World Bank Documentdocuments.worldbank.org/curated/en/294581468773394111/pdf/multi-page.pdf · Document of The World Bank Report No. 16608-JO PROJECT APPRAISAL DOCUMENT ON A PROPOSED

Document of

The World Bank

Report No. 16608-JO

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN OF US$30 MILLION

TO

THIE HASHEMITE KINGDOM OF JORDAN

FOR A

COMMUNITY INFRASTRUCTURE PROJECT

July 24, 1997

Infrastructure Development GroupMiddle East DepartmentMiddle East and North Africa Region

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CURRENCY

Currency Unit: Jordanian Dinar (JD)(As of December 1996)

JD 1.0 = 100 filsJD 1.0 = US$1.40US$1.0 = JD 0.71

WEIGHTS AND MEASURES

Metric System

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance StrategyCIC Camp Improvement CommitteeCIDA = Canadian International Development AgencyCIP Community Infrastructure ProjectCVDB Cities and Villages Development BankDFID = Department for International DevelopmentDOA = Department of AntiquitiesDO = Development ObjectiveDPA = Department of Palestinian AffairsEIA Environmental Impact AssessmentGDP = Gross Domestic ProductGNP Gross National ProductGOJ Government of JordanHUDC Housing and Urban Development CorporationIBRD International Bank for Reconstruction and DevelopmentICB International Competitive BiddingIDA International Development AssociationIFC = International Finance CorporationIP = Implementation ProgressIS International ShoppingKfW = Kreditanstalt fur WiederaufbauMMRAE = Ministry of Municipal and Rural Affairs and EnvironmentMOP = Ministry of PlanningNAF = National Aid FundNCB National Competitive BiddingNGO = Non-Governmental OrganizationNS National ShoppingO&M Operation and MaintenancePOC = Program Objective CategoryPMU = Project Management UnitSC = Steering CommitteeSOE = Statement of ExpenditureSPP Social Productivity ProgramSSU Social Survey UnitUK United KingdomUNDP = United Nations Development ProgramUNRWA United Nations Relief Works AgencyWAJ Water Authority of Jordan

FISCAL YEARJanuary I - December 31

| Vice President: Kemal Dervi~Country Director: Inder K. SudSector Director: Nemat Shafik (Actg.)Task Manager: Mario A. Zelaya

THE HASHEMITE KINGDOM OF JORDAN

COMMUNITY INFRASTRUCTURE PROJECT

PROJECT APPRAISAL DOCUMENT

Table of ContentsPage No.

Project Financing Data .................... ....................... ........... 1Block 1. Project Description ................... ....................................... 2 .............. . .. ... ..... 2

1. Project Development Objectives .22 Project Components ................... 2... ....... ................................ .... ..... ......... 23 Benefits and Target Population ...... 3....... .................. ....... . 34. Institutional and Implementation Arrangements. 3

Block 2. Project Rationale ....... ... ................................ ....................................... ..... . 4. .... 45. Country Assistance Strategy Objective(s) Supported by the Project. 46. Main Sector issues and Government Strategy .47. Sector Issues to be Addressed by the Project .58. Project Alternatives Considered and Reasons for Rejection ..................... .. ... ..... 59. Major Related Projects Financed by the Bank and/or other Development Agencies 610. Lessons Learned and Reflected in the Project Design ................................. .... .... 611. Indications of Borrower Commitment and Ownership ...... 712. Value added of Bank Support ...... 7

Block 3. Summary Project Assessments ............................. .. ................. 713. Economic Assessment .714. Financial Assessment .815. Technical Assessment ........................ .......................................... 8..................816. Institutional Assessment .................. 917. Social Assessment.................. 918. Environmental Assessment ... .................. 9............................... .................... 919. Participatory Approach ........ ... 9.................... 920. Sustaimability .......... 1021. Critical Risks ........ 10........................ ........................................................... 1022. Possible Controversial Aspects ........................ .............................. 1

Block 4. Main Loan Conditions ................ . .. ............................................ .... .............. 11Block 5. Compliance with Bank Policies .............................. 1 2

Annexes:Annex 1: Project Design SummaryAnnex 2: Detailed Project DescriptionAnnex 3: Estimated Project CostsAnnex 4: Economic AnalysisAnnex 5: Not ApplicableAnnex 6: Procurement and Disbursement ArrangemenitsAnnex 7: Project Processing Budget and ScheduleAnnex 8: Documents in the Project FileAnnex 9: Statement of LoansAnnex 10: Jordan at a Glance

Maps:IBRD No. 28719: Community Infrastructure Project - General LocationIBRD No. 28720: Community Infrastructure Project - Location of Squatter Settlements in

Greater Amman

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENTINTERNATIONAL DEVELOPMENT ASSOCIATION

Middle East and North Africa Regional OfficeMiddle East Department

Project Appraisal Document

The Hashemite Kingdom of JordanCommunity Infrastructure Project

Date: July 24, 1997 [] Draft [x] FinalTask Manager Mario A Zelaya Country Manager Inder SudProject ID JOR-PA-49581 Sector: Urban POC PovertyLending Instrument. SIL PTI: [x] Yes [] No

Project Financing Data [x] Loan [] Credit [] Guarantee [] Other [Specify]

For Loans:Amount.(US$m) 30.0Proposed Terms: [ Multicurrency [x] Single currency

Grace period (years) 4 [ Standard Variable [] Fixed [x] LIBOR-basedYears to maturity 17Commitment fee 0 75%

Service charge.Financing plan (US$m) Source Local Foreign Total

Government(a) 30.0 0.0 30.0Germany -- 14 2 14.2

UNDP 1.0 0 7 1.7IBRD 6.0 24.0 30.0

Other Donors(b) 29.0 35.1 64.1Totals 66.0 74.0 140.0

(a) Government contribution includes a grant from Germany of DM20 million equivalent as debt swap;. (b) GOJ is seeking theassistance of Italy, the Arab Fund, USAID, the Islamic Development Bank and Norway.Borrower Government of JordanGuarantor. n/aResponsible agency(ies). Ministry of Planning (MOP), Housing and Urban Development Corporation ( HUDC), and Cities and

Villages Development Bank (CVDB)Estimated disbursements (Bank FY/US$M) 1998 1999 2000 2001

Annual 1 8 5 2 12.5 10.5Cumulative 1.8 7 0 19.5 30.0

For Guarantees: Partial Credit Partial riskProposed coverageProject sponsorNature of underlying financing:Terms of financing: Principal amount (US$)

Final maturityAmortization profile

Financing available without guarantee9 [] Yes [] NoIf yes, estimated cost or maturity:Estimated financing cost or maturity with guarantee.Expected effectiveness date December 31, 1997 Closing date June 30, 2001

Project Appraisal Document Page 2Country: Jordan Project Title: Community Infrastructure Project

Block 1: Project Description

1. Project development objectives (see Aniiex 1 for key performance indicators):

The Community Infrastructure Project (CIP) represents the first (pilot) phase of a longer-term program of small-scaleinfrastructure improvements (sub-projects) to poor communities in Jordan This pilot phase would be completed in about three yearsand will test the opportunities for developing: (a) income-generating activities in economically deprived areas; (b) approaches topromote local participation in the identification of priority infrastructure needs; (c) criteria for eligible appropriate investments, and(d) detailed relocation plans in squatter settlements to enable upgrading basic infrastructure in subsequent phases of the CIP The CIPis one component of the Government of Jordan's (GOJ's) Social Productivity Program (SPP), aimed at addressing the problem ofpoverty The SPP is a comprehensive program to address the conditions of the poor and the unemployed through (i) improving thetargeting and coverage of social assistance to the poor and unemployed; (ii) upgrading or providing essential physical and socialinfrastructure to the poor through the CIP; and (iii) generating employment through the provision of skills training andmilcroenterprise development The CIP's primary development objective is to improve the living conditions of the poor through theprovision of essential physical and social infrastructure services A secondary objective is to improve the capacity of selectedinstitutions to deliver infrastructure services to the poor in an effective, efficient and targeted way. The CIP intends to reduce thehardship of poverty through infrastructure provision, but it is recognized that it cannot by itself reduce poverty

2. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown):

Cost Incl % ofComponent Category Contingencies Tota

(US$M) ToaPart AUpgrading On-site Infrastructure in Squatter Settlements in the Central Region: Physical; 34 24Upgrading and construction of essential physical and social infrastructure in 14 of 27 Projecturban squatter settlements, including footpaths and access streets, water supply networks, managementdrainage systems, street lighting, compulsory school rooms for boys and girls,community and youth centers, and health centers.

Upgrading On-Site Infrastructure in Refugee Camps in the Central Region: Physical; 32 23Upgrading of essential physical infrastructure in 13 refugee camps, including water Projectsupply networks, sewerage, access roads and footpaths, drainage systems, street lighting, managementretaining walls, and pedestrian crossings in main roads with heavy traffic

Upgrading Off-Site Infrastructure in Refugee Camps and Adjacent Areas in the Physical, 28 20Central Region: ProjectProvision of four sewage treatment and disposal facilities to service four refugee camps managementand nearby areas.

Part BUpgrading Municipal and Village Infrastructure: Physical; 32 23Provision of essential physical and social infrastructure in about 300 low-income Projectmunicipalities and villages throughout the country, including storm water drainage and managementaccess roads, retaining walls, solid waste equipment. primary health centers andcommunity and youth centers

Part CProject Management, Consultancy, Training and Pilot Projects: Institutional 14 10* Project management, design and implementation; and consultancy services and capacity

training for Project Management Units (PMUs) withlin the Ministry of Planning building;(MOP), the Housing and Urban Development Corporation (HUDC), and the Citiesand Villages Development Bank (CVDB)

* Poverty and unemployment surveys and public awareness program,* Design of five pilot sub-projects to investigate opportunities for

development of income-generating activities in economically distressed areas Physical(identified pilots will be implemented under Part B)

Total 140.0 100


3. Benefits and target population:

The CIP is aimed at the poor in underdeveloped urban squatter settlements and refugee camps (Part A of the CIP) and low-income municipalities and villages (Part B of the CIP) in Jordan The CIP will improve the living and safety conditions ofapproximately 290,000 people in 27 poor urban settlements and 1 3 million people in approximately 300 municipalities and villagesthrough the provision of. safe access roads; street paving and lighting, drainage systems; efficient potable water supply and sanitationservices, and social infrastructure such as schools, health centers and community and youth centers. These investments will (i) reduceflooding and the incidence of water-borne diseases, (ii) improve overall health, and (iii) mitigate environmental pressures In additionto developing income-generating activities in distressed communities (through the pilot program activities), the program will createtemporary employment opportunities for the unemployed poor through labor-intensive, small-scale public works

The project will improve the efficiency of public services through improvements to data collection, surveying, and studies toimprove the identification of beneficiaries Finally, the CIP will improve the capacity of local governments to identify and prioritizeneeds with the participation of beneficiaries and to improve planning, cost-effective design, implementation and maintenance ofessential infrastructure.

4. Institutional and implementation arrangements:

Implementation period 5 yearsProject Imnplementation

ExIecuting Agencies Part A of the CIP will be implemented by HUDC. A full-time project management unit (HUDC/PMU),which will report to the Director General of HUDC, will manage Part A HUDC will be responsible for all planning, studies, design,tendering, contract award, and supervision of construction, commissioning and transfer of completed works to the public institutionsresponsible for operations and maintenance With respect to work to be carried out within camps, HUDC will carry out its activitiesin coordination with the Department of Palestinian Affairs (DPA), which will coordinate with camp improvement committees (CICs)and the United Nations Relief Works Agency (UNRWA). Because it is likely that a large portion of the work under the CIP willinvolve water and sewerage works, HUDC will work closely with the Water Authority of Jordan (WAJ) in the planning, design, andimplementation of such works WAJ may be fully responsible for implementation of highly specialized investments, such as sewagedisposal facilities, and when such investments are financed by other donors.

Part B of the CIP will be implemented by CVDB A full-time project management unit (CVDB/PMU), which will report to theDirector General of CVDB, will manage the project CVDB will work with in-house experts and consultants, as required, to carry outinfrastructure needs assessment studies, survey communities, and prioritize investment needs The consultants will provide technicalsupport in aspects of public participation and awareness, prioritize needs, select least-cost options of priority investments, manageconstruction and quality control, monitor and evaluate project performance and report on project progress CVDB will coordinatewith the Ministry for Municipal and Rural Affairs and Environment (MMRAE) in all aspects of project implementation.

Part C of the CIP will be implemented by HUDC, CVDB and the MOP. The MOP will oversee the implementation of povertysurveys and pilot projects. The MOP will also coordinate the application of the findings and recommendations of poverty surveys andstudies

Sub-project cycle Part A: During project appraisal, 14 squatter settlements and 13 refugee camps and the basic infrastructure ineach of them were identified. In the case of refugee camps, the priority investments were based on a list of basic needs identified byCICs. in the case of squatter settlements, priority investments were based on surveys conducted by HUDC. HUDC, as administratorof Part A, will be responsible for planning, design, procurement. supervision of implementation and commissioning of completedworks for transfer to concerned municipalities, public utilities or sectoral ministries responsible for operation and maintenance of suchworks.

