Liberia Reconstruction Trust Fund (LRTF) Minutes of the Oversight Committee Meeting. March 1, 2012

Transcription

1 Liberia Reconstruction Trust Fund (LRTF) Minutes of the Oversight Committee Meeting March 1, 2012 Introduction 1. The LRTF Oversight Committee Co-chair, Ms. Inguna Dobraja, the new Country Manager of the World Bank in Liberia, called the meeting to order and welcomed participants to the first meeting of Ms. Dobraja also welcomed the new OC co-chair, Hon. Amara Konneh,, recently appointed Minister of Finance, to his first LRTF OC meeting. A list of other meeting participants can be found in Annex 2. LRTF Administration Update 2. LRTF Administrator, Ms. Renée Desclaux, presented the LRTF Financial Status as of March 1, 2012 (see Annex A). To date, the LRTF has received approximately US$149 million in cash contributions and investment income. Two donor contributions have been received since the December Oversight Committee Meeting; these included: EUR 15 million from the European Union and GPB 5 million from DFID. Ms Desclaux expressed the Bank s appreciation for these timely contributions and informed that another tranche is expected to be deposited by DFID in April Ms. Desclaux informed that disbursements under the Urban and Sanitation project (EMUS) and the Urban and Rural Infrastructure Project (URIRP) are on track and that the IDA additional financing for EMUS will soon start to finance additional construction and cost overruns. An initial disbursement of approximately US$ 13 million for mobilization will shortly be made to the winner of Lot 1 of road to Guinea, under the Liberia Asset Management Project (LIBRAMP). 4. The latest Implementation Supervision Reports (ISRs) and Aide Mémoires for the midterm supervision of the EMUS and regular supervision of URIRP and LIBRAMP, attached to these Minutes, will provide donors with information to review physical progress against project performance indicators.. Ms. Desclaux reiterated that any financial details regarding the LRTF are available on Client Connection, including a record of all payments made to date, under EMUS and URIRP. 5. In the follow-up discussion to the Administration update, the representative of KfW asked for a clarification of the use of Bank Budget vs LRTF budget for the supervision costs of the LRTF- IDA co-founded projects. It was agreed that more information be made available during the next OC meeting in early June. Project Updates I. Urban and Rural Infrastructure Rehabilitation Project (URIRP) 6. The 15 km section of the Buchanan road (Cotton Tree Bokay Town), funded under the US$9.2 million additional financing to URIRP 1 has been completed and the Defect Liability Period (DPL) of one year began in September The DPL for the additional 10 kilometer section is expected to be completed in May, Mr. Rao reported that no delays or major defects have been observed, to date. 7. For the remaining 56.5 kilometers of road to Buchanan port, the contracting entity has undertaken the following two major activities: the finalization of detailed road designs and the

2 Resettlement Action Plan (RAP) for all but the last 7 kms entering the city of Buchanan. That RAP, under review by the Bank at the time of the OSC meeting, has now since been approved. Civil works have started in areas which were covered under the approved RAP for Phase 1 of the project on this road. The monitoring consultant is fully mobilized and good progress is expected in what remains of the dry season. II. Liberia Road Asset Management Project (LIBRAMP) 8. LIBRAMP became effective in October Civil works were packaged in two lots, of which Lot 1 for the construction of 180 kilometers of roads was finally cleared and a contract for US$ 166 million was signed on January 25, The contracting entity, CICO, has begun preparing detailed designs of civil works. The procurement for the consultancy for monitoring supervision is slightly delayed; TORS should be cleared by Bank in the next few days. Eligible bids for Lot 2 greatly exceeded initial estimates and the MPW, after carefully examining various available options, has decided to rebid this work. The revised BER is expected from the IIU shortly, which will close the ongoing procurement and pave the way for the next procurement. The Bank clarified that managing the bidding process was a client s responsibility and that further details would be provided in the next LRTF report. 9. Discussions followed the presentation of the two transport projects and included the following points: The Bank clarified that the GoL is responsible for choosing the methodology of the rebidding for Lot 2. (OPRC vs Design, Build and Transfer) MPW stated that donors are welcome to participate in monthly on-site visits to projects. These are held the second Friday of every month; the next will be on April 13 th. There was some questioning of the OPRC methodology. Mr. Rao shared the advantages of adopting the OPRC methodology for faster, economical, efficient, and sustainable project delivery in a Post Conflict Fragile State. The Bank noted that the OPRC methodology provides real value for money given that newly created assets are preserved continually in fair condition and their sustainability is ensured. This is because OPRC involves pooling of funds for road rehabilitation and maintenance under a single contract. Such contracts ensure reduced administrative burden on the client and promote hiring of local staff and labor as is now being observed on the Bokey Town to Buchanan road project. The Bank agreed to share presentations with donors on the use of the OPRC methodology including the one on the Liberian OPRC. Those presentations are attached to these Minutes. The issue of the Government share of financing (i.e. $72 million over the next ten years) was discussed. While Minister Woods reconfirmed the Government commitment to finance its share, he indicated that it may face short term difficulties in meeting its share and may seek deferment of its contribution. A formal communication on this will be sent to the Bank shortly. Request that LRTF TTL s be physically present at next LRTF OSC meeting on June 7 th. Request that the next report include more detail about projects, including results of bidding processes and project results. Need to strengthen IIU and continue the original plan of strengthening participation of Liberian staff in order to create a Road Agency. Mr. Rao mentioned the fact that 8-10 local staff were being recruited and will then be trained and mentored and that an international consulting firm will be in place in approximately six months to work with the IIU on this. Minister Woods stated that the transition to a Roads Agency had begun. More engineers will be moved to the IIU and GoL is looking to recruit specialists from the Liberian Diaspora, including from the Association of Liberian Engineers in the US. 10. Since ownership and leadership of the program will eventually rest with local staff in Liberia, the Bank agreed that strengthening the IIU was critical for reasons of long term

