FILE COPY. Appraisal Report. Rural Water Supply Project FOR OFFICIAL USE ONLY. Document of the World Bank

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No KE Kenya Rural Water Supply Project Appraisal Report October 31, 1978 Energy and Water Supply Division Eastern Africa Regional Office FOR OFFICIAL USE ONLY Document of the World Bank FILE COPY This document has a restrictedistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 KENYA APPRAISAL OF THE RURAL WATER SUPPLY PROJECT Currency Equivalents The official unit of currency in Kenya is the Kenya Shilling. However, in accordance with the practice of the Kenya Government, budgetary values used in this report are expressed in Kenya Pounds. Currency Unit = Kenya Shilling (KSh) Kenya Cents 100 = KSh 1 Kenya Pound (KE) = KSh 20 KSh = US$0.125 K3 i = US$2.50 US$1 = KSh 8.00 US$1 = KI 0.40 Measurements Equivalents and Abbreviations I meter (m) = 39.4 inches = 3.28 feet (ft) 1 kilometer (km) 2 = 0.62 mile I square kilometsr (km ) = square mile 1 cubic meter (m) = 35.3 cubic feet (cu. ft.) 1 liter = 0.26 US gallon I cu4ic meter per day (m /day) = 35.3 cubic feet per day lcd = liters per capita per day Other Abbreviations and Acronyms C&L - Coopers and Lybrand Associates Limited CWP = Communal Water Point CPWB = Coastal Province Water Branch DDC = District Development Committee Government = Government of Kenya MF = Ministry of Finance MLG = Ministry of Local Government MWD = Ministry of Water Development O&M = Operation and Maintenance RWS = Rural Water Supply Program SIDA = Swedish International Development Authority WD = Water Department WHO = World Health Organization Government of Kenya Fiscal Year July 1 - June 30

3 FOR OFFICIAL USE ONLY KENYA APPRAISAL OF THE RURAL WATER SUPPLY PROJECT TABLE OF CONTENTS Page No. SUMMARY AND RECOMMENDATIONS i-ii I. INTRODUCTION... I II. THE ECONOMY III. THE WATER SECTOR Geography and Climate Water Resources Water Legislation Sector Organization Urban Water Supply Rural Water Supply Sewerage... 6 Financial and Technical Assistance... 6 IV. THE PROJECT... 7 The Rural Water Supply IV Program Project Objectives and Description... 7 Design of Water Schemes... 8 Construction... 8 Implementation... 9 Cnost Estimates... 9 Financing Plan Procurement Disbursement Environmental Aspects V. THE MINISTRY OF WATER DEVELOPMENT Organization Management and Staffing Performance of WD in Rural Water Supply Management Consultancy Services Audit VI. FINANCIAL ASPECTS Financial Objectives Accounting Systems and Financial Control Financial Performance Financial Prospects Tariffs Financial Rates of Return and Subsidies This document has a restricted distribution and may be us d by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

4 TABLE OF CONTENTS (Cont'd) Page No. VII. JUSTIFICATION Institution Building Analysis of Benefits Risks VIII. AGREEMENTS REACHED AND RECOMMENDATION... 21

5 KENYA RURAL WATER SUPPLY PROJECT List of Annexes ANNEX 1 Population by Provinces, Population Density and Projections 2 Potential Agricultural Areas 3 A. Rainfall Distribution in Kenya B. Drainage Areas 4 Foreign Financing of Water Development Projects 5 Selection of Water Schemes for the RSW IV 6 List of Water Schemes 7 Terms of Reference of Feasibility Studies 8 Design Procedures and Main Design Parameters 9 Implementation Schedule 10 Schedule of Presentation of Feasibility Studies 11 RWS IV Monitoring Unit 12 Job Description - Public Relations Officer 13 Project Costs Estimate 14 Phasing of Expenditures 15 Estimated Schedule of Disbursements 16 Organization Chart of the Ministry of Water Development 17 Proposed Organization Chart of the Ministry of Water Development 18 Project Monitoring Guidelines 19 Ministry of Water Development - Capital Budgets Ministry of Water Development - Recurrent Budgets Recurrent Budget for Rural Supplies 22 Existing Tariffs for Rural Water Supplies Map IBRD 12919R - Rural Water Supply Project

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7 KENYA APPRAISAL OF THE RURAL WATER SUPPLY PROJECT Summary and Recommendations (i) The Government of Kenya has been giving in recent years increasing priority to rural development. Along with agriculture, transportation, education and health projects, it has been recognized that the provision of safe water supplies had high priority, because of the substantial benefits it can bring in terms of: (a) relieving the Kenyan women from the daily drudgery of carrying water over large distances; (b) improving health and sanitation; and (c) increasing income through gardening and breeding graded cattle. At present, however, only about 15% of the rural population has access to safe water supplies; the balance use traditional sources which are often remote, polluted, or unreliable. (ii) Kenya is generally poor in surface water; a majority of its rivers are seasonal-shallow ground water is available only in a belt along the ocean coastline and near the shores of Lake Victoria. About 80% of the country is arid or semi-arid. (iii) The Government of Kenya has requested assistance from the Bank and six external aid agencies for the financing of the KSh 700 million (US$87.5 million) Rural Water Supply Program IV (RWS IV), which would provide safe water to a population of approximately 1.1 million. It consists of 65 schemes located throughout Kenya and selected through an equitable system based on national and local considerations. After the aid agencies had expressed their preferences, the 65 schemes were distributed among them and the Bank, taking into account geographical considerations to facilitate project implementation. (iv) The Bank project would consist of the engineering, materials for and construction of 33 schemes; strengthening operation and maintenance ability of the Water Department; and a comprehensive program of Management Consultancy Services for the Ministry of Water Development which will be in charge of program/project implementation. The proposed Bank loan of US$20 million would cover the foreign exchange component, estimated at US$18.7 million and a portion of local expenditures, while the remaining local costs, estimated at US$11.8 million would be financed by the Government. All equipment and materials contracts in excess of US$100,000 and construction contracts in excess of US$300,000 would be awarded on the basis of international competitive bidding. Contracts under these limits would be procured under local procedures, which are satisfactory. (v) The management of water resources is centralized in the Ministry of Water Development. The Ministry was created in 1974 and its executive branch is the Water Department; apart from the administration of the country water resources the Water Department operates more than 200 urban and rural water supplies and carries out the principal sector development programs. In 1970, the Rural Water Supply Program was initiated with the ultimate objective of providing the whole rural population of Kenya with safe water by the year 2000.

8 - ii - (vi) The Ministry of Water Development has a poor record in planning, constructing and operating rural water supply schemes, and the main risks of the project are tied to its performance. However, management consultants successfully completed a thorough analysis of the Ministry in May The Government accepted their recommendation and decided shortly thereafter to reorganize the Ministry, strengthen the staff, expand training facilities and introduce financial control systems. The proposed Bank loan includes a provision to strengthen the Ministry. (vii) Aside from the institution building aspect, the project is essentially justified by the benefits which will accrue to the rural population, and the high value they attach to convenient and reliable water supplies. After tariffs are increased and collection processing improved, revenues will suffice to cover Operations and Maintenance costs of the program as a whole. (viii) The project is suitable for a US$20 million Bank loan.

9 KENYA APPRAISAL OF THE RURAL WATER SUPPLY PROJECT I. INTRODUCTION 1.01 The Government of Kenya has requested financial assistance from the Bank and six external aid agencies to help finance a KSh 700 million (US$87.5 million) rural water supply program proposed to provide safe water to a population of about 1.1 million. A Bank Loan of US$20 million is proposed to be made to the Government; the other aid agencies would provide altogether US$45 million, and the balance of US$22.5 million would be provided by the Government. The program would be implemented by the Water Department (WD) of the Ministry of Water Development (MWD) In recent years, the Government of Kenya has given increasing emphasis to rural development, which has particularly materialized in the form of agriculture, health, education and feeder roads projects. Regarding water supply, a series of Rural Water Supply Programs (RWS) was initiated in 1970, with the objective of providing the whole rural population with safe water by the year 2000 to improve hygiene and health, relieve Kenyan women from the toilsome task of carrying water over large distances, and help in increasing income from animal husbandry. The program now under consideration for the period 1978 to 1984 is the fourth in the series, and is referred to as RWS IV Already in 1974, when the Mombasa and Coastal Water Supply Project was under preparation, the Government requested that a provision be made in that loan for the construction of rural water supplies in the coastal area. At that time, however, very little data were available on Kenya's experience in relation to the construction and operation of rural water supplies. As a result it was agreed, that: (i) the Government would undertake a comprehensive evaluation of all past and ongoing rural water projects, as a basis for the preparation of future rural water supply programs; and (ii) a provision of US$700,000 would be included in that loan to finance the evaluation study and the preparation of a rural water supply project. In early 1976, MWD appointed VIAK, a Swedish Consultant, to undertake the evaluation and to assist MWD in preparation of RWS IV 1/; the evaluation report of February 1977 provided important inputs for the preparation of the proposed project. S 1.04 The proposed loan would represent the fourth lending operation to Kenya for water supply but this project would be the first directed totally at rural water supply. The Bank has already financed three urban water supply projects: Nairobi Water Supply I (Loan 714-KE) has been completed; Mombasa and Coastal Water Supply (Loan 1167-KE), and Nairobi Water Supply II (Loan 1520-KE) are under implementation. In addition, the Nairobi Urban project, two Agriculture projects, and two Tourism projects include water supply and sewerage components. The implementation of the two Nairobi 1/ The consultant was financed by the Swedish International Development Authority (SIDA).

10 - 2 - projects by the Nairobi City lcouncil is satisfactory; performance on the Mombasa project, implemented by WD, is improving after a weak start. The water components in the remaining projects are also implemented by WD and its performance has generally been poor. However, through steps recently taken by the Government, and improvements proposed in connection with this project, WD' s performance should improve gradually The project was appraised in April 1977 by Messrs. J. Kozel, M. Heitner, P. Momal (IBRD), and R. Patel, Manpower Specialist acting as consultant to the Bank. Representatives of three bilateral aid agencies (Canada, Denmark and The Netherlands) joined the Bank's appraisal team. While the Bank and the bilateral agencies are financing independent components of RWS IV, close liaison has been maintained throughout to ensure harmonization of objectives. Management consultants were appointed to review the organization of MWD and a Bank post-appraisal mission visited Kenya in June 1978 to update the information and review the work of the management consultant. II. THE ECONOMY 2.01 Kenya's economic performance since independence has been remarkable, as real GDP increased by an average 6.6% per annum. Agriculture represented about 38% of GDP in 1977 and has shown good growth in years with favorable weather conditions, alternating with disappointing performance in years of drought or floods. Agriculture remains the single largest sector as it employs about 90% of the labor force; 1.2 million smallholders, engaged in subsistence farming contribute over half of the agricultural value added. Average annual per capita income of the rural population is estimated at US$90 against a countrywide average of US$270 (1977) The 1977 population of Kenya was estimated at 14.2 million of which 88% was rural. As Annex 1 indicates, population distribution is uneven; thus four Provinces located between Mount Kenya and Lake Victoria account for 70% of the population, and barely 20% of the land. In high and medium agricultural potential areas 1/, characterized by abundant precipitation (Annex 2), the population is mainly scattered on individual farms; villages as such, are rare; instead, small centers constituted by a few shops, a school, a dispensary, and occasionally a church are more frequent. In the low potential areas, the population is often nomadic and derives its livelihood from cattle breeding The efforts of the Government in rural areas have stressed the need to increase rural incomes and improve the quality of services. Increasing emphasis has been given to agriculture 2/ (introduction of cash crops, graded 1/ High and medium potential areas account for 90% of the rural population. 2/ Shares of agriculture in total development expenditures grew from 13% in to 22% in