Part B The general infrastructure needs of about 300 poor municipalities and villages were identified during appraisal. In theabsence of reliable poverty indicators, data from the National Aid Fund (NAF) on the number of families receiving NAF aid wereused as a proxy poverty indicator. Unemployment data, which is generally a good indicator of poverty, was not reliable and could notbe used. However, poverty surveys are included in the project to help improve identification mechanisms to be used in future phasesof the CIP. The priority needs in these eligible areas were based on a list of needs identified by the municipalities and village councilsavailable at CVDB. This list was not all-inclusive and did not directly take into account the views of the beneficiary population.During appraisal 12 communities and their basic infrastructure needs were reviewed and a program of eligible investments wereidentified for implementation in the first year of the CIP. However, since among the needs identified by the local councils there weremany investments not considered of priority, it was agreed that CVDB will undertake in the first year of the CIP detailed surveys and


assessments of such needs in the remaining communities (about 290) and take measures to promote participation of the beneficiarypopulation in the selection of priorities. CVDB, with the help of consultants, will also undertake socio-economic and affordabilitystudies and develop public awareness programs to promote participation of beneficiary populations in the process of prioritizing basicinfrastructure needs and to test beneficiaries' willingness to pay.

CVDB, as administrator of Part B, will assist eligible communities in the prioritization of needs, and, prior to approval of sub-projects, will appraise, approve and enter into implementation agreements with concerned municipal and village councils The localcouncils, with the support of the regional engineering units of the MMRAE, will prepare designs and bidding documents, contract outthe works following national procurement methods, supervise construction and assume responsibility for maintenance of completedworks CVDB will monitor implementation on a periodic basis to ensure the investments are made in accordance withimplementation agreements. CVDB's regional offices will disburse funds to beneficiary local councils for payments to contractors forservices rendered under approved contracts. CVDB will also provide, with the help of consultants, support to improve institutionalcapacity of local councils in all aspects of sub-project development and management. This support will improve identification ofpriorities with local participation, design using least-cost methods, and maintenance of completed works. A detailed methodology forCIP implementation is given in the Operations Manual.

Part C The project management unit in the Ministry of Planning (MOP/PMU) will manage poverty surveys and studies whichwill be used in the SPP (NAF component and poor communities identification under the CIP). MOP/PMU will also manage the pilotprojects with the support of CVDB, concerned ministries, authorities, NGOs, UNDP and beneficiaries. The findings obtained fromthese pilot projects will be used to design a comprehensive program consisting of similar sub-projects for implementation in a secondphase of the CIP. Details on the implementation of Part C are given in the Operations Manual.

Project Coordination

Overall SPP coordination will be the responsibility of the MOP/PMU. Subsidiary agreements between the MOP and HUDC andthe MOP and CVDB will be made, specifying the responsibilities of HUDC and CVDB in implementing the project. Initially, theMOP/PMU will also manage poverty and unemployment surveys. These surveys will eventually become the responsibility of theSocial Survey Unit (SSU) to be established in the MOP

Monitoring and evaluation arrangements

The HUDC/PMU and CVDB/PMU will submit quarterly and annual progress reports, annual audit reports, and a completionreport to the MOP/PMU, which will monitor project implementation and the achievement of project objectives and provide the Bankwith relevant reports on a quarterly and annual basis The Bank will supervise the program with four missions the first year, threemissions the second year, and two missions per year thereafter. A comprehensive review will be carried out at the end of the first yearof the CIP and a midterm project review will be conducted in the second year (September 1999) Missions will be staffed withengineering, financial, social development, and institutional development experts Performance indicators relating to developmentobjectives, i e., the provision of essential physical and social infrastructure and institutional capacity building, will be monitored andevaluated on the basis of data gathered by the implementing agencies and measured against agreed targets.

Block 2: Project Rationale

5. CAS objective(s) supported by the project

* Improve infrastructure extent and efficiency to relieve constraints to sustained growth Document number and date of latest* Reduce poverty and unemployment and improvement in the living conditions of the poor. CAS discussion: Report No. 14999-

JO, October 24, 1995.

6. Main sector issues and Government strategy:

The overall government strategy to combat poverty in Jordan has been to design and implement growth-oriented economic reforms,which have been supported by the World Bank-sponsored Economic Reform and Development Loans. Since 1996, however, theGovernment has also placed a high priority on addressing the immediate problems of poverty and unemployment. The long-term SPPsubsumes the economic reforms, the direct actions on poverty and unemployment, and sector-specific actions, all intended to increasethe productivity of Jordanian society The issues addressed by the direct action program on poverty and unemployment and thegovernment's strategy are outlined below:


Main sector issues Government strategy

Substandard living conditions Most of the poor are concentrated Government strategy currently focuses on the CIP, which wouldin low-income settlements (refugee camps, squatter settlements, finance locally-selected basic physical and social infrastructureand economically depressed municipalities and villages improvements for low-income communities, building localthroughout the country), where infrastructure and services are capacity to identify and, to the extent possible, raise local self-below generally acceptable standards. These areas are unsafe help resources for infrastructure projects that would benefit theand unhealthy, perpetuate low human productivity and poverty, poor. The strategy includes pilot projects to investigateand generate social tension. productive investments in economically depressed areas that

could be replicated and providing social (mainly education andhealth) services to poor communities

Unemployment among the poor. Unemployment is at a modest Government strategy to provide employment opportunities to thelevel but is relatively intractable because, apart from the poor focuses on improving the support system for (i) small andsubstantial share of non-working poor who are disabled or microenterprises and (i) linking vocational training with businessotherwise practically unemployable (thus excluded from the requirements.work force), skill levels for the employable tend to be lowSpecial efforts are needed to create matches between businessdemand for certain competencies and the competencies of theunemployed poor

Inefficiencies in the social safety net. The social safety net is Government strategy focuses on expanding the incomelimited in resources and ineffective in reaching the poor. NAF is supplement program to cover the able-bodied poor in such a waythe only major public program strictly targeted to the poor, and, as to maintain work incentives and to monetize the currentlydue to scarce funds, is limited to only those who are not expected quantity-based food subsidy and target it to the poorto work As a consequence, the share of the population livingbelow the poverty line is higher than it would be if existing foodand health care subsidies were focused on the poor rather thanmade available to most of the population. Major improvementscan be made in the short run through better targeting of the poorand efficiency measures such as converting in-kind assistance tocash. The institutions that identify the poor also requirestrengthening.

7. Sector issues to be addressed by the project

The CIP addresses (i) substandard living conditions through a program of investments in essential physical and socialinfrastructure in areas inhabited primarily by the poor; (ii) capacity building in the implementing agencies and local governments topromote local participation in the selection of priority investments, in the use of least-cost methods, and in timely sub-projectimplementation, and (iii) unemployment of the poor through increased construction activity under the project and the design of pilotsub-projects to investigate income-generating activities in economically deprived areas.

8. Project alternatives considered and reasons for rejection:

Establishing an autonomous social fund to implement the entire SPP, and therefore the CIP, was considered, but was rejected forvarious reasons. First, there are existing agencies with the experience to implement the components Second, it is feasible forcoordination and overall management of the SPP to be achieved through a small project management unit at the MOP In particular,the NAF and microenterprise components of the SPP would add an unacceptable degree of managerial complexity if handled togetherwith the CIP and training and employment support components by a social fund. Finally, the government has decided thatsustainability of the SPP could be accomplished better by strengthening program delivery of existing government institutions alreadyresponsible for the type of activities included under the SPP


9. Major related projects financed by the Bank and/or other development agencies

Bank-financed Projects Project Description

- Urban Development Project (1980-1987) Ln. 1893, $21.0 Provision of serviced plots, upgrading of low-incomemillion. settlements, provision of training, service equipment and

Highly satisfactory rating (PCR No. 7866) consultancy services.

- Second Urban Development Project (1985-1993); Ln 2587, Shelter improvements for low-income families, encouragement$28.0 million. of sound spatial development, institutional strengthening

Satisfactory rating (PCR No. 13288)

- Third Urban Development Project (1987- 1995); Ln. 2841; Infrastructure provision in previously unserved areas,$26.4 million construction of schools, health and community centers, municipal

Satisfactory rating (OED evaluative memo on ICR dated strengthening1/29/97).

- Cities and Villages Development Bank Project (1980-1986), Establishment of CVDB as a development bank, advisory andLn. 1286; $10.0 million. training assistance.

Satisfactory rating (PPAR No. 7225)

- Second Cities and Villages Development Bank Project (1985- Municipal and village development, CVDB capacity1991), Ln. 2614; $15.0 million. strengthening, training of local council officials

Unsatisfactory rating (PCR No. 11859)

- Human Resources Development Sector Investment Loan Facilities expansion and improvement of critical thinking/(HRDSIL); Ln. 31060, $73 million. problem-solving skills to meet the needs of a more competitive

DO = S, IP = S (latest supervision report) economy

- Second Human Resources Development Sector Investment Facilities expansion and improvement of critical thinking/Loan (HRDSIL-11); Ln. 38640; $60 million. problem-solving skills to meet the needs of a more competitive

DO = S; IP = S (latest supervision report) economy.

Other Development Agency-Financed Projects Project DescriptionCIDA - Economic Development through Technical Skills Improvement of business sector access to skilled labor,

Project; US$5 0 million grant. production of a strategic plan for technical/vocational education;improvement of vocational training curricula, teaching qualityand management, introduction of worker certification system

DFID (UK) - Queen Zein-AI-Sharaf Training Complex; US$3.0 Provision of training in four main areas of the Queen Alia Fund-million grant owned center. Activities include staff training, technical

assistance for curriculum improvement, and computer links forNGOs

DFID (UK)- Ministry of Social Development Strengthening; Support to implement a community-based social developmentUS$2 0 million strategy; video production on best practice in community/ social

development; improvements to the Ministry's coordination rolewith NGOs, crisis management skill development, and training

10. Lessons learned and reflected in the project design:

- Infrastructure investments may not be sustainable in areas where there are land tenure issues The CIP will not includesubprojects which would require acquisition of land in areas with unresolved land tenure issues The CIP requires that eligible sub-projects are located in areas with easements and rights-of-way, and land is acquired for the construction of buildings.

- Achieving cost recovery at levels higher than what the general population is paying is not feasible The selection of CIPinvestments will be done with the participation of community residents, taking into account affordability of various service levels,however, it still may not be possible to achieve cost recovery. Cost recovery will be in accordance will lawful charges and will notexceed the amounts paid by others for similar quality of services according to standard practice in Jordan. Also, projects wlil bedesigned to meet minimum service quality standards and will follow cost-minimization approaches This will enable cost recovery tothe degree possible


- Project design and supervision of municipal development operations need to focus principally upon strengthening local councilsThe CIP includes consultancy services to assist municipalities and MMRAE's engineering units. which provide technical support tomunicipalities, in sub-project identification and prioritization, including promoting the participation of beneficiary populations

11. Indications of borrower commitment and ownership:

H M The King, H R H. The Crown Prince, the Prime Minister. and several Ministers have publicly endorsed the SPP Theborrower has also formed full-time task forces for the preparation of each of the various components of the SPP and an SPP steeringcommittee chaired by MOP to provide policy guidance. Furthermore. PMUs have been established within the MOP, HUDC andCVDB and key staff are already identified

12. Value added of Bank support

Value added from Bank participation in the CIP comes from several factors

* The Bank has considerable experience working with HUDC's predecessor. the Urban Development Department, in upgradingslum areas in Jordan under Urban Development Projects 1, 11, and III, and working with CVDB to implement similarimprovement projects through local councils The Bank also worked with the CVDB on a 1994 green-cover report onlntergovernmental Fiscal Relations and Municipal Finance.

* Initial Bank support helped the Government to define the broad outlines of the SPP. Experience gained in earlier urban projectshas enabled the Bank to help design the project and include existing institutions as implementing agencies

* The Bank provides a degree of international experience and analytical rigor in community development projects not otherwiseavailable to the Government

* Bank support is currently the largest source of official funding for the project, without which the program's impact would begreatly reduced.

Block 3: Summary Project Assessments (Detailed assessments are in the project file. See Annex 8)13. Economic Assessment (Annex 4): [ ] Cost-Benefit Analysis [x] Cost Effectiveness Analysis [] Other]

Annex 4 explains in detail the logical framework used in the project analysis. Highlights are given below

Infrastructure investments in squatter settlements and refugee camps (Part A of the CIP) have been selected on the basis of a planto improve the level of infrastructure services to a defined minimum level Alternatives for addressing each deficiency wereconsidered and the least-cost option, consistent with sound engineering and design standards, was selected Infrastructure investmentsin urban areas not yet identified will be based on the same criteria as investments already chosen A traditional rate-of-returncalculation, which normally relies on increases in property values for multi-component upgrading, cannot be done because changes inland prices for land in untenured and low-transaction areas are not easily available or considered reliable However, evaluations ofsimilar Bank-financed projects carried out by the Operations Evaluation Department yield an economic rate of return (ERR) of about22 percent.