3 1 As of the time of the MTR, about 60% of the Project funds were disbursed and about 95% - committed (signed commitments following tenders/procurement process). During the remaining 21 months of the project, the remaining 40% of project funds will be used to fund the solid waste management system on a declining basis (i.e. 80% in Year 3 and 60% in year 4) as per project design. In addition, capacity building assistance is provided to MCC, for financial management, revenue generation, and technical which includes environmental auditing of monitoring wells around the landfill, advice with the supervision of the weight-bridges, advice with the primary collection through community-based SMEs. The pilot SME-based primary collection will be scaled up following the initial pilot program. The communication/educational campaign is scheduled to continue for another few months and will also be funded out of the remaining funds. Annual surveys are also scheduled to take place at the end of calendar 2012 and sustainability. URIRP and LIBRAMP will continue to fund such efforts including hiring and training of local staff. Minister Woods also agreed on the need to build expertise at the IIU and hire staff from Liberia, as proposed under the Ministry s training framework, due to be submitted to the Bank shortly. It was also requested that task team and IIU hold regular monthly meeting to review progress. The dates of such meeting will be shared with Donors so that they may participate as observers if they so desire. III. Emergency Monrovia Urban Sanitation (EMUS) 11. A Mid Term Review (MTR) of the EMUS Project took place three weeks prior to the OSC meeting in Monrovia and a special LRTF meeting was held during the review to discuss initial findings. The project was initially prepared as an emergency operation with the overall goal to restore a basic service in Monrovia, as well as start building capacity within the Monrovia City Corporation (MCC) for improved revenue generation and financial management. The MTR concluded that all activities planned for the first half of EMUS have taken place and the Project s intermediate results have been achieved. Two transfer stations have been designed and built, the landfill was also designed and construction works are nearly completed. A solid waste management system has been put in place and performance based long-term collection contracts as well as contracts for operation of the landfill and weight-bridges, etc. have been signed. In addition, financial and organizational audits have been carried out in MCC and a special Solid Waste Account has been opened. Finally, a baseline survey has been completed and a pilot primary collection system has been established and tested. In the remaining two years of the Project, the established solid waste management system will continue to function under established contractual arrangements, while the ability of MCC to raise revenue and manage the waste system is expected to be enhanced The cost of the solid waste service in Monrovia is high. EMUS finances this cost (approximately $3.0 million per annum for a 50% collection rate) on a sliding scale of 100%, 100%, 80%, 60% annually, with the balance being financed by Government funds. In year 5 (2014), when EMUS is expected to close, the entire cost of collection and disposal is expected to be absorbed by municipal and central budget funds. While the Government has expressed its commitment to this scheme, the required increase in Government contribution after the end of EMUS will be considerable and will create a significant burden on the MCC and MOF. Instead, a preferred approach would be that external financing continues for a few years beyond EMUS. It would allow MCC to strengthen the institutional improvements made over the course of EMUS. It would also lessen the financial burden on the GOL budget, and provide a better chance for the waste system to remain in place, once donors disengage fully. 13. Extending the sliding scale of external assistance (for instance 50%, 40%, 30% in years 2014/15/16) would also permit the Government to explore options for introducing cost recovery for waste services. The MTR recommended that such options be studied and followed up with the development of a financial model for the preferred option. In brief, options range from cost recovery through property taxation/waste fees attached to a utility bill or direct recovery of fees from users. Since none of these options will be ideal or easy to implement, the Government (MOF in particular) will need to review their pros and cons before deciding on a way forward.

