RETURN TOIREPORTS.DESK FL Co yRESTRICTEDWIPORTH FISS gLE COPY Report No. WH-200a

ONE WEEK

This report was prepared for use within the Bank and its affiliated organizations.They do not accept responsibility for its accuracy or completeness. The report maynot be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

ECONOMIC GROWTH OF COLOMBIA

PROBLEMS AND PROSPECTS

(in XII volumes)

VOLUME VII

TRANSPORT

November 1, 1970

South Arnerica Department

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CURRENCY EQUIVALENTS

(Certificate Market Selling Rate of Exchange)

End 1968

1 US$ = 16.91 Pesos

1 Peso = US$0.05913

End 1969

1 US$ = 17.90 Pesos

1 Peso = us$0.05586

End-March 1970

1 US$ = 18.20 Pesos

1 Peso = US$0.0549h

TABLF OF CONTETITS

Page No.

I. INTRODUCTION ....................... 1.................... l

A. General .. 1B. Ilighways .. 1C. Railways .. 2D. Ports . . 2

E. River Transport .. 3F. Air Services. 3C. Pipelines .. 4H. Investment Plans .. 4

II. THE HIGHWAY SECTOR. 5

A. Highway Network ....................................... 5B. llighway Administration .. 5C. Hip;hway Planning. and Financing . . 6D. Highway Engineering ......................... 6ED Highway Construction ................................. 7F. Highway Maintenance .. 7G. Characteristics and Growth of Road Traffic . . 7H. Taxes on Vehicle Ownership and Use . . 8I. Tolls on National Highways .. 10J. Records of Highway Traffic .. 12K. Foreign Assistance witth Highways . .13I. Highway Feasibility Studies, Current and Future ..... 14M. Colombia Feeder Roads .. 16N. The Highway Investment Program . .17

Ill. RAILWAYS ............ 1,... 18

A. The Railway System .. 18B. Vehicle Fleet .. 20C. Characteristics of Train Traffic . .21D. Outlook for Future Traffic .. 24E'. Uneconomic Lines .. 25F. Possible E'xtensions .. 27G. Railroad Costs andi Pricing .. 28-1. General .. 31

IV. INLAND WATERWAYS ........................... 33

V. AIR SERVICES .35

A. Introduction .35B. Forecast of Commercial Air Transportation Activity 35C. Long Range Aviation Needs .381). Air Services Proviled .40

TABLE OF CONTENTS (Continued) Pag.e No.

E. The National Airports System .......... .. ............. 41F. Pricing, Tariffs and User Charges . .42G. AVIANCA ............... 43tl. Legislative Changes in Managemenet of Colombian

Civil Aviation .................................... 44I. Feasibility Studies ............... .. ................... 46

VI. PORTS . .. 47

A. Organization .. ................ 47B. Port Charges .. ................ 47C. Port Capacity ................. . 47D. Port Operations ...................................... 49E. Traffic ................................. 5(F. Investment Program ............... .. .................. 51

ANNEX A Records of highway TrafficANNEX B Status of Feaisibility and other Highway Preinvestment StuldiesAININX C Inventory Sheets, Preinvestment StutdiesANNIX U) Preinvestment Study Data SheetsANNEX E Reference Material

TABLES - HIGHWAYS

I.1 Anticipated Public Sector Investment in Transport - 1970-1975II.1 National Highways by DistrictII.2 Departmental RoadsII.3 Past and Projected National Highway ExpenditureII.4 MOP Highway Design StandardsII.5 Vehicle Registrations - 1958-1967II.6 Motor Fuel Consumption - 1958-1968II.7 National Investment Program 1969-1972 Highways (million pesos)II.8 Sources of Revenue for 1969-1972 Highway Program

TABLES - RAILWAYS

III.1 Colombian National Riailroads DerailmentsIII.2 Freight TrafficIII.3 Freight Traffic by Commodity - 1969III.4 Average Length of HaulIII.5 Annual Paying Freight - 1962-1969III.6 Distribution of Rail Freight by Size of Shipment - 1969III.7 Summary Income Accounts - 1962-1970III.8 Summary Cash Flow 1968-1970III.9 Summary Balance Sheets, 1968-1970

TABLES - AIRWAYS

V.1 International Diversionary Traffic From ColombiaV.2 Balance Sheet (AVIANCA)V.3 AVIANCA Profit and Loss Statement

MAPS

Figure II.1 National Highway SystemII.2 Possible Future Highway Projects

III.1 National Colombian RailroadsIII.2 Republic of Colombia Railroad GradientsIII.3 Colombian National Railroads Traffic Density 1969

V.1 Colombian Air Routes

1. INTRODUCTION

A. General

1. The Republic of Colombia is situated in the northwestern cornerof South America and has coastlines on both the Pacific Ocean and the Carib-bean Sea. This advantage of having two coastlines is offset by the diffi-culty of movement between the coasts and the interior. The three massiveranges of the Andes Mountains which run from south to north present formid-able barriers to communication between the main areas of population, whichuntil recently developed as separate and almost isolated communities.Transport investment policy over the past twenty years has been aimed atnational integration and at overcoming the situation imposed by geography.Within the next year or two the task of establishing what might be termedthe basic transport -network of the country should be completed.

2. The World Bank has been closely involved in the improvement ofColombia's transport facilities since 1951. Six loans and an IDA credittotalling US$136 million have been made for highway construction and re-conEtruction. Five loans totalling US$94.6 million have been made forrailways1 primarily for the construction of the Atlantic line of the nationalrailroad and for a program of rehabilitation of the entire network.

3. The sixth highway project, consisting of about 1,600 km of paving,construction of a major bridge over the River Magdalena and the constructionof a port access highway at Buenaventura commenced in June 1970.

4. The Inter-American Development Bank has made loans for theCaribbean trunk highway and for roads supporting colonization schemes inthe Meta and Arauca. Two loans of US$28 million to finance the construc-tion of 2,000 km of feeder roads have recently been granted and the IDBis expected to provide another US$30 million in loans for major highways

in 1970. Altogether the IDB has lent about $70 million for road develop-ment schemes in the past three years. Except in regard to ports. where IDB

have provided some financial assistance, the contribution of internationallending agencies to other transport sub-sectors has been insignificant.

B. Highways

5. Colombia has some 45,000 km of roads, of which about 5,000 km are

paved. The total number of road vehicles - 260,000 in 1968 - has been in-

creasing by about 6% p.a. in recent years, and trucks by about 4% p.a.

This is a fairly slow rate of growth compared with that in other countries

at a similar stage of development. However, since there has been a slight

trend towards larger vehicles, total trucking capacity has been expanding at

a somewhat faster rate. Now that the Government is exercising control over

the importation of heavy vehicles in order to protect the highway system from

excessive loads, this trend may not continue. On the main trunk highways,

truck traffic predominates.

6. About two-thirds of public investment in the transport sector isbeing devoted to highway construction and reconstruction. To a large extentthe development of the highway network has been complementary to the railwaysystem rathier than competing with it. Transport between Bogota-Medellin andSanta Marta, for example, is essentially the province of the railway; on theother hand, the large rural areas in the northwest between Medellin andCartagena depend ,almost entirely on the trunk highway between these twocities as their main artery. The provision of modern highways has neverthe-less resulted in considerable diversions of traffic from rail to road insome areas.. In some cases this is due to the present rundown condition ofparts of the railways system; where good services can be provided with ade-quate equipment, the railway is under much less competitive pressure. On thePaz del Rio-Bogota route, for example, it seems likely that most of the steeltraffic is returning to rail now that a reasonable service can be offered.In other cases, particularly the routes Bogota-Espinal-Ibague, Cali-Medellinand, in future, Cali-Buenaventura, due primarily to the difficult operatingconditions imposed by the terrain, road transport is likely'to offer suffi-cient advantages for. many types of traffic to attract it away from the rail-way. Development of communications in Southern and Eastern Colombia will bein the form of highways and the government has prepared an ambitious feederroad system as a complement to the primary and secondary highway program nowunderway.

C. Railways

7. The Colombian National Railways (CNR) operate a unified network oflines totalling 3,436 route km. The system has access to the Pacific atBuenaventura and to the Atlantic at Santa Marta. Traffic from the otherAtlantic ports of Cartagena and Barranquille is transferred to the railwaythrough road and water routes. The Atlantic line is the most important.

8. Traffic on'the main trunk lines averages about 500,000 ton-km perroute km p.a., and in 1969, total traffic achieved a record 1,159 millionton-km. However, completion of some major highway projects, particularlythe new Buenaventura-Cali highway in 1970, is expected to result in substan-tial diversion of traffic from some routes. Passenger travel had been de-clining at 6% p.a. for several years, and in 1969 the CNR carried onemillion, or 28% fewer passengers than in 1968. About 260 km of apparentlyuneconomic line are being studied for possible closure. Improved operatingratios for the period 1968--1976 have been forecast and in 1969 the CNR brokeeven on operating account for the second time in its history. Consultants(SOFRERAIL of France) have been assisting the CNR since 1967 in advising onand implementing a track rehabilitation and maintenance program and trainingtechnical personnel.

D. Ports

9. Most foreign trade dry cargo is handled by four ports, Buenaventuraon the Pacific and the Caribbean ports of Barranquilla, Santa Marta, and

Cartagena. Total exports grew at a rate of 5.4% p.a. during 1956-68 whileimports have in recent years been substantially less than in the mid-1950's,reflecting both foreign exchange difficulties and import substitution effects.When the expansions being made at Buenaventura and Santa Marta are completedand in use, the country as a whole will probably have adequate port capacityfor the next ten years. The Government and COLPUERTOS which administersthe major ports are trying to remedy deficiencies in operation of'the portsarising from low labor productivity, poor timing of arrival of bulk imports,such as foodstuffs and other agricultural products, and failure to cooperatewith the railway and highway authorities in planning improved access to theports.

E. River Transport

10. There are several navigable rivers in Colombia, but 96% of theinland shipping takes place on the Magdalena and most of the rest operateson the Cauca. River shipping is possible in all seasons on the lower re-gions of the Magdalena. Upriver from Gamarra, 473 km from the mouth, how-ever, the river is not navigable on a 24-hour basis and travel becomes ex-trenmely hazardous and unreliable in the dry season. In favorable seasons,the river is navigable for 930 km to La Dorada; at other times only 600 km.The volume of traffic varies from year to year according to the conditionof the river, and in recent years there has been competition from the At-lantic line of the railroad over the whole length but especially in thenorthern reaches of the river. Yet, the absolute level of cargo trafficon it has been continuing to grow; a record 2.8 million tons or 1.3 billionton km of traffic was transported on the river in 1968. Passenger traffichas suffered much more from the improvement of road and rail services in theMagdalena Valley. In 1956, 363,000 passengers were carried on the river;in 1966, the last year of record, only 6,979 travelled by this mode.

F. Air Services

11. Colombia's very difficult terrain encouraged the early developmentof air services for internal as well as international transportation. Thereare about 700 aircraft landing facilities in the country. These are sevenwith jet services. Internal passenger traffic has increased by 4.6%p.a. between 1964 and 1968 and internal air freight movement is more or lessstatic. In 1968, only about 103,000 tons of traffic, generating 72 millionton kmi, were handled. There are evidences of recent over-expansion ofinvestment in airport facilities. In 1967, Avianca cancelled its Bogota-Popayan jet flight and the new airport at Popayan is almost unused as a goodroad now connects Popayan to Cali. Other recent improvements in surfacetratisport facilities have led to a decline in traffic on certain routes.

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G. Pipelines

12. Petroleum products. Colombia's second largest foreign exchangeearner after coffee, are mainly transported by pipeline. Crude oil pipelinessupply five refineries, including one at Cartagena, which ships refined pro-ducts via the Panama Canal to Buenaventura for distribution to western Colom-bia. Another line supplies crude to Santa Matta for export. Refined pro-ducts are also moved by pipeline from refineries in the north to Bogota,Medellin and the Cauca Valley, and from Buenaventura to the Cauca Valley.

H. Investment Plans

13. During the period 1970-72 the Government intends to increasepublic investment in most sectors, including Transport, substantially.The best estimate of current plans for investment in the transport sectoris given in Table 1.1, together with a tentative extrapolation for 1973-75. However, the Mission's conclusion is that, in spite of increasedabsorptive capacity, the investment targets are unlikely to be fullyrealized, particularly if final investment decisions are based on carefulappraisal of economic merit.

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Cable I-i. ANTICIPATED PUBLIC SECTOR INVESTME1NTIN TRANSPORT - 1970-1975

1970 1 971 1972 1973 1971- 1__)

Roads 2494 2429 2722 2800 2900 3070

Railways 240 28( 235 120 4h) 160

Rtiver Transport 40 47 95 100 107 14

Seaports 126 174 82 83 20 35

Civil Aviation 284 122 125 119 128 126

Total 3184 3061 3259 3222 3295 3505

Notes:

1. In current pesos with an assuaed 7% p.a. price increase included.

2. Some of these figures, particularly roads, include maintenanceestimates.

3. These figures differ from the sub-sector totals discussed in thevarious chapters because they include estimates for local governmentand a small element of private investment.

II. THE HIGHWAY SECTOR

A. Highway Network

14. Colombia has a road network totaling about 45,000 km in length, ofwhich about 19,000 km form the national highway system, a further 19,000 kmare departmental, and the balance are municipal (linking towns with outlyingcotmunities and farms) and private (such as to oil concessions). The De-partmental system includes about 3,000 km of "caminos vecinales", which arelow standard feeder roads built under a national program established in19450; materials and labor for these are furnished by the local communities.Ag-ricultural produce boards and departmental and central authorities allcontribute to this program. About 20% of the national system is paved,whereas less than 5% of the departmental roads are paved (Tables II.1 and11.2). The national highway network over the years 1962 to 1969 increasedfrom 16,500 km to about 19,000 km.

15. The difficult terrain (which leads to high construction costs) wasa major factor in the isolation and traditional independence of the variousregional centers. Only in the last two decades hias there been any real ef-fo:rt to link the main population and economic centers of the country by goodroads.

16. The national highway system includes the basic trunk network whichconnects the main centers of population and a number of secondary roads link-ing the smaller towns to the primary network, as well as some minor roads ofat present purely local importance, but which may in future form part of newlong distance routes (Map I.1).

B. Highway Administration

17. The Ministry of Public Works (MOP) is responsible for planning,constructing and maintaining the national highway network. The nationalhighway system accounts for about 90% of MOP's activities. Efforts tocreate a modern transport system started in the early 1950's but limitationswere imposed by lack of funds and by organizational difficulties within theMOP which operated with archaic procedures and systems. In 1966, theGovernment engaged management consultants to review the Ministry's operations,to make recommendations for improvement and subsequently to help implementthese recommendations. The implementation phase is still in progress. Pro-gress has been achieved in almost all the Ministry's activities, and partic-ularly in maintenance, but not at the pace which the Government hiad foreseenwhen the Bank Fifth Highway Loan (550-CO) was made in 1968. The main reasonfor this has been the difficulty of recruiting and retaining sufficient staffof high calibre, government salaries generally being unattractive and notcompetitive with the private sector.

Table II-1. NATIONAL HIGHWAYS BY DISTRICT

DISTRICT H.Q. PAVEI GRAVEL TOTAL

MEDELLIN 320 1,345 1,665C(ARTAGENA 396 309 705TUNJA 261 1,720 1,981MANILALES 530 606 1.,136POPAYAN 116 891 1,007M?NTERIA 168 329 497BOGOTA 513 518 1,031QUIBO 225 225RIOHACGA 435 1435NEIVA 226 803 1,029VALLED.UPAR 319 957 1,276VILLAVICENCIO 58 878 936PASTO 20 1,316 1,336BUCARAMPN)GA 345 1,150 1,1495WUCUTA 188 1, 666 1,8514

IBAGUE 352 909 1,261PALMIRA 413 141 827FORENCIA 66 198 264SAN ANDRE 12 48 60

TOTAl 4,303 14,717 19,020mggmw=xt W=a===_ =I===In

HISTORIC COMPOSITION OF NATIONAL HIGHWAY NETWORK

Year Length (Km) %Paved

1962 16,512 11.51963 16,692 13.71964 17,054 14.61965 17,1479 15.01966 17,564 15.41967 17,997 16.61968 18,842 22.51969 19,020 22.6

Source: MOP, Planning Office, Deoember 1969

Tabl e II-2'. DEPARTKFvThPNT-I, I<,ADS

DEI'Awrl¶tEiNT .... KM PAVED GRAVEL EARTH

A.NTI0QUIA 2,461.0 - 2,h81.0

ATLANTICO 552.4 33E3.2 180.0 34.2

BOLIVARh 204.] - 95.1 109.0

BOYACA 860.0 552.0 308.0

CALDAS 880.0 862.0 18.0

CAUCA 426.9 364.9 162.0

CESAR ....

CORDOBA. 267.0 - 155-0 112.0

CUNlNAMARCA 2,981-7 95.1 ',499.6 387.0

CHOCO . -

GUAJIRA 342..2 - 30.0 312.2

HUILA 6176.5 350.5 267.0

MAGDALENA 181.0 28.0 153.0

META 787.0 352.o 435.0

NARINO 771.0 - 643.0 128.0

NORTE DE SANTANDER 1.79.0 68.o 1116.8

QUINDIO 426.0 - 344.0 82.0

RISALRALDA 507.0 - 497.0 10.0

cANTANDER 1,861.5 - 837.4 1,024.1

SUCRE 164,0 - 76.o 88.0

TOLIMA 1, 353.0 707.0 646.0

VALLE 3,276.6 79.0 2,929.7 267.9

TOTAL ...... 19,118.9 512.3 13,952.2 4,654.4

Source: MOP, December 1969

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C. Highway Planning and Financing

18. The management consultants helped MOP to start an inventory ofthe national highway system. About 7,000 km have so far been covered andit iS expected that the inventory will be completed during 1970. It willfacilLitate future highway planning and operations and help to establish thebasis for classifying roads. The first comprehensive national traffic cen-sus was conducted in 1968; the results were used together with the inventoryand field inspections and some additional counts to plan the 1970-73 highwaypaving program. The analysis of similar traffic counts for 1969 has recentlybeen completed and these counts will be continued on an annual basis.

19. In the past, highway projects undertaken by MOP were numerous andambitious, but many were never completed; the policy of the last three yearshas been to concentrate more on completing projects already begun than onstarting new projects. There is however evidence of a tendency to go backto working on a large number of fronts. Funds for further feasibility studiesto ensure that suitable high priority projects are prepared for financingwere provided in Bank Loan 550-CO.

20. One of the main causes of poor performance on earlier highwayprojects was the inadequate provision of local funds by the Government foran ambitious road program; this not only forced construction contractors togear their output to known availability of funds; but led directly to thefinancial failure of some firms. The establishment of the National HighwayFund at the end of 1966 provided a more assured source of financing for high-way works. However, greater reliance will in future be placed on the generalbudget contribution unless the petroleum exchange rate is reformed. TableII.3 shows recent and projected expenditures on the national highway system.A considerable increase over past levels of spending is planned and it isdoubtful whether this can be attained.

D. Highway Engineering

21. The standards for new highway construction introduced in 1967 areshowm in Table II.4. Not all the roads in the 1970-73 paving program will beimproved to conform thereto since these roads are already in existence andupgrading to meet standards for new construction would in some cases beuneconomical or impracticable because of difficult terrain.

22. In Colombia, pavements have frequently been overdesigned toovercome deficiencies in drainage. The MOP is now being assisted by anexpert from the Road Research Laboratory (UK), whose main task is to re-view and advise on pavement design in the country.

23. Although many of its personnel are competent, the Ministry haslimited design capacity and uses consultants for this purpose. While re-organization of the Ministry could increase its engineering capability andthus enable some design to be undertaken directly, it will continue to benecessary to use consultants for most design work.

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Table II-.3. PAST AND PROJECTED NATIONAL HIGHWAY EXPENDITURE(Million Pesos)

Construction Maintenance Total

1963 n.a. n.a. 57.b

1964 n.a. n.a. AJ:?

1965 n.a. n.a. 711.4

1966 n.a. n.a. 643.7

1967 n.a. n.a. 873.9

1968 n.a. n.a. 1088.3

1969 711.0 388.0 1099.0

1970 1l78 ..9 ° 4). I .0' 1922.0

1971 1326.3 4P2.5 1758.8

1972 1ht27.0 604.8 2031.8

Sources: National Planning Department and MOP, National hoad Fund,Budget 1970.

Note: The maintenance estimates include provision for equipmentin the year acquired. The constructGion expenditure forecastsare based on very tentative timing of projects. Plannedexpenditure on feeder roads is not. included. iSxpenditure isshown in current, prices and therefore actual historical growthis overstated.

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24. The consulting profession is now well established in Colombia.There are a number of large and capable Colombian engineering firms, someof which have developed as a result of their participation in foreign-financed projects in highways, power supply and other fields. For mostroad projects in future there will be no need for foreign experts. How-ever, for large projects, such as Barranquilla Bridge and El Pailon-Buena-ventura Road, the Government intends to continue to utilize associationsof Colombian and foreign consultants. Consultants are frequently engagedby Government on open-ended contracts activated by work orders. This typeof arrangement can result in high engineering costs and the Government isconsidering changes which, it is hoped, will simplify administration, im-prove control of consultants and keep costs at reasonable levels.

E. Highway Construction

25. Modern methods of highway construction were first introduced inCclombia in the early 1950's. Mountainous terrain and corresponding heavyearthmoving led to intensive use of heavy equipment whiith had not previouslybeen operated to any extent in Colombia. There are now several local firmscapable of undertaking contracts worth $5 million equivalent or more.

26. Major highway construction is now almost invariably carried outundeer unit price contracts let after competitive bidding. Delays formerlyexperienced in legalizing contracts have been overcome and this is now donewithin thirty days of award.

F. Highway Maintenance

27.. The quality of maintenance work on the national highway systemhasI been uneven. The activity of the maintenance division was mainly gearedto the reconstruction of pavements which had deteriorated because of deferredmaintenance; the introduction of extensive routine maintenance has takenplace only recently. A pilot program in one of the maintenance districtshas already yielded considerable benefits. During 1970 the results of thisprogram will be extended to other districts.

28. Most districts have now been staffed with mechanical engineers whoare in charge of equipment. Workshop facilities have been improved, andma:Lntenance operations are now planned centrally rather than being dependentoni the interest of individual district engineers. The Ministry is using theproceeds of US and British credits to procure highway equipment worth US$21miLllon equivalent, which should more than meet the Ministry's needs formaintenance.

G. Characteristics and Growth of Road Traffic

29. The road vehicle fleet grew at an average annual rate of 5.6% p.a.between 1958 and 1967 (Table 11.5). The number of trucks increased at a lowerratce of about 4%, with trucks of less than 3-ton capacity increasing at 8%

Table II-5. VEHICLE REGISTRAIIONS - 1958-1967

Passenger vehicles Buaes Jeeps Panels and Pickus Light Trucks IThiks Others Total

1958 67,761 12,283 14^414a 25,092 4,9>1 3 6s 695 1> 75

195Y 68,808 13,358 1275 27,578 S,:155 > ,275 927 167,44f6

1960 72,353 15030 12±3 30,60 5 ) 998 131,91-

1961 8L,605 15,850 1',25 31, 043 5,696 -,l4 5 1,037 199,601

1962 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

1963 85,273 17,911 233i 5 .4.98C 2,270) 39,381 2,210 21?7,sLa

196k 86,423 18,041 i. 2k 9-;t 3,04os 1.3,680 2,L5( 2 2 . S,?>1965 87,977 19,345 27,037 .2,99h 8,724 45,171 2,603 232,&'fI

1966 95, 65L 20,719 29,831 [w,991 9,830 14,286 2,786 25>1 .07

1967 98,216 nva. n.a. n.a. na. n.a . n.a. 259,608

5ogjge Departamento Administrativo Nacional de Estadistica. (DANE) December 1969.