11 cattle, agriculture credit), transport, education and health. Much importance has been given to local involvement, which has been particularly significant since the inception of the District Development Committees (DDCs) in 1967; they play a major role in the identification and selection of local development priorities, as well as in the apportionment of available external resources among sectors and beneficiaries. Provision of reliable water supply to improve health, to relieve women from water carrying and to enhance cattle breeding has high priority for the rural population, as the construction of numerous "self-help" schemes demonstrates. This has also been recognized by the Government, which since 1970, has devoted considerable resources to the construction of rural water supply schemes. However, results have not been up to expectations because of the high costs and relatively sophisticated technology water supply entails. III. THE WATER SECTOR Geography and Climate 3.01 The Republic of Kenya, stretched inland from the Indian Ocean to Lake Victoria, covers 583,000 km 2. Although lying in equatorial latitudes, the country experiences wide differences in climatic conditions caused mainly by variations in altitude. Average rainfall is about 450 mm per annum but the uneven distribution results in vast areas reeeiving less than 250 mm while hill masses may receive about 2,500 mm (Annex 3). East of the Rift Valley there are two distinct rainy seasons, from March to May and from October to December. In the Western and Lake Victoria areas there is effectively no dry season. Rainfall is high during March - September and low during January - February. Water Resources 3.02 Kenya is generally poor in surface water. Apart from the Nzoia, Yalla, and Mara rivers in the west and the main courses of the Tana and the Galana in the east, all the rivers and their tributaries are seasonal. The major rivers originate from only 5% of the area of the country, where the rainfall exceeds 1,250 mm per annum. The drainage system consists of five basins. They are described in Annex The groundwater potential appears promising, but considerably more investigations are required. The main water table is about 80 m below the surface, but in some areas, particularly along the coastline and almost

12 everywhere along Lake Victoria, an abundant quantity of groundwater is available close to the surface. The quality of groundwater is generally satisfactory; however, in the north and east water is often saline; and in Nairobi and the Rift Valliey, some groundwater has excessive fluorides The systematic investigation and inventory of all water resources started in 1976 as a first part of the National Water Master Plan; in succeeding parts the Plan will evaluate development of water demands, present the technical solutions for development of water resources and propose ways of water conservation. Water Legislation 3.05 The Water Act, together with its subsidiary legislation, covers the broad field of conservation, control, apportionment and use of water resources. The control of all water resources is a responsibility of the Minister of Water Development. The Minister's powers to issue permits for the use of water, and con,trol of abstraction and pollution is exercised by the Water Apportionment Board. Subsidiary legislation provides a code for its procedures and functions, defines waterworks code for all water undertakers, and deals with level of water charges and methods of charging Complementary to the Water Act is the Public Health Act, which includes many provisions relating to water supply and sewerage from the health point of view; Local Government Regulations 1963, give power to local authorities in urban areas to undertake water supply, sewerage and drainage works, to maintain waterworks and to make appropriate by-laws The existing water laws of Kenya are adequate and, for the purpose of the project, no further legislation would be required. Sector Organization 3.08 The Ministry was established in 1974 and took over all responsibility for the country's water resources from the Ministry of Agriculture. MWD is the sole agency in the Government with technical expertise in water affairs as well as the largest water undertaker 1/. It is also in charge of coordinating water resources development MWD's executing agency is WD. Special assignments, however, are carried out by statutory Boards: the Tana River Development Authority is responsible for planning and coordination of programs designed for optimum exploitation of water resources in the Tana River catchment; the Mombasa Pipeline Board is responsible for bulk supply of water to the coastal area 1/ It presently owns and operates water supplies in five municipalities, 110 urban and 90 rural systems.

13 -5- from Mzima Springs; the Water Apportionment Board exercises the Minister's powers to control the right to use water in the country 1/. Major irrigation developments are the responsibility of the National Irrigation Board, under the Ministry of Agriculture. The development of hydroelectric power is concentrated in the Ministry of Power and Communications Several other ministries and agencies are involved in the development and operation of water supply facilities. The Nairobi City Council is responsible for the development and operation of the water supply and sewerage systems of Nairobi. Five municipalities and two County Councils operate their urban water supply systems under the direction of the Ministry of Local Government (MLG). Hundreds of small rural water supply schemes, are operated - though with varying degrees of success - by the forty County Councils; Kenya Railways operates about a hundred water schemes supplying staff houses and adjacent villages. The Ministry of Lands and Settlement plans and budgets water supply for new settlement areas 2/. The Ministry of Cooperatives and Social Services administers government grants to all "selfhelp" schemes in rural areas, i.e. also to water supply schemes 3/. Finally the Ministry of Health is responsible for potable water quality surveillance from the community health point of view, and has been engaged in a demonstration program for rural water development The development and operation of sewerage systems is the responsibility of the City Council in Nairobi, of MLG in the other larger towns, and of WD in the other settlements. WD also acts as the agency for MLG in engaging and supervising the work of consultants on the design and supervision of sewerage works The fact that several water supply and sewerage systems are owned by urban councils and are outside of MWD's responsibility is a result of a long historical process of strengthening local government. The Management Study (para 5.11) has recommended the gradual transfer of urban water supplies to local authorities. Urban Water Supply 3.13 Practically the whole urban population, estimated at about 1.7 million in 1977, is either served from piped water supply systems or has reasonable access to public systems. The quality of supply depends on the size of the community and is generally better in the larger towns. Some towns, with fast population growth have been unable to keep pace with water demand and are now experiencing periods of serious water shortages. Water is usually supplied through metered individual connections; usage is not excessive, ranging from 70 to 160 liters per capita per day (lcd). 1/ The organization of MWD is described in Chapter V. 2/ WD is usually the executing agency for construction. 3/ WD provides limited technical assistance.

14 -6- Rural Water Supply 3.14 The 1977 rural population is estimated at about 12.5 million, of which 1.5 million presently hals access to an improved water source or piped water supply. The balance carries water over considerable distances from natural sources, which are often polluted, insufficient or unreliable. About: one third of the rural population presently served has individual connections to their farms, and the balance draws water from communal water points (CWP), kiosks, 1/ protected springs or wells. Water usage ranges from 50 lcd for individual connections, to about 10 lcd for others. Maximum walking distance to an improved water source ranges from 1 km in high potential areas to 4 km in low potential areas. The level of maintenance of water supply schemes is generally low causing frequent disruptions of service, but remedial measures are now under consideration (para 5.09). Sewerage 3.15 Public systems for sewage collection, treatment and disposal exist in about 22 urban communities. There are no sewers in rural areas. In the country as a whole, about 4% of the population use public sewerage systems, about 4% septic tanks and 40% pit latrines. More than 50% of the population has no proper sanitation facilities. The City Council of Nairobi is expanding its sewerage system, four municipalities systems are now being expanded by MLG, while WD is constructing seven systems in smaller towns. Sewerage systems are always separated from storm water drainage; operation and maintenance, generally unsatisfactory, is provided by urban councils. County Councils, assisted by health inspectors are responsible for supervising standards of sanitation and refuse disposal in rural areas. Financial and Technical Assistance 3.16 Various aid agencies have been supporting the sector's important projects with large loans or grants. Aside from the Bank (para. 1.04), UNICEF/WHO participated by providing about US$1.5 million to finance about 800 water supply schemes in small rural settlements; the Swedish Government has supported, with about US$10 million, the first two RWS which include about 100 water supply schemes and WD's training school; it is presently financing the preparation of the National Water Master Plan (para. 3.04) and is also now considering supporiting the rehabilitation program (para. 5.09); the Governments of Norway and lwest Germany are participating in financing improvements of water supply and sewerage systems in towns. Foreign financing of water supply and sewerage development projects in the period 1964 to 1976 amounts to over US$130 million in loans and grants as shown at Annex The sector is also benefiting substantially from technical assistance from aid agencies. In recent years, 60 to 70 expatriate engineers and other specialists have been seconded to WD, under various aid programs. 1/ Water from CWP is either free or charged at a nominal fee per family; supply from kiosks is paid for by volume.

15 - 7 - IV. THE PROJECT The Rural Water Supply IV Program 4.01 RWS IV consists of 65 schemes located throughout Kenya which will supply safe water to about 1.1 million persons. The location of schemes is shown on map IBRD 12919R. The schemes were selected as in the previous RWS Programs through a two-stage process. The first stage consisted of an allocation of funds to each of Kenya's 40 rural districts in proportion to the unserved population when RWS was initiated in 1970, and funds already allocated under earlier programs. In the second stage, DDCs (para. 2.03) selected specific schemes on the basis of need, willingness to pay for service, equity, potential benefits and grassroots political considerations. Thus RWS IV includes schemes selected for each district in the order of DDC priorities, up to the limits of the allocated construction funds. The methodology used and the criteria applied for the selection of schemes is equitable; Annex 5 describes this process in detail The 65 schemes were allocated to the aid agencies (para. 1.05), and the Bank on the basis of specific preferences, and geographical considerations, in order to facilitate contracting and project implementation. Project Objectives and Description 4.03 The Bank Project would provide water to a rural population of about half a million. It would also strengthen MWD's organization and management capability to plan expansion programs and to operate and maintain water supply schemes The Project would consist of: (a) 33 rural water supply schemes; (b) strengthening of MWD's operation and maintenance, and direct labor sections; and (c) technical assistance for implementation of the recommendations of the management study and preparation of RWS V The 33 schemes are located in all agricultural potential areas and would supply between 100 and 10,000 households each. The standard of service in each scheme would be a mix of individual connections, CWPs and kiosks. The percentage of population served by individual connections in each scheme would depend on economic considerations and demonstrated willingness of users to pay for the connection (para. 4.08). The preinvestment studies for all schemes were completed and the list of schemes with their basic parameters appears at Annex 6.

16 Operation and maintenance (O&M), presently inadequate, would be upgraded by: (a) providing WD with District and Provincial stores and workshops, additional equipment, spare parts and tools; and (b) expanding WD's facilities for training of water operators (para. 5.06). Upgrading of O&M would also be supported by the other aid agencies. WD's direct labor section would be strengthened by additional construction, transport, and communication equipment, spare parts and tools The technical assistance would consist of: (i) implementation of the recommendations of the Management Study including the provision of experts required for training of local staff (para. 5.11); and (ii) preparing feasibility studies of schemes included in RWS V, proposed for Design of Water Schemes 4.08 Engineering would be prepared by WD and by consultants. Medium and large schemes 1/ would proceed in two stages: in the first stage, a feasibility study would be prepared for each scheme and essentially cover: (i) a review of the economic potential of the area; (ii) a review of existing water supply facilities (if they exist); (iii) a marketing study to assess particularly consumer's wishes and ability to pay for services; (iv) determination of service type and standard; (v) identification of the least cost solution to meet future demand, based on standards of service determined in (iv) above; and (vi) assessment of financial and economic implications of the proposed scheme. The terms of reference for the feasibility studies appear at Annex 7 and are satisfactory Bank's approval of feasibility studies would be a condition of disbursement for detailed design, and construction. After such approval has been obtained, the second stage consisting of the detailed design, preparation of tender documents and construction would proceed. The detailed design would be prepared in accordance with WD's guidelines which contain instructions regarding consumption rate, water quality, design period, and typical standard structures alnd are acceptable. The summary of the guidelines appears at Annex All medium and large schemes would be entrusted to consulting engineers, from the preparation of feasibility studies up to supervision of construction. WD is presently using about 20 consultants who are acceptable to the Bank. Studies and design of the smaller schemes would be carried out in one stage by WD's Planning and Design Division; Bank's approval of engineering documentation would be a condition of disbursement for construction. Construction 4.11 Medium and large schemes, which are located in highly populated areas, would be constructed by contractors supervised by consulting engineers. However, few contractors are likely to bid for small schemes located 1/ Estimated cost more than KSh 3 million.

