Project Name. Region. Date of Board Approval July 29, 2008

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project Name PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No: AB3458.: MAURITANIA: TRANSPORT SECTOR INSTITUTIONAL DEVELOPMENT TECHNICAL ASSISTANCE PROJECT Region AFRICA Sector CENTRAL GOVERNMENT ADMINISTRATION (100%) Project ID P Borrower(s) ISLAMIC REPUBLIC OF MAURITANIA Implementing Agency MINISTRY OF TRANSPORT Environment Category [ ] A [] B [ X] C [ ] FI [ ] Not required Date PID Prepared February 27, 2008 Date of Appraisal March 08, 2008 Authorization Date of Board Approval July 29, Country and Sector Background General Background: Recent developments in Mauritania underline challenges, as well as opportunities for the country s future. Over 2005 and 2006, a transition government embarked the country on the path to democracy, with strong popular backing and support from the international community. Following free elections in March 2007, the new Government embraced a roadmap for comprehensive reforms, including in the transport sector. In addition, Mauritania became a petroleum-producing country in early 2006, therefore additional revenues are expected over the next years. The new government recognizes the importance of proper management of oil revenues as a source of wealth and development for the nation. Support to Mauritania on this promising path is critical to help improve necessary capacity, transparency and sustained growth in the country. Mauritania Second Poverty Reduction Strategy Paper (PRSP-2, ). The country s strategy articulated in the second PRSP is based on a set of sound macroeconomic, structural, and sector policies. It tackles the fundamental question of how to manage the natural resources wealth transparently and focuses on growth and poverty reduction. The strategy is articulated around five pillars: (i) accelerate growth and maintain macroeconomic equilibrium; (ii) anchor growth in the economic environment of the poor; (iii) develop human resources and generalize access to basic social services; (iv) strengthen good governance and capacity building; and (v) reinforce monitoring, evaluation, and coordination. PRSP-2 identified four priority areas to support these pillars, namely education, health, water resources and infrastructure. Specifically for the transport sector, the Government is expected to make important contributions to the development of national and regional trade, the reduction of production costs, the reinforcement of the competitiveness of the national economy and the integration of rural poverty pockets. In this regard, the Government of Mauritania (GoM) launched comprehensive reforms and undertook the following actions in order to improve the transport sector performance: (i) issue new regulations liberalizing the Road Transport Industry with a time bound action plan for supporting this measure; (ii) create an independent National Civil Aviation Agency (ANAC), replacing the former Civil Aviation Directorate, (iii) create the Directorate for Studies,

2 Planning and Cooperation in the Ministry of Transport (MT), (iv) coordinate the formulation and implementation of sector policies and strategies; and (v) engage discussions with its partners to finance the improvement of road, port and airport facilities. This contributes to support four of the five pillars of the PRSP-2: (i) accelerate growth, (ii) develop human resources and generalize access to basic social services; (iii) strengthen good governance and capacity building; and (iv) reinforce monitoring, evaluation, and coordination. Sector Issues: The transport sector in Mauritania has been plagued by numerous institutional problems and deteriorating infrastructure, all of which combine to impede competitive and efficient transport services. There is a general consensus that poor quality, unreliable and costly transport has constrained economic growth, hampered delivery of social services and slowed efforts at national integration. A holistic and coherent Transport Sector Strategy has not yet been formulated, although sub-sector strategies (road transport, maritime and civil aviation) have been completed. However, the Bank-financed National Transport Sector (Multi-Modal) Strategy Study and an EU - funded Road Management and Investment Program Study have identified numerous structural problems: institutional (lack of capacity and weak institutions/inadequate institutional arrangements) and physical (deteriorating infrastructures due to insufficient maintenance). Institutionally, the sub-sectors are characterized by persistent structural and regulatory problems. Until 2007, transport sector management functions were divided up among several ministries and directorates, resulting in lack of coordination for sector planning and management. Road Transport sub-sector. The road sub-sector was characterized by a persistent imbalance between construction/rehabilitation and maintenance funds. As a result, sections of the country s core road network are in poor or bad conditions. While road maintenance resources have increased since 2002, existing mechanisms for securing longer-term funding are inadequate. The current road classification system is outdated (it was based on a 1968 Law) and responsibilities for network management remain unclear. Although rural roads constitute over two thirds of the entire network, there has been no overall strategy to improve rural access, and many agricultural production areas lack all-weather links to the main network and marketing outlets. Transport services were liberalized in 2006, which led to reduced transport costs (more than 30%). Air Transport sub-sector. The runways, taxiways and apron surfaces at Nouakchott and Nouadhibou Airports are in a badly deteriorating state and require immediate intervention. Other civil aviation issues include: (i) unclear institutional framework; (ii) weak institutional administrative and financial capacity, (iii) deficiencies in security and safety at the country s main airports; and (iv) inability of the Mauritanian Airports Company (Société des Aéroports de Mauritanie-SAM) to finance required infrastructure investments particularly in safety and security. Finally, the recently created National Civil Aviation Authority operates in an ambiguous legal environment and still lacks the capacity to fulfill its mission of ensuring compliance with international safety standards and security guidelines. Maritime Transport sub-sector. The Port of Nouakchott is facing berth capacity and draft limitations to meet its growing traffic (especially containers), while the Port of Nouadhibou (whose wharfs are dedicated to mining, petroleum and fishing) is facing negative traffic growth due in part to competition from the Canary Islands, depletion of fish stocks and changes in fish handling

