PROJECT APPRAISAL DOCUMENT FOR PROPOSED CREDITS (2) AND LOANS (3) IN THE AMOUINT OF SDR 4 MILLION AND US$14.07 MILLION RESPECTIVELY

Transcription

1 Public Disclosure Authorized Document of The World Bank Report No: LAC Public Disclosure Authorized PROJECT APPRAISAL DOCUMENT FOR PROPOSED CREDITS (2) AND LOANS (3) IN THE AMOUINT OF SDR 4 MILLION AND US$14.07 MILLION RESPECTIVELY TO THE COMMONWEALTH OF DOMINICA, ST. KITTS & NEVIS, AND ST. LUCIA Public Disclosure Authorized IN SUPPORT OF THE FIRST PHASE OF THE ORGANIZATION OF EASTERN CARIBBEAN STATES EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROGRAM December 2, 1998 Public Disclosure Authorized Fmance. Private Sector, and Infrastructure Unit Caribbean Department Lann America and the Caribbean Regional Office

2 CURRENCY EQUIVALENTS (Exchange Rates Effective December 1998) Currency Unit = Eastern Caribbean Dollars (EC$) EC$ 1.0 = US$ 0.37 US$ 1.0 = EC$ 2.7 FISCAL YEAR January 1- December 31 ABBREVIATIONS AND ACRONYMS APL CARICOM CAS CDB CDERA EU FEMA IBRD ICB IDA NCB NEAP NMS OAS ODP OECS OFDA O&M PAHO PCU TOR USAID WTO Adaptable Program Lending (World Bank) Caribbean Community and Common Market Country Assistance Strategy (World Bank) Caribbean Development Bank Caribbean Disaster Relief Agency European Union U.S. Federal Emergency Management Agency International Bank for Reconstruction and Development (World Bank) International Competitive Bidding International Development Association (World Bank) National Competitive Bidding National Environmental Action Plan National Meteorological Service Organization of American States Office of Disaster Preparedness Organization of Eastern Caribbean States U.S. Office of Foreign Disaster Assistance Operations and Maintenance Pan American Health Organization Project Coordination Unit Terms of Reference United States Agency for International Development World Trade Organization Vice President: Shahid Javed Burki Country Director: Orsalia Kalantzopoulos Sector Director: Daniel M. Leipziger Task Team Leader: Eugene D. McCarthy

3 ,ii IFOR OFFICIAL USE ONLY Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program CONTENTS A: Program Purpose and Project Development Objectives Program purpose and program phasing: Project development objectives: Key performance indicators:... 4 B: Strategic Context Sector-related CAS goal supported by the program Main sector issues and Government strategy Sector issues to be addressed by the program and strategic choices Program description and performance triggers for subsequent loans C: Project Description Summary Project components Key policy and institutional reforms supported by the program Benefits and target population Institutional and implementation arrangements D: Project Rationale Project alternatives considered and reasons for rejection: Major related projects Lessons learned and reflected in the project design Indications of borrower commitment and ownership Value added of Bank support in this project E: Summary Project Analysis Economic Financial Technical Institutional Social..., Environmental assessment Participatory approach.21 F: Sustainability and Risks Sustainability: Critical Risks Possible Controversial Aspects:.23 G: Main Loan Conditions Effectiveness Conditions: Other.23 H. Readiness for Implementation.23 I. Compliance with Bank Policies. 25 This document has a restricted distribution 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.

4 iv ANNEXES Annex 1 Program Design Summary Annex 2 St. Kitts and Nevis Annex 2A Detailed Project Description.29 Annex 2B Estimated Project Costs.37 Annex 2C Project Management and Implementation.38 Annex 2D Project Progress Indicators.39 Annex 2E Procurement and Disbursement Arrangements.40 Annex 2F Statement of Loans and Credits.43 Annex 2G Country at a Glance.44 A nnex 3 St Lucia Annex 3A Detailed Project Description.47 Annex 3B Estimated Project Costs.55 Annex 3C Project Management and Implementation.56 Annex 3D Project Progress Indicators.57 Annex 3E Procurement and Disbursement Arrangements.58 Annex 3F Statement of Loans and Credits.61 Annex 3G Country at a Glance.62 A nnex 4 Dom inica Annex 4A Detailed Project Description.65 Annex 4B Estimated Project Costs.72 Annex 4C Project Management and Implementation.73 Annex 4D Project Progress Indicators.74 Annex 4E Procurement and Disbursement Arrangements.75 Annex 4F Statement of Loans and Credits.78 Annex 4G Country at a Glance.80 Annex 5 Project Processing Schedule Annex 6 Economic Developments and Bank Program Implementation... 82

5 Page 1 Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program Project Appraisal Document Latin America and the Caribbean Region Caribbean Department Date: December 2, 1998 Task Team Leader/Task Manager: Eugene D. McCarthy Country Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Daniel M. Leipziger ProjectIID: 60-PA Sector: Multi-sectoral Program Objective Category: Lending Instrument: Adaptable Program Loan (APL) Program of Targeted Intervention: []Yes [ *] No PROGR FINANCING DATA IBRD IDA Govt Co-financiers TOTAL US$m % US$m % US$m % US$m % USsm APL I St. Kitts & Nevis % % % St. Lucia % % % % 7.68 Dominica % % % % 6.03 APL 1 SUB-TOTAL % % % % APL 2 St. Vincent & the Grenadines % % % 4.75 Grenada % % % 2.35 APL 2 SUB-TOTAL % % % _ 7.10 APL 3 Additional physical % % % 12.0 investments & institutional strengthening APL 4 Contingency Funding % %/o % _ 12.0 PROGRAM % % % PROJECT FINANCIAL DATA [A] IBRD [A] IDA [] Guarantee 1 Other[Specilyl For IBRD Loans: Amount (US$m): Proposed terms: [] Multicurrency [.] Single currency, specify (US$) Grace period (years): 3 [] Standard Variable [.] Fixed [] LIBOR-based Years to maturity: 15 Commitment fee: 0.75% Front-end fee: 1% For IDA Credits: Amount (SDRm): 4 million (US$5.5 million equivalent) Proposed terms: Standard IDA [] Multicurrency Grace period (years): 10 [I Standard Variable Years to maturity: 35 Commitment fee: 0.5% Service charge: 0.75%

6 Page 2 Government - St. Kitts & Nevis 1.08 Government - St. Lucia 1.15 Government - Dominica 0.63 Subtotal: OECS Governments 2.86 IDA - St. Kitts & Nevis 0.00 IDA - St. Lucia 3.00 IDA - Dominica 2.50 Subtotal: IDA 5.50 IBRD - St. Kitts & Nevis 8.50 IBRD - St. Lucia 3.03 IBRD - Dominica 2.50 Subtotal: IBRD Cofinanciers - St. Kitts & Nevis 0.50 Cofinanciers - St. Lucia 0.50 Cofinanciers - Dominica 0.40 Subtotal: Cofinanciers 1.40 g.x TOTAL T,? es Borrowers: Governments of St. Kitts & Nevis, St. Lucia, Dominica, Grenada and St. Vincent & the Grenadines Guarantor: Same Responsible agencies: St. Kitts & Nevis - Ministry of Finance, Planning and Development St. Lucia - Ministry of Finance and Planning Dominica - Ministry of Finance, Industry and Planning Grenada - TBD St. Vincent & the Grenadines - TBD t _ure~m~ _ t*_apjy,:(us$in) FY1999* FY2000 FY001 FY_2E* St Kitts & Nevis Annual Cumulative St. Lucia Annual Cumulative Dominica Annual Cumulative APL 1: APL 2: Implementation period: 3 years Implementation period: 3 years *Expected effectiveness date: January 31, 1999 Expected effectiveness date: June 30, 1999 **Expected closing date: January 31, 2002 Expected closing date: June 30, 2002 APL 3: Additional physical investments & institutional APL 4: Contingency Funding strengthening Implementation period: 3 years Expected effectiveness: Depends on occurrence of disaster Expected effectiveness date: FY2002 Expected closing date: FY2005 Expected closing date: FY2005

7 Page 3 A: Program Purpose and Project Development Objectives 1. Program purpose and program phasing: The proposed program aims to support the physical and institutional efforts of the five member countries of the Organization of Eastern Caribbean States (0ECS)' for disaster recovery and emergency preparedness and management. The OECS nations are particularly vulnerable to different types of disasters including hurricanes, tropical storms, floods, landslides, earthquakes and storm surges. The nations' low level of preparedness, lack of mitigating measures and limited disaster response capability was evidenced most recently by the devastating impact of Hurricane Georges on St. Kitts & Nevis in September The program will consist of individual lending operations in the five member countries. It will be phased over a period of approximately six years and will support a comprehensive set of activities: * Physical investments: Key social and economic infrastructure will be protected and strengthened before disasters strike so as to reduce the likelihood of loss of life and assets--alternatively, they will be rehabilitated or reconstructed in the aftermath of a disaster. * Capacity building: The capacity of national emergency management agencies will be strengthened to enable them to perform more effectively. * Institutional strengthening: Steps will be taken to increase the ability and interest of the private insurance industry to share disaster-related risks, and to improve and support the enforcement of building codes and sound land-use planning. * Community preparedness: Community-level disaster committees will be organized, trained and equipped to enhance their role in disaster preparedness, mitigation and recovery. These activities will be carried out in the following phases: * APL 1: The first phase of the program will focus on immediate reconstruction and rehabilitation of infrastructure in St. Kitts and Nevis which suffered major damage due to Hurricane Georges on September 21, It will also support disaster mitigation investments in St. Lucia and Dominica which are both particularly vulnerable to disasters due to their proximity to past hurricane paths. This phase will strengthen emergency preparedness and response systems in all these countries, such as Early Warning Systems. In addition, it will finance analytical studies for developing insurance/reinsurance schemes for public buildings, improving building codes and proper land use planning. The studies will lay the basis for improvements in the institutional framework and help develop disaster mitigation instruments which will be financed in subsequent phases. * APL 2: The second phase will bring in the two remaining OECS countries (Grenada and St. Vincent & the Grenadines) to the program. The activities supported will be the same as in APL 1. * APL 3: The third phase of the program will focus on additional physical investments identified through the hazard mapping analysis, as well as provide further support for the longer-term institutional strengthening of each country's disaster management capacity. * APL 4: The operation will include contingency funding for any eligible OECS member nation should a severe natural disaster strike them during the program period (approximately six years). This phase will run in parallel with APL 1 and APL 2, meaning that as long as a country has signed for either APL I or APL 2, they would be eligible to access the Contingency funds. 'OECS member countries are Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines. Antigua and Barbuda is not eligible for Bank financing.

8 2. Project development objectives: Page 4 Within the framework of the program, individual lending operations will be financed in the five countries (hereafter referred to as projects). The development objectives of the five projects will be the same: * To strengthen key economic and social infrastructure and facilities with the aim of minimizing damage caused by future natural disasters and reducing the disruption of economic activity in the event of disaster emergencies (pre-disaster works) * To reconstruct and rehabilitate key social and economic infrastructure following disasters to allow quick recovery and minimize disruption of economic activity (post-disaster works) * To strengthen the countries' institutional capacities to prepare for and respond to disaster emergencies in an efficient and effective manner 3. Key performance indicators: Program phasing and output indicators * Three OECS countries (Dominica, St. Kitts & Nevis, and St. Lucia) have already prepared projects in accordance with the program framework, and have signed a Development Program Agreement acceptable to the Bank. * The remaining two countries (Grenada and St. Vincent & the Grenadines) will be able to participate in APL 2 once they have adequately completed project preparation as well as made a clear commitment to a disaster management framework by signing the Development Program Agreement. These countries are expected to come on board early in 1999, as project preparation is already well under way. * Participation in APL 3 will be triggered by the following conditions: 1. Satisfactory completion of physical investments on time, within budget, and of adequate technical quality under APL I and APL 2 2. Evidence of adequate maintenance of infrastructure particularly vulnerable to disasters 3. A fully staffed National Emergency Management Agency with a clear mandate, adequate Terms of References, and sufficient financial resources 4. A program of preparedness and mitigation activities at the national and community level, including a complete National Disaster Preparedness and Response Plan for natural and manmade disasters 5. An operational plan within NEMA to carry out training and other activities in disaster awareness, preparation and response at the community level, including at schools and private businesses 6. A fully staffed National Meteorological Service with a clear mandate, adequate Terms of References, and sufficient financial resources to issue timely weather and flood warnings, as well as an operational island-wide communications systems to transmit the information to communities and businesses 7. Enactment of a National Building Code that provides for disaster-resistant construction standards for publicly owned buildings, infrastructure facilities as well as private buildings and homes 8. Completion of a national map of hazards and a detailed vulnerability analysis of natural and manmade disaster threats; 9. Completion of investigation of insurance/re-insurance policy options for public buildings, including exposure assessment as well as pricing of insurance policies. * Contingency funding (APL 4) will be available to member countries in the event of a major disaster during the program period (six years). Access to this loan will be triggered by a declaration of a disaster emergency by the government and recognition by the international community of an emergency situation. The contingency funding will run in parallel with APL I and APL 2, i.e. as long as countries have committed to a disaster management framework by signing either APL I or APL 2, they would have access to the loan.

9 Page 5 Outcome indicators * Appreciable reduction in time for restoration of key public services following a disaster. Key services include water supply, electricity service, basic health services, and opening of schools. * Smooth and effective disaster response systems (early warning, shelter management, relief supplies, subsequent reconstruction and rehabilitation, etc.) during and after emergencies. * Reduced cost to Governments of repair and rehabilitation of key infrastructure, and quick resumption of economic activities following disasters. Inputimplementation progress indicators * Specific monitorable indicators to measure implementation progress for different project components for each country are given in the Project Progress Indicators sections in the Country Annexes.

10 Page 6 B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the program (see Annex 1): CAS document number: LAC Date of latest CAS discussion: May 4, 1995 The program directly supports two principal goals of the OECS CAS: supporting infrastructure and safeguarding the environment. * Supporting infrastructure Supporting infrastructure is key to sustaining income growth as these countries develop fully as service-based economies. Although the initial strategy of the CAS had been to support infrastructure by providing resources to these countries via the Caribbean Development Bank (CDB), this strategy has not been successful, as witnessed by the recent cancellation of the CDB VI project. As a result, it was agreed with the OECS countries that it would be more effective to increase direct lending to these countries for projects (see Annex 6: Economic Developments and Bank Program Implementation). However, close coordination with similar CDBfinanced project investments has been maintained throughouthe preparation of this program. * Safeguarding the environment. In the last few years, the Bank has taken the lead in assisting the OECS countries in preparing National Environment Action Plans (NEAPs). The next step, foreseen in the CAS, is to assist in implementing these plans and preparing specific programs to address priority needs. One of the priority needs identified in the NEAPs is disaster prevention and mitigation, which is the primary objective of the proposed program. 2. Main sector issues and Government strategy: Main Sector Issues * The consequences of natural disasters in the small island states of the Caribbean from events such as hurricanes, tropical cyclones, earthquakes, and floods on economic activities, property, human welfare, and natural resources can be devastating. These events can lead to significant disasters greatly affecting the productive sectors of the economy such as agriculture and tourism, not to mention the impact on communities. The impact of various hurricanes on the OECS countries in the present decade is summarized below. St. Kitts Dominica Major Caribbean Disaster Losses E~~~ Year;- >; Setn Im<>,pac!t; - Hurricane Georges 1998 Housing Agriculture 85% damage/destruction 50% sugarcane crop lost Hurricanes Luis and 1995 All sectors $66.7 m in total damages Marilyn Antigua Hurricane Luis 1995 Tourism 3 months after 60%/e fewer tourists St. Lucia Tropical Storm Debbie 1994 All sectors $79 m in damages (18% Of GDP) Jamaica Hurricane Gilbert 1988 All sectors $956 m in total damages $130 m in lost exports S 100 m in lostourism St. Lucia Hurricane Allen 1980 Dominica Hurricanes David & 1979 Housing Housing 30% damaged 60% destroyed or damaged - Frederic Source: Caribbean Disaster Mitigation Project (CDMP), Organization ofamerican States (OAS), World Bank documents, and others

11 Page 7 * Since these events recur at frequent intervals, preparedness and mitigation activities must focus on minimizing their potential negative impact. The OECS countries face special challenges to development because of their small size. Their topography of mountainous terrain and low population densities (see table below) makes the cost of economic and social infrastructure high. The full cost of natural disasters in the OECS goes beyond the direct dpmages incurred from each storm. It involves the higher costs of building infrastructure to withstand storms and flooding, additional protections such as sea walls, and strict engineering designs for all facilities. The devastation associated with the impact of these hazards often overwhelms local emergency systems resulting in the need for massive external assistance. OECS Country Statistics Population Area G Population Unemployment (1997) (sq. km) Capita in Poverty (%) Rate (%) Dominica 75, $3, St. Kitts & Nevis 41, $6, St. Lucia 150, $3, St. Vincent & the 112, $2, Grenadines Grenada 99, $3, Source: Caribbean Economic Overview, The World Bank, June In the Caribbean, there were a total of 309 disaster events between 1900 and 1996 with over 72,000 deaths and approximately 12 million people affected. This included 189 natural disaster events in the Greater Antilles 2 with over 34,000 deaths and 11 million people affected, and 120 events in the Lesser Antilles 3, where there were over 38,000 deaths and 624,000 people were affected. On average, at least one major hurricane and numerous tropical storms cross the Caribbean each year, with the OECS countries often in their path. Types of Disaster Events by Country ( ) Total Tropical Floods Volcanic Cyclones Eruptions Dominica St. Kitts and Nevis St. Lucia St. Vincent 1I Grenada Source: Diagnostic Study for the DIPECHO Action Plan for Central America and the Caribbean, April 1997, ECHO Programme for Disaster Prevention, Mitigation, and Preparedness, CRED/CIFEG * The repercussions of disasters on the development of these countries' economies can be severe: Economic developments. The OECS countries demonstrated an impressive growth performance in the 1980s with an average GDP growth rate of 5-6%, due largely to a favorable external environment (concessional aid flows financing a large portion of public investments in infrastructure; preferential market access; favorable prices allowing a twofold increase in banana exports receipts; and fast growth in the tourism sector). However, growth in the 1990's has slowed considerably to approximately 3% per year, again due mainly to the external environment with external flows slowing down and concessional aid flows declining rapidly. The main economic trend in the OECS 2 Greater Antilles: Bahamnas, Cuba, Haiti, Cayman, Turks/Caicos, Jamaica, Puerto Rico, Dominican Republic 3 Lesser Antilles: Leeward and Windward Islands from Antigua to Trinidad/Tobago

