ZANZIBAR ROADS UPGRADING PROJECT

Transcription

1 AFRICAN DEVELOPMENT FUND Language: English Original: English UNITED REPUBLIC OF TANZANIA ZANZIBAR ROADS UPGRADING PROJECT APPRAISAL REPORT INFRASTRUCTURE DEPARTMENT ONIN NORTH, EAST AND SOUTH REGIONS NOVEMBER 2003 SCCD: N.G.

2 TABLE OF CONTENTS Page PROJECT INFORMATION SHEET, CURRENCY AND MEASURES, LIST OF (i - x) TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, BASIC DATA SHEET, PROJECT LOGICAL FRAMEWORK, EXECUTIVE SUMMARY 1. ORIGIN AND HISTORY OF THE PROJECT 1 2. THE TRANSPORT SECTOR The Transport System Transport Policy, Planning and Co-ordination Intervention of Other Donors in the Sector 3 3. THE ROAD SUB-SECTOR The Road Network, Vehicle Fleet and Traffic The Road Transport Industry Road Administration and Training Road Planning and Financing Road Engineering and Construction Road Maintenance THE PROJECT Project Concept and Rationale Project Area and Project Beneficiaries Strategic Context Project Objective Project Output and Description Project Traffic and Road User Prices Environmental Impact Social Impact Project Costs Sources of Finance and Expenditure Schedule PROJECT IMPLEMENTATION Executing Agency Institutional Arrangements Supervision and Implementation Schedules Procurement Arrangements Disbursement Arrangements Monitoring and Evaluation Financial Reporting and Auditing Aid Co-ordination 30

3 6. PROJECT SUSTAINABILITY AND RISKS Recurrent Costs Project Sustainability Critical Risks and Mitigation Measures PROJECT BENEFITS Economic Analysis Sensitivity and Risk Analysis Social Impact Analysis CONCLUSIONS AND RECOMMENDATIONS Conclusions Recommendations and Conditions for Loan and Grant Approval 34 This Appraisal report was prepared by Messrs. E. K YAMOAH (Chief Transport Engineer, Ext. 2438) M.O. AJIJO (Principal Transport Economist Ext. 3110) I. Samba (Senior Environmentalist Ext. 2657) and T. FADAYOMI (Principal Socio-Economist Ext. 3116), following their mission to Zanzibar in July/August 2003, and updated with a follow-up mission in November Any inquiries relating to this report may be referred to either the authors or to Mr. J. Rwamabuga, Division Manager, ONIN.3, Ext or to Mr. K. BEDOUMRA, Director, ONIN, Ext

4 i AFRICAN DEVELOPMENT FUND(ATR) BP 323 TUNIS BELVEDERE TUNISIA Tel: (216) Fax: (216) PROJECT INFORMATION SHEET The information given hereunder is intended to provide some guidance to prospective suppliers, contractors and consultants and to all persons interested in the procurement of goods and services for project approved by the Board of Directors of the Bank Group. More detailed information and guidance should be obtained from the Executing Agency of the Borrower. 1. COUNTRY : United Republic of Tanzania 2. PROJECT TITLE : Zanzibar Roads Upgrading Project 3. LOCATION : Unguja Island of Zanzibar 4. BORROWER : United Republic of Tanzania 5. EXECUTING AGENCY : Ministry of Communication and Transport (MOCT) P.O. Box 266 Zanzibar Tel: (255) Fax: (255) MOCT@zanzinet.com 6. DESCRIPTION : The project consists of: a) Construction of four bridges and km of roads in Unguja (Zanzibar) to bituminous standard. b) Consultancy services for i) Supervision of above construction works and ii) Project Audit services. c) Institutional Strengthening and Capacity Building to the Department of Roads (DOR) and Coordination Office for Donor Assisted Projects (CODAP) of MOCT 7. TOTAL COST : UA million i) Foreign Exchange : UA million ii) Local Cost : UA 5.83 million 8. BANK GROUP LOAN/GRANT ADF (Loan) : UA million ADF (Grant) : UA 0.71 million

5 ii 9. OTHER SOURCE OF FINANCE: GOZ : UA 1.88 million 10. DATE OF APPROVAL : April, ESTIMATED STARTING DATE OF PROJECT AND DURATION : February, 2005 August, 2006 (18 months) 12. PROCUREMENT OF GOODS AND WORKS : International Competitive Bidding (ICB) for construction works, among contractors from member countries of ADB and ADF State participants with regional preference in accordance with the Bank s Rules of Procedure for Procurement of Goods and Works. 13. CONSULTANCY SERVICES REQUIRED AND STAGE OF SELECTION : Consultancy services will be required for the supervision of construction works. Procurement will be in accordance with the Bank s Rules of Procedure for Use of Consultants. The procurement will be on the basis of shortlist of consulting firms. 14. ENVIRONMENTAL CATEGORY : 1 1 SDR = UA1 1 UA = US$ UA = TZS 1, (July, 2003) : Consultancy Services for Institutional Strengthening and Capacity Building for the Ministry of Communication and Transport (MOCT) will be in accordance with the Bank s Rules of Procedure for Use of Consultants. The procurement will be on the basis of shortlist of consulting firms. : Project audit services will be procured on the basis of a shortlist of auditing firms.

6 iii CURRENCY AND MEASURES Currency Equivalents (July, 2003 Exchange Rates) Currency Unit = Tanzania Shilling (TZS) 1 UA = TZS 1, I UA = US$ US$ = TZS 1, WEIGHTS AND MEASURES 1 metric tonne (t) = 2,205 lbs 1 kilogramme (kg) = lbs 1 metre (m) = ft 1 foot (ft) = m 1 kilometre (km) = mile 1 square kilometre (km 2.) = square mile 1 hectare (ha) = 0.01 Km 2. = acres FISCAL YEAR July 1 June 30 LIST OF TABLES Table 2.1 : 10 Year Road Sector Development Programme Table 2.2 : Donor Contribution to 10Y-RSDP Table 3.1 : Zanzibar Classified Road Network Table 3.2 : Road Development and Maintenance Financing Table 3.3 : Maintenance Needs and Projected Road Fund Revenue Table 4.1 : Summary of Project Cost by Component Table 4.2 : Summary of Project Cost by Category of Expenditure Table 4.3A : Sources of Finance for ADF Component Table 4.3B : Sources of Finance for ADF-Grant Component Table 4.4 : Expenditure Schedule by Component Table 4.5 : Expenditure Schedule by Sources of Finance Table 5.1 : Summary of Project Implementation Schedule Table 5.2 : Summary of Procurement Arrangements LIST OF ANNEXES 1. Map of Country and Project Area 2. Organizational Chart 3. Provisional List of Goods and Services 4. Project Implementation Schedule 5. Summary Traffic and Economic Analysis 6. Environmental and Social Management Plan Summary 7. Summary of Existing Portfolio as at 10/ Institutional Strengthening and Capacity Building Cost Estimates 9. Documents in PID

7 iv LIST OF ABBREVIATIONS AADT = Average Annual Daily Traffic ADB = African Development Bank ADF = African Development Fund ATC = Air Tanzania Corporation CBR = California Bearing Ratio CRB = Contract Registration Board CSP = Country Strategy Paper CODAP = Coordination Office for Donor Assisted Projects DANIDA = Danish International Development Agency DCA = Directorate of Civil Aviation DOR = Directorate of Roads DTL = Department of Transportation and Licensing EIA = Environmental Impact Assessment EIRR = Economic Internal Rate of Return ESA = Equivalent Standard Axles ESIA = Environmental and Social Impact Assessment FE = Foreign Exchange GDP = Gross Domestic Product GOT = Government of United Republic of Tanzania GOZ = Revolutionary Government of Zanzibar HDM-IV = Highway Development and Management Tool Version IV HIPC = Highly Indebted Poor Countries ICB = International Competitive Bidding IDA = International Development Association (World Bank) IRI = International Roughness Index IRP = Integrated Roads Projects kph = Kilometers Per Hour MOCT = Ministry of Communications and Transport (Zanzibar) MOFEA = Ministry of Finance and Economic Affairs MOW = Ministry of Works MTEF = Medium Term Expenditure Framework NEMC = National Environmental Management Council NTP = National Transport Policy NPV = Net Present Value OPEC = Organization of Petroleum Exporting Countries PMO = Prime Minister s Office, GOZ PID = Project Implementation Documents PRSP = Poverty Production Strategy Paper TANROADS = Tanzania National Roads Agency TZS = Tanzania Shillings UA = Bank Unit of Account VOC = Vehicle Operating Costs Vpd = Vehicles Per Day ZPRP = Zanzibar Poverty Reduction Plan

8 v Tanzania COMPARATIVE SOCIO-ECONOMIC INDICATORS Year Tanzania Africa Developing Countries Developed Countries Basic Indicators Area ( '000 Km²) Total Population (millions) , ,200.3 Urban Population (% of Total) Population Density (per Km²) GNI per Capita (US $) Labor Force Participation - Total (%) Labor Force Participation - Female (%) Gender -Related Development Index Value Human Develop. Index (Rank among 174 countries) n.a. n.a. n.a. Popul. Living Below $ 1 a Day (% of Population) GNI per capita US $ Tanzania Africa Demographic Indicators Population Growth Rate - Total (%) Population Growth Rate - Urban (%) Population < 15 years (%) Population >= 65 years (%) Dependency Ratio (%) Sex Ratio (per 100 female) Female Population years (% of total population) Life Expectancy at Birth - Total (years) Life Expectancy at Birth - Female (years) Crude Birth Rate (per 1,000) Crude Death Rate (per 1,000) Infant Mortality Rate (per 1,000) Child Mortality Rate (per 1,000) Maternal Mortality Rate (per 100,000) Total Fertility Rate (per woman) Women Using Contraception (%) Population Growth Rate (%) Tanzania Africa Health & Nutrition Indicators Physicians (per 100,000 people) Nurses (per 100,000 people) Births attended by Trained Health Personnel (%) Access to Safe Water (% of Population) Access to Health Services (% of Population) Access to Sanitation (% of Population) Percent. of Adults (aged 15-49) Living with HIV/AIDS Incidence of Tuberculosis (per 100,000) Child Immunization Against Tuberculosis (%) Child Immunization Against Measles (%) Underweight Children (% of children under 5 years) Daily Calorie Supply per Capita Public Expenditure on Health (as % of GDP) Life Expectancy at Birth (Years) Tanzania Africa Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2000/ Primary School - Female 2000/ Secondary School - Total 2000/ Secondary School - Female 2000/ Primary School Female Teaching Staff (% of Total) Adult Illiteracy Rate - Total (%) Adult Illiteracy Rate - Male (%) Adult Illiteracy Rate - Female (%) Percentage of GDP Spent on Education Infant Mortality Rate ( Per 1000 ) Environmental Indicators Land Use (Arable Land as % of Total Land Area) Annual Rate of Deforestation (%) Annual Rate of Reforestation (%) Per Capita CO2 Emissions (metric tons) Tanzania Africa Source : Compiled by the Statistics Division from ADB databases; UNAIDS; World Bank Live Database and United Nations Population Division. Notes: n.a. Not Applicable ; Data Not Available.

9 DESIGN TEAM: E.K. YAMOAH/M. O. AJIJO DATE: NOVEMBER, vi TANZANIA ZANZIBAR ROADS UPGRADING PROJECT PROJECT MATRIX Narrative Summary (NS) Goal 1. The sector goal is to support economic growth and poverty alleviation by providing least cost services in the road transport sector. Project Objective: 2.1 To reduce vehicle operating and road maintenance costs and improve road transport services in Unguja Island To achieve better management of the road network. Outputs Works Output 3.1 Four bridges and 2- lane asphaltic concrete standard road with 6.0m wide carriage way and two 1.0m to 1.5m shoulders on five roads. Institutional Strengthening and Capacity Building Output 3.2 Institutional Capacity of the DOR and CODAP of MOCT Strengthened. Activities: 4.1 Construction works Issue and receipt of tenders, evaluation, negotiation and award of contracts Commencement of Civil Works. 4.2 Consultancy Services- Objectively Verifiable Indicators (OVI) 1.1 Roads in good and fair condition increased from 46% in 2003 to 65% in 2010/ Composite vehicle operating costs on the proposed roads reduced by about 50% from US$0.564 per vehicle km in year 2004 to US$0.281 per vehicle km in year 2006 when project roads are completed. 2.2 Road Maintenance costs reduced from US$5,300 per km in year 2004 by about 32% to US$3,600 per km by year 2006 when project roads are completed. 2.3 Average passenger travel time cost on project roads reduced by about 40% by year 2006; cars and light vehicles from US$0.46 in 2003 to US$0.28 in 2006 while for buses from US$1.55 in 2003 to US$0.93 in Average lapse time of projects completion reduced to a range of 5-12 months by the end of the 10Y-RSDP in year 2011 while average project cost at completion to be within about 15% of initial cost estimates by the year 2011 towards improved Contract Administration and Sector Management km of main roads upgraded and four bridges on one road completed by year Roughness less than 3,000 mm/km for the project roads throughout their service life. 3.3 Post-graduate training of 2 MOCT staff completed; 97 staff-months on- and off-site training completed for MOCT staff towards improved Contract Administration and Sector Management by the end of the project in year man-months of Technical Assistance provided on- and off-site training for MOCT staff; developed Accounting Manual for use of CODAP; set up Project Management System Software and RMMS for use of DOR by the end of the project in year Input/Resources 4. Input Million UA 4.1 Civil Works Consultancy i) Supervision 0.82 ii) Capacity Building 0.75 iii) Audit Miscellaneous Means of Verification 1.1 Annual Programme Monitoring of the 10 -YRSDP. 1.2 Traffic Statistics 1.3 Socio-economic Data 2.1 Pavement Maintenance and Management System Reports. 2.2 MOCT Traffic and Travel time survey data on project roads. 3.1 Final Construction Reports. 3.2 Project Completion Report (PCR) of Borrower and the Bank. 3.3 Final Audit Report. 4.1 Supervision Reports 4.2 Quarterly Progress Reports 4.3 Disbursement Records 4.4 Audit Reports. Assumptions and Risks (Goal to super goal) Project Objective to Goal 2.1 Adequate Government commitment for the successful implementation of the 10 Y-Road Sector Programme (10Y-RSDP) 2.2 Axle Load control measures are in place. (Output to Project Objective 3.1 Roads Agency will maintain the roads after its completion 3.2 Road Fund will generate enough revenue for network maintenance. 3.3 Staff trained will be motivated to remain in institution. (Activity to output) 4.1 All procurement actions are on schedule 4.2 Payments for invoices are not delayed 4.3 Timely release of local

10 Supervision and Capacity Building: Approval of Short list, and RFP Issue and receipt of RFP Evaluation and approval of proposals Award of consultancy services Commencement of services. vii i) Resettlement Plan Contingencies Physical 1.46 Price 1.03 Total Resources ADF LOAN ADF GRANT 0.71 GOZ 1.88 Total PCR counterpart funds. 4.4 Effective supervision by the Bank and Executing Agency. 4.5 People affected by the project are resettled and compensated.