Sub-projects in municipalities and villages (Part B of the CIP) will be selected based on the same cost-minimization approachHowever, investments will not be chosen on the basis of an overarching plan for the community Instead, funded sub-projects mustmeet specified criteria, and ranking will be determined by measures of community commitment and evidence of high concentrationsof poor residents

Fiscal Impact (for all projects)

The CIP is estimated to cost $140 million for the initial three to five years. The GOJ will contribute $30 million (includingthe DM20 million debt swap with Germany). The World Bank would provide $30 million, UNDP will provide a $1.7 million grant,and Germany has agreed to provide a DM20 million grant and DM20 million through a debt swap. The Government is seekingfinancial assistance from Italy, the Arab Fund, USAID, the Islamic Development Bank and Norway which are assumed to contributeabout $64 million Should cofinancing in the amount of about U$64 million has not become effective by July 31, 1998, theGovernment must show that adequate funds are available from other sources otherwise the program will be scaled down The CIP willrequire counterpart funding of about $6 million per year and will increase the annual level of capital investment by about $28 million(including donor funding), compared to total government capital expenditures estimated at about $500 million per year over thisperiod Depending upon the terms of funding from donors, the GOJ will incur an additional, but manageable, debt service obligationin subsequent years as a result of the project


The CIP is intended initially to provide a conduit for targeted donor and GOJ programs to help poor communities, but the systemof prioritizing sub-projects according to how they affect the poor is expected to be eventually incorporated into regular publicprograms. The system of considering residents' ability to pay in deciding levels of infrastructure investments and services canpromote increased cost recovery in other, non-CIP areas in which low-income residents cannot afford full cost-recovery tariffs

All of the proposed CIP investments are presently covered by GOJ policy and regulation with respect to the financing of recurrentcosts. Those mechanisms are not satisfactory in all cases, and other Bank-assisted operations are seeking to address them in the areasof transport, power, agriculture, water, education and health. The CIP is not a suitable vehicle for improving recurrent cost-recoverypractices in general, and it is expected in any case that the light urban infrastructure proposed under the CIP will incur low recurrentcosts of approximately one to two percent of investment costs per year (about US$1 2-2 4 million)

Although the CIP provides grant financing for some of the capital costs of infrastructure targeted to poor communities, directcost-recovery from beneficiaries under the CIP will largely follow existing practice. For example, Part A will cover a portion of theimplementing agency's capital costs and the capital costs normally charged owners. Households will be expected to pay all normalconnection and usage costs such as water and electricity tariffs. For Part B, a portion of the capital costs will be covered by the CIP.Households will generally be assessed the same charges as prevail in existing infrastructure programs. No assistance for usage tariffsis anticipated.

14. Financial Assessment (see Annex 5): NPV=US$ N/A million; FRR= N/A

No single financial assessment is possible for the CIP, as sub-projects to raise infrastructure service levels will be selected basedon minimum standards and cost-minimization options. Calculation of traditional financial rates of return in multi-component projects,where changes in land prices are used to measure the benefits of the investments, will not be possible due to the conditions of landtenure in squatter settlements and refugee camps. Furthermore, as noted earlier, only partial cost recovery is anticipated as mostbeneficiary communities may not be able to afford to repay such investments.

15. Technical Assessment:

Projects funded by the CIP will follow internationally acceptable standards for design, construction, and operation andmaintenance (O&M) and will be technically sound. Environmental and social concerns will be taken into account as part of projectplanning, design and construction. The CIP will consist of simple small civil works that will be designed and implemented byagencies with good records in execution of small works. Because it is likely that a large proportion of investment will involverehabilitation of water supply and sewerage services, coordination with WAJ will be required in investment design andimplementation The investments themselves will be done by HUDC in accordance with WAJ's requirements, WAJ, however, will beresponsible for O&M of water and sewerage services.

First Year Program

During appraisal, investment programs for three urban settlements under Part A and fourteen municipalities and villages underPart B, estimated to cost a total of about US$8 million equivalent, were reviewed in detail and approved for further preparation.Tender documents for these investments will be completed by December 1997 so that procurement can take place as soon as financingis available. Other Part A investments in the pipeline are under preparation and should be completed within the first eighteen monthsof the CIP. Additional investments under Part B are also under development, and preparation should be completed within the firsteighteen months of the CIP.

The criteria for the selection of appropriate investments in municipalities and villages is given in the Operations Manual Thiscriteria is essentially based on the level of poverty and service deficiency, and requires that beneficiary local governments demonstrateadministrative and financial capability to properly operate and maintain the works funded by the CIP NAF and other poverty datahave been used to identify eligible areas This data will be complemented by poverty surveys and studies carried out through the CIP.Within selected communities, eligible projects will have to be oriented to the needs of the poor. CVDB consultants will ensure thatinvestments will benefit the community as a whole. Eligible communities will be asked to prioritize investment requests and, to theextent possible, contribute to the cost as well as to indicate commitment to maintenance and operations of facilities that are theresponsibility of local governments. Sectoral ministries responsible for the infrastructure being considered under the CIP willparticipate in planning, design and implementation, as they will assume full responsibility for running such facilities uponcommissioning of completed works.


16. Institutional Assessment

a. Implementing agencies: HUDC and CVDB are well known to the Bank They have a good implementation record, and have

significant experience in implementing similar programs However, consultants to strengthen CVDB and to complement HUDC will

be necessary, particularly to develop computerized management information systems and to introduce principles for promoting local

participation, for targeting beneficiaries, for introducing least-cost methods of project analysis and design, and for building

institutional capacity within local governments in the design and implementation of projects PMU directors and key staff at

HUDC/PMU and CVDB/PMU have already been identified and official appointment should be done soon. These staff participated in

project preparation and appraisal for which interim budgets were made available by each implementing agency.

b Project management: Overall CIP oversight will be the responsibility of MOP/PMU, a new unit to be established at the MOP. This

unit will also coordinate other SPP components, some of which may be financed with the support of bilateral donors. The MOP/PMU

will hire consultants, as needed, to assist in the management of the CIP. MOP Director for Infrastructure and staff participated in

preparation and appraisal of the CIP. This directorate will play a key role in the MOP/PMU.

17. Social Assessment.

The target populations of the CIP are urban poor living in squatter settlements and refugee camps and rural poor living in low-

income villages and municipalities throughout the Kingdom. HUDC has conducted socio-economic studies in some squatter

settlements and a report summarizing the findings will be completed soon. Under this first phase of the CIP, there will be no

involuntary relocation of people As subsequent phases of the CIP are likely to involve involuntary relocation of people, under this

project financing will be provided for a comprehensive relocation plan that will enable smooth implementation.

18. Environmental Assessment Environmental Category [ ] A [ ] B [x] C

The CIP is classified as a category C project. All investments will be of small size and will result in reductions in environmental

hazards. The CIP includes four small off-site sewage treatment and disposal facilities to service refugee camps and nearby areas.

These will be funded by bilateral donors and government The sizes and location of these investments are not yet known, but

agreement was reached during appraisal that environmental impact assessments (ElAs) will be performed during the planning stage,

and that facility design will take into account mitigative measures recommended by the ElAs. WAJ will be responsible for all

applicable studies, planning, ElAs, design and construction, commissioning and eventual operation and maintenance of the facilities in

an environmentally sound manner. WAJ will consider options ranging from improved on-site disposal to regional system integration

There are no known archaeological sites in the program areas. The Department of Antiquities will be consulted in the event that

any archaeologically significant finds are uncovered

19. Participatory Approach:

Identification/Preparation Implementation OperationBeneficiaries/community groups CON CON/COL COL

Local government COL COL COLOther donors IS/CON IS/CON IS/CON

Sectoral Ministries and Authorities CON/COL CON/COL COL

Note IS = information sharing, CON = consultation, COL =collaboration

Part A Community participation in the selection of priority investments is already institutionalized within the refugee camps

CICs have prepared a list of priority needs, which have been forwarded to DPA HUDC will coordinate with DPA regarding all

investments proposed for the camps. All work carried out within the camps will be prepared in coordination with the CICs.

Within squatter settlements, HUDC has significant experience consulting with residents to determine priority needs and work

arrangements HUDC has already conducted socio-economic surveys regarding the needs in these settlements, which have been used

in planning and design of upgrading programs. HUDC will carry out studies with respect to the need for relocation, which is likely to

be a necessary complement to street widening investments to be carried out in a later phase of the CIP.

Part B: Community participation in the selection of investments in muncipalities and villages is generally less common than inurban areas. As a first step in selecting appropriate investments, CVDB will review investment requests from local governments Inaddition, CVDB will, with the help of a team of specialists in engi.aeering, sociology and economics, assess the most urgentinfrastructure needs and the cost-sharing capabilities of beneficiaries and will, with the assistance of professional communicationsexperts to be selected to develop public awareness programs, inform local governments and beneficiaries about CIP objectives.


Local participation in the first two years will focus on decision making and, to the extent feasible, local contributions toconstruction and/or maintenance. For some types of investments, one measure of community preference may be willingness tocontribute financially to the investment

Part C An SPP task force will design pilot projects with the help of qualified consultants, NGOs with appropriate experienceand pilot beneficiary populations. In these projects, communities will be organized and encouraged with specific examples to identifycommunity infrastructure that would provide the greatest stimulus to job-creating business investments During implementation,beneficiaries will work hand-in-hand with the CIP team of experts, NGOs, concerned sectoral ministries and public authorities

20. Sustainability

CIP Sustainability The government has expressed strong commitment to the overall SPP and its sustainability It views the CIPas a long-term program, of which the current project is the first phase The methods developed under Part C of the project,particularly the experience gained through pilot projects to promote economic activities, would be expanded as rapidly as is feasibleduring the second phase, which would begin as early as three years from the start of the first phase This progression supports thegovernment's goals of decentralization and geographically broad-based development

Investment Sustainability Sustainability of CIP investments will be enhanced due to local participation in selection and therebylocal ownership. Most investments will be small civil works requiring only periodic repairs Water and wastewater investments willbe maintained by WAJ, and other sectoral investments will be maintained by the appropriate agencies Where local governments areresponsible for operations and maintenance, contractual agreements between HUDC and CVDB and beneficiary local governmentswill be made CIP institutional capacity-building components will improve local government capacity for maintenance of localservices

21. Critical Risks (see fourth column of Annex 1':

Risk Risk Risk Minimization MeasureRating

Project outputs to development objectives

The identification mechanism proposed may MR By design and by Implementation strategy, measures are included in thenot result in the improvement of the living program to avoid these problems (The Operations Manual describesconditions of the poor Although this would how the A and B components will test income).not necessarily affect the economic value ofthe investments, it would be a seriousshortcoming in achieving project objectives.

Project selection procedures may fail to MR This risk is mitigated both by the review procedures for preparedcorrectly minimize costs investments and by the decision to agree on criteria for selection of

future investments under the program which, in part, is codified in theOperations Manual for the CIP.

Project components to outputs

Co-financing may be insufficient or not MR To date three donors have made commitments to the programprovided in a timely manner. Difficulties in (Germany, UNDP, the Bank) Other donors also have expressedobtaining co-financing may result in either interest in the program- the Italian government, the Arab Fund, USAID,extending the implementation period in areas the Islamic Development Bank and Norway. The specific conditionsfunded by donors, or in scaling down the size regarding amounts and terms of financing have not been definedof the initial phase of the CIP Donors will finance self-contained packages of investments to enable

using their own procurement procedures. The implementation of Bank-financed components, which would be jointly financed by Government,would not be affected by delays in donor-financed investments.

Overall program risk MR

Project Appraisal Document Page IICountry: Jordan Project Title: Community Infrastructure Project

22. Possible Controversial Aspects:

Undermining of existing infrastructure financing mechanisms for municipalities and villages: Local governments generallyhave very few sources of funding. Municipal and village infrastructure investments are therefore often funded through CVDB loansextended to credit-worthy (solvent) local governments Local governments repay these loans from general revenues, such as propertytaxes, fuel-tax revenue sharing and proceeds of usage fees There is a risk that local governments may misunderstand the CIP to be areplacement financing mechanism, i e, established to fund all infrastructure investments, or, local governments not eligible for theCIP may place political pressure on CVDB to change the terms of existing loans or to cancel repayment. To try to mitigate this, apublic awareness program will clearly specify criteria for municipality and project eligibility. The program will clearly differentiateCVDB's system for financing non-poor communities and non-vital infrastructure from the CIP's system for funding basicinfrastructure needs in areas of concentrated poverty CIP launch workshops will train CVDB staff to make municipalities andvillages aware of the highly specific eligibility and implementation aspects of the CIP.

