and materials, and related estimated costs (total cost US$12.8 million,excluding contingencies) is included in Annex 3.4.

3.12 Road Safety Equipment, Vehicles and Materials. Road safety equipment (mostlycomputer equipment) is already being provided under the Roads Project (Loan 3564-POL), as partof the comprehensive Road Safety Program in close collaboration with the Ministry of Interior andAdministration, and the National Police. However, implementation of the nationwide Road SafetyProgram known as GAMBIT requires further strict action on the procurement of road safetyequipment, vehicles and materials for the Police, on the educational aspects of pedestrians anddrivers, on the adequate preventive signalization, and on the elimination of individual black spots.The project will include funding of road safety equipment, vehicles, and materials (US$12.7million equivalent, excluding contingencies). A list of Road Safety equipment, vehicles andmaterials to be acquired and related estimated costs is shown in Annex 3.5.

3.13 Technical Assistance (TA) and Training. Besides the technical assistance providedunder the Roads Project (Loan 3564-POL), an important and extensive program of TA and trainingfor MTME, GDDP, DODPs, and the National Police is required on road maintenance, privatizationof the management, construction, and design methods, modernization of the construction andconsulting industries, and the Road Safety Program. Most TA and training would be provided inthe Jozefow Training Center (near Warsaw), established under the Bank Roads Project and openedin December 1996. A list of the different TA and Training services to be provided under the projectand related costs (total cost US$1.7 million, excluding contingencies) is shown in Annex 3.6.Under this category, the project would also finance the Road User Charges Study. The Studywould review and adjust the different categories of charges for every vehicle using the road, andwould recommend to establish a balanced share between cost (road damage) and revenues (roadcharges) for every type of road user. The TOR for the Road User Charges Study are given inAnnex 3.7.

C. Design and Engineering

3.14 Management of the modernization program is being coordinated by the BPRSD, theDODPs, and local consultants selected through procedures consistent with Bank Guidelines.Designs are prepared from project dossiers drawn up by BPRSD and the respective DODP, andfollow GDDP's geometric standards, as shown in Annex 2.4. These are close to Western Europeanstandards, and no significant benefit would be obtained by changing them. Pavement thicknessdesign is similar to what is used in France, with the procedure being revised to include actual axleloads using data provided from the new weighing stations. The Road and Bridge Research Institute(IBDiM) has generously collaborated with GDDP and the BPRSD in cases of some designdifficulties, particularly in bridges, and when specific research, mainly on pavements, was requiredfor the preparation of the project. It is expected that this relationship will continue.

D. Cost Estimates

3.15 The estimated total cost of the project, including taxes and duties, and physical and pricecontingencies, amounts to US$540.0 million equivalent, with a foreign component of aboutUS$281.1 million equivalent or 52 percent of the total project cost. Cost estimates were


discussed and agreed during appraisal. The cost of the different project components, based on

September 1997 prices and a US$1.0 = Zloty 3.5 exchange rate, are given in Table 3.1 below.

Table 3.1 Project Components and Cost Estimates(US$ million equivalent, including taxes)

.o:- nont Local Frein Tota F.C. %A. CIVIL WORKS(a) Rehabilitation, upgrading, realignment

and resurfacing of priority roads sections 111.7 106.0 217.7 49(522 kin)

(b) Reconstruction of 2 bridges, and constructionof 3 major new bridges 10.6 10.4 21.0 50

(c) Construction of 12 new bypasses (61.7 kn) 69.7 66.6 136.3 49(d) Emergency reconstruction and repair of flood-

damaged high priority roads (300 km) and 26.2 39.2 65.4 60bridges (1.6 kn)

M S.'. ta) c2v2l wo'.k, 2:1. 2. -. 4403.4 5"'B. GOODS(a) Equipment, vehicles, and materials for road 0.8 12.0 12.8 94

maintenance(b) Equipment, vehicles, and materials for road safety 2.7** 10.0 12.7 79:Subtotal Od' .:5 2 :. 86C. TA and TrainingTA and Training _ 1.7 1.7 100(++C) BAECSY2. 4. 467.6 5:.~~~~~~~~~~~, j .............-:.: :. 1:11 )ASE::CQ .T.4:..................` - s- .-- 7,2Lai .... ....

D. Contingencies: Physical (10%) 22.1 24.6 46.7Price 15.1 10.6 25.7

3.16 Construction cost estimates for civil works (US$440.4 million, excluding contingencies)are based on quantities from advanced engineering designs prepared from project dossiers drawnup by BPRSD, and estimates of September 1997 unit costs. The foreign component is estimatedfrom a breakdown of cost elements. Costs of road maintenance and safety equipment andmaterials (US$25.5 million, excluding contingencies) are based on the latest and most recentacquisitions under the Roads Project, and on similar deliveries in the ECA region. The cost ofthe TA and training program on road maintenance, modernization of the management,construction, and design methods, modernization of the construction and consulting industries, andRoad Safety Program (US$1.7 million, excluding contingencies) are based on ongoingexperience. TA by expatriate consultants for a total of 50 man-month (m/in) has been estimatedon the basis of US$20,000 per mn/m, all inclusive. The time-based rate for consultants, i.e., theman-month, includes salary, social costs, firm's overhead, travel costs, fee or profit, and overseasallowances. Training has been estimated on the basis of 170 rn/i and US$4,000 per rn/in, takinginto account that most training would be inside Europe. The composition of the project and

*

Including VAT (7 percent of the total - local plus foreign - costs).* * This figure represents VAT (7 percent) of the foreign costs, and required operational local services for new

equipment.


related costs, including TA and Training services, were discussed and agreed duringnegotiations. All technical assistance, and training are exempted from taxes and duties.

3.17 A physical contingency of 10 percent has been included for all components, to cover a

possible increase in quantities. This amount is appropriate given the precise engineering designs

already available for the road works. Price contingencies have been applied to base cost plusphysical contingencies, expressed in US$ equivalent, in accordance with Bank guidelines.

E. Project Financing

3.18 The Borrower would be the Republic of Poland. The proposed Bank loan of US$300.0million equivalent would finance 60 percent of the roads, bypasses, and bridges rehabilitation,

reconstruction and construction works costs (estimated foreign exchange cost: 50 percent), and

80 percent of the flood-related emergency rehabilitation of the roads and bridges works costs

(estimated foreign exchange cost: 60 percent). It would also finance 100 percent of the foreign

cost of the acquisition of equipment, vehicles, and materials for road maintenance and roadsafety, and 100 percent of the total cost of training and consulting services. The Government's

contribution to the cost of the project, estimated at about US$240.0 million equivalent, would be

provided through GDDP's budget. The Government confirmed at negotiations that it wouldmeet these US$240.0 million equivalent local costs as well as, if the case arises, any costoverrun. A financing plan, based on the above assumptions, is shown in Table 3.2 below.

Table 3.2: Financing Plan(US$ million equivalent, including contingencies)

........... ....... .......... - . ........ ......A. CIVIL WORKS(a) Rehabilitation, upgrading, realignment and

resurfacing of priority road sections (522 kmn) 128.5 122.7 251.2(b) Reconstruction of 2 bridges, 12.2 12.0 24.2

and construction of 3 major new bridges(c) Construction of 12 new bypasses (61.7 km) 80.2 77.0 157.2(d) Emergency reconstruction and repair of

flood-damaged high priority roads (300 km) and 15.1 60.8 75.9bridges (1.6 km)

S'btoa iiwrk23. 272.5 0.B. GOODS(a) Equipment, vehicles, and materials for road maintenance 0.9 13.9 14.8b) Equipet eils andr matras for rodsft 3.1 11.6 14.7

C. TA and TrainingTA and Training 2.0 2.0

..... ~ .-j; ...-.- 0-0- i..;0000 -0


F. Implementation and Monitoring

3.19 The existing Project Monitoring Unit (PMU) set up in MTME under the First TransportProject and presently successfully completing the implementation of the Roads Project, will actwith responsibility for overall project management and coordination in close cooperation withthe Coordinating Unit established in GDDP. MTME and GDDP have developed significantcapacity in prequalification, bidding, contract documents and management, in cash flowcalculations and payments, and with the advice of the two roving resident (engineer and financialanalyst) advisers, presently working under the Roads Project, will be capable of successfullyimplementing the proposed project. GDDP with the same project Coordinator as under theRoads project and through the respective DODPs, will manage the road, bypasses, and bridgesworks program, the emergency works program, its TA and training programs, and procurementof road maintenance equipment, vehicles and materials. The PMU would be directly responsiblefor all procurement required by the different agencies, mainly but not only the National Police,and the procurement of all items required under the Road Safety (GAMBIT) program. It wouldalso coordinate with the National Road Safety Council and execute any decision related to theRoad Safety Program. The 59 road and bridge works contracts, assembled into four groups(Annex 3.1), will be carried out over a five-year period, beginning in 1998. Annex 3.2 includes alist of reserved tasks in case of unexpected savings or other justified reasons, for additionalinvestments. Each contract will include a one-year guarantee maintenance period followingcompletion. The 61 emergency repair road and bridge works contracts (Annex 3.3), along withthe group of small works, will be carried out over a three-year period, beginning in October1997. Acquisition of equipment, vehicles and materials for road maintenance, road safety androad signalization (during the first two years of the project implementation period), together withselection of experts for TA and training programs for GDDP, DODPs and National Policeexecutive staff (through the entire five-year project implementation period) would take placefollowing submission to IBRD, for review and approval, of the related documents and evaluationof the proposed experts. The GOP agreed at negotiations to retain the PMU in MTME andthe GDDP Coordinating Unit of the Roads Project for the implementation of the Roads IIProject.

3.20 Supervision of contracts will be the responsibility of the DODPs in the first instance, whowill request monthly payments to be made from GDDP headquarters where the ProjectCoordinator office would arrange for payment to be made. GDDP's Project Monitoring Team,under the lead of the Project Coordinator, will include an accountant/systems expert withprevious experience in internationally funded projects of this nature, who will establish thesystems and procedures for financial control of expenditure, and for making quick and efficientpayments to contractors. The main tasks and responsibilities of the Project Monitoring Team ledby the Project Coordinator would be:

* project coordination, liaison to Government, IBRD, and consultants* planning of works and budgeting* resource allocation* selection, negotiation/award of contracts to the international consultants

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

-22-SAR Roads II ProJect. Poland

* issuing of guidelines for prequalification and bidding

* preparation of overall project accounts

* monitoring of progress, quality and financial performance

* reporting (quarterly) to the Government, and IBRD

To monitor the progress of the project and to agree on the following year's program, therewould be a set of performance monitoring indicators (Annex 3.10) to be followed and

complied with and an annual meeting between the Polish authorities and the Bank prior toDecember 1 of each year, starting in 1997. This has been agreed at negotiations.

3.21 A Project Implementation Plan (PIP) defining the actions to be performed under the

project, the agencies, department or units responsible for the execution of each action and the

latest date to start each action, is shown in Annex 3.8. A Project Procurement Schedule and

Plan, complementing the PIP, is given in Annex 3.9. Loan effectiveness is expected in late

fourth quarter 1997, start of project preparation is planned for October 1997, physical

implementation would begin in October 1997 (emergency) and in January 1998 (non-

emergency), and the project would be completed by December 31, 2002, with the proposed loan

closing six months later on June 30, 2003. PMU would submit: (i) quarterly reports to the Bank

during the implementation of every project component activity on the basis of the performance

indicators detailed in Annex 3.10; (ii) before Bank approval of the bidding documents, a full

environmental assessment for each non-emergency new road or bridge, and the proposed flood

mitigation measures adopted for each emergency road or bridge works; and (iii) on or about

August 31, 2000 a report (prepared under terms of reference satisfactory to the Bank), integrating

the results of the monitoring and evaluation activities on the progress achieved in the carrying

out of the Project, and setting out the measures - to be discussed with the Bank before December

31, 2000 - recommended for the achievement of all project objectives. During negotiations,agreement was reached with the Government on the above project implementation andprocurement schedule, Project Implementation Plan, and monitoring criteria andreporting arrangements.

G. Procurement

3.22 A Country Procurement Assessment Report has been prepared for Poland dated March

15, 1996. The project elements, their estimated costs, and the procurement arrangements for the

components to be financed by the Bank, are summarized in Table 3.3 below.

-23-SAR Roads 11 Project, Poland

Table 3.3: Procurement Arrangements(US$ million equivalent, including contingencies and taxes)

Procurement MethodProject Element ICB OTHER NBF* otl

A. CIVIL WORKS(i) Rehabilitation of priority roads, and 432.6 220.9 432.6.

construction of bypasses and bridges (212.0) (220)

(ii) Emergency reconstruction and repair of 5.7 54.3 15.1 75.9flood-damaged high priority roads and bridges (4.3) (43.4 (60.)5-

9.9(7.9)

(4.8)

'.~~~~~~~~~~~~ .' .',.'.',',-.'""''''''','.'.''. ' (2163 (6.2) 225

B. GOODS(i) Maintenance Equipment, Vehicles and 14.0 0.4 0.9 -14.8

Materials (13.6) (0.2) -(13-9)0.4C

(O. I(ii) Equipment, Vehicles and Materials for 14.0 '03 3.1 14.7

Road Safety, including National Police (11.35) (0.15) (11.6)

________________________________ 11__ 35__ (0.15) 6____0.4c

SBTOTAL 29 0.. 1(. 4.0:. 29.5(24.95) (0. .5

C. CONSULTANCIES(vi) TA and Training to MTME, GDDP, 2.0 2,0

DODP and National Police Executive Staff (2.0) (2.0.SUBTOTAL- .2.0 2.0

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

Note: Figures in brackets are the respective amounts financed under Bank Loan*NBF - not Bank-financed

3.23 The procurement for this Project falls into two Parts, i.e., Part I which represents theoriginal Roads II project, and Part II which deals entirely with the Flood Emergency component(US$75.9 million equivalent) on the affected areas of Polish infrastructure. The procurement forboth Parts follows Bank Guidelines, January 1995 (revised January and August 1996).

ICB - International Competitive Bidding

b IS - International Shopping

c DC - Direct Contracting

dNCB - National Competitive Bidding

eForce Account

f Minor Works


3.24 Part I - Roads II:

(i) Civil Works - International Competitive Bidding (ICB; US$432.6 millionequivalent): The civil works representing the road modernization program (Annex 3.1), whichcomprises about 80 percent of total project cost, would be procured through ICB, followingprequalification (PQ) of contractors for four annual groups of contracts (commencement ofworks in early 1998, 1999, 2000, and 2001). The prequalification process, once a year for eachgroup, would be in accordance with the Bank's standard PQ document of April 1993. A GeneralProcurement Notice for each of the four groups of contracts shall be issued in each October of1997, 1998, 1999, and 2000 in the Development Business. Bank's standard bidding documentsfor major works dated January 1995 would be used for procurement of ICB contracts.

(ii) Goods (US$29.5 million equivalent): Goods, including equipment, vehicles, andmaterials, would be procured as follows:

(a) International Competitive Bidding (ICB; US$28.0 million equivalent):Road maintenance and road safety equipment, vehicles, and materials (Annexes 3.4 and 3.5)estimated to cost US$300,000 equivalent and above each would be procured through ICB byusing Bank's standard bidding documents dated January 1995. Domestic bidders will be eligiblefor a 15 percent preference margin in accordance with Bank Guidelines.

(b) International Shopping (IS; US$0.7 million equivalent): Goods estimatedto cost less than US$300,000 equivalent each would be procured on the basis of three quotationsfrom two different countries.

(c) Direct Contracting (DC; US$0.8 million equivalent): Goods which the Bankagrees are of a proprietary nature may be procured through direct negotiation under conditionsacceptable to the Bank. Goods under this category would include items for road maintenanceand road safety. The Borrower shall provide to the Bank a copy of the specifications and thedraft contract prior to the execution of any contract.

(iii) TA, Training , and Consultant Services - Quality and Cost-Based Selection(QCBS; US$2.0 million equivalent): The TA component includes training for GDDP/DODPstaff and Police (US$1.0 million); Road User Charges Study (US$0.25 million); Rutting andAxle Loading Study (US$0.1 million); procurement related TA to PMU (US$0.3 million) andsome short term consultancies (US$0.3 million). Details of the training and consultancies maybe seen in Annexes 3.6 and 3.7. Most of the consulting services, including TA and training, willbe procured following QCBS procedures in accordance with World Bank Consultant Guidelines,January 1997. Selection of individual consultants will be made on the basis of consultants'qualifications. Selections for all such assignments shall be made on competitive basis and theirTORs will be subject to prior Bank review.

(iv) Bank Prior Review: Prior Bank Review requirements will apply for thefollowing:

* prequalification of contractors for civil works


* bidding documents and contracts for civil works estimated to cost US$500,000equivalent each, and above

* bidding documents and contracts for goods estimated to cost US$300,000 equivalenteach, and abovedirect contracting purchases

* consultant contracts with firms estimated to cost US$100,000 equivalent each andabove, including TORs, shortlists and the request for proposalsTORs and consultant contracts with individuals estimated to cost US$50,000equivalent each and above, including TOR, shortlists and the request for proposals.

3.25 Part II - Flood Emergency Component: This component (US$75.9 millionequivalent) comprises emergency road repairs and bridge reconstruction, as detailed in Annex3.3. The works are of urgent nature and required to be contracted at the earliest, so thatreconstruction work can start without any further delay. The following procurement procedureswere agreed with the Borrower during Negotiations:

(i) International Competitive Bidding (ICB; US$5.7 million equivalent)procedures will apply to all contracts for civil works estimated to cost US$5.0 million equivalentand above. The Borrower will use Bank's standard bidding documents for such contracts.According to listing in Annex 3.3 there will be only one ICB contract for US$5.7 million.

(ii) National Competitive Bidding (NCB; US$54.3 million equivalent): Contractsestimated to cost US$0.5 million equivalent but not exceeding US$5.0 million equivalent, will beprocured in accordance with Bank Guidelines NCB procedures and regional (Europe and CentralAsia Region; ECA) sample NCB document dated August 1995. The procurement of such worksaccording to Polish Procurement Law of 1996 was considered. In view of the time constraintsinvolved in meeting Bank's conditions (participation by foreign bidders, domestic preferences,prequalification of contractors, and use of Bank approved bidding documents) for use of PolishNCB procedures, it was decided to procure these works by using the Bank's NCB procedure andbidding documents.