12 Page 8 countries during the 1990s has been the rapid transition from agriculture-based economies to servicebased ones, mostly tourism. The WTO ruling against the preferential treatment of Caribbean bananas accelerated this trend. Since 1995 there have been positive signs indicating that the OECS economies might have overcome the worst part of their adjustment towards more diversified economic structures. The prospects for GDP growth have improved somewhat relative to the first half of the 1990s, due mainly to the expansion of the tourism sector in substitution of the banana industry as the main foreign exchange earner. This development, however, will require a medium- and long-term perspective to protect the very resources that makes them attractive to tourism. The challenge that the OECS countries face is that both their main foreign exchange sources, tourism and agriculture, are particularly vulnerable to disasters. TourisnL Tourism has become the most important foreign exchange earning sector in these countries. In St. Lucia, for example, agriculture represented 16% of GDP in 1977, while tourism represented 21%. In 1996, agriculture formed 6% while tourism doubled to 32%. However, natural disasters like hurricanes can have a devastating impact on the tourist industry, as tourists become more cautious about going to the country that has been devastated by a tropical cyclone, and it takes time to rehabilitate necessary infrastructure to serve the tourist industry. In St. Kitts, Hurricane Georges destroyed the harbor that docks all cruise ships, caused severe damage to all but two hotels, and destroyed the airport traffic control tower. Prior to Hurricane Georges, the sugar industry and tourism accounted for 68% of total exports of goods and non-factor services and the share of tourism in GDP in St. Kitts and Nevis had been constantly rising. Although the impact of Hurricane Georges on revenue from the 1998/99 tourism season is yet to be seen, past examples like Antigua in the months following Hurricane Luis in 1995 show that an estimated 60% to 70% fewer tourists visited the island that year. Agriculture. Agriculture is also vulnerable to natural hazards because of its dependence on foreign trade and because it still plays an important role in creating the island's economic wealth. There is still a single-crop export-oriented agricultural industry (bananas or sugar cane) on many of the islands. In St. Lucia in 1979, in the aftermath of Hurricane Allen, farming employed 43% of the active population and consisted of about 15% of the country's GDP (banana production, which is particularly vulnerable to high winds, represented 80% of the island's agriculture exports). Following Hurricane Georges (1998), over 50% of the sugar crop was completely destroyed in St. Kitts. Roads, transport and coastal areas. The transport and communication networks, which are increasingly vital to these countries, are particularly vulnerable. Natural events cause disasters such as landslides and floods, which have a significant negative impact on road conditions and the road network, and eventually disrupt road transport. Selective strengthening of roads and bridges in key sections of the network is needed to help minimize this disruption. Housing. Housing is one of the most vulnerable sectors, because it is generally rudimentary and structurally weak in these countries. In Dominica, in the aftermath of Hurricane David (1979), 60% of housing was seriously damaged or destroyed. In St. Lucia, following Hurricane Allen (1980), 30% of housing was impacted, and 80% of the schools were destroyed or seriously damaged. In St. Kitts, following Hurricane Georges (1998), 85% of the housing stock was seriously damaged or destroyed and all schools sustained some damage. Public buildings and utilties. Lifeline infrastructure such as hospitals, airports, public buildings, shelters, etc., are also potentially vulnerable to natural disasters. In St. Kitts, following Hurricane Georges (1998), three quarters of the main hospital was destroyed. One of the major problems in the OECS countries is an absence of legislation, a lack of regulations and no effective enforcement measures to ensure appropriate building construction. Following a hurricane or tropical storm, the

13 Page 9 electrical network is often down for weeks, which causes serious disruptions in power supply to all economic activities and key social services such as hospitals and water distribution. In St. Kitts, electrical poles were uprooted or broken throughout the entire island leaving citizens without power for weeks. Communities. Due to rapid population growth and human settlements in disaster prone areas, more and more people and their assets are vulnerable to natural hazards. However, often communities are not forewarned of an impending disaster, not prepared, and are not organized to manage emergency situations. Government Disaster Mitigation Strategies * Although natural occurrences such as floods, hurricanes, earthquakes and volcanic eruption cannot be stopped, countries can take preventive measures at various levels to make the impact of such events less harmful and costly, and prevent some of their worst effects. * The OECS countries are committed to reducing their vulnerability to natural disasters and have taken, or are planning, several steps in the appropriate direction. They have: i) named a National Disaster Coordinator with the unique function of bringing diverse groups together to promote disaster mitigation, stimulate preparedness and to coordinate relief operations; ii) developed a process and structure to engage all aspects of society and to help them prepare themselves; iii) undertaken disaster related training; iv) attempted disaster training to improve emergency management skills; v) drafted and supported laws and regulations to strengthen national and community disaster awareness and protection; vi) engaged business and industry resources to support public projects; and vii) stimulated private sector to develop plans to protect their productive capacity * A number of regional initiatives are also under way. i) There has been considerable progress in the identification of hazards and analysis of country vulnerability. ii) The CARICOM countries formed the Caribbean Emergency Disaster Relief Agency (CDERA) which initially focused on relief coordination but has now launched a program aimed at evaluating the economic impact of hurricanes in the short, medium and long terms based on the 1995 hurricane season. iii) The UNCHS with the Organization of American States (OAS) has developed a Caribbean Disaster Mitigation Project (CDMP) which has developed an OECS Model Building Code and is providing technical assistance to OECS governments for adoption, enactment and enforcement of the code. iv) Several organizations are working with the Organization of American States (OAS) on an initiative to reduce the vulnerability of schools. v) The Pan American Health Organization (PAHO) has conducted vulnerability studies of hospitals and health facilities which have resulted in specific recommendations for strengthening hospitals in St. Lucia and Grenada. PAHO has secured funding for these countries and is seeking additional funds for hospital mitigation in other OECS countries. Countries have also improved Mass Casualty Management through training provided by PAHO. 3. Sector issues to be addressed by the program and strategic choices: The proposed program will consist of two types of activities: investments in physical infrastructure and strengthening institutional capacity to prepare for and manage disasters.

14 Page 10 * Emergency physical investments. Certain key infrastructure facilities in each country are repeatedly devastated by disasters (points along roads during heavy rains/landslides, bridges during floods, roofs of shelters, hospitals and other critical public buildings during hurricanes). There are other structures that need to be constructed as their absence leads to damage and destruction to nearby areas (like sea defenses and retaining walls. These facilities are likely to be affected at any time in bad weather conditions, and particularly during the "hurricane season" every year. These investments needs have already been prioritized by the member governments and are limited in number. Financing these key investments on an emergency basis will clearly be one of the most cost-effective ways to reduce damages and lessen the negative impact of future disasters on the society and economy. Therefore, for the infrastructure component, the program will finance specific investment needs and not seek to address any long-term sectoral issues in any one sector. * Disaster preparedness, mitigation, and emergency management. The program will address longterm issues in the area of disaster preparedness and mitigation. In each country, it will aim to strengthen the authority and capability of the national emergency management agencies, establish effective Early Warning Systems, and strengthen community organization and preparedness for disasters. The program will also seek to address institutional issues such as improvements in, and enforcement of, the regulatory framework of disaster-related insurance, building codes and land use planning. This would ensure that physical infrastructure in future is located in less vulnerable locations and built to minimize damage due to disasters, as well as reduce future costs of repair and rehabilitation. * Quick disbursing loans in emergency situations. In emergency situations, the program will also consider providing quick disbursing funds to finance essential imports from a positive list of items needed to help restore economic activity. These imports will include food grains, edible oils, construction materials, and petroleum products. In the case of St. Kitts and Nevis under APL 1, a quick disbursing component of US$2.4 million is included to finance imports. Similar mechanisms might be considered under APL 4 (the contingency funding) as well. 4. Program description and performance triggers for subsequent loans: The program consists of four types of activities: physical works, capacity building, institutional development and strengthening community involvement in disaster preparedness, mitigation and response. * Physical works: These include prevention and mitigation works such as construction of sea defenses; river control and damage protection; flood protection (for key facilities such as airports, main network roads); slope stabilization; retrofitting of schools and shelters; construction of hurricane-resistant shelters; and installation or construction of backup facilities (like generators and reservoirs) for critical services such as hospitals. They also include post-disaster rehabilitation works such as construction of hospital wards and shelters; beach restoration; restoration of water and electricity facilities, etc. * Capaciy building: This will involve strengthening the capacities of national institutions responsible for disaster preparedness, mitigation and management. National Emergency Management Agencies in each country will be adequately staffed, provided the necessary training, and given necessary equipment and facilities such as an Emergency Operations Center and communications equipment. Technical assistance will be provided in disaster planning and management as well as to enhance the operational links, including communications, between the national agency and other stakeholders in government ministries, private businesses, NGOs, and, most importantly, local communities. The National Meteorological Services in each country will be provided appropriate equipment and

15 Page 11 training to carry out weather observations and warnings adequately at the local level, including the development of flood alert warning systems and ham weather radio observation networks. Where necessary, the capacity of the Ministry of Communications and Works to carry out activities such as river training or monitoring earth movements, etc. will also be strengthened. Institutional strengthening: The program will support improvements in the regulatory framework as it relates to disaster planning and mitigation. This will involve the enactment and enforcement of a national Building Code and hazard analysis and vulnerability mapping to improve land-use planning. A major activity for institutional strengthening will be to put in place an appropriate insurance policy for government buildings. Studies will be carried out to examine the mechanisms for putting in place market incentives (for example, via insurance premium pricing) for mitigating risk and reducing vulnerability, as well as mechanisms for protecting against sharp fluctuations in insurance/reinsurance prices. The latter would have the objective of eventually augmenting overall insurance coverage at a reasonable cost, and ensuring the availability of backstop financial mechanisms to provide the insurance industry and the government sufficient reserve liquidity to finance damages from disasters. * Community involvement: The program will support District Disaster Committees and strengthen their capacity to prepare community disaster plans and respond to and manage disasters and emergencies. It will promote community activities in disaster prevention and mitigation by providing access to training and mitigation measures. As a pilot in Dominica, it will establish a small fund to finance small-scale community-driven initiatives for local disaster prevention and mitigation. * These activities will be carried out or initiated in the first phase of the program (APL 1 for St. Kitts & Nevis, St. Lucia and Dominica; APL 2 for St. Vincent & the Grenadines and Grenada). In the second phase (APL 3), the program will focus on additional physical investments identified through the hazard mapping analysis, as well as provide further support for the longer-term institutional strengthening of each country's disaster management capacity. Institutional strengthening will include activities such as: (i) the enforcement of regulation such as building codes and land use planning, including tracking and inspection; (ii) the development of insurance schemes for public buildings; (iii) examining ways in which appropriate technologies can be applied more effectively for disaster management and mitigation; (iv) continuing the process of community outreach and change; and other measures as they arise from the results of implementation of the first phase. The triggers. for this phase are given under "Program Phasing Indicators" earlier in this section of the PAD. * The program will also make available contingency funds whose objective would be to finance emergency rehabilitation and reconstruction investments as a result of disasters in order to restore critical public services and stimulate economic recovery. Any OECS member country that is already a participant in the program (by having signed either APL I or APL 2) would be eligible. The trigger for the loan, would be a national declaration of an emergency as a result of a disaster, which in turn triggers an international disaster/emergency declaration. The Contingency funding would finance immediate rehabilitation activities that would help restore critical public services, and the reconstruction of physical and social infrastructure which will stimulate economic recovery. It is expected that rehabilitation of roads and bridges, restoration of water and sanitation facilities, rehabilitation of critical public buildings (hospitals, schools, administrative buildings) and critical services (electric power), would receive priority consideration for funding. Purchase of capital goods (construction materials, equipment, repair materials such as "Bailey type" bridge elements, engineering services) would also be considered for financing. Relief supplies such as blankets, clothing and food would not be considered.

16 Page 12 C: Project Description Summary 1. Project components (see Annex 2A, 3A and 4A for detailed descriptions and Annex 2B, 3B, and 4B for detailed cost breakdown): Component Category Cost Incl. % of Total Bank- % of Contingencies financing Bank- ; (USSM) (US$ fi acin 1. ST. KITmS AND NEVIS % % a. Fast Disbursing Component Essential imports for recovery and rehabilitation Other % according to positive list b. Physical Recovery and Mitigation Works Hospital, shelters, water supply, electricity, Physical % roads and coastal protection, airport. c. Strengthening Emergency Preparedness and Response Physical works, (i) Strengthen NEMA and construct Emergency institution % Operations Center; (ii) Develop Early Warning building, other System (support to NMS, ham weather radio observation network); (iii) Community based disaster management (support to district disaster committees) d. Institutional Strengthening Hazard analysis/vulnerability mapping, Institution % vulnerability reduction of public buildings, building building code e. Support to the Project Coordination Unit Project % management 2. ST. LUCIA % % a. Physical Prevention and Mitigation Works Airport flood protection, bridges and river Physical works, % training, Cul de Sac flood prevention, reservoir, other schools and libraries b. Strengthening Emergency Preparedness and Response % (i) Strengthen Office of Disaster Preparedness; Institution (ii) Develop Early Warning System (support to building, other Met Service, flood alert system, ham weather radio observation network); (iii) Community based disaster management (support to district disaster committees). d. Institutional Strengthening Hazard analysis/vulnerability mapping, Institution % vulnerability reduction of public buildings, building building code e. Support to Project Coordination Unit Project % management 3. DObMINCA O 40.% a. Civil works Sea defenses, river control, flood prevention, Physical % roads, shelters

17 Page 13 Component Category Cost Incl. % of Total Bank- % of Contingencies financing Bank- (US$M) (USSM US$M) financing b. Strengthening Emergency Preparedness and Response (i) Strengthe national Office of Disaster Physical works, % Preparedness; (ii) Develop Early Warning institution System (support to NMS, flood alert system, building, other ham weather radio observatio network); (iii) Community based disaster management (support to district disaster committees and pilot Vulnerability Fund). c. Institutional Strengthening Hazard analysis/vulnerability mapping, Institution % vulnerability reduction of public buildings, building building codes d. Supporto Project Coordination Unit Project % management I I I TOTAL 23.62* _ 19S3** * Cost figures do not include the front-end fee charged on IBRD loans ** Bank financing figures include the front-end fee charged on IBRD loans

18 Page Key policy and institutional reforms supported by the program: * This is an emergency multi-sectoral operation, which does not intend to address long term economic, sectoral and institutional problems within any one sector or include conditionality linked to macroeconomic or sectoral policies. * To ensure sustainability of physical investments financed through the program in the different sectors, each responsible ministry (e.g. the Ministry of Health for a hospital rehabilitated) will be required to carry out satisfactory operations and maintenance (O&M) by including provisions for O&M in the annual budget. * Institutional reforms will be sought in the area of disaster preparedness, prevention and mitigation, namely through activities like staffing of national emergency management agencies, ratification of national disaster plans, institutionalization of effective Early Warning Systems, and passing of building codes, as necessary in the respective countries. * The program will also finance studies and other initiatives to enhance preparedness to manage future emergency situations in the long-term, for example, evaluating the existing frameworks of privately offered disaster-related insurance/re-insurance schemes for public buildings, incorporating hazard analysis and mapping into land use planning, and enforcing building codes. 3. Benefits and target population: * The main beneficiaries will be the population at large who will benefit from the avoidance or minimization of the disruption of economic activity due to prevention and mitigation works financed through the program, or in the event of damage, their rapid rehabilitation/reconstruction. * The program will benefit many lower income groups as it will finance the protection of dwellings and commercial properties in the most risk-prone areas, which are often inhabited by poorer sections of the population (in St. Kitts, the housing reconstruction component will be targeted to lower income people). * Government agencies such as the national emergency management agencies, the planning ministries, and other implementing agencies (especially the Ministries of Communications and Works) will benefit from technical assistance and institutional strengthening. * There will be a decrease in the cost of disaster management, response and rehabilitation, as the nation will be better prepared to work more effectively and with a better coordinated mechanism during and following disasters. 4. Institutional and implementation arrangements: Project coordination and management * In each country, a Project Coordination Unit (PCU) will be set up in the respective ministries of finance and planning. A Project Coordinator will be assigned by each ministry to coordinate and monitor implementation progress according to agreed upon performance indicators and report to the World Bank. The project will finance a project Financial Manager within each PCU for the duration of the project who will be familiar with Bank procedures and guidelines for administration and management of funds. The project will also finance a contract management specialist where necessary to assist the various implementing agencies in awarding and supervising contracts. * In each country, a National Hazard Mitigation Council (or similar body) will be set up to serve as a steering committee to coordinate policy issues, recommend the selection of priority investments, and assist in ensuring compliance of government commitments. The committees will consist of representatives of relevant sector ministries involved in the project, as well as representatives from the private sector and NGOs.

19 Page 15 Project impkmnentation * In each country, each project component will be implemented by the respective line ministry responsible for that component (e.g. sea defenses will be implemented by the Ministry of Communications and Works, while retrofitting of schools will be implemented by the Ministry of Education). For some of the institutional strengthening components, the national emergency management agencies will be the implementing agency. * The implementing agencies will provide progress reports to the PCU on a monthly basis. * Procurement, contracting and payments to contractors will be undertaken by the respective implementing agencies using World Bank guidelines with the assistance of the contract management specialist in the PCU where necessary. * Special implementation arrangements for specific components, like the Vulnerability Reduction Fund in Dominica, are described in the respective Country Annexes. Project supervision, reporting and audit requirements * A Project Implementation Manual will delineate financial management and control procedures, including TORs for internal and external audits acceptable to the Bank * Each implementing agency will forecast the amount to be requested from the Special Account on a quarterly basis. The Financial Manager in the PCU will authorize the withdrawal of these funds from the Special Account and make payments directly to the contractors/consultants. * The PCU will, on a periodic basis, supervise the implementation of each component of the project, including the physical investment components, and undertake periodic field visits * The PCU will make quarterly reports to the World Bank, including a statement of sources and uses of funds, ensuring that all project guidelines are being followed * Financial audits for all accounts and components will be carried out annually. Technical audits will be carried out for large civil works that do not include technical audits as part of the supervision process. Audits reports will be submitted to the Bank no later than six months after the end of each fiscal year.

20 Page 16 D: Project Rationale 1. Project alternatives considered and reasons for rejection: Regular Bank operations vs. Adaptable Program Loan (APL) All five of the OECS countries require assistance for disaster management and preparedness. Because three countries are advanced in project preparation, whereas two are in the process of identifying priority investments and developing engineering designs and studies, it was decided that an APL would allow the flexibility for the Bank to: * respond immediately to a disaster recovery emergency in St. Kitts & Nevis; * not penalize the countries that have prepared projects and taken the required steps; * allow the slower moving countries to come on board at a later stage; * follow through with institutional reforms for long-term sustainable disaster management policies and strategies; and last * through the Contingency funding, ensure that the Bank is fully responsive to the particular needs of member countries as they arise. Using the APL will have the important benefit of encouraging regional integration through the sharing of facilities, practices, and information between the OECS countries (for example, the program will finance a regional workshop for training local contractors in hurricane-resistant building technologies). It will also reduce the cost of preparing and supervising small operations (as a ratio of administrative budget over dollars lent). Earmarkingfundsforpost-disaster works on a country basis vs. creating separate Contingency funding It is not possible to predict how much damage might be caused by a future disaster. Earmarking funds within the allocated amounts per country for recovery from a disaster would reduce the flexibility of the operation by first, reducing the amounts available for pre-disaster works, and second, forcing countries to pay commitment fees for amounts that it cannot use until and if a disaster strikes. In addition, creating a regional facility gives the flexibility to increase the amount of assistance according to the level of damage incurred, especially if one country is hit particularly badly. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned): Sector issue Project Latest Supervision Ratings (Bank-financed projects only) Bank-fimanced hnplementation Development Progress Objective Rehabilitate hydraulic infrastructure of St. Lucia: Watershed & S S priority watersheds; strengthen govt Environmental Management capacity for environmental management & Project--completed 1997 flood preparedness Strengthen monitoring capacity & analysis GEF Planning for Adaption S S of global climate change to determine to Global Climate Change potential impact on coastal areas; identify Project areas vulnerable to adverse effects of global (implemented by OAS/ climate change & sea level rise CARICOM) Introduce pro-competitive reforms in OECS: Telecommunications N/A N/A telecommunications sector and increase Project supply of informatics-related skills.

