Updated Project Information Document (PID) Infrastructure services for private sector development (P) Project

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Updated Project Information Document () Project Name TANZANIA-Central Transport Corridor Project Region Africa Regional Office Sector Roads and highways (100%) Theme Infrastructure services for private sector development (P) Project P Borrower(s) REPUBLIC OF TANZANIA Implementing Agency(ies) TANROADS Address: Contact Person: Tel: Fax: Environment Category B (Partial Assessment) Date Prepared July 28, 2003 Auth Appr/Negs Date January 15, 2004 Bank Approval Date May 15, Country and Sector Background Transport Sector. The transport network in Tanzania comprises: (a) road transport, with roads totaling about 85,000 km (b) railway transport, with two railways totaling about 3,570 km and operated by Tanzania Railway Corporation (2,600 km) and Tanzania-Zambia Railway Authority (970 km) (c) Maritime transport, with major sea ports at Dar es Salaam, Tanga and Mtwara and inland water transport with ports in lake Victoria, Tanganyika and Nyasa (d) Air transport, with three international airports at Dar es Salaam, Kilimanjaro and Zanzibar. Road transport represents 70% of freight and 90 percent of passenger transport in the country. Registered vehicles are over 120,000 and average annual traffic growth rate is 6 percent. Commercial vehicle population was estimated at 36,000 (1999), of which 64 percent are freight vehicles. More than 90 percent of the commercial vehicles are one vehicle owner/operator, with low level of technical and managerial expertise and limited financial capacity. During 2001, the transport sector contributed 12 percent to the country s export earnings. Report No: AB100 Roads provide the only means of access to much of the rural communities and an effective management of road assets is of vital importance to the Government s strategy for economic development and poverty reduction as detailed in the Poverty Reduction Strategy Papers (PRSP). The road network is much less developed in Tanzania than in some other SSA countries. The density of the Tanzania road network is 96 m/sq. km as compared to Kenya (262 m/sq. km) and Uganda (330 m/sq. km). In addition, the primary grid is incomplete. The road network. The on-going review of Highway Ordinance recommends network classification in the following five categories: Trunk roads. Primarily national and international through routes that link several regions and provide access to important border posts and ports;

2 2 Regional roads. Secondary routes connecting district centers in a region or connecting another important center to a trunk road. District roads. Connecting district headquarters to higher class roads, or connecting important centers within the district or important centers to a higher class road; Feeder roads. Village access roads linking important centers within a ward to the rest of the network; Urban roads. Roads within a city, municipality or a township. In addition, there are numerous unclassified roads, which include paths, tracks, national park roads, estate roads, private roads, etc. Trunk and regional roads are the responsibility of the newly created Tanzania National Roads Agency (TanRoads). Responsibility for managing district and urban roads rests in the President s Office Regional Administration and Local Government (PORALG). The latest road condition survey was carried out in 1999, and although the value and accuracy of the data is uncertain, it does provide an overview of the trend in development. A visual condition survey of the paved trunk road network was carried out in connection with Phase 1 of the 10 year RSDP. The road network in the country is generally poor, especially for unpaved roads. Regional and district roads are in a worse condition than trunk roads. Table : Condition of Road Network, 1999 Road Type Good Fair Poor Total Trunk Roads Paved Unpaved 2, ,098 2, ,524 3,921 6,309 Regional Roads Paved Unpaved 22 4, , , ,477 District/Urban 3,995 9,755 36,250 50,000 Roads Total Roads 12,211 23,583 49,135 84,929 Note: Condition of district/urban roads is based on data surveys conducted in 1997 Source: District roads survey data, 1997; National Transport Sector Strategic Plan and Infrastructure Master Plan, The road transport sector in the country is characterized by high cost and low quality of services, resulting from: (a) high backlog of road network maintenance and rehabilitation; (b) inadequate institutional arrangements, laws, regulations and procedures; (c) Inadequate financing for road maintenance; (d) inadequate human capacity; and (e) low level of enforcement of safety, environmental standards, social impact management and gender equity related issues. (a) Need to restore the road network. A comparison of road condition surveys between 1997 and 1999 (PER, 2000) suggests that heavy investments by Government and donors in the rehabilitation and reconstruction of paved trunk roads has significantly improved quality of roads, though insufficient

