Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 11441-RO

STAFF APPRAISAL REPORT

ROMANIA

TRANSPORT PROJECT

MARCH 5, 1993

Infrastructure Operations DivisionCountry Department IEurope and Central Asia Region

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

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CURRENCY BOUIVALENTS

(as of February 1993)

Currency Unit = leiUS$1.00 - 500 leiUS$2,000 - lei 1 million

(as of June 1992)

US$1.00 = 198 lei

(as of January 1992)

US$1.00 - 261 lei

WEIGHTS AND MEASURES

m = meter (3.281 feet)km kilometer (0.621 mile)

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

CC Commercial CompanyCEE Central and Eastern EuropeCMEA Council for Mutual Economic AssistanceEBRD European Bank for Reconstruction and DevelopmentEEC European Economic CommunityEIB European Investment BankGOR Government of RomaniaHDM Highway Design ModelIBRD International Bank for Reconstruction and DevelopmentIPTANA Design Institute for Road, Water and Air TransportLIB Limited International BiddingMOEF Ministry of Economy and FinanceMOT Ministry of TransportMPW Ministry of Public WorksMTPW Ministry of Transport and Public WorksNRA National Road AdministrationOED Operations Evaluation DepartmentPCR Project Completion ReportPMU Project Management UnitPPAR Performance Audit ReportRA Regie AutonomeRAR Romanian Automobile RegistrarSNCFR National Railway Company of RomaniaSOE Statement of ExpenditureTACI Technical Assistance and Critical Imports LoanVOC Vehicle Operating Costs

ROMANIA -- FISCAL YEAR

January 1 - December 31

FOR OFFICL41 USE ONLY

TRANSPORT PROJECT

STAFP APPRAISAL REPORT

Table of ContentsPaac No.

LOAN AND PROJECT SUMMARY .i

I. THE TRANSPORT SECTOR. 1A. The Transport System .... . . . . . . . . . . . . . . . . . . 1

B. Traffic. 1C. Investments. 2D. Institutions. 2E. Sectoral Issues. 2F. Sector Strategy. 3G. Previous Bank Experience in the Sector. 4H. Role of the Bank and Lending Strategy. 4

II. THE HIGHWAY SUBSECTOR. 5A. Network and Traffic. 5B. Road Transport. 6C. Road Safety. . 7D. Highway Administration and Organization .8E. Engineering, Construction and Maintenanc .8F. Highway Expenditure. and Financing. . 9

III. THE RAILWAY SUBSECTOR .10A. Organization and Management .10B. Traffic and Staff Productivity .10C. Railway Property .10D. Operations .11E. The Restructuring Process .12

IV. THE PROJECT .12A. Project Objectives .12B. Project Description .13C. Engineering and Status of Project Preparation .14D. Cost Estimates .14E. Project Financing .16F. Implementation and Monitoring .17G. Procurement .18H. Disbursements .21I. Project Supervision .22J. Environment Impact .22K. Accounts and Audit .22

This document is based on the findings of an appraisal mission to Romania inOctober/November 1992, consisting of Jacques Y-nny (task manager); SvetislavOrlic, Luis Revuelta and Richard Florescu (engineers); and Branco Bjelorglic(consultant). Snezana Mitrovic assisted in preparing the report. Peerreviewers were Philip Blackshaw and Michel Ray (EMTIN). The division chief isPaula Donovan and the department director is Michael Wieh-n.

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

V. ECONOMIC EVALUATION *.............. .... ....... 23A. Benefits and Beneficiaries . . . . . . . . . . . . . . . . . . 23

B. Costs and Benefits . . . . . . . . . . . . . . . . . . . . . . 23C. Overall Evaluation and Risks .. 24

VI. AGREEMENTS REACHED AND RECOMMENDATIONS . . . . . . . . . . . . . . . 24

ANNEXS

1. Terms of Reference for Supervision of Civil Works 262. Terms of Reference for Project Management Unit . .323. Documents in Project File .. 34

TABLES

1. Freight Traffic by Mode of Transport . . . . . . . . . . . . . . . . 36

2. Passenger Traffic by Mode of Transport . . . . . . . . . . . . . . . 373. Road Traffic . . . . . . . . . . . . . . . . . . . 38

4. Traffic in Constanza Port . .. . . . . . . . . . . 39

S. Transport Sector Investment .......... . 40

6. Number of Road Vehicles. . . . . . . . . . . . . . . . . . . . . . . 41

7. Action Plans for Road User Charges and Axle-Load Control . . . . . . 42

S. Action Plan for Maintenance by Contract. . . . . . . . . . . . . . . 44

9. NRA's Equipment by Type and Age. . . . . . . . . . . . . . . . . . . 45

10. Highway Expenditures . . . . . . . . . . . . . . . . . . . . . . . . 46

11. Romanian Railway Operational Indicators. . . . . . . . . . . . . . . 47

12. List of Roads for tho Project. .. . . . . . . . . . . . . . . 5113. List of Equipment to be Procured under the Project .. . . . . 52

14. Outline of Training. . . . . . . . . . . . . . . . . . . . . . . . . 5315. Implementation Schedule. . . . . . . . . . . . . . . . . . . . . . . 55

16. Estimated Schedule of Disbursement . . . . . . . . . . . . . . . . . 58

17. Vehicle Operating Costs .. 59

CHARTS

1. Ministry of Transport ....................... . 60

2. National Road Administration Headquarters ............. . 61

3. National Road Administration Regional Organization . ..... . . . 62

4. SNCFR Organization .... . . . . . . ...... . . . . . . . . . 63

M&E IBRD 24275 - Romania - Transport Project

ROMANI

TRANSPORT PROJECT

STAFF APPRAISAL REPORT

LOAN AND PROJECT SUMMARY

Borrowers Romania

Beneficiarims: National Road Administration, Romanian AutomobileRegistrar and National Railroad Company of Romania

Lon Amount: US$120 million equivalent

T-rma Seventeen years, including 5 year grace at thestandard variable interest rate

Proiect Obiectivemand Descriptions The objectives of the project are to: (a) increase

efficiency of the sector and accommodate expectedchanges in transport demand by improving the conditionof the road networki (b) promote the selection oftransport investments on the basis of economiccriteria; (c) improve fiscal performance and reducethe uneconomic use of transport and energy byimplementing a cost-based systm of road user charges;(d) develop the execution of road works by contract;(e) build on transport policy initiatives under theTACI project particularly with regard to investmentselection and restructuring of the railways; and(f) support the economic reform program and encouragesocial stability by financing geographically dispersedefficient employment generation, including in newlyprivatizing contracting companies to the extentpossible.

The project includes: (a) rehabilitation of some 1,100km of national roads; (b) improvsment of border posts;(c) material and equipment for road safety, roadmaintenance, vehicle inspection and training;(d) technical assistance and training for the roadsubsector; and (e) urgently needed track maintenanceand data processing equipment, spare parts andtraining for the railways.

ii

Benefits and Risks: The project is expected to play an important role inaccommodating the aconomic reorientation of transportdemand to road transport and start restructuring therailways accordingly. Quantifiable benefits for theroad rehabilitation component will be in the form ofreduced vehicle operating costs (VOC), i.e. lower fuelconsumption, tire wear and general vehicle maintenancecosts, time and wage savings. Also, the present valueof road expenditure requirements will be reduced byundertaking road strengthening now and avoiding moreexpensive reconstruction at a later date. Roadmaintenance expenditures will also decrease onrehabilitated roads. The road safety component willcontribute to the reduction in accidents. Thebenefits will accrue to a large and widespread numberof beneficiaries. Lower road transport costs and timesavings will benefit vehicle owners as well as users.For the railway components benefits will consist ofreduced operating costs and improved traffic safety.Project risks are low. The GOR, NOT and NRA haveexpressed strong interest in the project, and arelikely to proceed even in the event of politicalchanges. The main risk is that the GOR would not havesufficient counterpart funds. However, the localcomponent of US$125 million would be affordable. Itwould amount annually over the project implementationperiod to one third of total highway expendituresbudgeted for 1992. NRA is budgeting for itscontribution as a top priority within its existingbudgetary allocation.

iii

ESTIMATED PROJECT COSTS Local Foreign Total----- US$ Million-------------

Civil Works 104.3 186.5 290.8

Road Safety 4.5 10.5 15.0

Materials and Equipment 5.1 27.7 32.8Technical Assistance and

Training 0.4 1.6 2.0

Railways 6 3 17.7 24.0Sub Total 120.6 244.0 364.6

Contingencies 13.4 27.0 40.4

Grand Total 134.0 271.0 405.0

FINANCING

Government 125.0 - 125.0

Bank 9.0 111.0 120.0Cofinancing - 160.0 160.0

Total 134.0 271.0 405.0

ESTIMATED IBRD DISBURSEMENTS (S million)

IBRD Fiscal Year 9 19 19 19 1998 122Annual 8 17 42 36 15 2

Cumulative 8 25 67 103 118 120

ROMANIATRANSPORT PROJECT

STAFF APPRAISAL REPORT

I. THZ TRANSPORT SECTOR

A. The Transoort Svstem

1.01 Romania is one of the largest of the former centrally plannedeconomies in the Central and East European (CDE) Region with a land area of237,000 sq. km and a population of 23 million, second only to Poland. Percapita income in 1992 was estimated at about $1,225. The country has a widerange of natural resources, including a fertile agricultural base, deposits ofcoal, lignite, oil, natural gas and other minerals. Long a major foodproducer, Romania was a large exporter of agricultural products until theearly eighties.

1.02 The transport system has relied primarily on the railways, whichhave a well developed network of 11,000 km, of which 36% is electrified and26% is double track. There are about 1000 stations for freight andpassengers. The road network totals 73,000 km, of which 20% are nationalroads carrying 60% of the road traffic. Road density, with regard to bothpopulation and land area, is the lowest among all CEE countries. The Danubeoffers a navigable distance of 1075 km in Romania and the Danube-Black SeaCanal (68 km) was opened to traffic in 1984. Ninety percent of foreign tradeis handled through the port of Constanza on the Black sea. There are fivemajor river ports on the Danube, the largest of which is Galati, accessible toocean-going vessels up to 15,000 tons. There are seventeen airports of which3 are international.

B. Traffic

1.03 As in other centrally planned economies, Romania's transportsector has been heavily rail oriented. In 1960, rail accounted for over 80%of freight traffic and over 70% of passenger traffic (Tables 1 and 2). Whilethe rail share has gone down since then, in 1989, rail still accounted foralmost 70% of freight and about 40% of passenger traffic. The higher share ofrail freight was the result of regulation forcing all transport above 50 km tothe railways. This regulation has now been abolished. Rail freight reached300 million tons and 80 billion ton-km in the late 80s, but has fallendramatically over the last two years. In 1991, it was down to less than halfits 1989 level at 37 billion ton-km. Passenger traffic held off better, beingdown less than 30%.

1 04 Road traffic grew rapidly in the 70s but stagnated in the 80s asit was suppressed by physical control and regulation (Table 3). The last twoyears have seen an explosion of private car traffic. Truck traffic has beenless buoyant due to the downturn in the economy, but has been affected muchless than rail traffic.

1.05 Traffic through Constanza port was around 60 million tons p.a. inthe late 80s, but in 1991, only 28 million tons were handled (Table 4). Ofthe earlier traffic, about 60% was liquid bulk and another 30% dry bulk,

leaving only about 5 million tons of general cargo. Container traffic wassmall but hau increased rapidly since 1989 as Romania's markets arediversifying. Inland water traffic is insignificant at only 3% of total landtraffic. On the Danube-Black Sea Canal, traffic reached 12.5 million tons in1989, well below the forecasts of 75 million tons made in 1979 beforeconstruction. Traffic in 1990 had fallen to some 6 million tons. Maritimetraffic carried by the Romanian fleet quadrupled in the 70s from 4 to 16million tons p.a. and more than doubled again to 36 million tons in 1989.

C. Investments

1.06 Investments in the transport sector have been around 10% of totalinvestments, substantially below the level in market economies. Until thelate-70s, railways got the bulk of the investments in the sector. Later, thebalance shifted toward water transport (maritime, river and canals) with theconstruction of the new Constanza port, the Danube-Black Sea Canal and theBucharest-Danube Canal (now abandoned) and a major increase in the maritimefleet. In the 80s, total water transport investments absorbed well over 50%of total transport investments, while rail received about 27%. By comparison,investments in road infrastructure decreased from 9% in the late 70c to lessthan 5% in the 80s (Table 5). In the 80s construction started on theBucharest metro and between 1986 and 1990, this absorbed about twice theamounts invested in the entire road infrastructure of Romania. In the lasttwo years, investments in the sector have come to a virtual halt. The 1992investment budget for the whole sector is US$35 million, only allowing forurgent capital repairs and periodic maintenance and no new investments.

D. Institutions

1.07 In 1990 and 1991, major changes took place in the transportinstitutions. The former Ministry of Transport and Public Works was splitinto two separate Ministries. The Ministry of Transport (MOT) was reorganizedto concentrate on policy making and regulation functions rather then being anoperator of transport means (Chart 1). The railways, highways and portsbecame autonomous units or "Regis Autonomes" (RA), while road transportdepartments, construction departments and design or research institutes becamerespectively transport companies, contractors and consultants commercialcompanies (CC). The shares of these CC are still owned 100% by the state, butwith the intention of privatization as and when feasible.

E. Sectoral Issues

1.08 One of the main problems of the sector is to evaluate the futurevolume and vattern of transport demand. The shift to a market economy, islikely to result in less emphasis on transport intensive industries such assteel, cement and petrochemicals and more on higher value added light industrysuch as textiles and agro-industry. The latter will require lower transportvolumes and are more likely to use road transport than rail or watertransport. Romania's use of energy was also very intensive. The demand for

coal transport may decline when energy subsidies are phased out, railway coaltariff. are increased and industries conserve fuel to reduce operating costs.On the passenger side, all modes of transport have already increased tariffssubstantially and will continue to do so in the future, in order to reduce theneed for subsidies. This could moderate travel demand, until income growthresumes. Automobile traffic is likely to grow significantly from a low base.The emphasis of the proposed project on the road subsector is appropriate asthe role of road transport for freight and passengers can only increase withthe structural reforms of the economy. Demand forecasts for rail and watertransport will be done as part of studies now underway.