(iii) Force Account (FA; US$6.0 million equivalent): The use of Force Account(FA) would be restricted to minor works estimated to cost US$500,000 equivalent or less each,which are dispersed and located in remote rural areas, which are of emergency nature, and whenprivate contractors are not available or willing to undertake such works. The procurement underFA will be done in accordance with procedures to be agreed with the Bank. Before using the FAthe Borrower will furnish to the Bank full details of the proposed works: estimated value,technical specifications, implementation schedule, production standards for the various workitems, and the cost accounting systems. Such works will be executed by the regional DODPswithout enlarging the existing force account units or creating new ones. The Bank disbursementwill be based on the agreed production standards and predetermined physical units. Duringnegotiations, it was pointed out by the Borrower that FA may not be used to extent presentlyanticipated and in such an event, the Borrower would use, with prior intimation to the Bank, thethree quotation for minor works procedure for the remaining minor works.


(iv) Minor Works (MW; US$9.9 million): Minor works (MW) estimated to costUS$500,000 equivalent or less each may be procured under lump sum, fixed price contractsawarded on the basis of quotations obtained from three qualified domestic contractors inresponse to a written invitation which shall include a detailed description of the work, basicspecifications and drawings, the required completion date, and a basic form of agreement. Theaward shall be made to the contractor who offers the lowest priced quotation and who has theresources to satisfactorily complete the contract. It was further agreed that the Borrower shalluse the regional ECA sample NCB bidding documents dated September 1995 for contracts ofUS$100,000 equivalent each and above. Contracts below US$100,000 may be procured on thebasis of the regional ECA sample document "Request For Quotation for Minor Works" datedOctober 1997 or a similar document acceptable to the Bank.

(v) Prior Bank Review: Prior Bank review shall apply to the following:

. all civil works contracts estimated to cost US$500,000 each or more; and* first two contracts awarded under the Minor Works procedure

The above prior review requirements would result in the Bank pre-reviewing about 96percent of the total contract value procured under the two Parts of the Project.

3.26 Implementation Arrangements. All the procurement would be the main responsibilityof the GDDP/PMU. Both are well experienced through the procurement of civil works andequipment under the ongoing First Transport and Roads Projects. A project launch workshop isalso planned closer to the date of effectiveness. Procurement information to be provided to theBank would include: (a) prompt reporting of contract award information; (b) comprehensiveexplanation of revised cost estimates for individual contracts and the total project; (c) revisedtiming of procurement action (including advertising, bidding, contract award and completiontime for individual contracts); and (d) compliance with aggregate limits on specified methods ofprocurement. The above procurement arrangements were agreed during negotiations andan agreement was reached with the Government on the Procurement Plan and Schedule(Annex 3.9).

H. Disbursement

3.27 The proposed US$300.0 million equivalent Bank loan, will be disbursed through two(US$ and DEM) single currency tranches, each of US$150.0 million equivalent (i.e., US$150.0million and DEM270.4 million, respectively) against the project components, as follows:


Table 3.4: Disbursement and Percent of Expenditures to be Financed

.. ; -. ; - - A ..- . .t.mount of.. -.- -,-,,~.. .. --:--. -. ... nt .... ...... . --u. ... ..... . .. . .. ... ..... ..--.C'A".. .. ......... .. ....... ..... - ', th '' : : eM ' ' ... ...RCATGR DE'CR' the-:-.- Do'lla"""'::- -Tr te DM P .E ENrCEN' O EF....... Trganih EXPENIUE OB

: -:- -: :: -:::: : :(U-$ millon) EM CED

1 CIVIL WORKS(a) Rehabilitation and 100.0 180.26 60%construction of roads,bridges, and bypasses

(b) Emergency 30.5 54.98 80%reconstruction of flood-damaged roads andbridges

2 GOODS 12.5 22.53 100% of foreign expenditures,100% of local expenditures(ex-factory costs), and 80% oflocal expenditures for otheritems procured locally

3 CONSULTANTS:TA and Training 1.0 1.8 100%

4 UNALLOCATED 6.0 10.83

During negotiations, agreement was reached on the amounts of the loan allocated to each

category, and on the percentage of expenditures for items to be financed in each category.

Estimated Loan Disbursements (US$ million equivalent)

IBRD Fiscal Year 1998 1999 2000 2001 2002 2003

Annual 20.0 40.0 80.0 80.0 50.0 30.0Cumulative 20.0 60.0 140.0 220.0 270.0 300.0; % 6.6 13.3 26.7 26.7 16.7 10.0

3.28 The PMU in MTME has gained considerable experience in disbursements for civil works

and equipment purchases during the ongoing projects. Contracts for works estimated at or

exceeding US$500,000 equivalent, contracts for goods estimated at or exceeding US$300,000

equivalent, and contracts for consulting finns and individuals estimated at or exceedingUS$100,000 and US$50,000 equivalent, respectively, would be fully documented.

Disbursements against contracts not requiring prior review would be made on the basis of

statements of expenditure (SOEs). During negotiations, agreement was reached with the

Government that documentation to support expenditures financed under SOEs will bemaintained by the Borrower and made available for review to the Bank supervisionmissions. In addition, they should be audited annually by auditors acceptable to the Bank.


3.29 For the critical items of emergency reconstruction and repair of the flood-damaged roadsand bridges, disbursement would be made against statements of expenditure for contracts ofworks up to US$50,000 equivalent.

3.30 Retroactive financing for the emergency program, up to a limit of 20 percent (US$12.0million) of the US$60.8 million Bank participation from August 1, 1997 till the date of loansignature, will allow an immediate start on emergency reconstruction and repair items. This wasagreed at negotiations.

3.31 To facilitate disbursements in civil works and reduce the volume of withdrawalapplications, the Bank's share of the project would be financed through two Special Accounts(SAs), one for each US Dollar and DEM currency. Both SAs will be opened and maintained bythe Borrower in the National Bank of Poland or in a commercial bank on terms and conditionssatisfactory to the Bank, including, only in the case of use of a commercial bank, appropriateprotection against set-off, seizure and attachment. The initial allocation will be US$3.5 millionand DEM6.3 million for each SA. This amount will be augmented to an authorized allocation ofUS$14.0 million, equivalent to a three-month average disbursement of the loan during the projectimplementation period, once the disbursements under the project reach or exceed 10 percent ofthe loan amount, i.e, US$7.0 million and DEM12.7 million for each SA. Replenishment of theSAs will be on monthly basis and would follow Bank procedures. The SAs would be auditedannually by independent auditors acceptable to the Bank. During negotiations, agreement wasreached on the establishment and operation of the SAs.

3.32 A schedule of disbursements, based on the Project Implementation Plan (para 3.21) isshown in Annex 3.11. With a late fourth quarter 1997 loan effectiveness date, an October 15,1997-March 1, 1998 project preparation (inception) phase, and a March 15, 1998 throughDecember 31, 2002 project physical implementation period (para 3.19 - 3.21 and Annex 3.8, and3.9), the proposed loan would be fully disbursed six months later on June 30, 2003. No contractshould be eligible for disbursement after the loan closing date, unless the Bank otherwise agrees.

I. Accounting and Auditing

3.33 GDDP already applies adequate Financial Management and Internal Control Systems. Ateam of expatriate experts financed by the Bank is advising and collaborating on the formulationand application of these systems. Starting in October 1997, GDDP would establish separateproject accounts through its PMU in accordance with acceptable accounting principles, record allproject expenditures, and maintain records on commitments, reimbursements, and the status ofproject funds on the basis of the accounting done by every DODP. With respect to the amountswithdrawn on the basis of SOEs, GDDP would maintain records on contracts, invoices andevidence of payments readily available for review. All records should also reflect adequately thedifferent contributions from the Government. GDDP would submit to the Bank a brief update ofthese accounts in the quarterly reports (para. 3.21). During negotiations, agreement wasreached that the PMU Secretary would have the project accounts, including SOEs (para.3.29), and the special accounts (para. 3.31), audited by an independent auditor acceptableto the Bank, and would submit annually to the Bank such audit accounts within six monthsof the end (December 31) of each fiscal year.


J. Environmental Impact

3.34 Most of the project construction consists of rehabilitation/strengthening of existing roads,and therefore does not raise any particular environmental concern; furthermore, it would enhancethe environment through more appropriate quality of existing infrastructure with less erosion, dust,noise, and fuel consumption and improved drainage systems and traffic safety. However, theinclusion of 12 bypasses and 3 new bridges implies that the project shifts from environmentcategory B to category A, in accordance with the provision of OD 4.01. All requiredEnvironmental Impact Assessments (EIAs) are underway (their Executive Summaries have beenalready presented to and agreed at the Bank) on the basis of the TOR in Annex 3.12, and will besubmitted to the Bank for approval prior to the Bank approval of the bidding documents (para.3.21). Every engineering study will include measures (including flood mitigation measures in thecase of the emergency component works) to mitigate satisfactorily any adverse environmentalimpact of the road works during and after construction. Both, timely submission and approval ofEIAs before approval of bidding documents, and inclusion of mitigation measures in everyemergency study, were discussed and agreed at negotiations. The project does not involve anyresettlement. Frequent contacts and full agreement have taken place with all communities affected,with several ecological NGOs, including "Friends of Earth" and the "Polish Ecological Club", andevery environmental decision has been and will be taken under the umbrella of the Polish Ministryof Environmental Protection and National Resources. The legislation on environment from thePolish Ministry of Environment is highly satisfactory and, since recently, well enforced.

3.35 Location of asphalt mixing plants and monitoring of their emissions is also tightlycontrolled by the voivodships. Attachment 1 to Annex 3.12 gives the current emission standards,which are being gradually applied to the existing fixed mixing plants formerly part of GDDP.These emission standards have been reviewed by the Bank and found acceptable. Theseregulations also apply to disposal of construction site spoil, and the Annex 3.12 comments on themonitoring arrangements.

3.36 The relative small scale of emergency works would not require the opening of newquarries or asphalt plant sites. Furthermore, by improving badly damaged road surface,shoulders and drainage, and removing downed bridge decks from rivers and their banks, theproject would have a positive impact on the environment. Therefore, and as an emergencyoperation, the subcomponent has not been assigned an environmental category. However, anyitems which present an opportunity for environmental enhancement, will be designedaccordingly, and all items will be monitored during supervision to ensure that there is nodegradation to the environment.

IV. ECONOMIC EVALUATION

A. Framework

4.01 The project is consistent with the Bank's Country Assistance Strategy of April 14, 1997,(para. 13, page 4, and para. 37 and 38, page 11), which concentrates on the removal ofinfrastructure bottlenecks, on creation of the better condition for private sector participation ininfrastructure, and on infrastructure modernization, as a core part of the strategy for successful EUintegration and on economic development. Highway sector policy in Poland is set by MTME,


which in 1993 promulgated a Statement of Aims and Intentions (para. 2.08, Annex 2.3). Theproject is based on GDDP's 1996-2000 Road Investment Program. It would be implementedduring 1998-2002 through GDDP, except for the road safety program directly under theresponsibility of MTME. The main lesson learned from the on-going projects is the importance ofkeeping the objectives and composition of the project simple so as not to exceed the absorptivecapacity of GDDP and MTME staff; this has been taken into account in the project design (paras.1.19 and 1.20).

4.02 The Government has made substantial progress in adopting market-based transportpolicies since the start of the economic transformation in 1990, and there are no major policydistortions that will affect project implementation (paras. 1.05 and 1.15). The project will continuepolicy initiatives begun with technical assistance and studies carried out under the on-goingprojects in the areas of improving road maintenance, road safety, and the system of road usercharges. The project is expected to have a further impact in each of these areas. The project is alsoexpected to encourage further privatization of road contracting, maintenance, and planning.

4.03 The project would facilitate the activities of virtually every sector of the economy, so thatbenefits are likely to be highly dispersed, as is the case with most transport projects. Theenvironmental impact of the project would also be positive (reduction of vehicle emissions mainlyin the bypassed cities, improved preparation of environmental assessments for road projects, lesssoil erosion and noise, and reduction of accidents particularly through the bypasses; paras. 2.16through 2.18, and paras. 3.34 through 3.36). Furthermore, the emergency program will reinstate theenvironmental balance damaged by the floods of July 1997.

4.04 GDDP will monitor the impact of the project both, during implementation with theassistance of the PMU, and thereafter, through regular traffic counts on project roads, GDDPreports on road maintenance activities, and the collection of road accident statistics by the trafficpolice.

B. Cost-Benefit Analysis

4.05 None of the non-emergency road sections for consideration has less than 6,000 vpd, noneof the bypasses and bridges less than 10,000 vpd. Bypass alignments were selected on the basis ofavoiding any resettlement, followed by a full cost-benefit and environmental analysis of possiblealternatives. Any bypass guarantees diversion of, at least, 70 percent of the total traffic. Everyroad, bypass and bridge contract (paras. 3.05 through 3.09; Annexes 3.1 and 3.2) would guarantee aminimal economic rate of return (ERR) averaging 25 percent, well above the economic cost ofcapital in Poland, estimated at 12 percent. A summarized economic analysis of three typical workscontracts is shown in Annex 4.1. The emergency program (Annex 3.3) is an urgent requirementlikely with higher economic and social returns than the non-emergency program (para. 4.07). Theproject would also provide other benefits which are difficult to quantify, such as improving theorganization and funding of road maintenance through the new Road Funding Law (para. 2.11),promotion of privatization through competitive procurement, reduction in road accidents throughthe GAMBIT program (paras. 3.12 and 3.13), and environmental improvements through wellconceived and implemented EIAs (para. 3.34). Hence, no ERRs have been calculated for the roadsafety program (2.8 percent of project cost), road maintenance activities (3.4 percent of projectcost), and TA/training (1.3 percent of project cost).


4.06 GDDP did the cost and benefit analyses and clearly has the capacity to do the jobsatisfactorily. Every (civil works contract) economic study reviewed and verified by the appraisalmission showed significant precision and detail. Costs and benefits were measured net of taxes.Cost estimates included physical (10 percent) and price (5 percent) contingencies. Current trafficlevels were estimated based on counts carried out by GDDP. Poland's high vehicle ownership rate,current high traffic growth rate (about 5 percent per annum) and prospects for the future, arediscussed in para. 2.04. Traffic on the project roads is expected to grow rapidly through 2005,when vehicle ownership would reach the current level of EU countries. Congestion effects werespecifically taken into account in the design of bypasses. Cost savings per km on roadrehabilitation/modernization are US$0.05 per km (10 percent of present vehicle operating cost) forthe average light vehicle and US$0.20 per km (15 percent of present vehicle operating cost) for theaverage heavy vehicle. In the case of bypasses, savings are doubled because construction of abypass adds to pavement betterment further improvements on road safety and urban pollution, andthe elimination of traffic congestion.

4.07 Rates of return for emergency road and bridge reconstruction are expected to be highsince: (i) downed bridges are critical bottlenecks causing, at certain locations, long waiting time;(ii) damaged roads and bridges are being used, despite the constant risk of collapse; and (iii)rehabilitation of landshields will avoid further degradation of the road sections. Moreover, theproposed project will support the restart of normal activity of industry and trade through the re-establishment of transport links.

C. Project Risk Analysis

4.08 The main risk is the availability of adequate budgetary funds for GDDP, which arepresently insufficient. The fiscal pressures in Poland are likely to remain such that carefulevaluation of priorities and on-going discussions on inter- and intra-sectoral budgetary tradeoffswill continue to be essential. Hence, GDDP's budget would be annually reviewed and agreedwith the Bank (para. 3.05). This agreement would cover the allocation of sufficient resources,their adequate distribution between maintenance and new construction, and adequate economicreturns for the proposed investments. This same procedure would also reduce the risk thatPoland might initiate a program of rapid motorway construction at the expense of neglecting theexisting network. The enforcement of the Road Funding Law starting January 1, 1998 (para.2.11), and the fact that the civil works contracts financed by the project will be let in four annualbatches, further reduces these risks. Both GDDP's ability to manage the project as well as thecapability of the Polish construction industry have been noted as a low risk of the project giventhe successful implementation of two Bank projects. Nevertheless, technical assistance andtraining have been included as part of the project, and there will be close follow-up of theseaspects by supervision missions.

V. AGREEMENTS REACHED AND RECOMMENDATION

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

(i) GOP will take all measures to ensure that economically and technically


appropriate GDDP maintenance budget will be allocated in accordance to theneeds (para. 2.11; LA Schedule 5, para. 5);

(ii) composition of first year's program (Group I) and procedures for preparation offollowing years' programs (para. 3.05 and Annex 3.1; LA Article III, Section 3.01 b);

(iii) composition and estimated project costs (para. 3.16; LA Schedule 2);

(iv) GOP will meet local costs (estimated at US$240.0 million equivalent) and, ifthe case arises, any cost overrun (para. 3.18; LA Section 3.01 a);

(v) MTME will retain the existing PMU, and GDDP the existing Coordination Unitfor the project (para. 3.19; LA Schedule 5, para. 2);

(vi) GDDP and the Bank each year, prior to December 1, will monitor progressof project and will agree on the following year's program and budget (para.3.20; LA Schedule 5, para. 3);

(vii) PMU in MTME and GDDP will apply the agreed performance monitoringindicators to monitor and evaluate the progress of the project, the procurementschedule, the Project Implementation Plan, a report by August 1, 2000 verifyingproject achievements and formulating recommendations before December 31,2000, for further achievement of project objectives, and reporting arrangements(para. 3.21; LA Schedule 5, para. 6 a, b, c);

(viii) Procurement Plan and Schedule, and all related procurement arrangements (para.3.23 through 3.26 and Annex 3.9; LA Schedule 4);

(ix) Disbursement and percent of expenditures to be financed (para. 3.27; LASchedule I);

(x) Documentation to support expenditures financed under SOEs, and its auditing byindependent auditors (para. 3.28; LA Article IV, Section 4.01 a, b (i),c);

(xi) Retroactive financing for US$12.0 million of emergency works since August 1,1997 to the date of loan signature (para. 3.30; LA Schedule 1, Section 3);

(xii) Establishment and operation of the two Special Accounts in US$ and DEM (para.3.31; LA Schedule 6);

(xiii) Submission of an annual project accounts audit report by an independent auditorwithin six months of the end of each GOP fiscal year (para. 3.33; LA Article IV,Section 4.01 b (ii), (iii)); and

(xiv) Environmental requirements (para. 3.34; LA Schedule 5, para. 4).

