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Document o f The World Bank
FOR OFFICIAL USE ONLY
Report No: 33534-TD
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED GRANT
IN THE AMOUNT OF SDR 10 MILLION (US$15 .O MILLION EQUIVALENT)
TO THE
REPUBLIC OF CHAD
FOR AN
URBAN DEVELOPMENT PROJECT
January 3,2007
Water and Urban I1 Central Africa 1 Africa Region
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective November 30, 2006)
Currency Unit = CFA franc (CFAF)
US$l .O = CFAF 510
SDR 1 = US$1.50435
Euro 1 = US$1.25
AAP AFD AfDB APL CA CAS CCSRP
CFPB CFPNB COJO
CPAR
dgMarket DGI DGCL DTG DU DURAH
CQ
EC EIA EO1 ERR ESMF EU FBS FMR GDP GNI GPN GTZ IC ICB IDA IDB IEC IGF
FISCAL YEAR January 1 - December 3 1
ABBREVIATIONS AND ACRONYMS
Africa Action Plan French Development Agency (Agence FranGaise de Ddveloppement) African Development Bank Adaptable Program Loan District Sanitation Committee (Comitd d ’Assainissement) Country Assistance Strategy Committee for Control and Oversight o f Petroleum Revenues (Collbge de ContrGle et de Surveillance des Revenus Pdtroliers) Property Tax for Developed Land (Contribution Foncibre sur les Propridtks Bdtis) Property Tax for Undeveloped Land (Contribution Foncibre sur les Propridtds Non-Bdtis) National Bid Opening and Evaluation Committee (Commission d’ouverture et de Jugement des Osfyes) Country Procurement Assessment Report Consultant Qualification Development Gateway’s portal for tenders and consulting opportunities worldwide General Directorate o f Taxes (Direction Gknkrale des ImpGts) General Directorate o f Local Governments (Direction Gdndrale des Collectivitks Locales) Decentralized Territorial Government Urban Department of MATUH (Direction de I’Urbanisme) Urban Development and Housing Project (Projet de Ddveloppement Urbain et d ’Amklioration de I ’Habitat) European Commission Environmental Impact Assessment Expressions o f Interest Economic Rate of Return Environment and Social Management Framework European Union Fixed Budget Selection Financial Management Report Gross Domestic Product Gross National Income General Procurement Notice German Agency for Technical Cooperation (Deutsche Gesellschaftflr Technische Zusammenarbeit) Individual Consultant International Competitive Bidding International Development Association Islamic Development Bank Information, Education, and Communication General Inspectorate of Finance (Inspection Gdndrale des Finances)
11
IGL IMF IRR LCS LSC MAT MATUH
M C D M D G M&E MFEP MI MME M o U MSP NCB NPV OED OHADA PAD PAMFIP PER P I M PROADEL PRML PRMP PRSP QCBS RAP RPF SA SCAC SDR SIL SME SOE SPN sss STEE TCAI TVLP UNDB UNDP VAT1
FOR OFFICIAL USE ONLY General Lump Sum Tax (Imp6t Gtndral Libtratoire) International Monetary Fund Internal Rate o f Return Least Cost Selection Local Steering Committee Ministry o f Land Administration (Minist2re de 1 iidministration du Territoire) Ministry o f Land Planning, Urban Development, and Housing (MinistGre de 1 ’Amtnagement du Territoire, de I’Urbanisme et de 1’Habitat) Ministry in Charge o f Decentralization Millennium Development Goal Monitoring and Evaluation Ministry o f Finance, Economy, and Planning (Ministke des Finances, de 1 ’Economie et du Plan) Ministry o f Infrastructure (Minist2re des Infiastructures) Ministry o f Mining and Energy (MinistGre des Mines et de 1’Energie) Memorandum o f Understanding Ministry o f Public Health (Ministke de la Santd Publique) National Competitive Bidding Net Present Value Operations Evaluation Department Organization for the Harmonization o f Business Law in Africa Project Appraisal Document Capacity Bui lding for Modernization o f Public Financial Management Public Expenditure Review Project Implementation Manual Local Development Program Support Project (Projet d’Appui au Ddveloppement Local) Petroleum Revenue Management Law Petroleum Revenue Management Program Poverty Reduction Strategy Paper Quality- and Cost-Based Selection Resettlement Action Plan Resettlement Policy Framework Special Account French Cooperation (Service Franqais de Coopdration et d ’Action Culturelle) Special Drawing Rights Sector Investment Loan Small and Medium Sized Enterprise Statement o f Expenditures Specific Procurement Notice Single Source Selection National Water and Electricity Company (Socie’td Tchadienne d ’Eau et d’Electricitd) Domestic Turnover Tax Tax on Value o f Business Premises (Taxe sur la Valeur Locative des Locaux Professionnels) United Nations Development Business United Nations Development Program Value Added Tax on Imports
Acting Vice President: Hartwig Schafer Acting Country Director: Sector Manager: Eustache Ouayoro Task Team Leader: Franck Bousquet
Marie Franqoise Marie-Nelly
This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.
CHAD URBAN DEVELOPMENT PROJECT
CONTENTS
I . A . B . C .
I1 . A . B . C . D . E .
I11 . A . B . C . D . E .
I V . A . B . C . D . E . F . G .
Page STRATEGIC CONTEXT AND RATIONALE ............................................................. 3 Country and sector issues .................................................................................................... 3
Rationale for Bank involvement ......................................................................................... 6
Higher level objectives to which the project contributes .................................................... 8 PROJECT DESCRIPTION ............................................................................................. 9 Lending instrument ............................................................................................................. 9
Project development objective and key indicators., ............................................................ 9
Project components ........................................................................................................... 10
Lessons learned and reflected in the project design .......................................................... 15
Alternatives considered and reasons for rejection ............................................................ 17
IMPLEMENTATION .................................................................................................... 18 Institutional and implementation arrangements ................................................................ 18
Monitoring and evaluation o f outcomes/results ................................................................ 20
Sustainability ..................................................................................................................... 20
Critical risks and possible controversial aspects ............................................................... 22
Grant conditions and covenants ........................................................................................ 24
APPRAISAL SUMMARY ............................................................................................. 25 Economic and financial analyses ...................................................................................... 25
Technical., ......................................................................................................................... 26
Fiduciary ........................................................................................................................... 27
. . .
Social ................................................................................................................................. 29
Environment., .................................................................................................................... 30
Safeguard policies ............................................................................................................. 31
Policy exceptions and readiness ........................................................................................ 31
Annex 1: Country and Sector or Program Background ......................................................... 32 Annex 2: Major Related Projects Financed by the Bank and/or Other Agencies ...........A. 48 Annex 3: Results Framework and Monitoring ........................................................................ 50 Annex 4: Project Description ..................................................................................................... 55 Annex 5: Project Costs ............................................................................................................... 65
i v
Annex 6: Implementation Arrangements ................................................................................. 67 Annex 7: Financial Management and Disbursement Arrangements ..................................... 71
Annex 8: Procurement Arrangements ...................................................................................... 81
Annex 9 : Economic and Financial Analysis ............................................................................. 89 Annex 10:
Annex 11 : Annex 12:
Annex 13: Annex 14:
Annex 15:
Safeguard Policy Issues ............................................................................................ 95 Project Preparation and Supervision ..................................................................... 97 Documents in the Project File ................................................................................. 98 Statement of Loans and Credits .............................................................................. 99 Country at a Glance ............................................................................................... 101
Map IBRD 34221 .................................................................................................... 103
V
REPUBLIC OF CHAD
ASSOCIATION Total:
URBAN DEVELOPMENT PROJECT
2 1 .oo 6.00 27.00
PROJECT APPRAISAL DOCUMENT
AFTU2
Date: January 3,2007 Act ing Country Director: Marie Franqoise Marie- Ne l l y Sector Manager: Eustache Ouayoro
Team Leader: Franck Bousquet Sectors: General water, sanitation, and flood protection sector (40%); Sub-national government administration (40%); Other social services (20%) Themes: Municipal governance and institution building (P); Other urban development (S) Environmental screening category: B Safeguard screening category: B - L imi ted impact
Project ID: PO72030 Lending Instrument: Specific Investment Loan
Project Financing Data 1 [ 3 Loan [ 3 Credit [XI Grant [ ] Guarantee [ 3 Other:
For Loans/Credits/Others: Total Bank financing (US$m.): 15.00
Recipient: The Government o f Chad N’Djamena Chad Tel: (235) 52 47 10 Fax: (235) 52 47 11
Responsible Agency: Ministry o f Land Planning, Urban Development and Housing (MATUH), Implementation Unit within the Urban Department.
1
Does the project depart f rom the CAS in content or other significant respects? Re$ PAD I. C [ No
Does the project require any exceptions f rom Bank policies? Re$ PAD I K G Have these been approved by Bank management? I s approval for any pol icy exception sought f rom the Board? Does the project include any critical r isks rated “substantial” or “high”? Re$ PAD III.D Does the project meet the Regional criteria for readiness for implementation? Re$ PAD I K G Project development objective Re$ PAD II.B, Technical Annex 3 The project development objective i s to increase sustainable access to municipal services for residents in targeted project cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba). Project description [one-sentence summary of each component] Re$ PAD ILC, Technical Annex 4 The proposed project will finance priority infrastructure (water, drainage, and economic infrastructure) in N’Djamena, Moundou, Sarh, AbCchC, and Doba to address partially the significant infrastructure gaps these cities are facing. By packaging public works appropriately and using labor-intensive methods whenever possible, the project will create employment opportunities for unskilled and semi-skilled labor and promote SMEs in construction and urban services. Further, the project will improve capacity at the local level to plan, manage, and maintain infrastructure and services, and will support capacity to foster urban development at the central level. Which safeguard policies are triggered, i f any? Re$ PAD I K F, Technical Annex 10 The Environmental Assessment and Involuntary Resettlement safeguard policies are triggered by the Project. However, the Project will not fund activities that would cause serious adverse effect on the environment or any form o f land acquisition or restriction o f access to sources o f livelihoods. Significant, nonstandard conditions, if any, for: Re$ PAD III.E Board presentation: None. Negotiation conditions Cfulflled):
[XIYes [ ] N o
[XIYes [ ] N o
Decree setting up the Inter-Ministerial Committee o f the proposed project sent to IDA. Draft agreements between the State and the participating cities sent to IDA. Draft Conventions de MaPtrise d ’Ouvrage Diligue‘ between the Implementation Unit o f the MATUH and each o f the beneficiary Cities sent to IDA. Sector Policy Letter finalized and sent officially to IDA. Draft Project Implementation Manual (PIM) sent to IDA. Draft Project Administrative, Financial, and Accounting Manual sent to IDA. Government letter confirming i ts commitment to make available counterpart funds amounting to US$12 mi l l ion during the project’s cycle and budgeted on o i l revenues. Appointment o f IGF as Internal auditor o f the Project.
Grant effectiveness conditions:
(a) The Recipient’s Project Account has been opened and the in i t ia l contribution o f CFAF 160 mi l l ion has been deposited therein.
(b) The Government has adopted the Project Implementation Manual (PIM), and the Project Administrative, Financial, and Accounting Manual, both in form and substance satisfactory to IDA. At least one Convention de Maitrise d ’Ouvrage Diligui and related Protocole d ’Accord, in form and substance satisfactory to the Association have been executed between the relevant Beneficiary City and the MATUH and the Recipient, respectively.
(c)
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I. STRATEGIC CONTEXT AND RATIONALE
A. Country and sector issues
1. Background. With 80 percent o f the population o f about 9.7 mi l l ion' living o n less than $1 a day, Chad i s one o f the poorest countries in the wor ld and faces enormous development challenges. The 2005 Human Development Report ranks Chad as 173 out o f 177 countries surveyed. The Gross National Income (GNI) per capita (2005) i s estimated at US$400. There i s a significant lack o f infrastructure services and capacity at a l l levels o f the administration to finance, plan, and implement development efforts to improve the living conditions for the population. The challenges are illustrated by what i t will take to achieve the Mi l lennium Development Goal (MDG) that 60 percent o f the population have access to an improved water source in 2015 - from the current situation where only 34 percent have access (compared to 58 percent in sub-Saharan Africa).
2. Expectations that large increases in financial resources could buttress and accelerate economic growth and development efforts in the country are o n the rise and widespread since o i l production started in the Doba basin in 2003. Oil revenues are a major source o f funding. In 2004, net o i l revenues o f US$13 1 mi l l ion (CFAF 66.8 bil l ion) represented 42 percent o f total revenues in the national budget, excluding foreign financing. In 2005, net o i l revenues had increased to US$250 mi l l ion (CFAF 130.4 billion), representing 45 percent o f the national budget. And by 2006, net o i l revenues had grown to US$800 mi l l ion (CFAF 416.2 billion), representing 73.5 percent o f total revenues in the national budget, excluding foreign financing.
3. Management of oil revenues. The impact o n the lives o f the ordinary Chadian as a result o f the increased revenues f rom o i l production depends crucially o n a transparent and effective management o f these revenues. Fol lowing amendments to the Petroleum Revenue Management L a w (PRML) (a precondition for Wor ld Bank backing o f the o i l production project), which would substantially weaken poverty-targeted programs in favor o f more resources for fiscal deficit and unplanned expenses (most o f which were security related), the Wor ld Bank withheld new loans and suspended disbursements o f IDA funds allocated to Chad.
4. However, an accord was reached after discussions between the two parties, and a Memorandum o f Understanding (MoU) was signed o n July 13, 2006 committing the Government o f Chad to spend 70 percent o f i t s 2007 budget (all spending) on priority poverty reduction programs. The Government agreed with donors on short- and medium-term steps to be undertaken to strengthen budget management within a comprehensive plan for the modernization o f public finances.
5. Development Agenda. The Poverty Reduction Strategy, adopted by the Government in June 2003, outlines Chad's development agenda and strategic objectives. The strategy aims at cutting the number o f people living in poverty in ha l f by 2015. T o reach this aim, a macroeconomic framework has been developed, with focus on five strategic orientations: 1) promoting good governance; 2) ensuring strong and sustainable growth; 3) improving human capital; 4) improving the living conditions o f vulnerable groups; and 5) restoring and safeguarding ecosystems.
6. At the polit ical and institutional level, the focus will be o n consolidating the foundations o f democracy by implementing the decentralization provisioned for in the Constitution o f 1996. In the economic and financial sphere, efforts will focus o n national skill-building in both the private sector and in government departments, and o n integration and internal organization o f the productive system,
' World Development Indicators 2006.
3
including overcoming the country’s isolation. Increased public investment in infrastructure and human capital will contribute to increasing the rate o f real Gross Domestic Product (GDP) growth.
7. Political Decentralization. Decentralization will lay the ground for a democratic distribution o f power among citizens, and creation o f three sub-national levels o f Government: regional, departmental, and municipal, each with elected bodies. Local elections have been postponed several times, and are envisioned to take place by 2007. In parallel, the authorities are endeavoring to make arrangements for the deconcentrated services2 o f the ministries to interact with the future elected local governments.
8. Involvement o f stakeholders at a l l levels o f society i s essential to better allocate the o i l revenues and manage the impatience o f the communities to tap into the dividends o f the o i l boom. This entails consulting the population o n priorities and requires that al l stakeholders concerned should actively participate in the development o f the country. The decentralization process wil l give more power to the local authorities in an otherwise very centralized state faced with high polit ical uncertainties and fierce competition for power.
9. Current operational and legal framework for Chadian municipalities. Until local elections take place, the municipalities continue to be administered by Management Committees which include representatives o f various deconcentrated services as wel l as local traditional leaders. The Management Committees deliberate o n the businesses o f the municipality, and in particular, discuss and adopt the budget. The President o f the Management Committee, a c iv i l servant appointed by presidential decree, i s the Mayor, assisted by the municipal administration.
10. Supervision o f the municipalities i s carried out by the deconcentrated administrative authority, i.e. by the Prefects or sub-prefects or the Government’s delegate in the case o f the municipality of N’Djamena. The municipalities’ budgets are subject to a pr ior approval o f the Minister o f Land Administration and the Ministry o f Finance.
1 1, Fiscal decentralization and municipal finance. The fiscal regime o f the municipalities i s at the heart o f the development effort. Whi le polit ical decentralization i s being prepared, municipalities are suffering f rom an ongoing financial crisis and unpredictability o f available resources. A s detailed in Annex 1, the main sources o f revenue o f Chadian municipalities include:
(1)
(ii)
(iii)
Taxes and fees allocated by the State for the municipalities (mainly custom duties, land, and fiscal taxes). The municipalities lack access to information on, and control of, the taxes managed by State agencies, which constitute a major part o f their revenue. Municipalities are faced with delays in transferring the refunds which have an adverse effect o n municipal resources.
Municipal revenue (business fees, tax on real estate transactions, taxes o n entertainment, etc.). Establishment and management o f these revenues i s not consolidated under one law, as municipalities establish them and set tariffs without specific guidance. For revenue from public space user fees, management tools constitute the main factor limiting their collection, e.g., fees for market space and roadway usage have not been subject to an exhaustive census, and the collection effort i s far below resource potential.
Public space user fees (stall rentals, parking fees, advertising fees, etc.). Collection i s far below resource potential, per above.
Deconcentrated services are the local representations o f the l ine Ministries, while decentralization refers to the process o f attributing more responsibilities and resources to local authorities.
4
e
12. There are major shortcomings in terms o f financial and account management, resource mobilization remains low, and Chadian municipalities are confronted with a resource crisis, preventing the development o f basic services and infrastructure. The level o f municipal resources in the five project cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba) i s within the range o f CFAF 1,500 - 3,200 per capita (US$2.6 to US$5.8), which i s about one third to ha l f o f that generally obtained in similar cities in sub -S aharan Africa.
13. Further hindrances to freeing resources for productive purposes are also caused by high administrative expenses. Staff costs account for approximately 47 percent o f municipal expenses in N’Djamena, and between 17 and 46 percent in the other four municipalities. Debt accumulation weighs o n the municipalities and so do charges or expenses carried forward f rom previous fiscal years. Various agencies o f the Ministry o f Finance are involved in assisting the municipalities in mobilizing resources and financial management, but they have very l imi ted capacity to carry out these functions.
14. Characteristics of urbanization and urban management. Chad’s urban population i s currently about 2.4 million, representing 26 percent3 o f the total population, up f rom an estimated 7 percent o f the total population in 1960. For the period 1990-2004, the average annual growth rate o f Chad’s urban population was 4.5 percent, compared to 4.4 percent for sub-Saharan Afr ica and 2.2 percent worldwide. The cities o f Chad have to accommodate about 108,000 new residents every year, roughly corresponding to the population o f the third largest c i ty o f the country.
15. According to the latest estimates, only 41 percent o f the urban population has access to an improved water source (as compared to 27 percent in 1984), and 30 percent o f the urban population has access to improved sanitation (as compared to 27 percent in 1990). In contrast, on average, 80 percent o f urban dwellers in sub-Saharan Afr ica have access to an improved water source (1990: 48 percent) and 55 percent have access to sanitation (1990: 53 p e r ~ e n t ) ~ .
16. Drainage o f storm water and sewage and the removal o f household waste are perpetual problems in most Chadian cities. Human waste i s often evacuated v ia the storm water drainage system or i s poured in the streets or in open lands throughout the year, with obvious health r isks and malodorous smell as a result.
17. Figures f rom the Ministry o f Land Planning, Urban Development and Housing (MATUH) estimate that a maximum o f 10 percent o f houses in N’Djamena are constructed o f durable materials. Globally, the living conditions in Chadian cities are distressing.
18. Urban areas are engines o f economic growth in the country, and currently contribute to about 77 percent o f GDP’ . I t i s estimated that households headed by persons working in the urban informal sector account for 32 percent o f GDP, whi le only making up 20 percent o f the population6. The urban sector relies heavily o n external financing (95 percent o f investment projects in the urban sector are being financed by the donor community), and the needs far outstrip available resources. For this reason, donor financing i s required to address the huge needs, provide more discipline in the management o f the l imited available funds, and provide know-how through technical assistance.
19. As detailed in Annex 1, the main challenges o f the urban sector can be summarized as follows:
United Nations Department o f Economic and Social AffairsPopulation Division - World Urbanization Prospects:
Most recent figures f rom World Development Indicators, figures from “Gender, Poverty and
Combination o f the contribution o f industry and services, principally located in urban areas. Estimate from the PRSP.
The 2003 Revision.
Environmental Indicators”, African Development Bank, (2004), and UNDP’s Human Development Index online. 4
.)
5
Clear imbalance between the economic importance o f Chadian cities and their available resources. L o w resource mobilization i s a serious hindrance o n the ability o f municipalities to provide services for their populations.
Rapid urbanization, lack o f urban planning, and very l imi ted technical capacity result in unplanned settlements, high costs o f service delivery, l o w quality o f life, and hinders people f rom participating in income-generating activities.
Inefficient municipal resource utilization i s brought on by high administrative expenses and construction o f new infrastructure without plans about how operation and maintenance would be funded and managed. In Moundou, the second largest c i ty in Chad, n o municipal resources are spent o n maintenance.
Weak financial and account management at the municipal level i s due to the virtual non- existence o f financial management tools and scarcity o f human resources.
Need for support to a nascent decentralization, which can act as a catalyst for local initiatives, given that the current planning regimen i s without democratic foundation.
Lack o f capacity o f the central and deconcentrated administration to support the municipalities results in weak State support for revenue mobilization and budget management in the municipalities.
20. Government strategy. The urban sector i s part o f the priority sectors that can benefit f rom the o i l revenues. In MATUH’s budget for 2007, o i l revenues represent CFAF 5.15 b i l l ion out o f a total o f CFAF 14.879 b i l l ion (Le. 35 percent). The 2006 Letter o f Urban Sector Policy lays out the strategic orientations, with a strong focus on practical implementation and the means to do so, supporting the channeling o f o i l revenues to the urban sector and providing an overall vision for the sector and the contributions o f the donor community.
2 1. A very important challenge for Chad, however, i s to promote growth in the non-oil sectors and increase non-oil revenues to ensure that resources for implementing the Government’s development agenda remain adequate. The Letter o f Urban Sector Policy specifies that investments are to be focused in the cities with the largest economic potential.
22. Overview of targeted project cities. The project cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba) have a special importance because o f their economic potential, population size, geographic distribution, and development needs. Based o n the 1993 national census and the urban projections (data used for project preparation) o f the MATUH, these five cities, with a combined population o f over 1.5 mill ion, account for about 65 percent o f the urban population o f the country. The technical expertise present in the municipal administrations i s very limited, and public urban investments have been focused o n N’Djamena, which has received 80 percent o f urban investments in the past two years.
23. N’Djamena i s the only c i ty in Chad capable o f carrying out planning and implementation to any significant extent. The preparation o f urban development plans, as those being co-financed under the proposed project, will clarify development needs for N’Djamena and the other cities and will set up clear priority investments, focusing on the immediate needs o f the population and on longer term local economic development.
B. Rationale for Bank involvement
24. Oil revenues have placed Chad in the spotlight o f the international donor community, and provide Chad with a unique opportunity to start o n a positive
Rationale for Bank involvement.
6
development trajectory. With the Wor ld Bank engagement in the o i l pipeline project and the reputational risk that the Bank has taken in advocating that borrowing countries should develop their natural resources to help themselves escape from poverty, the Bank i s in a unique position to ensure that, contrary to experiences from other countries, o i l revenues can benefit the entire population. The recent diff icult dialogue between the Bank and the Chad government over the use o f the o i l revenues testifies to the importance that the Bank and the Chadian government attached to the effective and targeted use o f resources generated by the o i l sector for the benefit o f al l Chadians and the fight against poverty. Ensuring that o i l revenues are put to the best use for the benefit o f the country represent a major test for the Bank in i ts attempt to help countries make the best use o f their natural resources and unleash a beneficial cycle o f development. Using the o i l revenues to fund urban infrastructure and improving the living conditions o f the poor represents one leg o f the ongoing process o f targeted use o f o i l revenues.
25. Considering the growing share o f the population that will be living in urban areas, the depth o f poverty in urban areas, and the r isks that lack o f improvement in living conditions can create conditions for social disturbance, the engagement o f the Bank in the urban sector i s highly pertinent. With the Bank’s extensive experience in the urban sector, the Bank i s wel l positioned to support the urban sector in Chad, ensure that o i l revenues benefit the population in general, and the urban population, in particular, and facilitate the fostering o f accountability relationships between local governments and the local population.
26. Given the pressure on urban areas and the re-emergence o f urban areas as engines o f economic growth, the Bank has decided to renew i ts support to the urban sector in Chad. In l ine with the Government’s urban program, Bank support will provide financing for urban infrastructure and capacity building to support economic growth and improve the quality o f l i fe for urban residents. The proposed project i s based o n previous sector experience in the region and will be prepared and implemented in close coordination with other donors to ensure complementarity o f interventions and maximum sector coverage.
27. Coordination with complementary projects. In i t s preparation and i t s implementation design, the project provides a complement to three IDA-financed projects: (i) the Local Development Program Support Project (PROADEL), supporting decentralization in rural areas; (ii) the proposed Capacity Building for Modernization o f Public Financial Management Project (PAMFIF’); and (iii) the Critical Electricity and Water Services Rehabilitation Project (Credit 3714).
28. The PROADEL supports the Government, at both the national and local levels, in finalizing the decentralization framework. In preparation for full decentralization, the proposed project’s activities are designed to promote “technical decentralization” by strengthening the technical and financial capacities o f the municipalities.
29. The PAMFIP’s overall development objective i s t o help, at the national level, the Government to improve the quality o f i t s Public Financial Management system to increase the efficient and transparent use o f public resources, in particular the expected o i l revenue, to attain the MDGs. Through component A o f the proposed project which finances support to municipalities in the area o f financial management, the proposed project will complement the PAMFIP’s objective established at the central level.
30. Coordination with donor partners ’projects. The Bank’s previous support to Chad’s urban sector included the 1994 Public Works and Capacity Building Project, which financed priority urban infrastructure, capacity-building for small and medium enterprises (SMEs) in construction, community involvement in infrastructure maintenance, and procurement reform. In the interim, other donors have supported the urban sector, particularly the French Development Agency (AFD). AFD has financed four infrastructure projects in the urban sector (drainage and water provision), covering N’Djamena and some
7
other major cities (N’Djamena: €25.8 million; Moundou and Sarh: €3.9 mill ion; total: €29.7 million). The main outcome o f the projects has been decreased flooding and increased and improved access to water. However, as detailed in Annex 1, the financing brought so far has not been able to keep pace with the demands generated by the rapid urban growth rate. The projects financed by the AFD have been instrumental in determining works included in the proposed project and the Bank has thus leveraged the various existing feasibility studies, focusing on updating them and ensuring, through workshops involving Government, cities, and the population, that those priority works remain val id today. During project preparation, the Bank team consulted other donors (GTZ, UNDP) to ensure that other activities in the sector would be fully taken into account. The proposed project will also complement other donors’ support in the urban sector, including: (a) UNDP’s, housing and land management activities in N’Djamena; (b) technical assistance provided by the French Cooperation to the Urban Department o f MATUH (Direction de 1 ’Urbanisme - DU); and (c) the initiatives o f the sister-city program (N’Djamena- Toulouse, Sarh-Cherbourg, and Moundou-Poitiers),
C. Higher level objectives to which the project contributes
3 1, PRSP, MDG, and CAS objectives. The Bank’s assistance i s fully aligned with the agenda detailed in the country’s Poverty Reduction Strategy Paper (PRSP) and the proposed urban development project itself supports three o f the five pillars o f the PRSP. The project supports the promotion o f good governance (f irst pillar) through building institutional capacity and promoting good governance at the local level (component A). It works to ensure strong and sustainable economic growth (second pillar) through investments in economic infrastructure (markets) and development o f transport infrastructure to support growth (component B). Finally, the project works to improve human capital (third pillar) by training and reinforcing the capacity o f staf f at various levels o f government and by improving living conditions (increasing access to water and protection against flooding) in poor areas.
32. The proposed interventions (especially component B) are central t o achieving two o f the Mi l lennium Development Goals (MDGs), to ensure that an increased proportion o f the population will have sustainable access to improved water sources and basic sanitation (Target lo), and to achieve a significant improvement in the lives o f slum dwellers (Target 11). Through i t s focus o n drainage works and therefore eliminating breeding grounds for mosquitoes, the project will also contribute to reduce chi ld mortality, improve maternal health, and combat diseases.
33. The overarching objective o f the Country Assistance Strategy (CAS) dated November 12, 2003 i s to help Chad make the best possible developmental use o f i t s new o i l revenues (and public resources more broadly) as i t strives to attain the MDGs. The project i s in l ine with the CAS’S two primary pillars: (i) strengthening governance, including public resource management and service delivery arrangements; and (ii) enhancing non-oil economic opportunities and ensure inclusive, broad-based growth, while reducing sources o f vulnerability, notably for the poor. The proposed Grant, amounting to US$15 mill ion, i s expected to play a catalytic role in channeling o i l revenues to identified priorities within the urban sector. Technical assistance and studies to be financed under component A o f the project wi l l provide support to MATUH so that i t can channel o i l revenues in the urban sector more effectively and o n a long term basis. As a result, the Government will provide US$ 12 mi l l ion counterpart hnding, which will represent 44 percent o f the total amount o f the project. Such a high level o f counterpart funding i s a testimony to the importance that Chadian authorities place in the development o f the urban sector and shows their commitment to use o i l revenues to reduce poverty.
34. Africa Action Plan (AAP). The project has been developed to support the achievement o f the objectives la id out in the AAP. Focus 1 o f the AAP (Results Framework for Achieving Impact) i s supported through the project monitoring and evaluation (M&E) framework, which concretely reports o n the proportion o f the population with access to an improved water source and the improvement in lives of
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slum dwellers. The project supports the A A P ’ s second focus (Building o f Capable States and Increasing Transparency) through improved revenue mobil ization and management at the municipal level, publishing local governments’ budgets, and financing service satisfaction surveys f rom the population. The project supports the AAP’s third focus (the Growth Agenda) o n closing the infrastructure gap, by assisting the government in channeling o i l revenues efficiently into infrastructure investments. The investment climate will be improved by providing economic infrastructure (roads and markets), which wil l also contribute to connecting the poor to markets (AAP Focus 4), and private sector development wil l be supported through packaging works contracts for SMEs.
35 . The project has been prepared in close collaboration with other development partners, strengthening partnerships at the local level. As part o f project preparation, regular meetings were held between the Bank and the French Cooperation (SCAC), the French Development Agency (AFD), the UNDP, and the German Agency for Technical Cooperation (GTZ) to inform about the project as wel l as collect feedback and guidance. Studies funded by other donors (such as AFD) were used under the preparation o f the project to avoid duplication o f work and to maximize aid impact. As a result, more than 85 percent o f a l l works to be funded under this project have been determined using updates o f feasibility studies already financed by AFD (the main actor in the urban sector in Chad).
11. PROJECT DESCRIPTION
A. Lending instrument
36 . Through i t s component A, the Project aims at: (i) ensuring the technical, environmental, and institutional viabil ity o f the investment funded under component B, and (ii) supporting the reform o f specific policies that affect the productivity o f the investment (such as: focus o n infrastructure maintenance and on better provision o f urban services and development o f urban plans leading to prioritized investments in the sector). A Sector Investment Loan (SIL) has therefore been chosen as the most appropriate lending instrument for the project. An Adaptable Program Loan (APL) was not considered at this time given the Bank’s recent re-engagement in this sector in Chad.
B. Project development objective and key indicators
3 7 . residents in targeted project cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba).
The project development objective i s to increase sustainable access to municipal services for
3 8 . The results for the project, l inked to the two components o f the project are:
a) Strengthened capacity o f the local governments in N’Djamena, Moundou, Sarh, AbCchC, and Doba to plan and manage the development and delivery o f infrastructure and urban services and to increase their financial resources to maintain existing and new infrastructure. Increased availability o f urban infrastructure. b)
39 . are:
The key indicators for monitoring progress towards achieving the project development objective
a) b) c) d)
Number o f people in targeted cities protected f rom periodic flooding. Number o f people in targeted cities having access to drinking water. Number o f people having access to the c i ty center v ia roads that are usable a l l year. Annual increase in municipalities’ own revenues.
