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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 12082-1ILI

STAFF APPRAISAL REPORT

REPUBLIC OF MALI

TRANSPORT SECTOR PROJECT

MAY 5, 1994

Infrastructure Operations DivisionSahelian DepartmentAfrica 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 witout World Bank authorization.

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EXCHANGE RATE

Currcncy Unit = CFA Franc (CFAF)US$1.00 = CFAF 600

WEIGHTS AND MEASURES

Metric System

FISCAL YEAR

January 1 - December 31

This report is based on an IDA appraisal mission which visitted Mali in May 1993, followed by a reappraisalmission in November 1993, comprising Messrs. Abdelghani Inal (Highway Engineer and mission leader),

' Karim-Jacques Budin (Sr. Railways Engineer), Jean-Marc Hdron (Financial Analyst, Consultant), Jean PierreTaroux (Engineer, Economist, Consultant) and Mmes. JoAnne Nickerson (Program Assistant), Ines Fraile-Ordonez (Young Professional), Tatiana Vaes (Transport Economist, Consultant). Messrs. J. Rebelo (LA1IN)was the Lead Advisor and M. Loir (MN 1 IN) and J. Bentchikou (MN1 IN) were the Peer Reviewers for theproject. The Department Director and Division Chief responsible for the project are, respectively, Ms.Katherine Marshall and Mr. Peter Watson. Mrs. Nana Afram-M'Bow supported the preparation of the report.

FOR OFFICIAL USE ONLYABBREVIATIONS and ACRONYMS

ABEDA = Arab Bank for Economic Development in AfricaADM = Aroports du Mali

(Mali Airports)ASECNA = Agency for the Safety of Aerial Navigation in Africa and MadagascarBOAD = - Banque Ouest Africaine de Developpement

(West African Development Bank)CEAO = Communaute Economique de IlAfrique de l'Ouest

(West African Economic Community)CFD = Caisse Francaise de Developpement

(French Development Fund)CIDA = Canadian International Development AgencyCIF Cost, Insurance and Freight (border point price)CMDT Compagnie Malienne de Developpement des Tevxiles

(Malian Textile Development Company)CNREX = Centre National de Recherche et d'Experimentation pour le BOliment et les

Travaux PublicsNational Construction and Public Works Research and Experimentation Center

COMANAV = Compagnie Malienne de Navigation(Malian Shipping Company)

CPTP = Centre de Perfectionnement des Transports et des Travaux Publics(Transportation and Public Works Training Center)

DGTSP = Declaration of General Transport Sector PolicyDNAC = Direction Nationale de l'Aeronautique Cdvile

(National Directorate of Civil Aviation)DNT Direction Nationale des Transports

(National Directorate of Transportation)DNTP Direction Nationale des Travaux Publics

(National Directorate of Public Works)EIB = European Investment BankERR = Economic Rate of ReturnFAC Fonds d'Aide et de Coop6ration

(French Aid Agency)FAD Fonds Africain de Developpement

(African Development Fund)FED = Fonds Europeen de Dgveloppement

(European Development Fund)GDP = Gross Domestic ProductICB = International Competitive BiddingIsDB Islamic Development BankLCB = Local Competitive BiddingMALITAS Mali Timbuktu Air ServiceMET = Ministere de l 'Equipement et des Transports

(Ministry of Equipment and Transportation)ONT = Office National des Transports

(National Transport Office)OPEC = Organization of Petroleum Exporting Countries

bdocment bas a resticted distnribon and may be usod by recipients only in the p omi of dtcirofficial duties Its contents may not otherwise be disclosed without World BaR auri

RCFM Regie du Chemin de Fer du Mali(Mali Railways)

SDR = Special Drawing RightsSMTP = Service a Materiel des Travaux Publics

(Public Works Equipment Setvice)SNCS = Socie Nationale de Chemins de Fer du S&nggal

(Senegal Railways)SRR = Service de Renforcement des Routes

(Roads Strengthening Service)TIF = Transport International Ferroviaire

(International Rail Transport)TOR = Terms of ReferenceTRIE = Transport Routier Inter-Etats

(Inter-State Road Transport)TSC = Transport Sector CommitteeUNDP = United Nations Development Program

REPUBIUC OF MALI

TRANSPORT SECTOR PROJECT

Staff Appraisal Report

Table of Contents

Page No.

Credit and Pioiect Sumam .. .........................................

I. BACKGROUND . ........................................... 1

A. Country Macro-Economic Background ............................... 1B. Country/Secto-al Background .................. I .................. 2

11. SECTeR STRATEGY AND ISSUES ......................... 3

A. Strategy ................................................... 3B. Issues . ................................................... 4

M. LESSONS LEAARNED AND RATIONALE FOR IDA INVOLVEMENT .... ..... 6

A. Previous IDA Operations in the Sector and Lessons Learned ................. 6B. Rationale .................................................. 7

IV. THE PROGRAM AND THE PROJECT .............................. 8

A. Program and Project Objectives ................................... 8B. Program and Project Description .................................. 9C. Program and Project Cost and Financing ............................. 15D. Program and Project Implementation ............................... 20E. Project Sustainability ......................................... 22F. Procurement . ............................................. 22G. Disbursements . ............................................. 25H. Accounting, Auditing and Reporting ............................... 26I. Environmental Impact ......................................... 27J. Impact on Employment and Poverty ................................ 28K. Economic and Financial Appraisal and Risk Evaluation .................... 28

V. AGREEMENTS REACHED, CONDITONS AND RECOMMENDATION .32

rabies in the Main Text

Table 2.1 Minimal Annual Routine Maintenance Budget Allocations ................. 6Table 4.1 Sumnuary of Estimated Consulting Services ......................... 10Table 4.2 Estimated Inflation Rates ............ ........................ 15Table 4.3 Program Cost Summary . .................................... 16Table 4.4 Credit Summ ary . ......................................... 17Table 4.5 Financing Plan ........................................... 18Table 4.6 Transport Sector Project Fin.ancing Plan ........................... 19Table 4.7 Summary of Procurement Arrangement ........................... 23Table 4.8 Disbursement by Category .......... ......................... 25Chart 4.9 Internal Rate of Return of Road Investments ........................ 30

ANNEXES

1. Gross Domestic Product2. Government Revenues3. Declaration of General Transport Sector Policy4. Training ProgramA5. RCFM Restructuring Action Plan6. Detailed Project Costs7A. Implementation Schedule7B. Performance Indicators7C. Supervision Plan8. Enviromnent Action Plan9. Selected Documents and Data Available in the Project File

Map: Transport Network of Mali (Ref. # IBRD 25497)

REUBLlC OF MALI

NSPORT SECTOR PROJECT

Staff Appraisal Report

Credit and Project Summarv

Borrower: Republic of Mali

Benficiaries: Ministry of Equipmtent and Transportation (MET)R6gie du Chemin de Fer du Mali (RCFM)

Amount: SDR 46.1 million (US$65 million equivalent)

Standard IDA terms, with 40 years' maturity

Cofinancinu: BOAD (US$10.7M), FAD ($14.3M), FED (US$50M), IsDB (US$53.6),Canada (US$7.1M), France (US$17.9M), Germany (US$19.8M), EIB, OPFC(amounts to be determined)

O-lending: For the track rehabHlitation and studies subcomponents, RCFM will receivcfunds in grant form; for the other subcomponents, amounts will be onlent at7.5% interest per annum, repayable over 20 years, with 10 years grace.

Program and ProjectQjectives: The proposed project is part of a sector-wide program to support the

Government of Mali's efforts: (a) to strengthen the sector's management andperformance through reorganization and local capacity building; (b) torestructure the transport sector's parastatals; (c) to modify the regulatory andinstiutional framework in order to promote increased private sectorparticipation in the provision of services and the execution of works; (d) torehabilitate and maintain a priority network of transport infrastructure; and (e)to improve the transport operation's efficiency, and reduce transport costs.

Description: The proposed project is designed around the Government's five-year (1994-1998) program of sectoral reforms contained in the Declaration of GeneralTrmnsport Sector Policy, supported by a parallel donor-assisted program ofinvestments in the trarsport sector. The program has four components; IDAwill participate in the fmancing of the following: (a) a capacity building andtraining componnt to support the reorganization of transport services, and toimplement sector policy measures, notably the final liberalization of thetransport industry, the upgrading of road maintenance by reorganizing itsagencies and work methods and allocating adequate resources, therestructuring of public enterprises and the improvement of the efficiency ofinternational transport corridors; (b) a road component focussing on (i) theroutine maintenance of a priority network of 9,000 km; (ii) the rehabilitation

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or periodic maintenance of 1,170 km of paved roads and 2,870 km of earthroads and tracks; (iii) the improvement of 500 km of rural tracks outside themain agricultural areas, and the purchase of ferries, (iv) the implementation ofspecific works to improve the environment and safety along selected projectroads; (v) the improvement of Bamako's main urbsn road system; (vi)technical studies and supervision; and (vii) the purchase of equipment forroutine road maintenance; (c) a railway cmponent focusing on (i) theexecution of the first tranche of a 10-year track rehabilitation program, andthe construction of a freight terminal in Bamako-Korofina, (ii) improvement ofthe telecommunication system, (iii) the purchase of three medium capacitylocomotives and rehabilitation of equipment; (iv) logistical equipment, and (v)studies to implement the railway restructuring policy and transform RCFMinto an autonomous and fully commercial enterprise with reduced personnel.The fourth component is an investment component for airports to financeboth safety equipment for the Timbuktu and Bamako-Senou airports andtechnical studies. This component is fully fmanced by cofinanciers.

Proiect Benefits: The project is designed to modernize the administration of the sector and,most importantly, to reduce transport costs. The overall appraisal of the twoprincipal program components (road and rail, accounting for about 95% ofprogram costs) yields an internal rate of return (IRR) of 28%, more thandouble the discount rate (12%) adopted (the rates of subprojects range from178% for periodic maintenance for a semi-urban road to 12% for the lastrural track included in the program). The sensitivity tests carried out showrates of return higher than 12%). The project is also expected to result inmany other indirect benefits that cannot be quantified. It will enhance thetransport sector's efficiency by realigning the functions of its administration,restructuring its public agencies to give them a firmly commercial characterand irpving their operational capacities. The program will have a higheconomic and social impact on the populatioL tnrough reduced transport costs,the 280,000 person/months of jobs it will create, and the promotion of smalllocal firms to meet the increased demand expected to arise through themultiplier effects of the incomes generated by the program.

Project Risks: The principal project risks stem from the fact that the Government may not beable to implement all the desired reforms in the sector, or to remove theobstacles to the mobilization and allocation of adequate financial resources forcounterpart funding and, in particular, for routine road maintenance.Secondly, the Mali transport agencies' institutional capacity to manage theprogram is weak. For RCFM, the risk would derive from insufficientintegration of international freight services with SNCS. These risks areminimized by the strong ownership demonstrated by the Government duringproject preparation, the rapid fulfillment of all conditions of negotiations,monitoring of the annual public investment programs and key indicators ofRCFM activities, continued coordination with other financing institutions, andstrengthening of sector management through reorganization and capacitybuilding.

MALITRANSPORT SECTOR PROJECT

PROGRAM COST SUMMARY

(CfA MILLION) (USS MILLION) % % TOTAL-. ..................--- ------------------------ FOREIGN BASE

LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL EXCHANGE COSTS._ _ _.-. ....... _ ....... ........ ....... ....... ........... _.. .. ........

A. CAPACITY BUILDING, TRAINING1. PROJECT MANAGEMENT UNIT 60 180 240 0.1 0.3 0.4 75% -2. TRAINING 120 840 960 0.2 1.4 1.6 87% 1%3. MANAGEMENT DEVELOPMENT

TRANSPORT DEPARTMENT 120 660 780 0.2 1.1 1.3 85% 1%PUBLIC WORKS DEPARTMENT 120 480 600 0.2 0.8 1.0 80X -

4. AUDIT COMPLIANCE PROGRAM 120 720 840 0.2 1.2 1.4 86% 1%_ .. ....... ....... ........... ....... -------... ....... -------.. ....-.---- _-... ..... .

SUBTOTAL CAPACITY BLDG. COMPONENT 540 2,880 3,420 0.9 4.8 5.7 84% 2%

S. ROAD COMPONENTROUTINE MAINTENANCE 8,340 11,880 20,220 13.9 19.8 33.7 B9% 13%PERIODIC MAINTENANCE REHABILITATION 3,480 67,020 70,500 5.8 111.7 117.5 95% 46%RURAL TRACKS AND FERRIES 420 8,100 8,520 0.7 13.5 14.2 95% X oENVIRONMENTAL ACTIONS 360 3,180 3,540 0.6 5.3 5.9 90% 2%BAMAKO URBAN ROAD 720 13,560 14,280 1.2 22.6 23.8 95% 94STUDIES, WORKS SUPERVISION 540 4,260 4,800 0.9 7.1 8.0 89% 3%EQUIPMENT FOR MAINTENANCE 0 3,000 3,000 0.0 5.0 5.0 100% 2%

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

SUSTOTAL ROAD COMPONENT 13,8t0 111,000 124,860 23.1 185.0 208.1 89% 82%

C. RAILWAY COMPONENTTRACK REHABILITATION - 1ST TRANCHE 1,560 9,600 11,160 2.6 16.0 18.6 86% 7%FREIGHT TERMINAL -- KOROFINA 120 1,680 1,800 0.2 2.8 3.0 93% 1%TELECOMMUNICATIONS 60 720 780 0.1 1.2 1.3 92% 1%ROLLING-STOCK REHABILITATION 0 3,660 3,660 6.1 6.1 100% 2%LOGISTICAL EQUIPMENT 0 1,680 1,680 2.8 2.8 100% 1%STUDIES, WORK SUPERVISION 0 420 420 0.0 0.t 0.7 100X -

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

SUBTOTAL RAILWAY COMPONENT 1,74i' 17,760 19,50.0 2.9 29.6 32.5 91% 13%

D. AIRPORT COMPONENTSECURITY EQUtIPMENT -- TIMBUKTU 0 2,700 2,700 4.5 4.5 100% 2%BAMAKO-SENOU 120 1,860 1,980 0.2 3.1 3.3 94% 1%

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

SUBTOTAL AIRPORT COMPONENT 120 4,560 4,680 0.2 7.6 7.8 97% 3%

TOTAL BASELINE COSTS 16,260 136,200 152,460 27.1 227.0 254.1 89% 100%a=====~ =====s ==:===: e== w=====ea: =~ =ee=5 ===e=ee

PRICE CONTINGENCIES 9,600 21,360 30,960 16.0 35.6 51.6 69% 20%............ ........................ ._.. .......... ..................... __.... ...... _.................. ..... ......... .... ... .................. .._........ ..... _. __...

TOTAL PROJECT COSTS 25,860 157,560 183,420 43.1 262.6 305.7 86% 120%

USS1 = CFAF 600/April 18, 1994

MALITRANSPORT SECTOR PROJECT

IDA CREDIT SUNMARY

(CFA MILLION) (US$ MILLION) X 2 TOTAL------------------------- ------------------------- FOREIGN BASE

LOCAL FOREIGN TOTAL LOCAL FsJREIGN TOTAL EXCHANGE COSTS

A. CAPACITY BUILDING, TRAINING COMPONENT1. PROJECT MANAGEMENT UNIT 60 180 240 0.1 0.3 0.4 75X 1X

2. TRAINING 120 840 960 0.2 1.4 1.6 87X 3X

3. MANAGEMENT DEVELOPMENTTRANSPORT DEPARTMENT 120 660 780 0.2 1.1 1.3 85X 2X

PUBLIC WORKS DEPARTMENT 120 480 600 0.2 0.8 1.0 80C 224. AUDIT COMPLIANCE PROGRAM 120 720 840 0.2 1.2 1.4 86X 2X

SUBTOTAL CAPACITY BLDG. TRAINING COMPONENT 540 2,880 3.420 0.9 4.8 5.7 842 10X

S. ROAD COMPONENTPERIODIC MAINTENANCE REHABILITATION 1,020 19,980 21,000 1.7 33.3 35.0 952 582

RURAL TRACKS AND FERRIES 120 2,1460 2,580 0.2 4.1 4.3 952 7X

ENVIRONMENTAL ACTIONS 60 1,080 1,140 0.1 1.8 1.9 952 31

STDIES, WORKS SUPERVISION 120 1,620 1,740 0.2 2.7 2.9 932 52....... .......... ... .... .. ...... ----- .... ..... ----- -----..-.-

SUBTOTAL ROAD COMPONENT 1,320 25,140 26,460 2.2 41.9 44.1 95 742

C. RAILWAY COMPONENTTRACK RENABILITATION - IST TRANCHE 180 3,720 3,900 0.3 6.2 6.5 952 112

FREIGHT TERMINAL -- KOROFINA 120 1,680 1,800 0.2 2.8 3.0 932 52

STUDIES, WORK SUPERVISION 0 420 420 0.0 0.7 0.7 100X 12....... -------... .. .... . --- -- ------- -- - - ------- -------.. .

SUBTOTAL RAILWAY COMPONENT 300 5,820 6,120 0.5 9.7 10.2 951 17X

TOTAL BASELINE COSTS 2,160 33,840 36,000 3.6 56.4 60.0 94% 100%UU=#==sa=a== ===a === aa=_ ===as ==

PRICE CONTINGENCIES 1,260 5,280 6,540 2.1 8.8 10.9 siX t8X. ........... .... ....... ........... .. ................ ...... ..................................

TOTAL PROJECT COSTS 3,420 39,120 42,540 5.7 65.2 70.9 922 1182

*Government counterpart included, excluding routine road maintenance.

USSI1 CFAF 600/April 18, 1994

V

Financing PlanUS$ million

Foreign % ofExchange Local Total Total

Gov't of Mali 20.8 27.0 47.8 16

IDA 65.0 0.0 6,4.0 21

Othet donors:BOAD 10.7 10.7 4FAD 14.3 14.3 5FED 50.0 50.0 16IsDB 53.6 53.6 18OPEC TBD TBDCanada 7.1 7.1 2France 17.9 17.9 6Germany 19.8 19.8 6

To be funded 3.4 16.1 19.5 6

Total program 262.6 43.1 305.7 100

Estimated IDA Disbursements(US$ million)

= =_ = : _

IDA 199S 199 1997 1998 1999 2000 2001FiscalYear

Dec- Jun- Dec- Jun- Dec- Jun Dec- Jun- Dec Jun- Dec Jun- Dec- Jun-94 95 95 96 96 97 97 98 98 99 99 00 00 01

Annual 0 2.0 4.5 5.2 5.2 7.8 10.4 S2 7.8 5.2 2.6 5.2 1.3 2.6

Cumul 0 2.0 6.5 11.7 16.9 24.7 35.1 40.3 48.1 53.3 55.9 61.1 62.4 65.0

Percent 0 3 10 18 26 38 54 62 74 82 8 94 96 100_- _ . = _ _ _

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Internal Rates of Return (%)

Overall Road component 28 (178-12)Road maintenance and rehabilitation 36 (178-14)Road constructionUrban road in Bamako 16Rural roads 12 - 19

Railway 23AirportFor inclusion in the program, a minimum ERR of: 12

Poverty Category: Not applicable

Map: Transport Network of Mali(Ref. IBRI) 25497)

REPUBLIC OF MALI

TRANSPORT SECTOR PROJECT

STAFF APPRAISAL REPORT

I. COUNTRY BACKGROUND

A. Country Macro-Economic Background

1.1 Mali is a vast, sparsely populated Sahelian country with limited natural resources. The bulkof its agricultural production takes place along the Niger River and in the southern third of thecountry. The habitually long distances between agricultural production areas and consumer centers,along with the poor condition of the country's transport infrastructure, make for high domestictransport costs and temporary inter-spatial disequilibria in agricultural markets. However, recently-enacted measures aimed at liberalizing the regulatory framework have increased competition in theansport industry and have resulted in more efficient service.

1.2 After several false starts, Mali began its adjustment effort in earnest in 1988 and has sinceimplemented a wide range of economic and institutional reforms. These have included completedomestic marketing and price liberalization, reforms to the regulatory framework and tax regime,public enterprise restructuring, and progressive elimination of trade distortions. The civil servicewage bill has been kept in check, and the share of social sector expenditures in the recurrent budgethas been steadily increased. These measures have improved the economic incentive system and haveallowed greater play of market forces in determining economic outcomes. Furthermore, thetransparency and efficiency of public resource allocation has improved. Real GDP growth has goneup from an annual average of less than 2% during the first half of the 1980s to an average of about3.7% between 1988 and 1992. The public sector's fiscal position also improved from a deficit of12% of GDP equivalent in 1991 to 9.6 % in 1993.

1.3 Progress in restoring macroeconomic balances, however, remains slow in a fragile politicalcontext that has seen three government changes between April 1992 and February 1994. During thesecond half of 1992 and for much of 1993, the financial recovery program began to falter. Revenueperformance was weaker than anticipated, and while overall spending was within the programmedlimit, some expenditure items (notably student scholarships) increased significantly in response topressure from various social groups. The fiscal deficit, despite some improvements, remained higherthan expected. Furthermore, balance-of-payment performance has been adversely affected by the fallin the world market price of cotton, the main export crop. More importantly, until recenty thep agram was unable to achieve significant improvements in Mali's external competitiveness and, as aresult, the economy was not able to generate the growth rates needed to allow improved standards ofliving and the alleviation of poverty.

1.4 On January 12, 1994 the govermnents of the CFA zone-of which Mali is a part-decided todevalue the CFA franc by 50% in foreign currency terms. This decision should give a new boost toMali's ongoing structural adjustment efforts and provide a greater chance for success in stimulatingthe economy and, ultimately, achieving the sustained growth necessary for raising the standards ofliving. A new Policy Framework Paper (PFP) has been agreed on with the Government for the 1994-96 period. This outlines important measures, accompanying the devaluation, which are necessary to

2

help restrain inflation and to ensure that significant real depreciation is attained. Other features of thePFP include continued focus on human resource development, improved efficiency in agriculture andthe provision of basic infrastructure services (notably transport), and the continuation of publicenterprise reform and reforms to the regulatory and incentives framework.

1.5 IDA's Country Assistance Strategy to Mali will continue to focus on promoting humanresources and developing the private sector development, extending and rehabilitating basic productiveinfrastructure, improving macroeconomic management, and building institutional capacity. IDAlending to Mali in the next few years is expected to increase substantially to support the Government'sexpanding adjustment effort and to assure that output growth recovers significantly. An emergencyEconomic Recovery Credit has been approved already, and planned operations include a follow-upadjustment operationi, and new investment operations in agriculture, infrastructure, and humanresources. The transport sector project is an important part of IDA's assistance stra jy for Malisince it will allow improved access to, and efficiency of, transport services, which are critical forensuring a quick and strong supply response and stimulating growth.

B. Country/Sectoral Background

1.6 The transport sector is a key factor in Mali's development. Based mainly on subsistenceagriculture subject to a highly unpredictable climate, the Malian economy depends heavily on foreigntrade (40% of GDP) and, therefore, on the efficiency of its international transport systems. Totalimports of various basic consumer and capital goods in 1992 were estimated at nearly 600,000 tons(including 200,000 tons of petroleum products) valued at CFAF 180 billion, while 1992 exportstotaled nearly 200,000 tons (cotton accounting for nearly half) worth CFAF 87 billion. Thedevelopment of local trade, spurred by the increased activity in population movement and in rapidurban growth, has made domestic transport particularly important. Overland transport accounts formost of the trade traffic, with annual volumes on the order of 1.1 billion ton-km (tk) (25% by rail)and 2.2 billion passenger-km (pk) (10% by rail). Transport contributes some 5% of GDP and hasposted average annual growth rates of about 4% in the last few years (see Annex 1 - GDP, andAnnex 2 - Government revenues). Given the country's size and its landlocked position, thedevelopment of Mali and the competitiveness of its economy depend more than usual on theoperational efficiency of its transport system which currently faces a number of problems.

1.7 Because it is landlocked, Mali's imports and exports are dependent on the neighboringcountries' overland routes and seaports. Until recently, Government intervention in intionaltransport (particularly through freight allocation and rate-setting) was party responsible for the highcost of international transport cqaivalent to about 30% of the country's import bill. About half ofinternational traffic is by road (mainly from Abidjan), while the rest is by rail (from Dakar). Roadtransport suffers from poor performance and insufficient competition in the trucking industry andfrom a lack of adequate maintenance of road infrastrucrre. Rail transport has shown significantimprovements in operational and financial performances in recent years, but the Re'gte du Ohemin deFer du Mali (RCFM) still needs to develop a decidedly commercial orientation and improvecollaboration with the Senegal railway company, the Socidte Nationale de COiemins de Fer du Senegal(SNCS) into a true partnership. River barge transport services are provided by the private sector forpart of the year when the Niger river permits navigation; the parastatal Conpagnie Malienne deNavigation (COMANAV) has also intermitently operated freight and passenger service at a lossdownstream from Koulikoro. Two new airlines, Mali Timbuktu Air Service (MALTAS) and Air

3

MALISA, were created in 1990 and 1993, respectively, with more than 80% private sectorparticipation to provide local air transport services; and Mali rejoined the international carrier AirAfrique in 1992. As a result of the receht devaluation of the CFA franc, the volume of imports isexpected to decrease somewhat; the share of international transport in the country's import bill maydecrease from 30% to about 20% to 25% since only a part of the fuel price increase is being passedon the users, with the rest being absorbed through a decrease in fuel taxes. For domestic traffic,which plays a crucial role in food security during recurring periods of drought and is handlicpredominantly by road, the impact of the devaluation is again expected to be muted since vehicleoperating costs are expected to increase by some 40%, i.e., well below price increases of importedgoods.