11 viii TANZANIA ZANZIBAR ROADS UPGRADING PROJECT (GRANT COMPONENT MATRIX) INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING DESIGN TEAM: E.K. YAMOAH/M. O. AJIJO DATE: NOVEMBER, Narrative Summary (NS) Goal 1. The sector goal is to support economic growth and poverty alleviation by providing least cost services in the road transport sector. Project Objective: 2.1. To achieve better management of the road network. Outputs 3.1 Institutional Capacity of the DOR and CODAP of MOCT strengthened. Activities: Objectively Verifiable Indicators (OVI) 1.1 Roads in good and fair condition increased from 46% in 2003 to 65% in 2010/ Average lapse time of projects completion currently experienced in Tanzania ranging from of months reduced to a range of 5-12 months in Zanzibar by the end of the 10Y-RSDP in year Average project cost at completion to be within about 15% of initial cost estimates by the year Reduced number of claims and litigations related to poor engineering designs to less than 1 in 5 projects executed by the year Reduced response time to clients and donors from an average of about 1 month to about 2 weeks by the year Post-graduate training of 2 MOCT staff completed; 97 staff-months on- and off-site training in Contract/ Procurement management (44), Road Maintenance management (18), Environmental Impact Assessment (9), CADD design (8) and project Financial Accounting (18) towards improved Contract Administration and Sector Management by the end of the project in year man-months of Technical Assistance provided on- and off-site training for MOCT staff, developed Accounting Manual for use of CODAP; set up Project Management System Software and Road Maintenance Management System reintroduced and fully operational for the planning and management of maintenance activities for use of DOR by the end of the project in year Input/Resources Means of Verification 1.1 Annual Programme Monitoring of the 10Y- RSDP. 1.2 Traffic Statistics 1.3 Socio-economic Data 2.1 Final Construction Reports 2.2 Project Completion Report (PCR) of Borrower and the Bank. 2.3 Final Audit Report. 3.1 Certified copies of certificates of completion of training. 3.2 Percentage of Projects completed on schedule. 3.3 Percentage of certificates in default of payment. 3.4 Percentage slippage in reporting requirements. Assumptions and Risks (Goal to super goal) Project Objective to Goal 2.1 Adequate Government commitment for the successful implementation of the 10 Y- Road Sector Programme (10Y- RSDP) (Output to Project Objective 3.1 Staff trained will be motivated to remain in institution. 3.2 Contract works will be sustained. (Activity to output) 4.1 Approval of Short list, and RFP. 4.2 Issue and receipt of RFP 4.3 Evaluation and approval of proposals 4.4 Award of consultancy services 4.5 Commencement of services. 4.1 Input Million UA i) Capacity Building 0.75 Total Resources ADF-GRANT 0.71 GOZ Supervision Reports 4.2Quarterly Progress Reports 4.3 Disbursement Records 4.4 Audit Reports. 4.5 PCR 4.1 All procurement actions are on schedule 4.2 Payments for invoices are not delayed 4.3 Timely release of local counterpart funds. 4.4 Effective supervision by the Bank and Executing Agency. Total 0.75

12 EXECUTIVE SUMMARY ix 1. Project Background 1.1 The United Republic of Tanzania was created on 26 April 1964, following a political union of two former sovereign states known as Tanganyika and the People s Republic of Zanzibar. Zanzibar consists mainly of the two islands of Unguja and Pemba. Under the constitution of Tanzania, External Affairs, Defence, Immigration, Higher Education, Civil Aviation, Natural Resources, Emergency Powers, External Trade, Currency and Borrowing are Union matters. Roads and water transport are non-union matters and are, therefore, the responsibility of the individual members. 1.2 The Government of Zanzibar in 1998, commissioned the feasibility and detailed engineering studies of priority road links in its network with ADF financing. These roads were eventually ranked as high priority and included in a 10 Year Road Sector Development Program (10Y-RSDP). The program, with a total cost of US$69.67 million, was adopted as an integral part of the Zanzibar Poverty Reduction Action Plan (ZPRP) which was promulgated with the support of donors in Zanzibar in The World Bank, OPEC and BADEA are participating in the program along with the Bank Group. 1.3 It is in this context that Government of the United Republic of Tanzania (GOT) has, on behalf of the Government of Zanzibar, requested the Bank Group to intervene in the 10 Y-RSDP by financing the upgrading of the five roads with a total length of 87.43km and four bridges on one other road. 2. Purpose of Loan/Grant The ADF loan of UA million, amounting to % of the total cost of the road upgrading works, will be used to finance 100% of the foreign exchange cost (UA million) and 55.17% of the local cost (UA 3.95 million). ADF grant amount of UA 0.71 million will finance the total foreign exchange cost of UA 0.71 million representing 95% of the total cost of institutional strengthening and capacity building of the Directorate of Roads (DOR) and the Coordination Office for Donor Assisted Projects (CODAP) of MOCT. 3. Sector Goal and Project Objective Sector Goal 3.1 The sectoral goal is to support economic growth and poverty alleviation by providing least cost services in the road transport sector. Project Objective 3.2 The objective of the project is to reduce vehicle operating and road maintenance costs and improve road transport services in Unguja Island and to achieve better management of the road network. It is expected that at the end of the project, vehicle operating costs would be reduced by about 50% from US$0.564 per vehicle km in year 2004 to US$0.281 per vehicle km in year 2006 and road maintenance costs from US$5,300 per km in year 2004 by about 32% to US$3,600 per km by year 2006 when project roads are completed; and road transport services in Unguja Island would be improved by reducing average travel time cost on project roads by about 40% by year 2006; cars and light vehicles from US$0.46 in 2003 to US$0.28 in 2006 while for buses from US$1.55 in 2003 to US$0.93 in 2006.

13 4. Brief Description of Project Outputs x 4.1 The project outputs consist of: (i) (ii) km of asphaltic concrete roads and four bridges on Mahonda-Mkokotoni road; and Strengthened MOCT in contract administration and sector management. 4.2 The Project consists of the following components: (i) Construction works for four bridges and upgrading of five gravel roads in 5 districts, to asphaltic concrete standard with 6.0 m wide carriage way with 1.0m to 1.5m wide shoulders on each side for a total length of km. (ii) (iii) Consultancy services for: - Supervision of construction works of (i) above - Project Audit Services, and Institutional Strengthening and Capacity Building for the DOR and CODAP of MOCT. 5. Project Costs The total cost of the project with related consulting services is estimated at UA million out of which UA million (69%) will be in foreign currency and UA 5.83 million (31%) will be in local currency. The estimated cost is based on July 2003 prices with 10% physical contingency and a price escalation per annum of 3% and 5% on foreign and local costs respectively. 6. Sources of Finance ADF and GOZ will jointly finance the project. ADF Funds amounting to UA million, will be utilised to finance 89.81% of the road project cost, and an ADF grant of UA million will finance 95% of the Capacity Building cost. The GOZ s contribution of UA 1.88 million will cover 10.19% of the road project costs and 5% of the Institutional Strengthening and Capacity Building cost. 7. Project Implementation The duration of implementation of physical works is 18 months from February, 2005 to August, The Implementing Agency will be the Roads Department of the Ministry of Communications and Transport, (MOCT). 8. Conclusion and recommendations 8.1 The project is in line with the Government s stated policy on roads infrastructure development in Zanzibar and aims at supporting economic growth and poverty alleviation. The project is also consistent with the Bank Group Country Strategy Paper for Tanzania. It is technically feasible, economically viable and socially desirable. 8.2 It is recommended that a loan not exceeding UA million from ADF resources and UA 0.71 million from ADF-Grant resources be extended to the Government of the United Republic of Tanzania for the purpose of implementing the project as described in this report, subject to the conditions specified in the Loan Agreement and Protocol of Agreement.

14 1 1. ORIGIN AND HISTORY OF PROJECT 1.1 The United Republic of Tanzania was created on 26 April 1964, following a political union of two former sovereign states known as Tanganyika and the People s Republic of Zanzibar. Zanzibar consists mainly of the two islands of Unguja and Pemba. Under the constitution of Tanzania, External Affairs, Defence, Immigration, Higher Education, Civil Aviation, Natural Resources, Emergency Powers, External Trade, Currency and Borrowing are Union matters. Roads and Water Transport are non-union matters and are, therefore, the responsibility of the individual members. 1.2 The Government of Zanzibar in 1998, commissioned the feasibility, economic and social impact assessment (ESIA) and detailed engineering studies of priority road links in its network with ADF financing. These roads were eventually ranked as high priority and included in the 10 Year Road Sector Development Program (10Y-RSDP). The program was adopted as an integral part of the Zanzibar Poverty Reduction Action Plan (ZPRP) which was promulgated with the support of donors in Zanzibar in The program is estimated at US$ million of which US$ 55 million is for development and the remaining US$ million for maintenance works. Donors are expected to contribute US$ million and the Government of Zanzibar, the balance. The World Bank, OPEC and BADEA are participating in the programme along with the Bank Group. 1.3 The Government of the United Republic of Tanzania (GOT) has, on behalf of the Government of Zanzibar, requested the Bank Group, in August, 2002, to contribute to financing the program. Following the request by the GOT to the Bank on behalf of the Government of Zanzibar to intervene in the 10 Y-RSDP, the Bank scheduled a preparation mission in November, 2002 at which the Bank component was discussed and agreed upon. The components include the upgrading of five roads with a total length of 87.43km and four bridges on one other road where the Bank would finance the bridges and the Government uses its force account to construct the road. This appraisal report is based on project studies, the discussions held with the relevant ministries, departments and agencies of the Government of Zanzibar, the Government of the United Republic of Tanzania, donors, as well as information collected by the preparation and appraisal missions. 2. THE TRANSPORT SECTOR 2.1 The Transport System The transport and communication sector in Zanzibar is estimated to account for 5.2% of Gross Domestic Product (GDP) and the road transport sub-sector contributing 2.5%. The transport system consists of (i) road network of about 1150 kms, (ii) two ports of Zanzibar, the main one in Zanzibar town in Unguja and Mkoani in Pemba, and (iii) a civil aviation sub-sector consisting of one international airport and one domestic. A brief description of the individual modes and their role in the country s economy is given in subsequent paragraphs. The responsibility of overseeing the regulation and development of the transport system in Zanzibar rests with the MOCT. The MOCT is structured into 6 Departments, namely; Civil Aviation, Planning, Roads, Transport and Licencing, Ports Corporation each headed by a Director and Zanzibar Shipping Corporation headed by a General Manager. The finance and administration function is headed by a financial administrator. The current organizational structure of the Ministry is shown in Annex 2.