21 Page 17 Sector issue Project _i ings.. -._ (Daulc..flanced rojects onl) i ~Implementation )evlopment _,,._,_,_._._._'Progres _ Objective Reduce public health risk OECS: Solid Waste Mgmt U U Project Finance rehabilitation needs; provide Jamaica: Emergency 2 1 framework for overall coordination & Reconstruction Import implementation of reconstruction program Loan---completed 1991 Reduce loss of life & deterioration of living Bolivia: El Nino Emergency S S standards from floods &/or droughts; Assistance Project rehabilitate & reconstruct infrastructure facilities damaged by floods reduce loss of human life and deterioration Peru: El Nino Emergency S S of living standards from floods &/or Assistance Project droughts; minimize the loss of, or damage to, economic and social infrastructure; enhance institutional capacity to forecast and respond to future El Nino events Other development agencies USAID, implemented by OAS PAHO Caribbean Disaster Mitigation Project (sp. Model Building Code project) Caribbean Hospital Mitigation and Mass Casualty Training IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: * The Bank has had experience with disaster management in the Caribbean region through two projects: the St. Lucia Watershed and Environmental Management Project (following Tropical Storm Debbie in 1994) and the Jamaica Emergency Reconstruction Import Loan (following Hurricane Gilbert in 1988). The main lessons learned from the St. Lucia project are the following: i) donor coordination in emergency situations is critical; ii) flexibility in procurement procedures, particularly for small contracts, allows rapid implementation; iii) a balance needs to be set between rapid implementation and engineering designs so that quality is not compromised, and environmental guidelines are adhered to; and iv) community participation can benefit implementation and ensure sustainability of interventions. The proposed program has been designed to address these main lessons: the project was designed in close coordination with donors; procurement procedures have been made particularly flexible for the project; engineering designs will be carefully reviewed by the Bank for the larger civil works projects, and the Project Implementation Manual will set the criteria and guidelines for environmental assessments for civil works; and as part of the disaster management framework, the project foresees the participation of communities through training in disaster management, search and rescue, etc. * Lessons learned from the Jamaica project have also been incorporated. The Jamaica experience demonstrated, among others: i) the need for greater involvement of communities and the private sector in decision-making and implementation of the project; and ii) the importance of clearly defining the responsibilities of implementing agencies (ambiguous roles can lead to significant implementation delays). The proposed program has been designed and conceived with active participation of all major stakeholders, including communities and the private sector, and the responsibilities of implementing agencies will be clearly defined during negotiations.

22 Page 18 * Bank-wide experience has shown that successful emergency projects have involved: (i) rapidity of response; (ii) project simplification; (iii) strong government commitment; (iv) not imposing major conditions that are difficult for the Governments to meet; (v) strengthening existing institutions rather than creating new ones; and (v) investing in measures that enable the Borrower to be better prepared to mitigate the effects of future disasters. The most successful emergency operations have been those that not only responded quickly, but identified and addressed underlying problems and determined how to resolve them in ways that resulted in long-term sustainable solutions. One of the main aims of the proposed program is to strengthen institutional capacity to prepare for and manage disaster situations in the future. Given the vulnerability of the OECS countries to disasters, there is already strong government commitmento the program. The program will also enhance the capacities of existing institutions involved in disaster management. * The management of regional projects with participation by a number of beneficiary countries poses special challenges to the implementing agencies as different national priorities, capacities, and practices must be taken into consideration when designing individual country participation in project activities. Although the proposed program is designed as a regional program, with similar issues addressed in each country, and similar goals pursued, the program has been tailored to fit the specific needs and circumstances of each country through individualending operations, which have been designed separately with each country. 4. Indications of borrower commitment and ownership: This program emerged in response to a direct request to the President of the World Bank in July 1998 by a team of Commonwealth Secretariat ministers to assist small nations to address their economic, environmental and legal vulnerability. Following a commitment by the President to create a Task Force for small states, the OECS member nations expressed a strong interest in using Bank resources for a Disaster Management Program. Following Hurricane Georges in September 1998 and its devastating impact on St. Kitts & Nevis, the governments' desire for rapid implementation of the program has increased. The Government of St. Kitts & Nevis especially has urged the Bank to assist on an expedited basis, and has made significant progress in carrying out damage assessments and identifying priority needs. The Governments of St. Lucia and Dominica have prepared preliminary designs for the majority of physical investment components. The Government of St. Vincent has identified physical investments and institutional strengthening components to be included in the future project, and Grenada has indicated a strong interest in participating and has made a preliminary identification of components. The program has strong support from senior officials in the governments, as witnessed by the Prime Ministers meeting with some Bank missions or signing mission Aide Memoires in some cases. 5. Value added of Bank support in this project: * Disaster mihigation experience. The Bank has gained experience, particularly over the last five years, in preparing a number of emergency disaster mitigation projects, including for floods, cyclones, and El Nino effects throughouthe Latin America and Caribbean Region, as well as in other developing countries outside this region. The lessons and best practices from these experiences are being applied to this project. * Regional OECS projects. The Bank has already worked on a number of regional projects for the OECS/CARICOM countries and has established strong working relationships, as well as experience in coordinating regional efforts. * Bringing in expert advice. Through the Disaster Mitigation Program within the Bank, the project team from the Bank includes staff from the U.S. National Weather Service, the USAID Office of Foreign Disaster Assistance (OFDA), and the U.S. Federal Emergency Management Agency to provide practical, operational and state-of-the-art approaches to emergency management. The team is also drawing upon the experience of the Organization of American States (OAS) in these areas.

23 Page 19 * Donor coordinaton. The project has been designed in collaboration with donors and other intemational organizationsuch as the CDB, EU, CIDA, OAS and PAHO. 6

24 Page 20 E: Summary Project Analysis 1. Economic (supported by Annex 4): [e] Cost-Benefit Analysis: NPV=US$ million; ERR= % [ ] Cost Effectiveness Analysis: [] Other (Specify) The investments financed through the project will be limited to the most urgent reconstruction, prevention and mitigation works. Economic analyses will be carried out for the major civil works that require a full design and will be financed if they have an ERR higher than the minimum acceptable to the Bank (approximately 12%). For schools, libraries, and shelters, most of which benefit entire communities and involve retrofitting of existing infrastructure, a least-cost approach will be used. 2. Financial (see Annex 5): NPV=US$ million; FRR= % Not applicable Fiscal impact. For each of the physical works components, the operations and maintenance costs will be calculated and a commitment required from governmento finance and carry out effective O&M on an annual basis. An annual review of O&M needs will be carried out three months prior to the beginning of each fiscal year. 3. Technical: The project will follow current economically acceptable best-practices in technical standards for infrastructure to ensure their ability to withstand natural disasters in the future and to minimize their environmental impact. Technical ministries have been actively involved in the preparation of project components, ensuring their consistency with national technical standards. The key issues would be the skills of local contractors in applying disaster-resistant technologies and ensuring that, in future, construction throughouthe country meets technical standards to withstand natural disasters, especially hurricanes. To address these issues, the project foresees some training of local contractors in disaster resistant technology, and aims to address the regulatory and enforcement capacities of the governments in infrastructure construction. 4. Institutional: * Inplementing agencies: Because the project is multi-sectoral, each sector ministry will be in charge of implementing their respective component of the project. They will prepare relevant terms of reference for studies, prepare bidding documents, hire consultants and contractors, and supervise implementation. Technical assistance will be provided to ministries on an as-needed basis (mainly for procurement of equipment and hiring consultants in specialized areas). For some components, the national emergency management agencies (or their equivalent) in each country will be the implementing agency. Because the capacities of these offices are generally weak, the project will require government commitment of resources and staff for some of the offices, while the project will finance some equipment and technical assistance. * Project management: Project coordination and management will be centralized in the ministry of finance and planning (or its equivalent) in each country. Each ministry will designate a staff person from the ministry as the Project Coordinator. Due to the lack of resources in these ministries, the project will finance the services of a financial manager who will be trained in Bank procurement and financial management procedures and be responsible for accounting, management of the Special Account, and reporting to the Bank. The project will also finance the services of a contract management specialist where necessary to assist the different implementing agencies in awarding and supervising the various contracts required for implementation.

25 5. Social: Page 21 No major social issues are foreseen for the program. On the contrary, the program is expected to have a positive social impact as a result of the restoration and retrofitting of basic infrastructure such as schools, hospitals, shelters, roads, etc., and benefit communities by strengthening the capacity of the countries to prepare for and warn their citizens in advance of natural disasters. The Community Based Disaster Management component aims to organize communities better, supply them with assistance and equipment to prepare for and respond efficiently to disasters, and provide funds for other communitybased disaster prevention or mitigation activities. 6. Environmental assessment: Environmental Category []A [.] B [] C * The project is considered to be a Category "B" project * The majority of investments are reconstruction, rehabilitation and retrofitting of existing infrastructure, and are not expected to have any negative environmental effects * For other investments, detailed design studies will include environmental impact analyses and appropriate mitigation measures will be incorporated into the final designs. The Project Implementation Manual will set the criteria for the need for and extent of environmental assessments necessary for civil works (preparation of this manual is a condition of disbursement on the civil works components). 7. Participatory approach * Primary beneficiaries and other affected groups: The project was prepared in close collaboration with the governments of the OECS member countries. Technical ministries and the national emergency management agencies (or their equivalent) were directly involved in discussions during the preparation and pre-appraisal missions, and project identification, assessment of investment needs and prioritization of actions were done in conjunction with the main stakeholders. In each country, a National Hazard Mitigation Council (or similar body) consisting of representatives of each of the concerned ministries will be formed to ensure coordination and to share progress, information and views throughout the project cycle. During project preparation, discussions were also held with communities and Community Disaster Committees to assess their needs. A Vulnerability Reduction Fund will be started as a pilot in Dominica, which would be a demand-driven fund to identify priority prevention and mitigation activities that can be undertaken at the community level. * Other key stakeholders: The preparation missions consulted with private sector businesses and the Chambers of Commerce to explore possible public-private partnerships in disaster preparedness and response. Collaboration with local or national NGOs was also considered, but there is a relative dearth of active NGOs in the countries. The Red Cross Society is the one of the few active national NGOs, and the project will seek to involve the Red Cross in project implementation, particularly to carry out training of communities and Disaster Committees.

26 1. Sustainability: Page 22 F: Sustainability and Risks * Maintenance of infrastructurefaciities: Inadequate maintenance has been a key issue in sustainability of infrastructure. For each of the physical investment components of the program, the relevant sector ministry will be expected to provide an operations and maintenance plan up-front before disbursement begins, and commit to providing the resources necessary. An annual review of O&M needs for each component will be carried out no later than three months prior to the beginning of each fiscal year. Disbursement on the physical investment components in the second year will depend on whether adequate provisions were made in the annual budget for O&M of works initiated or completed in the first year. * Institutional abilit toplanfor andmanage emergency response activities: The program will provide assistance to the national emergency management agencies (or their equivalent) to assist them in preparing for and managing emergency situations. To ensure sustainability in the long run, the project will seek government commitment of staff and financial resources to these agencies to ensure their long-term viability after the project is completed. The bulk of the assistance provided to these agencies from project resources will be in setting up systems for response activities, as well as for equipment and training. Through APL 3, the program will support long-term institutional reforms in disaster preparedness and management. 2. Critical Risks (reflecting assumptions in thefourth column of Annex 1): Risk Risk Ratiu Risk Mlinimization Measure Annex 1, cell "from Outputs to Objective" * That physical works are undertaken at technically Substantial Particular attention to supervision for adequate standards large infrastructure works plus technical audits * That national emergency management agencies have Substantial Careful monitoring of leadership sufficient authority and leadership to take leading role performance in Phase l; specific in disaster preparedness and response trigger mechanism for Phase II * That disaster committees in charge of early warning Modest Training programs in disaster use their offices and equipment appropriately preparedness * That communities are willing to be involved in Modest Careful prescreening of communities Disaster Committees and take responsibilities before, to ensure a minimum commitment during and after emergencies Annex 1, cell '"rom Components to Outputs" * Government capacity to manage project and perform Substantial Technical assistance to PCU and to effectively in each country national emergency management agencies * That adequate counterpart funding is in place Modest Substantial risk in St. Kitts. * That there is adequate capacity in the construction Substantial Supervision of more complex industry and that contractors are well supervised infrastructure works * That there is adequate government commitment and Modest Careful monitoring of financial and resources to staff national emergency management human resources in Phase I; specific agencies and to operationalize them trigger mechanism for Phase 11 * That communities are willing to organize and take Modest Careful selection of communities actions in disaster preparedness and mitigation supplemented by training programs (applicable for Dominica only) Overall Risk Rating Modest Risk Rating - H (High Risk). S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk)

27 3. Possible Controversial Aspects: None Page 23 G: Main Loan Conditions 1. Effectiveness Conditions: That a Project Coordination Unit (PCU) with a Project Coordinator and a Financial Manager will be established, and a financial management system acceptable to the Bank will be set up 2. Other [classify according to covenant types used in the Legal Agreements]: Conditions of disbursement * That a Project Implementation Manual will be prepared and approved by the Bank as a condition of disbursement on the civil works components (excluding engineering and studies). * That in St. Lucia, a disaster management expert will be hired in the national emergency management agency as a condition of disbursement for the "Strengthening Emergency Preparedness and Response" component * That in Dominica, an Operational Manual acceptable to the Bank will be prepared as a condition of disbursement for the Vulnerability Reduction Fund component. Other * That the Governments will provide quarterly progress reports to IDA and will hold project reviews with IDA supervision missions. * That the Governments will undertake to contract annual financial and technical audits for the project components, and submit audit reports no later than six months following the end of the fiscal year. For the activities to be financed retroactively, such audits will be sent to the Bank no later than December 31, * That the Government will make staff available to the PCU, the relevant sector ministries, and the national emergency management agencies (or their equivalent in each country) for satisfactory implementation of the components and to ensure compliance with Bank policies such as environmental and resettlement policies as needed. H. Readiness for Implementation [] The engineering design documents for the first year's activities are complete and ready for the start of project implementation. [.] Not applicable. StKits & Nevis: The specifications and quantities of standard equipment, portable generators, small rescue tools, electrical accessories, poles and supplies are ready. The retrofitting of shelters and other facilities will be contracted on the basis of an inventory of the damages. The feasibility study and general layout of the facilities for the Emergency Operations Center are available. Terms of Reference (TOR) for various engineering assignments for detailed design and supervision of sea defenses, hospital facilities and road works are being prepared St. Lucikc Complete designs of bridges at Caico and Marc Floissac and a detailed engineering proposal for river training have been prepared. For the Cul de Sac Valley flood prevention and road raising works, full designs have been prepared, and tender documents are under preparation; tender documents for the

28 wage 24 provision of supervision services and review of the design are expected shortly. Tender documents for the Hewanorra airport flood protection works, a hydrological study of the Vieux Fort river, and a detailed design for sea defenses are under preparation. Tender documents for the procurement of Bailey-type components, launching equipment, and gabions are ready. TORs to assess in-house the frequency of floods and a plan to mobilize internal resources for supervision are being prepared. Tender documents for the elaboration of detailed design for Victoria hospital and the provision of supervision services have still to be prepared; their status of preparation will be reviewed at negotiations. A complete list of equipment for schools and libraries, with a rationale, specifications, quantities of equipment, and tender documents for their procurement are being prepared. Donnica: River training work is dimensioned: computers and river and flood simulation models will be procured under the project together with drafting and surveying equipment to finalize the design and inspect the works. A feasibility study has been prepared by foreign experts for the sea defense and protection of coastal erosion: bidding documents used in similar works will be adapted by consultants to conform to the Bank's Standard Bidding Documents and the detailed engineering and supervision of these works will be hired using TOR under preparation. The detailed design of the model community shelter will be completed in consultation with the community and stakeholders. The retrofitting of shelters will be made based on a simple inventory to be carried out by the Department of Public Works. [] The procurement documents for the first year's activities are complete and ready for the start of project implementation. [i] Not applicable The participating implementing agencies are familiar with the ICB documents of the Bank. There will be a procurement workshop in St. Lucia in January 1999 (open to the other program countries also) where the ICB documents will be reviewed and NCB and quotation forms for civil works will be adopted. The agencies are also familiar with the standard package of documents for hiring consultants, and cases will be reviewed in the procurement workshop to ensure readiness of the PCU and other agencies in hiring the various technical and engineering services to implement the works. In the case of the hospital facilities in St. Kitts and Nevis, PAHO will be hired on a sole source basis to provide the technical input, preparation of bidding and supervision of the works. [] The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. [.] Not applicable PIPs were discussed and agreed upon during negotiations. [ The following items are lacking and are discussed under loan conditions (Section G):

29 t ] t[] Page 25. Comnliance with Bank Policies This project complies with all applicable Bank policies. [The following exceptions to Bank policies are recommended for approval: complies with all other applicable Bank policies.] The project Task Team Leader/Task Manager: Eugene D. McC Sector Director: Danny M.,7fie ger C'ountry Director: Orsa4a, x6iantzop6uos

30 Page 26 Orpnization of Eastern Caribbean States Emergency Recovery and Disaster Management Program ANNEX 1 PROGRAM DESIGN SUMMARY I.y.Slrfonac Indlcators Monltoring and Critial Assumptions 2 ~~~~~~~~~~~ ~~~~Evaluation Sector-related CAS Goal: (from Goal to Bank Mission) Economic growth and poverty 0 No major disruptions in GDP due to natural National data on That economic growth will be reduction disasters growth, income, equitable and have a positive Supporting infrastructure and gini coefficients impact on poverty alleviation safeguarding the environment Program Purpose: Program Phasing: (from Purpose to Goal) 1. To ensure that all five OECS 0 APL 2: Grenada & St. Vincent & the World Bank project That there is macroeconomic member nations have adequate Grenadines can join when project preparation team stability in each country systems in place to prepare for preparation is complete and quality and respond to disaster 0 APL 3: For all 5 countries upon assurance That institutional capacity in emergencies * L of: S if mechanisms demnonstration of. (i) satisfactorymagentisuand emergency preparedness and 2. To set up a credit facility for completion of investments during first any member nation in case of phases; (ii) sustained government severe disaster emergencies commitment to disaster mgmt policies as demonstrated by effective enforcement of key policies e.g. building codes & using hazard analysis for land use planning; (iii) adequate maintenance of infrastructure particularly vulnerable to disasters * APL 4: Triggered by: (i) declaration of disaster emergency by govt at any time during program period; (ii) evidence that govt is committed to implementing disaster mitigation policies. _ Project Development Objective: Outcome/Impact-lndicators: (from Objective to Purpose) 1. To strengthen key economic & social infrastructure to minimize * Appreciable reduction in time for Monthly * That disasters will not strike all damage caused by future natural restoration of key public services (water, implementation OECS countries at once disasters and reduce disruption electricity, basic health services, & schools) progress reports of economic activity (pre- following a disaster. from each disaster works) * Smooth and effective disaster response implementing * That Grenad and St. Vincent & 1. To reconstruct & rehabilitate systems (early warning, shelter mgmt, relief agency to PCU the Grenadines will adequately key social & economic supplies, subsequent reconstruction & prepare their projects infrastructure following rehab. Etc.) during & after emergencies PCU quarterly disasters to allow quick * Reduced cost to Governments of repair & monitoring and recovery (post-disaster works) rehab of key infrastructure, & quick reporting To strengthen the countries' resumption of economic activities following institutional capacities to disasters. prepare for & respond to disaster emergencies in an efficient and effective manner