3 regulations. Until 2007, the control and management of the two main ports (Nouakchott and Nouadhibou) were under the oversight of different ministries, while operations at the mineral pier at Nouadhibou Port were under the supervision of a third Ministry. Finally, maritime transport is confronted with the inability of the current port management system to finance its infrastructure growth, though PPP prospects exist given the sector s economic and financial potential. 2. Project Objectives The primary project objective is to improve road, maritime and air transport sector management. 3. Rationale for Bank Involvement The Bank s Country Assistance Strategy. The new CAS (FY07-11) supports the PRSP-2 and focuses on: (i) economic governance and public sector capacity; (ii) diversified growth through investment climate improvement, and possibly key enabling infrastructures through IBRD enclave operations; and (iii) continued efforts to fight poverty and inequalities in both urban and rural areas. Consequently, the proposed operation will respond to the improvement of transport sector reforms and management, one of the priority areas identified for IDA s intervention. The last World Bank-financed project in Mauritania s transport sector was completed in Since then, many donors have actively contributed to the sector, particularly the European Union, Spain and China in the Port Sector. The Economic Sector Work carried out in , which highlighted the capacity and institutional issues as critical to the sector sustainability, has helped to reopen a dialogue with the Government on the transport sector and provided an analytical foundation for developing a Transport Sector operation comprising sector reform support and road investment. A Concept Review meeting for a proposed Transport Sector Project was held on January 19, However, given the drop in the country s IDA-14 and prospective IDA 15 allocation, the scope and description of the project changed, which led to the proposed Transport Sector Institutional Development Technical Assistance (TSIDTA) operation in recognition of the need for institutional reforms which remains high regardless of infrastructure lending. World Bank involvement is therefore, considered as extremely desirable. The TSIDTA design will use a progressive approach. Using the Bank s competitive advantage, the proposed operation will serve as an instrument towards building a sustainable partnership and fostering coordination in sector interventions in order to achieve greater efficiency and effectiveness in the Mauritanian Transport Sector. It will provide Mauritania a platform to maintain collaboration with development partners and sustain the on-going productive dialogue in the transport sector. In addition, the Bank s support will complement EU and AfDB support, which is currently largely focused in investments projects. The EU has committed to support institutional reforms in the road transport sub-sector as well through the 9 th and 10 th FED. 1 Islamic Republic of Mauritania, Transport Sector Overview, Report No September, 2004

4 The proposed operation would complement other planned World Bank Group supports to the government of Mauritania as part of the implementation of its policy, namely : (i) a Mauritania component of the regional West and Central Africa Air Transport Safety and Security Project, which will tackle institutional support to the Civil Aviation sector and reinforce the sector in safety and security related investment, and (ii) a Port of Nouakchott Development project, which will complement the Government and China s funding to develop the port while addressing the substantial environment issues related to its initial construction. 4. Project Description The project will support the Government to update the National Transport Strategy, which was adopted in 1998 as the National Transport Plan (NTP), and to issue a Transport Sector Policy Document. The Transport sector Policy Document will be drafted in consistency with the findings of: (i) a Bank-financed Multi-Modal Transport Sector Strategy Study, and an EUfunded Road Transport Strategy, including Road Financing and Management, both completed in 2007 The Transport Sector Institutional Development and Technical Assistance Project is designed to support GoM to: (i) carry out institutional reforms; (ii) strengthen its coordination role, and (iii) promote Public-Private Partnerships (PPP) in transport sector infrastructure development. The TSIDTA will have four components, as described below, and would be financed with the proposed credit of US$ 4 million equivalent, including an advance already provided for the preparation of the Project of USD1.19 million. The Government of Mauritania will finance US$ 1 million. Component 1 - Institutional Support and Capacity-Building for the road transport sub-sector (US$0.68 million) Under this component, a special emphasis will be put on, but not limited to, the newly created Directorate General of Road Transport with a focus on road safety prevention/management, through (i) institutional capacity-building (with support to Road Safety Directorate); (ii) road safety situation assessment and implementation of a pilot M&E system; (iii) launch of a sensitization campaign; and (iv) purchase of road signalization for critical points in Nouakchott. This activitybased component will also undertake sub-sector studies to bridge the knowledge gap related to urban transport dysfunction costs in Nouakchott. Component 2 - Support to Institutional and Technical Capacity-building for the Maritime transport sub-sector (US$.75 million) The component will support GoM s efforts in reorganizing the sub-sector, through capacity building for the newly created DMM and CECAM. Part of this component s funding will also be used do develop and implement an information system for Nouadhibou Port, and legatorial framework will be improved, with the update of Merchant Shipping Code and Regulations. Component 3 - Support to Air Transport System Re-organization and Technical Capacitybuilding (US$0.95 million)