-33-SAR Roads II Project Poland

5.02 Based on the above agreements, the project is suitable for a Bank loan of US$300.0million equivalent (in two single currency loan tranches of US$150.0 million and DEM270.4million, respectively) to the Republic of Poland, with a 1 5-year maturity including a 5-year graceperiod, at the Bank's LIBOR - based floating interest rate.

I

Annex 1.1Page 1 of 1

POLAND

ROADS II PROJECT

Structure of the State Railway System in Poland(as of December 1996)

4 - track line 47.73 - track line 50.12 - track line 8,807.41 - track line 13,047.4

Subtotal standard gauge lines 21,952.6

Russian standard (1,525 mm) gauge lines 647.0

Subtotal standard & Russian standard 22,599.6

Narrow gauge lines 1,388.0~~~j-. : :- -:-: .. ......... ::.

kOA Ra:ilway -m i23987-::, - :, -: .. .: ,,, ..- .. ... ...,-: .

:TO- - ,jj -w iWe i-i-: , , i : - : .

Of which Electrified (3000 V) 11,627

Source: MTME, February 1997

m:\poland\ekastl\annexl I I.doc


POLAND

ROADS II PROJECT

Traffic Development

Transport Mode 1990 1991 1992 1993 1994 1995

---------------------------- ton - kilometer (in million) -------------------------

Railways 83.5 65.2 57.8 64.4 65.8 69.1Road haulage 40.3 39.7 42.1 40.8 45.4 51.2Public transport (state 10.1 6.6 5.2owned)Branch enterprises 9.0 12.1 16.2 20.6 24.0 28.2Own transport 21.2 21.0 20.7 20.2 21.4 23.0Inland shipping 1.0 0.8 0.8 0.7 0.8 0.9Air transport - - 0.1 0.1 0.1 0.1Pipelines 13.9 10.4 11.9 12.2 14.3 13.5TOTAL 138.7 116.1 112.7 118.2 126.4 134.8Shipping 207.4 202.3 193.1 155.1 144.1 165.9

Enterprises serving only particular branches of economy* Transport for own needs of non-transport enterprises: Partly estimates

- Negligible

------------------------------ Passengers (million) -------------------------------

Railways 790 652 549 541 495 466Road transport (bus) 2,064 1,709 1,513 1,381 1,216 1,132Air transport 2 1 1 1 2 2Inland shipping 4 1 1 1 1 1TOTAL 2,860 2,363 2,064 1,924 1,714 1,601

------------------------------ Passenger - km (billion) ----------------------------

Railways** 50.40 40.10 32.60 30.90 27.60 26.70Road transport (bus) 46.30 41.70 39.00 37.80 34.30 34.00Air transport 4.40 3.60 3.60 3.70 4.00 4.70Inland shipping 0.03 0.02 0.02 0.01 0.02 0.02TOTAL 101.13 85.42 75.22 72.41 65.92 65.42* Without urban transport passengers

Source: Statistical Year Book of Poland, 1996m:\poland\ekastd\annex21.doc


POLAND

ROADS II PROJECT

Evolution of the Road Vehicle Fleet 1990-1995

Passenger Buses Lorries and Ballast Tractors TOTALCars Vans and Tractors VEHICLES

1990 5,260,600 92,100 1,044,400 1,192,000 7,589,1001991 6,112,200 87,000 1,151,500 1,183,000 8,533,7001992 6,504,700 86,300 1,212,100 1,182,700 8,985,8001993 6,770,600 86,800 1,235,200 1,191,700 9,283,3001994 7,153,100 86,500 1,306,900 1,214,600 9,761,1001995 7,517,300 85,100 1,354,100 1,211,600 10,168,100

ESTIMATION: 2000-20052000 9,459,000 I 116,000 1500,000 1,300,000 12,375,0002005 r 12,659,000 l 132,000 1856,000 T 1,350,000 j15,997,000

Source: GUS (Main Statistical Office)Estimation source: Polish Transport Policy Paper, MTME, WarsawDate: April 1996

m:\poland\sar\annex22.doc


Intentions and Aims of The Ministry of Transport

and Maritime Economy with regard to

Development of Road Sector in Poland

January 1993


The Ministry of Transport and Maritime Economy (MT&ME) fully appreciatesimportance of road network in efficient functioning and development of national economyand international cooperation.

At the same time MT&ME is fully aware of continuous deterioration of the roadnetwork resulting from underfmancing of the road sector in recent years. Aiming atmodifying that status, transport sector, undertakes a number of organizational and technicalactions described in this study. Efforts are also made to increase expenditures formaintenance and road sector development. One of such efforts is development andimplementation of the policy of increased direct road users participation in costs involved inroad network maintenance and modernization, which should, within short period of time,result in achieving adequate level of expenditures for current maintenance of existing roads.

Particular attention will be paid to proper planning and management, economicalproject evaluation, road safety improvement, and also implementation of more effectivemanaging of financial resources.

Program of MT&ME aims will be implemented in the following areas:

1. Setting road sector priorities.

Fundamental priorities are recognized as:

insuring proper level of existing roads and bridges maintenance;

continuous modernization of main road network, including "bottle necks"elimination; and

road safety improvement.

2. Insuring adequate budgetary levels for national road network maintenance.

In 1993 road sector will be financed from the following sources:

- budgetary expenditures for road maintenance;

- budgetary expenditures for investments;

- income from: granting concession for operating international road transport,issuing single international haulage permits, and also periodical foreign permitsfor multiple haulage; and

- support financing of the Motorway A-4 sections completion, construction ofwhich has already been started (Krakow bypass, access road to Katowice),planned to be constructed as mutual undertaking with European Bank forReconstruction and Development.


3. Users charges.

The modification works of the Public Roads Bill are continued. The modified Billwill allow charging tolls for the use of motorways, expressways and exit roads leading toestablishments carrying on commercial activities.

Legislative works related to the Bill modification are also aimed at grantingconcessions for motorways construction, and for motorway construction with participation ofprivate or state, domestic or foreign capital.

According to MT&ME aims, expenditures for road maintenance have been recognizedas high priority.

Figures and structure of road expenditures are shown on the attached illustration.

It is planned, in accordance with the project of new Public Roads Bill, to shorten thelength of national road network financed through the State Budget, which will bring down thelevel of expenditures for these roads.

The delegation negotiating loan with the World Bank has been given authority to statethat Polish Government shall make efforts to:

halt in 1993 decrease of budget expenditures for national roads maintenance;

ensure gradual increase of budgetary expenditures to the level recognized astechnically and economically justified; and

1990 level of road maintenance expenditures (approximately US$340 million)is recognized as technically and economically justified. Such a level will beobtained as soon as the budgetary situation of the State will allow.


POLAND

ROADS II PROJECT

GDDP Geometric Standards

..i n c ~ a T D e s i g P a w w t e r . ._ _ _ _ _ _ _ _ _ _ _ _ _ __.. ., , _ _ __. ._................. .. .. .. . ....... .. . ............Design Lane Minimum Max.

Road Category Terrain Speed Width Horiz. Radius Grade (%)(km/h) (m) (m)

120 3.75 1000-700 5.0Motorways 100* 3.50 750-500 6.0

120 3.75 1000-700 5.0Expressways 100* 3.75-3.50 750-500 6.0

80** 3.50 500-300 6.0

Main Trunk Flat 100 3.50 750-600 5.0Roads Rolling 80 3.50 500-350 6.0

Mountainous 70(60); 3.50 350-250 6.5L_______________ ____________ ___________ (250-1 80)* _*

Secondary Roads Flat 70 3.00 350-250 6.5Rolling 60 3.00 250-180 7.0

=_______________ Mountainous 50 3.00 150-120 8.0

-... '~~~~~.......x ' ..... ""-"'""""" '"''"'"'"""" .':-'"' :Road Category Rural Sections Urban Sections

(pcu's/hr) (pcu's/hr)Motorways: Two lanes: one-way traffic 2,660 same

Three lanes: one-way traffic 3,430 sameMain Roads: Two lanes: two-way traffic 850 -1,400 1,400

Two lanes: one-way traffic 1,850 - 2,050 2,050

Source: BPRSD, February 1997m:\poland\ekastl\annex24

More difficult conditions (e.g. urban areas, hilly terrain etc.);very difficult conditions;in exceptional circumstances.

Annex 2.5Page I of 1

POLAND

ROADS II PROJECT

Number of Road Accidents Reported, Persons Injured and Killed, 1990 - 1996

1995 j

1994 o No. Killed

r No. Injured1993 | g 1 * No. Accidents

1992

1990 - _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~__________ _ _ G _ __i

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

[1990 199:1 199211993 1994 1995 i0t 11996-No. Accidents Reported 50,532 54,038 50,990 48,901 53,647 56,904 57,9111No. Injured 59,611 65,242 61,047 58,812 64,573 70,226 71,419No. Killed 7,333 7,901 6,9461 6,341 6,744 6,900 6,359

Source: Transport Institute of Road Safety,September 1997, Warsaw, Poland

m:\poland\ekastl\annex2.5

POLAND Annex 3.1ROADS 11 PROJECT

LIST OF CONTRACTS

Group I (page I of 2) cost in ZI million (in 9/1997 prices)

No. Contract Section Documentation IRR Task Task Inputs I DODPRno name and number length stage costs costs 1998 1999 2000 2001 2002

(kmn) ZI million US$ million2 3 4 5 6 7 8 9 10 11 12 13 14

I 61 21.735 PT 50.2 16.56 4.73 8.05 8.51 BIALYSTOKCONTRACT No 51.1 -Modernization of nationalroad no 61 Warszawa -August6w, section (Lomza)Pietnica -Stawiski from km153+565 to km 175+300 1 1 _

2 5 12.900 PT 36.2 27.39 7.83 13.59 13.80 BYDGOSZCZ

CONTRACT No 52.1 -Modemization of nationalroad no 5 Swiecie - Poznaf3,section Swiecie - Trzeciewiec

_ from km 7+000 to km 19+900 _ _3 5 15.100 PT 36.2 23.00 6.57 9.20 13.80 BYDGOSZCZ

CONTRACT No 52.2 -Modernization of nationalroad no 5 Swiecie - Poznaii.section Trzeciewiec -Bydgoszcz from km 19+900

,to km 35+0004 1 8.825 116.6 10.30 2.94 10.30 KATOWICE

CONTRACT No 56.1 -Pavement strengthening onnational road no I Gdansk -Cieszyn, section Katowice -Kostuchna from km 546+309to km 555+134, twocarriageways I

5 1 13.408 11.99 3.43 5.75 6.24 KATOWICECONTRACT No 57.1-Pavement strengthening onnational road no I Gdansk -Cieszyn, section Tychy -Pszczyna from km 565+920to km 579+328, twocarriageways

6 4 10.050 69.3 9.35 2.67 4.60 4.75 KATOWICECONTRACT No 58.1 -Modernization of nationalroad no 4 Wroclaw - Krakow,section Kleszcz6w - Gliwicefrom km 300+700 to km310+754 .

7 7 7.435 K 55.2 28.98 8.28 13.80 15.18 KIELCECONTRACT No 62 -Construction of theBialobrzegi bypass onecarriageway in the route ofnational road no 7 Warszawa -Krak6w from km 409+615 tokm 417+154 1 _ _ _ _

8 17 11.270 DP 82.5 8.63 2.47 8.63 LUBLINCONTRACT No 71-Modernization of nationalroad no 17 Warszawa - Lublinsection Kur6w - Garb6w fromkm 114+104tokm 119+816and from km 120+465 to km1126+025 1 1 1 _ _

9 7 9.425 34.9 8.91 2.55 8.91 OLSZTYN

CONTRACT No 74.1-Pavement strengthening onnational road no 7 Gdansk -Warszawa, section Rychnowo- Pawlowo from km 145+803to km 149+02S and from kim158+800tokm 165+000 _ _ _ ; _ _

1/8

POLAND Annex 3.1ROADS II PROJECT

LIST OF CONTRACTS

Group I (page 2 of 2) cost in Zi million (in 9/1997 prices)

No. Road Contract Section Documentation IRR .Task Task Inputs DODP_ no name and number length stage _ costs costs 1998 1999 2000 2001 2002

= = (In) Zl million USS million_ 1 2 1 3 4 5 6 7 t 9 tO Ii 12 13 14

10 7 17.446 _ 17.19 4.91 8.05 9.14 OLSZTYN

CONTRACT No 74.2 -Pavement strengthening onnational road no 7 Gdansk -Warszawa, section Witamowo- Napierki from km 173+000to km 174+800, from km176+915 to km 180+000,fromkm 183+S00tokm185+800 and from km193+500 to km 204+061 1 1__ ___ _

_ 8 77.050 PT 746. 20.59 5.88 9.78 10.81 POZNAN

CONTRACT No 78 -Construction of the Syc6wbypass one carriageway in theroute of national road no 8Warszawa - Wroclaw fromkin 265+300 to km 272+350 1 _ _ ___ __

12 5 5.340 PT 34.8 25.53 7.29 8.05 9.43 8.05 POZNAN

CONTRACT No 79 -Construction of the Smigielbypass one carriageway in theroute of national road no 5Poznan - Wroclaw from km233+165 to km 238+500 I

13 3 7.900 57.3 6.09 1.74 6.09 SZCZECIN

CONTRACT No 81 -Pavement strengthening onnational road no 3 Szczecin -Zielona G6ra, section Gorz6w-Deszczno from km 191+100to km 199+000 _ _

14 24 14.900 58.2 10.46 2.99 10.46 SZCZECIN

CONTRACT No 84 -Pavement strengthening onnational road no 24 Pniewy -Skiwerzyna, section Goraj -Skwierzyna from km 39+100to km 54+000 _ . .

15 2 27.500 PT 47.3 11.26 3.22 5.17 6.09 ZIELONAGORACONTRACT No 89 -Pavement strengthening onnational road on 2 Swiecko -Poznan, section Bocz6w -Gron6w from km 24+525 tokm 52+150 ___

Total: Group I 190.2S 236.23 67.491 130.43 97.75 8.05

2/8

/


LIST OF CONTRACTS

Group 11 (page I of 3) cost in ZI million (in 9/1997 prices)

No. Road Contract Section Documentation IRR Task Task _ Inputs DODPno name and number length stage costs costs 1998 1999 2000 2001 2002

_ - ______________ _ ZI(km) Zt million USS million _

2 3 4 5 6 7 8 9 10 It 12 13 14

l 61 35.868 PT 502 23.35 6.67 11.50 11.85 BIALYSTOK

CONTRACT No 51.2 -Modernization of nationalroad no 61 Warszawa -August6w, section Stawiski -Grajewo from km 175+300 tokm 197+357 and from km198+227 to km 212+038

2 10 5.000 PT 39.7 15.98 4.57 6.90 9.08 BYDGOSZCZ

CONTRACT No 53 -Construction of the Naklobypass one carriageway in theroute of national road no 10Szczecin - Bydgoszcz, fromkm 209+000 to km 214+000 .1 1 1

3 7 CONTRACT No 54 - 0.280 154.3 5.40 1.54 5.40 GDANSKRehabilitation of bridge overthe Wisla river in Kiezmarklocality in the route ofnational road no 7 Gdansk -Warszawa from km to

Ilkm4 1 10.786 116.6 12.58 3.59 5.75 6.83 KATOWICE

CONTRACT No 56.2 -Pavement strengthening onnational road no 1 Gdansk -Cieszyn, section Kostuchna -Tychy from km 555+134 tokm 565+920, two

_ carriageways5 1 15.049 14.11 4.03 6.90 7.21 KATOWICE

CONTRACT No 57.2 -Pavement strengthening onnational road no I Gdansk -Cieszyn, section Pszczyna -Bielskie voivodeship border,from km 579+328 to km594+377, two carriageways

6 4 3.062 69.3 2.84 0.81 1.15 1.69 KATOWICE

CONTRACT No 58.2 -Modernization of nationalroad no 4 Wroclaw -Krak6w,section in Bytom from km

_ 325+800 to km 328+862 _______

7 90 CONTRACT No 59 - 6.632 81.7 12.88 3.68 5.75 7.13 KATOWICEPavement strengthening onnational road no 90Sosnowiec - DabrowaG6rnicza, section from km0+000 to km 6+632 1

8 93 10.488 110.6 10.83 3.09 5.29 5.54 KATOWICE

CONTRACT No 60.1 -Pavement strengthening onnational road no 93 KatowiceWisla, section Piotrowice -Mikol6w from km 8+980 to

_ l kn 19+468, two carriageways

9 93 5.220 32.2 14.95 4.27 6.90 8.05 KATOWICE

CONTRACT No 61-Pavement strengthening onnational road no 93 KatowiceWisla, section WezelMikolowska - Piotrowicefrom km 3+760 to km 8+980 _

3/8

POLAND Annex 3.1

ROADS II PROJECT

LIST OF CONTRACTSGroup 1I (page 2 of 3) cost in Zl million (in 9/1997 prices)

No. Road Contract Section Documentation IRR Task Task Inputs DODPno name and number length stage costs costs 1998 1999 2000 2001 2002

_ - ________ (km) ZI million USS million_ 2 3 4 5 6 7 - 9 lo 1 12 13 14

10 7 5.800 PT 31.4 35.76 10.22 9.20 14.95 11.61 KIELCE

CONTRACT No 63 -Construction of the Jedrzej6wbypass one carriageway in theroute of national road no 7Warszawa - Krak6w from km554+941 to km 560+736

11 6 5.360 PT 42.1 21.73 6.21 10.35 11.38 KOSZALIN

CONTRACT No 64 -Construction of the Karlinbypass one carriageway in theroute of national road no 6Szczecin - Gdansk from km116+500 to km 121+862

12 4 1.770 K 19.9 17.71 5.06 8.05 9.66 KRAKOW

CONTRACT No 66-Construction of the Brzeskobypass one carriageway(followup) in the route ofnational road no 4 Krak6w -Rzesz6w from km 475+541 tokm 475+810 and from km

_ _ 476+500 to km 478+000 ._ . 11 _ _13 17 0.630 PT 184.3 5.29 1.51 2.53 2.76 LUBLIN

CONTRACT No 68 -Modemization of bridge overthe Wieprz river in Kosminlocality in the route ofnational road no 17 Warszawa- Lublin from km to km

14 82 i:oN I RtAT. o7(1.2 - 2.440 19.9 17.25 4.93 11.50 5.75 LUBLINConstruction of Okopy bypassin the route of national roadno 82 from km 66+088 to km68+530 __

15 8 12.200 70.9 29.32 8.38 12.65 16.67 LODZ

CONTRACT No 72.3 -Modemization of nationalroad no 8 Warszawa -Piotrk6w Trybunalski, sectionWolb6rz - Polichno from km101+000to km 113+200, two

I carriageways16 7 7.000 34.9 9.77 2.79 3.45 6.32 OLSZTYN

CONTRACT No 73.Pavement strenghtening onnational road no 7 Gdansk -Warszawa, section Ostr6dabypass from km 125+000 tokm 133+000.