31 Page 27 Project Outputs: Output Indicators: (from Outputs to Objective) 1. Physical works completion in * Degree to which each physical works Monthly * That physical works are prevention and mitigation component meets its original schedule implementation undertaken at technically 2. Adequately staffed and * Paid staff in emergency management progress reports adequate standards equipped national e-mergency from each managpednationalemenrgencys agencies, with clear roles & responsibilities implementing * That national emergency 3. Early Warning Systems in p and adequate equipment & facilities agency to PCU management agencies have with adequate equipment * Adequately equipped & staffed national sufficient authority and 4. Main public buildings meteorological services and system for early PCU monitoring leadership to take leading role in adequately covered by warning in place and reporting saer preparedness an insurance * Insurance for critical public buildings 5. Functioning District Disaster 0 That communities in charge of Committees * Number of functioning District Disaster early warning use their offices Committees; regularity of meetings; types and equipment appropriately of activities * That the governments pay insurance fees * That communities are willing to be involved in Disaster Committees and take responsibilities before, during and after emergencies Project Components/Sub- Inputs: (budget for each component) (from Components to Outputs) components: That adequate project coordination 1. Physical prevention, mitigation US$15-16 million Monthly and management teams are in place and recovery works implementation in each country progress reports 2. Strengthening emergency US$3-4 million from each That adequate counterpart funding preparedness and response implementing is in place agency to PCU 3. Institutional Strengthening USS million That there is adequate capacity in Quarterly reports the construction industry and that 4. Project management US$ million from PCUs to the contractors are well supervised Bank 5. For St.Kitts, Fast Disbursing US$2.4 That there is adequate govemment component commitment and resources to staff national emergency management agencies and operationalize them That communities are willing to organize and take actions in disaster preparedness and mitigation

32 Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program Country Annex ST. KITTS AND NEVIS ANNEX A ANNEX B ANNEX C ANNEX D ANNEX E ANNEX F ANNEX G Detailed Project Description Estimated Project Costs Project Management and Implementation Project Progress Indicators Procurement and Disbursement Arrangements Statement of Loans and Credits Country at a Glance

33 29 ANNEX 2A St. Kitts & Nevis St. Kitts and Nevis PROJECT DESCRIPTION 1. Fast Disbursing Component The project will provide US$2.4 million in fast disbursing funds to the Government which will be used to finance imports from a positive list of items required for recovery following Hurricane Georges. The list is as follows: Food grains Edible oils Fertilizers Seeds Agricultural equipment and inputs Cement and other construction materials Industrial machinery, spare parts and raw materials Petroleum and fuel products Medical equipment and supplies These essential imports can be financed retroactively (the total amount of goods that will be financed retroactively under the project will be a maximum of 20% of the total loan amount), as long as appropriate procurement procedures acceptable to the Bank have been followed. Implementing agency: Project Coordination Unit in Ministry of Finance, Planning and Development

34 30 ANNEX 2A St. Kitts & Nevis St. Kitts and Nevis PROJECT DESCRIPTION 2. Physical Prevention and Mitigation Works This component aims to strengthen and/or rehabilitate key public infrastructure to enable the country to resume basic operations, and to reduce their vulnerability to future hazards. In the social sectors, it will cover hospitals and shelters, and in the economic sectors, it will cover water, electricity, roads, and the airport. Technical assistance will be provided to the different implementing agencies to prepare bids, and award and supervise contracts. a. Reconstructaonlrehabiitation of hospitals A new ward with a 40-bed capacity will be constructed for the Joseph N. France Hospital, the main hospital on St. Kitts. Technical assistance in the design, engineering and bidding process, as well as in the specialized supervision of hospital construction, will be provided through a partnership with the Pan American Health Organization (PAHO), which is currently assisting the European Union in the definition of a long-term solution for the hospital. On Nevis, the resilience of Alexander Hospital to disasters will be strengthened by installing a back-up generator. In addition, two generating units for health posts requiring refrigeration of medicines will also be installed on Nevis. Implementing agency: Ministry of Health b. Construction of shelters Eight shelters will be constructed on St. Kitts and two on Nevis. The shelters will include toilets, kitchen and facilities to accommodate 50 to 100 people, and will be designed to withstand high winds and hurricane damage. The facilities might be used to lodge crews of neighboring countries assisting in the relief and restoration of other public services following a disaster (when people have returned to their dwellings). Between hurricane seasons, the shelters will serve as community centers or be used for other communal activities. Implementing agency: Ministry of Communications and Works c Improving the reliability of water supply Water supply is severely affected by the interruption of electricity after hurricanes, interruptions which can last several days. The reliability of water supply following a disaster will be improved by providing back-up generators--on St. Kitts, 11 wells supplying the water distribution system will be equipped with back-up generators, and on Nevis, 12 stand-by 50kv generators will be installed. Water storage facilities and other equipment will also be installed to ensure that water supply is uninterrupted following disasters. This will include setting up a pipe-rack storage facility for the Water Department warehouse on Nevis and small tools and portable storage tanks for both Water Departments on St. Kitts and on Nevis. This component will also include a study on how to improve the intakes to mitigate future damages and improve the operation of the intakes during heavy rains. Implementing agency: Ministry of Communications and Works d Improving electicy supply This component will strengthen electric power supply by rehabilitating the roof of the St. Kitts Power Station and supplying poles, tools and equipmento restore electricity supply. It will also include a study

35 31 ANNEX 2A St. Kitts & Nevis on the feasibility of placing underground transmission lines. The tentative allocation of costs is as follows: i) Poles (St. Kitts) US$200,000 ii) Conductor and distribution line accessories (St. Kitts) 100,000 iii) Roof for Needsmust Power Station 200,000 iv) Truck and small tools 100,000 v) Feasibility of underground feeders 100,000 vi) Nevis: poles, small tools and accessories 200,000 vii) Nevis: rental equipment 50,000 viii) Emergency response drills 50,000 Total: US$1,000,000 Poles, conductor and distribution line accessories for St. Kitts and poles, small tools and accessories for Nevis will be financed on a retroactive basis for a total of US$500,000. Implementing agency: Electricity utility company e. Roads and coastalprotection The project will contribute to the protection of vulnerable sites along roads and specific coastal areas against recurrent disasters. As a first step, studies will be carried out on the following: beach restoration and erosion control in specific areas; slope stabilization, coastal and inland erosion in several areas on St. Kitts and Nevis, particularly, the detailed engineering of vulnerable sites in Old Road and Saddlers on St. Kitts, and the Newcastle area on Nevis; and a study on water resource management of small, steep catchment areas. Based on these studies and recommendations, a priority list of investments will be developed, which will include cleaning up beaches; culverts, gabionage protection and clearing of water crossings, particularly in Southeast Nevis; and a program for periodic flood protection works in the ring road. Bailey-type components will be procured on St. Kitts. The first step in protecting the airport landing strip and the ring road on Nevis will be carried out through the completion of detailed engineering for sea defenses along these sites. In addition, an assessment of sea and beach movements and their potential impact on nearby tourist areas, fishing outposts and the airport will also be carried out. Implementing agency: Ministry of Communications and Works f. Air traffic control tower The air traffic control tower at Robert A. Bradshaw International Airport which was lost during the hurricane will be replaced by a mobile unit procured from Montserrat. This component will be financed through retroactive financing (the mobile control tower has already been transferred to St. Kitts) for a total of US$75,000. Implementing agency: Airport Authority

36 32 ANNEX 2A St. Kitts & Nevis St. Kitts and Nevis PROJECT DESCRIPTION 3. Strengthening NEMA and the Emergency Operations Center a. Construction of an Emergency Operations Center ($800,000) Disaster management operations are best coordinated when all major players are located in one place. The heart of these operations needs to be in close proximity to technical ministries, and the authorities responsible for coordination and management need to be equipped with modem communications equipment and reliable information sources. Under the project, a new Emergency Operations Center (EOC) will be constructed in Basseterre, located outside hazardous areas, accessible during adverse weather conditions, and built to earthquake- and hurricane-resistant standards (to withstand at least a Category 3 hurricane). The new building will serve as the headquarters of the National Emergency Management Agency (NEMA). The EOC will have modem, state-of-the-art disaster management facilities, and will contain a modest kitchen, bath and sleeping quarters, and have a radio/communications room, storage rooms for some relief supplies, water storage/cistern and a backup generator. The EOC will also be used for training and simulated disaster drills for district level communicationspecialists, rescuers and community volunteers. As this is the only country participating in the Disaster Management Program where a new EOC is being financed, the building will also house a regional training facility for emergency managers. Various regional training courses will be held at this center, and demonstrations of disaster-resistant construction and state-of-the-art communications and information equipment will be used as a model for the subregion. Construction costs for the EOC are estimated at US$800,000. b. Specialized disaster equipment and loss reduction materials ($160,000) Immediate availability of certain materials like reinforced plastic sheeting can limit or prevent secondary losses. Because infrastructure damage often impedes the movement of relief and assistance materials for days, the project will ensure the ready availability of limited stocks of emergency supplies and "loss reduction materials" such as portable generators, water purification equipment and storage tanks, reinforced plastic sheeting to cover valuable facilities, and search and rescue tools and protective gear for rescuers and community volunteers. Some of this equipment will be stored in the EOC, and some will be located with the District Disaster Committees at the community level. ca Island-wide emergency communications system ($80,000) A dedicated system is needed to communicate among national level agencies, and emergency management committees at the national and district levels, as this critical function cannot rely on other agencies, especially during crises. Proposed communications equipment will include: 12 VHF Base Stations one for each District Emergency Committee; two repeaters to link all the base stations; HF transceivers; hand held radios (50); antennas; marine radio base station; a hand held, marine frequency citizen band radio and spare; an antenna tower and installation; automatic and manual tuner for antennas; backup generators for the communicationsystems; rotators, cables, and other spares; and vehicle mounted mobile radios and whip antennas.

37 33 ANNEX 2A St. Kitts & Nevis St. Kitts and Nevis PROJECT DESCRIPTION 4. Developing an Effective Early Waruing System This component will aim to establish an effective early warning system to alert appropriate government authorities and the public of adverse weather conditions to provide for the protection of life and property. The island of Antigua provides weather forecasts and warnings for St. Kitts and Nevis. The St. Kitts Meteorological Service is responsible for collecting hourly weather observations at the St. Kitts Airport and providing those observations to the Antigua Meteorological Service. These observations are critical information for aircraft traffic approaching and departing the airport. The St. Kitts Meteorological Service is also responsible for disseminating forecasts and warnings to alert appropriate government authorities, the media and the public of adverse weather conditions to provide for the protection of life and property. The ability to collect weather observational data and disseminate warnings on a continual and timely basis will provide inhabitants with sufficientime to take measures to significantly reduce the loss of life and minimize property damages. Rehabilitating the early warning capabilities of the National Meteorological Service (NMS) will assist St. Kitts in mitigating the effects of extreme natural weather events such as hurricanes, tropical storms and floods. This sub-component will: (i) strengthen the National Meteorological Service; (ii) develop a Ham Weather Radio Observation Network; and (iii) provide technical assistance and training in meteorology and hydrology. a. Supportfor the National Meteorological Service ($135,000) St. Kitts and Nevis was devastated by the impact of Hurricane Georges. The hurricane destroyed all meteorological sensors and equipment at the St. Kitts Airport. The air traffic control tower which housed operations for the Meteorological Station was also destroyed. The NMS will be strengthened through: v Replacement of meteorological sensors and equipment at the St. Kitts Airport, including installation costs, such as: thermometers, thermohygrograph, large Stevenson Screen, rain gauges, tilting syphon rain recorder, anemographerecorder, anemometer, wind vane, wind dials, mercury barometer, aneroid barometer, barograph, S.T.U. & Antenna, uninterruptable power supply (UPS), electric generator (back-up). A specialized consultant will be hired to provide expert advice on procurement, installation and maintenance of equipment. * Purchase of three PC Pentium (200 MHz minimum) computers with 17-inch monitors and 56K speed modems and Internet connectivity, as well as two (laser quality) printers, to create the basis for the acquisition and dissemination of critical meteorological data and products from regional and international centers. * Installation of two additional phone lines; one dedicated for Internet access at the NMS at the St. Kitts Airport and the second dedicated for Internet access at the Meteorological Station at the Nevis Airport, and a fax machine. * Training associated with new equipment. b. Development of a Ham Weather Radio Observation Network ($40,000) Development of a network of 5-10 ham weather radio operators dispersed throughouthe country will provide critical auxiliary weather observationsuch as wind, gusts, barometric pressure and rainfall to the NMS and the U.S. National Hurricane Center in Miami. Providing ham radio operators, law enforcement or fire department officials with reliable instruments capable of measuring weather conditions automatically also increases the chances of obtaining critical information before, during and after a

38 34 ANNEX 2A St. Kitts & Nevis hurricane since these are likely to represent the only operable communication pathway to and from a hurricane devastated area. This sub-component will finance: (i) weather stations with solar panels integrated with a modem and an Automatic Weather Packet Reporting System; (ii) transmitters, generators, and spare parts and maintenance; and (iii) training associated with development of the Ham Weather Radio Observation Network. ca Technical Assistance and Training (S25,OOO) With the recent advances in science and technology, effective and efficient up-to-date training of staff in operational meteorology and hydrology is critical to maximize the information from new technology and to minimize error of misinterpretation of observational data. This sub-component will provide for: (i) training courses, symposiums and workshops associated with computer technology, basic meteorology and equipment maintenance (repair and preventive); and (ii) technical assistance related to operations and maintenance of meteorological equipment. Implementing agency: National Sea and Airport Authority and the National Meteorological Service

39 35 ANNEX 2A St. Kitts & Nevis St. Kitts and Nevis PROJECT DESCRIPTION 5. Community Based Disaster Management This component aims to organize, train and support new and existing District Disaster Committees to mobilize and educate communities in disaster preparedness, mitigation, response, and recovery. The ultimate mission of a National Disaster Plan is to save lives and protect property. The cornerstone of such a plan is the education, empowerment and active involvement of the local community in the plan's mitigation, preparedness, response and recovery activities. It is the citizens of local communities who will personally experience, or have already experienced, the devastating effects of disasters. A public/ private partnership, with local citizen participation in planning, decision-making and the implementation of the National Disaster Plan, is critical to quick and effective recovery from the effects of a disaster. This partnership is also necessary for awareness and understanding of community's responsibilities before, during and after a disaster. T-here are 12 disaster districts on St. Kitts and five districts on Nevis. The districts on St. Kitts do not have a formal structure, like District Disaster Committees, for disaster preparedness and response. Management of many emergency shelters following Hurricane Georges was accomplished solely through ad-hoc responses by compassionate and well-meaning volunteers (although one district, St. Paul's, mobilized volunteers very quickly and managed to put together a remarkably well-organizedisaster response system due to the initiative mainly of one individual). In contrast, on Nevis, there are structured District Committees with volunteer chairpersons, a health officer, scouts, and representatives of the police and churches. The Nevis Disaster Committees also have strong training programs. The absence of an overall system of strong and active local disaster committees nationwide, particularly on St. Kitts, presents a serious weakness in the Federal Government's disaster management system, and could undermine its capacity to mitigate the loss of life and property in future disasters. There is an urgent need to organize, train and support disaster committees on St. Kitts, continue the strengthening of the committees on Nevis, and to tie all committees into a strong National Disaster Plan. The Caribbean Disaster Emergency Response Agency (CDERA), the U.S. Office of Foreign Disaster Assistance (OFDA), the U.S. Federal Emergency Management Agency (FEMA), and the International Federation of Red Cross and Red Crescent Societies, are some of the agencies that could provide essential training for key District Disaster Committee members. Under the project, Disaster Committees will be provided the following types of training: (i) organization and functions of a District/Community Disaster Committee; (ii) training in "Surviving the Next Disaster" (special training available through the Red Cross); and (iii) other skills such as emergency search and rescue, donations management, disasterrelated needs of seniors and persons with disabilities, etc. Disaster Committees will be provided with essential radios and other search and rescue equipment, potable water delivery systems, etc. (financed under section 3b. Strengthening NEMA and EOC). Physical facilities are necessary for storage of disaster supplies and emergency response equipment at the community level. In addition, committees need a dedicated space to meet and to establish an operations center during an emergency. Under the project, NEMA and the Ministry of Community Development will ensure that the equipment provided to communities is stored in a safe place and that committees have a space to meet and organize. Implementing agency: NEMA and Ministry of Community Development

40 36 ANNEX 2A St. Kitts & Nevis St. Kitt and Nevis PROJECT DESCRIPTION 6. Institutional Strengthening a. HazardAnalysisIVulnerability Mapping(US$60,000) There is a need to more precisely identify hazards and vulnerability to protect current and future government and private sector investments in St. Kitts and Nevis. Once recognized, vulnerable areas can be identified for mitigation activities and held to an appropriate standard for development planning. Existing information in government ministries and in private companies need to be consolidated and additional research done to identify all hazards to be analyzed. The project will support the development of a comprehensive hazard and vulnerability map for St. Kitts and Nevis; the preparation of an economic and population vulnerability analysis; and training for government, private sector and communities to identify strategies to use the information for development planning across sectors and for disaster preparedness and mitigation. b. Vulnerability Reduction of Public Buildings(US$150,000) The main objective of this component will be to reduce potential fiscal liabilities incurred by the Government in case of catastrophic losses by efficiently insuring its buildings/facilities and reducing their vulnerability. This component will consist of technical assistance to: (i) assess the value of the Government's building/facilities; (ii) evaluate the risk of potential damages to buildings/facilities based on their location and quality of construction and maintenance; (iii) determine optimal vulnerability reduction measures through mitigation/retrofitting investments and/or an insurance strategy to minimize the cost of insurance for a given level of risk; (iv) consider alternative financial instruments (e.g. catastrophic bonds and weather hedges); (v) review existing regulatory requirements covering building codes, siting and land use planning, and recommend improvements to current practices; and (vi) make recommendations with regard to the development of an insurance sector regulatory framework, including prudential solvency and reserve provisions for disasters. The project will thus strengthen the capacity of the Governmento reduce or spread the risk of catastrophic loss. c. Building Codes ($50,000) The project will aim to strengthen the resilience of buildings, public and private, to disasters such as hurricanes in the country through adoption of a national building code and its effective enforcement through proper building inspection. The Organization of American States (OAS), as executing agency of the Caribbean Disaster Mitigation Project (CDMP) and with funding from USAID, joined the United Nations Centre for Human Settlements (UNCHS) in a technical assistance program to introduce a model building code in the OECS countries. The Government is committed to enacting such a model building code, and will use the technical assistance provided through the OAS program to adopt a national building code (modified from the model building code to fit the specific circumstances in St. Kitts and Nevis) and work out a firm timetable for its full adoption and enforcement. In addition, an assessment of the present situation regarding the enforcement of building inspection will be carried out (appropriate consultants have already been identified by OAS) and recommendations will be made as to what steps the Government will need to take to improve enforcement. Implementing agency: National Emergency Management Agency

41 ANNEX 28 St Kitt and Nevis SL KCt N" ESTIMATED PROJECT COSTS USSmilions Base Cods Physical Price TOTAL Local Foreign Total Confng. Conting. COSTS I Physical Recovery & Mitigation Works Hospital S Construction of new ward & equipment * Supervision by PAHO Sheters Water supply Nevis water intake study _Electrcity _ Feasibility study for underground electricity wiring Roads and coastal protecton Coastal erosion mnodeling Airportrafflic control tower Strengthning Emergency Prepadness & Response a. Strengthening NEMA and EOC Constcion of EOC Specialized disaster equipment for EOC Island-wide emeigency communicatons system b. Developing Effectve Early Waming Systems Meteorological equipment,0.14 0Q Weather Radio Obsevation Network* TA and training c. Community Based Disaster Management Strengthening Dist ctdisaster Commitees Inditutional Strengthening Hazard analysis/vulnerability mapping ' Vulnerability reduction of public buildings ! : 'Building Code ' 0.05 o.ool _Posltive 4 Fat Disbursing Component list of essential imports S ProJect Management _ Finandal manager & project management services Equipment Workshops Technical audits Financial audits TOTAL N.B. Figures may not add up due to rounding I_ PhysWcal contingendes a 10% for cm! works; 5% for consutandcies; 0 for goods Prce contingencies = 2% =

42 38 ANNEX 2C St. Kitts & Nevis St Kitts and Nevis PROJECT MANAGEMENT AND IMPLEMENTATION Project coordination and management A Project Coordination Unit (PCU) will be set up in the Ministry of Finance, Planning and Development. It will consist of a Project Coordinator, appointed by the Ministry, who will coordinate and monitor implementation progress according to agreed upon performance indicators, and report to the World Bank. The project will finance a project Financial Manager for the duration of the project who will be familiar with Bank procedures and guidelines for administration and management of funds. Consulting services will be hired (either through an individual or a firm) to assist the Project Coordinator in managing particularly the engineering and contract management aspects of the project. * The Government will set up a National Disaster Mitigation Council to serve as a steering committee to coordinate policy issues, recommend the selection of priority investments, and assist in carrying out government commitments. This council will be chaired by the Pernanent Secretary of the Ministry of Finance, Planning and Development (or his representative) and will consist of representatives of the relevant line ministries, as well as the Chamber of Commerce. * A Deputy Manager in the PCU will be appointed by the Governmento coordinate implementation activities in Nevis. Project implementation * Each project component will be implemented by the respective line ministry responsible for that component. The National Emergency Management Agency (NEMA) will be the implementing agency for the institutional strengthening components. Implementation of the new hospital ward will be carried out by Pan American Health Organization (PAHO) under special arrangements. - The implementing agencies will provide progress reports to the PCU on a monthly basis. - Procurement, contracting, and payments to contractors will be undertaken by the respective implementing agencies using World Bank guidelines, with the assistance of the PCU where necessary. Project superwision, reporting and audit requirements * A Project Implementation Manual will delineate financial management and control procedures, including TORs prepared by the PCU for internal and external audits acceptable to the Bank. * Each implementing agency will forecast the amounts to be withdrawn from the Special Account on a quarterly basis. The Financial Manager in the PCU will authorize the withdrawal of these funds from the Special Account and make payments directly to the contractors/consultants. * The PCU will, on a periodic basis, supervise the implementation of each component, including the physical investment components, and undertake periodic field visits. * The PCU will make quarterly reports to the World Bank, including a statement of sources and uses of funds, ensuring that all project guidelines are being followed. * Financial audits for all accounts and components will be carried out annually. Technical audits will be carried out for large civil works that do not include technical audits as part of the supervision process. Audit reports will be submitted to the Bank no later than six months after the end of each fiscal year.