15 2 Road Transport Road is the dominant mode of transport. The network comprises some 1,150 km of all the class of roads. Of this total, the Ministry of Communication and Transport (MOCT) is responsible for a classified network of 820 km comprising 250 km trunk roads, 440 km of rural roads and 130 km of feeder roads while the municipal authorities administer the rest The road density at 0.31 km/sq km is one of the highest in Africa, however due to the inadequate funding of the road maintenance since the early 1980 s and the lack of adequate capacity and expertise in the governmental bodies responsible for roads, there has been continuous deterioration of the trunk and rural roads. The most recent survey carried out in 2001, found that only 46% the road network was in good or fair condition. To overcome this problem the GOZ has decided to undertake reforms which involve the operationalization of the Road Fund and institutional changes to enhance government capacity to maintain the road network and to improve maintenance financing. More details on the road subsector are in Chapter 3. Maritime Transport The islands of Zanzibar are served by two ports of Zanzibar town in Unguja and Mkoani in Pemba. The great majority of structures were constructed before 1930 s except the Zanzibar town port which was rehabilitated in The ports are managed by the Zanzibar Ports Corporation, (ZPC) a public corporation wholly owned by the Government of Zanzibar. Zanzibar port handles 99% of the total country freight with an average of 120,000 tons per year and 35,000 passengers per year. Airports Unguja has an international standard airport, located to the south of Zanzibar Town. The airline industry was liberalized in 1992 as part of the on-going economic reforms, thereby opening up for private participation in the market hitherto a monopoly of Air Tanzania Corporation (ATC). Along with ATC, 15 small airlines are providing scheduled and charter services. As a result of this, air passenger movements have been increasing from about 113,000 in 1996 to 204,000 passengers in 2001 representing an increase of 81% Airports in Zanzibar are managed by the Directorate of Civil Aviation which is under the MOCT. As part of its economic reforms, Government plans to transform the directorate into a Government Executive Agency that will operate on commercial basis. 2.2 Transport Policy, Planning and Co-ordination The Zanzibar Ministry of Communication and Transport is responsible for the transport policy, planning and coordination in Zanzibar. The Government s policy in the transport sector is defined in the document Zanzibar Vision 2020 which provides a long-term development perspective on Government development agenda. Within this long term development plan, the Government policy objectives in the Transport sector consists of the following principal elements: - Ensure that transport services are provided according to the needs and development of Zanzibar and its people; - Promote transport services that are reliable, fast, safe, responsive, economical and compatible with the safety and protection of the environment;

16 3 - Ensure complementarity in the development of various modes of transport for optimum utilization of services But there are weaknesses and inadequacies in the policy set-up. One such weakness is that there is no separation of policy formulation, regulation and operation. During discussions with donors, there was a clear need to update the policy. There is assistance from the World Bank to bring in experts to assist the MOCT update the Transport Sector Policy, with MOCT focusing more on policy formulation and regulation of the sector and a greater participation of the private sector for the construction and maintenance of the road network to be managed within the set-up of the MOCT. The study is on-going and the GOZ will forward to the Bank, after acceptance of the final report on Transport Sector Policy, a letter of Transport Sector Policy The MOCT has responsibility for the three modes of transport; road, air and maritime. It channels its investment programmes for consolidation to the Zanzibar Ministry of Finance and Economic Affairs (MOFEA) based on the general guidelines and priorities set under this Ministry. The investment programme is then submitted to the cabinet for vetting before presentation to parliament for approval. 2.3 Intervention of Other Donors in the Sector Development Programme The Development programme in the transport sector has mainly concentrated on the road sector, maritime transport and airports. As air transport is a union matter, the development programme on airports and civil aviation forms part of the development programme for the United Republic of Tanzania. Donors have, over the last decade, supported the sector development through their intervention in port project, airport project and the road sector projects. With regards to ports development, the EU financed the port project which was designed to rehabilitate the West and North Wharf and Mkoani Port ( ) and have provided US$ 30 million for further rehabilitation of the port. The port project also attracted a pledge of US$20 million from Kuwait. With respect to airport development, the World Bank has provided US$ 10 million aimed at financing the emergency rehabilitation of Zanzibar Airport runway In the Road sector however, there is a 10 Year Road Sector Development Programme (10Y- RSDP), which was initiated by the GOZ in year 2000, which is aimed at restoring the trunk and rural roads that have become an obstacle to development especially of the agricultural and tourism sectors and to develop the MOCT capability to administer the road sector. The target of the 10Y RSDP is to develop and maintain 460 km out of the 820 km of classified road network. The programme, with a total cost of US$69.67 million, has been spread over two programming periods (2001/ /06) and (2006/ /2011) in the respective amounts of US$36.00 million and US$ million with details below.

17 4 Table Year Road Sector Development Programme (10Y-RSDP) (2001/ /11) (in US$ million) Source of Financing Capital Budget Programme GOZ Donor Sub-Total Recurrent Budget Programme GOZ Donor Sub-Total Total Programme GOZ Donor Total Phase 1 (2001/ /06) Phase 11 (2006/ /11) Total Source: MOFEA/ADF Mission July/August Under the road sub-sector, during the 1990 s, the GTZ, DANIDA, USAID and UNDP have supported a sustained programme of improvement and rehabilitation of roads in Zanzibar. The 10Y-RSDP is supported by the World Bank, OPEC, BADEA and the Bank Group. The expected donor contribution is US$ million of which the total pledges and commitments so far are US$ million as detailed in Table 2.2 hereunder. The Government of Zanzibar is approaching Norway and other donors to finance the gap for the full programme. The present development financing shows a strong bias to the road sector. Table Donor Contribution to 10Y RSDP (2001/ /11) (in US$ million) DONOR WORLD BANK OPEC BADEA ADF Financing Gap Phase I (2001/ /06) Phase II (2006/ /11) AMOUNT Total * Spill over to Phase II Source: MOFEA/ADF Mission July/August 2003 ADB Support in the Transport Sector The Bank has approved loans totaling UA million for nine operations in the road sector in mainland Tanzania, out of which 4 projects having a total loan amount of UA92.40 million are currently in progress and are at various stages of completion. In addition, two studies were completed on mainland Tanzania, with grant assistance of UA6.07 million and a road study under a grant amount of UA1.06 million has been completed for Zanzibar. The total extent of the intervention already carried out in the road sector includes upgrading of 393km of roads to bitumen surfacing standard and construction of 2 major bridges. The roads have linked neighboring landlocked countries such as between Tanzania and Zambia with the construction of the Tanzam Highway, and Rwanda with the construction of the Rusumo-Lusahunga road, hence furthering regional integration and economic

18 5 cooperation among the neighboring countries. Furthermore, the bridges that have been constructed have opened up regions within the country that were hitherto difficult to access and have thereby made it easier and faster to reach these areas for the distribution of resources within the country. The four ongoing projects in the mainland totaling 374 km of upgrading to bitumen standards and 3,557 kilometers of road repair and rehabilitation works will further open up more regions in the country along the central corridor from Dodoma to the lake zone. Furthermore, the roads will link neighboring Uganda in the north thus fostering regional integration and trade. Already, there is evidence of traffic growth along the corridor and increased traffic at the border between Tanzania and Uganda where the road links the two countries even though construction works are still in progress The support from the Bank has therefore contributed to the improvement of the road infrastructure network in mainland Tanzania and has thereby also supported economic growth and poverty alleviation by providing least cost services in the road transport sector, and also enhanced regional integration and economic cooperation with its neighbouring countries. The uncompleted projects have been generally behind schedule but progressing steadily, principally because of delays in start-up of the projects, mainly attributable to the institutional restructuring in the transport sector under which the newly established Executing Agency, TANROADS was created The roads study on which the project is based is the only intervention by the Bank in the road sector in Zanzibar. Zanzibar has great potential to develop its tourism industry and the productive sectors but constrained by poor transport system. The roads proposed under this project will enhance development of the economy and contribute towards poverty alleviation in Zanzibar through its support to the tourism, agricultural and manufacturing sectors. 3. THE ROAD SUB SECTOR 3.1 Road Network, Vehicle Fleet and Traffic The classified road network is estimated at 820 km and can be distributed into three classes as shown in the following table: Table Zanzibar Classified Road Network (Length in km) Paved Unpaved Total Trunk Road Feeder Roads Rural Road Total Source: MOCT Based on the latest survey of Directorate of Roads (DOR) of the condition of the network in June 2001, 46% of the trunk and feeder roads were estimated to be in fair to good condition with 54% being classified as in poor condition. This indicates, that despite the considerable amount of work carried out in the 1990 s under the Zanzibar Integrated Roads Program (ZIROP), the overall status of the road network showed only a limited improvement. This also shows that the expenditure on rehabilitation and maintenance is insufficient to significantly improve the overall condition of the network.

19 The latest estimates of 2001 suggest a total fleet size of about 22,000 of which 10,000 are motor cycles. The fleet has grown over 4.5 times (4,600-22,000) during the past nine years ( ). Daily traffic on the road network is relatively light at under 100 vehicles per day (vpd) on most roads. Most of the traffic concentrates along Zanzibar to Dunga Road which is one of the road sections under the project to be rehabilitated. 3.2 The Road Transport Industry The MOCT regulates the road transport sector, including entry into the business of passenger and freight transportation through the Department of Transportation and Licensing (DTL). The municipalities and town councils issue permits to operate vehicles. The commercial vehicle fleet is estimated at 7,000, out of which freight vehicles number 6,000. Both passenger and freight transport are provided by the private sector after the divestiture of the National Transport Corporation There are no regulatory barriers to market entry; de-regulation of the road freight sector and the removal of tariff control has resulted in a competitive market for the movement of goods. Freight transport is available through the country but its price varies with market conditions, back loading opportunities and road conditions. In the passenger transport sector, deregulation has stimulated a large expansion in the fleet resulting in an excess of aggregate supply over demand. Moreover, 95% are one vehicle owner/operator and have a low level of technical and managerial expertise. As of date no big firms with large fleets have entered the market due to the small size of the market. 3.3 Road Administration and Training Administration The responsibility for administration of the road network is shared by MOCT and the Ministry of Regional Administration that is charged with the management of urban roads under municipal authorities. The role of the MOCT includes policy direction, regulatory process and the overall development of the road network in Zanzibar The Directorate of Roads is the largest department within the Ministry and has four Technical Divisions which are; planning and design, construction, mechanical and maintenance (See Annex 2). The Director reports through the Deputy Principal Secretary to the Principal Secretary of the MOCT. The department employs 629 staff consisting of 12 professionals of which nine are engineers and the rest are mainly technicians, accounting, clerical and supporting staff. Seventy-three of the total staff strength are women The road directorate is responsible for trunk, rural and feeder roads and assists the Municipal authorities in the reconstruction and maintenance of the urban roads. Distinct functions of the road directorate include i) planning of road development in conjunction with the planning department of MOCT, ii) supervision of construction works contracts, iii) execution and supervision of road works by force account units and iv) execution and supervision of road maintenance by force account units The Directorate of Roads faces a number of problems including inadequate and inexperienced technical and management personnel, inadequate equipment resources and meager levels of funding. Financial Accounting Systems are particularly weak and there is little experience

20 7 in contractor/services procurement and contract management skills while environmental impact assessment management skills are almost non-existent. The Government is conscious of this situation and recognizes the need to introduce sectoral reforms. The GOZ undertook, in 1999, a feasibility study update for the rehabilitation of Zanzibar roads and Institutional Arrangements and identified major institutional deficiencies which included the fragmentation of responsibility for roads leading to duplication and lack of coherent management policies and for which institutional strengthening and capacity building requests were made to donors. On the basis of these findings, the Government, with financial assistance from the World Bank, is currently undertaking an institutional restructuring study which is on-going with provisional recommendations in critical areas for capacity building which include among others, procurement for works goods and services and in contract administration. The Bank is in consultation with the World Bank and will engage in coordinating effort to assist GOZ in the implementation of the outcome of the study. Training There is a shortfall in the training within the MOCT and absence of training facilities. While the awareness as to the need for training development is present, but for several reasons, such as lack of budget, the inability to undertake training needs assessment and prioritization, did not permit GOZ to carry out this type of activity. This has resulted in acute shortage of technically qualified personnel, poor staff motivation and lack of training planning activities. Many staff are under-qualified for the tasks that they undertake. In the last few years, some technical staff have been given short-term training in external and local institutions. However there is acute shortage of expertise in highway/transport engineering, contract and procurement management, technical supervision, financial accounting and environmental management. Training in these areas has been identified as critical in order to improve the institutional capacity of MOCT in sector management In support of this effort, the World Bank is providing Technical Assistance support to (i) the Department of Roads by installing the spare-parts inventory software and providing on the job training for master mechanics and technicians; and (ii) the CODAP of the MOCT by providing a contract management specialist whose duties include on the job training, for a period of one year. However, despite these efforts, the need for capacity building is so huge requiring further intervention of support, that will need to be filled with technical assistance and further training of MOCT staff, so as to deepen their ability to better manage the project and other projects in the future. On the mainland Tanzania, where some road projects have been undertaken, average lapse time of project completion has ranged between 10 to 36 months while project costs on completion have far exceeded project estimates, some as a result of claims arising out of poor engineering designs. Furthermore in Zanzibar, the technical capacity is weaker and therefore the same problems are prevalent as in the main land. The Bank will therefore provide Institutional Strengthening and Capacity Building support to address the identified weaknesses in capacity, through the provision of Technical Assistance and staff training in contract/procurement management, financial accounting and Road Maintenance and Management Systems, as well as staff training in environmental management and highway/transportation engineering. With adequate training, better decisions can be made in half the time it now takes to respond to clients and donors. Better project control would reduce the average lapse time of project completion to a range of 5-12 months and keep project costs to within about 15 percent of initial project costs while improved designs would reduce the occurrence of claims and litigations related to poor engineering on not more than 20 percent of projects constructed by the end of the 10Y-RSDP in year 2011.