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40. the proposed project.
With reference to the programmed works, the three tables below summarize the main impacts o f
Table 1. Drainage works. Expected project impact - population protected from periodic flooding. I I i
I POP. currently j % of pop. I Additional pop. I % increase in # I Estimated pop. I % of pop. City Population/ currently 1 protected, end 1 o f people I protected, end 1 protected , end
I I protected I I I protected j ofproject j protected j ofproject i ofproject
Moundou i 166,818 1 94,551 1 57% j 20,688 i 12% j 115,239 i 69% Sarh I 109,126 j 53,938 i 49% j 32,195 30% 86,132 I 79% Abeche 1 87,546 i 55,389 63% i 19,213 i 22% i 74,602 1 85% Total 1 363,490 i 203,878 1 56% 1 72,096 1 20% i 275,974 1 76% Source: Project preparatory studies.
Table 2. Water provision. Estimated project impact - access to piped water. I I I 1 Additional pop. 1 % increase in #I Estimated pop. 1
I getting access j of people % of pop. I pop. currently I % ofpop. /having access tojhaving access to 1
! to water, end of 1 having access to! water, end o f / water, end o f I j water 1 access to water I i I 1 1 project I water project I project
City i Population jhaving access tojcurrently having! I
Moundou i 166,818 i 41,705 25% j 32,000 j 19% 73,705 i 44% Sarh I 109,126 i 41,468 j 38% 1 19,500 1 18% I 60,968 I 56% Abeche I 87,546 f 43,773 1 50% I 12,000 14% 55,773 I 64% Total i 363,490 i 126,945 j 35% 63,500 17% 190,445 j 52% Source: Project preparatory studies.
Table 3. Road works. Estimated project impact - access to drained roads. I I i ! % o f pop. 1 Additional pop. 1 % increase in # Estimated pop. 1 % o f pop. 1 POP. currently I
having access I City / Population lcurrently having1 getting access, 1 o f people I having access, 1 having access,
i I access end o f project having access i end of project j end o f project I
Doba 45,000 1 1,500 1 3% 1 10,056 i 22% 1 11,556 1 26% Source: Project preparatory studies.
41. The objective o f the project i s complementary to that o f the Bank-financed PROADEL, which financed studies and technical support to the Ministry in Charge o f Decentralization (MCD) to complete the decentralization framework (“political decentralization”) and support democratically elected decentralized authorities. The PROADEL also supports decentralization through capacity building for decentralized entities, and finances small infrastructure in the rural areas around N’Djamena, Sarh, and Moundou.
42. Previous experience in the region (e.g. the Benin First Decentralized City Management Project) has shown that supporting the technical capacities o f the local governments’ administrations (“technical decentralization”, as carried out under the proposed project) provides a sound foundation for polit ical decentralization.
43. methodology are specified in Annex 3,
Project development objective indicators, intermediary outcome indicators, and data collection
C. Project components
44. Project design and preparation. The project design i s based on: (i) the project preparation workshop held in N’Djamena on February 24 and 25, 2005; (ii) the studies financed by the Bank and
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other donors, in the urban sector’, in particular AFD; (iii) the findings f rom studies financed under the Japanese Policy and Human Resources Development (PHRD) Grant (TF05373 1); (iv) the project validation workshop held in N’Djamena o n November 9 and 10, 2006; and (v) the lessons learned from other urban development projects in the Region. The PHRD Grant, amounting to US$960,000, has financed project preparation workshops, the environmental and social frameworks, a capacity and training needs assessment, a municipal finance study and detailed investment and engineering plans, as wel l as the project operational, administrative, and financial manuals.
45. Selection of cities to be included in the project. The project’s activities will take place in N’Djamena, Moundou, Sarh, AbCchC, and Doba’. The main characteristics o f these five cities are provided in Annex 1. N’Djamena has the highest needs in terms o f investment. Sarh, Moundou, and AbCchC are the most populated secondary cities in Chad and they are experiencing the highest population growth rate (above 5 percent). They have a poor and l imi ted infrastructure base to accommodate the needs o f their fast growing population. There are recurrent expectations f rom the population living in the Doba area, the o i l f ield o f Chad, to see large benefits trickle down in the form o f improved infrastructure. On February 24-25, 2005, the MATUH organized a project preparation workshop, gathering 120 participants to be involved in the project preparation at the central and local levels. T h i s workshop contributed to: (i) disseminate information o n the project and ensure transparency in i t s preparation; and (ii) collect feedback o n the project components and institutional arrangements f rom the various stakeholders and in particular f rom the beneficiary cities representatives.
46. Project description and components. The proposed project will finance priority infrastructure (water, drainage, and economic infrastructure) in N’Djamena, Moundou, Sarh, AbCchC, and Doba to address partially the significant infrastructure gaps these cities are facing. By packaging public works appropriately and using labor-intensive methods whenever possible, the project will create employment opportunities for unskilled and semi-skilled labor and promote SMEs in construction and urban services. Further, the project will improve capacity at the local level to plan, manage, and maintain infrastructure and services, and will support capacity to foster urban development at the central level.
47. capacity; and (ii) provision o f urban infrastructures and services (details are provided in Annex 4).
The project will have two components: (i) strengthening municipal and urban management
Component A: Strengthening municipal and urban management capacities (total estimated cost: US$4.96 million entirely funded by IDA)
48. The objective o f this component i s to strengthen the capacity o f the local governments in N’Djamena, Moundou, Sarh, AbCchC, and Doba to plan and manage the development and the delivery o f infrastructure and urban services and to increase their financial resources in order to maintain existing and new infrastructure. The use o f new or improved management tools and better identification and improved collection o f financial resources, in addition to capacity building, will be the main objectives o f this component. Activities under this component will target changes that should happen at the municipal level and actions that will take place at the central level regarding the Ministries in charge o f urban affairs, decentralization, finance, and land planning.
Among the key reports are: c Etude de faisabilitd et de Programmation des travaux d’amdnagement des deux quartiers commerciaux des marchds M i l et Dembe”, July 2003 ; and “Etude de plani jkat ion urbaine de Doba, Bdbkdjia et Moundou ’I, December 2001.
Population estimates: N’Djamena 1-1.2 million; Moundou 167,000-1 80,000; Sarh 107,000-139,000; AbCchC 88,000-100,000; Doba 45,000. Source: Project preparatory studies - August 2006.
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49. The preparatory studies identified the necessary measures to achieve the objective o f the componeht: (i) scale up municipalities’ human resources and improve the functioning o f their key support units; (ii) strengthen the technical services o f the municipalities and provide them with the tools to carry out urban planning; (iii) establish a more transparent municipal management and reinforce accountability; (iv) strengthen capacity o f the central and deconcentrated administration to supervise and provide technical assistance to the municipalities; (v) increase the financial resources at the disposal o f the municipalities through improved collection o f taxes, better y ie ld f rom municipal assets, and strengthened mechanisms for transfer o f resources from the State to the municipalities; and (vi) introduce efficient management o f expenditures with a focus o n maintenance, to improve sustainability o f investments.
50. The Government has confirmed i t s intention to achieve these objectives through i t s 2006 Letter o f Urban Sector Policy prepared by MATUH and adopted by the Minister o f Councils and sent t o IDA before project negotiations (one o f the conditions for negotiations).
5 1. Sub-component A.1: Strengthening urban and municipal management capacities (estimated cost: US$2.28 million). The sub-component will strengthen urban and municipal capacities in the respective municipalities through workshops, technical assistance, studies, training, and provision o f equipment. The objective i s to establish effective, accountable, and functioning local governments by encouraging the attitudes and behaviors o f officials and staff through appropriate incentive systems and penalties, and by clarifying the roles and responsibilities o f a l l actors. This sub-component will finance activities aimed at:
(a) improving the internal functioning and organization of municipalities (estimated cost: US$O. 38 million). Activities include: (i) organizational audit for local municipalities and adoption o f a municipal management manual; (ii) strengthening municipal technical services (training and equipment); and (iii) provision o f office equipment and logistics;
(b) improving resource mobilization and financial management (estimated cost: US$1.05 million). As detailed in Annex 1, a significant portion o f the municipalities’ resources consists o f State taxes returning totally or partially to the communes. In this regard, the general lump sum tax (IGL) and the tax on the value o f business premises (TVLP) constitute a major source o f taxes benefiting the communes. As for municipal finances, the project cities suffer f rom a weak finance framework, a lack o f appropriate management tools and inadequate system o f mobil izing resources, and non-regular transfer o f resources f rom the central government. The project will assist the government and the cities to improve their performance so that they can provide better urban services. This sub-component wil l finance the fol lowing activities: (i) improving resource mobilization (IGL/TVLP) leveraging the actions previously carried out in N’Djamena under AFD financing; (ii) improving management and yield o f municipal/property taxes; (iii) standardizing the budget nomenclature; (iv) modernizing the accounting and financial management;
(c) improving urban management and planning (estimated cost: US$0.34 million). Activities include: (i) strengthening technical services in management and planning (training, equipment); and (ii) preparation o f a sanitation master plan for N’Djamena;
(d) improving transparency and accountability of city managers to urban residents (estimated cost: US$O. I 4 million). With the objective o f increasing local governments’ accountability to urban residents, this sub-component will finance the public reporting of: (i) municipalities’ financial performance; (ii) progress reports o n the project and identifying bottlenecks and actions to be taken at national and local levels for delivery o f urban services; (iii) publication o f cities’ project performance indicators (this will done in a simplified manner and
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using the most appropriate means o f local communication); and (iv) surveys o n satisfaction o f the urban population to ensure that municipalities take into account specific needs expressed by urban residents;
(e) providing support to community integration and awareness on socio-environmental aspects (estimated cost: US$O. 3 7 million). Activities include: (i) support to sanitation committees; (ii) support to the management o f public standpipes (sanitation committees or private structures); (iii) information, education, and communication (IEC) activities in the area o f environmental protection and health; and (iv) training for municipalities and key ministries including deconcentrated services in environment and social aspects.
52. Sub-component A.2: Strengthening the capacity of the central administration and deconcentrated ministries to support the municipalities (estimated cost: US$2.68 million). The objective o f this sub-component i s to strengthen the capacities o f the central administration and deconcentrated ministries (MATUH, MCD, MAT, MFEP) to provide technical support to the municipalities to manage their responsibilities (financial and urban management, procurement, tax base identification and collection, reporting, etc..). T h i s sub-component will finance activities for:
(a) Ministry of Land Planning, Urban Development, and Housing (MATUH) and its deconcentrated services (estimated cost: US$2.55 million). MATUH’s capacity will be strengthened to: (a) better support cities, in particular in the development and use o f urban plans; and (b) ensure an optimal use o f o i l revenues in the urban sector. K e y activities to be funded under this sub-component include: (i) updating o f urban development plans for Moundou, Sarh, AbCchC, and Doba; (ii) preparation o f urban development plans for 12 other selected secondary cities; (iii) training and technical assistance to MATUH to complement actions already financed by the French Cooperation (SCAC) and AFD; (iv) project launch and mid-term review workshops; (v) information, education, and communication (IEC) activities for the project; (vi) functioning o f the Implementation Unit and transfer o f knowledge to staff o f the Urban Department; and (vii) strengthening regional departments o f the Ministry.
(b) Ministry of Finance, Economy and Planning (MFEP) (estimated cost: US$0.03 million). Taxes and fees collected by State agencies and transferred to the communes represent the largest share o f revenues for the communes. Assistance to MFEP will include: (i) support to the deconcentrated departments o f MFEP o f the General Directorate o f Taxes (DGI) and the Decentralized Territorial Government (DGT) to improve tax collection and transfer o f resources; and (ii) support to the Ministry’s local entities (DGI and DGT) in charge o f financial management in the municipalities.
(c) Ministry of Land Administration (MAT) (estimated cost: US$0.03 million). Assistance to MAT will include: (i) training o f staff involved with Project implementation; and (ii) support to the Regulatory Directorate o f the Ministry to improve budget supervision; (ii) support to entities in charge o f financial management in the municipalities; and (iii) training o f s ta f f involved in project implementation.
(d) Ministly in Charge of Decentralization (MCD) (estimated cost: US$O. 07 million). Assistance will include studies for preparation o f decrees to support the on-going decentralization process, in collaboration with other key Ministries.
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Component B: Provision of basic urban infrastructure and services (total estimated cost: US$18.42 million)
53. By implementing activities that are part o f the project, sanitary conditions will be improved and opportunities for unskilled and semi-skilled labor will be created.
The main objective o f this component i s to increase access to urban infrastructure.
54. Specific investments for the cities o f Moundou, Sarh, and Ab6ch6 are based on the priorities defined in preparatory feasibility studies financed by the PHRD Grant in 2006. These priorities were discussed during the preparation mission in each ci ty through a comprehensive and participatory process with local officials, the representatives o f Central government (sewices d&concent&s de I ’Etat), local NGOs, neighborhood associations, unions, and beneficiaries. These activities were confirmed by the municipalities during two workshops held at the time o f the pre-appraisal and appraisal missions (February 2005 and November 2006, respectively). Those workshops gathered a l l key stakeholders including local representatives and NGOs. The business communities in these cities highlighted the positive impact that the drainage works would have o n their activities by generating economic benefits in the form o f less property damage, lowering loss in stocks o f goods, and preventing damage to infrastructure. These activities include: (i) drainage and rehabilitation o f roads; (ii) rehabilitation and extension o f the potable water distribution network; and (iii) provision o f economic infrastructures such as a slaughterhouse.
55. As detailed in Annex 4, the project’s priority program: (i) was pre-identified by the cities; (ii) i s comprised solely o f investments having a sufficient economic rate o f return (IRR >12 percent for economic infrastructure, water supply system rehabilitation, and extension and drainage works); (iii) are complementary to existing networks. T h i s component will be financed by the Government (60 percent) and IDA (40 percent). Municipalities’ participation will focus o n establishing priorities for infrastructure maintenance and financing recurrent costs for these investments to ensure their sustainability. This obligation would be part o f the c i ty contracts to be signed between the Central Government and each o f the municipalities. The ci ty contract will be an important tool that will set up the municipalities’ contractual obligations to maintain the infrastructure built under the project.
56. Sub-component B.1: For the City of N’Djamena (cost: US$O.62million). Under this sub- component, the project will finance mainly drainage works for commercial areas, specifically in the main market (marche‘ d mi l ) to al low the extension o f the market to accommodate new canteens and better access by the neighboring populations. Drainage works related primarily to the rehabilitation and reconstruction o f a storm water drain along the market will be carried outg. The identified works to be financed by IDA in N’Djamena will complement works (especially inside the market) financed by AFD (amounting to €6.5 million).
57. Under this sub- component, the project will finance: (i) the extension o f the water supply network and rehabilitation o f water pipelines; the construction o f two equipped boreholes and the installation o f 64 standpipes in densely populated neighborhoods (59,000 inhabitants representing 40 percent o f the total population); (ii) the second phase o f drainage works’’.
Sub-component B.2: For the City of Moundou (cost: US$3.74million).
Funding for investments in N’Djamena i s l imi ted (as compared to other beneficiary cities) t o take into account o f other donors’ investments, in particular AFD which has been funding €25.8 mi l l i on o f works in the capital city, with the latest urban project being approved in 2006. lo The first phase was carried out in 2002-2003 under financing from AFD.
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58. Sub-component B.3: For the City of Sarh (cost: US$5.16 million). Under this sub-component, the project will finance: (i) the acquisition and installation o f 7.4 km o f network extension, installation o f 39 standpipes and construction o f three new equipped boreholes; and (ii) the second phase o f the drainage works".
59. Sub-component B.4: For the City of Abkchk (cost: US$5.31 million). Under this sub- component, the project will finance: (i) the construction o f two new equipped boreholes and extension o n 18,500 meters o f the water network to new outlying districts, the reinforcement o f the water pipeline in the extension zones and installation o f 24 standpipes o n the network; (ii) drainage works; and (iii) construction o f a slaughterhouse with sanitation facilities and waste management.
60. Sub-component B.5: For the City of Doba (cost: US$1.95 million). Under this sub-component, the project will finance the construction o f earth roads and the associated drainage to provide access to dense neighborhoods in Doba. The program will include the construction o f 5.4 km o f primary urban roads, 1.6 km o f secondary urban roads, and 7.5 km o f drains.
61. Sub-component B.6: M&E, Supervision of Works, and Audits (cost: US$1.64 million). Under this sub-component, the project will finance: (i) monitoring and evaluation activities; (ii) environmental and social impact studies that may be required during implementation o f project component B; (iii) supervision o f works; (iv) periodic technical audits for works and contract management procedures; (v) project financial audits; and (vi) training activities for the local private sector (SMEs) to strengthen their capacities in works management.
62. Provisions for physical contingencies (10% o f works or US$1.8 mill ion) and financial contingencies (8% o f project costs or US$1.82 mill ion) are included in the total project costs.
D. Lessons learned and reflected in the project design
63. Lessons learned f rom previous Wor ld Bank financed urban development projects in West Africa, the Urban Sector Strategy, and the Operations Evaluation Department (OED) urban sector review point to the fact that to achieve project sustainability, projects should: (a) be simple and easily manageable, especially in an environment with weak institutions; (b) have well-defined objectives; (c) be owned by the local Governments and the stakeholders; (d) ensure capacity to maintain works; and (e) have good coordination with interventions financed by other donors.
64. The lessons learned f rom the 1994 Public Works and Capacity Building Project merit special attention. T h i s project was suspended in 1997 due to poor performance o f the public works executing agency (Agence Tchadienne d'Exdcution des Travaux d 'Intdrgt public - ATETIP), and eventually closed in 1999 with only 25 percent o f the Credit (US$17.4 mill ion) disbursed. ATETP was inefficient and ineffective in contract management (the fees were 15 percent o f investments compared to the normal level o f 5 to 10 percent for public works agencies), and i t took o n too many projects, which resulted in lack o f control o f quality o f works. Competition for construction contracts was l imi ted and the procurement process was not transparent. Lack o f Government support to restructure the Agency further jeopardized the project. The project showed that tasks and responsibilities need to be clearly defined, with emphasis on transparency and accountability and close supervision during project implementation.
65. The project design and implementation arrangements have taken into consideration the following:
" The f i rst phase was carried out in 2002-2003 under AFD f inancing.
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(a) Ownership. A workshop involv ing project stakeholders was held in February 2005 to identify and confirm the participating cities and select project intervention priorities. A second workshop was held o n November 9 and 10, 2006 during appraisal for the validation o f project components and sub-components. During project implementation, local steering committees comprising representatives f rom the municipalities, l ine ministries, NGOs, and involved communities will: (i) review the proposed annual work program; (ii) review implementation status and progress; and (iii) decide o n necessary corrective actions for project implementation (see Annex 6 on Institutional Arrangements). Counterpart funding has been inscribed in the program budget for MATUH, increasing the probability that counterpart funds will be made available o n a timely basis.
Capacity building. Capacity building i s central to the project, ensuring that the necessary financial and technical capacities are available at the local level. This i s critical to the sustainability o f investments financed under the project as wel l as the capacity o f local governments to continue to improve service delivery to the population. Further, technical capacity wil l be built in the central and deconcentrated units o f MATUH to allow adequate support to the local governments for urban management. Additionally, by having a project technical secretariat at the central level, integrated project coordination and capacity building will be strengthened.
Institutional arrangements. The project’s institutional arrangements, which a im to develop tools at the central and municipal level to support the on-going decentralization strategy, are in l ine with the project’s objective. Additionally, those institutional arrangements set up contractual arrangements between municipalities and the State, which, inter alia, will strengthen accountability at both national and local levels.
Simple project design. Simplicity i s achieved by only including activities central to the achievement o f the project development objective, as identified by high quality preparatory studies. The project has only two components. One component targets the financial and technical capacities necessary to plan, finance, implement, and maintain services. The other component targets infrastructure investments that will directly improve access to services, whi le at the same time strengthening the foundations for economic growth. The main project interventions are l imi ted to f ive cities to avoid spreading the resources too thinly. The two components are l inked to a well-defined monitoring and evaluation framework, which will enable tracking o f the impact o f the project o n the beneficiary populations.
(e) Donor coordination. Effective project design and efficient implementation necessitate strong donor coordination. The proposed project builds significantly o n projects financed by other donors, especially AFD.
( f ) Transparency and sound supervision. Project implementation rests with an Implementation Unit o f the Urban Department o f the MATUH, ensuring that responsibility for implementation can be placed unequivocally. The establishment o f committees at the national and local levels, in charge o f reviewing the project’s annual programs, contributes to enhance transparency o f actions. Competition for works i s a key determinant to ensuring transparency, and, to the extent possible, the works contracts will be packaged so that small and medium enterprises can compete. Project supervision will be strengthened by making use o f team members in the country office. Technical audits, funded under component B, will be performed, one every 6 months for the f irst two years o f the project. Posting o f the procurement plan in local newspapers in addition to dgMarket, as wel l as the set up o f an anti-corruption hotline will contribute to strengthen
(b)
(c)
(d)
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the governance framework within which th i s project will be implemented. As required, a governance note has been prepared for the project.
(g) Supporting decentralization. Through the institutional strengthening o f the beneficiary cities, the proposed project supports capacity building at the local level, thereby preparing for the effective polit ical decentralization, by which the local governments will be made directly accountable to the local populations. A s the pace o f the decentralization process i s a matter o f polit ical determination, the project design has been elaborated without being too far ahead o f certain stages o f this process. Regardless o f the exact date o f the local elections, it i s clear that assistance should be n o w provided to the communes to modernize their management tools and build their capacity to mobil ize their resources for urban services which are not being provided currently in a satisfactory manner.
HIV/AIDS coordination with the Bank $named Second Population and HIV/AIDS Prevention Project. The HIV prevalence rate in Chad has decreased over the last f ive years f rom about 7 percent in 2001, stabilizing at around 4 percent in 2005 (based o n the HIV Prevalence Study) and confirmed by recent sentinel surveillance data. However, the prevalence rate in certain urban areas s t i l l remains high. The national H IV /A IDS fight and the Bank-financed project are putting more emphasis o n a decentralized and integrated approach (one o f the activities o f the Bank-financed project was reoriented at mid-term review to focus on decentralizing the fight against HIV/AIDS). This intensive approach i s being led by municipal authorities in close collaboration with c iv i l society organizations active in HIV /A IDS prevention activities and i s being piloted in the cities o f Moundou, Sarh, and N’Djamena where the Urban Development Project will operate. Prevention and information, education and communication activities will be coordinated by the two projects to maximize the number o f beneficiaries. The two Bank teams have been working in close collaboration o n this issue, quarterly meetings will be held, and an annual review o f the implementation and outcomes o f these activities will be undertaken.
(h)
E. Alternatives considered and reasons for rejection
66. considered and rejected:
Based on the lessons learned, the following alternative project design options have been
(a) Implementation Agency. As shown by the Public Works Project, using a delegated contract management agency outside Ministries can present significant risk in Chad. Therefore, this has been rejected, even though it has proven effective in some countries in the region. Another option was to have the project managed only by staff o f MATUH. However, as shown in the background chapter and in the Bank funded project PROADEL, there i s insufficient capacity in MATUH to manage the project. Project preparation o n the client side was at a virtual standstill until the recruitment o f a project coordinator in April, 2005, and subsequent recruitment o f technical staff (procurement specialist, socio-environmental specialist, and accounting specialist). One o f the objectives o f the project i s precisely to build this capacity. The use o f an Implementation Unit within the Urban Department o f the MATUH is a means o f ensuring that the necessary capacity and competency are present in the management o f the project f rom the l ine ministry. Appointed consultants will have in their terms o f reference specific performance criteria related to the way transfer o f knowledge i s provided to staff in MATUH. Additionally, two regular staff f rom the Urban Department o f MATUH (an urban expert and an engineer) will be part o f the Implementation Unit.
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(b) Sector Investment Loan (SIL) vs. Adaptable Program Loan (APL). An APL would have provided a flexible and medium-term implementation timeline for capacity building and infrastructure installation. However, as the Bank i s reengaging in the urban sector in Chad after some years o f absence and the decentralization framework i s not completed, an APL was not recommended.
Selected cities vs. nation-wide. Learning f rom the lessons o f other similar urban projects, the project focuses on a l imited number o f cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba), and uses a learning-by doing approach. Once the local urban management and financial tools are assessed as satisfactory and producing results, i t would be possible to bring this approach to the other cities.
Risks of not engaging. The current socio-economic conditions and country needs lend themselves to Bank’s engagement. Bank engagement across a wide spectrum o f sectors can serve as a vessel for strengthening good governance at a time o f polit ical tension and provide technical support for a productive use o f o i l revenues.
(c)
(d)
111. IMPLEMENTATION
A. Institutional and implementation arrangements
67. level to support the on-going decentralization strategy.
The institutional arrangements a im at developing tools and systems at the central and municipal
68. Project Management. The project will be managed by the Ministry o f Land Planning, Urban Development and Housing. The Urban Department (Direction de I ’Urbanisme - DU) will be responsible for the coordination o f the project through i t s Implementation Unit. This Urban Department’s Unit will be the entity responsible for implementing the project over the five-year period. MATUH and the other key l ine ministries (Ministry o f Land Administration, Ministry o f Decentralization and Ministry o f Finance, Economy and Planning) are part o f an Interministerial Steering Committee in charge o f the overall supervision o f the project, as developed below.
69. Within the Urban Department o f the MATUH, an implementation unit was set up to prepare the proposed project and to manage various studies financed under the PHRD (including studies o n municipal finance, social/environmental assessment, urban capacity strengthening, engineering (pre-feasibility and detailed engineering), project execution manual, administrative, financial and procurement procedures manual). The same Implementation Unit o f the MATUH will be responsible for the oversight and will ensure the day-to-day management o f the project. It will: (i) coordinate the overall implementation o f the project; (ii) ensure availability o f funds in a timely manner; (iii) manage project activities at the central level; (iv) maintain the books and accounts o f project activities and produce financial reports; (v) monitor and evaluate implementation and impacts o f the project; and (vi) report results to various stakeholders (administration, donors, c iv i l society, projects, Local Steering Committees). The Implementation Unit has been staffed with adequate technical and financial professionals to ensure that quality support and advice are delivered to the MATUH. The project execution manual will detail key performance indicators (including meeting the deadlines set in the project procurement plan, quality o f terms o f reference (TORS) and requests for proposals (RFPs), involvement o f staff at the local and national administrative levels during project implementation), which will be used to fo l low up regularly with the performance o f the Implementation Unit.
70. in Annex 6):
The institutional arrangements are defined to comply with the decentralization efforts (see details
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(i) At the national level, the project will be supervised and coordinated by an Interministerial Steering Committee. This Steering Committee will be headed by the Minister o f Land Planning, Urban Development and Housing (MATUH), and include representatives o f the municipalities, the Ministry o f Finance, Economy, and Planning, the Ministry o f Infrastructure, Ministry o f Land Administration, Ministry in Charge o f Decentralization, Ministry o f Public Health, Ministry o f Energy, and the c i v i l society. The Steering Committee will take overall decisions on project implementation. In particular, the Committee will review the annual program of activities o f the implementing Ministry (MATUH), review progress made o n a regular basis, and assess the quality o f project.
(ii) At the local level, Local Steering Committees (LSCs), presided over by the City’s General Secretary and comprising l ine representatives o f MCD, MAT, MATUH, MFEP and representatives o f local associations and Neighborhood Committees (such as the Comitis d ’Assainissement already set up in N’Djamena) will be the institutions in charge o f overseeing day-to-day project implementation at the local level in each beneficiary city. As part o f the project preparation, these LSCs have been set up. The project will focus o n the municipalities as the principal beneficiaries o f capacity building activities. Before effectiveness, at least one agreement (‘‘ProtoCole d’accord”) will be signed between the State and one o f the participating cities specifying the roles and responsibilities o f the cities, l ine ministries, and central government, and the pol icy reforms to be undertaken by each party (i.e. under these Agreements, the beneficiary cities will commit to set aside some o f their budget funds for maintenance o f the investments financed under the project).
(iii) Project Component Implementation. Project components will be implemented by the participating cities through the Implementation Unit o f the Urban Department o f the MATUH according to the project implementation manual (PIM), which includes terms o f reference for component activities and specifies their timing. Conventions de Maitrise d’Ouvrage Dilipi will be signed between the Implementation Unit o f the MATUH and each o f the beneficiary Cities. The P I M wil l specify the procedures for the development o f annual activity programs and include the procurement plan (slicing activities into contracts, type o f consultation chosen, tentative dates for bid launching), which was approved by the Bank on November 16, 2006. As agreed during project preparation, the Implementation Unit o f the Urban Department o f the MATUH will remain in charge o f project implementation, involving, at a l l stages, key units o f the Ministry o f Infrastructure to ensure use o f the administration structure and to contribute to capacity building. In particular, for Component B, the Implementation Unit will work closely with the key Departments o f the Ministry o f Infrastructure.
71. The overall project funding will consist o f IDA grant and counterpart funds f rom the Government. IDA funds will f l ow through a designated account in a local commercial bank acceptable to IDA. Counterpart funds will f low throughout a local commercial bank account. These accounts will be managed by the Implementation Unit o f the Urban Department o f the MATUH.
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B. Monitoring and evaluation of outcomes/results
72. The monitoring and evaluation (M&E) framework has been developed to reinforce the capacity strengthening activities o f the project, while at the same time giving a clear picture o f progress towards achieving the project development objective and objectives for each component.
73. Responsibility for collecting data will be assigned to the person in the Implementation Unit responsible for social and environmental aspects. This person has good basic knowledge in M&E, which will be strengthened via training at project startup. The data collection methodology i s based on simple on-site surveys and review o f municipal budgets, allowing for regular monitoring o f progress by the Implementation Unit, within the regular operating budget. This i s combined with: (i) semi-annual technical audits o f the infrastructure financed under the project, which will give information o n whether the infrastructure i s maintained and provide an opportunity for learning-by-doing for the technical departments o f the municipalities; and (ii) implementation o f service satisfaction surveys, which will provide information to the municipal administrations on their performance and serve as a tool for further improvements. The M&E framework has been developed to be SMARTI2. The level o f overall service satisfaction will not be an indicator for the project alone, as not a l l the services provided at the municipal level could be attributed to the project, but will give an indication o f the overall performance o f the municipal services.
74. The M&E framework i s not only a means o f tracking project performance, but also an entry point for the municipalities to strengthen their capacity to measure their own performance. As an iterative process, the municipalities will be expected to produce high quality indicators while capacity in the administrations i s built up in the course o f the project. Fo r example, while evaluation on budget management will only be done annually, the municipalities will be supported in producing budget reports on an as-needed basis. I t i s expected that the frequency and quality o f reporting wil l increase during the project. The Implementation Unit o f the Urban Department o f the MATUH will support the municipalities in developing their reporting capacities.
75. The M&E framework will further al low for reporting on progress o n the Mi l lennium Development Goals (MDGs) specifically targeted by the project. The project will track the increase in the population that has sustainable access to improved water sources (Target 10) and the number o f slum dwellers that experience a significant improvement in their living conditions (Target 1 1).
76. The well established baselines and clearly defined data collection methodology will provide for a continuous f l ow o f information for project management purposes. The M&E framework i s supplemented by monitoring o f project implementation performance o n procurement and disbursement and performance indicators o f MATUH, the implementation agency. The procedures will be specified in the Project Implementation Manual, which i s currently in draft form.
77. country office will be involved in regular project monitoring.
The Bank will conduct supervision missions at least two times per year, and team members in the
C. Sustainability
78. The sustainability o f the project will come from: (a) secured funding for operation and maintenance through improved mobilization and utilization o f local resources; (b) improved local government management capacity, with a clear definition o f responsibilities; (c) better transparency and accountability o f c i ty managers to urban residents through quarterly public reporting and information
Specific, Measurable, Attributable, Realistic/Relevant and Time-bound. I 2
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campaigns; and (d) stakeholder engagement and ownership. These four aspects o f sustainability are described below in more details.
