Draft Feasibility Study Report: Manatuto to Natarbora Road

1 Timor-Leste Road Network Upgrading Project ADB LOAN NO: 2857-TIM Draft Feasibility Study Report: Manatuto to Natarbora Road Katahira & Engineers International in association with Kai Watu Kmanek-Consultant Lda Timor Leste Road Network Upgrading Project (RNUP) ADB LOAN NOS : 2857-TIM Feasibility Report Katahira & Engineers International in association with Kai Watu Kmanek-Consultant Lda executive summary - Page 1 executive summary 1. Objectives and Scope of the Project This Feasibility Study applies to the National Road A-09 (Sections 01-04), Manatuto to Natrabora ( km), as well as to the District Road C-15, Laclubar-Jnc. to Laclubar, ( km).

2 The Manatuto -Laclubar- Natarbora road section was identified by the Strategic Development Plan, 2011-2030 of the Government as a Priority Section, providing essential mid-country cross-road between the North and the South of Timor Leste. It is considered by the Government to become particularly important in line with the large planned investment in Gas & Petroleum facilities, by Timor GAP, on the southern coast. Geographically, the Manatuto -Laclubar- Natarbora Road, is situated right the in the middle of the country. Thus, conceptually, it is the most appropriate route for a major North-South connection. However, the current conditions of this road are very poor, and hence it cannot fulfill its expected strategic role.

3 The GoTl wishes to upgrade the road to all weather, surfaced two-lane road with shoulders, adhering to international standards; which will enable it, among others, to carry, at the minimum, 20-foot container trucks. The Project includes plans to strengthen and widen the existing pavement to about six (6) meters, by asphalt-cement surfacing; plus one (1) meter shoulders on each side. The Project in its entirety includes two parts: (i) Feasibility Study ( months) (ii) Detailed Design for the upgrading of the Manatuto Laclubar Natarbora road to International Standards ( months) For expediency sake, the two parts have been carried out in parallel, from the outset of the Project. Figure 1 Study Area - Location Map Collaboration with Other Road Projects The timing of this Road Feasibility Study (February-April, 2013) coincides with another Feasibility Study , financed and carried out directly by ADB: Feasibility Study for the North-Eastern National Road Sections (Dili- Manatuto -Bacau-Lautan-Los Palos, and Bacau-Viqueque), TA 8146-TIM.

4 Team Members of this and the other ADB Project cooperated closely. Among others, the two studies used the same traffic survey instruments, divide between themselves the survey execution, and shared the survey findings. Similarly, the two studies coordinate on agreed-upon input data to the RED Program for Economic Analysis. Timor Leste Road Network Upgrading Project (RNUP) ADB LOAN NOS : 2857-TIM Feasibility Report Katahira & Engineers International in association with Kai Watu Kmanek-Consultant Lda executive summary - Page 2 2. Methodology and Report Structure Methodology The Feasibility Study assesses the Feasibility of reconstructing the Manantuto- Natarbora road (A09-1), including the branch road Laclubar Junction-Laclubar (C-15).

5 At the very end, the Feasibility is focused on the Economic Analysis, in particular the economic indices of: (i) Net Present Value (NPV), and (ii) Economic Internal Rate of Return (EIRR), shown below. However, the Feasibility Study in its entirety includes review of all components which are contributing, affecting and being affected by the reconstruction of this road. They include (but are not limited to): Poverty and Social Assessment of the Manatuto District, including: o Public Consultation o Gender Assessment o Social Action Plan o Indicators for Monitoring Initial Environmental Examination (IEE), including: o Description of the Environment o Screening of Potential Environmental Impacts and Mitigation Measures o Environmental Management and Monitoring Plan o Public Consultations and Information Disclosure o Findings and Recommendations Environmental Assessment Review Procedure (EARP), including.