21 8 3.4 Road Planning and Financing a) Road Planning The MOCT through the Directorate of Planning is responsible for planning of investment for the construction and rehabilitation of the classified road network. However, the directorate is inadequately equipped and poorly staffed by a director assisted by a planning officer whose duties are more devoted to coordinating donor activities under the CODAP. The proposals of the directorate are subject to review within the budget ceiling issued by the Ministry of Finance and Economic Affairs (MOFEA) and the Ministry of State, President s Office (Planning and Investments). The planning and execution of maintenance works is also done by the MOCT through the Director of Roads, subject to review and approval of the MOCT before consolidation by MOFEA for cabinet review and parliament approval. Through this process, GOZ has put together its component of the United Republic of Tanzania 10 Year Road Sector Development Program over two programming periods (2001/ /06) and (2006/ /11) in the respective amounts of USD million and USD million. Maintenance works constitute about 15.0% and 27.3% in the respective program periods. Under the plan, the criteria for candidate road sections for development are based on the importance vested by each road in Zanzibar economy; using the multi-criteria analysis approach of i) importance in the agricultural sector, ii) importance to the tourism sector; iii) importance in village transportation; and iv) importance to other sectors (power stations, Export Processing Zone, etc) Road sections selected by three of the criteria are ranked as high importance, those selected by two criteria are ranked as medium importance while those selected with one criterion are ranked as low importance. About 460 km of road sections are included in the 10Y-RSDP of which 109 km are of high priority, km are medium and km are low priority. Focus in the first programming period is on the high priority while during the second period the medium ones are to be implemented. For acceptance in the program, the cutoff is an Economic Internal Rate of Return (EIRR) of a minimum of 12.0%, which reflects the opportunity cost of capital in Tanzania. b) Road Financing The road sub-sector is funded respectively from the GOZ budget, development partners and road user charges. Though fuel levy was established in 1995 for funding road building and management in Zanzibar, yet the resources were not allocated to a dedicated Road Fund. Maintenance activities continue to depend on meager budget allocation from Ministry of Finance and Economic Affairs which in most cases only meet wages and salary payments of the work force of Directorate of Roads (DOR). Over the period 1998/99 to 2002/03, there has been serious gap between the budget for both capital and recurrent expenditure and the actual expenditures as indicated in Table 3.2 below. Government has given higher priority to the development of the network at the expense of maintenance as deficit in terms of capital budget narrowed down from 26.61% in 1998/99 to 16.68% in 2001/02. On the other hand, the deficit for recurrent budget remained widened at over 97% per annum over the period indicating low priority for maintenance due to the unbalanced budget allocations between recurrent and development expenditure.

22 9 Table Road Development and Maintenance Financing (1998/ /02) (TZS million) Road Programme 1998/ / / /02 Capital Budget Progr GOZ (Actual Allocat) Donors- Devt. Works Deficit (Excess) Deficit as % of Budget Recurrent Budget Prog GOZ (Actual Recur) Donors-M tce Works Deficit (Excess) Deficit as % of Budget Fuel Levy Revenue (US$=TZS1,027.70) Source: MOCT and Ministry of Finance & Economic Affairs. c) Road Fund To correct this situation, a Roads Fund was established under the Zanzibar Roads Fund Act, 2001 administered by an autonomous board. GOZ financial programming is to meet, through the road fund, 95% of network maintenance budget and, mainly from its own capital allocation, 10% of capital investment needs of the network. The Fund has been put in place and between July 2003 to December, 2003, a total allocation of TZS 369 million was allocated to the Fund from the fuel levy. The Act provides for the source of revenue, establishment of the Board, auditing of its accounts and to direct revenue to road maintenance as priority. The Road Fund Board has already been established. According to the provisions of the Act, the Road Fund Board may appoint such officers and employees as it considers necessary to achieve its objectives and for the efficient discharge of its responsibilities. As of July, 2003, only members of the Board and the Chief Executive of the Road Fund Administration had been appointed. Other principal officers of the Road Fund Administration, namely; Head of Administration, Fund Accountant and Technical Monitoring Team comprising at least one Engineer have not been appointed. Interviews were held in January 2004 for the post of Administrator, Accountant and two engineers as part of recruitment process which is on-going. Since road maintenance has always been a low priority, the institutional changes proposed under the Act have to be implemented fully in order to carry the reform agenda to completion. The effective establishment and operation of the Fund is essential to ensure the sustainability of the investment in the network. Therefore as a condition precedent to first disbursement of the loan, GOZ shall provide evidence satisfactory to the Fund that the staff comprising the principal officers of the Road Fund Administration namely; Head of Administration, Fund Accountant and Technical Monitoring Team comprising at least one Engineer, have been recruited. 3.5 Road Engineering and Construction The Directorate of Roads (DOR) has a small design division, which undertakes detailed engineering of minor roads. Most of the studies and design for large projects are undertaken by foreign consultants in association with national firms based in the mainland. There is no in-house capacity to review these designs and poor designs on projects often lead to cost increases, avoidable claims and litigations. There is therefore need to equip the Department of Roads to improve upon

23 10 their engineering design review capability with updated technology in engineering design such as Computer Aided Design (CADD) and training of the staff in this field. The roads department has a materials laboratory, which provides services for soil testing for the Ministry itself, building contractors and consultants Road construction is undertaken by force account and for large and complex works, mainly by foreign contractors. There is an entrepreneurial tradition in the building sector, but there is no domestic private sector contracting capacity in Civil works. The only registered local contractor for civil works has capacity to handle works not exceeding US$0.5 million. Inadequate managerial skills, and financial constraints due to lack of continuous financing of road maintenance works, have all affected the promotion of entrepreneurship in civil works. As a result of this situation, the MOCT is not exposed to contractors/services procurement and contract management. There is an acute shortage of technically qualified procurement personnel and lack of training. To this effect, the promotion of the private sector in construction and maintenance of the road network is a policy concern of the GOZ. The Institutional Strengthening and Capacity Building for the MOCT under this project is to address this concern and will also assist the MOCT to manage the procurement and contract administration aspects of the project. 3.6 Road Maintenance Current maintenance activities for the trunk, rural and urban roads are under the responsibility of the Maintenance Division of the DOR. Maintenance operation is carried out by force account in four maintenance zones, with three in Unguja Island and one in Pemba. There are 22 crews of road maintenance labourers and a supervisor called gangs in the four zones, with each zone headed by an inspector Maintenance over the last five years has become largely inactive due to a number of reasons among them, lack of financial and physical resources. Though the GOZ has a substantial inventory of existing plant and equipment resources suitable for construction and maintenance, however, the acute shortage of spares and other operating costs, severely constraints both availability and utilization of equipment fleet. The capacity of the DOR for road network maintenance and management planning is weak and has no adequately trained and motivated staff. The other major problem is insufficient maintenance fund budget and allocation in spite of the fuel levy established in 1995 which was not a dedicated fund to guarantee resource flow to maintain the network In order to address these concerns, the Zanzibar Roads Fund Act that was enacted in 2001, would ensure a steady flow of financial resources mainly for maintenance of the road network. In addition, Government is rehabilitating the equipment fleet and workshop and there is an on-going Technical Assistance to the equipment section of the DOR for specific spare parts inventory software and on the job training for master mechanics and technicians under World Bank financing. A Roads Maintenance and Management System (RMMS) has already been installed in 1994, under technical assistance financed by the EU for programming effective maintenance of the network yet the system is dormant and remains un-operated because of shortage of manpower to manage and operate it. This system will be updated and reintroduced into full use as an essential tool for identification and management of all maintenance activities to be carried out. As a component of the Institutional Strengthening and Capacity Building under this project, Technical Assistance services will be provided and adequate training offered to personnel from the Department of Roads.

24 The Government has committed itself to give priority to the maintenance of the road network under the 10Y-RSDP in order to bring 65 percent of the network in good condition from the current 46 percent. From the projected revenue from the Road Fund, shown in Table 3.3 below, GOZ will be able to restore substantial part of the network to good condition. Table 3.3- Maintenance Needs and Projected Fuel Levy Revenue (TZS billion) Year 2003/ / / / / / / /11 Maintenance Works (10Y-RSDP) Fuel Levy Revenue Surplus Revenue as Ratio of Need 1.53:1 1.40:1 1.33:1 1.37:1 1.21:1 1.16:1 1.15:1 1.16:1 Source: MOCT and Ministry of Finance and Economic Affairs As indicated in the Table 3.3 above on revenue forecast for the Road Fund, the main source of the road fund will be fuel levy which more than cover the projected maintenance needs under the 10Y-RSDP. However, the fuel levy contributes not more than 55% of the total revenue to the Road Fund. Despite this, the GOZ financial programming does not meet the required 95% of the network maintenance budget. The level of fuel levy is held constant in real terms and adjusted to reflect inflation on annual basis and consumption of fuel is projected to grow by 5% per annum. Other sources of financing under consideration by GOZ to generate additional revenue for the Fund include License and Registration Fees of USD 0.08 million per year based on transfer of 25% of total amounts and tourism impact fees estimated at USD 0.63 million per year in 2004 based on a 2.5% levy on additional tourist income attributed to improved accessibility. In order to ensure that the GOZ meets, through the Road Fund, 95% of the network maintenance budget from its financial programming, as a condition precedent to first disbursement of the loan, government shall have provided an undertaking that it will meet, through the Road Fund, 95% of network maintenance budget not later than fiscal year 2006/7 when the project comes to an end. Furthermore, in order to ensure that government has fulfilled its undertaking to meet 95% of the network maintenance budget, government shall provide to the satisfaction of the Fund, annual reports, not later than 6 months after the end of the fiscal year from the first project year, a road fund revenue and a road maintenance budget confirming that as from fiscal year 2006/7, 95% of network maintenance budget has been met through the Road Fund. 4. THE PROJECT 4.1. Project Concept and Rationale The rationale for the project is that the roads have deteriorated to a level that it has become a constraint to economic and social development. The service levels on these roads have reduced considerably that the vehicle operating cost on them have become excessively high and uneconomic to maintain. They therefore have to be rehabilitated to bring them up to serviceable standard. Furthermore, there are major institutional weaknesses in the road sector. Of special significance is the lack of capacity to manage works contracts, undertake procurement and planning activities and no efficient financial accounting and monitoring system.

25 There was participatory approach during the feasibility stage of the project. In discussions with stakeholders carried out during the social impact assessment, the project beneficiaries expressed strong desire for improvement in the project roads as they have access to markets and other social and economic activities. They recognize that a properly maintained road infrastructure promotes and supports the growth of agriculture and tourism activities which are the main source of livelihood for people in the project districts Three main technical options for the upgrading of the road project were examined during the feasibility study in order to select the viable options with minimum adverse impact on natural environmental sites and human settlements. The options involved a) rehabilitating the roads to gravel road, b) surfacing to Double Surface Dressing (DSD) and c) asphaltic concrete surfacing. The option for Asphaltic concrete is acceptable based on the technical considerations from the study. This is justified by i) high maintenance cost of gravel roads due to lack of suitable gravel material with acceptable plasticity index and ii) the whole area being prone to flooding and therefore not conducive to ordinary bituminous surface treatment which is less durable under very wet conditions. The selected option involves upgrading the road from gravel surface to 6.0 meter wide asphaltic surface with 1.0 meter to 1.5 meter wide shoulders. These specifications are in conformity with the Tanzania Road Standards The study on Rehabilitation of Zanzibar roads and Institutional Arrangements in 1999 financed by the World Bank, identified major institutional difficulties and deficiencies. Subsequent to that study, the World Bank undertook an optimization study in which it identified the needs of the MOCT. The World Bank had offered Technical Assistance to Government in order to address some of the needs. The Institutional Strengthening and Capacity Building under this project is to address the gap which still exists in the MOCT mainly in contract/procurement management, Road Maintenance Management and Financial accounting of projects In Zanzibar, the road study on which this project is based, is the only intervention by the Bank in the road sector as compared to nine road projects in Tanzania mainland, which include; the completed Tanzania Highway Rehabilitation Project, Lusumo-Lusahunga Road and 10 bridges project all of which have been completed and the ongoing Mutukula-Muhutwe Road, Shelui-Nzegi Road and the Road Rehabilitation/Upgrading Projects. The main lessons learned from Bank Project Completion Reports (PCR s ), and from other major donors involved in the road sector in both the mainland Tanzania and Zanzibar are that, (i) there is undue prolonged delay in start up of projects, (ii) there is institutional weakness in road administration and (iii) there is lack of maintenance. The proposed project incorporates these lessons by (i) providing institutional strengthening and capacity building to the Roads Department of the MOCT to assist in managing the project (ii) providing training to the staff of the MOCT within the context of the Optimization Study of the MOCT and (iii) ensuring that the investment is protected by secured funding for maintenance, updating and reintroducing the RMMS, coupled with close monitoring of project implementation by the Bank through regular supervision.