(ii)
(iii)
Securing funding for operation and maintenance through improved mobilization and utilization of local resources. Maintenance o f larger-scale works in the participating cities, such as roads and drainage, i s the responsibility o f the cities. Whi le past urban infrastructure maintenance in Chad has been poor, the project beneficiary cities will commit to set aside, o n an annual basis, funds f rom their budget to fund maintenance. Component A will continue to support improvements in central/local government finance for infrastructure maintenance through municipal management strengthening. Additionally, under the Agreements to be signed with the State, the municipalities wil l commit to set aside some budget funds for maintenance o f the investments financed under the project. To increase municipalities’ incentives to perform according to the agreements, performance o f those municipalities will be periodically reviewed by the Steering Committee and results wil l be publicized locally {communication to urban residents being funded under sub-component A. 1 (d)}.
Improved local government management capacity, with a clear dejinition of responsibilities. Component A aims at improving the organizational structure o f the municipalities with more qualified personnel in place, including technical officers and financial management personnel. In their Agreements to be signed with the State, the municipalities will commit t o having qualified personnel in charge o f project fo l low -up and to keep key staff working o n the project to avoid staff turnover and polit ical interference. Information regarding performance o f specific units in the municipalities in charge o f these activities will also be reported to build the necessary incentives for the municipalities to hire or to position the most qualified staff for these positions.
Transparency and accountability of city managers to urban residents. Local governments will be held more accountable to urban residents through budget monitoring and reporting for the beneficiary cities. The project wil l finance the publication o f project progress reports, identifying bottlenecks and actions to be taken at national and local levels for the delivery o f urban services. Communication o n the project’s progress will carried out locally, in a straightforward manner, so that urban residents are fully aware o f both the expectations and the actual results. T h i s will bring additional pressure o n the municipality to perform adequately.
Stakeholder engagement and ownership. Establishing a culture o f participation among involved communities will help share the burden o f delivery o f urban services and increase stakeholder ownership o f these services. Project ownership has been demonstrated during project preparation, in particular the organized workshops in which al l key national and local players participated. Under sub-component A. 1, the proposed project provides direct support to: (i) sanitation committees; (ii) the management o f public standpipes (sanitation committees or private structures); and (iii) I E C activities in the area o f environmental protection and health. These activities are designed to contribute to engage local participants and increase the probability that funded infrastructure will be wel l maintained. Engagement o f local participants i s further enhanced through: (i) their participation in the Local Steering Committee (LSC), as detailed in the institutional arrangements; and (ii) the communication programs funded under the Project {sub-component A. 1 (d)} which include surveys o n satisfaction o f the urban population.
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D. Critical risks and possible controversial aspects
Risk Mitigating Measures
79. The overall risk rating of the proposed project i s estimated to be High after risk-mitigating measures have been taken into account. The proposed project will start with immediate capacity building activities at the local level and with a reasonably calibrated investment program in the f i rst year (in al l project cities, but with particular focus o n N’Djamena).
Risk Rating w/ Mitigation
Risk
TO PROJECT
Lack of central Government commitment. The lack o f commitment in terms o f (i) supporting municipalities wi th both human and financial resources; or (ii) devolving the powers to the local level which could hinder progress o f decentralization and local empowerment.
Lack of timely provision o f counterpart funding. There i s a risk o f not receiving the required counterpart funding in time due to unwillingness or drastic reduction in o i l revenues and major macroeconomic shock. Controversial use o f o i l revenues (as described in the CCSRP Report o f May 2005) could contribute to cumulative negative effects for country and community if these revenues are not used as identified in the memorandum for the social benefit o f the country. This would directly affect the project.
The Letter o f Urban Sector Policy, which was adopted by the Minister o f Councils before negotiations (a condition for negotiations), has confirmed the Government’s commitment to complete the decentralization process. Additionally, the project activities are designed to promote “technical decentralization” to strengthen local technical and financial capacity so that municipalities can provide better urban services and improve residents’ access to roads and water. By involving the stakeholder population and local participants and having tangible results on the ground, the project wil l contribute to support the decentralization process.
Through the Petroleum Revenue Management Law and the M o U signed with the Bank on July 13,2006, the Government has committed to channeling funds from o i l revenues toward priority poverty reduction programs, such as the proposed project. The Letter o f Urban Sector Policy confirms this commitment. Additionally, project disbursement conditions w i l l ensure that Government counterpart funds, coming from o i l revenues, are provided before project activities. An additional condition was that IDA received a letter from the Government c o d i n g its commitment to make available counterpart funds amounting to US$12 mil l ion during the Project’s cycle and budgeted on o i l revenues. Lastly, communication on the project progress and outputs (funded under the project) wil l be key to engage all actors (at the national and local levels).
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TO C(3 Component A
Institutional instability and inadequate interministerial coordination. MATUH i s a relatively new Ministry. Cabinet reshufflings are frequent, resulting in changes in orientation, capacity, and coordination among Ministries involved in urban development.
Decentralization framework i s not completed. Local elections are currently envisaged to take place beginning 2007, but could be postponed, as it has been the case several times. This could cause disruption in project’s activities.
Component B
Non transparent procurement process and delays in signing contracts leading to delays, h igh cost and poor quality o f works.
Lack of competition for works and weak capacity of local SMEs. The local private sector i s l imi ted and has weak capacity; there i s a lack o f competit ion and therefore choice o f
IPONENT RESULTS
The proposed project by design necessitates the engagement o f mult iple sectors. These sectors are directly being represented at the Steering Committee in charge o f the overall supervision o f the project, wh ich wil l strengthen the coordination among Ministries.
As the decentralization timetable i s no t fm, the project design has been elaborated without being too far ahead o f certain stages o f this process. Regardless o f the exact date o f the local elections, assistance provided under the project is in l ine with Government’s strategy, supporting the communes to modernize their management tools and building their capacity to mobil ize their resources for urban services which are not being provided currently in a satisfactory manner.
The bulk o f procurement for vehicles, equipment, infrastructure works or rehabilitation, consulting services, studies and training wou ld be managed by the Implementation Unit o f the MATUH, ensuring that responsibility for implementation can be placed unequivocally. The contract value thresholds have been reduced compared to the Region’s average (under the proposed project, the respective thresholds are: US$300,000 for works; US$200,000 for goods; and US$lOO,OOO for consulting services. Posting o f the procurement p lan (which includes the l i s t o f activities to b e funded under the project and their corresponding cost estimates) in local newspapers in addition to dgMarket, as we l l as an anti-corruption hotline, wil l contribute to strengthening the governance framework in which the project will b e implemented. Training o n procurement using the Bank guidelines wil l be provided to staff o f the Implementation Unit o f the Urban Department o f the MATUH as we l l as to key staff in the Ministry. Progress reports o n procurement will be published o n a regular basis highlighting bottlenecks and regular interaction with respective ministries in charge o f approving and signing evaluation reports and contracts
The project wil l address these risks by designing works packages to be accessible to SMEs, utilizing labor-intensive methods (where possible), providing technical support t o
M
M
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competent and effective private firms in consulting and construction. The construction industry i s dominated by large local and international firms which do not have competitive prices and w h c h are often not interested in small public works o f the type to be financed by the project. In addition, although contracting out public services i s widely done, there i s a lack of procurement and contract management capacity at central and local levels.
Incoming refugees f r o m the Darfur area and neighboring countries increase the urbanization pressure.
H I V / A I D S risk which has become, with rapid urbanization, an urban phenomenon.
Risk of a change in national po l icy o n the use o f o i l resources which may lead to a standstill of the program.
Overall risk rating Risk rating: H (High risk), S (Substantial risk), M (Mot
E. Grant conditions and covenants
Negotiation conditions CfuFlled):
~~
contractors and t r a i n G i and technical assistance - to MATUH.
Through i t s component A, the project directly contributes to strengthen capacity o f municipalities (such as in Ab6chC) to provide better urban services to i ts urban population and address the need f r o m incoming refugees, should the need arise. Component A wil l also finance an urban development p lan in AbCche taking in to account mult iple scenarios. Component B wil l finance key urban infrastructure (water supply system, drainage) wh ich wil l be even more necessary in case o f urbanization pressure.
National HIV Bank-financed project is addressing this risk, including its high prevalence in urban areas. Quarterly meetings among the two Bank project teams wil l be held and an annual review o f the implementation and outcomes o f these activities wil l be undertaken.
Mi t igat ion of such a r isk includes on-going dialogue between the Bank and the Government, and Banks' abi l i ty t o suspend its operations in the country, based o n the agreed framework.
st risk) N (Negligible or low risk)
M
S
H
H
Decree setting up the Inter-Ministerial Committee o f the proposed project sent to IDA. Draft agreements between the State and the participating cities sent to IDA. Draft Conventions de Maitrise d 'Ouvrage Ddldgud between the Implementation Unit o f the MATUH and each o f the beneficiary Cities sent to IDA. Sector Policy Letter finalized and sent officially to IDA. Draft Project Implementation Manual (PIM) sent to IDA. Draft Project Administrative, Financial, and Accounting Manual sent to IDA. Government letter confirming i t s commitment to make available counterpart funds amounting to US$12 mi l l ion during the project's cycle and budgeted o n o i l revenues. Appointment o f IGF as Internal auditor o f the project.
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Grant effectiveness conditions:
(a)
(b)
The Recipient’s Project Account has been opened and the in i t ia l contribution o f F C F A l 6 0 mi l l ion has been deposited therein. The Government has adopted the Project Implementation Manual, and the Project Administrative, Financial, and Accounting Manual, both in form and substance satisfactory to IDA. At least one Convention de Maitrise d ’Ouvrage Ddldgud and related Protocole d ’Accord, in form and substance satisfactory to the Association have been executed between the relevant Beneficiary City and the MATUH and the Recipient, respectively.
(c)
IV. APPRAISAL SUMMARY
A. Economic and financial analyses
80. Incremental costs and benefits. Net incremental costs and benefits, “with” and “without” the project were considered. On the basis o f these scenarios, the net incremental financial benefits and costs o f the proposed investment programs are assessed. These are then adjusted for the impact of taxes, subsidies and externalities to arrive at the economic cost and benefit streams. Cash flows are discounted using a discount rate o f 12 percent. Costs include capital costs, operation and maintenance costs, and rehabilitation costs.
8 1. Benejts. Benefits o f provision o f urban services are expected to improve the quality o f l i fe o f the poorest residents living in the peri-urban zones o f the cities where most o f activities will be implemented. I t i s important to note that many Economic Rate o f Returns (ERRS) calculated for the project are understating some o f the below-mentioned social and environmental benefits expected to be gained in the targeted cities. The investments will have the following socio-economic quantifiable and non- quantifiable benefits:
(a)
(b)
(c)
(d)
(e)
( f ) (g)
Improvement in the quality o f l i fe through improved physical living conditions and better environmental management.
Increased productivity and efficiency arising f rom reduced flooding and’ avoided flood damages to economic and other properties.
Increased property value due to improved overall amenities.
Increased local revenues through the construction o f economic infrastructures as wel l as improvement o f local finance.
Improved health with reduction in waterborne disease and reduced medical costs.
Enhanced local government capacity to fulfill their service delivery mandate.
Employment generation, expand markets, promote increased private sector participation in the provision o f services; by dimensioning public works appropriately and using labor- intensive methods, the project will create employment opportunities for unskilled and semi-skilled labor and promote SMEs in construction and urban services.
Decreased production costs due to lower vehicle maintenance and transport costs resulting f rom road improvements,
(h)
82. By targeting the main cities in Chad, the project i s expected to have a positive impact l inked to economic growth and employment generation. Increased productivity and better possibility for trade opportunities would increase the overall production at the
From a macro-economic perspective.
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national level and contribute to economic growth. The project would generate a considerable amount o f short-term employment (for SMEs and consultant f i rms) since labor (mainly unskilled labor) accounts for a significant part o f the project investment. Given the fact that the interventions in al l f ive cities differ, as the access to services and physical characteristics are not homogenous, an overall ERR and Ne t Present Value (NPV) are not calculated. However, the program overall i s expected to be economically viable as the analysis o f the major components have positive results. A detailed economic analysis i s provided in Annex 9 for each o f the sub-components o f Component B o f the project.
83. Drainage works, accounting for CFAF 5,515 mi l l ion or about 64 percent o f total project works, has an individual ERR o f about 17.45 percent. Rehabilitatiodextension o f drinking water networks, accounting for 22 percent o f total project works, amount to CFAF 1,866 m i l l i on and has an individual ERR o f about 12.76 percent. Investments in economic infrastructure (slaughter house in AbCchC) have an ERR o f 14.50 percent. Investments in urban roads in Doba have an ERR o f 13.60 percent. I t i s clear that these Economic Rates o f Returns calculated for the project (in particular those related to the drainage works) are very l ikely to understate some o f the above mentioned social and environmental benefits expected to be gained in the targeted cities. As detailed in Annex 9, a full sensitivity analysis was carried out during appraisal, relative to the main risk considered in the economic analysis, namely, higher investment costs . 84. During project preparation, the economic analysis has also been used to support investment decisions:
(a) The ERR o f an investment in the market o f Sarh, in i t ia l ly proposed for IDA funding, was estimated at 5 percent. As a result o f the economic analysis, it was decided that the proposed investment in Sarh (CFAF 424,000,000) could not be included in the overall project.
Similarly, the ERR o f an investment in the market o f Moundou, init ially proposed for IDA funding, was estimated at 6 percent. As a result o f the economic analysis, it was decided that the proposed investment in Moundou (CFAF 365,000,000) could not be included in the overall project.
B. Technical
Technical evaluation
85. The proposed solutions take into account needs expressed by the municipalities and the l i s t o f priorities for each city. Technical standards generally accepted for the design o f drainage and water supply networks will be used. The water network was designed to meet the demand o f water until the year 2020. T o deal with potable water needs, i t i s planned to reinforce the available water resources by building up new boreholes with depths ranging f rom 30 meters to 100 meters, according to the hydro geological characteristics o f each city. The anticipated capacities o f the boreholes are 80m3/h for Sarh, 100m3/h for AbCchC, and 60 m3/h for Moundou. The nominal diameter o f the proposed drillings will be 300mm to help facilitate their future utilization by equipping them with rather wide diameter pumps. Standpipes will be installed o n the various distribution networks o f the participating cities, according to a ratio o f one standpipe for 1,000 inhabitants. The management o f these standpipes will be delegated to the local communities organized in “GIE” (Groupement d ’IntGret Economique) through a participatory process and will generate some permanent employment, primarily among women.
86. Rainwater runof f collection facilities will be designed to evacuate water f rom decennial floods. For protection o f the drains, the use o f materials frequently employed in the construction in the different
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regions will be encouraged. Protection by masonry i s recommended. The construction o f drains without protection i s not recommended given the risk o f erosion by the floods and siltation f rom sand coming f rom the non asphalted roads. Pedestrian and commercial traffic will be eased through the construction o f passages at the drainage sites. The runof f collection facilities will be located primarily in the neighborhoods threatened by the floods. I t i s expected that the flooded areas in Sarh, AbCchC, and Moundou could be reduced by as much as 80 percent. A partnership will be developed between the municipalities and the sanitation committees to help ensure proper maintenance o f the drains. For the economic infrastructure, focus will be o n the construction o f structuring equipments (platforms, drainage, hangars, roads, latrines...). The lack o f a competitive market for public works i s a major concern for the project, which will a im at promoting small- and medium-sized enterprises (SMEs). In such a context, project preparation has emphasized the use o f simple technologies with labor-intensive methods and to size works appropriately to attract SMEs. More transparent public works market management i s needed to promote the SMEs, through increasingly healthy competition among consulting services and entrepreneurs with expeditious payment to companies and consulting f i rms. All the technical studies necessary for the bidding documents were carried out during the preparation phase so that the requests for bids can be launched and contracts awarded as soon as the grant becomes effective.
C. Fiduciary
87. Financial Management and Disbursement Responsibilities. The Implementation Unit of the Urban Department o f MATUH will be responsible for the preparation o f technical and financial reports, as we l l as the annual work program, including the consolidated budget and financial statements for a l l project components. T h e Implementation Unit will also monitor project disbursements and ensure that they are in line with the IDA disbursement manual. The project financial management i s weakened by the absence o f an internal audit department. An internal auditor f rom the General Inspectorate o f Finance (IGF) was appointed to address this risk.
88. Flows of funds andfinancial reporting. The overall project funding will consist o f an IDA grant and national counterpart contribution using o i l revenues. The contracts will be paid through the Designated Account for IDA’S financing share and through the counterpart account for the Government’s share. Contributions f rom cities will solely consist o f providing adequate resources for maintenance o f the infrastructure rehabilitated under the project and the existing local infrastructure network. The project work programs and related budgets will be updated on a regular basis, and the project budget has been programmed on a multi-year basis, including a f i rst set o f operations commencing in al l project cities.
89. The Country Financial Accountability Assessment (CFAA), carried out by IDA, IMF, EU, and AfDB in April 2006, shows that Government o f Chad has to improve i t s Public Financial Management Systems. The fiduciary r isks associated with poor budget formulation, poor budget preparation and execution and cash management processes must be addressed. In terns o f appropriate legislation and regulatory frameworks, significant progress needs to be made to ensure that the r isks associated with lack o f clear rules and regulations are mitigated. The assessment also identified a lack o f capacity in auditing institutions and a weak follow-up o f audit findings. The procurement system has to be improved (i) to reduce the long processes in evaluating bids and attributing contracts, and (ii) to avoid “off-record” bids attributions. In July 2006, the Government reached an agreement with the Bank in which i t commits i t s e l f to provide 70 percent o f o i l direct resources to priority ministries. The Government i s also very committed to the implementation o f the PAMFIP sti l l at the appraisal stage.
90. financial management system i s running and comprises the following:
At the level o f the proposed project, a certain number o f actions have already been taken. The
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(a)
(b)
(c)
(d)
Computerized accounting system software, which was tailored to respond to specific project issues.
A fiduciary team has been recruited and i s comprised o f a financial management specialist and a procurement specialist, both wel l trained in IDA procedures.
A consultant has been recruited to prepare the administrative, financial, and accounting procedures manual, a draft o f which was sent t o IDA before negotiations.
An external auditor acceptable to the Bank has been recruited to carry out the first audit o f the PHRD grant. This audit was released to the Bank o n July 25, 2006 and reviewed with n o serious financial management accountability issues and n o major internal control issues. The auditor’s performance has been rated satisfactory by the Bank.
91. During the appraisal mission, the Implementation Unit and the Bank agreed on the Financial Management Report (FMR) format to be used during project implementation. As mentioned before, the appointment o f the General Inspectorate o f Finance as the internal auditor o f the project was a condition for negotiations.
92. The conclusion o f the assessment i s that the financial management arrangements satisfies the Bank’s minimum requirements under OPh3P10.02 and therefore they are adequate to provide, with reasonable assurance, accurate and timely information on the status o f the project, as required by IDA.
93. Procurement. During the appraisal mission, a procurement capacity assessment o f the MATUH was carried out, as wel l as for the Implementation Unit o f the Urban Department o f MATUH. The assessment revealed that MATUH has the necessary human resources capacities to implement procurement activities o f the project. However, certain deficiencies identified include a lack o f computerized equipment and software for monitoring and contract management, need to update the training o f procurement specialists, and the slow process for contract approval. The assessment of the Implementation Unit o f the Urban Department o f MATUH noted that the unit’s staffing includes a procurement specialist with procurement experience at both national and international levels (including experience with Wor ld Bank operations). The only deficiency noted i s the lack o f training o f the procurement specialist to operate the monitoring and contract management software. A detailed action plan has been prepared to strengthen procurement capacities in both MATUH and the Implementation Unit o f the Urban Department, including acquisition o f computerized materials and software, software training, and training at specialized regional procurement training centers.
94. The Implementation Unit o f the Urban Department o f MATUH will seek the n o objection o f IDA for al l contracts subject to pr ior review. The contract value thresholds have been reduced compared to the Region’s average (under the proposed project, the respective thresholds are: US$300,000 for works, US$200,000 for goods, and US$lOO,OOO for consulting services). Posting o f the procurement plan (which includes l i s t o f activities to be funded under the project and their corresponding cost estimates) in national newspapers with large distribution, in dgMarket, as wel l as in an anti-corruption hotline will contribute to strengthening the governance framework in which the project will be implemented.
95. As detailed in Annex 8, one o f the r isks for the project i s at the Country Procurement Code level. Certain articles o f the Procurement code are in contradiction with Wor ld Bank guidelines and procedures. Consequently, the Bank has reaffirmed to the Government during negotiations the primacy o f the provisions o f the Grant Agreement to those o f the national regulations.
96. The general implementation o f procurement activities will be prepared according to the Wor ld Bank Directives dated M a y 2004. A General Procurement Notice (GPN) will be published in the dgMarket soon after grant approval by IDA’S Board o f Directors. A procurement plan for the first 18
28
months has been prepared by the Government and has been reviewed during the appraisal mission and approved by the Bank o n November 16, 2006. The procurement plan will be published o n the Bank’s website after the Grant has been approved by IDA’S Board o f Directors. Procurement procedures for works, goods, and consultant services are given in detail in Annex 8.
97. The overall project r isk for procurement i s rated high because o f country conditions, provisions o f the national procurement code, delays experienced in the past with approval o f evaluation reports and signing o f contracts, and the overall experience o f poor contract management in the past despite the fairly strong arrangements in place at the level o f the Implementation Unit.
D. Social
98. Key social issues relevant to the project objectives. The project i s expected to deliver significant social benefits by improving the living and environmental conditions o f low-income communities in N’Djamena, AbCchC, Sarh, Moundou, and Doba. N’Djamena i s the capital c i ty and has the highest needs in terms o f investment. AbCchC, Sarh, and Moundou are the most populated secondary cities in Chad and they are experiencing the highest population growth rate (above 5 percent). They have a poor and l imi ted infrastructure base to accommodate the needs o f their fast growing population. Further, by improving living and sanitary conditions and services in poor areas and slums and reducing flooding, the project will also contribute to addressing human and social development issues. The potential social impacts (such as temporary resettlement o f households in targeted project areas) o f sub-projects under the project will be small-scale and site-specific typical o f Category B projects.
99. An Environmental and Social Management Framework (ESMF) was prepared as the environmental and social assessment instrument. I t i s anticipated that project activities might not lead to land acquisition or restriction o f access to sources o f livelihood. However, in the event that there are resettlement concerns, a resettlement policy framework (RPF) has been prepared to cover N’Djamena, Moundou, Sarh, AbCchC, and Doba. I t has been disclosed in Chad o n June 7, 2006 and at the Bank’s Infoshop on June 16, 2006, and this will be translated to Resettlement Act ion Plans (RAPS) as and when the need arises during project implementation.
100. Participatory Approach. Project ownership has been regularly demonstrated during project preparation, in particular through the project preparatory workshops in which a l l key national and local players participated. The MATUH organized a project preparation workshop, gathering 120 participants to be involved in the project at the central and local levels. T h i s workshop served to: (i) disseminate information o n the project and ensure transparency in i t s preparation; and (ii) collect feedback o n the project components and institutional arrangements f i o m the various stakeholders and in particular f rom the beneficiary cities’ representatives. The project will increase community cohesion by using a participatory approach in involv ing communities and their participation through the existing district sanitation committees (Comi th d Yssainissement - CA) in the planning and design process. At the local level, Local Steering Committees (LSCs), presided over by the City’s General Secretary and comprising representatives o f local associations and Neighborhood Committees (such as the Comith d Yssainissement already set up in N’Djamena) are the institutions in charge o f overseeing day-to-day project implementation in each Beneficiary City (ArrStCs setting up the LSCs in each beneficiary c i ty have been sent t o the Bank). The project wil l also bring net benefits, both social and economic, to the key stakeholders in the low-income neighborhoods. Public consultations with strong dialogue between Mayors and the local community took place during project preparation and will continue to take place during implementation.
101. The project will a im to involving women, youth, and marginalized groups in the planning process and in key decision-making, and to ensure equal benefits to women. The project’s
Gender.
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participatory design will involve women in key decision-making processes within the existing “ComitLs d ’Assainissement” members by insuring that women are wel l represented in these committees and that their voices are heard. The Social and Environment Specialist within the project will ensure that gender issues are adequately reflected in the project consultative process.
102. Project involvement of consultation or collaboration with NGOs, other civil society organizations, and other partners. The project design involves the beneficiary cities, local and international NGOs working in urban development and sanitation, and other intervening partners such as l ine ministries. The project coordinates with the French Development Agency and UNDP-financed infrastructure projects, and the Bank-financed PROADEL, and includes beneficiaries directly in decision- making process.
103, Institutional arrangements provided to ensure the project achieves its social development outcomes. As previously described, the consultative and participatory design will be followed to ensure that financed activities are benefiting the entire community in participating subprojects. Project works (drainage and road works, in particular) have been designed in a way that they will generate significant local employment. The Project’s Local Steering Committees (LSC) will ensure hll participation o f local communities in each o f the five beneficiary cities. A qualitative beneficiary assessment will be done if needed during the mid-term review.
104. How the project wi l l monitor performance in terms of social development outcomes. Most o f the project performance indicators are related to the improvement o f provision o f urban services to five selected cities. Baseline and performance indicators have been finalized during appraisal. As presented in Annex 3, monitoring the outcomes o f the project i s a key part o f the project and reporting on outcomes wil l be reviewed during supervision missions.
E. Environment
105. The project has been classified as an environmental category B project. All activities identified under the project are deemed not to cause major adverse environmental impact. The provision of basic urban services component will target service and economic infrastructure priorities in the project cities. Sub-project activities include: (a) improving drainage, sanitation, and the associated rehabilitation o f affected roads; (b) rehabilitating and extending the potable water supply systems (including addressing waste water issues); (c) improving provisions o f economic infrastructure (e.g. slaughterhouse); and (d) provision o f access roads and drainddrainage to isolated poor neighborhoods. The potential environmental and social impacts o f these sub-projects under project will be small-scale and site-specific typical o f Category B projects.
106. An Environmental and Social Management Framework (ESMF) was prepared as the environmental and social assessment instrument. The objective o f the ESMF i s to establish a mechanism to determine and estimate the future potential environmental and social impacts o f the activities to be undertaken under the project, and to define mitigation, monitoring, and institutional measures to be undertaken during project implementation. The ESMF was prepared to cover N’Djamena, Moundou, Sarh, AbCchC, and Doba. I t has been disclosed in Chad on June 7, 2006 and at the Bank’s Infoshop on June 16, 2006. In l ine with the requirements o f the ESMF, projecthite specific Environmental Impact Assessments (EMS) will be prepared as and when necessary during project implementation.
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F. Safeguard policies
Safeguard Policies Triggered b y the Prqject Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [I Natural Habitats (OP/BP 4.04) [I [X 1 Pest Management (OP 4.09) [I [X 1 Cultural Property (OPN 1 1.03, being revised as OP 4.11) [X 1 Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [X 1 Forests (OP/BP 4.36) [I [X 1 Safety of Dams (OPBP 4.37) [I [X 1 Projects in Disputed Areas (OP/BP/GP 7.60)' [I [ X 1 Projects on International Waterways (OP/BP/GP 7.50) [I [X ]
[I
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G. Policy exceptions and readiness
107. The project complies with a l l World Bank Policies and no exception i s required. A procurement plan for the f i rst 18 months of project implementation was finalized by the Recipient during appraisal and approved by the Bank. Pre-feasibility studies for civil works are completed and detailed engineering studies, along with bidding documents wil l be completed before Grant effectiveness. Civil works are expected to begin during the f i rst semester following Grant effectiveness.
' By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas
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Annex 1: Country and Sector or Program Background
CHAD URBAN DEVELOPMENT PROJECT
A. Country overview
1. With 80 percent o f the population o f about 9.7 million13 living on less than $1 a day, Chad i s one o f the poorest countries in the world and faces enormous development challenges. The 2005 Human Development Report ranks Chad as 173 out o f 177 countries surveyed. The Gross National Income (GNI) per capita (2005) i s estimated at US$400. In spite o f a l i f e expectancy o f only 44 years, the population i s growing at a rate o f 3.2 percent per year. There i s a significant lack o f services and infrastructure and a lack o f capacity at all levels o f administration to finance, plan, and implement development efforts to improve the living conditions for the population.
2. The Millennium Development Goal (MDG) for a population's access to potable water i s 60 percent in 201 5. According to the latest e~timatesl~, only 34 percent o f the population in Chad has access to an improved water source (up from 20 percent in 1990); only 8 percent o f the population has access to improved sanitation (6 percent in 1990). The developmental challenges faced by Chad are put into perspective when compared to sub-Saharan Africa, with an average access to water o f 58 percent (increased from 49 percent in 1990), and an average access to sanitation o f 36 percent (32 percent in 1990).
3. The economy suffers from the disadvantages o f a landlocked country. The nearest port i s about 1000 kilometers away to the south and, with a vast and seasonally flooded territory, transport costs are extremely high. Industrial output i s stagnating, and Chad i s one o f the most challenging countries in the world when it comes to doing business, ranked 172 out o f 175 countries surveyed in the 2007 Doing Business Report.
4. Expectations that large increases in the financial resources could buttress and accelerate economic growth and development effort in the country are on the r ise and widespread since o i l production started in the Doba basin in 2003. Oil revenues are a major source o f funding. In 2004, net o i l revenues o f US$131 mil l ion (CFAF 66.8 billion) represented 42 percent o f the total revenues in the national budget, excluding foreign financing. In 2005, net o i l revenues had increased to US$ 250 mil l ion (CFAF 130.4 billion), representing 45 percent o f the national budget (total revenues excluding foreign financing). By 2006, net o i l revenues had grown to US$800 mil l ion (CFAF 416.2 billion), representing 73.5 percent o f total revenues in the national budget, excluding foreign financing.
B. Management of oi l revenues
5. The impact on the l ives o f the ordinary Chadian o f the increased revenues from o i l production depends crucially on a transparent and effective management o f the revenues. A Petroleum Revenue Management Law (PRML) was passed in 1999, forming the basis for the World Bank co-financing an o i l pipeline from the Doba oilfields to the Atlantic coast o f Cameroon. From the outset o f the Chad Cameroon Pipeline Project, the PRML, and the revenue management program that i t underpins, were designed to assure that the country's o i l revenues would help finance badly needed development. An oversight body, the Committee for Control and Oversight o f Petroleum Revenues (Collzge de Contrde et de Surveillance des Revenus Pdtroliers) (CCSRP), with participation from c i v i l society organizations,
l3 World Development Indicators 2006
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was created under the revenue management program to monitor and oversee spending and ensure transparency.
6. The P R M L provides for allocation o f 80 percent o f direct o i l revenues to key sectors (agriculture, education, health, and infrastructure) and 5 percent to the oil-producing area. Allocations under the 2004 and 2005 budgets were in l ine with the law, but due to a tight financial situation the Government decided to amend the PRML as a way to get more funding from o i l resources to address i t s growing fiscal deficit and unplanned expenses (most o f which were security related). On December 29, 2005, the National Assembly passed amendments to the law. These amendments would substantially weaken programs that were intended to improve the lives o f poor people and instead al low for increased spending on justice, territorial administration, and security. The Wor ld Bank subsequently withheld new loans and suspended disbursements o f IDA funds allocated to Chad and froze the escrow o i l account.
7. Fol lowing discussions between the Wor ld Bank and the Government o f Chad, a Memorandum o f Understanding (MoU) was signed on July 13,2006 committing the Government to spend 70 percent o f i t s 2007 budget (all spending) o n priority poverty reduction programs. Chad will develop a Medium-Term Expenditure Framework to guide annual budgetary expenditures. Resources in excess o f these agreed annual needs will be reserved in a stabilization fund for future use, to finance investments and their maintenance when the o i l revenues start to diminish in the future.
8. The Government agreed with donors on short- and medium-term steps to be undertaken to strengthen budget management within a comprehensive plan for the modernization o f public finances. These steps include quarterly publication o f budget execution data and regular audits o f procurement contracts. The new agreement also provides for the continued allocation o f f ive percent o f o i l revenues for projects benefiting the people in the Doba region itself,
C. Development agenda
9. The National PRSP, adopted by the Government in June 2003, outlines Chad’s development agenda and strategic objectives. The strategy aims at cutting the number o f people living in poverty in ha l f by 2015. T o reach this aim, a macroeconomic framework has been developed, with focus o n five strategic orientations:
1) Promoting good governance; 2) 3) Improving human capital; 4) 5) Restoring and safeguarding ecosystems.