43 39 ANNEX 2D St. Kitts & Nevis St. Kitts and Nevis PROJECT PROGRESS INDICATORS :Comp0onent First Year Second Year Third Year Total Hospital new ward 40 bed-ward ready Shelters 4 shelters 4 shelters 2 shelters 10 shelters constructed Water supply Power back-up for pumps 12 pumps supplied 10 pumps supplied 22 pumps with back-up capacity Water intakes study. study completed Electricity Power station roof roof repaired roof repaired Feasibility study for study completed study completed underground cables Drills 1 practice drill I practice drill I practice drill 3 drills completed Roads/coastal protection Feasibility studies studies completed studies completed Road protection works works 15% completed works 75% completed works completed priority roads/coastal areas protected Airport traffic control tower in functioning traffic control tower place Emergency Operations Center bidding, award of center completed functioning EOC contract, commencement of works NEMA Equipment & loss equipment procured NEMA & disaster committees reduction materials equipped with communications equipment & loss reduction materials Early Warning System procurement and training EWS in place with trained staff installation of equipment; training Vulnerability Reduction of study completed study completed Public Buildings Hazard analysis study completed study completed

44 40 ANNEX 2E St. Kitts & Nevis St. Kitts and Nevis PROCUREMENT ARRANGEMENTS The civil works under the project consist of sea defenses, road protection, and buildings. For these works, ICB procedures will be used for larger contracts. Leasing of equipment for cleaning beaches, road crossings and bridges will be made on the basis of priced quotations. Consultancy services include studies on potable water intakes, underground electricity studies, and technical assistance on disaster preparedness. PAHO will be hired on a direct contracting basis for design and supervision of hospital facilities under the project for an amount up to US$210,000. A contract management expert and a financial specialist will be appointed to the Ministry of Finance, Planning and Development to assist in the implementation of the project. Technical and financial audits will be financed from the loan proceeds. Goods will consist of small tools, plastic sheeting, radio communication and meteorological equipment, Bailey-type bridge components, portable generators, roofing materials, poles and electricity distribution cable and accessories. The project will include a Fast Disbursing Component of about US$2.4 million to be disbursed against a positive list of goods, including construction materials and other items agreed upon during negotiations. Procurement of these goods will be made through ICB if the estimated cost of the package is US$1 million or more. For packages estimated to cost less than US$1 million, the Government will use national procurement procedures and private sector commercial practices which were examined by the Bank and found to be acceptable. Retroactive financing up to an aggregate amount of US$800,000 will be used to reimburse the Government for expenditures incurred in the procurement of electrical materials and supplies purchased by the Electricity Department for urgent repairs of distribution and transmission lines, and for the transport and insurance of a mobile air traffic control tower shipped from Montserrat immediately after the emergency. Retroactive financing will also be used to reimburse the Government for essential imports required for reconstruction, including housing construction materials, procured following the emergency under the Fast Disbursing Component. The total amount of retroactive financing under the project will be 20% to the total loan amount, or approximately US$1.6 million. The following methods will be used: (i) International Competitive Bidding (ICB) for major civil works above US$300,000, and procurement of large goods packages (above US$100,000); (ii) National Competitive Bidding (NCB) for small works under US$300,000; (iii) Limited International Bidding for specialized meteorological equipment or construction materials with a limited number of providers; (iv) three quotations from qualified contractors for civil works under US$75,000; (v) international shopping for acquisition of standard equipment (below US$100,000); and (vi) national shopping for procurement of standard equipment (below US$20,000).

45 41 ANNEX 2E St. Kitts & Nevis Table 1: Project Costs by Procurement Arrangements (in US$ million equivalent) Expenditure Procurement Method Total Cost Category ICB NCB Other N.B.F (including contingencies) 1. Works (2.15) (0.67) (2.82) 2. Goods (0.85) (0.85) (1.7) 3. Services (1.21) (1.21) 4. Fast disbursing Component (2.40) (2.40) 5. Operating Expenditures (0.28) (0.28) 6. Front-end fee (0.085) (0.085) Total (3.00) (0.67) (4.83) (8.50) Note: Figures in parenthesis are the amounts to be financed by the Bank loan/ida credit N.B.F. = Not Bank-financed Table 2: Consultant Selection Arrangements Consultant Selection Method Total Cost Services (including QCBS QBS SFB LCS CQ Other N.B.F. contingencies) A. Firms (0.59) (0.14) (0.21) (0.94) B. Individuals (0.27) (0.27) Total (0.59) (0.14) (0.49) (1.21) Note: Figures in parenthesis are the amounts to be financed by the Bank loan. QCBS = Quality- and Cost-Based Selection SFB = Selection under a Fixed Budget N.B.F. = Not Bank-financed Other = Selection of individual consultants (hiring of PAHO).

46 42 ANNEX 2E St. Kitts & Nevis Table 3: Thresholds for Procurement Methods and Prior Review Expenditure Contract Value Procurement Review Estimated Total Category (Threshold) Method Value Subject to US$ thousands Prior Review (USS million) 1. Works >300,000 ICB All 3.30 < 300,000 NCB First two < 50,000 Quotations First two 2. Goods > 100,000 ICB/LIB All 1.85 < 100,000 International Shopping First two 0.50 < 20,000 Local Shopping First two Services 100,000 QCBS All 0.59 > 25,000 Individuals All Fast Disbursing > 1,000,000 ICB All Not expected Component < 1,000,000 Commercial practices Ex-post Total value of contracts subject to prior review:

47 Status of Bank Group Operations in St. Kitts and Nevis Fiscal Project ID Year Borrower Purpose Difference Between expected Original Amount in US$ Milions and actual disbursemnts a/ IBRD IDA Cancellations Undisbursed Orig Fro Rev'd Number of Closed Projects: 0 Active ProAect0 KM-PE GOVERNMENT AG DEV SUPPORT l S0 l S Total Active Proiects Closed Proiects Total Total Disbursed (IBRO and IDA): of which has been repaid: Total now held by IBRD and IDA: Amount sold Of which repaid Total Undisburs d f a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. Note: Disbursemnt data Is updated at the end of the first w"k of the onth. GeMam by dhe Op _d Infonmdon System (OIS)

48 St. Kitts and Nevis at a glance lomm St Kite Lain U0Pne POVIERTY and SOCIAL and Ano muddle Nes & Cadb. h nme Developmlt dlamond Popadion. mki-wr (mlona) ULe apectancy GNP per capi (Alas meuod; USS) 6, ,520 GNP (Alis m.d, US$ bebl) ,564 Average annual grow, Populo X) Labor foe ( GNP Groan per primary Most recet esamate (at yea avaale, ) capita enrolmnt Povrty (% olf oduaion blbw nalnal oveo fw) 25 Urban popuaion (% o otol population) Ulh olency at birh h(yeas) Infant mortality (per 1,000 Ovem bbs) Child malnutriton (% ofchldn under 5) Acess to sah water Access to sale water (% ofpouation) iterac (% ofpoulafton o 15) Gross primarv enrollmnt (% of'school-age Populaton) St ardnews Male Female /Upper-ikdle4ncomo group KEY ECONOMIC RATIOS and LONG-TERM TRENDS # GDP (US$ biions) Economic rafts' Gross domestic investmenugdp Trade Exportsofgoodsand sernes/gdp Gross domestksaicngs/gdp Gross national saving/gdp Current account balancelgop Do0n0511\ Intbrest paymentsagdp S Total debugdp k westment Total ddt serviceports 4.6 Present lue of detgdp 16.2 Present value of ddbuexpott 30.8 Indteness (avwrae annual growth) GOP St K/is and Nos GNP per capita cupper-mo,income group EtVorts ofgoods and serces STRUCTURE of the ECONOMY Grow rates output and Investment %) (X of GDP)I4 Agriculture Industry Manufaturing o Sernces _ o, i Private consumption o Genral government consumption GDI GDP Impos of goods and services # Gowh of axporta and Imports (%) (avwage annual gom0) Agriculture Industry Manufacturing s Services Private consumption i r General oovemment consurnpton < Gross domestic investment s Imports of goods and sercs vons knpors Gro natlion poduct Not 1997 data are priminry estimates. * The damonds show brw key Indicators In tle cotry (in bold) compared with its Income-group are. Ifd are missng, the damond will be hcomple.

49 St. Kitts and Nevis PRICES aw GOVERNMEN FANCE K 15K 9on( 1557 i9 %) (% dflj 1 Consume pri knpcltgddellatar Cwrent re v e n u Cunrent budget bajance GOP distr Overall surplusldsfcit CcP TRADE (USS millions) Export and Import levels (UtS mullona Total exports (fob) Sugar Bevrages and tobacco 0 1 ISO Manufactures Tota impo"t (off) Food so Fuel and nergy Capital goods a Export price index ( ) 4 6 Import price index ( ) 11E *Eors * npcfl Terms of trde ( ) BALANCE of PAYMENTS (USS millions) "? Curant account balncto GOPM mo% Ex-orts of goods and se3rces c Inmorts of goods and seraces Resource balance Net income Notcurrenttransfers I I I Current account balance. 4 4S Financing items (ne) 7 es 52 Changes innet reserves memo: Reserves including gold (USS millions) Convesion rate (DEC, 1ocaLVSS) EXTERNAL DEBT and RESOURCE FLOWS U 1t99S 1557 (USS millions) ComposItlon of total debt, 1996 (US$ milliorn) Total debt outstanding and disbursed IBRD G2 A1 IDA F:4 32 Total debt service IBRD IDA Composition of not resouroe flows Offical grwnts E: 20 Offcial creditors Privabt creditors Foreign direct investment 17 Portfilo equity World Bank program Commitments A-NRD E - Blatal Dlsbuusement DA D -Othr muwtie F - Priv Pincipal repaments C-3Ff G - Shbrm Not flows bitest panb Net transfers World Bank 10/1/98

50 Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program Country Annex ST. LUCIA ANNEX A ANNEX B ANNEX C ANNEX D ANNEX E ANNEX F ANNEX G Detailed Project Description Estimated Project Costs Project Management and Implementation Project Progress Indicators Procurement and Disbursement Arrangements Statement of Loans and Credits Country at a Glance

51 47 ANNEX 3A St. Lucia St. Lucia PROJECT DESCRIPTION 1. Physical Prevention and Mitigation Works This component would aim to strengthen and/or rehabilitate key public infrastructure to reduce their vulnerability to hazards such as land slides, sea swells, storms surges, floods, and hurricanes. It would also finance the retrofitting of public buildings used as shelters (many of which are vulnerable in their existing state), and buildings critical to safety and public well being (such as hospitals). Environmental assessments will be carried out for all civil works. a. Hewanorra airportflood protection works Flood protection works will be carried out, consisting of reinforcing the embankment of the Vieux Fort river to prevent the river from going through the old bed. The engineering study will include hydrological assessment of river, and detailed engineering to prepare a sea defenses project to protect both the airport landing strip and the ring road. An assessment of sea and beach movements and their potential impact on nearby tourist areas and the airport will also be carried out. Implementing agency: Ministry of Communications, Works, Transport, and Public Utilities in conjunction with the St. Lucia Air and Sea Ports Authority (SLASPA) b. Bridges and river training Bridges and river training works will be carried out at: (i) Marc Floissac, and (ii) Caico including the launching of a Bailey-type bridge, a new abutment and wingwalls, and river training. Additional studies will be carried out to assess the frequency of floods and complete the design for the bridges. The project will aim also to strengthen the capacity of the Ministry of Communications, Works, Transport, and Public Utilities to carry out bridge works through the procurement of about 60 meters of Bailey-type components and the replenishment of the gabions stock, which will enable the Ministry to respond quickly to emergency flood situations. Implementing agency: Ministry of Communications, Works, Transport, and Public Utilities c. Cul de Sac Valley flood prevention works The project would finance bridge construction, drainage and embankment works for Cul de Sac Valley and raise the West Coast road. Implementing agency: Ministry of Communications, Works, Transport, and Public Utilities d. Supplementary reservoirfor Victoria Hospital A supplementary water reservoir at La Toc Road will be constructed to ensure water supply to Victoria Hospital, including construction of a gravity-fed system or other system to connect the reservoir to the hospital. Implementing agency: Ministry of Health, Human Services, Family Affairs and Women

52 48 ANNEX 3A St. Lucia e. Disawler Management Programfor schools and libraries (US$0.74 million) The project will establish a disaster management program for schools and libraries, which includes but is not limited to the retrofitting of schools used as shelters and the installation of sanitary facilities. The sub-component would include three items: (i) capacity-building; (ii) procurement of emergency equipment; and (iii) security of school plant and facilities. Implementing agency: Ministry of Education, Human Resources Development, Youth and Sports

53 49 ANNEX 3A St. Lucia St. Lucia PROJECT DESCRIPTION 2. Strengthening the Office of Disaster Preparedness The project would strengthen the capacity of the Office of Disaster Preparedness to prepare itself and the population at large to respond quickly and effectively in emergencies. a. Technical Assistance to the national Office of Disaster Preparedness ($175,000) The project will strengthen human resource capacity in the Office of Disaster Preparedness (ODP) in disaster preparedness and management. Technical assistance will be provided including: (i) a technical advisor to assist in mobilizing and maintaining support from businesses and industries; and (ii) a technical advisor in local emergency planning and mitigation to assist in the development of plans and mitigation activities. b. Emergency communications system ($75,000) A dedicated system is needed to communicate among national level agencies, and emergency management committees at the national and district levels, as this critical function cannot rely on other agencies, especially during crises. The project will provide for the design and installation of an islandwide emergency communication system to link national disaster officials with each district by providing base station radios, repeaters and mobile radios for district Disaster Committees to ensure effective communication during and after disasters. c. Disaster equipment and loss reduction materials ($175,000) Immediate availability of certain materials like reinforced plastic sheeting can limit or prevent secondary losses. Because infrastructure damage often impedes the movement of relief and assistance materials for days, the project will ensure the ready availability of limited stocks of emergency supplies and "loss reduction materials" like portable generators, water purification equipment/storage tanks, reinforced plastic sheeting, chain saws, lanterns, community first aid supplies and equipment for specialized emergency responders at the national and community levels. These will be managed at the national level by the ODP, but stored in several locations throughout the country. Implementing agency: Office of Disaster Preparedness

54 50 ANNEX 3A St. Lucia St Lucia PROJECT DESCRIPTION 3. Strengthening the Early Warning System This component will aim to establish an effective early warning system to alert appropriate government authorities and the public of adverse weather conditions to provide for the protection of life and property. Strengthening the existing early warning capabilities of the National Meteorological Service (the Met Service) will assist St. Lucia in mitigating the effects of extreme natural weather events such as hurricanes, tropical storms and floods. A well-defined hydrometeorological information infrastructure offering an effective means of distributing forecasts and warnings to appropriate government authorities, the National Office of Disaster Preparedness, the media and the public will provide citizens with sufficientime to take measures to significantly reduce the loss of life and property damages. This sub-component would: (i) strengthen the capacity of the National Meteorological Service; (ii) develop a Ham Weather Radio Observation Network; (iii) develop a local Flood Alert System; and (iv) provide technical assistance and training in meteorology and hydrology. a. Support for the National Meteorological Service ($70,000) St. Lucia's national Meteorological Service (Met Service) no longer has real-time access to radar information from Barbados since the radar does not function most of the time. Therefore, access to high-resolution satellite imagery in real-time becomes critical for detecting storm systems that might affect the country. Support for the Met Service will include: - An enhanced satellite receiving station with a high resolution imaging system (including installation costs) to acquire and process meteorological data from the National Oceanic and Atmospheric Administration's geostationary weather satellite covering the Caribbean Region to supply information on early storm warnings, hurricane tracking, and severe storms; - Upgrade Star IV computer terminal which is a critical component of the World Area Forecast System that provides special digital data files for world-wide aviation forecasts; - Three PC Pentium computers (including a laptop for the Office of Disaster Preparedness) with highspeed modems and Internet connectivity, as well as two printers, to create the basis for the acquisition and dissemination of critical meteorological data and products from regional and international centers; * Three additional phone lines for the Met Service base at Hewanorra International Airport, one dedicated for Internet access, the second for a voice mail system providing up-to-date forecasts and warnings (which would free up the Met Service to monitor and track adverse weather conditions during impending storms); and the third line to be used as back-up; * Training associated with new equipment b. Development of a Ham Weather Radio Observation Network ($40,000) Development of a network of ham weather radio operators dispersed throughouthe country will provide critical auxiliary weather observationsuch as wind, gusts, barometric pressure and rainfall to the Met Service and the U.S. National Hurricane Center in Miami. Providing ham radio operators, law enforcement or fire department officials with reliable instruments capable of measuring weather conditions automatically also increases the chance of obtaining critical information before, during and after a hurricane since these are likely to represent the only operable communication pathway to and from a hurricane devastated area. This subcomponent will include: (i) weather stations with solar panels integrated with a modem and an Automatic Weather Packet Reporting System; (ii) transmitters,