17 - 9 - in sparsely populated areas and therefore some of these schemes would be built by departmental force account (Direct Labor), specialized in this field; WD's senior staff of the Direct Labor Section would supervise construction. For works executed by Direct Labor, only the necessary construction equipment, materials and transport would be financed under the project. Implementation 4.12 Implementation of the RWS IV would last about six years - from mid-1978 to mid Annex 9 shows the implementation schedule of the Bank project. Annex 10 shows the proposed timetable of presentation of feasibility studies and designs (paras and 4.10) In view of the large number of schemes in RWS IV, the sizeable number of sequential steps required to implement each one and an obligation to coordinate the activities of aid agencies, WD would create by April 30, 1979, a Program Monitoring Unit, headed by a Program Coordinator. The Unit would prepare an annual implementation plan and set up and operate a monitoring system that would allow periodic comparison of actual performance against targets, thereby enabling timely corrective action whenever required. The description of the Unit's duties appears at Annex 11. Appointment of the Program Coordinator would be a condition of loan effectiveness Presently WD does not have the staff required to undertake the detailed surveys of demand for water in rural areas (para. 4.08). It was, therefore, decided to entrust this task to consulting engineers with the assistance of a Public Relations Officer, yet to be appointed. In addition, the Public Relations Officer would also ensure that the full benefits of operating rural water supplies are taken advantage of by, among other things, initiating and coordinating health campaigns. The Public Relations Officer was appointed in September 1978, and his job description appears at Annex 12. Cost Estimates 4.15 The estimated cost of RWS IV is about KSh 700 million (US$87.5 million); the cost of the proposed Bank project is estimated at about KSh 244 million (US$30.5 million), with a foreign element of KSh 149 million (US$18.7 million). Detailed cost estimates for the Bank Project appear at Annex 13 and can be summarized as follows:

18 Local Foreign Total -----(KSh million)--- Local Foreign Total ----(US$ million) Materials & Construction Engineering Strengthening MWD Technical Assistance Sub-total Contingencies Physical Price Increase Total Expected Cost of the Project (i) including taxes (ii) net of taxes For large and medium size schemes, the cost estimates of materials and construction were based on a unit cost of KSh 680 per capita; for small schemes, estimates were established on the basis of anticipated source of supply and range from KSh 0.25 to 0.65 million per scheme. The unit cost per capita was derived from an analysis of similar projects carried out by WD in the past and updated to 1979 prices by applying price index of the Ministry of Works for civil works and of WD for pipes. Engineering costs have been assessed at 12% of construction costs. Physical contingencies of 10% on materials and equipment and 15% on construction were added. Base cost estimates are expressed at January 1979 prices. Price escalation for equipment and civil works was estimated at 6.5% and 7.5%, respectively, for 1979, and 6% and 7% thereafter. Details are at Annex 14. Financing Plan 4.17 Seven aid agencies have been asked to provide financing for RWS IV. The loan applications are in various stages of processing. Each of the financiers would operate iin different areas and their projects would proceed independently; there iis no linkage between the processing of the Bank project and the processing of projects of other financiers. The proposed financing plan is as follows:

19 Amount Source of Financing KSh million US$ million % (i) African Development Bank (ii) Canadian International Development Agency (CIDA) (iii) Danish International Development Agency (Danida) (iv) IBRD (v) Japan r (vi) The Netherlands (vii) U.K. Overseas De elopment Ministry (ODM) q (viii) Government of Kenya RWS IV Total The proposed IBRD loan (US$20 million) would cover 75% of the cost of the IBRD project excluding taxes (US$26.8 million), including US$1.3 million of local expenditures; the Government would provide the balance (US$6.8 million). The loan would be on standard Bank terms for Kenya. During negotiations, assurances were obtained that the Government will provide for 25% of the project's cost in addition to custom duties and taxes. Procurement 4.18 Construction contracts in excess of US$300,000 and procurement of equipment and materials in excess of US$100,000 would be awarded on the basis of international competitive bidding in accordance with Bank Guidelines. Equipment and materials under US$100,000 and construction contracts under US$300,000 would be procured through local bidding procedures which are satisfactory. Total expenditures under such contracts would not exceed US$3.0 million over the life of the project. Construction contracts and procurement of equipment and materials would be grouped together whenever possible; construction contracts would include the supply of all required materials and equipment for the scheme. It is expected that most of the pipes will be manufactured locally but all equipment will have to be imported; civil works is expected to be executed by local contractors, participation of foreign contractors would be minimal. A preference of 7.5% to bids from local civil works contractors and 15% of the c.i.f. bid price (or the applicable custom duty, whichever is lower) to bids from local manufacturers would be applied. Civil works for some small rural water systems in sparsely populated areas would be carried out by the Direct Labor Section (para 4.11) Engineering consultants would be selected from among those registered with WD (para 4.10); the management consultants (paras and 5.11) have been selected from among three firms on the basis of evaluation of proposals; the selection and the contract were reviewed by the Bank. The contracts for studies would be of the lump-sum type as they would be relatively

20 small, well defined, short term assignments. Design and supervision contracts would be based on MWD's standard Agreement for Design and Supervision. The average cost of management consultants and engineers would be US$8,000 and US$4,500 per man month respectively. The engineering consultants' selection and contracts would be presented to the Bank for review and approval prior to signature of the contract. In order to expedite implementation of the project the management consultant and three engineering consultants are expected to be appointed prior to consideration of the project by the Board. Retroactive financing up to US$0.2 million is proposed for expenditure incurred after July 1, Disbursement 4.20 Disbursement of ftnds from the Bank Loan would be on the following basis: (a) 100% of the foreign costs of pipes, equipment, tools, spare parts, vehicles and training equipment if imported directly, 100% of local expenditures ex-factory, or 87% of local expenditures ex-store; (b) 65% of total costs of construction contracts; and (c) 75% of total costs of technical assistance and consultants. The project closing date would be July 1, The estimated schedule of disbursement appears at Annex 15. Environmental Aspects 4.21 The expansion of water systems would not have any detrimental effect on the environment: excreta disposal in rural areas is generally provided by water independent systems. The feasibility studies (para. 4.08) would also investigate types of sanitation in residential and institutional premises and propose improvements to achieve minimum acceptable sanitation standards. V. THE MINISTRY OF WATER DEVELOPMENT Organization 5.01 MWD is headed by a Minister; the Permanent Secretary, who reports to the Minister, is in charge of executing Government's policies. He is assisted by a small staff referred to herein as "Headquarters", dealing essentially with accounting, finance and establishment matters. WD, its executive branch, prior to formation of MWD had been successively under the Ministries of Water and Natural Resources, and Agriculture.

21 WD is headed by a Director who reports to the Permanent Secretary. WD is organized in four branches: Development; Operation and Maintenance; Resources; and Administration. All activities are centralized in Nairobi except Operation and Maintenance, which is directed from Nairobi but is mainly the responsibility of seven Provincial Water Engineers. pwd's organization chart appears at Annex Because of the high priority given to water supply, the scope of MWD's activities increased dramatically in recent years, and it became questionable whether the existing organizational framework was optimal, takipg into consideration the tasks ahead. In December 1977, the Government hired Management Consultants Coopers and Lybrand Associates Limited (C&L) of the U.K. to conduct a thorough investigation of the Ministry, its organization, management methods, staffing and accounting policies. The assignment was carried out by 5 U.K. based specialists assisted by 5 Kenyan professionals from the University and the Government, and was successfully completed in May C&L has recommended a reorganization of the Ministry, reflecting, inter alia, the need for the Permanent Secretary to control effectively the different arms of the organization, and to upgrade the planning/budgeting/monitoring process. The recommendations of C&L have been accepted by the Government; implementation would begin in 1979 and would be completed by December The proposed organization chart appears at Annex 17. Management and Staffing 5.04 WD employs presently a total staff of approximately 7,250 including 2,900 employees in the lower categories which are outside the establishment. They are referred to as "works-paid" staff, having been hired initially on a temporary basis; they do not receive most fringe benefits of regular civil service employment and often lack motivation. Out of 90 engineers and other professionals, 70 are expatriates, usually under two to three years secondment contracts through technical assistance programs; 35% of the senior posts are either vacant, or occupied by staff with substandard qualifications WD has set up, with SIDA assistance, a school to train several categories of sub-professionals and technicians. The curriculum combines formal courses with on-the-job assignments, and short courses at the Kenya Polytechnic. The output of the WD school is presently 100 trainees a year, of which about a quarter ends up in the O&M Branch. This output level is insufficient for WD's current and foreseeable requirements. Shortage of staff, equipment, workshops and dormitories have been, so far, the major constraints. At the higher echelons, while sufficient training facilities exist for engineers, assistant engineers, accountants, etc., it would appear that WD has not made enough effort to recruit these graduates While WD's personnel planning practices were deficient in the past, the C&L Management Study recognized, and MWD now acknowledges, the need to step up efforts in this area. It is now intended to increase the intake of fresh engineering graduates to 20 per annum, and at the same time to expand

22 the training school's output to 185 trainees per annum. It is proposed, under this project, to finance the expansion of the training facilities of WD (para. 4.06). It is intended to recruit a Training Officer who would undertake periodic assessments of MWD's manpower requirements, and set up training programs accordingly. Appointment of the Training Officer would be a condition of loan effectiveness. Despite the efforts now envisaged to increase the proportion of local staff at senior levels C&L has concluded, and MWD agrees, that in the short run the number of expatriate staff will have to increase substantially if the development plans now envisaged are all implemented. Performance of WD in Rural Water Supply 5.07 WD began to gain experience on a large scale in the planning, design and construction of rural water supplies only when SIDA made its first contribution for RWS I in Particularly in the case of RWS I and some RWS II schemes, the evaluation study (para. 1.03) found that schemes were built on the basis of insufficient data on water resources and water demand, both factors ultimately leading to inadequate design. Further, little attention was paid to the desires of consumers concerning quality of supply, location of kiosks and CWPs and willingness and ability to pay for various kinds of service. Implementation of RWS III showed only modest improvement. For RWS IV, the terms of reference for feasibility studies (para. 4.08) require the consultants to collect much more data than done previously, as well as to prepare market surveys to assess consumer's needs and willingness to pay. The primary duty of the Consumer Relations Officer would be to ensure compliance with this requirement (para. 4.14) WD is facing major problems in the Operation and Maintenance of rural water supply schemes already built. The Evaluation Study found that in a sample of 35 schemes: (i) only about half of the potential consumers actually used the new systems; (ii) less than half of the schemes provided a reliable 1/ supply; and (iii) nearly half of the schemes provided water that could not meet WHO standards. No single factor accounts for this unsatisfactory state of affairs. It is due to a combination of the following factors: (i) poor initial design; (ii) inadequate supervision by field offices of WD; (iii) lack of workshops, spare parts, transport etc.; (iv) inadequate financial control mechanisms resulting in misallocation of funds; (v) insufficient budgetary allocations; and (vi) lack of qualified staff Upgrading the quality of O&M has high priority; without it, only a fraction of the anticipated benefits of past and present investments would materialize. In connection with RWS IV the following steps are planned: 1/ A supply is considered reliable if interruptions longer than 48 hours do not occur "regularly."