3 3 maintenance has further deteriorated the remainder of the trunk and regional road network. The 10-year Road Sector Development Program (RSDP) developed alternate scenarios of the funding requirements to provide a good service level to road users and support the predicted economic growth in the country. The desirable program scenario estimated total cost of road construction and maintenance over a 10-year period between US$2.2 billion and US$2.0 billion, depending upon the maintenance strategy adopted. This amount is much beyond the capacity of the Government to finance from its own fiscal budget, requiring considerable assistance from the donors to finance the gap. While much of the road maintenance cost would be met from Government s own revenues (including the RF), development works and backlog maintenance would require donor assistance. A critical constraint to poverty reduction strategy is the inability to move agricultural products in rural Tanzania due to the poor condition of rural roads. The situation is bad because it either limits access to markets or raises the costs of access to products. Improvement in the rural/feeder road network in this context therefore entails establishing links between villages and markets to enhance commercialization and access to input, as well as intra-community links, for which involvement of the rural communities in the identification of needs and maintenance of the network is key for sustainability. (b) Inadequate institutional arrangements, laws, regulations and procedures, including: (i) the planning and management responsibilities are divided among a number of Ministries responsible for Transport, Works, Home Affairs, Finance, Regional Administration and Local Government; (ii) lack of coherent policy guidelines for planning and development; (iii) inadequate formal coordination and consultation among principal actors; (iv) weak application of scientifically based planning methodologies appropriate to the country specific environment and nonexistence of data systems; (v) lack of regulatory regimes equipped to enhance competition, fair operational practices and complementarity of services. The responsibility for road infrastructure is shared between the central Government through the Ministry of Works and the local Government authorities through the District and Urban Councils. The ministry responsible for transport is also involved in policy, planning and regulatory issues while the local Government is responsible for district and urban roads. The involvement of multiple institutions causes lack of accountability and inefficiency in both management and administration of the roads sub-sector. TANROADS was set up as a semi-autonomous Road Agency in July It has taken over the responsibility for road maintenance management from MOW, and is expected to improve Government s road project management capabilities and thus create the conditions for effective implementation of the IRP-II and RRRSP. It has established a dedicated Unit in September, 2001, under the management of its chief executive. The unit is in charge of IDA and other specific donors funded projects. Under IRP-II, institutional capacity building were provided to CODAP (MOW), which was responsible for all donor coordination related to the IRP. However, CODAP was constrained by a shortage of qualified personnel to carry out its mandate. Given the lack of qualified manpower that can be recruited permanently into the Government establishment, and the volume of work entailed in managing both ongoing and proposed projects, CODAP recruited Contract Management, Finance and Accounting, and Project Management specialists for technical assistance under IRP-II. These immediate resource requirements have strengthened CODAP s management capacity. TANROADS has absorbed most functions of CODAP. Zanzibar has also established a CODAP office which is being supported initially by IRP-II in the basic skills of financing and technical management. However, to achieve sustainability and expose staff to actual operations, the support needs to be continued over a longer period. (c) Inadequate financing and management for road maintenance. Much of the road maintenance undertaken to-date has been in response to emergency situations, at the expense of planned road

4 4 maintenance. To provide a secure and sustainable basis for road maintenance, the Parliament of the United Republic of Tanzania enacted a Road Tolls (Amendment No 2) Act 1998, establishing a Road Fund (RF) and a Board. Setting up the RF with dedicated financing from road user fees has made available more money for road maintenance than in the past. However, neither is the money sufficient to address full maintenance needs nor is it being put to use most effectively. In many respects, the character of the road fund continues to be along the lines of the first generation road funds the user generated fees are channelled into the RF through the budget; money is debited from the road fund account after instruction from the PS, Ministry of Finance; and requests from the RF Board to streamline flow of funds and divert revenues from existing charges not accruing to the RF do not receive adequate acceptance. The road fund continues to be a part of the regular budget process, even though it is supported by user charges. Absence of independent audits of collections and disbursements do little to strengthen market discipline. In absence of detailed inventory of the road network (including road length, type, condition, topography), an assessment of road maintenance need is a theoretical exercise, assuming that all roads are in a condition which require only routine and periodic maintenance. Rough estimates of road maintenance needs suggest a total annual requirement of US$90.8 million--paved (trunk and regional) roads (US$20.9 million); unpaved (trunk and regional) roads US$52.5 million); and earth, district and feeder roads (US$17.5 million). Total receipts into the RF fell far short of the estimated requirements in FY01 (US$48 million). In Zanzibar, a Road Fund was established in 1995 to provide a dedicated source of funding for road upkeep and maintenance activities, and a fuel levy was introduced to provide revenue for the Fund. However, the revenue generated from the fuel levy has not been allocated to the Road