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an<l heavier trucks at 3.2% p.a. In the heavy truck category, there isevidence of a trend towards heavier trucks, but the effect on the totaltruck fleet is not very significant. The motor fuel consumption statisticsshow somewhat higher growth than do vehicle registrations; 6.6% for gasolineancl 7.2% for diesel (Table II.6). The increased motor fuel taxes introducedin 1966 have had no discernible effect on fuel consumption. Although in1967 there was a sharp drop in the growth in consumption of gasoline and adrop in diesel sales, there was a recovery in the following year. The res-trictive factor in fleet growth has been import policy for balance ofpayments reasons. The motor industry is limited to assembly of cars, busesandi trucks at present, but plans for manufacture are being discussed withforeign interests.

30., About 95% of trucks are still single axle vehicles and overloadingis common. The government has banned the import of trucks whose dimensionsand axle load capacities do not comply with legal requirements and has in-dicated that it will not license replacement of engines for such trucksimported during a period of lax enforcement of loading standards. INTRA(the National Transport Institute) has recently introduced highway patrolsto enforce compliance with the law. A new draft law on vehicle weights anddomensions has just been prepared to replace Law No. 0102 of 1955. Thesamne maximum loads will be prescribed as before, i.e., 8.2 tons for singleaxLes and 14.5 tons for tandem axles hut maximum permitted lengthshave been extended somewhat. All ctucks will be required to carry a certi-ficate issued by INTRA describing their dimensions. The problem, as withthe existing law, will be enforcement. In order to comply with vehicleweight regulations,, the permissible maximum load of a two-axled truck wouldvary, according to type, between six and eight tons. Overloading is verycoimmon.

31. In 1968 the average age of vehicles in the truck fleet was12 years. About 88% of the fleet is of American origin and 12% is European.Although there are 48 makes in use in the country, Ford trucks constitute53% of the total. Over 90% of vehicle owners have one truck and over 99%have less than four vehicles. The average age of the passenger car fleet isalso high; in 1967 over 40% of total cars were more than 10 years old.

H. Taxes on Vehicle Ownership and Use

32. The revenue from taxes on vehicle ownership and use is not knownprecisely. Planeacion is currently collecting data on the subject. Themost important tax affecting vehicle operation is the import duty on vehiclesand spare parts. There are a large number of rates and exceptions, but themain rates are shown below:

'.lirje I1-6. PO1tGTU ¾JEL'] c,D,T,l,4iJUt [..lt, - iJ5d,- I%l t/1II6 MOO .Y_ .

Annual AnriunLGasoline i Tncr&:ut b /9 er]

1958 303. .5

1 959 317,7 4.X y .2

1960 35,' I 1 i !.5 .6

1 961 399/i I2it 1- 6

1 962 h4A 13 j9 8.3

1963 442A1 1.7 )35s& 0.h

1964 $1i, 5 Q.{ 5'- 11.8

196r, hL *j.o 9.6

1 966 2 7 .6 Y.3 76.9 6.6

1967 53>.w 'I - Io)6. -5.7

1968 583w 9.1 19,7 14.2

Average 1958/65 6. 7.2

1/ Converted at 1 harrel 4< U.:.

Sources: Colombian Petroleum Iaforrtati on Centerx, [ecember 1969

9 -

Vehicle Type Rate of Duty (on C.I.F. value)

Jeep 20%Car (0-US$1850)(assembled) 230%Car (0-US$1850-3300) (assembled) 350%Car (over US$3300) (assembled) 450%Bus 60%Truck (Chassis, no body)

(0-5000 lb) 180%(5000-9999 ]b) 70%(Others) 30%

Trucks, Pickups, etc.

(0-5000 lb) 200%(5000-9999 lb) 100%(Others) 70%

Unassembled Trucks

(0-5000 lb) 10%(5000-9999 lb) 50%(Others) 140%

33. Annual license fees are collected by municipalities. These feesare based on the weight of the vehicle and the following are rough averagerates:

US$ Eqivalent

Passenger vehicles 2.8Trucks 1.4Buses 0.9

34. These fees probably don't cover the cost of collection. However,there is a national stamp tax on the municipal license. This is based onthe age of the vehicle. Following are the annual rates:

Age of vehicle Tax US$ Equivalent

before 1950 01950-55 18.501956-59 25.801960-63 36.801964-date 58.80

There is in addition a 20% surcharge on all vehicles weighing more than1,400 kilograms.

10 -

35. Ad valorewn taxes are levied on motor fuels. Until 1964 there was

only a minor tax, 0.004 pesos per gallon, collected by the municipalities,

In 1964, a 10% ad valor2m tax enuivalent to less than 0.1 pesos per gallQn

was introduced. In 1967, an additional tax of one peso per gallon was

introduced. This was converted to an ad valorem tax in 1968 at the rate of

114% of the refinery price, the equivalent of one peso per gallon at that

time. Including the 10% ad valorem tax instituted in 1964, current taxes

on gasoline are 124% of the refinery price. A 55.5% ad valorem tax on

diesel fuel, equivalent to 0.48 Desos per gallon, was also introduced in

1968. Consumers of motor fuel in general receive a subsidy as a result of

the artificial ex-refinery price for motor spirit plus the low effective

tax.

36. The result of the special exchange t.te (Pesos 9 to the dollar)

is a refinery price of about just over 5 cents per gallon when converted

at the certificate exchange rate of 18 pesos to the dollar. The retail

price of regular gasoline is about 15 US cents and of higher octane gaso-

line 20 US cents, the differential between the two grades being one of the

highest in the world. The price of regular gasoline is the lowest in the

world. Special tax arrangements make this possible by allowing crude oil

producers to deduct losses on domestic sales from the overall net income

on which their tax liability is based. The result of this subsidy is that

the government loses in indirect productio-n subsidies approximately what

it collects as a consumption tax, rendering the effective tax close to zero.

37. A major step in the improvenient of the system of road user charging

would be the unification of the artificial exchange rate for domestically-

refined petroleum with the market exchange rate. This would prevent the

erosion of the yield from fuel taxes which takes place every year because

of inflation. A subsequent step would be for the government to review the

rationale for and structure of all taxes on vehicle ownership and use with

the object of devising a coherent policy in this regard. Distortions in

the choice of fuels are likely to be caused by the tax differential between

diesel and gasoline. There are no a priori reasons why a road user charge

in the form of a fuel tax should be lower for diesel than for gasoline and,

in fact, if fuel taxes are meant to reflect a policy of charging vehicles in

proportion to the use made of the road system, a higher tax on diesel would

be more appropriate because of the greater mileage possible by its use and

the generally heavier vehicles for which this fuel is appropriate. Hlowever,

in Colombia taxes on diesel en_ines have been higher than those on gasoline

engines. Moreover, the Mission recognizes that only non transport policy

considerations frequently affect diesel taxation policy and this is another

reason why attempts should be made to make the policy rationale explicit.

I. Tolls on National Highways

38. Tolls were first imposed on some Colombian roads in 1954 with a view

to raising all or a substantial part of maintenance costs of the correspond-

ing road. Rates have never been changed and as a result they now barely

cover the cost of collection. Total revenues from 25 stations on 10 roads

- 11 -

totalling about 1,200 km were 8 million pesos in 1968. The costs of adminis-

tration were about 30% and as much as 50% in the Cartagena area where thelevel of tolls is lowest. The rates vary between 0.04 and 0.16 US cents

per km for a car and 0.18 and 0.36 US cents per km for heavy vehicles. Ten

percent of toll receipts are given to the Ministry of Education and the re-mainder, varying from US$50 to $500 per km, is spent on highway maintenance.

39. The Government is authorized under existing law to impose tolls.In turn the Government has vested this responsibility in the Ministry of

Public Works. Under present regulations, the proceeds of tolls must be

kept in a special account of the highway fund (Fondo Vial) and used, afterpaying the cost of collection, for: a) maintenance of toll roads and b) the

construction of additional toll roads.

40. It is the intention of the Ministry to levy tolls on certain new

facilities which have the following featujres:

(a) they constitute a distinct improvement overpreviously available facilities;

(b) there are available alternative, toll-freetfacilities;

(c) the use of the new facilities will providesubstantial savings to the users; and

(d) the tolls envisaged are less than the savingsto users.

41. Tolls are viewed as a revenue produclng measure, justified by theprovision of an improved alternative to an existing facility. In order toby politically acceptable, the new tolls will be levied in accordance with a

ge!neral policy applicable to similar facilities throughout the country.Tolls are under consideration for the following facilities:

(a) the new road from Chusaca to Fusagasuga whichis a part of the Bogota to Girardot Road;

(b) the existing highway from Bogota northwards toLa Caro (the Autopista del Norte);

(c) the road from Loboguerrero to Buenaventura whichwill be open to traffic in 1970;

(d) the bridge being built over the Cauca river atPuerto Isaacs, leading from Cali to the newairport;

- 12 -

(e) the Calainar Bridge over the Canal dei Dique onthe alternat-ive (shorter) road from Barranquillato the western trunk road;

(f) the San Roquje-Las Pavas shortcut on the centraltrunk road to be paved in the current program; and

(g) the Barranquilla Bridge.

42. With respect to the latter bridge the government will carry out

for a period of not less than one year, a study to test the effect of tolls

on the traffic on the bridge and to compare this traffic with the trafficwhiclh was projected by the consultant who undertook the feasibility studyof the bridge. The study will be based on the variations in rates whichmay be introduced from time to time with respect to vehicle type and time

of day, week, month or year. Based on the results of this study, criteria

will be established for determining the structure and level of tolls.These criteria will be designed to raise revenues in a manner not incon-

sistent with achieving the economic benefit from the construction of the

bridge which was forecast in the consultant's report.

43. Compared to the revenues which could be obtained by the unifica-

tion of the exchange rate for petroleum with trhe certificate exchange rate,the revenues which could probably be raised by the imposition of tolls on

the facilities described above would be small. The Mission feels that

government should examine its policies with respect to all charges on

vehicle ownership and use.

J. Records of Highway Traffic

44. The Mission studied the Ministry of Public Works traffic censusdata and information on traffic volumes recorded at highway toll stations.

Data were available for 7-day, 24-hour counts taken at about 600 stationsin 1968 and for similar counts made in 1969. Toads on which traffic inexcess of 250 vehicles per day (the level at which it is frequently econo-mic to pave roads in Colombia) has been recorded and which are not paved

or planned for paving in the near future are shown in Green on Map No. 11.2.

As can be seen in the commentary in Annex A on these cotnts, however, there

is uncertainty about many of them. This can only he remedied by more fre-

quent checks. Since only abotuc 40 sections are involved, the task should be

an easy one and should be undertaken prior to the inclusion of any of these

roads in a future highway improvement program.

45. Comparisons have been made between the average daily traffic (ADT)figures obtained from the records of total traffic passing 23 toll stations

in 1968 and the ADT obtained from the seven-day traffic counts taken by the

MOP in the same year. In only six instances was the ADT for cars obtainedin the traffic census significantly less than the actual annual average

12a- [igtre II a

___-_-_-_-_-_-~~~~~~~~~ ~ -__ - - - --______ - -=- - - -_ -_____- ---

- _ _---_-- ------_-_-_ -_ _--__---___-__--------------- D------_-- --------DD----_--DD---- - ----___D__________----------_ _____---__--_------ - -_-_-_- ---D---_-_-_ -_-_-_---A -_---_D __-D D-_D- --- _ ---- _ -- -__---- -- ____-------------------D------ D ----------=------___D _____ _ ---- ic / t

_.____-_-_-_-_=_______-__~~~~~~ _--=- -- _----_---- -____-_ - - -Y - - - - ------ -- ----- -- - - - - --_ - - - - - - -- - -- - - - - - -gR A l tl -& -y -< - - _ ------ ------

---- - -- -- ----------- D----- -- ----____ _____ eer |

- .- _- _- __-_- _- _-_- _- _- _ - _- - - .- - ---- - -_e - -V alledup a -

- D-- - - - - - - - -- - - --a-r--o-n- -e- -D-- - --- i Becerril j M

:-~~~~~~~~ ~ - :- -D - - - - -_D _- --- - - - -_ -- -S -5 - -r _ -X - -- - -- _-_hah

X~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -_ - - -_ -oteee - - - -A -

- ,94 ! <- - i g V Planela j Gaina M i -Pa-not-- - - -D__- - \ATurbo 7 Rica NGAguIa '0de Oro Astieros

_ _ \ . * ,1/ i\ */ 11 sS~~~~~~~~an Alberta Cucuta

----_-D _ -_ D - - - - - - - - - - - - - - - - - -

-_-_---R _-----_--L 01 /- . t _#K La Leiia\ -

- - - ~- - - - - - - R- - - - - - - - - - - - - - - - - - - -n9 ~~ ._

~~---~---~----~ ~ < i Antioqu2 Barbosa > Capitdnejo

-- - -- - -Y -- ---- - - - -- --- -M D L I -V -(g - ----

- - -_-E- -- -- -Quibdo-ndaci

- - - - - - - - - - - - - - -M - - - -r 1--- 0; 40 0 S LsLa Unionion d

4zbg

--- - f- --- ------ - - /, -. -f - - - - -ci

- - - -- - - -- - - - - - Cruceo ' /|' Arcea of road in f luence---------- _-----_--_- -- .---- P - fta Tea- a - -A Roads discussed in Annex 1

_-_ -____- _- - - - - - -Ne,va- Paved highways

-=-~~~----:/ }} .. '. / .. / ~~~~~~Unpaved highways

-~~--~~~4/ **-- lGarzon 9)/ ~~~~~~Projects now in paving prograrn

-~_- ~ *- Alamira, / *-------.Ongoing paving projects--------- - Guadalupe-usria Rico | --4-4-+-- | --- Rai.lroad

W S 1J AFIorecra ~~~~~~~~~~,-X Bri.dge

)asta~~~~~~~~~~nu

-- . Tuu re Mataitaa COLOMBIAG>ctiucalDPeregast rDtaiPssltstt FUTURE HIGHWAY PROJECTS

'\ > lPlolfla_ _

E CU AD OR ° KILOMETERS

JJLY 1970 IBRD-3047

- 13 -

recorded at the toll stations. In virtually every case the daily averagenumber of trucks (and in some instances of cars), recorded by the trafficcensuis considerably exceeded the average recorded at the toll stations. Insome cases the trucks counted in the traffic census exceeded those countedin the toll by over 100%. There might, of course, be several different rea-sons for this. Official vehicles do not pay. There may be under collectionof tolls on the one hand and there may be a tendency on the part of trafficcensus workers to exaggerate the numbers of vehicles they see, on the otherhand. There may be considerable actual seasonal variation in daily trafficand the traffic census may have been conducted at seasonal peaks. However,since the counts were taken at different times of the year at different sta-tions, it is unlikely that this always happened.

46. The discrepancies emphasize the need for counts to be takenfrequently during the year, particularly on those road sections where in-vestment decisions are being considered. The present seven-day count takenarbitrarily once a year is not sufficient for satisfactory planning. Asdisc:ussed in detail in Annex A, when the 1968 and 1969 traffic census figureswere examined, there were also substantial variations in the record for thesame point. Traffic counts at many stations in the past two years haveindicated that traffic is less than 200 vehicles per day and often lessthan 100 vehicles per day. Counts at such points could be discontinued forsome time in order to conserve money and staff for undertaking more frequentcounts at more important stations.

I. Foreign Assistance with Highways

47. The Government which came to power in 1966 took many important stepsto improve the unsatisfactory situation with respect to the execution ofhighwiay projects. In order to insure a ready supply of local funds to com-plement foreign financing, additional road user taxes were imposed, a na-tional highway fund with earmarked revenues was created and consultants wereappotnted to help reorganize the Ministry of Public Works. The NationalHighway Fund has permdtted considerable flexibility in the allocation offunds between projects whereas formerly, there were long delays while nego-tiat:Lons took place with the Bureau of the Budget to obtain reallocationsof flnds from one expenditure item to another. Furthermore, reorganizationof the Ministry, although not complete, has resulted in improved supervi-sion0 of the execution of projects.

48. The World Bank has been closely involved with the improvement ofColombia's transport facilities since 1951 when it made its first loan. Ithas silnce made five other loans and IDA has given ong credit for highways.Altogether $136 million has been provided for this purpose.

49. Other international and national lending agencies have alsocontributed substantially to highway improvement in Colombia. USAID pro-vided funds and equipment for the Gcvernment's feeder road program in its

- 14 -

early stages and in 1968, the Inter-American Development Bank (IDB) madea loan of $12.7 million for the construction of the Cienaga-Santa MartaParaguachon Road which will link Colombia and northern Venezuela. TheIDB has recently agreed to finance a four-year 1,500 km feeder roadprogram with a loan of US$17 million and is also providing some $31 mil-lion to finance the foreign exchange costs of the Popayan-Pasto Highwayand the Santuario-Puerto Triunfo highway. The latter will be part of animproved route between Medellin and Bogota, the two largest cities in thecountry, and construction is expected to take four and a half years. Re-cently the Bank of London and South America has opened a sterling line ofcredit for E 4 million for the purchase by the Ministry of Public Works ofBritish road maintenance equipment and the Export--Import Bank and two NewYork commercial banks have made loans totaling US$10 million for the purchaseof road maintenance equipment in the United States.

50. The, sixth Bank highway loan, signed in June 1970, is to finance theforeign exchange costs, amounting to US$32 million equivalent, of a projectcosting a total of US$62 million. The project includes the paving of 1,618kilometers of national highways, the construction of a major highway bridgeover the Magdalena River at Barranquilla, the construction of 9.5 kilo-meters of multi-lane highway at the entry to the port of Buenaventura andconsulting services for the supervision of the above work.

51. The Government of Colombia intends to approach the Bank during thenext three years for at least 70% of its foreign exchange requirements inthe transport sector. It is important therefore to consider the likelihoodof well prepared, economically justified projects being available duringthis period.

L. Hlighway Feasibility Studies, Current and Future

52. A 1968 report prepared by the Bank on Colombia's economic positionand prospects referred to three highway projects identified for possiblefuture external financing. They were, Barranquilla Bridge, Popayan-Pasto-Rumichaca highway and Cali-Buga highway. The World Bank is assisting withthe financing of the Barranquilla bridge; the Inter-American DevelopmentBank recently lent Colombia an amount to cover the estimated foreign exchangecosts of improving the Popayan Pasto Section of the Pan-American Highway. Afeasibility study of a new highway connection between Cali and Buga hasrecently been completed by consultants (INGETEC/TAMS).

53. The consultants considered three alternative solutions for the pro-vision of additional highway capacity between Cali and Buga. An alignmentwhich would utilize part of the recently completed road from Cali to Yumboand which would then follow a new route between Puerto Isaacs and Buga wasrecommended. However, the study is incomplete and, as explained in Annex B,should not now be used as the basis for an investment decision.

- 15 -

54. The other completed feasibility study described in the pre-invest-ment inventory study sheet was undertaken several years ago for a road fromArmenia to Zarzal which is intended to provide an attractive route to thepresent road from Armenia via Sevilla to Uribe. However, the study waspoorly done and the MOP is considering a further investigation into themerits of the project.

55. A study of the Bogota urban area, being undertaken by a jointventure of Colombian and British/US consultants, partly financed by the UNDPwith the World Bank as executing agency is nearly completed. It is under-stood that the consultants found a proposed multi-lane facility between LaSultana (Bogota) and Bosa on the highway to Girardot to be of very highpriority. The Government may seek external assistance to finance thisproject. Another potentially attractive project is the reconstruction ofthe 70 km section of main trunk highway between Fundacion and La Ye nearSanta Marta. This road is currently carrying over 1,000 ADT and has de-teriorated badly in the past few years. A feasibility study and final en-gineering will be completed by the end of 1970. The MOP has indicated aninterest in external financing for this project and the Guadelupe-Florenciahighway for which a study will be available in July 1970.

56. In addition to the projects described in para. 55 above, thefollowing sections of highway have been proposed for study with a view toeventual external financing of their foreign exchange costs.

(a) Tres Puertas-Irra-La Felisa and La Virginia-Irra(b) Honda-Bogota(c) Barbosa-Puerto Olaya(d) Villavicencio-Puerto Lopez-Puerto Carrero(e) Cucuta-Ocana(f) Carretera Troncal de los Llanos(g) New route between Tolima and Valle(h) New route between Huila and Valle(i) Puerto Araujo - Barrancabermeja/Bucaramanga road(j) El Carmen-Zambrano-Bosconia

With the exception of the first three roads, and perhaps Villavicencio-Puerto Lopez, these roads would have more the function of development roadsthan of roads whose upgrading is warranted by current traffic volumes. Somewould be completely new roads. The improvement of others might have as yetunexpected effects on traffic generation. There is no prima facie urgencyabout the completion of any of them. That statement should not be inter-preted as meaning that they are not worthwhile projects, however; they wouldbear investigation and further comments about each are contained in Annex B.Among the roads intended to better serve existing traffic, the Barbosa-PuertoOlaya road should enjoy priority for feasibility study.

- 16 -

M. Colombia Feeder Roads

57. The Fondo Nacional de Caminos Vecinales (FNCV) began its activitiesin 1961 and since then has constructed 2,446 km of feeder roads. Another7,837 km have been identified for future construction. During the period1970-73, the Inter-American Development Bank (IDB) is assisting the FNCVwith a feeder road program which contains 45 roads totaling 1,548.5 km. Theestimated total cost is US$36.63 million equivalent. The IDB loan is US$17million. One 90 km section (Puerto Lleras-San Jose del Guaviare) currentlyhas traffic in excess of 100 vehicles per day. Most of the sections, 1,075km, have traffic in the 50-100 vehicles per day range and there are 383.5km with daily traffic of less than 50 vehicles. Provision for purchase ofmaintenance equipment costing US$2 million for the project roads is includedin the loan.

58. The roads in the FNCV program, at an average cost of over US$20,000per km, are expensive in relation to the traffic which they are initiallyexpected to carry. Their main justification must therefore come from theincreased production which their construction is expected to stimulate. It'was not possible for the mission to visit many of the areas in which theseroads are to be built. Nor can any conclusions be reached on the economicmerits of the program from the project descriptions now available. Aboutten of the roads however, are in the south and southeast part of the countryin Narino, Caqueta and the Meta where colonization is taking place. Ingeneral, these are likely to prove beneficial and worthwhile, in particularthe connections to San Vicente del Caguan from Algecira and the PuertoLleras-San Jose del Guaviare roads. Many of the other roads appear to havebeen selected to form part of future trunk roads or to provide some formof geographical balance in the distribution of feeder road funds. Thissystem will lead to a dispersal of funds all over the country and the ques-tion arises whether it would not be possible to relate much more closelythe construction of feeder roads to the expected economic benefits.

59. The mission believes that there is a need for improved transporta-tion in many areas as part of a program of agriculttral improvement. Areaswhere this is particularly true are the South already, mentioned and theCesar and Ariguani valleys in the North between Valledupar and the Magdalenariver. Feeder roads in the latter area would be an essential part of thedevelopment of irrigated agriculture. However, the probable form of roaddevelopment would be the preparation of networks of simple roads designedas an integral part of the agricultural investment programs rather than theconnection of an isolated community to the main road system which appearsto be the main objective of many of the roads in the present program.

60. In addition to the loan described in para. 57 above, a loan ofUS$10.7 million for the integrated type of development was made by IDB(Loan No. 197/SF-COO) in 1969. The projects are in Ariari and Sarare inthe Meta and Arauca and will assist both spontaneous colonization and thedevelopment of a timber industry. The roads in ti4e project consist of 327km of second class road, 145 km of cart tracks and 97 km of penetrationroads, or trails.

- 17 -

61. A recent IJ) study of the Colombian employment problem recommendsa "reexamination of the existing network of feeder roads and its rapidextension where most useful (cost-benefit analysis), partly within the frame-work of a public works program, partly through Accion Comunal." Where theopportunity cost of labor used for road construction is low this may providepossibilities of lowering transport costs between the small farmer and themarket and increasing the competitiveness of his prices while at the sametime lowering the cost of his inputs and consumption goods.