1.09 As mentioned above, investments in the sector were skewed towardvery large projects without regard for economic and financial feasibility.The result is that funds for replacement of life expired equipment andmodernization were scarce. Existing infrastructure and equipment are obsoleteand service availability is low. This is particularly evident in the roadsector which received low priority in the past. We are working with the NOTon a sector strategy that would generalize the use of economic feasibilitystudies as a basis for improving decision making on investments.

1.10 The sector was no exception to the general distortions resultingfrom administrative rather than market prices Fuel prices are stillcontrolled, but Government policy is to ensure that they reflect fluctuationsin world markets. Under the Structural Adjustment Loan (SAL) agreement hasbeen reached that Government would adjust them periodically for price andexchange rate movements. In late 1992, pump prices were US$0.34/1. forgasoline and US$0.26/1. for diesel. Transport prices are free for freight butstill regulated for public passenger transport. NRA has drafted a proposalfor introducing a comprehensive system of road user charges and retainedconsultants under the Technical Assistance and Critical Imports (TACI) Project- Loan 3363-RO to advise on this matter and recommend a system that wouldensure that the various users pay their share of the full economic cost ofbuilding and maintaining the road network. A timetable for the introductionof a comprehensive system of road user charaes within a year of completion inmid-1993 of the study was reconfirmed at neaotiations (para. 6.01 a andTable 7).

F. Sector Strategv

1.11 The following principles and policies are guiding the futureaction of government in the transport sector:

a) Equality of treatment between transport enterprises and stateowned transport means;

b) Financial autonomy of transport companies;c) Freedom of action of transport enterprises;d) Free modal choice by transport users; ande) Correct allocation of investments based on economic benefits for

the country.

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Regarding investments in the sector, the strategy of the Ministry of Transportis as follows:

a) Short term- arrest the technical and operational deterioration ofthe system;

b) Medium term - consolidate and renovate the existing transportcapacity through the free competition between modesl and

C) Longer term - modernize and develop the infrastructure, equipmentand vehicles to match the economic and technical levels of WesternEurope.

This strategy is sound and is clearly reflected in this project on theinvestment side as well as by the agreements reached regarding reforms to beintroduced in the sector.

G. Previous Bank Experience in the Sector

1.12 The Bank financed two projects in the transport sector: theDanube-Black Sea Canal Project (Loan 1794-RO) of US$100 million of January1980 and the Land Transport Project (Loan 2034-RO) of US$125 million approvedin April 1981. In January 1987, OED issued the PPAR for the first project.The main conclusion was that, although completion was 17 months behindschedule, the work was generally good. However traffic did not materialize tothe extent expected and therefore, the financial results and economic benefitswere lower than estimated. A main issue raised in the report concerns theBank's role. The Bank loan came five years after construction of the canalhad started and mainly supplied finance (about 5% of total cost). It wouldhave been better to participate earlier in the project cycle to have an impacton technical and economic decisions before they were made.

1.13 The second project was completed and the loan closed on schedulein May 1987. The PCR was issued in January 1992. The overall assessment issatisfactory. Disbursements were faster than expected and the project costwell below estimates. Economic returns are lower than expected following thedownturn in the economy since 1990 but all components remain justified.Issues of past irregular procurement practices were highlighted by theGovernment in its commentary on the project. The Government is anxious tocooperate fully with the Bank in designing and implementing new projects. Thecooperation throughout the proposed project's preparation has beenoutstanding, with the Bank's comments on project design, concept andimplementation fully taken into account.

H. Role of the Bank and Lendino Strateav

1.14 The Bank has begun the process of assisting the reform of thetransport sector through technical assistance for studies in the road, portsand urban transport subsectors. The road user charges study, the railwayrestructuring study and the urban transport study financed under the Technical

Assistance and Critical Imports (TACI) Project (Loan 3363-RO) are underway. Aport master plan study for Constansa, financed by the Netherlands started inMarch 1992 and IC PHARN will finance some technical assistance for pavementmanagement. These studies simply begin our familiarization effort in thesector. Real institutional reform will require continuous, long term,technical assistance, only possible when combined with investment lending.The proposed project is our first loan in the sector since lending resumed andwill focus mainly on highway rehabilitation and maintenance. It also includestechnical assistance and training in the road and rail subsectors as well as asmall railways component for well justified and urgently needed equipment, sobasic that it would be needed in any restructuring scenario. Depending uponthe timing and nature of railway restructuring after completion of the study,the Bank would be willing to assist such a process.

II. THE HIGHWAY SUBSECTOR

A. Network and Traffic

2.01 Public roads in Romania are classified in a three-tier system:national roads, district roads and communal roads. The National RoadAdministration (NRA) is responsible for the national road network. Thedistrict and communal roads are directly under the local administrations,however, NRA provides technical assistance on standards and project design.

2.02 In 1992, the road network totalled about 73,000 km of which some15,000 km were national roads.

ROAD NETWORK

PAVED L ARTH TOTAL

km % Km Km Km

National Roads 14,420 98% 263 14,683

of which motorways 113 100% 113

District Roads 17,770 66% 7,947 1,150 26,867

Communal Roads 4,608 15% 19,105 7,453 31,166

TOTAL 36,798 27,315 8,603 72,716

in % 50% 38% 12% 100%

2.03 In the past, roads and road transport were neglected as emphasiswas placed on rail transport. As a result, the condition of the networkdeteriorated, particularly in the 1980.. It is estimated that about one thirdof the national road network, 5000 km, require some form of strengthening toavoid failure. In 1991 and 1992, what was left in the budget after routinemaintenance, allowed NRA to do only 500 km of periodic maintenance. This

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would give a cycle of 30 years for the 15,000 km network, while the need wouldtypically be for a 7-10 year cycle. The proposed project is focusing on theurgent need to strengthen the national road network, which carries 60% of thetotal road traffic in the country and all international transit traffic.

2.04 Road traffic grew continuously until 1980. However, traffic onnational roads fell in the 19809 when fuel was rationed and stricterrestrictions applied to road transport, i.e. trucks and buses could onlyoperate within district boundaries and all transport beyond 50 km had to bedone by rail. The average transport distance for road freight was only 12 kmin 1989. After the revolution, in 1990, road traffic jumped to 46% above1989, with all the increase due to private cars. In 1991, following fuelprice increases, traffic was still 23% above 1989. This in comparison withrail traffic which has fallen off by 50% for freight and about 30% forpaosengers between 1989 and 1991. Future forecasts are difficult to make withconfidence until economic growth resumes. Examples from other countriesindicate that once growth resumes, road traffic can be expected to grow evenfaster than GDP from relatively low levels at present.

2.05 Detailed traffic surveys, including Origin-Destination surveys areconducted once every five years on the entire national road network with thelast one done in 1990. In the intervening years, continuous traffic countingis performed at over 350 locations on the network. Traffic distribution isassumed constant between the two detailed surveys. To improve the system, theproject includes the acquisition of some classification counters which willprovide continuous data on traffic composition, rather than once every fiveyear under the present system. Lese than 10% of the network has trafficlevels in excess of 6,000 vehicles per day (vpd) and less than 3% have over10,000 vpd.

Traffic levels on National Road Network kmin vpd

< 1,000 1,7961,000 to 3,000 6,3533,000 to 6,000 4,4076,000 to 10,000 1,136> 10,000 347

TOTAL 14,039*

* excludes length through municipalities.

B. Road Transport

2.06 Road transport was completely deregulated in 1990 for freight andpassenger services. Transporters are now free to enter and operate any routethey wish and determine their own tariffs for freight. The single large roadtransport company under HOT and the other 423 own account transport companiesoperated by various ministries for their own sectors have been transformedinto smaller units (average of 280 vehicles per company versus 500 in 1989) am

follows: the freight companies are commercial companies with state ownershipof capital (share companies), while the 55 passenger companies are RegiesAutonomes administered by the 41 districts and the Municipality of Bucharest.In addition to these state owned companies, there are already over 2000private transport companies, generally in the form of limited liabilitycompanies. The average size of private companies and individual transportersis small. The intention is to privatize the state owned companies startingwith those dealing with freight.

2.07 There were 1.9 million 4 wheel vehicles registered in 1991 orabout 76 vehicles per 1000 population. This is the lowest ratio of vehiclesper capita in all CEE countries except Albania. Commercial vehicles --buses,trucks and tractors -- account for 28% of the fleet with cars comprising theremainder. Cars are concentrated in the urban areas, with Bucharestaccounting for 20% of the registration, and traffic on major intercity roadshas a high proportion of heavy vehicles, often exceeding 30%, which is doublethe average proportion in other CEE countries as well as in France and the UK.

2.08 The Romanian Automobile Registrar (RAR), a public corporation(Regie Autonome) is responsible for registering all road vehicles, as well asfor periodic testing for technical conditions and emission levels. Trucks andbuses are tested annually and cars every two years. Except in Bucharest, mosttesting stations still have only rudimentary equipment. Emission tests arelimited to measuring carbon monoxide (CO). The project includes financing forRAR to equip test stations with modern equipment including facilities to testbrakes, lights, steering and measure emissions of other pollutants such as NOxand C02.

2.09 The present legal axle load is 10 tons for a single axle onmotorways and European roads (4,500 km) and 8 tons on other roads. NRA isstudying the consequences of adopting the 11.5 ton limit of the EuropeanCommunity for roads and bridges on European roads as well as increasing thebearing capacity on other national roads and technical assistance is includedin the project to assist them with this study. Trucks are only weighed atborder posts and not on roads within the country. Overloading was a problembefore the revolution, mostly on roads in the vicinity of large constructionsites. While the problem is less acute now, it is likely to come back witheconomic development. The project includes weighbridges to improve datacollection for pavement design and as a basis to revise axle load legislationand strengthen enforcement. An action clan for imorovina axle load controlwas Precared with NRA (Table 7) with a view to collect data and revise presentlegislation to facilitate enforcement. This clan was reconfirmed atneaotiations (para. 6.01 b).

C. Road Safet

2.10 Road traffic accidents have become a serious problem over the lastfew years. In 1990, there were 9,700 serious accidents, injuring 8,400persons and causing 3,800 deaths. These numbers are three times higher thanin 1985. The incidence of fatalities is much higher than in Western Europebut comparable to rates found in other CEZ countries. The Bank-sponsored Road

Safety Study team in Central and Zaztern Europe will vlsit Romania lnFebruary 1993 and recommend ways to improve the situation. It was aare-d atneaotiations that a olan to imorove road safety would be oresared by th-National Committee on Road Transport on the basiz of the recommendations ofthe study team (oara. 6.01 c).

2.11 Regarding the technical aspects of road safety which are withinits control, NRA is working on eliminating hazardous points on the network.Due to lack of funds and unavailability of modern materials, horizontalmarkings such as a center line and border lines are completely missing andvertical signs are very deficient even on the national road network. Theproposed project includes a program to improve markings and signaling on som5,000 km of priority roads which are designated Zuropean Roads by NRA.

D. Hiahwav Administration and Oroanization

2.12 The NRA is a public service corporation (Regie Autonom-) dependingon the budget for virtually all of its resources. Its present organization isshown in Chart 2. In 1992, NRA employed some 15,000 persons. The work forceconsists of 1,600 technical and administrative staff and 13,400 workers. Only100 persons are presently employed at headquarters in Bucharest. The NRA isreducing its labor force through the creation of construction CCs andattrition.

2.13 The field organization consists of 7 regional directorates furtherdivided into 41 sections, their borders coinciding with those ofadministrative districts. Zach section is divided into 4 to 6 districts forroutine and winter maintenance. In addition, there are some 140 units forperiodic resurfacing and strengthening, each one quipped with one asphaltplant and the corresponding transport and paving equipment (Chart 3). Otherequipment is held at the district level. There are small workshops formaintenance and minor repairs in each of the 41 sections and 7 regionalworkshops for major overhauls.

Z. Enaineerina. Construction and Maintenance

2.14 Zngineering for the road system has generally been prepared byinstitutes of the NOT, the main one being the Dosign Institute for Road, Waterand Air Transport (IPTANA). In 1990, these institutes became joint-stockcommercial companies. The stock is still owned by the state but they arecandidates for privatization. Private engineering consultants have alsostarted work and are competing with the institutes for work by contract. Roaddesign standards are appropriate to traffic flows and physicalcharacteristics.

2.15 Construction was done by specialized groups under the HOT, withsome specialization by mode. There were national companies as well asregional ones for the smaller works. In 1990, these large construction groupswere divided into smaller commerclal companies in a way similar to thatdescribed above for the institutes.

2.16 Maintenance has so far been done entirely by force account. NRAwill gradually shift more work to contract and has prepared an action planwith specific targets for shifting selected maintenance activities from forceaccount to contract over the next five years (Table 8). Technical assistanceand training to assist NRA in shifting work to contract and developing itscapacity for administering the contracts, controlling work quality, etc. isincluded in the project. The action plan was reconfirmed at necotiations(para. 6.01 dl.

2.17 The shift of maintenance to contract will be gradual over a numberof years and some operations will continue to be done by NRA. NRA's equipmentavailable is overaged and in bad condition; 64% is over 10 years old and 37%over 15 years old. (Table 9). Some new road maintenance equipment will beprovided under the project. Also, the project will assist NRA to developbetter practices for managing its equipment pool including the setting up of acharge back system. An action plan was reconfirmed at neaotiations(para. 6.01 *).

F. Hichwav Expenditures and Financina

2.18 Total road expenditures have been fairly constant between 1985 and1991, fluctuating between USS260 to 300 million per year. The distribution ofthese between the national roads and the rest of the network has also beenstable around 50-50.