Fund and road maintenance in Zanzibar suffers from severe under-funding, resulting in most of the primary roads being in very poor condition. The neglect of the roads in Zanzibar is due mainly to the absence of institutional arrangements based on specific legislation or mandatory regulations that would establish sustainable financing mechanism capable of ensuring an adequate flow of funds dedicated to long-term road maintenance. The updated ZIROP study for Zanzibar suggested draft legislation for both the Zanzibar Roads Implementation Office and Road Act for exclusive use of Road Fund for management and development of roads. (d) Inadequate human capacity, including: (i) weak capacity of the domestic construction industry in designing, construction and maintenance of roads; (ii) shortage of adequately trained and experienced personnel in the transport planning departments and units; and (iii) low managerial capacity in public enterprises. Through implementation of IRP-I and IRP-II, capacity building of private contractors has been carried out, and more than 300 contractors have been trained to contribute to the road sector projects. GOT intends to further strengthen the private sector capacity and to ensure a stable construction market for those contractors. The approach taken by GOT is to rely primarily on the private sector for the actual execution of the road work, while devoting a much greater emphasis and capacity within Government for planning and regulation, and within TANROADS for overall management and supervision of the road program implementation. In this connection, GOT has identified the need to define policies for: (i) developing and expanding the domestic construction sector to progressively take over a higher proportion of the road construction and maintenance works; and (ii) physical implementation of routine and periodic maintenance of the existing network.

5 5 (e) Low level of enforcement of safety, environmental standards, social impact management and gender equity related issues. Experience in the transport sector shows that environment and social issues are integral components of transport projects. Recently, MCT developed National Environmental Assessment Procedures and Guidelines to meet the challenge posed by environmental and social issues in transport projects. Sector guidelines are being further elaborated to address specific environmental and social issues that could result from road development projects. GOT's proposed National Transport Sector Strategic Plan and Transportation Infrastructure Master Plan also incorporate the crucial linkage with overall social sector strategy, especially in addressing the social aspects of road development and maintenance including actions taken to address poverty. These actions are particularly important, since the link between community isolation and the incidence of poverty was recognized. The IMF financed Poverty Reduction and Growth Facility focuses on this issue, along with the Local Government Reform Program (LGRP). The proposed Project will take into consideration the outcomes of those programs. Government Strategy The Government is committed to a policy of privatization/commercialization of core functions that can be transferred from central Government to focused specialized service providers. The objectives are: (a) provide an efficient, safe and sustainable road network in support of market integration and poverty reduction; (b) improve the managerial and operational efficiency of road administration; and (c) develop the domestic construction industry. In pursuit of these objectives, the Ministry of Works has, among things, embarked on a program of institutional reforms based on commercialization/ contract out of the technical services and development of performance based maintenance contracts The approach taken by GOT is to rely primarily on the private sector for the actual execution of road work, while devoting a much greater emphasis and capacity within Government for planning and regulation, and within TANROADS for overall management and supervision of the road program implementation. In this connection, GOT has identified the need to define policies for: (i) developing and expanding the domestic construction sector to progressively take over a higher proportion of the road construction and maintenance works; and (ii) physical implementation of routine and periodic maintenance of the existing network. While Government policy is to encourage private sector participation, the role of overall road management will remain in MOW until TANROADS has become fully operational. This transition of management and implementation roles were further clarified in the recently prepared National Transport Sector Strategic Plan. GOT has recently embarked on a Local Government Reform Program (LGRP) with donor support to strengthen the capacity of local government to deliver public services, including roads, and to strengthen their financial capacity. The Government has developed a National Transport Policy document (January, 2001) with the objective to: (a) support the national development program for sustainable economic growth, economic reform, meeting basic human needs and human resource development; (b) apply a participatory approach in the planning for infrastructure provision involving all stakeholders; (c) provide for suitable institutional arrangements, laws and regulations to ensure provision of effective, reliable and integrated transport services; and (d) support appropriate development strategies including development corridors, land use densification and efficiency and integrated economy through establishing a strong infrastructure base and services.