23 (a) The project provides for strengthening the Provincial Offices of MWD (para. 4.06). Other aid agencies have also shown interest in financing this item. (b) Financial control mechanisms (para. 6.05) and proper budgeting procedures would be established with the help of the management consultants (para. 5.11); and further MWD has been asked to recruit a Cost and Management Accountant for the Head Office and appoint qualified accountants at all Provincial Offices. Appointment of the Cost and Management Accountant would be a condition of loan effectiveness, while during negotiations, assurances were obtained that by April 30, 1979 qualified accountants would be posted at all Provincial Offices of MWD. (c) WD has recently prepared O&M standards which will be used in the preparation of the recurrent and capital budgets. These standards translate the physical characteristics of schemes (i.e. population served, area covered, length of pipe, type of supply, equipment, number and types of connections, etc.) into budgetary requirements (i.e. size and calibre of staff, chemicals, fuel, spares, transport, etc.). During negotiations, assurances were obtained that the Ministry of Finance (MF) would provide MWD with sufficient funds to meet the established standards. (d) The expansion of the training facilities (para. 5.06) will pay particular attention to the requirements of the O&M Branch. (e) The details of a rehabilitation program for existing schemes have been worked out by WD. Three aid agencies (from Canada, Denmark and Sweden) are financing this item. Engineering consultants will survey schemes in need of rehabilitation, make recommendations and, after MWD's approval has been obtained, will proceed with implementation. Further, mobile teams will be set up to undertake repairs as needed. While WD's O&M difficulties are serious, the above steps should help substantially in gradually improving the quality of O&M work County Councils (para. 3.10) and other autonomous rural supplies have had unforeseen difficulties in running their water supply systems. On the whole, their performance has proven very disappointing so that, over the past few years, MWD was asked to take over water supply systems. Often, when such a take-over took place, no additional staff was allowed, nor was a budgetary adjustment made, so that it added to an already heavy burden. During negotiations assurances were obtained that MF would provide sufficient funds

24 to meet the established O&M standards for all rural water systems under the control of MWD (para. 5.09). Further, in view of the already heavy commitments of the Development Branch, assurances were obtained that MWD would be provided with the financial resources and personnel to implement any additional project undertaken prior to completion of this project. Management Consultancy Servic,es 5.11 Besides the reorganization of MWD, C&L (para. 5.03) has recommended improved manpower planning practices, accounting/budgeting and financial control mechanisms, project planning and monitoring methods, and stores management. It is proposed, under this project, to finance the implementation of the proposals of the management consultants in the above areas, and in facilitating the introduction of the new organizational framework. Specialized personnel would assist local counterparts in their area of expertise. During negotiations, assurances were obtained that the program of implementation of the management consultants' proposals would be reviewed annually with the Bank prior to implementation The performance of ED in relation to project implementation and institutional improvements will be closely supervised. Proposed monitoring guidelines appear at Annex 18. Audit 5.13 MWD's accounts are audited annually by the Controller and Auditor General of Kenya. A Senior Auditor, assisted by a staff of seven, is assigned to MWD (and three other ministries). Provincial auditors undertake audit of all Government departments in provinces. During negotiations, assurances were obtained that MWD's accounts would continue to be subjected to an independent audit, and that the report of the auditors would be submitted to the Bank within six months from the end of each fiscal year. VI. FINANCIAL ASPECTS Financial Objectives 6.01 MWD, as a ministry does not have financial objectives of the type one would normally find in a water utility. The broad financial objective of MWD is that revenues should cover operation and maintenance costs. MWD's present accounting practices do, not generally permit identification of O&M costs of individual schemes, nor O&M costs of schemes grouped by type (urban, rural) or geographical division MWD prepares annually, and MF subsequently revises and approves 3-year 1/ forward budgets for each capital and recurrent item. Budget 1/ It is now envisaged to extend the planning horizon to 5 years.

25 ceilings are established on the basis of existing commitments, availability of foreign aid, and economic and financial considerations at the national and sector levels. While forward budgets are occasionally substantially modified by annual budgets, they nevertheless provide a major indication for the short term availability of funds. Accounting Systems and Financial Control 6.03 MWD operates within the Government budgetary system which is based on annual cash expenditures and revenues. The distinction between recurrent and capital expenditures is often arbitrary, e.g. new connections and meters are considered to be recurrent items MF has established an elaborate set of rules regarding the use of budget funds. MWD, however, has had difficulties in operating within this framework, essentially because it does not have sufficient accounting staff of the right caliber. This has affected its performance adversely with underspending of capital budget and lack of recurrent funds for O&M (para. 5.08). Newly recruited accounting staff (para. 5.09) should gradually help to solve this difficulty MWD has to follow cumbersome procedures for payments to contractors and suppliers; on the other hand, simple financial controls (particularly for fuel usage, salaries and wages, etc.), have not been instituted, resulting in misallocations of funds. The management consultants (para. 5.11), together with the Cost and Management Accountant (para. 5.09), are expected to set up financial control systems. Financial Performance 6.06 For MWD as a whole the report of the Controller and Auditor General provides the actual expenditures by budget item. These data are generally reliable. For individual schemes, however, data are unavailable or unreliable. This is essentially due to the lack of proper costing systems Annexes 19 and 20 show MWD's capital and recurrent budgets for FY , and the forward budgets. Growth of the capital budget has been impressive, from KE 6.2 million in FY1975 to K-z 33.6 million in FY1978, and an anticipated KE 46.9 million in FY1980. MWD's capital budget is now the second largest in the Government MWD's recurrent budget has also grown substantially. However, when compared with the size of facilities now in operation, the rural water supply budget has relatively declined. This is another indication that funding of O&M expenditures has been insufficient in recent years (para. 5.08) Annex 21 shows for FY1977 the initial request, approved budget, revised budget and actual results of the rural water supply recurrent account. It illustrates a major difficulty of MWD, the collection of

26 revenues. While anticipated revenues were estimated at KE 135,000, actual collections were only Kh 84,000, or 62%; this compares with operating expenses of Kb 365,000. The responsibility for billing and collection is divided. WD is in charge of meter reading; the local administration, falling under the Office of the President, is in charge of preparing bills and collecting. Payments are deposited in field offices of MF, and credited to MWD's account. Poor collection is generally attributed to: (i) lack of competent staff in field offices of the ministries concerned; (ii) nepotism; and (iii) lack of supervision. MF and MWD senior officers are well aware of the problem, and have recently prepared specific proposals to improve collections. The management consultants (para. 5.11) are also expected to assist in this area. Development in this area would be closely monitored during project implementation. Financial Prospects 6.10 WD's future financial position in respect of rural water supply depends on MF's decisions regarding budgetary allocations. During negotiations assurances were obtained that: (i) the implementation of the RWS IV would be given high priority; and (ii) sufficient funds would be provided in the recurrent budget to operate and maintain rural water supplies in accordance with O&M standards acceptable to the Bank (para. 5.09). Tariffs 6.11 The present tariffs for rural water supplies were introduced in 1971 and consist of six different scales (Annex 22). The Provincial Water Engineer (or Officer) decides on the particular tariff to be applied to a new supply on the basis of an assessment of consumers ability to pay. Normally his decision is based on income considerations as well as prevailing tariffs for nsighboring rural supplies. The existing tariffs are very low - KSh /m, when compared with ths average incremental costs of supply, which have been assessed at KSh 2 to 6/m, depending on the characteristics of the water scheme (i.e. gravity or pumping). The existing tariffs, even assuming 100% of budgeted collection, cover only 37% of direct O&M costs; taking into account the actual collection record (para. 6.09), actual revenues only cover 23% of direct O&M costs The Bank and MWD have agreed on the introduction of two-block tariffs based on: (i) ability to pay; anq (ii) economic cost of supply. Under these tariffs, a first block of 6 m would be sold at a subsidized price, while a second block would be sold at prices set at levels sufficient to recover, taking all rural water supply schemes in the aggregate, all O&M costs (excluding depreciation), starting in the fiscal year commencing July 1, The tariffs would be adjusted on December 31, 1981, and periodically thereafter, but not less than every three years. These tariffs would recognize the rural income constraint, and at the same time, limit water consumption. Introduction of new tariffs, acceptable to the Bank, would be a condition of loan effectiveness.

27 Financial Rates of Return and Subsidies 6.13 Financial rates of return, calculated for two model schemes, were 3% and -6%, based on the tariffs agreed at negotiations. The first scheme with a positive rate of return is inexpensive, technically simple (gravity) while the second is very expensive (pumping and treatment). Due to the mix of different types of schemes in the project, the resulting rate of return for the project is expected to be positive. Annual subsidies 1/ per capita range from KSh 24 to KSh 68 depending again on the characteristics of the schemes. Initially only O&M costs, excluding depreciation, would be covered in the aggregate from water revenues. Total financial subsidies are estimated at KSh 70 million per annum. This level of current subsidies is not unreasonable considering the high nonfinancial benefits (Chapter VII) If the objective of the Government to supply the whole rural population with safe water supplies by the year 2000 was to be accomplished, this would imply a capital investment of about US$900 million over the period, and a total annual subsidy in the year 2000 of about US$100 million (at 1977 prices). The economy will clearly not be able to sustain such a high level of subsidies and therefore the Government's objective is not likely to be achieved. During the implementation of this project, it is proposed to assess in detail the implications of this objective, and establish a more realistic target (i.e. postponement of the time horizon; increased recovery of costs, etc.). VII. JUSTIFICATION Institution Building 7.01 The Government has set up as an objective to provide the whole population with safe water by the year 2000; 2/ the objective is not likely to be achieved (para. 6.14). Nevertheless, massive investments are anticipated in the sector, and it is, therefore, important that it be developed on sound economic, financial, and technical foundations. It is expected that the vast majority of the future schemes will be constructed and operated by MWD. Even in the case of other sponsors (self-help, County Councils, etc. - para. 3.10), MWD will have to provide much needed expertise for planning, constructing and operating such schemes. 1/ Calculated as economic subsidies, i.e. average incremental cost multiplied by consumption minus revenues. 2/ At present about 15% of the rural population has access to safe water (para. 3.14).

28 MWD, however, is a weak institution (Chapter V). Serious deficiencies have been identified at all the levels of its operations. Through: (i) the introduction of specialized staff dealing with public relations, training and accounting (paras. 4.14, 5.06 and 5.09); (ii) the introduction of O&M standards as a basis feor the preparation of budgets, (para.5.09); (iii) the introduction of financial control systems (para. 6.05); and (iv) the strengthening of MWD's Provincial Offices (para. 4.06), the performance of MWD should gradually improve. The management consultants (para. 5.11) would assist particularly in the areas of organization, management, staffing and financial control Greater emphasis will, in the future, be given to the economics of rural water supplies. Thus schemes in RWS IV will be designed after the least cost solution to meet anticipated demand has been identified (para. 4.08); the agreed tariffs (para. 6.12), will permit recovery of all the 0&M costs, as compared to a very poor performance in recovering these costs at present (para. 6.11). Analysis of Benefits 7.04 RWS IV will provide safe and reliable water to about 1.1 million people, whose average per capita income is estimated to range between US$110 in high potential areas to less than US$50 in low potential areas The benefits expected from additional water will vary from scheme to scheme according to the existing situation with regard to water availability and the economic potential of the area. The main potential benefits are threefold - the amenity benefits, sometimes referred to as social benefits, the health benefits and the production benefits including grade cattle breeding and garden watering. Amenity benefits consist of the supply of convenient, reliable and safe water resulting in a considerable relief from the daily drudgery of the traditional Kenyan woman and from the hardship suffered by the population and livestock in the drier periods. These benefits will always materialize, to a greater or lesser extent. Production benefits, however, will only be taken advantage of where there is a true potential for development, i.e., dynamic agricultural extension agents, progressive farmers, efficient cooperatives, availability of credit, etc. If they do materialize, these will help transform a population stagnating at subsistence levels into a group of relatively afieluent food producers. Amenity benefits and production benefits tend to balance since plentiful water, implying lower amenity benefits from piped water, is associated with higher economic potential and vice-versa. Health benefits would consist of reductions in water-related diseases including diarrheal clisease and cholera. However, the relation between reduced incidence of disease and the provision of piped water has not yet been fully demonstrated because health benefits are difficult to isolate; resistance to water-related diseases is also enhanced by improved nutrition (milk from grade cows, vegetables from gardens, etc.) and improved general health conditions (calories saved, time released for better cooking and child rearing practices, etc).