HIGHWAY EXPENDITURE

NATIONAL ROADS DISTRICT COMMUNAL ROADS TOTAL

RECURRENT CAPITAL RECURRENT CAPITAL LEI US$COSTS COSTS TOTAL COSTS COSTS TOTAL mil mil

1985 1,489 744 2.233 1,580 545 2.125 4,358 255

1986 1.518 594 2.112 1,730 491 2,221 4,333 267

1987 1.480 612 2,092 1,680 512 2.192 4.284 293

1988 1,508 528 2,036 1,696 466 2,162 4,198 294

1989 1,557 528 2,085 1,918 534 2,452 4,537 304

1990 1.900 1.100 3.000 2,085 830 2,915 5,915 264

1991 8,288 918 9.206 6,515 2,671 9.186 18,392 307

1992 14.440 1.150 15,590 18.871 2,636 21.507 37,097 185

Most of the capital expenditures have gone to improving and strengtheningexisting roads rather than new construction. Extensive statistics are kept onthe condition of the roads by section, based on selected measurementscomplemented by professional inspections. This permits reliable priorityranking of needs. Further improvement in the pavement management system willbe obtained by computerization of the data base and introduction of equipmentto measure roughness as well as other pavement characteristics. Requiredtraining and equipment under the project will complement the equipment andtechnical assistance financed by iC PHARN.

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2.19 The needs for routine and periodic maintenance and the impact ofthe project on NRA's budget for the next few years has been assessed(Table 10). Aareement in principle was reached with MOEF reaardina the 1993budaet allocation to NRA. For subseauent years adeauate annual consultationswith the Bank have been aareed to ensure that sufficient funds and prioritvwill continue to be aiven to routine and oeriodic maintenance and to theoroiect and that acceptable criteria will be used to screen investments inand/or issuina credit auarantees for road proiects. These aareements werereconfirmed at neaotiations (para. 6.01 f).

III. THE RAILWAY SUBSECTOR

A. Organization and Manacement

3.01 In 1990, the Romanian Railways (SNCFR) were reorganized (Chart 4),and now have the legal status of a public service corporation (Regis Autonomein accordance with Law no.15 dated August 7, 1990) which gives them the rightto decentralize economic activities and accelerate the transition to a market-oriented economy. SNCFR is divided into eight regions and the area of theport of Constanza. Each region has 3-5 sub-regional units to manage railwayoperational activities. The president of the board is assisted by three vice-presidents (operational, technical and financial). This board is responsiblefor determining railway policy, including tariff policy, organization andoperations control.

B. Traffic and Staff Productivity

3.02 The decline of trade with the former CMEA countries, along withthe restructuring of the domestic economy, has contributed to a decrease infreight traffic over the past three years. Net-ton freight declined by about53% from 1989 to 1991 and continued to decline in 1992 with the continuedrestructuring of the economy. Railway passenger traffic also declined overthis period, from 35.5 to 25.4 billion pass.km., or 30% (for details, seeTable 11). However, in spite of a significant decrease in traffic, staffproductivity compares favorably with most other railways at 320,000 trafficunits per employee. SNCFR recognizes that staff reductions (from the present197,000) are required. This issue is being examined in the Railwayrestructuring study which has just begun, financed under the TACI loan.

C. Railway Propertv

3.03 The SNCFR network is extensive (11,365 route kmo of which 10,893standard gauge, 427 km narrow and 45 km broad gauge, and 3,721 km, or 33%,electrified). There are about 1,000 stations and 30 marshalling yards. Trackis generally in poor condition and traffic density is very high on the mainnetwork (10-30 million gross tons per line-track km on the most heavily used6,000 km). About 900 km of tracks need to be maintained (capital overhaul)annually (of which about 500 km with new material), including the same amountof ballast cleaning. During the last three years average track renewal was

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carried out on about 500 km only and the backlog has now reached about 2,000km. All track maintenance equipment is beyond refurbishment. The principalreasons for the unsatisfactory track maintenance situation are: theinsufficient number of track machine.; the low technical level anddeterioration of existing machines and their low productivity; and theincreasing number of machines becoming inoperable due to a lack of importedspare parts. Many existing track machines (tamping and ballast cleaning) dateback to 1964, and 64% are over ten year. old. In 1991, availability was lessthan 50%.

3.04 SNCFR owns 2,200 diesel locomotives, 1,061 electric locomotives,and about 948 steam locomotives (most of which are out of operation). In 1991SNCFR had over 140,000 freight wagons with a total capacity of 6.4 milliontons, and about 6,500 passenger coaches (Table 11). In the absence ofimported spare parts and material, SNCFR has been particularly expert inimprovising the maintenance of its assets. In aggregate terms, fleet capacityexceeds expected traffic demand but does not satisfy technical, qualitativeand structural requirements.

3.05 All construction, maintenance and repairs are performed in 28locomotive sheds, 117 maintenance workshops and depots, 123 sections forsignalling and telecommunication maintenance, 17 regional data processingcenters, and several enterprises for construction and installation works nowin the process of becoming self supporting commercial companies and candidatesfor privatization.

3.06 Although about 4,740 km of the open lines are equipped with anautomatic line block-signalling system, about 650 stations still have electro-dynamic interlocking equipment and 22 marshalling yards are mechanized. Mostof this equipment is technically obsolete for heavily used routes and needs tobe replaced to improve service, reliability and safety. Thetelecommunications system on main lines is generally obsolete and should alsobe modernized.

3.07 SNCFR runs its operations and financial control systems on twodistinct and incompatible computer networks with heterogeneous hardware fromdifferent generations, comprising: (i) a 16-year-old central UNIVAC 1106system with a low-speed network covering all border stations. This system hasbeen modified due to a lack of spare parts and its availability is under 50%with frequent down time lasting more than an hour; and (ii) a medium-speedX.25 network of Romanian PDP-11 compatible minicomputers linking all regionalheadquarters and some of the more important railway stations. The computersare 12-14 years old and spare parts have been unavailable for several years.Availability ranges slightly over 60%.

D. Olerations

3.08 SNCFR's operational performance in 1991 remained relatively highin spite of a deterioration over the last three years (1989-91) mainly due toa significant drop in traffic:

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- utilization of electric locomotives (measured by engine-km perengine day) decreased from 385 to 349 km/day for passengerservices and from 399 to 322 km/day for freight services;

- utilization of diesel locomotives dropped slightly for the samereasons;

- availability of traction and rolling stock which gives anindication of maintenance efficiency has significantly decreasedsince 1989 (electric locomotives decreased from 83% to 68% anddiesel locomotives from 67% to 51%).

3.09 The main reasons for the decline in availability are: (i) ashortage of spare parts; (ii) a shortage of modern workshop equipment, and(iii) an inefficient organization and spare part stock control. However,given the surplus capacity, SNCFR needs to avoid unnecessary maintenancethrough scrapping surplus capacity. The installation of a new managementinformation system (replacing the existing outmoded and inadequate system)will help improve the railway operation as a whole.

B. The Restructurina Process

3.10 The Government intends to make its railway system market orientedby: (i) improving railway efficiency by establishing its future role and sizebased on overall economic efficiency criteria and competition with othertransport modes; (ii) reducing or eliminating budgetary drains; and(iii) minimizing the adverse social effects of necessary staff reductions.The Government and SNCFR have begun the reform process by launching arestructuring study (by DR-Consult-Germany) and in parallel by taking urgentcost-reduction measures to improve SNCFR'c financial situation. SNCFR hasalready taken the following cost-reduction measures: (i) staff reductions ofabout 1,000 employees per month; (ii) closure of five marshalling yards andabout 50 stations; (iii) separation from SNCFR of 21 workshops and other non-basic activities together with appropriate facilities and employees; and(iv) revaluation of assets (to be applied on January 1, 1993) which willincrease the railway depreciation funds approximately tenfold. The projectaddresses urgent needs in track maintenance and data processing required toarrest further deterioration of the system. The proposed items are onlypartial replacement of existing equipment urgently needed for prioritymaintenance and traffic safety and would be essential in a restructuredrailway.

IV. THE PROJZCT

A. Proiect Obiectives

4.01 The objectives of the project are to: (a) increase efficiency ofthe sector and accommodate expected changes in transport demand by improvingthe condition of the road network; (b) promote the selection of transportinvestments on the basis of economic criteria; (c) improve fiscal performance

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and reduce the uneconomic use of transport and energy by implementing a cost-based system of road user charges; (d) develop the execution of road works bycontract; (e) build on transport policy initiatives under the TACI projectparticularly with regard to investment selection and restructuring of therailways; and (f) support the economic reform program and encourage socialstability by financing geographically dispersed efficient employmentgeneration including in newly privatizing contracting companies to the extentfeasible.

B. Proiect Descriotion

4.02 The proposed project is based on the NRA's 1993-95 rehabilitationand pavement strengthening program. Implementation of civil works startedduring these years would spread over a 3-5 year period. The proposed projectcomponents would consist of high priority items of this program.Specifically:

(a) the road rehabilitation component (77% of project cost) includesthe rehabilitation of about 1,100 km of national roads (Table 12).The sections to be rehabilitated have daily traffic ranging from2,000 to 10,000 vehicles per day and are mostly on major east-westitineraries across Romania. The rehabilitation projects followexisting vertical and horizontal alignments and includestrengthening of the existing pavements where existing ones haveexceeded their design life and are close to failure, widening ofshoulders, improvement of drainage system (side ditches, culverts,bridges), construction of climbing lanes and removal of blackspots;

(b) the border croosinac comoonent (2% of project cost) includesupgrading six main crossing border posts e.g. Ukraine, Hungary,Bulgaria, to ensure adequate flow of international road traffic;

(c) the road safety comoonent (4% of project cost) includes thesignaling (international vertical traffic signs) and horizontalmarking (central axis and the two border lines, and auxiliarypedestrian and vehicle marking) of 5,000 km of roads to improveinformation and safety levels on the network. These 5,000 kmrepresent the total length of the designated "European Roads" inRomania, and signalling and marking will be done in accordancewith European standards. Each road link would be improved tointernational standards of safety;

(d) the materials and eouioment comoonent (9% of project cost)includes purchase of imported materials such as bitumen to coverNRA's expected deficit for the 1993-95 strengthening program ofsecondary national roads. It also includes equipment for routinemaintenance, traffic monitoring, vehicle inspection and training,such as multi purpose maintenance vehicles, small asphalt millingmachines and manual compactor., snow removal equipment, bridgeinspection vehicles, weigh bridges, traffic counting andlaboratory equipment (Table 13);

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(e) the technical assistance and trainino com2onent (1 of projectcost) includes some 60 man-months of technical assistance in axleload control, equipment management and maintenance work bycontract. Over 100 managerial and technical staff will be trainedin various countries on the following major topics: economic andenvironmental analyses, design standards and computer assisteddesign, pavement management, contract and equipment management,supervision of works and quality control and budgeting, costaccounting and control (Table 14).

(f) the railway comoonent (7% of project cost) includes some urgentlyneeded track maintenance and data procesuing equipment and spareparts, required under any scenario of railway restructuring, andrelated training in various countries of about 50 manmonths on thefollowing topics: management strategy and railway restructuring,marketing and accounting, computerization, engineering, operationsand financial analysis (Table 14).

C. Enoineerina and Status of Progect Preoaration

4.03 Detailed engineering and feasibility studies for all project roadsections were completed or are being completed by NRA/IPTANA, with costsupdated to December 1992. The road sections were selected on the basis of ananalysis of the pavement condition of 13,000 km of national roads and with aview to rehabilitate major national and international itineraries. Designsfor the improvement of the six border posts are still being prepared. Theywill be reviewed prior to execution. The designs for the road safety program,i.e.,signalling and marking of 5,000 km of European roads of the Romaniannetwork, are complete. The prequalification of contractors has been completedand the bidding document for civil works have been agreed with NRA. Those forgoods and equipment are in an advanced stage of preparation by NRA, RAR andSNCFR. Terms of reference for supervision of civil works have been agreedwith NRA (Annex 1).

D. Cost Estimates

4.04 The estimated cost of the project, including contingencies,amounts to US$405.0 million equivalent with a foreign exchange component ofUS$271.0 million or about 67% of the total cost. The costs of the differentcomponents are given below.

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PROJECT COST ESTIMATES

(December 1992 Prices)US$1 - Lei 500

Million Lef Million USS

Local Foreign Total Local Foreign Total X FE

A. CIVIL WORKS

1. Road RehabiLitation 49,000 86,000 135,000 98.00 172.00 270.00 64X

2. Border Posts 1,350 3,100 4,450 2.70 6.20 8.90 70X

3. Supervision 1,800 4,150 5,950 3.60 8.30 11.90 70X

B. ROAD SAFETY

SignaLization and Marking 2,250 5,250 7,500 4.50 10.50 15.00 70X

C. MATERIALS AND EQUIPMENT

1. Bitumen nd additives 450 4,250 4,700 0.90 8.50 9.40 90X

2. Road Maintenance Equipment 1,200 7,800 9,000 2.40 15.60 18.00 87X

3. Vehicle Testing Equipment 900 1,800 2,700 1.80 3.60 5.40 67X

D. TECHNICAL ASSISTANCE AND TRAINING 200 800 1,000 0.40 1.60 2.00 80X

E. RAILWAYS

1. Track Maintenance Equipment 1,500 5,000 6,500 3.00 10.00 13.00 77X

2. Data Processing Equipment 1,600 3,750 5,350 3.20 7.50 10.70 70X

3. Technical Assistance & Training 50 100 150 0.10 0.20 0.30 67X

TOTAL BASELINE COST 60,300 122,000 182,300 120.60 244.00 364.60 67K

Physical Contingencies 3,015 6,100 9,115 6.03 12.20 18.23 67X

Price Contingencies 3,685 7,400 11,085 7.37 14.80 22.17 67X

3333333 ESUENBE . ... 3.. 3333333 3..3333

TOTAL PROJECT COST 67,000 135,500 202,500 134.00 271.00 405.00 67X

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4.05 Construction cost estimates are based on quantities from finalengineering designs and on NRA/IPTANA estimates of December 1992 unit rates inUS$ checked against recent contract prices in similar projects underimplementation in other countries. A detailed analysis of costs has been madeto determine the foreign exchange component, local costs, duties and taxes.Taxes amount to 60% of the local cost component.