26 Project Area and Project Beneficiaries A) Project Area The project area with a land area of about 1,038 square km lies in the Central, Western, North A and North B and Southern districts of Zanzibar and influences almost the entire island of Unguja, covering six administrative districts. Generally, most of the areas served by the project roads are very strategic to the economy of Unguja island. Apart from the predominance of agricultural activities, these roads also serve other functions particularly access to touristic sites and the Export Processing Zone (EPZ) The proposed Manzizini-Fumba road will form the main access to the Export Processing Zone (EPZ), to be located in the Fumba peninsular where Government is expecting to implement telecommunication and electric energy projects. The viability of the EPZ is largely dependent on the presence of adequate and efficient transport and energy in the area. The road passes through the proposed EPZ and through villages whose predominant economy is agriculture and fishing. The Zanzibar-Dunga road links Zanzibar town to the central part of Unguja Island and to the East Coast and traverses rural and semi-urban communities; passes through agricultural area of Mwera, Koani and Kidimni which are known for their high production of fruits, banana, cassava and other crops. In addition to tree crops and vegetable production, the population in this area is engaged in smallscale enterprises such as furniture making, concrete block manufacture and mechanical workshops. Mkokotoni, on the Mahonda-Mkokotoni road link, is one of the principal fishing ports of Unguja. In this area, fishing, marketing and maintenance of fishing boats and equipments are important activities. Major food crops cultivated include cassava, banana, sweet potatoes, while the major cash crop (cloves) which is the major export crop of Zanzibar comes from this region. In the area to the West and North of Mahonda, there were formerly extensive areas of sugar cane cultivation with associated processing facilities that would be reactivated within the context of Zanzibar's vision on industrialization The proposed Mfenesini-Bumbwini Road provides access to the tourist sites of the former slave caves and adjacent beach resort and also links the beautiful coast of Mangapwani, where high standard tourist hotels and other significant tourist related developments are proposed within the current development plan. The Kinyasini-Tunguu Road serves as an important link joining the South to North of Unguja Island, thus enhancing the connectivity of the network and passes through very fertile areas from Mkokotoni to Tuunguu. The Paje-Makunduchi road traverses the eastern shore of Unguja island where there is fast development of tourist resorts. B) Project Beneficiaries The direct beneficiaries are the people in the catchment area of the roads representing about 20 percent of the population of the island of Unguja, that is about 120,000 people in year Between percent of the population of the catchment area of the roads are engaged in agricultural production while a few others are engaged in small-scale artisanal activities and services; and those along the coast are in fishing and associated activities. This rural population is concentrated in high agricultural production areas and commute between their farms and the principal urban markets. About 61 percent of Zanzibar population are below the income poverty line and experience deprivation and social exclusion worsened by decreasing export base and poor access to infrastructure services such as roads. When the roads are in place, the rural population will have improved access and reduced transport costs. It is estimated that a travel of time of hour can be done in about 36 minutes and transport cost operation reduced by about 30 percent. The

27 14 rural farming, fishing and artisanal population will then be able to enhance their productivity by evacuation of their farm produce to the urban markets and access to social and other essential services The secondary beneficiaries are the rest of the population living in the six administrative districts of Unjuga island who will be served by an improved road network also with positive impacts of reduction in transport costs, access to schools, health centers and other essential services. Another potential beneficiary is the tourist industry which, at present, is on its way to rapid expansion according to GOZ tourism zoning of the country. Tourism revenue following improvement of the network is estimated to rise from US$39.6million in year 2000 to US$58.6million in year 2003 and to US$132.6million by year The Zanzibar vision of longterm development has earmarked tourism development as a major objective. There is a great potential for developing the tourism industry as the country is endowed with beautiful and virgin beaches, natural forests with rare plant and animal species, ancient architectural features, handicraft etc. This wealth has been barely harnessed; besides, its development has been hampered by relatively poor and limited road network, which this project will assist in correcting. 4.3 Strategic Context The GOZ initiated a 10 Year Road Sector Development Program (10Y-RSDP) in year 2000 with the following main objectives; (i) to restore trunk and rural roads that have become an obstacle to development especially of agriculture and tourism sectors and (ii) to develop the Ministry of Communication and Transport (MOCT) capability to administer the road sector. The poor condition of these roads in the project area is a major constraint to the development of the agricultural and tourism sectors. The project will support the 10Y-RSDP by upgrading kilometre priority main roads and improve the road sector management through intervention by the Institutional Strengthening and Capacity Building efforts by Government. This intervention is within the context of the Zanzibar Poverty Reduction Plan (ZPRP) which identified an efficient reliable and cost effective road transport as essential for the development of other sectors of the economy. The project will reduce the transport costs and open markets for the agricultural products and support the tourism industry which are the lead sectors for the development of the Zanzibar economy The strategic context is consistent with the Bank Group s intervention strategy in Tanzania with the overall objective to support Tanzania s poverty reduction efforts. As contained in the Country Strategic Paper that was approved by the Board in June 2003, the Bank Group is to provide support for the effective implementation of the ZPRP by emphasizing the rehabilitation of rural roads taking into account the extent of linkages with other Bank supported investments. The project is therefore in line with the Zanzibar Poverty Reduction Action Plan (ZPRP) and is consistent with the Bank Group Country Strategic Paper (CSP). 4.4 Sector Goal and Project Objective: Sector Goal The sectoral goal is to support economic growth and poverty alleviation by providing least cost services in the road transport sector.

28 15 Project Objective The objective of the project is to reduce vehicle operating and road maintenance costs and improve road transport services in Unguja Island and to achieve better management of the road network. 4.5 Project Output and Description The project outputs consist of: (i) (ii) km of asphaltic concrete roads and four bridges on Mahonda-Mkokotoni road; and Strengthened MOCT in contract administration and sector management The project consists of the following components: (i) (ii) (iii) (iv) Construction works for four bridges and upgrading of five gravel roads in 5 districts, to asphaltic concrete standard with 6.0 m wide carriage way with 1.0m to 1.5m wide shoulders on each side for a total length of km. Consultancy services for: - Supervision of construction works of (i) above - Project Audit Services, and Institutional Strengthening and Capacity Building for the DOR and CODAP of MOCT. Resettlement Detailed Description of Activities and Components A. Civil Works (i) Upgrading Works The upgrading of the following six road sections: Zanzibar Town (Manzizini)-Fumba Road (17.81 km) Kinyasini-Tunguu Road (26.77 km) Zanzibar Town (Amani)-Dunga Road (12.75 km) Mfenesini-Bumbwinini Road (13.10 km) Paje-Makunduchi Road (17.0 km) Mahonda-Mkokotoni Road (Four Bridges only) The alignment of the proposed roads, generally follow the existing ones requiring only short horizontal adjustments without any major changes, except for sections at the beginning of Zanzibar Town (Manzizini)-Fumba Road where a 2.5 km stretch is to be replaced by a new alignment from the existing dual carriageway and the Zanzibar Town (Amani)-Dunga Road where there are more

29 16 extensive realignments. The proposed roads have been designed according to the standards of the Ministry of Works in Tanzania for the class of roads specified for the level of service they provide. In addition, the Bank has financed road transport projects in the past using the design standards of the Ministry of Works in Tanzania. A carriageway width of 6.0 m with 1.0 m-1.5 m shoulders has been adopted with a design speed of 80 kph in the flat terrain open country and 50 kph through established villages. Improvements to horizontal and vertical alignments have been made to meet the desirable geometric criteria consistent with traffic safety requirements The road foundations will be protected by side drains which will be paved where there are steep gradients. The upgrading works on these roads also involves the rehabilitation of 5 bridges including the Mwera bridge and 8 box culverts and are provided with elaborate protection measures. Besides the box culverts, other drainage structures will be in the form of concrete pipe culverts and these together with side drains will be constructed along the whole stretch of the roads The design of the pavement was based on sub-grade evaluation of California Bearing Ratio (CBR) tests taken along the alignment after soil sampling and compaction tests. A CBR value between 3 to 15 percent has been used in the pavement design which has been carried out in accordance with TRL Road Note No.31 and is based on the estimated traffic, using a design life of 20 years. The road pavement shall be of Asphaltic concrete Standard of 50 mm thick placed on 125 mm thick crushed stone base over a natural gravel sub-base layer of varying thickness between mm. The rock material in the island is coral limestone. There are aggregates that are suitable for the asphaltic concrete option adopted. (ii) Bridge Works on Mahonda-Mkokotoni Road The Bridge works to be constructed/rehabilitated involve the four main bridges along the Mahonda-Mkokotoni road, viz: i) Mwanakombo Bridge; ii) Kipange Bridge; iii) Mto Maji Bridge; and iv) culverts at Mkokotoni town. The GOZ is already constructing the Mahonda Mkokotoni road using its own force account. As a loan condition Government shall provide annually to the satisfaction of the Fund evidence of adequate budget for the implementation of the Mahonda- Mkokotoni road section until it is completed The Mwanakombo Bridge will be reconstructed to a new bridge of steel beam concrete slab (SBCS) deck on reinforced concrete abutments and will be 0.5m higher than the existing bridge. It will have a span of 10m with a 2 lane carriageway, each 3.25m wide, and a 2.0m wide walkway. The Kipange bridge will be repaired and a 2.0m walkway which will be supported off existing masonry piers and steel beams will be added to the deck. The Mto Maji bridge spanning 5.1m, will be widened with a concrete slab deck, without raising it, to 2 lane carriageway, each 3.25m wide and a 2.0m wide walkway. The culverts bridge is retained with repairs done to the deck and protection works. B. Consultancy Services Consultancy Services for the supervision of the road and bridge construction works will be carried out by one reputable firm of consultants on behalf of the DOR of MOCT. The selected firm will provide tender assistance services including updating of tender documents, supervise the construction, monitor quality control testing performed by the contractors, track progress and costs, prepare progress reports and maintain close liaison with DOR, CODAP and the ministries responsible for the project during project implementation.

30 Audit Services for the project will be undertaken by a consultant who will, as part of his services, prepare the audit reports every year of the project implementation, 3 months after the end of the respective financial year and at the completion of the project. C. Institutional Strengthening and Capacity Building Institutional Strengthening and Capacity Building will comprise technical assistance for two individual experts in contract/procurement management and Financial accounting for a period of 8 months and 2 years respectively and a Road Maintenance Management Specialist for a period of 18 months; training of MOCT staff in technical fields such as, financial accounting (18 staff months), contract/procurement management (44 staff Months), highway design review using CADD (8 staff months) and Environmental Impact Assessment (9 staff months), in national and external institutions; and academic post-graduate training for two civil engineers, one in contract/procurement management and one in Highway/Transportation engineering. The Technical Assistance would set-up a Project Management System Software and a Road Maintenance Management System for use by the DOR and develop an accounting manual for the use of CODAP during the project implementation period. The details are contained in Annex 8. The GOZ shall appoint counterpart staff to be assigned to each of the three Technical Assistance experts. As other conditions, the GOZ shall establish, from the MOCT, the list of staff from DOR and CODAP to be trained under the Institutional Strengthening and Capacity Building in the identified areas of need and whose qualifications and curricula vitae are acceptable to the Fund. D. Resettlement Along most of the road sections to be rehabilitated, people have cultivated and built houses and shops inside the roads right of way corridor, causing the need for Resettlement. A census has been carried out indicating that 610 households will be affected by the project and would require resettlement. The property to be affected include land, homesteads of thatched roof huts, cement brick buildings and stick and mud huts with iron roofing sheets as well as tree crops. 4.6 Project Traffic and Road User Prices i) Traffic Levels The demand for motorized traffic on project roads was estimated based on traffic counts and origin destination studies carried out by the project study consultant in June Traffic data from earlier surveys between 1986 and 1992 were analyzed to determine past traffic growth patterns and trends. The estimated base year normal traffic (2001) on all the six project roads/sections range from an average of 21 vehicles per day on Kinyasini South Mchangani road section to 1,677 vehicles on Zanzibar (Amani) Kianga road section. Three of the 13 links have traffic below 100 vehicles per day. About 85.6% of the traffic currently on the project roads is passenger vehicles; the remaining 14.4% are goods vehicle of mainly light to medium trucks. (See Annex 5 and more details in the traffic analysis in the Project Implementation Document). Traffic growth rates between 1992 and 2001 on the project roads averaged 14.4% per annum broken down to 16.7% per annum for passenger vehicles and 6.2% for goods vehicles These high traffic growth rates of the past decade can however not be sustained. High, medium and low traffic growth scenarios were used in projecting future traffic levels. The medium traffic growth scenario was based on overall economic growth rate of at least 5 percent per annum over the period ; and at 4% per annum in the years after Normal passenger

31 18 traffic (cars, pick-ups and buses) are projected to increase at 6.0% per annum from 2001 to 2010, implying a passenger transport demand elasticity of around 1.3; which is within the acceptable range and thereafter at a slightly lower rate of 5.0% per annum. Goods traffic (light, medium and heavy trucks) is projected to grow at a lower rate of 5.0% per annum, implying a goods transport elasticity of demand of around 1.1 and assumed to increase at 4.0% per annum to Generated traffic has been estimated at about 25.0% of normal traffic in the opening year of project road, and expected to rise to 40.0% over three years of traffic use; thereafter grow at same rate with normal traffic. In addition, location factors of proposed major rice scheme to the east of Kinyasini Tunguu road and the likely development of the Export Processing Zone with 30 developed commercial sites by 2010 on Zanzibar Fumba road have been taken into account in forecast of traffic. Potential for diverted traffic was limited to only one of the road links, Kinyasini Tunguu road with estimate of about five vehicles per day, as it offers substantial distance savings over alternative routes. The forecast traffic for the project link roads over the period are as indicated in Annex 5. b) Road User Prices and Unit Costs The road user prices consist of the vehicle operating costs (VOC), travel time values and accident costs. Unit construction rates and costs are derived from projects in progress and recently awarded contracts in Zanzibar. VOC data were calibrated for Zanzibar in view of the very different fleet structure in the mainland. Zanzibar buses are generally much smaller than that of the mainland and the island has very few trucks of more than three axles. There are also differences in travel patterns/operating characteristics due to the much shorter journey lengths on the island. The VOCs, based on the seven vehicle types on the project roads net of taxes were estimated based on vehicle type replacement cost, tyre type replacement cost, fuel cost per litre, lubricants cost per litre, maintenance labour cost per hour crew cost per hour, annual overheads, annual interest rate (12.0%). Details of the VOC Input Data used are in the PID. Composite VOC on existing gravel roads estimated at US$0.564 per vehicle kilometre would reduce to US$0.281 in 2006 when project road is completed. These benefits are linked to the improvement of riding quality from gravel surface to asphalt with IRI reducing from 16 mm/km in the without project case to about mm/km in the project case. Passenger time cost per hour were based on assumptions about average vehicle occupancy, splits between working and leisure time valued at 25% of those of working time, and hourly wage rates per typical passenger. Average passenger travel time costs would be reduced by about 40 percent by year 2006 on project completion; cars and light vehicles from US$0.46 in 2003 to US$0.28 in 2006 while for buses from US$1.55 in 2003 to US$0.93 in The road maintenance intervention unit cost for gravel and paved roads are based on current rates in the construction industry in Zanzibar and are estimated as Gravel Roads i) Routine/recurrent maintenance US$ 800 per km/year; ii) Periodic Maintenance US$ 4,500 per km/year and for Paved Roads i) Routine and recurrent maintenance US$ 1,100 per km/year; ii) Periodic maintenance US$ 2,500 per km/year. The project would result in reduction of road maintenance costs by about 32 percent when the gravel roads are upgraded to asphaltic standard. 4.7 Environmental Impact The components and activities of the project resulted in its classification in the environmental category 1 according to the ADB Environment and Social procedure. Category 1 projects are projects that are likely to have the most severe environmental and social impacts and require a full Environmental and Social Impact Assessment (ESIA), including the preparation of an Environmental and Social Management Plan (ESMP). These projects are likely to induce important