1.8 While efficient and competitive transport is necessary to the country's development, transportinfrastructure is expensive to construct and maintain, thus placing heavy demands on the scarceavailable resources. The parity change of the CPA franc will increase road maintenance costs bysome 40% (in CFAF). Therefore, it will be more essential than ever that future investment andmaintenance works be carefully screened with particular emphasis on maximizng potential foreign-exchange savings.

H. SECTOR STRATEGY AND ISSUES

A. Strategy

2.1 To bring the transport sector in line with Government's macro-economic adjustment reforms,the then Ministere de l'Equipement et de l'Habitat (MEH) decided in early 1991 i. set up a TransportSector Committee (TSC) which brought together all the sector's operators, public and private, in afirst-ever attempt to bring a particiatorv approach to bear on identifying key sectoral problems anddeveloping solutions. The TSC mnet a number of times and, with the assistance of facilitators broughtin for this purpose, prepared a draft Declaration of General Transport Sector Policy (DGTSP). Thiswas fully discussed with IDA and formally adopted by Govermnent on Novemnber 2, 1993 (Annex 3).The Policy introduced fndamental changes in sector objectives in five major respects. It pledged itscommitment (a) to encourage competitiveness and give a bigger role to the private sector in thetransport and public works industries; (b) to restructure public enterprises, particularly the RCPM,and to replace force account works in the highway sector, including road maintenance with works bycontract; (c) to use economic criteria in transport investment choices; (d) to give infrastructuremaintenance tie highest priority in resource allocation; and (e) to take more responsibility for ruralroads, in particular, and the environment, in general. The new strategy is discussed fully in the MaliTransport Sector Memorandum (Report No. 12095-MLI, green cover issued in October, 1993).

2.2 The DGTSP next translated these general objectives into a series of more detailed sub-objectives, all geared towards transforming the main obstacles into a smooth operation of the sectorand boosting its efficiency at all levels and over all sub-sectors: (a) raising the efficiency of thetransport sector administration by redefining its functions and reorganizing and modernizing itsservices; (b) improving the efficiency of international transport corridors; (c) stepping up competitionbetween land freight modes and enterprises; (d) absorbing the surplus capacity of the truckingindustry; (e) restructuring public enterprises to upgrade their performance by making them fullycommercialy viable; (f) upgrading road maitenance by reorganizing its agencies and work methods

4

and allocating adequate resources; (g) improving infrastructure cost recovery; (h) substantiallyincreasing attention to rural trarsport; and rinally, (i) enhancing transport safety, particularly inpassenger transport. To ensure realization of these sub-objectives, the D(GTSP proposesimplementation of a series of institutional, organizational, regulatory and financial measures andrestructuring of public enterprises. All these measures have been agreed upon by the Governmentand IDA.

B. Issues

2.3 Generally speaking, the transport sector administration has not evolved in over two decades.The local administration is fragmented into a number of independent, specialized services representingthe ministry and it continues to suffer from serious understaffing at all professional levels. Therefore,the central administration has not been able to perform its design, planning, regulatory, leadership andsupervisory functions as required, and instead has confined itself to routine management tasks,notably the inefficient execution of road works by force account. Serious capacity building efforts arerequired to remedy this situation.

2.4 The transport sector's recent evolution and its medium-term development prospects reflect thestructural adjustment policy initiated by Malian authorities in the early 1990. Until the end of 1990,the transport system was closely controlled by the Government through the national transport office,Office National des Transports (ONT). The rigidities inherent in this type of administrationconsiderably impaired its efficiency and took its toll on the Malian economy. The recent abolition ofthe ONT and the liberalization of transport tariffs constitute a major step forward; they have alreadyallowed for a more flexible management of the system. Competition between transport modes andenterprises, nevertheless, remains generally insufficieLt and the temptation to reintroduce regulation toprotect the interests of certain transport sector operators is still present. This was demonstrated bycertain interventions during the Conference of Transport Authorities and Operators (Conference desEtats-Gbieraux des Tranwsports) held in March 1992.

2.5 The Government withdrew from the road transport industry during the 1980s, but it continuesto be directly involved in transport services through three public enterprises: the RCPM (railways),the Aeroports du Mal (ADM) (airports) and the COMANAV (river shipping). The restructuring ofthese public enterprises is a component of the medium-term strategy for the transport sector. Theobject of the strategy is generally two-fold: (i) to make these enterprises commercially viable, and(ii) to terminate government financial assistance to their operations.

2.6 The restructring plan of the COMANAV was decided upon by the Government on April 28,1993 and it is now under implementation. It is based on privatizing its metal construction and otherauxiliary activities, as well as converting its river transport activities to a smaller-scale commercialoperation. The Govermnent wiUl expedite presentation of the findings of the ongoing studiesconcerning ADM's management set-up and its conversion into a mixed-capital company withsubstantial management autonomy.

2.7 In the future, the Dakar/Bamako rail corridor will face increased competition from theAbidjan/Bamako road link for international freight traffic, RCFM's main market. The railway willplay an essential role in the Malian transport system only if the competitiveness of rail transport andits quality of service can be substantially improved, and transport costs, reduced. Improving the

5

financial performance of RCFM is also required for sustainably suppressing all Government financialoperating contributions (except for possible compensation to cover public service obligations). Thekey actions which will be taken to achieve these objectives are: (a) restructuring RCFM into a fullycommercial enterprise; (b) implementing a staff rationalization program; (c) significantly enhancingcommercial and operational integration of international freight services provided by RCFM andSNCS; and (d) selectively rehabilitating infrastructure and improving operational efficiency.

2.8 RCFM's staff decreased slightly from 2400, in 1988, to 2300, in 1992, but despite continuousimprovements in staff productivity, it remains largely overstaffed. Unit staff costs increasedsignificantly in 1991 and 1992 due to the Government's decision to increase wages. The total staffcost/revenue ratio, which was very favorable in 1989 (19%), deteriorated accordingly (29% in 1992).It is now reaching a point beyond which RCFM's financial situation would be seriously jeopardized.Telecommunication facilities are defective and hinder operational efficiency. The track needs to beselectively rehabilitated. Freight terminal facilities in Bamako are inadequate. Improvement is alsoneeded in locomotive maintenance and utilization, as well as in wagon control. Substantial progresshas been achieved in RCFM management's commercial approach to railway activity, and this processhas been enhanced by a contrat-plan covering the 1992/1993 period. The main obstacle to improvingthe competitiveness of the Dakar/Bamako rail corridor in international freight transport is theinsufficient and ineffective cooperation between RCFM and SNCS in the fields of marketing,commercialization and traffic organization.

2.9 Rail and road transport enterprises have evolved in different directions over the last decade.If the efficiency of international rail transport has improved considerably, road transport continues tosuffer from excess capacity due mainly to the acquisition of additional trucks for the purpose oftransporting food aid during the severe drought of the mid-1980s. As a result, transport prices havebeen falling steadily for several years to the point that they now cover only a fraction of theoperators' true costs. This prevents any modernization of the fleet, and leads to overloading practicesthat severely damage the road network. Thus, the road transport industry is experiencing a seriouscrisis. Surface freight transport is characterized, first of all, by excess fleet capacity.

2.") Over the past two decades Mali has put substantial effort into the development of its transportinfrastructure, particularly its road network. Nevertheless, its road density remains one of the lowestin West Africa, with 1.18 km of road per 100 kmin, compared to 3.1 for the West African EconomicCommunity, the CommunautO Economique de l'Afrique de l'Ouest (CEAO), as a whole. Inadequateresources allocated to the maintenance of the road and rail networks, lack of rational programming,and the inefficiency of force account routine maintenance have led to substantial maintenance backlogsand have accelerated the deterioration of the existing network. IDA's Fifth Highway Project (Credit1629-MLI) even devoted part of the Credit, until 1991, to the routine maintenance of the prioritynetwork to reduce the cumulative backlog. The Letter of Transport Sector Policy signed in October1990 and the examination of annual investment plans under the adjustment program slowed thisprocess.

2.11 Since the Road Fund was abolished in 1990, the actual resources allocated to routine roadmaintenance (about US$4.6 million a year) have condinued to fall below the theoretical appropriationsset forth in the natonal budget, and far short of the real needs (estimated at US$7 to 8 million ayear), despite the large volume of govermnent revenues contributed by road users. Maintenancescheduling, already inefficient, becomes very much a hit-or-miss affair under these conditions.During the 1985-1992 period, total expenditures on the road ietwork averaged approximately US$32

6

million a year (1.4% of GDP). New construction represented 43% of that total, with rehabilitationand periodic maintenance representing 37% and routine maintenance, only 20%. External financingaccounted for nearly 80% of the total.

2.12 Annual requirements to keep the existing road network in good repair-without anyexpansion-are estimated at US$36 million (3.3% of the renewal value of the network, estimated atUS$11 billion), i.e., about the same level of road expenditures as over the period 1985-92, but withprojected maintenance expenditures that are 70% higher. Preventive periodic maintenance is essentialto protect the paved network. In the DGTSP, Goverment undertakes to limit investments in the1994-98 period to those provided for in the project and it will allocate the following minimum annualamounts (calculated aftei devaluation) to the routine road maintenance budget:

Table 2.1 - Minimal anual routine maintenance budget allocations(1993 value)

Year 1994 1995 1996 1997 1998

Amount(US$ million) 6.1 6.5 6.9 7.0 7.2

2.13 The major element of the strategy concerning financial relations between the Government andthe transport sector pertains to the recovery of infrastructure costs. The objective is to ensure, overthe medium term, that infrastructure maintenance and renewal costs are borne entirely by users, eachin proportion to the cost generated by its infrastructure us.

MI. LESSONS LEARNED AND RATIONALE FOR IDA INVOLVEMENT

A. Previous IDA Operations in the Sector and Lessons Leamed

3.1 In just under three decades, IDA has financed five highway and three railway projects for atotal of (current) US$130 million. The implementation of all these projects was marked byadministrative sluggishness, procurement delays, slow disbursements, insufficient resource allocationfor routine maintenance, inefficient execution of works by force account, payment delays tocontractors, and poor programming of investments and works. A tendency to favor new investments,often with inadequate rates of return, over maintenance has been persistent throughout the period.

3.2 The most salient lessons from the ongoing Fifth Highway Project are the following:

(a) procurement delavs have been the single most serious problem;

(b) maintenance performed by force account was lower in quality, but higher in cost thanif the works had been contracted out to the private sector;

(c) it has been difficult to get an accurate picture of the cost of force account worksbecause Government did not keep adequate project accounts;

7

(d) the issues of rural roads and the environment were not explicitly addressed;

(e) the cost and price of transport decreased, especially for international traffic, but thesesavings were not passed through in the reduction of prices of consumer gocjs;

(f) project-by-project efforts to develop a more rational approach to investment planning,to strengthen institutional capabilities and to improve sub-sector performance have hadlittle success; and

(g) donor coordination has been weak and little synergy has developed.

3.3 These past experiences have been translated into the design of the proposed project as follows:

(a) Design of a transport sector program which places transport development in a policy-based, sect3r-wide framework developed by the Government and supported by alldonors. Government and IDA cooperated closely in carrying out joint sector work toanalyze issues and devise action plans for restoring sector efficiency. The Governmentthen called a meeting of donor agencies to discuss the strategy and solicit donoragency support for implementing it over the next five-year period;

(b) The necessity of implementing polica reforms through a coordinated investmentProgram. This keeps the focus on the broad sectoral and developmentobjectives-particularly where economic and financial ministries are concerned-toresolve critical issues related to sector financing and strategic policy-seting on issuessuch as restructuring public enterprises and increasing the role of the private sector.The proposed program and project investments are geared directly toward attainingthe goals set out in the DGTSP; and

(c) The need to carefully define the mechanics of resource allocation for routinemnaintenance and to ensure quick payment of local contractors, if the development andstrengthening of the role of the private sector is to succeed. This requires thereorganization of the public administration and a revolution in the way of thinking inpublic works construction and in the provision of transport services. The proposedproject foresees the establishment of an autonomous account in a commercial bank forroutine road maintenance managed by the Direction Nauionale des Travaux Publics(DNTP), and the execution of works by private sector companies under delegatedcontract management, notably to a private agency, AGETIPE-Mali.

B. Rationale for IDA Involvement

3.4 The reform program launched by the Government in the transport sector calls for support toimprove the sector's efficiency in order to reduce transport costs, help make the Malianeconomy-paricularly the export sector-more competitive, and stmulate the development ofagriculture by opening up isolated rural areas in coordination with the Ministry for RuralDevelopment. The institutional reforms proposed are geared toward modernizing and streamliningthe administration, withdrawing it from management and execution of works and provision ofservices, and strengthening its investment planning, programming, and supervision capabilities. The

8

new orientation aims at strengthening the role of the private sector, both in the transport industry,where administrative constraints will be eliminated, and in public works, where the proposedmeasures will foster the development of local contractors and engineering firms.

3.5 Considering Mali's resources, external aid is needed to successfully implement the reformand investment program. With its long and extensive experience in the transport sector, IDA'sparticipation would be essential to assisting Government in coordinating the contributions of alldonors in the framework of a sectoral program that includes priority projects offering reasonable ratesof return, together with support for reform measures.

IV. THE PROGRAM AND THE PROJECT

A. Program and Project Objectives

4.1 The proposed Transport Sector Program was designed to tackle the persistent problems ofMali's transport sector by replacing the earlier, and consistently unsatisfactory, project-by-projectapproach with a sustainable framework for implementing a coherent, sector-wide developmentstrategy. Thus, the proposed program pursues a continual process of sound sector policy makingtranslated into rational investment decisions tied to Mali's macroeconomic background and absorptivecapacity. In selecting the sector program approach, a choice had to be made between a smaller,single subsector project versus an all encompassing sector-wide operation. Because of the need todevelop a rational sector development strategy, and to reduce distortions within the sector, both interms of investment planning and resource allocation, the latter option was chosen. In the Malicontext, a subsector project approach could neither achieve the required fundamental sector reform,nor could it meet the criteria of sustainability. It has led Government to elaborate its Declaration ofGeneral Transport Sector Policy, which constitutes the framework for the program supported by theIDA project and by those of the other donor agencies active in the sector.

4.2 The methodology used in designing the sector program included the following steps: (a)preparing a thorough analysis of all subsectors (Transport Sector Memorandum) in close associationwith the TSC and the Govermment to arrive at a broadly internalized consensus on sector issues andthe need for change; (b) combining sector analysis and strategy development with project preparationmissions using the seminar approach to attract multi-disciplinary groups from the Government, as wellas private sector representatives, focussing on the need for a new sector development strategy and theformulation of policy measures to implement it; and (c) forging alliances within the donorcommunity, heretofore uncoordinated, and between donors and Government, to adopt a commonapproach to a balanced sector development in order to ensure consistency between strategy andprogram financing.

4.3 The principal program and project objectives are:

(a) to strengthen the sector management and performance through reorganization andlocal capacity building;

(b) to restructure the transport sector parastatals;

9

(c) to modify the regulatory and institutional ;ramework in order to promote increasedprivate sector participation in tne provision of services and execution of works;

(d) to rehabilitate and maintain a priority network of transport infrastructure; and

(e) to improve the efficiency of transport operations and reduce transport costs.

B. Program and Project Description

4.4 The proposed program is designed around the Government's five-year (1994-98) program ofscctoral reforms contained in the DGTSP, supported by a parallel donor-assisted progran ofinvestment. Since existing infrastructures do not have any capacity problems, the investment programfocuses essentially on their conservation and consolidation. The program has four components:

(a) a capacity building and traiing conmonent focusing on support for theimplementation of sector policy measures, the modernization of sector administration,and the reorganization of transport services. This component will be fully financed byIDA;

(b) a road component to finance a five-year program focusing on the rehabilitation, androutine and periodic maintenance of a priority network accompanied by environmentalactions, improvement of rural tracks, purchase of ferries and equipment for rouineroad maintenance, and improvement of Bamako's main urban roads system. Thiscomponent will be cofinanced by donors. The IDA project will finance some 19% ofthis component;

(c) a railway component designed to help the Govermment and RCFM implement theprogram to restructure the railway business and put it on a more commercial footing,and finance a five-year investment program, focusing mainly on improving trafficsafety and preserving existing assets. The IDA project will finance some 28% of thiscomponent; and

(d) an airport component to finance safety equipment for the Timbuktu and Bamako-Senou airport and various studies. This component is fully financed by other donors.

Capacitv Building and Trainin Comlonent (US$5.6 million, fully financed by IDA)

4.5 In light of the poor results obtained under earlier road and railway projects in the area ofdevelopment of the Government's management capacities, the project puts particular emphasis oncapacity building. In accordance with recent regional directives, technical assistance and trainingneeds have been carefully reviewed. The technical assistance program is based on the following threebasic concepts: (a) external support will be provided by short-term consultants who will assist withwork program organization and prenaration, carry out technical tasks that the local personnel areunable to perform by themselves, monitor the performance of other tasks, and provide advice andguidance when necessary; (b) groups of local and external consultants will be encouraged to bidjointly, particularly for studies, with a view to developing capacities in the Malian private sector.

10

Agreement was obtaied dwing negotatons that all executing agencies will have adequatecounterpart staff in place before the begining of any technical assistance assignments (para. 5.3(a)).The summary of estimated consulUing services is presented, in staff-month, in Table 4.1 below,including studies, training (Centre de Perfectionnement des Transports et des Travaux Publics -CPTP) and project audits:

Table 4.1

Summary of Estimated Consultina Services(Staff-Months

TotalTechnical -

Assistance Training Studies Audits CB IS

Coordinator 6 _ ___ 6DNT 27 34 27 34

DNTP 20 10 30

CPTP 116 116

Audits 36 36

Total 53 116 44 36 179 70

CB: Capacity Building; IS: Implemenaion Support

4.6 Modendzaton of Sector A aton. The lack of sufficient resources and expertise onthe part of the two main Directorates responsible for administering sector activities-the DirectionNationale des Trnsports (DNT) and the DNIP-has led to weaknesses in sector management andinadequacies in the sector's store of scientific knowledge (insufficient and incomplete statistics).Resource allocation has been dominated by political choices, or choices of donors, rather than byeconomically-dmied priorities. The sector approach adopted for this project is geared towardsthe development of Mali's programming capacities. The definition of a clear strategy and an optimuinvestment program reflecting the macroeconomic framework is expected to ensure not only a morerational use of scarce resources, but also an improved coordination of external aid.

4.7 Investnt gig . It was confirmed during negotiations that investments in thetransport sector would be limited to those included in the program adopted by the Government andspecified in its January 4, 1994 letter. All actions not included in the program would require priorapproval from IDA. Throughout the period of program execution, the Government will prepare andsubmit to IDA and all co-donors by July 15 of each year at the latest, a rolling three-year investmentprogram for the transport sector, ranking projects according to their relative economic prority, andtaking into account the Govermnmet's infrasuc maitenance capacity and the financial capacitiesof the Govermment and/or its relevant agencies and enteprises (para. 5.3(b)). Delivery to IDA of a

11

letter confirming Government's five-year transport sector investment program was a condition ofBoard presentation (para. 5.4(a)). Each annual program will subsequently be adopted by theGovernment in agreement with the donor community.

4.8 The technical assistance to the DNT (capacity building - 27 person/months) will helpstrengthen its general studies and planning capacity, and develop its role as transport monitoringagency through reorganization and computerization of DNT's units. It will help in:

(a) setting up a monitoring unit, charged with establishing and maintaining a transportdata bank, and to train the unit staff;

(b) re-registering the vehicle fleet and computerizing vehicle registration (gray card) files;

(c) organizing and carrying out information and sensitization campaigns oriented towardfreight carriers on a series of sector-related issues;

(d) reviewing the Traffic Code and promoting the adoption of its implementingregulations (transport of hazardous materials, special convoys, road signs, penaltiesfor violations, etc.), road safety and user sensitization campaigns, providinginstruction on the Highway Code in schools, specialized training for driving schoolinstructors and driving test examiners; and

(e) acquiring miscellaneous office equipment (computers, photocopiers, etc.).

4.9 The consulting services for studies (34 person-months) will cover the following:

(a) analysis of the legal framework governing transport, and revision of the road-usertaxation system to improve the recovery of road infrastructure maintnance andrenewal costs. The studies will be carried out during the first year of project exewtioneffectiveness; study recommendations will be reviewed with IDA and implemented, asagreed, no later than two years after credit effectiveness, as confirmed duringnegotiations (para. 5.3(c)); and

(b) other studies, to be mutually agreed with IDA, and preparation of a future project.

4.10 In addition, a vehicle inspection program will be set up. Inspection is to be contracted to oneor more private finrs accredited by the Ministry of Transport; they will be paid with proceeds fromvehicle inspection fees. The TOR and a list of vehicle inspectors acceptable to IDA were delivered asconions of negotiations. The signing of a contract with the consultants hired to provide thetechnical assistance mentioned in 4.8 and 4.9(a) above is a condition of effectiveness (paras. 5.5(a)and (b)), while the signing of the agreement(s) with the firm(s) responsible for vehicle inspection is acondition of disbursement of the DNT technical assistance subcomponent. Agreement was reachedduring negoftations that vehicle inspections will be carried out by independent private firms incoordination with the re-registration exercise (para. 5.3(d)), that it will be launched no later than sixmonths following credit effectiveness, and that the first vehicle inspection campaign will last for atleast two years, until re-registration of all of the existng vehicle fleet is completed. Vehicles notmeetng the technical inspection reqirements will be taken out of circlaon and placed on a

12

temporary three-month registration to allow time to make the necessary repairs. If the vehicle doesnot pass inspection a second time, the registration will be permanently withdrawn.

4.11 The assistance to the DNTP (capacity building: 20 person-months) will focus on two aspects:(a) DNTP's internal reorganization, which will cover the overhaul of its accounting systems andcomputerization, installation and testing of the new accounting system, and training of DNTP staff(..apacity building); (b) setting up of road network management systems, organization of its networkmanagement unit, and establishment, testing and maintenance of a road data bank, and an investmentprogramming system. TOR and a short-list, acceptable to IDA, for this technical assistance weredelivered as a condition of negotiations. A technical and financial audit of the Centre National deRecherche d'Experimentation pour le Btiment et les Travaux Publics (CNREX) will be carried outwith a view to its reinforcement. An inventory of rural roads will be taken and will include adefinition of their status, the services responsible for them, the method of financing theirmaintenance, and their construction and maintenance standards. The consultants will assist in thepurchase of computer equipment and vehicles required for the restructured directorate, as well as inthe purchase of axle weighing equipment.

4.12 The training subcomponent covers support for the operation of CPTP, estimated at 36person-months of expatriate experts and 80 person-months of local personnel for courses givenlocally, plus some specific short-term training courses abroad within the framework of a trainingprogram intended both for administration staff and private contractors' personnel (see Annex 4 onprovisional training program from a study, which was carried out in late 1993, to determine thesector's training needs with overall training program, detailed by specialty and modules, local trainingand training abroad, training centers identified, costs, etc.). Specific seminars on environmentalaspects will be organized for those involved in the road subsector, particularly for regional directorsand chiefs of local authority subdivisions. As agreed during negotiations, CPTP will be allowed totrain staff from the private sector in transport sector specialties not taught in other centers in Mali(para. 5.3(e)).

4.13 The local Project Coordinator will be provided with technical assistance during project start-up to develop the monitoring system for the Sector Program and ensure its satisfactory launching; hewill also receive logistical support. The signing of a contract for this assistance is a condition ofeffectiveness (para. 5.5(a)).