N. The Highway Investment Program

62. It is clear from Tables 11.3 and 11.7 that in 1969 actual expenditureon the national highway system fell far short of what had been planned. Thiswas mainly due to slow disbursement on contracts under way and it remains tobe seen whether the momentum of construction will increase sufficiently topermit the completion of the 1969-72 spending program by the end of 1972.It seems unlikely at present. Also, with the exception of the projectsdiscussed in paragraph 55 above, and perhaps some of the sections of un-paved road carrying h:lgh traffic volumes discussed in para. 44 and AnnexA, there are few projects of clear priority outside work currently underconstruction or provided for by recent loan conmmitments described in SectionK. There are, of course, growing urban traffic: problems which have not beendiscussed in this report. The government proposes shortly to seek externalfinancing for the roads described in para. 55 above. The proposed finan-cing plan for the over-all highway program is shown in Table 11.8; it indi-cates a heavy and growing dependence on general budgetary contributionsand on external loans. In view of the severe competing claims of othereconomic sectors on both sources in the next severa]. years, the Missionsuggests that both the magnitude and the financing plan be re-examined.Specifically, there should be a demonstration that the program is well con-ceived and there should be a reform of the tax system on highways, includ-ing the petroleum exchange rate. Furthermore, although, as described inChapter III, substantial improvements are required in the operation of theColombian National Railroads, the situation which has existed whereby theywere left short of working capital and investment capital while some roadsof doubtful priority were built should be looked upon with disfavor bypotential lenders. 'There is adequate provision in Bank loan 550-CO for theforeign exchange costs of any highway studies required in the next two orthree years (Annex D). The MOP is considering the engagement of some

foreign transport experts to work in the Mlinistry and assist in the pre-parat:ion and consideration of highway studies designed to produce a programof feasible projects.

- 17a -

Table TI-7. NATIONAL INVESTMENT PROGRAM 1969-1972 HIGHWAYS(Million Pesos)

1969 1970 1971 1972

Bridges 83.6 91.6 122.8 136.0

Cons truction & Reconstructionof National Hlighways 869.2 707.1 773.9 639.0

Construaction & Reconst,ructionof other Highways 132.0 90.0 132.0 203.0

Nat,ioraal Highway Pavring Program - 191.0 22O0.0 31]0.0

Construction & Reconstruction 15.2 20.3 7.6 36.0of Ci Ly Access Roads

Revolving Special Assessment Fund 4.-j 38.0 )40 . l 58 .0

Studies &.Technical Services h4.5 30.0 30.0 45 -C

(1) Sub-Total 1148.9 1168.0 1326.3 14P7.0

(:2) Maintenance 387.7 742 * .2 Lt3? .5 604.B

(3) Total Fondo Vial (1) + (2) 1536.6 1910.2 'L78. 8 2,031.2i

(4) Feeder lloads 211h.6 265.0 306.5' 3583.2

TOTAL CAPITAL (1) + (2l) 1363.5 1h33.0 16313.2 1785.2

GRAND T'OTAL (3) + (4) 1751.2 2175.- 2065.7 2390.0

* InclLudes studies o-ther than for roads

t*0f' which 360 m is for purchase of equipment

Source: R-epublic of Colombia, Planes y PrOgrarrLas de DeS Car'ro I O, 1969/11972Plan de Inversiones PubhlJicas, Sector Transportes 'Pomro 1

- 17b -

Tab-le II-S. SOURCES OF REVNUE FOR 1969-1972 HIGHWAY PROGRANI(J I4 ion Peo.sns

SUUOLFC; 1969 Y Y/o I )(1 1972

1/Gasoline & Diesel Taxes 6 9 3. i 7400. 3 760.0

Equipment rental 6.0 3.0 3,0 3.0

Sale of Equipment and Materiale 6.0 10.0 1.0 10.0

Toll fees 5.° - 14.0 13.0

Petroleum royalties - 3i4,0 8.2 8.2

Miscellaneous 2.8 14.7 2.0 2.0

Savings 126.0 172.5 - -

2/Foreign construction loans- 171.0 362.2 493.0 527.0

Equipment Loans - 360.0 - -

National Budget Contributibons 40O.8 39o0.2 799 1,066.8

TrOTA.1,7,- 1,410.5 2,066.6 2,065.7 2,390.0

Source: 14OP, December 1969 and MOP, Fondo Vral Budget 1970.

1/ TLhese estimates are substantially more conservative than thhose

made by the National Planning Department.

2/ Subject to revision as further information on foreign credits becomes

available.

3/ Some of these funds are used for river training works and as a

contribution to the national feeder road program.

h/ Included in "nmisce Llaneous.'

5/ Contract with Putumauo Intendencia.

III. RAILWAYS

A. The Railway System

63., Railroads in Colombia were first built to provide access from theinterior cities to water transport through either river or ocean ports fromwht.ch goods could be imported or exported. In the early stages, rail andrivrer transport tended to complement one another. Because the highwaysynitem was undeveloped and other modes of transport apart from the riverdicL not exist, the railroads had virtually no competition until the 1950's.the railroads themselves were not well-integrated and operated as independeatregional railroads until 1954 when Colombian National Railroads (CNR) wasincorporated.

64. With the completion of the Atlantic railroad down the MagdalenaValley to the Carribean at Santa Marta in 1961, the overall rail systemwas integrated into a sigle opeTating system. It also continued to offerservice to many areas which had no other means of access and in the LowerMagdalena provided transport to areas which had formerly been inaccessible.The faster and more reliable rail service proved more attractive for manyconmiodities, in particular highly valued imports, than the river.

65. The C?R is organized in five Divisions as follows:

km

Central 1,368

Pacific 903

Santander 400

Magdalena 425

Antioquia 340

3,436

A full description is contained in Figures II.l. The railway gauge isstandardized at 914 m, or 36 in.

66. The tremendous expansion in the highway network in the past tenyears has greatly improved the quality of service which can be offered bytruckers. As a result, the railroads have been forced to compete moreactively than was formerly necessary. The management of the railway isfacing this competitive environment with realism. The first stage of aprogram of rehabilitation of track which had been neglected for many yearsduring the construction of the Atlantic railroad is currently underway and

- 18a - Figure III-1

C A R I B B E A N S E AJ

3 IAR R ANO UIL -1 CIENAGA/\

0 50 CAPT A;rA 9 IOULI2Vj'~ / Xlundacidn /O so 100 150 200 En

X tA\ C X \X:.[[~~~~~~~~~~~~~~~,wrra\|

ssS f H~~~~~~~~~ARRe,EiGABE R,MlJA \t / Hz $9 U B~~J FUCARA.MANGS -''A

A ,, slwf~~~~~ED ELLIN /

z a s 9 aJ r~~~~~~~~~~~~~~~~~~~~i r;s Pa cel X "i < 5 X, f g / vi~~~~~~~~~~~~~~Bolencito