17 4 18.980 36.9 14.26 4.07 6.90 7.36 OPOLE

CONTRACT No 75 -Pavement strengthening onnational road no 4 Wroclaw -Krak6w, section Opole -Strzelce Opolskie from km

Ito kkm18 4 4766.000 PT 75.0 37.30 10.66 18.60 18.70 RZESZOW

CONTRACT No 80 -Construction of the Radymnobypass in the route of nationalroad no 4 Krakow -Przemysl,from km 646+938 to km651+704

4/8


LIST OF CONTRACTSGroup II (page 3 of 3) cost in Zl million (in 9/1997 prices)

No. Road Contract Section Documentation IRR Task Task Inputs DODP_ no name and number length stage _ costs costs 1998 1999 2000 2001 2002

(km) Z1 million USS million_ 2 3 4 5 6 7 8 9 10 II 12 13 1419 17 11.900 20.5 34.50 9.86 - 16.1 18.40 - WARSZAWA

CONTRACT No 85.1 -Modernization of nationalroad no 17 Warszawa -Lublin, section Garwolin -Gonczyce from km 48+400 tokkm 60+300 ____ _ _ .

20 17 15.750 20.5 46.00 13.14 13.80 18.40 13.80 WARSZAWA

CONTRACT No 85.2 -Modernization of nationalroad no 17 Warszawa -Lublin, section Gonczyce -Trojansw from kin 60+300 tokm 76+050 (including asection on the area of DODP

I Lublin) I_III_ _ _21 61 3.537 44.0 21.42 6.12 10.35 11.07 WARSZAWA

CONTRACT No 87.1 -Construction of bridge overZalew Zegrzynski in Zegrzein the route of national roadno 61 Warszawa -Ostrolekafrom km 26+900 to km30+150, construction of

_ bridge _22 61 3.537 44.0 12.35 3.53 5.75 6.60 WARSZAWA

CONTRACT No 87.2 -Construction of bridge overZalew Zegrzynski in Zegrzein the route of national roadno 61 Warszawa -Ostrolekafrom km 26+900 to km30+150, construction ofaccess roads

23 456 18.100 38.6 7.59 2.17 3.45 4.14 WROCLAWCONTRACT No 88 -Pavement strengthening onnational road no 456 Wroclaw- Brzeg, section Wroclaw -Gozdzikowice from km13+000 to km 28+011 andfrom km 33+000 to km

_ 36+084 ________

24 3 0.423 20.5 30.30 8.66 5.00 15.00 10.30 SZCZECIN

CONTRACT No 91.1 -Construction of Wolin bypassin the route of national roadno. 3 Swinouscie - Szczecinfrom km 26+550, to km29+090. Construction ofbridge over Dzwina river.

25 3 1.977 20.5 40.50 11.57 5.00 21.00 14.50 SZCZECIN

CONTRACT No 91.1 -Construction of Wolin bypassin the route of national roadno. 3 Swinouscie - Szczecinfrom km 26+550, to km29+090. Construction ofbridge over Dzwina nver.Total: Group 11 4967.789 _ 493.97 141.13 198.22 245.54 50.21 _

5/8


LIST OF CONTRACTSGroup III (page I of 2) cost in ZI millioa (in 9/1997 prices)

No. Road Contract Section , Documentation IRR Task Task Inputs _ DODPno name and number length stage costs costs 1998 1999 2000 2001 2002

_ _ _______________ .. L(km) Zl million USS million2 2 3 4 5 6 7 I 9 1l o i 12 13 14

I 7 1.700 41.4 8.28 2.37 3.45 4.83 GDANSKCONTRACT No 55 -Construction of overbridgeand bridge in Bogaczewo inthe route of national road no 7Gdansk - Warsaawa, sectionfrom km 71+140 to km

_ 72+840 _____

2 93 15.287 110.6 15.73 4.49 7.47 8.26 KATOWICE

CONTRACT No 60.2 -Pavement strengthening onnational road no 93 KatowiceWisla, section Mikol6w -Zory from km 19+468 to km34+755, two caniageways

3 93 17.078 110.6 17.59 5.03 8.62 8.97 KATOWICE

CONTRACT No 60.3 -Pavement strengthening onnational road no 93 KatowiceWisla, section Zory -Zbytk6w from km 34+755 toakm 51+833, two carriageways _

4 4 0.840 K 27.5 6.67 1.91 3.22 3.45 KRAKOWCONTRACT No 65 -Construction of bridge overthe Raba river in Cheimlocality in the route ofnational road no 4 Krak6w -Rzesz6w from km 453+952 tokm 454+797 1 1 _ 1

5 17 3.770 ZTE 54.5 19.32 5.52 9.20 10.12 LUBLINCONTRACT No 69.1 -Construction of the Piaskibypass one carriageway inthe route of national road no17 Lublin - Zamosc, task Ifrom km 167+320 to km171+090 1 1

6 82 16.406 19.9 22.65 6.47 11.50 11.15 LUBLINCONTRACT No 70.1 -Modemization of nationalroad no 82 Piaski - Dorohusk,section Chelm Lub. -Dorohusk from km 49+682 to

,km 66+088 ___ ___7 CONTRACS No 72.2 - 8.000 70.9 25.87 7.39 8.05 9.77 8.05 LODZ

CONTRACT No 72.2.-Modemization of nationalroad no 8 Warszawa -Piotrk6w Trybunalski, sectionTomasz6w Mazowiecki -Wolb6rz from km 93+000 tokm 101+000, twocarriageways _

9 10 13.500 41.9 21.62 6.18 10.35 11.27 SZCZECIN

CONTRACT No 82 -Modemization of nationalroad no tO Szczecin -Bydgoszcz, section Szczecin -Stargard Szczecinski from km

_ 0+000Oto km 13+500 .___10 24 CONTRACT km 13 -019.700 58.2 27.37 7.82 12.65 14.72 SZCZECIN

CONTRACT No 83 -Modemization of nationalroad no 24 Pniewy -Skwierzyna, sectionKamionna - Goraj from km19+400 to km 39+100

6/8


LIST OF CONTRACTSGroup III (page 2 of 2) cost in Zl million (in 9/1997 prices)

No. Road Contract Section Documentation IRR Taak Task I inputs DODPRno name and number length stge Costa 1998 1999 2000 2001 2002=

(Ian)____ ZI million USS mtillion ___

2 3 4 S 6 7 a 9 lo I I 12 1 3 141 18 5.900 KP 28.7 37.95 10.S4 11.50 14.95 11.50 WARSZAWA

CONTRACT No 86.1Constiuction of the Ostr6wMaz. bypass one carriagewayin the route of national roadno 18 Warszawa - Bialystoksection from km 92+500 tokm 97+170 (junction Lomza)and relocation of road no 628in the area of Brok juncture,

11,3 km long ___

Total: Group 1ill 102.1811 1SI 203.05 58.01 86.01 97.49 19.551

7/8


LIST OF CONTRACTSGroup IV (page 1 of 1) cost in Zl million (in 9/1997 prices)

No. Road Contract Section Documentation IRR Task Task Inputs DODPno name and number length stage costs costs 1998 1999 2000 2001 2002

_ (km) =________________ _ Zl million USS million _ _=

2 3 4 5 6 7 5 9 1 11 12 13 14T 95 21.100 28.0 7.59 2.17 3.45 4.14

CONTRACT No 67 -Pavement strengthening onnational road no 95 Rabka -Zakopane section Klikuszowa- Nowy Targ from kIn 13+160to km 17+100 and sectiorNowy Targ - Zakopane fromkm 21+334 to km 39+741

2 17 2.530 ZTE 54.5 12.53 3.58 5.75 6.78 LUBLIN

CONTRACT No 69.2 -Construction of the Piaskibypass one carriageway in theroute of national road no 17Lublin - Zamosc, task 11 fromkm 171+090 to km 173+620 _______

3 8 8.000 70.9 27.61 7.89 12.66 14.95 LODZ

CONTRACT No 72.1 -Modernization of nationalroad no 8 Warszawa -Piotrkow Trybunalski, sectionCzemiewice - Tomasz6wMazowiecki, eastemcarriageway from km81+991,5 to km 93+000 andwestem carriageway from km

_ 84+989,5 to km 93+0004 5 20.500 63.6 17.59 5.03 8.05 9.54 POZNAN

CONTRACT No 76 -Pavement strengthening onnational road nr 5 Pozn;a -Wroclaw, section Komomiki -Gluchowo from km 189+200to km 209+700 _ _____

5 5 9.620 42.5 7.59 2.17 - 3.45 4.14 POZNANCONTRACT No 77 -Pavement strengthening onnational road no 5 Poznan -Wroclaw, section Smigiel -Leszno from km 241+000 tokmn 251+400

6 18 2.900 KP 28.7 20.70 5.91 9.20 11.50 WARSZAWACONTRACT No 86.2 -Construction of the OstrowMazowiecka bypass onecarriageway in the route ofnational road no 18 Warszawa- Bialystok, section from km97+170 (Lomza junction) to

I km 99+2507 61 3.537 44.0 7.62 2.18 3.45 4.17 WARSZAWA

CONTRACT No 87.3 -Construction of bridge overZalew Zegrzynski in Zegrzein the route of national roadno 61 Warszawa - Ostrolekafrom km 26+900 to km.30+150, rehabilitation of theexisting bridge including

_modemization of access roads8 l CONTRACT No 90 - 7.600 45.9 15.97 4.56 7.92 8.05 LODZ

Modemization of nationalroad no I L6dz - Cieszyn,section Tuszyn - WezelTuszyn, from km 369+900 tokm 377+500, twocarriageways_ otal: Group IV 75.787 117.20 33.49 _ - 53.93 63.27TOTAL in PLN 5336.041 - 1050.4! - 130.43 295.97 339.60 201.63 82.82TOTAL in USSS 5334.0411 I=I 1 350.00 43.47 98.56 113.20 67.20 27.60

8/8

POLAND Annex 3.1Attachment

ROADS II PROJECT Page 1 of 1

List of Selected Tasks

No. Road Task Name Section vpd Realization Character ERRNo. lenght (km) 1996 Phase of Works (%) DODP

1 61 Lomza-Grajewo 57.60 6,000 1998-1999 R 50.2 Bialystok2 5 Gruezno-Bydgoszcz 28.00 8,500 1998-2000 R 36.2 Bydgoszcz3 5 Rynarzewo-Szubin 6.71 7,400 1998-1999 R 26.1 Bydgoszcz4 10 Bypass Nakla 4.34 7,000 1999-2001 C 39.7 Bydgoszcz5 7 Kiezmark Bridge 0.28 8,300 1998-1999 S 154.3 Gdansk6 7 Dworek-Bogaczewo 38.44 9,500 1998-1999 S 32.4 Gdansk7 7 Bridge in Bogaczewo 1.70 8,000 1999-2000 C 41.4 Gdansk8 1 Katowice-Tychy 19.60 19,700 1998-1999 S 106.7 Katowice9 1 Tychy-Gzechowice 26.00 18,700 1999-2000 S 153.8 Katowice10 4 Kleszczow-Gliwice 13.12 10,200 1998-1999 R 69.3 Katowice11 90 Sosnowiec-Dabrowa G. 6.63 18,000 1998-2000 S 81.7 Katowice12 93 Piotrowice-Zbytkow 42.90 13,900 1999-2001 S 110.6 Katowice13 93 W. Mikolowska-Piotrowice 5.22 22,400 2000-2003 S 32.2 Katowice14 7 Bypass Bialobrzegi 5.90 14,600 1998-2001 C 55.2 Kielce15 7 Bypass Jedrzejowa 5.80 8,350 1998-2001 C 31.4 Kielce16 6 Bypass Karlina 5.36 6,500 1998-1999 C 42.1 Koszalin17 4 Bridge in Rabie 0.84 17,400 1998-1999 C 27.5 Krakow18 7 Myslenice-Lubien 13.02 11,000 1998-2001 C 25.0 Krakow19 95 Klikuszowa-Zakopane 21.10 7,600 1999-2000 S 28.0 Krakow20 98 Bypass Gorlic 2.02 8,000 1999-2000 C 55.2 Krakow21 17 Bridge in Kosmin 0.63 7,100 1998-1999 R 184.3 Lublin22 17 Bypass Piaski 6.30 10,500 1999-2002 C 54.5 Lublin23 1 Tuszyn-Lodz 21.35 18,000 2000-2002 R 45.9 Lodz24 8 Czerniewice-Polichno 28.20 26,700 2000-2002 R 70.9 Lodz25 7 Bypass Ostrody 7.00 6,200 1998 S 34.9 Olsztyn26 7 Olsztynek-Napierki 26.87 7,500 1998-1999 S 34.6 Olsztyn27 5 Komomiki-Gluchowo 20.50 9,500 2000-2001 S 63.6 Poznan28 5 Smigiel-Leszno 9.62 8,000 2000-2001 S 42.5 Poznan29 8 Bypass Sycowa 7.05 10,800 1998-1999 C 74.6 Poznan30 25 Bypass N. SkaLmierzice 4.70 7,900 2001-2002 C 34.9 Poznan31 5 Bypass Smigla 5.34 8,100 1998-2002 C 34.8 Poznan32 4 Bypass Ropczyc 4.45 10,300 1998-1999 C 42.6 Rzeszow33 3 Renice-Marwice 20.70 6,400 1998-1999 R 25.7 Szczecin34 3 Gorzow-Deszczno 7.90 9,200 1998-1999 S 57.3 Szczecin35 10 Szczecin-Stargard Szcz. 13.50 10,850 1998-1999 R 41.9 Szczecin36 24 Kamionna-Goraj 19.70 6,500 1998-2000 R 58.2 Szczecin37 24 Goraj-Skwierzyna 14.90 6,700 1998 S 58.2 Szczecin38 7 Przejscie through Raszyn 1.98 42,900 1998-1999 R 38.9 Warszawa39 18 Bypass Ostrowii Maz. 6.68 10,500 1998-2000 C 28.7 Warszawa40 61 Bridge in Zegrzu 1.40 17,000 1998-2000 C 44.0 Warszawa41 456 Wroclaw-Gozdzikovce 18.10 8,000 1998-2001 S 38.6 Wroclaw42 2 Boczow-Gronow 27.50 8,000 1999-2001 S 47.3 Zielona Gora43 17 Kurow-Garbow 11.27 11,750 1998 S 82.5 Lublin44 4 Opole-Strzelce Opolskie 18.98 12,000 1998-2000 S 36.9 Opole45 4 Strzelce Opolskie-Nogawc. 11.60 9,900 1998-1999 S 42.4 Opole

TOTAL 620.80 _

45 Selected Tasks were divided into 56 Contracts (Annex 3.1).R - Rehabilitation; C - Construction; S - Strengthening


POLAND

ROADS II PROJECT

List of ReserveTasks

No. Road Task Name Section vpd Realization Character ERR DODPNo. lenght (km) 1996 Phase of Works (%)

1 3 Bialystok-Bobrowniki 45.81 1,700 1998-1999 R 12.1 Bialystok2 29 Obwodnica Gorlic 2.02 8,000 1998-2000 C 55.2 Krakow3 33 Obwodnica Lubartowa 6.34 10,000 1998-1999 C 20.6 Lublin4 49 Obwodnica Ropczyc 4.45 10,300 1999-2001 C 42.6 Rzeszow5 51 Obwodnica m. Biecz 5.25 4,800 1998-1999 C 23.7 Rzeszow6 57 Przejscie przez Raszyn 1.98 42,900 1998-1999 R 38.9 Warszawa7 61 Obwodnica Zmigrodu 4.63 4,700 1999-2000 C 39.6 Wroclaw8 63 Most w Scinawie 2.55 27,500 1998-1999 C 52.5 Wroclaw

9 70 Strzelce Opolskie- 11.60 9,900 1999-2000 S 42.3 OpoleNogawczycaTOTAL 84.63

R - Rehabilitation; C - Construction; S - Strengthening

POLAND Annex 3.3ROADS II PROJECT Page I of 7

Contracts for Emergency Rehabilitation of Flood-Damaged Roads and Bridges(cost in Zl thousand, in 9/1997 prices)

Item Road Name Voivodship Range Works Works Annual Breakupnumbe of road or project km/rm value value

____________________ _________ in thous. ZI in US$ 1998 1999 20001 2 3 4 5 6 7 8 9 10

_ 489 Reconstruction of bridge in Katowice 15.00 1,510 431,429 1,5101 Krzepice in km 33+530

Uplifting of road alignment2 1 in Goczalkowice from km Katowice 0.40 1,100 314,286 1,100

584+799 to kmn 585+199

Reconstruction of flood-

3 936 ruined bridge in on Katowice 140.00 15,000 4,285,714 7,000 8,000

nkm 10+935Reconstruction of bridge in

4 950 Bierun locality, on km Katowice 73.00 2,000 571,429 2,000_ _16+172 1 1 1

5 791 Construction of connecting Katowice 0.60 1,560 445,714 1,560road section on kmn 53+500

Rehabilitation of shoulders,

6 936 road ditches and slopes and Katowice 0.94 4,335 1,238,571 4,335placing of pavement fromkm 5+250 to km 10+900

Rebuilding of retaining7 969 walls from km 38+600 to Krak6w 1.20 6,000 1,714,286 3,000 3,000

km 39+800Reconstruction of roads,

8 965 culverts, retaining wall Krakow 4.04 2,877 822,000 2,577 300from km 36+200 to km40+249Reconstruction of roadbody fragments andretaining walls on

9 963 Wierzbanowa - Kasina Krak6w 0.35 723 206,571 360 363Wielka section from km21+450 to km 21+800

Reconstruction of roadbody fragments, accessroad to bridge and bridge

10 977 itself, together with Krakow 24.28 453 129,429 113 340liquidation and securing oflandslide on Tuchow -Plawna section from km15+720 to km 40+000