29 It is extremely difficult to quantify the benefits of providing rural water supply, but available evidence, acquired through the analysis undertaken by the mission in a particular village chosen as a case study indicates that the rural water supply is well justified in terms of sufficiently high rates of economic return. Risks 7.07 Most of the risks associated with this project are related to MWD's ability to plan, construct and operate rural water schemes satisfactorily. In order to reduce this risk, MWD has since 1977 already taken a large number of steps, i.e. appointment of management consultants, introduction of O&M standards, upgrading training programs, embarked on the rehabilitation of certain systems, etc Substantial other risks include the ability of MWD together with MF and the Office of the President to carry out effective tariff policies and collection methods and implement improved O&M procedures. The implementation of financial control mechanisms, an accelerated training program and other items in the program of management consulting services (para. 5.11), combined with the recruitment of additional trained staff should substantially reduce these risks Despite these risks the project deserves Bank support because of the high priority given by lower income groups in the rural areas of Kenya to the provision of safe water supplies. MWD has proved to be the only institution through which the sector can be soundly developed at present on a meaningful scale; since substantial investments are anticipated in the sector, it is important that these funds be well used, and the benefits of new schemes materialized as anticipated. VIII. AGREEMENTS REACHED AND RECOMMENDATION 8.01 The following agreements have been reached with the Government: (i) MWD will create a RWS IV Monitoring Unit by April 30, 1979 (para 4.13); (ii) The Government will finance 25% of the project's cost in addition to custom duties and taxes (para. 4.17); (iii) MWD will present to the Bank consultants' selection and contracts for approval prior to signature of the contracts (para 4.19); (iv) qualified accountants will be posted at all provincial offices of MWD by April 30, 1979 (para. 5.09);

30 (v) MF will provide sufficient funds to MWD to meet the O&M standards of the existing schemes and those to be taken over (paras and 5.10); (vi) the Government will ensure that MWD is provided with adequate staff and financial resources to carry out any new development program undertaken by MWD until the project is completed; (vii by April 1 of each year, MWD will present to the Bank for approval the yearly project implementation programs (para. 4.13) and the detailed program of implementation of management consultant's proposals (para. 5.11); (viii) MWD's accounts will be subjected to an independent audit and the auditor's report will be sent to the Bank within six months from the end of each fiscal year (para. 5.13); (ix) implementation of RWS IV will not be affected by arbitrary budget cuts based on unrelated considerations (para. 6.10); and (x) MWD will introduce two-block tariffs, and will periodically (but not less than every three years) revise the tariffs to permit recovery of the O&M expenditures on all the water supply schemes as a group (para. 6.12) It was also agreed that, as a condition of loan effectiveness, MWD will: (i) appoint a Program Coordinator (para. 4.13); (ii) appoint a Training Officer (para. 5.06); (iii) appoint a Cost and Mlanagement Accountant (para. 5.09); and (iv) introduce new tariffs acceptable to the Bank (para. 6.12) Bank approval of relevant feasibility studies (para. 4.09) would be a condition of disbursement The proposed project: is suitable for a US$20 million Bank loan on standard terms for Kenya.

31 ANNEX 1 KENYA RURAL WATER SUPPLY PROJECT A. Population by Provinces and Population Density a! PROVINCE Land area - km 2 Pnpulation Density Population Density Population Density Population Density thousand per km 2 thousand per kmy thousand?er km 2 thousand per km 2 Central 13,173 1, ,C , , Nairobi , ,300 1,140 1,670 Coast 83, , , , N. Eastern 126, Eastern 154,000 1, , , , Rift Valley 170,000 2, , , , Nyanza 12,525 2, , , , Western 8,223 1, , , , a=s =- = n - A -- _.. _=_ TOTAL 569,249 10, , , , =s_=_ -.., ---- t..,_ l,_ n s-- 5- a/ Land only; in addition, water covers 13,300 km 2. july 1978 B. Population Projection (thousand) Urban 1,113 1,499 2,021 2,717 3,643 6,421 Rural 10,134 11,752 13,667 15,888 18,459 24,599._..S a. s._se... =.. _ a = ssse TOTAL 11,247 13,251 15,688 18,605 22,102 31,020 5=ns 5 5 usa-se ---- ma=-s = e_sin se-=s Sources: Kenya Statistical Abstract 1975 IBRD Population Projections in member countries.

32 ANNEX 2 KENYA RURAL WATER SUPPLY PROJECT Potential Agricultural Areas Rural water supply schemes selected for feasibility studies are categorized by WD's Planning Section into high, medium and low potential areas devised as follows: (i) high-potential agricultural area - covers about 70,000 km 2 and is generally characterized by an annual rainfall of more than 1000 mm. The agricultural potential of the zone is high, particularly in the highlands; it is characterized by extended cash crops and intensive livestock husbandry; (ii) medium-potential agricultural area - covers about 80,000 km and is characterized by an annual rainfall of between 500 mm. and 1000 mm. The zone contains most of the large-scale mixed farming areas. Important crops are maize, wheat and barley; in smallholder farming can be found cotton, groundnuts and oilseeds; livestock can be kept intensively or on natural grazing; 2 (iii) low-potential agricultural area - covers about 420,000 km is characterized by an annual rainfall of less than 500 mm. Besides large scale ranching the smallholder farms in this area are oriented to subsistence crop only. It inclvdes particularly all of Northern Kenya (about 120,000 km ) where the erratic rainfall is the cause for nomadism. July 1978

33 ANNEX 3 KENYA RURAL WATER SUPPLY PROJECT A. Rainfall Distribution in Kenya Average mm/year % of Land Area Average mm/year % of Land Area , ,000-1, ,500-2,000 2 B. Drainage Areas Mean Annual Thous2nd % of the Run-off % of the No. Drainage Area km Total Area millions m 3 Total Run-off I Lake Victoria , Rift Valley Athi River , Tana River , Ewaso KENYA Lake Victoria catchment comprises the whole of the area west of the Rift Valley draining into Lake Victoria and Lake Kioga by numerous rivers. 2. Rift Valley catchment is an area of internal drainage discharging into Lake Turkana in the North and Lake Natron in the South. Within this area there are several sub-drainage areas discharging into a number of smaller lakes. 3. Athi River catchment comprises the southern part of the country east of the Rift Valley draining the southern slopes of the Aberdare Range and the flanks of the Rift Valley to the south to form the Athi River which in its lower reach is known as Sabaki (or Galana) and discharges into the Indian Ocean. An important contribution to the flow in the lower reaches is provided by the Tsavo River. 4. Tana River catchment drains the eastern slopes of the Aberdare Range, the southern slopes of Mount Kenya and the Nyambeni Range, and discharges into the Indian Ocean. This is the largest river of Kenya. 5. Ewaso-Ngiro 1/ catchment comprises the northern slopes of the Aberdare Range and Mount Kenya. The river continues to the Lorian Swamp which is the end of its normal flood flow. In exceptionally wet years the flow continues up to Somalia. Source: Water Department July / In lower reach known as Dera River.

34 ANNEX 4 A. Urban Water Supply - Loans KENYA RURAL WATER SUPPLY PROJECT Foreign Financing of Water Development Projects From 1964 to 1976 Year Amount US $ Million Financing Project Agreement Currency in Million Equivalent Agency Nairobi, Sasumua Dam 1964 US$ US Aid Mombasa pipeline 1967 Isr.E Israel Nairobi water supply 1970 US$ IBRD (714 KE) Naivasha - Suswa water supply 1970 fstg U.K. Nakuru water supply & sewerage 1973 DM KfW W. Germany Kisumu water supply & sewerage 1974 DM KfW W. Germany Mombasa & costal water supply 1975 US$ IBRD (1167 KE) Mombasa & costal water supply 1975 DM KfW W. Germany B. Urban Water Supply - Grants SUBTOTAL 68.8 Minor urban water supply 1974 Norw.Kr Norad C. Rural Water Supply - Loans Rural Water Supply I-a 1970 Sw.Kr SIDA Rural Water Supply II-/ 1972 Sw.Kr SIDA Isiolo Range & Water Development 1974 Can.$ CIDA D. Rural Water Supply - Grants SUBTCTAL 12.1 Rural Water Supply III 1974 Sw.Kr SIDA E. Equipment and other Loans Vehicles 1973 Jap.Yen Japan Banks Drilling equipment 1974 DM KfW W. Germany F. Equipment and other - Grants SUBTOTAL 1.7 National Water Master Plan 1974 Sw.Kr SIDA Drilling equipment 1975 DM KfW W. Germany Drilling equipment 1976 tstg U.K. SUBTOTAL 6.0 a/ These two loans were subsequently converted to grants. Source: Ministry of Finance July 1978

35 ANNEX 5 Page 1 of 4 KENYA RURAL WATER SUPPLY PROJECT Selection of Water Schemes for the RWS IV 1. The RWS Program is one of the Governmental programs to develop rural water systems. Within MWD itself the Range and Ranch Water Programs are providing water to nomads and their cattle. The Ministry of Agriculture has a livestock water program, which helps supply stock owners. The Ministry of Lands and Settlement has an extensive settlement program which includes water supply systems for settlers. In addition, self-help activities with or without Government's support, are developing new water schemes in many parts of the country. 2. Among all these development programs only RWS is not tied to a specific activity or location and therefore requires definite selection criteria which would help to establish a degree of priority between potential schemes. When the RWS Program was introduced (1970) MWD decided that RWS funds would be distributed equitably to each district to avoid the possibility of eventual preferential treatment of any particular area or tribe of the country. The distribution of available funds is based on the number of population with no improved water supply in each district in 1970, adjusted by allocations already made under previous RWS stages. Practical implementation variables such as the influence of the optimal size of the scheme, and unequal cost-per-head of schemes' technical solutions, make it difficult to adhere to this principle in each stage. The balancing of inevitable differences between equal-theoretical and unequal-practical distribution of funds is checked and corrected in every subsequent RWS stage. 3. At the district level the selection procedure involves a planning process where DDCs formulate water supply projects in the districts and select priorities. Each Committee, chaired by the District Commissioner, comprises members of the administration, district's heads of Government Departments and representatives of the population. The project requests from different communities are channeled to DDCs through Location and Development Committees. DDCs review project proposals listed with basic non-technical information and assign priorities. The procedure of assigning priorities, i.e., the selection procedure itself, involves the application of several criteria, which may be complementary or conflicting. In the end it is a result of an amalgam of the following economical, social and political factors: (i) need - replacement of the existing polluted sources or a reduction the walking distance to the source and increase in its reliability in dry season are considered fundamental;

36 ANNEX 5 Page 2 of 4 (ii) enthusiasm - the general attitude of the population and level of contributions to all development projects in the involved area is given a major importance in assessing the interest in improved water supply; (iii) equity - all existing and planned development activities should be, as much as possible, equally spread among all areas in a district; (iv) potential benefits - improved livestock, irrigation of vegetables, etc., have recently been considered as a selection parameter in high potential areas, with well developed agricultural infrastructure; (v) political influence - some Members of Parliament exercise their right to sit in on DDC meetings and support the interest of their constituents. 4. Priorities for Government financed schemes are set according to districts' development strategies. A project considered important by a Location Development Committees (or Water Association) may rank low in terms of district priorities. Therefore a willingness to contribute to the project in cash or kind has not been used as a determining selection factor; however the peoples' enthusiasm for a water scheme was given particular emphasis as the Government did not wish to force schemes on unwilling recipients. 5. Following the selection process a list of schemes for each district ranked in order of priority is submitted to WD, which on this basis prepares a preliminary pre-development study for each scheme. Each study consists of assessment of present and future population, determination of limits of supply, assessment of possible water source and cost estimates. Should the first scheme in the priority list prove unfeasible for technical or financial reasons a second selection is considered and the proposal is referred back to the DDC. 6. The construction cost of RWS IV of about KSh 350 million was proposed by WD in relation to the long-term Program plan; this amount has been distributed to each district. In the process of the adjustment certain districts were found to have had excessive allocations in previous stages namely Nyeri, Lamu, Embu and Marsabit, 1/ and are excluded from this stage; similarly Machakos district, where rural water supply forms part of a separate 1/ The previously carried out projects showed very high cost parameters, and therefore Lamu and Marsabit districts were later included in RWS IV with appropriate allocations.