X~~~~~~~~~~~~~~~~~~~~~~~U r ' uerto,

~~~~~~~~~~~~~~~AIC) j EL e.nd -o c

0~~~~~ Lope- ,j altlt tg o paquira

CARTAIGO'*RIS La Caro

N g t > >V1 / J ~~~~~~~BOCTAvErar/9 El Sallto

Anldalucl, lsls Air>4 Girardlot

< 3ULP:AVEITUPA '

J , I i, ALMfIRA // Ytrnho>v Pradera }

pi) rnla '1 CA L COLOMBIAN6 ,Sall~~~~taiider i:5n igrlacio

/ , /.iEIVA ~NATIONAL RAILROADS

/ ~~~~POPAYAN,

< ~~~~~~~~~~~~~~~~~~~~~~~LEGENL)

TUraACO> l l l .l l l l l l~ ~~~~~~~~~~~~~~ Atlantic Line

j:. I )l[iviso.// \ I f l l I t t l § l l~~~~~~~~~~~HHH M~ Other Lines

\ ~~~~~~~~~~~~~~~~~~~~(001: of surv ice)

IE C U A D O R JAMJtARY 11)70 Bt .lR

- 19 -

should be completed in 1973. Improved management and operating practiceshave also been initiated. Rail pricing policy was reviewed and revised in1966. This change has increased revenues and resulted in larger rail ship-ments and longer hauls which have improved efficiency and net revenues.

67. From time to time, new rail projects have been proposed with theobject of improving the railroados competitive position. These projects,because they parallel existing highway facilities which are being improved,would duplicate highway capacity which will shortly be provided. Con-sequently, any proposal for extension of the existing rail network mustbe examined carefully before any financial commitment is made.

68. As can be seen from the map, the railroad network serves manycities in the country. In fact, the only principal cities not served bythe railroad are Barranquilla and Cartagena on the Caribbean Coast. Therewas formerly a railway from Cartagena to the Magdalena river port of Calamarbut it was abandoned some years ago. The areas of the country which atpresent have no rail service include the Llanos, the upper Magdalena rivervalley, the Guajira, the Choco and much of the north coast area.

69. The Colombian topography presents the national railroad systemwith geographical obstacles more severe than those confronting railroads inmost other parts of the world. Gradient is probably the most importantsingle feature of the system. The topographical characteristics of the railnetwork are illustrated in Figure III.2.

70. The heavily traveled line from Buenaventura to Cali. is one of themore rugged on the Colombian railroad system and is the most difficult sec-tion in the Pacific Division. For its 174 km length it has an average gradeof over 2.5% and a maximum of 4.2X. In some places the hillsides traversedare too steep to permit even short radius turns, so switchbacks are used,requiring trains to reverse direction to proceed up the hill. Location ofsome track on the steep wall of a river canyon requires heavy annual main-tenance expenditure to repair damage caused by landslides. Maintenance ofway investments on this line over the last few years have greatly improvedits condition. However, in late 1969 severe landslides caused by rivererosion closed the Buenaventura-Cali line for 6 weeks and had an adverseeffect on the company's financial operating results for 1969.

71. From Cali northward up the Cauca Valley as far as Alejandro Lopez,the grades are less than 1% and curvature is minimum. Beyond this point,however, grades increase and the final ascent to the City of Medellin is againquite circuitous, involving a ruling gradient of about 3%. The railroad fromMedellin eastwards to Puerto Berria on the Magdalena river includes severegrades of up 4.4% and curves of very short radius, requiring low operatingspeeds and short trains.

V SANTA MARTA

C; - - -

FUNDATION

FIGURE 3.2

REPUBLIC OF COLOMBIA\IV

RAILROAD GRADIENTS

GAMARRA

BUCARAMANGA

8BARBOSA

- \ \ \PTrO BERRiO

MEDELLIN \ \.

HONUA 2 *I

/ --.. w . BGOTA

A / I.ARMENIA7 S> IBAGUL : IGIRADOTBUENAYE~NTURA \URIBE

-I \ \ j O GREATER THAN 3%:.... v \ I OBETWEEN 2% 8 3%

; /I\ . } I% B 2%

ICAL.I _ 1% OR LESS

SOURcE HARVARD TRANSPORT STUDY 1968

NEIVA

PtOPAYAN

JUNE 1970 IBRD 3033

- 20-

72. The conditions encountered on the Central Division are alsoquite varied. Within the Magdalena Valley, the line from Neiva to La Doradahas small curvature and occasional moderate grades of up to 2.5%. Operatingconditions there are generally good. From Ibague down to the MagdalenaValley, severe grades are encountered once more and the maximum grade is3.5%.

73. The line from Girardot up to Bogota is in a mountainous sectionwhich has a ruling grade of 4.6% and an average grade of 2%, thereby limitingtrain length to 6 cars or less. The ascent from Puerto Salgar to Bogotais similarly difficult.

74. The main line of the Atlantic Division from La Dorada north toSanta Marta is quite level and very straight, permitting lower operatingcosts than anywhere else on the national system. However, the very oldbranch line from Puerto Wilches up to Bucaramanga is winding and has aruling grade of 2.5%.

75. On lines where the rehabilitation program has been vigorouslypursued, these efforts have been rewarded by greatly improved operatingconditions. However, in 1969 only 116 km out of a planned 192 km of trackwas relaid. In the mid-1960's there was a reduction in derailments on theBuenaventura to Cali line following a major rehabilitation of the road bed,ballast and track there. It is expected that work underway between PuertoSalgar and Bogota will yield similar improvements on that line. Much ofthe system, however, still does not rest upon satisfactory ballast oradequate ties or employ rail of sufficient weight to allow efficient opera-tion of the railroad. The number of derailments on the Buenaventura-Caliline rose substantially once more in 1969 (Table III.1) and it remains to beseen whether this was due to exceptionally bad conditions in that year.

B. Vehicle Fleet

76. In recent years, the CNR has not been able to carry all trafficoffetred because of lack of rolling stock in good condition. This situationhas improved considerably during the past two years with the acquisitionof 60 new diesel locomotives and will improve further when 1200 new railcars and wagons which are currently being assembled are put into service.This is expected to take place by April 1971. Dieselization has been takingplace since 1959 and now more than half the system's locomotives are dieselpowered. About 84% of train kilometers are by diesel and steam enginesare confined for the most part to switching and repair duties.

77 While the 1969 Boletin Anual of the CNR gives the number of steamengines in service as 146, 74.6% of the time of these was spent in the work-ships either being repaired or awaiting repair. In fact, many of theselocomotives will never be used again and the productivity figures such asamount of time spent on trips (3.2%) and average kilometrage per engine(1.2,500) are misleading. The CNR has recently indicated that It intends

Table 1IT-1. COLOM1IAT1 NATIONAL RA7LROATD DERAIIIElNTS

DIVISION CEN1TAL PACIFICO SANTANDEAR MAGDALEIA ANTIOQUIA TOTAL

Length of 1362 90, 393 416 339

Main line

Accidents Hours Accidents Hours Accidents Hours AccidentV Hours Accidenti Hours Accient- :+z*.

1967 1005 3828 637 341W 509 1340 11 396 298 855 2g555 8

1968 1063 Q5 3 423 2T752 13 247i 367 1201 b1 343 319,11

1969 314 426 5e3 3979 -1O9 2J. 93 19$5 7 526 L931 4$'4L >02..

Source: FC7I1", Lcz FerroctavJes eii . s e ua_

- 21 -

to overhaul 44 steam locomotives for main line use instead of withdrawingthem as formerly intended. It is not clear that the economics of this havebeen carefully investigated. In connection with World Bank Loan 551-CO, theCNR gave an undertaking that they would have a comprehensive study made ofpresent and forecast traffic, together with the corresponding needs forrolling stock. Consultants for this study have not yet been appointed andit is very important that a current review is made of CNR's traction needs.

78. While the advent of the new diesels has made a great difference tofleet: availability, the best use is not being made of them. Two diesellocomotives are out of action while parts, especially batteries, are bor-rowed for others pending the arrival of spare parts. The costs of keepingexpensive equipment waiting for months and even years for spares are veryhigh.

79. The average capacity of rail wagons is about 30 tons. Theappropriate size of wagons is governed partly by the narrow gauge and sharpcunres of the railroad. Small average shipments also make these wagonsmore appropriate than the larger vehicles used on most other systems.

C. Characteristics of Train Traffic

80. Total train traffic in 1969 decreased by 400,000 train kilometersby comparison with the previous year when commercial trains traveled 9.9million kilometers. The reduction, which took place in spite of increasedton--kilometrage, is related to the increased used of multiple engine trainswhich permit increased train size. The average commercial speed of freighttrains was 22.3 kilometers per hour with an average train of 6.8 loaded carsand a load of 162.8 net tons per train. Passenger trains traveled 1.98million km with an average speed of 21 km per hour and an average trainlength of 8 coaches. In 1969 the average load of a loaded car was 24 tons.The average capacity of a car was 30 tons and therefore the average utiliza-tion is 80%. The average haul was 380 km (Table III.4).

81. The daily average freight traffic on the Colombian railroad net-worlc is shown on FigureIII.3. On only a few sections of the system doestraEEic exceed 1000 tons per day. Of the five divisions of the CNR, onlythe Magdalena Division averages more than 1000 tons of cargo per day forthe entire division.

82. Between 1962 and 1969, total freight loaded on the railroad droppedfrom 3.6 to 3.0 million tons (Table III.5. In the same period the number ofton kilometers increased from 918 to 1159 million. The fact that while thetotal tonnage loaded has been decreasing while the average length of haulhas been increasing hias been interpreted as a healthy sign because thelonger the haul the more profitable the traffic. However, part of thereason for the increasing length of haul has been the chronic shortageof equipment on the network, which has meant that the railway has been ina position to choose and has naturally selected the most attractive traffic.

- 21zt -

b1arr-Anquillta Sl.kITt :,Al.TA Fgr I

Ci 6n aga

RI of r fo

Latal

Colombian Natiional Roilrocics',

TRAFFIC DENsSITY 1969 Fu, ac T (Tons Per DaY) -$

w,f , Chiriquan6

bamarra (Pto. Capulco) ,, . _

Pt . C, .,*,W . , 9lilcj;s

-: i530 566)-

1,170 i-1.24s .- ^ c.\ uceta 2>;i

dEDELL|IN r--7=- 8. t.!elo 4\j uj

Envigado t> 83 42^3 L t enguazaqu $

AA 0 '. ,'4 H2re Z~~~~~~~~~~~~~~~~~~ip9irX,, ocontii

Angel6polls 7*li ;. > ~~~~Pto. 2algar Be2i @

A. 1.6pi3z } aDr d / _nvj ; ntonio

. i 2 MianizaleS T , 5.2,, i

Arauca. 12 ; ! Faca \rmerJoA Lt E.

, .. | ~ereira l . : A ,,1192 t) 52ch

Cartago 26 O t -< - d . )rdo

rx168 J 16aA)e 7lb Espinal

Zarzal Armrenia

,, g 102 GuA a G

S 997 102605 AI[

. , S ~~~~C A LI

Sn Francisco

POPAYAN ?jIE 'A

t )P;2 gTr ~~~~~~~~~~~~~~~~~~~~~~~~~ahl

- 22 -

The recent substantial increase in locomotive capacity and pros-pective in-crease in rolling stock will make a great difference in this situation.It remains to be seen whether the high costs of terminal operations willpermit the shorter hauls to be handled economically. Some at least of theincreased ton-kilometrage in 1969 was due to the diversion to the longerroute to the Caribbean ports when the Cali-Buenaventura line was closed fors-Lx weeks, so it does not reflect a gain to the economy.

8:3. Freight carried by the railroad is concentrated on particularparts of the network, expecially those which traverse zones of industrialanid agricultural production, as can be seen in Figure 111.3. On the Atlanticline between Puerto Salgar and Santa Marta, the flow of traffic is denseIn both directions, but in general terns the volume tends to be greater nearproducing and consuming centers. The density is particularly high in themain industrial zone of the country located in and around Bogota, a logicalconsequence of the consumption requirements of the population and the supplyrequirements for local industries. More than 11% of the population of thecountry is concentrated in the special district, which explains why theCiR received in this region 11.9% of the cargo which it handled and dis-patched only 3.2% of the same total.

84i. Detailed statistics by commodity are contained in Tables III.2 andII1.3. Thirteen products constitute 69% of the CNR's freight and contribute65% of its freight revenues.

Tonnage % Position Ton-Km % Position Revenue % Position

Coffee 4.8 5 12.6 1 9.3 1Wheat 6.7 3 8.7 2 8,2 2Fertilizer 6.7 3 8.0 3 7.8 3Petroleum Products 14.7 1 7.5 4 7.6 4Iron and Steel 3.9 8 6.9 5 6.6 5

';igar 7.1 2 6.9 6 5.7 6Salt 3.5 10 3.3 7 3.1 9Newsprint 1.3 12 3.2 8 3.2 8Barley 1.2 13 3.0 9 2.8 11Cattle 4.8 5 2.5 10 3.7 7Coal 4.3 7 2.3 11 2.0 12Cotton 1.4 11 2.1 12 2.9 10oCment 3.9 8 1.7 13 1.9 13

8.5. Coffee is the most important commodity to the railroad because ofthe tonnage and long average haul (540 km in 1969). It moves from the coffeegrowing area between Manizales and Medellin, north to Santa Marta, a distanceof almost 1,000 kilometers or from this Same growing area southward toward3iaenaventura, a distance of over 400 kilometers. Although coffee dominatesboth total freight and contribution to revenue, it contributes far less torevenue than its share of traffic would imply that it should. The average

- 22a -

Table 111-2. COLOMBkAN NATIONAL RAILROADS: FREIGHT TRAFFIC(Million Ton-kin)

1965 1966 1967 1968 1969

Rice 1]8 1b 9 16 16

Corn ll 16 14 19 23Wheat 8l 109 74 1140 101Banana 12 10 9 6 4Coffee 93 91. 135 147 1147Cotton - 20 25 24 25Cattle 21 27 29 28 30Timber 12 13 15 i6 I4Limestone 19 13 10 7 1Salt 143 36 36 33 39Sand & Gravel 11 1 it 10 11

Coal 29 3). 30 26 27Other Minerals 17 19 2B 29 36PetroleuLm Products 108 106( 98 89 87

(exc luding asphalt)Asphalt 18 16 22 43 33Sugar l4 52 70 90 74Molasses 6 11 13 12 8Fod(der - - - 20 28Beer 10 23 10 8 7Fertilizer 6c B(6 98 7 '93

Cemnent 29 22 25 21 20Newsprint 30 26 36 28 38Iron andl Steel 55 82 214 52 81Wire - - - -lO 18

Sub-Total 730 836 821 9148 964

Miscellaneous i60 278 175 177 195

Total- 890 1,1114 996 1,125 1,159

*-ource: F.C.N. Los Ferrocarriles en Citras, Boletin Anual.

- 22h) -

Table 111-3. tlOLOMBIAN NATIONIAL RAILROADS:

FREIGHT TRAFFIC BY COMMODITY - 1969

000 Tons % m.Ton-km % Revenue (m rDcsos) 5

Rice 43 1.) i.5 1.3 . ?Corn 61 .0 3 L[.9 6.6 .8Wheat 20'; 6.7 10). 8.7 28.8 F.'Banana 79 2.5 4 0. 2.7 0.7Coffee 273 8.9 147 12.6 3'.6 9.3Cotton 43 1.4 25 2.1 10.2 2.9Barley 38 1.2 36 3.0 10.0 2.8Cattle 148 4.8 30 2.5 13.2 3.7Timber 75 '.4 1l1 1.2 1.9 0.5Limestone 16 0.5 It 0.3 1.0 0.3Salt 107 3.5 39 3.3 10.9 3.1Sand & Gravel h4 1.3 1:1 0.9 3.4 0.9Coal 132 6. 27 2.3 7.2 2.0Other Minerals 85 9. 36 3.1 11.h 3.2Petroleum Products 450 14.7 87 7.5 26.9 7.6Asphalt 90 2.9 33 2.8 10.4 2.9Sugar 217 7.1 76 6.3 20.2 5.7Molasses 42 1.3 8 0.6 2.3 0.6Fodder 41 1.3 28 2.4 6.5 1.8Beer 27 0.8 7 0.6 2.4 0.6Fertilizer 207 6.7 93 8.0 27.5 7.8Cement 113 3.7 "0 1.7 6.9 1.9Newsprint 40 1.3 338 3.2 11.3 3.2Iron and Steel 120 3.9 81 6.9 23.2 6.6Wire 27 0.8 18 1.5 4.9 1.i

Sub-Total 2857 93.6 966 83.1 276.9 79.2

Miscellaneous 19. 6.4 195 1:6.9 73.0 20.8

Total 3050 -100 11•9 100 369.9 100

Source: FCN, Boletin Anual

- 22c -

Table III-4. COLOMBIAN NATIONAL RAILROADS:AVERAGE LENGTH OF HAUL

FreiRht Average Passengers AverageTon-km Tons Haul Pass-1 Passengers JoLrney

(Million) _(million) km (m-illion) (million) kin

1962 918 3.6 2h8 571 8.2 70

1963 891 3.7 241 627 8.6 73

1964 952 3.3 288 546 7.4 74

1965 890 3.1 287 513 6.5 79

1966 1JJ)I 3.3 338 491 5.8 85

1967 996 3.2 311 418 4.8 87

1968 1125 3.2 352 351 3.7 95

1969 1159 3.0 380 273 2.6 103

Source FCN, Los Ferrocarriles en cifras, Boletin Anual

Tab,le III-15. COT MBIAM MTAT -ODT.AT T RA TT 'ADS. M PYN FRIGTT-16216

F_31TIGHT PASSzKIG3.R

Average i';,vrenu Deele j Pv.erabe g ;e__e^. e

Tons rT con,k Besos) per T3on,`.'an Passen-;cers Bass.,t -a vel.- per -RS(m) ¢^) ~~~"m) ((,entavros-> | ()() 'eos:,{,a-Sr

1962 C. 1-191.' 8.2 571 jt

1963 3.7 1 7C2 , 8.,27-:'

1964 3.13 2> l! 0.!, aJ65.

1965 31.1 ,:? 512- 6 .5 7,1:, 28

-1967 ,3 1.1 252 22 ? i 8n3

1967 3.2 ,?2- 5. 6 . 1, -

IT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

sDource: F..S,Febi rla:17

- 23 -

hatil for this product is 50% longer than the average haul for rail trafficin Colombia. However, it is not very much (9%) longer than the averagehaul for wheat (see Table in para. 84 above) and there is a great dis-crepancy in the revenue per ton km. The Government and CNR might find itdeEsirable to review the rates charged for coffee.

86., Fertilizer is an increasingly important commodity for the rail-road. In 1969 approximately 207,000 tons were carried for 93 million ton-ki:Lometers or 8 percent of the railroad traffic. A large portion of thisfertilizer moves southward, entering the rail system at the river transferterminal at Capulco and then traveling to either Medellin and the CaucaVaLley or up to Bogota. This is a bulk commodity not requiring particularlygood service and is profitable for the railroad because of the long distancesinvolved (450 km average haul).

87. Sugar has become an important commodity for the railroad aserlports have climbed rapidly in the past ten years. It is produced primarilyin the Cauca Valley and all exports are through Buenaventura. Domestic re-fined sugar finds markets northward in Medellin and up to the north coastcities. The tonnage of sugar carried on the railroad has rose from 74,000tons in 1964 to 217,000 tons in 1969, at which time it constituted 74 millionton-kilometers or approximately 6 percent of total rail traffic. The averagehaul was 350 km.

88. Imports, mainly wheat, have historicallv played an important rolein rail traffic in Colombia. A large percentage of the imports comingthrough Buenaventura move inland by rail at least as far as Cali, althoughrelatively little continues by railroad past that city. Of the importsentering the country through Santa Marta, almost all move inland by rail-road. The Santa Marta import flow is particularly profitable to the rail-roads because most of it is destined for Medellin and Bogota and therebyprovides one of the longest hauls on the railroad system (500 km).

89. The increase in the highway passenger fleet and the expansionand marked improvements of the national highway network in recent yearshave been significant factors in the rapid decline of rail passenger traffic.Paissenger travel by rail declined from 8.2 million to 2.6 million between1962 and 1969. The average journey has increased from 70 km to 103 km.Passenger kilometrage also declined substantially, though less severely,from 571 to 273 million ton km, in the same period. In 1969 alone, therailway lost one million passengers, the equivalent of 28% of its traffic.

9(. Passenger traffic is offered on all lines of the railroad system,although the journey is generally very short and the revenue does not evencover direct costs of providing the service such as crew salaries, fuel andthe repair of equipment. The railways are offering a purely social service,with the possible exception of some express services between Bogota and theCaribbean coast which have increased in popularity in the past few years.

- 24 -

D. Outlook for Future Traffic

91. The quality of future rail service will be an important factor

in the retention and attraction of traffic. At present, the railway suffers

both from natural characteristics related to the country's terrain and

from track and rolling stock in very pour condition. Recently, there has

beeni a great improvement in rolling stock availability. Between 1968 and

1972 about 700 km of track are being renewed. In 1969 the number of de-

railments reached 4,700, costing about 16,000 train-hours, in addition to

seriously damaging existing rolling stock. It is thought that perhaps

1500 km of the 3,400 km of main line may be seriously defective. The

wheels of much of the rolling stock are out of true and also responsible

for many of the accidents. Only in 1970 was a program introduced of screen-

ing wagons for defects and withdrawing them from service until corrected.

92. It is highly desirable that, before the end of 1970, the FCN make

an inventory of the current condition of track, rolling stock and main-

tenance facilities. A review of the eftects of defective state of repair

on the quality of railroad service, on costs of operation and on life of

equipment should be used as the basis for a phased program of economically

feasible rehabilitation which could be undertaken during the period 1972-76.

The 1970 study would ensure adequate lead t-ime for arranging financing and

placing orders for imported materials. An out-Line of the purpose and scope

of the study is contained in Annex D.

93. It is, of course, essential that any track rehabilitation takes

place only on economic lines. The railroad will face increasing competition

from the improving highwav system. The railroad enjoys a competitive ad-

vantage over highway transport where there are long hauls on easy grades.

The main section satisfying this condition Is that along the Magdalena

River Valley from Neiva north to Santa Marta. But this line, to serve main

centers of production and consumption, is joined to lines which have to

negotiate very severe terrain. Completion of the Buenaventura-Buga highway

in 1970 will have a substantial impact on the Pacific Division of the rail-

road. The heaviest traffic on that division is carried between Buenaventura

and Cali. When the present narrow, steep, partly unpaved highway is re-

placed in 1971 by the much more direct and better graded and wider paved

highway now under construction, the highway capacity between the Cauca

Valley and Buenaventura will be greatly increased and the cost of operating

trucks will be reduced markedly. The distance from Buga to Buenaventura

will become 121 km compared with 216 km at present. This will certainly

confront the railroad with much more severe competition than that which

presently exists, although no efforts to forecast the effect seem to have

been made. It has been pointed out however that just over 200 trucks per

day could carry all the railway's present traffic, which at 1800 tons per

day utilizes virtually the full capacity of the rail line between Cali and

Buenaventura.

- 25 -

94. The other important impact of the new Buenaventura highway willbe to shift some imports and exports presently using the North Coast portsto the port of Buenaventura as the inland surface transport service to andfrom this port improves. Thus, the Atlantic Division of the railroad aswell as the Pacific Division, may feel some impact from.this new highwayconstruction. Increased sugar production in the Cauca Valley should leadto larger rail shipments of this commodity. If exports increase as theyhave in the last few years, the potential traffic between Cali and Buenaven-tura will increase and may compensate for some of the loss of rail trafficexpected when the Buga-Buenaventura highway opens.

95. On the other hand, construction of the San Roque-Las Pavas highway,which will take place by 1973, was found in the Harvard study simulationsto have relatively little potential diversion effect on Atlantic rail flowin spite of the substantial improvement that completion of this highwaylink will make in the eastern and central truink systems. However, completionof a highway from Medellin to Puerto Berrio, together with a new highway fromPuerto Berrio down to Barrancabermeja and Capulco, could have a very seriouscompetitive effect upon the railroad. Completion of individual portions ofthis highway would not attract nearly as much of the long-haul traffic uponwhich the railroad depends. The Government is anxious to complete highwayimprovements along this route and it is desirable that before doing so itshould study the implications of improved road and/or rail service fromMedellin to Puerto Berrio, Barrancabermela and Bucaramanga and the coststo the economy of alternative investment decisions.

96. Much of the railroad system is already paralleled by highways ofrelatively high design standard. These sections of the railroad should notbe seriously affected by future highway improvements, except as long-distancehighway trips suddenly become more feasible.

97., The introduction of the Caldas refined product pipeline may haveslightly diminished rail traffic in refined products. No other pipelineconstruction is anticipated in the area of the country served by the rail-roads, so the remaining gasoline and kerosene traffic is not likely to beseriously affected.

E.. Uneconomic Lines

98. It was agreed as a condition of the fifth World Bank railroadloan to Colombia (551-CO) that the Government would engage consultants tostuidy the following apparently uneconomic lines:

Manizales - MariquitaPalmira - PraderaArmenia - PereiraPereira - ManizalesLengazaque - Barbosa

- 26 -

Consultants (SOFRERAIL) were engaged and in 1969 their draft report recom-mended closure of the following lines:

Armenia - Pereira (60 km)

Guacheta - Barbosa (100 km approx.)

Palmira - Pxadera (14 km)

Manizales - Mariquita (72 km)

99. Traffic on Manizales - Mariquita has in fact been suppressed forsome years. Palmira-Pradera has also been closed. By closing the Armenia-Pereira line, the CNR would save about 1.5 million pesos per annum and wouldin addition be able to recover some capital from the sale of the line,buildings and warehouses in good condition. Suitable highway connectionsalready exist between the two towns. The closure of the line from Guachetato Barbosa would save about 2.4 million pesos per annum. No decision hasyet been made by Government on the closure of these two lines.

100. The study also examined the possibility of reconnecting Manizalesto Pereira (78 kin). The line was cut in 1959 for eight km north of Pereira.Subsequently, service was withdrawn from Santa Rosa and then Chinchina, andfinally the whole line was closed to traffic in September 1968, although astaff of 30 was retained for track maintenance. The consultants felt thatthe line could be reopened with some major realignment for an investmentof some 25 million pesos and that it could compete effectively for trafficwith the road system between Manizales and Buenaventura. The Mission con-siders however that a far more comprehensive study of the road and rail net-work in the upper Cauca Valley would be required before such an investmentdecision was made. The Sofrerail report was not final and the CNR in March1970 did not know when they would receive the final recommendations.

101. The 1968 Harvard study suggested that the Barbosa-Bogota, Cartago-Pereira, Cali-Popayan, and Facatativa-Girardot lines be abandoned becauseof low traffic. The Government in its 1969/72 development plan drew attentionto the low traffic, less than 100 tons a day, on the 31 km Bogota-Soacha (ElSalto) line, but it has taken no action to close the line, apparently becauseit provides rail access to some large industries. Little use appears to bemade of the industrial sidings however. It appears that, rather than facethe political problems of closing these lines outright, the railroads haveadopted a policy of progressive neglect, keeping services and expenditures toa minimum. This may well be the least costly solution to the problem.But in instances where passenger traffic has declined to negligible pro-portions and adequate alternative highway transport already exists, it isdesirable to pursue the rapid abandonment of rail services both on thegrounds of national economy and corporate efficiency. Moreover in the caseof Bogota-El Salto, for example, valuable right-of-way is being withheldfrom alternative use.

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F. Possible Extensions

102. Frequently over the past ten years, proposals have been madefor the construction of extensions to the country's rail network. Nosatisfactory economic case has been made for any. Officials of the FCNare not strong advocates of adding to the network. The current status ofproposals which are made from time to time is given below.

103. A study of three alternative proposals for an extension from theMagdalena line to Barranquilla and Cartagena was made by consultants in1965. The proposed routes were:

(a) North - from Cienaga along the coast parallel to thehighway on the island of Salamanca to Barranquilla andthen to Cartagena.

(b) South - from Algarrobo, 41 km South of Fundacion on theAtlantic line, crossing the Magdalena near Calamar andthen branching, one line down the west bank of theMagdalena to Barranquilla and the other going toCartagena with a crossing of the Canal del Dique.

(c) Central - from Fundacion, crossing the river at SantaRita. A branch would follow the west bank of theMagdalena to Barranquilla and another would go toCartagena and Mamonal, via Sabanalarga.

104. The consultants preferred the Central alternative because itwould be 80 km shorter to Cartagena than by the Northern alternative andonly 17 km longer to Barranquilla. It would require fewer large rivercrossings and avoid the congested banana traffic between Cienaga andFundacion. The Southern route would involve much more expenditure andwould not be suitable for a connection to Barranquilla.

105. The forecast of traffic which would be generated by the adventof the railway is, of course, out of date and other improvements have beenmade to highways both on the parallel Medellin - Caribbean coast and Bogota-Caribbean coast routes and on the Bogota-Cali/Buga-Buenaventura route. TheCNR is currently preparing an updated traffic forecast which is expected tobe complete by August 1970. The 1965 study did not make a comprehensiveeconomic analysis of the project. No incremental comparison was made ofthe yield on the proposed investment resulting from the difference betweentruck/river and rail costs. In fact, the only comparison made in the re-port is between point to point prices by difference modes. Average 1965ton-kilometer CNR revenues multiplied by the projected traffic volumes wereused to ascertain whether the yield would cover the investment.

- 28 -

106. Presently there is substantial excess capacity in the river fleet.

Furthermore, the crude oil pipelines have large amounts of unused capacity

whic:h could divert oil traffic from the river, leaving even greater excess

river capacity. It is clear that from a capacity standpoint there is no

need for the rail extensions for carrying bulk cargoes.

107. Even if the rail extensions could attract traffic from the trucks,

say by providing a high quality of service, and the boats by cutting rail

tariffs, the advantage will be marginal at best. A very substantial invest-

ment will have been made for a marginal benefit to the economy since the

overall cost to the shipper is not likely to be greatly reduced.

108., The Harvard Report entitled An Analysis of Investment Alternatives

in the Colombian Transport System (1968) came to the conclusion that, if any

extension was warranted, it was probably a line from Cienaga to the east

bank of the Magdalena opposite Barranquilla, but that this should be studied

more carefully before any investment decision was made. Recent investigations

have led the U.N. industrial consultant to the Government to a similar con-

clusion. It is hoped that the CNR study will when it is completed later this

year indicate whether in the light of current traffic prospects there is a

case for any extension in the area.

109.. From time to time in the past, the possibility of constructing a

line across the central Cordillera from Ibague to Armenia has been raised.

At present, rail traffic is transhipped by truck between the two points

under contract to the CNR. In 1969, it averaged 116 tons per route km per

day and clearly any justification for the considerable investment involved

in tunnelling through the Cordillera would have to be based on calculations

of potential diversion of regular truck traffic using this route and of

traf-fic now using other rail routes. The Sofrerail study recommended further

investigation. However, the staff of CNR are of the opinion that it would

not be a viable proposition.

110. In 1969, a firm of American consultants (Madigan-Hyland de la Cruz,

Ltda.) made an engineering study of a proposed new section between Loboguerro

and Yumbo on the Cali-Buenaventura line which would maintain a 2% grade and

still avoid construction of tunnel which had been proposed in earlier pro-

jects. The length of line would however have been 26 km longer than the

other proposals. The study found that, at present, there was no economic

justification for any major engineering work between Cali and Buenaventura.

G. Railroad Costs and Pricing

111 In general, rail line-haul operations are characterized by very

low unit costs due to the small crew required per ton of cargo and the small

number of units required. Efficiency also depends heavily upon the ability

to run long distances at relatively constant speeds utilizing a low power to

weight ratio. This means, however, that a train which is efficient for

operation in level or nearly level conditions will be able to ascend only

- 29 -

very slight grades. Therefore, trains must usually be divided into numeroussmaller trains at the base of a mountain or additional power must be addedto the train. The latter solution is limited by the strength of the couplersor the cars themselves and their tendency to derail or capsize when negotia-ting sharp turns under heavy drawbar pull. This constraint applies to manyof the older cars in Colombia. In addition, the tortous terrain encounteredin the mountains of Colombia creates many sharp turns which cause hazardouscouditions for the operation of long heavy trains. Thus, the sections ofthe system which involve steep gradients and sharp curves would probably re-quLre the use of very short trains even with the best of rolling stock.Still shorter trains are now required because the equipment is not in idea.Lcondition.

112. The division of a train into several smaller ones is essentiallya yard operation and therefore adds significant costs to any line-haul move-ment where it is required. Thus, rail operating costs rise much more rapidlyin mountainous territory than do the costs of truck operations because truckscan adapt to steep grades simply by shifting gears, as traction and derail-menit are no problem for a truck. For example, Harvard found that, evenignioring the greater deterioration of roadbed in mountainous terrain, railoperating costs in the flat areas of the Magdalena Valley were only one-halfthe magnitude of comparable costs in the mountainous areas.

113. Railroad transportation usually involves very substantial terminalcosts for loading and unloading cargo and also for yard operation, wherecars are stored for assembly into trains or trains separated into individualcars for delivery t:o the consignee. Yard costs are not incurred in truckingoperations since a loaded truck can depart directly for its destination with-out waiting for others. Railroads, therefore, do not begin to reap thebenefits of their low cost line-haul operations until. the length of thehaul ensures that the fixed terminal and yard cost:s are offset by line-haulsavings.

114. In 1969, the average revenue per ton km on the entire Colombianrailroad system was 30.2 centavos. The range except for coffee at 22.2 centa-vos, was between 26.5 centavos and 156.8 centavos. Only 5,000 tons were car-ried at the latter price and they represent packages. These revenues reflectthe railway's shortrun marginal costs. Truck costs in 1969 were estimatedto range from 25 to 60 centavos per ton km. Although truck costs are lowerin flat than hilly terrain, truck-costs are probably somewhat lower than railin mountainous regions and much higher in the flat regions. However, in-vestment or abandonment decisions should be based on much more disseggregatedinformation than is available from national averages.

115. Comparison of rail operating costs with those of the river fleetis more difficult because accurate cost figures are simply not availablefor barge operation. River tariffs have generally been approximately two-thirds the magnitude of rail tariffs on a ton/kilometer basis. This hasoccurred despite the persistent excess capacity of the river fleet whichraises their cost somewhat above the most efficient level.

116. Prior to I96i(), thie cal.' road tard !-L.d ftis stetd of a f ixcd part

and a variable part. The!se LwoC tariff romoeen ts we Ce computeti separa tel

for almost every 'ine on thi rai-Iroad; thait: tra-ffic betlwbc± i L;gue and

Facatativa would pav a difrfe.rert fixed portioii LhanL traffic t B;cen Barbosa

andi Bogota 'n addition to Iviving a different vari,ahle charge pce tun/lcilo-

meter, In addcf ion, there ware three classes of commodities, Class A,

Class 13, and Class C. Finally, there were a iu.rher of specIal, rates for

commodities whi(Ah were exempiipted from these ,neral categories. The special

tariffs had their own ft,Eed and variable parts whiicih were diffierent for

different lines on tiie railroads and included such Important commodities as

fertilizer, combustible, catLlec coffee, and banianas.

117. In 196b, introductiotn of a new taiff system based on the recom-

mendations of consultants (SOFRERAIL) considerably simplified -T-e rate

structure. This reform was designed to help the railroad specialize in

longer haul and bulk traffic and is consistent with the aim of exploiting

the natural conmparative advantages of rail. transpcirt. Under the new system,

cargo is clas6ifiied as either class A or class B. Tariffs are computed using

a table entitled "''a:rifas Especiales por Cupos Completos y Geenerales de Cargo

y Ganada" which gives the total tariff charged for class A and class B goods

for any distance t;.avreled. For cargo which does not fill a complete car,

another rate is avaitable based on the percentage of the car which is

occupied. A shfi)pe, has a choice between paying the class A or class B rate,

whichever is appAicalLe to his commodity, or instead paving the percentage

occupancy rate which does not depend upon commodity classification. For

class B comjnodities Lhe pe-reentage occupancy cate will be cheaDer for a

shiPper who has letss than 751%' *f a carload. For class A commodities the

percentage occupancy rate is chieaper for shippers who have less than li%

of f-ull carload.

118. The rate given is based on distan-. but tihe unit of distance is

not a kilometer. Rather it is called "unidaIl ferrera de liquidacion."

These "'units" as they are called are roughlv proportional to distance be-

tween points but they have been adjusted to account for competition or costs

and other factors thought to be relevant by the railroads. Published tables

specify the number of units between each termLnal and other stations along

the route. Thus, to determine the rate, the shipper simply classifies his

cargo as class A or class B. lie then decides whether to pay the appropriate

class rate or to pay the rate based on percentage occupancy. He then looks

up in a table the number of units between thle relevant origin and destination

and computes the tariff he will have to pay.

119. In the new rate structure, special rates have been retained for a

few selected commodities. Coffee, for example, has a separate rate table

independent of the unit concept. As indicated above, (para. 85) this umay

warrant review. Refined petroleum, kerosene in tank cars and cattle are

also charged special rates.

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H. General

120. Operating statistics are reported fully and promptly every month,

and then annually. In many cases, such as the tables devoted to passenger

traffic, there is unnecessary detail. In others, the figures given are not

meaningful. For example, as mentioned above, in the Boletin Anual for 1969,the number of steam locomotives is shown as 146. But most of these willnever enter service again. Because they are carried on the books of the

cDrporation, they are included in the operating statistics, thus making it

difficult to estimate productivity. The freight car position is alsoreported in a misleading fashion. In the CNR annual budget, only expenditire

of local funds is shown. Expenditure financed by foreign loans and credits

does not appear and true capital expenditure is grossly understated. Thle

CNR should review the contents of its reports for usefulness and validity.

121. Although, no doubt, there are sections of line and quantities of

traffic which it would be more economic to dispense with, it is possible to

say that in the past few years the policy of the CNR has been in the correct

direction. The restructuring of rates and drastic simplification of the

tariffs, the rationalization of passenger and less-than-carload freighttraffic, the replacement of old rolling stock and the acquisition of addi-

tional motive power, together with the rehabilitation program are all highly

commendable and have secured for the railways a much greater share of the

nation's freight traffic tllan would otherwise have been the case. The con-

centration of traffic in large shipments has b?en partictularly successfutl

(Table III.6) and the reduction of the labor force from 14.90O in 1963 to justover 11,000 in l9("9 is commendable.

122. Tables III.7 to III.9 give the summary income accounts for 1962-*1972and sunmnary cash flow statements and balance sheets for 1967-1970. While

actual and expected operating revenues for 1969 and 1970 are better than

forecast in 1968, operating costs have risen sharply, mainly due to wageawards, increasing labor costs by 10% in 1969, with a further 10% in 1970,

so that net operating revenues are less than expected, Interest charges,

due to slower disbursement of foreign loans than earlier anticipated, aresomewhat lower than forecast, but revenues are still insufficient to cover

them. An operating ratio of just under 100 was achieved in 1969 for the

second time in the history of the CNR, and one of 92 is forecast for 1970.-lowever, CNR{'s working capital position has; deteriorated cdue to lower tihan

expected net earnings and to the failure of Government to provide the fullamount of local currency ftnds required for the rehabilit,ation program. Inrespect of the latter, there was a net shortfall in 1969 and 1970 of 24 mil-lion pesos. The effect of this has been that the railway has had to resortto high interest borrowing from local banks.

123. Tariff increases together with additional traffic onabled CNR toincrease its average revenue per ton-km by 1.6% in 1969, and a further 6%

increase per ton km is forecast for the expected 1369 mil-[on ton km in 1970.However, as already discussed, costs are also rising rapidly. In addition,

- 31a -

Table III-6. COLOMBIAN NATIONAL RAILROADS: DISTRIBUTION OF

RAIL FREIGHT BY SIZE OF SHIPMENT - 1969

Size (kilos) Revenue % Xilos % T.hn % No. ofj % Kilos Revenuein Pesos (n) (O Ship- per car per t IT

________ _____ ~~~~merits __ __ _ (p sOs)35.0 and oveT i¶27702.9 7T 1,i105. 36.2 7-71.5 140.7 30,971 T.1 3 5. 7 0.26

31.5 - 34.99 56,459.9 16.1 386.5 12.7 200.1 17.3 11,622 3.0 33-. 0.282

28.0 - 31.49 24,85.14 7.1 226.9 7.4 84.1 7.2 7,60h 2.0 29.8 0.296

214.5 - 27.99 2I4,363.8 7.0 222.11 7.3 81.0 7.0 8,670 2.3 25.7 0.301

21.0 - 24.49 24,745.6 7.1 255.0 8.4 80.8 7.0 12,200 2.9 20.9 0.306

17.5 - 20.99 24,673.7 7.0 194.4 6.4 73.9 6.4 10,187 2.7 19.1 0.334

)L.0 - 17.1h9 23,818 .5 6.6 262.6 8.6 78.41 6 .7 16,086 14.2 16.3 0.3041

10.5 - 13.99 9,113.2 2.6 69.7 2.3 25.3 2.2 5,816 1.5 12.0 0.360

7.0 - 10.1s9 13,5o5.8 3.9 106.5 3.5 31.0 2.7 11,715 3.0 9.1 0.L36

3.5 - 6.99 6,185.9 1.8 38.7 1.3 10.9 0.9 7,614 2.0 5.1 0.569

1.0 - 3.49 7,026.0 2.0 52.0 1.7 10.0 0.9 28,133 7.3 1.8 0.700

.1 - .99 5,922.6 1.7 43.3 1.14 6.7 0.6 128,849 33.5 .3 0.887

.01- .09 1,805.7 045 5.2 0.2 1.2 0.1 105,83 27.5 .05 1.568

Sub-total 347,207.9 99.2 2,971.3 97.4 1,108 99.7 384,328 100 - 0.301

Bananas 2,726.9 0.8 78.6 2.6 1.0 0.3 - - - 0.687

Total 349,932.8 100.0 3,049.9 100 1,15K.7 100 100 - 0.302

Source: FCN, Boletin Anual

'i'ale., 11T-K { . vi.LOfhMi5iAN NAT[UONAi, 1A.fbi.Y),UJSi: 6 MIARyINCOME ACGOUTTI'S - lY-,.'70

(Million Pesos)

Forecast196,2 1963 j-196k) 196f, JQn.) 1967 ].96f3 1969 1970

Freight rL9 179 194 180 263, 265 311 370 41h1Passenger 22 30 29 29 31 34 35 3it 35Other it 6 6 8 11 13 19 16 2W)

Total operating revenue 145 21, 229 217 305 312 365 4j20 500

Operating expenses (ex-cluding depreci ation) :161 238 2 i3 2 li7 2ti6 316 345 36!4 412

Depreciation 1!i 24 :30 34 36 h3 42 53 _49

Total operating exponses 175 262 263 281 30° 359 387 417 iL61

Net operating revenues(deficitsa (30) (l17) (Th (61) 3 (47) (22) 2 39

I]nterest charges -i2 2)6 31 29 40 45 53 66

Net loss (Lj3) (69) (60) (95) (26) (87) (67) (50) (27)

Non-operatinr income (net) 5 21 17 7 13 16 12 31 11

Net deficiencv (38) (48) (43) (88) (13) (71) (55) (19) (16)

Operating ratio -a 122 122 115 129 99 115 106 99 92

- 31c -

Table III-8. COLOMBIAN NATIONAL RAILROADS: SWMMARYCASH FLOW 1968-1970

1968 1969 1970To 652 (a) o2 1 -)Forecast Actual Forecaslt Actual Foo Ie.aLs' b Bdt;c

(Ps . illio.7n s)

Cash fcquirereonts

Investni-ent 212 169 558 466 239 240Debt service - Interest 61 45 71 53 73 66

Amortization 63 49 66 70 93 98

Total Debt Service 124 94 137 123 166 164

Wlorking capital increase (decrease) - 10 10 (32) 15Reserve Funds increaso 30 - 40 - 40 -

Total Cash Required 366 213 745 557 1460 4 Ci

Cash Available

From IGIR:

Net operating profit (loss) 10 (22) 25 3 55 39Depreciation 44 42 60 53 66 4gProfit on sale of real estate 17 12 17 31 18 11Increase in social security

reserves 30 11 30 3 30 3

Sub-total 101 43 132 90 169 102

F'rom Goveronent Fumds

Debt service 59 49 59 59 59 59Investnent 117 116 138 115 123 124

Sub-total 176 165 197 174 182 183

From Loans .: Bi-lateral financinz

For locor:otives and frei,ht cars 41 59 292 249 - 25551-CO 54 _ 128 18 116 91

Sub-total 95 59 420 267 116 116Local loans _ 32 - 3

Total Cash Available 372 267 749 563 467 404Cash at bel,innin_ of yoar 26 26 32 20 36 26Cash at end of year 32 20 36 26 43 26

- 31d -

Table III-9. COLOMBIAN NATIONAI, UILROADS: SUMMARYBAIANCE SHEETS, 1968-1970

December 31 ]968 Doccritb'r 31 1969 D ccmbcr 31 1970

Forecast Acti!l Forec,-":t; Actl-1 Forecast Forecast( Vs;rn:ili~on~7

Assets

Current Assets

Cash 32 20 36 26 43 26Inventories 165 207 175 187 180 180Other 117 120 127 153 141 159

Total Current Assets 314 347 338 366 364 365

Fixed Assets

Gross 2,283 2,337 2,800 2,870 3,025 3,090less acciunulated depreciatiorl 250 269 270 315 320 344l

Net Fixed Assets 2,033 2,068 2,530 2,555 2,705 2,746

Reserve Funds 30 - 70 - 110 -

Niscellaneous Assets 32 46 _ 22 63 21 60

Total Assets 2,409 2,L61 2,960 2,984 3,200 3,171

Liabilities

Currenit Liabilities 70 95 75 151 80 150Long-term Debt 821 890 1,171 1,165 1,194 1,183Capital 1,776 1,776 1,973 1,950 2,155 2,133Less accumulated deficit 408 430 439 U45 439 461

Net Capital 1,368 1,346 1,534 1,505 1,716 1,672

Reserves 150 130 180 163 210 166

Total Liabilities 2,409 2,461 2,960 2,984 3 200 3,171

Ratios

Current Assets over currentLiabilities 4.5 3.7 4.6 2.4 4.6 2.5

Current Assets (less inventories)over Current Liabilities 2.1 1.5 2.2 1.2 2.2 1.3

Debt/&quity 37/63 40/60 43/57 44/56 41/59 41/59

- 32 -

Law No. 5-a passed in October 1969 would considerably increase railroadpensions retrospective to 1966. This has not yet been put into effect butit is estimated that it would require at least an increased 25 million pesosper annum for existing pensions.

124. While it should be official policy to continue to rationalizethe railway's operations in keeping with current and prospective demandfor its services, economically justified rehabilitation should not behampered by shortage of local funds at a time when this shortage is notbe:Lng experienced by other agencies responsible for transport investment.It also becomes difficult for the CNR to function as a commercial enterprisewhen additional costs, such as the pension increases, are imposed on thecorporation.

IV. INLAND WATERWAYS

125. The Magdalena River provides an important complement to the high-way, railway and pipelines for transportation of goods between the Atlanticcoast and the interior. The river is navigable from its mouth near Barran-quilla about 930 kilometers southward to the Honda rapids. Depths in theriver limit operations to vessels of about 5 feet in the lower reaches upto Gamarra (473 km upstream) and it becomes progressively more difficult tonavigate further upstream, with limitations on drafts to as little as threefeet: during periods of low water and restrictions on night operations.

126.. The port of Cartagena is connected with the river at Calamar, 91kilometers from Barranquilla, by the Canal del Dique, which has a control-ling depth of about 7 feet. Typical river operations consist of a tugboatpushing several barges, with an average capacity of about 350 tons each.

127.. Total traffic on the river has exhibited a steady growth of about5% per year over the last decade and in 1968 amounted to 1.3 billion ton-kms, of which almost 1.1 billion consisted of petroleum traffic. Since 1964general cargo traffic has declined from 430 million ton-kms to 350 millionton-kms in 1968, while petroleum traffic increased from 700 million ton-kmsto about 970 million ton-kms over the same period. Petroleum traffic con-sists mainly of crude oil shipments from Barrancabermeja down to a refineryat Cartagena. General cargo traffic is about 2/3 upstream and 1/3 down-stream. The average haul of cargo transported on the river is about 500 km,with an average of 580 km for general cargo and 470 km for petroleum.

128. Crude oil is also moved to the refinery at Cartagena by pipeline.In 3.968 this pipeline carried about 3 times as much crude as the river. Thepipeline and the river barge fleet have a combined capacity far in excessof the present crude oil traffic. The tariffs for moving crude by pipelineand river transport are regulated by the Government in a complicated manner,restulting in practice in similar prices for transport by either mode and anappcirtionment of the traffic over the two modes. Crude oil traffic fromBarrancabermeja to Cartagena is not expected to rise in the near future andno investments in either river fleet or pipelines are contemplated. It isnot clear why it would not be more economical to use the pipeline to itscapacity and move the remainder of the crude, if any, by river. The in-cremiental cost of moving additional oil via a pipeline not used to capacitywould presumably be much lower than transport by the river.

129. The general cargo traffic along the river has, as noted before,declined in recent years. It would appear that for certain cargoes,especially bulk cargo, the river would continue to be the most economicalmeans of transport. This, however, requires that the navigability of theriver and the Canal del Dique is maintained, river ports have sufficientcapacity and are adequately equipped and the river fleet itself is efficientlyoperated.

- 34 -

130. Before embarking on an investment program in port facilities andriver works, the Government intends to undertake a comprehensive study ofthe prospects for river transport in the context of other modes which com-pete with or supplement the waterways. The oblective should be to bringabout an efficient integrated transport system. A recommended outline ofthe purpose and scope of the study is attached in Appendix E. In the mean-time the Government's investment program should be considered tentative.It includes sums to assist Adenavi in its river maintenance operationsand allocations for hydraulic works as follows:

1970 1971 1972(Millions of Pesos)

Assistance to Adenavi 10 13 15Hydraulic Works 10.5 21 37

Totals 20.5 34 52

V. AIR SERVICES

A. Introduction

131. In 1968, significant changes were made in the management of

civril aviation in the public sector in Colombia and it is too soon to

assess the full impact of these changes yet. The Department of Civil

Aviation commissioned a comprehensive study by consultants 1/ to review

the:! aviation needs of the country and to prepare an investment program.

This study has been completed and presented to the Department and is

now being reviewed in detail by the Government with a view to developing

an approved National Aviation Plan, which would be used as a basis for

investment planning in the public sector of aviation. Much of the material

used and presented hereunder was obtained from the consultants' study.

B. Forecast of Commercial Air Transportation Activity

(i) Passenger Traffic

132. While world air traffic has experienced substantial increases in

the 1960's, Colombia's domestic passenper traffic declined in several of

the recent years. The statistics related to passenger traffic in Colombia

show several trends - good growth in passenger kilometers (8.5% p.a. 1956-68),

substantial increases in average trip length, and little growth in numbers

of passengers (4% p.a. 1956-6R but static for the last five years of this

period).

l/ National Airports Plan, Cia. de Estudios y Interventorias, Restrepo y

Uribe Ltda; and R. Dixon Speas Associates, February 1970.

- 36 -

Air Passenger Demand in Colombia

Number of Number ofEnplaned Passenger AveragePlassengers Kilomete;s Kilometers

Year x 1,000 X I,000 per Ir-ip

1956 1,389 562,'i9O 4051957 1,490 615,163 4131958 1,436 631,821 4401959 1,484 680,591 4591960 1,515 745,265 4921961 1,685 822,749 4881962 2,074 993,442 4791963 2,316 1,219,727 5271964 2,571 1,343,747 5231965 2,519 1,336,903 5311966 2,511 1,429,772 5691967 2,432 1,525,699 6271968 2,462 1,610,846 654

133. The development of total domestic passengers and passengerkilometers has been affected bv (a) the development or improvement ofalternative travel modes; (b) air fare changes; (c) air service changes;and (d) economic factors.

134. Improved hiiglhways have had a si.gn:flcant impact on air traffic.In L964, prior to the opening of thie road betureen Bogota and Neiva, airtraffic between this city pair was 67,000 passengers per year. In 1968,air traffic had dropped to 49,000 passengers trips. In the case of Popayantraffic, the new highway from Cali had significant impact on air passengerdemand. In 1966, the total passengers at Popayan were 21,000 while in 1968,after completion of the highwav, the number dropped to 3,500. It is nowrecognized that the recent investment in airport at Popayan was the resultof inadequate planning and forecasting.

135. There have been two increases in air fares in recent years - 20%in 1966 and 25% in 1967; this undoubtedly has had some effect on air traffic.

136. The consultants' forecast approach is based on passenger kilome-ters and trip length, which leads to a passenger forecast. An analysis ofthe relationship between revenue passenger kilometers and Gross NationalProduct (GNP) was undertaken to investigate the possible use of GNP in aforecast model. GNP and revenue passenger kilometers (RPK) were analyzedfor the years 1950-1966. The coefficient of correlation between RPK andGNPP with RPK the dependent variable is high at 0.983. The relationshipdeveloped graphically is given by the equation:

RPK = -938 + 77.7 GNP

Using this relationship and the forecast of GNP, it was possible to

- 37 -

develop a regression forecast of total Colombian RPK's. The forecastof total passengers of the national carrier was developed by dividingforecasted RPK's by the expected length of haul.

(ii) Air Cargo

137. The rate of growth of air cargo traffic has been low; servicehas been inadeqtuate and unreliable..

Thousands of Tonne-Ki.oometers

Year 1953-1968 Domestic International Total

1953 59135 - 591351954 64469 - 644691955 61222 - 612221956 63349 - 633491957 56269 - 562691958 51614 - 516141959 52751 - 5275].1960 39748 5301 450491961 41279 6867 481461962 45931 7620 535511963 56602 10496 670981964 56513 14181 700941965 47552 1.6307 638591]966 54060 20114 741.741967 491.85 19497 686821968 48625 233493 71974

Average Compound Growthrate 1960-68 2.5% 18.57 7.3%

138. The imbalance of air cargo traffic flow is a problem in Colombiaand may accouint for some of the apparent lack of interest of the carriersin air cargo. However, such imbalance is not peculiar to Colombia. Al-though there has been a decline in actual terms of air cargo carried, thenumber of tonne kilometers has increased slightly. This reflects the longeraverage hanl. In addition, the domestic portion of traffic has been decli.n-ing and the international portion has been increasing. The consultants believethat onlv If a vigorous marlketing effort were made would the current growthrates be exceeded.