4.06 Costs of technical assistance (TA) to NRA (60 manmonths includingTA for road maintenance by contractor) are based on an average cost ofUS$15,000 per manmonth (m/m) while cost for the supervision of the civil workshas been estimated at less than 4% of the total construction cost. Costs ofmaterials and equipment are based on the latest acquisitions by NRA and SNCFR,including some purchases under the TACI project. These costs are in line withthose in similar ongoing operations in neighbor countries. Cost for trainingabroad of NRA staff (180 m/m) is estimated at US$5,500 per m/m, taking intoaccount that the trainee travel costs would be relatively low being mostlywithin Europe.

4.07 A physical contingency of 5% has been included for all componentsto cover possible increases in quantities. This amount is appropriate giventhe precise engineering designs already available for all civil works exceptthose of the six international border posts. Price contingencies have beenapplied to base costs following the Bank guidelines as follows:

Year 1993 1994 199 129 1222 1998

Local % 43 15 10 5 5 5Foreign% 3.8 1.9 2.7 3.4 3.6 3.6

E. Proiect Financina

4.08 The Borrower will be Romania with onlending to NRA, RAR and SNCFRfor their components. The proposed Bank loan of US$120.0 million equivalentwould finance about 30% of the total project cost. This includes aboutUS$9 million of local cost financing for the road rehabilitation component andits supervision. This is justified since, without it, we would finance only14% of the civil works and therefore be unable to participate meaningfully inthe process of contracting out road works for the first time in Romania.Another 40% of project cost, US$160.0 million equivalent, will be financed bythe European Bank for Reconstruction and Development (EBRD), and the EuropeanInvestment Bank (EIB) which have agreed to providing loans of US$80.0 millioneach. The remaining US$125.0 million equivalent would be financed by theGovernment. During neootiations the Government confirmed that it would meetall local cost includino cost overruns, and any shortfall in foreign exchanoeL

4.09 In accordance with the above, a financing plan, including theparallel US$160 million cofinanciers' participation in theconstruction/supervision of civil works, and in the purchase of equipment, isas follows:

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FINANCING PLAN(USS million includina continoenciesi

(December 1992 Prices )

Cost Financina

Project Component Loai Foreian iTtl1 cyt1A of2L

A. Civil Works

Rehabilitation 109.0 191.0 300.0 104.4 52.0 143.6Border posts 2.7 6.8 9.5 2.7 4.3 2.5Supervision 4.0 __.2 132 _ 3.2 J.Lf

Subtotal 115.7 207.0 322.7 107.1 59.5 156.1

B. Road Safety 5.0 11.7 16.7 5.0 11.7

C. Materials and EquipmentBitumen 0.9 9.5 10.4 0.9 9.5Equipment 5.0 21.0 26.0 5.0 18.0 3.0

0. TA and Training 0.4 1.8 2.2 - 1.3 0.9

E. Railways 7.0 20.0 27.0 7.0 20.0

TOTAL UiL2 2ZLQ A405 12L 0 L.R 1=L0

F. Imolementation and Monitorina

4.10 The proposed US$120.0 million equivalent loan would be made toRomania. The project would be implemented by NRA, RAR and the railwaycomponent by SNCFR. A Project Management Unit (PMU) will be maintained byNRA. Its members will include a Chairman and seven representatives inmanagerial positions of: (i) NRA's Department of Constructionj (ii) NRA'sDepartment of Maintenancel (iii) NRA's Department of Equipment and Materials;(iv) NRA's Procurement Division; (v) NRA's Economic Department; (vi) SNCFR;and (vii) RAR. The PMU will have a secretary provided by NRA with throepermanent staff. For its part of the project, SNCFR has established a projectmanagement team (PMT) including a chairman and three high officials, one foreach sub-component of the project. The chairman would be the member of thePMU. The PMU would review and follow up on procurement procedures and biddingdocuments, monitor and coordinate every aspect of project implementation andassemble, in quarterly reports, all project implementation information. ThePMU will also be responsible for liaising with and coordinating all thecofinanciers, project tasks and keeping direct contact with their supervisionmissions. Terms of Reference for the PMU were agreed and are in Annex 2.Durina necotiations. the Government reconfirmed that the PMU will remain inooeration and fully staffed throuahout the oroiect execution loara. 6.01 a).

4.11 NRA would be the executing agency directly responsible for theexecution of the road rehabilitation, improvement of the six internationalborders, and signalling and marking works by private contractors. Consultants

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would be employed to assist NRA in supervision of civil works. The terms ofreference are in Annex 1. Acquisition of NRA's materials and equipment,selection of TA to NRA and the NRA/IPTANA staff training program would beunder NRA's direct responsibility, following approval by the Bank of proposedspecialized experts and training programs. Procurement of vehicle testingequipment will be done by RAR. The railway component would be directlyexecuted by SNCFR under the PMU's monitoring.

4.12 The restart of the Bank's transport activity in Romania followingseveral years of inactivity, and under totally new circumstances, results in alack of reliable implementation profiles for the road rehabilitation workswhich is the component determining the period of implementation of theproject. These works are planned to start during the first and second year ofproject implementation and once started would take about two years tocomplete. With loan effectiveness expected in the third quarter of 1993,project implementation would start in late 1993. Acquisition and delivery ofNRA's and SNCFR's equipment would be completed in the first three years ofproject implementation. TA and training would extend for three years. Theproject's implementation schedule is shown in Table 15. The proposed loanwould close on December 31, 1998, six months after the projected projectcompletion date of June 30, 1998. Proposed monitoring indicators for thepreparation of PMU's quarterly reports have been agreed with NRA and SNCFR.During negotiations. agreement was confirmed on the Droiect implementationschedule. monitoring criteria, and reporting arranaements loara. 6.01 h).

G. Procurement

4.13 Procurement arrangements of Bank financed project elements aresummarized below. Procurement would be made in accordance with the Bank'sprocurement guidelines for all Bank-financed items. The civil works andequipment components, cofinanced in parallel by the Bank, EBRD and EIB, wouldbe procured through International Competitive Bidding (ICB) procedures withtendering for their respective contracts open to contractors of the Bank's,EBRD's, and EIB's eligible countries.

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Procurement Arrancements(USS Million)

Total

Proiect Element BOthers Cst

A. Civil Works

1. Rehabilitation 300.0 300.0

(52.0) (52.0)

2. Border Posts 9.5 - 9.5

(4.3) (4.3)

3. Supervision 13.2 ' 13.2

(3.2) (3.2)

B. Road Safety 16.7 - 16.7

(11.7) (11.7)

C. Materials & Equipment

1. Bitumen 10.0 0.4 LI 10.4

(9.2) (0.3) (9.5)

2. Road Equipment 18.0 2.0 0 20.0

(12.6) (1.4) (14.0)

3. Vehicle Testing 5.0 1.0 M 6.0Equipment (3.4) (0.6) (4.0)

D. TA and Training - 2.2b w 2.2

(1.3) (1.3)

E. Railways 26.7 0.3 " 27.0

(19.8) (0.21 (20.0)

TOTAL 385.9 19.1 405.0

(113.0) (7.0) (120.0)

Note: L/ Cost include estimated contingencies; figures in brackets are therespective amounts financed under the Bank loan.

k/ In accordance with Bank's Consultant Guidelines.c/ International shopping ($3.4 million).

d/ Training

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4.14 Civil works contracts for roads rehabilitation (about 1,100 km;US$300 million), the improvement of the six international border crossings(US$9.5 million), and road signalling and marking (5,000 km; US$16.7 million)would be let through ICB among prequalified contractors. Road rehabilitationcontracts (Table 12) range from US$5 to $38 million with an average size ofUS$20 million. Prequalification has been completed and its results approvedby the Bank. Recently formed Romanian commercial companies specializing inroad construction have formed joint ventures with well experienced andcapitalized foreign firms and have been prequalified. They are expected to becompetitive with their new financial status, former construction experience,good knowledge of the country, and low salary costs. The implementationschedule is in Table 15. Bidding for civil works is expected to start inMarch 1993 with contract awards in June/July 1993.

4.15 The materials (bitumen and additivesl US$10.4 million) andequipment (US$26.0 million) for NRA and RAR would be procured under ICB withpost-qualification of bidders. Goods manufactured in Romania will be granteda preference of 15% or related duties whichever is less provided that thevalue added in Romania is more than 20%. However, contracts for materials andequipment not exceeding US$300,000 each, would be procured by InternationalShopping (IS) based on the comparison of price quotations from three differenteligible countries. The total aggregate value of IS would not exceedUS$400,000 for bitumen, US$2.0 million for NRA's equipment and USS1.0 millionfor RAR's equipment. Equipment for SNCFR (US$26.7 million) track maintenancewith spare parts and for data processing would be procured under ICB. Thegeneral parts of the bidding documents for goods approved and used for theprocurement of electronic data processing equipment under the TACI projectwill be used for this project also.

4.16 Consultants services for supervision of civil works estimated atsome 4% of construction costs (US$13 million), and for technical assistance,and training, would be carried out by qualified and experienced consultantsappointed in accordance with the Bank Guidelines for the Use of Consultantsexcept for contracts estimated to cost less than US$100,000 equivalent. Forsupervision it is envisaged that foreign consultants would mainly providemanagerial capabilities and local consultants will carry out the actual work.Local consultants have demonstrated their competence during projectpreparation. Training programs are described in Table 14.

4.17 All contracts exceeding US$300,000 (over 99% of total projectcost) would be subject to prior review and approval by the Bank. Othercontracts will be reviewed by supervision missions. For civil work contracts,supervising consultants will be assisting NRA in evaluating tenders andpreparing final civil works contracts. Procurement information will beincluded in the quarterly project progress reports agreed with the borrower.Durina neaotiations, agreement were reconfirmed with the Government on allorocurement arrancements (para. 6.01 il.

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H. Disbursements

4.18 The proposed Bank loan would be disbursed against the projectcomponents as follows:

Amount I of ExpendituresCategory Description USS mil Ea, Financed

1. Civil Works 66.0 70%.

2. Materials & Equipment 26.0 100% of foreign or 100%of local (ex-factory netof taxes and duties) and80% of localexpenditures for otheritems procured locally.

3. Consultant Servicesand Training 4.2 100%.

4. Railway Equipment 18.9 100% of foreign or 100%of local (ex-factory netof taxes and duties).

5. Unallocated 4 9

Total 120.0

4.19 Withdrawal applications for contracts above US$300,000 would befully documented and for contracts valued at US$300,000 or less would be made

on the basis of statements of expenditure (SOB). Durina neootiationsacreement was reached that documentation to suooort exoenditures financedunder SOEs would be maintained by the Borrower and made available for reviewby Bank suoervision missions, in addition to beina audited annually byauditors acceotable to the Bank (oara. 6.01 ii.

4.20 A schedule of disbursements is given in Table 16. Since NRA'sdisbursement performance (up to mid-1980s when Bank discontinued operations inRomania) has been satisfactory and above average, actual disbursements may befaster than estimated. The Loan Agreement provides for retroactive financingfor supervising consultants contracts entered into by NRA after March 1, 1993,in an amount not to exceed US$250,000. To facilitate disbursements, theBank's share of the project would be financed through a Special Account. Theauthorized allocation for the Special Account would be US$7.0 million,equivalent to about four months of project foreign expenditures (financed bythe loan) during the five-year project implementation period. Funds for goods(equipment and materials) would be withdrawn by the Borrower from the SpecialAccount after approval of the ICB or IS procedures and related contract awardsby the Bank. Replenishment for technical assistance, and for consultants for

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construction supervision, would be made on the basis of appropriatedocumentation. Replenishment of the Special Account would follow Bankprocedures. The Special Account would be audited annually by independentauditors acceptable to the Bank. The audit report would be submitted to theBank for review and approval within six months of the end of each fiscal year.Durina negotiations. aoreement was reached on the establishment. oDeration.and auditina of the Svecial Account (para. 6.01 ki.

I. Proiect Supervision

4.21 Three two-week Bank supervision misuions per year during the firsttwo to three years of project implementation would be needed to supervise allproject activities. The missions would be staffed by a civil engineer and oneeconomist, responsible for all engineering and economic aspects of theproject; they should be longer in 1994 and 1995 when review and clearance ofroad sections to be contracted, and discussions on the technical assistanceitems would be most frequent. Sufficient time should also be allowed to reviewcontract documents and specifications for the varied equipment to be procuredunder the project. A railway expert would be required for about four weeksannually to advise on the purchase of railway equipment and supervise therestructuring study. After 1995, with all project. items under execution, theparticipation of the economist can be shorter. One mission in 1998 wouldcarry out the final wrap-up project supervision and would prepare the ProjectCompletion Report (PCR). In sum, the proposed project would require about 18staff weeks in FY94 and FY95 and 14 staff weeks in FY96 to FY98.

J. Environment ImDact

4.22 The project has been classified as "BR for purposes of O.D. 4.01on Environmental Assessment, meaning that only limited environmental review isrequired. The civil works are primarily confined to improvements on existingroads. These improvements would protect the areas adjacent to every road fromerosion through the construction of side drains, cross drainage structures andretaining walls, would provide a comfortable and clean asphalt riding surface,and would eliminate accident black points. Conditions along the roads wouldbe better through reduction of dust, noise, water ponding and erosion, andelimination of safety hazards. No population resettlement would be necessarysince the works would be inside the existing right of way. The project wouldnot affect any archaeological or historical site. Contractors under theclauses of the bidding documents are responsible for maintaining worksitespollution free, returning sites to their original condition, and equip asphaltplants and crushers with dust collectors. They are also responsible fornotification of any problem related to unknown historical sites. The terms ofreference of the consultants which will supervise the works expressly refer toensuring that environment protection provisions as set out in the contractualdocuments are respected.