Road Component (US$208 million, of which US$40 equivalent is IDA-financed)

4.14 The road component is, by far, the most important under the program and covers fivesubcomponents. The first of these is routine mainenance (US$33.7 million) for the priority networkof roads, covering a total of nearly 9,000 km, is financed mostly by the Government. TheGovernment will allocate the necessary resources as indicated in para 2.12 and guarantee theiravailability by paying them monthly in advance into a separate account opened in a coinmercial bankin the name of, and managed by, the ministry responsible for roads. This account was opened as acondition of negotiations. The delivery to IDA of an "arr&e" modifying the Arrete creating theroutine road maintenance special account was a condition of Board prese on (para. 5.4(b)). Thiscomponent will be executed mainly by private contractors (75% at least), with only a small partcarried out by force account (25%), as indicated in the DGTSP. Contract management for alroutine road maintenance to be carried out by private contractors will be delegated to a private

13

agency. This agency will be governed by the terms of an agreement to be concluded with DNTP andby a procedures manual, both of which must be acceptable to IDA. Agreement was reached duringnegotiations that routine maintenance is to be handled by delegated contract management for theentire life of the project. The delegated contract mnanager, at least during the first two years of theproject, will be AGETIPE-Mali (para. 5.3(f)).

4.15 The second subcomponent concerns the periodic maintenance (US$52 million) of 778 km ofpaved roads, 819 km of earth roads and 615 km of classified tracks, and the rehabilitation (US$66million) of 383 km of paved roads, 857 km of earth roads and 660 km of classified tracks in thenorth. The works will be carried out entirely by private contractors; priority will be given to thepaved network to ensure that it is safeguarded and consolidated. The IDA project would financeperiodic maintenance/rehabilitation of 413 km of paved roads and 188 km of earth roads estimated tocost US$25 million or some 20% of this subcomponent.

4.16 The third subcomponent consists of the construction of about 500 Ikn of rural tracks andthe procurement of four ferries (US$14 million) to serve zones that presently lack reliable roadaccess. These tracks, located outside the present major agricultural project areas such as those of theCampagnie Malienne de D&veloppement des Textiles (CMDT), or the Office du Niger cotton zones,will be constructed to open up regions that are underserved, but which possess agricultural potentialthat they have the ability to develop. Lhe communes, or other beneficiary authorities, will beequipped under the project with non-mechanized small-scale routine maintenance equipment financedby the Government to maintain the tracks. The communities concerned could participate in theconstruction works, for which labor-intensive methods may well be competitive, following the recentchange in CFAF parity; the choice of subprojects was made in coordination with the Ministry ofRural Development. The IDA project will finance 123 km of rural tracks (US$3.0 million) and theprocurement for two ferries (US$1.3 million) or some 28% of the cost of this subcomponent.

4.17 The fourth subcomponent concerns the implementation of specific works to improve theenvironent and safety along the roads improved under the periodic maintenance and rehabilitationsubcomponent (planting, improvement in villages, safety, etc.). The amount of this subcomponent isabout 5% of the periodic and rehabilitation program (US$5.9 million-IDA financing: US$1.3million).

4.18 The fifth subcomponent comprises improvement of the Faladie-Pont des Mas road andits connection with the new bridge over the Niger River in Bamako (US$23.8 million). This projectwas approved and financed before the adoption of the DGTSP; IDA will not participate in thefinancing of this component.

4.19 The sixth subcomponent covers studies, supervision and delegated contract management(US$8 million) in connection with the road works under the project. IDA will finance 36% of thissubcomponent (US$2.9 million), covering the AGETIPE delegated contract management and theengineering studies and construction supervision of the subprojects financed by IDA.

4.20 The seventh subcomponent finances equipment and parts (US$5 million) for routine roadmaintenance. The equipment will be procured by or for the new equipment rental company. IDAwill not participate in the financing of this subcomponent.

14

Rail ComRgnent (US$32.5 million, of which US$10.2 million equivalent financed by IDA)

4.21 The program supports a major effort to restructure RCFM, with the main objective of puttingits operations on a financially sustainable commercial basis and eliminating the need for anyoperational subsidies. Details of the restructuring policy are described in Annex 5. It will besupported under the project through the execution of the 1994-98 tranche of a longer-teiim investmentprogram (US$53.57 million) agreed on between RCFM and the donor community. The investmentprogram is technically sound and economically justified. It covers (a) studies and technical assistancefinanced by IDA (US$0.70 million); (b) infrastructure improvements (track rehabilitation and freightterminal - US$21.5 million; IDA financing: US$9.5); (c) telecommunications (US$1.3 million); (d)rolling stock (US$5.7 million); (e) miscellaneous logistical equipment (US$3.3 million). The railcomponent will be financed by the Caisse Franfaise de Developpement (CFD), the CanadianInternational Development Agency (CIDA) and IDA. IDA's contribution will finance studies andtechnical assistance, construction of the Bamako-Korofina terminal, and the acquisition of ballast forthe track rehabilitation program.

4.22 The first subcomponent consists of studies, supervision of works, and short-termconsultancies (about 50 person-month) to improve traffic organization and set up new bodies tofacilitate technical and commercial integration of international freight and passenger services with theSNCS.

4.23 The second subcomponent relates to infrastr e rehabilitation and maintenance: (a)execution of the first tranche of a 10-year track rehabilitation program - this first tranche will focuson those stretches of track in particularly bad condition where derailments are frequent; and (b)transfer of the freight terminal, whose inadequate layout is the reason for the inefficiency and highcost of its operation, from its present location in downtown Bamako to the Korofina site. Thistransfer will free up high-value land in the center of Bamako for urban developmnent purposes, andwill also ease freight operations. Part of the cost of the new terminal will be borne directly by theprivate sector (container terminal under construction, storage facilities).

4.24 The third component will involve the itrprovement of telecommunications systems throughthe rehabilitation of the highly dilapidated existing network, and the imnprovement of operationsthrough the creation of a dispatcher/train radio network and a local radio network for the Bamakoarea.

4.25 The fourth subcomponent, rolling stock, comprises (a) the acquisition of three shuntinglocomotives (1,100 hp) to replace locomotives to be written off; (b) replacemnent of vacuum-brakingsystems on part of the freight car fleet by compressed air-braking systems. The use of air brakes willincrease the safety of movement of heavy trains (those carrying petroleum products and containers)and will prevent accidents such as the derailment that occurred in Bamako in early March 1993.

4.26 Logistical equipment, the fifth subcomponent, concerns: (a) rehabilitation of a tampingmachine, service railcars and small railgang cars for the maintenance of tracks and thecommunications network; (b) purchase of minor equipment for track maintenance; and (c) equipmentand tools for the rolling stock shops and miscellaneous other purposes.

15

Aip_ort Component (US$7.8 million, fully financed by co-donors)

4.27 This component covers: (a) installation of safety equipment at the airport in the tourist city ofTimbuktu; (b) improvements in the Baniako airport consisting of fencing around the airport to preventpeople and animals from coming in and straying over the runways and other security measures; and(c) studies of future programs for airports that could be implemented in the event of an acceptablerate of return and a favorable macroeconomic context. The public agency ADM, in liaison withASECNA, will be responsible for the execution of this component.

C. Program and Project Cost and Financing

4.28 The total cost of the program, including routine road maintenance, is estimated at US$254million, excluding taxes in Mali, and including physical but not fmancial contingencies. Of this, theproposed IDA credit of US$65 million equivalent will finance 21% of the program, excluding dutiesand taxes. The exchange rate used in the estimate is US$1 = CFAF 600; estimated inflation indicesare in Table 4.2. Program costs are summarized in Table 4.3 below, the IDA project costs areseparated out in Table 4.4, and a detailed breakdown by component is given in Annex 6. Theforeign exchange components are around 86% in the program (which includes the routine roadmaintenance), and 92% in the project, the only local currency costs being for local personnel.

Table 4.2: Estimated Inflation Rates (%)

FY 1994 1995 1996 1997 1998 1999 2000 2001

Local currency 35.1 8.1 3.5 2.7 2.7 2.5 2.5 2.5

Foreign 3.4 2.9 3.0 2.7 2.7 2.5 2.5 2.5

currency* I_I__I__I_

* BP.6.50, October 1993

4.29 The portion of the IDA Credit relating to the rail component will be onlent by Government toRCFM on the following conditions:

(a) the track rehabilitation and studies subcomponents will be conceded to RCFM in grantform; and

(b) for other subcomponents, the amounts will be onlent at a 7.5% interest rate, with 10years grace and a 20 year repayment period. The exchange risk will be assumed byRCFM.

4.30 This arrangement will be covered in a subsidiary loan agreement between the Government andRCFM. Signature of a subsidiary agreement acceptable to IDA, is a condition of disbursemet forthe railway component (para. 5.6(a)). A draft Project Agreement has been concluded between IDAand RCFM.

TABLE 4.3MALI

TRANSPORT SECTOR PROJECTPROGRAM COST SULMARY

(CFA MILLION) (USS MILLION) X X TOTAL------------------------- ------------------------- FOREIGN BASELOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL EXCHANGE COSTS

A. CAPACITY BUILDING, TRAINING1. PROJECT MANAGEMENT UNIT 60 180 240 0.1 0.3 0.4 75X -2. TRAINING 120 840 960 0.2 1.4 1.6 87X 1t3. MANAGEMENT DEVELOPMENT

TRANSPORT DEPARTMENT 120 660 780 0.2 1.1 1.3 85X 1XPUBLIC WORKS DEPARTMENT 120 480 600 0.2 0.8 1.0 80X -

4. AUDIT COMPLIANCE PROGRAM 120 720 840 0.2 1.2 1.4 86X 1t

SUBTOTAL CAPACITY BLDG. COMPONENT 540 2.880 3.420 0.9 4.8 5.7 84X 2X

B. ROAD COMPONENTROUTINE MAINTENANCE 8,340 11,880 20,220 13.9 19.8 33.7 59X 13XPERIODIC MAINTENANCE REHABILITATION 3,480 67,020 70,500 5.8 111.7 117.5 95f 46XRURAL TRACKS AND FERRIES 420 8,100 8,520 0.7 13.5 14.2 951 6XENVIRONMENTAL ACTIONS 360 3,180 3,540 0.6 5.3 5.9 90X 21BAMAKO URBAN ROAD 720 13,560 14,280 1.2 22.6 23.8 951 91STUDIES, WORKS SUPERVISION 540 4,260 4,800 0.9 7.1 8.0 891 31EQUIPMENT FOR MAINTENANCE 0 3,000 3,000 0.0 5.0 5.0 1001 21

SUBTOTAL ROAD COMPONENT 13,860 111,000 124,860 23.1 185.0 208.1 89% 821

C. RAILWAY COMPONENTTRACK REHABILITATION - 1ST TRANCHE 1,560 9,600 11,160 2.6 16.0 18.6 861 7XFREIGHT TERMINAL -- KOROFINA 120 1,680 1,800 0.2 2.8 3.0 931 1tTELECOMMUNICATIONS 60 720 780 0.1 1.2 1.3 92X 1tROLLING-STOCK REHABILITATION 0 3,660 3,660 6.1 6.1 1001 21LOGISTICAL EQUIPMENT 0 1,680 1,680 2.8 2.8 1001 1tSTUDIES, WORK SUPERVISION 0 420 420 0.0 0.7 0.7 100X -

SUBTOTAL RAILWAY COMPONENT 1,740 17,760 19,500 2.9 29.6 32.5 911 131

D. AIRPORT COMPONENTSECURITY EQUIPMENT -- TIMBUKTU 0 2,700 2,700 4.5 4.5 1001 2XBAMAKO-SENOU 120 1,860 1,980 0.2 3.1 3.3 94% 1%

SUB'OTAL AIRPORT COMPONENT 120 4,560 4,680 0.2 7.6 7.8 971 31

TOTAL BASELINE COSTS 16,260 136,200 152,460 27.1 227.0 254.1 891 1001

PRICE CONTINGENCIES 9,600 21,360 30,960 16.0 35.6 51.6 69X 201.. . . .. . . . .. . . . .. . . . ...... ...... _ .... .... __^. .. .. I -- - - - - - - - - - - - -- - - - - - - - - - - -

TOTAL PROJECT COSTS 25,860 157,560 183,420 43.1 262.6 305.7 861 1201

USSI = CFAF 600/April 18, 1994

TABLE 4.4MALI

TRANSPORT SECTOR PROJECTIDA CREDIT SUMMARY

(CFA MILLION) (US$ MILLION) % X TOTAL-------------------- ------------------------- FOREIGN BASE

LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL EXCHANGE COSTS

A. CAPACITY BUILDING, TRAINING COMPONENT1. PROJECT MANAGEMENt UNIT 60 180 240 0.1 0.3 0.4 75% 1%2. TRAINING 120 840 960 0.2 1.4 1.6 87% 3%3. MANAGEMENT DEVELOPMENT

TRANSPORT DEPARTMENT 120 660 780 0.2 1.1 1.3 85X 2%PUBLIC WORKS DEPARTMENT 120 480 600 0.2 fl.8 1.0 80% 2%

4. AUDIT COMPLIANCE PROGRAM 120 720 840 0.2 1.2 1.4 86% 2%-- - - -- - - -- - - . - - - - - - .. ..... - - - - - -

SUBTOTAL CAPACITY BLDG. TRAINING COMPONENT 540 2,880 3,420 0.9 4.8 5.7 84% 10%

B. ROAD COMPONENTPERIODIC MAINTFNANCE REHABILITATION 1,020 19,980 21,000 1.7 33.3 35.0 95% 58%RURAL TRACKS AND FERRIES 120 2,460 2,580 0.2 4.1 4.3 95% 7%ENVIRONMENTAL ACTIONS 60 1,080 1,140 0.1 1.8 1.9 95% 3%STUDIES, WORKS SUPERVISION 120 1,620 1,740 0.2 2.7 2.9 93% 5%

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

SUBTOTAL ROAD COMPONENT 1,320 25,140 26,460 2.2 41.9 44.1 95% 74%

C. RAILWAY COMPONENTTRACK REHABILITATION - 1ST TRANCHE 180 3,720 3,900 0.3 6.2 6.5 95% 11%FREIGHT TERMINAL -- KOROFINA 120 1,680 1,800 0.2 2.8 3.0 93% 5%STUDIES, WORK SUPERVISION 0 420 420 0.0 0.7 0.7 100% 1%

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

SUBTOTAL RAILWAY COMPONENT 300 5,820 6,120 0.5 9.7 10.2 95% 17%

TOTAL BASELINE COSTS 2,160 33,840 36,000 3.6 56.4 60.0 94% 100%== ====== -===== … = -====== ======= ===== …========:

PRICE CONTINGENCIES 1,260 5,280 6,540 2.1 8.8 10.9 81% 18%~. ... .... .... ...... . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TOTAL PROJECT COSTS 3,420 39,120 42,540 5.7 65.2 70.9 92% 118%

*Governent counterpart included, exotuding routine road maintenance.

USS1= CFAF 600/Aprit 18, 1994

18

Fiancin Plan

4.31 Following the donors' meeting in Bamako in mid-May 1993, a number of institutions havedeclared their intention to participate in financing the proposed program. These include the FondsEuropEan de DEveloppement (FED), the Islamic Development Bank (IsDB), Canada, France andGermany. Two credit agreements have already been signed with the African Development Fund(FAD) and the West African Development Bank (BOAD) for construction of the Bamako urban roads.The Organization Petroleum Exporting Countries (OPEC) has also expressed interest in participatingin the financing of the project. All co-financing will be on a parallel basis, with each participatinginstitution managing its own subprojects in accordance with their respective rules. At present, thereremains a financing gap of US$20 million. Should the external contributions to program financing beinsufficient, the Government will increase its participation, or the road component in the outer yearsof the program will be reduced accordingly. The financing plan is presented in Tables 4.5 and 4.6below; they include financial contingencies.

Table 4.5 - Financgna PlanUS$ million

Foreign % ofExchange Local Total Total

Gov't of Mali 20.8 27.0 47.8 16

IDA 65.0 0.0 65.0 21

Other donors:BOAD 10.7 10.7 4FAD 14.3 14.3 5FED 50.0 50.0 16IsDB 53.6 53.6 18OPEC TBD TBDCanada 7.1 7.1 2France 17.9 17.9 6Germany 19.8 19.8 6

To be funded 3.4 16.1 19.5 6

Total program 262.6 43.1 305.7 100

TABLE 4.6N.1

TRAIISPNRT SECTOR PROJECT * PRWET SECTORIEL TRANSPORTSFINAING PLAN - PLAN DE FINMCENENT

PROGRA GERMANY TOCOPOENT - COPOSNTE TOTAL tDA FED FAD al 119 S CAUN FRANCE ALLEAGE OPEC OTHER RCFN CON...........................................................................................................................................................................

A. CAPACITY BUILDING, TRAINING 6.7 6.7

C. RD COMENT - RmESR"MtINE NAINTENANCE 40.4 1.4 39.0PERIODIC MAINTENANCE/RENAB 141.0 37.1 18.4 4.2RURAL TRACKS (INC. FERRIES) 17.0 4.8

0.4ENVIRONNNTAL ACTION 7.1 2.0 0.2BAMAKO URBAN ROaD 28.6 0.0 14.3 10.7 3.0STIJDIES, UIRUS SUPERVISION 9.6 3.5

EOUIPHENT 5.9EllUIPMEXt ~ ~ ~ ~ ... ,, .. i....... ....... ..... ..... .... .... .... .... .... .... .... -.--. **.*-.-SISTBTAL 249.6 47.4 0.0 14.3 10.7 49.1 0.0 0.0 19.8 11.5 0.0 4.8

C. RtAIL COMPONENTTIRAX RENAlB (ST TRANCNE) 21.1 6.9FREIGNT TERMINAL (ORINA) 4.6 3.2TELECOSUIICATiGS 1.6ROLING-STOCK RENAL. 6.8

'SUIITCING LOCOTIVES (3)LOGISTICAL EWUIPNENT 4.0STUDIES, VORW SUPERVISION 0.8 0.8

SUtTOTAL 36.9 10.9 0.0 0.0 0.0 0.0 7.1 17.9 0.0 2.0 1.0 0.0D. AIR COMPONENT

SECURITY EQUIPMENT - TINMl 6.0 4.5SfAAKO-SENCU 4.5

SUSTOTAL 10.5 0. 0 0 0 4.5 0 0 0 0 0 0_n~ginu uu MuMu =MuUU su m=u C:S &121UUM 0=,U was=== = U=awi ULsuUU sun_ ua=M3tOTAL 305.7 65.0 50.0 14.3 10.7 TO 53.6 7.1 17.9 19.8 TBD 13.5 1.0 46.8

AprIl 18, 1994

t

20

4.32 As regards the financing of routine road maintenance, agreement was confinned duringnegotiations that Government will:

(a) make monthly payments to the separate routine road maintenance account to beestablished in a commercial bank, (see para 4.14 above) managed by the ministryresponsible for roads, of the amounts agreed as necessary for routine roadmaintenance execution (para. 5.3(g)(i)); and

(b) ensure that funds necessary to pay in a timely manner for routine maintenance workperformed under delegated contract management are transferred by the ministryresponsible for roads into an account opened for the purpose by the agency serving asdelegated contract manager before start of works (para. 5.3(g)(ii)).

It was a condition of Board presentation that funds would be deposited into the special account forroutine maintenance (para. 5.4(c)).

D. Program and Project Implementation

4.33 The program will be implemented by the ministries responsible for finance, for transport andfor roads and by two independent agencies (RCFM, and ADM-ASECNA) under the supervision ofthe respective donors. To facilitate successful implementation and good coordination among theexecuting agencies and with the co-financiers, a Coordinating Committee composed of representativesof the ministries and agencies mentioned above and the Chamber of Commerce will be formed tooversee program execution. A Project Coordinator acceptable to IDA will be in place throughout theproject. The Coordinator will be provided technical assistance in the initial months following projectstart-up to establish procedures for monitoring and follow-up, and for liaison and coordination withdonor agencies. The Coordinator will organize joint donors' meetings anually to agree on remediesfor any problems observed in project implementation. A formal mid-term review of the programincluding all donor agencies will also be carried out (see para. 4.55). The Coordinator will assist theexecuting agencies in handling procurement and disbursements procedures for the different donoragencies. In addition, he will coordinate the documentation and reports to be prepared by eachexecuting agency, after which he will prepare the consolidated project progress reports. DNT will bethe executing agency for transport technical assistance, CPT? for training, DNTP for the roadscomponent and the relevant technical assistance, RCFM for the rail component, and ADM-ASECNAfor the airport component, under the supervision of the Direction Nationale de I'Aeronautique Civile(DNAC).

4.34 For DNT, the vehicle registration, drivers' license and waybill administration systems will becomputerized in the first year following credit effectiveness. Vehicle inspection, subcontracted toprivate agencies, will be carried out jointly with the re-registration of the automobile fleet and theaxle weighing exercise. The results of the first year's statistical survey will serve as a basis foradaptation of the regulations covering violations and the respective penalties. Agreement wasobtained during negotiations that DNT will act on, and publish the results of, the vehicle inspectionno later than 18 months following credit effectiveness. Likewise, it will prepare the new regulationscovering penalties for violations. The new system of penalties will be applied starting the third yearof inspection (para. 5.3(d)). The results will also enable DNT to proceed at the end of the first year

21

with launching the study on the overhaul of the road-user taxation system, with a view to achievingmore equitable recovery of the road infrastructure costs imputable to different categories of users.

4.35 DNTP will be responsible for the road component (including the related technical assistance).DNTP's accounting system and unit will be reorganized during the first year of credit effectiveness.DNTP, supported by technical assistance, will set up and maintain a road data bank, and prepare theannual routine and periodic maintenance programs and reports. The special credit account will bemanaged by the ministry responsible for roads. The separate routine maintenance account opened bythe ministry responsible for roads, to which the Malian Treasury will deposit the allocations forroutine road maintenance, will be managed by DNTP. These deposits will be made monthly inadvance. The regional directorates will be involved in the programming process. They will also beresponsible for the implementation of the force account routine maintenance that is to be contractedout. The completion rates of routine maintenance work done under contract will be closelymonitored, with a view to ensuring that, at least, the minimum thresholds is respected. Experimentswill be done to check if the regional directorates can be entrusted with the responsibility ofsupervising the periodic maintenance and rehabilitation work with the assistance of consultants. Thiswork will be fully cotitracted out. Agreement was obtained during negotiations on a technical andfimancial audit of CNREX (with terms of reference (TOR) acceptable to IDA) to be performed on thefirst year of credit effectiveness to determine the real capacities of this laboratory and the actions tobe taken to improve its efficiency (para. 5.3(h)).

4.36 Starting in the 1994 fiscal year, execution of the works, including those still carried out byforce account, will be by contract. Performance indicators, agreed upon during negotiations, willbe established and monitored by the management unit and the delegated contract manager (para.5.3(i)). A price comparison and the quality of work of the two methods of implementation will bemade annually from the technical and financial audits of the special accounts of routine maintenance.As agreed duimg negotiations, all technical studies for road rehabilitation and periodic maintenancestudies will need to be completed by the end of the second year of credit effectiveness (para. 5.3(j)),so that priorities can be clearly identified, and investments optinized, within the framework of theannual program reviews. All the other studies should be completed by the project's mid-term.

4.37 Consultants financed under the Fifth Highway Project are preparing legal documents for theestablishment of the public equipment rental company, that will manage operable public worksequipment former Societe a Materiel de Travaux Publics (SMTP) in a first phase which, if successful,may lead to privatization of the compan,y over the medium term. The new company will rent out theequipment both to the regional public works directorates and to private enterprises, charging all itsclients market rental rates. Agreement was obtained on the formal establishment of the SMTP as anequipment rental company under conditions acceptable to IDA (new statutes, installation of its Boardof Directors, on the nomination of a company director, and on the adoption by SMTP's Board ofDirectors of a business plan) as conditions of effectiveness (para. 5.5(c)).

4.38 RCFM will be responsible for implementing the railway component. A Project Managerdesignated by the Director General will coordinate implementation of the various subcomponents,their supervision being the responsibility of RCFM agents. Adoption of RCFM's business plan andnew statutes acceptable to IDA, installation of its Board of Directors, and signing of the 1995-1997contrat-plan, including the adoption by Government, within the three-year investment plan and in theanmual budget, of detailed mechanisms to finance the program for staff cutbacks at RCFM, allacceptable to IDA, are conditions of disbursement of the railway component (para. 5.6(b-e)).

22

Agreement was obtained during negotiations that the RCFM will begin to implement its staffreduction program no later than two months following credit effectiveness and the staff size will bereduced to 1,700 at most by the end of 1995 and 1,500 at most by the end of 1998. The RCFM willcomplete its staff reduction program no later than 1 months following credit effectiveness (para.5.3(k)). The adoption by the Governments of Mali and Senegal of a joint action plan acceptable toIDA for the technical and commercial integration of international freight rail transport services will bea condition of disbursement of the component (para. 5.6(f)). The action plan will be monitoredquarterly. The signing of service agreements (acceptable to IDA) between RCFM and theGovermnent for the operation of domestic passenger services under a public service obligation schemeand amounts for corresponding to RCFM have been provided for in the Government budget (para.5.6(g)).

4.39 ADM-ASECNA will be responsible for the implementation of the airport component-boththe infrastructure and the safety equipment subcomponents-supported by technical assistance asrequired.

