Document of The World Bank PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN AND CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN AND CREDIT Report No: STV IN THE AMOUNT OF US$ 3.0 MILLION AND SDR 2.4 MILLION (US$ 2.91 MILLION EQUIVALENT) RESPECTIVELY TO SAINT VINCENT AND THE GRENADINES FOR THE EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROJECT IN SUPPORT OF THE SECOND PHASE OF THE ORGANIZATION OF EASTERN CARIBBEAN STATES EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROGRAM May 9, 2002 Finance, Private Sector and Infrastructure Department Country Management Unit--LCC3C Latin America and Caribbean Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective May 31, 2001) Currency Unit = EC$ EC$ 1.0 = US$0.37 US$1 = EC$ 2.7 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS APL CAS CIMH CMO DDC EOC GoSVG IBRD ICZM IDA LHDC MEYS MFP MHE MTST MTWH NDPC NDP NEAC NHMC NMS OAS ODP OECS PC PCU Adaptable Program Loan (World Bank) Country Assistance Strategy (World Bank) Caribbean Institute for Meteorology and Hydrology Caribbean Meteorological Organization District Disaster Committee Emergency Operations Center Government of St. Vincent and the Grenadines International Bank for Reconstruction and Development (World Bank) Integrated Coastal Zone Management International Development Association (World Bank) Land and Housing Development Corporation Ministry of Education, Youth and Sports Ministry of Finance and Planning Ministry of Health and the Environment Ministry of Telecommunications, Sciences and Technology Ministry of Transport, Works and Housing National Disaster Preparedness Coordinator National Disaster Plan National Emergency Advisory Council National Hazard Mitigation Council National Meteorological Service Organization of American States Office of Disaster Preparedness Organization of Eastern Caribbean States Project Coordinator Project Coordination Unit Vice President: Country Manager/Director: Sector Manager/Director: Task Team Leader/Task Manager: David de Ferranti Orsalia Kalantzopoulos Danny M. Leipziger Bernard A. Becq/Amaud M. Guinard

3 ST. VINCENT AND THE GRENADINES EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROJECT CONTENTS A. Program Purpose and Project Development Objective Page 1. Program purpose and program phasing 3 2. Project development objective 4 3. Key performance indicators 5 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 6 2. Main sector issues and Government strategy 6 3. Sector issues to be addressed by the project and strategic choices 9 4. Program description and performance triggers for subsequent loans 10 C. Program and Project Description Summary 1. Project components Key policy and institutional reforms supported by the project Benefits and target population Institutional and implementation arrangements 13 D. Project Rationale 1. Project alternatives considered and reasons for rejection Major related projects financed by the Bank and other development agencies Lessons learned and reflected in the project design Indications of borrower commitment and ownership Value added of Bank support in this project 20 E. Summary Project Analysis 1. Economic Financial Technical Institutional Environmental Social Safeguard Policies 27

4 F. Sustainability and Risks 1. Sustainability Critical risks Possible controversial aspects 30 G. Main Loan Conditions 1. Effectiveness Condition Other 30 H. Readiness for Implementation 31 I. Compliance with Bank Policies 31 Annexes Annex 1: Project Design Summary 32 Annex 2: Detailed Project Description 39 Annex 3: Estimated Project Costs 45 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 46 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 51 Annex 6: Procurement and Disbursement Arrangements 52 Annex 7: Project Processing Schedule 63 Annex 8: Documents in the Project File 64 Annex 9: Statement of Loans and Credits 65 Annex 10: Country at a Glance 67

5 ST. VINCENT AND THE GRENADINES Emergency Recovery and Disaster Management Project Project Appraisal Document Latin America and Caribbean Region LCSFU Date: May 9, 2002 Team Leader: Arnaud Marie Guinard Country Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Danny M. Leipziger Project ID: P Sector(s): BY - Other Public Sector Management, MY - Non-Sector Specific Lending Instrument: Adaptable Program Loan (APL) Theme(s): Public Sector Poverty Targeted Interventioii: N Program Financing Data Estimated APL Indicative Financing Plan Implementation Period Borrower (Bank FY) IBRD/IDA Others Total Commitment Closing USS m % US$ m US$ m Date Date APL /31/ /30/2003 St. Kitts & Nevis, St. Lucia, Loanl 14.07/ Dominica. Credit 5.50 APL /02/ /31/2006 St. Vincent & the Grenadines Loan/ 8.06 (US$ 6.81 m total); Grenada Credit 7.93 (US$ m total). APL Reallocated to APL 2. Loan/ 0.00/ Credit 0.00 APL /31/ /31/2005 APL 1 & APL 2 countries Loan/ 5.00/ following a declared local Credit 5.00 disaster emergency. Total [ ] Loan [I Credit [1 Grant [ Guarantee 1 Other: For Loans/CreditslOthers: Loan Currency: United States Dollar Amount (US$m): 3.00 IBRD (Libor-based single currency loan); 2.91 equivalent (SDR 2.4 million) IDA (standard credit) Initial choice of Interest-rate basis: Auto. Rate Fixing by amount (specify)us$3.0 million Type of repayment schedule: [X] Fixed at Commitment, with the following repayment method (choose one): level [ ], Linked to Disbursement Conversion options: [X]Currency [X]Interest Rate [ ]Caps/Collars:

6 Financing Plan (US$m): Source Local Foreign Total BORROWER IBRD IDA Total: Borrower: SAINT VINCENT & THE GRENADINES Responsible agency: MINISTRY FINANCE AND PLANNING, ODP, MINISTRY WORKS Project Coordination Unit (PCU) Address: P.O. Box 608, Kingstown, St. Vincent and the Grenadines Contact Person: Mr. Hudson Nedd, Project Coordinator Tel: 1 (784) Fax: 1 (784) cenplan@caribsurf.com Other Agency(ies): Office of Disaster Preparedness (ODP) Contact Person: Mr. Howie Prince, National Disaster Preparedness Coordinator Tel: Fax: 1 (784) Ministry of Transport, Works and Housing Contact Person: Mr. Alistair Campbell, Deputy Chief Engineer Tel: 1 (784) Fax: 1 (784) pwds@caribsurf com Estimated Disbursements ( Bank FY/US$m): FY Annual Cumulative Project implementation period: 3 years Expected effectiveness date: 09/15/2002 Expected closing date: 01/31/2006 OS APL PAD F-m P WM 2ZO -2-

7 A. Program Purpose and Project Development Objective 1. Program purpose and program phasing: This project for St. Vincent and the Grenadines, along with a similar project for Grenada, approved in October 2001, forms the second phase (APL 2) of an Adaptable Program Loan (PAD Report No LAC) that covers five Organization of Eastern Caribbean States (OECS) member countries. The program aims at strengthening the OECS countries' ability to manage efficiently and effectively emergency situations, in order to reduce the likelihood of loss of life and assets. The program also aims at enhancing the capacity of disaster management agencies and mitigate the adverse effects of disasters that regularly strike the island, in particular floods, landslides, sea surges, and hurricanes. To this end, the program aims to support the strengthening of physical infrastructure to better weather natural disasters and enhancing institutional capacity in order to improve responsiveness once disasters have struck. The entire program consists of individual lending operations in five OECS countries (Dominica, St. Lucia, St. Kitts & Nevis, Grenada and St. Vincent and the Grenadines). It originally was expected to be implemented over a period of approximately six years. The program supports the following comprehensive set of activities: * Physical prevention and mitigation 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 and strengthening disaster management capacity: The capacity of national emergency management and disaster preparedness agencies will be strengthened to enable them to perform more effectively. * Community preparedness: Community-level disaster committees will be organized, trained and equipped to enhance their role in disaster preparedness, mitigation and recovery. APL 1: The first phase of the program (APL 1) is now well underway in St. Kitts & Nevis, Dominica and St. Lucia, where credit and loan agreements have been effective since respectively April, June and August By and large, the implementation of these projects has generally been slow at the beginning due to a general lack of project management capacity in Governments, the difficulty to coordinate all agencies involved, the lead-time necessary to prepare detailed proposals and complete tender documents, and the lack of proactive management of the procurement process. Implementation is now proceeding satisfactorily and closing dates have recently been extended. APL 2: Both projects for St. Vincent and the Grenadines and Grenada under the second phase of the program required substantially more funding than was originally allocated for APL2 projects (about US$ 10 million vs 2 million for Grenada, and about $6 million vs $4 million for St.Vincent and the Grenadines). The needed additional funds (about 10 million overall) have been taken from APL 3, leaving no IBRD and IDA funds for this phase, which has therefore been canceled. Additional funding for the St.Vincent and the Grenadines project is required to strike the proper balance between pilot physical mitigation measures and support to strengthening disaster management capacity. The amount for the APL 4 phase --the contingency funds-- remains identical to maintain the comprehensiveness of the program. The funding reallocation, as well as changes in the triggers to access the contingency funds under APL4 (see below), were approved by the World Bank Board of Executive Directors on October 17, 2000, when the Grenada project was approved. APL 3: All countries participating in APL 1 and APL 2 require long-term support in order to improve capacity to prepare and respond to disasters. The APL 3 phase was originally to allow the Bank to provide continued support for long-term strengthening of disaster management capacity and focus on continuing - 3-

8 and enhancing the process of community outreach and involvement, and finance additional physical investments for which feasibility and detailed engineering studies will be carried out during APL 1 & APL 2. With this phase cancelled for lack of available funds, APL 1 & APL 2 will thus strengthen the capacity of the countries to manage disasters and provide for some preventive physical mitigation measures, and APL 4 will allow for quick response following an emergency. Should the countries need additional financing for further capacity building in disaster management and preparedness, or for further preventive physical mitigation measures (which APL 3 would have provided), additional World Bank support would take the form of new and separate projects, and/or supplemental loans and credits. This course of action is justified on the basis of the slow implementation of APL I projects in all participating countries, and limited results and progress at this stage, as the APL3 phase was to be conditioned by: (i) the satisfactory implementation and completion of APL I or APL 2 (depending on the country); (ii) the evidence of adequate maintenance of infrastructure (in particular those funded under APL 1 or APL 2); and (iii) the existence of formal disaster committees and disaster-resilient communities to finance more community-based investments. APL 4: Through APL 4, the program will make contingent financial resources readily available to the Government of any of the five participating countries to assist in restoring, inter alia, critical public facilities, should a severe natural disaster strike them during the program period. This phase will run in parallel with APL 1 and APL 2, meaning that as long as a country has signed for either APL 1 or APL 2, they would be eligible to access the contingency funds. The contingency fund was originally to be triggered by first a declaration of a national disaster emergency by the respective Government seeking to access the fund and its recognition by the international donor community, and second evidence of said Government's commitment to improving disaster mitigation policies as demonstrated by the effective implementation of its project under either APL 1 or APL 2. The first trigger was amended to the declaration of a local disaster emergency by the respective Government seeking to access the fund and recognition by the World Bank of such an emergency, which was approved by the Board in October This reflects the well-recognized fact that it is hardly possible for any of the OECS countries to declare a state of national disaster emergency when their economies are so much depending on tourism which would be very negatively affected by such declaration for a long period of time. 2. Project development objective: (see Annex 1) The primary development objective of the project is to strengthen St. Vincent and the Grenadines' resilience, preparedness, and ability to respond to natural disasters. This objective will be achieved by: * building the capacity of the Office of Disaster Preparedness (ODP) and other concerned public agencies to perform their respective responsibilities more effectively prior to and during a crisis; * strengthening the country's institutional disaster preparedness and management procedures, rehabilitating a designated Emergency Operations Center (EOC) which would also serve as ODP headquarters, and procuring specialized and emergency equipment; * implementing selected priority mitigation and prevention measures to protect key infrastructure and lifeline facilities before disasters strike, on a pilot basis; * retrofitting shelters and health centers to improve the safety of the populations, particularly in poor areas; * improving environmental protection through better standards with regard to disaster management, and environmentally-sound prevention measures; and * promoting community involvement through organizing, training and equipping community disaster committees, and enhancing their role in disaster preparedness measures, and mitigation and recovery operations. -4 -

9 3. Key performance indicators: (see Annex 1) The following project performance monitoring indicators will be used to measure project progress and impact. Outcome Indicators: * Operational emergency procedures and mobilization guidelines as per international standards in place by June * Improved reporting of weather information by the National Meteorological Service (NMS) to the Office of Disaster Preparedness (ODP) with: a) regularity (at least once daily); and b) quality (verified by missions of the Caribbean Meteorological Organization (CMO), Caribbean Institute of Meteorology and Hydrology (CIMH) or equivalent institution). * Enhanced ability of ODP to accurately analyze incoming information and data on emergencies and serve as a single "clearing house" for early warning information and dissemination (as evidenced by timely decision making, the triggering of emergency procedures and timely dissemination of warnings by ODP to populations at risk). * Increased number of people serviced by adequate shelters due to the retrofitting program. * Strengthened capacity in the Ministry of Transport, Works and Housing (MTWH) to carry out works during emergencies, and in MTWH and the Ministry of Health and Environment (MHE) Environmental Unit to prepare Environmental Impact Assessments (EIAs) and monitor mitigation measures. Output Indicators: * Existing National Emergency Advisory Council (NEAC) streamlined by the end of calendar year 2003 into a full-fledged National Hazard Mitigation Council (NHMC) through the elaboration of a charter establishing new procedures and the appointment of new members. * Adequate staffing and financial resources for the Office of Disaster Preparedness (ODP) in line with the civil service reform recommendations: (i) "upgrading" before mid calendar year 2004 of the National Disaster Preparedness Coordinator (NDPC) position to a higher level in the civil service pay-scale; and (ii) appointment respectively before the end of calendar year 2004 and mid calendar year 2005 of two additional high level staff in ODP --Technical/Data Specialist and Deputy Disaster Coordinator. * Draft legislation by mid calendar year 2004 to formalize ODP as an agency with specific authority to coordinate all disaster management activities and agencies involved during emergencies, and to adopt revised operational guidelines; * Training of High-level Government Officials in disaster and emergency management. * At least 72-hour advance warning from NMS to ODP of impending tropical events. * Number of District Disaster Coordinators (DDCs) reached, and reduced response time of those coordinators to an emergency. * Efficient shelter management procedures in place. * Number of shelters retrofitted. * Number of shelter managers actually from communities. * At least one shelter manager per shelter trained and in place. * Dedicated unit in MTWH capable of erecting on-site metallic bridges of a 10 to 15 meter span in less than 4 days. * Design standards and monitoring guidelines elaborated; MHE Environmental Unit trained in preparing EIAs; and MTWH staff trained in monitoring the implementation of mitigation measures. -5 -