Ensuring strong and sustainable growth;
Improving the living conditions o f vulnerable groups; and
10. The PRSP i s based o n integrated policies aimed at establishing the basic conditions for a continuous expansion o f economic opportunities and at ensuring equal access to those opportunities by opening markets and strengthening ski l ls.
11. At the polit ical and institutional level, the focus i s on consolidating the foundations o f democracy by implementing decentralization as contemplated in the Constitution o f 1996 and strengthening domestic capabilities in government institutions and among the representatives o f c iv i l society. In the economic and financial spheres, efforts will focus o n national capacity building in both the private sector and in government departments dealing directly with economic agents, and o n integration and internal organization o f the productive system, including overcoming the country’s isolation, and the promotion o f domestic trade. Increased public investment in infrastructure and human capital will contribute to increasing the rate o f real GDP growth.
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12. Some o f the concrete activities anticipated for implementing the agenda are a continuation o f c iv i l service reform by conducting audits and applying merit-based promotion, completing the deconcentration and decentralization framework, conduoting public expenditure reviews in the priority sectors, and training public employees involved in infrastructure planning and management.
13, The decentralization agenda i s important in terms o f promoting growth in the non-oil sectors and increasing non-oil revenues, to ensure that resources for implementing the Government’s development agenda remain adequate in the long run. The PRSP integrates rural and urban development pol icy in order to respond to the needs o f people working in the primary sector in rural areas and o f informal sector operators in urban areas.
14. This PRSP i s being updated as part o f the M o U signed between the Bank and the Government o f Chad. The updated PRSP wil l form the basis for determining future expenditure priorities and will be enacted into law.
D. Political decentralization
15. Decentralization i s part o f the institutional framework embedded in the 1996 Constitution, laying the ground for a democratic distribution o f power among citizens to even the most local level o f Government. Over the Country Assistance Strategy period covering F Y 0 4 to FY06, legislation was prepared to create three sub-national levels o f Government: regional, departmental, and municipal, each with elected bodies. Decentralization was the subject o f a body o f laws o f which the most important are: L a w 002/PFU2000 o f February 16, 2000 (Organic law), defining the statutes o f decentralized territorial governments, and L a w 11/PR/2004 o f M a y 24, 2004, establishing the general framework for municipal resources. Local elections have been postponed several times due to a lengthy process o f preparing and enacting the necessary legislation. According to the Government’s expectations, elections should take place at the beginning 2007.
16. Progress has been made towards holding the f irst municipal elections, with most o f the legal and regulatory framework already prepared: (i) the laws on allocation o f competencies between the State and municipalities, o n transfer o f resources, on creation and functioning o f the services o f the decentralized levels o f government, and o n a localized c iv i l service have a l l been prepared; (ii) the decrees defining the budget and accounting nomenclature for the municipalities, the support function o f the deconcentrated services o f the State vis-a-vis the decentralized levels o f government have been prepared; and (iii) the 50 department capitals have been delimited.
17. In parallel, the authorities are working to make arrangements for the deconcentrated services o f the ministries to interact with the future decentralized governments. A “High Level Committee for Decentralization”, has been set in place, headed by the Prime Minister, with permanent membership comprised o f representatives o f the ministries dealing with finance, regional development planning, and administration. The Committee’s function will be to coordinate the decentralization pol icy and sector policies, notably between the Ministry in Charge o f Decentralization (MCD) and the Ministry o f Land Administration (MAT), which i s the oversight ministry o f the new municipalities.
18. Whi le the Government finalizes the legal and regulatory framework for decentralization, including laws on the transfer o f responsibilities and resources to the municipalities, i t also intends to take measures to improve the effectiveness and efficiency o f the municipalities to enable them to fully assume their new responsibilities. Moreover, since the municipalities cannot be expected to perform a l l o f the tasks under their responsibility, c i v i l society and the private sector have an important role to play. Involvement o f stakeholders at a l l levels o f society i s essential to better allocate o i l revenues and manage
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the impatience o f the communities to tap into the dividends o f the o i l boom. T h i s entails consulting the population o n priorities, and requires that a l l stakeholders concerned should actively participate in the planning, implementation, and especially maintenance o f infrastructure and provision o f services, and contribute to the local development effort (e.g. v ia paying taxes). The decentralization process will give more power to the local authorities in a very centralized state faced with high polit ical uncertainties and fierce competition for power.
19. Current operational and legal framework for Chadian municipalities. Under the Constitution o f 1996, the municipalities are decentralized territorial governments, but until local elections take place, the municipalities continue to operate under the Ordinance n017/PR/85 dated July 24, 1985. Currently, the municipalities are administered by Management Committees which include representatives o f various deconcentrated services (Ministry o f Land Administration, Ministry o f Finance, Economy, and Planning, Ministry o f Land Planning, Urban Development and Housing, Ministry o f Public Health, Ministry o f National Education), as wel l as local traditional leaders. The Management Committees deliberate o n the businesses o f the municipality and in particular discuss and adopt the budget. The President o f the Management Committee, a c iv i l servant appointed by presidential decree, i s the mayor, and i s assisted by the Permanent Secretary and the municipal administration. In accordance with the principle o f separation o f the directors and accountants, the accounts o f the municipalities are prepared by a public accountant (attached to the Ministry o f Finance) who keeps the municipality’s accounts and i s in charge o f collecting the municipality’s taxes and executing expenses approved by the Mayor.
20. Supervision o f the municipalities i s carried out by the deconcentrated administrative authority, i.e. by the Prefects or Sub-prefects or the Government’s delegate in the case o f the municipality o f N’Djamena. The municipalities’ budgets are subject to a pr ior approval o f the Minister o f Land Administration (“Direction de la Tutelle des Collectivitb”) and the Ministry o f Finance.
E. Fiscal decentralization and municipal finance
21. The fiscal regime o f the municipalities i s at the heart o f the development effort. Whi le polit ical decentralization i s being prepared, municipalities are suffering f rom an ongoing financial crisis and unpredictability o f available resources. This i s rooted in a multitude o f shortcomings in the management o f finances, budget, accounts, and expenditure, combined with a l o w level o f resource mobilization and unreliable transfer o f funds from the State. The presentation o f the municipal fiscal system provides detailed background for the capacity building activities included in the proposed project.
Legal framework for financial resources
22. Art ic le 212 o f the Constitution defines the composition o f municipal financial resources as: (i) the portion o f proceeds from taxes and fees collected for the State’s budget which returns to the municipalities; (ii) the revenue from allocations and subsidies provided by the State; (iii) the revenue f rom their assets; (iv) the revenue from loans taken out by decentralized sub-national authorities; and (v) the percentage o f revenue from soil and subsoil resources exploited in their territory. The L a w 1 1/PR/2004 concerning the financial and tax system o f the decentralized sub-national authorities established broader provisions on municipal resources and l is ts the various resources and defines the system, as detailed below.
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Overview of the municipal financial system
23. The main sources o f revenue o f Chadian municipalities are currently: (i) taxes and fees allocated by the State to the municipalities (mainly custom duties, land and fiscal taxes); (ii) the municipal revenue (business fees, etc.); and (iii) public space user fees (stall rentals, parking fees, advertising fees, etc.). These sources o f revenues, along with the difficulties encountered in maximizing their output, are presented below.
Breakdown of current revenues for beneficiary cities (in 2004) I I I I 1 Taxesandfees i I I 1 Total recurent i allocated by the I i revenue ! State to the Irevenue (business! fees (stall rentals, i revenue carried
Communal i Public space user 1 Other revenue and
Communes 1 (Million FCFA)! communes ! fees, ...) ! parking fees, ...) ! forward Abeche ! 158/ 25 j 23j 47 j 63 I
Moundou j 2761 2081 251 34j 9 I 361 ! 2351 191 171 90 I 143j 99 i 28! 91 7 I Sarh
Doba N’Djamena 1 1823.21 797.7i 364.9/ 51 1.5[ 149.1
24. Taxes and fees allocated by the State to the municipalities. Taxes and fees collected include refunds f rom customs duties, and land and fiscal taxes on activities for which the revenue i s set aside for municipalities. Refunds from customs duties fa l l into the category o f national taxation - domestic turnover tax (TCAI) which has been replaced with the value added tax o n imports (VATI) - 6.7 percent o f which i s refunded to the municipalities. The contribution o f this tax i s significant, with revenue ranging f rom 12 to 71 percent o f the “taxes and fees allocated” category. The essential components o f local taxation, the proceeds o f which are fully allocated to the municipalities, are: (i) a land taxation system (property tax for developed and undeveloped lands (Contributions FonciBres sur les Propri&t&s Bcitis et Non Bcitis )-CFPB, CFPNB); and (ii) a business taxation system (tax on activities), including: business license fees, (Impbt G&n&ral Liberatoire (general lump-sum tax) (IGL); tax on Rental Value o f Business Premises (Taxe sur la Valeur Locative des Locaux Professionnels (TVLP); and licenses. On average, for the five largest municipalities in the country, including the capital, the business tax constitutes the essence o f direct local taxation, at almost 23 percent. The municipalities are not participants in the tax determination and collections processes. Collection i s carried out by issuing notices or advance payment. The municipalities lack information or control over these taxes managed by State agencies, though the taxes constitute a major source o f their revenue. This lack o f information i s exacerbated by the public revenue department’s tardiness in refunding the municipalities’ quota.
25. One o f the main problems encountered i s that the tax ro l l does not reflect reality. In N’Djamena, for example, the general lump sum tax (IGL) has a total o f approximately 5,000 entries, though a partial census recently conducted indicates a,minimum o f 12,000 entries. This considerable deficit i s primarily a result o f the difficulties in capturing a l l (or at least the essential part) o f the tax base, as the procedure generally followed i s based on the voluntary filing o f returns by taxpayers using the PPA system. Without material resources for collection, tax control i s barely operational. The Tax Directorate i s even overwhelmed by carrying out collections using the existing rolls. For the 2006 IGL, the collection target o f CFAF 1.9 b i l l ion in N’Djamena was not realized, as only 25 percent o f that target had been attained by the beginning o f June.
26. A number o f actions which relate to the IGL and the tax o n the value o f business premises (TVLP) have been jo in t ly initiated by the General Directorate o f Taxes (DGI) and the municipality o f N’Djamena under EU and AFD financing. Their objective i s to help the DGI have a better grasp o f its tax base, and consists o f a generalized census (with GPS tracking) o f activities subject t o the IGL and using
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this census to revise the current rolls upwards. Although currently contributing in only a l imited way to budgets, actual municipal revenue (those which are totally controlled by the municipality) experiences similar problems.
27. As the municipalities are not part o f the fiscal system for State taxes, they are not associated with the establishment o f their budget forecasts and tax collection. Furthermore, the delays in providing state refunds have an adverse effect on municipal resources: collection i s being done by the public revenue departments, which relay the information to the central revenue departments, which in turn distribute the shared taxes and redeposit the municipalities’ portions in their respective accounts. I t takes an average o f three months for the funds to be made available to the municipalities’ accounts. For certain taxes instituted by the new decentralization laws, inaccuracies in their system and procedures for collection severely limit their scope and implementation.
28. Municipal fees. These mainly consist o f municipal taxes o n infrastructure development, real estate transactions, gas pumps, taxis and manual vehicles, advertising and entertainment, electricity, and municipal port dues. These are the only municipal taxes that currently exist. They are diverse in their classification, content, and base, and in their relative importance among the different municipalities. Lef t to the initiative o f the municipalities, but with some amount o f regulatory control (especially in budgets where they appear in the annex), they are established through the deliberations o f the Management Committee. Tariffs are not guided by legislation; their setting i s at the discretion o f the municipality, which adjusts the level based on the specific features and circumstances o f the city, drawing f rom other municipalities’ experience, especially N’Djamena.
29. Public space user fees. For revenue from public space user fees, management tools constitute the main factor limiting their collection. Fees for market space and roadway usage have not been subject to an exhaustive census, and the collection effort i s far below resource potential owing to a lack o f work tools. In N’Djamena, the development o f a computerized management tool for municipal collections has remained at a standstill. In most o f the municipalities, stall rentals represent up to 50 percent o f this category o f revenue. In N’Djamena, revenue f rom public space user fees at “Marchk h mil” (the main market in the ci ty where works are to be financed under the proposed Project) amounted to 160 mi l l ion CFAF in 2004, while having a potential to generate 400 mi l l ion CFAF. The number o f taxes and their variations give rise to a wide variety o f taxpayers, a handicap that compounds a l o w collection rate f rom the tax base identified.
30. A study’4 funded under the P H R D grant and largely disseminated among key stakeholders (Ministry o f Finance, Economy and Planning, Ministry o f Land Administration, Ministry o f Urban Affairs, municipalities) revealed the following key deficiencies.
Municipalities ’ financial difficulties.
3 1. Financial and accounting management. The major handicaps in this context relate largely to the four secondary municipalities o f the project (Moundou, Sarh, AbCchC, and Doba): (i) the budget and accounting classification i s n o longer suitable; (ii) the financial and accounting management tools are practically non-existent, and existing accounting systems are not reliable and cannot be used for budget follow-up or forecasting; (iii) the absence o f a written manual o f procedures for the different departments o f the municipality and the public accountant, combined with weak management o f the financial services o f the municipalities; and (iv) severe inadequacy o f human resources in financial management. In certain cases, init ial training i s clearly insufficient, and in al l cases the absence o f training and upgrading are a serious handicap. The four secondary municipalities use a manual accounting system, which i s generally improperly kept and incapable o f reliably effecting commitment, verification, and payment. Furthermore,
Preparatory study: Etude des finances et de l a fiscalite locale des vil les de N’Djamena, Moundou, Sarh, AbBchB et 14
Doba. 2006
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producing accounts for the fiscal year i s laborious and the periodic reconciliation o f accounts with the Comptroller General’s Department i s equally difficult.
32. The above problems cause the Chadian municipalities to be confronted with a resource crisis, which inhibits a l l significant actions towards taking responsibility for developing basic services and infrastructure. The level o f resources in the five project cities i s very low, as evidenced by the ratio o f revenue per capita. For the past few years this has fallen within the range o f CFAF 1,500 - 3,200 per capita (i.e. US$2.6 to US$5.8 per capita)” which i s about one-third to ha l f o f that generally obtained in similar cities in sub-Saharan Africa.
Weak resource mobilization.
33. Municipal expenditure. Budget and accounting process deficiencies are particularly significant for the four secondary municipalities o f the project. Aside f rom the issue o f reliabil i ty o f accounts, the major findings are:
(0
(ii)
(iii)
High administrative expenses reduce funds available to provide public services in the urban sector. Staff costs account for approximately 47 percent in N’Djamena, and between 17 and 46 percent in the other four municipalities. As a result, few resources are available for the delivery o f services to the population.
Debt accumulation weighs on the municipalities. The precarious resource situation and the accumulation o f unpaid debts have greatly impeded the municipalities’ effort to invest. In the case o f N’Djamena, practically n o funds are available for investment, pending external financing. The same phenomenon i s noted in the other municipalities, except in a l imi ted number o f cases.
Charges carried forward (N’Djamena) or expenses carried forward from previous fiscal years for the other four municipalities). Budgets for the fiscal years appear to be balanced, but in reality the municipalities pass on their debts to their creditors, including their own employees, not being able to objectively meet their deficit needs through the use o f funds or public revenue advances. The expenses carried forward include accounts payable f rom preceding years, unauthorized expenses, or even deficits in operational expenses. This seems to have been wel l contained in N’Djamena (average o f 4.2 percent o f municipal expenses over the last 5 years), but in the other four municipalities, it accounted for 8 to 50 percent o f expenses.
34. Support and supervision function of deconcentrated administration. Generally, the municipalities are subjected to weak regulation and supervision. Regulatory supervision i s not exercised, with the exception o f budget approval, and there are many instances o f outstanding delays. For N’Djamena and Moundou, the 2005 and 2006 budgets have not yet been approved. Doba i s the only exception, as for some years now i t obtains approval for i t s budget in the f irst quarter o f the fiscal year. Various agencies o f the Ministry o f Finance are involved in the mobilization o f resources and in terms o f financial management, including the regional public revenue official (“Trksoriers Gknkraux u) and tax collection agencies (“Sewices des Impots”). The lack o f resources o f the deconcentrated ministries in the area o f personnel, equipment, filing facilities, and funds to cover operational expenses i s pervasive. All works are done manually (documents are produced on o ld typewriters that are diff icult to service). Supervision and support activities to the benefit o f the municipalities are very limited. As a result, the municipal administrations do not receive essential assistance to help them carry out their mandate and improve the living conditions for their populations.
In 2004, per capita revenues in each o f the beneficiary cities were: US$5.8 for Doba, US$5.3 for Sarh, US$2.9 for Abkchk, US$2.7 for Moundou, and US$3.3 for N’Djamena.
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F. Characteristics of urbanization and urban management
35. Chad’s urban population, which was estimated at 7 percent o f the total population in 1960, i s currently about 2.4 million, representing 26 percentI6 o f the total population. The rapid growth in the urban population i s reflected in the increase in the population o f the capital city, N’Djamena. The population was 53 1,000 in 1993 (year o f the latest general census), up from 100,000 inhabitants in 1964. Today, its population has surpassed 1 mill ion with an estimated annual growth rate o f about 6 percent. For the period 1990-2004, the average annual growth rate o f Chad’s urban population was 4.5 percent, compared to 4.4 percent for sub-Saharan Africa and 2.2 percent worldwide. This can be compared to a 3.2 percent population growth rate for the country as a whole and 2.8 percent for the rural population. Overall, the cities will have to accommodate somewhere in the area o f 108,000 new citizens per year17, corresponding to the population o f the third largest c i ty in the country.
36. According to the latest estimates, only 41 percent o f the urban population has access to an improved water source (27 percent in 1984), and 30 percent o f the urban population has access to improved sanitation (27 percent in 1990)l8. There are no sewerage systems or sewage treatment plants in Chadian cities. In peri-urban areas, human waste i s often evacuated via the storm water drainage, with obvious health risks and malodorous smell as a result.
37. The drainage o f storm water and sewage and the removal o f household waste are perpetual problems in most Chadian cities, especially in low-income neighborhoods. In some poor neighborhoods o f N’Djamena, sewage remains stagnant throughout the year. Household waste i s only collected sporadically and uncollected waste blocks the drains and aggravates the situation. There are only a few kilometers o f paved urban roads outside o f N’Djamena, and the unpaved urban roads turn into mud during the rainy season (two to three months per year).
38. All in all, the situation in Chadian cities i s appalling and the quality o f l i f e for the urban population i s very low. Figures from the UN-HABITAT Global Urban Observatory indicate the percentage o f people in urban areas living in slums’g at 99 percent (for 2001). Even though this figure i s based on a stringent definition o f “slum”, it gives an indication o f the living conditions in Chadian cities. The dire conditions are also captured by figures estimating the proportion o f households living in modern housing at only 3.9 percent in 1993 (year o f the latest census) and figures from MATUH estimating that maximum 10 percent o f houses in N’Djamena are constructed o f durable materials.
39. The high level o f poverty and land-locked situation o f the country accords a special importance to the transport and urban sectors as supporters o f development in the productive sectors and as mechanisms in the fight against poverty. Urban areas are engines o f economic growth. Industry and services, normally located in urban areas, contributed to about 77 percent o f GDP in 200520. I t i s estimated that
l6 Source: United Nations Department o f Economic and Social AffairsPopulation Division-World Urbanization Prospects: 2003 revision
4.5 percent o f 2.4 mil l ion urban residents. Most recent figures from World Development Indicators, figures from “Gender, Poverty and
Environmental Indicators”, African Development Bank, (2004), and UNDP’s Human Development Index online. UN-HABITAT defines a slum household as a group o f individuals l iv ing under the same roof in an urban area
who lack one or more o f the following: 1) Durable housing o f a permanent nature that protects against extreme climate conditions. 2) Sufficient l iv ing space (not more than three people sharing the same room). 3) Easy access to safe water in sufficient amounts at an affordable price. 4) Access to adequate sanitation in the form o f a private or
This figure i s up from 54 percent in 2004, the year before the o i l production effectively took o f f on a large scale. ublic toilet shared by a reasonable number o f people. 5) Security o f tenure that prevents forced evictions.
’
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households headed by persons working in the urban informal sector account for 32 percent o f GDP, while only making up 20 percent o f the population2'.
40. In spite o f the importance o f the urban sector to the economy, the housing and urban sector i s characterized by an inadequate institutional and legal framework, and a dire lack o f resources. The public structures charged with the development o f the sector are suffering f rom lack o f organization, equipment, and human resources and the problem has been deepened by the lack o f a strategy for physical planning and urban development. As a response to this, the Government has recently begun the process o f developing an updated pol icy for the urban sector, highlighting the commitment to priorit izing urban development in proportion to i t s importance for the economy.
41. However, the urban sector relies heavily on external financing (95 percent o f investment projects in the urban sector are being financed by the donor community), and hence the need to ensure generation o f revenues to enable the Government and the municipalities to carry a larger share o f the investment budget and to assure the maintenance o f the investments. The needs far outstrip the available resources and donor financing i s required to address the huge needs, provide more discipline in the management o f the l imi ted available funds, and provide technical assistance.
Urban sector issues
42. Chad i s developing an appropriate institutional framework to implement the decentralization process currently underway and to manage i t s public resources. As this framework i s emerging, the fo l lowing challenges to the development o f livable cities in Chad need to be taken into consideration:
0 Clear imbalance between the economic importance o f Chadian cities and their available
Rapid urbanization resulting in unplanned settlements and l o w quality o f l i fe resources.
0
e Lack o f urban planning. e Inefficient municipal resource utilization. e Weak financial and account management at the municipal level. 0
0
A nascent decentralization process in need o f support. Weak institutional structure and support capacity.
43. These key sector issues are developed below:
(i) Imbalance between the economic importance of Chadian cities and their available resources. L o w resource mobilization i s a serious hindrance on the capacities o f municipalities to provide services for their populations, and exacerbates the challenges o f urban development. As mentioned above, Chadian municipalities are confronted with a resource crisis that i s out o f proportion with the importance o f cities for the economy. As a result, the level o f urban services provided by the municipalities i s low, municipalities' debt arrears are accumulating, and the development o f local infrastructures i s extremely limited. Investments are either put o n hold pending availability o f external financing or carried out in an unstructured manner, except in a l imited number o f cases.
(ii) Rapid urbanization resulting in unplanned settlements and low quality of life. The urban population growth rate o f 4.5 percent poses enormous challenges to the planning capacity o f the municipal administrations and their abil ity to extend services to expanding urban
2 ' Estimate from the PRSP.
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areas. Due to the economic difficulties for a large part o f the in-migrating population with n o means, and different types o f land ownership that fuels land speculation, urbanization often takes place o n land unsuitable for construction (e.g. subsidence, swamps). This situation i s perpetuated by the diff iculty o f obtaining legal t it le to land and the high cost o f quality construction materials, causing urbanization to take the shape o f unplanned, low-density sprawl. This, in turn, increases the cost o f delivering basic services (such as access to water, sanitation, drainage o f storm water, roads, and access to economic infrastructure, etc.), hinders people f rom participating in income-generating activities and contributing to economic growth, and reduces the quality o f l i f e for urban residents.
(iii) Lack of urban planning. From the early 1960s to the beginning o f the 1990s, n o urban planning documents were elaborated in Chad. Urban planning has been an isolated and centralized process, undertaken without reference to the parallel task o f planning investments and often fail ing to consult with the people affected. Some master plans were developed for N’Djamena, Moundou, Sarh, and AbCchC during the 1990s, but there was n o capacity to implement them. Other cities are developing f rom day to day, without control and without reference to any kind o f investment plans. Legislation o n land ownership dates back to 1967. Under the leadership o f MATUH, efforts are under way to bring the legislation in line with current realities, and a new body o f l aw governing land ownership i s being prepared for technical validation.
(iv) Ineficient municipal resource utilization. High staff costs, over 25 percent for a l l cities except Moundou (and even then probably underestimated), limit the resources otherwise available for public services. N e w infrastructure has been constructed without clarity about funding for operation and maintenance. As a result, budget allocation and expenditure o n routine maintenance o f infrastructure has been insufficient, while municipalities seek funds for new investments. The resulting degradation o f infrastructure i s a waste o f resources, since this practice can result in up to ten times the lifetime cost o f infrastructure, compared to an optimal maintenance program. The minor maintenance works that are carried out are often undertaken by the population. The case o f Moundou, the second largest c i ty in Chad, n o resources are spent o n the municipal budget for maintenance, and the task i s whol ly passed on to the population.
(v) Weak financial and account management at the municipal level. Municipalities face a number o f difficulties in financial and account management: (i) the budget and account classification i s n o longer suitable; (ii) financial and accounting management tools are practically nonexistent; and (iii) there i s a scarcity o f human resources in financial management. The four municipalities o f Doba, Sarh, Moundou and AbCchC use a manual accounting system, which i s generally improperly kept and unable to produce a reliable report o f the required operations. Furthermore, producing accounts for the fiscal year i s laborious and periodic reconciliation o f accounts with the Comptroller General’s Department i s equally difficult. Attempts to enter the accounting data into a spreadsheet have been made (e.g. in Doba) but are l imi ted to individual efforts and do not in any way constitute a shared effort by the financial departments o f the municipality or the Comptroller General’s Department. Establishment o f a sound basis for planning municipal expenditure will contribute to overcoming problems with current funding o f the municipalities.
(vi) A nascent decentralization in need of support. Local elections, under the responsibility o f the Ministry o f Land Administration, have been postponed several times. Before the
41
recent eruption o f violence in Chad, they were expected to take place at the beginning o f 2007. After local elections, with elected bodies in place, the municipalities’ statute will fo l low the l a w and be under the control o f L a w n0002 o f February 16, 2000 on decentralized government. Decentralization will act as a catalyst for local initiatives. With decentralization, the Government seeks to improve municipal management systems and to clarify the delegation o f authority between the state and municipalities.
(vii) Weak institutional structure and support capacity. The central administration lacks the capacity to support the municipalities. MATUH i s a recently created Ministry. The Department o f Urban Development only has 15 sector specialists, and the Cadastre has 25 technicians. The Ministry o f Finance, Economy, and Planning, and the Ministry o f Land Administration are equally suffering f rom lack o f organization, equipment, and human resources, so ministerial support to municipal revenue mobilization and budget management remains weak.
G. Government strategy
44. In urban areas, the Poverty Reduction Strategy Paper (PRSP) supports the interconnection o f medium-sized towns by a road network that can be used al l year round and can be accessed from any satellite settlement. The PRSP further supports preparation o f national, regional, and urban development plans, and concentrates o n developing infrastructure and urban services, specifically providing major urban centers with water production and distribution networks, creating sewer and drainage systems, and assuring evacuation o f waste out o f the cities.
45. The urban sector i s among the priority sectors which can benefit f rom the o i l revenues. In MATUH’s budget for 2007, o i l revenues represent CFAF 5.15 b i l l ion out o f a total o f CFAF 14.879 b i l l ion (i.e. 35 percent). The Government i s committed to improving the provision and quality o f basic urban services, as indicated in the 2006 Letter o f Policy for the Urban Sector, communicated to the Bank. The urban policy has a strong focus o n practical implementation and the means to do so, by channeling o i l revenues to the urban sector and providing an overall vision for the sector and the contributions o f the donor community.
46. A very important challenge for Chad i s to promote growth in the non-oil sectors and increase non-oil revenues to ensure that resources for implementing the Government’s development agenda remain adequate. The urban sector pol icy specifies that investments are to be focused in the cities with the greatest economic potential, giving priority to critical infrastructures which can improve the productivity o f cities (roads, drainage, drinking water, removal o f waste, etc.), improving living conditions in poor neighborhoods, promoting employment creation, promoting delegation o f responsibilities by the State and local authorities, furthering growth o f municipal resources by improving their management systems, and promoting a participatory pol icy to involve the population in the development effort.
47. Since the municipalities cannot be expected to perform a l l o f the tasks under their responsibility, c iv i l society and the private sector should become increasingly involved in the planning, implementation, and especially maintenance o f urban infrastructure, and the provision o f services. T h i s involvement entails consulting the beneficiary population o n the services and infrastructure to be made available.
48. The proposed urban development project i s in line with the PRSP and the Government’s strategy, with a focus on an efficient use o f o i l revenues in the urban sector. The preparation o f urban development plans, as those being co-financed under the proposed project, will clarify development needs for the cities and will set up priority investments programs, focusing on the immediate needs o f the population and on longer term local economic development and poverty reduction.
42
H. Overview o f targeted project cities
49. The project cities (N’Djamena, Moundou, Sarh, AbCchC, and Doba) are a l l subject to the challenges described above. In terms o f poverty reduction and economic growth, N’Djamena has a special importance because o f i t s economic weight, population size, and needs. AbCchC, Sarh, Moundou, and Doba are important because o f their geographic location, weight in the economy, and the rapid increase o f their populations. With combined populations o f over 1.5 mill ion, these five cities account for about 65 percent o f the urban population o f the country.
50. Due to the slow pace o f decentralization, only the most important urban municipalities (N’Djamena, Moundou, Sarh, and AbCchC) have experienced any significant development with the establishment o f operational technical services. The technical expertise present in the administration i s very limited, and some municipal departments are managed by persons with n o formal professional training.
51. Public urban investments have been focused o n N’Djamena, which has received 80 percent o f Chad’s urban investments in the past two years. At the institutional level, N’Djamena i s the only fully functioning city, with an organizational structure, qualified staff, and financial resources to enable the c i ty to carry out planning and implementation to any significant extent. The other cities largely depend o n the central ministries’ support (through deconcentrated units), especially in municipal finances. The administrations o f the project cities a l l suffer f rom a lack o f professional staff and appropriate management tools, the inadequacy o f the resource mobil ization system, the irregularity o f transfers o f funds f rom the Treasury, and inefficient management o f public expenditures.
52. The relevant characteristics o f these cities are outlined below.
N’Djamena
53. Socioeconomic characteristics. The population o f N’Djamena i s estimated at between 1.0 and 1.2 mi l l ion and has been growing at an estimated rate o f 6 percent during recent years, mainly due to in- migration f rom rural areas. The population was 531,000 in 1993 (year o f the latest general census), up from 100,000 inhabitants in 1964. Nearly 99 percent o f the population o f N’Djamena can be considered to be living in slums.
54. Water. There were 15,000 individual water connections in N’Djamena in 2002 and about 280 water standpipes, each serving about 500 persons. Counting 10 persons per individual connection, this gives a coverage o f only 29 percent o f the city’s population o f one mi l l ion people, thus lower than the national average o f 41 percent with access to water in urban areas (2004 figures). An AFD-financed urban development project in N’Djamena (€12.5 mill ion) includes a water provision component.
55. Government to set aside CFAF 100 mi l l ion per year for road maintenance.
Roads. Under the AFD-financed project, N’Djamena has signed a city-contract with the
56. Electricity. 12,000 individual electricity connections in N’Djamena result in a coverage o f about 14 percentz2 o f the city’s population. The Critical Electricity and Water Services Project, co-financed by the Wor ld Bank (US$54.8 million), as wel l as a project for the construction o f a new power station in Raracha and an extension o f the water and electricity network financed by the Islamic Development Bank
22 Figures taken from the Project Appraisal Document of the Critical Electricity and Water Services Project (P077240).
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(IDB) (€32 mill ion) aim to remedy some o f the infrastructure constraints by increasing electricity generating and water supply capacity, decreasing the number o f days with disruptions (250 days per year in 2002), and increasing the number o f people with access to electricity and water.
57. Drainage. Due to high levels o f donor investment, the c i ty has 120 kilometers o f functional drains. As N’Djamena i s in a depressed area, i t i s necessary to pump rain water to the receiving basin by the Chari River. Dredging o f drains has been contracted out to a private operator since 2004, and in 2006 the.first competitive bidding was launched in Chad in this sector. The ci ty has an outdated drainage master plan from 1975.