- 38 -

139. In general, the consultants' methodology and restil ts in traffic

forecasting seem realistic and reasonable.

C. Long Range Aviation Nee(ds

140. There is a strongp market for aviation services in Colombia. The

size of the counitrv, the nature of the terrain and the improved services

provided, all contribute to the demand for modern air services, botlh in the

hislh density routes and i.n the remote areas of the country. The natural

competition to air services, which develops when new highways are completed

usually makes inroads into the volume of air traffic, but this is a healthy

sign as it shows that the nuhlic will make a COnSCiOuIS choice between modes

based on cost of travel and level of service as definedi bv frequencv, trip

time, comfort and safetv.

14.. The greatest long range needs for aviation are an accurate and

comprehensive statistical data base, realistic forecasting of demand, good

technical planning of services and facilities andl a sound plan of investment

based on economic policies and priorities which are systematically reviewed.

This is imnortant in such a dynamic industrv as aviation. IJith these things

in mind, the Government commissioned a study bv consultants to review the

long range aviation needs. A hrief stummary of the findings of the constul-

tants' report follows:

(a) There are about 700 airports in Colombia.

(b) 97%7o of the air activityv is conducted at 68 major airports.

Only 12 of these airports have paved runwavs.

(c) Domestic passenper traffic has declined In absolute numbers

in the last few vears but the nuimber of passenger km has

increased, indicating a higher averape trip length.

(d) llowever, domestic passenger traffic is forecast to increase

at the rate of 4.5';' p.a. and international passenger traffic

will increase at 14% p.a. Revenue passenger kilometers (RPK)

will increase from 1,700,000 in 1968 to 3,500,000 in 1978.

(e) Cargo traffic will increase also, but the most significant

increase in the air in(dustry will be in general aviation,

i.e. in activities other than scheduled carrier work.

(f) Major improvements are recommended for the following airports:

BogotaBarranquillaMedellinCartagena

- 39 -

In addition, lesser improvements are recommended for 27airports. Some airports are recommended to he operated ona reduced scale and some abandoned.

(g) Improvements in Navigational aids are recommended, in-cluding: the installation of 20 additional Verv HighFrequency Omni-Directional Ranges; radar systems atBogota, Barranquilla, Cali, Medellin and Bucaramanga;Instrument Landing Systems at Barranquilla, Cali andBucaramanga.

(1) The financial program recommended by consultants indicatesthe estimated capital costs for 1970-79 is 798 million pesosfor airports and 175 million pesos for navaids. This is lessthan the existing rate of expenditure. The estimated operat-ing and maintenance costs of the recommended airports systemfor the same period is 415 million pesos. Estimated revenueis 921 million pesos.

(i) The economic analysis indicates a rate of return of theorder of 17%. However, this excludes the acquisition ofPereira airport, the construction of the new Medellin airportand the new parallel Runway at Bogota as insufficient informa-tion was available on these proposals.

(j) The report gave certain conclusions and recommendations onthe organization of the public sector. However, the Govern-ment made certain institutional changes by means of newlegislation before the consultants' studv was completed.The consultants' recommendations in this area were not inaccordance with the new changes and so have not been imple-mented.

D. Air Services Provided

(i) International Routes

142. The percentage of international traffic handled at Colombianairports, although relatively small, is very significant as it is concen-trated at only five airports; it accounts for nearly all of the larger letoperations at Colombian airports and requires special facilities and ser-vices.

- 40 -

143. There are three major and three minor routes within the Americas

and to or from Colombia. There is only one malor route pattern outside the

Americas; the middle Atlantic route to Europe, with flights offered by five

carriers under a pool arrangement. All such flights originate in or pass

through Bogota. There is no air service from Colombia to Asia or Africa.

(ii) Domestic Routes

144. Nearly all the intra-reglonal services are provided by piston

engine aircraft ranging from single engine Beavers to DC4's. There are

no jet or turboprop intra-regional operations except for flights between

Cartagena, Baranquilla and Santa Marta.

145. The inter-regional routes can he designated as trunk routes in

contrast to the intra-regional feeder routes. Inter-regional non-stop

services are limited in number. Nearly all of the citv pairs are made up

of major Colombian centers, and nearly all services are operated by the

national carrier, Avianca, two of its subsidiaries SAM and Aerotaxi, or

the third trunk carrier, Aerocondor. The services out of Villavicencio

show this town's importance not only as the intra-regional Llanos center,

but also as the focus of all longer routes to fringe settlements at Leticia,

Inirida, and in the Yari.

146. An idea of regional integration within Colombia can be derived

from even a casual study of the present interactions:

~~- IDI.LS1 ~ ~ ~ ~ ID IP\noU 3 \

n1aNR >fl2lW aumotA /AiOJSd 4 \

R A\S,w,2~~~~~~~~Ja.t. ta w/ Iltd

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5L F ft f fP.PlJ4.L

.... Sf 3DlAb;t8 | r OC- 9\

MAY .. . . . . . . 113MVI'N t' °S k A VXt E lev { ......... \

/ \ anlAtsasuye~~~~~~~~~s V

SIDIOlOD~~~~~~ODI "beE-dwVIY

T'A sjrNTj~~ inbsj i4;flu41 tin SS 0 EI GiC4 Y .L

_f I A 2 _ r . \. ....... I-. a nfl wihD f m3wX e o5Sfl

- 41 -

Many linkages exist between the Antioquia region (CaucA Nortlh)

and both the Atlantic Coast (Costa) and Santander. Bogota is

included in more inter-regional city pairs (20) than any other

city; Medellin is second with 12. The focus of the Llanos in

Villavicenclo and their isolation otherwise is apparent both

from the inter-regional city pairs including Villavicencio and

from the absence of any other malor linkages of the Llanos besides

that of Bogota and Villavicencio. The eastern jungle expanse has

no connection with the developed part of Colombia except through

Villavicencio. San Andres has linkages with diverse areas of the

country, which is an indication of its unique status in the

Colombian interaction pattern.

E. The National Airports System

147. Air activity in Colombia is performed in a relatively extensive

airports system. Actually, there are 685 airports registered with the

Civil Aeronautics D)epartment. However, the majority (520) are in flat terrain,

generally with grass surface, for operation, almost exclusively in the

drv season of one-engine private aircraft or one-engine aircraft for

spraying agricultural plantations. These landing strips are mainly

situated in flat zones, such as the Llanos Orientales (Eastern Plains)

and the Valle del Rio Magdalena (Magdalena River Valley). They are gener-

ally owned by private individuals or by the municipalities in which they

are located.

14;3. Of the remaining 165 airports, 70 are owned bv the Fondo

Aeronautico Naciona]. (FAN), 5 are military and the rest are privately owned

or belong to a municipality. Among the most important privately owned is

the present Cali Airport (Calipuerto). The airport of Pereira, which is

also one of the main commercial airports in the country, belongs to the

city of Pereira.

149. The main airports of the cotuntry are those which at present have

runways for jet operation, domestic or international. The ten major com-

mercial airnorts, listed in rank order by activity, are as follows: Bogota;

Medellin; Cali; Barranquilla; Cucuta; Bucaramanga; Cartagena; San Andres;

Pereira and Santa Marta. Of the preceding airports, Bogota, Barranquilla

Cali, Medellin and San Andres have regular international flights of for-

eign and domestic airlines. Cartagena has regular international flights

of only domestic airlines. The ten airports listed above account for 80%

of the countrv air activity, based on the total enplaned and deplaned pas-

sengers at each airport.

150. Bogota, the center of activity in Colombia, accounts for 28%

of the domestic passengers total and for 70% of the international passen-

gers. If the passenger movements at the next twenty busiest airports

were added to the total activity of the above mentioned airports, these

30 airports wou]d then account for 94% of the total passenger movements

in Colombia.

- 42 -

151. At present, the Civil Aer-onautics Administrative Department

through the Fondo Aeronauti-o Nacional is in the process of constructing

three new airports at Cali, Bucaramatiga and O0cana and is improving seven

additional airports at Cartagena, San Andres, Pasto, Corozal, Mangangue,

Tumaco and Guapi. In the airways svstem, improved navigationi coverage is

required. This will most likely be done through the expansion of the

existing system based on the use of Very Higlh Frequency Omni Directional

Ranges (VOR's). The consultants have recommended that radar coverage and

ILS systems should be provide(d in the terminal areas of Bogota, Baranquilla,

Cali and Bucaramanga.

F. Pricing, Tariffs and User Charges

152. Nearly all the air services are provided by AVIANCA, its two

affiliates, SAM and AEROTAXI, or the third trunk carrier, AEROCONDOR.

The present level of domestic aviation fares is low compared with inter-

national fares in Central & South America. The national carrier, AVIANCA,

has requested a 25% increase in such fares but so far, this request is

still being considered by the Government. It used to be said that the

domestic operations were subsidized by the international operations. With

the relatively high load factors on the domestic jet routes, this is now

coming more into balance and AVIANCA believe that each part of their system

is viable.

153. The consultants report as follows:

"Largely as a result of the inexpensive domestic Colombian air

fares, significant "international" traffic results from a combi-

nation of internal Colombian air travel and various other air

and surface combinations in order to reach four countries prima-

rily at often substantial savings. This is of particular

interest in a countrv like Colombia (and similarly in reverse

from at least three of the four countries involved), where the

difference between the price of an international direct jet

flight and an alternative method or methods can be of considerable

importance to a considerable portion of the market. The four

routes are:

(a) Bogota - Rio de Janeiro via the Amazon River Basin, instead

of the West Coast of South America.

(b) Bogota - Caracas via Cucuta and Venezuelan highways.

(c) Bogota - Quito via Ipiales and air or road within Ecuador.

(d) Bogota - Miami via Aerocondor piston-engine services.

Table Vl gives the approximate price differentials among the

alternate methiods; the list is not necessarilv inclusive of

all possible routes."

- 42a -

Table V-l. INTERNATIONAL DIVERSIONARY TRAFFIC FROM COLOMBIA

I. :30G0TA-RIO DE JANEIRO

Cost(Economy) U.S.pAs of January, 19609

Via Service Equipment O/W FVT

Lima Intl-Varig Jet $240 $457

Leticia Intl-Avianca PistonManaus Natl-Cruz do Sol J.et $179 $3- ()

LeticiLa Natl-Avianca PistonManaus Natl-Cruz do Sol Piston/Jet, $157 $302

II. 3OGOTA-CARAC AS

Non-S,°L3op Intl-Various Jo L, $ 70 $1 333(12<

1.7 da:pF;)CucutaL Natl-Avianca Jet

Natl-Avensa Jetorop/Je $ 53 $106"Via Maracaibo

Cucut;a Natl-Avianca Je-l(Road) __l'.xi-l4 ~.-.oiza fare) $ 35 : 70

III. BOGO['A-QUI1'0TPC

Non-3t,op Intl-Various Jet $ l15 $ 45

Cali-IJipiales; NatI-Avian ca Jet/Piston $ 32 $ 41Tulcr-n-Qui-to (fRoad) (Taxi-4 Loal f e)

Ca:li--:,:piale,;; INat,l-Avianca Jet/Piston $ 35 $ 70TuIC,An-Quito (Ron(1) (paxi-14 total fee)

Nat:L-'Iime E'iston

IV. BOGOTA-MIAMJI

Non-'S op Tnt:l-&vianca Jet; $1 1 I A (A(' 1,> )1';'.'

aTarravicu-i 1a Intl-Aerocondor Piston *$ 75 1>({"

Barra. rlcl:iqul .I LaNat,L-Av:iane a Fix;,An 8? 9'In Li. -A( roc ondo r PistLon

- 43 -

154. There was a 20% fare increase in domestic fares in May 1966 and

a 25% increase in July 1967. However, AVIANCA considers the IATA mechanism

for setting international air fares as the only practical solution in such

a competitive field. Revenues include a tax paid by passengers using thie

airports ($7.50 pesos for domestic flights and $75 pesos for international

flights), landing fees, communications fees, rentals, concessions. The

tax on aviation fuel yields another source of revenue to the economy based

on aviation activity:

Cost/ImpCallon Tax

turbo fuel 1.83 pesos 0.03768 pesos

Av gas 2.80 pesos 0.182 pesos

Thus, it can be seen that the tax on turbo fuel is quite low.

155. Economic benefits identified and quantified in the analysis of

the recommended investment program were passenger time savings (valued

at $l0 pesos/hour/passenger), aircraft operating time savings and reduced

maintenance costs of facilities.

G. AVIANCA

156. AVIANCA's operation has been profitable in the past and continues

to grow. The company employs about 9,000 people of whom a total of 1,200

are assigned to the operation of thie air mail service. AVIANCA has an

exclusiive franchise on air mail in Colombia. The Post Office handles

surface mail. Thirty per cent of the gross revenues from air mail services

is given to the Government. Net profit on air mail operations amounts to

about US$500,000 per year.

157. AVIANCA is exempt from taxes and this privilege was recently

extended for another 10 years. In its accounting procedures, the company

depreciates flight equipment on the straight line method as follows:

(a) jet airframes - 15 years to 10% residual

(b) jet engines - 12 years to 10% residual

(c) spare parts - 12 years to 0

(d) Piston aircraft - 5 years to 10% residual

(e) Turboprop aircraft - 10 years to 10% residual

Ground equipment is depreciated at an annual rate of 15% to 10% residual

while facilities are depreciated over 10 years to 10% residual.

- 44 -

158. Financing of aircraft is arranged jointly with the Export-ImportBank, the Bank of America and the Boeing Company, leaving a minimum of fundsto be provided by AVIANCA.

159. Although AVIANCA is exemnt from the payment of income taxes, itis subject to Article 91 of Law No. 81 passed by the Colombian Governmentin 1960. IJnder this law, private companies such as AVIANCA must invest aportion of their net earnings in the development of Colombia. At thepresent time, the company must invest 6% of earnings, exclusive of certainreserve provisions and a theoretical tax of 36%. A pro forma balancesheet for each year to 1972 is included in Table V.2. A profit and lossstatement is shown in Table V.3.

160. AVIANCA's let fleet includes the following types of Boeing air-craft - 707-320B, 720B, 727 and 737. This variety is under review by thecompany to see if a reduction in the number of types would be advisable.

H. Legislative Changes in Management of Colombian Civil Aviation

161. In 1938 the Government created the Aeronautica Civil to manageall aspects of civil aviation. In 1951 it was placed under the Ministryof Public Works. The National Airports Corporation (ECA) was establishedin 1954 to manage the airports, navigational aids and communicationssvstems while Aeronautica Civil would manage the purely aeronautical,administrative and legal aspects of aviation. In 1960, two new entitieswere created:

(a) Civil Aeronautics Administrative Department (DAAC)

(b) National Civil Aeronautics Council (CNAC)

162. Further significant changes were made in 1968 when the Governmentmodified the civil aviation organization.

(a) The National Airports Corporation (ECA) and the NationalSchool of Civil Aviation were dissolved.

(b) The responsibilities of the Administrative Department (DAAC)were defined.

(c) The National Aeronautical Fund (FAN) was created.

(d) The National Council of Civil Aeronautics was to bedirected by the Head of the Administrative Departmentrather than the Minister of Public Works.

- 44a -

Table V-2. AVIANCA: BALANCE ShEET(DOllarS- (00)

ACTUAL FORECAST

1965 1966 1967 1968 1969 1970 1971 1972

Current, Assets: 14,182 19,371 23,374 27,522 29,415 31,387 31,249 33,210

Fixed Assets:

Flight, Equipment - Net 8,835 16,083 31,293 44,619 47,398 50,535 48,216 41,973Property & Ground Equip-

ment - Net 8,141 7,340 9.133 9.840 9,803 9,951 10,152 10,28!,

Sub-Total 16,976 23,423 40,426 54,459 57,201 60,486 56,368 52,237

Other Assets: 2,253 2,689 4,266 4,393 4,529 4,718 4,956 5,242

Total Assets: 33,_1 45,483 68,066 86,374 91,145 96,591 92,573 9.68R9

Current Liabilities: 7,282 12,191 13,603 15,282 16,308 17,906 18,337 19,220

Long Term Debt 13,597 18,318 35,434 46,012 43,873 40,822 32,Nl45 214,387

Dnployee Termination Benefits 497 676 1,149 1,909 2,8114 3,871 5,051 6,341

Special. Provisions 5,002 6,525 7,221 7,981 7,981 7,981 7,981 7,981

Stockholders'Equity:Common Stock 2,993 3,181 4,690 5,983 7,156 8,349 8,349 8,349Paid-in Capital 82 0 0 2,597 5,413 8,229 8,229 8,229Retained Earnings 3,958 4,592 $,969 6,630 7,600 9,433 12,181 16,182

Sub-Totiki 7,031 7,773 10,659 15,190 20,169 26,011 28,759 32,760

Total Liabilities & Net.Worth: 33.411 45.483 68,066 86,374 91,145 96,591 92,573 90,689

Net Working Capital: 6,900 7,180 9,771 12,240 13,107 13,481 12,912 13,990

Debt-Equity Ratio 1.93 2.36 3.32 3.03 2.18 1.57 1.13 a.71

%Debt - 't Equity 66:34 70:30 77:23 75:25 69:31 61:39 53:47 43:57

- [lb -

Table V-3. AVANCA: PROFIT AND L.OSS STATEM5NT(Million U.S. Dollars)

1965 1966 19G/ 1908 1909 1970 1071 I On,' ?

JNTERNATIONAL OPERATION

Operating Rtevenues 16.234 20.2386 22.745 27.332 30.917 35.902 41.002 4G.935

Operating Expenses 14.950 19.256 21.446 25.563 ?2.093 32.068 33.105 41.273

Operating Profit 1.284 1.0.30 1.209 1.769 2.824 3.894 41397 5.6G2

DOMIESi IC OPERATION

Operating Reveniues '16.311 23.136 28367 32.1719 33.919 3.&C4 8 37.174 38.316

Operatinj Expenses 16.330 22.607 2-/.206 230.00S 31,209 33.015 34.425 35.003

Operating Profit (.019) .529 1.071 2.171 2.710 3.002 2.749 2.703

TOTAL OPERATING PROFIT 1.265 1.559 2.3f0 3.940 5l.534 0.X93 7.C06 8.370

Add: Other earning and(eKprenses) W4et 3¶SQ .7I'- .93G 1.050 1.050 1.050 1.C50 1.050

Less: interest expense .668 .915 1.232 2.415 3.033R 3.014 2.506 1 9/7

NET FflOiFIT .984 1.433 2.104 2.545 3.551 4.932 6.190 7.443

- 45 -

163. The following tasks were entrusted to the AdministrativeDepartment:

(a) to regulate, guide and inspect air commerce and civilaviation;

(b) to control air traffic and to operate aeronautical com-munications;

(c) to construct, install, administer and maintain aeronauticinfrastructure facilities and works;

(d) other tasks related to Civil Aviation and Air Transport;and

(e) to manage the National Aeronautical Fund.

164. The National Aeronautical Fund (FAN) is responsible for themanagement of the necessary expenditures for the construction, mainte-nance and administration of the Government's airports and navigationalaids. FAN's technical and administrative functions are carried out byDAAC and DAAC's Head is the Fund's Legal representative.

165. At the present time, by virtue of the 1968 legislation, the Headof the Administrative Department of Civil Aviation (DAAC) is in a uniqueand very influential position in Colombian Civil Aviation, being head ofthe Government Administrative Department; Chairman of the National CivilAeronautics Council; and Head of the National Aeronautical Fund. In addi-tion, the present incumbent has been designated as one of the two directorsof AVIANCA appointed by the Government.

166. Thus, the head of DAAC is in control of the economic regulationof civil aviation, the technical and safety regulation, the operationalaspects of the aviation facilities and services, and the capital investmentprogram. In those cases where the National Aeronautics Council providesguidance, comments or recommendations on significant aspects of ColombianCivil Aviation policy, the Head of DAAC is not necessarily bound to followor implement them. When import licenses for foreign aircraft or aircraftequipment are being processed, the Head of DAAC must certify as to thetechnical suitability, public need and accuracy of cost estimate beforethe license can be made effective. This centralization of control goessomewhat beyond what is considered to be the desirable arrangement in themanagement of civil aviation in other countries, where there is a clearand separate distinction between the economic regulation of the industry,the operation of the system of infrastructure and the airlines.

- 46 -

I. Feasibility Studies

167. The airport at Medellin is subject to operational restrictionsdue to terrain constraints in the vicinitv of the airport. Operations arerestricted to the hours between 5:00 a.m. and 7:00 p.m. and the airportis closed the rest of the day. Some of the most critical impediments toexpansion are:

(a) Intensive urban development immediately adjacent to theairport on the East and North.

(b) A large hill immediately adjacent to the airport on thesouth (located in the runway approach zone).

(c) A large hill about one mile north of the airport in theapproach zone to the runway.

(d) Building obstructions in the north approach zone.

(e) The noise problem associated with extensive jet operations.

(f) Terrain problems presented by the high mountains whichsurround the airport and negate the possibility of con-sidering alternate runway configurations.

(g) Smoke and haze created by the industrial activity in thevalley.

168. The Government is in the process of commissioning a study onthe feasibility of developing a new airport. In the meantime, it istheir intention to keep the existing site in operation and considerationis being given to some improvements. Additional details on this proposedstudy are provided on the study data sheet (Annex D). This study is worth-while and appears to be the only major study which is warranted at present.

VI. PORTS

A. Organization

1693. The principal seaports of Colombia are Cartagena, Barranquillaancd Santa Marta on the Atlantic or North coast, and Buenaventura on thePacific coast. These ports, as well as the much smaller Pacific coastport of Tumaco, are administered by a national port authority, EmpresaPuertos de Colombia, a semi-autonomous agency of the National Government.The chief executive officer of the Port Authority is its General Manager,who is appointed by and responsible to a Board of Directors consisting offour members. The Ministers of Finance and Public Works are ex-officiomembers of the Board; the two other members are designated by the Presidenitof the Republic. }Bach of the ports is administered by a Port Managerappointed by the Board of Directors. He is assisted by a local adminis-trative board consisting of four members appointed by the President of theRepublic. The Port Authority is financially indenendent of thie NationalGovernment; port charges are designed and periodically adjusted to coverthe cost of port operations.

B. Port Charges

170. The tariEf of port charges applies uniformly to all five por:-sadministered by the Port Authority. Port charges in the aggregate coveLrthe overall cost of the Port Authority's operations, but specific chargesare not directly related to the cost of rendering the service. Chargesfor the handling of imported cargo are significantlv higher than those forthe handling of exports. In fixing charges no distinction is made betweenthe costs of handling different types of goods and the same charge pe! tonapplies to solid bulk, liquid bulk or general cargo. It would seem desira-ble to revise this policy and brinig charges more in line with actujal costsof handling. Average cargo-handling costs to the shipper are of the orderof US$10.80 per ton for imports and $3.15 for exports.

C. Port Capacity

1;1. The capacity of a port is usually expressed as the nuimber ofmetric tons of cargo that can be handled annually. Port capacity not onlydepends on the physical facilities provided but on many other factors suchas the type of cargo (liquid bulk, solid bulk, uniform or miscellaneous),the regularity of vessel calls and the number of tons transferred per caJl,working hours, efficiency of operations, etc. Considering that the fourprincipal Colombian ports are general-cargo terminals which handle a mixtureof uniform bagged or baled cargo (about 30%), miscellaneous cargo (about50%), and solid bulk cargo (about 20%), and do have a reasonably steadyf:low of cargo throughout the year, the number of berths at each port can

- 48 -

be used as a rough measure of their capacity. The recent llarvard TransportStudyl/ made an evaluation of "effective" port capacities on the basisof port facilities in place in 1967 and actual tonnages handled (1967),usinig a somewhat arbitrary, but not unreasonable, assumn2d berth occupancyfactor of 70Z, with the followinrg results:

Port Capacity No. of Berthis(tons per year) (1967)

Pacific: Buenaventura 1,300,000 8Atlantic: Cartagena 430,000 4

Barranquilla 560,000 4Santa Marta 600 000 3

Total Atlantic 1,590,000

172. On the basis of tons per berth per year, the figures indicatea capacity range from just over 100,000 tons per berth in Cartagena toapproximately 160,000 tons per berth in Buenaventura and 200,000 in SantaMarta with Barranquilla at about 140,000 tons per berth. The range ofthese figures reasonablv ref:Lects, and is consistent with, known conditionsat the ports.

173. The capacity of Buenaventura and Santa Marta (the only portswith direct rail access to the interior) is, for instance, favorablyinfluenced by the fact that mnost of the country's dry bulk cargo is handledat these two ports. In addition, one of Santa Marta's berths has a lengthof 240 m and can accommodate two small vessels. On the other hand, Cartagena'scapacity is adversely affected by the operationally awkward configurationof its port facilities. In contrast to the marginal wharves at the otherports whiclh make possible an efficient use of berthing space, Cartagenahas four berths alongside two finger piers, whichi afford no flexibility inberthing. In addition, these berths have the disadvantage of very limitedworking space and are at a considerable distance from cargo storage areas.

174. Since 1967, the year on which these capacity estimates werebased, improvements and expansion of port facilities have taken place andadditional improvements and expansion of facilities are underway or planned.The number of berths now available in the ports and the number expected tobe available by 1973 on completion of present expansion plans, is as follows:

1/ "An Analysis of Investment Alternatives in the Colombia TransportSystem," September 1968.

- 49 -

No. of Berths AvailablePort 1967 1970 1973

Buenaventura 8 13 13Cartagena 4 4 5Barranquilla 4 4 5Santa Marta 3 4 5

Total 19 25 28

175. Substantial improvements of the transit storage and cargo handlingareas and facilities are underway and planned, particularly in the Northcoast ports. The mission considers that an average capacity figure of150,000 tons/berth/year would be reasonable as a measure of the overallcapacity of the Colombian ports in 1973. The capacity per berth inCartagena would probably fall considerably below this (probably in theorder of 120,000 tons) but other ports would probably exceed the average,particularly Santa Marta and Buenaventura, once efficient bulk handlingfacilities for wheat and sugar, now under construction in these ports,become operational. With 15 berths at the North coast and 13 atBuenaventura, Colombia should be able to handle in excess of 2,000,000tons per year at each coast.

D. Port Operations

176. The capacity of the ports discussed above obviously depends onthe efficiency of port operations. The capacity figures computed in theHarvard Study are based on observed handling rates in the ports and there-fore reflect the actual level of efficiency. In the judgement of themission, the current level of efficiency in the Colombian ports can beimproved by:

(a) Improving the transit storage and cargo handling facilities;

(b) Improving cargo handling operations.

The current and proposed investment programs (see para. 183) focus pri-marily on providing the transit storage and cargo handling facilitiesnecessary to achieve a balance between the cargo handling capacity betweenvessel and berth and between berth and inland transport system. With onerelatively minor exception, (para. 186) the mission is of the opinionthat the investment program is properly conceived to achiieve this purpose.

177. The mission feels, however, thAt substantial improvement can beachieved in the operation of the facilities. Such operational improvementsshould reduce both vessel and truck or railcar turnaround time and reducethe time cargo remains in storage in the port. A recommended outline ofthe purpose and scope of the services required [s attached (Annex D).

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E. Traffic

178. Practically all of Colombia's foreign trade moves through itsocean ports on the Atlantic and Pacific coasts. The four principalseaports administered by the National Port Authority together moved about2.4 million tonsl/ of general cargo in 1969, of which one million tonswere exports. In addition, petroleum, bananas, cement, and timber areexported through other port facilities.

179. About 52 percent of the 2.4 million tons moved via the Pacificcoast port of Buenaventura and the remainder via the three North coastports. Buenaventura accounted for about two-tllirds of the tota]. exportsand about 40% of the total imports through the four ports. The distribu-tion of import and export traffic over the four ports, for 1960 and 1969,is set out in Tables VI.1 and VI.2 below.

TABLE VI.l. PORT TRAFFIC(in thiousand of metric tons)

1960 1969Imports Exports Total Imports Exports Total

Buenaventura 539 :333 872 575 655 1,230

Cartagena 302 56 358 168 85 253

Barranquilla 296 39 355 326 98 424

Santa Marta 16 - * 16 341 132 * 473

Total 1,153 428 1,581 1,410 970 2,380

* (Excluding bananas handled by a special faci]ity.)

1/ Metric tons unless otherwise stated.

- 51 -

TABLE VI.2

Imports Exports Total1960 % 1969 % 1960 % 1969 % 1960 % 1969 %

Buenaventura 539 47 575 41 333 78 655 68 872 55 1,230 52

North Coast 614 53 835 59 95 22 315 32 709 45 1,150 48

1,153 1,410 428 970 1,581 2,380(100) (100) (100) (100) (100) (1(0)

180. Since 1960 total traffic has increased by some 50%. Exportsgrew by some 125% from 428,000 tons to 970,000 tons and imports from1,153,000 tons to 1,480,000 tons, an increase of about 28%. North coasttraffic has grown faster than traffic through Buenaventura (by 62% and41% respectively over the period), with the result that Buenaventuratraffic now accounts for 52% of the total, as compared to its 55% sharein 1960. The North coast's share of both imports and exports has increased,but the increase in its share of exports has been particularly significant,growing from 22% to 32% of the total. Its share of imports grew from 53%to 59% over the same period. The biggest factor in this shift has been thecompletion of the connection of the Atlantic Railroad to the port of SantaMarta in 1962. Before that time, virtually the only traffic through SantaMarta consisted of banana exports via a special banana wharf.

181. General cargo traffic at Santa Marta has grown from 16,000 tonsin 1960 to 473,000 tons in 1969, largelv at the expense of the otherAtlantic coast ports. While total traffic through the three Atlanticcoast ports grew by 62% over the period, traffic at Barranquilla increasedby only 38% and the Cartagena traffic decreased by 29%.

182. These shifts of traffic between the four ports are possiblebecause important parts of the hinterland such as the Medellin and Bogotaareas are served by all four ports. It is considered that the effect ofthe construction of the Atlantic Railroad on this pattern has by now fullydeveloped and that no further shift of traffic to the Atlantic coast wi].ltake place because of it. Improvements in road connections such as thoseunderway between Cartagena and Medellin and Buenaventura and Medellin andBogota mav have some effect on the traffic distribution in the future.

F. Investment Program

183. The Port Authority proposes to spend 325 million pesos over theperiod 1971-73 for port works and equipment as follows:

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1971 1972 1973

Port Works 95.0 82.0 68.0

Equipment 80.0 - -

Of the total about Col$170 million is to be spent in civil works at theAtlantic coast ports and Col$75 million for works at Buenaventura. The

remainder of Col$80 million is allocated for equipment, the largest iten(Col$65 million) being for new dredging equipment for Buenaventura.

184. The foreign exchange element of this program is US$11.3 millionequivalent and the Port Authority has made an application to the Inter-American Development Bank for the financing of this foreign exchange cost.

185. The program is set out in detail in a study entitled "EstudioIntegral de Factibilidad de las Obras Complementarias en los Puertos delBuenaventutra, Barranquilla, Cartagena y Santa Marta," prepared by theColombian consulting firm ilidroestudios in December 1969.

186.. Although) the economic evaluation presented by the consultants insupport of the program has deficiencies and does not constitute a fulljustification of tile program, the mission believes that the program is

basicallv sound and that a convincinIg economic Justification could probablybe made. The only doubtful investment is that for a new passenger vesselberthl in Cartagena to serve cruise ships. The mission feels that if sucha berth is to be constructed, it should be designed with shore facilitiesthat will serve bothl general cargo as well as passenger vessels to makethe best use of the berth. This can be accomplished by the constructionof a cargo transit shed which incorporates passenger facilities. Thepassenger facilities can be designed to keep passenger movement completelyseparate from the cargo handling operations.

187. I])EMA is constructing bulk grain silos, includin-g ship loading

and unloading facilities in Santa Marta and Buenaventura. These installa-tiorts should considerably increase the capacity of the two ports.

ANNEX A

RECORDS OF HiIGHWAY TRAFFIC*

(A) Maintenance District No. 1 - Medellin

The 10 km section of Primavera to T. de Amaga is in the pavingprogram being financed with Bank assistance. It has an average dailytraffic (ADT) of over 1,200 vehicles per day which is probably the high-est traffic density of any unpaved road in the country. At T. de Amaga,traffic divides between the access road to the coal mining area of Amaga(about 600 ADT) and the road to Quibdo. Between T. de Amaga and VeneciaADT is 500 and between Venecia and Bolombolo (1) it is about 300. It thendrops to less than 200. The only other section of road in Antioquia carry-ing more than 250 ADT and not programmed for paving appears to be La Ceja-Rio Negro (2) with an ADT of about 275. However, traffic counts fluctuateconsiderably from one year to the next in this area. For example, ADTbetween La Union and Mesopotamia rose from 179 in December 1968 to 235in December 1969, whereas in the same period A)T between Mesopotamia andSonson declined from 244 to 189.

(B) Maintenance District No. 3 - Cartagena

There is no road in this District carrying over 250 ADT which isnot either paved or included in current paving programs.

(C) Maintenance D)istrict No. 4 - Tunja

Four road sections in Tunja which are not included in the currentpaving program had ADT's in excess of 250 in 1968 and 1969. They were:

ADT1968 1969

(3) El Bosque - Duitama 371 273

(4) P. Blanco (Belencito)-Corrales 542 446

(5) Crucero - Sogamoso 339 290

(6) Paipa-Termales 406 960

It is noticeable that substantial declines in traffic were recorded on allthe above sections except the last one, and this figure is suspect.Similarly, substantial drops were recorded in the following sections:

* Road sections are numbered in thie same way as in Map No. II.1.

ANNEX APage 2

ADT1968 1969

(7) Tres Esquinas-Sogamoso (km) 606 217

(8) Tunja-Boyaca (km) 477 182

(9) Boyaca - P. Camacho (km) 320 187

On the other hand, the following sections had substantial increases:

ADT1968 1969

(10) Tasco - Paz de Rio 221 316

(11) Paz de Rio - Socha 209 273

In 1968 counts were taken in April and the 1969 counts were taken in August.Moreover, these roads are in the area of the iron and steel industry and itis known that some traffic formerly lost to roads returned to the railway in1969. The composition and origins and destinations of potential trafficshould be studied carefully before any improvements are undertaken in thisarea.

(D) Maintenance District No. 5 - Manizales

The only roads exceeding 250 ADT whose paving is not providedfor are Barragan-Genova (12) (ADT 366) and Asia-Viterbo (13) (ADT 600).

(E) Maintenance District No. 6 - Popayan

Two road sections in this district whose paving is not providedfor exceed 250 ADT, via

ADT1968 1969

(14) Popayan - Canagria (km) - 322

(15) Popayan - Purace (km) 457 232

(F) Maintenance District No. 7 - Monteria

Three sections of road for which paving is not yet planned hadADT' s greater than 250.

ANNEX APage 3

ADT1968 1969

(16) km 15 (Monteria/PlanetaRica-Betanci) (30 km) 281 305

(17) El Viajano - San Marcos(52 km) 212 281

(18) Monteria - Puerto Rey (70 km) 306 354

(G) Maintenance District No. 8 - Cundinamarca (Bogota)

Two roads in this district for which paving is not as yet com-mitted are carrying well in excess of 250 vehicles per day. One is roadfrom Los Alpes on the Bogota/Honda road to T. de Viani (19). Recorded trafficis -as follows:

ADT1968 1969

Los Alpes - Corralejas 323 374

Corralejas - T. de Viani - 230

ThiJ3 might form part: of a future road from Facatativa across the Magdalenato Cambao and Armero.

The other is the road from Zipaquira via Pacho to La Palma nearLa Dorada (20). The first traffic count was taken in 1969 and ADT was 585 be-tween Ziaquira and Pacho (40 km) and 336 between Pacho and La Palma (58km).

(H) Maintenance District No. 10 - Riohacha

ADT on the Villanueva - San Juan del Caesar-Barranca road (21)(47 km) ranged from 310 to 478 in 1968.

(I) Maintenance District No. 11 - Huila (Neiva)

The Garzon-Pital road (22) (28 km) registered an astonishing increasefrom 151 ADT in September 1968 to 351 ADT in September 1969. The vehiclecom)osition was as follows:

CAR BUS TRUCK

1968 50 42 24

1969 126 94 130

ANNEX APage 4

Neiva-Palermo (23) (21 km), which is unpaved, had an ADT of 520 in 1968 and 540in 1969.

(J) Maintenance District No. 12 - Valledupar

All roads in this district with over 250 ADT are provided for.

(K) Maintenance District No. 13 - Villavicencio

All roads in this district with over 250 ADT are provided for,except San Martin-Granada (24) where 1969 count recorded 430 ADT.

(L) Maintenance District No. 14 - Narino (Pasto)

Four sections of road not yet provided for appear to have anADT of more than 250.

1968 1969

(25) Ipiales-Gualmatan (25 km) 389 576

(26) Tuquerres-Espi-O (14 km) 349 238

(27) Pasto - Encano (23 km) 311 340

(28) Encano - Sibundoy (52 km) 255 -

(M) Maintenance District No. 15 - Santander (Bucaramanga)

Only two road sections exceeding 250 ADT have not been providedfor:

1968 1969

(29) Barbosa - Velez (32 km) 257 -

(30) San Gil - Charala (35 km) - 255

(N) Maintenance District No. 16 - Cucuta

The following roads with ADT exceeding 250 are unpaved and arenot in the program:

ANNEX APage 5

ADr1968 1969

(31) Zulia - Cornejo (km) 375 500

(32) Ocana - Chapinero (km) 270 411

(33) Astilleros - La Punta (km) 243 296

(0) Maintenance District No. 17 - Ibague (Tolima)

The following sections for which no provision for paving has

been made carry traffic in excess of 250 ADT:

ADT1968 1969

(34) Mirolindo - Rovira 334 328

(35) Armero - Libano 339 317

(36) km. 96 - Aabalema 254 271

(37) Dorada-Norcasia 324 248

The last section is part of the present trunk road between

Medellin and Bogota.

(P) Maintenance District No. 18 - Palmira

All roads carrying more than 250 ADT are either paved or shortly

will be.

ANNEX B

STATUS OF FEASIBILITY AND OTIIER hIIGIh1AYPRETNVESTMENT STUDIES

A. Cali-Buga Hlighway

1. Reference is made in paragraph 55 and 56 above to the recentlycomp:Leted study of the feasibility of providing additional highway capacityin the Cali-Buga corridor.

2. The consultants considered three alternative solutions for the pro-vision of additional capacity between Cali and Buga. The first alternativewas an upgrading and widening of the existing highway from Cali via Palmirato Bujga (69 km). ThIe second alternative was the construction of a higlhwayfroTn Cali via Puerto Isaacs to La Guajira and then to Buga. This alterna-tive would utilize the recently completed new higlhway between Cali and PuertoIsaacs. The new distance from Cali to Buga would be 55 km. The third alter-native is from Cali to Buga via Isaacs and Medicanoa. This highway would be58 km long and would utilize the existing Cali-Puerto Isaacs and Mediacanoato Buga sections of road. All alternatives for providing additional highwaycapacity between Cali and Buga include provision for future traffic fromCali fo the new airport near La Guajira.

3. The consultants state that past studies of the Cauca Valley havedemonstrated the need for additional traffic handling capacity in that area.It would be useful if the results of these studies were shown. They alsostate that without the provision of additional traffic handling capacitv inthe area, the potential development of the project area will be stifled.After comparing the costs of constructing the three alternatives, the con-sultants reached the conclusion that the second alternative is the most econo-mic and they consider that traffic which will be diverted to the new roadfrom the existing Cali-Buga highway will include all the long-distancetraffic.

4. The study has several shortcomings. First, the likely effectson traffic distribution of the opening of the new highway between Buga andBuen:aventura, expected to take place in mid-1971 have not been considered.The construction of this highway will mean that the journey from Buga toBuenaventura will be only 121 km compared with its present 216 km. In addi-tion to traffic traveling to Buga and beyond, much traffic originating onthe present Cali-Buga road will use the less congested northern end ratherthan the southern encl as at present. Some traffic which now travels fromBuenaventura to Cali by rail and then switches to road will now travel allthe way by road, avoiding Cali. The present and the prospective routesbetween Buga and Cali will therefore be relieved of a considerable amountof long-distance traffic. Secondly, it is stated that 2,000 vehicles perday uising the present: Cali to Cali-Puerto road will be diverted to the new

ANNEX BPage 2

Cali airport road. This statement is not supported by detailed evidencefrom origin and destination studies as to the actual amount of highway

traffic which can be attributed to the airport. No very clear trafficassignment is made in the report, although the maps show the present and

projected traffic distribution on the different segments of existing and

improved highway. The origin and destination studies on which these assign-ments are made are single day, 24-hour studies undertaken in 1963, 1965 and

1966. If possible the origin and destination information should be basedon a much larger sample, for example a seven-day, 24-hour study taken atseveral periods in the year of a more recent date. The Ministry of PublicWorks proposes to carry out a more detailed origin and destination enquiryshortly.

5. In addition to providing relief from congestion to traffic whichtravels from Buga to Cali, the proposed improvement will provide additionalrelief for the road from Cali to Palmira by virtue of the direct connection

which will exist between Yumbo via Puerto Isaacs to the new Cali airport.It is conceivable that this improvement, funds for parts of which have al-ready been committed, could be justified by itself. However, a study wouldhave to be undertaken to establish this more clearly.

6. The comparison between the three alternative proposed solutions forincreasing the traffic capacity along the Cali-Buga corridor consists offinding a least cost solution to provide traffic service equivalent to U.S.Highway Capacity Manual level of service C. There is no discussion of theeconomic costs which would result from no additional highway capacity beingprovided so that in fact there is no comparison between the costs of notmaintaining the recommended level of service C and the investment cost re-

quired in order to maintain level of service C on various alignments. The

cost of the various solutions discussed varies from Col$282.9 million toCol$390 million. For the first stage construction i.e., for the period 1969to 1973, the costs range from Col$179 million to Col$169 million. It wouldnot be advisable to commit such large amounts without very careful investigationof the problem. The timing of the study should probably be deferred untilthe Buenaventura-Buga road has been opened to traffic for some time, in orderto observe the actual impact of this new highway on the traffic pattern inthe Cauca Valley area.

B. Fundacion - Le Ye (Santa Marta)

7. The stretch of road between Fundacion and La Ye (near Santa Marta)a distance of 65 kilometers, is the only part of the Central Trunk road, be-tween Bogota and Santa Marta, that has not been improved under previous pro-grams or is not included in those at present being carried out. This stretchof road has the highest traffic, over 1,000 vehicles per day, of any part ofthe road between Bucaramanga and Santa Marta, except for short sections close

ANNEX BPage 3

to those two cities. The existing road has, on the whole, good alignment.It is narrow (6 meters), the embankments in several places are too low, drain-age is inadequate and some bridges must be replaced. Due to the nature ofthis road as the final part, with the highest traffic density, of a roadwhich is being improved throughout the rest of its length, the Ministry pro-posed to carry out the detailed design immediately. In spite of the prima-facie case for reconstructing this road, it is desirable to undertake suffi-cient economic investigation to select the best final alignment and designstandards. The Mission discussed this with the MOP and the consultants to-gether with MOP Planning staff will endeavor to optimize the design. Thestudy and final engineering are expected to be completed by the end of 1970.

C. Tres Puertas - Irra - La Felisa and La Virginia - Irra

8. An improved stretch was built on the Western Trunk Road in aprevious period, with IBRD assistance, between Supia and La Pintada. Be-tween. La Felisa and La Pintada (a major part of the above section) the im-proved road follows the canyon of the Cauca river; the main objective inthis construction was to build a shorter road with adequate specifications,avoiding the mountainous route with steep grades of the previous road. Aroad from La Felisa to Irra would continue along the Cauca Canyon, avoid-ing the longer, mountainous route of the existing road towards the South.At Irra, the road would cross to the east of the Cauca river over an exist-ing htighway bridge of adequate characteristics. The proposed road wouldthen follow a south-easterly direction to Tres Puertas, connecting therewith a modern road under construction to Manizales. The purpose of theTres Puertas-Irra-La Felisa project is thus to complete a modern road linkbetween Manizales and the Western Trunk Road, appreciably decreasing thedistaLnce (by 58 kms.) and time between Manizales and points North on theTrunk road. The existing road Tres Puertas-Arauca-Cauya (the present linkto the Trunk road) has very poor characteristics. The proposed road is56 kmis long.

9. In order to complement the improvement of the connections for theMani2:ales region towards the South as well as towards the North, using theTrunk road, a further section of new road between Irra along the Cauca canyonSouth to La Virginia may require consideration. This would also shorten thedistance and improve conditions for all traffic traveling North or South be-tweern Antioquia and Valle on the Western Trunk Road.

10. It is understood that an economic study of the proposed road wasmade several years ago and that engineering has been completed. The studywas not available to the Mission and would in any case be out of date inview of highway construction which has taken place subsequently. The wholenetwork between Medellin and Manizales, Pereira and La Virginia should bestudied in order to ascertain the origins and destinations of the principaltraffic flows and to program future improvements to the network. The MOPintends to update the earlier study in the near future.

ANNEX BPage 4

D. Guadalupe - Florencia

11. This road joins the Caqueta region with Huila Department andthence with the rest of Colombia. The adequate region is undergoing rapiddevelopment, primarily in rice-growing and cattle raising. The IBRD hasunder consideration a loan to assist the Agrarian Reform Institute (INCORA)in accelerating this process, through the construction of penetration roads.The highway from the region to the interior is a bottleneck in this devel-opment and the provision of an adequate link therefore has a high priority.The existing road of about 140 kms. from Garzon (on the road Garzon-Neiva-Girardot-Bogota) to Guadalupe and Florencia, the principal town in Caquetais poor. It constitutes a serious limitation to further development of theCaqueta region because very steep grades (up to 20%), poor alignment, fre-quent slides and the dangers attendant on the poorly drained and very narrowright-of-way result in high transport costs. The Garzon-Guadalupe sectionwill be paved under the Bank Sixth Highway Project. The Ministry has under-way a feasibility study designed to determine, on the one hand, transportrequirements in the light of the resources of the region and of their prob-able development and, on the other, the capability of the existing roadwith the feasible improvements to it. The study will be available in July1970 and will indicate whether improvements should be made to the existingroad or whether alternative routes should be sought.

E. Cucuta - Ocana

12. The present low standard road from Cucuta (on the Venezuela border)to Ocana and La Mata (on the Central Trunk Road from Bucaramanga to SantaMarta) has a daily traffic of the order of 100 vehicles, rising to 270near Ocana. The total length of road between Cucuta and Ocana is 208kilometers. The stretches between Cucuta and Astilleros (38 kms) and be-tween Ocana and the Central Trunk Road at Aguaclara will be paved under thecurrent paving program. There is a new road (unpaved) between Astillerosand Sardinata (31 kms). Thus, the sector that requires extensive improve-ments is that between Sardinata and Ocana, a total on the existing align-ment of 139 kms. The proposed road would provide improved communicationbetween the Cucuta region and the Magdalena valley and, through the CentralTrunk Road, with the Atlantic coast. Imports for Cucuta and the surround-ing area move through Santa Marta and Barranquilla. The Ministry has ar-ranged for a feasibility study to determine the nature and degree of justi-fiable improvements. The consultants are to consider making all possibleuse of the existing road and should propose the study of widespread devia-tions from it only if substantial benefits are throught to be attainableby such changes. The Mission considers however, that the alternative ofconnecting Cucuta with the Coast via the existing improved highway systemthrough Venezuela should be explored.

ANNEX BPage 5

F. Villavicencio - Puerto Lopez - Puerto Carreno

13. This road would be 938 km long. Villavicencio, capital of thestate of Meta, is located at the foot of the Eastern Cordillera in the Llanos.It is the principai town in the Llanos area and the fastest growing town inColombia. Puerto Lopez is the first sizable settlement on a route runningEast into the Llanos and a bridge was completed some time ago over theMetica river at Puerto Lopez.

14. The Villavicencio-Puerto Lopez road is the principal route intothe heart of the Llanos region. In addition, the soils in the area betweenVillavicencio and Puerto Lopez are of top quality (in contrast with thoseof the Llanos as a whole) so that they lend themselves to crops and tointensive cattle production. Improvement of the existing road is probablyjustified by local production alone. The present traffic volume is between250 and 387 vehicles per day. The existing road between Villavicencio andPuerto Lopez is 88 kilometers long, of which 10 kms are paved. The rest ofthe distance has good alignments: it needs widening, raising of many em-bankments, improvement of drainage and other structures and the construc-tion of base and pavement. The Ministry considers that under the circum-stances there is ample justification for proceeding with the design of theimproved road, The Mission considers that before any final design aprior study should make a benefit cost analysis of the proposed improvements.

15. The river Meta runs along a fault in the Llanos, and it separatesthe flood plain to the North from high-lying savannahs to the South. Thereis here a very large area with well-drained soils, which could be highlyproductive in crops and grass if the existing deficiencies are corrected,by the application of lime and fertilizer. Rainfall is ample and fairlywell distributed.

16. Only one important river, the Manacacias, has to be crossed betweenPuerto Lopez and Puerto Carreno, on the Orinoco, about 850 kilometers dis-tant. During the dry season, vehicles can perform this trip without diffi-culty although no roads exist; in the rainy season (which extends over mostof the year, from April to December) flooding of low ground in certainlimited areas impedes through passage. Small ocean-going vessels can sailup the Orinoco to Puerto Carreno, although there exist navigational hazards.The Government feels that an all-weather road is needed to bring into thedevielopment area machinery, lime, fertilizer and supplies, and to move theproduction to market within Colombia and towards the Orinoco for export.The Mission view is that a preliminary investigation might be madeinto the possibilities of using the Meta, together with north-south accessroads to develop the area (see the volume on Agriculture).

ANNEX BPage 6

G. Carretera Troncal de los Llanos

17. This is the trunk road running along the foot of the EasternCordillera in the Llanos region. It corresponds to the Colombian sectorof the Carretera Marginal de la Selva. Substantial but disconnected sectionsof this road, totalling almost 1,500 kilometers, have been built to varyingspecifications over the years. It is believed that a similar policy shouldbe followed in the future, that is, to push forward in the various regions,instead of shifting to construction on only one or two fronts. However,an attempt should be made to achieve a higher rate of progress on eachfront so that the road will precede or accompany colonization instead offollowing it, assisting by this means a more orderly settlement of land.In addition, the MOP regards it as essential to pave new stretches of roadas they are built, to reduce high maintenance costs due to the extremelyheavy rainfall prevailing throughout the area. Finally, a determinationshould be made of the standards apprioriate for the road, with a view tokeeping current investments at a minimum while making sensible provisionfor the future.

18. The Harvard Study reached the conclusion, with which the Missionconcurs, that "road connections on the Llanos should be developed on a ten-tative basis. Exploratory roads should be pushed northward and southwardfrom central points such as Villavicencio, Uribe and Florencia, but majorroad development shiould not begin until traffic potential has been moreclearly established."

H. Honda-Bogota