10 * Sea wall reconstructed at Layou. * Flood protection/gabion works at selected river-crossing sites (Georgetown, Buccament, Colonarie) completed. * Rehabilitation of priority health centers and clinics completed. * Recommendations of studies financed by the project reviewed by Government before December 2003, and approved recommendations implemented before December B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: LAC Date of latest CAS discussion: 06/28/01 The program directly supports the principal goals of the new OECS Country Assistance Strategy (CAS): building human and institutional capacity, and reducing income security and vulnerability at aggregate and household levels --which includes mitigating disaster risks to the extent feasible. As St. Vincent and the Grenadines develops further into a service-based economy, strengthening infrastructure and ensuring their reliability will become increasingly important, especially to increase the country's resilience to disasters and prevent economic activities from being interrupted. The program is expected to have a tangible poverty reduction impact, both direct through the provision of shelters and health clinics which will benefit the poorer populations whose houses cannot withstand strong hurricanes, and early warning and better communications which will allow those populations to seek refuge in time, and indirect by reducing the economic and social risks, income loss, and vulnerability of the usually more exposed poorer populations. In addition to risk minimization measures and to the strengthening of Governments' capacity to prepare for and manage natural disasters, there is a need for improved availability of affordable catastrophe insurance which another Bank-funded project will help providing, and for support to the OECS Governments in monitoring and managing the effects of global climate changes which a Bank AAA study and a proposed GEF project will assist in identifying. Economic development. During the 1980s, rapid growth was driven largely by a favorable external environment, characterized by concessional aid flows, which financed a large portion of public investments in infrastructure, preferential market access, favorable agricultural export commodity prices, and fast growth in the tourism sector. In the 1990's, however, real GDP growth has slowed considerably from an annual average of 6.2% in the 1980s to roughly 3.5% for the following decade. This slowdown in growth has been largely due to a reversal in the extemal environment, with extemal flows slowing down considerably and concessional aid flows declining rapidly. During the 1990s, the main economic trend in St. Vincent and the Grenadines, as with other OECS countries, has been the rapid transition from an agriculture-based economy to a service-based one, primarily driven by increased tourism. The prospects for growth have improved somewhat and real GDP is expected to grow by an annual average of 3.7 % to 4.4% over the next five years, due mainly to the expansion of the tourism sector in substitution of the agricultural industry as the main foreign exchange earner. The challenge that St. Vincent and the Grenadines faces is that both of its main foreign exchange sources --tourism and agriculture-- are particularly vulnerable to natural disasters. 2. Main sector issues and Government strategy: St. Vincent and the Grenadines is an archipelagic state covering over 10,600 square nautical miles of water and comprising 32 islands, nine of which are inhabited. The country lies in the Atlantic hurricane belt and has an active volcano, which last erupted in It is very vulnerable to floods, and during the last century, it has been struck by four hurricanes, experienced four major floods, and suffered three volcanic - 6 -

11 eruptions. As recently as November 1999, storm surges resulting from Hurricane Lenny served to highlight the country's vulnerability to hurricanes. While the storm did not inflict severe damages to the island, it caused significant coastal erosion along the leeward side of the island of St. Vincent. The country faces special challenges due to its small size. The country is about 340 sq. km., with a population of roughly 110,000 inhabitants for the entire archipelago, and had a GNP per capita of US$ 2,720 in Its mountainous terrain and relatively low population density make the cost of providing and maintaining economic and social infrastructure high. St. Vincent and the Grenadines also lacks preparedness and the institutional arrangements required to manage emergency situations in an effective manner. In order to minimize the adverse impacts of disasters on economic activity and to protect communities, the Government is thus seeking to strengthen the institutions responsible for managing natural disaster situations. Tourism and Agriculture. Tourism has become the most important foreign exchange earning sector. Agriculture has historically been important, and still represented about 10% of GDP in 2000, but tourism and related activities have shown rapid growth, representing roughly two-fifths of GDP in Natural disasters can, however, have a devastating impact on the tourism industry, since tourists are generally wary about visiting a country that has been devastated by a tropical storm. In addition, it also takes time following a disaster to rehabilitate the infrastructure needed to serve the tourism industry. However, most hotels have already protection/evacuation plans and emergency procedures, and are usually the most proactive in repairing their facilities after hurricanes. Agriculture is also vulnerable to natural hazards due to its dependence on foreign trade and because it still plays an important role in contributing to the country's economic wealth. Exports from the agricultural industry still forms an important source of foreign exchange revenues. Roads, Transport and Coastal Areas. The transport and communication networks are increasingly vital, in terms of output (comprising over 15% of GDP), and the transport network is vital for transporting both merchandise and people, particularly the St. Vincent island road network and the maritime and air links between the main island and the Grenadines. The country's physical infrastructure, especially the road network and the coastal areas, are particularly vulnerable, as witnessed by the coastal erosion caused by the storm surges associated with Hurricane Lenny in November Many populated areas are also vulnerable to disasters, such as landslides and floods, which not only threatens living conditions, but also have a significant negative impact on road conditions and the road network, hence possibly also disrupting road transport activities. Selective strengthening of roads and bridges in key sections of the network is needed to help minimize disruptions in transport and economic activities. The rehabilitation of most of the main Western Coast Road has been completed last year with the Government-funded rehabilitation of the Layou to Wallilabou section. The main Eastern Coast Road will be rehabilitated under a large program of civil works to be partly financed by the European Union (EU). The program is expected to include bridges repairs at key locations such as Argyle, Gorse and Georgetown, a bypass road in Mount Grenan, and drainage and flooding protection, as well as studies of options for the Byera tunnel, and the crossing of the Rabacca river. Shelters. Government has identified the existence of safe and hurricane resistant shelters and health centers as key to disaster management. Shelters and health centers are currently not hurricane resistant, and not adequately managed. There is a lack of clear guidelines with regard to shelter management, no regular training for shelter managers, and they are also poorly equipped for effective functioning during an emergency (i.e. lack of generators, water supply, etc.). In addition, shelter managers also tend to be school principals, who may not reside within the community where the shelter is located. - 7-

12 Community Involvement in Disaster Management. While District Disaster Committees (DDC) exist, they are not well trained, have weak mobilization capacity to handle emergencies, and are not properly equipped to effectively deal with emergency situations. Currently, DDCs exist at the local level, but they are purely voluntary and do not coordinate with the local level Government structures for disaster management. They tend to act as "relief' committees rather than committees that can play an active role in disaster preparedness and mitigation. There is thus a need to restructure these committees, institutionalize them, and facilitate better cooperation between them and local Government structures. Public Sector Capacity. Expertise in the public sector is generally quite limited with regard to disaster management, in spite of the existence of a dedicated disaster management agency (ODP). ODP is currently still critically understaffed, with only one professional staff on a part-time basis, and is not housed in an appropriate office. The main disaster management inter-governmental structure, NEAC, has no real decision-making power, includes too many sub-committees with unclear mandates to be effective, hence the need for a less bureaucratic and more operations-oriented institutional framework. The lack of capacity within the public sector institutions with regard to disaster management is also reflected in the fact that: (i) there is little planning for disaster investments and a lack of proactive efforts to improve preparedness measures; (ii) the national disaster plan dates back to 1986, making it operationally outdated, and it has no legal authority; (iii) disaster emergency procedures are not regularly tested; (iv) there is a need for better collaboration between all stakeholders, and for all to be closely associated with emergency measures (e.g. disaster committees, community leaders and organizations); (v) there are no real regulations to prepare and/or enforce zoning and new building code; and (vi) there are no early warning systems, as well as a lack of good emergency communications. Government Strategies. The Government's strategy to strengthen disaster management capacity is to adopt and implement institutional measures aimed at improving preparation for and response to disaster emergencies, increase staffing in concerned agencies and implement a comprehensive training program, and put in place sustainable procedures to ensure quick response in case of natural disasters. The main thrusts of the Government's strategy are to: * strengthen the human resource capacity of ODP through the appointment of qualified professionals in permanent positions financed by Government; * improve disaster planning and preparedness, and operational emergency procedures; * institutionalize disaster management into mainstream Government functions, in particular through specialized technical training for ODP and all concerned branches of Government, as well as other agencies, the private sector and communities; * sensitize communities to disaster preparedness and mitigation to demonstrate the effectiveness of properly organized committees representing all sectors of the community such as churches, schools, the business community, etc.; * designate and renovate the building that will house the national EOC and serve as the headquarters of ODP. * operate the existing NEAC as a full-fledged National Hazard Mitigation council (NHMC), with new procedures and members consisting of high level representatives from each of the concerned ministries and agencies and from the private sector; and * increase investments in mitigation and prevention measures. - 8-

13 3. Sector issues to be addressed by the project and strategic choices: The Government's key priority areas are: (i) the strengthening of the institutional capacity of ODP and other institutions concerned with disaster management; (ii) the protection of the populations during emergencies through a program to retrofit shelters, particularly in poorer areas; (iii) the protection of key lifeline facilities to avoid disruptions of economic activities; (iv) the improvement of the access of populations to health care after emergencies; and (v) the protection of the populations who are particularly exposed to storm surges and floods, and in particular those living along the main Eastern Road due to the undersea Kick-em Jenny volcano threat. The project will support these objectives by focusing on two strategic activities, namely (i) strengthening disaster management capacity through institutional development and capacity-building measures, including a comprehensive training program available to staff involved with disaster management in all concerned agencies, and support to strengthening community involvement in disaster preparedness, mitigation and response; and (ii) preventive physical mitigation, focusing on selected priority investments and pilot measures, and the engineering and feasibility studies necessary to prepare for more extensive works programs. The strengthening of disaster management capacity aims at addressing the capacity issues and improving the country's preparedness and response to natural disasters. In St. Vincent and the Grenadines, this capacity is particularly weak in ODP --the principal Government agency dealing with disasters-- which is ill-organized, suffers from inadequate staffing, lacks resources, and does not possess a dedicated office building. The project will support the creation of a well-staffed and well-equipped ODP with a mandate, legal authority and adequate procedures to prepare for and manage emergency situations, and housed in an appropriate structure where the EOC would also be located. It will also assist in implementing a comprehensive training program open to all Government staff and communities leaders involved in disaster management, as well as strengthening the Government capacity with regard to environmental guidelines and monitoring. Additional priorities, to be supported by the Project and aimed at improving early warning, include the setting up an effective emergency communications system between ODP, concerned agencies and communities, and the strengthening of the weather monitoring and reporting functions of the National Meteorological Service (NMS) under the Ministry of Telecommunications, Science and Technology (MTST). An important aspect to protect populations is the retrofitting of shelters, which ensures that the bulk of the population (particularly the poor living in vulnerable homes) has access to safe accommodation during and immediately following a natural disaster. Thus a number of shelters in high density and high vulnerability areas will be retrofitted and shelter management operations improved. District Disaster Committees (DDCs) are at the core of the strategy to respond to and manage disasters and emergencies at the community level. Their capacity, however, needs to be strengthened in order to prepare community disaster plans and organize community activities related with disaster prevention and mitigation. The preventive physical mitigation measures are all intended to help maintain the smooth functioning of the island during an emergency, and protect areas where there is a high concentration of population and economic activity at risk. To this end, Government intends to first and foremost address the critical issue of maintaining access in the St. Vincent island which largely depends on road transport. The two key measures are to protect priority roads and bridges from floods, and to preserve coastal areas --where most of the population lives-- from sea surges. The sea defense works at Layou will serve to protect an important and currently very vulnerable town center on the western side of the island. Other selected physical mitigation measures under the project are intended to test --on a pilot basis before all the necessary -9-

14 studies are completed-- flood protection measures. In addition, providing metallic bridges, gabions and technical assistance to MTWH is necessary to improve its ability to effectively intervene to keep the country functional during emergencies, while also enabling it to conduct quality repair works immediately after disasters. Finally, the rehabilitation of priority health centers will help maintaining an adequate medical response during emergencies. 4. Program description and performance triggers for subsequent loans: The detailed program description is provided in Section A. 1 of this document. The table below outlines the triggers for additional investments in all countries participating in the APL program, and the triggers required for APL 4 to be effective. Loan Type Triggers to activate loan/credit Subsequent 1. Satisfactory and on-time completion of physical investments within budget, and with loans/credits adequate technical quality under APLI and APL2. and/or 2. Evidence of adequate maintenance of infrastructure vulnerable to disasters. supplemental 3. Fully staffed disaster management agencies (ODP in St. Vincent and the Grenadines) loans/credits to with clear mandates and sufficient human and financial resources. APL1 and/or 4. A program of preparedness and mitigation activities at the national and community APL2 levels, including a complete National Disaster Preparedness and Response Plan for (APL3 natural and man-made disasters. canceled) 5. An operational plan within disaster management agencies (ODP in St. Vincent and the Grenadines) to carry out disaster awareness, preparation, and response training activities at the community level, including at schools and private businesses. 6. A fully staffed meteorological service (National Meteorological Service in St. Vincent and the Grenadines) with a clear mandate and sufficient human and financial resources to issue timely weather and flood warnings, as well as an operational island-wide emergency communications systems to transmit the information to communities and businesses. APL 4 1. Declaration of a local disaster emergency by Government, and approval by the Bank after consultations with the international community. 2. Satisfactory implementation progress of the projects under APL 1 and/or APL 2. C. Program and Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The St. Vincent and the Grenadines project will consist of two major components: (A) strengthening disaster management capacity, aimed at improving the country's capacity to prepare for and respond to disaster emergencies through technical assistance, training, the rehabilitation of a Government-owned building into an Emergency Operations Center (EOC) and headquarters for ODP, and the procurement of specialized equipment, emergency supplies and rescue tools; and (B) preventive physical mitigation, aimed at minimi7ing disaster-caused damages through selected priority and pilot preventive infrastructure investments and associated supervision services, as well as the necessary preliminary studies to assess