Reconstruction of damaged

11 801 elements of bridge over the Lublin 189.40 1,600 457,143 100 1,500Wieprz river in Borowalocality on km 108+725

Page I of 7

POLAND Annex 3.3

ROADS II PROJECT Page 2 of 7Contracts for Emergency Rehabilitation of Flood-Damaged Roads and Bridges

(cost in ZI thousand, in 9/1997 prices)

Item Road Name Voivodship Range Works Works Annual Breakupnumbe of road or project km/m value value

I_______ in thous. ZI in US$ 1998 r 1999 2000l 2 3 4 5 6 7 8 1 9 10

Uplifting of road andpavement rehabilitation on

12 824 J6zef6w - Annopol road, Lublin 3.70 1,300 371,429 1,300from km 49+300 to kn53+000

Reconstruction ofZawichost - Sandomierz

13 777 road together with uplifting Lublin 1.05 2,000 571,429 1,500 500of road, from km 180+750to km 181+800

Uplifting of road, pavementstrengthening in

14 777 Sandomierz - Zlota road Lublin 3.40 2,040 582,857 1,040 1,000from km 162+000 to km165+400

Uplifting andreconstruction of flood wall

15 777 on Sandomierz - Zlota road Lublin 0.84 2,500 714,286 100 400 2,000from km 164+715 to km165+555

Repair of bridge, together

16 777 with its access roads, over Lublin 81.20 550 157,143 100 450the Czama river at Polaniecon km 120+271

Strengthening of road body,liquidation of distortions,

17 801 placing of new pavement Lublin 7.90 6,350 1,814,286 2,700 3,650on Pulawy - Deblin sectionfrom km 109+800 to km117+700

Pavement rehabilitation,reconstruction of shoulders

1 8 405 on Niemodlin - Sowin road, Opole 17.43 2,913 832,286 1,213 1,200 500

and from km 9+604 to km18+428

Pavement rehabilitation onKorfant6w - Podg6rze road

19 407 from km 20+697 to km Opole 12.80 2,120 605,714 1,120 1,00026+797 and from km27+236 to km 33+995

Pavement rehabilitation and20 453 reconstruction of sidewalks Opole 8.60 (9600 m2) 3,400 971,429 1,400 1,200 800

on Brzeg - Lubsza road

Page 2 of 7

POLAND Annex 3.3ROADS II PROJECT Page 3 of 7

Contracts for Emergency Rehabilitation of Flood-Damaged Roads and Bridges(cost in ZI thousand, in 9/1997 prices)

Item Road Name Voivodship Range Works Works Annual Breakupumbe of road or project km / m value value

_ in thous. ZI in US$ 1998 1999 20001 2 __3 4 5 6 7 a 9 10

Pavement rehabilitation and

21 457 reconstruction of road Opole 20.40 4,490 1,282,857 2,290 1,400 800ditches on Brzeg -

Kocierzyce road

Pavement rehabilitation and

reconstruction of sidewalks

22 458 and ditches on Lewin Opole 6.50 (21000 826 236,000 826Brzeski - Skorogoszcz road m2)

from km 10+800 to km

18+130

Pavement rehabilitation,

reconstruction of sidewalks

23 459 ans ditches on Opole - Opole 18.85 (27600 2,060 588,571 980 780 300Narok road fr-om km 2+280 m2)to km 13+000 and from km

16+256 to km 20+110

Pavement rehabilitation on

24 461 Kup - Jelowa section from Opole 13.60 1,548 442,286 648 900

km 0+000 to km 13+600

Pavement rehabilitation anddredging of road ditches on

25 385 Grodk6w - Janowice Opole 6.54 940 268,571 600 340

section, from km 90+100 tokm 96+536


26 406 Pietkowice - Jasienica Opole 3.80 738 210,857 538 200Dolna section from km

8+108 to km 11+906

Road reconstruction on

27 1032 Stobrawa - the Odra river Opole 3.56 889 254,000 189 700

km 3+556

Repair and rehabilitation of

28 4 bridges on km 218+082a Opole 107.00 1,100 314,286 100 1,000on km 2 18+790 and on k218+951

Reconstructionand

29 382 rehabilitation of bridges on Opole 114.00 830 237,143 100 730km 72+538 and on km72+821 _ _ _ _ _ _ _ _ _

Rehabilitation of bridges on

30 404 km 17+293 and on km Opole 89.00 945 270,000 370 57518+1 10 on the NysaKlodzka river

3 1 324 Construction of new bridge Poznan 2,500 714,286 2,500lin km 6+571 Poznan 20_82,

Page 3 of 7



Item Road Name Voivodship Range Works Works Annual Breakupnumbe of road or project km / m value value

____________________ _________ _______________ in thous. ZI in US$ 1998 1999 20007 7 2 7 3 4 5 _6 7 s 9 10

Modernization of bridge on

32 982 the Stary Bren river in Rzeszow 17.10 780 222,857 780Sadkowa G6ra locality onkm 22+107

Pavement strengtheningand rehabilitation on

33 131 Nowiny Wielkie - Szczecin 3.10 1,200 342,857 1,200Krzeszyce section, from km7+400 to km 10+500

Rehabilitation of pavementand sidewalks in Slubice

137 locality, national road no34 and 137 from km 0+500 to km Szczecin 2.80 1,730 494,286 1,730

275 2+600; national road no275 from km 0+000 to km0+700

Reconstruction of bridge35 122 over the Rurzyca river, on Szczecin 2,400 685,714 1,200 1,200

km 4+786


36 370 Kaczor6w - Swidnik Wroclaw 3.90 1,404 401,143 1,404section from km 31+700 tokm 35+500

Pavement rehabilitation on37 3 Szklarska Poreba - Wroclaw 7.70 2,550 728,571 1,275 1,27

Jakuszyce section from km W491+000 to km 498+700

Reconstruction and

38 358 modernization of bridges in Wroclaw 1,000 285,714 1,000Swiecie locality on km16+924 and on km 18+211

Reconstruction of road on100 m section and

39 381 pavement rehabilitation in Wroclaw 3.40 1,000 285,714 1,000Roztoki locality from km83+600 to km 87+000

Rehabilitation of damaged

40 389 pavement on Gniewosz6w - Wroclaw 11.00 2,800 800,000 1,400 1 400Miedzylesie section fromakm 38+000 to km 49+000

Page 4 of 7




in thous. ZI in US$ 1998 1999 2000l 2 3 4 5 6 7 s 9 lo

Reconstruction of roadsidewalks and retainingwalls, pavement

41 392 rehabilitation on Zelazno - Wroclaw 22.50 12,000 3,428,571 6,000 6,000Stronie Sliskie sectionfrom kIn 0+000 to km22+500

Reconstruction of road andretaining walls, pavement

42 393 rehabilitation, on ldzik6w - Wroclaw 15.44 20,000 5,714,286 10,500 9,500Stronie Sliskie section fromkm 4+900 to km 20+340

Road reconstruction fromkm 27+340 to km 27+840,filling up of shoulders from

43 452 km 28+040 to km 31+500, Wroclaw 10.00 1,515 432,857 1,515pavement rehabilitationfrom km 21+500 to kn28+500

Repair of retainingwallsfrom km 483+600 tokm 488+000. Strengthening

44 3 of road ditches from km Wroclaw 10.90 1,060 302,857 1,060491+500 to km 496+000and from km 452+000 tokm 453+500

Road reconstruction andrehabilitation from km

45 383 9+000 to km I0+000; from Wroclaw 8.27 1,376 393,143 376 1,000km 19+484 to km 23+025and from km 23+341 to km27+070

Reconstruction of 300 m.long road section

46 385 Tlumacz6w - Nowa Ruda Wroclaw 0.30 640 182,857 640from km 0+100 to km

______ 19+500

Pavement rehabilitation anddredging of ditches on

47 346 section from km 17+870 to Wroclaw 4.55 752 214,857 752km 20+370 and from km43+000 to km 44+550

Rehabilitation of bridge

48 275 over the Odra river in Zielona G6n 164.00 6,500 1,857,143 500 5,50| 500Krosno Odrzanskie localityon km 51+414

Page 5 of 7


Contracts for Emergency Rehabilitation of Flood-Damaged Roads and Bridges(cost in ZI thousand, in 9/1997 Drices)

Item Road Name Voivodship Range Works Works Annual Breakupumbe of road or project kmj/rm value value

in thous. ZI in USS 1998 1999 2000I 2 3 4 5 6 7 a 9 10

Replacement of bridge

49 275 superstructure over the Zielona G6ra 15.60 1,505 430,000 1,505Ulga canal in KrosnoOdrzanskie on km 52+424

Replacement of bridge

50 275 superstructureoverthe ZielonaGora 15.60 1,505 430000 1,505Ulga canal in Krosno , ,Odrzanskie on km 52+491

Rehabilitation of bridge

51 284 over the B6br river in ielona G6ra 101.00 2,200 628,571 700 1,500Nowogr6d Bobrzanski , ,locality on km 24+715

Replacement of pavementand bearings together with

52 3 on the Odra river in Zielona G6ra 476.00 2,000 571,429 2,000

Cigacice locality, on km278+083

53 Reconstruction of bridge in Katowice 1,500 428,571 1,5001 Piasek locality

Strengthening of slopes atGoczanlkowicki Reservoir,

54 939 on Wisla Mala -Wisla Katowice 0.20 700 200,000 200 250 250Wielka road, from km6+200 to km 6+400

Uplifting of road of55 949 Jawiszowice - Osieck road, Katowice 0.50 500 142,857 250 250

from km 5+900 to km6+400Modemization of roadtogether with construction

56 969 of retaining walls along Krak6w 2.50 11,300 3,228,571 5,000 6,300Dunajec river inTylmanowa from km38+140 to km 40+600Modemization of road

57 965 section Jegocina - Krak6w 6.20 3,500 1,000,000 1,500 2,000

to khn 50+218 _

Modemization of Szczucin58 982 Jaslany road from km Rzesz6w 8.90 9,700 2,771,429 4,500 5,200

27+301 to km 36+212

Page 6 of 7

POLAND Annex 3.3

ROADS II PROJECT Page 7 of 7Contracts for Emergency Rehabilitation of Flood-Damaged Roads and Bridges

(cost in ZI thousand, in 9/1997 prices)


I ___________________ _________ in thous. ZI in US$ 1998 1999 2000l 2 3 4 5 6 7 a 9 lo

Correction of route anduplifting of national roadno 122 Krajnik Dolny -

59 122 Ognica from km 0+OO Oto Szczecin 11.30 16,000 4,571,429 5,000 5,000 6,000kmn 11+300 together withconstruction of new bridgeover the Rurzyca river inkm 4+786

Correction of route anduplifting of national road

60 118 no 118 Ognica - Szczecin 5.50 6,800 1,942,857 2,200 2,200 2,400Widuchowa from km36+100 to km 41+600

61 - Other small works 29,246 8,356,000 18,718 10,528

Total in ZI 299.74 1597.90 222,360 112,049 93,111 17,200

Total in US$ 65,400,0001 32,956 27,386 5,059in this: l X

World Bank 52,300,000 26,354 21,900 4,046Poland 6|1 13,100,000 6,602 5,486 1,01'

Page 7 of 7


POLAND

ROADS II PROJECT

Road Maintenance Equipment, Vehicles and Materials

1. Small quantities of road maintenance equipment, few vehicles and materials arealready being provided under the ongoing Roads' project. Because of the critical importanceof ongoing maintenance and the present shortfall in the maintenance budget, an additionalsignificant provision has been made for the supply of maintenance equipment, vehicles andmaterials. This will include assistance with winter maintenance procedures.

A. Vehicles

2. To reduce the requirement for many sources of spare parts, it is preferable tostandardise on a fleet of vehicles and it is intended to proceed with the procurement of modemtypes of maintenance vehicles. It is intended to equip the DODP Maintenance Units with Pickup trucks for transport of materials and site inspections and Multi purpose vehicles to replaceexisting outdated and inefficient vehicles.

B. Equipment

3. Universal vehicle possessing the options for many maintenance applications, are nowavailable on the market, and it is intended to purchase those suitable to Polish requirements.These options will cover winter maintenance in the form of snow clearance by blade andblowers and sand/salt applications to icy roads. However, the versatility of the range ofequipment available covers many other essential maintenance procedures and a list of othertypical equipment to be purchased for these vehicles will also include provision for othermaintenance actives such as:

(i) Shoulder and ditch cleaning; (ii) Grass and tree cutting; (iii) Cleaning traffic signs; (iv)Drilling foundations for barriers, posts, signs and lights; (v) Removal of obstructions; (vi)Drain cleaning; and (vii) Pot hole repairs.

C. Materials

4. Materials required to be purchased under the Project include the provision of guard-rails, barriers, lights and signs suitable for efficient and safe road maintenance activities.There is an increasing awareness of the importance of safe road working, which are mostlyconcerned with maintenance activities and the need for suitable signs, lights and barriers. Theneed to adequately equip the DODP maintenance units is recognized. Stocks of safely guardrails are also required to be held by the units for emergency repairs and for local programs toupgrade the guard-rail requirements along dangerous sections of road.


D. Cost Estimate

5. A summary of items required, price per unit, and total cost estimates, follows:

(i) Four Wheel Drive Pick-up Trucks:

150 @ US$25,000 each = US$3,750,000

(ii) Universal Maintenance Vehicles and Associated Equipment:

25 No ( US$250,000 each = US$6,250,000

(iii) Guard Rails:

I Ikm @ US$100,000/km = US$1,100,000

(iv) Barriers:

5km @ US$120,000/km = US$600,000

(v) Mobile Lighting systems:

100 units ( US$10,000 = US$1,000,000

(vi) Signs:

1,000 No @ US$I00 = US$j100,000

TOTAL US$12.8 million


POLAND

ROADS II PROJECT

Road Safety and Signalization Equipment, Vehiclesand Materials

No. Specification Unit Quantity TotalPrice pcs. Price(ZI) (ZI)

A Equipment, vehicles and materials for Road Police.I Heavy motorcycles (min. 750 ccm) with adequate 50,000 220 11,000,000

equipment for Police officers - two for each motorcycle(outfits, helmets, communication equipment, boots andIgloves).

2 Portable electronic sobriety testers with printers. 7,000 220 1,540,0003 Portable microcomputers of special nature, for police 10,000 200 2,000,000

vehicles for road technicians and environmental_specialists.

4 Stationary equipment for disclosure and registration of red 220,000 10 2,200,000light violations and speeding (with supporting equipment)

5 Specialized battery torches, charged from vehicle electric 400 2.500 1,000,000system with adapters for halting vehicles.L______________________________________________ L Sub-total 17,740,000

B Equipment and materials for road safety pilot_ programs.

I Pedestrian safety equipment for crossings with monitoring 100,000 6 600,000_ system.

2 Concrete barriers for separation of traffic (purchase and 500,000 3kmn 1,500,000installation).

3 Accommodating traffic lights systems for selected 250,000 8 2,000,000____ intersections.4 Educational materials for schools including videoscopes 30,000 30 900,000

_ (for ,,Traffic Education" subject).5 Weather stations and pavement monitoring stations with 60,000 20 1,200,000

adequate signing and central storage of data(communication links).

6 Portable measuring equipment for speeding, red light 220,000 6 1,320,000violations and traffic intensity.

7 Single retroactive elements (so called ,cat eyes"). 20 10,000 200,0008 Variable message signs. 100,000 6 600,0009 Equipment for Educational Centers for Drivers. 200,000 3 600,00010 Speed displaying signs. 10,000 15 150,0001 1 Elaboration and purchase of educational materials for road 30 30,000 900,000

I safety and traffic training. I I_I= _____________________________________________ _________ Sub-total 9.970.000 ,


Road Safety Signalization Equipment Vehiclesand Materials

(CONTINUED)

No. Specification Unit Quantity TotalPrice pcs. Price(ZI) (Z_)

C Additional purchase of equipment, vehicles andmaterials for road safety. ______._.

I Additional equipment for vehicle inspection stations for 50,000 10 500,000PKS (Bus Transport Company).

2 Other items 1,140,000Sub-total 1,640,000

D Pilot tasks.I Organization and equipment for road safety elements of 2,900,000

pilot programsa) upgrading facilities of training centers,b) formulation of institutional framework for road safetyauditors at the level of voivodships and communities,c) elaboration of methodology for road safety evaluation inmunicipalities and communities,d) preparing guidelines for use of effective road safetyimprovement measures.

2 Speed issue diagnosis 3,750,000a) for urban areas with road safety evaluation,b) for inter-city roads with particular attention for smalltowns (with relevant safety equipment),c) implementing increased speed control measures andmonitoring of results,d) road safety improvement measures in small towns(traffic calming).

Sub-total 6,650,000TOTAL ZI 36,000,000TOTAL 10,280,000

Us$ f

Secretariat of the Road Safety Council - MT&MEWarsaw, September 8, 1997


POLAND

ROADS n1 PROJECTTechnical Assistance & Training

1. An extensive prograrn of Technical Assistance (TA) and Training is included in theproject that will continue and expand the progress made under the Roads Project. There is anongoing demand for technical assistance and training. This is based on the success of thework so far and the appraisal of future demand.

2. The scope of the TA & Training component under the Roads II Project is to extend thetechnical assistance provided under the Roads Project as well as in the field of roadmaintenance, privatization of the management, construction and design methods,modernization of the construction and consulting industries, and the Road Safety Program. Itwould also include a Road User Charges Study (estimated cost US$250,000) to define theadequate contribution of each type of vehicle on the basis of damage infringed to the roads.

3. During the Roads Project the supply of expatriate advisors to support the operation ofthe PMU has worked well. Also the Consultants have arranged and delivered training coursesand follow up seminars for GDDP/DODP staff on many topics, such as the forms of contract,management and supervision of contract works, seminars on financial control and pilotcourses for former State enterprise contractors covering forrns of contract, bidding andmanagement of contracts.

4. Not all DODP staff have had the opportunity to participate on the training course andthe new loan will also involve some new DODP's. The feedback from staff attending thesecourses and follow up seminars has been very positive. It is necessary to update the coursematerial in light of the more sophisticated understanding now of many staff and new Bankguidelines. A comprehensive program of courses should be prepared during the wintermonths that would cover new and in some cases previous participants to refresh and reinforcetheir understanding. Follow up seminars will also be included. These are normallyworkshops held one year later and previous course participants are invited back to presenttheir practical experiences and discuss problems encountered. Training is not a static processand in this way the advantage of the benefits to the individual can be monitored and improved.The advantages are now being seen in the end product, better management and qualitysupervision of contracts.