55 51 ANNEX 3A St. Lucia generators, and spare parts for maintenance; and (iii) training associated with development of the Ham Weather Radio Observation Network. c. Developnent of a Local Flood Warning System ($175,000) The Government needs a flood warning system that measures and transmits instantaneous data on precipitation and water levels of streams prone to flooding. A system called ALERT (Automated Local Evaluation in Real-Time) is one of the local flood warning systems that seems most appropriate in this country context. This subcomponent will ensure the establishment of an ALERT system that would encompass four basic components: (i) sensors for detecting weather events (rain gauge, river gauge, etc.); (ii) a transmitter that encodes and transmits the data from the gage; (iii) a repeater that receives and transmits the signal to the receiving base station; and (iv) a base station, which receives the information and decodes and stores the data in a PC computer with appropriate software. The project will also finance a specialized consultanto advise on an effective flood warning system, provide data collection systenifstandards, carry out site selection and installation of necessary equipment and provide appropriate training related to the operation and maintenance of the local flood alert warning system. Currently, the Ministry of Agriculture already has 33 rain gauges deployed throughout the island which are used on a weekly basis for monitoring purposes. The Met Service does not have access to the data from these rain gages, and in addition, weekly monitoring is not sufficient for effective flood warning. In order to avoid duplication of equipment and resources, the project would aim to enhance collaboration between the Ministry of Agriculture and the Met Service to share the data for their respective purposes. The project would also finance enhancements to the current rain gages if necessary to transmit the data to the Met Service in real time. c. Technical Assistance and Training ($15,000) With the recent advances in science and technology, effective and efficient up-to-date training of staff in operational meteorology and hydrology is critical to maximize the information from new technology and to minimize error of misinterpretation of observational data. This subcomponent will finance: (i) training courses, symposiums and workshops associated with: agrometeorology, climatology, media training, equipment maintenance (repair and preventative), satellite interpretation, hydrology and specialized meteorology for personnel involved with hydrologic and meteorology operations; and (ii) technical assistance related to meteorological equipment operations and maintenance. Implementing agency: National Meteorological Service

56 52 ANNEX 3A St. Lucia St. Lucia PROJECT DESCRIPTION 4. Community Based Disaster Management Background The ultimate mission of a National Disaster Plan is to save lives and protect property. The cornerstone of such a plan is the education, empowerment and active involvement of the local community in the plan's mitigation, preparedness, response and recovery activities. It is the citizens of local communities who will personally experience, or have already experienced, the devastating effects of disasters. A public/ private partnership, with local citizen participation in planning, decision-making and the implementation of the National Disaster Plan, is critical to quick and effective recovery from the effects of a disaster. This partnership is also necessary for awareness and understanding of community's responsibilities before, during and after a disaster. Disaster Committees exist in all 10 governmental districts. In addition there are two additional Disaster Committees in two large rural areas. The government districts are scheduled to become legal local selfgoverning jurisdictions in the year Currently, the chairperson of the District Council serves as the chairperson of the Disaster Committee and the District Clerk serves as the Disaster Committee Clerk. In communities below the district level, the local community development committee serves as the Disaster Committee. Organization of the Committees is strong on paper with defined organizational responsibilities. However, the Committees are at different levels of operational effectiveness and resource capacity. There is a need for resources to strengthen and sustain this institutional disaster management capacity at the local level. The Caribbean Disaster Emergency Response Agency (CDERA), the U.S. Office of Foreign Disaster Assistance (OFDA), the U.S. Federal Emergency Management Agency (FEMA), and the International Federation of Red Cross and Red Crescent Societies, are some of the agencies that could provide essential training for key district Disaster Committee members. Under the project, Disaster Committees will be provided the following types of training: (i) organization and functions of a District/Community Disaster Committee; (ii) training in "Surviving the Next Disaster" (special training available through the Red Cross); and (iii) other skills such as emergency search and rescue, donations management, disasterrelated needs of seniors and persons with disabilities, etc. Disaster Committees will be provided with essential radios and other search and rescue equipment, potable water delivery systems, etc. (financed under section 2b. Strengthening the Office of Disaster Preparedness). Physical facilities are necessary for storage of disaster supplies and emergency response equipment at the community level. In addition, committees need a dedicated space to meet and to establish an operations center during an emergency. Under the project, the ODP and the Ministry of Community Development will ensure that the equipment provided to communities is stored in a safe place and that committees have a space to meet and organize. Implementing agency: Office of Disaster Preparedness

57 53 ANNEX 3A St. Lucia St. Lucia PROJECT DESCRIPTION 5. Institution Building a. Vulnerability Reduction of Public Buildings ($160,000) The main objective of this component would be to reduce potential fiscal liabilities incurred by the Government in case of catastrophic losses by efficiently insuring its buildings/facilities and reducing their vulnerability. Currently, very few of the Government's buildings are insured. Given the country's propensity to experience disasters, an improved insurance scheme for public buildings is considered the top priority. This component will consist of technical assistance to: (i) assess the value of the Government's building/facilities; (ii) evaluate the risk of potential damages to buildings/facilities based on their location and quality of construction and maintenance; (iii) determine optimal vulnerability reduction measures through mitigation/retrofitting investments and/or an insurance strategy to minimize the cost of insurance for a given level of risk; (iv) consider alternative financial instruments (e.g. catastrophic bonds and weather hedges); (v) review existing regulatory requirements covering building codes, siting and land use planning, and recommend improvements to current practices; and (vi) make recommendations with regard to the development of an insurance sector regulatory framework, including prudential solvency and reserve provisions for disasters. The project would thus strengthen the capacity of the Government to reduce or spread the risk of catastrophic loss. The component would cost a total of US$160,000 with the following breakdown: (i) consultants for studies (US$100,000); (ii) study tour (US$30,000); and (iii) in-country workshop with representatives of major insurance/re-insurance and catastrophic bonds/weather hedges companies (US$30,000). b. Hazard Analysis/Vulnerability Mapping (US$60,000) There is a need to more precisely identify hazards and vulnerability to protect current and future government and private sector investments in Dominica. Once recognized, vulnerable areas can be identified for mitigation activities and held to an appropriate standard for development planning. Existing information in government ministries and in private companies need to be consolidated and additional research done to identify all hazards to be analyzed. The project will support the development of a comprehensive hazard and vulnerability map for Dominica; the preparation of an economic and population vulnerability analysis; and training for government, private sector and communities to identify strategies to use the information for development planning across sectors and for disaster preparedness and mitigation. c. Building Codes The project will aim to strengthen the resilience of buildings, public and private, to disasters such as hurricanes in the country through adoption of a national building code and its effective enforcement through proper building inspection. The Organization of American States (OAS), as executing agency of the Caribbean Disaster Mitigation Project (CDMP) and with funding from USAID, joined the United Nations Centre for Human Settlements (UNCHS) in a technical assistance program to introduce a model building code in the OECS countries. The Government of St. Lucia is currently carrying out a national consultation of the model code. Under the project, the Government, with technical assistance from OAS, will work out a firm timetable for the code's adaptation, enactment and enforcement. In addition, an assessment of the present situation regarding the enforcement of building inspection will be carried out

58 54 ANNEX 3A St Lucia and recommendations will be made as to what steps the Government will need to take to improve enforcement. Implementing agency: Office of Disaster Preparedness

59 Annex 3B st Lucia St. Luda ESTIMATED PROJECT COSTS _US$ mnions ncos Physical Price TOTAL Local Foreign Total Conting. Conting. COSTS 1 PhyWsal Prevenon & litigation Works CMl works a. Hewanonr alpoit3 food proction b. Bddges and,ert.ung c. Culde Sac Vagey flood prventon d. Supplementary servorforvwctodsahosptal e. Disaster management for schoos &lb,es Procuremnent of goods a. Bailey-te bddges b. Gabions o.10 c. Emergency equipment for scoashaeltrs Technical assistance and studies a. Technkal assistance to Ministiy of Educatiin b. Engineerng studfes c. Environmental assessments d Supervision of works Strengthening Emergency Prparednes & Response a. Strengthening the Office of Disaster Preredness Island-wide emergency communications system n Spedaledisaster equimet _ TA and training for ODP lb. Developing Effectve Early Waming Systems Q 00 Q Meteorological equipment Ham Weather Radh iobsanation Network Local flood alert waming system _ S TA and training c. Community Based Disaster Management Training for Dist Disaster Comt s i~ ~ ~ ~ ~ ~ I 3 Instittonal strengthening Hazard analysis/vulnerability mapping ; Vulnerability reduction of public builings , 0.17 [Building code _i 4 ProJect Managemnt TA (financial manager & contact specialist) equipment workishops technical audits financial audits TOTAL C N.M. Figures may not add up due to rwndg CW Civl Wiorks; CON a consrtancle GOODS g oods & equ4pnent MISC. a idsoaineous I Physkal conijrngencis u 10% for cwwod5 rcfrongnc; 0 roods ieon de - 2%

60 56 ANNEX3C St Lucia St. Lucia PROJECT MANAGEMENT AND IMPLEMENTATION Project coordination and management * A Project Coordination Unit (PCU) will be set up in the Ministry of Finance and Planning (MFP). It will consist of a Project Coordinator, appointed by the Ministry, who will coordinate and monitor implementation progress according to agreed upon performance indicators and report to the World Bank. The project will finance a project Financial Manager for the duration of the project who will be familiar with Bank procedures and guidelines for administration and management of funds. The project will also finance a contract management specialist on an as-needed basis to assist the various implementing agencies in awarding and supervising contracts. * The Government has set up as of November 1, 1998, a National Hazard Mitigation Council to serve as a steering committee to coordinate policy issues, recommend the selection of priority investments, and help ensure the compliance of government commitments. This council is chaired by the Permanent Secretary of the Ministry of Finance and Planning (or his/her representative) and consists of representatives of the relevant line ministries, as well as the Chamber of Commerce. Project implementation * Each project component will be implemented by the respective line ministry responsible for that component. The Office of Disaster Preparedness (ODP) will be the implementing agency for the institutional strengthening components. * The project will strengthen the implementation capacity of ODP by financing a technical advisor from the private sector to assist the ODP in mobilizing and maintaining support from businesses and industries, and a technical advisor in local emergency planning and mitigation to develop plans and mitigation activities. * The implementing agencies will provide progress reports to the PCU on a monthly basis. * Procurement, contracting, and payments to contractors will be undertaken by the respective implementing agencies using World Bank guidelines, with the assistance of the contract management specialist in the PCU where necessary. Project supervision, reporting and audit requirements * A Project Implementation Manual will delineate financial management and control procedures, including TORs prepared by the PCU for internal and external audits acceptable to the Bank. * Each implementing agency will forecast the amounts to be withdrawn from the Special Account on a quarterly basis. The Financial Manager in the PCU will authorize the withdrawal of these funds from the Special Account and make payments directly to the contractors/consultants. * The PCU will, on a periodic basis, supervise the implementation of each component, including the physical investment components, and undertake periodic field visits. * The PCU will make quarterly reports to the World Bank, including a statement of sources and uses of funds, ensuring that all project guidelines are being followed. * Financial audits for all accounts and components will be carried out annually. Technical audits will be carried o,ut for large civil works that do not include technical audits as part of the supervision process. Audit reports will be submitted to the Bank no later than six months after the end of each fiscal year.

61 57 ANNEX 3D St. Lucia St. Lucia PROJECT PROGRESS INDICATORS [conmponent e Second Year Third Year - Hewanorra Airport Flood 100% completed 100% completed Protection Works Engineering Study 100% completed 100% completed Bridges and River Training 100% completed 100% completed Cul de Sac Valley 50% completed 50% completed _ 100% completed Reservoir for Victoria Hospital 50% completed 50% completed 100% completed Schools and Libraries 25% completed 75% completed 100% completed Office of Disaster Preparedness Emergency communications 100% procured 100% procured equipment Disaster equipment and loss 100% procured 100% procured reduction materials Early Warning System Equipment 100% procured 100% procured Training 33% completed 33% completed 33% completed 100% completed Community Based Disaster Management Disaster Management Committees 25% equipped and 65% equipped and 80% equipped and 80% equipped and functional functional functional functional Community Training 25% committees 65% committees 80% committees 80% committees trained trained trained trained Vulnerability Reduction of Study completed Study completed Public Buildings Workshop completed Workshop completed Hazard Analysis Study completed Study completed Building Codes Building codes Building codes adopted and enforced adopted and enforced

62 58 ANTNEX 3E St. Lucia St. Lucia PROCUREMENT ARRANGEMENTS Civil Works: The civil works under the project consist of: (i) flood protection works and reinforced embankment; (ii) repair and construction of bridges and river training; (iii) flood prevention works and raising of roads; (iv) construction of a supplementary water reservoir for the main hospital; and (v) protective works for school and facilities, including retrofitting of schools used as shelters and the installation of sanitary facilities. For these works, ICB procedures will be used for larger contracts. Given the expected size of the works in the island, there is no need for a prequalification of contractors under ICB nor any international advertisement beyond the announcement of the project in the General Procurement Notice. NCB procedures acceptable to the Bank will be used for contracts estimated to cost less than US$300,000 up to an aggregate amount of US$3 10,000. Small works estimated to cost less than US$30,000 up to an aggregate amount of $310,000 will be procured using three quotations from registered contractors. Goods and Equipment: The procurement of goods will be carried out through ICB except for the following items: LIB procedures will be used for the procurement of Bailey-type components and its launching system and for gabion baskets (estimated aggregate cost of US$400,000) and for meteorological equipment (estimated aggregate costs of US$410,000); international shopping procedures will be used for the procurement of small rescue tools, office equipment, early warning systems, and other emergency tools in packages estimated to cost less the US$50,000 individually up to an aggregate amount of US$610,000; and local shopping procedures will be used for procurement of sundry items in packages estimated to cost less than $20,000 up to an aggregate amount of US$ 100,000. Consultants' Services: The hiring of consulting firms will be made using Quality and Cost-Based Selection (QCBS) or Selection under Fixed Budget (SFB), and the hiring of individuals will be made using selection based on qualifications. Prior Review: All ICB will require prior review. For LIB procedures, the Borrower will submit a list of the bidders invited to bid, the tender documents, the specifications and the official cost estimate prior to inviting for bids and then will seek the non-objection of the Bank to the proposed awards and draft contract. Two copies of the signed contract should be sent to the Bank prior to making disbursements against these contracts. The first NCB procurement for civil works in each year as well as the first international and local shopping procedures in each year will require prior review. All consultants' services estimated to cost above $100,000 for firms and $25,000 for individuals will require prior review by the Bank.

63 59 ANNEX 3E St. Lucia Table 1: Project Costs by Procurement Arrangements (in US$ million equivalent) Expenditure Procurement Method Totad Cost Category (including contingencies). ICB NCB Other N.BF 1. Works (3.31) (0.31) (0.31) (3.93) 2. Goods (0.28) (0.6) (0.88) 3. Consulting Services (0.80) (0.34) (1.14) 4. Operating Expenditures (0.06) (0.06) 5. Commitment fee (0.03) (0.03) Total (4.39) (0.31) (1.34). (6.04) Note: Figures in parenthesis are the amounts to be financed by the Bank loan/ida credit N.B.F. = Not Bank-financed (includes elements procured under parallel cofinancing procedures, consultancies under trust funds, any reserved procurement, and any other miscellaneous items). Table 2: Consultant Selection Arrangements Consultant Total Cost Services Selection Method (including contingencies) QCBS QBS SFB LCS CQ Other N.B.F A. Firms 1,000, ,000 1,460,000 B. Individuals 440, ,000 Total 1,000, , ,000 1,900,000 Note: Figures in parenthesis are the amounts to be financed by the Bank loan. QCBS = Quality- and Cost-Based Selection LCS = Least-Cost Selection QBS = Quality-based Selection CQ = Selection Based on Consultants' Qualifications SFB = Selection under a Fixed Budget N.B.F. = Not Bank-financed. Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc.

64 60 ANNEX 3E St. Lucia Table 3: Thresholds for Procurement Methods and Prior Review Review.Conict Value Ga~~gwy (I%treshoId) Procurement Mehdvalue Estimated Total Sujct to Prior '* t $ housand S Review 1. Works <300,000 NCB First 300,000 <50,000 Quotations First 550,000 >300,000 ICB All ' '0,A 1 2. Goods LIB All 400,000 <50,000 International Shopping First 610,000 <20,000 Local Shopping First 100, Services 25,000 Individuals All 530,000 >100,000 QCBS All Tota value of contracts subject to prior review:

65 Status of Bank Group Operations in St. Lucia Difference B3etween expected Original Amount in USS Millions and actual Fiscal disbursements a/ Project 1D Year Borrower Purpose lird IUA Cancellations Undisbursed Orig Fr. Rev d Number of Closed Projects: 2 Active Proiects LC-PE GOV'T OF ST. LUCIA BASIC EDUC REFORM Total Active Projects Closed Prolects Total Total Disbursed (IBRD and IDR): of which has been repaid: Total now held by IBRD and IDA: Amount sold Of which repaid Total Undisbursed a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. 0r' Note: Disbursement data is updated at the end of the first week of the month. A 0 rt S Generated by the Opcrtos Information System (0IS)

66 St. Lucia at a glance Likn Upw@- POVE and SOCUL Ajuca middle- SL LUCa & Cuw hcom Development dbamand 197 Ppulaon, midwaw (man) Uh apa GNP per cat Aas mao USS) 3, GNP (Ales neol bigon) , Jea aua growt, 131M- Populaon ) Labor fre IX) GNP Gross most ~~~~t a.st~~~~ ) o~~at~~a~~ ~~per piimary Mostreml sent _IbbkWtn wun aftbbb, W capita enrolment POrWt (%0 oopjlalon beow ndonawlpo) Urbn populaton (% of ot poulaon) Lia exechincyat bith (ws) Want mortality (per 1,000Nve Mls) Child mn tton (X of d n uw b) Access to safe water Acces lo safe water (X ofpopuan) hlumb (X ofpopuulon 15+) Grs primay enroilmnt ( of scool popubon) & Lucia me UpperW-niddleincore group Female KEY ECONMIC RATIOD and LONG-TM TRENOS U T Economic ratlos GDP ((18$ blio) Gos domesic Imest GDP Eaports of goods and serloegdp Trade Gross domestc ung DP Grss noa singsgdp C nt account bl GDP Dorrestcs/ Intee pa_mentsgdp Invesbnt Totl debgdp Saings Total debt servcdoqxorts Presa valueof ddabgdp Presentvalue ofdetxpot Indebtedness (averae annua rowth) GDP S.. LS ucia GNP per capit Upper-middle4ncorne group Eort of goods nd services _.. STRUCTURE of the ECONOMY (of01 GOP) Growth rates of output and Investment (%) Agriculture dustby Manufcturing n..rw e *\ Priate consumption Genera govemment oonsumption G01 0GDP Imports of goods and services Growth ret. of exports and Imports (%) (avefao annua t owth) Artu Industry Manufacturing s Ser Prvt cnsumpion G lv gownt e tum0on Gross domestl invnsbmmn Import of goods wd ser* E ports p Gros nati product N7 Note: 1997 d are preinasy estimtes. *The dimonds show foure Indkaictor Iiecot be incomplet. In bod) compred whhf its income_roup erage. I dat are missng, l diamond wvn

67 St. Lucia PRICES and GOVERNMENT FINANCE In f (on (% chane) Consumer prices 3.1 o nmpliit GOP deflator Govemment finance 2 (% of GDP. includes cufent grants) Current revenu 31.2 *2 g w 07 Current budget bance 8.2 GDP dtnawor CCPi Ovall surplus/deficit.1.9 TRADE (UJS$ millions) Export and Import levels (US$ millions) Total exports (fobb) 118 o Bananas 48 Fruits and vegetables 1 3W_ Hanufaceures 26 Total imporls (cin 348 Fuel Food and energy Capital goods so Export priee index (1995= 100) SI o mport price index (1995=100) 99 a E2orts a nports Terms of trade ( ) BALANCE of PAYMENTS (US$ millions) S Currnt acount balance to GOP ratio (% Exports of goods and services o 0 mportsofgoodsandservices *7 Resoure balance s* Net income Net currentransfers Current account balance s Financing items (net) Changes in net reserves Reserves including gold (USS miilions) Conversion rate (DEC, ocasuuss) EXTERNAL DEBT and RESOURCE FLOWS S 1997 (USS millions) Compostion of total debt, 1317 (USS millions) Total debt outstanding and disbursed IBRD IDA G: Total debt service IBRD IDA Compositon of net resource flows Officialgrants Official creditors Private creditors E 34 : 71 Foregn direct investment Porfolio equity World Bank program Commitments Disbursements A-SRO EB- BiitrFw Principal repayments c,_ )A DOt - ngiitw F -Prvm Net fows C. SW G - Sh r_ Interest pawments Net transfers World Bank 9/29198