15 disaster-related risks, elaborate comprehensive long-term mitigation investment programs, and prepare detailed designs for critical priorities to be subsequently financed. It will also include a project management component to assist Government in discharging its overall coordination, financial management, auditing, procurement, works supervising, environmental monitoring, and reporting responsibilities. Initially, as outlined in the original PAD prepared for APL 1, the program sought to differentiate and support the funding of both institutional strengthening and capacity building. Institutional strengthening was defined as measures aimed at improving the regulatory framework as it applies to disaster planning and mitigation (such as improving the regulatory framework, developing a national building code, disaster insurance, hazard analysis and vulnerability mapping), and strengthening disaster management capacity sought to strengthen the capacity of national institutions responsible for disaster preparedness, mitigation and management (such as staffing, training, and equipment for disaster-related agencies). APL 2 has been slightly restructured to focus primarily on strengthening disaster management capacity rather than on institutional strengthening as defined above due a number of factors. First of all, there was a general lack of details in the documentation of the proposals discussed for funding under the Bank project, and most tender documents remained incomplete. Second other donors and organizations that already have substantial experience and a long involvement in disaster management in the region, and have adapted funding mechanisms for regional activities, have expressed a willingness to continue financing such activities under the framework provided by the APL program. Third, the country's inability to implement and enforce regulatory reforms does not allow for activities aimed at institutional reform --such as hazard mapping and zoning regulations-- to be pursued before the Government's enforcement capacity has been enhanced. Finally, the Bank project has been streamlined to reflect the current weak capacity of ODP, the national institution responsible for disaster management. Component A of the Project, Strengthening Disaster Management Capacity, will include four sub-components: 1) Institutionalizing and strengthening the Office of Disaster Preparedness (ODP), including inter alia elaborating/revising emergency procedures, rehabilitating the newly-dedicated Emergency Operations Center (EOC) and ODP office, procuring specialized equipment, emergency supplies and rescue tools, and developing and implementing a comprehensive disaster management training and public awareness program; 2) Developing emergency communications and improving meteorological assessment capacity on a country-wide basis, including technical assistance and training, and the procurement of specialized equipment; 3) Implementing a shelter program, including technical assistance, training, and the retrofitting of selected public buildings; and 4) Capacity-building in the Ministry of Communications and Works (MTWH) to effectively respond to disaster emergencies through training and the procurement of strategic stocks of prefabricated metallic bridges and gabions, and strengthening the environmental capacity of MTWH and the Environmental Unit of the Ministry of Health and the Environment (MEH) through training and technical assistance to establish standards and guidelines, and monitor mitigation measures. Component B, Preventive Physical Mitigation, will include four sub-components: 1) river flooding protection through civil works and gabionage to protect selected river crossings against floods and storm surges and the associated design review and supervision services, and a feasibility and design study to define priority river training and river flood protection investments; (b) coastal erosion protection through minor priority sea defense works at Layou and the associated design review and supervision services, and an Integrated Coastal Zone Management (ICZM) study to define a prioritized sea defense and road realignment investment program and to elaborate the corresponding design; (c) flood control through a comprehensive drainage improvement, flood control and watershed management study to design an optimal - I 1 -

16 storm drainage system for the Kingstown area; and (d) health centers and clinics through a program to retrofit priorities. Component C, project management, includes the funding of: 1) the specialists to be recruited in the PCU (financial manager/accountant, procurement specialist and part-time disaster management specialist) and training of Government staff appointed to the PCU; 2) office equipment and project vehicles; 3) independent yearly financial audits, and selective technical audits; and 4) operating expenditures, including communications services and secretarial support. Total costs for the project's components are listed below. (Bank financing is to be understood as the total under the IBRD loan and the IDA credit, and including the US$ 30,000 front-end fee). Component Sector Indicative Costs % of Bankfinancing % of Bank- (US$M) Total (US$M) financing A. Strengthening Disaster Other Public Sector Management Capacity Management B. Preventive Physical Mitigation Non-Sector Specific C. Project Management Other Public Sector Management Total Project Costs Front-end fee Total Financing Required Key policy and institutional reforms supported by the project: Institutional reforms will be sought in the area of disaster preparedness, prevention and mitigation, in particular through various capacity-building measures, namely: (i) enhancing the capacity of ODP to perform its role effectively and in a timely manner, in particular through appropriate staffing and a recognized authority to act; (ii) ensuring that the National Disaster Plan (NDP) is updated and disaster management procedures are in place; (iii) formulating a national environmental protection policy and guidelines, and strengthening the institutional capacity --in particular in MTWH-- to preserve the environment; and (iv) protecting and maintaining infrastructure facilities through increased funding for maintenance, improved construction standards, better capacity to enforce disaster mitigation regulations, and enhanced MTWH capacity to quickly react during emergencies. The overall Government program aims at financing initiatives to enhance preparedness to manage future emergency situations in the long-term. To address pervasive flooding and coastal protection issues, this first project in support to the overall program will finance engineering studies to prepare investment programs. The rest of the program includes activities which would be funded by other donors or under a next phase of the program, including inter alia hazard analysis, vulnerability mapping and risk assessment; building legislation; and seismic and volcano monitoring. In addition, all investments on the Eastern Coast are incorporated in an EU-financed rehabilitation program. Government is committed to reducing its vulnerability to natural disasters through further reforms and restructuring actions, in particular regarding staffing and training, awareness and information. To this end, Government would during the life of the project take action with regard to inter alia: (i) appointing a full-time NDPC as a high-level civil servant with the unique function of bringing together diverse groups to - 12-

17 promote disaster mitigation, stimulate preparedness and to coordinate relief operations; (ii) staffing ODP (now under the Prime Minister Office) with professional and permanent civil servants; (iii) developing an appropriate institutional process to engage/mobilize all parts of society and stakeholders in disaster preparedness and emergency management; (iv) engaging business and industry resources to support public projects; and (v) encouraging the private sector to develop plans to protect their own productive capacity. In addition, Government will with direct support from the Project: (i) undertake disaster-related training and drills in order to improve emergency management skills; (ii) draft and support laws and regulations to strengthen national and community disaster awareness and protection; and (iii) improve the degree of preparation of MTWH to respond to emergency situations and its capacity to quickly proceed with the removal of debris to reopen road transport infrastructure and carry out repairs. 3. Benefits and target population: The main benefits of the project would be to: (i) ensure that people can move quickly to safe areas (such as shelters) thanks to better emergency procedures, improved early warning, and a new communications system; (ii) protect assets through the rehabilitation of selected infrastructure and the retrofitting of public facilities (shelters and clinics) to better withstand disasters; (iii) contribute to gradually decreasing the cost of disasters through improved response capacity and appropriate infrastructure protection; (iv) facilitate protecting the environment, and raise awareness and capacity in this regard; (v) increase the effectiveness, timing and coordination of interventions during and following disasters; and (vi) carry out the necessary engineering and feasibility studies to prepare a comprehensive preventive mitigation program for the country. The main beneficiaries will be the population at large who will benefit from improved disaster preparedness, in particular through enhanced early warning and better and quicker meteorological information, and revised emergency procedures. They will also benefit from improved Governmental capacity to intervene and carry out more rapidly the rehabilitation/reconstruction of damaged infiastructure. Some populations will benefit from the minimization of the disruption of economic activity due to the prevention and mitigation works financed under the project in selected areas, and more secured access to health care during disasters. The project will also benefit many lower income groups as it will improve access to the safety of retrofitted shelters in the most risk-prone areas, which are usually inhabited by poorer sections of the population. The involvement of local communities through the disaster coordination committees will ensure that people can move quickly to safe areas and shelters if a disaster strikes. Government agencies, such as ODP, the Central Planning Division and the Physical Planning Section of the Ministry of Finance and Planning (MFP), and other implementing agencies, especially MTWH, will benefit from capacity building through training and technical assistance. 4. Institutional and implementation arrangements: Institutional arrangements have been streamlined to account for lessons from the implementation of APLI projects, in particular the difficulty to coordinate too many implementing agencies. They are mainly based on the establishment of a full-fledged Project Coordination Unit (PCU) to coordinate and manage the project, and the devolution of part of the implementation responsibility --under the monitoring and with the assistance of the PCU-- to only two implementing agencies: ODP and MTWH. In addition, in order to facilitate the handling of disaster management matters on a sustainable basis, Government will strengthen ODP through additional staffing and proper offices, and streamline the current NEAC to serve as a steering committee (NHIC) for policy matters. The PCU will be responsible for the implementation of the project, including inter alia coordinating implementing agencies, keeping financial accounts and files, carrying out and monitoring the procurement

18 process, and reporting to the Government and to the World Bank. The implementing agencies will in turn monitor all activities under their component, including those that may be directly involving other agencies, and coordinate with other concerned stakeholders as may be needed. Project Coordination and Management. The PCU, which has been set up within the Central Planning Division of the MFP, will be retained during the whole duration of the project. It is headed by a Project Coordinator (PC) --to be fully dedicated to the project, at least during the early implementation phase. The PCU will also include --under project funding-- a full time procurement specialist, a full-time financial manager/accountant and a clerical administrative assistant for the whole duration of the project, and a part-time disaster management specialist (initially for a one-year period to be extended as needed until a second professional staff has joined ODP as committed by Government). Detailed terms of reference for each PCU staff, and a description of the respective responsibilities of the PCU and implementing agencies have been prepared and included in the Project Implementation Manual (PIM). The implementing agencies will work under the auspices of the PCU, and will provide progress reports to the PCU on a quarterly basis. The PCU will supervise and be ultimately responsible for managing the procurement and contract management process for all components of the project, and will discharge this responsibility in full coordination with the implementing agencies which would retain responsibility for substantive matters such as the preparation of terms of reference (TORs) and specifications, engineering aspects, etc... The PCU will report on a bi-annual basis to the World Bank. Annual performance reviews will be conducted, with the one to be held during the second year of implementation also serving as mid-term review. ODP will be the implementing agency for Component A (Strengthening Disaster Management Capacity). In this regard, it will directly manage sub-component 1), while coordinating with NMS for sub-component 2) regarding meteorological and communications systems, MTWH and the Ministry of Education, Youth and Sports (MEYS) for sub-component 3) regarding shelters, and with MTWH and the Environmental Unit of MvHE for sub-component 4) regarding the strengthening of the Government emergency response and environmental monitoring capacity. MTWH will be the implementing agency for Component B (Preventive Physical Mitigation). MIHE will be involved with MTWH in the management of the sub-component dealing with the rehabilitation of health centers and clinics. Finally, the steering committee (NHMC, ex NEAC) will coordinate country-wide policy issues, approve the selection of priority investments, and help ensure compliance with Government commitments. The committee would consist of representatives of relevant sector ministries involved in the project, as well as representatives from the private sector and NGOs. Government has committed to complete this by the end of calendar year Financial Management, Accounting, and Auditing Arrangements A Financial Management Assessment of the existing financial management procedures, accounting system and administrative controls of the Ministry of Finance and Planning was carried out and cleared by the World Bank in February To assist with financial management, the PCU has retained an internationally qualified accountant/financial manager for the duration of the project. The PCU will maintain two separate accounts for project-incurred expenditures, one account for IBRD/IDA funds (the Special Account) and one account for Government's counterpart funds (the Project Account)

19 Financial statements and reports will be prepared in formats satisfying the Government and IBRD's monitoring and fiduciary purposes. On a monthly basis, the PCU will prepare the project's basic Statement of Expenditure, a matrix classifying receipts by financing source and expenditures by financing source and disbursement category. This report will be submitted to the Office of the Accountant General and to the MFP. In addition to Statement of Expenditure, the monthly financial reports will include the Special Account Reconciliation Statements. Any difference in the amount of expenditures reported under the two financial statements must be clearly explained. The project financial statements, along with the physical progress and procurement sections of the FMRs, will be submitted to the Bank on a quarterly basis, and will be submitted no later than forty-five (45) days after the end of each quarter. The contents of the FMRs have been discussed, and the formats of the reports will be finalized by loan negotiations. The World Bank also assessed the capacity of the Auditor General to perform the annual independent audit of the PCU. Given the limited resources of the Office of the Auditor General, the audit will be contracted to an external accounting firm according to the Bank's procurement guidelines. The PCU will ensure that an annual independent audit is carried out and completed by a qualified International Auditing firm, with a final report issued to the Bank no later than three months after the end of the fiscal year. An audit firm acceptable to the Bank was hired prior to negotiations. Detailed financial management, accounting and auditing arrangements are given in Annex 6. D. Project Rationale 1. Project alternatives considered and reasons for rejection: This project forms the second phase of an APL for five OECS countries. The rationale for the entire APL program is described in detail in the Project Appraisal Document for the APL 1 (Report No LAC), and the program's phasing is described in Section A. 1 of this document. The first alternative would have been to focus the project on short-term priority measures and help the country reduce its vulnerability to hurricanes and mostly finance physical mitigation investments to repair past damages (particularly those caused by the effects of Hurricane Lenny in November 1999). This quasi ad-hoc approach would have limited the assistance impact as it would not have addressed the key issues which are to improve the country's preparedness to withstand and manage disasters over the long term through both preventive mitigation investments and strengthening disaster management capacity. A second alternative would have been to finance a more complex project, in particular including an institutional strengthening component (as defined in Section C of this document and the original PAD for the APL 1 phase) with such activities as (i) hazard analysis, vulnerability mapping and risk assessment, building codes and zoning regulations; (ii) seismic and volcano monitoring; and/or (iii) disaster insurance. The first two sets of items were not retained due to the weak implementation capacity within the country, the added difficulty to coordinate the additional implementing agencies that such an approach would have involved, and the low degree of preparation of activities in these areas. In addition, a number of other organizations in the region --which are well equipped to intervene in these fields due to their long experience in the sub-region, and have a proven capacity to exchange best practice and finance such activities on a regional basis-- have indicated their willingness to finance these types of activities or are already doing so. Given the high cost of financing such activities, retaining these under the present project could also have been premature as currently there are neither accompanying zoning regulations to enable Government to control land use, nor capacity to enforce building regulations. Regarding catastrophic