5. The pilot courses prepared for contractors have also received positive feedback. Thereis an urgent necessity to assist in the modernisation of the old state contracting enterprises andequip them for the present world of competitiveness. Advice on aspects involved in theprivatization, financing, organization, management and operation of a modern contractingorganization will be given. This will include details of plant possible leasing arrangements;preliminary discussions have already been held to establish the interest and feasibility ofassisting small contractors through leasing major and expensive items of plant instead of thecostly purchase options that they cannot at present afford. In this way they are better equippedto compete with larger foreign and local companies.


6. As well as implementation of further training as noted above, a brief description andbudget cost of training targets proposed is given below. These include other areas ofdeficiency identified during the Roads Project and also taken into account aspects recorded inthe needs assessment survey carried out by Consultants for GDDP and DODP staff in 1994.

A. Forms of Contract, Procurement, Supervision and Management of ContractWorks (for GDDP, DODP and local consultants staff)

8. With well over 100 contracts envisaged under the Roads II Project this will involveseveral hundred personnel at different levels in the procurement and management of theContracts, from Project and Resident Engineers to Site Inspectors. The one week coursesgiven so far will be developed to target separate groups, from Senior Managers to more JuniorInspectors. Specific guidance will be given on the processes involved in contract procurementand administration under the emergency loan procedures.

Estimated Cost US$280.000

B. Design and Specification Standards (for BPRSD, DODP and local consultants).

9. During the Roads Project some progress was made in the standardisation ofspecifications. It is necessary that this will be reviewed with the aim to produce a standardspecification for road and bridge works. The standardization of designs and the production ofa standard set of road and bridge detailed drawings for routine uses should also be advanced.Courses will be run for appropriate staff on how this should be implemented.


C. Financial Management of Projects (for GDDP/DODP)

10. Training on specific and routine aspects of Financial Management will be furtherdeveloped. This will include, at the more senior level, management of the Loan procedures,planning, budgeting and payment procedures while the preparation and processing of monthlycertificates will also be covered.

Estimated Cost US$50,000

D. Arbitration and the role of Adjudicators in Civil Engineering Contracts (forselected Polish Engineers).

11. Based on experience gained this important aspect will be covered by the organizationof selected seminars to enable a better understanding of international contract arbitrationprocedures.



E. "On the Job" Practical Training Schemes.

12. The use of a larger contract to be involved in some practical, on site training, will beinvestigated.


F. Road Maintenance Organization and Procedures (for GDDP, DODP's)

13. One of the principal aims of the Roads II Project is to improve road maintenanceprocedures and it is envisaged that detailed training will be given to personnel involved in theplanning and implementation of road maintenance. This should take the form of classroomlectures supplemented by selected visits to sister maintenance organizations in Europe.


G. State Contracting Enterprises

14. Following from the experience gained under the pilot courses already given to somecontractors it would be worthwhile to develop this approach. The courses have offered advicefrom local and international professionals in the industry on modernization and dealing withpresent types of contract, from the understanding of forms of contract and bid procedures tothe organisation of the site works and measurement. Aspects covering the issues ofprivatisation, capitalization and plant leasing will be introduced.


H. Assistance to PMU

15. The existing PMU is coping well despite a heavy work load. Some technicalassistance in the overall monitoring of the project and the day to day solutions of contractproblems should be still available if required. Works under the component for the emergencyworks will place an extra burden on the PMU that may require further advice and support.


I. Rutting and Axle-loading

16. Few survey reports have been prepared on the problem of rutting to the road surface inmany areas of Poland. Progress has been made and new guidelines have been issued butfurther investigations will be carried out into the sufficiency of the new measures and wherenecessary more in-depth testing should be carried out and some limited experimental surfacesmonitored to effectively solve the rutting problem.

Estimated Cost US$l100.000


J. Road Safety/Police Training

17. See Attachment I.

Estimated cost US$463.000 equivalent.

K. Training Centres

18. The DODP's already have a network of training centres well placed around Poland,including the new Jozefow Training Centre near Warsaw. It gives the flexibility for coursesand seminars to be either centralised (at Jozefow) or taken to the regional centres. Coursesrun so far have successfully followed a pattern that combines both options as is found mostsuitable. It is envisaged that many of the proposed courses would be run from Jozefow,although the use of regional centres will be encouraged. Facilities at the Jozefow and othercentres will be reviewed.


Annex 3.6Pagc 5 of 5

Attachment I

Goalk Decrease in the number of fatal road accidents relative to forecasts, implementing therecommendations of ,,Road Safety Improvement Program in Poland - GAMBIT" throughcomprehensive pilot programs for Gdansk, Krak6w and Suwalki Voivodships.

Targets:

1. Creation of principles for implementation of voivodship programs for the improvement ofroad safety under ,,GAMBIT", implementing technical, organizational and legal actionsrecommended therein.

2. Elaboration of techniques for equipping road sections in road safety improvement measures(diverting traffic, warning drivers, monitoring traffic conditions and speed) on areascovered by pilot programs.

3. Elaboration and implementation of educational methodology and materials for localgovernmental and communal administration units, local road authorities, Police, schoolsand universities.

Expenditures planned for road safety in the State Budget (7,200,000 ZI) willfinance mainly research programs, training materials, guidelines and manuals, monitoring ofthe results, data base and data analysis, publicity and information campaigns, auditrequirements etc.

In addition, relevant training programs and technical assistance need to be carried outunder Component C of the Project, concerning:

1 Traffic education for children 1,000,000 ZI2 Increasing awareness of the society 200,000 ZI3 Educating road safety trainers 200,000 ZI4 Training programs related to procurement of road safety equipment 220,000 ZI

for Police officersTOTAL ZI 1.620,000 ZI

TOTAL US$ US$463,000

I


POLAND

ROADS II PROJECT

Road User Charges Study - Terms of Reference

Background

1. There are three conditions which must be taken into account in assessing the system ofroad user charges in Poland. First, the revenue directly linked to road use and vehicleoperations in Poland are as follows: turnover tax on vehicles; vehicle registration fees; driverslicensing fees; fuel taxes; and fees from international road transport concessions. All revenuesfrom these sources go to the state budget except the registration fees and vehicle driverlicensing fees, which are levied by the local authorities. The Government, following thetransition, uses the fuel tax as a major source of general revenue because it is easy to collect,impacts the wealthy more than the poor, because it is common practice in most Europeancountries, and because it reflects the social costs of vehicle emissions. The retail price ofnormal gasoline in Poland (UJS$0.50-0.53 equivalent per liter) ranks 24th among 35representative European countries, while diesel fuel (US$0.40 equivalent per liter) ranks 25th.Second, the national road network is mostly in poor or fair condition, requiring rehabilitationbefore it is capable of being maintained (particularly periodic maintenance). The PMS(following Bank HDM III), on the other hand, assumes that the road network is in sufficientlygood condition that it can be maintained through normal maintenance procedures. Third, asignificant part of the local rural road network was built by cooperatives which now havedisappeared. Many of these roads are not maintained, and part of them may be abandoned inthe future. Under these circumstances, the PMS model is most useful in indicating the fundswhich would be needed to maintain the main rural network (and urban network) after mostroads have been rehabilitated, which will take a number of years.

2. A new formulation of the road user charges issue is appropriate. This formulationwould focus on the overall balance between the tax revenues received from each type of roaduser (focusing on heavy diesel vehicles) and the costs that each user imposes on the network,namely new construction, rehabilitation, maintenance, congestion, accident costs and othermeasurable externalities.

3. The taxation would promote an adequate modal split, an efficient use of resources andcontribute to a better coordination of the transport system.

Study Objectives

4. The main objectives of the study are to ensure that:

(i) the fees and taxes paid by road users are clearly separated from the user chargesthey pay for use of the road network;

(ii) all service fees are appropriate, well structured, effectively administered, and


cover the costs of providing these services (e.g., driver license fees, vehicleinspection fees, registration fees, etc.);

(iii) all taxes paid by road users are consistent with the taxes paid on similar plantand equipment, are well structured, and effectively administered to minimizeavoidance and evasion;

(iv) the taxes on fuel reflect the Governments objectives regarding fuelconservation,vehicle emissions, etc. and also promote economic efficiency;

(v) RUCs are set so that each class of vehicle covers the costs it imposes on theroad network ("waer and tear" costs, mainly for heavy diesel vehicles); and

(vi) all vehicles collectively generate sufficient revenue to finance the overall roadprogram, bearing in mind that some road expenditures are likely to be financedon the cost-sharing basis.

Scole of Work

5. The consultant will be expected to carry out the following tasks:

(i) Review all the fees, taxes and charges paid by road users and, in consultation withthe Ministry of Finance, separate them into services fees, general taxes, and RUCs. Servicefees generally cover services which establish title to property (to facilitate law enforcement),check vehicles for mechanical soundness (to promote road safety), and ensure drivers arecompetent (also to promote road safety).

(ii) Examine the nature and structure of these fees, and the costs of providing theservices they cover. Advise on whether any fees are redundant or unenforceable (e.g., vehicletransfer fees), whether the structure could be improved to minimize avoidance and evasion,their administration could be strengthened (e.g., by contracting services out to the privatesector) , and they cover the costs of the services provided. Recommend appropriate changes.

(iii) Review all taxes paid by road users and compare them with the taxes paid onsimilar plant and equipment. Recommend changes to bring them into line with other tax ratesand suggest what steps might be taken to simplify the tax structure and strengthenadministration of transport taxes to minimize avoidance and evasion.

(iv) Review the taxes imposed on transport fuels and identify the objectivesunderlying these tax rates. In particular, examine whether they reflect any energyconservation objectives, environmental objectives, trade and industrial policy objectives, orincome distribution objectives, particularly with regard to the taxation of kerosene (which canbe substituted for diesel).


Also examine whether any attempt has been made to impose an optimal tax, based on the lowprice elasticity of demand for transport fuels. Recommend appropriate changes that wouldenable fuel taxes to better reflect the Governments objectives and that would also contributetowards an optimal tax structure. Also recommend relative price levels that would minimizesubstitution between different transport fuels (particularly karosene and diesel) or, in casewide differentials are unavoidable, recommend what other administrative steps might be takento minimize substitution between different transport fuels.

(v) Examine the structure of existing RUCs for each main vehicle class (at least threeclass of heavy trucks) and compare the annual payments by each vehicle class with theestimated costs each class imposes on the road network. Also examine how well the RUCsare administered. Recommend changes in the number and structure of the RUCs, and the waythey are administered, to ensure that evasion and avoidance are minimized and each vehicleclass covers the avoidable costs it imposes on the road network. The resulting RUCs shouldbe simple, readily recognizable by road users, and easy to administer.

(vi) In congested urban areas, examine the feasibility of imposing some form of urbancongestion charge to be added to the regular RUCs. These recommendations should beformulated in consultation with the concerned municipalities and should focus on chargingsystems which are acceptable, can be administered by the municipalities, and can be readilyenforced.

(vii) Review the financing plan for the overall road network and, based on plannedexpenditures and proposed cost-sharing arrangements, recommend a level of RUCs whichwould generate sufficient revenues to fully-finance the overall expenditure plan. Theserecommendations should bear in mind that the final expenditure plan must be scaled back (orcost-sharing arrangements revised) to produce an acceptable level of RUCs.

Staffing

6. The Study would be carried out by a team of about three consultants, covering:

transport planning 6 monthstransport economics 3 monthsfinancial/fiscal analysis 3 months

12 months

The cost of the study is estimated at US$250,000.

Reporting Arrangements

7. The Study (tentative study start date January 1998) would include:


* progress reports every month detailing work carried out during previous periods;

* interim report within four months of the starting date including overall review ofthe progress achieved, completion of Phase 1 and recommendations involved;

* draft final report including recommendations after ten months; and

* comments by Government and the Bank three months after receiving draft.Final report by consultants one month later.

Institutions Involved

8. The following institutions will be involved in the study:

Coordinator - GDDPCore Group - MTME, MOFParticipants - Motorway Agency

POLAND Annex 3.8Page 1 of 3

ROADS II PROJECT

PROJECT IMPLEMENTATION PLAN

The Road Network Development Planning Office sends attached a list of tasksqualified for implementation under the Second Road Project cofinanced by the World Bank,realization of which is expected in the years 1998-2002. Values of separate works are listedin the 1997 prices. General rules of documents preparation, procurement of works and theirperformance are the same as in the previous Road Project. Bidding Documents must beissued in the English language (which is obligatory basic version). For local contractors orsuppliers the Borrower may provide Polish translation of the English version of the BiddingDocuments.

A. Emergency rehabilitation of flood-damaged roads and bridges

Due to the urgent nature of the emergency roads and bridges repair, preparatory worksconnected to the emergency contracts commencing in the 1998 should be urgently taken up,and planned within the expedited timing as follows:

preparation of materials and bidding documents by the Regional Directorate ofPublic Roads (DODP) - October 20, 1997

* invitation for bids - November 28, 1997submission of bids - January 12, 1998

* signing the Performance Agreement with Contractor - February 6, 1998* commencement of works - March 16, 1998

B. Non-emergency civil works

The first group (Group I) of non-emergency civil works will be procured with the followingdeadlines:

preparation of materials by the Regional Directorate of Public Roads (DODP) forprequalification of bidders - October 31, 1997

* advertising prequalification of bidders - December 31, 1997* prequalification of bidders - February 28, 1997

preparation of bidding documents - December 31, 1997* obtaining construction permissions - December 31, 1997* invitation for bids - March 15, 1998* submission of bids - May 15, 1998* signing the Performance Agreement with Contractor - July 15, 1998* commencement of works - August 15, 1998

Agreed during negotiations.


The three remaining non-emergency groups (Group II, III and IV) of civil works contractswill be procured once a year, and the implementation deadline will be the following:

* preparation of materials by the Regional Directorate of Public Roads (DODP) forprequalification of bidders - April 15

* advertising prequalification of bidders - June 30* prequalification of bidders - August 31* preparation of bidding documents - June 30* obtaining construction permissions - June 30* invitation for bids - October 15* submission of bids - December 15* signing the Performance Agreement with Contractor - February 15 (next year)* commencement of works - March 15 (next year)

This procedure will be repeated three times, starting on April 15, 1998 according to the Time-Table on the attached List, each time in the year preceding commencement of works.

Materials for prequalification comprise description of tasks in English together withinitial Engineer's evaluation in current prices without VAT. Printout of work descriptionshould be forwarded together with a diskette (Word 6.Opl). Initial Engineer's evaluations fortasks to be commenced in 1998 should be sent only when the investment inputs determined atpresent time will differ from those sent to the Road Network Development Planning Office inautumn 1996 be more than 10 percent.

At the same time the BPRSD requires that together with materials for bidders'prequalification to submit information concerning:

* environmental protection - titles and dates of prepared documentation (study,analysis, etc.), xerocopies oI opinions, or declaration on absence of suchrequirements, should be submitted.

* land acquisition. Land acquisition according to the law should be confirmed inform of declaration. Construction permission (copy) should be sent, with deadlineon June 30.

Generic Documents, helpful in preparation of bidding documents, are available in the Englishand Polish language at BPRSD (to be copied - Word 6.Opl).

These documents should not be changed, amended or modified. Only Bidding Data andContract Data applications should be completed. Road Network Development PlanningOffice is to provide at a later date detailed guidelines that will concern filling out the genericdocuments, bid security amount, insurance and realization period.

BPRSD requests name and telephone number of a person:


* selected in each DODP, and responsible for preparing materials forprequalification and bidding documents and giving any other necessaryinformation.

* designer, name and address of design office.

At the same time BPRSD reminds that according to Regulation No. 9 General Directorof Public Roads dated April 28, 1995 concerning principles of elaboration of BiddingDocuments for works financed from the World Bank means, the DODP bears responsibilityfor checking of Bidding Documents which are finally approved by the Regional ManagingDirector Public Roads. Therefore all documents delivered to the Road Network DevelopmentPlanning Office should be verified by DODP. BPRSD kindly request to confirm till January30, ability to prepare tasks which were qualified for commencement of works in 1998.

The acquisition and delivery of the Equipment and Materials for Road Maintenanceand Road Safety would be procured during the first two years (1998 and 1999) of projectimplementation, following Annexes 3.4 and 3.5 of the SAR.

Technical assistance and training will be implemented according to needs, during thewhole 5-year project implementation period, following Annexes 3.6 and 3.7 of the SAR

Poland - Roads 11 Project Annex 3.9Procurement Plan and Schedule Page 1 of 3

1998 ~~~~1999 1 2000 1 2001 2002 12003Task Name Cost/Group Proc. SO JJ IJJAISOINIDIJ F MJ JJAISONIDIJ F MJ JJAISOINIDIJF AMI IJJAISJONIDJ F MJ J JAS ONIDIJ F MJIJJAEmergency Program US$5,700,000 ICB

Preparation of Documents (1 contract*)

Prequalification

Bidding

Evaluation/Award/Signing

Construction

Emergency Program US$54,300,000 NOB ......

Preparation of Documents (55 contracts*)

Bidding


Construction

Emergency Program US$6,000,000 FA

Preparation of Documents

Execution of Works

Emergency Program US$9,900,000 MW

Preparation of Documents

Execution of Works L______

Note: *for emergency programn contracts see Annex 3.3; **for non-emergency road works contracts (Group 1, 11,1III, and IV) see Annex 3. 1; and *~for technical assistance and training packages see Annex 3 .6 and 3.7

Poland - Roads II Project Annex 3.9Procurement Plan and Schedule Page 2 of 3

1998 | 1999 | 2000 | 2001 2002 2003TaskName Cost/Group Proc. SIOINID JIF A IJIJIAISIOINIDIJIF lAMIJIJIAISIOINID JIF JAIAIJOJIASOINIDIJF A J JAJSIOINID JF l J JJIAPP IARoad Works, Group I US$78,740,000 ICB

Preparation of Documents (15 contracts-*) r L

Prequalification

Bidding


Construction

Road Works Group II US$164,650,000 ICB

Preparation of Documents (25 Contracts*)

Prequalification

Bidding . . . . . .