6 6 The Government has prepared a Transport Infrastructure Master Plan (September 2001) with the objective to prepare a prioritized short, medium, and long term investment plan for the transport sector which is consistent with the national transport policy objectives. The main purpose of the master plan was to further the goal of national integration and stimulate regional development by providing transport corridors that can be used by neighboring countries for trade. The level of future transport activity was estimated using a disaggregated approach to demand forecasting. In addition, a series of meetings were held with producers and transport companies. The model provided a prioritized investment plan for maintenance, rehabilitation and upgrading of the trunk and regional road network for a 50 year investment period, in seven phases. The total road sector requirements for the first five year phase ( ) were estimated at US$ 577 million. The Government has also prepared a 10-year Road Sector Development Program (RSDP) (July, 2001) to support its national development objectives. Using a set of economic and strategic importance criteria (production in agriculture, mining and tourism and international transit trade), transport corridors and road sections were ranked in order of importance. Nine corridors were assessed and the central corridor obtained the highest ranking. The desirable program ensured a good service level to road users over the network, which is capable of supporting the predicted economic growth in the country within the framework of the 10-year RSDP. The estimated total cost of the desirable 10-year program range between US$2.2 billion and US$2.0 billion, depending upon the maintenance strategy adopted, which is much beyond the capacity of the Government to finance from its own fiscal budget, requiring considerable assistance from the donors to finance the gap. 2. Objectives The project supports Government s 10-year Road Sector Development Program (RSDP) by focusing on rehabilitation of the most priority link within the Central Transport Corridor area and improving institutional capacity to manage road program, assets and services on a more commercial basis. The primary objective of the proposed project is to: (a) improve access to economically productive Central Transport Corridor area; (b) support actions aimed at further strengthening management and financing systems for sustainable maintenance of the road network; and (c) reduce poverty and promote awareness of HIV/AIDS program. The Central Transport Corridor is one of the nine transport corridors identified in the strategic plan, which interconnects most parts of the country and is critical to promoting trade and investment by opening up areas of main economic activities, such as mining, tourism, agriculture and manufacturing. The Corridor serves Western and North-Western parts of the country as well as the neighboring land locked countries of Rwanda, Burundi, Uganda and Democratic Republic of Congo. The Government accords high priority to the rehabilitation and upgrading of the sections along the Central Corridor. In addition to upgrading section of the Central Transport Corridor, the project focuses on: (a) preparing feasibility studies and detailed designs of trunk roads located within the Central Transport Corridor area; (b) improving maintenance management by setting up performance based contracts; (c) providing technical assistance for road sector management capacity building; and (e) conducting poverty impact baseline studies and HIV/AIDS awareness program.