Perception that the CIP will "regularize" the status of refugee camps: There has been little infrastructure investment inrefugee camps outside of UNRWA and DPA due to the fear that government investment in the camps would signify "regularization"of refugees, and therefore relinquishment on the part of refugees of the right to return and the right to compensation. The CIP,however, in no way affects the status of refugees. Improvements to necessary infrastructure affects the health, safety, and sanitationconditions of the community as a whole, but do not assume or imply ownership of dwellings within the camps. In order to reduce theperception that the CIP regularizes the status of refugees, the government will continue to present its arguments on this point to thepublic.

Block 4: Main Loan Conditions

23. Agreements reached at Negotiations:

(i) GOJ shall agree to continue to maintain the SPP/SC through the life of the project,

(n) GOJ shall agree to maintain the PMU within the MOP, and to ensure that CVDB and HUDC maintain their respective PMUs, withorganization, staffing, and terms of reference satisfactory to the Bank;

(iii) GOJ shall agree to ensure that the respective PMUs will:

(a) appraise sub-projects in accordance with the Operations Manual;

(b) ensure that land is acquired for the construction of new buildings under the project,

(c) ensure that easements and rights-of-way exist for all roads and pipelines to be constructed under Part A (i) and B of theProject,

(d) ensure that only existing roads, footpaths and pipeline are upgraded under Part A (2) of the Project, and that such roads,footpaths and pipelines are in accordance with planning layouts and circulation plans available at DPA;

(e) ensure that Subprojects will not require any involuntary relocation;

(f) supervise the preparation of summary environmental assessments satisfactory to the Bank, identifying any potential adverseenvironmental effects to be produced by proposed Subprojects; and

(g) ensure that proposed subprojects valLued above $700,000 are furnished to the Bank for its approval:

(iv) GOJ shall maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance withagreed indicators, the implementation of the Project and the achievement of its objectives;

(v) GOJ shall prepare, by January 31 of each year, under terms of reference satisfactory to the Bank, and furnish to the Bank, a reportintegrating the results of monitoring and evaluation activities; including progress achieved and recommended measures forimprovement; and

(vi) GOJ shall review. by February 15 of each year, monitoring and evaluation reports with the Bank and to take all measures requiredto ensure the efficient completion of the Project. The review to be conducted in the year 1999 will be a mid-term review.

(vii) if cofinancing in the amount of about $64 million has not become effective by July 31, 1998, the Government must show thatadequate funds are available from other sources or the program will be scaled down.

Project Appraisal Docuinent Page 12Country: Jordan Project Title: Community Infrastructure Project

24. Conditions of Effectiveness

Execution of subsidiary agreements by MOP with HUDC and CVDB.

Block 5: Compliance with Bank Policies[x ] This project complies with all applicable Bank policies

1x Task Manager ario A. Zlaya Country Director. Inder K. Sud

Annlex IJordan: Commiuniity Infrastructure Project

Project Design Summary

Narrative Su m mary Key Performance Indicators Monitoring and Supervision Critical AsSum ptions and___________________________ ~~~~~ ~~~~~~Risks

CAS ObjectiveReduce poverty and Reduction in rates of Surveys and analysis withinl Favorable macroeconiomilicunlemployment poverty and unemploymenit the Department of Statistics conditions

Project Development (Development Objectives toOkjectives CAS Objective)1. Improve living conditionis 1. I mprovement of basic 1.I HUDC and CVDB 1.1 The project willof people in poor infrastructure in at least 12 surveys successfully identify areascommunities squatter settlemenits, 13 of concenitrated poverty;

camps and about 300municipalities and villages. 1 2 HUDC will

successfully implemenitproject components

2. Improve the capacity of 2.1 (a) establishment and 2.1 Progress reports; 2.1 Procedures forcentral and local implementation of project monitoring beneficiary consultationlgovernment agencies to procedures for beneficiary developed durinig the CIPdeliver infrastructure consultation withi respect to will be institutionialized byservices to the poor. infrastructure and other the implementinig agencies

investments; and (b) timelyexecution of the CIP 2.2 CVDB will successfullycompared with agreed implemenlt projectimnplementation schedule comiponentsincluded in the OperationsManual.

Project Outputs1. Improved safety and 1.1 Provision ofsafeaccess 1.1 HUDC surveys: I I MuLnicipalities aidhealthi conditions for roads in about 10 squatter monitorinig reports public authorities will haveresidents of very-low- settlements and about 100 resources for the properincome areas inun icipalities. operation and mainltenianice

of services.1 .2 Mitigation of flood 1 .2 HUDC and CVDBdamage in about 100 surveys: monitoring reportscommunities.

1.3 Provision of adequate 1.3 Progress reports:water supply and sanitation project monitoringfor 14 squatter areas and 13refugee camps

2. Enilaiced economic 2.1 Relatively higher 2.1 MOP surveys; 2.1 Busillesses hlave input

activity in pilot areas growth of jobs, incomes, monitoring reports into decision makingand investment in pilot regarding infrastructureareas than in control areas investment.measured in terms of directand indirect jobs generatedby pilot projects

Annex 1Page 2 of 2

Project Conmponents Inputs (Components to ProjectOutputs)

1. On-site infrastructure in I I Upgrading aid I I Progress reports, 1.1 Effective cooperation,squatter settlements construction of essential regular monitoring implementationi, and

infrastructure in 14 of 27 fundinig arrangementsurban squatter settlements between HUDC, donors,

municipalities, and utilitiesagenlcies

2. On-site infrastructure in 2.1 Upgrading and 2 1 Progress reports, regular 2.1 Effective cooperation,refugee camps construction of essential monitoring implementation, and

infrastructure in 13 refugee fundinig arrangementscamps between HUDC, donors,

UNRWA, DPA, CICs, andutilities agencies

3. Off-site infrastructure for 3.1 Construction of four 3.1 Progress reports; 3.1 Effective cooperation,refugee camps sewage treatment and regular monitoring implementation, and

disposal facilities to service funding arrangemenitsfour refugee camps and between HUDC, WAJ, andnearby areas donors

4. Essential infrastructure 4.1 Upgrading and 4.1 Progress reports; 4.1 Effective cooperationin low-income construction of essential regular monitoring and implementationimunicipalities and villages infrastructure in arrangements between

approximately 300 low- CVDB, municipal andincome municipalities and village councils, NGOs,villages utilities agencies and

sectoral ministries

5. Technical assistance and 5.1 Timely completion of 5 1 Progress reports, 5.1 Cooperation betweentraining programs surveys, studies, and pilot regular monitoring CVDB, outside consultants,

projects and local NGOs

5.2 effective selection, 5.2 NGOs interest indesign, and program working withi localimplementation with communities in thesubstantial participation of implementationi of socialbeneficiaries programs in community and

youth centers

6. Implementation of pilot 6.1 Completion of pilot 6.1 Progress reports, 6 1 Cooperation betweenprojects in income- projects and design of a regular monitoring MOP, consultants, NGOs,generating investments in program of similar activities and beneficiarieseconomically distressed for implementation underareas the second phase of the CIP

Annex 2Jordan: Community Infrastructure Project

Detailed Project Description

Introduction

1. The Government of Jordan (GOJ), concerned with rising poverty and unemployment, hasdeveloped a program entitled the Social Productivity Program (SPP), which forms the basis forGovernment policy and a framework to solicit donor assistance The SPP is designed to address in acomprehensive way the conditions of the poor and the unemployed. This program has three mainthrusts: (1) improving the targeting and coverage of social assistance to the poor and unemployed; (2)upgrading or providinig essential plhysical and social infrastructure to the poor; and (3) generation ofemployment through two parallel tracks, demand-driven skills training and credit facilities and servicesto promote microenterprise development

2. The Community Infrastructure Project (CIP) is the first component of the SPP to be prepared,appraised and ready for Bank and donor funding. This pilot phase would be implemented in about threeto five years and will test the opportunities for developing: (a) income-generating activities ineconomically deprived areas; (b) approaches to promote local participation in the identification ofpriority infrastructure needs; (c) criteria for eligible appropriate investments. and (d) detailed relocationplans to enable upgrading basic infrastructure in subsequent plhases of the CIP. The CIP is designed toimprove only the living conditions of the poor. It is designed as a public sector instrument for financingessential infrastructure in areas where there is a concentration of poor households and where essentialinfrastructure services are below a minimum acceptable standard. The total financial needs of the CIPhave been estimated oni the order of JD465 million. It should be noted, however, that appraisal of theCIP was based on limited studies of essential physical and social needs in squatter settlements andrefugee camps and municipal and village communities in the Kingdom. During CIP appraisal, arepresentative sample of investment needs for such areas, prepared by the CIP task force to preliminarydesign levels, were reviewed in the field.2 This review concluded that the overriding need in mostcommunities is jobs. Therefore, the proposed program will include five pilot projects to testopportunities for income-generation activities integrating, to the extent possible, the various componenitsof the SPP. These pilot projects may provide the necessary knowledge and methodology to preparesimilar comprehensive programs over a larger geographic area in the Kingdom, and expand the CIPobjectives to include integrated economic development goals in which infrastructure would supporteconomically and socially viable employment-generation initiatives. On this basis, the pilot phase wouldbe the first package of investments identified by the World Bank (Bank-financed program), whichrepresents a modest slice of the bigger program of essential needs, is estimated to cost about US$140million (about JD 98 million) over a period of about three to five years. The investment program isgrouped in separate packages to give donors a menu of choices ready for financing 14 out of 27 squattersettleimients and 13 refugee camps, and about 300 out of 600 municipalities and villages in the country.

The entire CIP includes about 27 squatter settlements and 13 refugee camps (Part A of the CIP) and about600 (now being considered to be reduced to about 433 local councils) municipalities and villages (Part Bof the CIP) in the Kingdom The total investment needs (JD 465 million) were based on the followingbreakdown by major component JD 244 million for Part A, JD 205 million for Part B; and JD 16 millionfor program management, design and supervision, consultancy, pilot projects, surveys and training

2 During pre-appraisal and appraisal Bank missions visited 12 municipalities and villages (or 4 percent ofabout 300 communities considered in the first phase program) and 15 squatter settlements and refugeecamps (or about 55 percent of 27 settlements considered in the first phase program).

Annex 2Page 2 of 8

Bank-Financed Project

3. Project Objectives. Strategy and Design Concept. The principal objective of the CIP is toimprove the living conditions of the poor through the provision of essential physical and socialinfrastructure services. A secondary objective is to strengthen the capacity of selected institutionls todeliver infrastructure services in a more effective, efficient and targeted way to benefit the poor and theircommunities. It is clearly recognized that this project can alleviate some of the hardship of being poorbut that infrastructure cannot by itself make people less poor. The Bank-financed project, however, hasbeen designed as a pilot phase to test opportunities for income-generating activities which would bedesigned in partnership with beneficiary communities and use this experience in the design ofcomprehensive programs to expand the CIP objectives.

4. Within the CIP, the strategic consideration was whetlher to concentrate oni the needs of the pooror on projects most likely to directly help the poor, regardless of where they live. The division of theprogram in two parts -- A and B -- the first including underdeveloped poor settlements (squattersettlements and refugee camps), and the second including poor municipalities and villages throughout theKingdom, reflects the outcome of that deliberation. The worst living conditionis were found in ruralcommunities in the southern and northeastern areas and the Jordan Valley, and in areas of denseconcentrations of poor inhabitants who were generally without formal land property rights (squattersettlements and refugee camps). Part A of the CIP thus focuses on area-wide comprehensive upgradingof the latter. This approach also lends itself to rapid implementation since consultations with residentsand feasibility studies and preliminary designs of some areas were available. Part B of the CIP, on1 theother hand, is designed to provide discrete service upgrading to more isolated and dispersed groups ofthe poor throughout the Kingdom. The investments financed bv Part B will be smaller, and the process ofcommunities generating and bringing forward proposals will necessarily take longer. Thesecommunlities will need assistance to identify their priorities and to design and implement projects.

5. The criteria for identification of candidate investments under Part A and Part B are based ondeficiencies in infrastructure service levels or performance below a minimum standard. Candidateinvestments so identified will then be compared to a menu of CIP-eligible projects and subject to a cost-minimization analysis both in terms of alternative solutions and the design of the projects. Both Part Aand Part B will serve beneficiaries whose needs are not easily addressed by existing programs. In thecase of Part A, since beneficiaries have n1o property rights, it is very difficult for municipalities toprovide them with infrastructure, which requires owners to financially contribute to the capital costUnder Part B, local authorities and implementing agencies are generally too poor to shoulder their shareof infrastructure cost and thus have not been able to provide some essential infrastructure services. CIPwill thus channel funds for the benefit of poor households without property rights and to poor localauthorities in support of projects for low-income residents. Without the CIP few if any of these areascould be served with additional essential infrastructure at this time.