K. Accounts and Audit

4.23 Separate accounts would be used to record all project funds(Government local funds and Bank loan foreign funds) expenditures. These

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accounts, including the SOEs as well as the Special Account would be auditedeach year by auditor(s) acceptable to the Bank. The accounts and theauditor's report thereon would be received in the Bank within six months ofthe end of the fiscal year.

V. ECONOMIC EVALUATION

A. Benefits and Beneficiaries

5.01 The project is expected to play an important role in accommodatingthe economic reorientation of transport demand to road transport and startrestructuring the railways accordingly. Quantifiable benefits will be in theform of reduced vehicle operating costs (VOC), i.e. lower fuel consumption,tire wear and general vehicle maintenance costs, time and wage savings. Also,the present value of road expenditures will be reduced by undertaking roadstrengthening now and avoiding more expensive reconstruction at a later date.Road maintenance expenditures will also decrease on rehabilitated andstrengthened roads. The road safety component will contribute to thereduction in accidents. The benefits will accrue to a large and widespreadnumber of beneficiaries. Lower road transport costs and time savings willbenefit vehicle owners as well as users.

B. Costs and Benefits

5.02 NRA/IPTANA has prepared feasibility studies for all road sectionsto be rehabilitated under the project. They have also analyzed 13,000 km ofnational roads to establish priorities for the rehabilitation program. Allcosts and benefits were evaluated in constant December 1992 prices. Financialcosts and prices have been converted to economic prices. Traffic growth rateshave been assumed at 4% p.a. for freight vehicles and 2% p.a. for cars andbuses. VOC have been estimated using the Bank's HDM model; the unit VOCs aresummarized in Table 17. Road roughness coefficients have been estimated basedon engineer's evaluation of the road surface. Time savings were valued at thepredominant wage rates for drivers, no time savings value was inputed forpassengers. The economic rates of return (ERR) calculated over an assumed 15year service life, range from 23 to 66% for roads to be rehabilitated underthe project (Table 12).

5.03 The proposed list of equipment to be procured was agreed based onan evaluation of the total equipment required for NRA's maintenance operationstaking into account those activities that would be shifted to contract workaccording to the agreed action plan. These requirements have been comparedwith the present fleet, its condition and the need to scrap overaged andinefficient equipment. All the proposed equipment is for routine maintenance.

5.04 It is more difficult to estimate the economic return of roadsafety components, but it is proven that horizontal marking such as center andside lines reduce accidents significantly.

5.05 Railway track maintenance equipment and ballast cleaning machinesproduced mostly in Romania are old and of obsolete technology. Their

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availability is lss that 50% and the result is a rapidly deteriorating trackeven on main lines. There are speed restrictions on a large part of thenetwork. The acquisition of 8 ballast cleaning machines and spare parts forexisting machines would improve the technical level of over 2,000 trak-km peryear while increasing technical speed from 64 to 84 km/h with annual savingsestimated up to US$5 million. The IRR for these machines is estimated at 29%.The replacement of deteriorated data processing and communications equipmentwill prevent a costly breakdown of the system. It would also reduce billingerrors, reduce expenditures on foreign cars used and better control 6,000private freight cars and payments for their rent and maintenance. The IRR forthis equipment is estimated at 22%.

C. Overall Evaluation and Risks

5.06 Project risks are low. The GOR, NOT and NRA have expressed stronginterest in the project, and are likely to proceed even in the event ofpolitical changes. The main risk is that the GOR would not have sufficientcounterpart funds. However, the local component of US$125 million would beaffordable. It would amount annually over the project implementation periodto one third of total highway expenditures budgeted for 1992. NRA has alsoagreed that local funds would have to come from its regular budget allocationwithout additionality because of the project. This was confirmed also byMOEF.

VI AGREEMENTS REACHED AND RECOMMENDATIONS

6.01 During negotiations, agreements were reconfirmed on the following:

a) implementation of a system of road user charges within one year ofcompletion in mid-1993 of the road user charges study financedunder the TACI Project (Loan 3363-RO) (para. 1.10);

b) an action plan to collect data and revise present legislation onaxle load control (para. 2.09);

c) the preparation of a plan to improve road safety (para. 2.10);

d) an action plan for shifting selected maintenance activities fromforce accounts to contract with quantified targets over the nextfive years (para. 2.16);

*) an action plan for better management practices including a chargeback system, for NRA's equipment pool (para. 2.17);

f) joint review in advance of each year's total highway expendituresand criteria for investing in and/or issuing credit guarantees forroad projects (para. 2.19);

- 25 -

g) continuation throughout project implementation of the ProjectManagement Unit (para. 4.10);

h) the reporting procedures for the project (para. 4.12);

i) the procurement procedures, including bidding documents for civilworks and equipment and selection of consultants for supervision,Technical Assistance and Training (para. 4.17);

j) the documentation supporting expenditures financed under SOBs andits annual auditing (para. 4.19);

k) the procedures for the Special Account (para. 4.20);

6.02 Based upon the above assurances and agreement, the project issuitable for a Bank loan of US$120 million equivalent to the Republic ofRomania for a 17 year term including a 5-year grace period.

- 26 -

Annex 1ROMIANIA Page 1 of 6

TRIANSPORT PROJECT

ROAI) REHABTLITATION PROGRAM

SUPERVISION OF WORKS

Terms of Reference

A. BACKGROUND

1. The Government of Romania has requested loans from three InternationalFinancial Institutions (IFI), namely, the World Bank, the European Bank forReconstruction and Development, and the European Investment Bank, for financinga program of road rehabilitation of selected priority sections of the National RoadNetwork. The National Road Administration (NRA) of the Ministry of Transport(MOT) would be responsible for supervision of the works to be carried out byprequalified civil works contractors through International Competitive Bidding(ICB).

B. BRIEF DESCRIPTION OF THE PROJECT

2. The works to be carried out ("the Works") include road improvements suchas pavement reconstruction, pavement overlays, widening, shoulder strengthening,side drains, and, in some instances, retaining walls, in the sections specified in theAttachment to these Terms of Reference. The rehabilitated pavement consists ofasphalt mixture, binder and asphalt concrete. The work also includes gravel sub-base, stabilised gravel base and surface treatment where shoulder have to bewidened. The length, estimated cost, starting year, and period of construction aredetailed in Attachment 1 together with the names of the international financinginstitution for each contract. The implementation period of the program would beforty two (42) months with individual contractual periods varying between twelve(12) and thirty six (36) months. The maintenance guarantee period for everycontract would be twelve (12) months.

3. The GOR has decided to use part of the proceeds of the loans to engagequalified consultants ("the Supervision Consultants") with satisfactory internationalexperience in supervising works similar in size and nature to the Works to provideservices to the NRA on pre-construction activities, construction supervision andmaintenance monitoring of the Works. The detailed engineering report of theprojects together with the bidding documents were prepared by the Design Institutefor Roads Water and Air Transport (IPTANA). The Works will be done under thesupervision of the Supervision Consultant acting as 'Engineer's Representative" asper bidding documents definition with NRA acting as 'Engineer" as per biddingdocuments definition, for approval of certain actions.

- 27 -Annex 1Page 2 of 6

C. OBJlECTIVES

4. The objectives of the services are:

(a) to assist NRA for pre-construction activities including tenderingphase, evaluation of tenders and preparation of final civil workscontracts;

(b) to supervise the Works, approve the materials, equipment andworkmanship;

(c) to ensure proper accounting and recording of the progress of theWorks; and

(d) to provide on-the-job training to selected NRA staff in contractmanagement and supervision.

5. The Supervision Consultant will exercise every reasonable and possibleeffort to protect the interests of NRA and to avoid the occurrence of disorders andvice of construction during the works. To this end, the Supervision Consultant shallensure the supervision and control of on-going works by its engineers andtechnicians in a timely manner, The Supervision Consultant, however, will not beresponsible for the incapacity of the contractor to properly implement the works.

6. Responsibility. If the Supervision Consultant is a joint-venture or anassociation of a qualified international consultant and a local consultant, leadershipof the joint-venture shall be the responsibility of the qualified internationalconsultant and it shall provide the key supervision personnel (at least a residentproject manager and a quality control expert); the balance of the staff may becontributed by the other firm.

7. Training of Local Personnel. For purposes of training local personnel andfor such personnel to acquire experience, the central and regional units of NRA maysecond staff up to the level of chief-engineer in their current position to work withthe Supervision Consultant. The level and number of the NRA staff accepted onsecondment will be determined by the Supervision Consultant on the basis of thesize of the sub-projects. The Supervision Consultant will select the seconded stafffrom a list of qualified nominees offered by the central or regional units of theNRA. The Supervision Consultant will bear the salaries of the seconded staff;however, the seconded staff will enjoy the same conditions as the SupervisionConsultant's other local staff. The Supervision Consultant will decide whatresponsibilities and function to assign to the seconded staff, and will have the rightto ask to have replaced any seconded staff.

D. SCOPE OF WORK

- 28 -Annex 1Page 3 of 6

8. It is proposed that the study will be carried out in two sequential phases.The first phase would relate to objective (a) above while the second phase wouldinclude supervision activities from the signature of the first civil works contract.

9. Duties and Responsibilities of the Supervision Consultant. The SupervisionConsultant will administer the Works contract(s) ensure that contractual clauses,whether related to quality or quantities of work, are respected. The SupervisionConsultant will make the necessary measurements and control the quality of works,The Supervision Consultant will make all engineering decisions required for thegood implementation of the contract. However, the Supervision Consultant willseek prior approval of the NRA to:

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

(b) issue variadons in work quantities;

(c) sancdon additional items, sums or costs;

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

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

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

(a) attend the pre-bid conference, if any , at the date and venue specifiedin the request for proposal;

(b) reply by circular letters to all bidders to written requests foraddidonal information;

(c) assist NRA in the evaluation of tenders and prepare the tenderevaluation report;

(d) check drawings, calculations and documents supporting alternativesproposals;

(e) assist NRA in preparing the final version of contract documents

(f) issue the order to commence the works;

(g) administer the civil work-s contracts, approve the materials andquality of the Works in accordance with the contractual specification;

(h) approve the Contractor's work program and the source of materials;

(i) issue monthly progress reports;

-29- Annex1Page 4 of 6

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

(k) ascertain and determine by measurement the value of the Works inaccordance with the Contract;

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

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

(n) seek prior approval of railway authorities before ordering any workin the vicinity of railways crossings;

(o) ensure that environment protection provisions as set out in thecontractual documents are respected;

(p) ensure that traffic operational safety is met before commencing theWorks and issue any workplan or drawing in that respect;

(q) facilitate any communication between the Contractor and otherservices (water supply, telephone, electricity, gas) sharing the use ofthe road;

(r) prepare the maintenance program;

(s) inspect the Works during the maintenance period, and issue themaintenance certificate in consultation with NRA;

(t) verify and get corrected the 'as built' drawings supplied by theContractor;

(u) provide on-the-job training to all seconded NRA personnel; and

(v) advise NRA on all matters related to the execution of the contractsincluding processing of the Contractor's claims.

11. Duties and Responsibilities of the Resident Engineer and his Staff. TheResident Engineer and his staff are under the overall control of the SupervisionConsultant (the Engineer's Representative), and shall carry out such duties andexercise authority as may be delegated to him by the Engineer. The Engineer mayfrom time to time delegate to the Resident Engineer any of his duties.

12. The main responsibilities-of the Resident Engineer shall be as follows:

-30- Annex IPage 5 of 6

(a) to inspect performance of works in compliance with thespecifications, order, supervise or perform tests on materials, andapprove or disapprove the contractor's plant and equipment;

(b) to order if required the uncovering of completed work and/or theremoval and substitution of proper materials and/or work;

(c) to check the progress of the Works systematically and to order thecommencement of certain work which is part of the contract;

(d) to examine and attend the measurement of any work that is about tobe covered or put out of view before permanent work is placedthereon and/or examine and attend the measurement of the completedwork in the prescribed form;

(e) to check the Contractor's accounts, invoices, and other statementswith respect to arithmetical errors and compliance with the contractand if required to make corrections thereof;

(f) to supervise the Contractor in all matters concerning safety and careof the Works;

(g) to direct the Contractor to carry out all such work or to do all suchthings as may be necessary in the opinion of the Resident Engineer toavoid or reduce the risk in case of any emergency affecting the safetyof life, of the Works or of adjoining property and to advise theEmployer thereof as soon thereafter as is reasonably practicable;

(h) to keep and maintain a day by day project diary which shall record allevents pertaining to the administration of the contract, requests fromand orders given to the Contractor, and any other information whichmay at a latter date be of assistance in resolving queries which mayarise concerning execution of the Works;

(i) to carry out maintenance inspection visits, at least three during theone-year Defects Liability Period; and

0j) to verify and get corrected the 'as built" drawings supplied by theContractor.

C. REPORTS AND DOCUMENTS

13. The Supervision Consultant shall furnish to the NRA the following reportsand documents both in the Romanian language and in the English language:

(aj Tenders Evaluation Report (10 copies) within 30 days following thebids opening date;

-31 - Annex 1Page 6 of 6

(b) Monthly Progress Reports (10 copies) provided on a monthly basis atthe end of each month. During the Defects Liability Period, thesereports shall be submitted at four month intervals;

(c) Completion Report (20 copies) at the time of the final completion ofthe works (Final Completion Certificate);

(d) 'As-built" drawings (one original and five copies) of the projectwithin one month following the issue of the Final CompletionCertificate; and

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

D. SERVICES TO BE PROVIDED TO TffE SUPERVISTONCONSULTANT

14. The Contractor shall provide the Supervision Consultant furnished office,laboratory, data processing and communication facilities and transportation free ofcharge as per Tender documents

15. The Supervision Consultant and its expatriate staff shall be exempt from, orreimbursed of payment of Income Tax in Romania. The NRA shall assist theSupervision Consultant in obtaining any entry/exit visas, etc. However, the cost ofthe same shall be bome by the Supervision Consultant.