7 7 3. Rationale for Bank's Involvement An important source of value added by Bank is its comparative worldwide experience in the preparation and implementation of major capital expenditure programs. This has been acknowledged by the donor community which has recognized the Bank s leadership role during the preparation of this project. Bank involvement and experience with developing road management and maintenance systems in Ethiopia, Ghana, Zambia, and Uganda, will be beneficial to efforts aimed at developing road network improvement and administrative improvement in Tanzania. Performance based maintenance management contracts have been implemented or are being developed in a number of countries, such as Argentina, Chile, Brazil, USA, Canada, New Zealand, UK, Australia and Chad. A number of these initiatives are supported by the World Bank. Another source of advantage is the Bank s experience in road sector reform in the region gained over the last 10 years through he steering of he Road Maintenance/Management Initiative (RMI). This has provided the Bank with the good will of the beneficiaries and donors in creating a cooperative framework where sector reform has gradually been shaped, implemented and monitored. It will also help ensure further institutional and financial sustainability of roads management by helping to define and implement efficient, effective and sustainable policy frameworks, institutional arrangements, and financial management systems and financing mechanisms tested and endorsed in RMI practices. The Bank s participation would provide continuity in the implementation of the long-term national program. The Bank will also help Tanzania to incorporate new concerns in its transport sector, particularly regarding poverty and HIV/AIDS issues. 4. Description Tentative components have been identified and are specified below. (A map showing road components of CTCRP is attached.) (a) Civil works and Supervision of upgrading to bitumen standard of Singida-Shelui Road. Singida-Shelui road (110 km) leads from the region's headquarters to the border of Tabora region, serving a number of intermediate administrative and trade centers as Iguguno, Misigiri and Shelui. It belongs to the central corridor of the national trunk road system. The existing roadway is gravel surfaced (7 to 10 m wide, including shoulders). Design features are poor and road safety is below standard. (b) Feasibility study and detailed design for upgrading of Singida-Babati-Minjingu road (220km). (c) Institutional capacity building to TANROADS/MCT/MOCT Zanzibar. (d) HIV/AIDS components. (e) Study to establish baseline and Monitoring Indicators for alleviation of poverty as related to development of the transport sector. (f) Development of Project Document and Specification for Performance Oriented Maintenance Project for Tanzania Mainland. (g) Development of Project Document and Specification for Performance Oriented Maintenance Project for Zanzibar. (h) External audit services (over 6 years). (j) Feasibility Study and Detailed Design for Dodoma-Babati Road (263 km). Civil works for upgrading Singida-Shelui Road Supervision of Singida-Shelui road (110 Km) Feasibility Study and Detailed Engineering Design of Singida Babati Minjingu (220km) Feasibility Study and Detailed Design for Dodoma-Babati Road (263 km) Study to establish baseline and Monitoring Indicators for Transport/Poverty Alleviation Development of Project Document and specification for Performance Oriented Maintenance Project for Tanzania Mainland

8 8 Development of Project Document and specification for Performance Oriented Maintenance Project for Zanzibar Technical Assistance for TANROADS and MOCT Zanzibar HIV/AIDS awareness components through project implementation 5. Financing Source (Total ( US$m)) BORROWER ($5.00) IDA ($61.00) Total Project Cost: $ Implementation Financial Management. The dedicated IDA/SDP Unit established within TANROADS will be in charge of specific projects including IDA financed projects. However, the need for strengthening the financial management capacity is aggravated by the extra responsibilities to be taken on for the new project and the current lack of segregation of financial management responsibilities. The IDA/SDP Unit will take full responsibility for project financial management and reporting within the Finance and Administration Division (FAD). Currently a significant proportion of the funding for the roads network is received from donors and TANROADS has an obligation to demonstrate at all times to the donors that their funds are being effectively managed and fully accounted. The following proposed action plan would strengthen the current financial management system within the TANROADS unit and address some of the emerging financial management issues. No. Action 1. Update the Accounting Procedures Manual (April 2000 version) with due observance of strengthening the Internal Control System. 2. Integrate the current accounting and financial reporting system used by the IDA/SDP unit with the EPICOR system used by other TANROADS units. Use 1 July 2002 as the cut-off date. 3. Prepare and update status reports on financial and physical progress on quarterly basis. The reports should compare planned/actual targets and outputs and be integrated with the accounting system. 