6. In support of the primary objective of ameliorating poor living conditions, the framework forselecting investments is a model of raising infrastructure service and performance levels to a minimumstandard in deficient areas where income levels are low. The minimum standard is defined in terms ofthe level of service or performance necessary for safe and healthy inhabitation. Within the identifiedinfrastructure deficiencies, priorities were set which ranked first, investments related to public safety(mostly high risk flood mitigation and soil stability projects) and dangerous environmental and healtlhrisks, such as exposed raw sewage discharges and unsafe potable water supply. Part A focuses onlocations where high concentrations of poor households could be identified. A comprehenisive plan for

Annex 2Page 3 of 8

raising critical infrastructure services to minimum levels was devised. Few technical alternatives existfor most simple problems but more costly problems, such as sewage collection and disposal, technicalalternatives including regional collection systems under consideration by the Water Authority of Jordan(WAJ) will be considered. For Part B, the method of selecting investments will be somewhat different.They will be individual projects prepared by local governments with the assistance of regionalengineering units of the Ministry of Municipal and Rural Affairs and Environment (MMRAE) as needed,against criteria for both eligible projects and qualified beneficiaries. The eligible project criteria is listedin the Operations Manual. Determination of acceptable targeting to the poor and of participation by thebeneficiaries in the identification and selection process will be incorporated in the project design criteriafor Part B.

7. Project Description. The Bank-financed project consists of three parts: (i) Part A, upgrading on-site and off-site essential infrastructure in about 14 squatter settlements and 13 refugee camps located inthe central region (Greater Amman, Zarqa, Russeifa, Jerash, Madaba and Irbid); (ii) Part B, upgrading orproviding priority essential infrastructure in about 300 low-income municipalities and villagesthroughout the Kingdom; and (iii) Part C, program management, project design and supervision,consultancy services and training to strengthen the capacity of implementing agencies and local councils.Consultanits will carry out poverty-related surveys, studies to identify and prioritize essential needs andto prepare projects for CVDB's appraisal, and to design and implement pilot projects for income-generating productive activities linking the various SPP components. A detailed description of thesecomponents is given below.

Part A:Project Component 1 - Upgrading On-Site Infrastructure in Squatter Settlements in theCentral Region - US$34 million (total cost of component)

This component consists of upgrading about 14 urban squatter settlements in or near GreaterAmman, Zarqa and Russeifa. It will include the following squatter settlements: Abdoun, Al-Hashemi, Al-Qaisiyeh, Al-Natheif, Safeh Al-Nuzha, Al-Tafayleh, Al-Lawziyeh, Abu Sayyah,Al-Misdar, Al-Haddadeh, Al-Musheirfeh, Al-Bakistan, Janna'a, and Al-Qattar. Thesesettlements are densely built-up and were illegally and randomly developed on government andprivately owned land and privately co-owned land (the latter are not squatter sites, but sites havebeen developed illegally by owners). These areas have developed without any consideration ofzoning and building codes, and therefore are not approved by municipal authorities. The streetsconsist of narrow poorly-built pathways suitable only for pedestrian access, which areinaccessible for rescue and emergency vehicles, as well as for garbage collection equipment.The water supply networks are undersized, some installed above ground, however, pipesinstalled underground leak excessively due to corrosion. Water leaks, in addition to being aneconomic loss of a scarce resource, also become a hazard to the structural stability of houses.These areas also have sanitary sewerage networks which for the most part will need minorupgrading (mostly leveling access manholes and improving covers), however, some houses willneed connections to the network. There is no drainage system to collect surface stormwaterwhich is a hazard to people and properties. And there are areas without street lighting, which is ahazard to people at night, and power lines in many places pose a life threatening hazard topeople. On-site upgrading will be extended to integrate such services to existing off-sitefacilities. Some settlements will also need schools, health centers and community and youthcenters. These facilities will complement the programs of concerned ministries. The provisionof community and youth centers will be coordinated with programs (such as skills training forwomen and youth, and other community related activities) which would be provided byconcerned government agencies and possibly Non-Governmental Organizations (NGOs). Under

Annex 2Page 4 of 8

the project, financing has been included for the preparation of relocation plans in consultationwith and agreement of affected people, and to be approved by Government, the World Bank andconcerned donors. The relocation plans will be carried out for areas identified under subsequentphases of the CIP. The relocation plans will include fair compensation for affected families.

Project Component 2 - Upgrading On-Site Infrastructure in Refugee Camps in the CentralRegion - US$32 million (total cost of component)

This component consists of upgrading 13 refugee camps in the central region. It will include thefollowing camps and their surroundings: Souf, Al-Baqa'a, Al-Husein, Al Shalhid Azmi El-Mufti(Al-Husn), Hai Al-Amir Hassan (Hneiken), Irbid, Jerash, Madaba, Hitten (Marka), New Amman,Sukhnia, Talbiyeh, and Zarqa. These areas will be upgraded to improve water supply andsewerage, drainage, roads and footpaths, pedestrian crossings at major roads, street lighting andretaining walls. This program will not require relocation of people. Some settlements will alsoneed schools, health facilities, and community and youth centers. Some of these investmentswill be included in the first phase of the CIP. The latter facilities will complement thedevelopment plans of concerned government ministries.

Project Component 3 - Upgrading Off-Site Infrastructure in Refugee Camps in the CentralRegion - US$28 million (total cost of component)

This component includes the provision of four sewage treatment plants for four refugee campsand nearby communities in the central region. The cost estimate has been based on theassumption that separate facilities designed to meet secondary treatment levels would beprovided. These facilities would be designed to meet environmental, social and economiccriteria. However, prior to taking a final decision of the type of off-site facilities, severalalternatives will be studied. Options to be considered will be improved on-site facilities (existingfacilities are undersized and soil conditions may not be suitable) and new off-site disposalfacilities, which will be large enough to serve surrounding communities. These facilities havenot yet been sized, the least-cost feasible options have not yet been studied, and locatioii of off-site facilities have not yet been determined (except for Talbiyeh camp, for which WAJ is seekingfinancing) During the detailed planning stage, environmental impact assessments will becarried out to identify negative impacts and recommend mitigative measures. Studies of regionalwastewater management systems are under way by consultants retained by WAJ, which alsoinclude looking into alternatives to service these areas (either through separate systems or byintegrating them in regional systems). The planning, studies, design, tendering, constructionimanagement and commissioning of sewage disposal facilities to service these settlements wouldbe the responsibility of WAJ Least-cost options are preferred, as building central systems willentail substantial costs in operation and maintenance. Long-term sustainability of investmenitswill also be taken into consideration To date, several donors have expressed interest in finalicinigthis program component.

Annex 2Page 5 of 8

Part BProject Component 4 - Upgrading Municipal and Village Infrastructure - US$32 million(total cost of component)

This componenit will consist of a first phase program to provide essential physical and socialinfrastructure in about 300 municipalities and villages. The poorest communities will beaddressed first. Upgrading essential infrastructure will generally consist of either providing orupgrading drainage systems and stream crossings; safe access roads; retaining walls; streetlighting; and solid waste collection equipment. As in Components I and 2, some communitieswill also need health centers and community and youth centers. These will complementapproved development plans of concerned sectoral ministries Programs of activities for thefacilities would be approved prior to approval of construction.

Part C:Project Component 5 - Project Management, Project Design and Supervision, Consultancy,Training and Pilot Projects - US$14 million (total cost of component)

This component includes project management over five years, consultancy services and trainingto strengthen the capacity of selected institutions for the management of the project (MOP/PMU,HUDC, CVDB, MMRAE's regional engineering units and local councils). Consultants willcarry out poverty surveys, and project preparation studies and design, as well as design andimplementation of pilot projects. Design of five pilot sub-projects will be carried out in fiveselected areas to test opportunities to complement essential infrastructure with income-generating productive community activities and possibly activities supported by microenterprisecredit facilities and services. Consultants will be retained to assist implementing agencies inpublic awareness programs and affordability studies to promote participation of beneficiaries inthe selection of priorities, project implementation and cost-sharing (in kind or cash).

8. Project Cost Estimate. The cost of the proposed first (pilot) phase CIP is estimated at aboutUS$140 million equivalent (about JD 98 million), of which about US$74 million (about JD 52 million)will be foreign costs (about 53% of total costs). This first phase project would be implemented over aperiod of three to five years depending upon availability of donor financing. A cost breakdown bycomponent is given below:

Project Components Cost EstimateJD million US$ million equivalent

Part A(1) upgrading about 14 squatter settlements 24 34(2) upgrading 13 refugee camps

on-site works 22 32(3) off-site works (include nearby 20 28

communities)Part B:upgrading 300 municipalities and villages 22 32Part C:consultants (surveys and studies) 2 3pilot projects (5) 2 2project management units (5 years) and training 2 3project design and supervision 4 6Total Cost 98 140

Annex 2Page 6 of 8

9. Project Financing. Preliminary project financing would consist of a GOJ contribution of US$30million equivalent (about JD21 million including a grant from Germany of DM20 million equivalent as adebt swap), a World Bank loan of about US$30 million equivalent (about JD21 million), a UNDP grantof US$1.7 million (JD].2 million equivalent), a contribution from Germany of DM20 million (in termsyet to be determined and a DM20 million grant as debt swap) and contributionis of other donors (theterms and conditions are not yet known) of about US$64 million equivalent (about JD44.8 million). Todate, the Governments of Italy and Norway, the Arab Fund, USAID, and the Islamic Development Bankhave expressed interest in the project. The Bank loan was allocated as follows: about US$17 million forPart A, about US$12 million for Part B and about US$1 million for Part C.

10. Implementation Arrangements. A project implementation operations manual was prepared bythe Bank based on discussions and understandinigs agreed with the CIP task force, HUDC and CVDB. Afinal operations manual was agreed by the Bank and GOJduring negotiations Highlights of the mainelements of the operations manual are summarized below.

11. The MOP, on behalf of GOJ, will be responsible for the management of the SPP. To this end, itwill establish an SPP Steering Committee (SPP/SC), a Project Management Unit (MOP/PMU), and aSocial Survey Unit (MOP/SSU). SPP/SC will be chaired by the Ministry of Planning and will includehigh level officials (at the level of secretary general) of concerned ministries, authorities and institutionsto provide SPP policy guidance. MOP, on behalf of GOJ, will enter into subsidiary agreements withimplementing agencies (HUDC and CVDB) for carrying out the CIP. These agreements will specify themanner in which both institutions will be compensated for their cost to manage the project; and in thecase of HUDC, the compensation for professional services rendered onl planning and zoning, designingand procurement, construction supervision and commissioning which will be carried out with owInresources. Regarding the Bank loan proceeds, MOP, under these subsidiary agreements, will makeavailable to HUDC the funds allocated for carrying out Parts A and C of the CIP, and to CVDB the fundsallocated for carrying out Parts B and C of the CIP. These funds will be deposited directly by the Bank asinstructed by MOP in the Special Account each of these institutions will open in accordance with theBank's requirements as specified in the Loan Agreement. MOP will also be responsible to ensure thatSPP policy decisions taken by the SPP/SC are carried out diligently. MOP/PMU will functioll assecretariat to the SPP/SC, and will be responsible for SPP operational oversight. This unit will beresponsible for ensuring that the four components of the SPP are implemented by the governmentagencies charged with that responsibility within the agreed subsidiary agreements and programs.Regarding the CIP, the MOP/PMU will be responsible for monitoring implementation of the programscarried out by the implementing agencies, and will ensure that program development objectives are beingmet. In the event that program changes may be required to meet its objectives, it will present suchproposals to the SPP/SC and the Bank for consideration. MOP/PMU will be responsible for managingthe implementation of pilot projects included under Part C of the CIP, and will coordinate the applicationof the findings and recommendations of poverty surveys and studies managed by MOP/SSU.MOP/PMU will also be responsible for submitting to the Bank and concerned donors CIP consolidatedquarterly and annual progress reports, annual audits of program accounts and a CIP implementationcompletion report (ICR).

12. Implementation of Part A of the project will be the responsibility of HUDC. To this end, HUDCwill establish a full-time project management unit (HUDC/PMU) with senior staff to manage theprogram. All detailed work will be done by the various departments within the organization upoInrequest from the PMU. Consultants may be hired as needed to carry out detailed design and supervision

Annex 2Page 7 of 8

to complement the work done in-house. HUDC will be responsible for all planning, studies, design,tendering, contract award, and supervision of construction, commissioning and transfer of completedworks through MOP, on1 behalf of the Government, to the public institutions (ministries, municipalities.authorities) responsible for operation and maintenanice of such infrastructure. It will provide the MOPthe necessary information on cost recovery of the parts that correspond to concernied governmentinstitutions which are legally responsible for the provision of such services.3 Regarding works in refugeecamps, HUDC will carry out its activities through the Department of Palestinian Affairs (DPA), whiclhwill coordinate with the camps improvement committees (CICs) and with the United Nations ReliefWorks Agency (UNRWA). Regarding water and sewerage works, HUDC will work closely with WAJ Inthe planninig, design and implementation of such works; however, in highly specialized cases such asimplementationi of sewage disposal facilities, and when such works are financed by the Bank, it willdelegate implementation responsibility to WAJ under special agreements4 . HUDC will also coordinateits work in Part A area with donors interested in financing such programs. HUDC will maintain separatespecial accounts for each source of funds and carry out annual audits. It will monitor projectimplementation against agreed indicators to determine if the project meets its objectives, ifimplementation is on schedule, and to measure program outputs. HUDC will also prepare and submit toconcerned donors through MOP/PMU quarterly and annual progress reports and a completion report atthe end of the project.