37 ANNEX 5 Page 3 of 4 rural development program, presently under preparation, is excluded. Also the allocation to all North Eastern Province districts is lower because of substantial water investment under the Livestock Water Program. The distribution of RWS IV funds appears at page 4 of this Annex. 7. The priority selection would be verified during the preparation of each scheme's feasibility study. 1/ The study would, through preparatory meetings with involved population, check the determined interest of the majority of population in the improved water supply, and assess the number of individual connections for which applicants are prepared to make immediate preliminary financial commitments and for which applicant may be interested in the future. It would also assist the population in forming communities interested in CWPs. Finally, the meetings would be used to explain applicable tariffs, assess the population willingness to pay for water after the scheme is in operation and agree payment procedures and suitable collection calendar. 8. If the study finds the population's attitude to one or more of these important aspects indifferent or even negative, the further processing of the preparation would be stopped and the selection reconsidered with DDC's. The meetings would be held with the local leaders, sub-chiefs, chiefs, assistant district officers, etc., and area population; the meetings would be arranged by the study's engineer in cooperation with the Public Relations Officer of WD. 1/ Terms of reference appear at Annex 7.

38 ANNEX 5 KENYA Page 4 of 4 RIJRAL WATER SUPPLY PROJECT Distribution of RWS IV Construction Funds Central Percent of RWS I- Allocation Corrected Adjustment Allocation of Final national I - III plus cr allocation for KSh.400 million Adjustment rural capital minus for RWS IV negative KSh. '000 population allocation district unserved X Calculated Final in 1970 Kiambu ,350 5, Kirinyaga ,200 9, Muranga ,150 21, Nyandarua , Nyeri , ,800 59, Coast Kilifi ,700 8, Kwale ,650 6, Lamu , Taita Taveta ,150 4, Tana River ,400 1, ,250 26, Eastern Embu , Isiolo , Kitui ,150 19, Machakos , Marsabit , Meru , ,500 59, North Eastern farissa ,400 1, Mandera ,150 2, Wajir ,950 2, ,000 6, Nyanza Kisii ,000 30, Kisumu ,500 15, Siaya ,750 12, South Nyanza ,250 27, ,500 84, Rift Valley RRrin,O ,050 1,70n 0.0 Elgeyo Marakwet ,350 6, L'a(iAdo 0.8 0, ,150 2, Kericho ,900 45, Laikipia ,150 12, Nakuru ,950 8, Nandi ,400 9, Narok ,600 1, Samburu , Trans Nzoia ,300 9, Turkans ,700 7, Uasin Gishu ,750 9, West Pokot o.e , , Western Bungoma ,100 3, Busia ,450 11, Kakamega ,000 30, ,550 44, Source: Water Department July 1978

39 -31 - AWNE 6 WEAL WATER SUPPLY PROJECT Llt.t of atter Schee ~ISTRICT SCHEME COOT ESTTEOTS- 100~~~~~KS 1000 GEnERAL imowitei mpotential - ESTIMATES PPULATI00 WATER 02E1AND POSSIBLE W&TER SOURCE e'/.say Iteob,, C-t-oo Proince ~~Batho ItI SgE5 I inrtdee dcc cud tret- 0 17,000 26,000 Boo 1,500 Oct61 River 5,500 nt, Stage II abo- 201 of tho fe1as.ohece dleonbatos Klrivpyog. Ococt Sta" I inoloda Intake ae ehon E 15,000 23, ,000 S-tfece mir0 000 SOT o,f the focl sha Moreoco ~~Kig- 10 Stag I,ioIdoe intake, Stoat 00 i 00,000 27, ,400 So-fe- oce.500 Ehont 201 of td. Steal ohecee diettlb.tioc cyct Reandaro Kitten p- Too..horehoOccict, ort to n 01,000 16, ,000 Groud ctet 13 DO0 ociocehc-i.no,ot hr drille.:. tilifi 8-b.h-Vitengc1 Oche oy.toitaioo nor to Eooottoo. Ottoogosot N8,000 12,000 Oat cet. Not idat-ifi.d 50 Cote... olghb-tio Io-titOt Bach.. 0 5,000 t.000 Oat -e. Not Idn-otltd 3 50 Koc1e KiAo...i Co.t. too f c dc for tho 0 16,000 Sot eel. Sot ect. Rot id-oiftld Lea Lcho totyaltt 1 Sottiesett.. b-e, Stago I 0 6,000 9, Lce Eroyatto, dltltioe,t -yct -d Tato tivot DtAo.. StbhMe f-to village end tde L 500 1, Sot ide.tified einr it dry pettod. Ki-i Mettoysol II Otege I toecdcc, t-eot and 5 10,000 15, trfcco wate ehoot 501 of n final -oh-'. licreablo DorAcca Ott~~ 1 t 4 tr xtilhfe d o.de L 200 1, Sholowwel1I 0 Ged-a St.b-. Ln for villaga ad onde L 600 2, G-ood valt- 800 ocdiitcln dr period. al.th. Sth Lc for village end ode L 200 1, Shallow wits I 00 tecto to dry period. Holgsbo Oh IeSovill.ge cod ude L. 1, Oat.tet-ctd Sot ideotitted 1,300 toning in dry period. OardeElo Sthe O for vileac cd,,de I. 1,E00 1,500 SoS.ceit.td Eolo-it -horhlo 000 tinv to dry perid. Mavdeva ~~Taab. S.he.e1ft.. Jill-aAelj tmde L 1,000 1, Not ido-iftfld 330 D-me sthev J. for vilage and to-do L Sot -a -tttd Not idattifted aecic to doy pe-ld. oajlr tlao~.daki Soha L. tor village cci.ede L Not ctteitd Sot idortifiod g in dry penidi. Rvenca P-oo..t thovtf R ra thece Is to illag Ro neda L , Shallow wells 1 30 t_iv to dry perid. Soot NY...c Mioogi XdiAtr Sthe in tar viilag end ou- 6,600 10, trood wae 500 Mcct got- Stare I and 00 twa i.ltta, H Plod Stage rh.apo III tra-t ed pert ef diotribo- 12, Lak, 0Vi-toli 500 Ilgeyt Starcwet l.o tvetel... o-f coistleg eyet o 2,000 5, Gtocd ouei 300 laftinas aon t 1 it0g I mniciec ineam., 15,000 25, tura- u- o trecust -d 61 ef dl~ib.tihsl Nakaro lehen"ti to- e.. A vtllep on0-10, Sot idolitto.d sbk" S'_oy t fee a vitlag ci 0 3,000 5,000 too 250 Not idootif ted ~~l Re.a-Na,WareA Syfl4 to Ear e vlbeg end S10,000 15, Sot Idetifttd r Towes-Seato n1~~~~~~i SyoS- i. for a enemt 16,000 24, ,200 Sot ideotifiod ysetin ce~kw Sol_c le far villge -d -sdi L, 1,000 2, Shel1by ooll I 530 alas, En ivy perid. Earto Villa".c Sob f.c to ilag cad vade L 1,500 2, tot idr.ttifid I 330 -tent in dry period. L.kitcooa sthee is for.lgecd o.ada L. 5,000 7, Sot idootifled ceitt ES dry period. Neucak irhootic for oljjaga cod oondo L Sha11oo oc11t 1,300 coio to dy period. EoooonO Songem oral I Sta I I -oet ittabe thaco 5,000 8, to-fa- ae.0 cod per of dti-ittb-iw eyet- Mbcle Ill Otcgoe I Vnd 01 -oo i.ttkh, -ttctet end nib loo-e: H Boo 1, Ednav Ether 600 ;--tc:14.eitt-; 0' T- a ~P--ette Afa 21 Coet cebeeit Jaoost 1979 Prt..c O Wrt Ota J.t, 1370 Bopartflot

40 ANNEX 7 Page 1 of 2 KENYA RURML WATER SUPPLY PROJECT Terms of Reference of Feasibility Studies The selection of water schemes is based on priorities made by the Provincial and District Development Committees. The Water Department provides at this stage reconnaissance/desk studies, identifies area of supply and prepares preliminary cost estimates. The consultants will receive this overall introduction together with the terms of reference before commencing the study. The consultants will work in close cooperation with the Water Department staff. Chapter 3, in particular, will be finalized only after it is approved in draft by the Planning Section. Chapter 1 Background Information 1. Geographic Background: area, topography, climate, geology, hydrology, etc. 2. Population Assessment: present population, expected growth rate, future and ultimate population, land carrying capacity, centres, institutions. 3. Economic Background: major crops, livestock, industries, crafts and wage employment, cash income, seasonal pattern of cash availability, etc. 4. Potential for Economic Development: existence of cooperative, caliber of extension agents, availability of credit (including credit for individual connections) existence of progressive farmers, existence of development projects, self-help activities, etc. 5. Existing Water Facilities: traditional sources and existing water works (with maps and drawings) sources, structures, number of individual connections, number of stand pipes, pipelines, water quality, total production, consumption and leakage, population served by the various sources, etc.). 6. Existing Demand Patterns: peak demand, walking distances to sources, water use at the source including livestock consumption, amounts carried home, existence of water carriers and their tariffs, consumption of institutional consumers, etc. 7. Existing Water OrganiLzations: operation and maintenance procedures, manpower situation and requirements, breakdown of direct cost of service, present water tariffs, billing procedures and financial results over the past three years, list of major assets (original and depreciated value). 8. Existing Sanitation and Hygiene: type of sanitation in residential and institutional premises, general health level, incidence or water-borne disease, proposals for improvements to achieve minimum sanitation standards in conjunction with the proposed water supply, etc.

41 _ 33 - ANNEX 7 Page 2 of 2 Chapter 2 Marketing Study (will be done in cooperation with the Water Department and supported by local meetings with the leaders and future users) 1. Willingness to Pay: past and present revenue collection record, and assessment of the population preparedness to commit funds at time of meetings. 2. Proposed Strategy: analysis and acceptance by the users of proposed standard of service, proposed tariffs, proposed revenue collection procedures and enforcement measures. 3. Demand Forecast: verification with the users of forecast for periods of 5, 10, 15 and 20 years by consumer category and type of use for the proposed standard of service. Chapter 3 Proposed Project 1. Existing Facilities: proposals for improving and upgrading existing water supply facilities, to optimize their use, and reduce wastage and leakage. 2. Alternative Sources: identification and evaluation of existing and alternative future water sources, with due regard to appropriate technology, time estimates for their development, recommended investigations, surveys and measurements (with detailed time and cost estimates). 3. Project Description: based on the results and data for the least cost solution as obtained in previous investigations, 1/ alternative of phasing, construction schedule and cost analysis, exact definition of supply area, etc. 4. Operation and Maintenance: detailed description of satisfactory operation and maintenance procedures with cost estimates and additional staffing requirements in all categories, level of inventory, type of transport, etc. 5. Financial Projections: year by year projections consisting of source and application of funds, income statements and balance sheets and extending at least two years after expected completion of the water scheme with all supporting assumptions (water produced and sold, expected tariffs, consumption of fuel, etc.). 6. Average Incremental Cost: will be calculated on the basis of the above projections of costs and water consumption. 1/ A separate preliminary report may be required if extended field investigations would be expected. July 1978