68 Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program Country Annex DOMINICA ANNEX A ANNEX B ANNEX C ANNEX D ANNEX E ANNEX F ANNEX G Detailed Project Description Estimated Project Costs Project Management Project Progress Indicators Procurement and Disbursement Arrangements Statement of Loans and Credits Country at a Glance

69 65 ANNEX4A Dominica Dominica PROJECT DESCRIPTION 1. Physical Prevention and Mitigation Measures This component deals primarily with public infrastructure, and includes: (i) retrofitting key vulnerable buildings used as shelters, and buildings critical to safety and general public well-being such as hospitals; and (ii) strengthening/rehabilitating key infrastructure (bridges/culverts; river bank protection; slopes protection; sea defenses with regard to land slides, sea swells and floods. Environmental assessments/ screening will be carried out for all civil works. The sub-projects will include: a. Sea Defense works (Estimated Direct Cost) a) Soufriere to Scotts Head Road $1,400,000 b) Hatten Garden Wave Tidal Protection $478,000 Indirect cost $230,000 Design $205,000 Bidding preparation $ 20,000 Supervision of Works $ 82,000 Total estimated cost US$2,415,000 b. River Control and Flood Damage Reduction a) Pichelin River Dredging $250,0001 b)colihaut River Control $195,000 c) Engineering and Supervision $120,000 Total estimated cost US$565,000 The capacity of the Ministry of Communications, Works and Housing (MCWH) to engineer and supervise bridge strengthening and river training works (including wing-walls and gabionage) will be strengthened through the hiring of an individual expert in river control and by equipping the ministry with the appropriate technology required, including a computer, flood and river simulation software, and drafting and surveying equipment. c. Road Protection Elmshall Road Reinstatement $300,000 Design $40,000 Bidding Preparation $4,000 Supervision $16,000 Total estimated cost US$360,000 d Shelters (US$690,000) A regional hurricane community shelter will be constructed, equipped with a small kitchen and sanitary facilities. The shelter will be used in non-emergency situations throughout the year for disaster training of community Disaster Preparedness Committees. Six existing shelters will also be retrofitted to hurricane-resistant standards. Retroactive financing; not subjecto indirect costs

70 66 ANNEX 4A Dominica Dominica PROJECT DESCRIPTION 2. Strengthening the National Office of Disaster Preparedness The project will strengthen the capacity of the national Office of Disaster Preparedness to prepare itself and the population at large to respond quickly and effectively in emergencies to save lives and protect property. This will be done by enhancing human resource capacity through technical assistance to the ODP; establishing an island-wide emergency communications systems; and providing quick access to disaster equipment and loss reduction materials, both at the central and community levels. a. Capacity building in the ODP (US$175,000) The project will strengthen the human resource capacity in the national Office of Disaster Preparedness (ODP) in disaster preparedness and management. Technical assistance will be provided including: (i) a technical advisor from the private sector to assist in mobilizing and maintaining support from businesses and industries; and (ii) a technical advisor in local emergency planning and mitigation to assist in the development of plans and mitigation activities. b. Specialized disaster equipment and loss reduction materials ($197,000) Immediate availability of certain materials like reinforced plastic sheeting can limit or prevent secondary losses. Because infrastructure damage often impedes the movement of relief and assistance materials for days, the project will ensure the ready availability of limited stocks of emergency supplies and "loss reduction materials" like portable generators, water purification equipment/storage tanks, reinforced plastic sheeting, and equipment for specialized emergency responders at the national and community levels. Some of this equipment will be stored at the central level, and some will be located with local Disaster Preparedness Committees. c. Island-wide emergency communications system ($45,000) A dedicated system is needed to communicate among national level agencies, and emergency management committees at the national and district levels, as this critical function cannot rely on other agencies, especially during crises. Proposed communications equipment will include: 7 VHF Base Stations one for each district; mobile radios for the local Disaster Preparedness Committees; and other communications equipment to ensure effective communication during disasters.

71 67 ANNEX 4A Dominica Dominica PROJECT DESCRIPTION 3. Developing an Effective Early Warning System This component will aim to establish an effective early warning system to alert appropriate government authorities and the public of adverse weather conditions to provide for the protection of life and property. Strengthening the existing early warning capabilities of the National Meteorological Service (NMS) will assist Dominica in mitigating the effects of extreme natural weather events such as hurricanes, tropical storms and floods. A well-defined hydrometeorological information infrastructure offering an effective means of distributing forecasts and warnings to appropriate government authorities, the National Office of Disaster Preparedness, the media and the public will provide citizens with sufficient time to take measures to significantly reduce the loss of life and property damages. Barbados provides weather forecasts and warnings to the Dominica Meteorological Station at Melville Hall Airport. Dominica is responsible for collecting hourly weather observations at both the Melville Hall Airport and the Canefield Airport and providing those observations to the Barbados Meteorological Service. The Dominica Meteorological Station (Melville Hall Airport) is also responsible for disseminating weather forecasts and warnings to alert appropriate government authorities, the media and the public of adverse weather conditions to provide for the protection of life and property. Although the primary purpose for these observations at the airports is to provide critical surface observations for effective airport operations, this data is also very important in developing weather forecasts and warnings. This sub-component will provide: (i) support to the National Meteorological Service; (ii) development of a Ham Weather Radio Observation Network; (iii) development of a local Flood Alert System; and (iv) technical assistance and training in meteorology and hydrology. a. Supportfor the National Meteorological Service (US$55,000) Several pieces of existing meteorological sensors and equipment are in need of upgrading at the Melville Hall Airport and the Canefield Airport to improve the weather observations for both of Dominica's Weather Observation Stations. Support for the NMS will include: * Replacement of existing antiquated meteorological equipment (including installation costs) including two large Stevenson screens, two tilting syphon rain recorders, one anemographe recorder, one anemometer, two wind vanes, and two wind dials. Specialized consultants will be hired to provide expert advice on procurement, installation and maintenance of equipment. * Two Pentium (200 MHz minimum) computers with appropriate software, 17-inch monitors, 56K speed modems, with Internet connectivity at the Melville Hall Airport Meteorological Station, and 2 laser quality printers. Internet access creates the basis for the acquisition and dissemination of critical meteorological data and products from regional and international centers. * Two additional phone lines for the NMS at the Melville Hall Airport; one dedicated for Internet access, and the second a dedicated phone line between the Dominica Meteorological Station (Melville Hall Airport) and the Barbados Meteorological Service. This will ensure data is received and disseminated on a timely and continual fashion, since Dominica receives their weather forecasts and warnings through the Barbados Meteorological Office. Computers between the two Meteorological Observation Stations and the National Disaster Preparedness Office should be networked to continue to improve the communication between these offices. * Training associated with new equipment.

72 68 ANNEX 4A Dominica b Development of a Ham Weather Radio Observation Network (US$40,000) Development of a network of 5-10 ham weather radio operators dispersed throughout the country will provide critical auxiliary weather observations such as wind, gusts, barometric pressure and rainfall to the NMS and the U.S. National Hurricane Center in Miami. Providing ham-radio operators, law enforcement and fire department officials with reliable instruments capable of measuring weather conditions automatically also increases the chances of obtaining critical information before, during and after a hurricane since these are likely to represent the only operable communication pathway to and from a hurricane devastated area. Setting up such an observation network will involve (i) installation of weather stationsmwith solar panels integrated with a modem, augmented by Automatic Weather Packet Reporting Systems; (ii) transmitters, generators, and spare parts for maintenance; and (iii) training associated with development of the Ham Weather Radio Observation Network. c. Development of a Local Flood Warning System (US$230,000) The Govemment needs a flood waming system that measures and transmits instantaneous data on precipitation and water levels of streams prone to flooding. A system called ALERT (Automated Local Evaluation in Real-Time) is one of the local flood warning systems that seems most appropriate in this country context. Through the project, an ALERT system will be established encompassing four basic components: (i) sensors for detecting weather events (rainfall gage, river gage, etc.); (ii) a transmitter that encodes and transmits the data from the gage; (iii) a repeater that receives and transmits the signal to the receiving base station; and (iv) a base station, which receives the information and decodes and stores the data in a PC computer with appropriate software. A specialized consultant will be hired to advise on an effective flood warning system, provide data collection system standards, evaluate site selection and provide appropriate training related to the operation and maintenance ofthe local flood alert warning system. d TechnicalAssistance and Training (US$25,000) With the recent advances in science and technology, effective and efficient up-to-date training of staff in operational meteorology and hydrology is critical to maximize the information from new technology and to minimize error of misinterpretation of observational data. This subcomponent will provide: (i) training courses, symposiums and workshops associated with: computer technology, basic meteorology, and equipment maintenance (repair and preventative) for personnel involved with hydrologic and meteorology operations; and (ii) technical assistance related to meteorological equipment operations and maintenance. Implementing agency: National Meteorological Service

73 69 ANNEX 4A Dominica Dominica PROJECT DESCRIPTION 4. Community Based Disaster Management Background The ultimate mission of a National Disaster Plan is to save lives and protect property. The cornerstone of such a plan is the education, empowerment and active involvement of the local community in the plan's mitigation, preparedness, response and recovery activities. It is the citizens of local communities who will personally experience, or have already experienced, the devastating effects of disasters. A public/ private partnership, with local citizen participation in planning, decision-making and the implementation of the National Disaster Plan, is critical to quick and effective recovery from the effects of a disaster. This partnership is also necessary for awareness and understanding of community's responsibilities before, during and after a disaster. Disaster Districts of Dominica Within the Commonwealth of Dominica, there are seven Disaster Districts covering 86 local communities, all of which have Local Disaster Management Committees. Through the Department of Local Government and Community Development, there is strong organizational linkage of the National Disaster Plan to the local communities. Indicative of the strength of the effectiveness of the department and its dynamic leader is the impressive "Report on the Passage of Hurricane Georges, September 20th 1998" produced less than two weeks after Georges just missed Dominica. The report details the results of the seven district assessments and evaluation sessions covering the preparedness and response of the local communities to the projected hit by a Category 4 hurricane of 150 miles per hour. This self-assessment report highlights the need for continued training in disaster management, continued public education, shelter management and management of special needs populations such as the physically challenged and elderly. There is a clear need for resources to help meet these training needs required to sustain the institutional disaster management capacity of the Local Disaster Management Committees. This component aims to: (i) train district and local Community Disaster Committee Members to better mobilize and educate communities in disaster preparedness, mitigation, response, and recovery including a special emphasis on shelter management and management of persons with special needs such as the physically challenged, elderly, and other vulnerable persons; (ii) provide access to emergency disaster equipment and loss reduction materials at the local level (financed under 2b, Strengthening the National Office of Disaster Preparedness); and (iii) make available financial resources for small scale community initiated activities in preparedness and mitigation a. Training in Community Disaster Preparedness (US$50, OO) The Caribbean Disaster Emergency Response Agency (CDERA), the U.S. Office of Foreign Disaster Assistance (OFDA), the U.S. Federal Emergency Management Agency (FEMA), and the International Federation of Red Cross and Red Crescent Societies, are some of the agencies that could provide essential training for key District Disaster Committee members. Under the project, Disaster Preparedness Committees will be provided the following types of training: (i) organization and functions of a District/Community Disaster Committee; (ii) training in "Surviving the Next Disaster" (special training available through the Red Cross); and (iii) other skills such as emergency search and rescue, donations management, disaster-related needs of seniors and persons with disabilities, etc.

74 70 ANNEX 4A Dominica b. Vulnerability Reduction FEnd (USS375,000) A Pilot Vulnerability Reduction Fund will initiated in Dominica. The objective of the Fund will be to demonstrate in Dominica that targeted and continuous financial support for disaster loss reduction projects at the community level can be encouraged, effectively implemented, and managed well. Over a period of two years commencing January 1999, this Fund will promote local involvement in self-help disaster mitigation activities by local disaster preparedness committees in twenty one of the most vulnerable communities in Dominica. A pilot of three projects from each of the seven local government districts will be targeted. District teams in consultation with local councils and community disaster preparedness committees will be required to make submissions to a project selection committee to be established with members from the Local Government and Community Development Department, Disaster Preparedness Office, the Ministry of Finance, Industry and Planning, and the Project Management Unit. Bottom-up proposals from the communities will be developed around the following sub project categories designed to reduce the vulnerability of each community to potential disasters: * Hazard mapping and assessment of mitigation measures required to reduce the loss of life and property; * Individual, community, and public disaster mitigation education; and * Improved drainage and culvert projects. The total amount available under the Vulnerability Reduction Fund will be US$375,000. A maximum of US$20,000 will be provided per grant for the local activities. Implementing agency: The Local Government and Community Development Department of the Ministry of Community Development and Women's Affairs

75 71 ANNEX 4A Dominica Dominica PROJECT DESCRIPTION 5. Institutional Strengthening al HazardAnalysis/Vulnerability Mapping (US$60,000) There is a need to more precisely identify hazards and vulnerability to protect current and future government and private sector investments in Dominica. Once recognized, vulnerable areas can be identified for mitigation activities and held to an appropriate standard for development planning. Existing information in government ministries and in private companies need to be consolidated and additional research done to identify all hazards to be analyzed. The project will support the development of a comprehensive hazard and vulnerability map for Dominica; the preparation of an economic and population vulnerability analysis; and training for government, private sector and communities to identify strategies to use the information for development planning across sectors and for disaster preparedness and mitigation. b. Vulnerability Reduction of Public Buildings(US$100,000) The main objective of this component will be to reduce potential fiscal liabilities incurred by the Government in case of catastrophic losses by efficiently insuring its buildings/facilities and reducing their vulnerability. This component will consist of technical assistance to: (i) assess the value of the Government's building/facilities; (ii) evaluate the risk of potential damages to buildings/facilities based on their location and quality of construction and maintenance; (iii) determine optimal vulnerability reduction measures through mitigation/retrofitting investments and/or an insurance strategy to minimize the cost of insurance for a given level of risk; (iv) consider alternative financial instruments (e.g. catastrophic bonds and weather hedges); (v) review existing regulatory requirements covering building codes, siting and land use planning, and recommend improvements to current practices; and (iv) make recommendations with regard to the development of an insurance sector regulatory framework, including prudential solvency and reserve provisions for disasters. The project will thus strengthen the capacity of the Government to reduce or spread the risk of catastrophic loss. c. Building Codes The project will aim to strengthen the resilience of buildings, public and private, to disasters such as hurricanes in the country through adoption of a national building code and its effective enforcement through proper building inspection. The Organization of American States (OAS), as executing agency of the Caribbean Disaster Mitigation Project (CDMP) and with funding from USAID, joined the United Nations Centre for Human Settlements (UNCHS) in a technical assistance program to introduce a model building code in the OECS countries. The Government of Dominica has already modified the model building code for Dominica, and final adoption of the code is pending a vote in parliament on the legislation required to have the code promulgated as an official document. The Government, with technical assistance from OAS, will work out a firm timetable for the code's full adoption and enforcement. In addition, an assessment of the present situation regarding the enforcement of building inspection will be carried out and recommendations will be made as to what steps the Government will need to take to improve enforcement. Implementing agency: National Emergency Management Agency

76 Dominica ESTIMATED PROJECT COSTS ANNEX 41 Doniinica U.(S$ millions Base Costs Physical Price TOTAL Category Local Foreign Total Conting. Contlng. COSTS 1 Physical Prevontion & Mitigation Investments Sea defense works CW River control and flood damage reduction CW , Tfrrietraining and flood control CON Road protection CW _ Shelters.41' J 0.0!T Construction of regional community shelter CW ~ _0.27 ~.Retrofit 6 existing shles W shelters c Strengthening Emergency Preparedness & Response : ! 1.22 I.Strengthening National Office of Disaster Preparedness 0.02: O I 1sland-w~ide emergency communications systemgo S ± OOW; o.05 Specializedisaster equipment for national ODP IGOODS ' TA (2 experts) and training - CON o.of 01608_ _ Deeopn Effective Early Warning Systems 1-0.0, Meteworolgial equipment GOODS -- j :Weather Radio Observation Network JGOODS I Local flood aleft waming system J ODS TA and training - -- CN , c.cmmunity Based Disaster Management 0 2_ Ž~~ Wi6b 0.43 Trining4 for Disaster PreparenessComites CON I : Vulnera bility Reduction Fund - - t InstitutionalStrngqtlheninig , ' 0.00, 0.17,.Hazard. analysisavulnerability mapig O.o 0_ _ 0.0I00 Vulnerability reduction of public buildings jco: N- j IDA0~ : 0.11 Building cds , Pojet Mnagmen ; TA (financial manager) :equipment GO - ONS O'- i-- workshops CN technical audii--- financial ~~ audits CON - CON- O ' OO C OOD 00, ~TTL -1.28' i~i iip 7 to-roi 1 -g--- JN.B.Fij~ m~ay CW=- Ci fft CJ =~suflancies; con GOODS =goods & eiquipment, MIC=miscellaneous Phssca `ontingencres 10% for civi works; 5% for cons~ultancies; 0 for goods, Price contingenci~es =2%

77 73 ANNEX 4C Dominica Doiminica PROJECT MANAGEMENT AND IMPLEMENTATION Project coordination and management * A Project Coordination Unit (PCU) will be set up in the Ministry of Finance, Industry and Planning. It will consist of a Project Coordinator, appointed by the Ministry, who will coordinate and monitor implementation progress according to agreed upon performance indicators and report to the World Bank. The project will finance a Financial Manager for the duration of the project who will be familiar with Bank procedures and guidelines for administration and management of funds. An engineer will be hired with contract management experience to assist the PCU with project implementation. * The Government will set up a Joint Disaster Management Task Force comprising members from the National Development Corporation and the National Emergency Planning Organization to coordinate policy issues, evaluate priority investments, and help ensure the compliance of government commitments. Project implementation - Each project component will be implemented by the respective line ministry responsible for that component. The national Office of Disaster Preparedness (ODP) will be the implementing agency for the institutional strengthening components. The implementation arrangements for the Vulnerability Reduction Fund are described separately in the description of that component. - The project will strengthen the implementation capacity of ODP by financing a technical advisor from the private sector to assist ODP in mobilizing and maintaining support from businesses and industries, and a technical advisor in local emergency planning and mitigation to develop plans and mitigation activities. X The implementing agencies will provide progress reports to the PCU on a monthly basis. * Procurement, contracting, and payments to contractors will be undertaken by the respective implementing agencies using World Bank guidelines. Project supervision, reporting and audit requirements * A Project Implementation Manual will delineate financial management and control procedures, including TORs prepared by the PCU for internal and external audits acceptable to the Bank. * Each implementing agency will forecast the amounts to be withdrawn from the Special Account on a quarterly basis. The Financial Manager in the PCU will authorize the withdrawal of these funds from the Special Account and make payments directly to the contractors/consultants. * The PCU will, on a periodic basis, supervise the implementation of each component, including the physical investment components, and undertake periodic field visits. * The PCU will make quarterly reports to the World Bank, including a statement of sources and uses of funds, ensuring that all project guidelines are being followed. * Financial audits for all accounts and components will be carried out annually. Technical audits will be carried out for large civil works that do not include technical audits as part of the supervision process. The Vulnerability Fund will also be subject to technical audits. Audit reports will be submitted to the Bank no later than six months after the end of each fiscal year.