58. Solid waste. The ci ty produces about 600 m3 o f solid waste per day. The material at the disposal o f the c i ty i s dilapidated, and frequent breakdowns o f trucks result in an inefficient transport o f solid waste out o f the city. Solid waste management i s the largest i tem o n the municipal budget at CFAF 240 m i l l i on budgeted per year (1 3 percent o f the budget), not including personnel expenses and depreciation o f equipment. The urban development project financed by AFD will construct an engineered landf i l l in N’Djamena and provide training and technical support to the neighborhood pre-collectors.
59. Urban and municipal management. N’Djamena has an administration comprising 1,100 staff (corresponding to 0.97 staff per 1,000 residents). The rapid population growth has led to unplanned settlements and a lack o f services to the urban residents in general. The ci ty needs tools to help plan urban development and strengthen municipal administration o f revenue generation and technical services. The Bank has been working with MATUH to prepare a proposal for a Ci ty Development Strategy to be submitted to the Cities Alliance Programz3.
AbCchC
60. Current estimates place the population o f AbCchC between 88,000 and 100,000, with an estimated annual growth between 4.0 percent and 5.0 perced4. The city’s population increased from 22,000 in 1964 to about 55,000 in 1993. Inadequately connected to the rest o f the country, AbCchC accumulated wealth through trade with Sudan, L ibya and, to a lesser extent, the Central Afr ican Republic. As a result o f the decline o f that trade combined with influx o f refugees f rom the conflict in Darfur in neighboring Sudan, AbCchC faces serious economic problems. Because o f i t s isolation, AbCchC’s commercial activity i s based o n regional trade o f food crops and livestock. Urban development has mainly taken the form o f makeshift settlements.
Socioeconomic characteristics.
61. Water. An estimated 61 percen?’ o f the population has access to potable water, with 18 percent being served by an individual connection and 43 percent having access via a standpipe. Per capita consumption i s estimated at 79 liters per day for an individual connection and 19.8 liters per day for people using a standpipe. Investment in the ci ty has been minimal, through an urban drinking water supply project funded by the German Agency for Technical Cooperation (GTZ). Failure to maintain the works and rapid population growth results in severe drinking water shortages.
62. embankments erode, threatening the residential areas.
Roads. The local rainfall conditions contribute to the city’s decay, as the roads are gullied and the
23 Cities All iance is an alliance o f cities and their development partners committed to urban poverty reduction. 24 Feasibil i ty study for Component B: Avant-projet sommaire. September 2006 and Note sur 1’Cvolution de taux d’accts a l ’eau saine des populations tchadiennes en regard de l’atteinte des Objectifs du M i l l h a i r e pour le D6veloppement (OMD). Min is t t re de l’environnement et de l’eau. 2006. 25 Feasibil i ty study for Component B: Avant-projet sommaire. September 2006.
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63. Urban and municipal management. The municipality employs 53 staff (equal to 0.57 staff per 1,000 residents). As with other regional capitals, AbCchC has limited support from deconcentrated services o f the state. There i s a regional delegation o f the Ministry o f Infrastructure, o f the Urban Department o f MATUH, o f health and o f hygiene and sanitation. These delegations have very limited transport means, and cooperation with the municipal departments i s very limited.
Sarh
64. Socioeconomic characteristics. Current estimates set the population at between 107,000 and 139,000 people, with an annual growth estimated at between 2.926 percent and 5.0 percent. The city’s population increased from 30,000 in 1960 to 75,000 in 1993. The city’s industrial activity slumped as a result o f the closure o f the meat processing company o f Chad (SNIT), the closure o f the textile company o f Chad (STT), and the transfer o f the operation o f the cotton company o f Chad (COTONTCHAD) to Moundou. The only remaining major employer i s the Chad Sugar Company. The increase in Sarh’s population has exceeded all urban planning projections, partly due to a considerable inflow o f migrants from all o f the country’s regions.
65. Water. There are about 60 standpipes in the city (set up in central districts), and the water supply network i s in a state o f extreme disrepair. Access to potable water i s estimated at 56 percen?’ o f the city’s population, with 9 percent being served by an individual connection and 47 percent having access via a standpipe. Per capita consumption i s estimated at 70 l i ters per day for an individual connection and 2.4 liters per day for people using a standpipe. The municipality’s limited resources prevent it from meeting the population’s demand for services, and the city faces a serious (qualitative and quantitative) water supply problem.
66. Roads. N o roads in Sarh are paved but the road network seems to provide adequate access to the various neighborhoods. Sporadic road maintenance i s carried out with the assistance o f the Sugar Company or by renting equipment from private operators during periods o f modest activity.
67. Drainage. Sarh suffers from a low run-off gradient towards the Chari-Bah Kh8, and the sandy soil clogs the drains. Sarh i s subject to recurrent flooding. The city benefited from a drainage project financed by AFD in 2003, but this i s the f i rst drainage construction since 1942. The only planned project, apart from the proposed project, i s the construction o f soil trenches, with the assistance o f sanitation committees.
68. Urban and municipal management. The municipality o f Sarh employs 149 staff, corresponding to 1.23 staff per 1,000 residents. Sarh has signed a sister-city agreement with Cherbourg (France) in 2001, through which Sarh has received equipment for the sanitation committees, construction o f public latrines, and a pilot operation o f digging drains directly in the soil.
Feasibility study for Component B: Avant-projet sommaire. September 2006. ’’ Feasibility study for Component B: Avant-projet sommaire. September 2006. 26
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Moundou
69. Socioeconomic characteristics. As a result o f Moundou’s proximity to the KomC oilfields, i ts population o f between 167,000 and 180,000 i s increasing at a very rapid rate (4.4 to 5.5 percent annually). Moundou’s population was 30,000 in 1964, and had grown to almost 100,000 by 1993. In view o f i t s dynamic industrial and economic role, Moundou i s appropriately being referred to as “the economic
* capital” o f Chad. Location o f most o f the industrial production o f the country, Moundou hosts the headquarters o f many industrial companies, including COTONTCHAD, Chad’s o i l and soap production company (formerly DHS), the Lagone breweries (BDL), and the cigarette manufacturing company o f Chad (MCT). Proximity to the Central African Republic and Cameroon has made Moundou somewhat o f a regional center, further reinforced by economic activity linked to o i l production in the region.
70. Access to potable water i s estimated at 58 percenf8 o f the city’s population, with 8 percent being served by an individual connection and 50 percent having access via a standpipe. Per capita consumption i s estimated at 45 l i ters per day for an individual connection and 1.9 liters per day for people using a standpipe. Six out o f 10 public standpipes have been shut down because o f faulty management by the management committees. AFD has funded a rainwater drainage project for an amount o f CFAF1.84 bil l ion (US$3.6 million). Like other cities in Chad, Moundou suffers from severe drinking water and power shortages and inadequate access o f the population to basic services.
Water and electricity.
7 1. Roads. The city has a paved road going through the city, but apart from that the road network i s degraded by rainfall and badly maintained. The technical services have no material to maintain roads, so maintenance i s carried out by sporadically hiring equipment at an elevated cost.
72. Drainage. Moundou i s situated in a somewhat elevated basin, with rather steep slopes toward the east and the northeast. The highly argillaceous soil leads to flooding at the peak o f the rainy season, inundating roads in many neighborhoods. Despite the construction o f a drainage network under AFD financing in 2004, the city has grown to an extent that i t i s still disposed to flooding during the rainy season, making many neighborhoods inaccessible.
Waterborne epidemics occur every year.
73. eventually ends up in the drains and gutters.
Solid waste. A t most, 20 percent o f solid waste i s transported out o f the city, so the majority
74. Moundou i s a sister city with Poitiers (France), and has benefited from a variety o f support, including twinning o f hospitals in the two cities and furnishing o f a power generator, hospital equipment, school material, construction o f five water standpipes, and support to sanitation committees.
75. Urban and municipal management. The municipality employs 152 staff (0.88 staff per 1,000 residents). In the absence o f an urban master plan, land use patterns are informal and do not meet urban planning standards. The cadastre documents are outdated and can be considered obsolete, and the municipality does not possess any aerial photographs. None o f the departments has a copy o f the urban development plan o f 1997 or the updated version o f 200 1. The municipal services are housed in buildings o f varying quality, and there i s no room to install additional staff. Maintenance o f infrastructure i s wholly passed on to the population, and there i s no regular dredging o f drains and gutters after the rainy season. The delays in payment o f invoices deter private providers from responding to solicitations from the municipality. Municipal resources are insufficient for the maintenance o f existing infrastructure and, as a result, l iving conditions deteriorate steadily.
Feasibility study for Component B: Avant-projet sommaire. September 2006.
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Doba
76. Socioeconomic characteristics. The c i ty o f Doba has a population o f about 45,000.29.
77. O i l development in the Doba basin has created important expectations among communities. Wh i le the Government has tried to manage them, expectations remain high and challenge the Government to use the o i l revenues to address poverty. US$18.8 mil l ion has been allocated to the oil-producing region itself to support regional and community-driven development projects to benefit the local population. Despite Doba's key role in Chad's o i l industry, i t s infrastructure i s not in good condition.
78. Doba has benefited from numerous interventions from 2001-2003, to prepare for o i l production in the region. Most notable are electrification and provision o f public lighting in several neighborhoods, collection o f solid waste, dredging o f drains and gutters, construction o f a school, a high school, a water tower, and extension o f the water network. The construction o f a market and asphalting o f the Koumra- Doba-Moundou road i s planned for 2006.
79. Water. The National Water and Electricity Company (STEE) has a reservoir o f 500 m3, which supplies a network with 420 individual connections. The construction o f a second borehole and two reservoirs o f 50 m3 each i s ongoing, to supply the northern parts o f the city. There are 16 standpipes in the city, o f which only 5 are operational, as the rest have been shut down because o f faulty management. The functional standpipes are managed by leaseholders in agreement with the mayor's office.
80. Solid waste. The municipality i s not able to transfer solid waste out o f the city to any significant extent, due to the lack o f equipment. Interventions financed by o i l revenues managed to improve collection and transfer for a while in 2000-2002, but without continued exterior support, the achievements could not be sustained.
81. Urban and municipal management. The municipal administration in Doba employs 32 staff (0.71 staff per 1,000 residents). The municipality does not have maps or aerial photographs, and the s ta f f does not possess any ski l ls in map reading. An urban development plan was elaborated in 2001, but needs to be updated and reviewed so that i t can be used as a guide for planning investment decisions. The deconcentrated services o f the Urban Department o f MATUH are located in Moundou, which hampers cooperation, but nevertheless there i s frequent communication between the two services. Since Doba's population i s expected to increase significantly as a result o f i t s importance to the country's economy, the preparation o f an urban development plan now i s a prerequisite for planning the city's future economic and physical growth. A t the same time, emergency measures needed to respond to the population growth include the construction o f a road network to enhance access to ci ty districts, the prevention o f flooding, and the improvement o f city equipment and infrastructure.
29 Preparatory study: Etude desfinances et de la fiscalit6 locale des villes de N'Djamena, Moundou, Sarh, Abe'che' et Doba. 2006.
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Annex 2: Major Related Projects Financed by the Bank and/or Other Agencies
Sector Issue
CHAD URBAN DEVELOPMENT PROJECT
Project Latest Supervision Summary of sector-related (ISR) Ratings projects
(Bank-financed projects only)
Community Development
Public Sector Management
Education
Health
Energy
PO66998 Local Development Program Support Project (PROADEL) (active)
PO90265 Under preparation: Capacity Building for Modernization o f Public Financial Management (PAMFIP).
PO00527 Education Sector reform Project (active)
PO55 122 Health Sector Support Project (active)
PO48202 Petroleum Sector Management Capacity Building (closed)
I P MU
N o t rated
Mu
U
U
DO MU
N o t rated
Mu
Mu
U
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PROADEL assists in designing and implementing a decentralized and participatory financing mechanism that will empower local communities and decentralized authorities to manage development funds by: (i) strengthening the capacity and responsibility o f local communities and decentralized authorities; (ii) implementing demand-driven subprojects; and (iii) supporting the emerging process o f decentralization. The proposed operation (scheduled for Board presentation on March 6) will assist the Government o f Chad in the implementation o f i t s PAMFIP action plan to improve i t s public financial management system and increase the efficient and transparent use o f public resources. The project aims to develop quality universal basic education and focus on building the institutional capacity for a more effective partnership between the State and communities. The project will assist the Ministry o f Public Health in the process o f decentralizatioddeconcentration and wil l ensure that resources reach the regional and district levels in project-targeted areas. The project aimed to strengthen the capacity o f the Government o f Chad to: (a) manage the development o f i t s petroleum resources in an environmentally and socially sound
Infrastructure
Project Services de base dans les quartiers dCfavorisCs et environnement urbain ti N’Djamena. Projet de DCveloppement Urbain et d’AmClioration de 1 ’Habitat (DURAH). Support to developing and implementing an action plan in MATUH Water provision
Community development,
Infrastructure
Summary o f sector-related projects Water provision and drainage in the peripheral areas o f N’Djamena, solid waste management and capacity building (€12.5 million).
Housing project. CFAF 20,000 m i l l i on (CFAF 1,200 mi l l ion UNDP technical assistance, the rest national funds). Technical assistance to MATUH (DU) CFAF 20 mi l l ion at present, some limited financing foreseen for 2007. Water project focusing on Faya Largeau (US%5.2 mill ion)
Technical Assistance through a Drinking Water
PO00533 Public Works and Capacity Building Project (closed)
PO77240 Critical Electricity and Water Services Rehabilitation Project (active)
Other development agencies
Agency French Development Agency (AFD)
UNDP
CoopCration f r a y ai se (SCAC) Islamic Development Bank (IDB) European Commission (EC)
City twinning programs: N’Djamena- Toulouse; Poitiers- Moundou; Cherbourg-Sarh
U
U
U
U
manner, beginning with the development o f the Doba o i l fields; and (b) increase revenues from o i l production. The project objectives were to build local capacity through private sector development, improve public procurement, assist the government in maintaining infrastructure assets and participate in reducing unemployment. The project seeks to secure the delivery o f basic electricity and water supply services, to prevent the collapse o f the system, particularly in N’Djamena, in addition to reducing service delivery costs, through increased private sector participation in both sectors.
water supply, infrastructure, health, education CoopCration dCcentralisCe
- Program (9th EDF).
N’Djamena: Support to municipal management, solid waste management, health, culture. Moundou: Extension o f water network and installation o f standpipes (complimentary to the proposed Urban Project), health and culture. Sarh: hygiene and health.
LPDO Ratings (Implementation ProgresdDevelopment Objective Ratings) HS (Highly Satisfactory), S (Satisfactory), M S (Moderately Satisfactory), MU (Moderately Unsatisfactory), U [Unsatisfactory), HU (Highly Unsatisfactory)
49
Annex 3: Results Framework and Monitoring
CHAD URBAN DEVELOPMENT PROJECT
Results Framework
PDO
Increased sustainable access to municipal services for residents in targeted project cities.
Intermediate Results One per Component
Component A:
Strengthened capacity o f the local governments in N’Djamena, Sarh, Moundou, AbCchC, and Doba to plan and manage the development and delivery o f infrastructure and urban services and to increase their financial resources to maintain existing and new infrastructure.
Outcome Indicators
Number o f people in targeted cities protected from periodic flooding.
Number o f people in targeted cities having access to drinking water (based on users per standpipe and per individual connection).
Number o f people having access to the c i ty center via roads that are usable a l l year.
Annual increase in municipalities’ own revenue (municipal taxes and revenue from municipal assets).
Results Indicators for Each Component
Component A:
Annual budget allocation and expenditure o n routine road and drainage maintenance within appropriate range (percent o f total annual budget).
Technical review shows satisfactory maintenance o f infrastructure financed under the project (percentage o f infrastructure).
Number o f municipalities having adopted and using transparent, standardized, and efficient budget management procedures as specified in administrative management procedures manual.
T o assess impact o f works o n improved urban services.
To assess increased access to urban infrastructure.
To assess increased access to urban infrastructure.
T o assess the municipalities’ ability t o raise local revenues for service provision.
Use of Results Monitoring
Component A:
T o monitor municipalities’ progress in generating revenues.
T o assess whether budget allocation i s assuring proper maintenance.
T o assess efficiency o f municipal administration.
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Component B:
Improved availability o f urban infrastructure.
Number o f service satisfaction surveys carried out and published in targeted cities.
Number o f urban development and investment plans developed and adopted by key local stakeholders in targeted cities.
Component B:
Number o f man-days o f work generated.
Number o f kilometers o f newly constructedrehabilitated drainage works.
Number o f kilometers o f newly constructedrehabilitated water supply network.
Number o f newly constructed water standpipes .
Number o f kilometers o f roads rehabilitated in Doba.
Number o f slaughterhouses rehabilitated in AbCchC.
To assess if municipal administrations are getting feed- back o n their performance.
To assess the capacity o f municipalities to plan and execute investments.
Component B:
To assess if the works are benefiting the local population.
To assess the actual implementation o f drainage works.
To assess the actual implementation o f water supply works.
To assess the actual implementation o f water supply works.
To assess the actual implementation o f road works.
To assess actual construction o f economic infrastructure.
51
m s 0 m
0 0
8 W
0 0
03 m z-
m 2 M
g m
0 0
0 0 0 0 0 0 0 0 0 0 D O C 0 0
0 0 0 0 3 o c 0
‘c! W
CI
0
0
0
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0
Annex 4: Project Description
CHAD URBAN DEVELOPMENT PROJECT
1. The proposed project i s based o n previous sector experience and studies and will be implemented in close coordination with other donors to ensure complementarities o f interventions and maximum sector coverage. On February 24 and 25, 2005, the MATUH organized a project preparation workshop, gathering 120 participants to be involved in the project at the central and local levels. This workshop served to: (i) disseminate information on the project and ensure transparency in i t s preparation; (ii) collect feedback on the project components and institutional arrangements f rom the various stakeholders and in particular f rom the beneficiary cities’ representatives. During the Bank appraisal mission, a project validation workshop was organized by the MATUH and held in N’Djamena o n November 9 and 10, 2006. This workshop, which gathered a l l the key national and local stakeholders, led to the validation o f the project’s activities and institutional arrangements for i t s implementation.
2. The project will improve basic infrastructure (component B) in the major cities o f Chad, thereby meeting some o f the needs that are obvious in light o f the unprecedented demographic pressure o n those cities. T o ensure the sustainability o f interventions and lay the foundation for continued improvement o f services, institutional support and capacity building (component A) are central t o the project, as illustrated by the share o f project funds allocated for technical assistance. Given the acute lack o f infrastructure in the major cities o f Chad, the two components will be implemented in parallel, with capacity to maintain infrastructure being strengthened concomitant with the construction o f infrastructure. Thus, the municipal technical departments will be able to fo l low the works as they are being implemented and be trained in practice.
a
3. The two components are mutually reinforcing, as the new infrastructure financed under the project will provide the basis for local economic growth, and the capacity building wil l enable maintenance o f infrastructure and continued service improvements. Increasing the financial resources at the disposal o f the municipalities and their technical capacity to plan and implement new infrastructure and services will strengthen this development. The project will finance urban development plans, which will in turn be used as basis for priority investment programs, and thus link available resources to infrastructure investments.
4. AFD and other donors are currently focusing their financing o n infrastructure in the capital city, N’Djamena. Thus, the proposed project will limit infrastructure investments in N’Djamena to priority storm water drainage, and concentrate infrastructure investments in the major secondary urban centers (Moundou, Sarh, AbCchC, and Doba, as agreed with the Government at an early stage o f project preparation). Moundou, Sarh, and AbCchC are the most populated secondary cities in Chad, with the highest urban population growth rate and significant infrastructure shortage. Oil production in the Doba Basin has created important expectations among local communities. In Doba, the Project will finance urban roads (and their corresponding drainage works) to improve accessibility t o some city’s highly populated neighborhoods.
5. The project wil l provide capacity building activities for the urban sector as a whole, in conjunction with other donors’ operations. The project will be complementary to the Wor ld Bank- financed Local Development Program Support Project (PROADEL), which supports decentralization in rural areas and to the project on Capacity-building for Modernization o f Public Financial Management (PAMFIP). Since the pace o f the ongoing decentralization process i s uncertain (local elections have been postponed several times and may not take place at the beginning o f 2007 as anticipated by MAT and MCD), i t s was decided that the project would focus o n activities that do not depend o n the momentum o f
55
the decentralization process to be successful. By strengthening the municipalities, the proposed project i s preparing the ground for effective polit ical decentralization, by which the local governments will be made directly responsible to the local populations. Beyond holding local elections, the Government i s committed to taking measures to improve the effectiveness and efficiency o f the municipalities to enable them to fully assume their new responsibilities. Component A o f the proposed project h l l y f i t s into this strategy.
COMPONENT A: STRENGTHENING MUNICIPAL AND URBAN MANAGEMENT CAPACITIES (estimated cost: US$4.96 million to be entirely funded by IDA)
6. The objective o f this component i s to strengthen the capacity o f the local governments in N’Djamena, Sarh, Moundou, AbCchC, and Doba to plan and manage the development and delivery o f infrastructure and urban services, and to increase their financial resources to maintain existing and new infrastructure. The use o f new or improved management tools and better identification and improved collection o f financial resources in addition to capacity building will be the main thrusts o f this component. Activities under this component will target changes that should happened at the municipal level and actions that will take place at the central level regarding the Ministries in charge o f urban affairs, decentralization, finance, and land planning.
7. The preparatory studies identified the necessary measures to achieve the component objective: (i) scale-up municipalities’ human resources and improve the functioning o f their key support units; (ii) strengthen the technical services o f the municipalities and provide them with the tools to carry out urban planning; (iii) establish a more transparent municipal management process and reinforce accountability; (iv) strengthen capacity o f the central administration and deconcentrated ministries to supervise and provide technical assistance to the municipalities; (v) increase the financial resources at the disposal o f the municipalities through improved collection o f taxes, better y ie ld f rom municipal assets, and strengthen the mechanisms for transfer o f resources from the State to the municipalities; and (vi) introduce efficient management o f expenditures with a focus on maintenance, to improve sustainability o f investments.
8. The Government has confirmed i t s intention to achieve these objectives through a letter o f sector pol icy prepared by MATUH which was adopted by the Minister o f Councils and sent to IDA before project negotiations. This was a condition for negotiations.
9. level and one for activities directed towards the central administration and decentralized ministries.
This component i s divided into two sub-components, one for activities directly targeted at the city
A.1: Strengthening urban and municipal management capacities (estimated cost: US$2.28 million)
10. Through this sub-component, the project will strengthen municipal and urban management capacity in the project cities. The component finances workshops, technical assistance, studies, training, and equipment. This component has five sub-components:
(a) Improving the internal functioning and organization of municipalities (estimated cost: US$0.38 million)
(i) Organizational audit and municipal management manual. Based on organizational audits, municipal management manuals will be developed for the five cities o f the project, laying out a functional reorganization o f municipal departments (definition o f responsibilities, functional organizational chart, operational directives for technical,
56
administrative and financial departments, and j o b profiles). The manuals will be developed in coordination with the municipalities, MAT, MATUH and M C D , to facilitate the dissemination to other municipalities in Chad. Training for key personnel will be carried out during the f irst year o f the project. As part o f the agreements to be signed between the State and each o f the beneficiary cities, the latter ones will commit to using those manuals and apply their recommendations, which will be also subject to audits funded under the project.
(ii) Strengthening municipal technical services. Support to cities’ technical departments and MATUH’s regional offices for programming infrastructure maintenance, programming and quality control o f works, and support to contract management and involvement o f the private sector in works execution.
(iii) Provision of ofice equipment and logistics. information technology (IT) equipment for the technical departments o f the communes.
The project will finance office and
(b) Improving resource mobilization and financial management (estimated cost: US$l. 05 million)
11, The actions to be funded under this sub-component result f rom two preparatory studies funded under the PHRD. These actions have fully taken into account the need to: (i) prioritize financial problems and deficiencies faced by the communes, and subsequently target the most urgent actions and measures whi le ensuring their feasibility within the project’s framework; (ii) ensure that the targeted actions are consistent with the advancement o f the decentralization process; and (iii) move ahead in collaboration with other programs and actions undertaken within the framework o f other projects or initiatives, in particular those supported by other donors working in this area.
12. The fol lowing actions a im at improving the fiscal information database, reducing the cost of administration o f local taxes and reducing the time o f billing and collection o f taxes. Based on the preparatory studies, actions will be funded in the fol lowing areas:
(0
(ii)
(iii)
Improving resource mobilization (including IGL/TVLP). Training o f perwnnel to increase efficiency o f tax collection. The focus will be o n direct taxation by transferring actions that have been carried out successfully in N’Djamena o n the general lump sum tax (IGL) and the tax o n the value o f business premises (TVLP) to the four other municipalities.
Improving management and yield of municipal/property taxes. A census o f the principal potential yield o f property taxes will be carried out in each o f the beneficiary communes o f the project. Management software for tax collection and recovery will be put in place. A procedures manual specifying the official collection procedure will be elaborated.
Standardizing the budget nomenclature. The communes do not use an obligatory unified budgetary nomenclature. Only the commune o f N’Djamena has, for a decade now, been using a more developed budgetary nomenclature, which takes into account the requirements for budgetary and accounting management, as wel l as the monitoring and analysis o f expenditure. Moreover, in the case o f N’Djamena, the accounting process i s computerized. In close coordination with key l ine Ministries (including Finance, and Land Administration), this sub-component will finance action plans (draft terms o f reference have been prepared as part o f project preparation) and technical assistance to: (i) determine and adopt a new budgetary nomenclature; (ii) computer applications
57
util izing this nomenclature; (iii) provide training o n the new nomenclature and i t s applications; (iv) computerize the budget and accounting process.
(iv) Modernizing the accounting andPnancia1 management. The four communes, apart f rom N’Djamena, use a manual accounting system, which i s generally improperly kept and unable to produce a reliable report o f the required operations. Under this sub-component, focus will be o n computerization o f accounting practices through development o f financial and administrative manuals, training o f financial departments’ staff, and installing information technology equipment.
(c) Improving urban management and planning (estimated cost: US$0.34 million)
(i) Strengthening technical sewices in management and planning. The urban development plans (to be funded under sub-component A.2-a) will form the basis for elaborating, in each o f the concerned municipalities, a priority investment plan clarifying the interventions that the Government and the municipalities must implement over the fo l lowing five years, taking into account the budgetary resources actually available. This sub-component will finance training for municipal staff and representatives o f MATUH’s regional offices in charge o f urban planning, investment programming, and topography.
(ii) Sanitation master plan for N’Djamena. The terms o f reference of the study are finalized and the study will be launched during the f i rst year o f project implementation. The preparation o f a sanitation master plan will enable the municipality o f N’Djamena to better program future investments such as rainwater drainage using funds from o i l revenues and internationalhilateral aid.
(d) Improving transparency and accountability of city managers to urban residents (estimated cost: US$O. 14 million)
With the objective o f increasing local governments’ accountability to urban residents, this sub- component will finance the reporting to the population of: (i) municipalities’ financial performance, (ii) progress reports o n the project, identifying bottlenecks and actions to be taken at national and local levels for delivery o f urban services, (iii) publication o f cities’ project performance indicators (this will be done in a simple manner using the most appropriate means o f local communication); and (iv) surveys on satisfaction o f the urban population to ensure that municipalities take into account specific needs expressed by urban residents.
(e) Providing support to community integration and awareness on socio-environmental aspects (estimated cost: US$0.3 7 million)
Training and support to the district sanitation committees and the local steering committees, so that they can assist in maintaining infrastructure.
Training o f operators o f water standpipes (sanitation committees, NGOs or private operators).
Public awareness campaigns on the effects o f dumping household waste in the drains and o f lack o f maintenance o f water stand-posts, to mobilize community participation in maintenance and preservation o f public infrastructure.
Training for municipalities, key ministries including deconcentrated services in environment and social aspects.
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A.2. Strengthening the capacity of the central and deconcentrated administration to support the municipalities (estimated cost: US$2.68 million)
13. The objective o f this sub-component i s to strengthen the capacities o f the central administration and deconcentrated ministries (MATUH, MCD, MAT, MFEP) to provide technical support to the municipalities to manage their new responsibilities (financial and urban management, tax base identification and collection, reporting, etc.).
(a) M A TUH and deconcentrated sewices (estimated cost: US$2.55 million)
14. This sub-component will finance:
Updating o f urban development plans for Moundou, Sarh, AbCchC, Doba (in coordination with the Bank, the c i ty o f N’Djamena i s requesting funds f rom Cities Alliance for an update o f i t s urban development plan).
Preparation o f urban development plans for 12 other selected secondary cities (population varying between 30,000 and 60,000), namely Mongo, Lay, Pala, Bongor, Bol, Mao, Am- Timan, Biltine, Ati, Fada, Faya, and LCrC (those cities have been selected by the Government during project preparation and in close coordination with the PROADEL). In the Letter o f Urban Sector Policy, the Government has confirmed i t s intention to use a portion o f o i l revenues to finance the priority infrastructures resulting, in particular, f rom the urban development plans funded under this sub-component.
Training and technical assistance to MATUH, to complement actions already financed by the French Cooperation (SCAC) and AFD, for: (i) strengthening technical support to municipalities for urban development; and (ii) assistance for implementing annual urban pol icy reviews and strengthening budget planning and execution, to facilitate focused and efficient use o f o i l revenues (taking into account the long-term effect o n the budget in terms o f operation and maintenance).
Project launch workshop and mid-term review workshop.
Information, education, and communication (IEC) activities for the project.
Functioning o f the Implementation Unit and transfer o f knowledge to staff o f M A T U H ’ s Urban Department to build capacity within the urban department and facilitate the dissemination o f lessons learned from the proposed project to other Chadian municipalities.
Strengthening regional departments o f MATUH. This includes support to recruitment o f qualified personnel, training, office and IT equipment and logistical means.
(b) Ministry of Finance, Economy and Planning (estimated cost: US$0.03 million)
15. I t i s important to reinforce the capacities o f the central services to assist and then to regulate the communes. The project will fund the publication o f the results o f the actions described above (such as standardized budget nomenclature, lessons learned in terms o f improving tax collection) for dissemination to the communes, the training o f officers and managerial staff and agents, and the provision o f office equipment. The project will also finance:
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(i) Support to the deconcentrated departments o f the General Directorate o f Taxes (DGI) and the Decentralized Territorial Government (DGT) to improve tax collection and transfer o f resources.
Support to entities in charge o f financial management in the municipalities. (ii)
(e) Ministry of Land Administration (estimated cost: US$0.03 million)
16. The Regulatory Directorate (“Direction des Collectivitks Locales”) in the Ministry o f Land Administration i s responsible for inquiring into, and making a determination on, the commune’s most important financial matters, including the budget. The Directorate has insufficient human and basic physical resources available to it. The project wil l finance under this sub-component:
(i)
(ii)
(iii)
Support to the Regulatory Directorate o f the Ministry o f Land Administration to improve budget supervision.
Support to entities in charge o f financial management in the municipalities.
Training o f staff involved with project implementation.
(d) Ministry in Charge of Decentralization (estimated cost: US$O.O 7 million)
17. decentralization process, and in collaboration with other key Ministries.
Assistance will include studies for preparation o f decrees in the framework o f the on-going
Component B: Provision of basic urban infrastructures and services (estimated cost: US$18.42 million)
18. The main objective o f this component i s to improve access to urban infrastructure. More specifically, the project aims at supporting the project cities in acquiring the infrastructure needed to achieve the fol lowing objectives: (i) increase the population’s access to basic urban services; (ii) improve sanitary and health conditions for the population; (iii) increase municipal revenue by improving market infrastructure; and (iv) generate employment opportunities for unskilled and semi-skilled labor, and promoting SMEs in construction and delivery o f services, by dimensioning public works appropriately and using, where possible, highly labor-intensive techniques.
19. Component preparation. The specific investments for the cities o f Moundou, Sarh, and A b t c h t are based on the priorities defined in an extensive 1997 feasibility study financed by the Wor ld Bank3’, which were adopted in the “Lettre de politique gbnkrale dans le secteur de 1 ’urbanisme et de 1 ’habitat” f rom 1999. These priorities remain valid today and were confirmed by the municipalities during a project workshop organized in N’Djamena in February 2005, gathering al l the key national and local representatives.