20 insurance, the Bank is currently in the process of finalizing a separate regional loan for the OECS countries. A third alternative would have been to include in the project additional preventive mitigation investments. It was not retained due to the limited implementation capacity within the country, the generally insufficiently justified proposals from both economic and disaster management points of view, the high risk associated with the fact that most identified priority investments were ill-prepared and not supported by appropriate engineering studies, and the lack of detailed environmental and social impact analysis. The emphasis has been put on small pilot investments to demonstrate and replicate in further phases. The project is part of a larger program which addresses all needs in a phased way and in coordination with other donors who have committed funds for potential investments, hence the timing of disaster-related investments over the medium to long term. A fourth alternative would have been to prepare a larger infrastructure sector project based on up-front policy reforms to address the need for restructuring a fairly inefficient public sector, increasing infrastructure funding and cost recovery, and organizing adequate routine and periodic maintenance which should be financed under regular Government budget. This would, however, have proved difficult in the disaster management and preparedness context where the overarching objective is to focus on strengthening long-term disaster management capacity rather than just financing physical infrastructure, and target priority investments to prevent or mitigate the impact of disasters. Addressing all infrastructure sector issues would have resulted in too complex a project and loosing the focus on capacity building in disaster management. The project was designed bearing in mind the need for a balance between capacity-building in disaster management and preventive mitigation. A choice was therefore made to include two major components, one to strengthen the country's institutional capacity to manage and respond to disasters, the other to carry out preventive physical mitigation measures. minor preventive civil works have been selected as pilot projects: sea defenses at Layou, and works to protect critical bridges and culverts against floods at priority locations. They aim at minimizing any major devastation from storms and/or sea swells works and supporting long terrn physical mitigation, and enabling emergency repairs. With the related design and supervision consultancies, they represent roughly 41% of the total project cost. The remaining expenditures under the project are largely focused on strengthening key disaster management capacity activities, including 25% of the total project cost for civil works, namely the retrofitting of priority shelters and the rehabilitation of the newly-designated EOC and ODP building. Recognizing the need for a longer term approach to disaster management and prevention, the project will lay the foundation for future financing --under further phases of the program as well as under other donors' programs and Government funding-- of priority needs once they have been properly assessed. These further initiatives will also provide funding for additional support to long-term strengthening of disaster management capacity. This project will finance a series of feasibility and design studies to define phased programs of sea defenses, drainage and flood control, and river training and slope protection. Investments on the Eastern Coast are already incorporated into a comprehensive EU-financed rehabilitation program, and most critical parts of the Western Coast have already been financed. The priorities to be financed under the next phases of the program and/or future Bank/donors operations will --pending satisfactory environmental impact assessments-- focus on completing priority physical preventive mitigation investments such as sea defenses, drainage improvement, and river training

21 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project (PSR) Ratings (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Strengthen monitoring capacity & Global Environmental Facility S S analysis of global climate change to GEF Planning for Adaption to determine potential impact on coastal Global Climate Change areas; identify areas vulnerable to Project--I997 adverse effects of global climate change (implemented by the & sea level rise. Organization of American States-OAS, and the Caribbean Community and Common Market-CARICOM). Introduce pro-competitive reforms in OECS: Telecommunications S S telecommunications sector and increase Project supply of informatics-related skills. Protect the environment and reduce OECS: Solid Waste S S public health risk. Management Project Improve the preparedness and response OECS Emergency Recovery S S to natural disasters in five OECS and Disaster Management countries. Program (APL 1) for three countries St. Kitts and Nevis, Dominica, and St. Lucia. Other development agencies Office of Foreign Disaster Assistance Institutional support to disaster (OFDA) of the United States Agency preparedness agencies on a for International Development (USAID) regional basis. Caribbean Development Bank (CDB) Sea Defenses in selected areas. United Kingdom Department for Technical assistance for disaster International Development (DFID) management. United Nations Development Program Technical assistance to the (UNDP) Caribbean Disaster Emergency Relief Agency (CDERA). Canadian International Development Technical assistance for disaster Agency (CIDA) management. IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

22 3. Lessons learned and reflected in the project design: Bank-wide experience of successful emergency and disaster management programs and previous projects undertaken in the Caribbean, including the APLl projects, and incorporated into this project are: (i) project simplification with fewer components and implementing agencies to facilitate project coordination and implementation in a weak institutional capacity context; (ii) early dialogue with Government on necessary institutional reforms with regard to disaster management and preparedness, and up-front strong government commitment as evidenced by institutional measures agreed and implemented before negotiations; (iii) more advanced and detailed preparation of project components and activities; (iv) clear understanding between the Bank and the Borrower regarding project implementation arrangements, and clear and agreed project management responsibilities for the coordination unit and the implementing agencies; (v) focus on strengthening the capacity of existing institutions to effectively discharge their responsibilities with regard to disaster management and preparedness; and (vi) investing in capacity-building measures in this first phase of the program to increase the Borrower's ability to mitigate the effects of future disasters and avoid ad-hoc requests for emergency assistance following disasters. Specific lessons were derived from the implementation of the APLI projects. First of all, project preparation in the prevailing emergency situation resulted in many ill-prepared proposals and henceforth delays during implementation to complete tender documents and launch activities, and often the need to restructure some components or sub-components. Second, activities earmarked for co-financing with undefined donors resulted in the need for an increased effort for both the Government and the Bank during implementation to leverage the required additional resources --sometimes to no avail, leaving a few activities not carried out. Third, disaster management projects --which are very complex by nature (multi-sector and new area of assistance)-- cannot be easily implemented in the prevailing context of limited project management capacity. Fourth, national institutions responsible for disaster management are still very much in infancy and unable to handle all the complex dimensions of project management and the coordination of too many agencies. Finally, the Bank is better placed to focus on long-term prevention (both institutional and physical investments) than on short-term emergency measures, which other donors are often better organized to deliver. While this phase will primarily build the institutional capacity of the country with regard to disaster management and emergency response, its preparation has also highlighted weaknesses within various specific government agencies to respond to and manage disasters that are fairly similar to those above-captioned. This was very much accounted for in identifying the key investments and capacity strengthening activities that the project has finally settled on. In addition, the importance of shelters during an emergency has helped identify related assistance necessary for the use of shelters to be effective. General experience with communications, meteorology and early warning systems has helped structure related sub-components in more easily palatable activities. The lack of capacity to coordinate and manage the projects has resulted in more focused technical assistance to ODP, and the general lack of managerial capacity has influenced the choice to elaborate and implement a comprehensive training program for staff of all concerned agencies, disaster managers and community committees. This led to streamline the Bank-financed project to focus primarily on capacity-building measures and selected priority preventive physical mitigation investments. Better up-front coordination with donors allowed a more focused approach to co-financing and the agreement that a number of key activities, particularly those regarding institutional issues (such as the regulatory framework, disaster planning, adoption and enforcement of a new building code, catastrophic insurance, hazard analysis and vulnerability mapping) would be implemented within the APL framework under the funding of other donors and/or Government using alternative financing resources

23 Specifically, for the five OECS countries covered by this APL, including St. Vincent and the Grenadines, the need for training is of utmost importance to ensure rapid response and effective management of the situation during and immediately after a natural disaster strikes. Training in Bank procedures, such as procurement and financial management in particular for the PC and relevant PCU staff, will prove vital to enable successful project implementation. Also, in building the country's institutional capacity with regard to disaster management over time, emphasis is given to technical assistance to ODP and MTWH, and to a lesser extent to other implementing agencies, and to on-the-job training. This is aimed at building local capacity through actively transferring knowledge to local agency staff from experts within Saint Vincent and the Grenadines or internationally recruited. Also, Bank assistance to project preparation through the provision of documents, and the sharing of best practice and experience, has proven to be crucial. Another important aspect given special attention to was the Borrower commitment to both the short run implementation of the current project, as well as the long run sustainability of a disaster management programn. In terms of implementation, the coordination and management role of the PCU vis-a-vis the other government agencies (such as MTWH and ODP in particular) responsible for executing the various project components, was clearly spelled out to avoid conflicts later on during project implementation. The PCU also needed a clear mandate enabling it to coordinate various other government agencies, and housing it within MFP aided this process. Regarding disaster management and response, the role and legal authority of ODP has to be more clearly defined, and Government has committed to institutionalize its existence during the project implementation period. Although ODP needs to be able to act independently, it also needs to be backed by Government if it is to act effectively during an emergency. For that purpose, ODP has recently been placed under the trusteeship of the Prime Minister office. In addition, the response at the local level is also critical, and community involvement via the district disaster committees has been incorporated into the project design to provide in particular inputs into the streamlining of emergency procedures. Training for both ODP staff, the district disaster committees and communities in disaster management and response will be critical. In order to ensure that the shelters are properly utilized and accessible during an emergency, the project has emphasized the need for shelter managers to be selected from, and preferably living in, the local commnunity where the shelter is housed. Inadequate maintenance of physical infrastructure has also been a key contributing factor to the vulnerability of infrastructure facilities. In the case of St. Vincent, the coastal erosion caused during the storm surges associated with Hurricane Lenny showed the adverse effects resulting from the lack of proper resource management. The Borrower will submit to the Bank, prior to each annual review, an Operations and Maintenance (O&M) plan and a budget for all relevant physical sub-components financed under the project. 4. Indications of borrower commitment and ownership: A higher profile has been given to disaster management following on the impact of Hurricane Lenny in November The new Government -which came on board in April has endorsed the approach, and indicated its commitment to reducing the country's vulnerability to natural disasters, and to building capacity in agencies responsible for --or concerned with-- disaster management. Cooperation among various government agencies will be critical for the smooth implementation of this multi-sector project. Government has given assurance in this regard to ensuring that the implementing agencies be proactive in assuming control of their respective components. Government has, therefore,

24 established the PCU in the Central Planning Division of MFP which has overall responsibility for donor-funded projects, and a new Project Coordinator from this division has been in place since Fall Government has also taken a number of steps during project preparation that demonstrated its commnitment to the project content and objectives, in particular: (i) the preparation of a draft disaster management training program for all concemed agencies; (ii) the completion of terms of reference for most studies and consulting services to be recruited under the project; (iii) the preparation of preliminary engineering studies and bills of quantities for the shelters retrofitting and the health centers and clinics rehabilitation programs, the preliminary design for the renovation of the ODP/EOC building, and the feasibility and preliminary design of coastal erosion protection and flood protection civil works; and (iv) the elaboration of a draft Implementation Manual (Project Operations Manual). The new Government has confirmed the approval by the previous one of the Development Program Agreement of the OECS Emergency Recovery and Disaster Management Program, and the signing by the former Government of the Program Letter for the Adaptable Program Loan. It also confirmed the terms of the April 7, 2000, letter which: (i) committed to appoint in the mid-term a deputy National Disaster Coordinator, a Technical Data Specialist, and other clerks in ODP, and to recommend and draft legislation to formalize ODP; and (ii) designated the Land and Housing Development Corporation (LHDC) building as both the ODP office and EOC headquarters. In a letter dated September 26, 2001, the Government has also indicated its commitment to: (i) appointing before Loan Signing the National Disaster Preparedness Coordinator (NDPC) as a full-time position with a minimum grade of 10 in the civil service scale (to be later "upgraded" to a higher level as part of the ongoing civil service reform); (ii) appointing before Effectiveness a Disaster Management Specialist in the PCU who would remain until the ODP Technical/Data Specialist has been recruited; and (iii) institutional reforms (also in an additional legal covenant) regarding the streamlining of the existing National Emergency Advisory Council (NEAC) into a full-fledged National Hazard Mitigation Council (NHMC), the amendment of the legislation regarding ODP and disaster management activities and agencies, and the staffing and financing of ODP in line with the civil service reform recommendations. In addition, Govemment indicated that it intends to: (i) update the National Disaster Plan (NDP), streamline the emergency operating procedures, and review the conditions for calling both a local and national state of emergency; and (ii) prepare a plan for coordinating the roles of governmnent agencies, private sector and volunteers in the early warning/emergency communications systems. 5. Value added of Bank support in this project: Disaster Mitigation Experience. The Bank has gained experience, particularly over the last five years, in preparing and monitoring the implementation of a number of emergency and disaster mitigation projects, including for floods, cyclones, and El Nino effects throughout the 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. Throughout project preparation, the project team liaised closely with the Bank's Disaster Management Facility (DMF) on disaster management related issues. 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. External Expert Advice. The Bank project team liaised and coordinated with several international and national agencies in practical, operational and state-of-the-art approaches to emergency management. The

25 Bank team also drew upon the experience of donor agencies, in particular the Organization of American States (OAS) and the USAID Office of Foreign Disaster Assistance (OFDA). Donor Coordination. The project has been designed in collaboration with international organizations and bilateral donors, including inter alia the CDB, UNDP, OAS, PAHO, USAID/OFDA, DFID, CIDA. The Dutch trust fund was used to finance the use of some consultants during project preparation. E. Summary Project Analysis (Detailed assessments are in the project file, see Amnex 8) 1. Economic (see Annex 4): * Cost benefit NPV=US$ million; ERR = 46.7 % (see Annex 4) O Cost effectiveness O Other (specify) Given the non-revenue generating nature of the project, benefits are estimated based on expected damages averted due to the investments pursued in this project. Expected benefits are a combination of physical losses avoided, and the costs of lost economic activity and disruptions in social welfare minimized. The analysis includes the costs and expected benefits of the minor coastal and flood protection works and rehabilitation works for health centers and clinics (under the preventive physical mitigation component), and the shelters retrofitting and reconstruction of the ODP and EOC (under the strengthening of disaster management capacity component). The economic analysis is described in greater detail in Annex 4. The NPVs and ERRs shown below are for the base-case scenario, which assumes (i) that the objective probability of a major hurricane striking St. Vincent and the Grenadines is at least 10% per year (this is the lower bound of the probability range estimated by the U.S. National Ocean and Atmospheric Administration), and (ii) that the minimum damage averted due to the project's investments equals a 10% value of GDP. In Annex 4 the expected benefits are also subjected to sensitivity analysis by varying the probability of a hurricane striking the island and simultaneously varying the value of damages averted (as a percent of GDP). 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) This analysis is not applicable, since it is a non-revenue generating project. Fiscal Impact: The fiscal impact is expected to be limited, with government counterpart. funding amounting to less than 1% of GDP per year during construction, and a negligible amount in post-project years. The effect on the country's debt position is also expected to be minimal given the IBRD/IDA blend nature of the financing. Of greater concern is the capacity within government to undertake the project, and maintain momentum once the project is completed. 3. Technical: River Flooding: the reconstruction of gabion walls and protection works for selected bridges is based on sound and simple engineering design, taking into account the need for environmental mitigation measures to avoid any damage to the river basins downstream and the surrounding settlements. A study will be carried out to prepare a national program of priority bridges repairs, and flood protection and river training works, bearing special attention to environmental and social aspects