Construction

Road Works Group Ill US$67,660,000 ICB


Prequalification

Bidding

Evaluation/Award/Signing . . . . . . . . . .

Construction

Note: * for emergency program contracts see Annex 3.3; ** for non-emergency road works contracts (Group 1, 11,111, and IV) see Annex 3.1; and ** for technical assistance and training packages see Annex 3.6 and 3.7

Poland - Roads II Project Annex 3.9

Procurement Plan and Schedule Page 3 of 3

1998 1999 2000 2001 2002 2003Task Name Cost/Group Proc. SONDJ |FFA| SNJ |J |A|S|O|N|DJ JFOAOAJ |J JA|S|ON|D JF JFIAFAMJ |J JA|S|O|N|D J IFMIAMIJ IJ JAISINJO J IFA|J |J JIJSAINID J IJ JARoad Works Group IV US$39,000,000 ICB


Prequalification

Bidding


Construction

Road Maint.& Safety Eq. US$28,000,000 ICB

Bidding

Evaluation/Award

Delivery/Instalation

Road Maint.& Safety Eq. US$700,000 Is

Bidding (3 packages)

Evaluation/Award


Road Maint.& Safety Eq. US$800,000 DC

Bidding


Note: * for emergency program contracts see Annex 3.3; ** for non-emergency road works contracts (Group I, 11, III, and IV) see Annex 3.1; and *** for technical assistance and training packages see Annex 3.6 and 3.7

Poland - Roads II Project Annex 3.9Procurement Plan and Schedule Page 4 of 3

1998 | 1999 2000 2001 2002 | 2003Task Name CostVGroup Proc. SIINIDI I vIAPiIJ IJ IAIS!°T!D!J 1FM[APIJ IJ |AIF PJNJjFIAMIJ !J IA]SIOINIDJ IFFV|A viIJ JIAISIOINIDIJ IF vLA|A JIJ 1J IAISTOINIDIJ |FP'v¶IAP|J | JATA and Training USS2,000,000*, QCBS

Selection

Implementation 0 _ ._i __ _ _._ __

Closing Date (6/30103)

List of TA. Training. and Consultants packages:

Studies

1. Road User Study US$250,000 QCBS2. Rutting and Axle-load Study US$100,000 QCBS3. Consultant services PMU USS300,000 QCBS

Training

4. Training for Police Officers US$500,000 QCBS5. Training of GDDP staff US$500,000 QCBS6. Short terrn consultancies US$300,000 Individual Consultants

Note: * for emergency program contracts see Annex 3.3; ** for non-emergency road works contracts (Group 1, 11, 111, and IV) see Annex 3.1; and ̂ for technical assistance and training packages see Annex 3.6 and 3.7


POLAND

ROADS II PROJECT

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

ReasonsProject Component Estimated Actual Actual % (if any) Actions

(US$) (Cost per of for to beUnit; US$) Estimated Difference Taken

A. Project Inception Phase(i) Appointment of Project Coordinator

(ii) Start of Project CoordinatorB. Civil Works

(i) Invitation(ii) Prequalification(iii) Bidding(iv) Evaluation(v) Contract award (date)(vi) Contract Signature and Mobilization

(vii) Earth works completed (m3)(viii) Retaining walls (m)(ix) Drainage structures, culverts (units)(x) Sub-base completed (m3)

(xi) Base completed (m3 )(xii) Shoulders completed (km)

(xiii) Resealing (km)(xiv) Asphalted concrete paving (km)(xv) Signs (units)

(xvi) Painting (m)(xvii) For Bridges:

(a) Foundations (m3)(b) Piles (m3 of reinforced concrete)(c) Girders (m3 of prestressed concrete)(d) Deck slabs (mi of reinforced concrete)(e) Sidewalks (m)(f) Guard rails (m)

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

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


(CONTINUED)Performance Monitoring Indicators for Project Activities

(to be covered in progress reports)

Project Component Estimated Actual Actual Reasons (if Actions(US$) (Cost per % of any) for to be

Unit; US$) Estimated Difference TakenC. Road Maintenance and Road Safety

Equipment.Vehicles and Materials(i) Invitation

(ii) Bidding(iii) Evaluation(iv) Award (date)(v) Delivery

(vi) Spare parts(vii) Assistance Service providedD. TA to GDDP, DODPs. MTME and National

PoliceTA items: (a) Forms of Contract, Procurement,Supervision and Management of Contract Works;(b) Design and Specification Standards; (c)Financial Management of Projects; (d) "On theJob" Practical Training Schemes; (e) RoadMaintenance Organization and Procedures; (f)State Contracting Enterprises; (g) Assistance toPMU; (h) Rutting and Axle-loading; and (i) RoadSafety ProgramFor each item:

(i) short listing(ii) Invitation

(iii) Selection and award(iv) Start of work(v) Experts by skill, m/m and department

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

department(vii) Achievements on each item, including on

Polish counterparts(viii) Final cost of each item

F. Training of GDDP. DODPs. MTME and Nat.Police Staffs

(i) Selection of trainees(ii) Polish under training by skill in Poland(iii) Polish under training by skill overseas(iv) Training by twinning(v) Examination of training targets achieved(vi) Completion and final cost of each training

component

Annex 3.11POLAND Page 1 of 1

ROADS II PROJECT

Schedule of Disbursements*(US$ million equivalent)

IBRD Fiscal Year Estimated Disbursement Schedule(July 1-June 30) (Cumulative %) Quarter Cumulative

FY 1998December 31, 1997 1.7 5.0 5.0**March 31, 1998 4.0 7.0 12.0June 30, 1998 6.6 8.0 20.0FY 1999September 30, 1998 9.3 8.0 28.0December 31, 1998 12.3 9.0 37.0March 31, 1999 16.0 11.0 48.0June 30, 1999 20.0 12.0 60.0

September 30, 1999 26.0 18.0 78.0December 31, 1999 33.0 21.0 99.0March 31, 2000 39.4 19.0 118.0June 30, 2000 46.6 22.0 140.0

FY 2001September 30, 2000 53.0 19.0 159.0December 31, 2000 59.7 20.0 179.0March 31, 2001 66.4 20.0 199.0June 30, 2001 73.3 21.0 220.0



* Loan Effectiveness estimated in late-fourth quarter 1997 (para.3.21)** Initial Deposit of US$2.5 million to each (US Dollars and DEM) Special Account

(para.3.32)


POLANDROADS II PROJECT

ENVIRONMENTAL ASSESSMENT TERMS OF REFERENCEFOR THE CONSULTANT

DRAFT

I. INTRODUCTION

At the request of the Polish Government, The World Bank in close cooperation withthe GDDP, are developing the Roads II project.

The nature and size of the investment part of the project, as well as its potentialenvironmental impacts require, according to the Polish environmental regulations: "Ustawa oAutostradach Platnych I Rpozporzdazenie Ministra Ochrony Srodowiska z dnia S czerwca1994, Ustawa o Zagospodarowaniu Przestrzennym Z DNL9 7 lipca 1994, RozporzadzenieMinistra Ochrony Srodowiska i Zasobow Naturalnych z dnia 13 maja 1995 oraz Ustawa 0Ochronie i Ksztaltowaniu Srodowiska z dnia 31 stycznia 1980", and those of the participatingfinancial institutions, the carrying out of an environmental assessment.

The project has been ranked as category "A" for the purpose of the World BankOperational Directive O.D. 4.01, which means that a full environmental assessment study isrequired before the banks can approve the project for its financing.

The study area for the assessment consist of the (i) improvement the main roadnetwork (highways, bridges, bypasses); (ii) study and solve the rutting situation on thenetwork; (iii) promote the competitive capacity of domestic contractors through improvementof their technical, managerial, and financial capacity; (iv) improve the road safety situation;(v) adjust road user charges for different road rehabilitation including bypasses.

II. OBJECTIVES OF THE STUDY

The environmental assessment study is being developed to: (i) assess potentialenvironmental consequences of the potential project alternatives; (ii) help guide the design ofthe proposed project's alternative to minimize any potential negative environmental impactswhich might occur during construction and operation, and (iii) to formulate recommendationsconcerning measures that should be undertaken in order to maintain conditions for theprotection of the environment in the project areas.

This study with its recommendations will be the basis for applying for anenvironmental permits from the regional authorities.

III. SCOPE OF WORK

Under these Terms of References the consultant is required to prepare anEnvironmental Assessment Study. Specifically this means:

(a) Preparing an environmental assessment meeting(s), according to the requirements for acategory "A" project under the World Bank Operational Directive O.D. 4.01, as well as Polish


requirements for Environmental Assessment.

(b) The issues of construction alternatives for the project components, the locationselection and maintenance measures should be carefully considered, and impact assessed withrespect to all potential options.

(c) Consultations with the local community, authorities, representatives of the scientificcommunity, and NGO's should be done in coordination with the implementing agency GDDP.The objective of the consultations is to inform all interested parties as to the project conceptand to ensure that their concerns and comments are incorporated into the design, routeelection, mitigation measures, monitoring programs and community communicationprograms. The consultation process must build public confidence in the anticipated sites,route of the bypass or bridge, construction phases, operation, and the monitoring program.

(d) Review and analysis of Polish and European Union, international agreements to whichPoland is a Party, and other international agreements pertinent to the project scope.

(e) Where data is insufficient and prevents accurate prediction of environmental impacts,an estimation based on the most likely conditions prevailing at a project area, or based onsimilar predictions at other areas previously evaluated by the Consultant, should be used.

(f) Presenting a full draft EA report, in a concise manner, and focusing on the significantenvironmental issues is required in a format similar to the following:

* Executive Summary;* Policy, Legal and Administrative Framework-* Project Description;* Baseline Data;* Environmental Impacts;* Analysis ofAlternatives;* Mitigation Plan;* Environmental Management and trainingfor Institutions and

Agencies;* Environmental Monitoring Plan;* Appendices

- List of EA Preparers,- References,- Record of Interagency/Forum/Consultation meetings.

(g) The preparation of an Executive Summary includes a description of the majorenvironmental issues, the proposed mitigation measures, and the recommendations forinstitutional strengthening/training and environmental monitoring. The Executive Summaryshould indicate community consultations undertaken and the budget levels required toimplement the mitigation, training and monitoring measures recommended.


IV. PROJECT

The project components defined and agreed is enclosed as attachment No.1 to thisTORs and includes components of the GDDP's 1998-2000 investment program, as agreed anddetailed under Government Decision 16/96 of July, 1996, consisting of (i) rehabilitation,upgrading, realignment, and resurfacing of priority road sections and their crossings throughcities with a total length estimate of 515 kIn, and (ii) emergency reconstruction and upgradingof 6 bridges, including 3 new bridges, (iii) construction of 12 new bypasses around congestedcities, (iv) acquisition of road maintenance equipment and road safety (including vehicleinspection) equipment and materials, and (iv) technical assistance (TA) and training for theongoing road safety programn, and in the fields of management, planning, pavement andmaintenance systems, protection of the environment, modem design and constructiontechniques, and firther privatization of the local contractors and consultants.

TASKS:

TASK 1. DESCRIPTION OF THE PROPOSED PROJECT

Provide a full description of the project including: location; general layout; size interms of population, present and projected, reconstruction and construction activities,schedule, staffing and support facilities and services.

TASK 2. DESCRIPTION OF THE ENVIRONMENT

Assemble, evaluate and present baseline data on the environmental characteristics ofthe study area Include information on any changes anticipated before the project commences,such as:

* Physical environment: geology (general description for overall study area anddetails for land application sites);topography; soils (as above); monthly average

TASK 3. LEGISLATIVE AND REGULA TORY CONSIDERATIONS

Describe the pertinent regulations and standards governing environmental quality,loss of agricultural land, deterioration or loss ecologically sensitive areas, interference withcustomary local transportation systems, signifi cant natural sites, etc.

TASK 4. DETERMINATION OF THE POTENTIAL IMPACTS OF THE PROPOSEDPROJECT ELEMENTS

Distinguish between significant positive and negative impacts, direct and indirectimpacts, and immediate long-term impacts. Identify impacts that are unavoidable orirreversible. Wherever possible describe impacts quantitatively, in terms of environmentalcosts and benefits. Assign economic values when feasible. Characterize the extent and qualityof available data.

Annex 3.12Page4of5

Special attention should be given to:* Induced development;* Loss of agricultural land;* Deterioration or loss of ecologically sensitive areas;* National implications

TASK 5. ANALYSIS OFALTERNATIVES TO THE PROPOSED PROJECT

Describe alternatives that were examined in the course of the development of theproposed project and identify other alternatives which would achieve the same objectives. Theconcept of alternatives extends to routes, construction techniques and phasing selection, andoperating and maintenance procedures. Compare alternatives in terms of potentialenvironmental impacts on environment, land and energy requirements, reliability andsuitability under local conditions, and institutional training, and monitoring requirements.When describing the impacts, indicate which are irreversible or unavoidable and which canbe mitigated To the extend possible, quantify the costs and benefits of each alternative,incorporating the estimated costs of any associated mitigating measures.

TASK 6. DEVELOPMENT OF MANAGEMENTPLAN TO MITIGATE NEGATIVEIMPACTS

Recommend feasible and cost-effective measures to reduce significant negativeimpacts to acceptable levels. Estimate costs of those measures, and of the institutional andtraining requirements to implement them. Make proposals which will address measures to:minimize impact and protect areas or sites of special importance during design, constructionand exploitation phases. Assess cost of implementation of the mitigation measures.

V. STUDY SUPERVISION AND TIME SCHEDULE

The work of the consultant will be supervised by the implementing agency, who willkeep all agencies and financial institutions informed.

The Consultant shall begin work no latter than 7 days after the date of effectiveness ofthe contract. It is anticipated that the Consultant would conduct and complete the work over amaximum duration of 3 months. The Consultant should propose a clear schedule with criticalphases, and make all possible efforts to meet or complete the work in a shorter period of timethan the proposed time schedule.

VI. REPORTSProgress report

A Progress report should be submitted every 30 days following signing of the contract.The progress report, 2-3 pages in length, should present a very brief overview of progress incompleting the task dates, budget and other issues pertinent to the project.

'AII repors should be submitted to the implmenting agency and the participating financial institutions.


Interim ReportAn Interim Report should be submitted within 45 days of the starting date, and include

details of the work performed, analysis made, justification of options and the recommendationproposed.

Draft Environmental Assessment ReportThe Draft EA Report should be submitted within 85 days of the starting date for the

study. The report should provide complete details of all work performed. The report should beprepared in Polish and English, with 10 copies of each. The working papers and annexes canbe prepared in Polish.

Final ReporThe Final EA Report shall be submitted within 15 days following the close of the

review and comment period. The final EA report will incorporate all comments received fromthe implementing agency, including issues and discussed at review meetings and publichearings. Each of the final reports will have an Executive Summary and a Main Report, andeach should be submitted in Polish and English, 15 copies each, to the implementing agencywho will assure proper distribution to all interested parties. In addition, a master copy of each,suitable for reproduction purposes, should be provided to the implementing agency to meetany future needs for reprinting.

VII. STAFFING REQUIREMENTS

The Consultant shall propose and justify the range of disciplines to be included in theproject team. It is expected that the proposed project team will contain several of, but notnecessarily to be confined to, the following socialist:

environmental specialist;environmental planner;road safety specialist

VIII. TIME SCHEDULE

Following is a tentative Time Schedule for the consultant services:

1. Submission of proposals2. Negotiation of contract3. Signing of contract4. Commencement of work5. Submission of interim report6. Submission of progress report7. Submission of final report

POLAND Annex 3.12Attachment

ROADS II PROJECT Page 1 of 5

ENVIRONMENTAL REQUIREMENTS AND REGULATIONS EFFECTINGSITE SELECTION FOR ROAD INVESTMENTS.

Effective environmental regulations regarding site selection investments are found in:

1. Statutes:

1.1 of 31. 01. 80 - re: protection and structuring of environment includingamendments of27. 04. 92;

1.2 of 12. 07. 84 - re: spatial planning (unified text of 28. 02. 89);1.3 of 24. 10. 74 - re. Construction Law with subsequent amendments;1.4 of 24. 10. 74 - re. Water Law with subsequent amendments;1.5 of 24. 03. 82 - re. farm land and forest areas protection with subsequent

amendments;1.6 of 21. 03. 85 - re. public roads with subsequent amendments.

2. Council of Ministers and Ministers of relevant sectors regulations anddispositions.

3. State and sector standards.

II. Road Investment Classification

1 . Motor and expressways are ranked to be particularly harmful for people andenvironment, according to the disposition of Minister of EnvironmentalProtection, Natural Resources and Forestry of 23. 04. 92.

2. According to the disposition of Council of Ministers the investments types,areas and order of site location is covered by amendment to announcement ofMinister of (Spatial and Construction Economy of 16.02.90). - roadinvestments fall into one of the following categories:

1. national (construction of motor and expressways and national roads).Site selection is suggested by Central Planning Office. Site decision ismade by local state administrative body on voivodship level.

2. voivodship (voivodship roads and facilities).Site selection is suggested by local voivodship state administrativebody on voivodship level.

3. local (investments not mentioned above).Site selection is suggested and decision made by county bodies.

Annex 3.12AttachmentPage 2 of 5

III. Procedures

1. Before the investment decision is made the investor receives guidelines fromrespective state administration body.If the investment may present hazard to human health or environment it isnecessary to attach the environmental impact assessment prepared by an expertin this area. The expert is chosen by local state authority on voivodship level.

2. To the request for site selection, if the investment is to be hazardous for humanhealth or environmental impact assessment.

3. Evaluating road investment impact on environment acceptable indicators of air,water and soil pollution are considered. Another considered factor is noiselevel defined by regulation mentioned in pt. I and presented in Appendix 1 &3.

IV. Coordinating Bodies

According to the regulations:- motor and expressways construction requires clearing with Ministry of

Environmental Protection. Natural Resources and Forestry. Ecologicalassessment can only be prepared by qualified experts.

- bypass construction and adding of a second carriageway to all purpose roadsrequires clearance from voivodship authorities. In most of the cases it issufficient to use studies prepared by designing offices.

- all purpose roads modernization like wearing course, adding hard shoulders orslow traffic lanes do not require consultations.

- construction of new road production plants require clearance from voivodshipbodies.Plants that up to date did not have environmental impact assessment mustobtain such and clear them.