16. Any available information, reports, documents, etc., related to the executionof the Works shall be made available by the NRA to the Supervision Consultant.

17.All documentation related to the Works is, and will remain NRA's property aftercompletion of works. The Supervision Consultant cannot use or dispose of thisdocumentation without previous NRA's written consent.

- 32 -

Annex 2Page 1 of 2

ROMANIATRANSPORT PROJECT

PROJECT MANAGEMENT UNIT

Terms of Reference

The Project Management Unit (PMU) will be responsible for themanagement, administration and coordination of the project. Its members willinclude a Chairman and seven representatives in a managerial position of:(i) the National Road Administration (NRA) department of Construction; (ii)too NRA department of Maintenance; (iii) the NRA department of Equipment andMaterials; (iv) the NRA Procurement Division; (v) the NRA economic department;(vi) SNCFR; and (vii) RAR. The PMU will have a secretary provided by NRA,with three permanent staff: an engineer, an accountant, and an administrativeofficer. All permanent staff of the PMU will be provided under the currentbudget of the NRA. The Chairman and members of the PMU can delegate itsfunctions temporarily in other person(s) of their departments when dulyjustified reasons exist.

1. The main functions and responsibilities of the PMU will be:

a. monitor and coordinate the activities of the project until itscompletion, including the one-year guarantee maintenance periodfor civil works;

b. liaise with the Bank in all matters concerning projectimplementation and supervision;

c. provide advice and assistance to project beneficiary departmentson procurement matters, and clear procurement documents in orderto ensure that they meet Bank procurement guidelines;

d. finalize arrangements for the technical assistance advisors;

*. submit to the Bank disbursement applications on behalf of thebeneficiary agencies or departments;

f. monitor and supervise the project accounts;

g. prepare (and submit to the Bank) quarterly progress reportsdescribing (in accordance with the progress implementationindicators previously established and agreed between theGovernment and the Bank) project implementation and compliancewith time schedule, and identifying issues arising during theproject implementation and solutions proposed, as outlined in thelegal documents;

h. submit to the Bank annual project audit reports, prepared byindependent auditors, as described in the legal documents; and

- 33 -

Annex 2Page 2 of 2

i. contribute to the preparation of a project completion report (PCR)based on the submission of the progress reports, correspondencewith the Bank, and actual tasks completed compared with thoseestablished and scheduled at appraisal.

2. Various departments would nominate persons responsible for their ownpart of the project (sub-project). These persons, who can be the respectivemembers of the PMU, would act as coordinators of department project activitieswith the PHU.

3. The functions and responsibilities of these sub-project implementationcoordinators would be to:

a. ensure the timely and proper implementation of their sub-projects;

b. liaise with the PMU and seek procurement advice and/or otheradvice from the PHU to perform (a) above;

c. prepare all detailed and technical specifications and documentsfor the procurement of works and goods, and submit them to theprocurement specialist in the PMU for clearance;

d. prepare terms of reference and draft contracts for all consultantsand submit them to the PMU for approval and further processing;

*. submit to the PNU related contribution to the quarterly projectprogress reports, as applicable; and

f. at the completion of their respective project component, submit tothe PMU previously specified information for the projectcompletion report.

- 34 -

Annex 3Page 1 of 2

ROMANIATRANSPORT PROJECT

Selected Documents in the Prolect File

1. Road ComRonents

Proposed Rehabilitation Works on 450 km of National Roads includingBucharest Ring Road - IPTANA, March 1992.

Moravita Border Post on Road E70 Timisoara - Belgrade. ExistingSituation and Development Proposal - IPTANA, March 1992.

Program to Reinforce the National Road Network of Romania - A technico-economic study - IPTANA, June 1992.

Rehabilitation of DN 1, Volume 4Impact Analysis and Expropriations - IPTANA, June 1992.

Traffic - Capacity - ProfitabilityVolume la DN 1Volume la DN 2Volume le DN 2AVolume le DN 38

DN 39Volume le DN 1

Regulations for the periodical inspection of road vehicles and trailersincluding: Decrees n° 594, 2.09.1991 on verification of technicalconditions of road vehicles and trailers and n° 768, 8.11.1991establishing the Romanian Auto Registrar as a Regie Autonome.

Statutes of Romanian National Union of Road Hauliers (UNTRR) extract.

2. Rail Components

Track Maintenance Equipment and Spare Parts, Technical and EconomicAnalysis - SNCFR, November 1992.

Replacement of Deteriorated Computing Equipment, Technical and EconomicAnalysis - SNCFR, November 1992.

Study regarding the development of data transmission network for theRomanian transport and touristic activitiesMinistry of Transport and Ministry of Tourism - 1990.

- 35 -

Annex 3Page 2 of 2

Information Technology - SNCFR.

Statuu of the SNCFR's Track Maintenance Fleet.

Track Maintenance Equipment and Spare Parts, SNCFR.

Methodology for the Preparation of Project Progress Reports.

3. Sectoral Backaround

Strategy to Restructure and Develop the Transport Sector in Romania1992-2005 - MOT April 1992.

Romania: European Roads Rehabilitation ProjectEBRD January 25, 1992.

- 36 -Table 1

ROMAN~IA

TRANSPORT PROJECT

Freight Traffic by Mode of Transport

(In billion ton km)

RoadPublic Own :

Railway Transport Account Total River Pipellnes Total

1960 19.8 0.9 1.2 2.1 0.9 1.0 23.81965 31.0 2.5 3.3 5.8 1.2 1.1 39.11970 48.0 5.2 7.7 12.9 1.3 1.8 64.01975 64.8 9.3 10.3 19.6 2.1 2.8 89.31980 75.5 11.8 15.9 27.7 2.4 5.2 110.81985 74.2 7.5 20.4 27.9 2.4 4.8 109.3

1989 81.1 5.8 24.2 30.0 3.7 6.7 121.51990 57.3 5.9 23.1 29.0 2.1 5.1 93.51991 37.8

Modal 1960 83.2% 3.8% 5.0% 8.8% 3.8% 4.2% 100.0%Distrib. 1989 66.7% 4.8% 19.9% 24.7% 3.0% 5.5% 100.0%

(n million tons)

1960 77.6 56.7 107.7 164.4 1.9 5.6 249.51965 114.4 130.6 271.5 402.1 2.9 7.5 526.91970 171.3 239.8 594.0 833.8 3.4 11.3 1019.81975 228.3 418.5 862.0 1280.5 4.1 14.5 1527.41980 274.6 451.3 1335.2 1786.5 12.3 22.5 2095.91985 283.4 362.2 1825.0 2187.2 18.4 21.3 2510.3

1989 306.3 382.3 2033.7 2416.0 37.4 30.6 2790.31990 218.8 201.8 1732.6 1934.4 12.0 23.5 2188.71991 146.3

Average Distance In km

1960 255 16 11 13 474 1791965 271 19 12 14 414 1471970 280 22 13 15 382 1591975 284 22 12 15 512 1931980 275 26 12 16 195 2311985 262 21 11 13 130 225

1989 265 15 12 12 99 2191660 262 29 13 15 175 217"I 258

Source: NRA

- 37 -

tale2

ROMANIATRANSPORT PROJECT

Pasusmor Traffic by Mod. of TansDort

an billion =_nfr km)

RoadPublic Sub-

Raiha BUS Othems 1xi u

1960 10.7 1.4 2.3 3.7 14.41965 13.5 3.6 5.7 9.3 22.81970 17.8 7.9 12.5 20.4 38.21975 22.4 18.9 30.1 49.0 71.41980 23.2 24.0 37.9 61.9 85.11985 31.1 21.7 31.0 52.7 83.8

1989 35.5 23.1 26.3 49.4 84.91990 30.6 24.0 21.1 45.1 75.71991 25.4

mod. dist % 1960 74% 10% 16% 26% 100%1989 42% 27% 31% 58% 100%

(in million oassenoers)

1960 215 72 188 260 4751965 262 170 474 644 9071970 328 359 1043 1402 17301975 367 815 2469 3284 36511980 348 1034 3035 4069 44171985 460 837 3722 4559 5019

1989 481 879 3153 4032 45131990 468 781 2531 3312 37801991 363

Averaae Distance In Km

1960 50 20 12 14 301965 51 21 12 14 251970 54 22 12 15 221975 61 23 12 15 201980 67 23 12 15 191985 68 26 8 12 17

1989 74 26 8 12 191990 65 31 8 14 201991 70

Source: NRA

- 38 -

Table 3

ROMMITRANSPORT PROJFCT

Road Traffic

AADT1

1956 7701960 9301965 14201970 18601975 21001980 26801985 2614

1989 22001990 32201991 2710

1/AADT: Average Annual Daily TrafficFigures are the average traffic on the 14,000 km of nationalroads.

Source: NRA

- 39 -

ROMANIA TableTRANSPORT PROJECT

Trafflc in Constanza Port

Mlillon tons

1985 1986 1987 1988 1989 1990 1991

LIQUID BULK

Import 14.6 17.0 21.3 21.3 22.4 16.7 8.4Export 10.9 10.0 11.6 14.4 14.3 5.9 4.3

Sub Total 25.5 27.0 32.9 35.8 36.7 22.6 12.7

DRY CARGO

Imports- minerals, coal, core 10.5 10.7 12.3 12.0 12.3 9.4 6.4- fertilizer 2.5 2.8 2.7 2.9 2.5 1.5 0.8- grain 0.4 1.8 0.6 0.2 0.6 1.9 1.6- sugar and food stuff 0.2 0.1 0.3 0.3 0.3 0.5 0.2- general cargo 1.4 0.8 0.5 1.5 0.3 1.1 0.5

Sub Total 15.1 16.3 16.5 16.9 16.0 14.3 9.5

Exports- chemicals 3.9 4.3 3.9 2.7 4.8 1.7 1.9- steel 1.6 1.5 1.0 1.5 1.2 0.7 0.7- cement 0.8 1.2 1.1 3.0 1.6 1.0 1.6- grain and food stuff 0.7 0.7 0.5 0.2 0.4 0.4 0.1- general cargo 1.0 1.3 1.2 1.0 0.7 0.3 0.5

Sub Total 7.9 9.0 7.7 8.5 8.7 4.0 4.9

TRANSIT 0.4 0.6 0.9 1.1 0.8 0.8 0.9

TOTAL 48.9 52.9 58.0 62.3 62.2 41.7 27.9

Source: MOT

ROMANIATRANSPORT PROJECT

Transport Sector Investmmt(In Lai Miion)

1976-1980 1981-1985 1981 BudaxTota In Tct In J 1966 1987 18 18 1990 Total In% 1991 1992

Rihways 31,106 35.7% 33,417 27.5% 5,187 4,988 5,856 5,629 6,780 28,440 26.5% 360 800

Highway 7,455 8.5% 4,867 4.0%-National 595 612 528 546 558 2,839 2.6% 918 1,150-Local 491 512 466 534 2,003 1.9%

Road Motor Vehicles 18,014 20.7% 9,980 8.2% 714 1,153 892 859 1,135 4,753 4.4% 0 0

Rwver&Canals 11,289 12.9% 15,515 12.8% 4,175 5,380 4,498 6,134 1,115 21,302 19.9%1,213 3,100 o

Maritime 15,965 18.3% 47,670 39.2% 7,271 7,149 8,651 8,656 4,227 35,954 33.5%

Aviation 1,826 2.1% 2,379 2.0% 292 747 865 625 736 3,265 3&0% 135 700

POeline 1,571 1.8% -- 0.0% -- -- -- -- -- 0

Stunay# (etrou) 7,827 6.4% 1,961 1,886 1,642 1,933 1,334 8,756 8.2% 943 1,900

Total hi Lai (m) 87,2B8 100.0% 121.665 100.0% 20,686 22,427 23,398 24,916 15,N85 107,312 100.0% 3,569 7,650

Transport as shareofptublkinnvesments 10.9 10.4 9.7 10.8 11.6

US$ million equIvalent 1,277 1,536 1,636 1,672 709 6.830 59 38

Note: In 1991 and 1992 MaritIme Includes Rlver and Canals.

Source: MOT Ul

- 41 -

Table 6

ROKMNIATRAN8PORT PROJECT

Number of Road Vehicle(000)

1985 19902 1991

Cars 950 1,292 1,397

Trucks 197 343 301

Buses 23 28 31

Tractors 151 196 213

Total 4-wheels 1,321 1,859 1,942

Motorcycles 297 312 312

Total 1,618 2,171 2,254

Source: NRA

- 42 -

Table 7Paoc1 f

,ROtUANnLTRANSPORT PROJtCT

Action Plan for Road User Charaes

ACTION AGENCY STARTING COMPLETIONRESPONSIBLE DATE DATE

1. Complete study. NRA July 1993

2. Prepare legislation. NRA/MOT Aug. 1993 Nov. 30, 1993

3. Submit legislation on Road NRA/MOT Jan. 1994User Charges.

4. Upon passing of legislation NRA/MOTby Parliament, take allaction needed to implementit promptly.

Based on previous work by NRA/MOT on the matter and the findings of the ongoingroad user charges study, NRA/MOT will prepare the legislation referred to aboveon the basis of a system of road user charges, which ensures th4t revenues fromthe various road users cover their share of the full economic cost of buildingand maintaining the road network.