32 19 adverse environmental and/or social impacts that are irreversible, or to significantly affect environmental or social components considered sensitive by the Bank or the borrowing country An Environmental Impact Assessment was carried out for the first set of five road sections, then a complementary one for the Paje-Makunduchi road. A special Environmental Impact Assessment was prepared for the Mwera Bridge area that is located in the vicinity of a wetland. In addition, findings of observations and discussions during preparation and appraisal were integrated in the project Four marine habitats are important in relation to the project: 1) the coral reefs in pristine condition and highest biodiversity in East Africa surround the island; 2) Sea grass beds which have a value as fish nurseries and habitat; 3) the heavily exploited mangrove forests with serious loss in biodiversity affecting coastal fishing; 4) Sandy beaches in general used for fishing activities, some of which are important sea turtle nesting sites. Impacts on the marine ecosystems will be significantly minimized by the mitigation measures integrated in the roads design and construction Terrestrial habitats, on the other hand, are limited in Unguja compared with marine ecosystems. True forest is limited to Jozani, consequently biodiversity of flora and fauna is also limited. The best-known fauna species are the red colobus monkey, suni and leopard. A significant ecosystem is a wetland located in the vicinity of the Mwera Bridge. As well the impacts on the terrestrial ecosystems will be significantly minimized Along most of the road sections to be rehabilitated, people have cultivated and built houses and shops inside the roads right of way corridor, causing the need for Resettlement. A census has been carried out indicating that 610 households will be affected by the project and would require resettlement. A Resettlement Plan which gives details of those to be affected by the project and for whom resettlement would be required, has been submitted by government and approved by the Bank. In order to ensure that government shall implement the Resettlement Plan and that those affected are adequately relocated and compensated, as part of loan conditions, government shall have provided an undertaking that the people affected by the project shall be properly relocated and adequately compensated in accordance with the Resettlement Plan prior to the construction of each road section. Positive impacts of the project On air quality, the upgrading from gravel to paved road will significantly reduce or eliminate the amount of dust in the atmosphere. As well, noise will be reduced as driving on asphalt is much smoother that on gravel roads, especially near residential areas. As asphalt roads are friendlier on vehicles, road upgrading will reduce vehicle degradation, hence, cost of repair and maintenance. Water resources and water bodies will be positively affected by road rehabilitation and upgrading as erosion and silting of the rivers for example are significantly reduced, providing the conditions for recovery of the river ecosystems. Proper dimensioning of bridges and culverts will improve surface water flow, minimize water logging, and reduce infiltration of stagnant and contaminated water into the ground water resources. Soil erosion will be reduced, especially along the rehabilitated road as surface water is better channelled to minimize scouring and silting. Roads also will be better stabilized to minimize landslide or rupture of roadside embankments. In the Zanzibar road project, there is extensive use of existing borrowed-pits rather than creating new ones, this will minimize adverse impacts, and after the works, restoring them as planned will avoid spread of water related diseases. All the roads of the project already exist, as such there will be

33 20 minimum disruption of ecosystems or increase in encroachment; this is a positive impact on the overall environment, or disruption of the landscape. Adverse impacts Adverse impacts are expected from quarrying, bridging, and land take. Negative impacts are short to medium term including limited soil erosion, limited surface and groundwater pollution, disruption of social services, visual impacts, noise, temporary increase in dust, and limited loss of vegetation and loss of private properties The Mwera river is lying west of centre in the island, and is an important groundwater recharge area. It lies in and forms part of the Bumbwini Corridor. The aquifer here is a steps and stairs type. Groundwater resources are vulnerable to pollution from any wastes discharged in the area, as the largely sand and coral derived soils are generally very permeable. However, despite the sensitiveness of the area, the EIA carried out for this site is favourable to the replacement of the bridge. No significant impacts are expected. Mitigation Measures Mitigation measures, mostly integrated in the project design and the civil works, are detailed in the EIA Summary submitted to the Board. Only Resettlement is costed separately. The Project Implementation Document will integrate the Environmental and Social mitigation measures stated in the EIA report and the EIA Summary as shown in Annex 6. Environmental Monitoring The project implementation agency, in collaboration with the environmental authorities will implement and enforce the environmental mitigation measures, as well as the overall monitoring. Supervision missions of the Bank will validate and crosscheck whether the agencies responsible for environmental management and monitoring have ensured that the mitigation measures have been efficiently carried out. In order to ensure that government has fulfilled its undertaking to relocate the people affected by the project, as part of loan conditions, government shall provide to the satisfaction of the Fund, adequate proof prior to the construction of each road section, that the people affected by the project have been adequately compensated and resettled according to the Resettlement Plan already approved by the Bank. Meanwhile, the EIA capacity of the MOCT is weak. In order to strengthen the Environmental Impact Assessment and Monitoring capacity of the MOCT, off site training will be provided for staff in EIA, including Social/Gender Impact Analysis and Resettlement Planning. The staff will work with the supervision consultant to ensure that the civil works contract reflects the mitigating measures embedded in the project design. 4.8 Social Impact At construction, the proposed roads will incorporate a wayleave of 18 metres, for which land take will be required. The latter will affect cropped lands, residential areas and the use of the road frontage for vegetable crops. With design improvements, these properties will be lost and it would necessitate Resettlement remedies according to GOZ procedures and Bank s Policy on Involuntary Resettlement.

34 A lot of benefits will be derived from the road project and the quality of life of the people will be greatly improved. The greatest economic benefit will be from Kinyasini to Tunguu road, which will give ready access to the island's most productive agricultural areas with respect to inputs and markets, with reduced damage to perishable fruits and other crops and limit the recourse to middlemen. Therefore, farming households will obtain higher revenue. The combination of the Mkokotoni to Mahonda and Kinyasini to Dunga roads will link the small ports of Potowa and Mkokotoni in the North with the hinterland For women in particular, seaweed farming on the east Coast has become a popular activity and women control the local business of seaweed farming. The road will give them more economic power and autonomy. Women will also be able to more easily transport perishable produce to the market more cheaply with less damage/waste, circumvent middlemen, and have better access to market centres in the urban areas. They are also more likely to expand from subsistence to cash production in order to meet larger demands with better roads and alternative means of transport. Women will be able to increase their productive time. As markets develop and expand, women will be able to advance their social capital, and be in a position to make small business investments and diversify their economic activities into local industry/handicrafts. Access to social services will be made easier for women, therefore, health status of the population will improve, and health risks reduced. Better transport facilities will give women more access to education for their children and other supportive public institutions, which are more concentrated in a few urban and semi-urban areas Since the road project, when completed, will be linked directly or via already constructed roads to the historic and cultural sites of the island, the potential for tourism will be greatly enhanced and consequently the foreign exchange earnings of the island from tourism will increase While this project has positive health impacts, the likely immigration, especially of male skilled and unskilled workers in search of work at the project sites can lead to an increase in sexually transmitted diseases. According to the Zanzibar AIDS Commission, the current prevalence of HIV/AIDS in Zanzibar is low. Verification studies have indicated that only 0.6 percent of total population have HIV. This is in direct contrast to the mainland Tanzania where the incidence of HIV is running at 12 percent. Therefore, mitigation measures designed in the project to complement on-going programmes include the provision of a budget line item in the Bill of Quantities (BOQ) of the contract works. This budget will be used to engage the services of an NGO which is involved in the prevention and treatment of HIV/Aids in Zanzibar, and also for the recruitment of a Social/health expert to monitor the activities of the NGO in respect of HIV Aids awareness, education, prevention and treatment for the workforce and roadside communities that might be impacted by the project. This activity will be monitored by the Bank during its supervision missions and will be reported regularly in the Quartely Progress Reports (QPR s) to the Bank Presently, there is considerable out-migration from Pemba to Unguja, from rural to urban areas, and from the coral rag areas to deep soil areas. This situation could be aggravated with an improved road network if regional development programmes stressing the balanced development of all areas of the island do not accompany it. However, other donors are already intervening in Pemba island in order to curb out-migration to Unguja.

35 Project Costs Civil Works and related Consulting Services The cost of Civil works including resettlement and related consulting services is estimated at UA million net of taxes and duties, of which the foreign exchange cost is UA million (TZS billion) or 68% of the total and the local cost is UA 5.79 million (TZS 8.33 billion) or 32% of the total The civil works cost estimates are based on the construction bill of quantities, and the engineer s cost estimate provided by the design consultants. These estimates have been updated to July 2003 prices by taking into account the recent contracts awarded and other technical assistance and supervision services. Allowances have been made for physical and price contingencies. Physical contingencies are estimated at 10% of base cost. An average price escalation of 3% per annum on foreign exchange and 5 % per annum on local currency prior to and during implementation has been adopted. An amount of UA 0.82 million (TZS 1.18 billion) representing 6% of construction base cost, was provided for supervision consultancy services including tender assistance services to update the tender documents. A lump sum amount of UA 0.04 million (TZS 0.05 billion) has been included for the Consultancy Services for audit of the project accounts during the implementation stage. A lump sum amount of UA1.02 million (TZS1.46 billion) has also been provided for the resettlement of those affected by the project. Institutional Strengthening and Capacity Building The indicative cost of Institutional Strengthening and Capacity Building component to be financed under the ADF-Grant is estimated at UA 0.75 million (TZS 1.08 billion) net of taxes, which is made up of UA 0.71 million (TZS 1.03 billion) or (95%) in foreign exchange cost and UA 0.04 million (TZS 0.05 billion) or (5%) in local costs. Resettlement The indicative cost of Resettlement is estimated at TZS 1.46 billion all of which is in local currency. The assets to be foregone as a result of the project, in terms of homesteads, land and crops, have been enumerated and valued by the relevant officials of the Ministries of Lands and Agriculture using the current official rates The project cost estimates by components and by category of expenditure are presented below in Table 4.1 and Table 4.2 respectively. More detailed cost estimates are given in Annex 3 with project detailed costs and estimation methods in the PID.

36 23 Component A. Civil Works (Total) -Lot A -Lot B Table 4.1 Summary of Project Cost Estimates by Component (Net of Taxes) TZS billion UA million F.E L.C Total F.E L.C Total B. Consultancy Services: i) Design Review and Supervision ii) Audit C. Institutional Strengthen- ing and Capacity Building % D. Resettlement % Total Base Cost Physical Contingency Price Contingency Total % (Exchange Rate: 1UA=US$ =TZS ) Table 4.2 Summary of Project Cost Estimates by Category of Expenditure (Net of Taxes) % F.E. 72% 72% 90% 100% 69% 73% 61% Category TZS billion UA million % F.E L.C Total F.E L.C Total F.E. A. Civil Works % B. Consultancy Services: % C. Institutional Strengthening and Capacity Building % D. Resettlement % Total Base Cost Physical Contingency Price Contingency Total % (Exchange Rate: 1 UA = US$ = TZD ) 4.10 Sources of Finance Civil Works and related Consulting services The ADF and GOZ will jointly finance the civil works, resettlement and consultancy services components of the project. The proposed financing from ADF will cover 100% of the foreign exchange costs of UA million (TZS billion) and 68.22% of the local cost of UA 3.95 million (TZS 5.68 billion), for a total commitment of UA million (TZS billion). The GOZ will finance 31.78% of the local cost amounting to UA 1.83 million (TZS 2.64 billion). Overall, ADF will finance 89.81% of the cost of civil works, resettlement and related consulting services with GOZ meeting the remaining 10.19% plus taxes and duties. The proposed financing plan by source of finance is shown in Table 4.3A below. 69% 73% 61%