4.40 CPTP will implement the training subcomponent. The detailed annual programs preparedunder the study for the transport sector training needs (1993) will be reviewed annually; it will besubmitted and agreed on with the donors and IDA every year by July 15 at the latest. The first-yearprogram was agreed on during negotiations (para. 5.3(1)). The annual training program reports willbe submitted no later than August 15 each year. CPTP will be assisted by local and foreign teachers,especially with courses targeting the private sector, carriers and public works contractors.

E. Project Sustainablity

4.41 The economic appraisal of the planned investments shows a 28% rate of return; tae existingand expected revenues from road-user taxation and RCFM's billings cover all infrastructure costs, aswell as RCFM's operating costs. The sustainability of the project will be promoted by means of:(a) institutional reforms to be introduced within the sector's administration to upgrade its planning andmanagement capacities; (b) reforms in transport regulations to allow the industry to develop;(c) restructuring of the public enterprises to enhance their efficiency, and the passing on to users,through the prices charged, of the full range of transport operating costs, including maintenance andinfrastructure renewal; (d) revision of the road-user taxation system to improve recovery of road-usecosts; (e) development of the Malian construction industry; (f) training and upgrading of sectorpersonnel; and (g) reduction of the annual infrastructure rehabilitation bill through introduction ofrational routine maintenance and preventive periodic maintenance.

F. r-rourement

4.42 With IDA assistance, Mali undertook a complete overhaul of its outdated and cumbersomeprocurement legislation in 1992. A new and much streamlined framework is now in place, althoughperformance in applying it still leaves something to be desired. The legal framework for public sectorprocurement consists of: (a) Law No. 90-06/AN-RM of February 19, 1990 creating the DirectorateGeneral of Public Sector Procurement (Direction GCnfrale des Marches Publics); (b) Decree No. 90-030/P-RM of the same date establishing the organization and functions of the abovementionedDirectorate; and (c) Decree No. 92-059/P-CTSP of February 14, 1992 establishing in detail the

23

responsibilities of all entities concerned with public sector procurement. The local competitivebidding (LCB) procedures provided by the latter Decree are acceptable to IDA.

4.43 Procurement procedures and the corresponding amounts are set forth in Table 4.7 below:

Table 4.7 - Summary of Procurement Arrangements(US$million)

Pro iremem Metod TotalProject Element ICB LCB Oter NIF Cost

1. Works1.1 Road component 39.9 153.4 193.3

(35.9) (35.9)1.2 Railway 9.5 12.1 21.6

(8.5) (8.5)1.3 Airport 3.2 3.2

2. Goods2.1 Ferries 1.3 0.5 1.8

(1.3) (1.3)2.2 Telecommunications 1.3 1.32.3 Swithing locomotives,

roling stock rehab. 5.7 5.72.4 Logistical equipment 3.3 3.3

2.5 Airport securty equipment 4.5 4.52.6 Vehicles, computer equipment 0.5 0.7 1.2

(0.5) (0.7) (1.2)2.7 Road maint equipment 5.0 5.0

3. Consultamces3.1 Coordinating Unit

TA 0.1 0.1(0.1) (0.1)

3.2 Training 1.2 1.2(1.2) (1.2)

3.3 TA to DNT 1.1 1.1(1.1) (1.1)

3.4 TA to DNTP 0.5 0.5(0-5) (0-5)

3.5 Audits 1A 1.4(1.4) (1.4)

3.6 Works studies and spn 3.6 5.1 8.7(3.6) (3.6)

4. Coord. Operatng Costs 0.2 0.2(0.2) (0.2)

TOTALS 50.7 0.5 8.8 194.1 254.1(45.7) (0.5) (8.8) (55.0)

Note: Fgues in parenlteses are the respective amounts financed by the IDA credit N.l.F.: Not IA-financed. Totals do not includeprice contingencies.

24

4.44 All goods and works will be procured in accordance with the Bank's Guidelines forProcurement under IBRD Loans and IDA Credits (May 1992). Contracts financed by other donorswill follow their respective guidelines. For IDA-financed contracts, the Bank's standard biddingdocuments will be used for the project, and preparation of these documents is a condition ofeffectiveness (para. 5.5(d)). All fixed price contracts will provide for an automatic price correctionfactor due to delays in decision and exclusion of bid validity.

(a) Civil Works: all works under IDA financing will be procured by InternationalCompetitive Bidding (ICB). Local contractors will be eligible for 7.5% domesticpreference as stated in Bank guidelines.

(b) Goods: contracts for goods will be packaged for US$100,000 or more, and will beprocured by ICB. Contracts between US$50,000 and US$100,000 each are consideredsmall and unsuitable for ICB. They apply to small-scale procurement of vehicles,computers, etc., which will be done through LCB and will not exceed US$0.50million in total. Contracts less than US$50,000 each, up to an aggregate amount ofUS$0.75 million, will be procured by International/Local Shopping Procedures, orfrom the Inter-Agency Procurement Services Office of UNDP. Procurement ofvehicles and computers will be handled by the Project Coordinator and evaluated bythe Committee fonned for that purpose.

(c) Contracts or packages of contracts for the track rehabilitation subcomponent (railway),estimated to cost an aggregate amount exceeding the equivalent of US$0.5 million,shall not be awarded unless the financing of the rehabilitation of the Bamako-Dibolitrack has been secured.

All contracts for goods, works and consultants will be reported quarterly as per the agreed format.

4.45 Review by IDA of invitations to bid, bidding documents and of proposed awards and finalcontracts will be carried out as follows:

(a) All contracts for goods and works estimated at $150,000 or more and contracts fortrack rehabilitation will be subject to IDA's prior review procedures as outlined in theBank's Guidelines for Procurement under IBRD Loans and IDA Credits (May 1992).Where payments for such contracts are to be made out of the Special Account, thetwo conformed copies of the contract, required by IDA should be furnished prior tothe first payment made out of the Special Account in respect of such contract;

(b) For all contracts not governed by subpara (a), the terms and conditions of the contractshould not, without IDA's approval, materially differ from those on which bids wereasked or prequalification of contractors, if any, was invited. Where payments forsuch contracts are to be made out of the Special Account, these procedures aremodified to ensure that the two conformed copies of the contract, together with otherinfornation required by IDA, shall be furnished to the Association;

(c) the provisions of the subpara (b) do not apply to contracts on account of whichwithdrawals from the Credit Account are made on the basis of statements ofexpenditure; and

25

(d) post review of contracts will be carried out on selective basis (one in four).

4.46 For all routine maintenance carried out by contractors and financed by the Government ofMali, the delegated contract manager will follow the rules of procurement set forth in a proceduresmanual adapted from the one used by AGETIPE-Mali, the executing agency for the Public Works andCapacity Building Project (Cr. 2371-MLI). The procedures manual must be acceptable to IDA.Force account routine road maintenance work will be perforned under sole-source "contracts" withthe regional directorates using model contracts prepared for the purpose. Performance indicators forboth types of execution will be established by the network management unit.

4.47 In order to successfully imnplement the program and the project, the Government may employconsultants and experts whose qualifications, experience, terms of reference and terms of employmentare satisfactory to IDA. Such consultants and experts will be selected using principles and proceduressatisfactory to IDA in accordance with the Guidelines for the Use of Consultmts by World BankBorrowers and by the World Bank as Executing Agency published by the Bank in August 1981. IDAwill proceed to prior review for (a) all consultant contracts above the equivalent of US$100,000 forconsulting firms; (b) terms of reference for all contracts; (c) single-source contracts; (d) contractamendments valued at more than US$100,000 equivalent for firms, or those that raise the totalcontract value above these thresholds; and (e) any standard documents that the borrower intends todevelop and use repeatedly. Contracts with consulting firms below US$100,000 each, will bereviewed on a selection basis (one in three). All contracts with individuals will follow Part V of BankGuidelines.

G. Disbursements

4.48 The proposed IDA credit will be disbursed as shown in Table 4.8 below:

Table 4.8 - Disbursements by Cateeorv

Category Amount of Credit Percentagel _____________________________ (US$ million) disbursement

1. Civil WorksRoads 35.90 90Rail 8.55 90

2. GoodsCapacity Building 1.21 100Road (ferries) 1.30 100

3. Capacity Building, Training, 8.10 100Studies l

4. Unallocated 9.94 l

TOTAL 65.00

26

4.49 The IDA credit will be closed seven years after its signing; however, disbursements maycontinue to be made during an additional four-month period for items executed prior to closing. Forcontracts requiring prior review, the credit will be disbursed on the basis of approved contracts forthe works, equipment and technical assistance subcomponents. Disbursement percentages shown inTable 4.8 above are net of taxes in Mali. Disbursements will be based on CIF or border deliveryprices for imports, and on ex-factory prices for locally manufactured goods. To facilitatedisbursement, the Government will open a Special Account in a local commercial bank to which, oncethe effectiveness conditions have been met, IDA will disburse an initial amount of US$300,000,equivalent to the estimated expenditure level for a three-month period. This account will operateaccording to procedures and condition, acceptable to IDA. It will be replenished monthly, providedreimbursement requests have exceeded US$100,000 equivalent.

4.50 Requests for withdrawal of funds are to be accompanied by supporting documents, except inthe case of civil works contracts under US$150,000 and purchases of goods and equipment underUS$25,000, for which disbursements will be made upon submission of statements of expenditure. Inthese cases, the supporting documents will be retained by the executing agency which will make themavailable for examination by IDA supervision missions and external auditors. Disbursements forsubprojects financed by other cofinanciers will be made in accordance with the rules of the respectiveinstitution.

H. Accounting, Auditng and Reportng

Accountina and Auditing

4.51 MET will be responsible for the overall project financial management. Project accountingcentralization, including the review of withdrawal applications, will be subcontracted to a privateaccounting firm acceptable to IDA, throughout the project. The structure of the financial managementsystem would be evaluated by the auditor who will confirm to IDA, during the first quarter followingthe signing of its contract, that the system is satisfactory, as agreed during negotiations (para.5.3(m)). The auditor would be responsible for any training of project accounting staff. The projectaccounts will be maintained in accordance with international accounting standards. The Ministry willprepare quarterly reports on project progress covering accounting, budgetary, and financial aspectswith contribution from the agencies involved in project execution.

4.52 The project accounts, including the special account, will be audited annually, in accordancewith international standards on auditing by independent auditors acceptable to IDA. The auditor'sreports with the project financial statements will be submitted to IDA not later than four months afterthe end of each fiscal year through the Project Coordinator who will manage the auditing contracts.The signing of the annually renewable project audit contract and project accounting contract, and theestablishment of project accounting systems acceptable to IDA is a condition of effectiveness (para.5.5(e)). The TOR for audits were agreed on during negotiations (para. 5.3(m)). RCFM's corporateaccounts will be audited by an external auditor acceptable to IDA. The audit of RCFM's accounts forFY92 conducted by an auditor acceptable to IDA were delivered as a condition of negotiatim s. Atechnical audit will be carried out in the second year following effectiveness.

27

Reporting and Monitoring

4.53 Each executing agency will submit to the Project Coordinator quarterly execution reports foreach program and project component summarizing progress achieved, problems encountered,solutions proposed, and changes or adjustments to be made. The Coordinating Committee will reviewprogress against plans and take appropriate corrective actions. Agendas and minutes of committeemeetings will be prepared by the Project Coordinator and transmitted to IDA and other donors tofacilitate program and project supervision.

4.54 The Project Coordinator will submit the following to IDA and other donors: (a) projectquarterly progress reports, including those relating to routine road maintenance covering accounting,budgetary, financial, physical, and costing aspects with contributions from the agencies involved inproject execution; (b) annual financial statements for each of the sector's public enterprises, and theannual balance sheet showing all project and program expenditures, including the annual specialaccount balance sheets; (c) annual investment programs, including road maintenance programs, asspecified in para 4.7; (d) an annual report on implementation of the measures included in the actionplans; (e) anmnal training programs and balance sheets; (f) annual technical assistance programs andbalance sheets; and (g) a project completion report within six months following the credit closingdate.

4.55 Implementation of the overall program will be supervised by the respective donors who wiUljointly review progress during annual donors' meetings organized by the Project Coordinator. TheIDA project will be supervised every three months. Supervision missions will consist of field trips toreview financial and management practices, bidding and payment procedures and local enterpriseparticipation, and the policy and implementation (particularly RCFM's restructuring). Animplementation schedule, key indicators and a supervision plan are given in Annexe 7 (A-). It wasconfirmed during negotiations that the investment program and key indicators will be reviewedduring the annual meetings, while a mid-term review will examine overall project implementationand objectives reached (para. 5.3(b)). More particularly, the review will (i) monitor program andproject implementation, and performance of the agencies involved in program implementation; (ii)monitor implementation of the RCFM restructuring action plan; (iii) update the road program takinginto account the degree of road deterioration and the results of the technical studies; (iv) discuss andagree on additional steps required for improved cost recovery in the transport sector; and (v) discussand agree on an updated program financing plan, including all available cofinancing sources.

I. Environmental Impact

4.56 The proposed project is classified as a "B" project with limited possible environmental effects.The Environmental Action Plan adopted by the Government in the DGTSP covers the keyenvironmental actions to be taken. An environmental analysis of the ongoing Fifth Highway Project'simpact was carried out with the assistance of a consultant; its recommendations have beenincorporated into project. It is expected that the project will have substantial positive environmentaleffects by providing better conditions on major roads that will benefit the rural and urban population,and by improving road drainage which, in turn, will limit erosion. Second, the analysisrecommended that attention be paid to the design and execution of civil works to alleviate thepotential risk of disturbance caused to people and the natural environment, and proposed ways in

28

which the project can help improve the environment, with some minor additional outlays which theproject has provided for.

4.57 Environmnental disturbances that might be caused by the civil works during-or as a directconsequence of-their execution will be addressed through appropriate detailed design work,provisions in contract documents for work, and work supervision (Annex 8). Suitable safeguards willbe incorporated into bid documents and contracts for works to minimize potential environmentaldamage caused by road works-especially those involving drainage facilities, deforestation, risks oferosion, handling of anti-erosion planting, handling of camps and workshops following completion ofworks, local improvements in villages, and safety. Little impact, oie way or the other, will occurwhere road and rail track rehabilitation will follow existing alignments, with minimal effect on currentland use. Nevertheless, dumping of used engine oil into storm drains, sewers or watercourses, lakesand ponds must be strictly prohibited by regulations to be adopted as a condition of effectiveness(para. 5.5(f)).

J. Impact on Employment and Poverty

4.58 EmDlovment. The Credit will help create jobs in both urban and rural areas. The wage billdistributed locally will come close to US$25 million (9% of the total program cost). It will cover atleast 4,700 jobs over five years (280,000 person/months). Other jobs will be created indirectlythrough the promotion of small local firms to meet the increased demand that will be created throughthe multiplier effects of the income generated by the Project.

4.59 Poverty. It is expected that at least 50% of the temporary jobs created, particularly for therural roads subcomponent, will be offered to unskilled workers. In addition, the geographic locationof several subprojects outside the major development areas will make it possible to reach people whohave not previously been able to benefit from government investment, reducing transport costs willreduce the prices of basic commodities, facilitate the accessibility of these areas and the mobility of itspopulation.

K. Economic and Flnancial Appraisal and Risk Evaluation

4.60 The proposed investments covering Mali's entire transport sector under the program represent1.8% of GDP, a slight increase ove- those executed during the 1987-92 period. They affectpractically all of the regions of Mali. The overall appraisal of the two principal program components(road and rail, accounting for almost 95% of the program cost) yields an internal rate of return (IRR)of 28%, more than double the discount rate adopted (12%). The airport component includes safetyequipment justified by the avoidance of risks that would otherwise be run by air traffic. The programis also expected to produce indirect benefits (access to market and social facilities, improved exportperformance etc.) that have not been quantified.

4.61 The road component has an IRR of 28% (see Chart 4.9). It has been optimized through theselection of subprojects according to their IRR. These rates range from 178% for periodicmaintenance of the semi-urban road Koulouba-Kati to 12% for the last rural track included in theprogram. The HDM Im model was used for appraisal of the subprojects. The methodology used wasto compare "with" and "without" project situations, assuming construction as scheduled under theprogram and with a five-year postponement. Projected traffic growth was based on recent trends in

29

fuel consumption (average increase of 3% per annum) and in traffic over sections, where regularcounts are taken. No diverted traffic was taken into account, and induced traffic represents only 3 %of existing traffic on paved roads and 10% on earth roads. The overall IRR of the road component is28% for around 45 projects totaling US$190 million. This is a much more satisfactory program thanthat initially proposed before appraisal and which would have yielded an 18% IRR, for a total cost ofUS$280 million. The rates of return obtained are 40% for periodic maintenance, 31% forrehabilitation and reconstruction, and almost 16% for new construction (Bamnako's urban road systemand rural tracks). A traffic variation of plus or minus 20% results in a corresponding variation ofaround 5% of the IRR, without actually changing project classification. A cost variation on the orderof 20% was applied for certain sensitive projects. The present net value of these projects remainspositive.

4.62 The rail component has an IRR of 23 %. The economic appraisal is based on the reduction inrail transport costs with project, the overall gains to the economy derived from the use of the Dakar-Mali railway instead of the Abidjan route, and lastly, the reduction of maintenance and accident costsand the postponement of certain heavier investments. The hypotheses used assume a 10% tariffincrease starting in 1993. Fuel traffic would increase by some 15% per annum between 1994 and1998; container traffic would increase by 10% in 1993 and by decreasing percentages subsequently,going down to 1% in 1997; the other international and domestic freight traffic would remain at the1993 level during the period; passenger traffic would go up by some 8% in 1993 in response tocoaches newly placed in service, but subsequently, the rate of increase would be no more than 0.9%per annum. All the sensitivity tests carried out still yield rates of return higher than 12%. If trafficgrowth was reduced by 10%, the IRR would drop to 17%. A 20% decrease in alternative roadtransport costs results in an IRR for the railways of 19%. A 10% increase in rail transport costswould result in an IRR of 16%.