V. Environmental Control

Environmental Control regarding road after the construction is completed in notcarried out as yet.Production plants are periodically checked by Environmental Research and ControlCenters along the lines of generally accepted rules.Acceptable levels of air pollution (according to the regulation of Ministry of

Environment, Natural Resources and Forestry, of 12.12.1990, regarding air protection):

Annex 3.12AftachmentPage 3 of 5Appendix I

Accepted Concentration mgfM3

Normal Areas Specially protected areas

Annual AnnualPoll 30 min 24 h A. 30 min 24 h AM.

1 Sulfur dioxide until 600 200 32 250 75 111998 440 150 32 250 75 11from 1999

2 Lead 1 0.2 0.5 0.1

3 Suspended dust 120 50 60 40

4 Carbon Monoxide 5000 1000 120 3000 500 61

5 Nitrogen dioxide 500 150 50 150 50 30

6 Hydrocarbons Lack of unified indicator

*/ Specially protected areas represent areas of health resorts, resort protection, national parks, naturereservations in green landscape parks.

Note: The table quotes only the substances for which concentration is calculated in road environment protectionstudies in 30 min. periods, and during 2% time annually, for average 24 h concentration.


Appendix II

Highest acceptable indicators of sewer pollutants polluting soil and water (accordingto regulation of Ministry of Environment, Natural Resources and Forestry of o5.11.1991,regarding water and conditions required of sewers introducing their matters into water andsoil).

Poz. Indicator Unit Value

1. Suspended matter mg/l 50.02. ChZT"l mgO2/1 150.03. BZT52 ' mgO2/1 30.04. Petroleum benzine extracting mg/l 50.05. Nitrogen mgN/I 30.06. Phosphorus mgP/l 50.07. Lead mgPb/l 0.58. Benzo/a/piren /1 2.0

1i ChZT - chemical oxygen requirements21 _BZT5 - 24 hrs. biochemical oxygen requirement.

Attention:Table quotes values regarding suspended matters as a basic pollutant indicator and otherrelevant road rain sewers pollutants.


Environmentally accepted levels (Council of Ministersregulation of 30.09.80)

Sounds Level in Max. shortPoz Area type equivalent hours sound level

06.00-22.00 22.00-6.001 a/ Resort protection areas LA=4OdB LA=3OdB LA=65B

b/ Protected landscape areasc/ Green landscape parksd/ Recreation & landscape areasprotected by article 41 of EnvironmentProtection & Structuring Statutee/ Historical monuments areas

2. a! Hospital & convalescence home LA=45dB LA=35dB LA=7OdBgroundsb/ Suburban housing developmentsc/ Suburban recreation areas

3. a/ Residential areas with small no. of LA=5OdB LA=4OdB LA=75dBshops & services located near streetswith traffic volume up to 1000 veh/hb/ Common dwellings & welfaregroundsc/ Scientific & research centersgroundsd/ Nurseries, kindergardens, schoolsand other institutions where childrenlive either permanently or spend manyhours on a.daily basis

4. a/ Residential areas with small no. of LA=55dB LA=45dB LA=80dbshops & services located near streetswith traffic volume up to 2000 veh/hb/ City parks & garden lotsc/ Recreation & athletic grounds

5. a/ Downtown areas with LA=6OdB LA=5OdB LA=85dBmultifunctional buildings (housing,commercial, business, etc.) or streetswith traffic volume over 2000 veh/h

*/ Sound level equivalent is expressed by average value of sound levels during observations calculated fromresults obtained from measurements defined by Polish standards.

CONTRACT No 55 - Construction of overbridge and bridge in Bogaczewo in the route ofthe national road No. 7 Gdansk - Warszawa, section from km 71+140 to km 72+840

F8 Droga kraiowa nr 7 - skrzyvowanie z linia koleiowa w m. Boaaczewo (wol. eiblaskie)

ANALIZA EKONOMICZNA NAKtQAD6W I KORZY§CI IRR (o16qn 41.44%

ECONOMIC ANALYSIS OF COST AND BENEFITSzi

Nakiady netto OszczqdnotciRok drogowo- uZytkownik6w `"NV' Roczne zdyskontowane korzy§ci netto

mostowe netto Korzytci przy wsp61czynnikach stopy dyskontowej:Net Each year value at discount rate coefficients:

Year road & bridge Benefits Net Value : _ _ ._._:I costs 0.08 0.12 0.17 0.25 0.4144

1 2 3 456 7 .8919961997 -3 268 207 -3 268 207 -3 026 118 -2 918 042 -2 793 339 -2 614 566 -2 310 6891998 -3 268 208 -3 268 208 -2 801 962 -2 605 395 -2 387 470 -2 091 653 -1 633 7051999 429 624 1 939 688 2 369 312 1 880 837 1 686 430 1 479 329 1 213 088 837 3722000 -11 934 2 277 087 2 265 153 1 664 955 1 439 546 1 208 799 927 807 566 0122001 -11 934 2 738 832 2 726 898 1 855 881 1 547 315 1 243 769 893 550 481 7582002 -11 934 3 251 928 3 239 994 2 041 746 1 641 482 1 263 075 849 345 404 7032003 -11 934 3 811 951 3 800 017 2 217 273 1 718 935 1 266 148 796 921 3355902004 71 604 4 348 683 4 420 287 2 388 143 1 785 280 1 258 820 741 601 275 9982005 -123 318 4 991 628 4 868 310 2 435 367 1 755 561 1184 965 653 413 214 9152006 -11 934 5 729 954 5 718 020 2 648 550 1 841 050 1189 562 613 968 178 4702007 -11 934 6 533 592 6 521 658 2 797 027 1 874 821 1159 614 560 206 143 9162008 429 624 7 406 054 7 835 678 3 111 656 2 011 223 1190 820 538 464 122 2532009 -11 934 8 351 987 8 340 053 3 066 620 1 911 325 1 083 310 458 499 91 9992010 -11 934 9 441 574 9 429 640 3 210 425 1 929 491 1046 871 414 720 73 5432011 -11 934 10 784 376 10 772 442 3 395 923 1 968 085 1022 177 379 022 59 4012012 71 604 12 286 298 12 357 902 3 607 154 2 015 842 1002 238 347 844 48 1792013 -600 678 13 830 983 13 230 305 3 5757 41 1 926 919 917 086 297 920 36 4682014 -11 934 15 549 253 15 537 319 3 888 199 2 020 467 920 514 279 895 30 2802015 -11 934 17 489 334 17 477 400 4 049 724 2 029 245 885 004 251 876 24 0822016 429 624 19 541 412 19 971 036 4 284 750 2 070 333 864 337 230 250 19 455

NPV(2O06) 42 862 862 24 687 419 12 825 324 4 593 737 0BIC(2016) 9.496 6.320 4.060 2.280 1.000

_ O 4

CONTRACT No 58.1 - Modemnization of national road No. 4 Wroclaw - Krak6w, sectionKleszcz6w - Gliwice from km 300+700 to km 310+754

F8

EACH YEAR ECONOMIC ANALYSIS OF COSTS & BENEFITS I R R = 69.3438|

XLESZCZOW - GLIWICE AND SECTION IN BYTOM [thous. zl.]

NET|

YEAR ITEM ROAD BENEFITS NV NET PRESENT VALUE AT DISCOUNT RATE COEFFICIENTS

COSTS l 0.12 | 0.30 0.60 [ 0.6934 0.75 0.80 0.85

0 11 2 [ 3 4 5 6 1 7 8 901

1996 0 -4020.00 0.00 -4020.00 -4020.00 -4020.00 -4020.00 -4020.00 -4020.00 -4020.00 -4020.00

1997 1 -2464.84 0.00 -2464.84 -2200.75 -1896.03 -1540.53 -1455.52 -1408.48 -1369.36 -1332.35

1998 2 1621.50 5342.92 7170.42 5716.21 4242.85 2800.95 2500.38 2341.36 2213.09 2095.08

1999 3 -34.66 5688.95 5654.29 4024.61 2573.64 1380.44 1164.31 1055.03 969.53 893.02

2000 4 -34.66 5924.23 5889.57 3742.93 2062.10 898.68 716.15 627.96 561.04 502.80

2001 5 -34.66 6017.15 5982.49 3394.63 1611.26 570.53 429.57 364.50 316.61 276.07

2002 6 -34.66 6233.43 6198.77 3140.49 1284.24 369.48 262.84 215.81 182.25 154.62

2003 7 -551.80 6344.75 5792.95 2620.44 923.20 215.80 145.05 115.25 94.62 78.11

2004 8 - 379.17 6699.59 7078.76 2858.99 867.78 164.82 104.67 80.47 64.24 51.59

2005 9 -34.66 6991.81 6957.15 2508.82 656.06 101.24 60.74 45.19 35.07 27.41

2006 10 -34.66 7220.15 7185.49 2313.54 521.22 65.35 37.05 26.67 20.12 15.30

2007 11 -34.66 7287.75 7253.09 2085.09 404.71 41.23 22.08 15.39 11.29 8.35

2008 12 -34.66 7595.15 7560.49 1940.59 324.51 26.86 13.59 9.16 6.54 4.70

2009 13 -2362.08 7786.57 5424.49 1243.15 179.10 12.04 5.76 3.76 2.61 1.82

2010 14 1827.50 7989.48 9816.98 2008.75 249.33 13.62 6.15 3.89 2.62 1.78

2011 15 -34.66 8295.95 8261.29 1509.31 161.40 7.17 3.06 1.87 1.22 0.81

2012 16 -34.66 8622.94 8588.28 1400.93 129.07 4.66 1.88 1.11 0.71 0.46

2013 17 -34.66 8750.80 8716.14 1269.46 100.76 2.95 1.13 0.64 0.40 0.25

2014 18 -34.66 9105.60 9070.94 1179.58 80.66 1.92 0.69 0.38 0.23 0.14

2015 19 -137.98 9420.88 9282.90 1077.81 63.50 1.23 0.42 0.22 0.13 0.08

. 1~ - . _ . _ _NPV 37814.57 10519.36 1118.44 0.00 1 -519. 81 -907.04 -1239.93

|B/C 8.28 ; 3.12 t 1.23 | 1.00 0.9I 0.81 | 0.7

CD esO s.

0_

CONTRACT No 62 - Construction of the Bialobrzegi bypass one carriageway in the route ofthe national road No. 7 Warszawa - Krak6w from km 409+615 to km 417+154

F8EACH YEAR ECONOMIC ANALYSIS OF COSTS & BENEFITS IRR= 5.1971

[thous. zi. ]NET

YEAR ITEM ROAD BENEFITS NV NET PRESENT VALUE AT DISCOUNT RATE COEFFICIENTS .COSTS 0.12 0.25 0.50 0.55 0.551971 0.56 0.57 0.58 0.60

0 1 2 3 4 5 6 7 a 9 10 11 12 131996 0 -420 0 -420 -420 -420 -420 -420 -420 -420 -420 -420 -4201997 1 -1845 0 -1845 -1647 -1476 -1230 -1190 -1189 -1183 -1175 -1168 -11531998 2 -8390 0 -8390 -6688 -5370 -3729 -3492 -3483 -3448 -3404 -3361 -32771999 3 -8390 0 -8390 -5972 -4296 -2486 -2253 -2244 -2210 -2168 -2127 -20482000 4 -20 13023 13003 8264 5326 2569 2253 2241 2196 2140 2087 19842001 5 -20 14691 14671 8325 4807 1932 1640 1629 1588 1538 1490 13992002 6 405 15432 15837 8023 4152 1390 1142 1133 1099 1057 1018 9442003 7 -20 16229 16209 7332 3399 949 754 747 721 689 659 6042004 8 -20 16937 16917 6832 2838 660 508 503 482 458 436 3942005 9 -500 17876 17376 6266 2332 452 336 333 318 300 283 2532006 10 1905 19794 21699 6987 2330 376 271 268 254 238 224 1972007 11 -20 20636 20616 5927 1771 238 166 164 155 144 135 1172008 12 -20 21302 21282 5463 1462 164 111 109 102 95 88 762009 13 -20 22063 22043 5052 1212 113 74 73 68 63 58 492010 14 -2200 22879 20679 4231 909 71 45 44 41 37 34 292011 15 405 25801 26206 4788 922 60 37 36 33 30 27 232012 16 -20 26487 26467 4317 745 40 24 23 22 19 18 142013 17 -20 27687 27667 4030 623 28 16 16 14 13 12 92014 18 -20 28608 28588 3718 515 19 11 10 10 9 8 62015 19 * -500 29785 29285 3400 422 13 7 7 6 6 5 4

NPV 78226 22205 1210 39 0 -152 -329 -496 -797B/C 6.36 2.94 1.15 1.01 1.00 0.98 0.95 0.93 0.88

= - - -- - - - - -~~~~~~


POLAND

ROADS II PROJECT

Documents in the Project File

1. - Road Funding Law (The Government of Poland, Warsaw, August 1997);

2. - Executive Summary of 15 Environmental Impact Assessments (12 bypasses; 3new bridges, Ekokonsult, August 1997);

3. - GAMBIT, Road Safety Program (Technical University of Gdansk, Gdansk,January 1997);

4. - Accidents and Fatalities 1996 (National Traffic Police, Warsaw, January1997);

5. - Resolution No. 16/96 of the Council of Ministers, dated July 15, 1996: RoadInvestment Program;

6. - Polish Transport Policy Paper (Ministry of Transport and Maritime Economy,Warsaw, April 1996);

7. - Report on Pavement Technical Condition on National Road Network inPoland (Road Network Development Planning Office, Warsaw, April1996);

8. - Country Assistance Strategy (The World Bank, Washington D.C., October 20,1994);

9. - Program of Motorways in Poland (The World Bank, December 1994);

10. - Resolution No. 92/93 of the Council of Ministers, dated October 21, 1993:Creation of Council of Road Safety;

11. - Polish National Road Network Study (Danish Road Directorate, 1992)

POLAND

ROADS II PROJECT

Organization Chart of Ministry of Transport and Maritime Economy

Agencyfor Motorway Ministry of Transport and MaritimeConstruction and operation Economy

(ABiEA) (MTME)

Polish General 174 Bus General Inspectorate 4 Maritime 6 Shipping 6 ShipState Directorate of Transport Inspectorate of of Inland Ports Companies Reparing

Railways Public Roads Companies Civil Aviation Waterway Yards(PKP) (GDDP) Shipping

235 JSCs 167 SOEs* I SOE 3 SOEs* 3 SOEs*3 JSCs** 3 JSCs** 3 JSCs**

Road Network8 Regional Development 17 Polish Air Polish 8 Regional

Offices Planning Office Regional Lines Airports Offices(BPRSD) Offices (LOT) (PPL)

m:\poland\sar\chartl .docSource: BPRSD, Warszawa, February, 1997

SOEs - State Owned EnterprisesJSCs - Joint-Stock Companies

POLAND

ROADS II PROJECT

Organizational Chart of GDDP

Director .l ~~~~Generall

: ~~~~~~~~~~~~Personnel17 DODPs LDivision

Defense Unit]

|Deputy Director |Deputy Director .Deputy Director | |Deputy Director for ||Deputy Director|for Road Network for Road Network Development for Legal and Organization Economic and Finance for Motorway

Maintenance ,.Construction

Road Bridge Road Construction European Information Legal Economic and MotorwayDivision Division Network Division Program and Division Finance Division Construction

Division Division Cooperation OfficeDivisionlll ll

Source: GDDP, February 1997, Warsaw, Polandc:\date\chart22.doc

Q

POLAND

ROADS II PROJECT

Organizational Chart of the Council of Road Safety

The Chairman of the Council-Deputy Chairman ofCouncil of Ministers |

r1 t Council of Road SafetyMIA/MTME Under Secretary of State in MIA - Deputy Chairnan of the Council

Secretary of State in MTME - Deputy Chairman of the CouncilNational Coordinator of RS

Members Representatives of following Ministers:MTME I MIA _ MNE MIT I MF I MHSW I MND I MJ I MAFE MRPC I MEPNRF I CPN NCRT

ROAD SAFETY SECRETARIATMTME DIRECTOR IHigh level government Official - Ministry Advisor

The permanent service of the Office IForeign Group of Experts from particular Ministries and Subjects:Experts

MTME MIA MNE MIT MF MHSW I MND MJ MAFE MRPC MEPNRF CPN NCRT OTHER

SOCIALCOMMITTEE OF ATTE PSA PMA PRC MEDIA FOUNDATIONS OTHER

ROAD SAFETY

Relation within MTMEDVT | DT |DTP |GDPR |CRS |UNV |OU

Relation within other Ministries 3Source: Rada Bezpieczefistva Ruchu Drogovego, Warszawa, July 1996, Polandm:\poland\sar chart3.doc

lORD 28740

14' 16 18 - 20- 22" 24' P

. - > . ~~~~~~~~~~~~~~~~RUSSIAN \.jPOLAND,.1 ,,- : , ;, FEDRUSATION ! L I T9UANIA j ROADS II PROJECT

FEDERATION /y\\Xu LITHUANIA ' h/dI PROGRAMMED WORKS

4' 1 t; 5- * ) kanak . To If

al m/lvgind - - - - 51 CONTRACT NUMBER

b 5,rctd ' K-lin 6 ZO In i 't l; w NNK 9SgoK*i 0 CONSTRUCTION OF BRIDGES

64C''1 SLSJPSK Elbiog *I y i > ' - 5 o w ,. SUWALKI / MODERNIZATION OF BRIDGES

1JA ' .\ O T td' CONSTRUCTION OF BYPASS

KOEZAIN 9strodq- WOlsztyn ~~~~~~~~~~~~~~~~~~~~~~~~~~ 7~ T.I V,-,, C' STRENGTHENING OF BTPASS

SjCZCIN 21 TF RaocS , A BYDGOSZCZ - ' j

CDNSTRUCTION GE ROADS

So / Stonc -n' 51 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -~~~~rSTRENGTHENING OF ROADS

W f ,, -- p Z 5 S . k - 74 1 N 1; 52, TB•JN E- L-~ A R U S MODERNIZATION OF ROADS

<7' ~~ 7 \ ~~ ~< BiUytMk ? B~~ELARUSRyd0 osrcz * '. Ostroleao 0 >t~~~~~~~~ Lornzo, "'u N ------ ~STOKMAIN ROADS<2 9" >TyK~~~~~~~~~~IL C/IH OW~ 7[C EKA ICYTK

&ORZOW N PLA RA I -. -i-J-- RAILROADS

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Report No.: 17085 POLType: SAR