20. The method used for identifying these investments “Inventaire pour la Programmation des Infrastructures et Equipements (IPIh‘)” consists in establishing priorities among a l l investments, accounting for the current level o f access to infrastructures and services (roads, drinking water, etc.. .) in each ci ty district. A ranking among districts and cities was then established providing the priorities (per type o f infrastructure) corresponding to the highest needs. The resulting proposed priority program was then confirmed by the cities during mission preparation and during the project workshop. These
Projet de Developpement Urbain au Tchad, Etude de faisabilitk, MinistBre des Travaux Publics, de 1’Habitat et des 30
Transports. Direction de 1’Urbanisme et de l’Habitat, 1997.
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investments will provide a significant complement to the investments being financed by other donors, as wel l as the IDA-financed Crit ical Electricity and Water Services Rehabilitation Project. Most o f the works identified in this component represent a complement to the works already carried out by other donors in the past six years.
21. As a result o f the above-mentioned engineering study, a priority program will be finalized during appraisal, and will be: (i) validated by the cities; (ii) comprised solely o f investments having a sufficient economic rate o f return (IRR >12% for economic infrastructure, drainage, and potable water networks); and (iii) complementary to existing infrastructure financed by other donors. Additionally, beneficiary cities will have to commit funds in their budget to finance recurrent costs for these investments as wel l as for the existing infrastructure.
22. The activities will include: (i) rehabilitation and extension o f the water supply network; (ii) construction o f primary drainage networks in neighborhoods not already served in the beneficiary cities and rehabilitation o f existing drainage networks; (iii) construction and rehabilitation o f economic infrastructure (markets and slaughterhouses); (iv) technical studies and supervision needed for implementation o f these works; and (v) periodic technical audits o f works and contract management procedures and financial audits o f works. Regarding rehabilitation and extension o f the water network, special attention will be paid to reducing leakage, eliminating i l legal connections and maximizing efficiency o f the National Water and Electricity Company (STEE) in the project areas; and the national water company wil l submit an action plan before credit effectiveness to improve the Moundou, Sarh, and AbCchC networks and ensure sustainability o f the investments under this project.
23. Sub-component B.1: For the City of N’Djamena (estimated cost: US$0.62 million). Under this sub-component, the project will mainly finance drainage works to be rapidly implemented during the f irst year o f project implementation. These works have been selected based o n technical meetings with representatives o f the c i ty o f N’Djamena and derived from the pre-feasibility study for rehabilitation works in N’Djamena, financed by AFD” in 2003. Drainage and road access works around the main market (march6 b mi l ) (the most important market in Chad, with 17,000 stalls) were identified as a priority. These drains would eliminate flooding around the market during rainy seasons, permit the extension o f the market, and would also contribute to increasing municipal revenues f rom the market operations, thus directly enhancing economic development o f the city.
24. The identified works consist o f rehabilitation and reconstruction o f a storm water drain along the market, at a length o f 1,500 meters. The works are comprised o f dredging, reinforcing, and covering 700 meters o f the storm water drain with reinforced concrete, and reprofiling, construction, and covering in masonry an 830 meter segment o f the drain. The identified works to be financed by IDA in N’Djamena would complement works (especially inside the market) financed by AFD for a total amount o f €6.5 mi l l ion.
25. be financed include:
Sub-component B.2: For the city of Moundou (estimated cost: US$3.74 million). Activities to
(i) Water network (estimated cost: US$O. 72 million). (i) Extension o f Moundou’s water network for a total o f 7,400 meters and rehabilitation o f 1,000 meters o f water pipeline; (ii) construction and equipping o f two equipped boreholes (including power generating
3’ Etude de faisabilitk et de Programmation des travaux d’amhagement de deux quartiers commerciaux des Marches Mil et Dembe, Rapport DCfinitif. V i l l e de N’Djamena, Direction des Services Techniques Municipaux. July 2003.
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units) and connecting them to the network; and (iii) installation o f 64 standpipes in densely populated districts.
(ii) Drainage (estimated cost: US2.8 million). This corresponds to the second phase o f rainwater drainage works in Moundou (the first AFD-funded phase, carried out in 2002- 2003, consisted o f setting up approximately 6 km o f primary rainwater drains). The works to be funded include: (i) construction o f secondary drains in masonry, total length o f 6.5 km; (ii) construction o f a water detention pond at the site o f the old racecourse with a total capacity o f about 90,000 m3; (iii) construction o f 40 culverts and 195 footbridges in reinforced concrete for secondary drains; (iv) installing safety edgings; and (v) backfill ing recessedareas and reshaping pavements.
26. financed include:
Sub-component B.3: For the city of Sarh (estimated cost: US$5.16 million). Activities to be
(i) Water network (estimated cost: US1.3 million). The water supply in Sarh i s totally inadequate. I t i s necessary to enhance the water resources available and to expand the network. Financing will be provided for: (i) replacement o f 5 kilometers o f existing water pipeline; (ii) acquisition and installation o f 7,400 meters o f network extension; (iii) the installation o f 39 standpipes in conformity with appropriate standards; and (iv) the construction o f three new equipped boreholes (including power generating units) with a capacity o f 80 m3 each.
(ii) Drainage (estimated cost: US3.8 million). This corresponds to the second phase o f rainwater drainage works (the first, AFD-funded phase, carried out in 2002-2003, consisted in setting up an approximately 2.3 km long main drain for the Paris Congo and Kamati districts). Works to be funded include: (i) extension o f the existing secondary drain for 300 ml upstream; (ii) construction o f two drains in masonry parallel to the existing one for a total length o f 6,070 ml for the drainage o f the Bornou, Baguirmi, Yalnas, Paris Sara and Maroc districts; (iii) construction o f 40 new culverts; and (iv) construction o f 175 footbridges for access by residents.
27. financed include:
Sub-component B.4: For the city of Abkchk (estimated cost: US$5.31 million). Activities to be
(i) Water network (estimated cost: US$l. 4 million). Funded activities include: (i) construction o f two new equipped boreholes (including power generating units) and their connection to the network; (ii) the extension o f the network to new outlying districts o f a length o f 18,150 meters (N’Djamena road, Amir district, Ryad district, AdrC road, Goz Amir district, and Wara); (iii) reinforcement o f the water pipeline in the extension zones (water distribution network o f N’Djamena road and the districts o f Goz Amir and Wara); and installation o f 24 standpipes at various points on the network. A system o f participatory management o f these standpipes will be established and i s expected to generate permanent employment opportunities, with extensive participation o f women.
(ii) Drainage (estimated cost: US$3.5 million). The works will comprise: (i) land upgrading against erosion for the waterways (Ouadis) o f Am Soudourieh, Am Kame1 and Hayal Matar by protecting the banks eroded by gabion on a length o f approximately 1900 meters; (ii) installation o f an area in gabions over approximately 70 meters behind the city hospital, to bring back the flows o f the Oaudi Am Soudourieh towards i t s initial bed;
62
(iii)
(iii) reduction o f the bed slope o f the Ouadi Am Soudourieh after crossing N’Djamena Road at the level o f the Kamina 1 district, by introducing a series o f gabions installed 20 meters apart across the width o f the bed; (iv) rehabilitation o f existing drains on a length o f approximately 2150 meters; and (v) installation o f a new drain in the north western part o f the city on a length o f approximately 830 meters.
Economic infrastructure (slaughterhouse) (estimated cost: US$0.4 million). Funding will be provided for the construction o f a slaughterhouse with a capacity o f about 40 oxen and 60 sheep or goats per day. This will comprise: (i) construction o f a platform (surface area 10,000 m2 and an access road o f a length o f about 500 meters long and 6 meters wide in laterite (access road works are optional); (ii) rehabilitation o f the drainage network o f the slaughterhouse, including renovating works on the existing gutter for waste water drainage inside the slaughterhouse; (iii) installation o f electricity in the slaughterhouse and electricity supply to existing constructions; (iv) provision o f potable water and the construction o f a feeding trough; (v) construction o f a public latrine; (vi) provision o f waste disposal facilities; and (vii) rehabilitation works o f hangars and existing buildings,
28. Sub-component B.5: For the city of Doba (estimated cost: US$1.95 million). Under this sub- component, the project will finance the provision o f access roads to isolated poor neighborhoods in Doba. This will consist o f the construction o f earth roads and the drainage associated to provide access to dense neighborhoods in Doba and the industrial zone and improve access to the transportation area. The program will include the construction o f 5.4 km o f primary urban roads (sections AA, CC and II), 1.6 km o f secondary roads (sections DD and BB), and 7.5 km o f drains.
29. Sub-component B.6: M&E, Supervision of works and audits (estimated cost: US$1.64 million). Under this sub-component, the project will finance: (i) monitoring and evaluation activities; (ii) potential environmental and social impact studies that may be required during implementation o f component B o f the project; (iii) supervision o f works; (iv) periodic technical audits for works and contract management procedures; (v) financial audits o f works; (vi) service satisfaction surveys in the targeted cities; and (vii) training activities for the local private sector (SMEs) to strengthen their capacities in works management.
30. Provisions for physical contingencies (10% o f works or US$1.8 million) and financial contingencies (8% o f project costs or US$1.82 million) are included in the total project costs.
Technical evaluation
3 1, The proposed solutions take into account needs expressed by the municipalities and the l i s t o f priorities for each city. Technical standards generally accepted for design o f drainage and water supply networks will be used. The water network was designed to meet the demand o f water until the year 2020. To deal with potable water needs, i t i s planned to reinforce the available water resources by building up new drillings with depths varying from 30 meters to 100 meters, according to the hydro geological characteristics o f each city. The anticipated capacities for the drillings are 80m3/h for Sarh, 100 m3/h for Abtcht, and 60 m3/h for Moundou. The nominal diameter o f the proposed drillings wil l be 300mm to help facilitate their future utilization by equipping them with rather wide diameter pumps. Standpipes wil l be installed on the various distribution networks o f the cities involved, with a ratio o f one standpipe for 1/500 inhabitants. The management o f these standpipes will be delegated to the local communities through a participatory process and will generate some permanent employment, for women in particular.
32. Rainwater runoff collection facilities will be designed to evacuate water from decennial floods. For the protection o f the drains, the use o f materials frequently employed in the construction in the different regions will be encouraged. Protection by masonry i s recommended. The construction o f drains
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without protection i s not recommended given the risk f rom erosion by flooding and siltation f rom coming f rom the non-asphalted roads. Pedestrian and commercial traffic will be eased through the construction o f passages at the drainage sites. The runof f collection facilities will be mainly carried out in the neighborhoods threatened by the floods. It i s expected that flooded areas in Sarh, AbCchC, and Moundou could be reduced by as much as 80 percent. A partnership will be developed between the municipalities and the sanitation committees to help ensure proper maintenance o f the drains. For the economic infrastructure, focus will be o n the construction o f structuring equipments (platforms, drainage, hangars, roads, latrines, etc.). The lack o f a competitive market for public works i s a major concern for the project, which will a im at promoting small- and medium-sized enterprises (SMEs). In such a context, i t will be necessary to emphasize on the choice o f simple technologies using labor-intensive methods and to size works appropriately to attract small- and medium-sized enterprises. Clauses relating to the use o f high labor-intensive techniques will be included in the contracts o f the f i r m s in charge o f carrying out the works as wel l as in the technical specifications. As detailed in Annex 3, the project will be able to generate 6 10,000 man-days equivalent during the five years of project implementation.
33. The management o f water standpipes will need to be defined in detail before their implementation. T w o options will be considered, entrusting management to: (i) district committees; and (ii) to individuals who wil l be selected based on pre-established criteria or to legal community organizations (for example: women’s association or sanitation committee). At this stage, i t i s important that the attribution and management modalities o f the standpipes are clearly defined. In the definition o f the modalities, the Local Committees will have to play an important part. A consultative group including the main partners in the management o f water standpipes (communes, STEE, district representatives, consumer representatives) wil l be put in place by the local committees. The main missions o f this consultative group will be: (i) choice o f management protocol adapted to the standpipes; (ii) distribution o f the roles in the management o f the standpipes among the various partners; (iii) definition o f the criteria for the selection o f the managers o f the standpipes; (iv) definit ion o f a mode o f follow-up and control o f the management o f the standpipes; (v) development o f a sample contract binding the different actors (STEE, communes, standpipes managers); and (vi) the settlement o f litigations.
34. During project appraisal, discussions were held with the national water and electric company (STEE) which committed to: (i) ensure proper maintenance o f the water supply network which will be funded under the project; and (ii) reduce technical and commercial losses in the areas where the project will be implemented. This commitment resulted in a letter f rom STEE sent t o MATUH, the l ine Ministry in charge o f the proposed project.
35. Component financing. Audits and studies for supervision o f works are financed at 100 percent by IDA. The Government’s contribution (including o i l revenues for the urban sector) will be used primarily to finance infrastructure works. I t i s currently estimated that 40 percent o f this component will be funded by IDA and 60 percent by the State.
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Annex 5: Project Costs CHAD URBAN DEVELOPMENT PROJECT
li) Training for staff involved in project implementation (ii) IPreparation o f documents for implementation of decentralization
10,200 20,000 25,500 50,000
TOTAL COMPONENT A I 2,530,0431 4,960,8681
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I I Amount I
Physical Contingencies (10%) Financial contingencies (8%) TOTAL PROJET COSTS
939,449 1,800,000 953,963 1,818,563
13,817,945 27,000,000
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Annex 6: Implementation Arrangements
CHAD URBAN DEVELOPMENT PROJECT
A. Implementation arrangements
1. Project Management. The project will be managed by the Ministry o f Land Planning, Urban Development, and Housing (MATUH). The Urban Department (Direction de 1 ’Urbanisme - DU) will be responsible for the coordination o f the project through i t s Implementation Unit. This Unit will be the executing entity responsible for implementing the project over the five-year period. MATUH and the other key l ine ministries (Ministry o f Land Administration, Ministry o f Decentralization and Ministry o f Finance) are part o f Interministerial Steering Committee in charge o f the overall supervision o f the project, as developed below.
2. Within the Urban Department o f the MATUH, an Implementation Unit was created to prepare the proposed project and to manage various studies financed under the PHRD (including study o n municipal finance, social/environmental assessment study, engineering study (pre-feasibility and detailed engineering), project execution manual, administrative, financial and procurement procedures manual). The Government, through MATUH and the same Implementation Unit, will be responsible for ensuring that implementation o f the IDA project i s undertaken as planned. During project preparation the Government has agreed upon the following institutional arrangements to implement the project.
B. Institutional organization
3. Given the proposed project’s paralleling efforts in the urban sector to the Local Development Program Support Project’s (PROADEL) efforts in the rural sector, both within MATUH, the implementation arrangements and institutional organization, when appropriate, have been aligned to parallel the PROADEL project.
4. Sections C and D below provide details on the project oversight and coordination at the central and local levels, as wel l details on the project component implementation, which were discussed and agreed during the project preparation workshop held in N’Djamena o n February 24-25,2005.
C. Project oversight and coordination at the central and local levels
C.1 Overall coordination of the project at the central and local levels
5. At the national level, the project will be supervised and coordinated by an Interministerial Steering Committee (in a way similar to the Bank-financed PROADEL project). This Steering Committee will be headed by the Minister o f Land Planning, Urban Development, and Housing (MATUH) and include representatives o f the municipalities, the Ministry o f Economy and Finance, the Ministry o f Infrastructure, Ministry o f Land Administration, Ministry in Charge o f Decentralization, Ministry o f Public Health, the Ministry o f Energy, and the c iv i l society. The Steering Committee will take overall decisions on project implementation. In particular, the Committee will review the annual program o f activities o f the implementation Ministry (MATUH), review progress made o n a regular basis, and assess the quality o f the project. This Committee will ensure both coordination o f donor activities at the various project levels and communication between ,the steering committee and the local neighborhoods. The decree establishing the Interministerial Steering Committee was a condition for negotiations.
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6. This Committee platform i s o f particular importance for the proposed project which finances activities across sectors through i t s component B (water, transport, urban) thereby requiring agreements and complementary actions f rom other Ministries. Additionally, the Steering Committee represents a platform for discussion on urban sector reform using o i l revenues, which naturally requires the adhesion o f other Ministries (in particular Ministry o f Finance).
7. This Committee will meet twice a year to review activity reports o f the implementing agency and local steering committees, discuss and act o n institutional recommendations arising f rom project implementation, oversee application o f conventions between the State and each o f the cities, evaluate the progress report o f the project, and periodically br ie f the Council o f Ministers o n the project’s implementation status and communicate i t s recommendations, as wel l those o f the Council o f Ministers, to the implementing agency. This Committee will organize at least one annual meeting with IDA and involved bilateral donors and co-financing institutions, involved l ine ministries, heads o f participating cities, NGOs, and involved communities to: (i) review the proposed annual work program; (ii) review implementation status and progress towards achievement o f the project’s performance indicators and overall objectives; (iii) decide o n necessary corrective actions for project implementation; and (iv) coordinate with other related projects and the various interventions o f other donors.
8. The Interministerial Steering Committee has a Secretariat (Comitd Technique de Suivi) gathering the General Secretaries o f key Ministries involved in the project. The main functions o f this Secretariat wil l consist of: (i) agreeing on key actions to be taken to facilitate project implementation and smooth coordination among Ministries; (ii) preparing a l l necessary documents for the Inter-Ministerial Steering Committee Members; and (iii) summarizing recommendations coming f rom financing institutions.
9. At the local level, Local Steering Committees (LSCs), presided over by the City’s General Secretary and comprising l ine representatives o f M C D , MATUH, MF and representatives o f local associations and Neighborhood Committees (such as the Cornit& d ’Assainissement already set up in N’Djamena) will be the institutions in charge o f overseeing day-to-day project implementation at the local level in each beneficiary city. Arrgtds setting up the LSCs in each beneficiary c i ty have been sent to the Bank.
C. 2 Day-to-day implementation of the project
10. For implementation o f the project, the Implementation Unit o f the MATUH, set up within the Urban Department, will be responsible for the management o f the project, focusing on the following main functions: (i) coordinating the overall implementation o f the project; (ii) ensuring availability o f funds in a timely manner; (iii) managing project activities at the central level; (iv) maintaining the books and accounts o f project activities and producing financial reports; (v) monitoring and evaluating implementation and impacts o f the program; and (vi) reporting results to various stakeholders (administration, donors, c i v i l society, projects, Decision Committees). The Implementation Unit has been staffed with adequate technical and financial professionals to ensure that quality support and advice are delivered to the beneficiaries. The key staff o f the Implementation Unit consists o f a coordinator specialized in urban development, an environmental and social expert, an engineer, an administrative and finance director, and a procurement specialist. The environmental and social expert will also carry out monitoring and impact evaluation o f the project. T o reinforce project sustainability, two c iv i l servants f rom the Urban Department o f the MATUH will be assigned to the Implementation Unit during the project implementation period. The two c i v i l servants should be specialists in urban development and engineering. This arrangement will ensure that the project’s activities carry their benefits beyond the project implementation period and that the funded activities are directly benefiting the Ministry. A Project Implementation Manual (PIM) will be finalized before effectiveness with detailed institutional arrangements, financial and accounting procedures, procurement, monitoring, evaluation, and other
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administrative and organizational arrangements for the implementation o f the project In particular, the P I M will detail key performance indicators (including: meeting the deadlines set in the project procurement plan, quality o f terms o f reference (TORS) and requests for proposals (RFPs), and involvement o f urban staff at the local and national level during the implementation process) to fo l low regularly with the performance o f the Implementation Unit.
11. The Implementation Unit i s not seen as an entity on i t s own, but will be a strengthened unit within the Urban Department, assisting i t to develop and operationalize the national urban program. For the institutional capacity building component, the Implementation Unit within the Urban Department o f MATUH will be responsible for: (i) providing technical and financial advice to c i ty and district beneficiaries; (ii) follow-up o f monitoring and evaluation o f implementation; (iii) operating a data-base with financial ratios o f each beneficiary; (iv) preparing terms o f reference for sector studies and activities, and performing associated procurement tasks; (v) reviewing the quality o f sector studies; (vi) defining and monitoring training programs for beneficiaries; (vii) organizing necessary events, workshops; (viii) ensuring adequate communication between stakeholders; and (ix) ensuring dissemination o f learning from the project to the entire MATUH. The involvement o f urban staff at the local and national level during the implementation process o f the project will be a key criteria for the Government and the Bank when assessing, o n an annual basis, the performance o f the Implementation Unit’s staff. T o reinforce the project’s sustainability, two government c i v i l servants (whose salaries and/or indemnities are not to be paid out o f the project) f rom the Urban Department wil l be assigned to the Implementation Unit for the duration o f the project. The qualifications o f the two c i v i l servants wil l be those o f experts in urban development and in engineering. This arrangement will ensure sustainability o f the activities financed by the project wel l beyond the project implementation period.
D. Project implementation framework and component implementation
12. The project will be oriented by the municipalities as the principal beneficiaries o f capacity building activities and as managers o f works to be completed under the project. The municipal local Governments will be responsible for implementing priority investments and ci ty management programs.
13. Before effectiveness, agreements (“Protocoles d ’accorcf’) will be signed between the State (MATUH, MFEP, MCD, MAT) and the participating cities specifying the roles and responsibilities o f the cities, l ine ministries and central government, and the responsibilities o f each party (i.e., under these agreements, the beneficiary cities will commit to set aside some funds o f their budget for maintenance o f investments financed under the project). IDA funding for project components will be made available to the Implementation Unit by the Recipient (Government o f Chad) with conditions o f delegation specified in project agreements. These agreements’ covenants will be legally binding and monitored by the Implementation Unit.
14. Project Component Implementation. Conventions (Conventions de Maitrise d ’Ouvrage Ddldgue? in form and substance satisfactory to IDA will be signed between the Implementation Unit o f the MATUH and each o f the beneficiary cities. As a result, project components will be implemented by the participating cities through the Implementation Unit (for studies, technical assistance, advice, training, equipment purchase, and works), according to the project implementation manual (PIM), which provides details on the implementation timetable and terms o f reference for component activities. The PIM will be a working base for development o f annual activities programs and include a procurement plan (dividing activities into contracts, type o f consultation chosen, tentative dates for bid launching) which was reviewed during the negotiations. As agreed during project preparation, the Implementation Unit will remain in charge o f project implementation, involving, at a l l stages, key units o f the Ministry o f Infrastructure to ensure use o f the administration structure and to contribute to building capacity. Together with the Implementation Unit o f the MATUH, the departments o f the Ministry o f Infrastructure
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will prepare and technically validate the procurement documents (terms o f reference, request for proposals, etc.) for component B (provision o f basic urban infrastructures and services) o f the project, and also provide support for monitoring and supervision o f the works.
Report Monthly Report Quarterly Progress Report o n implementation and budget
15. The Implementation Unit will develop annual activities programs in close consultation with, and subject to the final approval of, the beneficiaries (cities and the Interministerial Steering Committee). The annual programs specify activity, target costs, financing (IDA grant and counterpart funding), terms o f reference, procurement plan, draft implementation timetable and respective roles and responsibilities o f the parties. These annual programs will be subject to pr ior review by IDA and must be approved by the project’s Interministerial Steering Committee.
The fol lowing chart provides a description o f the institutional arrangements.
Frequency Responsibility Month ly Implementation Unit 4/year Implementation Unit
E
execution Annual Reviews (incl. financial reporting)
1 Institutional Arrangements -Urban Development Project 1
Yearly I Implementation Unit
- MATUH - MAT, MFEP
REPUBLIC OF CHAD (“STATE”)
Annual Act iv i ty W o r k Plan and Budget Mid-Term Review Supervision Report
-MI, M C D
- Participating cities - Civ i l Society
-MSP, MME
Signed Agreements between State and cities
MATUH L
URBAN DEPARTMENT
Yearly Implementation Unit llproject period Implementation Unit 2lyear Implementation Unit
Implementation Unit Signed
0 \ \ Conventions 0
0 ’ \
0 0 0 ‘ \ ’\, (Conventions de 0 0 0
\ ‘ \ paitrise d’ouvrage I
I
0 1
I I
0 0
0c . f l 4 K,
.‘
Reporting and supervision
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Annex 7: Financial Management and Disbursement Arrangements CHAD URBAN DEVELOPMENT PROJECT
Summary of the Financial Management Assessment
Introduction
1. The financial management assessment i s done in line with the Financial Management Practice Manual issued by the Financial Management (FM) Board on November 3, 2005. The objective o f the assessment i s to determine whether the implementing entity has acceptable financial management arrangements which will ensure: (i) the funds are used only for the intended purposes in an efficient and economical way; (ii) the preparation o f accurate, reliable and timely periodic financial reports; and (iii) the safeguard o f the entities’ assets.
Executive summary
Summary of project description
2. The project development objective i s to increase sustainable access to municipal services for residents in N’Djamena, Moundou, Sarh, AbCchC, and Doba. I t will be achieved by: (i) strengthening urban management capacity; and (ii) providing basic urban infrastructures and services.
3. The intermediate results are as follows: (i) strengthened urban management capacity and improved management tools and financial resources enabling municipalities to better provide basic services and maintain implemented infrastructure, with support o f relevant l ine ministries and deconcentrated administration; and (ii) improved access to urban infrastructure.
Country issues
4. Chad i s currently in the process o f major public financial management transformation. In 2005, with the collaboration o f IDA and other donors, the Government created what i s now called the PAMFIP32 officially adopted in 2005. A review o f public finance management was organized in April 2006 by a multi-donor team and the conclusions are the following:
Budget preparation
5. Significant efforts have been made. A framework for medium term expenditures and a programmatic budget has been adopted in priority ministries. Functional and economic nomenclatures have been adopted. However, some weaknesses s t i l l need to be addressed: (i) the link between the PRSP and the budget i s not yet satisfactory; (ii) budget management continues to be operated throughout four (4) financial resources procedures not l inked to one another: ordinary budget, HIPC budget, petroleum revenues budget and foreign aid budget; and (iii) the Computerized Integrated Expenditures framework does not cover the whole expenditures o f the Government so that budget consolidation needs manual updates to be completed.
6. Under these conditions, i t becomes diff icult to fo l low up on budget execution.
32 (Projet d’Appui a la Modernisation des Finances Publiques)
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Budget execution
7. Although the finance law i s adopted by parliament before the end o f the fiscal year, authorization to use the budget allocation generally comes late. This creates a weak budget execution rate. The ministries then concentrate their expenses on the last quarter, and cash management becomes complicated. Some important budget lines are not completely mastered either in cash or in expenses. The tax office does not completely master how to verify petroleum corporations accounts. And the customs office has very heavy procedures not in l ine with international standards. As far as expenses are concerned, the fo l low up i s not based o n acceptable and reliable practices. So the Government does not really master the exact volume either o f wages o f c i v i l servants or common expenses l ike electricity and water. A procurement code was adopted in 2003, but the implementation i s s t i l l problematic. There i s not yet a procedure manual specifying the role and duties o f each stakeholder. The percentage o f contracts awarded under direct contracting i s s t i l l significant. In addition, the procedures to attribute the bids are sti l l too long. In the end, there i s a lack o f training in procurement methods.
Cash management
8. There i s not a single treasury account. Treasury accounts are scattered across local commercial banks and are not systematically reconciled. In order to master i t s treasury gaps, the Government requests frequent overdrafts at these banks, and this generates high bank charges. In fact, coordinated cash management does not exist and the Government frequently uses the system called “pay before verification”. This means there i s s t i l l a significant rate o f operations paid without following the legal procedures. This situation jeopardizes priority expenses related to poverty reduction and gives way to corruption.
Accounting and auditing
9. The accounting system o f the Treasury was modernized in 2001 but i s s t i l l unable to deliver reliable and complete information o n government financial operations. The chart o f accounts i s not harmonized with budget schedules, The Computerized Integrated Expenditures Framework i s not in line with the computerized public accounting system. There i s n o way, therefore, to assess a fo l low up o f expenditures f rom authorization to payment. Finally, there are important delays for the accounting department o f the Treasury to produce government financial statements.
10. The main institution in charge o f internal audits i s the General Inspectorate o f Finance (IGF) which does not intervene in Bank funded projects. Since July 2006, the Bank has initiated a partnership with IGF which jo in t ly intervenes in statement o f expenditures (SOEs) reviews and plays the role o f internal auditor in a l l newly created Bank-funded projects including the Urban Development Project.
11. The external audit profession i s yet to be organized. The Supreme Audit Institution ( S A I ) i s located in the Ministry o f Justice. The short term goal i s to shift the S A I f rom the Ministry o f Justice so as to improve i ts independence.
12. Wor ld Bank funded projects are thus far audited by external private auditors coming mainly f rom abroad (Cameroon, France, Mauritius). There i s not yet an external audit professional body in Chad. The most significant event these recent years i s the creation in 2001 o f the Committee for Control and Oversight o f Petroleum Revenues (College de Contrde et de Surveillance des Revenus Pe‘troliers) o n one hand and the Ministry o f State Control and Moralization on the other hand. Auditing weaknesses to be addressed include: (i) lack o f coordination o f audit activities; (ii) duplication o f audit works; (iii) lack o f audit capacity; and (iv) lack o f fo l low up o f audit recommendations.
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Risk Assessment and Mitigation
Accounting S
Internal Control
Funds F l o w Financial Reporting
Audit ing ' S
S S
Overall control 7
Being addressed by the Government outside this Project through the ongoing P A M F I P which is supported by the Bank. Being addressed by the Government outside this Project through the ongoing P A M F I P which i s supported by the Bank.
Close supervision to be carried
Budget preparation for each exercise at least 3 months ahead to ensure that counterpart funds are included in the State budget for the coming exercise and that the budget program o f MATUH includes counterpart funds for the Urban Development Project. Substantial supervision and recruitment o f an assistant accountant t o the Administrative and Finance Director.
IGF will assume the role o f Internal audit and IGF's capacity to assume this responsibility i s acceptable.
The format for the F M R s has already been delivered by the Preparation team for implementation. The Bank has discussed the format with the Implementation Unit. An external auditor needs to be recruited based o n terms o f reference acceptable by IDA.
N
N N
N
N N
N
Remarks
This r isk arises f rom weak capacity, including shortage o f qualif ied accountants and auditors.
MATUH is part o f the Government l ine ministries.
The Implementation Unit prepares annual budgets and expenditures are incurred in l ine with the budget.
The Implementation Unit has a good system o f accounting, which i s capable o f recording and reporting financial transactions, but needs to be reinforced through the recruitment o f an assistant accountant. A letter formally designating IGF to perform internal audit i s signed by the Government. This was a condition for negotiations (held o n December 6 and 7.2006)
Financial statements o f the PHRD for FY05 were ready before June 30,2006.
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Overall risk 5 H-High, S-Substantial, M-Moderate, L -Low
Remarks
The country corruption environment, the weakness o f the public finance management system, and issues linked to procurement highly jeopardizes the FM system o f the txoiect.
Strengths
13. The country’s commitment to implement the proposed Bank-financed Capacity Building for Modernization o f Public Financial Management Project (PAMFIP) and put into force the recommendations o f the April 2006 multi donors’ Country Financial Accountability Assessment (CFAA) i s one o f the major strengths in implementing this project. Counterpart funding wil l equal about 50 percent o f the project financing. This project i s implemented by MATUH and the project team has well- trained and experienced staff. The Finance Unit in charge o f financial management in the Implementation Unit has also qualified and experienced staff t o handle the financial transactions o f the project. The accounting system i s computerized and i s already running.
Weaknesses and Action Plan
Significant Weaknesses Counterpart funding i s insufficient, not provided, or provided with delav. Long delays in procurement
Implementing entity
Action Have the Government include al l counterpart funding in the budget programme o f MATUH Prepare the bids and the procurement plan long before the beginning o f the exercise and begin the necesssary process with the Financial Controller and the Treasury.
Responsible body
MATUH
Implementation Unit
Before Negotiations (done)
14. The Implementation Unit located in the MATUH i s the implementing entity o f the project.
Budgeting
15. Since the project obtains funds from the Government, i t presents i t s budget request to the Government via MATUH. MATUH follows the Government budget calendar in preparing i t s budget and submitting the same to the Ministry o f Finance. The project then prepares a consolidated budget comprising IDA funds and counterpart funding. The budget needs to be integrated in the accounting system so as to facilitate a good follow-up o f budget execution.