26 Coastal Erosion: the technical design of the sea defense at Layou is based on existing sea defenses in St. Vincent and the Grenadines and the region, including designs for similar works in other countries participating in the Emergency Recovery and Disaster Management Program. A feasibility and design study (Integrated Coastal Zone Management-ICZM) will be carried out to prepare a national program of priority sea defense and road realignment investments. Drainage and flood control: no works are actually financed under the project, as most proposals were too sketchy and no technical solution to the overall Kingstown watershed and storm drainage system issues has been elaborated. The study to prepare a comprehensive drainage improvement, flood control and watershed management program for all sub-basins of Kingstown, South River and Kingstown North River, will focus inter alia on run-off and drainage analysis, and environmental aspects. Construction design standards and civil works specifications: the design of the rehabilitation/retrofitting works, for both the shelters and the health centers and clinics, is based on design standards compatible with other OECS countries, especially the specifications established by USAID/OFDA and OAS under the CDMP program. The renovation of the existing shelters and the rehabilitation of the health centers and clinics are based on materials specifications and construction techniques aimed at ensuring that structures will be resistant to hurricanes. The shelters' renovation also takes into consideration the minimum requirements needed for the well being of the tenants. The selection of the shelters to be retrofitted prioritizes areas of high population density which are more at risk and usually among the poorest in the nation, while taking into account the costs of the works to be undertaken. Reliability of cost estimates: the project cost estimnates are based on detailed engineering cost breakdowns and the result of past bidding processes carried out for similar works in the island during the last five years. Capacity of the local construction industry: three or four large construction firms have the capacity to carry out significant infrastructure works, purchase materials and manage construction contracts. About 200 or so "local operators" carry out the majority of maintenance work for the Government, where the Government purchases the materials, and give labor contracts to the operators. The maximum value of these labor contracts is about EC$ 20,000 For housing construction, there are eight or nine large construction firms who have the capacity to purchase materials and carry out construction, and another 100 or so local operators working with labor contracts. This capacity will be adequate with regard to the scope and quantity of works to be implemented under the proposed Bank-financed project. 4. Institutional: 4.1 Executing agencies: Government has engaged on an effort to down-size its 5,700 strong civil service through the redeployment of civil servants, particularly at the middle and lower levels, with the assistance of a EU Stabex-funded institutional development program. Government's experience with and capacity to handle the management of complex and multi-faceted projects is quite limited. This is mostly due to under-staffing in a number of agencies, the lack of staff experienced in project management at all levels, and the lack of well-defined mechanisms and procedures. The capacity issue is particularly acute with regard to managing donor-funded projects

27 MTWH, which is inter alia responsible for all infrastructure-related matters and often acts on behalf of other Ministries in this regard, has demonstrated little capacity during project preparation to complete in a timely manner the tasks that were entrusted upon it. Its Public Works Department --which is organized horizontally, meaning that professional staff work on different sectors as needed-- has, however, some potential to deliver, provided that Government exerts its influence to mobilize resources and prioritize tasks. ODP has been somewhat involved in project design by helping to identify communications gaps and needs regarding equipment and supplies, but contributed little to the detailed project preparation. The structure is particularly weak in the OECS context, with a National Disaster Coordinator only recently recruited, and previously under the trusteeship of the Ministry of Housing with offices located in a very inappropriate and unequipped office. As a result, the country does not benefit from an effective disaster preparedness system, and capacity at the community level must be urgently built to prepare for and respond to disasters. The role of the district disaster coordinators and committees in particular would have to be strengthened. 4.2 Project management: Both ODP and line ministries are stretched too thin to effectively manage the project, and are also constrained by their current staffing and organizational structures. Capacity-building with regard to project management is thus of the essence, but difficult to achieve due to the small size of the economy which cannot easily sustain the necessary critical mass of expertise in administrative and managerial services. The lack of capacity issue is the main rationale for creating a PCU to be operated during the whole project implementation period, the idea being to mainly recruit local staff and train them in project management matters, including procurement and financial management. This would eventually form the basis for a longer-term solution to the issue of limited Government capacity in project management. A Procurement Assessment was carried out during project preparation, and approved by the Bank's Regional Procurement Advisor in February The procurement and contracting of contractors, suppliers, and consulting firms will follow World Bank guidelines. The PCU will be responsible for the procurement and management of contracts, while the implementing agencies --which have been involved during project preparation in designing the various sub-components and activities -- will provide substantive inputs to tender documents (terms of reference for consultancies, lists and specifications for goods, design and specifications for works) and be involved in the day to day supervision of the activities and management of implementation issues. The publication of the General Procurement Notice (GPN) will take place before Effectiveness. Advertisements of Bidding Documents and Requests for Proposals (RFP) as well as Special Procurement Notices (SPN) --if required-- will be published in Development Business and national newspapers respectively for all ICB works and for studies estimated to cost over US$ 200,000. The preliminary design and environmental impact assessment for the sea defense and gabion protection works have been carried with the assistance of consultants. Advanced Procurement has taken place for the recruitment of the PCU staff and the auditors, and retroactive financing will be used to cover the relevant expenses. Retroactive financing will also be used to cover expenditures related to the procurement of office equipment for the PCU as may be needed. Total retroactive financing will not exceed US$100,000 equivalent. 4.3 Procurement issues: Recruitment of a Procurement Specialist is a condition of effectiveness

28 4.4 Financial management issues: See Financial Management Plan. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. Key sections of the coastlines of the several islands of St. Vincent and the Grenadines have been retreating in association with rises in sea level and increasing frequency of storms, trends which are predicted to continue. Because of the topography of the main island of St. Vincent, coastal areas are vital to the country's economy; they are the locus for major population centers and highways. Steep inland topography also channels storm water runoff into river gullies which are increasingly responsible for flash flooding and danger to life and property in populated areas. In addition, illegal sand mining undermines coastal protection efforts. The need for support to community efforts related to the cleaning-up of beaches and preventing uncontrolled construction on the coast and flood plain is key. Environmental management, planning and land-use developments are still not mainstreamed into regular development practices, and there is a crucial need for formulating land-use regulations and introducing legal documents in this regard, and generally strengthening environmental management in the country. Government has recognized this, and identified the improvement of environmental management and monitoring as a priority for effective disaster mitigation and prevention. A special unit responsible for environmental management --the Environmental Management Unit under the responsibility of the National Environmental Coordinator-- was established in 1995 in what has now become the Ministry of Health and the Environment (NMIHE). This unit currently has a limited budget and lacks equipment to monitor environmental conditions on the islands. In an effort to mitigate these problems, the project proposes to fund minor civil works on a pilot basis in two critical areas: reinstating sea-walls to ensure coastal erosion control in the Layou area, and protecting from floods river crossings and banks in three critical areas. MTWH assessed that the situation in these and similar areas constitutes a significant hazard, and has prioritized the areas according to perceived threat. The project will also assist MTWH and the MHE Environmental Management Unit in strengthening their environmental assessment and management capacity within the context of disaster preparedness. This will take the form of technical assistance to: (i) prepare environmental standards and guidelines for the infrastructure (urban and transport) sector; (ii) review the organizational and administrative relationships of the Environmental Unit of MHE with MTWH and other relevant Government agencies with regard to disaster mitigation and preparedness; and (iii) review environmental legislation, and develop environmental regulations and EIA guidelines with regard to disaster mitigation and preparedness. In addition training will be provided to staff from MTWH and the Environmental Management Unit of MNHE, in particular in carrying out environmental impact assessments. Government will in addition review the national environmental institutional structure, including the determination of staffing profiles and training needs, and the organizational and administrative relationships of MHE with other relevant Government agencies such as MTWH. The project will also finance three major studies in connection with: (i) coastal protection through the ICZM study; (ii) drainage, flood control and watershed management through the Integrated Kingstown Drainage Improvement, Flood Control and Watershed Management (Kingstown DIFCWM) study; and (iii) -24 -

29 river flooding protection, river training and slope protection through a study to define priority bridges repairs and river training & flooding protection investments (including assessing flooding risks and drawing a hazard map of flood-prone areas. These studies will all address environmental and social issues, and define mitigation measures. The TORs for these studies include specific wording to ensure that appropriate environmental requirements are accounted for in the design of future civil works, and that recommendations are made as to the type of mitigation measures which should be carried out as part of the proposed investments to be carried out during the subsequent phase of the program or financed by other donors. 5.2 What are the main features of the EMP and are they adequate? The Environmental Impact Assessment (EIA) study for the whole project has been carried out by a regional consultant, and Government has submitted to the Bank the final EIA report in May The potential environmental and social impacts have been deemed to be limited, and no major issues have been identified. The EIA did not identify any resettlement issues associated with the civil works or any other project components. The EIA includes specific mitigation measures for the rehabilitation of the Layou sea defenses and gabion protection works. They will, in addition to the usual mandatory good construction practices, be strictly abided by during project implementation (specific covenant). 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: May How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Meetings regarding the above-captioned specific sub-projects were held at the community level at Layou and at the three river sites by MTWH, in coordination with the MEHE Environmental Management Unit, at the time of completion of the final detailed design of the proposed works. In addition, a workshop --to be organized by the Secretariat of the Physical Planning Board (namely the Physical Planning Section of the Central Planning Division of MFP)-- will be held as part of the launch workshop at the inception of project implementation. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Mitigation measures have been included in the bidding documents for civil works. Close supervision will be undertaken during execution and provision has been made to carry out technical and environmental audits. In addition, strengthening of the MHE and MTWH environmental management capacity will be undertaken through technical assistance. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The project is expected to have a positive social impact because a majority of the components would restore and retrofit basic infrastructure such as sea defenses, roads, and schools, all infrastructure that is used on a day-to-day basis by the general population. The project will benefit communities by strengthening the capacities of the agencies that are in charge of warning citizens of impending disasters and improving their ability to manage the situation efficiently and effectively during and after such emergencies. ODP procedures will be reviewed to focus more on reaching out and consulting with communities. The actual review of the procedures will also be carried out in consultation with

30 communities. In addition, the project will finance technical assistance to MTWH and training of its staff to prepare EIAs and monitor/enforce environmental and social measures to be implemented under all MTWH projects. The project will also assist in developing a training program in disaster management activities for the disaster committees and communities. Such training will include the functions of a District Disaster Commnittee, surviving a disaster, and specialized training like emergency search and rescue, donations management, etc. The training program will also include community-level training and other activities to promote community participation in disaster preparedness and mitigation. As a part of this effort, the project will finance the production of training and education materials, including pamphlets for public distribution through the District Disaster Coordinators and public centers like post offices, community centers, churches and major employers. 6.2 Participatory Approach: How are key stakeholders participating in the project? The project will benefit communities directly through: * support to District Disaster Committees and community volunteers through training and equipment, including communications equipment such as hand held radios; * ensuring that shelter managers are from the communities (as opposed to defacto school principals), which should be reflected in the drafting of the new Shelter Policy; * the procurement of a new country-wide communications and early waming systems to improve the local capability to wam communities of impending emergencies, and facilitate the management of disaster situations at the community level; and * the review of the ODP procedures (aimed at focusing more on reaching out and consulting with communities) which will be carried out in consultation with communities. ODP and MTWH are among Government agencies the primary stakeholders to benefit from the Project through technical assistance and training. NMS and MHE are the secondary beneficiaries of the Project. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? Local communities and NGOs were consulted during preparation and will continue to be involved in the project execution as mentioned in para What institutional arrangements have been provided to ensure the project achieves its social development outcomes? At local level, District Disaster Committees and community volunteers would receive training and equipment. At central level, ODP will be strengthened and coordinate the activities of relevant agencies. 6.5 How will the project monitor performance in terms of social development outcomes? Assessments and evaluations will conducted at the conclusion of each training session and an evaluation of the District Disaster Committees and ODP's capacity will be undertaken as part of the project supervision

31 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Natural Habitats (OP 4.04, BP 4.04, GP 4.04) Forestry (OP 4.36, GP 4.36) Pest Management (OP 4.09) Cultural Property (OPN 11.03) Indigenous Peoples (OD 4.20) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP 4.37, BP 4.37) Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* Applicability 0 Yes 0 No 0 Yes 0 No 0 Yes 0 No 0 Yes 0 No 0 Yes 0 No O Yes * No O Yes * No O Yes * No 0 Yes * No 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. F. Sustainability and Risks 1. Sustainability: Disaster Management Capacity. Both ODP, the line ministries such as MTWH and MHE, as well as other Government agencies such as NMS, cannot effectively manage activities under the project and/or project components as they are currently staffed and organized. The project will provide assistance, mostly to ODP, to prepare for and manage emergency situations. It will also assist in building capacity with regard to emergency management, disaster preparedness and environmental monitoring in MTWH, the Environmental Management Unit of MHE, and NMS. The bulk of the assistance provided from project resources would be in setting up systems, elaborating procedures and guidelines to improve response and preparedness capacity, providing training, and procuring the specialized equipment necessary to operate efficiently. This important "setting-up" phase will be followed by further support to longer-term institutional reforms in disaster preparedness and management, and emergency response through possible additional loans/credits from the World Bank Group or under other donors' financing. Preventive Physical Mitigation. Inadequate maintenance has been a key issue in the lack of sustainability of infrastructure, as was witnessed by the damages caused during the sea surges associated with Hurricane Lenny. In accordance with Section 9.01 of the General Conditions Applicable to Loan and Guarantee Agreements, each relevant sector ministry will, prior to annual reviews, prepare and submit to the Bank for review and approval an O&M plan and budget for all relevant physical components financed under the project. Implementation Capacity. The assessment of procurement and contract monitoring capacity, as well as financial management capacity, in line ministries showed significant weaknesses, except for procurement-related matters in MTWH. The project will, therefore, provide assistance to the Government, via the PCU, to discharge its project management responsibilities, particularly with regard to procurement and financial management. Capacity exists among local contractors and all civil works are of a limited scope, so that the local construction industry should be able to carry out the civil works appropriately. Local consulting firms are not usually involved in the supervision of donor-funded projects, but their -27-