6 O Assessment of Legal Framework and Institutional Capacity o ADB s SPS 2009, and ADB Environmental Guidelines and Policy of 2003 Anticipated Environmental Impacts o Environmental Assessment for Subprojects and/or Components o Consultation, Information Disclosure, and Grievance Redress Mechanism o Institutional Arrangement o Monitoring and Reporting Engineering: Technical Investigation & Project Design, including: o Introduction & Description of Project Roads o Technical Field Investigation o Technical Design Standards and Guidelines o Bio-Engineering Measures o Climate Change Adaptation o Proposed Road Upgrading Alternatives o Cost Estimate and Contract Packaging o Detailed Technical Engineering Appendices Reviews of Existing Traffic Studies, including: o Review of the 2009 Road Master Plan, TA 7100 o Timor GAP Traffic Study 2013 Travel Surveys and Analyses, (Conducted by this Feasibility Study and by TA 8146-TIM), including: o Background and Data Sources o Survey Methodology o Average Daily Traffic (ADT) & Average Annual Daily Traffic (AADT) o Road Side Survey (O-D), Road A01-01, Dili - Manauto Rd.

7 O Estimated Induced Traffic from South Coast (Regression Equation) o Estimated Traffic Growth Rate for RED All of these efforts are culminating in the: Economic Evaluation, including: o Analytical Scenarios/Alternatives Timor Leste Road Network Upgrading Project (RNUP) ADB LOAN NOS : 2857-TIM Feasibility Report Katahira & Engineers International in association with Kai Watu Kmanek-Consultant Lda executive summary - Page 3 o Road Characteristics & Cost Estimates of Alternative Scenarios o Unit Costs and Operating Data, by Vehicle Type - Input to RED o Traffic Normal Traffic Generated Traffic Induced Traffic Traffic Growth Rates o Road-Based Quantifiable Benefits Savings on Vehicle Operating Costs (VOC) Savings on Value of Time (VOC)

8 O Other Quantifiable Benefits Multiplier & Retainer Local Share of Investment/Maintenance Costs Proxy for Social Benefits and Affected Population Residual Share of Bridges and Special Culverts o Standard Economic Analysis, 12% Discount Rate o Alternative Economic Analysis - at 5% Discount Rate o Sensitivity Analysis o Distribution of Benefits o Risk Analysis o Conclusion and Recommendations Report Chapters Al in all, this Feasibly Study includes the following Chapters: Chapter 1 Introduction Chapter 2 - Socio-Economic Review Chapter 3 - Strategic Development Plan Chapter 4 - Engineering: Technical Investigation & Project Design Chapter 5 - Social & Poverty Assessment (PSA), and Safeguards Chapter 6 - Initial Environmental Examination (IEE) Chapter 7 - Environmental Assessment Review Procedure (EARP) Chapter 8 - Climate Change Adaptation Chapter 9 Traffic Reviews of Existing Studies Chapter 10 Traffic: 2013 Travel Surveys and Analysis Chapter 11 - Economic Evaluation 3.

9 Background Information: Population and Land Area Study Area Table 1 shows population and land area of Timore Leste and of the Study Area Manatuto District, and Figure 2 shows the Manatuto District and Sub-Districts The population of Timor Leste is slightly above million (2010 Census), and the land area about 15,000 Of these totals, Manatuto District, with a land area of 1,782 ( of total), had population of only about 43,000 people ( of total). The Manatuto District includes six Sub-Districts. Of which, two towns Manatuto Town and Laclubar (on relatively small land area), account for more than half of the district s population. Each of them account for about 12,000 populations. Total population in these two towns is 23,715 ( of total). Excluding these two towns, only 19,537 people ( of total) live in this vast area.

10 In summary , the vast area of the Manatuto District is very sparsely populated, inhabited mainly by subsistence farmers, and is expected to remain that way also in the foreseeable future. For example, the Strategic Development Plan, 2011-2030 (SDP), which provides vision and guideline for TL development, designates the core of Manatuto mountainous area as protected forest . It does not include any significant plans to alter the subsistence farming character of this vast country*1. *1 Discussio s with a World Ba k Agricultural Expert i dicated that pla ti g co ercial forest as cash crop i this area (say of Philippine Tik), is the only viable agricultural means to alleviate poverty in mountainous area. However, the current SDP does not include such plans.