37 24 Table 4.3A Sources of Finance for the ADF Component (Net of Taxes) Civil Works, Resettlement and related Consulting Services (In UA Million) Source F.E L.C Total % of Total ADF GOZ Total Institutional Strengthening and Capacity Building ADF Grant and GOZ will jointly finance the Institutional Strengthening and Capacity Building component. ADF Grant will cover 100% of the foreign exchange costs of UA0.714 million (TZS1.028 million) representing 95% of the cost while the GOZ will finance 100% of the local cost amounting to UA million (TZS0.054 billion) and representing 5% of the cost excluding taxes and duties. The proposed financing plan by source of finance is shown in Table 4.3B below. Table 4.3B Source of Finance for the Grant component (Net of Taxes) Institutional Strengthening and Capacity Building (In UA Million) Source F.E L.C Total % of Total ADF GOZ Total The financing of part of local costs by ADF is based on the fact that projects focusing primarily on poverty reduction have a high content of local costs. This project seeks to improve the road network in order to support economic growth and poverty alleviation. The Government will however be expected to bear some local cost financing to demonstrate its commitment to enhance ownership and ensure sustainability of the project on completion of implementation. The support for financing part of the local cost during project implementation is further justified by the GOT s strong effort towards the mobilization of internal and external resources to support its long term development strategy for both Tanzania mainland and Zanzibar. As part of this effort, the GOT has introduced important measures to broaden its tax revenue base and also to improve tax collection. These measures include the establishment of the Tanzania Revenue Authority which has helped reverse the decline in revenue performance. Further, following after the Government of the United Republic of Tanzania, the Government of Zanzibar is in the process of adopting the Medium Term Expenditure Framework as an instrument for allocating budgetary resources to priority sectors. The shift towards a medium-term framework for expenditure planning will improve the prioritization of expenditures across and within sectors including roads In spite of the efforts by the GOZ, it has not been possible to generate enough resources to finance the whole of the local cost of externally financed projects. Government of Zanzibar s external finance requirements are large and the Government relies mostly on grants and concessionary loans to meet these requirements and the foreign exchange costs of projects and programs. The fragile financial situation and the demonstrated measures being put in place by the

38 25 Government of Zanzibar provide strong justification to support its request to the ADF to finance 68.22% of local currency costs for the civil works project and related consulting services from ADF resources. Expenditure Schedule The expenditure schedule by component of the project is derived from the implementation programme and is in proportion to the works and services programmed for each year of the project implementation. The yearly expenditure plans by component and sources of finance are shown in Table 4.4 and Table 4.5 respectively. Table 4.4 Expenditure Schedule by Component (Net of Taxes) (In UA Million) Component Total A. Civil Works (Total) Lot A Lot B B. Consultancy Services Design Review and Supervision Audit Services C. Institutional Strengthening and Capacity Building D. Resettlement TOTAL Table 4.5 Expenditure Schedule by Sources of Finance (Net of Taxes)- (In UA Million) Source Total ADF ADF-GRANT GOZ TOTAL PROJECT IMPLEMENTATION 5.1 Executing Agency The Executing Agency for the project will be the Ministry of Communications and Transport, MOCT. The project will be managed through the construction section under the Directorate of Roads of the MOCT. 5.2 Institutional Arrangements The implementation of the project will fall directly under the control of the head of the Construction section who reports to the Director of Roads. The Directorate of roads will liaise with CODAP (Coordination Office for Donor Assisted Projects) whose function will be limited to

39 26 consolidation of project accounts and reports, facilitating donor supervision missions and arranging for comprehensive quarterly progress reports, annual audits and Borrower s PCR as per Bank s Rules. In order to ensure effective liaison and monitoring of project implementation, the GOZ will nominate a Civil Engineer from the construction section of the DOR of MOCT whose qualifications and experience are acceptable to the Fund, to co-ordinate and monitor the project during implementation. This will be a condition Precedent to First Disbursement of the loan. The coordinator will work in conjunction with Department of Environment (DOE) to monitor the implementation of the environmental mitigation measures. 5.3 Supervision and Implementation Schedule The road works will be supervised by a civil engineering consulting firm on behalf of the Executing Agency. The consultants will be responsible for the day-to-day supervision of the works, quality control and certification of the woks done The Contract/Procurement Technical Assistance will assist MOCT in the development, approval and managing the contract following required procedures while the Project Financial Accountant Technical Assistant will assist in monitoring project cost performance, develop accounting manuals, put accounting system in place and keep all the required project accounts as per Bank s Rules The Bank will intensify its field supervisions over the project implementation period. It will field a launching mission after the approval of the project comprising the appropriate skill mix to ensure that the Bank s regulations, the procurement guidelines disbursement procedures are followed. Furthermore, two supervision missions will be undertaken annually to monitor project implementation and the fulfillment of the other conditions of the loan The project implementation will commence from February, 2005 and end in October, The implementation schedule for the project is presented in Table 5.1 below and more details are given in Annex 4. Table 5.1 Summary of Implementation Schedule Activities Date Agency Responsible Board Approval May 2004 ADF GPN May 2004 MOCT/ADF Consultancy Services for Pre-Contract, Supervision Preparation of RFP May 2004 MOCT Approval of RFP May 2004 ADF Preparation of Shortlist June 2004 MOCT Approval of Shortlist June 2004 ADF Issue of RFP June 2004 MOCT Receipt of Proposals by Consultants July 2004 MOCT Evaluation of Proposals Aug 2004 MOCT Approval of Evaluation Aug 2004 ADF Award of Contracts Sep 2004 MOCT Commencement of Consultancy Services Oct 2004 MOCT/ADF Completion of Consultancy Services Sep 2006 MOCT/ADF

40 27 Table 5.1 Summary of Implementation Schedule (cont d) Activities Date Agency Responsible Consultancy Services for Institutional Strengthening and Capacity Building Preparation of RFP May 2004 MOCT Approval of RFP May 2004 ADF Preparation of Shortlist June 2004 MOCT Approval of Shortlist June 2004 ADF Issue of RFP June 2004 MOCT Receipt of Proposals by Consultants July 2004 MOCT Evaluation of Proposals Aug 2004 MOCT Approval of Evaluation Aug 2004 ADF Award of Contracts Sep 2004 MOCT Commencement of Consultancy Services Oct 2004 MOCT/ADF Completion of Consultancy Services Oct 2006 MOCT/ADF Civil Works Contract Preparation of Tender Documents May 2004 MOCT Approval of Tender Documents June 2004 ADF Advertisement and Notification (SPN) June 2004 MOCT Receipt of Tenders Sept 2004 MOCT Evaluation of Tenders Oct 2004 MOCT Approval of Evaluation Oct 2004 ADF Award of Contract Nov 2004 MOCT Civil Works commenced Feb 2005 MOCT/ADF Construction Works completed Aug 2006 MOCT/ADF 5.4 Procurement Arrangements The procurement arrangements are summarized in Table 5.2 below. All procurement for construction works and acquisition of consultancy services financed by the Bank will be in accordance with the Bank s Rules of Procedure for Procurement of Goods and Works and Rules of Procedure for the Use of Consultants using the relevant Standard Bidding Documents (SBD). Table 5.2 Summary of Procurement Arrangements (UA million) Project Category ICB Shortlist Miscellaneous Total 1. Civil Works -Lot A -Lot B 9.04(8.63) 7.01(6.70) 9.04 (8.63) 7.01(6.70) 2. Consultancy Services 2.1 Design Review & Supervision 0.95(0.85) 0.95(0.85) 2.2 Project Account Auditing 0.04(0.04) 0.04(0.04) 2.3 Inst. Str. & Capacity Bldg (0.71) 0.75 (0.71) 2. Resettlement 1.02(0.00) 1.02(0.00) TOTAL 16.05(15.33) 1.74(1.60) 1.02(0.00) (16.93) Note: Figures in parenthesis are the respective amounts financed by ADF

41 28 Civil Works The road works costing UA million will be packaged into two lots of UA9.04 million and UA 7.01 million respectively, and will be procured through ICB with regional preference of 7.5%. One lot comprises the two road sections from Kinyasini-Tunguu (26.77km) and Paje- Makunduchi (17km), while the remaining four road sections and bridges constitute the other lot. Consultancy Services for Supervision The Consultancy Services for supervision will be procured on the basis of a shortlist of firms. The selection procedure will be based on technical quality with price consideration. The Executing Agency shall complete both technical and financial evaluations and obtain the Bank s No Objection in one step. Institutional Strengthening and Capacity Building Services The Consultancy Services for Institutional Strengthening and Capacity Building to the DOR and CODAP of the MOCT, will be procured on the basis of a shortlist of firms. The selection procedure will be based on technical quality with price consideration. The Executing Agency shall complete both technical and financial evaluations and obtain the Bank s No Objection in one step. Audit Services Audit Services will be procured through limited competition on the basis of a shortlist of firms. The selection procedure will be based on the comparability of technical proposals and selection of the lowest financial offer. As the amount for Audit Services is less than UA 350,000, the Borrower may limit the publication of the announcement to national or regional newspapers. However, any eligible consultant, being regional or not, may express his/her desire to be shortlisted. For continuity, the contract will be multi-year with the option of retaining the same consultant. National Procedures, Regulation and Executing Agency Procurement of works contracts and consultancy services have been done in the past by MOCT for donor assisted projects for the World Bank and OPEC/BADEA and so far, there has been no serious adverse complaint in the procurement processes. The Executing Agency, MOCT, will be responsible for the procurement of the works and acquisition of consultancy services. However MOCT has not undertaken many contract works and is therefore not exposed to contractors/services procurement and contract management. In order to strengthen the capacity of the MOCT, Technical Assistance is being provided under the project for contract/procurement management specialist for a period of 8 months and for the staff of MOCT to be trained to be able to manage procurement aspects and undertake contract administration. General Procurement Notice and Review Procedures The text of a General Procurement Notice (GPN) has been agreed with MOCT and it will be issued for publication in Development Business, upon approval by the Board of Directors of the loan and grant proposal.

42 The following documents are subject to review and approval by the Bank before promulgation: (i) Specific Procurement Notice; (ii) Tender documents/requests for Proposals; (iii) Tender Evaluation Reports or reports on Evaluation of Consultant s proposals including recommendations for contract award; and (iv) Draft Contracts if these have been amended from the drafts included in the tender invitation documents. 5.5 Disbursement Arrangements The loan will be disbursed through two categories of expenditure for (i) civil works and (ii) consultancy services for supervision and project audit. The Grant will be disbursed for only one category of expenditure, namely, consultancy services for institutional strengthening and capacity building. The direct payment disbursement method will be used for both the loan and grant following the procedures and standard supporting documents outlined in the Bank s Disbursement Hand Book. 5.6 Monitoring and Evaluation MOCT shall regularly provide the Bank with Quarterly Progress Reports QPR's, in line with the Bank's format covering all aspects of the project not later than one month after the end of each quarter. The reports will include progress achieved against implementation and disbursement schedules, key performance indicators, work programmes and cost estimates for the next quarter. The Quarterly Progress Report will also include reporting on the implementation of the Environmental and Social Management Plan (ESMP). Results achieved shall be clearly identified. The progress report will provide updated information on project implementation, highlighting key issues and problem areas, and recommending action plans for resolving identified bottlenecks The implementation of the EIA mitigation measures will be supervised by the supervision consultants and also be monitored by the project co-ordinator in Roads Department with Environmental Department of Zanzibar. The consultant will prepare a quarterly brief on the implementation of the identified mitigative measures and forward to the Bank and MOCT. The consultant is required to prepare and submit to the Executing Agency and the Bank, a final report at the completion of the Project. Thereafter, the Roads Department will prepare and submit to the Bank, the Borrower s Project Completion Report (PCR), not later than six months after project completion. The consultant s final reports and the Borrower s PCR, will provide the background documents for the preparation of the Bank s PCR required to facilitate post evaluation of the project. 5.7 Financial Reporting and Auditing The Finance and Administration Division of CODAP will be responsible for the financial management and reporting procedures for the project and for other donor assisted projects. A project accountant has just been posted to the CODAP section and an assistant accountant to support him in accordance with the organizational structure and other support staff members in terms of account clerks are to be recruited. There is need to update their skills in order to meet the task of adequate financial reporting under the project. In addition, proper accounting system required for the Financial Reporting and Auditing of Bank Group financed projects are yet to be established. In order to strengthen the financial reporting, technical assistance will be provided for the establishment of accounting systems and preparation of Accounting Manuals in the MOCT. The Financial Accountant will develop accounting manuals and put accounting system in place, and keep all the required project accounts as per Bank s Rules.