32 capacity --on their own or in association with regional firms-- is deemed sufficient to supervise the relatively simple and small civil works and ensure that adequate technical standards are enforced for the rehabilitation of the EOC, and the retrofitting of the shelters and of the health centers and clinics. Long Term Sustainability. The Govermment has committed to the hiring of permanent professional staff in ODP to ensure sustainability and capacity in the long run, and to provide financial resources to ensure their viability after the project is completed. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Parliament has not approved various H Government commitment to prepare and present necessary legislations to improve needed legislation; emergency operations, in particular with Preparation and adoption of revised disaster regard to ODP's lack of authority to management procedures; assume leadership role during an Government strong commitment to the emergency; appropriate financing and staffing of ODP; Disaster management procedures untested Public awareness and communications and not well understood and known by campaign; communities and Government agencies; Revised procedures to improve maintenance ODP still lacks staff and financial operations and safe storage of emergency resources; equipment. Emergency equipment is not effectively stored and maintained, and not properly distributed during an emergency. NMS and ODP do not have enough M Government budget for appropriate staffing and adequately qualified staffed to maintenance of equipment and facilities; respectively use emergency Training and assistance to District Disaster communications and early waming Committees by ODP; equipment, and properly act upon the Public awareness program and participation in receipt of information; procedures and drills; Communities are unwilling and unable to Improved country-wide communications and mobilize and organize before an early warning systems. emergency. Communities, in particular poorer M Community leaders' involvement and training in households, are unable to access shelters disseminating relevant information; during an emergency; Government commitment to keep access roads Shelters' construction/retrofitting is not open; technically adequate. Enforcement of appropriate standards for the retrofitting of shelters, and adoption of efficient shelter management procedures. MTWH is not properly budgeted and S Government commitment to elaborate national staffed to discharge its quick post-disaster environmental standards and monitoring response responsibilities; guidelines, present relevant environmental Environmental mitigation guidelines and legislation, and subsequently enforce it and - 28-

33 legislation are neither adopted by Parliament, nor enforced by Government. implement mitigation measures. MIE Environmental Management Unit to be trained in preparing EIAs and MTWH staff to be trained in monitoring the implementation of mitigation measures Financial and human resources devoted to H Adequate Government budget for O&M, the maintenance of key infrastructure are allocation of enough staff to maintenance, and insufficient; and training; Civil works are neither adequately Selective technical audits to monitor compliance designed nor carried out with proper with hurricane-resistant design standards and construction standards and regulations, construction standards and regulations. with regard to hurricanes. Government has not prepared preventive S Government commitment to complete three mitigation investment programs and/or major preventive mitigation studies, review secure resources to finance them. recommendations, and secure resources for at least priority investments. From Components to Outputs Slow adoption of revised emergency and S Legal Covenant in the Loan Agreement for disaster management procedures and Government to hire additional professional staff status for ODP; in ODP, adopt new procedures, and create a ODP staff not trained in disaster NHMC with new members and appropriate management; procedures, with technical assistance financed ODP Headquarters and EOC not under the project; operational. Staff training, and EOC/ODP rehabilitation works financed under the project. Emergency communications equipment M Staff --of agencies responsible for managing the and meteorology equipment are not equipment-- to undergo continuing education adequately maintained and used. and training in the use of new systems by their suppliers. Local construction industry has limited M Improved and harmonized design standards and capacity to carry out works to retrofit materials and construction specifications and shelters and rehabilitate health centers and regulations; clinics to hurricane resistant standards. Project-financed assistance to the design and supervision of civil works by consultants. MTWH has improved neither its capacity S Project-financed procurement of stocks of to respond during and after emergencies, specialized equipment; nor its capacity to enforce environmental Project-financed technical assistance to the guidelines and regulations, and monitor MHE Environmental Management Unit and mitigation measures. MTWH, including the development of environmental guidelines and regulations, and training. MTWH has limited capacity to properly S Project-financed technical audits; supervise contractors. Project-financed recruitment of consultants for supervision of civil works

34 PCU experts are not well-qualified and M Recruitment of qualified staff in the PCU prior unable/unwilling to transfer their to negotiations with precise terms of reference know-how. and fixed-term contracts to be assessed during annual reviews. Overall Risk Rating Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) s 3. Possible Controversial Aspects: None. G. Main Loan Conditions 1. Effectiveness Condition * A completed Project Implementation Manual (P1M) has been submitted to the Bank and found acceptable (i.e. including finalized Financial Management and Procurement Sections); * An Eastern Caribbean Dollar Project Account for Government counterpart funds has been opened in the National Commercial Bank with an initial deposit in an amount of US$ 450,000 equivalent; * The Financial Management Plan has been completed satisfactorily; * A Procurement Specialist has been recruited. 2. Other [classify according to covenant types used in the Legal Agreements.] Additional covenant The Government commits to: * (i) streamline the existing National Emergency Advisory Council (NEAC) into a full-fledged National Hazard Mitigation Council (NHMC) through the elaboration of a charter establishing new procedures and the appointment of new members by the end of calendar year 2003; * (ii) recommend and draft legislation to formalize ODP as an agency with specific authority to coordinate all disaster management activities and agencies involved during emergencies, and to adopt revised operational guidelines, by mid calendar year 2004; and * (iii) ensure adequate staffing and financial resources for ODP in line with the civil service reform recommendations (NDPC position "upgraded" to a higher level in the civil service pay-scale, and appointment of two additional high level staff in ODP --Technical/Data Specialist and Deputy Disaster Coordinator-- respectively before the end of calendar year 2004 and mid calendar year 2005). Additional financial covenant * The Borrower shall deposit into the Project Account the balance of counterpart funding (US$ 450,000 equivalent) required for the project one year following project effectiveness. Environmental covenant * The Borrower shall take all environmental and social recommendations set forth in the Environmental Impact Assessment (ELA) report prepared for the Project dated May 2001, and ensure that all mitigation measures are implemented by contractors and properly monitored by the Ministry of Transport, Works, and Housing (MTWH); * All recommendations from the EIA report regarding the sea defense works at Layou, and the flood - 30-

35 protection works and gabion walls reconstruction at Georgetown, Buccament and Colonaire, shall have been referenced in the bidding documents and reviewed by the Bank before invitations to bid are issued; * The Borrower shall review legislation regarding land ownership and loss to the sea in coastal areas as well as public/private delimitation in riverbeds and riverbanks, and conduct public awareness campaigns to explain the danger of occupying such lands. H. Readiness for Implementation 1 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. El 1. b) Not applicable The procurement documents for the first year's activities are complete and ready for the start of project implementation. Z 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. FI 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies H 1. This project complies with all applicable Bank policies. I 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Ara Mare%ie ard Danny M. Ieipziger Orsali Kal ntzop ulos Team Leader Sector Manager/Di 0o Country Manager/Director

36 Annex 1: Project Design Summary ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project Key Performance Data Collection Strategy Hierarchy of Objectives Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Strengthen infrastructure and Social and economic Data on growth, income, and Macroeconomic policy safeguard the environment. disruptions following a socio-economic indicators. conducive to growth. natural disaster. Program Purpose: End-of-Program Indicators: Program reports: (from Purpose to Goal) Ensure that all five APL 1: Reconstruction and World Bank missions' Aide All countries have a stable participating OECS member rehabilitation of Memoires, Back to Office economic and political nations have the ability to infrastructure, and support Reports (BTOs) and Project environment. adequately respond to natural disaster mitigation Status Reports (PSRs). disasters. investments in St. Kitts & Annual reviews and mid-term Nevis, St. Lucia and reviews (MTR). Dominica. Implementation Completion APL 2: This second phase Report (ICR). brings St. Vincent & the Semi-annual Reports of the Grenadines and Grenada into Project Coordination Unit the program. The projects, (PCU). similar to those in APL 1, focus on strengthening emergency preparedness and response, and preventive physical mitigation. Provide additional investment Additional Loans/Credits World Bank project Continued Governments' to strengthen both physical and/or Supplementals to preparation and quality commitment to disaster infrastructure and APL1 or APL2 (APL 3 assurance mechanism. management. institutional capacity building. cancelled): Demonstration Governments' enforcement of of: (i) satisfactory key policies. implementation of APL1&2 Governments' budgets devoted projects; (ii) continued to maintenance. adoption by the respective Governments of good disaster management policies; (iii) adequate maintenance of infrastructure, particularly of those assets vulnerable to disasters. Establish a contingency credit APL 4: Contingency funds to Governments declaration of a facility for participating mitigate natural disaster local disaster emergency, and countries to access emergency strikes during the program appraisal/approval mission by funds in the event of a severe period. APL 4 triggered by a World Bank. natural disaster emergency. declaration of local disaster Evidence of implementation emergency by Govermnents. of disaster mitigation policies. Technical audits. Effective donor coordination

37 Key Performance Data Collection Strategy T Hierarchy of Objectives Indicators T Critical Assumptions Project Development Outcome / Impact Project reports: Objective: Indicators: (from Objective to Purpose) Strengthen St. Vincent and Operational emergency Quarterly implementation Effective coordination among the Grenadines' resilience, procedures and mobilization progress reports from each government agencies. preparedness, and ability to guidelines as per international implementing agency to the respond to natural disasters. standards in place by June PCU Improved reporting of Mission reports of the CMO Effective coordination and weather information by the or other equivalent timely communications National Meteorological organization. between ODP and NMS. Service (NMS) to the Office of Disaster Preparedness (ODP) with: a) regularity (at least once daily); and b) quality (verified by missions of the Caribbean Meteorological Organization (CMO), Caribbean Institute for Meteorology and Hydrology (CIMH), or an equivalent institution). Enhanced ability of ODP to ODP reports. Accurate and timely reporting accurately analyze incoming Annual reviews and MTR. to ODP by all public agencies, information and data on private sector and NGOs emergencies and serve as a involved. single "clearing house" for early warning information and dissemination (as evidenced by timely decision making, the triggering of emergency procedures and timely dissemination of warnings by ODP to populations at risk). Increased number of people Beneficiary surveys. Adequate progress with the serviced by adequate shelters construction of new shelters due to the retrofitting and the retrofitting of existing program. ones to appropriate standards. Strengthened capacity in the Performance indicators. Contingent budget for MTWH Ministry of Transport, Works emergency activities, and and Housing (MTWH) to enforcement of environmental carry out works during regulations. emergencies, and prepare EIAs and monitor mitigation measures

38 Key Performance Data Collection Strategy Hierarchy of Objectives Indicators I Critical Assumptions Output from each Component: Output Indicators: Project reports: (from Outputs to Objective) 1. ODP capable of effectively 1.1 Existing National 1.1 Final Charter approved. Parliament has approved all preparing for disasters and Emergency Advisory Council the necessary legislation. managing emergency (NEAC) streamlined by the situations. end of calendar year 2003 into Proper emergency and disaster a full-fledged National Hazard management procedures are Mitigation Council (NHMC) tested, well understood and through the elaboration of a known by communities and charter establishing new Govemment agencies. procedures and the appointment of new members; 1.2 Adequate staffing and 1.2 Civil Service Ordinances ODP has sufficient authority financial resources for ODP in and relevant budgets. to assume leadership role line with the civil service during an emergency, and reform recommendations: (i) enjoys appropriate staffing "upgrading" before mid and financial resources. calendar year 2004 of the National Disaster Emergency equipment is Preparedness Coordinator effectively stored and (NDPC) position to a higher maintained, and properly level in the civil service distributed during an pay-scale; and (ii) emergency. appointment respectively before the end of calendar year 2004 and mid calendar year 2005 of two additional high level staff in ODP --Technical/Data Specialist and Deputy Disaster Coordinator; 1.3 Draft legislation by mid 1.3 Final legislative text. calendar year 2003 to formalize ODP as an agency with specific authority to coordinate all disaster management activities and agencies involved during emergencies, and to adopt revised operational guidelines; 1.4 Training of High-level 1.4 ODP quarterly Govemment Officials in monitoring and reporting. disaster and emergency management. 2. Country-wide emergency 2.1 At least 72-hour advance NMS and ODP quarterly NMS has enough qualified communications and early warning from NMS to ODP of monitoring and reporting. staff. warning systems operational. impending tropical events

39 2.2 Number of District ODP has enough staff to Disaster Coordinators (DDCs) properly act upon the receipt reached, and reduced response of information. time of those coordinators to an emergency. Communities are willing and able to mobilize and organize before an emergency. 3. Functional shelters. 3.1 Efficient shelter Semi-annual implementation Communities, in particular management procedures in progress reports from the poorer households, are able to place. Ministry of Education. access shelters during an ODP quarterly monitoring and reporting. emergency; and MTWH is able to keep access roads opened at all times. 3.2 Number of shelters Construction and/or retrofitted. retrofitting of shelters is completed at technically adequate standards. 3.3 Number of shelter managers actually from communities. 3.4 At least one shelter manager per shelter trained and in place. 4. MTWH able to respond 4.1 Capacity in MTrWH to Semi-annual implementation MTWH is properly budgeted quickly to repair erect on-site metallic bridges progress reports from MTWH and staffed to discharge its infrastructure following a of a 10 to 15 meter span in and/or MHE. quick post-disaster response disaster; MTWH and the less than 4 days. responsibilities. Environmental Management Unit of MHE able to carry out environmental impact assessments and monitor mitigation measures. 4.2 Design standards and Environmental mitigation monitoring guidelines legislation is elaborated; MHE adopted/approved by Environmental Management Parliament/Govemment, and Unit trained in preparing enforced/implemented. EIAs; and MTWH staff trained in monitoring the implementation of mitigation measures. 5. Improved and maintained 5.1 Sea wall reconstructed at Selective technical audits to Govemnment commits enough hysical infrastructure. Layou. assess compliance with financial and human resources disaster-resistant design and to the maintenance of key construction standards. infrastructure

40 Civil works are designed with 5.2 Flood protection/gabion adequate standards to works at selected river-crossing withstand hurricanes, and sites (Georgetown, Buccament, carried out with proper Colonarie) completed. construction standards and regulations with regard to hurricanes. 5.3 Rehabilitation of priority health centers and clinics completed. 6. Feasibility and detailed 6.1. Recommendations of Consultants' reports. Government has prepared engineering studies for ee major studies financed by reventive mitigation reventive mitigation the project reviewed by investment programs and/or investments carried out. Government before December secure resources to finance 2004, and approved them. recommendations implemented before December