4. Design and provide continuous training courses for staff in the regions in order to enhance their accounting capacity in particular on the basic utilization of computer applications. 5. Develop/procure and implement a PMS compatible with the FM System. Auditing. The external audit will be carried out as part of the annual TANROADS audit by the Controller and Auditor General (CAG) or such other person registered as an auditor under the Auditors and Accountants Act, 1972 and approved by the CAG. Financial statements will be prepared and audited annually. In addition, detailed management letters containing the auditor s assessment of the internal controls and accounting system and suggestions for improvement will be prepared and submitted to management for follow-up. Disbursement of IDA Funds. Disbursements from IDA would be initially be made on the basis of incurred eligible expenditures (transaction based disbursements). IDA would then make advance disbursement from the proceeds of the Credit by depositing into a Borrower-operated Special Account to expedite Program implementation. The advance to a Special Account would be used by the Borrower to finance IDA s share of Program expenditures under the proposed Credit. Another acceptable method of withdrawing funds from the Credit is the direct payment method, involving direct payments from the Credit to a third party for works, goods and services upon the Borrower s request. Payments may also be

9 9 made to a commercial bank for expenditures against IDA special commitments covering a commercial bank s Letter of Credit. IDA s Disbursement Letter stipulates a minimum application value for direct payment and special commitment procedures. Upon credit effectiveness, TANROADS would be required to submit a withdrawal application for an initial deposit to the Special Account, drawn from the IDA Credit, in an amount to be agreed to in the Development Credit Agreement. Replenishment of funds from IDA to the Special Account will be made upon evidence of satisfactory utilization of the advance, reflected in SOEs and/or on full documentation for payments above SOE thresholds. Replenishment applications would be required to be submitted regularly on a monthly basis. If ineligible expenditures are found to have been made from the Special Account, the Borrower will be obligated to refund the same. If the Special Account remains inactive for more than six months, the Borrower may be requested to refund to IDA amounts advanced to the Special Account. In addition, TANROADS shall comply with the new requirements of a circular issued by the Ministry of Finance (2001) on the Channeling of Project Funds through the Exchequer System. Compliance or exemption from these requirements should be agreed with the Accountant General by the time of pre-appraisal of the project. Strengthening its accounting and financial management capacity will enable TANROADS to establish effective financial management and accounting systems, which should eventually facilitate the introduction of Financial Monitoring Report (FMR)-based disbursements in periods subsequent to project effectiveness. The adoption of this approach will enable the project to move away from time-consuming transaction based disbursement (voucher-by-voucher) methods to quarterly report based disbursements to the Project s Special Account, based on the FMRs. Report-based disbursements offers more flexibility. 7. Sustainability The critical factor required for sustainability of Program and Project benefits is continued Government commitment. In this regard, the Government has demonstrated its commitment at the highest level by according the road sector the highest priority in its economic development, and has taken a number of actions to confirm this commitment along with necessary institutional strengthening. The President's declaration made on May 31, 2000 at the Road Stakeholders' Conference in Dar es Salaam, highlighting the need for roads as a key instrument in the development of the country, symbolizes the straightforward commitment of the GOT. MCT has prepared National Transport Sector Strategic Plan, to further clarify the focus of institutional strengthening. MCT has also prepared a Transport Infrastructure Master Plan, while MOW completed a 10-Year Road Sector Development Program (10YRSDP), of which the RRRP is a priority part. The annual Road Sector Public Expenditure Study indicates the use of funds for each sector, and highlights where there may be shortfalls in some sectors. These actions are expected to contribute to ensuring the availability of the local counterpart financial resources needed to complement IDA and other donor financing of the Program. The establishment of TANROADS further enhances GOT's ability to effectively manage the RRRSP preparation and implementation. 8. Lessons learned from past operations in the country/sector Experience from past projects indicates that the main risk has been the limited capacity of the implementation agency, in particular, the ability of the agency to effectively address problems related to contract management, contract administration, and financial and technical monitoring. The following are some of the lessons learnt from recent programs.