- 43 -

Table 7Paae 2 of-2

ROMANIaTRANSPORT PROJECT

Action Plan for Axle-Load Control

ACTION AGENCY STARTING COMPLETIONRESPONSIBLE DATE DATE

1. Identify staff and requiredfunds for program NRA Feb. 1993 May 1993implementation

2. Procure equipment needed NRA June 1993 Dec. 1993(weighing scales andtraffic counters)

3. Assess traffic/loadingcondition, collect NRA Jan. 1994 Dec. 1994statistics and presentresults

4. Review existing legislation NRA/MOT Jan. 1994 Dec. 1994and prepare revisedlegislation

5. Submit new legislation ofaxle-load limits and NRA/MOT Jan. 1995vehicle sizes.

6. Upon passing of legislationby Parliament, take all NRA/MOTaction needed to implementit promptly.

- 44 -

Table 8

ROMMATRANSPORT PROJEC

Action Plan for Maintenance by Contract

SequentialMember Description of Activity 1993 1994 1995 1996

1 Current/routine road and bridgemaintenance 0% 0% 0% 0%

2 Periodic maintenance of roads(overlays and strengthening) 0% 20% 40% 80%

3 Periodic maintenance of bridge.10% 35% 60% 80%

4 Road signing and marking 20% 40% 60% 80%

5 Roadside maintenance,plantation, landscape andnurseries maintenance 20% 40% 70% 90%

6 Drainage structures,embankment, consolidation worksand river bank protection works 25% 50% 75% 90%

7 Periodic repairs of fixedassets (buildings,transportation means,equipment) 15% 40% 70% 90%

S Winter maintenance 15% 30% 45% 60%

9 Production of road constructionand maintenance materials 25% 50% 100% 100%

- 45 -

ROMANIA Tabe 9TRANSPORT PROJECT

NRA's Eaulipment by Type and Aae(As of October 1992)

---------------------- AGE GROUPS------------------------------------

EOUIPMENT TYPE 1-5 Years 6-10 Years 11-15 Years Over 15 YearsNumber % Number % Number % Number % Total

Trucks 180 30 112 24 118 25 56 12 466Fuel tanks 4 10 7 16 17 42 13 32 41Bitumen tanks 7 8 28 32 36 41 17 19 88Motor graders 16 15 48 46 15 14 26 24 105Front loaders - - 8 18 16 35 21 47 45Bitument spreader 7 12 29 51 12 21 9 16 57Snow blower 11 8 12 9 35 25 81 58 139Buldozer 6 46 2 15 4 31 1 8 13E=cavator - - 7 20 11 31 17 49 35Asphalt Plant - - 10 8 41 34 69 58 120Road markingmachine 2 40 3 60 - - - - 5Asphait finisher - - 7 7 53 50 45 43 105Compacting rollers 8 3 25 8 70 24 189 65 292Tractor 80 14 125 22 130 23 236 41 571

Total 321 15 423 20 558 27 780 37 2082

Source: NRA

RONAIA

TRANSPORT PROJECT

Nationsl Highway ExpwndituresDesirable Armual Target

' ' 1991 1992 1993 (See Mote)

Quantit. Value Quntit. Va lue auntit. Vatue Quantit. Unit Price ValueEXPEUDITU E CATEOTY cantitate Valoare Cantitate Valoare Cantitate Valoare Cantitate Valoare

million Let million Lei sillion Lte LOSS USS

Bas* c Naintnnce roods nd bridges 14,000 1,186 14,000 2,840 14,000 5,000 14,000 800 11.2(Intretinwre drueuri si poduri)Patching q. meter 3,963 639 3,287 1.542 3,500 2,500 3,500 1,600 5.6(REuratit pa Suprafete Izolate)8ridge Pepairs M. 11,000 199 5,000 288 12,000 1.100 12,000 200 2.4(Reparatil Podurt)

Sub-Total 2,024 4,670 8,600 19.2

Bituminous Surfae Treatment km 2,029 359 2,000 2,000 2,300 3,600 2,300 3,500 8.1(Tratem_nte Situminoes.)AC Overly up to 5 cm km 208 739 260 2,600 260 4,680 300 40,000 12.0(Coore asphaltice) IPeinforc_ ts > 5 cm km 277 1,600 250 5,000 240 8,640 600 80,000 48.0 0(lanforsrfi) a

Sub-Total 2,696 9,600 16,920 68.1

Pehabilitation km(Rhabitlitare dru rl)Mem Construction (frm inv tt. budget) kmlConstructii not)Other, incl. *limin. black spots Unite 40 534 48 882, 90 2,633 90 65,000 5.9(Punto paricul., tc. parc. *tc.) (buc.)Equipmnt Acquisition 406 1,220 3,000 6.0(Furnitura)

Sub-Total 940 2,102 5,633 11.9

Local Contribution to ProJact 12,500

overhead (headque rter salaries etc.) 1558 5319 2,200 3.0

TOTAL FRMO DOESTIC SMJLCES In Lei 7,220 21,691 45,853Exchin9 rate L*IjUSS 180 300 450

Total in US$ 40.1 72.3 101.9 102.1 o3 Banks contribution 49.0TOTAL EXfDITUtlES 150.9

NOTE: Desirable Aivual Target should lnclude full cost of routine m*intenance (first sub-total) and periodic m_intennce needed to prevent deterioration of the systomnd eliminate backlog of deteriorated roads over a 10-15 year period.

- 47 -

Page 1 of 4ROMANIA

TRANSPORT PROJECT

Romanian Railway Operational indicators

(1986-1991m

Unit 1986 1987 1988 1989 1990 1991

A. Lenath of Line km 11221 11275 11298 11343 11348 11365- standard gauge km 10704 10803 10826 10871 10876 10893- narrow gauge km 472 427 427 427 427 427- broad gauge km 45 45 45 45 45 45- electrified km 3328 3411 3459 3654 3721 3721

B. Traffic

- passengers mil. 469 472 473 481 408 363- net tons mil. 307 304 315 306 218 146- passenger-km bil. 32.3 33.5 34.7 35.5 30.6 25.4- net ton-km bil. 79.1 78.1 80.6 81.1 57.2 37.8- tariff ton-km bil. 67.9 66.0 69.4 67.2 48.9 32.6- traffic units bil. 111.4 111.6 115.3 116.6 87.8 63.2- average passenger journey km 68.9 71.0 73.4 73.8 74.9 69.9- average freight haul km 221.2 217.1 220.3 219.6 223.5 258.9- passenger gross ton-km bil. 32.4 33.0 34.9 35.3 35.3 31.4- freight gross ton-km bil. 135.4 143.0 148.8 148.1 110.9 66.8- total gross ton-km bil. 167.8 176.0 183.7 183.4 146.2 98.2- gross ton-km per route

km (of line) mil. 15.0 15.6 16.3 16.2 11.8 8.6

Gross ton-km by tvoeof traction

Standard aauae

- steam bil. 0.01 0.01 0.04 0.07 0.02 0.02- diesel bil. 62.20 61.10 60.30 54.40 45.70 29.80- electric bil. 113.50 112.80 121.70 127.40 100.20 67.70- diesel rail buses bil. 0.40 0.40 0.50 0.50 0.30 0.20

Narrow aauce

- steam mil. - - - - - -

- diesel mil. 240.00 230.00 180.00 270.00 187.00 140.00

- 48 -

Pago 2 of 4

Romanian Railway operational Xndicatorst1986-1991)

Unit 1986 1987 1988 1989 1990 1991

C. Traction Stock

- Standard aauce

Steam locomotives number 1213 1114 1021 995 948 948in traffic % - - - - - -Diesel electric locomotives number 1495 1495 1492 1490 1485 1485availability t 72 69 68 67 61 51Diesel hydraulic locomotives number 680 681 689 699 723 723availability t 75 75 74 73 72 55Zl-ctric locomotives number 902 925 978 1019 1061 1061availability I 82 84 84 83 81 68aLk buses number 149 140 140 140 141 141

availability 60 59 54 52 43 43

- Narrow Caua

Stea locomotives number 30 29 29 29 29 29in traffic t 63 66 66 69 - -Diesel hydraulic locomotives number 45 44 44 44 44 44availability t 84 86 84 84 45 45

- Broad caua

St- locomotives number 12 12 12 12 12 12in traffic t 67 58 67 67 - -DieJel locomotives number 6 8 8 8 12 12availability t 67 75 75 75 42 33Diesel hvdraulic locomotives number 16 16 16 18 14 14availability 75 69 69 72 22 22

- 49 -

Page 3 of 4

Romanian Railway Oneratioo-l Sndicators11986-19911

Unit 1986 1987 1988 1989 1990 1991

D. Rollina Stock

Pasuenaer care number 5993 6068 6191 6213 6311 6520- *tandard gauge number 5864 5941 6068 6091 6187 6382- narrow gauge number 125 123 119 118 120 138- broad gauge number 4 4 4 4 4 -- no. of seatu thousands 420.7 431.6 438.8 442.4 465.4 450.1- no. of seats s.g. thousands 416.9 427.9 435.3 438.8 462.0 446.1- no. of seats n.g. thousands 3.5 3.5 3.3 3.3 3.3 4.0- no. of meats b.g. thousands 0.3 0.3 0.3 0.3 0.1 -

Freiaht cars number 139585 140912 142464 144028 144388 142222Total capacity thous.tons 6171 6250 6358 6458 6502 6433

Standard aauae number 138334 139666 141227 142791 143177 141025Total capacity thous.tons 6150 6228 6337 6436 6481 6411Average car capacity tons 44.2 44.6 44.9 45.0 45.3 45.5

Narrow aauce number 1224 1219 1210 1210 1184 1170Total capacity thous.tons 20 20 20 20 20 20Average car capacity tons 17.0 17.0 17.0 17.0 16.5 17.1

Broad cauce number 27 27 27 27 27 27Total capacity thous.tons 1 1 1 1 1 0.7Average car capacity tons 26 26 26 26 26 26

Z. Utilization of Traction andRollina Stock

Encine-km oer engine-dayavailable lmain linel

a) Passenaer traffic S.G.- steam locomotives km - - - - - -- diesel locomotives km 397 387 388 385 359 349- electric locomotives km 538 542 536 536 512 478

- 50 -

Page 4 of 4

Roaanian Railway ODerational Indicators(1986-19911

Unit 1986 1987 1988 1989 1990 1991

b) Freight traffic SG.- steam locomotives km - - - - - -

- diesel locomotives km 249 248 234 299 224 218- electric locomotives km 350 346 341 399 389 322

passenger-km per mil. 5.39 5.52 5.60 5.71 4.85 3.90passenger car km

passenger-km per thousand 76.8 77.6 79.1 80.2 65.7 56.5seat pass km

net ton-km per thousand 567 559 571 568 396 266freight car tons km

not ton-km per thousand 12.8 12.5 12.7 12.6 8.8 5.9ton cap. of fleet km

average load per tons/ 11.00 11.05 11.15 11.20 11.11 11.10car loaded axle

turnaround timeof S.G. freight cars days 3.79 3.90 3.50 3.52 6.59 8.34

F. Staff

employees number 171400 171100 171400 171300 221532* 197253traffic unit per employee thousand 649.9 652.3 672.7 680.7 396.3 320.2employee per km of line employees 15.3 15.2 15.2 15.1 19.5 17.3

Note: * Staff increase in 1990 was due to a reduction in the work week from 6 to 5 daysand to some administrative reclassification of staff in peripheral activities.

Source: SNCFR

- 51 -

Roa~~~~ZWTRNSPORT PRoJZCT

I-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~List of Roads for tho Proiect

CONTRACT ROAD NATIONAL FINANCED LENGTH ESTIMATED STARTING AOT TRAFFIC-1990 IRRNO. SECTION ROAD BY (km) COST YEAR TRAFFIC SECTION (X)

Cmii S)

min. Mx.

1. CONARNIC-TIMIS I IBRD 8.0 4.757 1993 6,474 10,441 31.4

2. BUCURESTI-URZICENI 2 IBRD 40.0 14.221 1994 4,793 9,533 35.9

3. URZICENI-GIURGENI 2A IBRD 113.3 15.242 1994 4,904 5,175 66.2

4. AGIGEA-NEGRU VCA 38 IBiD 26.2CONSTANTA-EFORIE 39 IBRD 13.9 12.525 1993 1,836 6,592 30.6

5. CONARNIC-BRASOV 1 IBRD 43.8 10.220 1994 6,474 10,441 56.8

6. PITESTI-CALIMANESTI 7 EBRO 61.0 28.000 1993 3,144 6,323 27.3

7. CALINANESTI-VESTEN 7 EBRD 78.8 16.733 1993 4,272 6,323 62.6

8. VESTEN-SIBIU I EBRD 10.8SIBIU-CLUJ NAPOCA I EBRD 145.8 31.105 1994 4,767 7,740 54.7

9. CLU NAPOCA-BORS 1 EBRD 151.8 28.000 1994 2,569 7,562 39.6

10. DEVA-LIPOVA 7 EIB 100.0 37.500 1994 1,859 4,004 23.1

11. LIPOVA-NADLAG 7 EIB 100.0 37.500 1993 2,684 5,857 23.7

12. SEBES-DEVA 7 ElB 58.9 12.647 1994 5,431 8,920 63.8

13. TINISOARA-MORAVITA 59 EIB 57.0TIMISOARA-ARAD 69 EIB 44. 20.870 1994 1,623 6,807 39.2

TOTAL 1053.6 269.320

- 52 -

Table 13ROMANIA

TRANSPORT PROJECT

List of Eauloment and Materials to be Procured under the Prolect

ITEM No. Unit TotalUnits Cost Cost 3/

----- USS,000---

A. ROAD MAINTENANCE EQUIPMENT 1/1. Cold Milling Machine (0.5 width) 41 80 3,2802. Vibrating Manual Compactor (0.9t)

including Trailer 41 23 943& Chipping Spreader 7 246 1,7224. Multipurpose Road Maintenance Truck 41 173 7,0935. Road Core Drilling Machine 7 4 286. Road Marking Machine 7 69 4837. Snow Blower Equipment 9 81 729S. Mobile Welghbridges 9 16 1449. Traffic Counters 100 1.7 17010. Training Equipment 805