41 Key Performance Data Collection Strategy Hierarchy of Objectives Indicators I I Critical Assumptions Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) Institutionalizing and US$ million ODP monthly reporting to Adoption of new emergency strengthening ODP. Government. and disaster management Consultants' reports. procedures, and revised status for ODP. ODP staff well trained in disaster management. Rehabilitation of the newly-designated headquarters of ODP to also serve as Emergency Operations Center (EOC). Emergency communications US$ million Monthly implementation Emergency communications and early warning. progress reports from each equipment and early warning implementing agency to the equipment are adequately PCU. maintained and used. Shelters program. US$ million Monthly supervision Local construction industry engineers reports to the PCU. has capacity to carry out Consultants' reports. shelter retrofitting works to hurricane-resistant standards. Strengthening Emergency US$ million Consultants' reports. MTWH has demonstrated Response and Environmental Revamped MTWH emergency response Management Capacity organization. procedures. MTWH and vie have trained staff to enforce environmental guidelines and regulations, and monitor mitigation measures. River Flooding Protection. US$ million Monthly supervision MTWH has the capacity to engineers reports to the PCU. properly supervise Consultants' report for the contractors. main study. Coastal Erosion Protection. US$ million Monthly supervision MTWH has the capacity to engineers reports to the PCU. properly supervise Consultants' report for the contractors, and monitor the main study. consultants. Kingstown Drainage US$ million Consultants' reports. MTWH has the capacity to Improvement, Flood Control properly monitor the and Watershed Management. consultants. Retrofitting Health Centers US$ million Monthly supervision Local construction industry and Clinics. engineers reports to the PCU. has capacity to carry out rehabilitation and retrofitting works to hurricane resistant standards (idem shelters

42 above). Project Management. US$ million PMRs and semi-annual PCU has recruited staff reports. well-qualified and able to Quarterly implementation transfer know-how. progress reports from each implementing agency to the PCU

43 Annex 2: Detailed Project Description ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project By Component: Project Component I - US$3.34 million A. Strengthening Disaster Management Capacity This component has four sub-components: 1) institutionalizing and strengthening the Office of Disaster Preparedness (ODP), including inter alia: (a) elaborating/revising disaster management and emergency procedures; (b) rehabilitating the newly-dedicated Emergency Operations Center (EOC) which will also serve as ODP headquarters; (c) procuring emergency equipment, rescue tools and supplies; and (d) developing and implementing a comprehensive disaster management training program open to other agencies and communities, and a public awareness program; 2) developing emergency communications and improving meteorological systems on a country-wide basis to facilitate early warning through technical assistance and training, and the procurement of specialized equipment; 3) implementing a shelter program, including technical assistance, training, and the retrofitting of selected public buildings (schools and community centers); and 4) building capacity within the Ministry of Transport, Works and Housing (MTWH) to manage emergency situations, including the procurement of stocks of prefabricated metallic bridges and gabions, and within MTWH and the Environmental Management Unit of the Ministry of Health and the Environment (MHE) to carry out their responsibilities with regard to environmental assessment and mitigation through technical assistance and training. 1. Institutionalizing and Strengthening the Office of Disaster Preparedness (ODP) The following sub-components addresses four key areas for strengthening ODP: (a) elaborating/revising disaster management and emergency procedures, including protection/evacuation plans and emergency procedures for hotels, new regulations to legitimize ODP and focus its mission, and an update of the National Disaster Plan; (b) rehabilitating the newly-dedicated ODP headquarters to standards making it a suitable EOC; (c) providing equipment for ODP's daily operations, as well as procuring emergency equipment, rescue tools and supplies required during an emergency; and (d) developing and implementing a comprehensive disaster management training program open to ODP staff, government officials, disaster management volunteers, other related agencies, and communities, and a public awareness program. In addition, the Government of St. Vincent and the Grenadines (GoSVG) will finance under its civil service reform program the strengthening of the ODP human resource capacity through the appropriate professional staffing of ODP as follows: (i) upgrading of the permanent National Disaster Preparedness Coordinator (NDPC) position to a higher level in the civil service scale; and (ii) hiring a Deputy National Disaster Preparedness Coordinator and a Technical and Data Specialist. The NDPC, the Technical and Data Specialist, and the Secretary will constitute the ODP's "basic/core team". (a) Elaborating/revising disaster management and emergency procedures The project will finance consultants to initiate several activities in direct collaboration with ODP. The scope of work for the consultants are: (i) updating the National Disaster Plan, including emergency communication procedures, and streamlining the procedures and conditions for calling both local and national states of emergency; (ii) preparing operational guidelines for ODP; (iii) preparing a plan for coordinating the roles of government agencies, private sector and volunteers in the early

44 warning/emergency communications system; (iv) recommending and draft legislation to formalize ODP as an agency with specific authority to coordinate all disaster management activities and agencies involved during emergencies, and prepare revised operational guidelines; (v) reconstituting the existing National Emergency Advisory Council (NEAC) as a full-fledged National Hazard Mitigation Council (NHMC) through a charter establishing new procedures and the appointment of new members; and (vi) making recommendations for adequate staffing and financial resources for the ODP after the completion of the ongoing civil service reform exercise. (b) Rehabilitating the Office of Disaster Preparedness (ODP) and Emergency Operations Center (EOC) The rehabilitation of part of the building currently housing the Land and Housing Development Corporation (LHDC) will be financed in order to accommodate the EOC and offices for the ODP. The EOC will house multiple functions, in particular it will serve as: (i) a base for ODP's daily activities; (ii) a training center; (iii) a national command center during an emergency; (iv) an emergency communications center; and (v) a storage base for emergency equipment to be distributed to district shelters. The second floor of the existing building will be converted and rehabilitated for these functions, with central air-conditioning, an emergency generator and transformer, upgraded wiring, and telephone outlets. The site, including adjacent storage facilities, will be secured with lockable gates and building security systems. (c) EOC Equipment and Supplies The project will finance a stock of emergency equipment and supplies, rescue tools, and loss reduction materials to ensure that: (i) ODP can function effectively in its daily operations; (ii) the EOC can function effectively as a command center in case of an emergency; and (iii) local disaster coordinators and emergency shelters will be able to function effectively in an emergency with items distributed from the EOC. ODP will prepare proper procedures for secure storage and maintenance, and use and distribution of materials and supplies during an emergency. The list of agreed items includes small emergency generators, portable water purification equipment, pumps, reinforced plastic sheeting, water storage and distribution containers, chain saws, portable emergency lighting, emergency health supplies (stretchers, first aid kits, and possibly others as needed), and hand tools. Much of the fumiture and equipment required for the command center will do double duty in serving ODP's training activities (chairs, tables, projector etc. Some of the communications equipment to be used in ODP's daily operations (fax, phones, intemet access) will also service EOC's radio room during an emergency. All essential and sensitive electronic equipment will be protected by UPS back-up systems, and a stand-by generator will power the equipment in the event of a power failure. GoSVG will ensure that at least ten phone lines are provided to the EOC, including a "hardened" direct line for the use of the Prime Minister under which ODP falls, and dedicated intemet access. (d) Training and Public Awareness The project will finance a comprehensive Training Program to be administered by ODP. Staff from ODP, district disaster coordinators, shelter managers, key GoSVG officials responsible for NEAC sub-committees, selected volunteer amateur radio and CB operators who will provide emergency communications capability around the country would be eligible. Training in operational meteorology will also be provided to staff from the National Meteorological Service (NMS) to maximize the information from new technology and to minimize error of misinterpretation of observational data. Training in project management, procurement and financial management would be offered to selected PCU as needed. A draft program has already been prepared on the basis of a training-needs analysis. The training sub-component will fund: (i) off-the-shelf and customized training by local and regional providers; (ii) short-term courses abroad in specialized fields; (iii) conferences, seminars and study-tours; (iv) course materials for training courses at EOC; (v) one full-scale emergency simulation exercise designed to test new equipment and -40 -

45 system response; and (v) a Public Awareness Campaign in the form of a series of pamphlets to be produced by ODP in close liaison with GoSVG's Public Information Office, local disaster coordinators and public centers like post offices, community centers, churches and major employers. Advantage will also be taken of regional training programs as well as free training offered by NGOs and other agencies. Each year, the PCU will submit to the Bank for "No Objection" a comprehensive training program, including the type of training and the modalities by which the training could be offered. 2. Emerzency Communications and Meteorology Systems The project will finance emergency communications and meteorology equipment, and training in their use, to strengthen the country's early warning capacity, enable ODP and the National Meteorological Service (NMS ) to alert appropriate govermment authorities, the media, and the public of adverse weather conditions in good time. The Project will also finance technical assistance to strengthen ODP and NMS capacity to gather and disseminate timely, reliable and useful information to the population at large in case of emergencies. (a) Emergency Communications The project will finance equipment provided that a national emergency communication plan linking Government and private communications systems into a comprehensive network be developed as part of the National Disaster Plan. The consultants under 1 (a) above will assist Government in developing this plan in relation with the technical specialists in the concerned agencies and organizations. (b) Meteorology System Financial support will be provided to NMS to ensure that there are effective ways to collect weather data and the means to disseminate essential weather information to appropriate authorities and the population. The project will finance the procurement of specialized equipment including automated weather observation stations, weather observing and data collecting equipment with appropriate software, and office equipment. The supplier will provide NMS with assistance to install the equipment, and training in equipment operations and maintenance. The Caribbean Meteorological Organization (CMO) and/or the Caribbean Institute for Meteorology and Hydrology (CIMH) will assist NMS in siting equipment and designing a climate database. The procurement of specialized equipment will be conditioned on the following: (i) NMS offices are moved to a higher floor of the airport to prevent flooding, which is currently occurring on a regular basis; (ii) a dedicated phone line for Internet access be secured under Government regular budget; and (iii) the receipt of a report with recommendations for siting the equipment. 3. Shelters Program The project will finance: (a) the retrofitting to hurricane-resistant standards of schools and community centers to serve as shelters, including electrical upgrade and the procurement--as part of the civil works contracts--of new water storage tanks (with increased capacity) and possibly back-up generators (when justified); and (b) technical assistance to develop/adapt a Shelter Operations Manual and revise the shelter policy. The project will not fnance air conditioning, due to the need to retrofit many shelters and the limited financial resources available. In addition, specific retrofit guidelines for shelters should be used (possibly OAS), and it would be desirable to conduct community meetings to discuss proposed plans for the retrofit and subsequent management of the future facilities. EIAs are not necessary for these works, and the Environmental Management Unit of the MHE will monitor the proper disposal of construction materials (to be incorporated in the civil works contracts), and use of sound construction practices with regard to the environment

46 4. Strengthening Emergency Response and Environmental Management Capacity The project will finance MTWH capacity-building in disaster management response. Continuity of access will be ensured through the procurement of a stock of built-on site prefabricated metallic components (60 meters of double-single type, enough to erect three 10/15 meter-span bridges and covering the longest 20 meters span bridge) with launching equipment, as well as training of one maintenance crew and the purchase of assembly manuals. In addition, a stock of gabion baskets to protect piers and abutments will be financed under the project. The Project will also finance the procurement for MTWH of a vehicle dedicated to the supervision of the Preventive Physical Mitigation works financed under the Project, laboratory testing equipment, and lap-top computers with appropriate software to facilitate fieldwork. The project will also assist the MHE Environmental Management Unit and MTWH in strengthening their environmental management capacity through technical assistance to: (i) prepare environmental standards and guidelines for the infrastructure (urban and transport) sector; (ii) review the organizational and administrative relationships of the Environmental Management Unit of MHE with MTWH and other relevant Government agencies with regard to disaster mitigation and preparedness; and (iii) review environmental legislation, and develop environmental regulations and EIA guidelines with regard to disaster mitigation and preparedness. In addition training will be provided to staff from MTWH and the Environmental Management Unit of MHE. Project Component 2 - US$2.77 million B. Preventive Physical Mitigation The preventive physical mitigation component includes: 1) river flooding protection through (i) civil works and gabionage to protect selected river crossings against floods and storm surges, and associated design review and supervision services, in selected priority areas, and (ii) a feasibility and design study for priority river training and flood protection investments; (b) coastal erosion protection through (i) an Integrated Coastal Zone Management (ICZM) study to define a prioritized sea defense and road realignment investment program and elaborate the appropriate designs accordingly, and (ii) minor priority sea defense works at Layou, and associated detailed design review and supervision services; (c) the preparation of a comprehensive drainage improvement, flood control and watershed management program for the Kingstown area through a comprehensive study to design an optimal storm drainage system; and (d) a program of retrofitting works for priority health centers and clinics

47 1. River Flooding Protection The project will finance the (re)construction of gabion walls to protect against floods three bridges and river banks at Georgetown (bridge over the Caratal river), Buccament and Colonaire. Minor environmental mitigation measures have been recommended in the Project ETA study. The supervision of the works, including the review of the design, will be contracted out. The Project will also finance a study to: (i) assess flooding risks, draw a hazard map of flood-prone areas, and identify critical river crossings (bridges and culverts) requiring protection; (ii) define priority investments, such as bridges repairs and river training & flooding protection; and (iii) prepare detailed design for priority works to be carried out during the subsequent phase of the program or financed by other donors. 2. Coastal Erosion Protection The project will finance minor sea defense works at Layou to protect the village population against sea swells and ensuring access. Minor environmental mitigation measures, mostly for the construction period, have been recommended in the Project EIA study and will be included in the tender documents. The supervision of the works, including a review of the detailed design, will be contracted out. The project will also finance an Integrated Coastal Zone Management (ICZM) study in order to gain better knowledge on natural sea and sand conditions around the islands of St. Vincent and the Grenadines. The ICZM study will also determine a prioritized investment program of coastal erosion protection works -- and road realignment where needed-- for all the islands of the archipelago, including appropriate detailed design and environmental assessment for key areas to be identified as priority investments to be carried out during the subsequent phase of the program or financed by other donors. 3. Kingstown Drainage Improvement. Flood Control and Watershed Management The project will finance the preparation of a comprehensive Kingstown drainage improvement program, through a study to conduct an overall assessment of the whole Kingstown watershed and design an optimal storm drainage system. The study will inter alia include: (i) a detailed run-off and drainage analysis, with special environmental and social components, covering the major drainage sub-basins of Kingstown, South River and Kingstown North River; and (ii) detailed engineering design to define an optimal solution providing assurance of a reliable protection against flood through sound investments to be carried out during the subsequent phase of the program or financed by other donors. 4. Retrofitting Health Centers and Clinics The project will finance the retrofitting of health centers and clinics, including the procurement as part of the civil works contracts of back-up generators, new water tanks (or with increased capacity), and incinerators to mitigate any potential environmental hazards. -43-

48 Project Component 3 - US$ 0.70 million C. Project Management This component is aimed at assisting Government in meeting its project management obligations through the financing of the Project Coordinating Unit (PCU) staff not seconded by Government and to be recruited externally, i.e. the full-time Financial Manager/Accountant for the duration of the Project, and a Disaster Management Specialist until such time as ODP is adequately staffed. This component will provide financing for the PCU operations related to project management: (i) office equipment and software; (ii) one project vehicle; and (iii) operating expenditures, including communication services and secretarial support. In addition, the project will finance: (i) independent financial audits every fiscal year; and (ii) selective technical audits to ensure that the various retrofitting and rehabilitation works (shelters, health centers and clinics, and the EOC) have been designed and carried out according to acceptable international disaster-resistant standards