42 ANNEX 8 Page 1 of 4 KENYA RURALI WATER SUPPLY PROJECT Design Procedures and Main Design Guidelines 1. The Project's engineering preparation would require two principal changes from present routines. The first change concerns the feasibility studies. The old format of the feasibility studies was very simple, mainly descriptive. The feasibility studies required for the Project would be more extensive, and much more detailed in hydrology and hydrogeology for selecting a water source; besides technical aspects of proposed least cost solution they would analyze the economic background of population. Through promotion/ marketing investigation they would also assess the population requirements concerning supply standards and willingness to pay for water during system's operation. The terms of reference of feasibility studies are shown in Annex 7. The second change concerns the stages of design preparation. The designs were previously prepared in preliminary and detailed design stages, where the preliminary design, based on the feasibility study of the old type, was expected to analyze possible technical alternatives and recommend, and often include, additional investigations concerning hydrology, hydrogeology, soil conditions, surveying and mapping, chemical analysis and others. The detailed design was then prepared for a selected alternative. The new design documentation would require the investigations and evaluation of possible alternatives, all to be prepared in the stage of the feasibility study except, probably, the surveying. The detailed design could proceed immediately after the feasibility study of the scheme is approved. The survey, if required, should be made during the detailed design. In particular cases, when extended field investigations would be required, a feasibility study may be split into a preliminary report consisting mainly of a descriptive part and a final report, which would describe the proposed scheme's solution on the basis of detailed investigations. Also, in cases when a need is substantiated, particularly in schemes with complicated distribution systems, a preliminary design analyzing possible alternatives to a bigger detail may be prepared. WD would decide on the preparation of design in each case during the feasibility study stage. Schemes with advanced technical documentation could continue with further processing only after the analysis of population's economical background and investigation of required standard of service and population's willingness to pay for water during scheme's operation would be completed and approved. 2. The schemes' studies and design would be prepared by WD's Planning and Design Division either through department forces or through employment of firms of consulting engineers. The preparation and/or approval of feasibility studies is a responsibility of the Planning Section of the

43 ANNEX 8 Page 2 of 4 Division, while all design stages are a responsibility of the Design Section. In principle, both sections would concentrate the departmental forces on execution of smaller schemes particularly those planned to be constructed by departmental direct labor' (force account); therefore these studies and designs would be simplified. The design would consist of a short report, drawings, list of materials and costs estimate but would not include specifications and bills of quantities. Feasibility studies and the design of major schemes would be prepared by firms of consultants. 3. WD requires each consultant to be registered, which entails a local operative office, appropriate staff, experience and a registration of one employee as a qualified engineer under the Water Act by the Water Appointment Board. The Division provides regular monthly supervision of consultants' design progress, during which it advises on design and approves particular design decisions. 4. All studies and designs prepared either by WD or by consultants would follow the design guidelines 1/ containing compulsory instructions, recommendations and other technical data, calculation diagrams and checklists of investigation activities. The compulsory instructions concern primarily population projections, consumption rates and variation, water quality, service pressure, and design periods. Possible deviations from these instructions and parameters should be approved in each case by WD. 5. The values of design parameters are related to the agricultural potential quality of the scheme's location, i.e. to the economical position of population. For the purpose of determining which design parameters are applicable in a particular scheme, the scheme first has to be categorized by WD into one of the potential agricultural areas shown in Annex The design guidelines comprise the following compulsory design of rural water systems: (i) population projection - should wherever possible be based on physical development plans. Where no such plans exist the following growth rates are applicable: 2% per annum in low, 3% in medium and 4% in high potential area. (ii) consumption rates - population and livestock in a design area is supplied by individual connections (IC), CWP, kiosks, and cattle troughs. The following basic consumption rates are to be used: 1/ WD's Design Manual.

44 ANNEX Page 3 of 4 Type of Consumption Unit Design Quantity Individual Connection CWP/Kiosks Persons litres/person/day 50 Grade cattle litres/livestock unit/day 75 Persons litres/person/day 25 Grade cattle litres/livestock unit/day 50 The number of population expected to use water from the system, and the number of ICs and CWPs would be assessed through detailed investigation of consumers in the supplied area during the feasibility study stage. However, the following general principles should be considered. CWP should not serve more than about 250 persons per tap; the walking distance to CWP should be maximum 1 km in high and 3 km in medium potential areas; minimum distance between CWP should be about 0.5 km; no CWP should be located within the market or rural center. (iii) consumption variation and storage - the peak factor for areas served by ICs varies between 1.8 and 10 for population between 2000 and 10. The factor may be reduced where individual storage is provided. For bigger number of population the design would investigate and demonstrate the suitability of the factor used. CWP and kiosks should be designed for 12 hours continuous flow of 10 1/minute for each tap. The overall storage volume would balance only peak variations; no provision would be made for the system's breakdowns or for fire fighting. (iv) water quality - the physical and chemical quality is recommended to be at least in accordance with maximum permissible levels published by WHO. 1/ Where it is economically impracticable to supply water to the consumers through a piped distribution network and where reliance has to be placed on individual wells, 1/ International Standards for Drinking Water; World Health Organization, Geneva 1971.

45 -37 - ANNEX 8 Page 4 of 4 bores and springs, the standards may not be attainable. From a bacteriological point of view, everything possible should be done to prevent pollution of the water particularly by proper protection of sources. When surface water, treated or untreated, from an unprotected river, reservoir or lake is used as a source of supply it should be disinfected, preferably by chlorine. (v) service pressure - should not exceed 6 kg/cm 2, except where undulating terrain makes it necessary to allow up to 15 kg/cm 2. A minimum pressure of 1 kg/cm 2 should be maintained during peak conditions. (vi) design period - recommended to be 20 years (ultimate demand); structures such as treatment plant and reservoirs, and also trunk mains could be in bigger schemes designed for a shorter period, preferably for 10 years (future demand). Economic consideration should form the basis for feasible phasing of the implementation. 7. A number of technical parameters, procedures, ways of calculation of particular parts of the water system, selection of construction material, etc., are recommended by WD and included in its Design Manual; repeated structures as storage tanks (size from 10 to 100 m 3 ), CWPs, valve chambers, fences and gates, staff houses, office-stores, septic tanks, etc. were also prepared by WD in form of typical drawings and both the drawings and the Design Manual would be used by the design engineers in the process of design. Starting from the RWs IV Program the design engineers would also discontinue the current practice of using different national standards and change to standards of the International Standards Organization (ISO). Any deviation from this new practice would have to be approved by WD. July 1978

46 38 - KENYA RURAL WATER SUPPLY PROJECT Implementation Schedule ANNEX ' 1978/ / / / / /84 I I II IIIj IV -I I I IV I IIJ IF IIIV ]73RHi - iv j I I I Matinyani 'M I Ia m sii I I I I - Bamba-Vitengeni - aaawaas WIm II - M Marmanet _ A mmmiii I mmmiii W_ Kargung-Kapkorok laa mmmm_. a a v Naivasha-Longonot v.a e sammli l l :- - Bungoma Rural I raiii I i Ganze r _ mum i A _ Kikoneni '_ *mmmmmmmmmpt{, _ - a Wanguru Mbale III ' a miiiva i m_ mummmmmu _ - _ - Mirogi Ndhiva _ Iimmmmisrll c _, - Kigumo 1 iiii I _ m,i - Lake Kenyatta V iijiiiis iisii ie _ Gedoma _ Imwi n I I I I I z 5 - L Takaba _t_ljlov a aa.aayz Wardeglo L mii s a l Lekwa L _ mmmiil a s. a Subukia _d_imip'. m m i i _ Durkana 1inr'w. mmiii. 1 Hulugho PI'dU.iUiP' miii Khorof Harrar rai IJ I I I I * I i _ Cherangani Fr mimma 2 mi ianif1ar1 Kakuma _aaa _ West Karachuonyo III w mm a i i x Kerio Village - iiii.ii'.w4up Lokitaurng I mm_ I I I a a v 'A O ^ Namadak _. Kalacha _ " w' _ Handaki i mii a a_ Damasa r_ **samong - - Dukanotu mjmi.- au Bathi III 1WA_ C _- - Bahati i _i mm... m.. m_.m Key -A_ Feasbility Study Construction miimima Design m M E Maintenance PWIAVAA Tendering World Bank

47 KENYA ANNEX 10 RURAL WATER SUPPLY PROJECT Schedule of Presentation of Feasibility Studies and Detailed Design Date by which Feasibility Study is to be furnished to the Bank December 1, 1978 Name/Location of Water Scheme 1. Matinyani 2. Bamba-Vitengeni March 1, Marmanet 4. Kargung-Kapkorok July 1, Naivasha-Longonot 6. Bungoma Rural 7. Wanguru December 1, Mirogi Ndhiwa January 1, Kigumo 10. Lake Kenyatta March 1, Cherangani July 1, West Karachuonyo January 1, Bathi III March 1, Bahati Date by which Feasibility Study and Detailed Design are to be furnished to the Bank March 1, Mbale III March 1, Ganze 3. Kikoneni July 1, Gedoma 5. Takaba 6. Wardeglo 7. Lekwa 8. Subukia 9. Durkana 10. Hulugho 11. Khorof Harrar January 1, Kakuma 13. Kerio Village 14. Lokitaung 15. Namadak July 1, Kalacha 17. Handaki 18. Damasa 19. Dukanotu

48 -40 - ANNEX 11 Page 1 of 2 KENYA RURAL WATER SUPPLY PROJECT RWS IV Monitoring Unit 1. The implementation of the Program would be a complicated task, considering the number of water schemes (65), the different procurement regulations of the various financing agencies, total financial volume and given implementation period of five years. RWS IV is now at a preliminary stage of preparation and MWA) would require for its orderly implementation the elaboration of detailed annual plans and close monitoring devices. 2. The monitoring system would be set up by the RWS IV Monitoring Unit (MU) and use one of the modern planning techniques; MU would be headed by the Program Coordinator responsible to the Deputy Director-Development, and would have direct contacts with all WD's Divisions and Sections involved in RWS IV implementation; it would have no direct management authority. 3. Monitoring of RWS IV is understood to consist of the continuing assembly and analysis of information which would: (i) allow coordinatiorn of RWS IV activities in different sections of WD; (ii) facilitate operational decisions by WD's management at all levels; (iii) allow comparison of actual and predicted RWS IV performance; (iv) keep MWD and financing agencies informed of RWS IV progress; and (v) allow coordination of different financing and procurement requirements of aid agencies. 4. The methodology for collecting, analyzing and presenting monitoring data to WD's management would be the responsibility of MU. The selection of techniques and parameters should be guided by the following aspects: (i) monitoring data must be available on time and with sufficient frequency to assist management in coordinating and running RWS IV;

49 ANNEX Page 2 of 2 (ii) analysis of data and reporting to WD management should be a simple routine operation, preferably made by a computer; and (iii) user and purpose of any collected and reported information should be clearly defined in advance. 5. The design of data collection for RWS IV monitoring should recognize, that the principal objective is coordination of mutual timing of: (i) preparation of schemes' feasibility studies; (ii) water sources investigation; (iii) preparation of market studies; (iv) preparation of design by consultants and WD; (v) tendering procedures; (vi) construction by contractors and by WD; and (vii) procurement of material for construction and strengthening of operation and maintenance capacities in Provinces. 6. The annual plan should form a basis for preparation of the budget in appropriate heads for a particular financial year and should help WD to reduce the mid-year budget variations to a minimum. It should also initiate timely preparation of trained manpower for operation and maintenance of completed schemes. July 1978

50 - 42- ANNEX 12 Page 1 of 2 KENYA RUALk WATER SUPPLY PROJECT MINISTRY OF WATER DEVELOPMENT Job Description - Public Rclations Officer Background 1. The public relations officer should have at least a B.A. in sociology or economy, preferably in both. He should have at least five years experience in the field of rural development in Kenya including close contact with the rural population. Scope of Work 2. The office of the public relations officer would be located in Nairobi but the job would require frequent field visits. He would be part of the Operation and Maintenance Division of the Water Department but would have numerous working contacts with the Development Division. 3. The public relations officer would be responsible for marketing and promoting MWD services and for establishing satisfactory relationships with consumers on rural water supply schemes. 4. The public relations officer should be in close contact with consultants from the preliminary investigations up to the feasibility study for all projects. He should brief, advise and support them with regard to the marketing aspects of the study and should give his final clearance to the marketing chapter of the feasibility study. Detailed actions would include: (i) issuing updated guidelines for co'summe relations studies; (ii) participating in the dialogue with consumers (meeting with chiefs and subchiefs, barazas, individual interviews, etc.); (iii) explaining MWD tariff policies and revenue collection procedures to the consultants and reviewing their proposals before they are submitted to the consumer.