78 74 ANNEX 4D Dominica Dominica PROJECT PROGRESS INDICATORS Compoment First Year Second Year Third Year Total ; ^ Sea Defense Hatten Garden 100 m completed 200 m completed 100 m completed 400 m completed Soufriere-Scotts Head Road 500 m completed 500 m completed 1000 m completed 2000 m completed River Control & Flood Damage Pichelin River Dredging 500 m completed, 500 m completed Colihaut River Control 100 m completed 200 m completed 100 m completed 400 m completed Road Protection Elmshall Road 100 m completed m Completed Shelters I shelter retrofitted 5 shelters retrofitted 6 shelters retrofitted Hazard Analysis and Mapping I study completed _ Study completed Vulnerability Reduction of Public Buildings Study I study completed - I study completed Workshop I workshop completed - I workshop completed Emergency Communications Syst 25% installed 100% installed - Systems fully functional Early Warning Systems 25% installed 100% installed - Systems fully functional Disaster Mgmt. Committees 25% equipped & 65% equipped & 80% equipped & functional 80%equipped & functional functional functional Community Training 25% committees trained 65% committees 80% committees trained 80% committees trained trained Vulnerability Fund 7 sub-projects 7 sub-projects 7 sub-projects 21 projects financed

79 75 ANNEX 4E Dominica Dominica PROCUREMENT ARRANGEMENTS Civil Works The civil works under the project consist of sea wall defenses, river control and flood damage reduction, road protection, construction of a community shelter and retrofitting of six other shelters. For these works, ICB procedures will be used for larger contracts. Given the expected size of the works on the island, there is no need for a prequalification of contractors under ICB nor any international advertisement beyond the announcement of the project in the General Procurement Notice. NCB procedures acceptable to the Bank will be used for contracts estimated to cost less than US$300,000 up to an aggregate amount of US$1,200,000. Small works estimated to cost less than US$20,000 up to an aggregate amount of $375,000 under the Community Based Disaster Management component will be carried out by the beneficiary community using procedures acceptable to the Bank. Goods and Equipment The procurement of goods will be carried out through ICB except for the procurement of small rescue tools, office equipment, other emergency tools in packages estimated to cost less than US$50,000 individually up to an aggregate amount of US$210,000, which will be procured through international shopping. Also, local shopping procedures will be used for procurement of sundry items in packages estimated to cost less than US$20,000 up to an aggregate amount of US$50,000. Consultants' Services The hiring of consultants, including for financial and technical audits, will be made using QBCS, and hiring of individuals will be made on Selection Based on Qualifications. A financial specialist will be appointed to the Ministry of Finance, Development and Planning for the financial management of the project Prior Review All ICB will require prior review. The first NCB procurement for civil works in each year as well as the first international and local shopping procedures in each year will require prior review. All consultants' services above an estimated cost of US$50,000 for firms and US$25,000 for individuals will require prior review by the Bank. Retroactive financing River training works at the Pichelin River, carried out by the Department of Public Works using procedures acceptable to the Bank, will be financed on a retroactive basis in an amount not to exceed US$250,000.

80 76 ANNEX 4E Dominica Table 1: Project Costs by Procurement Arrangements (in US$ million equivalent) e'e'other (incding) 1. Works (2.25) (1.12) (3.37) 2. Goods (0.37) (0.23) (0.60) 3. Services (0.60) (0.60) 4. Miscellaneous (Vulnerability (0.38) (0.38) Reduction Fund) 5. Operating Expenses (0.028) (0.028) 6. Front end fee (0.025) (0.025) Total (2.62) (1.12) (1.26) (5.00) Note: Figures in parenthesis are the amounts to be financed by the Bank loan/ida credit Table 2: Consultant Selection Arrangements Consultant TotalC ost Services Selection Method (including condngencies) QCBS QBS SFB LCS CQ Other A. Firms (0.40) (0.05) (0.45) B. Individuals (0.3) (0.3) Total (0.39) (0.05) (0.3) (0.75) Note: Figures in parenthesis are the amounts to be financed by the Bank loan. QCBS = Quality- and Cost-Based Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants

81 77 ANNEX 4E Dominica Table 3: Thresholds for Procurement Methods and Prior Review Expenditure Contract Value Procurement Review Estimated Total Category (Threshold) Method Value Subject to US$ thousands Prior Review (U S$ m illion) 1. Works >200,000 ICB All 2.9 < 250,000 NCB First Goods >500,000 ICB All 0.37 < 50,000 International Shopping First 0.05 < 20,000 Local Shopping First Services QCBS All 0.39 Individuals All Miscellaneous Vulnerability Fund Ex-post -- Total value of contracts subject to prior review: 4.28

82 Status of Bank Group Operations in Dominica Difference Between expected Original Amount in USS Millions and actual Fiscal. disbulsemenits a/ Project ID Year Borrower Purpose IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Number of Closed Projects: 3 Active Projects DM-PE GOVERNMENT BASIC EDUCATION REF Total Active Projects Closed Projects Total Total Disbursed (IBRD and IDA): of which has been repaid: Total now held by IBRD and IDA: Amount sold Of which repaid : Total Undisbursed : T a a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. Note: Disbursement data is updated at the end of the first week of the month. a 5. x3 o..b~ Generated by the Operations Information System (OIS)

83 Dominica at a glance Latin Lower- POVERTY and SOCIAL Amedca middle- Dominica & Carib. Income h Dvelopment diamond 1997 Popuaton, mid-war (milons) ,285 Life expectancy GNP per capita (Atlas meod,us$) ,880 1,230 GNP (Ats nmo", USS billions) ,917 2,818 Average annual growth, Population ) GNP Gross L.abor tore() GNGos per primary Most recent estimate (latst yer available, ) capita enrollment Poverty (% of pubion below neaonal poverty line) Urban population 1% of total population) Life expectncy at birth (years) Infant mortality (Per 1,000 live births) Child malnutriton (% of chiklren under 5) Access to safe water Access to safe water (% topulation) Iliteracy % ofpopulafon age 15+) Gross primary enrollment (% of schoowage population) III III Dorinira male 11s Lower-middle-income group Female 113 KEY ECONOMIC RATIOS and LONG-TERM TRENDS "7 GDP (US$ bilwions) Economic mtros Gross domestc investmenvgdp Trade Exports of goods and serviceslgop Gross domes0c savingsgdp Gross nabional sninggdp Current account balancelgdp , Domesbc Interest paynentslgdp Sasings Investment Total debgdp Total debt service/exports Present value of debtgdp 32.0 Present value of debt/exports 63.6 Indebtedness (average annual growth) GDP Dominica GNP per capita I L ower-niddle-income group Exports of goods and serices STRUCTURE of the ECONOMY Growth rates of output and Investintnt I%) (% of GOP) Agriculture Industry Manufcturing o 0 Services , 2 1 *4 *5 ' * Private const. ption General government consumption GD -GDP Imports of goods and services (average annual wowth) Growth rates of exports and Imports(%) Agriculture , Industry , Manufacturing Seices ;- Priate consumpbon '7 General government consumpbon Gross domestic investment Imports of goods and servkes Exports - knpocds Gross national product Note: 1997 data are preiminary estimates. The diamonds show tour key indiators in the countr (in bold) compared with its income-group average. n data are missing. the diamond will be incomplete.

84 Dominica PRICES and GOVRNMENT FINANCE - DOMe"*Ic prices Inflation (%) Govwrnme Oinance 2- (% of GDP, includes cu'entgrants) o -- Current reveue Curfen budoet balance GDP deflator -- CPI Overall surplus/deficit TRADE (USS millions) Export and Import levels (USM millions) Total exports (fob) 53 53, Other manufactures 17 i8 Bananas. Uanufactures t -* Total imports cif) il l t Food sd JJ Fuel and energy Capital goods o Exp toriprce index(199f-100). 113 Import price index (1995=100) 95 a EVorts * knports Terms of trae (195=100) 119 BALANCE of PAYMENTS Consumer pnces t.- kmplicit GDP deflator ( Current account balance to GDP ratio I%) (USS milsons) Exports of goods and serwcs a Importsofgoodsand servcs 1t , Resource balance Not income t19 o - Net current transiers a Current account balance Financing items (net) Changes in net reseres Afemo:_ Reserves induding gold (US$ milions) Convemsion rate fdec, loc&uss) 2.6, EXTERNAL DEBT and RESOURCE FLOWS (USS millions) Total debt outstanding and disbursed IRD IDA G 16 8: 12 Total debt service IBRD IDA Composition of total debt, 1S95 (USS mtlilons) Composition of net resource ilows Official grants Offcialcreditors E:35 Ptivatecreditors Foreign direct investment Portfol oequity World Bank program Commitments A - BRD E - Bilsra! Distursements B - IDA 0 - Ote mulbtal F - Priae Pnincipal repasments C - M G - Shofltarm Net flows Interest pawnents Nettransfers World Bank * 10/1198

85 81 ANNEX 5 Organization of Eastern Caribbean States Emergency Recovery and Disaster Management Program PROGRAM PROCESSING BUDGET & SCHEDULE A. Program Budget Planned Actual $296,100 $235,500 B. Program Schedule Planned Actual Time taken to prepare the program (months) 4 months 4 months First Bank mission (identification) 08/14/ /14/1998 Appraisal mission departure 09/21/ /21/1998 Negotiations 11/02/ /23/1998 Planned Date of Effectiveness 01/31/1999 C. Prepared by: St. Kitts & Nevis - Ministry of Finance, Planning and Development St. Lucia - Ministry of Finance and Planning Dominica - Ministry of Finance, Industry and Planning St. Vincent & the Grenadines - TBD Grenada - TBD D. Preparation assistance: Bank Budget E. Core Project Preparation Team: Name Eugene D. McCarthy Bernard Becq Oliver Davidson John Guerre Rumana Huque Andrei Iatsenia Efraim Jimenez Debra Larson Thakoor Persaud Rajeev Swami Kevin Tomlinson Specialty Task Team Leader, Principal Operations Officer Engineer Consultant, Emergency Management Specialist, Counterpart International Consultant, Community Development and Loss Reduction Specialist, U.S. Federal Emergency Management Agency Urban Planner Environmental Specialist Procurement Specialist Consultant, Early Warning and Communication Systems Specialist, U.S. National Weather Service Senior Economist Financial Management Specialist Program Assistant

86 82 ANNEX 6 ORGANIZATION OF EASTERN CARIBBEAN STATES ECONOM1C DEVELOPMENTS AND BANK PROGRAM IMPLEMENTATION (DECEMBER 1998) Background: 1. This annex summarizes the main economic developments in the countries of the Organization of Eastern Caribbean States (OECS)' and the implementation of the Bank's program since the April 1995 CAS. The Bank Group's strategy for the OECS aims to help these countries in their efforts at reducing poverty and attaining sustainable growth, focusing particularly on limiting economic reversals from natural disasters, assisting the transition from agriculture to service-based economies, and helping to reduce per capita costs of infrastructure and service provision through the introduction of sub-regional coordination mechanisms. The projects and programs currently under implementation or in preparation rely on these principles and complement the programs of other institutions, such as the European Union and the Caribbean Development Bank. Some of the issues that are being addressed by the Bank are telecommunications reform, waste management, education reform, safety-net mechanisms, and disaster management. Institutional development, at the country level and at the sub-regional level, is key in each one of these initiatives. Preparation has begun for a new OECS CAS, which is currently scheduled for Board presentation in FY The OECS countries face special development challenges because of their small size and vulnerability to natural disasters. On the one hand, with an overall population of half million2 the per capita cost of economic and social infrastructure is very high in the OECS. On the other hand, hurricanes and floods regularly reverse economic gains by destroying fixed investments and disrupting economic activities, particularly in agriculture and tourism. In addition most of the islands have traditionally been monocrop economies (bananas for Dominica, St. Lucia, St. Vincent and the Grenadines and to a lesser extent Grenada, and sugarcane for St. Kitts and Nevis) and have relied on preferential trade Population (1997) 485,000 arrangements for their main exports. These Average popn growth ( ) 0.8% affangement are nowinjeopadgdp (1996) US$1,651 mill.. arrangements are now in Jeopardy due to an GNP per capita (1997-Atas) USS3,371 unfavorable World Trade Organization GDP growth (96-97) 3.9% (WTO) ruling. GDP growth (91-97) 3.2% Fiscal DeficitVGDP (1996) 0.8% Economic Developments: Inflation p.a. (1996) 1.1% CurrentAccount/GDP(1996) 4.7/o 3. After the impressive growth performance of the OECS in the 1980's (an Ilfiteraiy of -6 ea),grwt pr i te nfant mortality rate 1/0 average of 5-6% per year), growth m the Access to safe water 100% 1990's has slowed (approximately 3% per Life expectancy 71 yrs. year). The primary reason for the strong growth rates of the 1980's was a favorable external environment: concessional aid flows financing a large portion of public investments in infrastructure; preferential market access and favorable prices allowing a twofold increase in banana exports receipts; and fast growth in the tourism sector The OECS consists of 6 independent states, Antiguand Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. Antiguand Barbuda is not included in the CAS update because it is not a borrowing member of the World Bank estimates: Dominica 75,000; Grenada 99,000; St. Kitts and Nevis 41,000; St. Lucia 158,000; St. Vincent and the Grenadines 112,000.

87 83 ANNEX 6 fueled by foreign investment (albeit starting from a small base). In the 1990s, external flows declined, with concessional aid flows declining rapidly, from a peak of about 9 percent of GDP in the early 1980s to about 4 percent in the 1990s and with foreign direct investment remaining steady (7.9 percent of GDP in the 1980s and 8.6 percent in the 1990s). 4. The main economic trend in the OECS countries, during the 1990s, has been the rapid transition from agriculture-based economies to service-based ones, mainly tourism. 3 The WTO ruling against the preferential treatment of Caribbean bananas accelerated this trend. Relative to the first half of the 1990s, the prospects for GDP growth have improved somewhat, due mainly to the expansion of the tourism sector in substitution of the banana industry as the main foreign exchange earner (Annex I).4 In addition, the Eastern Caribbean islands continue to enjoy some inherent advantages. Their population is highly educated (illiteracy rates range from 1-5 percent), their relative proximity to the markets of North America and Europe and their attractive natural resources offer them the opportunity to further develop their tourism sector. 5. Future growth perspectives have improved somewhat in most of the OECS countries. In particular, the European Union has also introduced Stabex-financed banana recovery plans in the Windward countries in order to improve quality and productivity through better agricultural techniques. The results are beginning to be felt with a marked improvement on the quality index for exported bananas, which rose from 76 in 1996 to 84 in 1997-on a scale of 100 and with a score of 80 considered acceptable. The European Union is also facilitating the use of Stabex funds by offering-starting with Stabex '95-general budgetary support instead of projectspecific financing There has also been some improvement in the tourism sector which, besides generating most of the region's foreign exchange earnings, is also behind most of the foreign direct investment (FDI) received by the countries. The expansion of the sector is, therefore, expected to bring more FDI as anticipated in the case of St. Lucia, where FDI is expected to jump from US$14 million in 1997 to US$37 million in 1998 due to the construction of a new hotel unit. 7. The OECS economies are projected to sustain, in most cases, the current growth trend toward the year 2000 with some improvement in the-traditionally highxternal current account deficits. 6 Creditworthiness indicators-net international reserves, debt-to-gdp, and debt serviceto-exports of goods and non-factor services-are projected to be stable and within comfortable ranges. In particular, net international reserves are expected to continue accumulating in virtually all countries. 8. Even with the good overall economic growth prospects, creditworthiness could be seriously hampered by large natural-disaster-related losses or large public expenditure/investment 3 For example, in St. Lucia agriculture represented approximately 16 percent of the total GDP value added in 1977 while tourism represented 21 percent. The agriculture and tourism percentages for 1996 were 9% and 32% respectively. 4 In St. Lucia, for instance, travel receipts increased by over 55 percent in dollar terms in whereas the dollar value of banana exports fell by almost 50 percent. By the samne token, while the share of tourism in the exports of goods and services reached 70 percent in 1998, up from 52 percent in 1993, the participation of banana exports decreased from 15 percento 7 percent. s In the case of St. Lucia, for example, Stabex has represented an imnportant source of public investment financing-stabex '94 totaled ECU 22.2 million, Stabex '95 ECU 17.7 million, and Stabex '96/97, not yet committed but already announced, amountogether to ECU 12.6 million. 6 The current account deficits have been financed by a blend of aid flows, foreign direct investinent, and concessional borrowing.

88 84 ANNEX 6 commitments. A disaster mitigation project addresses the former, whereas regional programs meant to generate economies of scale-to reduce the per capita cost of infrastructure and services-help address the latter. Implementation of the Bank's Assistance Program 9. The 1995 CAS foresaw direct Bank lending to the OECS of about $10 million annually for FY The bulk of the Bank's financial assistance to the sub-region was going to be based on Caribbean Development Bank (CDB) lines of credit in a wholesale-retail partnership. However, in recent years CDB has encountered difficulties in disbursing those lines of credit. The fifth such credit line, CDB V (US$32 million) was approved by the Board in FY90 and will be closing at the end of this calendar year with US$14 million remaining undisbursed. CDB VI (US$32 million) which was approved in FY94 had no commitments in 4 years and was cancelled in June At the request of the governments of the region, the Bank has agreed to increase its direct lending to these countries, while maintaining a strong partnership with CDB. The increase in direct Bank lending has been facilitated by the use of more flexible instruments (such as APLs and LILs), leading to a reduction in lending costs. As a result, the Bank's portfolio in the OECS will increase from 4 to 7 projects by the end of FY99 compared with FY97,' which will still be within the exposure envisaged in the 1995 CAS. 7 Lending to the OECS since the 1995 CAS: Total IBRD IDA OECS Waste Management $11.5 million $6.8 $4.7 St Lucia Education $7 million $3.5 $3.5 Grenada Education $8 million $4.0 $4.0 Dominica Education $7 million $3.5 $3.5 OECS Telecom $6 million $3.6 $2.4 Total $39.5 million $21.4 $18.1

89 85 Annex 6 ANNEX 6: Table 1 - Selected Economic Indicators Doniinica RealGDPgrowth(%) Tourismn ReceiptstXGS (/o) Banana Receipts/XGS (%) CAB/GDP (%) Net Intemational Reserves(USS M) Extemal Debt/GDP (/6)" External Debt Service/XGNFS (%) Grenada Real GDP growth (%) Tourism ReceiptstXGNFS (%) Banana Receipts/XGNFS (%) CABtGDP(%) Net Intemational Reserves(US$ M) Extemal Debt1GDP (%) " External Debt Service/XGNFS (%) St. Kitts & Nevis Real GDP growth (%) Tourism ReceiptstXGS (%) Sugar Receipts/XGS (%) CAB)GDP (%) Net International Reserves(USS M) External DebttGDP (%) " External Debt Service/XGNFS (%) 1' St. Lucia Real GDP growth (%) Tourism Receipts/XGS (%) BananaReceipts/XGS(%) CAB/GDP(%) Net Intemational Reserves (USS M) Extemal Debt/GDP (Yo)"' Extemal Debt Service/XGNFS (%))" St. Vincent & the Grenadines Real GDP growth (V) Tourism Receipts/XGNFS (%) BananaReceipts/XGNFS(%) CABtGDP(%) Net Intemational Reserves (USS M) Exteral DebtAGDP (%)i External Debt Service/XGNFS (%) / Total public and publicly gateed debt. 2/ Projedimns completed before hurricu Goroes.

90 86 Annex 6 ANNEX 6: Table 2 - IDA Commitments and Disbursements IDA Commitments and Disbursements to the OECS by Fiscal Year (USS million) Country TOTAL COMMITMENTS ee e Dominke Grenada St. Kils A Nevis St. Lucia St. Vincenid Grenadines DISBURISEMENTS Domnuica Grenada St. Li, & Nevis SL Lucia St. Vincenth Grenadines Source: World _CT. Bank

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