49 Annex 3: Estimated Project Costs ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project Project Costs by Cor onent: Sthousand) % Foreign % Total Local Foreign Total Cost Exchange Project cost A. Strengthening Institutional Disaster Management Capacity 1. ODP Strengthening Disaster Management Procedures EOC Retrofitting and Equipment Equipment and Supplies for ODP Training for ODP Subtotal ODP Strengthening Emergency Communications and Early Warning Emergency Communications System Early Warning System Subtotal Emergency Communications and Early Warning Shelters Program Retrofitting Shelters Shelter Policy and Operations Subtotal Shelters Strengthening MCW Metallic Bridges and Gabions Technical Assistance for MCW Subtotal Strengthening MCW Subtotal Strengthening Institutional Disaster Management Capacity B. Preventive Physical M Itigation Measures 1. River Training and Protection Gabion Walls and Bridges Repairs River Training Study Subtotal River Training and Protection Coastal protection Layou Sea Defense and Road Rehabilitation Integrated Coastal Zone Management Study Subtotal Coastal protection Feasibility Study for Kingstown drainage Health Centers Rehabilitation Subtotal Preventive Physical Mitigation Measures C. Project Management Project Coordination Unit PCU Training Office Equipement and Laboratory Testing Equipment Vehicles Technical Audits Financial Audits Operating Expenditures for Project Management Secretarial support Office supplies and communications Subtotal Project Management Total Base Costs Contingencies Total Project Costs

50 Annex 4: Cost Benefit Analysis Summary ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project The economic rationale for disaster management and mitigation is based on the premise that improved recuperative capacity of the economy will lower any adverse longer term impacts on the country's economic growth trajectory. The costs of disasters can be broken down into two parts, firstly the opportunity cost of not being able to safeguard the population and their property, and secondly the opportunity cost of lost economic activity, especially if damages to physical infrastructure leads to prolonged disruptions in economic activity. The analysis below examines the sensitivity of the expected net economic benefits for the APL 2 phase of the project in St. Vincent and the Grenadines. Expected benefits are adjusted using a combination of the probability of a hurricane striking the island, and the damage averted (expressed as a percent of the Growth Domestic Product-GDP) due to the mitigating investments and the strengthening of disaster management capacity measures implemented. Vulnerability can thus be defined as both the frequency at which a particular disaster (hurricane) occurs and the impact it has on the country (i.e. its severity). The effects of severity can be partially offset by mitigation measures aimed at limiting damages and improving response times once a disaster strikes. Summary of Benefits and Costs: The project's investment costs and expected benefits are calculated over a twenty year period. These costs and expected benefits are summarized in Table A4. 1 below. The benefits are adjusted by the probability of a hurricane striking St. Vincent, which in the base case is assumed to be 10%; that is, the lower bound as calculated by the U.S. National Ocean and Atmospheric Administration (NOAA), which estimates the mean probability of a hurricane striking St. Vincent in any given year to be in the range of 10%-25%. As for damages averted, this variable is largely unknown, since no extensive and consistent historic data set is available on damages averted due to mitigation measures. Data on damages caused by hurricanes in St. Vincent specifically is also absent, as is data on the damages caused by the annual storm surges that affect the country. In the base case, the assumption is that on average the investments from the project can avert (save) a value equal to 10% of GDP, that would otherwise have been destroyed by a major hurricane (or that could result from damages caused by storm surges). The sensitivity analysis below, though, assumes various values for damages averted as a percent of GDP, and both the Net Present Value (NPV) and the Economic Internal Rate of Return (EIRR) are also subjected to sensitivity tests in order to see how their values change due to variations in the probability of a hurricane and the damages averted due to mitigation investments. The probability of a hurricane striking the island is harder to quantify and sensitivity tests are performed in order to see what the lower bound may be for a probability of a hurricane hitting the island in order for the NPV to be greater than zero, i.e. for the project to be economically viable. While Table A4.1 above shows both gross and expected benefits (as adjusted by the probability a hurricane striking St. Vincent), the latter is the correct variable to use in calculating the NPV and when comparing investment costs with "true" benefits. -46-

51 TABLE A4.1 COSTS AND BENEFITS (US$ '000) Investment (yrs 1-4) Operations & Maintenance, Depreciation (yrs 4-20) Costs Institutional Strengthening Communications ODP Strengthening Shelters Ministry of Works Physical MitIgation Gabion Walls and Bridges Repairs Coastal Protection Study for Kingstown Drainage Health Centers Rehabilitation Project Management Total Costs Benefits (averted costs) Institutional Strengthening Physical Mitigation ProjectManagement Total Benefits (Unadjusted) Expected Benefits (Basdine) Expected Net Benefits Main Assumptions: The main thrust of the economic analysis is to compare the cost of physical mitigation-for both the strengthening of disaster management capacity and infrastructure rehabilitation-with the present and future costs averted (imputed benefits) from pursuing such investments. The project's costs are defined as the direct investment costs associated with the project and the future operations and maintenance costs plus depreciation of the physical assets. The imputed benefits will be defined as the future costs foregone (or saved), which is also tantamount to the opportunity cost of not undertaking the mitigating investments. A discount rate of 10% will be applied to the costs and the benefits in order to calculate the NPV and EIRR for the project as a whole. For the project's purposes, the NPV calculations are more important, since a zero NPV will yield a positive ERR, and the economic analysis is generally more concerned with a positive NPV for the project. As for damages averted, this variable is largely unknown, since we have no historic data on damages averted due to mitigation measures. Data on damages caused by hurricanes are also limited, as is data on the damages caused by the annual storm surges that affect St. Vincent. More recently, in November 1999, the island suffered some damages from Hurricane Lenny, although the full extent of these damages have not yet been assessed. In the analysis below, we will assume various values for damages averted as a percent of GDP. In the base case, however, the assumption is that on average the investments from the

52 project can avert (save) at least 10% of GDP that would otherwise have been destroyed by a major hurricane or that could result from damages caused by storm surges. Sensitivity analysis / Switching values of critical items: The analysis below examines the sensitivity of the expected net economic benefits for the project. Expected benefits are adjusted using a combination of the probability of a hurricane striking the island, and the damage averted (expressed as a percent of GDP) due to the mitigating investments and the strengthening of disaster management capacity measures. Table A4.2 below shows the results from the univariate sensitivity analysis, which allows the probability of a hurricane to vary, while assuming that the value of damages averted remain constant at 10% of GDP. TABLE A4.2 Prob. of Expected Hurricane NPV 1% % % 426 4% % % % % % % At a probability of 3% for a hurricane, the project becomes economically viable (NPV > 0). The probability distribution of hurricanes striking the island is then juxtaposed against the value of expected damages averted (costs saved). Table A4.3 summarizes the results of the bivariate sensitivity analysis (covarying both the probability of a hurricane and the damages averted). From this analysis it can be seen that a probability of 3% for a hurricane with damages of at least 10% averted, forms what is tantamount to the "minimal hurdle rates" of this project. In other words, if either of these values fall below their respective "minimum hurdle rates" it would not be economically justifiable to pursue the mitigating investments. Thus, the results of the sensitivity analysis helps to establish a baseline under which it would be economically viable to pursue the project. In reality, the probability of a hurricane is unknown and changes in global weather patterns suggests perhaps an increasing occurrence (hence higher probability) of tropical storms. The sensitivity analysis in Table A4.3 below shows that the "objective" minimum hurdle rates for the joint events as a probability for a hurricane at 4% per year and damages averted at 10% of GDP. However, given the observed lower bound of a probability of a hurricane of roughly 10%, the "minimum" damages that need to be averted for this project to become economically viable becomes 3% of GDP. Data gathered in other Caribbean island, most notably the observation from neighboring Grenada where a tropical storm destroyed 20% of GDP in 1975, suggests that an assumption for the base case of damages averted of 10% of GDP would be a reasonable assumption

53 TABLE A4.3 Prob. of Percent Damage Averted Hurmcane 1% 2% 3% 4% 5% 10% 15% 20% 25% 30% 1% -10,245-9,881-9,518-9,155-8,791-6,975-5,158-3,342-1, % -9,814-9,088-8,361-7,634-6,908-3, ,992 7,625 11,258 3% -9,384-8,294-7,204-6,114-5, ,876 11,325 16,775 22,225 4% -8,954-7,500-6,047-4,594-3,140 4,126 11,392 18,659 25,925 33,192 5% -8,523-6,707-4,890-3,073-1,257 7,826 16,909 25,992 35,075 44,158 10% -6,371-2, ,528 8,162 26,328 44,494 62,660 80,826 98,992 15% -4,219 1,230 6,680 12,130 17,580 44,829 72,078 99, , ,825 20% -2,067 5,199 12,465 19,732 26,998 63,330 99, , , ,659 25% 84 9,167 18,251 27,334 36,417 81, , , , ,493 30% 2,236 13,136 24,036 34,935 45, , , , , ,326 The next step is to calculate the NPV and EIRR using the baseline scenario, and the minimum hurdle rates. The results calculated using the minimum hurdle rates (probability = 4%, damages averted = 10%) are summarized in Table A4.4 below, along with the base case, which uses the lower 10% bound of the NOAA probability of a hurricane striking St. Vincent and damages averted equal to 10% of GDP. In both cases, damages averted is assumed to be 10% of GDP. TABLE A4.4 NET ECONOMIC BENEFITS AND RETURN Economic Analysis Operations & Maintenance, Depreciation Investment (yrs 1-4) (yrs 4-20) Minimum Hurdle Rate Total Costs Expected Total Benefits Expected Net Benefits (ENB) PV (ENB) Cumulative PV(ENB) NPV (of Expected Benefits) $3,129 Economic IRR 15.3% Base Line Total Costs Expected Total Benefits Expected Net Benefits (ENB) PV (ENB) Cumulative PV(ENB) NPV (Expected Benefits) $26,328 Economic IRR 46.7% -49-

54 While the probability of a hurricane is going to vary by year, and the damages caused will depend on the strength of the hurricanes, the actual values will most likely exceed the minimum hurdle rates we have calculated, which at best are very conservative assumptions

55 Annex 5: Financial Summary ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project Project Components by Year (including contingencies), (US$ thousand) A. Strengthening Institutional Disaster Management Capacity Total 1. ODP Strengthening Disaster Management Procedures EOC Retrofitting and Equipment Equipment and Supplies for ODP Training for ODP Subtotal ODP Strengthening Emergency Communications and Early Warning Emergency Communications System Early Warning System Subtotal Emergency Communications and Early Warning Shelters Program Retrofitting Shelters Shelter Policy and Operations Subtotal Shelters , Strengthening MCW l Metallic Bridges and Gabions Technical Assistance for MCW Subtotal Strengthening MCW Subtotal Strengthening Institutional Disaster Management Capacity , , ,339.3 B. Preventive Physical Mitigation Measures 1. River Training and Protection Gabion Walls and Bridges Repairs River Training Study Subtotal River Training and Protection , Coastal protection Layou Sea Defense and Road Rehabilitation Integrated Coastal Zone Management Study Subtotal Coastal protection Feasibility Study for Kingstown drainage Health Centers Rehabilitation Subtotal Preventive Physical Mitigation Measures , ,767.4 C. Project Management Project Coordination Unit PCU Training Office Equipement and Laboratory Testing Equipment Vehicles Technical Audits Financial Audits Operating Expenditures for Project Management Subtotal Project Management Total PROJECT COSTS , , ,810.0 OoP: Office of Oisaster Preparedness MCW: Ministry of Communications ana Works

56 Annex 6: Procurement and Disbursement Arrangements ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project Procurement Procurement Advanced Procurement will take place for the recruitment of the PCU staff and the auditors, as well as the purchase of office equipment for the PCU, and possibly tendering the EOC rehabilitation works (e.g. initiating and processing the process up to the point where an award has been decided upon and a contract possibly signed but short of mobilizing the contractor). A) Procurement Arrangements Procurement for the proposed project would be carried out in accordance with World Bank" Guidelines:Procurement Under IBRD Loans and IDA Credits", published in January 1995 (revised January/August 1996, September 1997 and January 1999); and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" published in January 1997 (revised in September 1997 and January 1999), and the provisions stipulated in the Loan Agreement. The methods to be used for the procurement described below, and the estimated amounts for each method, are summarized in Table A. The threshold contract values for the use of each method are stipulated in Table B. Civil Works: The civil works under the project consist of minor sea defenses for a critical coastline area (Layou), river flooding protection works (gabion walls and bridge repair) at priority sites, the rehabilitation of priority health centers and clinics, the retrofitting of selected shelters, and the rehabilitation of the newly-dedicated Emergency Operations Center (EOC) and Headquarters of the Office of Disaster Preparedness (ODP) totaling US$ million equivalent. The larger Layou contract which involves more sophisticated construction techniques will be procured following International Competitive Bidding procedures (ICB), using Bank-issued Standard Bidding Documents (SBDs). Given the relatively limited size of these works, there is however, no need for a pre-qualification of contractors, and international advertisement of the works will be done through a Special Procurement Notice (SPN). Contracts estimated to cost less than US$ 0.5 million equivalent per contract, up to an aggregate amount of US$ million, may be procured using National Competitive Bidding (NCB) procedures, using standard bidding documents agreed in advance with the Bank. The NCB tenders include river flooding protection works to be packaged in two contracts, shelters retrofitting to be packaged in several contracts on the basis of proximity, the rehabilitation of health centers and clinics to be packaged in two contracts, and the EOC rehabilitation under one tender. Goods and Equipment: Goods procured under this project, totaling US$ million equivalent, would include specialized equipment, emergency equipment and supplies, various materials for emergency response, and vehicles and equipment for MTWH and the PCU. They are all, except possibly for computers and other office equipment, expected to be procured from foreign suppliers as there is no local manufacturer for any of those goods. To the extent possible, contracts for these goods will be grouped into bid packages of more than US$ 100,000 equivalent and procured following International Competitive Bidding (ICB) procedures, using Bank-issued Standard Bidding Documents (SBDs). This concerns three packages accounting for about 90% of the value of the goods to be procured: 1) technological equipment in two lots (communications