Sub-Total 15.397

B. LABORATORY AND TESTiNG EQUIPMENT 211. Bridge Inspection Equipment 2 419 8382. Road Measurement Equipment 1 520 520S. Laboratory Equipment 8054. Computers 36 11 396

Sub-Total .m

C. VEHICLE TESTiNG EQUIPMENT 1/ 30

D. RAILWAY EQUIPMENT 1/1. Track Maintenance Machines and Spare Parts 8 1625 13,0002. Data Processing Equipment 10,020

Sub-Total 23.020

Total Equipment 43.976

E. MATERIALS (tons) 1/1. Bitumen 52000 180 9,360

Total 53,336

1/ To be financed by IBRDY To be financed by EBRDI Incxlding taxe

ROMANIATRANSPORT PROJECT

Outline of Trainina Abroad Programfor NRA (Headcuarters and Recionsl

1994 1995 1996 Total

TOPIC Total Est. Total Est. Total Bst. Total EstimatedMan- Cost Man- Cost Man- Cost Man- Cost

Months US$000 Months US$000 Months US$000 Months US$000

1. Feasibility studies, 6 33 6 33 5 27 17 93economic and

environmental analysis

2. Design standards and 12 66 11 61 9 50 32 177computer assisted design

3. Pavement management and 7 39 9 50 7 39 23 128road maintenanceplanning, programming andexecution

4. Contract management, 20 110 18 99 12 66 50 275supervision and qualitycontrol

5. Budgeting, accounting, 13 70 15 82 12 66 40 218execution and control

6. Equipment, management, 8 44 7 38 5 27 20 109maintenance, costaccounting quipmentcharges and leases

TOTAL 66 362 66 363 50 275 182 1,000

OQ a

0 4

ROMIAIA

TRANSPORT PROJECT

Outline of Trainina Procram for SNCFR

1994 1995 1996 Total

Topic Proposed Total Est. Proposed Total Est. Proposed Total Est. Total Est.Country an- Cost Country Man- Cost Country Man- Cost Mn- Cost

Months USS800 Months USS000 Months US000 Months USS000

B. Rati

I Manrgement strategy - France, 3 12 France, 3 12 6 24CFRD restructuring GCiermny Ger_mny,

U.K. U.K.

2 Business m_gers, - for France, 4 16 France, 3 12 7 28business center mnagemnt GermWny, Cermny,

U.K. U.K.

3 Traport economics France, 4 16 France, 3 12 7 28Germany, Gerany,U.K. U.K.

4 Comuterization France, 2 8 France, 2 8 4 16Germany, Germany,U.K. U.K.

Un

5 Operations - restructuring France, 2 8 France, 2 8 4 16process (mrshallirg Ger_mny, Germny,yards, depots, Jwtions, U.K. U.K.stations)

6 Marketing and account_cy France, 4 16 France, 4 16 8 32German, German,U.K. U.K.

7 Engineering - track France, 3 12 France, 4 16 7 28m_intenance, Gerny, Germay,installations, signaLling U.K. U.K.and teleco_mications

8 Financing - financial France, 3 12 France, 4 16 7 28aalysis Germany, Gerany,

U.K. U.K.

Total base cost 25 100 25 100 50 200Te a2

: ~~~~~Total, with Contirgerncies 25 108 25 112 50 220 (D

o -f.

- 55 -

ROMANIA Table 15TRANSPORT PROJ£I Page 1 of 3

Imnlementation ScheduleEstimated Annual Contractual and Other Pai,nts

(USS million equivalent)

Project Year

PRO,JECT ELEIIENT 22,1919596197PAYMENTS REMARKS

A. CIVIL WORKS

a) Bank-financed Works

Road Rehabilitation 9.0 30.4 30.6 9.1 79.10 ICB

Border Post Improvements 1.0 3.0 1.8 5.80 ICB

Supervision of Works 0.4 1.2 1.2 0.4 3.20 OTHER

b) EIB and EBRD -

Road Rehabilitation 18.7 96.4 83.6 22.2 220.90 COFINANCED

Border Posts Improvement 0.4 1.3 1.3 0.7 3.70 COFINANCED

Supervision of Works 0.9 4.4 3.8 0.9 10.00 COFINANCED

xUcxxvuYYuvyxxxxxxyyuxxxyuux

B. ROAD SAFETY

Bank-fin, marking and Signal. 5.0 6.7 5.0 16.70 ICB AND LCB

C. EOUIPMENT AND MATERIALS

a) Bank-financed Road Equipment 8.3 8.4 5.6 22.30 ICB AND IS

Materials (fuel and bitumn) 3.5 3.5 3.4 10.40 ICB

.ewax xxuoa )usJoa

Railway Equipment 2.4 1B.9 5.3 26.60 ICB

b) EIB and EBRD Finance

Laborat. & road measure. equip. 0.5 1.6 1.6 3.70 COFINANCED

0. TECH. ASSIST. AND TRAININ6

a) Bank-financed TA & Training

- NRA Training and TA 0.5 0.5 0.3 1.30

- SNCFR Training and TA 0.2 0.2 0.40

b) EIB and EBRD Finance

- TA and Training 0.2 0.4 0.3 0.90 COFINANCED

TOTALS 32.5 173.1 150.0 49.4 405.00

(Bank Financed) (8.0) (49.4) (41.8) (20.8) (120.00)

IBRO Disbursement Schedule (Table 16) reflects a more conservative schedule with payents through end 1988. to allow

for any slippage In NRA's impluentation schedule.

ROMANIA

TRANSPORT PROJECT

IMPLEIIENTATION SCHEDULEFIRST CIVIL WORKS CONTRACTS

19 92 19 93Activity Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

General Procuremnt Nodti pubished by IORD +General Procurment Nod.. pubishad by EBRD +Preproaton of Prequallcaton DocumentsIFb Comennts on Prequdlilotionissunwo of Prequolfication Nodoe +Candidates Submit Prequallloodon DocumwntsEvaluoton at PrequlNfloatdon Submissions _ Prequeliflcation Report to the IFt.AppioWv of Ust of Frm to be InvitedPrpotion of Imwltadon to bid _Send to Flu end I- ReviewCandidates Subrnit Bids

Pre-Tendet Meating +Evaiuation al BidsEvaluation Report to the IFlsIFl Comments on awardContract Finalistdon nd SignaturtDeginino of WorksAgree with IFl on Short Usts Ior Supervision +Finallsatlon of TORs (or Supervisin OQo.Requost for Proposals , _ Receive nd Evaluato ProposalsFinblso nd Award Supervision Contract _

RMJIATRAQiSPORT PRO)ECT

IMPETATI-T1 SOMERULWUY COFINT

ACTIVITY ' 199; "1993' '1994' 1995- .I 11 III IV I It III IV I 11 fi1 IV I II III IV

I. Elecronic Data Procsuing E rpnl

1.1 Bd Prqpwaimn

Doawns PronC_

Sbnk RelW _ 15.UBiddhg Pedod 5IEnlSodon I 5.VIBa Review .VII .Contact Award Cl LVIym

Training of EDP eople. ConsuLXing 3O.1X osite Prepar IVIll [r _V

Fard,safwort Devay. nsta;on, Acelane Tests 15.1 I 30.1VData TranawrsslnNet 1.11 V rActi ASS h mnwnt 1.11 30.IXNOw Appl-ci 1.1 1: _1 30.VIII. Track Muitenanc Ma_ ns

2.1 BOd Prepwaa_on

Dcamat parao

Bank Rew 15.11

Biding Perod IVi.'-

Evaraliw LI I5.Vll .h

2.2 llftd T~nM*q 1wim JI( 5--. 1 30.VI w2.3 Tam ping h i - Swes 1 .X L.

2.4 Testhg and Ineealion |_1_.VII _ 1 .1 -301XJil. Traning Program _ _1_31 ,.. . . _ ._ 31XII

- 58 -

Table 16

ROKNIATRANSPORT PROJtCT

Estimated Schedule of Disbursement*

Cumulative DisbursementsBank Fiscal Year Ouarter Endina USS million Fauivalent

94 December 31, 1993 7.0**March 31, 1994 7.0June 30, 1994 8.0

95 September 30, 1994 10.0December 31, 1994 14.0March 31, 1995 19.0June 30, 1995 25.0

96 September 30, 1995 35.0December 31, 1995 45.0March 31, 1996 56.0June 30, 1996 67.0

97 September 30, 1996 77.0December 31, 1996 87.0March 31, 1997 95.0June 30, 1997 103.0

98 September 30, 1997 108.0December 31, 1997 112.0March 31, 1998 115.0June 30, 1998 118.0

99 September 30, 1998 119.0December 31, 1998 120.0

* Loan Zffectiveness estimated in third-quarter 1993.** Initial deposit of US$7.0 million to a Special Account.

- 59 -

ROMANIA Table 17

TRANSPORT PROJECT

Basic Vehicle Opersting Costs

Dbcember 1992 Prices

Truck Truck Art. TruckUnit Prices Car Bus < 5 Ton * 5 Ton

Gasolirn Lei/Liter 145

Diesel Lei/Liter 110 110 110 110

Lubricating Oil Lei/liter 800 500 500 500 500

Maintenanco Labor Le/hr 150 150 150 150 150

Tyres 10,000 50,000 50,000 50,000 50,000

Crew Wages Lei/hr 200 200 200 200 200

VehicLe Prices 1,100,000 25,000,000 12,000,000 20,000,000 25,000,000

Annu L km 8,000 75,000 60,000 60,000 70,000

Basic Vehicle Operating Cost on Level Tangent Road (Roughness s 2) in Le/km

*;

Fuel 14.0 27.6 24.9 26.4 37.5

Lubricants 1.5 1.7 1.7 1.7 2.7

Tires 0.6 6.4 6.0 8.5 10.4

Crew wages 0.0 2.6 2.7 2.7 2.5

Maintenance 1.7 20.1 13.5 22.1 40.0

Depreciation 7.4 57.2 28.0 39.7 44.2

Total 25.2 115.6 76.8 101.1 137.3

in US cents 6 27 18 24 32at IS a 430 Lei

Source: NRA/IPTANA

ROMANIATRANSPORT PROJECT

MINISTRY OF TRANSPORT

ORGANIZATIONAL CHART

January, 1993

ADVISOR

CONTROLER MINISTERSPECIAL AFFAIRS

LEGAL AFFAIRS

STATE SECRETARY STATE SECRETARY STATE SECRETARY STATE SECRETARY STATE SECRETARY

WATER A TRANSPORT fRODTRANSPORTI| CIVIL AVIATION RAIL TRANSPORT 111 RESOURCES I

TECH. REG. a TECH. REG. a TRAFF. MGMT. TECH. REG. a STRATEGY, MGMT.PRIVAT. a SOC. REL.

INT.REL INT.REL a INT. REL. INT.REL

INVESTMENT aTECHNOLOGY a TECHNOLOGY & FINAN. a -TECHNOLOGY a BIDDINGDEVELOPMENT DEVELOPMENT INVEST. DIREC. DEVELOPMENT

ECONOMIC ECONOMIC AIR. a NA/IG. ECONOMIC ECONOM.8STRATEGY STRATEGY STATE INSPECT. STRATEGY BUDGET

-STATE INSPECT. _ ROAD VEHIC. OFSTATE INSPECT. SPECIAL PROBLEMS

OF NAVIG. STATE INSPECT. _MEDICAL a

SOCIAL ASSIS.

RELATION WITHPUBLIC a MEDIA

_INT. ROADPERMITS

- FREE ZONE AGENCY 't

ROMANIATRANSPORT PROJECT

NATIONAL ADMINISTRATION OF ROADSOrganization Chart

1992

GOVERNINGCOUNCIL

INTERNATIONAL ECON. A TECHN.COOPERATION DEMRTMENT

GENERAL LEGAL OPPICEDIRECTOR PLANING, ORGANIZATION AND PERSONEL

INTERNAL AUDITING OFPICE

ROAD TAXE* & PERMITE - DEPUTYGEN. DIRECTOR

DEPT. DEPT. TECHNICAL ECONOMICFOR ROAD MAINTEN FOR STUDIES DEPT. DEPT.

DIRECTOR DIRECTOR DI RECTOR DI RECTOR

ROAD MOTORWAYS TECHNICAL F INAN,-MAINTENANCE -OFFICE -ACC. & TARIFFS

BRIDGE INVESTMENTS EQUIPMENT ADMINISTRATIONOFFICE OFFICETRAFFIC BIDDINGSAFETY & REGUL CONCESS & JVPROCUREMENT

ROMAN IATRANSPORT PROJECT

NATIONAL ADMINISTRATION OF ROADSREG. DIR.

_B U C H A R ES T SSECTIONS (9) DISTRICTS (64)BUCHAREST ~WORKSHOPS (1) ASPH.UNITS (40)

REG. DIR. SECTIONS (6) DISTRICTS (33)CRAIOVA ~WORKSHOPS (1) ASPH.UNITS (22)

REG. DIR. H SECTIONS (5) DISTRICTS (38)TIMISOARA | WORKSHOPS (1) ASPH.UNITS (20)

REGIONAL _ GENE RAL DORGANIZATION DIRECTOR _ REG. DIR. SECTIONS (7) DISTRICTS (48)

CLBURJ WORKSHOPS (1) ASP H. UNI TS (26)

REG. DIR. SECTIONS (1) DISTRICTS (33)

IASI H WORKSHOPS (1) ASPH.UNITS (76)

REG. DIR. SECTIONS (4) DISTRICTS (22)CONSTANTZA WORKSHOPS (1) ASPH.UNITS (17) |

REG. DIR.

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MAP SECTION

IBRD 2427

ROMANIA

-/ '. t-\ U K R A I N E , TRANSPORT PROJECTPROJECT LV

N RAo REG obI,ONS O

, RAIL_ WRROADS

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