30CHART 4.9

IERNAL RATE OF RETUr OF ROAD INVESTMES

TOTAL FOR THE ROAD COMPONENT

|PEXUODtC COMNSNE(TRRqmir ~ ~ ~ ~ ~ ~ ~ ~~~~~S4

I ~~~~~~~I ,

PERIODIC ~~REPAJRMARENC . _ (Rehab.. eco0nlI

lOADS 40,5XA31,8%

~~~~~~~~~DI DRTIROADS ROADS

- 114,1% 14

31

4.63 The financial evaluation indicates that the production sold by RCFM will progress throughoutthe period under review (1993-98). External consumption will remain stable and will represent lessthan one third of production sold. The value added will grow at a pace a little higher than that ofbusiness activity. Personnel costs will decline heavily and will represent no more than 31% of valueadded, against 42% at the start of the period (the payroll will be trimmed from 2,400 to 1,500employees in four years). The gross operating result will increase from CFAF 2 billion in 1993 to3.5 billion in 1998. The operating ratio will reach 0.80 in 1997 (0.87 in 1994) and the ratio of staffcosts to value added will decrease from 0.53 in 1994 to 0.34 in 1997.

4.64 The benefits expected to result from the airport component are in the area of improved safety.Enclosure of Bamako airport reduces a present risk of having cattle on the runways with the distinctpossibility of a collision between an animal and an aircraft during takeoff. The consequences wouldrange from the pilot simply having to abort takeoff and start his run over again, to the plane sufferingdamage to its landing gear, to the aircraft actually exploding. In Timbuktu, the airport facilities aregeared to the safety of traffic both in the air and on the ground (fire-fighting equipment, runwaylights, fences, generator set, etc.). The benefits in terms of safety are reinforced by the possibility ofincreasing the number of hours of aircraft use, currently 130 flight hours per month for two planes,or less than three hours a day per plane. Normal use on regional routes is six hours a day. Theexpected benefits may be estimated by doubling the number of aircraft flight hours.

4.65 The principal project risks stem from the fact that the Government may not be able toimplement all the desired reforms in the sector, or to remove the obstacles to the mobilization andallocation of adequate financial resources for counterpart funding, in particular, for routine roadmaintenance. Second, Mali transport agencies' institutional capacity to manage the program is weak.The devaluation impact will result in increasing transport operating costs; therefore, theimplementation of the revision of user taxation and transport prices will be difficult. These risks areminimized by the strong ownership demonstrated by the Government during project preparation, thefulfillment of all conditionalities, monitoring of the annual public investment programs, continuedcoordination with the other financing institutions, strengthening of sector management throughreorganization and capacity building.

4.66 For RCFM, the main risk would derive from insufficient integration of international freightservices with SNCS. The Malian side is firmly resolved, at the country's highest level, to promotesuch cooperation, which has become all the more important following the recent devaluation of theCFA franc and the opportunities it provides for more competitive exports. To guard against thedanger of a possible deterioration in the situation, RCFM's international traffic will be monitored on amonthly basis, and performance indicators will be established and monitored regularly.

4.67 The contracting out of routine road maintenance is likely to encounter a few pockets ofresistance, but the conversion of the SMTP into an equipment rental company, the anmnalprogramming of the maintenance works, and the consequent allocation of the maintenance budgets,will leave the regional directorates with no alternative concerning the free availability of equipmentand the availability of budget allocations for force account execution of maintenance work. Thedelegation of contract management to AGETIPE-Mali will allow for the rapid development ofcontract-based activity and the disappearance of the force account system over the long term.

32

V. AGREEMENTS REACHED, CONDITIONS AND RECOMMENDATION

5.1 The following actions have been accomplished so far:

(a) adoption by the Government of the Declaration of General Policy for the TransportSector Policy on November 2, 1993;

(b) adoption of a Five-Year Investment Plan for 1994-98, with annual program review;

(c) adoption by decree of a new cahier des charges for railway operations;

(d) abolition of traffic programming by DNT and the Malian Warehouses in C6ted'Ivoire, Senegal and Togo;

(e) abolition of the requirement that Malian freight pass through the Malian Warehouses(December 21, 1993);

(f) signing of service contracts between RCFM and the Government for operation ofdomestic passenger services under a public service obligation scheme;

(g) formation of a committee to monitor the contrat-plan (1992-1993) between theGovernment and RCFM;

(h) preparation of a draft (1994-1998) business plan for RCFM;

(i) circular concerning bid proceedings for major transport orders emanating from theGovernment and from public agencies and enterprises;

(j) reduction . the number of police and customs posts and simplification oftheir procedures;

(k) preparation and implementation of COMANAV's restructuring plan;

(1) launching of the process to privatize RCFM's hotel services;

(m) inclusion in the 1994 investment budget and in the three-year investment plan of thenecessary road maintenance and project counterpart funds;

(n) signing of the delegation of contract management agreement with AGETIPE-Mali forexecution of the routine road maintenance works; and

(o) TOR for technical assistance and studies for DNT and DNTP.

5.2 The following were conditions of negotiations:

(a) appointment of a Project Coordinator acceptable to IDA;

(b) delivery to IDA of the audit of RCFM's accounts for FY92;

33

(c) opening of a routine maintenance special account;

(d) delivery of TOR and a list of consulting firms to be invited to submit proposals forthe technical assistance to DNTP and DNT;

(e) delivery to IDA of TOR and a list of vehicle inspector-firms to be invited to submitproposals for the vehicle inspection subcomponent; and

(f) delivery of TOR and a list of consulting firms to be invited to submit proposals forthe study of the road-user taxation system.

5.3 The following points were confirmed during negotiations:

(a) all executing agencies will have adequate counterpart staff in place before thebeginning of any technical assistance assignments (para. 4.5);

(b) investments in the transport sector would be limited to those included in the Programadopted by the government and specified in its January 4, 1994 letter; all actions notincluded in the Program would require prior approval from IDA; the Government willsubmit to IDA, for the duration of the credit, and no later than July 15 each year, therolling three-year investment program for the transport sector, to be adopted inagreement with IDA (para. 4.7); investment program and key indicators will bereviewed during the annual meetings with donors, while a mid-term review willexamine overall project advancement, objectives reached, update the program, agreeon additional steps required for improved cost recovery and agree on an updatedprogram financing plan (para. 4.55);

(c) the recommendations from the road-user taxation system study will be implemented inagreement with IDA no later than two years after credit effectiveness (para. 4.9 (a));

(d) vehicle inspection will carried out by independent private firms and will take place incoordination with the re-registration exercise (para. 4.10); DNT will publish theresults of the vehicle inspection no later than 18 months following credit effectiveness,prepare the new regulations covering penalties for violations and apply it starting thethird year of inspection (para. 4.34);

(e) CPTP will be allowed to train staff from the private sector in transport sectorspecialties not taught in other centers in Mali (para. 4.12);

(f) the share of routine road maintenance work performed under contract will be at least75% for the duration of project implementation, and force account works will be"contracted out" starting FY94 (para. 4.14) and routine maintenance by contractors isto be handled by delegated contract management (para. 4.14);

(g) as regards the financing of routine road maintenance, the Government will:

34

(i) make monthly payment into the separate routine road maintenance accountmanaged by the ministry responsible for roads of the funds necessary forroutine road maintenance (para. 4.32(a));

(ii) ensure that funds necessary to pay for routine maintenance work performedunder delegated contract management are transferred in advance by theministry responsible for roads into an account opened for the purpose by theagency serving as delegated contract manager (para. 4.32(b));

(h) technical and financial audit of CNREX will be performed on the first year of crediteffectiveness (para. 4.35);

(i) performance indicators for routine road maintenance (para. 4.36);

(j) technical studies for road rehabilitation and periodic maintenance would be completedby the end of the second year of credit effectiveness (4.36);

(k) RCFM will undertake its staff reduction program no later than two months foliowingcredit effectiveness; the staff will be reduced to 1,700 at most by the end of 1995 and1,500 at most by the end of 1998, and RCFM will complete its staff reductionprogram no later than 12 months following credit effectiveness (para. 4.38);

(1) a first year CPTP training program (para. 4.40); and

(m) that the auditor will review the executing agency's accounting systems (pam. 4.51)and agreement on TOR for the audit (para. 4.52).

5.4 The conditions of Board presentation were:

(a) delivery to IDA of a letter confirming Government's five-year transport sectorinvestment program (para. 4.7);

(b) delivery to IDA of an "arr&t6" modifying the Arret6 creating the routine roadmaintenance special account (para. 4.14); and

(c) deposit of funds into the special account for road maintnance as agreed upon duringnegotiations (para. 4.32).

5.5 The conditions of credit effectiveness are:

(a) signing of the technical assistance contracts for DNT (para. 4.10) and ProjectCoordinator (para. 4.13);

(b) signing of an agreement with the firm responsible for vehicle inspection (para. 4.10);

(c) establishment of SMTP as an equipment rental company under conditions acceptableto IDA (para. 4.37);

35

(d) preparation of standard bidding documents (para. 4.44);

(e) signing of the contract for project audit and setting up of an appropriate accountingsystem (para. 4.52); and

(f) adoption of regulations prohibiting dumping of used engine oil into storm drains,sewers, or watercourses, lakes and ponds (para. 4.57).

5.6 The conditions of disbursement, which apply to the railway component, are:

(a) signature of a subsidiary agreement acceptable to IDA (para. 4.30);

(b) adoption of a new legal status for RCFM (satisfactory to IDA) and the appointment ofits new Board of Directors (para. 4.38);

(c) adoption by RCFM's Board of Directors of a (1994-1998) business plan acceptable toIDA (para. 4.38);

(d) signing of the 1995-97 contrat-plan, acceptable to IDA, between the Government andRCFM (para. 4.38);

(e) for the RCFM staff reduction program, adoption of detailed financing mechanismsand listing of corresponding expenses in the three-year investment plan and in theannual budget (para. 4.38);

(f) adoption by the Governments of Mali and Senegal of a joint action plan, acceptable toIDA, for the technical and commercial integration of international freight railtransport services (para. 4.38); and

(g) signing of service agreements (acceptable to IDA) between RCFM and theGovernment for the operation of domestic passenger services under a public se-viceobligation scheme and amounts for corresponding compensation to RCFM have beenprovided for in the Govemnent budget for 1995.

5.7 Recommendaton. Subject to the above conditions, the proposed project is suitable for acredit to the Republic of Mali in the amount of SDR 46.1 million (US$65 million equivalent), onstandard IDA terms with 40 years of maturity.

- 36-

MALI

TRANSPORT SECTOR PROJECT

STAFF APPRAISAL REPORT

ANNEXES

Annex 1: Gross Domestic ProductAnnex 2: Government RevenuesAnnex 3: Declaration of General Transport Sector PolicyAnnex 4: Training ProgramAnnex 5: RCFM Restructuring Action PlanAnnex 6: Detailed Project CostsAnnex 7A: Ihplementation ScheduleAnnex 7B: Performance IdicatorsA onex 7C: Supervision Plan

mex 8: Environmental Action PlanAnnex 9: Selected Documents and Data Available in the Project File'

Map: Transport Network of Mali (Ref. IBRD 25497)

Annex 1

Grows Dotnestic Product at Constant 1987 Prices. 1987-1992estimates

1987 1988 1989 1990 1991 1992

(in biffions of CFAF)

Primary sectorFoodocrops 106.7 108 142.7 114.6 95.8 121.7Sxport crops I/ 36 34.3 45.3 46.2 53.4 seLivestock 73.1 76.6 78.8 79.4 79.7 83.7FishIng 8.7 8.8 11.2 7.7 7.8 8ForestrVy 30.2 31 31.9 38.2 38.8 39.9Sub-total 252.7 256.7 309.9 286.1 276.6 309.3

Secondary sectorIndustry 33 34.7 36.8 39 33.1 31.3Mining 14 14.3 7.2 9.6 10 10.2Handticrafts 15.6 15.7 16.2 17.8 18.2 18.5Construction/publics works 26.4 24.7 28.1 27.9 32.2 32.2Sub-total 88.9 89.4 86.3 94.2 93.5 92.2

Terftry sectorTranportafIon 26.4 27.9 29.8 29.4 30 30.9Trade 92.1 92.4 104.8 115.7 122 125.1Other services 37.7 38.4 41.8 45.6 47.9 49.3Public admtn. 65.6 58.4 67.2 62.3 62.3 63.5Other -4.1 *4.1 *4.6 *4.9 -4.9 4.9Sub-total 217.7 213 229 248.1 257.3 283.9

GDP (at factor cost 589.4 569.3 626.3 628.4 626.2 665.6mporttaxes 31.1 29.8 33.1 35.3 36 37.1

CGOP (at market prices) 690.5 839.1 658.4 663.7 662.3 702.7

(Annu" percetgo changs) _

PrImy sector 4.30% 1.88% 20.72% -7.68% -3.70% 12.27%Food crops -5.50% 0.28% 34.62% -19.69% -16.40% 27.04%Etxport crops 2V 16.30% -2.00% 32.07% 1.99% 156.68% 4.87%Ivestock 19.40% 4.79% 2.87% 0.76% 0.38% 0.02%

Pating -1 1.S0% 1.16% 27.27% -31.26% 1.30% 2.56%Forestry 2.80% 2.65% 2.90% 19.75% 1.67% 2.84%

Secor swetor 40.50% 0.56% -3.07% 9.15% 40.74% -1.39%Indust 2.20% 5.15% 8.0S% 5.98% -15.13% -6.44%MIning 0.80% 2.14% .49.65% 31.94% S.26% 2.00%HandIcrafts -1.60% 1.29% 3.18% 9.88% 2.25% 1.65%Constructlonlpubrlc works -3.60% 4.44% 5.67% 8.90% 15.41% 0.00%

Tatry sctor -1.90% -2.18% 7.51% 8.34% 3.71% 2.57%TransportatIon 4.40% 5.68% 6.81% .1.34% 2.04% 3.00%Trade *.t10% 0.33% 13.42% 10.40% 6.4S% 2.54%

Otter sevices 4.10% 1.86% 8.85% 9.09% 5.04% 2.92%PubUc admin. 2.50% -10.98% -2.05% 8.92% 0.00% 1.S3%Other 17.40% 0.00% 12.20% 6.52% 0.00% 0.00%

GOP (at factor cost) 1.00% 11.80% 0.50% 40.35% 6.29%Import taxes 4.00% *4.18% 11.07% 6.68% 1.98% 3.06%

GOP (at market pricesl 1.20% 22.13S 0.80% 0.21% 8.10%

11 Includes cotto roundnuts. tobacco, fruit vegetbes, and oteSources: Mallon authorItdIs, staff estimates

ANNEX1 .XLS/515t94

-38- Annex 1

Grom Domeatc Product at Cumnt Market PMc.. 1987-1992

esrtimates1907 19S8 1989 1990 1991 1992

(in btons of CFAfl

Pritmar sectorFoodcrops 105.7 99.9 127.1 110.8 94.5 118.2txport crops I/ 35 32.9 43.9 45.2 52.8 54.9Lvestock 73.1 78.1 80.4 82.2 84.8 91.5Fishing 8.7 8.6 11.1 7.7 7.8 8.6Fortr4 30.2 31.9 32.8 39.7 41.9 44.4Sub-total 252.7 251.4 295.3 285.6 251.8 317.8

Secoary setorIndustry 33 33.7 38.1 39.1 33.6 32.7Mining 14 13.6 7.8 9 9.7 10.1HandIcrffts 15.5 18 18.7 18.8 19.3 20.3Construction/public works 2A.4 25.4 27.2 29.7 35 38.4Sub-tots 8.9 88.7 87.6 98.4 97.f 99.5

Tray Trnportaton 26.4 28.2 29.5 29.4 30.4 32.8TrAde 92.1 94.3 106.8 119.3 128.3 134.1Other senrces 37.7 39.4 43.7 48.7 61.8 a5.3Public sdlnL. 86.8 81.3 80.7 67.7 69.8 73.3othe .4.1 .4.2 4.8 -5.2 .5.4 .5.5Sub-tot 217.7 219 234.9 259.9 274.9 290

GOP (8t factor coet 559.4 559.3 8172.8 42 654.1 707Import te 31.1 31 36 36.5 37.3 41.2

GOP (at market prlcss 590.5 590.3 653.8 878.5 091.4 748.2

(Am perntae Chn

Pumtrs t9.90% _0.51% 17.40% -3.28% .1.40% 12.78%Food cros 7.% -.. 49% 27.23% .12.82% -14.71% 25.08%&Port crop 2! 22.40% 4.00% 33A3% 2.96% 10.81% 3.98%Uvestock 10.60% 8.84% 2.94% 2.24% 2.92% 8.18%Fishing .0.50% .1.18% 29.07% .30.83% 14.30% 10.28%Forsstry 7.70% 5.63% 2.82% 21.04% 5.54% 5.97%

seoondy r .30% -0.22% .1.24% 10.05% 1.24% 1.96%Industry 8.70% 2.12% 7.12% 831% -14.07% -2.08%

InIn 6.10% *2.88% .44.12% 18.42% 7.78% 4.12%Hr bnft 2.50% 3.23% 4.38% 11.38% 3.760% 5.18%Construction/publlc works 2.60% 4.79% 7.09% 9.19% 17.85% 4.00%

Tenraysr 2.00% 0.60% 7.26% 10.64% 5.77% 5.49%Transportation 0.80% f.82% 4.61% 4.34% 3.40% 7.99%Trded 2.00% 2.39% 12.20% 12.78% 7.54% 4.52%Otheservle. 10.80% 4.51% 10.91% 1 1.44% 6.37% 8.78%Pubaicdamin. .80% 4.56% 4.98% 11.53% 3.10% 5.01%Othw 18.80% 2.44% 14.2S9 8.33% 3.85% 1.86%

GOP (at factor cos S.20% 10.40% 3.92% 1.89% 8.09%Import taxes 8.40% 4.32% 16.13%6 1.39% 2.19% 10.40%

GOP (at market ptIc) 6.30% 10.76% 3.78% 11.8% 8.22%

1/Includes ctton, grodnut.4 totbac frWt. vegeteb. ar otwe

Sources: Mahn autdort saff esdates

ANNEX1 .XLS1515194

39- Annex 2

Origin and Use of Resources, 1987-92estimates

1987 1988 1989 1990 1991 1992(CFAF Billion)

GDP 590.5 590.3 653.8 678.5 691.4 748.2

Consumption 566.1 575.8 621.3 640.2 648.2 702.9Public 81.2 75.9 83.1 87 82.6 87.5Private 484.9 499.9 538.2 553.2 565.6 615.4

Domestic savings 24.4 14.5 32.5 38.3 43.2 45.3

Investment 120.4 123.7 139 151.4 155.6 172Public 59.9 55.2 69 71.9 72.6 73.9Private 60.5 68.5 70 79.5 83 98.1

Resource Gap -96 -109.2 -106.5 -113.1 -112.4 -126.7Exports of goods and 96.1 95 106.7 114.2 119.4 106.7nonfactor servicesImports of goods and -192.1 -204.2 -213.2 -227.3 -231.8 -233.4nonfactor services I

(Percenta le of GDP)

Consumption 95.87% 97.54% 95.03% 94.36% 93.75% 93.95%Public 13.75% 12.86% 12.71% 12.82% 11.95% 11.69%Private 82.12% 84.69% 82.32% 81.53% 81.81% 82.25%

Domestic savings 4.13% 2.46% 4.97% 5.64% 6.25% 6.05%

Investment 20.39% 20.96% 21.26% 22.31% 22.51% 22.99%Public 10.14% 9.35% 10.55% 10.60% 10.50% 9.88%Private 10.25% 11.60% 10.71% 11.72% 12.00% 13.11%

Resource Gap -16.26% -18.50% -16.29% -16.67% -16.26% -16.93%Exports of goods and 16.27% 16.09% 16.32% 16.83% 17.27% 14.26%nonfactor servicesImports of goods and -32.53% -34.59% -32.61% -33.50% -33.53% -31.19%nonfactor services

Sources: Malian authorities, staff estimates

ANNEX2.XLS/5/5/94

- 40 -

Annex 3Page . of 28

Republic of Mali

OFFICE OF TEE PRIME MINISTER

The Prime Minister Bamako,Head of Government November 2, 1993

Mr. Edward V. K. Jaycox Ref:Vice President, World Bank No. E-0503/PRIM-CABWashington, D.C.

Subiects General Transport Sector Policy Declaration

Dear Mr Vice Presidents

In connection with implementation of the Mali Transport SectorProject, I have the honor to enclose the Declaration of General Transport SectorPolicy dated November 2, 1993, the corresponding Action Plans and the investmentprogram.

The Government notes with great pleasure the constant supportfurnished by the World Bank for Mali's development program and would be glad ifIDA were to help finance the important transport sector project. The project isdesigned around a priority investment program for the period 1994-98 with anestimated base cost of CFAF 75 billion (CFAF 79.75 billion with the North Regionprojects).

The Government is ready to receive an IDA mission to Bamako, asannounced in Mr. Peter Watson's letter of October 15, 1993, to examine the issuesinvolved in implementing the transport sector project.

I thank you for your excellent cooperation, and tender the assuranceof my high consideration.

Stamp: Office of the Prime Minister /a/ Maitre Abdoulays Sekou SowRepublic of Mali Chevalier de l'Ordre National

En:ls General Policy DeclarationAction Plans and Investment Program

cc: Ministry of TransportMinistry of Economy, Finance and PlanningMinistry of Construction, Urban Planning and HousingGeneral Secretariat, Office of the President of the Republic

- 41 -

Annex IPage 2 of 28

Republic of Nali

MINISTRY OF TRANSPORTATION

DECLARATION OF GENEP)AL TRANsPORT

SECTOR POLICY

- 42 -

Annex 3Page 3 of 28

1. INTRODUCXION

In 1982 Mali began implementing a series of economic stabilizationand adjustment programs which have received very special attention since 1988.Action has been taken to deregulate commercial prices, simplify the regulationsgoverning economic activities, and implement reforms of customs tariffs, domestictaxation and the public enterprises sector. The result has been to improve thework climate in the government sector and lighten the financial burdenrepresented by the public enterprises. This in turn has allowed the Governmentto devote more resources to the priority sectors and bring the public financescloser to balance. Favorable climatic conditions in 1990 helped Mali achievebetter than projected economic results, with real GDP growth of 2.4 percent.

Major events in 1991 included the March demonstrations, the adventof a transition Government on April 5, the holding of the National Conferencefrom July 29 to August 12, and the establishment, in consultation with Mali'spartners, of a macroeconomic framework designed to limit the repercussions of theevents of March on economic growth, the budget situation and the balance ofpayments. Those events, combined with a bad agricultural season, led to a fallin real GDP of 0.2 percent.

The year 1992 was marked by the adoption of the Constitution on theoccasion of the referendum of January 12, the holding of the municipal,legislature and presidential elections from January to April, and the formationof a new Government on June 9.

With the aim of limiting receipts losses, the Government put theemphasis on rebuilding and strengthening the tax and customs administrations andimproving revenue collection. In addition, a number of tax reforms wereimplemented, designed to strengthen the.: isticity of the tax system, rationalizeand simplify customs tariffs and facilitL.-e issues and recoveries. A number ofmeasures were also taken to strengthen control and monitoring of the budgetingprocess, abolish price controls and improve government organization. TheGovernment continued to implement the Public Enterprises Sectoral AdjustmentProgram (PASEP), a number of other sectoral programs and the public investmentprograms (PIP) and public investment budgets (BSI), in order to gain bettercontrol of public expenditure and investment.

Despite the difficulties caused by the fall in cotton prices, theGovernment is determined to implement all the reforms included in the program andto pursue a more prudent macroeconomic policy. The medium-term (1992-95) goalsare to deepen the structural reforms so as to improve the incentives to theprivate sector, strengthen the management of public resources, develop humanresources and improve natural resource management, while contiauing to applyfinancial policies aimed at reducing government expenditure. This strategyshould stimulate economic growth over the period 1992-95.

The transport sector has a key role to play in this strategy owingto Mali's landlocked situation, the dispersion of economic activities over itsvast territory, the rapid growth of the urban centers, the importance of itsforeign trade and its marked integration in regional trade flows. Becausetransport is such an important factor in Mali's development and economiccompetitiveness, government policy is designed to enhance the sector'soperational efficiency in the medium term by intensifying the actions aimed atdeveloping competition between transport modes and enterprises on a sound basis,

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improving the condition of the existing infrastructures, especially those of theroad and rail networks, by applying a suitable maintenance policy, and continuingthe process of opening up areas that lack easy access.

The Government' action is designed, among other things, to absorbthe excess capacity of the road transport industry; raise the efficiency of theinternational transport corridors; pursue restructuring of the transport sectorpublic enterprises; improve the collection of infrastructure user charges,reorganize transport administration and infrastructure maintenance; and enhancethe safety of and improve responsibility for rural transport and tracks.

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II. DESCRIPTION OF THE TRANSPORT SECTOR

The Malian economy, based mainly on subsistence agriculture subjectto marked climatic vagaries, depends entirely on imports and therefore on theefficient functioning of its international transport systems for the procurementof numerous strategic commodities (notably petroleum products) and consumer andcapital goods. Recourse to food imports even becomes a matter of survival forMali during drought periods of the kind experienced during the first half of the1980s. Efficient functioning of the international transport systems isimperative also to enable Mali's exports--particularly of fiber cotton, itsleading export, which accounts for 85 percent of export tonnage--to compete onthe international market. The dispersion of activities across a vast territory(over 1.2 million km2), the pronounced disparities in population densities, rapidurban growth and the ensuing development of trade flows have also made domestictransport of goods as well as passengers particularly important. Transportaccounts for 20-30 percent of the cost of most essential products. Increasingthe future competitiveness of Mali's economy will depend in large part onimproving the operational efficiency of its transport system.

Over the 1970s and 1980s Mali put a substantial effort, with the helpof its development partners, into developing its transport infrastructure,particularly its road network. Despite this, its road density remains one of thelowest in West Africa. The inadequacy of the resources available for maintenanceof the road and rail networks and the inefficiency of the method used to executeroad works have created substantial maintenance backlogs and accelerated thedeterioration of the existing networks.

For their part, the various transport enterprises have undergonecontrasting evolutions during the last few years. While the efficiency ofinternational rail transport has improved substantially, the road transportenterprises continue to suffer from inherited over-capacity, due mainly to theexcessive addition of trucks to meet the very heavy demand for food aid transportin the mid-1980s. The necessary capacity adjustments are hindered by attitudesof various kinds with harmful consequences. The transport industry thus findsitself in serious crisis. As regards air transport, in April 1992 Mali accededto the Yaound5 Treaty setting up the company Air Afrique.

Both the sector's recent evolution and its radium-term developmentprospects reflect the structural adjustment policy initiated at the beginning ofthe 1990s and since reaffirmed. Up to the end of the 1980s the transport systemwas closely controlled by Government through the National Transport Office (ONT).The marked rigidities inherent in this type of administration greatly impairedits efficiency and boosted its cost to the Malian economy. Management of thesector will henceforth be bised essentially on market mechanisms. The recentabolition of the ONT and 'lie liberalization of transport tariffs constitute amajor step forward and are already allowing more flexible management of thesystem. Competition between transport modes and enterprises nevertheless remainsgenerally insufficient.

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Responsibility for the transport sector is shared by four departmentsof the Ministry of Transport and the Ministry of Construction, Urban Planning andHousing:

- National Directorate of Transportation (DNT)- ?ational Directorate of Civil Aviation (DNAC)- National Directorate of Public Works (DNTP)- National Directorate of Meteorology (DNM)