13. Implementation of Part B of the project will be the responsibility of CVDB. CVDB willestablish a project management unit (CVDB/PMU) with senior staff to centrally manage the program.The PMU will be supported by the CVDB departments in the day-to-day operations. It will also hireindividual consultants, as needed, under short- or long-term contracts to support the PMU with expertisenot available in-house and to help with the increased work load. It will also hire consultants, as needed,to complement its staff resources in carrying out infrastructure needs assessment studies in the Kingdomto improve the targeting of benefited areas and their corresponding priority needs. Consultants wouldalso provide technical support to the local councils and MMRAE's regional engineering units in aspectsof public participation and awareness, prioritizing needs, selecting least-cost options of priorityinvestments, managing construction and controlling quality, monitoring and evaluating projectperformance, and reporting. CVDB will provide the MOP the necessary information on cost recovery of

Cost recovery will be in accordance with current law, however, since there are poor municipalities andbeneficiaries that may be unable to pay their share of the cost, this matter will be resolved by the SPP/SC

Agreement in principle on institutional cooperation has been reached at the highest levels of WAJ andHUDC. Since WAJ is in the process of designing the Amman water distribution network, and regionalwastewater collection and disposal studies are ongoing, HUDC will work closely with WAJ to take intoaccount these studies. WAJ's design of water supply network rehabilitation and standards of pipe materialand construction will be used, and HUDC will ensure that WAJ participates in construction supervision,testing and commissioning of such works However, in the case a donor may wish to fund only theprovision of water supply and sewerage networks, and the sewage treatment plant for a given camp wherethere are no other works requiring HUDC's participation, it may be advisable to assign full responsibilityfor implementation of such works to WAJ. Four camps are now facing very serious problems with in-situsewage disposal facilities: some require pumping as frequent as twice per month at very high cost to poorfamilies; and in others raw sewage overflow from cesspools into open channels in the street floodingprivate property off-site. As an interim solution, GOJ should seek donor assistance in the form of tankertrucks (five to eight would suffice) which could be operated by camp improvement committees or WAJ ataffordable charges, to provide short-term solutions to untenable financial burden (some poor families payto private companies up to forty percent of their monthly income to pump-out their cesspools) andunsanitary conditions until more permanent measures, which would take five or more years to beoperational, are taken

Annex 2Page 8 of 8

if the project meets its objectives, if implementation is on schedule, and to measure project outputs.CVDB will also prepare and submit to concerned donors through MOP/PMU quarterly and anilualprogress reports and a completion report at the end of the project

14. All procurement and disbursements for Bank funded programs will be in accordance with WorldBank guidelines. Final agreement on procurement arrangements was reached at negotiations. Inprinciple, with few exceptions, most procurement would be based on National Procurement Procedures,as most works will be small in size and scattered all over the Kingdom. Works in squatter settlementsand refugee camps will be issued in separate packages for each site and will also be small in size whichwould not be of interest to international contractors

15. Monitoring indicators to determine during project implementation whethier the project asdesigned is meeting its development objectives, whether project implementation is on schedule, and tomeasure project outputs are given in the operations manual. MOP/PMU will be responsible foranalyzing such data together with HUDC and CVDB and to propose to both the SPP/SC and the Bankproject restructuring to better meet the development objectives, or, in the event implementation isdelayed, to bring project implementation on schedule.


Estimated Project Costs

Project Components Local Foreign Total-----------------------US $ million---------------

A.I Upgrading On-site infrastructure in squatter settlements 14.0 13.9 27.9A.2 Upgrading On-site infrastructure in refugee camps 13.0 12.6 25.6A.3 Upgrading Off-Site infrastructure in refugee camps and 7.0 16 2 23.2

adjacent areasB. Upgrading Municipal and Village Infrastructure Kingdom- 8.4 14.3 22.7

wideC. Pilot Projects (five) 1.8 0.6 2.4

Consultancy and Training 1.8 0.6 2.4Project Management 1.2 0.4 1.6Project Design and Implementation 5 0 1.0 6.0

Total 52.2 59.6 111 8

Total Baseline CostPhysical Contingencies 5.3 6.0 11.3Price Contingencies 8.5 8 4 1 6.9

Total Project Cost 66.0 74.0 140.0

I


Economic Analysis

Project Context in Country Strategy

I. The Community Infrastructure Project (CIP) is a program of small-scale infrastructureimprovements to poor communities in Jordan. It is one component of the government of Jordan's(GOJ's) Social Productivity Program (SPP), which is a comprehensive strategy to address the problem ofpoverty. The CIP is envisioned as a first phase of a long-term program of financing essentialinfrastructure in areas of concentrated poverty where infrastructure services are below basic needs.

2. The most recent CAS for Jordan (October 1995) identifies, inter alia, improving the livilgconditions of the poor as a priority for Bank assistance. As a result of a relative deterioration of theliving conditions of the poor, the GOJ asked the Bank to assist in the preparation of a program to addressrising poverty and unemployment. The results of a joint effort between the Bank and GOJ - the SPP -was formally adopted by the GOJ in late 1996 The SPP has formed the basis for GOJ policy andprovides a framework under which the GOJ will solicit assistance from other donors, some of whomhave already expressed their intention to assist.

3. The SSP has three thrusts: (1) social assistance, (2) physical and social infrastructure, and (3)employment generation. The CIP addresses the second of the three thrusts and is the first to be preparedand appraised for Bank and donor funding. The commitment and priority accorded this program by theGOJ is high.

Project Objectives. Strategy and Design

4. The principal objective of the CIP is to improve the living conditions of the poor through theprovision of essential physical and social infrastructure services. A secondary objective is to strengthenthe capacity of selected institutions to deliver infrastructure services to the poor in a more effective,efficient and targeted way. The CIP intends to reduce the hardship of poverty through infrastructureprovision, but it is recognized that it cannot reduce poverty by itself. The Bank-financed project,however, has been designed as a pilot phase to test opportunities for income-generating activities whichwould be designed in partnership with beneficiary communities and use this experience in the design ofcomprehensive programs to expand the CIP objectives. Other components of the SPP address and aim toalleviate causes of poverty in Jordan.

5. Within CIP, the strategic consideration was whether to concentrate on the needs of areas withconcentrations of poverty or on the needs of the poor regardless of where they live. The division of theproject into two components, Part A and Part B, reflects the outcome of that deliberation. The worstliving conditions were found in rural communities in the southern areas and in the Jordan Valley and inareas of dense concentrations of poor inhabitants who are generally without formal land property rights(squatter areas and refugee camps) Part A therefore focuses on area-wide comprehensive upgrading forthe latter settlements. This approach also lends itself to rapid implementation, since consultations withresidents and feasibility studies of some camps and squatter areas were already available. Part B, thesecond component of the project, is designed to address infrastructure deficiencies in more isolated anddispersed poor communities throughout the country. Part B investment decision making will involveprioritization of candidate projects and implementation of the most urgent needs. Comprehensiveupgrading as proposed in Part A is not envisaged for Part B. The investments financed by Part B will besmaller, and because the consultative process has not yet begun, the generation of proposals willnecessarily take longer.

Annex 4Page 2 of 6

6. The criteria for candidate investments under Part A and Part B are based on deficiencies ininfrastructure service levels or performance below minimum standards. Identified candidate investmentswill then be compared to a menu of CIP-eligible projects and subject to a cost-minimization analysisboth in terms of alternative solutions and the design of the projects. Both Part A and Part B will servebeneficiaries whose needs are not easily addressed by existing programs. In the case of Part A, sincebeneficiaries have no land property rights it is very difficult for municipalities to provide infrastructure,which requires owners to contribute financially to capital costs. Under Part B, eligible local authoritiesand implementing agencies are too poor to shoulder their normal and full share of infrastructure costs,and therefore have not been able to provide essential infrastructure services. Without the CIP few if anyof these communities could be served with additional infrastructure services at this time.

Fiscal Impact and Cost Recovery

7. CIP is estimated to cost $140 million for the initial three to five years. The World Bank willprovide $30 million, donors are assumed to contribute $80 million, and the GOJ $30 million. The CIPwill require government commitment of about $6 million per year and will increase the annual level ofcapital investment by about $28 million, compared to total government capital expenditures estimated atabout $500 million per year over this period. Depending upon the terms of funding from donors, theGOJ will incur an additional, but manageable, debt service obligation in subsequent years as a result ofthe project.

8. The CIP is intended initially to provide a new conduit for targeted donor and GOJ programs tohelp poor communities, but the criteria for identifying low-income communities and priority investmentsis expected to eventually be incorporated into the prioritization of public infrastructure investments. Thesystem of considering residents' ability to pay in deciding levels of infrastructure investments andservices can be used to promote increased cost recovery in other, non-CIP areas, as well.

9. All of the proposed CIP investments are presently covered by GOJ policy and regulation withrespect to the financing of recurrent costs. Those mechanisms are not satisfactory in all cases, and otherBank-assisted operations are seeking to address them in the areas of transport, power, agriculture, water,education and health. The CIP is not a suitable vehicle for improving recurrent cost practices in general,and it is expected in any case that the light urban infrastructure proposed under the CIP will incur lowrecurrent costs of approximately one to two percent of investment costs per year.

10. For each type of eligible investment under CIP there is an existing cost recovery regulation.Although CIP is designed to provide grant financing for some of the capital costs of infrastructuretargeted to poor communities, direct cost recovery from beneficiaries under the CIP will largely followexisting practice. For example, Part A will cover a portion of the implementing agency's capital costsand the capital costs normally charged owners. Households will be expected to pay all normalconnection and usage costs such as water and electricity tariffs. For Part B, a portion of the capital costswill be covered by the CIP. Households will generally be assessed the same charges as prevail inexisting infrastructure programs. No assistance for usage tariffs is anticipated.

I. Existing cost recovery practices for eligible investments are:

a. Roads: owner beneficiaries are charged 50 percent of the capital cost of new roads (localcouncils cover the balance from general revenues), and 100 percent for new sidewalks and footpaths.

Annex 4Page 3 of 6

b. Water supply: owner beneficiaries are charged for house connections, a hook-up fee and usagetariffs.c. Sewerage: 25% of rental value or connection charge, the full cost of the sewerage connection,plus 10% of water consumption in quarterly bill. Same as water but usage bill is 3 percent of annualimputed rent.d. Drainage and flood protection: no charge to beneficiaries; 100 percent is paid by local councilsfrom general revenues.e. Street lighting: no charge to beneficiaries; 100 percent is paid by local councils from generalrevenues.

Choice of Investments: Providing Minimum Services in a Cost Effective Manner

12. In support of the primary project objective of ameliorating the poor living conditions of thoseliving in poverty, investments will be selected to raise infrastructure service and performance levels to aminimum standard in deficient areas where income levels are low. The minimum standard is defined interns of the level of service or performance necessary for safe and healthy habitation. Minimumstandards, as used for the CIP, imply a political decision that the benefits of reaching the minimum levelof service are sufficient to justify the cost (minimized by a least-cost procedure). The costs of not havingaccess to a minimum level of service include both private costs to the intended beneficiaries and externalcosts to other members of the society. From identified infrastructure needs, investments related to publicsafety (mostly high-risk flooding and soil stability projects) and dangerous environmental problems suchas exposed sewage flows and unsafe potable water supply will be given priority.

13. Part A focuses on locations where high concentrations of poor households were identified. Acomprehensive plan for raising critical infrastructure services to minimum levels was devised. Fewtechnical alternatives exist for most simple problems, but for more costly problems, such as sewagedisposal, technical alternatives are considered, e.g., individual septic disposal versus a common water-borne system. Cost minimization techniques are used to evaluate all proposed investments. The benefitsof each type of investment are described below (for Part A and Part B), but most benefits are notquantified. The usual method for quantification of the benefits of comprehensive upgrading projects is tomeasure changes in property values, but this can not be undertaken where there are no beneficiaryowners and virtually no property transactions. It should be noted, however, that the economic rate ofreturn for similar Bank financed operations has been estimated by the Operations Evaluation Departmentat about 22%.

14. The method of selecting investments for Part B will be somewhat different. All investments willraise existing infrastructure services to a minimum level, but investments are not derived from acomprehensive plan prepared for this purpose Instead, they are individual projects prepared by electedlocal governments and central ministries. Proposed investments will have to be tested against projectand beneficiary criteria. The eligible project criteria is listed in the operations manual. Beneficiarycriteria and the degree of beneficiary participation in the identification and selection process will beincorporated in the decision criteria for Part B.