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Accounting
16. The project uses the accrual basis o f accounting with a double entry accounting system. The OHADA (Organization for Harmonization o f Business L a w in Africa) system o f accounting based o n International Financial Reporting Standards (IFRS) in recording and reporting financial transactions o f the project are in force. T o alleviate this risk, it was agreed that the fo l lowing actions would be taken:
(i) Establish a computerized financial management system, acceptable to IDA which would provide the recipient and IDA with accurate and timely information regarding resources and expenditures; and
(ii) Maintain books o f accounts.
17. The computerized accounting system will have to perform journal processing, budgeting, financial reporting, bank reconciliation, general and auxiliary trial balances, general and auxiliary ledgers.
18. In addition to the computerized accounting system installed, and the books needed to maintain an accurate and complete record o f transactions, the project will maintain a set o f additional books o f registry, either within i t s system or outside it, for control purposes. These books include: (i) a fixed assets register; (ii) a contract register; and (iii) a book o f control for document deliveries and controlled stationery such as checks, bills, invoices and forms. The actual system operates individually using the TOMPRO software. Before grant implementation, there i s a need to reinforce the system based o n a network o f four client workstations and a main network.
M a i n c Client workstation
Coordinator H Client workstation Client workstation Client workstation
19. The project coordinator will have exclusive “consultative” access o n financial and procurement modules. The Administrative and Finance Director will have a l l necessary access to the accounting modules to enter and review the accounts. The Director will have access to the procurement module for consulting only. The assistant accountant will only be able to enter data, and will not have access to review/modify the accounts. The procurement specialist will have access to a l l procurement modules but not to the financial modules.
20. Implementation Unit during project implementation.
I t i s recommended that an assistant accountant be recruited to support the Finance Director o f the
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Internal control
21. Internal control comprises the whole system o f control, financial or otherwise, established by management to: (i) carry out the project activities in an orderly and efficient manner; (ii) ensure adherence to policies and procedures; and (iii) safeguard the assets o f the project and secure, as far as possible, the completeness and accuracy of the financial and other records.
22. The main focus o f internal control i s placed o n the following: segregation o f duties, physical control o f assets, authorization and approval, clear channels o f command, arithmetic and accounting accuracy, integrity and performance o f staff at a l l levels, supervision, with al l this clearly explained and described in the administrative, accounting and financial procedures manual. The draft accounting and financial administrative manual o f procedures was sent to IDA before negotiations, and it will have to be finalized before grant effectiveness.
Fund flows and disbursement arrangements
Flow of funds
23. The overall project funding will consist o f IDA grant and counterpart funds f rom the Government.
24. T o facilitate project implementation and reduce the volume of withdrawal applications, the project will have one Designated Account in CFAF in a commercial bank acceptable to IDA. The DA will be managed by the Implementation Unit. The authorized allocation for the DA will be CFAF 500,000,000 representing an average o f four months o f operating costs and direct payments. The DA will be replenished through the submission o f withdrawal applications (WA) o n a monthly basis. All disbursements will be channeled through the DA, except for direct payments and special commitments based o n irrevocable documentary credits which will be paid directly out o f the grant account. The Recipient may choose to prefinance project expenditures and seek reimbursement f rom IDA. The provisional l i s t o f expenditures (approved at negotiations) to be prefinanced by the Recipient before grant effectiveness may be eligible for retroactive financing and are subject to IDA procurement procedures.
Designated Account (DA).
25. Government Counterpart Fund. The Recipient will open a Project Account in a commercial bank in accordance with terms and conditions acceptable to IDA, to receive the counterpart funds necessary to cover the part o f the Recipient with respect to the total cost o f the project and under the different categories whenever necessary. Before effectiveness, the Government will deposit an in i t ia l contribution o f CFAF160 m i l l i on in the Project Account and will replenish it regularly through deposit of CFAF 35 m i l l i on per month for the first year, CFAF 120 m i l l i on per month for the fo l lowing two years, CFAF 150 m i l l i on per month for the fourth year and CFAF 100 m i l l i on per month for the fifth year o f project implementation. The Government must ensure that amounts deposited in the Project Account are used for the expenditures relating to goods, services, and works as part o f the different components o f the project. Based on the commitments o f the Government planned in each annual budget, the Implementation Unit will initiate as need may arise, a replenishment application to be submitted to the Government in accordance to the procedures o f the public expenditure cycle.
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FUNDS FLOW CHART
in a local commercial bank in CFAF
Chad Counterpart Funds
f Project account in CFAF 7
Project transactions paid in CFAF
Disbursement methods
26. The disbursement for the project will be transacted based on Designated Account, Advance, Direct Payment, and Special Commitment methods. These methods will be used in the beginning o f the project. I t i s expected to shift to the quarterly un-audited financial report-based disbursement as soon as the Bank i s satisfied with the capacity o f the implementing entity. All disbursements are subject to the conditions o f the Grant Agreement and the procedures defined in the Disbursement Letter.
Minimum value of applications
27. the authorized allocation in the DA not yet justified.
The minimum value for direct payments and special commitments will be at least 20 percent of
Reporting on use of grant proceeds
28, The supporting documentation for reporting eligible expenditures paid f rom the Designated Account should be a summary report o f the Statement o f Expenditures (SOEs) and records evidencing eligible expenditures for payments against contracts valued at US$200,000 for goods, US$ 100,000 for consulting f irms, and US$50,000 for individual consultants, and a l i s t o f payments against contracts that are subject to the Bank’s prior review. The supporting documentation for requests for direct payment should include records evidencing eligible expenditures (copies o f receipt, supplier’s invoices, etc). The project will submit a Bank statement and a reconciliation o f the Designated Account together with the withdrawal application on a monthly basis. All supporting documentation for SOEs will be retained at the project’s office and will be made available for review by periodic Wor ld Bank review missions and external auditors.
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Designated account
Category
1. Works Component B
29. The Designated Account will be managed by the Implementation Unit. The Minister in Charge of Economy and Planning, also the Chad Governor for Wor ld Bank-funded operations, will delegate staff f rom the Implementation Unit to manage the Designated Account. The coordinator o f the Implementation Unit will necessarily be included among the Designated Account management staff. The currency for the Designated Account will be CFA Francs (CFAF). The authorized allocation o f the Designated Account will be CFAF5OO mill ion.
,
Amount of Grant Allocated (in SDR) Financed
YO of expenditures to be
4 460 000 40 %
Counterpart funding
2. Goods and equipment
3. Consultant services and training
Counterpart funds for the project will be budgeted by the Government and will be made available as needed through a replenishment application processed by the Government.
310 000 100 %
3 300 000 100 %
4. Operating Costs under A.2(a)(vii) of the
5. Unallocated TOTAL
Project 800 000 100 % 1130000
10 000 000
I I I I I
Financial reporting
30. Separate financial statements will be prepared for the project. They wil l comprise: (i) a statement o f sources and application o f funds for the project during the current financial year and cumulative since the start o f the project; and (ii) a balance sheet. These two financial statements will be prepared annually.
31. In addition, the project management unit will submit within 45 days o f the end o f the reporting period a Financial Management Report (FMR) based o n the fol lowing format as agreed with the Implementation Unit :
(i) Financial reports. These reports provide information o n resources and expenditures by disbursement categories or project activities, the provisions for future expenses, disbursements, and reconciliation o f the special account.
Technical progress reports. These reports provide information o n technical progress on the physical and financial aspects o f the project, based o n monitoring indicators.
(ii)
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(iii) Procurement reports. These reports provide information on the acquisition o f goods, works, and services for project activities and o n the selection o f consultants indicating the respect o f procurement guidelines. They also provide the status o f contracts, commitments, and disbursements, as wel l as pr ior review contracts and others subject to post review (Le. for amounts less than US$lO,OOO). The reports provide a comparison o f activities implemented as against the approved procurement plan, indicating any issues such as staffing or capacity building. The report should indicate any modifications made to contracts, complaints f rom bidders, contract implementation, and other major contractual concerns.
32. The format and contents o f the FMR have been discussed and agreed with the Implementation Unit during appraisal. A copy o f the FMR for Bank-financed projects “Rapport de Suivi Financier des Projets Pnancb par la Banque mondiale: Directives Ci l’intention des Emprunteurs” was given to the Implementation Unit. I t has been agreed that the project will use the option “Appletonia” Annex 2 - example 2 o f the document.
33. The budget accounting and general accounts plans should fo l low the components and sub- components o f the project in order to facilitate easy automatic production o f FMRs - financial reports- and technical progress reports.
34. reporting period and should not be delayed.
The FMR should be submitted in the format indicated above within 45 days o f the end o f the
Auditing
35. Internal audit. MATUH does not have an internal audit department. T o remedy this and to start using the country system, the internal audit will be carried out by the General Inspectorate o f Finance (IGF) on a quarterly basis. A copy o f the reports o f the IGF shall be sent to the Bank n o later than 30 days after the end o f the mission. The Bank made a request to the Minister o f Finance during the appraisal mission for the official nomination o f the IGF as internal auditor for the project. The nomination o f the IGF as internal auditor for the project was a condition for negotiations.
36. External audit. The Recipient will appoint an independent auditor acceptable to IDA. The audit will be conducted in accordance with international auditing standards acceptable to IDA and under terms o f reference acceptable to IDA. The auditor will be responsible for the annual audit o f project consolidated financial statements, and provide an opinion on: (i) project accounts; (ii) transactions o n the Designated Account and project account; and (iii) statement o f expenditures (SOE) and the eligibil i ty of the expenses withdrawn o n the basis o f SOEs. The auditor will also prepare a Management Letter giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls, and compliance with financial covenants in the IDA Agreement. The project audit report shall be submitted to IDA within six months o f the end o f the project fiscal year, and should not be delayed in any case. Terms o f reference for recruiting the external auditors have been finalized, and reviewed by IDA. Recruiting the auditors i s not a condition for effectiveness but shall be carried out during the f irst six months o f project implementation.
37. The required audit reports to be submitted by the project and their due dates for submission are:
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Audit Reuort
execution Finalize the procurement action plan for the next 18 months o f the Grant execution
Project specific financial statements, i.e., annual audited accounts and Management Letter
Done Project team
Quarterly Financial Management Report
Due Date Submitted within six months after the end o f each fiscal year, i.e. June 30, at latest. The f i rs t audit report wil l be due on June 30, 2008 at the latest if the Grant becomes effective before June 30, 2007. However, i f the Grant effectiveness takes place after June 30, 2007, the f i rst audit report will then be due on June 30, 2009 at the latest and will report for a maximum period o f 18 months.
(i) After Grant effectiveness: within 45 days after the end o f the quarter fo l lowing effectiveness; (ii) during project execution: within 45 days after the end o f each quarter.
Supervision plan
38. Besides regular supervision missions carried out by the Bank, a site visit will be conducted at least three times per year to assess financial execution o f the project. The objectives o f these site visits will be to review the financial management system in place and to ensure that i t i s functioning satisfactorily. A review will be carried out regularly to ensure that expenditures incurred by the project remain eligible for IDA funding. The Implementation Status Report (ISR) will include a financial management rating for the component. This will be done by the country office Senior Financial Management Specialist after an appropriate review.
"Comprises configuration of the chart of accounts, configuration of analytical and budgetaiy charts
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Annex 8: Procurement Arrangements CHAD URBAN DEVELOPMENT PROJECT
A. General
1. A Country Procurement Assessment Report (CPAR) for Chad carried out in 1993 and 2000, and the audit o f f ive large contracts carried out by the Audit Off ice o f the Supreme Court in 2002, together highlighted the dysfinction o f the procurement procedures in Chad. The principal deficiencies identified in the CPAR were: (i) absence o f a procurement regulatory body; (ii) the lack o f a formal recourse available to the tenderers to al low them to dispute the decisions o f contract awards; (iii) very l o w procurement thresholds lack o f their harmonization; (iv) very cumbersome and time consuming approval process o f contracts, compromising the rapid disbursements o f national and external resources; and (v) excessive recourse to direct contracting. Fol lowing the recommendations o f these reports, the Government, with technical and financial support f rom the Wor ld Bank, undertook a procurement reform, and a new Procurement Code was published in December 2003. The Procurement Code and i t s implementation decrees took in to account most o f the recommendations o f the CPAR. The Code, in Line 2 o f Article 5, recognizes the primacy o f international agreements in the event o f a conflict with the provisions o f the Code and the implementation decrees. The present key deficiencies o f the national procurement system are: (a) the requirement that foreign bidders have to associate with national bidders or subcontract to national bidders, (b) the obligation for al l bidders (national and foreign alike) to obtain a qualification certificate prior to the submission o f a bid, and (c) a cumbersome procedure for the award and signature o f contracts, involv ing the Minister o f Finance and the President o f Republic in contracts o f relatively l o w value. The deficiencies have been extensively discussed with the Government, including during appraisal, and their rectification in the Code and the regulations i s part o f the broader governance dialogue. For ICB, the procedures specified in the Procurement Guidelines and the use o f the Bank’s standard bidding documents i s mandatory. For NCB, the Government agreed during negotiations to the primacy o f the provisions o f the Bank’s Guidelines over the national regulations, as recorded in the Minutes o f Negotiations dated December 7, 2006.
Use of Bank Guidelines
2. Procurement for the proposed project would be carried out in accordance with the Wor ld Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004; and “Guidelines: Selection and Employment o f Consultants by Wor ld Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, pr ior review requirements, and time frame will be agreed between the Recipient and the Association in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
3. The procurement process and the Standard Bidding Documents (SBD) that will be used by the implementing agencies will be defined in the Project Implementation Manual (PIM) and in the Procurement and Financial Management Manual. The adoption o f these manuals by the Government, satisfactory to IDA, i s a condition o f effectiveness.
Advertising
4. A General Procurement Notice (GPN) will be prepared and published in United Nations Development Business (UNDB), in Development Gateway’s (dgMarket) and in at least one national
81
newspaper after the project i s approved by the Association. The GPN wil l show all International Competitive Biddings (ICB) for works and goods contracts and all international consulting services. Specific procurement Notices (SPN) for all goods and works to be procured under ICB and Expressions o f Interest (EOI) for all consulting services to cost the equivalent o f US$200,000 and above would also be published in the UNDB, dgMarket, as well as in the national press.
Procurement methods
5. C iv i l Works procured under this project would include: (i) improving drainage and sanitation; (ii) rehabilitation and extension o f the water supply system; (iii) provision o f economic infrastructures (e.g. constructionhehabilitation o f markets, slaughterhouses, depot, etc.); and (iv) provision o f access roads to isolated neighborhoods. Each civi l works contract package estimated to cost US$300,000 and more would be procured through International Competitive Bidding.
Procurement of civil works.
6. National Competitive Bidding (NCB) would be advertised locally and carried out in accordance with Chad’s procurement laws and regulations, with the qualifications described in paragraph 1 above. Each civil works contract package estimated to cost more than US$50,000 equivalent but less than US$300,000 equivalent may be procured using National Competitive Bidding procedures.
7. Shopping procedures. Smaller works contracts estimated to cost less than US$50,000 equivalent each may be procured through shopping procedures on the basis o f three written price quotations. The contract award will be made to the lowest evaluated responsive bidder who has appropriate experience and financial resources to complete the works successfully.
8. Procurement of goods. Goods procured under this project would include: procurement of computer equipment, office equipment and furniture, vehicles, motorcycles etc. Each goods contract package estimated to cost US$200,000 equivalent or more per bid package would be procured through International Competitive Bidding. Contract estimated to cost less than US$200,000 equivalent would be advertised locally and carried out in accordance with Chad’s procurement laws and regulations, with the qualifications described in paragraph 1 above. Procurement for readily available off-the-shelf goods that cannot be grouped, or standard specification commodities for individual contracts for less than US$50,000 equivalent may be procured through shopping according to procedures detailed in paragraph 3.5 and 3.6 o f the “Guidelines: Procurement under IBRD Loans and IDA Credits’’ and Memorandum dated June 9,2000 “Guidance on Shopping” issued by the Bank.
9. Selection of consultants. Consultancy services may include engineering studies, technical assistance, specialized studies, control and supervision o f works, financial studies etc. The selection method would include Quality and Cost Based selection (QCBS), Fixed Budget Selection (FBS), Consultant Qualification (CQ), Least Cost Selection (LCS), and Single Source Selection (SSS) as appropriate. All consultancy services contracts estimated to cost US$lOO,OOO equivalent or more for f i r m s would be awarded through Quality and Cost Based Selection (QCBS) method. In case o f assignment requiring Individual Consultants (IC), the selection will follow the procedures stipulated in Section V o f the Consultants Guidelines. Short l i s t s o f consultants for services estimated to cost less than US$50,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.
10. with the provisions o f paragraphs 3.9 to 3.13 o f the Guidelines, with IDA’S prior agreement.
Single Source Selection (SSS). In exceptional cases, this method would be used in accordance
1 1. carried out on the basis o f approved annual programs.
Training, workshops, seminars and conference. The expenditure o f these activities will be
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12. Operating costs. The Grant would finance the operating costs associated with the project implementation. Operating costs would be procured using the implementing agency’s administrative procedures which were reviewed and found acceptable to the IDA.
B. Procurement capacity assessment
13. during the appraisal mission. .
A procurement capacity assessment o f the MATUH and the Implementation Unit was carried out
Ministry of Land Planning, Urban Development, and Housing (MATUH)
14. The assessment revealed that a body in charge o f bids opening and award (Commission d ’Ouverture et de Jugement des Oflres - COJO) exists in MATUH, and i s composed o f the fo l lowing members :
The General Secretary o f MATUH - President The Representative o f the Ministry in Charge o f Economy and Planning - Vice-president The Administrative, Financial, and Equipment Director o f MATUH - Member The Procurement Specialist o f MATUH - Member The Urban Director o f MATUH - Member The Director o f Financial Control in the Ministry o f Economy, Finance and Planning - Member The Public Procurement Body - Observer
15, In addition to the COJO, there i s a procurement unit in the MATUH which prepares and monitors a l l procurement activities. The unit i s staffed with a chief procurement specialist with solid experience in the country’s procurement procedures and other donors’ including the Bank. This unit also provides services to the secretariat o f the COJO.
16. The assessment did not reveal any anomaly in the functioning o f COJO and MATUH’s procurement unit. The submission o f evaluation reports by the sub-commission in charge o f bids evaluation does not exceed 10 days, and COJO’s rules o n the evaluation report within 3 days. However, certain deficiencies which may affect project implementation were reported during the assessment, including: (i) slow process for contract validation and approval; (ii) insufficient information technology equipment and programs for monitoring; and (iii) insufficient training for the two procurement specialists. T o address these deficiencies, the project will: (i) ensure that training i s provided to the two procurement specialists at the specialized Regional procurement training Centers; (ii) computerize procurement monitoring and management in the MATUH through the purchase o f computer notebooks with procurement monitoring and management programs); and (iii) ensure training on these programs.
17. capacities in the M A T U H :
The following i s a schedule o f actions to be carried out for the strengthening o f procurement
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Action to be undertaken
Purchase o f computer notebooks with procurement monitoring and management programs Training in the use o f procurement monitoring and management programs Participation for the 2 procurement specialists in procurement workshops at the specialized regional procurement training centers
Implementation Unit within the Urban Department of M A T U H
Dates Responsible Institution
Implementation Unit At the latest 6 months after Grant effectiveness and MATUH
At the latest 6 months after Grant effectiveness and MATUH At the latest 6 months after Grant effectiveness and MATUH
Implementation Unit
Implementation Unit
18. The Implementation Unit within the Urban Department o f MATUH satisfactorily carried out al l the preparatory studies for the project. The staff in the Implementation Unit includes a procurement specialist who has procurement experience at both national and international levels (including Wor ld Bank experience). A procurement plan for the first 18 months o f project implementation was prepared by the procurement specialist in the Implementation Unit and was found acceptable to IDA. This procurement plan will be posted o n the Bank’s website after Grant approval. The procurement filing and archiving system in the Implementation Unit was found to be acceptable by IDA and the same system will be maintained during the project’s l i fe. The assessment did not reveal any anomaly within the procurement unit o f the Implementation Unit, except for the need o f training in the use o f procurement monitoring and management programs. Under the project, the procurement specialist will benefit f rom procurement training organized by specialized regional procurement training centers or at the Bank’s country office in N’Djamena.
At the latest 6 months
the specialized regional procurement training centers
Implementation Unit
Implementation Unit
20. During the appraisal mission, the Bank discussed with the Government (i) the possibility o f setting up an ad-hoc committee which will facilitate the procurement process for the project; and (ii) an exception to Article 7, l ine 2 o f the Country Procurement code, Articles 1 and 3 o f Decree 462 establishing the procurement thresholds and approval responsibilities, and Decree 465 establishing the conditions for f i r m s to obtain a qualification certificate. In this sense, the Secretary General o f the Presidency has indicated that the Government i s not ready at this stage to accept such exceptions. However, i t was suggested during the meeting that MATUH addresses a letter explaining the request for this exception.
21. The overall project risk for procurement i s rated h& because o f the country conditions, the provisions o f the national procurement code, delays experienced in the past with approval o f evaluation
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reports and signing o f contracts, and the overall experience o f poor management o f contracts in the past despite the fairly strong arrangements in place at the level o f the Implementation Unit.
Expenditure Category
1. Works
C. Procurement implementation arrangements
Contract value Procurement method Contract Subject to Threshold (US$) Prior Review
>= 300,000 ICB All < 300,000 NCB None, except f irst 5
< 50,000
22. The bulk o f procurement for vehicles, equipment, infrastructure works or rehabilitation, consulting services, studies, and training would be managed by the Implementation Unit within the Urban Department o f MATUH. The Implementation Unit wil l seek the n o objection f rom IDA for a l l contracts subject to pr ior review. The Implementation Unit would use consultants as necessary to carry out specific tasks in procurement in compliance with Bank’s Guidelines.
D. Procurement plan
23. The Recipient, at appraisal, has prepared a procurement plan for project implementation that provides the basis for the procurement methods. This plan covering the f irst 18 months o f project implementation has been reviewed and agreed between the Recipient and the project team during the appraisal mission. I t will be updated in agreement with the project team at least once a year reflecting the proposed activities for the following 18 months o f project implementation as required to reflect the actual project implementation needs and improvements in institutional capacity. I t wil l also be available in the project’s database and in the Bank’s external website once the Grant i s approved by IDA Board o f Directors.
E. Frequency of procurement supervision
24. In addition to the pr ior review supervision to be carried out f rom Bank offices, the Recipient and the Bank team have agreed to at least three missions per year for the f irst two years of project implementation to minimize the risk o f fail ing to fo l low procurement procedures as wel l as for supervision o f project activities. The Recipient and the Bank have also agreed to two supervision field visits to carry out post-review o f procurement activities.
F. Details of the procurement arrangements involving international competition
25. A detailed procurement plan for the 18 months o f implementation has been prepared at appraisal. The thresholds for procurement methods and Bank pr ior review have been agreed upon and are as follows:
Threshold for procurement methods and prior review
Three quotations contracts None (Post Review)
2. Goods >= 200,000 200,000
< 50,000
ICB 1 NCB
Shopping
All None, except first 5 contracts None (Post Review)
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3. Services
a. Firms A l l None (Post Review, except first 3 contracts and al l contracts for audit)
A l l
>= 100,000 QCBS < 100,000 CQ, Other
b. Individuals >= 50,000 < 50,000
Details o f the procurement arrangements involving international competition
IC A l l IC None (Post Review) Single Source Gelection A l l
1. Goods, works, and non-consulting services
1 2 3
Ref Contract Estimated No. (Description) cost
(US$)
- 0 1 Water network 3,658,824 - 02 Storm drainage 617,647
works in N’Djamena
works - Moundou, Sarh, AbBche
of slaughter- house in AbechC
installation o f I T equipment and photocopy machines
- 03 Stormdrainage 10,196,078
- 04 Rehabilitation 356,863
- 05 Acquisition and 204,000
(a) implementation:
List o f contract packages to be procured fol lowing ICB during the f irst 18 months o f project
4 5 6 7 8 9
Procure P-Q Domestic Review Expected Comments
Method (yeslno) (Prior I Date -ment Preference by Bank Bid-Opening
Post) ICB NIA NIA Prior review May 26 2007 ICB N/A NIA Prior review May 13 2007
ICB NIA NIA Prior review May 12 2008
ICB NIA NIA Prior review May 25 2008
ICB NIA NIA Prior review June 15 2007
(a) Goods, works, and non-consulting services
ICB contracts estimated to cost US$300,000 and above for c i v i l works, and US$200,000 and above for goods per contract and a l l direct contracting, will be subject to prior review by the Bank.
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2. Consulting services
(a) L i s t o f consulting assignments with short-list o f international f i r m s
1
N O
rCf.
-
- 01
- 02
- 03
- 04
- 05
06 -
- 07
- 08
09 -
- 10
11 12
13 14
15
-
- -
-
-
2
Description of Assignment
Preparation of an organizational audit and municipal management manual Standardization o f the budget nomenclature and preparation of a users guide and training Modernization of the financial management and accounting, technical assistance, and preparation of a manual o f ~~
procedures and training Improving and collection of municipal taxes, census, setting up software, preparation of a manual of procedures and training Household satisfaction surveys in the targeted cities Update/preparation o f urban development plans for Moundou, Sarh, Mongo, Pala, Bongor, and Bo1 Update/preparation of urban development plans for Doba, AbechB, Mao, Amtiman, Biltine, Ati, Fada, and Faya Control and supervision of drainage works in N’Djamena Control and supervision of drainage works in Moundou, Sarh, and AbechB, and rehabilitation o f slaughterhouse in AbBchB Control and supervision o f water works in Moundou, Sarh, and AbBchC Socio-environmental study Technical assistance for MATUH Training in urban planning Technical assistance in local taxation Project auditing for the first 2 years o f project implementation
3
Estimated cost (US$)
150,000
200,000
100,000
230,000
100,000
360,000
470,000
55,000
740,000
256,118
117,647 55,000
90,000 90,000
60,000
4
Selection Method
QCBS
QCBS
QCBS
QCBS
Individual consultant QCBS
QCBS
Individual consultant QCBS
QCBS
QCBS Individual consultant QCBS Individual consultant SMC
5
Review by Bank (Prior I Post)
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review
Prior review Post review
Prior review Prior review
Prior review
6
Expected Proposals
Submission Date
June 3,2007
August 1,2007
August 16,2007
September 15, 2007
August 15,2007
September 28, 2008
October 28,2008
July 3 1,2007
August 13,2007
August 5,2007
May 30,2007 July 3 1,2007
April 29,2008 March 2008
February 14,2007
7
Commen ts
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@) Consulting services
Consulting services estimated to cost above US$lOO,OOO equivalent per contract for f irms, and US$50,000 and above for individuals, and al l single source selection o f consultants will be subject to prior review by the Bank.
Short l is ts composed entirely o f national consultants: Short l is ts o f consultants for services estimated to cost less than US$50,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.
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Annex 9: Economic and Financial Analysis
Abkchk Sarh Moundou Doba N’Djamena
CHAD URBAN DEVELOPMENT PROJECT
Total
1. infrastructure and basic services for residents in targeted project cities, namely: Moundou, AbCchC, and Doba.
Project objectives. The project development objective i s t o increase sustainable access to N’Djamena, Sarh,
Drainage, Sanitation
Rehabilitation and Extension o f Potable Water Supply System
Roads
Rehabilitatiodconstruction economic infrastructure (markets,. . .) TOTAL
2. Component A: Strengthening urban management capacity (estimated cost: US$4.9 million). The project will improve capacity at the local level to plan and manage urban services and at the central level to support urban development. Returns on investment in institutional development are included in the analysis, as they are considered the basis for service sustainability and are ultimately seen in improved access to urban services.
1,800 1,950 1,450 315 5,515
725 68 1 460 1,866
994 994
182 182
2,707 2,631 1,910 994 315 8,557
3. Component B: Provision of urban service delivery (estimated cost: US$ 18.4 million). The proposed project will support pr ior i ty infrastructure (water, sanitation, drainage and economic infrastructure) in the cities o f Moundou, Sarh, AbCchC, and Doba for which infrastructure priorities have been identified and reported in Table 1 below (prices are without contingencies).
NB: Exchange rate used: U S $ l .OO = FCFA 5 10.
4. Most o f the investments (drainage works, road works to improve access to poor neighborhoods, slaughterhouse, etc.. .) included in the proposed project bring economic advantages consisting o f social and environmental benefits expected to be gained in the targeted cities which cannot be quantified. However, an economic analysis was carried out o n the basis o f some key impacts below outlined.
5 . Incremental costs. T o determine net incremental costs and benefits, “with” and “without” project were considered. On the basis if these scenarios, the net incremental financial benefits and costs o f the proposed investment programs are assessed. These are then adjusted for the impact o f taxes, subsidies, and externalities to arrive at the economic cost and benefit streams. Cash flows are discounted using a discount rate o f 12 percent.
6. Costs include capital costs, operation and maintenance costs, and rehabilitation costs.
7. Benefits o f provision o f urban services are expected to directly improve the quality o f l i fe o f about 53,000 urban residents in Moundou, 52,000 o f urban residents in Sarh, 31,000 urban residents in AbCchC, and 10,000 urban residents in Doba.
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8. benefits.
The investment will have the fol lowing socio-economic quantifiable and non-quantifiable
(a)
(b)
(c)
(d)
(e)
(f)
Improvement in the quality o f l i f e through improved physical living conditions and environmental management;
Increased productivity and efficiency arising f rom reduced flooding and avoided flood damages to economic property;
Increases in property value due to improved overall amenities;
Improved health with reduction in waterborne disease and reduced medical costs;
Enhanced local Government capacity to fulfill its public service delivery mandate;
Employment generation, openedexpanded markets, promotion o f increased private sector participation in the provision o f services; creation o f employment opportunities for unskilled and semi-skilled labor (estimated at 610,000 man-days as detailed in Annex 3) and promotion o f SMEs in construction and urban services, by sizing public works appropriately and using labor-intensive methods; and
Decreased production costs due to lower vehicle maintenance and transport costs resulting f rom road improvements.
(g)
9. I t i s clear that manv Economic Rates o f Return calculated for the project are l ikely to understate some o f the above-mentioned social and environmental benefits expected to be gained in the targeted &.
10. By targeting the main cities in Chad, the project i s expected to have a positive impact l inked to economic growth and employment generation. More opportunities for trade and better productivity to benefit f rom the trade opportunities could increase the overall production at the national level and contribute to economic growth. The project i s expected to generate a considerable amount o f short-term employment (SMEs and consultant f irms) since labor (mainly unskilled labor) accounts for a significant part o f the project investment. As detailed in Annex 3, i t i s estimated that the proposed project will create approximately 610,000 man-days over the five years o f project construction.
From a macro-economic perspective.
11. Given that the interventions in al l f ive cities differ, as the access to services and physical characteristics are not homogenous, an overall ERR and Ne t Present Value (NPV) are not calculated. However, the program overall i s expected to be economically viable as the analysis o f the major components have positive results. A detailed economic analysis i s provided in this Annex for each o f the sub-components o f Component B o f the project.
12. Drainage works, accounting for 5,515 mi l l ion CFAF, or about 64 percent o f total project works, has an individual ERR o f about 17.45 percent. Rehabilitatiodextension o f drinking water network, accounting for 22 percent o f total project works, amount to 1,866 mi l l ion CFAF and has an individual ERR o f about 12.76 percent. Investments in economic infrastructure (slaughterihg house in AbCchC) have an ERR o f 14.50 percent. Investments in urban roads in Doba have an ERR o f 13.60 percent. I t i s clear that those Economic Rates o f Returns calculated for the project (in particular those related to the drainage works) are very l ike ly to understate some o f the above mentioned social and environmental benefits expected to be gained in the targeted cities. Table l(b) presents a summary o f the results o f the economic analysis carried out for each main project’s activities.