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III T TRANSPORT SECTOR STRATEGY

A. SteoDina UD Comoetition in Land Freight Trans2ort

The mechanisms of competition operate very imperfectly on both theinternational and the domestic land freight transport markets. Supply and demandadjustment, as well as that of prices, which do not reflect the true cost oftransport operations, are inhibited by protectionist measures taken by countriesof the subregion, distribution quotas for traffic among carriers within thetransit countries, and the "taking turns" (tour de r6le) system instituted by theunions, which allows the less efficient operators to stay in the market. Toremedy this situation, the Government proposes to implement a medium-term programof measures designed to boost competition, under which it will inter alias

(i) continue to encourage systematic recourse to tendering for alllarge-load transport operations by public or semipublic agencies oron Government's behalf;

(i) undertake negotiations with neighboring countries, in the context ofregional integration, with a view to amending the provisions of thefreight transport agreements as soon as rehabilitation of Mali'sroad transport industry has been completed;

(iii) improve the system of economic and financial information to carrierson the structure of the industry and transport conditions. TheNational Directorate of Transportation (DNT) will develop itsfunction of transport monitoring agency, in cooperation withprofessional organizations, so as to make adequate informationavailable and easily accessible to all transport operators. Thisinformation will cover inter alia available transport capacities,past traffic trends, market structure and development prospects,agreements with neighboring countries, and so on.

S. Absorbina Excess Road Transport Ca2acitv

As a result of persistent excess road transport capacity, transportprices have been falling steadily for several years, preventing any modernizationof the fleet and leading to overloading practices that seriously damage the roadnetwork. The Government therefore proposes to take a series of short-termmeasures designed to absorb this excess capacity within a reasonable time and tryto limit overloading:

(i) revision of the Highway Code (Code de la Route) and its implementingregulations;

(ii) a motor vehicle re-registration program;

(iii) an ongoing vehicle inspection program, subcontracted to independentprivate agencies set up under Malian law, approved by the Governmentand independent of the carriers; the inspection program will beconducted in conjunction with the re-registration operation,

(iv) strengthening of the current truck-loading controls;

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(v) a carrier sensitizing campaign;

(vi) preparation of regulations for the punishment of violations, afterexamination of the initial results of the programs referred to at(ii), (iii) and (iv) above;

(vii) implementation of the re-registration, vehicle inspection and axle-load control operations by the agencies referred to at (iil) above;

(ix) prohibition, for a transitional period of three years (renewable),of the importation of all used heavy trucks (total laden welght lnexcess of 15 t) over four years old.

The Government will moreover retain the current liberal provlslonswith respect to entry into the transport business and will not lntroduce anyrestrictive legislation. It will encourage the development, in the medlum term,of appropriate mechanisms of bank financing of vehicle purchases which shouldslow any growth in capacity not justified by satisfactory profit prospects.

C. Imiroving the Efficiency of the International Transport Corridors

The Government will seek to reduce transportatlon costs ln theimmediate future essentially by improving the efficiency of the exlstlnginternational transport corridors, and in the longer term by seeklng othercorridors that meet the objectives of improved access, competltLveness,profitability and subregional economic integration. To that end the Governmentwill:

(i) pursue effective implementation of the TRIE procedures in roadtransit, in cooperation with authorities of the transit countries,and ratify the road agreement concluded with Senegal last March;

(iL) continue to simplify customs procedures, limiting pollce controlsand upgrading the skills and working conditions of inspection staff;

(iii) facilitate the development of rail terminal facilitLes in the Bamakoarea;

(iv) abolish traffic schedulLng and the issuing of loading permits by DNTand Malian Warehouses in the transit ports;

(v) abolish the requirement that Malian goods translt through MalianWarehouses in Abidjan, Dakar and Lome, and transfer those facilitiesto the Chamber of Commerce and Industry of Mali or privatize theirmanagement, restructure them or return them to the port authoritiesconcerned in exchange for special conditions of treatment of Mallanfreight, after evaluating the best alternatlves and renegotiatingthe old agreements;

(vi) continue the process of consultation and agreement with the regionalcountries on the medium-term development of sea traffic organizatlonand examine the impact of the current traffic distributlon system onthe sea transport cost borne by the Malian economy;

(vii) directly manage national sea traffic rights not exerclsed by Malianshipowners, pending the devisal of a regional solution.

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It is proposed to implemert these measures in the context ofnegotiation with the transit countries of the conditions of treatment of Malianfreight with the object of facilitating transit and bringing it under control.

D. Passenaer Transport

Urban and intercity passenger transport takes the form mainly of roadtransit services provided by private enterprise on market terms. Despite thecrisis situation of recent years, passenger transit has undergone substantialdevelopment. While the quality of the services offered is sometimes rudimentary,they do meet the effective demand without any government contribution. Theexpected improvement in infrastructure conditions following upgrading of the roadnetwork should stimulate private operators to put better quality vehicles intoservice more quickly during the next few years wherever demand justifies it. Thesector will generally speaking continue to develop on the current bases, andgovernment action will consist of improving transport safety, chiefly byintroducing vehicle inspection, as already mentioned with regard to freighttransport, and through road accident prevention campaigns.

Z. Rural Transoort

Rural tracks and rural transport are a key factor in developing andopening up the rural areas. The Government will prepare an inventory of therural tracks network (whose length is probably close to 15,000 km), definingtheir status, the services responsible for them, and the methods of financingtheir maintenance and construction. The Government will also, in cooperationwith local authorities and with the support of its development partners, initiateintegrated access and agricultural development operations together with pilotoperations to assist local authorities to assume direct responsibility for ruraltrack maintenance. it will also seek to put new river ferries into service atcarefully selected crossing points in order to further facilitate local accessand facilitate trade flows.

Ferries located on classified roads will be transferred underconcession to the SMTP, which will operate them autonomously on a commercialbasis.

F. Air Transoort

Air transport demand is growing rapidly in Mali in both internationaland domestic traffic, supplementing the land transport modes, particularly inareas that otherwise lack reliable access. This trend is sharpening with thedevelopment of tourism, a significant source of foreign exchange.

Following the dissolution of Air Mali and the joining by Mali of themultinational company Air Afrique, the Government's current policy is geared topromoting private enterprise and expanding regional cooperation under a nationalcivil aviation plan established under the aegis of the United Nations DevelopmentPlan (UNDP) and the International Civil Aviation Organization (ICAO).

The Government will also strengthen airport security in order tocombat traffic in drugs and other substances and terrorism. It will give specialattention to safeguarding the existing facilities and equipment.

These operations will cover, essentially:

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(i) airport infrastructures and the airfield equipment open to publicair traffic and handling domestic air trafficS

(ii) radio-telecommunications and radio-navigation aidsl

(iii) meteorology;

(iv) air space and air traffic service;

(v) personnel training.

0. Restructuring the Transiwort Sector Public EnterRrises

Government withdrew from the road transport industry during the 1980cand continues to be involved in transport services only through Mali Railways(RCFM), Mali Airports (ADM) and lIali Shipping Company (COMANAV), which have thestatus of public establishments. The Government will pursue restructuring ofthese establishments, with a twofold purpose: to convert them into firmlycommercial enterprises, and to terminate government financial assistance fortheir operations.

Mali Railways (RCFM)

RCFM accomplished substantial management progress during the period1986-90. The quality of its services improved, with the result that itappreciably increased its market share of international freight traffic. Thepolicy of stringency actively pursued, fox example in staff remuneration, enabledit to post an operating surplus in 1990. The railway will continue to play anessential role in Mali's transport system in the future; however, it will faceincreased competition from the Abidjan-Bamako road transport corridor ininternational freight transport, which accounts for much the greater share of itsoperations. Developing railway traffic therefore calls for continued action toboost rail transport efficiency and competitiveness, which will be pursued byconverting RCFM into a firmly commercial enterprise, managed autonomously inaccordance with competitive-sector principles and rules.

The restructuring measures to convert RCFM into a commercialenterprise were defined in the 1992-93 RCFM contrat-plan. They include interaliat

(i) overhaul of the institutional framework for the railway sectorthrough adoption of a new "cahier des charges" and a new legalstatus for RCFM to replace its current status of an industrial andcommercial public establishment and widen its management autonomy;

(ii) action to rationalize RCFM's greatly excessive labor force andoverhaul its personnel statute and remuneration system;

(iii) conclusion of agreement(s) with the Government for compulsoryoperation, as a public service, of loss-making domestic passengerservices that the Government feels must be retained for reasons ofsocial policy and regional access;

(iv) subcontracting of certain support activities to the private sector,particularly in the area of equipment and infrastructuremaintenance. Improving technical and commercial coordination withSenegal Railways (SNCS) is another essential component of action toboost international transport efficiency. To that end, RCFM willwork with SNCS to set up, in the first stage, a joint agency to

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manage and monitor the international wagon stock. The functions ofthis agency could later be enlarged to include technical managementand marketing of international freight transport services on behalfof the two networks. In international passenger transport, RCFN andSNCS will seek to set up a privately-run joint affiliate inassociation with external partners. Finally, in the longer term,they will examine the possibility of unified operation of the twonetworks with each Government retaining infrastructure ownership.

Mali ALrports (ADM)

Mali Airports (ADM), a public industrial and commercial establishment(EPIC), manages Bamako-S6nou international airport and the country's domesticairports. New management approaches are currently under study, includingconversion in the short term of Mali Airports into a mixed-capital companyendoi-ed with substantial management autonomy.

Mali shipping Company (COMANAV)

River transport plays a not inconsiderable role in freight andpassenger transport on the Xoulikoro-Gao navigable section of the Niger River.It is provided partly by artisan launch operators and partly by Mali ShippingCompany (COMANAV), which also operates a shipyard and a cask- and drum-makingfactory. Whereas the activity of the launch operators appears to be growingsteadily, that of COMANAV fell by half during the 1980s, while its operatintg lossrose to a significant level. In addition to the internal management problemsinherent in its status of a public enterprise, the decline in COMANAV's activityis due to the fact that its fleet is increasingly ill-adapted to navigationconditions on the river. The activity of the artisan launch operators will notmerely be preserved but encouraged, and a river transport study will be conductedto that end. Since large-scale works to improve the navigability of the riverinvolve heavy investments, in the future river shipping will be basedincreasingly on light vessels. As for COMANAV itself, its restructuring will bebased on privatizing its metal construction and other ancillary activities andconverting its river transport activities to a smaller-scale commercialoperation. These actions to be implemented very soon.

B. Finaeinag of the Tranasort Sector and Imorovinc Infrastrueture CostRcover

The policy of government withdrawal from the public transportenterprises will lead in the future to abolition of all government financialcontributions to the execution of transport operations in the strict sense. Thesole exception will be possible contributions to compensate for government-imposed public service requirements to operate structurally loss-making domesticpassenger services in isolated areas.

The major element of the strategy concerning financial relationsbetween the Government and the transport sector pertains to the recovery ofinfrastructure costs. The Government will ensure, over the medium term, thatinfrastructure maintenance and renewal costs are borne entirely by the users,each in proportion to the cost generated by its infrastructure use. TheGovernment will conduct a detailed study of sector financing and recovery ofinfrastructure usage costs and take the appropriate measures.

In the particular case of rail transport, RCFM will bear the cost ofmaintenance and renewal of the infrastructures it manages and pass the cost onto users through its transport tariffs.

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Road transport taxation, which currently corresponds poorly to theroad infrastructure utilization costs generated by the various users, will be re-examined with the object of improving infrastructure maintenance and renewal coutrecovery, particularly in the case of heavy truck and passenger transportservices.

Z. Reoreanizing Road Infrastructure Administration and MaintenanceS

Mali's road network comprises some 15,000 km of roads, including2,500 km of paved roads and 1,500 km of modern year-round dirt roads. Thisnetwork is one of Mali's most important assets: its renewal value is estimatedat about CFAF 300 billion. The heavy toll taken by heavy truck traffic,particularly through the disastrous practice of overloading, and theinsufficiency of routine and periodic maintenance despite the efforts put in areleading the Government to seek to remedy the situation by taking truly effectiveaction to combat truck overloading, improving and completely reorganizing roadmaintenance and setting up suitable mechanisms to guarantee its financing. TheGovernment's policy in this field is spelled out below.

1. A priority road network, on which maintenance is to be concentrated, wasdefined recently with a length of about 9,000 km. Its annual maintenancecost averages about CPAF 10 million. Regular allocation of the resourcesfor this purpose is an essential component of sectoral strategy. TheGovernment will allocate adequate resources to ensure maintenance of thisnetwork.

2. The Government will reorganize the DNTP, which is currently responsiblefor the entire road network except for certain rural tracks, in accordancewith the following principles:

(i) The DNTP's headquarters administration will retain responsibilityonly for general studies, general policy formulation, maintenanceprogramming and supervision.

(ii) The local agencies will specialize in monitoring the road network(setting up, updating and operating a data bank) and supervisingexecution of maintenance works.

(iii) Actual maintenance execution (including routine maintenance) willeventually be entrusted almost entirely to private enterprises inaccordance with competitive procedures. The DNTP will be assistedby a group of private consultants, provided with juridical statusand adequate operating resources and methods and possessing thenecessary expertise. The purpose of this formula is to obtain animmediate improvement in the DNTP's operational efficiency and know-how transfer to the benefit of Malian public- and private-sectormanagement staff.

The group will act as Project Authority for management of thenetwork and the programming of both routine and periodic maintenanceand as Delegated Contract Manager for routine maintenance and intechnical assistance for other works.

3. Aware that the success of the new maintenance policy depends on thedevelopment of private enterprises capable of performing the maintenancework efficiently, the Government will facilitate lifting of theconstraints under which they operate by:

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(i) relaxing routine maintenance contracting procedures and ensuringrapid settlement of invoices;

(11) giving medium-term work-load guarantees.

4. The Government will open a special account at a commercial bank into whichthe routine maintenance appropriations will be paid and which will beregularly replenished by the Treasury. The account will be managed by theDNTP in order to expedite payment for routine maintenance work.

S. The Public Works Equipment Section (SMTP) will be converted into anautonomously managed equipment-leasing enterprise to mako it moreefficient and provide access by private works enterprises to equipmentunder optimum conditions. -he future enterprise will be privatized in themedium term.

6. The Public Works Refresher Training Center (CPTP) will also reshape itsactivities to meet the private enterprises' training needs, in addition tothose of the Administration.

7. The Government will provide support for the DNT's activities throughobjective-oriented technical assistance to help it strengthening itsgeneral studies, planning, regulatory and control functions and its roleof transport monitoring agency.

8. The Government will conduct a general reorganization study of theministries with public works and transport responsibilities and proceed tomodernize their services, for example through basic and refresher trainingactivities.

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IV. ACTION PLAN FOR T OPERATION OF RNSPORT SERVICES

Introduction

The purpose of the present Action Plan is to identify and program themeasures that need to be taken to achieve the objectives of Mali's nationaltransport sector policy (apart from road infrastructures, rail transport, airtransport and environment, for which separate action plans have been prepared),particularly with respect to:

(a) stepping up competition on the land freight transport market;

(b) absorbing excess road transport capacity;

(c) improving the efficiency of the international transport corridors;

(d) passenger transport;

(*) restructuring COMANAV and ADM;

(f) improving infrastructure cost recovery.

A. Steoginc_ UP Competition on the Land Transaort Market

Among the proposed measures, the Government undertakes to:

(a) continue to encourage systematic recourse to tendering for alllarge-load freight transport operations by public or semi-publicagencies. A Transport Ministry circular will be sent to the headsof these agencies and other ministerial departments instructing themto include tendering for transportation of their goods in thecontrats-plans of the agencies under their supervision;

(b) include in the functions of the reorganized National Directorate ofTransportation (DNT) that of "transport monitoring agency". The DNTwill be given technical assistance to help it set up informationsystems and personnel training by the end of 1994. The terms ofreference of this assistance will be presented by the end ofDecember 1993 and the assistance will be put in place in mid-1994.

S. Absorbing Excess Road Transogrt Ca3acitv

The Government will implement:

(a) A detailed study of the status of the vehicle stock, particularlyits condition and capacity after completion of the vehicle re-registration and technical inspection campaigns.

(b) Revision of the Highway Code (Code de la Route) and its implementingregulations. In addition, regulations will be drawn up concerningthe transportation of hazardous materials and special loads. Thisrevision will take place by mid-1995 at latest.

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(c) A motor vehicle re-registration program. Technical assistance willbe provided to help the DNT prepare for this campaign and tocomputerize the vehicle registration data bank by mid-1994 atlatest. The terms of reference of this technical assistance will bedrawn up by the end of 1993. The vehicle re-registration operationshould be fully completed by the end of 1995.

(d) A vehicle inspection program, wi_ h the first inspection operationcoordinated with the re-registration operation during 1994. Theterms of reference for selection of the private inspection agencieswill be prepared, and the contracts with the selected firms drawnup, by the end of 1993. The actual inspection operation will beginin 1994.

(e) Strengthening of the current axle-load controls through repair orreplacement of existing and procurement of new weighing equipment.The new control points will be selected in November 1993. They willbe set up and will enter into service by the end of 1994.

(f) Sensitizing campaigns targeted to truckers concerning the harm doneby overloading to roads and vehicles, particularly just before andduring each rainy season. The first campaign is due to start inSeptember 1993.

(g) Preparation of regulations for the punishment of violators whoexceed the admissible loads. These regulations will be put intoeffect during 1994.

(h) Continuation of the inspection and axle-load control operations bythe agencies referred to above, with application of the penaltiesfrom the end of 1994.

(i) Prohibition, for a transitional period of three years (renewable),of the importation of all used heavy trucks over four years old.The pertinent regulations will be put into effect not later thanJanuary 1, 1994. The draft regulations will be drawn up in December1993, following completion of a general and explanatory informationcampaign.

C. XmDrovina the Efficiency of International Trans2ort Corridors

The Government undertakes to:

(a) seek in the immediate future only to improve the efficiency of theexisting corridors and in the longer term those that meet theobjectives with respect to area access, profitability andsubregional economic integration;

(b) pursue effective implementation of the TRIE procedure for roadtransit, in cooperation with the authorities of neighboringcountries;

(e) ratify the road agreement concluded with Senegal in April 1993;

(d) continue the process of simplifying customs procedures, limitingpolice controls and upgrading the skills and working conditions ofinspection staff. specific provisions will be drawn up andimplemented by the services in question during 1994;

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(e) abolish traffic scheduling and the issuing of loading permits by theDNT and Malian Warehouses. The DNT will inform Malian Warehousesand the economic operators of these new provisions, f or examplethrough the print and broadcast news media, by the end of 1993;

(f) abolish the requirement that Malian goods transit through MalianWarehouses in Abidjan, Dakar and Lom6, and transfer those facilitiesto the Chamber of Commerce and Industry of Mali and restructure themor privatize their management or return them to the port authoritiesconcerned in exchange for special conditions of treatment of Malianfreight, after assessing the beat alternatives and renegotiating theold agreements. The assessment of alternatives should take placenot later than June 1994 and the provisions enacted should enterinto effect by the end of 1994;

(g) directly manage national sea traffic rights not exercised by Malianshipowners, pending agreement on a regional solution. To that endthe current situation must be reviewed in order to suppress any de.facto monopoly or sinecure situation;

(h) continue the process of consultation and agreement with regionalcountries on the medium-term development of sea trafficorganization, and examine the impact of the current trafficdistribution system on the sea transport cost borne by the Malianeconomy and Malian consumers.

D. passenger Transoort

Apart from vehicle inspection and overloading control, the Governmentundertakes to carry out the following activities in order to improve automobiletraffic safety:

(a) road accident prevention campaigns;

(b) training activities;

(c) refresher training of driving school instructors and driving permitexaminers.

S. Restructurina of COMANAV and ADM

The Government undertakes to implement the following measures:

- Mali ShiRping companv (COMANAV)

Restructuring of COMANAV is scheduled for 1994, when it will beconverted into one or more privately managed companies. The restructuring planwill be presented during 1994.

The Government will also conduct a study of river transport. Theterms of reference of the study will be presented in early 1994.

- Mali Airoorts (ADM)

The Government undertakes to seek potential partners with the objectof converting ADM into a mixed-capital company during 1994.

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F. purojvnag Infrastructur* Cost Recovery

The Government undertakes to conduct a study on reform of the systemof taxing infrastructure, particularly road infrastructure, users. The purposeis to ensure, in the medium term, that infrastructure maintenance and renewalcost recovery is borne by the users, each in proportion to the cost generated byits infrastructure use. The terms of reference will be drawn up by mid-1994 andthe study will be started by the end of 1994. The Governmr4nt undertakes toimplement the necessary reforms, In light of the study findings, from the end of1995.

…. w =.

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V. ROAD MAINTENANCE ACTION PLAN

A. Introduction

The purpose of this Action Plan is to identify and program themeasures that need to be taken to achieve the objectives assigned to the roadsector by the General Sector Policy Declaration.

Mali's road network comprises about 15,000 km of roads including2,500 km of paved roads, 1,500 km of modern dirt roads and 3,000 km of improvedtracks. A priority network of 8,400 km has been identified which is to bemaintained to provide a constant satisfactory level of service consistent withthe traffic carried. The purpose of the 1994-98 Transport Sector Project isperiodlc maintenance or rehabilitatioi of 749 km of paved roads in addition toroutine maintenance of the entire paved network, periodic maintenance orrehabilitation of 1,358 km of modern dirt roads, routine maintenance of 3,000 kmof improved tracks and targeted maintenance of the rest of the priority network,for example at stream-crossing points, in order to keep them open to traffic.It also includes construction of 272 km of roads and 567 km of rural tracks,pur-hase of routine maintenance equipment and procurement of four ferries.