15. The benefits expected from each type of investment under Part A and Part B are as follows:

a. Roads. Scattered, relatively small investments in roads, footpaths and stairs will benefit residentsby providing access for emergency and other vehicles, by increasing the safety for pedestrians, and byreducing mud and dust where roads are not paved. No quantification of benefits is proposed, but all

Annex 4Page 4 of 6

investments are subject to least-cost analysis following an identification of the problem based onminimum service levels.

b. Water Supply: In most cases the benefit from water supply investments will be improved supply(pipes are currently undersized) and reduced leakage (physical losses could be as high as 40 percent ofsupply). Each investment will be required to produce savings in excess of its cost; savings will bemeasured as the marginal cost of lost water saved. An additional benefit will be safer water - currently,failure to maintain constant pressure in the systems makes leaking pipes susceptible to flooding ofcontaminated ground and waste water.

c. Sewerage: Except for four camps, no new collection systems are planned, so the benefits ofrepair will be to keep systems fully functional. For the four possible treatment plants to be built underthe project, the benefits will be reduced environmental and health hazards. Technical standards fordetermination of unacceptable levels of such hazards will be used to establish the need to remedy thesituation. Alternative solutions (comparing on-site disposal, connection to existing systems andconstruction of new treatment facilities) will be subject to technical feasibility and a traditional costminimization approach to select the investnent. The required environmental impact assessment (EIA)for a treatment facility will examine benefits in more detail.

d. Drainage and Flood Protection: The benefits of such projects are to protect the lives and property(including livestock) of nearby residents, as well as to preserve existing infrastructure such as roads.Investments will be identified based on surveys of actual conditions and enumeration of the risks.However, no damage estimate or probability analysis is planned as the investments are relatively smalland scattered. Once an area is ranked above a threshold for risk, alternative methods to address the needswill be explored and the least-cost effective option selected. Larger projects would be subject to a fullcost-benefit analysis.

e. Street Lighting: The main benefit will be increased safety. Need and the commitment of localauthorities to pay for the recurrent costs of operating street lighting will be used to determine whereinvestments in lighting will be made.

The Risks

16. The principal risk of the program is that the CIP will not be able to identify: (i) low-incomeareas in greatest need, and (ii) infrastructure investments that will benefit poor communities as a whole(rather than influential or relatively well-off residents of poor communities). Although this would notnecessarily affect the economic value of the investments it would be a serious shortcoming in achievingproject objectives. This risk will be mitigated by the mechanism for identifying eligible communitiesand investments. National Aid Fund (NAF) data will be used initially to identify eligible communities,and will be complemented by site visits, meetings with municipal and village councils, and surveys ofcommunity residents in order to determine the most needed investments with the widest impact on thepoor. The second risk of the CIP is that it may be perceived by municipalities as a new fundingmechanism for all infrastructure investments, rather than as a supplemental mechanism for very poorcommunities lacking the most basic levels of infrastructure. Although this would also not affect theeconomic value of investments, this misperception could undermine the existing system of infrastructurefinancing - local governments not eligible for financing from the CIP may exert political pressure tochange the existing mechanism, change the terms of existing loans, or cancel repayment. This secondrisk will be mitigated by a public awareness program that clearly specifies the objectives of the CIP and

Annex 4Page 5 of 6

the criteria for community and investment eligibility. The awareness program will clearly differentiateCVDB's system for financing non-poor communities and noni-vital infrastructure from the CIP's systemfor funding basic infrastructure needs in areas of concentrated poverty.

17. The specific risk to the economic value of investments under the CIP is that project selectionprocedures may fail to correctly minimize investment costs. This risk is mitigated both by theinvestment review described above and by the establishment of criteria for future CIP investments.

Institutional Capacity

1 8. In order to expedite the program and to minimize the cost of delivering assistance, the programrelies upon and strengthens the capability of existing proven institutionis. The strategy is to provide clearand consistent policies for the program from a steering committee established for that purpose. Inaddition, to augment the capability of the implementation institutions, particularly with respect totargeting projects to the poor, stimulating and incorporating community preferences and introducingstronger project analysis and selection skills, technical assistance and training will be provided to theimplementing agencies - the Housing and Urban Development Corporation (HUDC) and the Cities andVillages Development Bank (CVDB).

19. Part A: HUDC has successfully undertaken similar projects in the past. The volume of workmay require HUDC to hire consultants to undertake some tasks, but in-house managerial capacity andexperience exist to carry out HUDC's role in the program.

20. Part B: CVDB's role in the program is first as a fund management institution, which is theirnormal scope of work. They will also be charged with promoting, appraising and overseeingimplementation, for which they will require considerable strengthening. CVDB will establish a programmanagement unit (CVDB/PMU), and additional skills will be acquired through the use of consultants. Inaddition, Part B will make use of regional offices of the Ministry of Municipalities and Rural Affairs andenvironiment (MMRAE), where local engineering services exist. All institutions will require newcapacity to analyze projects and training in beneficiary participation techniques.

21. National-level capacity to identify the poor and their needs is an important operational input.The technical assistance component of the program will address capacity strengthening in this area.

Addressing Poverty

22. Both Part A and Part B target benefits to the poor. In the case of Part A, the refugee camps andsquatter areas selected are well known and studied by officials. According to studies the typical incomein most families in Part A target areas are below the poverty line. Part B will use data from the NAF andunemployment statistics (available unemployment data is unreliable but surveys may provideinformation to fine-tune the initial targeting mechanisms based on NAF's data) to prioritize communitiesfor assistance.

23. The definition and selection of eligible projects is also part of the targeting mechanism. In thecase of Part A, the standards were kept low to maximize coverage of the areas of concentrated poverty.The investment programs for each location has been discussed with camp improvement committees. ForPart B, the list of eligible projects favors smaller investments in the areas with poorest service anddemands a full consultative process with residents in order to receive funding priority.

Annex 4Page 6 of 6

Environlmental Analysis

24. The program is classified as Category C for environmenital purposes. Most investmenits aresmall and many are expected to have environmental benefits. Larger projects, such as the seweragetreatment facilities, if required, will be subject to full EIAs in accordance with Bank procedures (ordonor's procedures, as such facilities are likely to be funded by donors).

25. Environmental factors play an important role in assuring that program investments areeconomically sound. In many cases the identification of infrastructure service deficiencies is in terms ofenvironmental criteria. This threshold defines the minimum benefits to which all households areentitled. Actual selection of investments results from the comparison of alternatives and the applicationof cost-minimization guidelines. If the minimum environmental criteria are set too high relative to thecost of solutions, projects could have unfavorable economic consequences


Financial Summary

(Not Applicable)


Procurement and Disbursement Arrangements

Procurement

Procurement methods (Table A)

Civil works undertaken under the Project will generally consist of small, labor- intensive worksusually not exceeding US$250,000, in dispersed communities throughout the Kingdom, except for worksin refugee camps and squatter settlements, where contracts will not exceed US$500,000. However,works in the latter areas will be packaged in sizes not exceeding US$700,000. Off-site works forrefugee camps and vicinities consist mostly of the provision of about four sewage treatment and disposalfacilities which would be packaged in sizes of about US$5,000,000 each and will cost aboutUS$20,000,000 in the aggregate. However, these works will be financed by donors and procurement willbe in accordance with donors' requirements. All civil works would be procured through NationalCompetitive Bidding (NCB), but foreign contractors will not be excluded. Goods and equipment with anestimated value per contract not to exceed US$100,000, up to an aggregate amount not to exceedUS$2,000,000, will be procured through National Shopping. Goods and equipment with an estimatedvalue per contract not to exceed US$150,000 up to an aggregate amount not to exceed US$3,000,000 willbe purchased through International Shopping. Goods and equipment exceeding the above thresholdswill be procured through International Competitive Bidding (ICB).

Bank-financed consultants will be appointed following the World Bank's Consultant Guidelines;except for specialized consultancy services not available in Jordan, consulting firms will be recruitedlocally through competitive selection. The short list of consultants for services for project management,estimated to cost US$200,000 equivalent per contract, may comprise entirely national consultants.Consulting services may be required from a single source, costing in the aggregate less thanUS$100,000, for twining services primarily to CVDB in aspects of program management. Individualconisultanits, mostly Jordanians, who would be hired under short- or medium-term contracts, may berequired to complement the Program Management Units in the implementation of the program.

Prior review thresholds (Table B)

The first bidding package for Bank financing below the threshold and all bidding packages abovethe threshold of US$700,000 for civil works, and all bidding packages above the threshold ofUS$150,000 for goods and equipment would be subject to prior review procedures. The threshold forprior review (the first contract below and all contracts above the thresholds) for consultant services willbe US$100,000 for contracts with consulting firns and US$50,000 for contracts with individuals and allsole source contracts and terms of reference regardless of the contract value. All other contracts wouldbe subject to selective post award review. HUDC and CVDB will be responsible for followingmonitoring procedures and for maintaining proper records for easy review by the Bank. It is expectedthat about 95 percent of the NCB contracts for civil works and about 90 percent of the NCB contracts forgoods and equipment would be subject to post review.

Annex 6Page 2 of 5

Disbursement

Allocation of loan proceeds (Table C)

The proposed loan would be disbursed over a period of three years and the project would becompleted by December 31, 2000. The last date for presentation of sub-projects by GOJ to the Bankwould be December 31, 2000 The closing date of the Bank loan would be June 30, 2001

Use of statements of expenses (SOEs):

Payments made by MOP, HUDC and CVDB out of the Special Accounts (SAs) will be againstStatements of Expenditures (SOEs) for contracts that are below the prior review threshold as well as fortraining.

Special account.

To facilitate disbursements against eligible expenditures, the Government will establish threeSpecial Accounts in the Central Bank of Jordan. The first is to be operated by HUDC, the second byCVDB and the third one by MOP; these accounts will be operated under terms and conditionssatisfactory to the Bank. IBRD will make Authorized Allocations of US$1,700,000 for HUDC,US$1,400,000 for CVDB and US$200,000 for MOP. Initially the allocation will be limited toUS$800,000 for each HUDC and CVDB accounts, until disbursements had reached US$3,000,000 forHUDC and US$3,000,000 for CVDB, then the full Authorized Allocation could be claimed.Replenishment applications will be submitted on a monthly basis, or when about 20 percent of the initialdeposit has been utilized, whichever comes first. The replenishment application will be supported by thenecessary documentation, bank statement of the special account, and a reconciliation bank statement ofthe special account against Bank records. During negotiations agreement will be reached with theGovernment that the Special Accounts and the SOEs will be audited annually by independent auditorsand submitted to the Bank within six months from the end of the fiscal year.

Annex 6Page 3 of 5

Table A: Project Costs by Procurement Arrangements(in US$million equivalent)

Expenditure Category Procurement Method Total Cost(including

contingencies)ICB NCB Other N.B.F

1. WorksPart A --- 47 --- 20 67

--- ~~(1I6) --- --- (1]6)Part B --- 19 --- --- 19

(7) --- --- (7)2. GoodsPartA --- --- 2 17 19

(1) (1)Part B 5 --- I --- 6

(3) --- (1) (4)

Part C --- --- 1.0 --- I(0.1) --- (0.1)

3. ServicesPart A --- --- 0.5 10 10.5

--- --- (0.3) --- (0.3)Part B --- --- 0.5 6 6.5

(0.3) --- (0.3)PartC --- --- 2 9 11

(1.3) --- (1.3)

Total5 66 7 62 140

(3) (23) (4) (-) (30)

Note. N.B.F = Not Bank-financed.Figures in parenthesis are the amounts to be financed by the Bank loan.

Annex 6Page 4 of 5

Table B: Thresholds for Procurement Methods and Prior ReviewExpenditure Contract Value Procurement Contracts Subject to

Category (Threshold) Method Prior Review

1. Worksup to $700,000 NCB First

more than $700,000 NCB All

2. Goodsup to $ 50,000 NS None

$ 50,000-150,000 IS Nonemore than $150,000 ICB All

3 ServicesIndividual consultants up to $50,000 Bank guidelines FirstConsulting firms up to $100,000 Bank guidelines FirstIndividual consultant more than $50,000 Bank guidelines AllConsulting firms more than $100,000 Bank guidelines All

Annex 6Page 5 of 5

Table C: Allocation of Loan ProceedsExpenditure Category Amount in Financing

US$million Percentage

(1) Civil Works:(a) Under Part A 16 70%(b) Under Part B 7

(2) Equipment and Vehicles:(a) Unlder Part A 1 100% of foreign(b) Under Part B 4 expenditures, 100%(c) Under Part C (3) 0.1 of local expenditures

(ex-factory cost)90% of localexpenditures forotiler items procuredlocally

(3) Consultants' services and training 100%(a) Under Part C (1) 0.3(b) Under Part C (2) 0.3(c) Under Part C (3) 1.3

Total 30

Annex 7Jordan: Community Infrastructure ProjectProject Processing Budget and Schedule

A. Project Budget (US$000) Planned Actual

250 245.0

B. Project Schedule Planned Actual

Time taken to prepare the project (months) 4 4First Bank mission (identification) 11/28/96 11/28/96Appraisal mission departure 04/13/97 04/09/97Negotiations 06/09/97 6/16/97Planned Date of Effectiveness 12/31/97 __/_/19

Prepared by:

Ministry of Planning (MOP), the Housing and Urban Development Corporation (HUDC), theCities and Villages Development Bank (CVDB), and an inter-ministerial task force.