90
Drainage, Sanitation IRR
Rehabilitation and Extension o f Potable Water Supply System
Roads
Rehabilitation economic infrastructure (slaughterhouse)
TOTAL
IRR
IRR
IRR
13. The Project’s economic analysis has also been used to support investment decisions:
AbCchk Sarh Moundou Doba N’Djamena 1,800 1,950 1,450 315
15.60% 12.10% 26.10% 21.30%
725 68 1 460 12.60% 13.30% 12.20%
994 13.60%
182 14.50%
2,707 2,631 1,910 994 315
Total 5,515
1,866
8,5571
(i) The ERR o f an investment in the market o f Sarh, init ially proposed for IDA funding, was estimated at 5 percent. As a result o f the economic analysis, i t was therefore decided that the proposed investment in Sarh (CFAF 424,000,000) could not be included in the overall project.
(ii) Similarly, the ERR o f an investment in the market o f Moundou, in i t ia l ly proposed for IDA funding, was estimated at 6 percent. As a result o f the economic analysis, i t was therefore decided that the proposed investment in Moundou (CFAF 365,000,000) could not be included in the overall project
Drainage and sanitation works
14, Costs used in the economic analysis include capital costs and maintenance costs during l i fe o f the assets. The main quantifiable benefits o f the drainage works in N’Djamena, Sarh, Moundou, and AbCchC include: (i) reduced flood damage, (ii) income loss and medical expense; and (iii) business development. Additionally, in the case o f N’Djamena, the drainage works will enable the opening o f 225 stalls currently closed during the rainy season.
15. Reducedflood damage. In the case o f AbCchC, works wil l significantly reduce r isks o f f lood damage on the houses located on the waterways (Oaudis) o f Am Soudourieh and Am Kamal In this case, the analysis therefore includes both direct and indirect damages to private houses and household goods. Assessment o f f lood damages i s based on the actual number o f households identified as affected during storm rain either because o f lack o f drainage or local depression. Based on historical data, i t i s assumed that o n an average a household in flooded areas has cleaning up expense and repairs o f CFAF 2.5 mi l l ion per household (furniture, equipment, food) and the cost o f actual reconstruction amounts to CFAF 5 mil l ion.
16. Income loss and medical expenses. An expected benefit o f the project’s component B i s the reduction in the incidence o f sickness due to decrease in the prevalence o f disease. Increasing incidence o f diarrhea, malaria, skin and eye diseases are associated with poor storm water drains, environmental air pollution due to uncollected waste and dust, water and sanitation services and lack o f hygiene. Reduction in the prevalence o f these diseases would result in the loss o f fewer working and school days due to sickness, and may result in lower medical expenses. In 2005, the three municipalities o f Moundou, Sarh and AbCchC had a total population o f 415,000 people.
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17. Sunituire), the probabilities for urban residents o f being infected by waterborne diseases are as follows:
According to statistics f rom the Ministry o f Health (Division du Syst2me d’hformution
Beneficiary cities AbCchC Moundou
- Malaria: 10 percent - Cholera: 1 percent (as cholera i s an epidemics, this percentage represents an indicative average) - Diarrhea: 12 percent - Others: 3 percent
Area (km’) Population benefiting 1.62 19,213 8.93 59.989
18. Most o f the incidents o f disease are among the poor. According to c i ty statistics: (i) an outpatient with diarrhoea in mild case losses three days and spends an average o f CFAF 3,375 for medical expense; (ii) an outpatient with malaria in mild case losses five days and spends an average o f CFAF 3,500 for medical expense; (iii) an outpatient with cholera in mild case losses seven days and spends an average o f CFAF 4,500; (iv) for other diseases, an outpatient losses two days and spends an average o f CFAF 1,500.
Sarh N’Djamena
19. The daily average household income has been estimated to CFAF 3,200.
9;29 45,013 30,000
20. below:
The population benefiting form the works in AbCchC, Sarh, Moundou are indicated in the Table 2
ITable 2: Drainage works in Sarh. Moundou and N’Diamena I
21. Lastly, the project has been designed in a way that each sub-project works (drainage, water supply or road works) are expected to generate local employment during their implementation. As detailed in Annex 3, the number o f man-days generated amounts to 610,000. The average daily worker’s salary amounts to CFAF 2,750.
22. works:
As a result, the fo l lowing advantages (avoided costs) can be expected f rom the proposed drainage
- AbCchC: CFAF 203,870,479 /year - Moundou : CFAF 240,720,740/year - Sarh: CFAF 180,625,571/year
23. Economic Growth. Value added based o n business prof i t and wages i s taken as a measure o f the project’s contribution to economic growth. The improved amenities due to the drainage works as wel l as rehabilitation o f associated roads create a favorable business environment. For the c i ty o f N’Djamena, in addition to the advantages presented above, it i s estimated that works completion will enable 225 stalls to remain opened during the rainy seasons. This represents additional revenue to the management o f the “Murchd d Mil” which collects an average o f CFAF 50/stall/day. As a result, the advantage o f drainage works in N’Djamena amount to CFAF 47,242,896Iyear. Based o n the foregoing, the sub-project’s economic rate o f return on the investment i s 21.30 percent.
92
Rehabilitation and extension of the potable water supply system
24. The major benefits o f the works on the rehabilitation and extension o f the water supply system are improved water services to approximately 44,250 beneficiaries in the three municipalities o f AbCchC, Moundou, and Sarh. These include direct user benefits: resource savings (time savings and savings that result from the elimination o f individual water treatment, e.g. the cost o f boiling water), health benefits (estimated as reduction in costs for coping with water borne diseases) and benefits from increased water consumption estimated by the wil l ingness to pay for the increased consumption, for users who without the project would use less effective and more costly alternatives (such as bottled water, etc). The proposed project also focuses on achieving sustainability by financing training for the population in the management and a better use o f public drinking fountains.
(9
(ii)
(iii)
Moundou (1 89,000 inhabitants). The works will consist of: (i) rehabilitation and extension o f the network for at total o f 8,400 meters; (ii) construction and equipping o f two boreholes and connecting them to the network; and (iii) installation o f 64 standpipes in densely populated districts. Works in Moundou amount to US$0.72 million.
Sarh (126,000 inhabitants). I t i s necessary to enhance the water resources available and to expand the network. Financing wil l be provided for (i) replacement o f five kilometers o f existing water pipeline; (ii) acquisition and installation o f 7,400 meters o f network extension; (iii) the installation o f 39 standpipes in conformity with appropriate standards; and (iv) the construction o f three new equipped boreholes (including power generating units) with a capacity o f 80 m3 each. Works in Sarh amount to US$1.3 million.
AbCchC (100,000 inhabitants). The project will consist of: (i) construction and equipment for two new boreholes and connecting them to the network; (ii) the extension o f the network to new outlying districts o f a length o f 18,150 meters (N’Djamena road, Amir district, AdrC road, Goz Amir district and Wara); (iii) reinforcement o f the water pipeline in the extension zones (water distribution network o f N’Djamena road and the districts of Goz Amir and Wara); and (iv) installation o f standpipes at various points on the network. A system o f participatory management o f these standpipes will be established and i s expected to generate permanent employment opportunities, with extensive participation o f women. The amount o f works i s US$1.3 million.
The water supply in Sarh i s totally inadequate.
25. Economic analyses were carried out for each o f the cities o f Moundou, Sarh and AbCchC, and found that over a period o f 15 years, the additional revenues brought by the project, due to new connections, decreased leakage and increased the quantity o f water sold. The data were gathered at STEE, the company in charge o f operating the network, which will be benefiting from the investment financed under this project. Production cost savings (fuel, chemical, electricity, personnel) i s also assessed. The following water sale prices were used: CFAF 230/m3 in Sarh, CFAF 215/m3 in Moundou, and CFAF 290/m3 in AbCchC.
Provision of economic infrastructure (slaughterhouse)
26. In AbCchC, the project will finance the construction o f a new slaughtering house, with a capacity o f about 40 oxen and 60 sheep or goats per day. This works comprise: (i) construction o f a platform for storing water for the animals and o f the access road; (ii) construction o f a drainage network; (iii) provision o f potable water; (iv) installation o f electricity; (v) provision o f sanitation and waste disposal facilities (one wetcore and two waste compartments); (vi) and provision o f small additional structures (a slaughter house and rooms for skinning and cutting). Operation o f the slaughtering house in AbCchC will generate revenues, according to Table 3 below:
93
Oxen Sheep Camel
27. Using the current price, the total revenues generated by the slaughtering house o f AbCchC amount to CFAF 8,760,000/year. However, current prices are assessed very l o w (compared to other Chadian cities) and the municipality intends to multiply by two the price for oxen, sheep and camel after rehabilitation o f the slaughterhouse. Based on the above, the economic rate o f return o n the investment i s 14.5 percent.
Number/day Fee (CFAF/head) Annual Revenue (CFAF) 50 200 3,650,000
250 50 4,562,500 3 500 547.500
Provision of access roads to isolatedpoor neighborhoods in Doba
28. In Doba, the project will finance the construction o f earth roads and the drainage associated in order to provide access to dense neighborhoods in Doba and the industrial zone and improve access to the transportation area. The program will include the construction o f 54 km o f primary urban roads (sections AA, C C and II), 1,575 km o f secondary roads (sections DD and BB), and 7,550 km o f drains. The works’ estimated cost is: US$1.9 mi l l ion. As detailed in Annex 3, the road investment in Doba i s expected to bring to 1 1,556 the number o f people having access to the c i ty center v ia roads that are usable al l year.
29. I t should be noted that one o f the main obiectives o f the road investments in Doba i s to improve access to the c i ty for urban residents living in poor neighborhoods. The expected outcome o f the proposed investment in Doba (provision o f access roads to isolated poor neighborhoods) cannot be quantified and inteerated into the economic analysis. However, an economic analysis was sti l l carried out o n the basis o f some o f other projects’ impacts as developed below.
30. The main advantages o f the investments are three folds:
(i) Health related advantages directly l inked to drainage works. Reduction in the incidence o f siclcness due to decreases in prevalence o f diseases. Increasing incidence o f diarrhea, malaria, skin and eye diseases are associated with poor storm water drains, environmental air pollution due to uncollected waste and dust, water and sanitation services and lack o f hygiene. Based o n the same data used above, the economic advantages o f drainage works in Doba amount to CFAF 40,127,423/year.
(ii) Advantages associated with vehicle operating costs. The cost o f congestion on existing roads that will be relieved once the roads are improved was not taken into account, nor the benefits derived from diverted traffic f rom alternative roads. These conservative assumptions al low for a cautious economic evaluation. Current traffic in Doba i s l o w but i s expected to increase due to economic development in Doba region benefiting f rom o i l production. For the analysis, an annual traffic growth i s estimated at 6 percent. Based o n these data, the economic advantages o f the road investment amount to CFAF70,411,073/year during the f i rst year and CFAF159,192,674 /year at the year 15.
(iii) Employment generation in Doba. The road and drainage works are expected to generate short-term employment (SMEs and consultant f i rms) since labor (mainly unskilled labor) accounts for a significant part o f the project investment.
3 1. The economic rate o f return o f the investment i s 13.6 percent.
94
Annex 10: Safeguard Policy Issues
CHAD URBAN DEVELOPMENT PROJECT
Potential long-term impacts
1. This project falls into Environmental Category B because n o adverse long term impacts are anticipated. No long term adverse impacts were identified in the Environmental Assessment instrument: Environment and Social Management Framework (ESMF). This project will not fund activities that would cause an adverse effect o n the environment or any form o f land acquisition or restriction o f access to sources o f livelihoods.
2. The provision o f basic urban services component will target service and economic infrastructure priorities in the project cities. Sub-project activities include: a) improving drainage, sanitation, and the associated rehabilitation o f affected roads; b) rehabilitating and extending the potable water supply systems; c) improving provisions o f economic infrastructure (e.g. constructionhehabilitation o f slaughterhouses, etc); and d) provision o f access roads to isolated neighborhoods. The potential environmental and social impacts o f sub-projects under this component will be small-scale and site- specific typical o f Category B projects.
3. The ESMF and Resettlement Policy Framework (RPF) carried out during project preparation have provided mechanisms to identify impacts beyond the generic ones for which standard mitigation measures are built and to be applied during the implementation phase.
Project location and salient physical characteristics relevant to the safeguard analysis
4. The proposed project i s expected to take place in five major towns: N'Djamena, Doba, AbCchC, Moundou, and Sarh. In addition, the project will finance the preparatiodupdate o f urban development plans in the following selected cities: Mongo, KClo, Pala, Bongor, Bol, Mao, Am-Timan, Biltine, Ati, Fada, Faya, and LCrC.
5 . The ESMF report for this project contains an " Analysis o f Alternatives " section, and concludes that the project, as presently designed, adequately addresses its development objectives, while not placing irreversible adverse impacts on the bio-physical and social environment. The report further maintains that the 'do nothing' scenario would worsen the present situation in the proposed intervention sites and worsen poverty.
Measures taken by the Recipient to address safeguard issues
6. An E S M F and an RPF were prepared as the Safeguards instruments. The objective o f the ESMF i s to establish a mechanism to determine and estimate the future potential environmental and social impacts o f the activities to be undertaken under the project, and to define the mitigation, monitoring, and institutional measures to be undertaken during implementation o f the project. The E S M F was prepared to cover Moundou, N'Djamena, Doba, Sarh, and AbCchC. As stated in paragraph 1, i t i s anticipated that project activities might not lead to land acquisition or restriction o f access to sources o f livelihood. However, in the event that there are resettlement concerns, a resettlement policy framework (RPF) has been prepared, and this will be translated to RAPS as and when the need arises during project implementation.
95
7. Involuntary resettlement. The proposed project i s expected to deliver significant social benefits by improving the living and environmental conditions o f low-income communities in the form o f better health, improved water and sanitation services, easier access, reduced flooding, and generally a more pleasant living space. It will increase community cohesion by taking a participatory approach in involving communities. Communities engaged in the district sanitation committees " C o m i t b d 'Asssainissement" during project planning and design, thereby bringing the community together for a common cause. In addition, this effort aims to involve women and youth in the planning process and ensure equitable benefits. The two main objectives o f the RPF are to: (i) minimize resettlement; and (ii) assist displaced people and the most vulnerable inhabitants, improving their living conditions (return, at a minimum, to the same conditions before being displaced).
8. The RPF, prepared by the Government, addresses the issue o f resettlement o f the affected people and this will cover the five cities o f N'Djamena, Moundou, Sarh, Doba, and AbCchC. The scope o f the RPF i s to provide details on: (i) populations to be affected by the project; (ii) the most vulnerable populations; (iii) legal regulatory framework; (iv) methods used for identification and evaluation o f the affected people; (v) methods and planning o f resettlement and compensation packages; and (vi) external and internal monitoring. Although a governing principle o f development i s to minimize relocation and resettlement, engagement in minor land acquisitions and resettlement will be unavoidable in Component B, inclusive o f tertiary infrastructure upgrading, primary and secondary infrastructure etc. RAPS in accordance with the O P B P 4.12 will be developed during the implementation phase. The RFP provides principles and instructions on: (i) minimizing land acquisition and subsequent displacement; and (ii) compensation to a l l project-affected persons including non-title holders etc. The RPF provides the principles and procedures for the preparation o f R A P s related to investment works funded under the project, as and when the need arises. Stakeholders and potential project-affected persons were consulted during the preparation o f the ESMF and RPF. The Safeguards Instruments o f RPF and ESMF were disclosed to the public within the country o n June 7, 2006 and at the Wor ld Bank In fo shop on June 16, 2006.
9. The Implementation Unit will be responsible for the implementation o f the ESMF and RPF recommendations. Consultants will be recruited to prepare R A P s as and when necessary. Project- specific Environmental and Social Impact Assessments (ESIAs) will be prepared if and when necessary during project implementation. The Implementation Unit wil l have an environmental and social specialist o n a retainer basis. T h i s specialist will be responsible for implementing the recommendations contained in these safeguard instruments, and will be supported with short-term national social/environmental safeguards consultants as and when the need arises. Provisions have been made in the ESMF and RPF for capacity building (training, workshops, and seminars) for key actors (central ministries, municipal administrations, municipal technical services, c iv i l society and NGOs, and the populations) involved in implementation.
96
Annex 11: Project Preparation and Supervision
CHAD URBAN DEVELOPMENT PROJECT
Planned Actual PCN review 101 1412004 10/28/2004 Ini t ia l P I D to PIC 1012 1/2004 11/29/2004 Ini t ia l ISDS to PIC 1012 112004 01/07/2005 Appraisal 12/05/2005 10/30/2006 Negotiations 12/04/2006 12/06/2006 BoardmVP approval 01/30/2007 Planned date o f effectiveness 04/30/2007 Planned date o f mid-term review 05/01/2009 Planned closing date 10/30/20 1 1
K e y institutions responsible for preparation o f the project: Ministry o f Land Planning, Urban Development, and Housing (MATUH) Urban Department (DU) within MATUH
Bank staff and consultants who worked o n the project included:
Name Title Unit Bousquet, Franck Senior Financial Specialist, TTL AFTU2 Diop, Mahine Municipal Engineer AFTU2 Vang Eghoff, Christian Urban Development Specialist, Consultant AFTU2 Olojoba, Afr ica Eshogba Senior Environmental Specialist AFTS3 Munzberg, Nathalie Counsel LEGAF Chadab, Wolfgang Finance Officer L O A G 2 Desclaux, RenCe Finance Officer L O A G 2 Cave, Al ison Senior Urban Planner S A Seyni, Abdoul-Wahab Social Development Specialist AFTS3 Donang, Charles Senior Procurement Specialist AFTPC Zerbo, Aissata Procurement Analyst &'TU2 Nkoa, Etienne Senior Financial Management Specialist AFTFM Kok Shun, Connie Senior Program Assistant AFTU2 Jarosewich-Holder, Martha Environment and Water Resources Consultant A F T U 2 Ortiz, Alexandra Senior Urban Economist, Peer Reviewer LCSFU
Glasser, Matthew Senior Urban Development Specialist, Peer AFTU 1
Louani, Mahamat Goadi Senior Human Development Specialist, Peer AFTH3
Fallert Kessides, Christine Senior Adviser, Peer Reviewer TUDUR
Reviewer
Reviewer
Bank funds expended to date on project preparation:
Estimated Approval and Supervision costs: Bank resources: US$401,371
Remaining costs to approval: US$150,000 Estimated annual supervision cost: US$90,000
97
Annex 12: Documents in the Project File
CHAD URBAN DEVELOPMENT PROJECT
1
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Feasibility study report prepared by Groupe Huit-BCEOM o n the Urban Development Project in Chad -IDA-financed (1 997)
N’Djamena - Center City engineering report (AFD)
Etude de faisabilitk et de programmation des travaux d’amtnagement de deux quartiers commerciaux des march& Mil et Dembe - ACT consultants - Financement AFD, Juillet 2003
Etude de Planification Urbaine de Doba, BCbCdjia et Moundou - Groupe Huit - SIRUS-ATAUD - Financement IDA - Dtcembre 200 1
Revue des DCpenses Publiques du Secteur des Travaux Publics et des Transports et du Secteur de 1’Habitat et de 1’Urbanisme (1995-2001) D, MPTPT, MATUH, Octobre 2002
Mission sur Sites des Projets FinancCs sur Ressources PCtrolikres, CCSRP, M a i 2005
Cadre politique de rkinstallation des populations dCplacCes - Rapport f inal - M a i 2006 - SOFRECO (financement don japonais TF05373 1)
Cadre de gestion environnementale et sociale - Rapport f inal - M a i 2006 - SOFRECO (financement don japonais TF05373 1)
Etudes d’identification des besoins en renforcement des capacitts de gestion urbaine - Urbaplan - Septembre 2006 (financement don japonais TF05373 1)
Etude des finances et de l a fiscalit6 locale - Rapport f inal - URAM - Juin 2006 (financement don japonais TF053731)
(i)
(ii)
(iii)
(iv)
(v)
de l a commune de N’DjamCna ;
de l a commune d’AbCchC ;
de la commune de Moundou ;
de la v i l le de Sarh ; et
de l a v i l le de Doba.
Rtalisation des Ctudes techniques pour le programme des travaux pour les villes de Moundou, Sarh, N’DjamCna, Doba et AbCchC - STUD1 International - Septembre 2006 (financement don japonais TF053731)
98
Annex 13: Statement of Loans and Credits CHAD URBAN DEVELOPMENT PROJECT
Original Amount in US$ Millions
Difference between expected and actual disbursements
Project FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. ID Rev’d
PO66998 2005
PO74266 2004
PO77240 2003
PO00527 2003 PO72226 2002 PO35672 2001
PO62840 2000
PO44305 2000 PO48202 2000
PO55122 2000
TD-Local Dev Prog Sup APL (FY05) CHAD: Agricultural Services & POs Project TD CRITICAL ELEC & WATER Services Education Sector Reform 2nd Pop. & AIDS TD Nat. Transp. Program Support Project TD-Petroleum Economy Mgmt (FYOO) TD/CM PIPELINE TD-Petroleum Sec Cap Bldg Prj (FYOO) Health Sector Support
Total:
0.00
0.00
0.00
0.00 0.00 0.00
0.00
39.50 0.00
0.00
0.00
20.00
54.80
19.13 24.56 67.00
17.50
0.00 23.70
41.51
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
24.07 0.00 0.00
20.12 -1.02 0.00
37.34 23.41 0.00
45.21 8.25 4.65 16.12 3.73 -1.33 44.11 36.96 0.00
1.63 0.73 0.00
3.05 -1.95 0.00 1.38 7.64 0.00
15.89 12.64 -2.99
39.50 0.00 0.00 0.00 208.92 90.39 0.33 268.20
99
CHAD STATEMENT OF IFC’s
Held and Disbursed Portfolio I n Millions of US Dollars
Committed Disbursed
IFC IFC
FY Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Approval
2002 Finadev Tchad 0.00 0.19 0.00 0.00 0.00 0.00 0.00 0.00 2003 Financial Tchad 1.23 0.00 0.00 0.00 1.23 0.00 0.00 0.00 2000 TOTCO 13.90 0.00 0.00 13.90 13.90 0.00 0.00 13.90
Total portfolio: 0.19 0.00 0.00 0.00 15.13 13.90 15.13 13.90
Approvals Pending Commitment
FY Company Loan Equity Quasi Partic. Approval
2002 Finadev Tchad 0.00 0.00 0.00 0.00 Total pending 0.00 0.00 0.00 0.00 commitment:
100
Annex 14: Country at a Glance CHAD URBAN DEVELOPMENT PROJECT
LII13IV6
11.7 7.3 5.0 4.9
POVERTY and SOCiAL
2005 Population. mid-year (millions) GNI per capita (Atlas method, US$) GNi (Atlas method, US$ billions)
Average annual growth, 1999-05
Population (%) Labor force (%)
Most recent estimate (latest year available, lSSS-05) Poverty (% of population below national poverty line) Urban population (% of total population) Life expectancy at birth (years) infant mortality (per 1,000 live births) Child malnutrition (% of children under 5) Access to an improved water source (% ofpopulation) Literacy (% ofpopulation age 15+) Gross primary enrollment (% of school-age population)
Male Female
KEY ECONOMIC RATiOS and LONG-TERM TRENDS 1985
GDP (US$ billions) 1 .o Gross capital formationlGDP 7.3 Exports of goods and services/GDP 11.9 Gross domestic savings/GDP -12.1 Gross national savings/GDP -2.1
-GCF -GDP
Current account baiance/GDP Interest payments/GDP Total debVGDP Total debt servicelexports Present value of debVGDP Present value of debtiexports
4.1 2.7 -5.3 6.1 1.0 18.9 126.5 5.0
1.6 5.6 7.8 6.2
1.0 3.9 13.2 -4.9 -6.5 5.3 -16.3 3.6
..
-10.2 0.2
21.0 13.9
2w j50
1w
50
1985-95 1995-05 (average annual growth) GDP 2.3 7.7 GDP per capita 0 . 7 4.2 Exports of goods and services 1.9 17.2
1.5 18.7 -39.7 -26.2
Chad
9.7 400 3.9
3.4 3.0
25 44
117 37 42 26 71 86 56
1995
1.4 13.2 21.9
1.4 4.8
-8.4 0.3
83.1 4.7
2004
29.5 25.2
170.4
-Exports -imports
Sub- Saharan
Africa
74 1 745 552
2.3 2.3
35 48
100 29 56
93 99 87
2004
4.3 24.9 52.8 30.5 18.3
-6.6 0.3
39.5 2.0
18.1 34.1
2005
5.6 2.3
17.7
LOW- income
2,353 580
1,364
1 .9 2.3
30 59 80 39 75 62
104 110 99
2005
5.5 17.4 58.9 37.0 20.7
3.2
2005-09
2.6 0.4
-0.9
levelopment diamond.
Life expectancy
T Gross
prima4 :ita enroiimen,
Access to improved water source
-Chad - Low-income group
Economic ratios'
Trade
I
indebtedness
-Chad Low-income group
STRUCTURE of the ECONOMY
(% of GDP) Agriculture industry
Services
General gov't lnai consumption expenditure imports of goods and services
Manufacturing
Household final consumption expenditure
(average annual growth) Agriculture industry
Services
Household final consumption expenditure General gov't final consumption expenditure Gross capital formation imports of goods and services
Manufacturing
1985 WS5 2004 2005 I Growth of capital and GDP (Oh) 1 38.1 35.8 24.1 13.1 13.6 45.5 10.4 11.2 5.2 48.9 50.5 30.3 26.1 0
100.4 91.4 64.5 58.1 5 0
1s85-s5 19s5.05 2004 2005 /Growth of exports and importa ('h) I
Note: 2005 data are preliminary estimates. This table was produced from the Development Economics LDB database.
The diamonds show four key indicators in the country (in bold) compared with its incomegroup average. if data are missing. the diamond wiii be incomplete.
101
PRICES and GOVERNMENT FINANCE
Domestic prices (% change) Consumer prices Implicit GDP deflator
Government finance (% of GDP, includes current grants) Current revenue Cunent budget balance Overall surplus/deflcit
TRADE
(US% millions) Total exports (fob)
Cotton Cattie Manufactures
Total imports (cif) Food Fuel and energy Capital goods
Export price index (2000=100) Import price index (2000=100) Terms of trade (2000=100)
BALANCE of PAYMENTS
(US% millions) Exports of goods and services Imports of goods and services Resource balance
Net income Net current transfers
Current account balance
Financing items (net) Changes in net reserves
Memo: Reserves including goid (US% millions) Conversion rate (DEC, /ocaWUS$)
EXTERNAL DEBT and RESOURCE FLOWS
(US% millions) Total debt outstanding and disbursed
IBRD IDA
Total debt service IBRD IDA
Composition of net resource flows Official grants Official creditors Private creditors Foreign direct investment (net inflows) PoMolio equity (net inflows)
World Bank program Commitments Disbursements Principal repayments Net flows Interest payments Net transfers
1985
5.2 -5.1
4.6
1985
86 44 26 5
185
19 54
1985
123 324
-201
-5 101
-105
87 18
449.3
1985
217 0
40
17 0 5
128 5
-6 54
0
0 4 4 0 1
-1
1995
9.2 8.8
8.2 -0.7 -9.8
1995
243 126 50
277 22 22
126
159 142 113
1995
317 488
-171
-5 55
-121
165 -63
499.2
1995
912 0
379
16 0 4
121 58 0
33 0
67 42
1 41
3 38
2004
-5.4 13.3
8.2 1.5
-6.5
2004
2,184 46
302
738
57
24 1 118 205
2004
2,274 2,034
24 1
-694 168
-286
341 -55
282 527.7
2004
1,701 37
874
46 1
11
21 1 94
0 478
0
25 80 4
76 8
68
2005
20.0
9.6 3.4
-5.9
2005
2,955 66
305
719
76
285 118 24 1
2005
3,219 2,150 1,069
-1.026 133
176
-128 4 8
371 526.6
2005
35 864
4 16
64 12 52 8
44
lnflatlon (%)
"OT I
-GDP deflator - 0 ' C P I
Export and Import levels (US$ mlll.)
3 . m
2.m
1.m
0
I m M 01 02 03 04 06
Exports Imports
Current account balance to GDP ('h)
25 T
1.125 1
:ompositlon of 2004 debt (US$ mlll.)
G:23 ~ : 3 7 F: 33
c: 96
, . IBRD E ~ Bilateral B . IDA D . Other multilateral F - Private
I C - I M F G . Short-ten
Note: This table was produced from the Development Economics LDB database. 8/13/08
102
Annex 15: Map IBRD 34221
103
1963 Level1973 Level
2001 Level
TT ii bb ee ss tt ii BB
oodd
éé ll éé EE nn nn ee dd ii
BB oo rr kk oo uu
SS aa hh aa rr aa DD ee ss ee rr tt
K A N E MK A N E M
B AT H AB AT H A
S A L A M ATS A L A M ATG U E R AG U E R A
B I L T I N EB I L T I N E
MOYEN- CHARIMOYEN- CHARITANDJILETANDJILE
C H A R I -C H A R I -B A G U I R M IB A G U I R M I
LOGONE LOGONEOCC.OCC.
O U A D D A ÏO U A D D A Ï
B O R K O U - E N N E D I - T I B E S T IB O R K O U - E N N E D I - T I B E S T I
L A CL A C
LOGONE ORIENTALLOGONE ORIENTAL
MAYO- KEBBIMAYO- KEBBI
FadaFada
Koro ToroKoro Toro
SalalSalal
BokoroBokoro
KéloKélo
KoumraKoumra
HarazéHarazéMangueigneMangueigne
PalaPala
MasalasefMasalasef
MelfiMelfi
Abou DeïaAbou Deïa
MangalméMangalmé
Goz BeïdaGoz Beïda
OumOumHadjerHadjer
MassenyaMassenya
GélengdengGélengdeng
BoussoBousso
MassaguetMassaguet
MoussoroMoussoro
MouzarakMouzarak
Oum-ChaloubaOum-Chalouba
ZouarZouar
AozouAozou
MaoMao
AtiAti
MongoMongo
BolBol
Am TimanAm Timan
Abéché
BiltineBiltine
SarhSarh
DobaDoba
LaiLai
BongorBongor
Moundou
Faya-LargeauFaya-Largeau
N´DJAMENAN´DJAMENA
K A N E M
B AT H A
S A L A M ATG U E R A
B I L T I N E
MOYEN- CHARITANDJILE
C H A R I -B A G U I R M I
LOGONEOCC.
O U A D D A Ï
B O R K O U - E N N E D I - T I B E S T I
L A C
LOGONE ORIENTAL
MAYO- KEBBI
Fada
Koro Toro
Salal
Bokoro
Kélo
Koumra
HarazéMangueigne
Pala
Masalasef
Melfi
Abou Deïa
Mangalmé
Goz Beïda
OumHadjer
Massenya
Gélengdeng
Bousso
Massaguet
Moussoro
Mouzarak
Oum-Chalouba
Zouar
Aozou
Mao
Ati
Mongo
Bol
Am Timan
Abéché
Biltine
Sarh
Doba
Lai
Bongor
Moundou
Faya-Largeau
N´DJAMENA
NIGER
NIGERIA
LIBYA
SUDAN
CENTRAL AFRICANREPUBLIC
CAMEROON
Bahr Ergig
LakeChad
MbakaouRes.
Bahr Aouk Logone O Fama
Bahr
el Gha
zal (S
oro)
Batha
Chari
Bahr
Sal
amat
Vina
Bangoran
Bamingui
Gribingui
W
adi H
owar
To Séguédine
To Akhaltsikhe
To Nyala
To Birao
To Kaga Bandoro
To Bossangoa
To Bozoum
To Maroua
To Fotokol
To Maroua
T i b e s t i B
od
é l é E n n e d i
B o r k o u
S a h a r a D e s e r t
Emi Koussi(3,415 m)
Tarso Emisou(3,376 m)Pic Touside
(3,315 m)
15E 20E 25E
15E 20E
10N
15N
20N
15N
20N
CHAD
0 100 200
0 100 200 Miles
300 Kilometers
IBRD 34221
SEPTEMBER 2005
CHADURBAN DEVELOPMENT
PROJECTPROJECT CITIES
SELECTED CITIES AND TOWNS
PREFECTURE CAPITALS
NATIONAL CAPITAL
RIVERS
MAIN ROADS
RAILROADS
PREFECTURE BOUNDARIES
INTERNATIONAL BOUNDARIES
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.