S. Obiectives

The major infrastructure policy objectives are set forth in theGeneral Transport Sector Policy Declaration. The purpose of the Road MaintenanceAction Plan is to identify and prograr the measures that need to be taken,particularly with respect to:

(a) allocation of sufficient financial resources to maintain the roadnetwork;

(b) reorganization of the National Directorate of Public Works (DNTP)and its field services in order to enhance network management andinvestment programming efficiency;

(c) execution of practically all maintenance works by privateenterprise, in due course, and appointment of an Executing Agency inorder to improve the DNTP's efficiency;

(d) promoting the development of private enterprises by taking thenecessary measures to lift the constraints under which theycurrently operate;

(e) the necessary technical assistance, including training, to implementthe program successfully.

c. Allocation of Sufficient Financial Resources to Maintain the Road Network

To achieve this purpose, the Government undertakes tot

(a) limit investments during the period 1994-98 to those provided for inthe Transport Sector Project;

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(b) allocato the following minimum annual amounts to the routine roadmaintenance budgets

CPA? millon

1994 2,5001995 2,7201996 2,8201997 2,8701998 2,970

13,880

(c) guarantee availability of these funds by paying them, in monthlyinstallments in advance, into a special account in a comercial bankin the name of the ministry responsible for roads, which will managethese appropriatLons under its own authority. The legal instrumentscreating and regulating the operation of this account will beenacted by the end of 1993 and the account will become operationalon January 1, 1994. The draft texts will be submitted to the donorsby the end of 1993;

(d) ensure availability of the necessary counterpart funds for executionof the periodic maintenance, rehabilitation, construction, tralnligand technical assistance programs, cofinanced by the project donors;

(S) conduct an annual review, in consultatLon wlth external partners, ofthe operational prLorities of the lnvestment program ln light ofdevelopments in executLon of the project, the country'smacroeconomLc situation and the detailed studies of the roadprojects included in the Transport Sector Project.

'. R oroanisation of the National Directorate of Public Works -MUP1

The Government undertakes to:

(a) conduct a study of reorganization of the ministries wlth transportresponsibilities by mid-1994 and put the new organlzatlon intoeffect by the end of 1994;

(b) include the necessary provisions in the budget for 1995 and, ifapproprLate, following years to modernize the Administration and tomeet the costs arising out of personnel movements and thereorganization generally, including that of the Publlc WorksEquLpment SectLon (SMTP). These provisions wlll be separate fromand additional to the road maintenance budgets;

(c) support the work of the DNTP by appolnting a private ExecutingAgency which will be responeLble inter alla for setting up a roaddata bank, drawing up the road maintenance programs, budgets,standards and works documentation, in collaboratlon with thepertinent government departments, and promotlng the development oflocal resources and capabilities in terms of works enterprises andstudy and supervision firms;

(d) lnclude the appropriate environmental Lmpact measures ln the studlesand works documentation;

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Annex 3Page 20 of 28

(a) implement the DNTP's new accounting organization from 1994 onward,following completion of the proposed study;

(f) convert the Public Works Equipment Section (S4TP) into anautonomously managed equipment-leasing enterprise, after completionof the conversion study, by the end of 1994.

The new organization will be required to pay particular attention totrimming government intervention and to limit its field of action to generalplanning and programming studies, setting standards, outreach and supervision.It will put the emphasis on decentralization to the Regional Directorates leveland reducing government staffs. The necessary measures to support this processof reducing government staff will be taken in consultation with Mali'sdevelopment partners.

B. Sxecution of Maintenance Works by Private Enterorise

The Government undertakes to:

(a) have the entire periodic maintenance and rehabilitation programcarried out under private enterprise contracts;

(b) contract out all routine maintenance work, including that stillexecuted on force account;

(c) phase out the execution of works on force account and encourageprivate enterprises and jobbers/subcontractors to performmaintenance tasks. The share of routine maintenance work done undercontract should be in the 70-80 percent range during the period1994-981

(d) facilitate implementation of the contracting out of maintenancetasks by entrusting Delegated Contract Management to the consultantsgroup, which will use for that purpose a speciflc procedures manualacceptable to the Government and the project donors.

F'. Promotina the Development of Malian Privatoe ntergrises

As part of action to develop the private sector, the Governmentundertakes tos

(a) proceed so far as possible to divide maintenance works into lotssuitable for execution by small enterprises;

(b) provide technical assistance and training facilities to smallenterprises;

(c) include leasing of public works equipment to Malian privateenterprises in the services to be provided by the new equipment-leasing company;

(d) institute the necessary procedures to ensure rapid payment toenterprises, jobbers and roadmenders (payment to be made not laterthan 1S days after billing by the provider of the service).

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Ane 3Page 21 of 28

a. Technical Assistance and Trainin@

The necessary technical assistance in support of reorganization ofthe Ministry, and particularly of the DNTP, will be furnished in order to developthe capabilities of the private enterprises and provide basic and furthertraining for DNTP and private enterprise personnel. The technical assistancewill comprise:

(a) targeted actions by experts in order to develop, instal and start upnew management systems, including the accounting system, at both thecentral and the regional or local levell

(b) targeted actions by experts in order to help the equipment-leasingcompany set up the new organization and assist private enterprisesin improving their management and technical skills.

In setting up the new organization, the Government will:

(a) prepare the technical assistance terms of reference by the end of19931

(b) instal the technical assistance in accordance with a timetableagreed upon with the project financing institutions;

Xc) set up a system of evaluation of the effectiveness of the technicalassistance by the end of 1993;

(d) conduct an annual review, with the project donors, of technicalassistance needs. These needs will be determined after progress hasbeen made in the accounting organization studies, reorganization ofthe Ministry and conversion of the Public Works Equipment Section.

With respect to training, the Government undertakes to:

(a) restructure and strengthen the Public Works Refresher TrainingCenter (CPTP) in order to extend its activities to the entiretransport sector, including private enterprises;

(b) implement the training programs defined in the multiannualmaintenance program study and the sectoral training needs study.The latter study is to be started by the end of 1993.

The annual training programs will be submitted to the project donorsfor agreement in June of each year. Annual training balance sheets will bepresented to the donors during the month of August each year at latest.

s. Road Comoonent Executina Aaencv

The Government undertakes to entrust implementation of the roadcomponent of the Transport Sectoral Project to a group of local and externalconsultants. The contract with the group will enter into effect at the beginningof 1994. The Government will entrust the following tasks to the agency: ProjectAuthority for management of the road network, including programming of allmaintenance and rehabilitation works, Delegated Contract Management for routinemaintenance works, technical assistance for other road works and support for theProject Coordinator. The agency's principal responsibilities are to:

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Annex 3Page 22 of 28

(a) implement the road component of the project under optimum conditionsof efficiency, bearing in mind the project objectives and thosedefined below;

(b) develop the necessary Malian capabilities for more efficientmanagement and maintenance of the road network, both within thegroup and in the government agencies;

(c) develop local study and execution resources through betterpreparation of studies and works allotments, efficient managewnt ofthe pertinent contracts and dynamic technical assistance to theenterprises.

I. Rural Roads

The Government undertakes to:

(a) prepare an inventory of rural roads during 1994, and define theirstatus, the services responsible for them, and the methods offinancing their maintenance and construction by the end of 1994;

(b) draw up rural road construction and rehabilitation standards;

(c) prepare technical and economic feasibility studies of a number ofmain access and agricultural development roads, including theprovision of river-crossing ferries, by the end of 1994;

(d) prepare a program of pilot operations to assist local authorities toassume direct responsibility for maintaining rural tracks, aftertheir rehabilitation (where applicable) by the Government, by mid-1994.

This program will comprise identifying certain rural tracks and thelocal authorities responsible for them and concluding agreements with the latterto maintain them at their expense using small-scale works equipment furnished bythe Government.

J. Automobile Traffic Monitoring

In order to gather the necessary data for the roads data bank, theGovernment undertakes to:

(a) continue the traffic count operations;

(b) strengthen axle-load inspection, in cooperation with the DNT;

(o) set up a road traffic accident statistics system.

Measures will also be taken to improve road signing and carry outaccident prevention campaigns.

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Page 23 of 28

VI. RAIL TRANSPORT ACTION PLAN

The railway plays an essential role it. Mali's transportation system.In international freight transport, however, it faces stiff competition from theAbidjan-Bamako road link--competition will sharpen further in the next few yearsas a consequence of, for example, the road infrastructure improvements. Thepolicy for the rail subsector included in the Declaration of General TransportSector Policy is aimed essentially at improving rail transport efficiency andcompetitiveness by converting Mali Railways (RCFN) into a firmly commercialenterprise competing actively with the other transport modes and enterprises.

The main guideposts of this conversion of RCFM into a commercialenterprise were set forth in the 1992-93 contrat-plan between the Government andRCFM. The activities already started will be developed further during the period1994-96. An RCFN corporate plan for that period will be prepared during thesecond half of 1993 and adopted by RCFM's Board of Directors by December 15, 1993at latest. On the basis of this corporate plan, a new contrat-plan for 1994-96will be negotiated with the Government and will enter into effect in March 1994.The principal measures to be agreed on in the corporate plan or the contrat-plan,as appropriate, concern the following topics.

A. Institutional Framework

The new modus operandi in rail transport is defined by the RCFMcahier des charges approved by Decree no. 93-254/P-RN of July 23, 1993. Undera new legal status, yet to be defined, the railway enterprise will be given totalmanagement autonomy. Whatever legal form is finally adopted, RCFM be given fullauthority in contracting and in setting its personnel management rules. Thecomposition of its Board of Directors will include significant representation ofthe business world.

B. DeveloDment of Commercial Activities. Obliaatorv Public Services

RCFM will step up its commercial activities in the profit-makingsegments of rail transport and continue to abandon loss-making services andactivities. In the case of international freight transport, which is the leadingarea of railway activity, RCFM and Senegal Railways (SNCS) will seek to set upa joint marketing affiliate; special attention will be given to developingpetroleum product and container transport. In international passenger transport,RCFM and SNCS will seek to create a privately-managed joint affiliate.

PCFM will henceforth operate only such loss-making domestic passengerservices as the Government requires it to provide, as a public-serviceobligation, under an operating agreement providing for payment by the Governmentof an adequate contribution to RCFM; this matter will receive special attentionduring negotiation of the 1994-96 contrat-plan.

C. Imorovina Cooperation Between RCFM and SNCS

Improving RCFM/SNCS cooperation, which is currsntly inadequate, isessential to boosting efficiency and competitiveness in international freighttransport. In addition to setting up the joint services marketing affiliatereferred to above, they will step up their cooperation in the areas of wagonfleet management and movement of international freight traffic.

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Annex 3Page 24 of 28

D. Staff Rationalization

The goal of the program of action to rationalize RCFM*s labor forceis to achieve staffs close to the target numbers by the end of the period. Itwill therefore be carried out during the period 1994-98. It will be basedessentially on measures to give early retirement and encourage voluntaryresignation by redundant staff. It will be supported by an incentive programdesigned to encourage former railwaymen to set up private enterprises able toassume responsibility for certain activities currently performed directly byRCFM, which will be subcontracted. A new RCFM personnel statute will beintroduced and the remuneration system will be revised to improve the incentivesto raise productivity and accept responsibility. Finally, a personnel refreshertraining program will be developed. A staff rationalization timetable will beset by common agreement. This timetable will take into account the investmentsto be made in the subsector affected by this rationalization.

3. Manauement Improvement

RCFM will continue the activities already started with a view toimproving internal management, especially with respect to rationalizing rollingstock maintenance, redefining track maintenance policy, simplifying managementprocedures, and the use of PC data processing. The program of subcontracting ofancillary activities (when financially and technically justified), currentlyunder preparation, will be implemented.

P. Investment Program

Total investment in the rail transport subsector is estimated at CFAP15 billion. The amount adopted for the period 1994-98 is CFAF 10 billion.

0. Financial qauilibrium of RCFM

Subject to effective implementation of the financial restructuringmeasures provided for in the 1992-93 contrat-plan between the Government and RCFMand government financing of the staff rationalization program, RCFM will ensurebreak-even in its financial management over the period 1994-98. The Governmentwill ask the donors to finance the staff rationalization program.

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Annex 3Page 25 of 28

VIU . AIR TRANSPORT ACTION PLAN

1. obiectiv-I

The three objectives of the action Plan for air transport are to:

- open up domestic and external access to the country;

- promote rational utilization of civil aviation through applicationof the new Code of Civil Aviation, which was recently updated forthat purpose and adopted by the National Assembly;

- effect the necessary remunerative investments to meet normal airnavigation and airport safety conditions.

2. Mature of the Ooerations

These concern, essentially:

(i) airport infrastructures and airfield equipment open to public airtraffic and handling regular domestic air traffic;

(ii) radio-telecommunications and radio-navigation aides

(iii) meteorology;

(iv) air space and air traffic services;

{v) personnel training.

Implementation of these operations calls for self-financing of theair transport subsector through mobilization of its resources to create aNational Civil Aviation Fund intended to guarantee the loans to be obtained fromthe donors. The Fund will comprise remuneration in the form of fees for thevarious services provided by the administrative and technical agencies--NationalDirectorate of Civil Aviation (DNAC), National Directorate of Meteorology (DNM),Agency for the Safety of Aerial Navigation in Africa and Madagascar (ASECNA), andMali Airports (ADM)--for which a levy on turnover could be charged by way ofparticipation in the Civil Aviation Fund.

3. 1994-98 3meraencv Plan

The immediate investment requirements concern the followingoperations:

- expansion and strengthening of runways and movement areas on Samako-S6nou Airport;

- airport safety (fencing of facilities and separation of arrival anddeparture flows) at Bamako-S6nou, Mopti and Timbuktu airports;

- facilitation (upgrading of airports, runway euipment andrefuelling, etc. facilities) at Bamako-S6nou and Timbuktu;

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Annex 3Page 26 of 28

airport utilization safety (fire-fighting appliances, water supplyfacilities and fire-truck foam spreaders, runway lighting, emergencybeaconing, visual landing gradient indicator, radio facilities, andso on).

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Annex 3Pago 27 of 28

VIIIt ENVIRONMENTAL ACTION PLAN

The purpose of the Environmental Action Plan is to identify theprincipal measures that need to be taken in order to achieve the objective ofreducing the potential adverse impact on the environment of:

(i) transport infrastructure construction and maintenance projectsl

(ii) the operation of transport systems;

(iii) transport safety facilities.

Mali is characterized by a substantial level of environmentaldegradation due to unfavorable climatic conditions, desertification,deforestation and population growth, particularly in the cities. These factorshave major repercussions on soil erosion and decline in soil fertility andtherefore on agricultural development and health. Transport systems play asignificant role in this environmental degradation.

The environmental protection action plan drawn up as part of MaliL'sNational Transportation Policy defines and programs measures in the followingareas:

1. Sensitisin. to Environmental Problems

(L) define and adopt project appraisal methods and guidelines that takedue account of the project's environmental impact;

(LL) set 1ip environmental problem monitoring and alleviation system.;

(iii) develop local capacity to assess the environmental impact oftransport projects;

(iv) introduce environment-related courses into training programs, forexample those of the Public Works Refresher Training Program (CPTP);

(v) draw up regulations and standards governing the transport ofhazardous materials;

(vi) give priority consideration to problems concerning the safety oftransport users and of populations located along transportinfrastructures, through preventive and awareness-arousinginformation activities.

2. * ransnort system Desian

(L) take action to preserve arable lands;

(Li) restrict deforestation;

(iii) carry out reforestation in conjunction with infrastructure worksthat damage plant cover;

(lv) take action to preserve protected natural areas such as classifiedforests, animal reserves, and tourist and archeological sites;

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Anx 3Page 28 of 28

(v) give close attention to water resource and sewage disposal problemsin urban areasl

(vi) take due account of safety problems in designing transport projectUp

(vii) take adequate measures to ensure that efficient emergency help inavailable for accident victims;

(viii) implement the vehicle inspection measures.

Bamako, November 2, 1993

For the Government of the Republic of Mali

(Signature and stamp)

Samba Sibide, Civil UngineerXinister of Transport

Annex-AMMze4MaU Page I

Transport Sector ProjectTrining Program

Plan do Formation du socteur Entretien at R6paratlon M6canlquo des v6hicules at mat6rebset nombro do jours (Thdorde + Pradquel sur 5 ans

No. des Chef Chef do Parc Geraoete Chef d'AteIier M64cricon Conducteur Chef d'Atehier Chef d'Atotlr MrcaicienModules d'ontrtprlis do grag vehEue routihr d'.ntreprleo nmtIde et TP. rnmtdel *t T.P.

do Tronsport _ T.P 0 ecteurRG I 2+0 2+0 2+0 2+0 2+0 2+0 2+0 2+0RG2 2+0 _ 2+0 2+0 2+0 2+0RG3 1+1 1+1 20 20 1 t +RG4 1+2 1+2 1+2 1+2 1+2RG5 3+2 3+2 3+2M1 1+4 1+4 1+4 1+4M2 __= 1+1 1+1 = _ 1+1M3 _ 2+3 2+3 2+3 2+3M4 2+3 2+3 2+3 2+3F1 1+2 1+2F2 1+3 ______1+3F3 1+1 1+1F4 2+3 2+3 1+2 =2+3 a'F5_ 1+2 1+2 _ _ _ ___ _ 1+2 1+2 ooSGi _ _ 0+2 0+2 _ _ __ __ _ 0+2 0+2 =S1 1+4 _ 1+4S2 1+4 1_ _ t+4El 1+3 1+3 t 1+3 1+3E3 2+3 2+3 2+3 2+3E 2+3 _ 2+3E3 _ _ _ _ _ _ _ _ _ _ 1+2 __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _1+2E4 2+3 2+3 _ 2+3 2+3ES _ 2+3 2+3 2+3 2+3E7 ___ _ 6+5 6+5E" 2+3 2+3 = _ _ _ Hi = 1+4 1+4H2 _ 2+3 2+3H3 , - 3+2 3+2HS _ _ _ _ _ _ __ _ _ __ _ _ _ _ 3+2 3+2do __ __=________ 2*3 2+3

H7 23 3 t 2 _me ____ | *__ 6t3 T 3+2 __0_

TOWI ________3_ +3 5+2 27+42 33+57 2+0 6+3 43+03+6

Domon ____so ___ 60 so so-0io 260 40 20 30s

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Annex 5 Page 1

REUPtBLIC OF MALI

TRANSPORT SECrR PROJEC

RCFM Restructuring Action Plan

1. The restructuring measures to convert RCFM into a fully commercial enterprise in activecompetition with other transport modes and enterprises have mostly been defined in the 1992-1993contrat-plan, and they are presently being prepared or implemented. They include:

(a) "cahier des charges" of railway activity providing for full deregulation ofcommercial railway services (complete freedom for RCFM to set serviceconfiguration ard tariffs), granting RCFM full management autonomy andclarifying its relationship with Government (transfer of ownership of railinfrastructure to the State, general conditions of provision of public serviceobligation services, etc.). The decree approving the new "cahier des charges"wassigned on July 3, 1993;

(b) adopdon of a new legal status for RCFM (satisfactory to IDA) and appointment ofits new Board of Directors;

(c) signature and implementation of contracts for passenger services operated under thepublic service scheme (contract signed on May 7, 1993);

(d) divestiture of non-railway related activities (hotels) and contracting out to the privatsector of support activides in the fields of infstructure and equipment mantnnce(under implementation);

(e) design and implementationof a staff rationalization program; and

(f) By end 1993, RCFM has prepared a 1994-1998 corporate plan ("pland'entreprise") in coordination with SNCS. The plan will be adopted by RCFM'sBoard of Directors. A 1995-1997 contrat-plan will be negotiated by RCFM with theGovernment in the first quarter of 1994 and signed before the end of 1994.

2. Total RCFM staff (pemanent and temporary staff) will be reduced from 2,600 at the end of1993 to 1700 at the end of 1995 and to 1,500 at the end of 1998. The reduction of 1,100 in totalstaff will be reached through the normal retiremeat of 250 workers and through early retirementand voluntary departure of 850 workers. Implementation details of the staff reduction plan wasnegotiated between management and RCFM s labor union by end 1993 and ageed on measureswill be included in the 1994-1997 corporate plan and contrat-plan. The staff reduction progamwill be financed by the Government, with possible participation of donors. The cost of itheprogram (early retrement bonuses and voluntary departure incentives) is tentatively estimated atCFAF 2.0 billion. RCPM will adopt a detailed financing mechanisms and listing of co dingexpenses in the Government three-year rolling investment program and in the annual budget.RCFM will implement its staff reduction program within 2 months following IDA crediteffectiveness. As part of the staff rationalization program, staff rules applicable to railway stawill also be revised following the change of legal status of RCFM.

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Annex 5 Page 2

3. Enhancing significantly commercial and operational cooperation between RCFM andSNCS is one of the key elements to improving the competitiveness of the Bamako/DAKAR railcorridor. Despite some progress made in the recent past -- notably the creation of a RCFMVSNCSjoint office for the management of the wagon pool in June 1993 -- achievements have beendisappointing and a clear vision for the future associated with an action program is lacking. Such aprogram should likely target for the medium-term an unified technical and commercial managementof the Dakar/Bamako link, possibly through the creation of a private operating company (Senegaland Mali Governments keeping the ownership of rail infrastructure). Policy in this field has to beset jointly by the Governments of Senegal and Mali. In the first quarter of 1994, a meetingbetween the two Governments and the main donors interested in the Dakar/Bamako railway will beorganized to examine various institutional options for the future and prepare an action program.An action program, satisfactory to IDA, will be adopted by the Governments of Mali and Senegalbefore the end of 1994.

Traffic Projections

4. The 1994-1998 Corporate Plan to be prepared by RCFM (in conjunction with SNCS forinternational freight and passenger traffic) will detail traffic projections. Preliminary tfficprojections were agreed with RCFM during project preparation (Annex 14). In 1997, freighttraffic would reach 312 million lakm (285 in 1992) and passenger traffic 230 million passenger/km(208 in 1992). These preliminary traffic projections assume that traffic levels during the periodwill remain similar to those levels achieved during the last past years, except for (a) petroleumproducts from Dakar, for which traffic would increase from around 50,000 tons to 100,000 tons in1998, under the assumption that the railway would take advantage of the opportunities offered bythe recent deregulation of petroleum product distribution in Mali and that traffic organization wouldbe completely overhauled (under a scheme under definition by an IDA-financed consultant toSNCS); (b) containers, for which traffic would increase from around 100,000 tons to 130,000tons under 1998, thanks mainly to the commissioning of the new privately managed Bamakocontainer terminal; and (c) domestic passenger traffic, which would continue to grow at a rateslightly less than population growth.

Financial Projections

5. Financial projections have been prepared under the assumptioais of preliminary trafficprojections mentioned above. The main results are presented in the economic and financialappraisal. The net income throughout the 1994-1997 period is positive; critical to achieving thisresult will be (a) the effective implementation of the staff rationalization program; and (b) the abilityof RCFM management to contain the trend of unit wages at an annual increase rate not exceeding3%. A firm agreement on these elements will have to be reached between RCFM management andthe railway labor union and embodied into the 1994-1997 RCFM Corporate Plan.