Preparation assistance:

Government resources

Banik staff who worked on the project included:

Mario A. Zelaya, Task Manager (MNSID); Lawrence Hannah, Principal Economist (TWURD);John Macgregor, Country Officer (MNCMS); Albert Peltekian, Consultant Engineer; HanyAttalla, Social Fund Consultant, Egyptian Social Fund for Development (ESFD). Ms. SoniaHammam (TWURD) was peer reviewer. Ms. Elisabeth Sherwood provided editorial support.


Documents in the Project File*

A. Project Implementation PlanA. I Included under Program Appraisal Memorandum of Understandings, Annex 2, Operational Manual for

lImplementing Agencies

B. Bank Staff AssessmentsB.1 Memorandum of Understandings and Annexes 1-7B.2 Jordan-Appraisal Mission, Community Infrastructure Program/April 11-May 3, 1997, Book 1 of 1, By

Mario A. Zelaya, Mission Leader, Appraisal Notes and Calculations.B.3 Jordan-Community Infrastructure Program, Economic Analysis, by Lawrence Hannah, Principal Urban

Development Economist, TWURD, dated April 20, 1997.

C. OtherC. I Social Productivity Program, Community Infrastructure Component, Upgrading Sites and Refugee Camps,

C .P-A Part, Appraisal report, dated April 1997 prepared by the Housing and Urban DevelopmentCorporation, Volume I Report, Volume 2, Annexes

C.2 National Bidding Documents, Volume 1: General Conditions of Contract, 1996; Volume 11: ParticularConditions of Contract.

C.3 HUDC Annual Report, 1994C.4 List of Projects and Cost estimates for Refugee Camps, dated February 1997 by Mr. Albert Peltekian,

Urban Development Engineering Consultant, Bank Appraisal MissionC.5 HUDC 1997 Budget, I-ExpendituresC.6 Translation of a Paper Submitted by Water Authority of Jordan on Sewage Treatment Plants for Sewerage

Projects in refugee Camps.C.7 Ministry of Public Works, Agricultural roads Program

Cost Tables and disketteC.8 Cities and Villages Development Bank, CVDB, The Annual Report 1995C.9 Jordan-Community Infrastructure Program, Draft Resettlement Plan by HUDC, dated April 1, 1997; and

World Bank review comments by Ayse Kudat, EMTEN, dated April 15, 1997.

*Including electronic files.


Statement of Loans

Status of Bank Group Operations in JordanIBRD Loans in the Operations Portfolio

As of June 30, 1997

Original Amount in DifferenceUS$ Millions Between actual

Project Loan Fiscal and expectedID No. Year Borrower Purpose IBRD Undisbursed Disbursements

a!

Number of Closed Loans/credits: 52

5319 L35740 1993 Government of Jordan Health II 20.00 17.79 5.995284 L35680 1993 Govermnent of Jordan Transport III 35.00 18.32 16.625322 L37380 1994 Telecomm. Corporation Jordan Telecom 20.00 9.11 7.415318 L36510 1994 Government of Jordan Energy Sector Loan 80.00 20.00 20.025307 L38640 1995 Government of Jordan Human Res. Devt. SIL 60.00 53.99 15.595321 L38180 1995 Government of Jordan TA for Agriculture 6.60 5.02 4.2235995 L39930 1996 Govermment of Jordan Export Development 40.00 24.22 -3.785323 L40710 1997 Govermnent of Jordan Housing Finance/Urban 20.00 20.00 2.92

Total 281.60 168.44

Active Loans Closed Loans TotalTotal Disbursed (IBRD) 113.16 1,242.10 1,355.26

of which has been repaid 0.00 515.88 515.88Total now held by IBRD and IDA: 281.60 726.22 1,007.82Amount Sold 0.00 11.53 11.53

Of which repaid 0.00 11.53 11.53Total Undisbursed 168.44 0.00 168.44

a/ Intended disbursements to date minus actual disbursements to date as projected at appraisal.

Annex 9Page 2 of 2

JordanSTATEMENT OF IFC's

Committed and Disbursed PortfolioAs of 31 -May-97

(In US Dollar Millions)

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic1987/90/93/95 Al-Hikma 4.12 0.00 2.70 0.00 4.12 0.00 2.36 0.00

1994 Al-Keena Paper 8.00 0.00 0.00 0.00 8.00 0.00 0.00 0.001995 Indo-Jordan 30.00 0.00 0.00 0.00 18.66 0.00 0.00 0.001995 Jordan Telephone 15.00 3.00 0.00 0.00 15.00 3.00 0.00 0.001996 MODAL 5.50 0.00 0.00 0.00 4.50 0.00 0.00 0.001996 Zara 15.00 3.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Portfolio 77.62 6.00 2.70 0.00 50.28 3.00 2.36 0.00

Approvals Pending Commitment

Loan Equity Quasi Partic

1997 Dead Sea Marriot 4.00 1.00 0.00 0.00

Total Pending Commitrnent: 4.00 1.00 0.00 0.00


Jordan at a Glance

M. East Lower-POVERTY and SOCIAL & North middle-

Jordan Africa income Development diamond'

Population mid-1995 (millions) 4 2 273 1,154GNP per capita 1995 (US$) 1,500 1,7B0 1,700 Life expectancyGNP 1995 (bilrons US$) 6 4 486 1,962

Average annual growth, 1990-95

Population ('A) 5 7 2 7 1 4GNP ~~~~~~~Gross

Labor force (%) 5 2 3 3 18 Nper pnmary

Most recent estimate (latest year available since 1989) capita enrollment

Poverty headcount index (% of populahon) 1 5Urban population (% of totalpopulabon) 72 56 56 lLife expectancy at birth (years) 70 66 67Infant mortality (per 1,000 Irve births) 31 49 36 Access to safe waterChild malnutriton (% of children under 5) 17Access to safe water (% of populahon) 97 82 78Illiteracy (% of population age 15+) 13 39 .- JordanGross primary enrollment (% of school-age population) 94 97 104

Male 94 104 105 Lower-middle-income groupFemale 95 90 101

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1976 1985 1994 1995Economic ratios'

GDP (billions US$) 5 0 60 66Gross domestic investment/GDP 21 7 36 2 35 8 Openness of economyExports of goods and non-factor services/GDP 37 2 49 8 53 0Gross domestic savings/GDP -17 4 12 7 14 3Gross national savings/GDP -2 4 27 0 26 7

Current account balance/GDP -19 9 -9 2 -9 1Interest payments/GDP 3 8 3 3 4 2 Savings InvestmentTotal debtlGDP 80 6 117 6 1093Total debt service/exports 37 17 2 122Present value of debtWGDP 83 8Present value of debt/exports 121 1 Indebtedness

1975-84 1986-95 1994 1995 1996-04 1(average annual growth) -JordanGDP -01 58 64 71GNP per capita -S 6 S S 0 5 3 5 Lower-middle-income groupExports of goods and nfs 8.7 12 11 0 88

STRUCTURE of the ECONOMY1975 1985 1994 1995

(% of GDP) Growth rates of output and investment (%)Agriculture 7 9 4 9 5 8 57 6 0

T

Industry 23 7 26 9 281 28 2Manufacturing 89 119 140 136 30

Services 68 4 68 2 66 2 661 0 - _

i 90 91 92 93 95Private consumption 90 6 64 6 62 5 -30General government consumption 26 8 22 7 23 1 - GDI -- *-GDPImports of goods and non-factor services 76 3 73 3 74 4 I

197544 1985-95 1994 1995(average annual growth) Growth rates of exports and imports (%)Agriculture 119 10 40 30

Industry 20 6 5 58 i

Manufactunng 53 93 30 20Services -3 3 60 50 10

Pnvate consumption -3 0 52 22 2/ _General govemment consumption -0 9 85 7 7 95Gross domestic nvestment 9 9 -9 9 4 9 -10lImports of goods and non-factor servioes 5 8 -5 5 5 6 Exports ImportsGross national product -0 8 94 40 - -

Note 1995 data are preliminary estimates

The diamonds show four key indicators in the country (in bold) compared with its income-group average If data are missing, the diamond willbe incomplete

Annex 10Page 2 of 2

PRICES and GOVERNMENT FINANCE1975 1985 1994 1995 Inflation (°)

Domestic pncese(% change) 40

Consumer prices 119 30 3 5 24Implicit GDP deflator -0 3 3 9 3 6 20

Government finance(%/ of GOP) 0 90--- 91 9 - 4 9

Current revenue 189 224 297 314 s 92 93 94 95Current budget balance -9 9 -11 6 -0 1 1 7 - GDP def -Q--CPIOverall surplus/deficit -281 -21 6 -6 2 -5 1

TRADE

(millions US$) 1975 1985 1994 1995 Export and Import levels (mill USS)

Total exports (fob) 125 789 1,425 1,771 4.000T

Phosphorus 168 117 151Other metals 79 166 174 3 0004

Manufactures 282 607 704Total imports (cif 732 2,720 3,374 3,696 2000 I

Food 386 582 598Fuel and energy 490 427 480 100

Capital goods 661 858 906 O i~Export price index (1990=100) 107 114 89 90 91 92 93 94 95

Import pnce index (1990=100) 102 109 CoExports limportsTerms of trade (1990=100) 104 105

BALANCE of PAYMENTS1975 1985 1994 1995

(millions US$) Current account balance to GDP ratio (%)Exports of goods and non-factor services 379 1,976 2,986 3,490 j ,Imports of goods and non-factor services 942 3,723 4,395 4,905 1 89 90 91 92 93 194 ' 95

Resource balance -562 -1,747 -1,409 -1,415

Net factor income 26 -89 -144 -304 -10! |Netcurrent transfers 172 845 1,002 1,118

Current account balance,before official transfers -365 -991 -551 -601 -- _ _

Financing items (net) 538 1,145 850 963Changes in net reserves -173 -154 -298 -362 -30 L

Memo: IReserves including gold (mill US$) 571 770 1,977 2,257Conversion rate (local/US$) 0 3 0 4 0 7 0 7

EXTERNAL DEBT and RESOURCE FLOWS1975 1985 1994 1995 1

(milhons US$) ! Composition of total debt, 1995 (mill. USS)Total debt outstanding and disbursed 345 4,022 7,051 7,200 G A

IBRD 0 168 635 736 55 736 BIDA 33 82 71 69 69 C

Total debt service 21 531 505 641 141IBRD 0 21 102 125 , 291IDA 0 2 2 3 F /

3090 1 ;-Composition of net resource flows

Official grants 357 453 306 320Officiai creditors 71 210 109 205 /Private creditors 19 190 -162 -106 - 2818Foreign direct investment 26 25 3 43Portfolio equity 0 0 0 0

World Bank programCommitments 12 97 107 190 A-IBRD E-BilateralDisbursements 10 64 58 158 B- IDA D- Other multilateral F - PrivatePrincipal repayments 0 10 59 79 c - IMF G - Short-termNet flows 10 54 -1 79Interest payments 0 12 47 49Net transfers 10 42 -48 30

International Economics Department 1116/96

IBRD 28719

36, 37' 38,

JORDAN 330

COMMUNITY INFRASTRUCTURE PROJECT 7ibakeros GENERAL LOCATION 77

0 ,SplUm Gain T Damascus

_ , e p AL HUzN< / .AL 'AFR-t ,. X 4 .AJ, IOUN AtbMaf rac _,

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lII Aff4St g A | j -AREAS OF SQUATTER SETTLEMENT

AYQABA r *REFUGEE CAMPS

/ 603 NATIONAL CAPITAL

GOVERNORATE CAPITALS

XXqab,a ,0' \ / ° SELECTED CITIES AND TOWNS

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.-- &. S- -_. !Al Mt1dawwara'% 7 ROADS

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ToAIB ir PERENNIAL RIVERS AND STREAMS

. This map Was produced by the Map Design Unit of The World Bonk _ INTERMITTENT STREAMS AND WADsTheboondiries,color-, denominations nd anyotherinformaionshown 29

-2948 / on this map do not imply, on the port of The World Bank Group, any _-_ GOVERNORATE BOUNDARIES.udgment on the legalstiats of any territory or asy edo-rsewent oracceptance of such boundaries 36° 37' INTERNATIONAL BOUNDARIES

JUNE 1997

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IMAGING

Report No.: i 6608 JoType: PAD