10 10 Key Lessons Learned from IRP (i) Complexity of the Project and Country Absorptive Capacity. Project composition and implementation schedule should match the absorptive capacity of the implementing agency. In design of such large investment, involving several donors, the approach should aim at a phased investment with well-defined triggers with long-term program supported by all donors. (ii) Project Design. The absence of substantially completed detailed engineering for all major roads immediately prior to Board presentation makes variation orders almost inevitable, leading to delays and cost increases. In institutional capacity building, too many demands for simultaneous reforms along with implementation burdens taxed the capacity of the government and implementing agency to deliver budget and outputs on schedule. (iii) Learning from Past Mistakes. The lessons of experience of past project implementation were to safeguard against future mistakes both for IDA and the borrower. Major flaws experienced in the Sixth Highway Project Credit were also experienced under IRP-I. For example, appropriate technical documentation and provision of adequate resources should be fully completed before commencement of works. In short, more attention needs to be paid to past lessons of experience during project design and implementation. (iv) Donor Coordination. The spirit of cooperation of the donor community in support of the IRP-I and IRP-II was initially satisfactory. However, during the course of implementation, it was not easy to maintain the interests of all donors as each focused on execution of their own program under the parallel financing arrangement. In this regard, strengthening of TANROADS coordination ability is essential, or alternatively, a transport sector coordination unit in MOF could be established. Lessons from neighboring country There have been substantial delays in the processing and awarding of contracts, leading to substantially higher costs at the initial stages of commencement and to delayed completion. The structure of road administration in Tanzania has been subject to frequent changes, resulting in poorly organized planning and administration, and ineffective long-term institutional development. Therefore, institutional strengthening of road administration, as well as changes in the decision-making process, have been undertaken by the Government. Other lessons are that inadequate engineering design and weak documentation resulted in implementation delays and cost overruns. Steps are therefore being taken during project implementation to ensure the readiness and availability of completed contract documentation before commencement of works. Lessons from Sector Investment Programs (SIPs) in other countries Several lessons from road SIPs in other East African countries are being considered in the preparation of the RRRSP and the Phase 1 Project. These include: (i) the need for ownership and accountability and avoidance of overlapping responsibility (for example, the responsibility/authority of Road Agency in relation to that of Road Fund Board, MOW, and PORALG); (ii) the importance of having in place a sector strategy, institutional frameworks, and stable and sufficient financial resources for counterpart financing which contribute to the effectiveness and sustainability of investments and avoidance of implementation problems; (iii) ensuring that road designs and bidding documents are completed and updated as necessary before bidding; (iv) the need for building up sufficient capacity for project implementation and; (v) the need for effective donor coordination to avoid inconsistency in development objectives. These important lessons would be reviewed with the Borrower prior to appraisal to ensure that action is taken. Based on the above mentioned lessons, the Project will: (i) assist implementing sustainable institutional arrangements, particularly those focused on capacity building of TANROADS; (ii) avoid complexity in project components and adjust the size and pace of project implementation considering the improvement

11 11 of absorptive capacity of implementation agency, thus by adopting APL; and (iii) prepare adequate engineering design and documentation before commencement of works to avoid implementation delays and cost overruns.. 9. Environment Aspects (including any public consultation) Issues : The following direct and indirect negative environmental impacts can arise from road rehabilitation and maintenance works: land take, dust and noise, generation of sediment, river pollution and scour damage (river damage extraction), safety hazards (quarry faces, blasting, etc.), health hazards, visual impacts. The following socioeconomic impacts can arise from road rehabilitation and maintenance works: permanent and temporary land take resulting in involuntary resettlement and/or compensation, land tenure impacts, public health impacts, cultural impacts, and changes in local population's way of life and/or exploitation of natural resources, etc. An EA and RAP will be prepared, approved and disclosed prior to Project appraisal. 10. List of factual technical documents: Draft detailed designs and Prequolification Document for Contractors. 11. Contact Point: Team Manager Yitzhak A. Kamhi The World Bank 1818 H Street, NW Washington D.C Telephone: Fax: For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) Web: Note: This is information on an evolving project. Certain components may not be necessarily included in the final project.