Perfonnance Indicators

6. Two main indicators will be used to monitor Jie global performance of RCFM during theproject and will be included in the 1994-1997 RCFM contrat-plan: (a) the gross cas' flow("r6sultat brut d'exploitation") and (b) the ratio of total staff costs/value-added ("ratio frais depersonnel totaux/valeur ajout6e"). Subject to revision following preparation of the 1994-1997Corporate Plan, targets for these performance indicators are set as follows:

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Annex 5 Page 3

RCFM Global Performance Indicators 1994-1997

1924 199 1996 12

Gross cash flow(CFAF million base 1993) 1,600 2,400 3,000 3,500

Ratio Staff Costs/Value-added (%) 43 38 34 32

Ratio worling expenses/operartion revenues 0.87 0.84 0.83 0.80

7. Specific aspects of the technical, conmiercial and financial performance of RCFM will alsobe monitored at the level of the railway enterprise, notably in the fields of locomotive availability,reliability and utlization, wagon and coach availability and utilization, track maintenance,operatons, staff productvity. A tentative list of indicators is presented in Annex 12B. The finalset of indicators, as well as annual targets, will be included in the 1994-1997 RCFM CorporatePlan.

Annex - Annexe 6ADT_1 JKLS Page I of 3

MiTmnwupt Sect Project - IDA CreditTabe 1. Capacity Bu"ng, Trainig CoDetaied Costs Bsse Cod (CFA Million) Base Cost (US$ Milon)

1915 1996 IS 9 1999 19 2000 2001 Total 1U s 1996 1997 1998 1999 2000 2001 Tota

L brIestent CossA Managemet Deveblopnt

Tmansport Dbpmet 23.4 117.0 156.0 187.2 156.0 93.6 46.8 780.0 0.04 0.20 0.26 0.31 0.26 0.16 0.08 1.30

Pubic Wafs Deparnmet 18.0 90.0 120.0 144.0 120.0 72.0 36.0 600.0 0.03 015 0.20 0.24 0.20 0.12 0.06 1.00

Subtotal Mgnt Development 41.4 207.0 276.0 331.2 276.0 165.6 82.8 1,380.0 0.07 0.35 0.46 0.55 0.46 0.28 0.14 2.30

S. Prject Managmern Unit 72 36.0 48.0 57.6 48.0 28.8 14.4 240.0 0.01 0.06 0.08 0.10 O.Od 0.05 0.02 0.40

C. Tring 28.8 144.0 192.0 230.4 192.0 115.2 57.6 960.0 0.05 0.24 0.32 0.38 0.32 0.19 0.10 1.60

D. Audi Comnpanoe Program 25.2 126.0 168.0 201.6 168.0 100.8 50A 840.0 0.04 0.21 0.28 0.34 0.28 0.17 0.08 1.40

Total 102.6 513.0 684.0 820.8 684.0 410.4 205.2 3,420.0 0.17 0.88 1.14 1.37 1.14 0.68 0.34 5.70

Totas Inluding Contingencles (CFA Millonl Totals nhcding Cont_ngenciOe $USS Milion)199S 199 1997 1999 1999 2000 2001 Total 1996 1996 1997 1999 1999 2000 2001 Total "

L Ienvetmnt CostsA Managemnt DevelpntTrtanpod DepartmeA 25.8 133.5 183.1 225.7 193.0 118.7 60.8 940.5 0.04 0.22 0.31 0.38 0.32 0.20 0.10 1.57

Pubti Wafs Depaxnent _ 20.2 104.5 143.4 176.7 151.1 92.9 47.6 738.4 0.03 0.17 024 0.29 025 0.15 0.08 1.23

Subtotd Mageme D0vdwopn 46.0 238.0 326.5 402.4 344.1 211.6 108.4 1,677.0 0.08 0.40 0.54 0.67 0.57 0.35 0.18 2.79

B. PnjectManagerenUnk 82 42.5 58.4 71.9 81.5 37.8 19.4 299.7 0.01 0.07 0.10 0.12 0.10 0.06 0.03 0.50

C. Trann 31.5 163.1 223.8 275.8 235.8 145.0 74.3 1,149.3 0.05 0.27 0.37 0.46 0.39 0.24 0.12 1.92

D.AudtCompanceProgamm 27.7 143.2 196.5 242.2 207.1 127.3 65.3 1,009.3 0.06 0.24 0.33 0.40 0.35 0.21 0.11 1.68

Tota 113.4 586.9 805.2 992.3 848. 521.8 267.4 4,135.3 0.19 0.98 1.34 1.65 1.41 0.87 0.45 6.89

pop I

VT2J.XL Annex- Annex 6APap 2o3

MdTrupait 8ecbor Poject - IDA CrdTtbb 2. Read ComponeDabad Costs _r_ Cost tCFA Milon) Base Cost N8t Milion)

19t 19 1997 19S3 1999 2000 2001 Totl 1995 1996 1997 195 195 2000 2001 Totdal

L Irnmt CostsPewkdic Manenc Rebtl 630.0 3,150.0 4,20.0 5,040.0 4,200.0 2,520.0 1,260.0 21,000.0 1.05 5.25 7.00 8.40 7.00 4.20 2.10 35.00Rura TcdTm a:d FerrIs 77.4 387.0 516.0 619.2 516.0 309.6 154.8 2,580.0 0.13 0.65 0.86 1.03 0.86 0.52 0.26 4.30

EnomnaAc00ons 34.2 171.0 228.0 273.6 228.0 136.8 68.4 1,140.0 0.06 0.29 0.38 0.46 0.38 0.23 0.11 1.90Susls, Wdst SupeAcn 52.2 261.0 348.0 417.6 348.0 206.8 104.4 i,740.0 0.09 0.44 0.58 0.70 0.58 0.35 0.17 2.90

Totl 793.8 3,9690 56292.0 6,350.4 5,2920 3,175.2 1,587.6 28,460.0 1.32 6.62 8.82 10.58 8.82 529 2.65 44.10

Tobt Including Contingnies (CFA Milon) Totas Incudhg Conwngencies (US$ Mbion)1955 19S1 1997 1998 1999 2000 2001 Total 1999 1996 195 195 19" 2000 2001 Total

L nvestnt Codst PeIdic MaIteinance Rehab. 672.1 3,465.8 4,753.4 56581 5,008.6 3,060.3 1,578.7 24,416.9 1.12 5.78 7.92 9.76 8.35 5.13 2.63 40.69

Rurfal Tracs and Feffbs 82.6 425.8 584.0 719.7 615.3 378.4 193.9 ZM9998 0.14 0.71 0.97 1.20 1.03 0.63 0.32 5.00ErNwcmfent AcUtns 36.5 188.1 258.0 318.0 271.9 1672 85.7 1,325.5 0.06 0.31 0.43 0.53 0.45 0.28 0.14 2.21

Studes, Wail Supervlal 56.1 289.3 396.8 489.0 418.1 257.1 131.8 2038.1 0.09 0.48 0.66 0.81 0.70 0.43 0.22 3.40

TOal ' 847.2 4,369.0 5,9922 7,384.8 6,313.9 3,883.1 1,990.1 30,780.3 1.41 7.28 9.99 12.31 10.52 6.47 3.32 51.30

Pop I

Annex - Anexte 6A07...3XLS Page 3 of 3

MdTMnipoW Secd trafjt - IDA CrediTabe 3. ROMy CannWeDtOb10ed Cods Base Cost (CFA Mlion) Ease Cost russ Mllion)

t 1995 t99S 1997 1998 1999 2000 2001 Totd 1996 1996 1997 1986 1f9f 2000 2001 Totl 1995

L hrw untd CosdsA. Trck RdablWatln-lstbawnch 117.0 585.0 780.0 938.0 780.0 488.0 234.0 3,900.0 0.20 0.98 1.30 1.56 1.30 0.78 0.39 8.50 124.8B. Fmdltt tem*I -Koftiu 54.0 270.0 360.0 432.0 360.0 216.0 108.0 1,800.0 0.09 0.45 0.60 0.72 0.60 0.36 0.18 3.00 58.0C.Studis,WCWkSupedvlbn 12.6 63.0 84.0 100.8 84.0 50.4 25.2 420.0 0.02 0.11 0.14 0.17 0.14 0.08 0.04 0.70 13.2

Tota 183.6 918.0 1,224.0 1,468.8 1,224.0 734.4 387.2 6,120.0 0.31 1.53 2.04 2.45 2.04 1.22 0.61 10.20 196.0

Totdls bcukdin Ctngcincs (CFA M111) Totals hding Coinfgences (US$ Mlion)Totd 1995 1996 1997 1998 1999 2000 2001 Totd 1996 1996 1MY7 199S 19M9 2000 2001 Totd

L .vemnt CoodsA.Tra* RdiItdan-lst bIuch 6.60 124.8 643.6 882.8 1,087.9 9302 572.1 2932 4,534.8 0.21 1.07 1.47 1.81 1.55 0.95 0.49 7.58B. Fng0p Ibmhd - Kuina 3.00 58.0 299.3 410.5 505.9 432.5 268.0 136.3 Z108.4 0.10 0.50 0.68 0.84 0.72 0.44 0.23 3.S5C. Sa, WorkSupentbn 0.70 132 88.0 93.3 115.0 98.3 60.5 31.0 479.3 0.02 0.11 0.16 0.19 0.16 0.10 0.06 0.80

Totl 10.20 196.0 1,010.9 1,386.6 1,708.8 1,461.0 698.5 460.5 7,122.3 0.33 1.68 2.31 2.85 2.43 1.50 0.77 11.87

Ppot

- 75 -

Annex-Annexe6BPage of 2

MALI

TRANSPRT SECTOR PROJECT

DETAILS OF ROAD COMPONENTS PROJECTS(US$'O0O)

(Base 1993 including Jan.1994 CFAF Devaluation)

A. ROUTINE MAINTENANCE: TOTAL PROGRAM COST: 33,700B. PERIODIC MAINTENANCE

and REHABILITATION: TOTAL PROGRAM COST: 117,600

Section Scheduled date Km cost Unit Cost

B, Periodic Maintenance 2221 51,979

(i) Paved Roads 788 29,103 36.93

1. Koutiala-Faramana Jun-95 1122. Ouan-S6var6 Jun-95 1113. Faladid-S6gou Sep-94 674. Sikasso-Koutiala Jan-95 130S. S6var&Douenta Jan-97 1706. Sienso-Ouan Jan-96 827. Markala-Niono Jun-95 648. Accds barrage Selingu6 Jun-95 52

(ii) Gravl Roads 818 16,589 20.28

9. Bougouni-Badogo Nov-94 5710. Badogo-Kalana Nov-94 3311. Fana-Dionla Jan-97 4012. Bamako-Kour6mal6 Jan-97 12213. S6var-Bandiagara Jan-96 6114. Tion-frontiFre Burkina Jan-96 4615. Bougouni-Manankoro Jan-97 12316. Sikasso-Koloko-front. BF Jan-96 4417. Kayes-Sadiola-Djibroua Mar-97 18718. Bamako-Kati Jun-95 1S19. Koulikoro-Banamba Avr-97 90

(iii) Imvmrwd Tnrua 615 6,287 10.22

20. Diona-Sikasso Jan-97 11521. Diolla-Massigui Jan-97 10022. Didieni-Gounbou Oct-96 18223. Kounna-Korientz6 Jan-98 6524. Konobougou-Baroueli Jan-97 1825. Kita-Krounikoro Jan-96 9526. Fana-Nangola Jan-97 40

- 76 -A==ex- Annexc6B

Pqs 2 af2

Section Scheduled date Km Cost Unit Cost

B2 Rehabilitation 1738 65,621

(i) Paved Roads 383 26,057 68.03

27. Koulouba-Kati Jan-96 928. Koutiala-Sienso Oct-97 11529. Bla-Koutiala Jan-98 7530. Bamako-Koulikoro Jan-97 5731. S6gou-Bla Jan-96 7932. S6gou-Markala Nov-94 3533. Mopti-Svar6 Jan-96 13

(ii) Earth Roads 1,355 39,564 29.20

34. Kayes-Nioro-Gogui-fronti&re Jan-97 31235. Kati-Kita Jun-96 16536. Diema-Didi6ni Jun-97 16537. Bandiagara-Frontiere BF Jan-98 11338. Tambaga-Manantali Jan-96 10239. North region tracks 498

C. Tracks and Ferries 14,200Tracks 512 12,400 24.22

40. Krouninkoto-Nioro Jan-97 17441. Korientz6-Niafounk6 Jan-98 9042. San-Say Jan-96 5543. Tamani-Baroueli Jan-95 3044. Falo-Bani-RN6 Jan-95 4045. Other rural tracks 1998 123

Ferries46. Ferries (4) 1995 1,800

D. Environmental Actions 5,900(5 % of B)

E. Bamako Urban Road 1994 23,800

F. Studies and Works Control 8,000

TOTAL FOR ROAD COMPONENT 203,200

G. Road Maintnace Equpnt 5,000

GRAND TOTAL 20400

f -==== -G:W-Lg!irj

SM I Li' IA1X I

- 78 -

Ane - Anexe 6DMALI

Trnport Sector PojctProet Sectoriel TransportuTchncal As8islAssislance Technique

I__________________________ U NB PU USSML DNT _ __

TA, AT PM 55 0.018 1.00

hnfmam PM 6 0.018 0.12Vehics, vihia U 3 0.03 0.09

Cor.iAw U 6 0.01 0.06

l,2! -mdi -Office equpms F 1 0.03 0.03

S&UIOuto_ 1302. DNTPl

TA, AT PM 30 0.018 .53Vhicl, v&u_ _ _ 12 0.03 036

Cc.puuequipmmt U 8 0.01 0.08

Office equ u F 0.03Equpemmi de b__

SuhicbLsauc__ 1.003. COORDINAT1ON

TA, AT CoordinWti PM 6 0.018 0.10

ZPUTI 04g naa, ~ 1.meam_ _ _ __ _ _ _ _ __ _ _ _ __ _ _ _ _ _ 0.10Eq*me, Eqdme_ 0.10

Peractl M 240 0.00029 0.10lut*oucot 0.404. TRAINING, FORMATION _____ __________

Eqipnit.Equ**Me 0.45

OpngmAth twamemt" 0.10

Tnibnugaa 0.15

ExparIae specdiast 27 0350I Pe ______

a Speciaist 0.40

A AUDITS L40

TOTAL S.70

4y:U-isiugWU-Nwswb '-uIh

P-~

-79 -An= - Anne= 6E

Cellule de Coordination - Coordinadon UnitCofits (en FCFA) - Costs (FCFA)

(5 ans - Sca)

Millions

1) Personnels - Personnel 59,3

Coordonnateur - Coordinator 350 000 x 60 moisCoordonnateur Adjoimt - Asst Coord. 300 000 x 60 moisSecr6taire - Secretary 100 000 x 60 moisChauffeur - Driver 60 000 x 60 mois

810 000 x 60 mois = 48,6Charges sociales - Social charges 10,7

2) Equipement - Equipment 62,0

2 Vehicules - 2 Vehicles 15 000 000 x 23 Micro-ordinateurs - 3 Computers 6 000 000 x 3Divers (bureaux) - Miscellaneous 14 000 000

3) Fonctionnement - Operaing Costs 63,5

Vbhicules - Vehicles 30 000 000Fournitures - Supplies 18 000 000T61., fax - Tel., fax 9 000 000Assurances-Insuance 1 500 000Divers - Misc. 5 000 000

4) Assistance Technique - Technical Assistance 60,0

6 h/mois x 10 000000

Total Gn&al - Grand Total 245M(Cofits de base - Base costs)

COORDcO.2

- 80 -Annex 7A

RIPUSUC OF MAUTrasport Sactor Projelmnlemen Schwdg"

Estimated AnrW Cont a d 0OUtw Pament(US million *qAwalet In be o

Project Element FY95 FY96 FY97 FY98 FY99 Total Remaks1 2 3 4 5 P __men

Credit Timing -Sign/EffectlClose 9194 8/2001

Works - RoadsRoutine Maintenance 6.10 6.60 6.90 7.00 7.20 33.70 LC81Force account

Periodic Maintenance/Rehab 5.50 22.50 27.70 31.30 30.60 11 7.60 ICBIDA (3.40) (6.40) (9.90) (4.60) (7.20) (31.60)

Rural Tracks 2.40 2.10 2.50 5.40 12.40 ICBIDA (1.50) (1.20) (2.70)

Environmental Actions 0.30 1.10 1.40 1.80 1.50 6.90 ICBlCoencedIDA (0.20) (0.60) (0.50) (0.30) (0.30) (1.70)

Bamako Expressway 4.70 7.70 6.60 4.80 23.80 IC8

Works - RailwayTrack Rehab 2.60 4.30 4.70 4.00 2.10 17.70 IC81CoffnancedIDA (1.20) (1.80) (2.40) (2.40) (0.70) (8.60)

Freight Terminal 0.80 1.30 1.30 0.60 3.80 ICBlCoflnaced

Works - Airport

Upgrading of Baenako-Senou 1.00 1.10 1.10 3.20 Cofinanced

GoodsFerries 0.80 0.50 0.60 1.80 CoflnancedIDA (0.80) (0.50) (1.30)

Telecommunicatdons Equipment 0.30 0.30 0.7.0 1.30 Coflnanced

Switching Locomotives/RoUingStock Rehab. 0.70 2.80 0.90 1.30 6.70 Coflnanced

Logistical Equipment 0.40 0.70 2.20 3.30 Cofinanced

Airport Security Equipment 1.00 1.30 1.30 0.50 0.40 4.60 Co-financed

Vehicles, Comnputer Equipmeant (1.00) (0.20) (1.20) IC8

Road Maintenance Equipmnt 3.00 2.00 6.00 Co-finsnced

Cosdutenas (IDA -100%)TAtoDNT 0.40 0.20 0.40 0.10 1.10

TA to DNTP 0.30 0.10 0.10 0.60

TA to Coordinator 0.10 0.10 0.10 0.30

Studles, Works SupervAsion 0.60 2.00 2.30 2.30 t.ao 8.70

Audits 0.30 0.40 0.40 0.30 1.40

Training 0.30 0.30 0.30 0.30 1.20

TOTALS 23.10 56.40 83.10 69.30 53.20 254.10

(IDA -flnanced) 7.701 13.00 16.30 8.90 9.20 65.16

ANNCONT.XLS/4/1 9/94

- 81 -

Papc I of 3

MAUTrutport Sector ProePufonmnce Indlcatots

Element Year 1 Year 2 Year 3 Year 4 Year 5 TOTALROAD MAINTENACE 3,000 3,500 4,000 4,500 4,500 19,5001. Routine by force account (kCm) 2,000 1,600 1,000 1,000 1,000 6,500-paved roads (km) 500 500 300 300 200 1,800-earth roads (kfm) 1,600 1,000 700 700 800 4,700*amount US$'000 1,500 1,600 1,700 1,760 1,800 8,350

2. Routine by contractors 1,000 2,000 3,000 3,500 3,500 13,000-paved roads (krm) 1,000 1,000 1,000 1,000 1,000 6,000-earth roads (-tm) 1,000 2,000 2,500 2,500 8,000-amount US*'000 4,600 4,900 4,200 6,250 5,400 24,350

3. Periodic and rehabilitation (IDA) 60 176 180 180 139 724-paved roads (km) 50 100 100 100 63 413-earth roads (km) 75 80 80 76 311

4. Planting 0-number of ts 500 1.600 1,600 1,600 1,660 6,960-length (kcm) 5 16 16 16 16 69-square ha 3 8 8 8 8 35

5. Road date (km) 200 1,000 1,000 1.800 2,000 6,0008MTPoperating income US*'000-part from force scmt (%) 66 50 25 25 20-part from private (%) 34 50 75 75 80

DNT-number of cars re-eistered 2,000 8.000 8,000 8,000 26,000-number of cars inspected 2,000 2,000 2,000 2,000 8,000

TRAINING-number of days 100 400 400 400 300 1,600-number of beneficiaries 50 200 200 200 150 800-number of ben. from private ctor 100 100 100 50 350

PER*IND.XLS/4/20/94

-82 -

Annex - Annexe 7B

RC;FM PEIUiOMA= IDATORS Pap 2 of 3

The following performce indicators will be monitored on a monthly (M), quarterly (Q)or yearly (Y) bash.

Annual targets for these indicators will be included in the 1994-199 RCFM CorporatePlan (tentative targets for global performance indicators are presented In pa. a 1.50).

Global gerformance indicators

Operating income (REsultat Brut d'Exploltadon) (Q, Y)

Ratio Total Staff Costs/Value Added (Ratio Prais de personnel totaux/Valeur ajoutee) (Q,Y)

Loortive availability. reliability and utilization

Locomotive availability (Disponibilit6 des locomotives) (M, Y)

Locomotive reliability (Fiabilite des locomotives) (M, Y)

Locomotive time utlization factor (Taux d'utilisation des locomotives) (M, Y)

Annual kilometrage per available locomotive (Kilom6trage amuel parcouru parlocomotive disponible) (M, Y)

MM V agoailabiliq atnd utilizEo

'Wagon availabiity (Disponibiite des wagons) (M, Y)

Wagon turnaround (Rotation des wagons) (M, Y)

* Average wagon load of loaded wagons (Chargement moyen des wagons charges) (M, Y)

Coach availability and utilization

Coach availability (Disponibilite des voiture voyageurs) (M, Y)

Annual kilometage per available coach (Kilometrage annuel parcouru par voiturevoyageurs disponible) (Y)

Average gross trailing load of freight trains (charge brute remorqu6e moyenne des trismarchandise) (1M, Y)

Average number of seats of passenger trains (Nombre moyen de sieges des traisvoyageurs) (M, Y)

Annex - Annew 7B- 83 - Pap 3 of3

Aveao occpancy rao of passenger twains (am moyen d'occupation des trainsvoyger) (M Y)

Avere delay of passenger train (Retard moyen des trains voyageurs) (M, Y)

Numbor of mainline derailments (Nombre do d6raillements de pleine voie) (Y)

Number of non-main line derailments (Nombre de diliemes hors pleine voie) (Y)

Lenh of slow orders and time lost by trains (Loneur des raletissements voie et tempsperdu par lae trains)

Reue per ton x km (Recete par tonne x kilomere) (M, Y)

Reme per seat x km for passenger services (Recette par sibge x kilomtre pour lessrvices voyageu) (M, Y)

stffom odu,h:

Number of traffic units per permanent staff (Nombre dunits de trafic par tavailleurpermanent) (Q. Y)

- 84 -8An - Anam 7C

Page 1 of 2

SUPERVISION PlAN

APPROXIMATE ACTIVITY EXPECTED SKILLSDATE (SW)

Sept/Oct. 1994 Supervision Mission Highways Eng. (1)Proiect Launch Workshop Railways Specialist (1)

Disbursements (1)Objectives: Procurement (1)a) Explain project objectives to beneficiaries, enterprises and Lawyer (1)

Governmentb) Hold detailed workshops on procurement and disbursementsc) Review effectiveness:

i) Achievement of credit effectiveness3_________________ ii) Review accounting and management information system

December 1994 Supervision Mission Engineera) Review project progress

l_________________ b) Review outstanding issues

March 1995 Sunervision Mission Engineera) Review project progress Railways Specialistb) Review outstanding issues

June 1995 Supervision Mission Engineera) Review project progressb) Review outstanding issues

Sept/Oct. 1995 SuDervision Mission Engineera) Review project progress Railways Specialistb) Review outstanding issues

December 1995 Supervision Mission Engineera) Review annual investment programb) Review project progressc) Review outstanding issues

March 1996 Sunervision Mission Engincera) Review project progressb) Review outstanding issues

May/June 1996 Sunervision Mission Engineera) Review project progressb) Review outstanding issues l

September 1996 Sunervision Mission Engineera) Review annual investment programb) Review project progressc) Review outstanding issues

- 85 - Anue A Anexe 7C

Page 2 of 2

December 1996 Joint Bank/Government Mid-Term Review Engineera) R-"iew Action Plan Railways Specialistb) Review overall project progress and adequacy of institutional Disbursement

arrangements Procurementc) Review project accounting, SOE and disbursemtents Financial Analystd) Review project's overall impact

March 1997 Supervision Mission Engineera) Review project progress and implementation of

recommendations from -he mid-term reviewb) Review outstanding issues

June 1997 Supervision Mission Engir.a) Review project progress Ralwajy; Specialistb) Review outstanding issues

September 1997 Supervision Mission Engineera) Review annual investment programb) Review project progressc) Review outstanding issues

December 1997 Supervision Mission Engineera) Review project progress Railways Specialistb) Review outstanding issues

March 1998 Supervision Mission Engineera) Review project progress

_____________ b) Review outstanding issues

June 1998 Supervision Mission Engineera) Review project progress Railways Specialist

l________________ b) Review outstanding issues

September 1998 Sup ern sion Mission Engineera) Review annual investment programb) Review project progress

l__________________ c) Review outstanding issues

December 1998 Supervision Mission Engineera) Review project progress Railways Specialistb) Review outstanding issues

March 1999 Supervision Mission Engineera) Review project progressb) Review outstanding issues

June 1999 Final Suervision Mission Engineera) Discussions with Govemnment Railways Specialistb) Preparations for drafting of PCRc) Initiation of preparatory work for future project.

Staff inputs in staff weeks (sw) to supervision are as follows: 13 sw for FY95, 12 sw for FY96, 15 sw forFY97, 10 sw for FY98, 10 sw for FY99, and 5 sw for FY00.

ANNEX12C.PLN

- 86 -

Annex 8Page 1 of 2

REPUBLC OFMALI

TRANSPORT SECTOR ]PROJECT

Environment Action Plan

1. The environmenWal aspect was neglected by the transport sector. A change of attitude wherestdies are concerned wil be sought through the assignment of at least one person to the DNTP totake charge o. enviromnental matters. His initial task will be to persuade sector authorities (whoseapproach is viewed by Malian environmentalists as far from transparent) to be more responsive toenvironmental concems and to help them address the environmental aspect in road projects as farupstream as possible; to do this, they would be encouraged, when tanking projec'. works, to use othercriteria to supplement those based on purely technical and financial concerns. All studies willaccordingly include an environmental section, comprising not only an environmental impactassessment for a given prject, but a review of how that project can help improve the environment,possibly with a few minor additional outlays. The next step will be coordination with othersocioeconomic sectors and with the environmental authorities to ensure that the relevant aspects areduly addressed in project studies.

2. Environmental concerns wiU also be addressed by means of actions of a more operationalnature in the field, both during rouine and periodic maintenance and in the context of the newprojects Certain possible actions are listed below:

(a) Roads and reforestation, The project will seek: (i) to introduce short seminars,tageting the regional and subdivision authorities, on the importance of plant cover,*ii)to encourage critical review of the technical road criteria with a view to limiting

deforestaon; (iii) to foster the possibly forced reforestation of borrow areas once aproject is completed; (iv) to implement planting programs alongside roads andslopes; (v) to initiate dialogue with the water and forestry authorities with a view tocoordinatng road constructon with other measures falling within their purview anddesigned to facilitate massive reforestation; and (vi) to initiate with theenvironmental authorities a study on the monitoring of plant cover development inrelation to the accessibility provided by the road.

(b) Roads and settlements. In the towns and viUages traversed by the road sections tobe built, rehabilitated or periodically maintained, the project will seek: (i) to create aframework for dialogue with the local authorities with a view to identifying possibletechnical improvements to be made to the project; (ii) to try out a number oftechnical arrangements in the area either of local development (market, bus station,roadside restaurant parking, etc.) or of actual road construction (widening of theroad as it passes through a village, speed bumps, separate lanes for bicycles andcarts, safety barriers, etc.); and (iii) in conjunction with the local authities, to setup an accident statistics system.

(c) Work mpdo. Through dialogue with the people who will be living alongsidethe road the site managers will be able to determine the condition in which the site isto be left when the construction crews depart. It is a fact that small-scaleimprovements can be made at least cost when the equipment is still on site.However, a certain number of arrangements will need to be considered in advance.

- 87 -

Annex 8Page 2 of 2

The reuse of borrow areas as watering points will have to be examined with care,provision must be made for laterite pits to be covered whenever they could causeerosion of adjoining land, boreholes drilled for water supply during roadconstruction must be designed so as to be subsequently usable for agriculturalpurposes, worksite detours should be designed for future use as bicycle and carttracks, certain bridges or culverts can be designed from the start to serve as waterretention works, etc.

(d) Dumping of used oil. RCFM, the major trucking companies, service stations, andpublic works contractors are particularly required to notify the competentenvironmental authorities, for opinion and approval, of the location where theypropose to dump used engine oil and cobalt-containing coolants. Dumping intostorm drains or sewers or watercourses, lakes and ponds must be strictly prohibitedby regulations to be promulgated prior to Credit effectiveness, and a sensitizationcampaign on this topic must be conducted among vehicle owners, businesses andservice station operators. Collection of used oil by DNTP, for use in dunestabilization alongside roads in Mali's northern regions, should be tried out on anexperimentti basis.

- 88 - Annex - Annexe 9

1/4

Republic of Mali - Republique du MaliTransport Sector Project - Projet Sectoriel Transports

Documents in the Project File - Documents dans les archives du Projet

Document Title - Titre du Document

1. Capacity Building - Assistance Technique

1.1 Etude des besoins de formation du secteur(AFPA-BICI - novembre 1993)

1.2 Termes de reference de l'assi-tance technique au coordinateur(JB Consultant - janvier 1994

1.3 Termes de reference de l'assistance technique I la DNT(Observatoire des transports) (Beauvais Consultant - janvier 1994)

1.4 Termes de reference pour la reimmatriculation du parc automobile(Beauvais Consultant - janvier 1994)

1.5 Termes de references pour l'etude de la taxation des usagers de la route(Beauvais Consultant - janvier 1994)

1.6 Termes de reference pour la mise en place d'une Banque de donnees routibres etd'une systeme de programmation de l'entretien routier (JB Consultant - janvier 1994)

1.7 Termes de reference pour les etudes techniques routieres (entretien periodique,rehabilitation, routes revetues, routes en terre, pistes rurales)(JB Consultant - janvier 1994)

- 89 - Annex - Annexe 9

2/4

2. Road Component - Composante roudere

2.1 Etude de l'impact du VI Projet Routier sur l'Environnement(Mime. Ta Tu Thui, Consultant - fevrier 1993)

2.2 Evaluation economicue des sous-projets routiars(Beauvais Consultant - novembre 1993)

2.3 Arr&e portant ouverture d'un compte pour l'entretien routier (mars 1994)

2.4 Couvention de maftrise d'ouvrage deleguee avec AGETIPE (anvier 1994)

3. Railway Component - Composante ferroviaire

3.1 Etude d'un programme d'investissements (1994-2003)

3.2 Etude du plan de rationalisation des effectifs (1993)

3.3 Evaluation economique de la composante ferroviaire(Mme. Tatiana Vaes, Consultant - mai 1993)

3.4 Evaluation financiere de la composante ferroviaire(Fiduciaire de la Tour - mai 1993)

3.5 Audit des comptes de la RCFM pour l'exercise 1992

3.6 Avant-Projet de Plan d'entreprise 1994-1998 (RCFM)(RCFM - janvier 1994)

3.7 Termes de reference pour l'&tude d'int6grationRCFM-SNCS (avril 1994)

3.8 Termes de r6ference pour l'etude de la gare I marchandises de Bamako-Korofina(avril 1994)

3.9 Cahier des charges regissant l'exploitation ferroviaire (1993)

3.10 Contrat RCFM-Etat pour l'exploitation de lignes de voyageurs pour service public

- 90 - Annex - Annexe 9

3/4

4. Transports

4.1 Etude de l'impact du VP Projet Routier sur les prix I la consommation(Mme Tatiana Vaes, Consultant - 1993)

4.2 Document de la reunion des Etats Generaux des transports (1993)

4.3 Rapport de la Commission de coordination sur te secteur des Transports (1993)

4.4 Rapports remis aux Bailleurs de fonds lors de la reunion de mai 1993 a Bamako

4.5 Proces verbal de la reunion des Bailleurs de fonds de mai 1993 b Bamako

4.6 Etude d'un plan d'investissements 1994-1998(SOCETEC - mai 1993)

4.7 Plan aeronautique national 1991-2006 (1991)

4.8 Arrere et circulaires portant suppression de la programmation du trafic par la DNT etde l'obligation pour le fret malien de passer par les Entrepots Maliens(decembre 1993)

4.9 Circulaire pour recourir aux appels d'offres pour les transpo,rts importants de l'Etat etses orFiismes

4.10 Rapport sur les corridors de transports internationaux(Vionles Consultant, avril 1993)

4.1 i Transport Sector Memorandum - Memorandum sur le secteur des transports (octobre1993)

91 - Annex - Annexe 9

414

5. Annexes related to the project - Annexes relatives au projet

5.1 Presentation du Secteur5. IA Classification du rdseau routier5.1B Prix moyen a la TK en fonction de la quantite et de la distance5.1C RCFM - Rultats 1989-905.1D RCFM - Transport de marchandises 1987-19925.1E RCFM - Transport de passagers 1987-1992S.1F Corridors internationaux de transport5.1G Composition des exportations5.1H Compcsition des importations5.11 Relations commerciales5.1J Organigramme de la DNT5.1K Organigramme de la DNTP5. IL Recettes provenant oas usagers de la route5. IM Revenus du Gouvernement de la Taxation des Produits PetroliersS.1N Consommation de produits petroliers5. IP Ddpenses routieres5.2 Experiences de l'MlA dans les oj .ations pass6es dans le secteur5.3 Evaluation economique et financibre

12 10 83 16 T. 4 2' - 2

M A L I j .. s

TRANSPORT SECTOR PROJECT iPROJE7 SECTORIEL TRANSPORTS

WORSLANNED FOUN-DER N E PA LECG ERIA

MRAS'ASS 0RO0Al.ES 0ANS If ROSET IIN.

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