51 -43 - ANNEX 12 Page 2 of 2 5. The public relations officer would be responsible for encouraging sound water consumption for domestic use as well as for commercial use - specific tasks could include: (i) initiation of health campaigns specifically geared to basic hygiene in relations to water use; and (ii) initiation of projects using piped water such as grade cattle breeding, etc. July 1978

52 ANNEX 13 KENYA RURAL WATER SUPPLY PROJECT Prolect Costs Estimate 1. Water schemes: materials and construction Local Foreign Total Local Foreign Total ---- KSh million US$ million---- Equipment, Pipes and Specials Civil Works Engineering Feasibility Studies & Design Supervision of Construction Preparation of RWS V Strengthening MWD O&M Equipment Training School Equipment: Direct Labor Equipment Buildings Technical Assistance Management Consultancy Services Contingencies Sub-total Physical Price Increase Total Expected Cost of the Project (i) including taxes (ii) net of taxes July 1978

53 KENYA ANNEX 14 RURAL WATER SUPPLY PROJECT Phasing of Expenditures 1/ (in KSh million) 1978/ / / / / /84 Total 1. Schemes Construction Pipes and equipment; Base Costs Physical Contingencies Price Increase Sub-total Civil Works; Base Costs Physical Contingencies Price Increase Sub-total Engitteving Feasibility Studies and Design Supervision of construction Base Costs Physical Contingencies Price Increase Sub-total Preparation of RWS 7; Base Costs Price Increase Sub-total Strengthening MWD 061 equipment Training School equipment Direct Labor equiptent Base Costs Physical Contingencies Price Increase Sub-total Provincial and Training School Buildings; Base Costs Physical Contingencies Price Increase Q.4 Sub-total Technical Assistance Management Consultancy Services Price Increase Sub-total TOTAL / Base Costs in January 1979 prices. PriCe Increase Assumptions Price increases on: (i) civil works % (ii) aquipment Annual price increase factors for 1979/ / / / /84 (i) civil works (ii) equipment July 1978 Annual price increase factors for financial years are calculated by compounding the rates of price increase in prior calendar years.

54 ANNEX 15 KENYA RURAL WATER SUPPLY PROJECT Estimated Schedule of Disbursement IBRD Fiscal Year Disbursement Cumulative Disbursement and Quarter During Quarter at end of Quarter _ US$ thousand /80 September 30, December 31, March 31, June 30, , /81 September 30, ,800 9 December 31, , March 31, , June 30, , /82 September 30, ,400 5, December 31, ,400 6, March 31, ,400 8, June 30, ,500 9, /83 September 30, ,500 11, December 31, ,500 12, March 31, ,500 14, June 30, ,500 15, /84 September 30, , December 31, , March 31, , June 30, , /85 September 30, , December 31, , March 31, , June 30, , July 1978

55 00-0'l t!c >0 If zo d * is~~~~~~~ 0 0 0

56 KENYA RURAL WAITER SUPPLY PROJECT Proposed Organizational Chart of the Ministry of Water Development ANNEX 17 Z MINISTER ASSISTANT I-ITFTL~~~~~~~~ ASSISTANT MINISTER~ 17~ r-iae RTASSN C EFA DEEL T OP TIG^.IOENT ~~~~~~~~~~~~~~~~~~ - -3-i 1E F', -& OI TORINGASS MAINTENA CE ENGIPE R WATER RESOURCES ENGINEER DEPUTY SECRETARY TEAS OF FINANCIAL LE IAL MECHANICAL HEAD OF PEAS OF MANPOWER PROGRAMMINGB& RUDGETING DEVELOPMENT ENGINEERF MAINTENANC ENCI GROUNDWATER SERVICES PLANNING & DEVELOPMENT PLANNINGh MONITORING DESIGN ENGINEER,ELECTRICAL& MECHANICAL READ OF PRINCIAO SENIOR URBAN WATER h STATIC PLANT READ OF WATER QUALITY I SEWAGE DESIGN ENGIN EFFICER ENGINEER CONTROL CHIEF SUPPLIES SENIOR RURAL WATERIPICPAFNN DESIGN ENGINEER d TRANSPORT MANAGER HEAD OF WATER RES URCES PRINCIPAL FINANCES SENIOR SURVEYOR WORKSHOPS MANAGER CHIEF ACCOUNTANT PLANNING A APPRLISNAL _ SENIOR DRAUGHTSMAN CONSTRUCTION ENGINEER AINISTRATIO CONTRACTS ENGINEER DIRECT LABOR ENGINEER PROVINCIAL ENGINEER NYANTA :WESTERN CENTRAL EASTERN RIFT VALLEY N EASTERN I=k Il PROVINCIALAOMINISTRATIOI PROVINCIAL WORKS MANAGER SUPERINTENDENT PROVINCIAL PROVINCIAL TERNICAL ACCOUNTANT J SERVICES OFFICER SPROVINCIAL PROVINCIAL PERSONNELOFFICER j TRANSPORTDFFCER PROVINCIAL PROVINCIAL G SUPPLIES OFFICER I WORKSROP MANAGER ReE BWED

57 ANNEX 18 Page 1 of 2 KENYA RURAL WATER SUPPLY PROJECT Project Monitoring Guidelines In view of the particular nature of this project, the usual public utilities indicators do not always apply. Project supervision will concentrate on: (i) construction of schemes financed under the proposed loan; (ii) Operation and Maintenance of existing schemes; (iii) accounts and finance; (iv) training of staff; and (v) progress of institutional reform. 1. Construction of Project a. Evaluation of actual progress against planned targets (Annex 9 provides the project implementation schedule). b. Comparison of schemes costs (those used for appraisal purposes are at Annex 6) with actuals. 2. Operation and Maintenance a. Review of schemes with serious O&M difficulties (i.e. quality or reliability of supply). b. Classification of such schemes by Province, and by cause of failures (staff, lack of spare parts, lack of supervision, etc.). c. For these schemes, comparison of budget and actual expenditures. d. Progress in metering. 3. Accounts and Finance a. District by District review of revenue due and actual collections. b. Review of adequacy of funds provided for O&M against O&M standards. c. Progress in preparation of costing system. 4. Training a. Staff under training will be monitored annually under the following headings: (i) Engineers; (ii) Technicians; (iii) Craftsmen; and (iv) Accounts and administrative staff. b. Progress in Kenyanization against targets.

58 ANNEX Page 2 of 2 5. Organization Reform a. Review of the performance of the manageilent. conzt.t't agai-^t agreed work program,. b. Review of program over the next year, a,nd coi*parison with initbi program. c. Review of impact of consultancy services on MWD's performance. July 1978

59 - 51 ANNEX 19 - KENYA RURAL WATER SUPPLY PROJECT Ministry of Water Development Capital Budgets (K6 Thousands) Actual Forward Budget (1977) Year Ending June Headquarters, Provincial and District Offices ,450 1,675 1,700 Rural Water Supplies House Allowances, RWS Planning Design and Research RWS I, II, III and IV Transport Plant and Equipment Construction of Buildings RWS I RWS II 1,068 1, RWS III 500 1,624 3,800 2,650 2,207 3,408 1,443 RWS IV ,850 4,200 Construction of Water Supplies (Settlement) Subtotal 2,242 4,692 4,016 3,S ,856 Water Supply for Livestock Development 1,003 1,285 1,017 1,556 3,190 2,105 2,470 County Council Water Supply Self-Help Water Supplies ,832 3,300 2,500 2,400 Mombasa Pipeline Board Mombasa and Coast Water Supplies 525 6,114 5,490 11,950 10,100 7, Water Resources and Pollution Control , Urban Water Supplies ,525 2,300 3,250 4,350 Sewerage and Sewerage Research ,708 1,750 Water Conservation Miscellaneous Water Programs ,025 1,060 SRDP Training School Tana River Development Authority ,594 8,021 17,000 17,000 12,000 Rehabilitation of Water Supply ,000 1,200 Integrated Program ,400 TOTAL 6,240 15,767 16,719 33,598 45,535 46,932 37,012 Source: Ministry of Finance July 1978

60 -52- ANNEX 20 KENYA RURAL WATER SUPPLY PROJECT Ministry of Water Development Recurrent Budgets (KL Thousands) Forward Approved Request Approved Budget Year Ending June Gross Expenditures Ministry Headquarters Water Department - Headquarters, Provincial & District Offices 798 1,306 1,422 1,560 2,508 1,608 1,749 Rural Water Supplies Transport Operating Expenses Travelling & Accommodation Expenses Fuels Chemicals Purchase of Water _ Uniforms and Clothing Purchase of Meters Maintenance of Installations Works Paid Staff - Maintenance Work New Water Connections Subtotal Monbasa Pipeline Board Mombasa and Coastal Water Supply 973 1,305 1,599 1,581 1,777 2, ,295 Water Resources and Pollution Control Urban Water Supplies Sewerage and Sewerage Research Water Conservation _ Miscellaneous Water Programs Training of Water Staff Subtotal 6 2, ,847 Total Gross Expenditures 2,656 4,578 5, , Appropriations in Aid Rural Water Supplies Urban Water Supplies 723 1,095 1, ,805 2,161 Mombasa and Coastal Water Supply 1,104 1,503 1,635 1,792 2,563 2,302 2,534 Miscellaneous Total Appropriations in Aid ,064 3, , ,456 NET EXPENDITURE , ,872 1, Source: Ministry of Finance July 1978

61 ANNEX 21 KENYA RURAL WATER SUPPLY PROJECT Ministry of Water Development 1977 Recurrent Budget for Rural Supplies (KS Thousands) Actual Expenditure Request Approved Estimate Expenditure Transport Operating Expenses 30,500 37,450 37,450 40,425 Travelling and Accommodation 11,000 9,000 9,000 8,293 Fuels 70,000 65,000 65,000 73,934 Chemicals 10,000 10,000 10,000 4,063 Uniforms and Clothing 4,000 4,000 4,000 3,460 Purchase of Meters 10,000 10,000 10,000 8,871 Maintenance of Installations 67,000 57,000 57,000 67,250 Works Paid Staff 121, , , ,731 New Water Connections 17,000 17,000 17,000 10,941 Total Gross Expenditure KS 340, , , ,968 Appropriations in Aid Sale of Water 135, , ,000 83,989 New Connections 17,000 17,000 17,000 11,680 Miscellaneous 1,800 1,800 1,0 1,049 Total Appropriations in Aid Kb 153, , ,800 96,719 NET EXPENDITURE K 186_, , , ,249 SOURCE: Ministry of Finance, Ministry of Water Development July 1978

62 _54 - ANNEX 22 KENYA RURAL WATER SUPPLY PROJECT Existing Tariffs for Rural Water Supplies (KSh) Classification 1/ Individual Connections Monthly Flat Rate 2/ Price per m Monthly Minimum Charge Communal Water Points Monthly Rate per Family Licensed Retailers Price per m3 Paid by Retailer Price per m Paid by Consumers / The existing classification dates from 1971 and is solely based on consumer's ability to pay. No clear guidelines, however, exist on the attribution of a specific tariff to a newly commissioned scheme. The decision is left normally to the Provincial Water Engineer. 2/ Unmetered connection. Source: Kenya Gazette..

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