4 14. Other findings from the MTR related to: (i) the status of the current landfill, which will need to be replaced by a new one in 4 years, at a significant cost; and (ii) the significant revenue potential for MCC. With regards to the latter, Ms. Ionkova indicated that the revenue potential had not been fully utilized, to a large extent due to outdated legal enablers. The Municipal Charter is from 1973 and has been supplemented with Presidential Ordinances which prescribe tax and fee rates that are outdated and need adjustment. Since developing a new Charter for MCC is expected to take time, a bridge enabler such as a new Executive Order that empowers MCC to update its rates, may be an option. 15. Discussion following the presentation on EMUS included the following points: The Acting Mayor of Monrovia, Ms. Mary Broh, thanked donors for their support and noted that revenues were improving. A technical audit has taken place and a supervision unit has been established to monitor project activities. While achievements have been impressive, Ms. Broh indicated that a three year extension of EMUS would greatly help strengthen the Municipality and allow it to improve its revenues. Donors congratulated Ms. Broh on her impressive achievements and results to date. They requested that the team first consider the available funding under the LRTF and submit a Concept Note. Ms. Ionkova clarified that the estimated MOF contribution towards the cost of waste services for the current Fiscal Year was US$513,000, while the estimated contribution for the following Fiscal Year was US$1,102,000. A copy of the MTR (the Aide Memoire of the mission) will be sent to all LRTF members and observers. III. Presentation by the Ministry of Public Works (MoPW) 16. Minister Woods informed that the RAP for the remaining 7 kms of the road to Buchanan was still under preparation, given that this is a highly populated zone, reaching the heart of the city. He also stated that the MPW would undertake a full assessment of the Buchanan road project to measure the impact on employment, costs of goods and services, and gender impacts. He also shared the following: IIU is preparing TORS for temporary monitoring consultant for Lot 1 of Libramp. Staff performance evaluations have been done and sent to Bank. GoL has formally requested an Additional Financing of US$50 million from the World Bank to cover cost overruns for Lot 2, of Libramp and that a restructuring of the project would also be needed in order to program the GoL contribution for the latter part of the project. With respect to future priorities for the LRTF pipeline, there is a short term need to deal with paving of several key streets of Monrovia (aprox. US$ 2 million), develop capacity of engineers, and do a national bridge inventory. MPW will present a mid-term investment strategy to the LRTF in mid April, He also agreed to a meeting with partners to discuss the government strategy to establish the road authority including responsibility for routine maintenance. 17. MOPW recognized the significant impact of LRTF interventions in terms of the rehabilitation of Monrovia streets and strengthening of the MCC. He recognized that much more needs to be done, including: pavement of 2 km of Monrovia city streets, and reconstructing bridges with concrete and rural roads, installing weighing stations, Minister Woods expressed his satisfaction with LRTF contributions and invited partners to pursue their strong collaboration in He also stressed that the GoL would make every effort not only to contribute its share to reconstruction efforts but also to better coordinate and sequence work in infrastructure. Other points of discussion included: LRTF partners spoke of the need to get a pipeline of projects for future LRTF financing.