19. The road between Medellin and Santuario is currently nearingcompletion with IBRD financing. It is expected that the section fromSantuario to Puerto Triunfo, on the Magdalena river, will be financedshortly by the IDB, with a view to completing it in about 4 years. Onthe right bank of the Magdalena opposite Puerto Trijp.fo. there exists aroad leading to Puerto Salgar and Honda which will be paved under the pro-posed IBRD program. Thus, the MOP feels that the only additional worknecessary to provide a modern paved road between Medellin and Bogota isthe section from Honda to Bogota, currently a distance of 148 kms. Thecurrent traffic on the stretch that requires improvement between Facatativaand Honda (108 kms.) is above 1,000 vehicles per day. The Ministry desiresto complete the investigation of line changes which would avoid unnecessaryclimbs and would probably shorten the road, as well as the correspondinggeological studies, and to proceed to the design of the changes that may beadopted. At this time, improvements to this road would not appear to beof very high priority and while it is always desirable to plan ahead,improvements should not be made too far in advance of the traffic whichjustifies them.

ANNEX BPage 7

I. New Routes Between Tolima-Valle and Huila-Valle

20. The only existing road from Buenaventura and the state of Valletowards the state of Tolima and Bogota, makes a long detour in order to usethe lowest pass over the Central Cordillera between Ibague and Armenia. Theroad has extremely steep grades which coincide with an area that has unstablegeological conditions. Traffic is 1,300 vehicles per day, of which 70% areheavy vehicles. Due to the high percentage of heavy vehicles and the verylontg steep grades (over 10%) at high altitudes (over 3,000 meters) trucktraffic moves slowly and is beginning to cause congestion in the criticalsectors. It is thought that the distance from Bogota to Buenaventura couldbe shortened by at least 100 kilometers by using a different route, whilethe time-saving could be much more than proportional. The Ministry wishesto carry out a route study to determine whether there exist alternativesthat could afford a definite improvement over the existing road.

21, Much of the production of the Caqueta region finds a market inthe Cauca Valley and it is thought that this will continue and increasesince the latter region is dependent on beef brought in from other partsof the country. If Caqueta production were to increase sufficiently forexport to neighboring countries (notably Peru) the appropriate route wouldbe through Buenaventura. The available road for this purpose is a verypoor one from La Plate to Popayan, involving a very long detour. The majorpart of an alternate road direct to the Cauca Valley has been built; however,thLs also has very poor specifications. The Ministry wishes to carry out apre-feasibility study to determine the availability of a suitable alterna-tive to the Popayan route or the desirability of improving the latter.

J. Puerto Araujo-Bucaramanga/Barrancabermeja Road

22. This road would run from Puerto Araujo near Puerto Olaya to anas yet undefined point on the Barrancabermeja-Bucaramanga road, which isclose to completion. This road, together with the Medellin-Puerto Berrioroad which is currently under construction, would provide a greatly improvedconnection between Medellin and Bucaramanga which might be of significanceto industrial development. Furthermore, the area to be crossed by the pro-posed road has forest resources and is suitable for cattle production and,in some areas, for rice and cocoa cultivation. Quantification of the ex-pected benefits should be undertaken.

K. Barbosa-Puerto Olaya Road

23. The cold rolling mill shortly to be located at Paz de Rio wouldresult in a movement of over 150,000 tons per year of slab from the RioMagdalena by this road. In addition, near the road, in the area of Landazuri,there are large anthracite deposits which are already worked. In March 1970

ANNEX BPage 8

the first export shipment of anthracite was made from Cartagena. Sincethere are plans to produce 150,000 tons in 1970 and 300,000 to 400,000 tonsp.a. by 1971, implying a truck ADT of 300 from this source alone, a feasi-bility study to determine the standard of improvement whichl is warrantedshould be undertaken early. T'his study should enjoy priority over any otherwhich has not yet been started.

L. El Carmen - Zambrano-Bosconia

24. The purpose of improving this road is to provide an improvedlateral connection across the Magdalena Valley from Valledupar to the high-way to Medellin. Origin and destination studies would assist to determinethe potential exchange of goods between the two areas if improved transportconnections were available.

INVZSNOFRY SHIBET ANNEX C

Counrtry: CGolombia Completed and Current Preinvestinent Studies Sheet 1 of t

Missiorl Datez Febr'ry 197 S ector(s) .Tnrsnt

t _ _ _ _ _ ~~~~I I 'rt A,~)l. o ,TU**f j - v-;r-*.n- ();nq

.Ho r x t AND 5F0N5J3IS IDENTIFICATION B: T ELALS TT B T

A Prograz for the Thprovement ofthe hi'ghway system between Cali MOP _ - 1970 - Spanish I Comoleted B. Shieldsand Buga. Needs addi-

tional work

Study for Reconstruction ofFoundatton La Ye Rihhway MOP D ec. Dec.

1i969 970 _ Spa3si s 1 rn progress

Guadalupe - floreneia ighway MOP _ ec. June2968 1970 Spanish I In progress

Cucuta - Ocaana Iiglhway MOP _ Jan. Jan.1970 19t1 SpanIsh 1 In progress

_~~~~~~~~~~~~~~~~6 . To be re- S. ._ - .. __.

.Cl Campestre - Zarzal moP _ - 19 Spanish 1 To -be re- S. Sh%eldsuised since Dec. 1%9

-;ery defi-cient.

La Sultaria (Bogota) - Scacha MOP Anril Design by1970 3panish 7 D25ThC0

OornletedEnglish ceiirg sLul. iF

-as paa oflUrbanr Studiy ____

_ P _ _ _ , _ .._ - - . S 1 C- _ _ _ -

L Virginia-Irra-La Felisa MOP 9 969 1971 Spanish kesP' cor etc

ibe - Tres Puartas 9 _t _ .. anishtnate

INVENTORY SHEET ANNTPX CPage 2

Country: Colombia Completed and Current Preinvestment Studies Sheet2 of L

ission Da_te: February 1970 SectorCs):Trar=:ortSub-Sector kRait-..,-,

I | STUDY _ '.I= N.h OF STUDI L S.-JDY SFOIiSCRS TIMING BUDGET AVA:LABL, R5XJLT NO. AND SPONSRIS IDENTIFICATION I L0ESTiC FOREIGN STAPRT CoI/,p2 (US$ EQ,) LANG S IVOLIS STATUS BY: DATE:

Etude Economique des Lignes Ferrocarrile sA Faible Traffic Nacionales A _ ug. French 1 Draft to'be B. Shields

Sofrerail August 1969 de Colombia 969 revised February1970

Factibilidad Economica de una FerrocarrilE sExtension Ferrea Barranquilla y Nacionales MayCartagena by Madigan Hyland, De La de Colombia _ _ 1965 | Spanish 1 Completed B. Shields

Cruz & Cia. Ltd. i March 19

Estudios Preliminares de Ruta yDetalles Suplementarios de la FCN A _ pril _ Spanish 1 Completed B. ShieldsExtension Ferrea a Barranquilla y 965 March 19Cartagena

FCN is currently updating the above,studies of which the second comp- Sept.lements the first. FCN _ 1970 1970 _ Spanish in progress

INVUNTORY Si-LET ANI:Ex c

Country: Colombia Completed and Current Preinves+nent Studies Pege 3

Y'aIssion Date: February 1970 Sector(s): aTrr _tSubsector: Ports &- Navtaticn

_ -- t t - STUDY t -- I ~~S;V-D-ITEX XAXZ OF 5TH?! 'STUDY SPONSORS I. TTMTh >I tVBUET AVAILL ET

NO. AID SPONSOR'S IDLtJNTIFICATION OCIESTiC _FOREIGN ISTARTJCONK (11$ ESQ.) LANC-. VOLSSSSAT&S BSY: AIR:

Estxdio Integral de ractibilidad Puertos 30/12J S.van carde las obras co-mlenentarias en de none ? 69 not know.,n Spanish I completed :-Mcrlos puertos de Buenaventura, ColoSbia B.ShieldsBarranquilla, Cartagena y Santa . Feb/:'ar

_ ,N,Tzz ....... a _ - _ ...................... _ _ _ _ _ . ~1970

Mejoras a la Navegacion y los ADENAVI none ? 29/2/ not known Spanish I completed S&van derPuertos del Rio Magdalena 68 ':7eer

_____---- - -- 1- 1-_

ANNEX C

INVENTORY SHEET Page L

Country: Colombia Completed and Current Preinvestment Studies Sheet h of Li

I4ission Date: February l970 Sector(s). Tr: orSub-Sector - --

1i 1 I STUDY f . I r

I1E14 .A.: ;F STUDY STUDY SPONSORS TIMING BIUJGET AVIUABLS ?.RLCRTSXo. AND SPCN,SiR'S IDENTIFICATION L0C,'STIC FOREIGN S.-ART COM?LI (US$ EQ.) LANG._ VOL'SI STATUS BY: DATE:

National Airports PlanAdministrative Department, of Civil None Feb. Feb. English 1 Completed A.Douglas

Aviation and D.A.A.C. 1968 1970 $212,0O0 Spanish 1 Completed Feb./Ylar.National Aeronautical Fund F.A.N. 1970

. -- . _ __ _-.---

i~~~~~~~ - I - -

P 'I.VN1A JFORM No. 386 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL r INkqCE 7g7e(11-69) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION ' De

PREINVESTMENT PROGRAM - STUDY DATA SHEET No.: 8-1 (i)

I Area: Country: Sector(s):South America Colombia Transportation

1. NAME OF PROPOSED STUDY: Highway Feasibility Studies

2. PURPOSE: T'o determine the feasibility of upgrading sections of existing highways arid ofconstructing new highways of the national system, totalling about 1,000 kin.

3. SCOPE: To compare Uhe costs of and benefits from major improvements to about 1,000 knm. of national highway. The studies, some of whioh are already lnder way, will review prosent:.

and prospective traffic demand on each section of highway and for alternative aliinmlenLts,

where t,hese are worth considering. Where substan-tial diversions of traffic may beexpected as a result of the improvements being considered or of others in the Project larea, these will be taken int;o account. Estimated costs of construction and prospectivebenefits will be compared to determine the feasibility of the proposals. The economictiming and the design standards of desirable construction will be determined.

4. BACKGROUND: (a) Related Studies (b) Other Available Data (c) Expected Data Problems i

(1) Traffic Counts Preparation of accept,-(2) Reconnaissance studies and able traffi.c estimxa-les.

preliminary cost estimatesof varying quality.

5. TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date 1970The average duration of these studies is 6-8months; they are to be executed over a 24-monthperiod.

6. COMMENT ON POTENTIAL STUDY SPONSORS: The Ministry of Public Works will be the main sponsor. Mostof the studies will be undertaken by local consultants, a few by joint ventures withforeign firms. IBRD has made provisions to finance foreign exchiange requirements ofthese studies (see page (2) item 3.)

7. PROJECT(S) IXPECTED TO RESULT FROM STUDY (if known):

(a) Description (b) Estimated Investment (US$ equivalernt). Highwa.y construction program 1972-7)4 In the order of 60 mil.lion

(c) Financing Need and Potential SourceForeign Exchange Element: 30 mil.lioiPotential Source: I r3RD

8. ORDER OF MAGNITUDE OF STUDY COST (US$ equivalent): Sheet Prepared by: Brian Shields

About, 2` million Dept. or Agency: IBRD/'I'PDDate: April 1970

9. STAFF'S COMMENT ON PRIORITY RANKING OF STUDY: Sheet Revised by: IThe studies are importennt to ensure the preparation Item(s) Revised:of projects for the pipeline of economicall.y :iusti- D o Aec Ified highway projects. They are not so urge Dept. or Agency: ______

as the reconmmended railway rehabilitation and port Date:management studies. I

ANNEX DFORM No. 386.01 INTERNATIONAL DEVELOPMFNT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE Pag 2(11-69) ASSOCIATI ON RECONSTRUCTION AND DEVELOPMENT CORPORATION Pa,e

PREINVESTMENT PROGRAM - STUDY DATA SUPPLEMENT No.: 8-1(9)(to be filled in when possible)

1. TENTATIVE STAFFING Type of Specialist Number on Team Total Man-Months(a) Foreign Professional Staff:

Total:

(b) Local Professional Staff

(c) Local Supporting Staff

2. TENTATIVE STUI)Y BUDGET (US$ equivalent) Foreign Local TotalCurrency Currency _

(a) Professional Staff Costs

(b) Equipment

(c) Other (Travel, non-prof. staff, etc.):

(d) Total

3. OTHER COMMENTS

Provision of U,S$1.25 million equivalent was made in Bank loan 550-co to fin tu,cthe foreign exchange costs of feasibility studies i'or about 70( km of road nroiects andfinal design of 300 km of highest priority road. These funds have not, been driun uponbecause of inability on the part of the Ministry of Public Works to produce a list, ofproposed studies until very recently. This list is currently being appraised. However,the Government has a marked preference for the use of local consultants and the fullamount of foreign exchange provided in the loan may not be utilised.

Supplement Prepar-ed by: jri3rl ih-ildsDept. or Agency: IBRD/'1PDDate: April 1970

Supplement Revised by:

Item(s) Revised:

Dept. or Agency:

Date:

FORM No. 386 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE ANNEX 1)(11-69) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION Page 3

PREINVESTMENT PROGRAM - STUDY DATA SHEET No.: 8-2

Area: South America ucountrY: Colombia Sector(s): TransportationSDouth America Cuty

1. NAME' OF PROPOSED STUDY: Colombian National Railroads Investment Requirements

2. PURP'OSE:CTo ascertain the desirable magnitude ol a continued railroad rehabilitationprogram for the period 1972-76.

3. SCOPE:IBRID is currently financing most of the f'oreign exchange costs of the FCN developmentprogram, 1968- 72, which is essentially a program of rehabilitation of both track arnd rllinlh;stock. DuringZ this period onily some 700 khni of track are being renewed. It is estimnated thatperhaps 1,500 kTn of the 3,400 krn of main line are seriously defective givin ri e -to a veryhigh rate of derailrments (4,700 in 1969) which cost about 16,000 train hours per a1nnum, inaddition to seriously damaging existing rolling stock.

'The scope of' this study would be to:(a) Make an inventory of the current condition of track, rolling stock & maintenance facilitie!b.(b) Review the effects of the present condition on railroad service, costs of crerr rriton, anni

l-Lfe of equipment.(c) Prepare a phased program for economically feasibile rehabilitation to take place in the

p1friod-1972-7 6 , togeth,r with an apppropri_atn maintenance prI•rrnm.

4. BACKGROUND: (a) Related Studies (b) Other Available Data (c) Expected Data Problems1. Informe .uplernentario Sobre La Los Ferrocarri-les en Cifras,Rehabilitacion de los Ferrocarriles Boletin Anual, FerrocarrilesNacionales de Colombia, January 1965. Nacionales de Colombia (FCN)

2. IBRD, Apraisal of a Fifth Rail-Road Project in Colombia, 1968.

5. TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date]_97G)

Three mnonths.

6. COMMENT ON POTENTIAL STUDY SPONSORS:'T'he FCOkN should undertake this study with its own staff' assisted by SOIFRERAIL teehni ciansalready engaged by them.

7. PROJECT(S) EXPECTED TO RESULT FROM STUDY (if known):(a) Description (b) Estimated Investment (US$ equivalent)

* 1972-76 E ?ehabilitation Program consistingrnminly of' track relaying. (c) Financing Need and Potential Source

Foreign exchange element: not knownPotential Source: IBIU)

8. ORDER OF MAGNITUDE OF STUDY COST (US$ equivalent): Sheet Prepared by: Prian ShieldsNot Known. Dept. or Agency: IBRD/T.P.D.

Date: April 1970

9. STAFF'S COMMENT ON PRIORITY RANKING OF STUDY: Sheet Revised by: Brian ;i elds'Th1is stud;y should enajoy the highest priority. It is Item(s) Revised: 3vittal to the continued improvemnent of' railway ser-vices ;a:nd the retenLt-in of fina.nciaJ viabi Dept. or Agency: lB BRD/T .1'.D.

Date: Oct.cber I,6, 1970i_ _ _ _ _ _ _ _ __ __ __ __ _ __ __ __ _ - _ _ _ _ _ _ ___ __ _ _

t-ORM NO. :Jtb INTERNATIONAL DEVELOF'MEN1 INTERNATIONAL BANK FOR INTERNATIONAL riNAPiCE ANNE X D(11-69) ASSOCIATION RECONSTRUCTION AND DEVELOI'MENT CORPORATION

PREINVESTMENT PROGRAM - STUDY DATA SHEET No.: 8-3 1 )

Area: Country: Sector(s):South America Colombia Transportation

NAEOF PROPOSED STUDY: Medellin A t: Improvements to existing site;I-.NAME OFPROPOSEDSTUDY:Medelli Airport: Selection of new site

2. PURPOSE: 1. Improve operating capacity, reliability and safety at existing airport.2. Select possible new airport site and do preliminary design.

3. SCOPE: 1 . Study needs for navigation aids for increases in aviation activity at existingairport.

2. Study new approach procedures particularly relating to terrain clearances.3. Forecast 10 years operational traffic.4. Determine ultimate and economic capacities of existing site and if found to

be inadequate, proceed to select new site and develop master plan, preliminarydesign and cost estimates.

4. BACKGROUND: (a) Related Studies (b) Other Available Data (c) Expected Data Problems

None Consultants has already No special difficultysubmitted proposal.

Operational statisticsfrom AdminiistrativeDepartment of Ci;TilAviation (LAAC).

5. TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date 1 9-11. Traffic For-casts - 4 months Note: I and 2 to rmn2. Determine Ultimate Capacity concurrently: phase

FExisting Airport 2 months3. Select new site, prepare - 4 months Totaf Tiepe: 6- month2

_TMaster Plan, Concepts,_costs___ T6. COMMEN'i' ON POTENTIAL STUDY SPONSORS:

S-tudv to be funded by Government who will appointconsultants.

7. PROJECT(S) EXPECTED TO RESULT FROM STUDY (if known):

(a) Description (b) EstW mated Investment (US$ equivalent)1. Supply and install navaid equipment 1. 250,000

2. Desigrn and construction of new airport 2c nanI5ng ai2 an Potential Source(c) Financingeel and PtnilSuc1. Probably bilateral or suppliers financiag.2. Probably from international lending in-

stitutions.

8. ORDER OF MAGNITUDE OF STUDY COST (lIS$ equivalent): Sheet Prepared by:

Dept. or Agency: A. Douglas110,000 IBRD/TPDDate: March 31, 1970 __

9. STAFF'S COMMENT ON PRIORITY RANKING OF STUDY: Sheet Revised by: Briain -;hie_1d:-;Fairly high priority because of safety aspects Item(s) Revised: -(b) and long lead time in getting now airport Dept. or AcRD/T 14)operational Agency: I

Date: 0i tober in, 1970

ONEX D)

FORM No. 386.01 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATICNlAL FINANCE Page.,11-69) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION

PREINVESTMENT PROGRAM - STUDY DATA SUPPLE}ENT No.: 6-3 (2)_(to be filled in when possible)

1. TENTATIVE STAFFING Type of Specialist Number on Team Total Man-Months

(a) Foreign Professional Staff: Engineer (Airport) 1 8

Economist 1 8Engineer (Telecom) 1 2Airways Specialist 1 1A.T.C. Specialist 1 1

Meteorologist 1 1

Total: 6 21

(b) Local Professional Staff Survey Crew 3 18

(c) Local Supporting Staff Draftsmen 2 14Technicians 2 14

2. TENTATIVE STUDY BUDGET (US$ equivalent) Foreign Local TotaCurrency Currency T

(a) Professional Staff Costs 75,000 75 , O 0

(b) Equipment 2,000 2,000

(c) Other (Tr.ivel, non-prof. staff, etc.): 8,ooo 26,000 34,W00

(d) Total 83,000 28,000 11 0,00(0

3. OTHER COMMENTS

The existing airport is located in a valley, surrounding hillsprovide severe terrain restraints to aircraft operations inmaneuvering and on final approach.

Supplement Prepared by: A. UDoUgl s

Dept. or Agency: ITBREl/TFDDate: March 31, 1970

Supplement Revised by:

Item(s) Revised:

Dept. or Agency:

Date:

FORM No. 386 INTERNATIONAL DEVELOPMENT INTERNATtONAL BANK FOR INTERNATIONAL r-INAkCE Jqi;NA U

( Ill-tOi9 ) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION Page 6

PREINVESTMENT PROGRAM - STUDY DATA SHEET No.: __-_

Area: Country: Sector(s):

South America Colombia Transportion

1. NAME OF PROPOSED STUDY: Study of cargo handling operations at major ports.

2. PURPOSE: To seek ways to improve vessel, truck and railcar turnaround time by improvement

of untilization of existing and planned port facilities, with emphasis on proper use of

transit s*torage space, cargo handling equipment, pallets, etc. and on operational pro-

cedures, including customs regulations and practices.

3. SCOPE, Study present methods of handling cargo between vessels and the inland transport

system. Identify deficiencies in methods, procedures (including customs procedures)in movin; and storing cargo. Evaluate the adequacy of numbers and types of equipmnent,

their utilization and maintenance. Recommend improvements in above that would result in

improved turnaround time of vessels, railcars and trucks, and evaluate the cost a:.d

benefits of the recommended improvements to the economy of Colombia. Assist the portmanagemertt in implementing the recommendations once a decision to implement them hasbeen made.

4. BACKGROUND: (a) Related Studies (b) Other Available Data (c) Expected Data Problems

Not known Operational statistics fromEmpresa Puertos de Colombia

5. TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date 197'

Phase I - Study present methods and recommendimprovements. - - - - - - - - - - - - 6 months

Phase II- Assist port management in implementing-rooomre ndation;z - - - - - - - - - - - 12 months

6. COMENI ON POTENTIAL STUDY SPONSORS: Since IDB has been requested to finance second phase of port

expansion program, it may want to include funds for the study in its construction loan.The Empre;sa Puertos de Colombia would be the Borrower and be responsible for -the study.

7. PROJECT(S) EXPECTED TO RESULT FROM STUDY (if known):

(a) Description (b) Estimated Investment (US$ equivalent)

none(c) Financing Need and Potential Source

8. ORDER OF MAGNITUDE OF STUDY COST (US$ equivalent): Sheet Prepared by: S.M.L. van der Meer

160.000 Dept. or Agency: IBRDVTPDDate: March 1970

9. STAFF'S COMMEIT ON PRIORITY RANKING OF STUDY: The priority of Sheet Revised by: Bri;in J-i cldi!the study is considered high as it is expected to Items) Revised: '(t) aol 9

result in a considerable improvement in the return _ __9----

to Colombia of recently made and programmed sub- Dept. or Agency: Tj_BIl)/L I'-

stantial investments in port facilities. T4mse I Date: PeWber 16 19I0_sh6ulLd be orn leted by June 30 1971. Dat11_____r_ l___-9

ANNEX DFORM No. :386.01 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATICNAL FINANCE Page 7

(11-69) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION

PREINVESTMENT PROGRAM - STUDY DATA SUPPLEMENT No.: 8 -4 (2)

(to be filled in when possible)

I. TENTATIVE STAFFING Type of SPecialist Number on Team Total Man-Months

(a) Foreign Professional Staff:

Phase I - Cargo handling expert 2 12

Phase II - Cargo handling expert 2 24

Total: 34

(b) Local Professional Staff None

(c) Local SuiDporting Staff None

2. TENTATIVE STuJDY BUDGET (US$ equivalent) Foreign Local Total

Currency Currency ota

(a) Professional Staff Costs 126,000 1 26,000

(b) Equipment -

(c) Other (Travel, non-prof. staff, etc.). 10,000 22,000 32,000

(d) Total 136,000 22,000 158,000

3. OTHER COMMENTS

One expert would be assigned to the port of Buenaventura and one to the ports ofCartagena, Barranquilla and Santa Marta. They would be expected to coordinatetheir work and exchange information and ideas at regular intervals. They shouLd beSpnriish speaking if at al:L possible.

Supplement Prepared by: S.M.L. van der Neer

Dept. or Agency: IBRI/TP.DDate: March 19 70

Supplement Revised by:

Item(s) Revised:

Dept. or Agency:

Date:

A1\1 IN:JA LFORM No. 386 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL rINAiJCE O

( I 1.- i9 ) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION Page 5

PREINVESTMENT PROGRAM - STUDY DATA SHEET No.: J-' (1)

Area: Country: Sector(s):

South America Colombia Transportation

1. NAME' OF PROPOSED STUDY: Inland Waterway Transport Survey (Magdalena river basin)

2. PURPOSE: Establish to what extent the inland waterways, river ports and river transportoperations should be improved to complement other modes of transport and thereby bringabout an efficient integrated transport system.

3. SCOPE: Examine the technical feasibility and cost of improving (a) the navigability ofthe Magdalena river, its tributaries and canals and (b) the river ports. Estimate thefuture traffic demand on the inland waterway system over a period of 20 years, takinginto account likely improvements in the inland water transport facilities and in othlermodes of transportation which compete with or supplement the waterways. Review tlleinland water transport operations (including the organizations responsible for rivermaintenance) and the existing rate structure and make recommendations designed toincrease the efficiency of operations. ENaluate the economic feasibility of improvingthe waterway system by making a comparison of the economic benefits to be obtained andthe cost of the improvement.

4. BACKGROUND: (a) Related Studies (b) Other Available Data (c) Expected Data Problems1. Mejoras a la navegacion y

los puertos del Rio Magda-lena for ADENAVI by Apron yDuque completed Feb. 1968.

2. Study to be undertaken byNEDECO for Ministry of PublicWorks sponsored by Dutch Govt.

5. TIMING: (a) Duration and Phasing of Study (b) Desired Starting Date

12 months 1971

6. COMMENT ON lPOTENTIAL STUDY SPONSORS: UNDP with Bank acting as Executing Agency. Application toUNDP has not yet been submitted by Government. Ministry of Public Works is expectedto designate ADENAVI as responsible agency.

7. PROJECT(S) EXPECTED TO RESULT FROM STUDY (if known):

(a) Description (b) Estimated Investment (US$ equivalent)Acquisition of dredge 5.0 millionNavigational aids (c) Financing Need and Potential SourcePort improvement works Dutch suppliers have indicated

interest in financing dredge(3.0 million) -

8. ORDER OF MAGNITUDE OF STUDY COST (US$ equivalent): Sheet Prepared by: S.M.L. van der Meer6oo,ooa D,40. or Agency: IBRD/TPD

Date: March 1970

9. STAFF'S COMMENT ON PRIORITY RANKING OF STUDY: Considered of Sheet Revised by:

lowest priority among studies recommended in trans- Item(s) Revised:port sector. A problem of potential duplication -p-t-- with a study to be sponsored by the Dutch Governrmnt . or Agency: _ ___has to be resolved before the UNDP study can proceed Date:

ANNEX i)FORM No. 386.01 INTERNATIONAL DEVELOPMENT INTERNATIONAL BANK FOR INTERNATIONAL FINANCE Page

(11-69) ASSOCIATION RECONSTRUCTION AND DEVELOPMENT CORPORATION

PREINVESTMENT PROGRAM - STUDY DATA SUPPLEMENT No.: 8-5 (2)(to be filled in when possible)

I. TENTAIIVE STAI:FING Type of Specialist Number on Team Total Man-Months

(a) Foreign Professional Staff:Project Manager .1 10Office Engineer 1 9Transport Economist 2 19Management & Oper. Expert 2 14Port and River Engineer 3 23Naval Architect 1 2Rate Expert 1 3

Total: 11 80

(b) Local Prol:essional Staff

(c) Local Supporting Staff 15 148

2. TENTATIVE STUDY BUDGET (US$ equivalent) Foreign Local TotalCurrency Currency

(a) Professional Staff Costs 300,000 50,000 350,000

(b) Equipment 50,000(c) Other (Travel, non-prof. staff, etc.): 50,001) 150,00( 200,000

(d) Total 400,000 200,000 600,000

3. OTHER COOMENTS

Supplement Prepared by: S.MITI. van derl Meer

Dept. or Agency: IBRD/TP.D

Date: March 1 970

Supplement Revised by: ___

Item(s) Revised:

Dept. or Agency:

Date:

Rt: "Vi'> NATh"'I' ,AL

ADENAVI, ,joras a la I ave acion y los Puertos del R.io MLtcalepa, February, 1.968.

Corpor-.cion Finanniera del Tr.ansporLe (CFT) - Las p,,ipresas ;yeL Parque-A_1o.motorde C-i -a de Servicio Publico Caracteris3Aecas - I:gota, October 1.969

Dixon Speat:, ClKC and Restrepo y Uribe, National Airports Plan, February 197C)

F1 Traisr^sorLe AuLoinmotar oe Carf-a, (Sorvicio publico en larvo recorricdo), forCFP by Pla'cnificadov'- s Asociados Ltda. 19683

Ferrocarriles Iacioriales de Colombia, -s Ferrocarriler, en Cifras, Boletin bliutal.

Ferrocarriles NacionaLes de Colombia, Los Ferrocarriles en Cifras, Boletirn Mensual.

Fondo Nacionril. de Caminnos Vecinales, Pro5rama para Financraniento Parcial j2or elBanco Intera-,iericano de. Desarrollo Bogota, August 1969.

Harvarid University Transport Research Program, An Analysis of InvestmentAlter native, .in thl ColombL,<n Trans ort SystEQ, Septeniber 1968.

INGLTFC/TAMIS, Economic Feasibil;it Renort,_Barranquilla Bridge across the MaLdalcnaRiver at AcLedu.icto for Minsiry of Piublic Works, September 19 9.

INGŽ>f NC/TAMS, s)aving P>raiwn, Sept ember 1969 for the Road Funcl of the M-inisturyof Publicc Works

INGETEOC/TAMS, A Prorrani for the Imorovement of the Hiytem between Call.and Buia, Octoher 1969.

INTEGR.NiL. LTDA., Bueniaventura~-Bua H,ihwar Buenaventura - El. Pailon Sect.ion,Alte:mate INwy Dnsoi Decemiber 1969

MadigE,w-Hlyland, De La Cruz & Cia., Estudliosr Preliminares de Ruta y Deta.lelesSup:l.en!,ientarios de la Extension Ferreea a Barranq llayCartaena, April 1965

Madigaan..1Tyland, Do l,a Cruz & Cia., Factabilidad Economica de Una Extens:ionrFerJfa a Barranquilla y CartajMena, May 1965

11iil.sterJo dc Obras Publicas, Volumenes de Tranaito Conteos 1968, Bogota, 1.969.MinisLcerio de Ohras Publicas, Volurilenev de Transi.to Conteos 19(69, Bogota, 1970

PiwrUctcL dle Colombia, Est;vdaio Integral dr Fact,abilidadl do las Obrasl.r!Lcntin fen lpt; pt o'C 3ry R vn Irranr Cart-'en-n- S 3 M:,4jvDc(c owP e!ni 1.969.

SOF'1cEATRI, i:tuoEconlqu e CiCEi LirFnes c Faibl]o Traffie, AugU;t 1969 (Draft)