5 The component will support GoM s efforts to set up a development program for Mauritanian airports by funding the redaction of a master plan, with an emphasis on Nouakchott airport s development perspectives. It will also provide institutional support to ANAC and SAM to help reorganize the sub-sector. A large part of this component will consist in purchasing airport security and safety control equipments. Component 4 Support to the Ministry s coordination role and Project Activities Coordination (US$1.05 million) Given that GoM recently consolidated its transport sector management institutions under the Ministry of Transport, this component will support capacity building of the new institutions to ensure efficiency, taking into consideration the need for multi-modal coordination. Specifically, it will assist the Ministry of Transport in finalizing a coherent sector policy consistent with GoM s projected reforms and the need for a multi-modal transport strategy. It will also support the overall transport sector planning unit within the Ministry. 5. Financing Source: ($m.) Borrower/recipient 1$m IDA 4$m Total 5$m 6. Implementation Arrangements The project will not set up a Project Implementation Unit (PIU). It will provide technical, operational and material assistance to the newly established Directorate of Studies, Planning and Cooperation (DEPC) to coordinate project implementation activities. DEPC is already managing the activities undertaken through a PPF, and coordinating the EU and Bank-financed studies. In this regard, fiduciary staff will be recruited to reinforce DEPC internal project coordination unit, which assumes the overall sector planning. Fiduciary and procurement responsibilities will be centralized in the Unit, while implementation responsibilities will remain with the implementing agencies, namely, Directorate of Road Transport and Road safety, Civil Aviation National Agency and maritime Transport directorate for their respective institutional activities. 7. Sustainability No Bank-financed project has been undertaken in the transport sector for 10 years. However, learning from past experiences in similar countries, the critical factor required for sustainability of the proposed project benefits is the permanent governmental commitment to define ant then apply a consistent framework for its transport sector policy. Mitigation measures have been proposed (cf. paragraph below). Besides, the project will strengthen the agencies capacity to guarantee accountability and transparency, which should lead to long-term sustainability. 8. Lessons Learned and reflected in the project design

6 Further to the recommendations of the Economic Sector Work (ESW) carried out in 2004, the Bank has financed the Multi-Modal Transport Sector Study, through its ongoing Urban Development Project (Cr MAU), in order to integrate the findings of the EU-financed Road Sector Study into a broader strategic vision for managing the country s transport sector. The results of this study can be summarized by the following points: (i) institutional organization for the port sector is largely fragmented, which leads to uncoordinated policies; (ii) regulatory framework for both air and maritime transport sectors is not adapted or incomplete; (iii) there are many infrastructure development projects whereas there is no global framework, which often creates a lack of coherence between the different projects; (iv) the competitiveness of operators is reduced, due to costs higher than anywhere else in the region; (v) human resources are poorly managed; (vi) and information systems are largely underdeveloped. This study served as a base to determine the issues that Mauritanian transport sector had to deal with and the actions that had to be taken to face these issues. In response, the Government took a number of concrete steps to address institutional problems, notably: (i) the issuance of a Joint Declaration from the Ministers of Public Works and Finance, which affirms the Government s intention to liberalize the Road Transport Industry, and puts forth an Action Plan of initial tasks to be achieved by the end of 2005; (ii) the creation of an independent National Civil Aviation Agency (ANAC), which replaces the former Civil Aviation Directorate; (iii) the completion of several studies on ports management, and the planning of a national workshop on this subject in March-April 2005; (iv) the creation of a Directorate of Studies, Planning and Cooperation in the Ministry of Equipment and Transport (MET), which will coordinate formulation and implementation of sector policies and strategies; and (v) the creation of a Ministry of Transport, as well as a Road Transport General Directorate, a Merchant Marine Directorate and a Road Infrastructures Directorate, in Based on these reforms, the project was designed to support the Government of Mauritania in reorganizing the transport sector. It was especially designed to help strengthen the newly created agencies, so as to improve transport sector management efficiency. 9. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ ] [X ] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [ ] [X] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [ ] [X] Indigenous Peoples ( OP/BP 4.10) [ ] [X] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects in Disputed Areas (OP/BP 7.60) * [ ] [X] * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties claims on the disputed areas

7 Projects on International Waterways (OP/BP 7.50) [ ] [X] Piloting the Use of Borrower Systems to Address Environmental and Social Issues in Bank- Supported Projects (OP/BP 4.00) [ ] [X] 10. List of Factual Technical Documents Economic Sector Work (2004) Multi-modal Transport Strategy (2007) Road Transport Strategy (2007) 11. Contact point Contact: Ibou Diouf Title: Sr. Transport Specialist Tel: Fax: idiouf@worldbank.org Location: Dakar, Senegal (IBRD) 12. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) Web: wb L:\naboudocument\divers\pid mauritania appraisal stage doc 02/27/ :12:00 PM