5 Importance of improving the state of bridges in the country. Formerly, they were not always part of the investment plan for a road. A national bridge inventory is needed to complement the road inventory supported by GiZ. Discussion/Any Other Business 18. Ms. Dobraja thanked participants for a fruitful conversation and the meeting was adjourned. Attachments: - Annex A: LRTF Financial Status - Annex B: List of Participants - Annex C: Updated Action Matrix

6 I. LRTF Administration ANNEX A: LRTF financial status, as of March 1, 2012: LRTF Quarterly Report March 1, 2012 As of February 22, 2012, the LRTF status was as follows: USD million Contributions Received Cash Contributions $146,902, Investment Income $1,960, Total Receipts (Note 1) $148,862, Future Cash Contributions as per signed Administration Approx. $23,714, Agreements (Note 2) Total LRTF Approx. $172,577, Project Commitments EMUS ($18,400,000.00) URIRP ($9,200,000.00) URIRP II (Additional Financing) ($27,000,000.00) LIBRAMP ($108,900,000.00) Total project commitments ($163,500,000.00) LRTF Administration and Projects Preparation and Supervision Costs LRTF Administration ($527,430.19) Total Non-Project Disbursement Admin Costs (Note 3) ($1,241,366.57) EMUS Appraisal and Supervision ($791,721.35) URIRP I Supervision ($ 247,230.00) Total Costs ($2,807,748.11) Available amount for future commitments $ 6,269, (Note 1): This amount includes all donor contributions to date plus investment income (1,960,336.18). The first tranche of the European Commission (EC) for EUR 30 million (US$39,807,000) and the additional contribution by KfW for EUR 25 million (US$33,110,500 million) were deposited in December A DFID contribution of GBP 5 million (US$7,850,000) was deposited in December 2011 and the second tranche of the European Commission (EC) for EUR 15 million (US$19,830,000) in January (Note 2): This amount includes EUR 15 million from the European Commission and GBP 1,75 million from DFID. (Note 3): This includes the Administration Cost Recovery Fee, as per the Administration Agreements, Annex 2, paragraph 3.

7 Annex B: LRTF Oversight Committee Meeting Attendance List March 1, 2012 Name Title Organization LRTF Co-chairs Inguna Dobraja Country Office Manager World Bank Amara Konneh Minister of Finance Ministry of Finance (MOF) Oversight Committee Members Paula Vasquez Head of Operations EU Jallah Kennedy Programme Officer SIDA Helmut Schon Representative for West Africa KFW Martin Walshe Sr. Regional Infrastructure Advisor DFID Observers Samuel Kofi Woods Minister Ministry of Public Works(MPW) Sebastian Muah Deputy Minister of Budget MOF Stephen Yekeson Deputy Minister for Administration MPW Dr. Bodo Schaff Ambassador Republic of Germany Mary T. Broh Acting Mayor Monrovia City Corporation Samuel Z. Joe Director, Aid Management Unit MOF Georgio Kirchmayr Prog. Manager Infrastructure EU Claudia Hermes Project Manager GIC Daniel Dasic Infrastructure Advisor USAID Emmanuel K. Baker Acting Deputy Program Director IIU/MPW Akindele Beckley Program Director IIU/MPW Korer Richardson Project Manager IIU/MPW Victor B. Smith Deputy Minister for Technical MPW Services Peter Ofor Asumadu Project Manager EMUS MCC Sarah-Rose Serry Program Assistant DFID World Bank Kremena Ionkova Urban Sanitation Specialist World Bank Kulwinder Singh Rao Transport Specialist World Bank Coleen Littlejohn Sr. Operations Officer World Bank Renée Desclaux Sr. Operations Officer World Bank Jenny Hasselsten JPO World Bank Esther Bryant Team Assistant World Bank

8 ANNEX C: Updated Action Matrix March 1, 2012 LRTF Actions Matrix Action Deadline Status Person Responsible LRTF Quarterly Report Circulate June LRTF financial report; clarify how supervision costs are shared between IDA and LRTF for projects that are cofinanced To be included in report prepared for June 7, 2012 meeting. Upcoming LRTF Secretariat Meeting on Road Authority MPW to convene meeting on strategy and progress on structuring a Road Authority Before June 7 th meeting. Upcoming MPW Participation of donor partner technical specialists in monthly on-site project visits Bank to give list of technical advisors to IIU/MPW who in turn will invite advisors to participate. Visits are second Friday of every month. Next visit is Friday, April 13: Underway WB and MoPW TTLs to coordinate missions to Liberia to coincide with LRTF OC meetings Appropriate arrangements to be made if possible. June Underway World Bank Share Mission Aide Memoires, Audit Reports and OPRC presentation with donors Attach to Minutes of LRTF meeting March 31, 2012 Done World Bank Send EMUS Concept Note to Donors Deliver to donors and OC members April 15, 2012 Underway World Bank Demonstrate Cost Effectiveness and Value-for-money of OPRC Presentation to be made to donors During next transport mission Date to be confirmed shortly World Bank