43 Project Audit will be carried out once every year. In addition a final audit will be prepared at the completion of the project. The audit report shall be submitted to the Bank not later than three months after the completion of the project audit. Provision has been made as part of project cost for annual audit of the project during implementation and a final audit at the end of the project in line with the Bank s Guidelines for Project Audit. The auditing services will be undertaken by a qualified, experienced and independent audit consulting firm procured in accordance with the Bank guidelines. 5.8 Aid Co-ordination The Department of External Finance of the Government of United Republic of Tanzania (GOT) is responsible for co-ordinating the operations of Development partners in the roads sector The preparation and appraisal missions held discussions with resident donors on the mainland (World Bank, EU, UNDP, Norad) to explain the rationale for the project and discuss planned donor interventions on the island. Following these meetings, the donors reacted favorably to the project initiative. The UNDP intends to open a permanent office in Zanzibar shortly to serve as a center for sharing information by donors. It is proposed that such meetings with donor partners continue during the implementation of the project. Furthermore, with the ADB intended field presence in Tanzania, coupled with the planned supervision missions, co-ordination with donor development partners would be enhanced. 6. PROJECT SUSTAINABILITY AND RISKS 6.1 Recurrent costs Throughout the construction and guarantee period, the construction firms will be responsible for the road maintenance. One year after commissioning, the maintenance expenditure of the project will be taken on by the Roads Department of the MOCT and will be charged to the road maintenance budget. The maintenance activities comply with the current maintenance policy mostly comprising: (i) routine maintenance of the road side, ancillary works including patching and (ii) periodic maintenance comprising of asphatic overlay every 8 years Maintenance expenditure requirements have been estimated at USD 0.02 million per annum and this cost per annum has been incorporated into the HDM-IV model during the service life of the road. The maintenance needs has been taken into account in the 10Y-RSDP for a sustainable road network and these costs could be met from the Road Fund as indicated in Section 3.3 above. 6.2 Project Sustainability The sustainability of the project will depend on the maintenance financing. A Roads Fund was established under the Zanzibar Roads Fund Act, 2001 to give priority to maintenance. Road maintenance will be financed through the Road Fund. The Act also provides for the sources of revenue, auditing of the accounts and the establishment of the Board. However the Fund is not yet operational, as only the members of the Board and the Chief Executive of the Road Fund Administration have been appointed and no principal officers of the Administration have been appointed and Fund has no office accommodation. The Road Fund will be fully operational with the appointment of the principal officers of the Road Fund Administration and ensure a steady flow of resources for maintenance in line with the Road Fund 2001 Act. The World Bank Technical assistance for training of master mechanics and technicians, upgrading of road maintenance

44 31 equipment, preparation of spare part inventory control software; the upgrading and reintroduction into full use of the EU installed road maintenance and management system; and the Technical Assistance provided under this project, are to strengthen capability for maintenance planning and operation. All this effort is to ensure sustainability of investment in the sector. 6.3 Critical Risks and Mitigation Measures The principal risk to the achievement of the project objectives includes prolonged delays in procurement and project implementation. To mitigate this risk, the project will provide technical assistance to the DOR of the MOCT in the key area of contract/procurement management and financial accounting to the CODAP of MOCT. Another risk is the inability or the delay in the GOZ paying for the Resettlement costs to the persons to be affected by the project. A conditionality clause has been inserted to ensure that those affected by the project are adequately compensated and resettled before the commencement of each road section according to the Resettlement Plan submitted by Government to the Bank. Another risk is the GOZ ability to meet counterpart funds obligations, a risk which is mitigated by Government s increased revenue mobilization drive, and implementation of a sector programme within the macro-economic framework and MTEF of GOZ and GOT. The MTEF, which is a 3-year rolling expenditure framework supported by donors, enhances Government ability to prioritize its expenditure and to allocate resources put together by both donors and the Government. This therefore ensures that funds are made available for the priority projects approved by Government. 7. PROJECT BENEFITS 7.1 Economic Analysis a) Methodology The Economic analysis is conducted for the road component of the project link roads, which constitute 95.82% of the total project financing; it excludes the Institutional Support and Capacity Building component. The Benefit Cost analysis was carried out using the Highway Development and Management Tools model (HDM IV). Base data on road condition, traffic, capital investment, maintenance strategies and costs updated to 2003 prices were inputted into the model. The HDM-IV allows modeling over the analysis period ( ) for each road link, the interaction between these factors in the with and with out project scenarios of respectively asphalt surfaced roads and deteriorated gravel surfaced roads. Construction works would start in 2005 and last for 18 months with the roads opening to traffic in The evaluation has been carried out using the mid July 2003 free market exchange rate of US$ 1.00 = TZS 1, Economic prices have been estimated by converting financial prices to economic using a conversion factor of 0.81*. This is a standard conversion factor which has been estimated and adopted by the World Bank and other donors for Tanzania for the transport sector. The measures of project worth used in the analysis are the EIRR, NPV and BCR. The evaluation has adopted a discount rate of 12.0% which reflects the opportunity cost of capital in Tanzania (See Annex 5 and details of methodology in the PID). National Planning Parameters based on Economic and Sector work ( ) for the 10 Y-RSDP (2001/ /11)

45 32 b) Costs and Benefits Investment in the six roads that made up the project was subject to specific Cost-Benefit Analysis. The costs taken into account are the Road Agency costs in the with and without project scenarios, estimated road link by road link and for the overall road network that constitute the project. These Road Agency costs are the capital investment costs and the recurrent costs of maintaining the road links. The estimated economic capital investment cost in 2005 is estimated as USD million, which is equivalent to USD million discounted to 2003 consisting of the base cost for civil works, consulting services for supervision, project audit services and physical contingencies. The recurrent costs are made up of routine and periodic maintenance expenses for the road links. The incremental recurrent costs over the project life cycle is estimated at USD million in economic terms which is equivalent to about USD 0.02 million per annum The benefit streams for the six link roads that made up the project consist of vehicle operating cost savings for normal, generated and diverted traffic and travel time cost savings estimated as USD million during the project life cycle. The analysis period is 20 years and residual value of 10.0% of initial capital investment has been taken into account as benefit at end of project life cycle in the analysis. (See Annex 5 and details on stream of benefits and costs in PID). c) Result of Cost Benefit Analysis The results of the Base Case Cost Benefit Analysis for the project network of six link roads indicated that the project is viable on all indices of project worth with a NPV of USD million, a Benefit/Cost Ratio of 1.67 and an aggregate EIRR of 19.4% that is above the opportunity cost of capital of 12.0 % for Tanzania. One of the six road links (Kinyasini Tunguu road) has an EIRR of 9.5% which is marginally below the 12.0% opportunity cost of capital of 12.0% for Tanzania. This link can be justified on the need for network density and access considerations to social and economic activities for the rural population in its zone of influence. Particularly the success of the planned large scale rice scheme to the east of the Kinyasini Mchangani section, will depend on improvement of this road. On network basis, the overall project is viable with an aggregate EIRR of 19.4%, which is above the opportunity cost of capital in Tanzania of 12.0%. (See Annex 5 for Summary Base Case Economic Evaluation Results). 7.2 Sensitivity Analysis A sensitivity test on the base case EIRR of 19.40% was undertaken. A 10% increase in capital investment cost would reduce the base case EIRR for the overall project from 19.4% to 17.95% while a 10.0% reduction in benefit will lower the EIRR to 17.7%. The combined effect of 10.0% increase in capital investment cost and 10.0% reduction in benefits would result in an EIRR of 13.3% for the project which is above the opportunity cost of capital of 12.0% for Tanzania The analysis of switch value for capital investment cost and benefits is undertaken for the whole intervention. The result indicated that, construction cost would increase by over 66.5% before viability is threatened while benefits would have to reduce by over 39.9% before EIRR fall below the threshold of 12.0% opportunity cost of capital in Tanzania. The level of traffic (benefits) is the most sensitive to watch, as a drop in traffic of about 40.0% would threaten project viability. However as moderate (central) traffic growth assumptions had been used and the results from past traffic growth trends on the network indicated higher growth rates than used in the analysis, such magnitude of drop in traffic levels is most unlikely. In addition, the results from similar projects implemented in Zanzibar indicate tendency for higher traffic growth rates after project roads are put

46 33 under traffic use. With respect to capital investment cost, project costing has been a result of detailed engineering design studies and cost estimates are comparable to those on current contracts. On top of this, physical contingency provision has been taken into account in the analysis; thus the possibility of such a high increase in construction cost is not expected. 7.3 Social Impact Analysis Given the context of Zanzibar economy, which is largely based on rural high density population, the majority of which engage in subsistence agriculture, with few exports, limited artisanal enterprises and tourism; the poor state of existing road network is an additional handicap to the enhancement of socio-economic development and poverty reduction. The poor state of the roads contributes to loss of productive time through difficulties of travelling and finding transport. The project will generate a passenger time cost savings of over USD 7.28 million at 2003 prices during its life cycle. This represents the estimated benefit of increased access to social-economic facilities including school, health centres and markets and income from other productive endeavours. The travel time savings will also lead to reduced damage to perishable products. This access to resources and opportunities at least cost to the economy will improve the quality of life of the people as inputs and extension services will reach farmers at a lower cost and farm gate prices will improve with better access to urban markets The nation s economy will derive much revenue from better access to tourist sites, and the project roads will encourage private sector investment in this sector. Current studies have estimated the tourism impact benefits of the Zanzibar road network improvement as increasing from USD 13.3 million in 2003 to USD million in 2009 for which about 15-20% is attributed to the project road network. During the construction phase, more job opportunities will be open that will require hiring of skilled and unskilled workers, some of whom can be recruited locally with about 3.0% 5.0% of project costs representing payment of wages to labour. The project works will also create indirect employment in terms of additional employment generated for catering and other services to the work force. This will have multiplier effect in the economy of the project zone of influence. 8. CONCLUSIONS AND RECOMMENDATIONS 8.1 Conclusions The project is in line with the Government s stated policy on roads infrastructure development to provide effective support for its economic growth and poverty alleviation objective. The project is also consistent with the Bank Group Strategy Paper for 2002/2004 period which focuses on poverty alleviation with rural infrastructure development and capacity building as the major priority areas of intervention for Tanzania. It is technically feasible, economically viable with an EIRR of 19.40%, which is above the opportunity cost of capital in Zanzibar. It would also support development efforts in other sectors of the economy particularly, agriculture and tourism.

47 Recommendations It is recommended that a loan not exceeding UA16.22 million from ADF resources and a grant not exceeding UA 0.71 million from ADF-Grant resources be extended to the United Republic of Tanzania to finance the full foreign exchange component of the project costs as well as 55.17% of the local costs of civil works, resettlement and related consulting services for the purpose of implementing the project as described in this report, subject to the loan and grant conditions below: A. Conditions Precedent to Entry into force of the Loan Agreement The entry into force of the Loan Agreement shall be subject to the fulfillment by the Borrower of the provisions of Section 5.01 of the General Conditions applicable to Loan Agreements and Guarantee Agreements of the Fund. B. Condition Precedent to First Disbursement The obligations of the Fund to make the first disbursement of the Loan shall be conditional upon entry into force of the Loan Agreement and the fulfilment of the Borrower of the following conditions. The Borrower shall have: (i) (ii) (iii) (iv) Nominated from the Directorate of Roads of the MOCT, a Civil Engineer, whose qualifications and experience are acceptable to the Fund, to co-ordinate and monitor the project during implementation; (5.2); Provided evidence satisfactory to the Fund, that the principal officers of the Road Fund Administration, namely: Head of Administration, Fund Accountant and Technical monitoring team comprising at least one engineer, have been recruited; (3.4.4); Provided an undertaking that it will meet, through the Road Fund, 95% of network maintenance budget, not later than fiscal year 2006/7; (3.6.5); and Provided an undertaking that the people affected by the project shall be properly relocated and adequately compensated in accordance with the Resettlement Plan prior to the construction of each road section. (4.7.5). C. Other Conditions of the Loan The Borrower shall in addition: (i) (ii) Annual reports, not later than 6 months after the end of the fiscal year from PY1, a road fund revenue and a road maintenance budget confirming that as from fiscal year 2006/7, 95% of network maintenance budget has been met through the Road Fund; (3.6.5); Annually, evidence of adequate budget for the implementation of the Mahonda- Mkokotoni road section until it is completed; (4.5.6); and

48 35 (iii) Adequate proof prior to the construction of each road section that the people affected by the project have been adequately compensated and resettled according to the Resettlement Plan. (4.7.10). D. Conditions Precedent to Entry into force of the Protocol of Agreement The Protocol of Agreement shall enter into force on its signature. E. The Conditions of the Grant The obligation of the Fund to make the first disbursement of the Grant shall be conditional upon the following: (i) The Recipient shall establish from the MOCT, the list of staff from the DOR and CODAP to be trained under the Institutional Strengthening and Capacity Building in the identified areas of need and whose qualifications and curricula vitae are acceptable to the Fund. (4.5.10).

49 MAP OF ZANZIBAR (UNGUJA ISLAND) ZANZIBAR ROADS PROJECT ANNEX 1 Page 1 of 2 This map was provided by the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgment concerning the legal status of a territory nor any approval or acceptance of these borders.

50 MAP OF ZANZIBAR (UNGUJA ISLAND) ZANZIBAR ROADS PROJECT ANNEX 1 Page 2 of 2 Key! Project Roads This map was provided by the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgment concerning the legal status of a territory nor any approval or acceptance of these border

51 ORGANISATION CHART FOR MINISTRY OF COMMUNICATIONS AND TRANSPORT - ZANZIBAR ANNEX 2 MINISTRY OF COMMUNICATION & TRANSPORT PRINCIPAL SECRETARY DEPUTY PRINCIPAL SECRETARY DIRECTOR OF CIVIL AVIATION DIRECTOR OF PLANNING & ADMINISTRATION DIRECTOR OF ROADS DIRECTOR OF Traffic & Licensing (DTL) GENERAL MANAGER Zanzibar Shipping Corporation (ZSC) DIRECTOR GENERAL OF PORTS CORPORATION HEAD CODAP FINANCIAL ADMIINISTRATOR PROJECT COORDINATORS TA Accountant CONSTRUCTION SECTION MAINTENANCE MECHANICAL PLANNING & DESIGN WORLD BANK OTHER OPEC/BADEA /ADB CONTRACTS FORCE ACCOUNT

52 TANZANIA Zanzibar Roads Project ANNEX 3 Provisional List of Goods and Services Category A. Civil Works (Total) -Lot A -Lot B B. Consultancy Services: -Supervision - Audit C. Institutional TZS billion UA million Financing UA Million F.E L.C Total F.E L.C Total ADF TAF GOT Total Strengthening & Capacity Building D. Resettlement Total Base Cost Physical Contingency Price Contingency Total (Exchange Rate: 1UA=US$ =TZS )

53

54 A: CONSULTANCY SERVICES Preparation and Approval of RFP Preparation and Approval of the Shortlist Issue of RFP Reciept of RFP Evaluation and Approval by ADF Award of Contract Commencement of Consultancy Services Completion of Consultancy Services TANZANIA ZANZIBAR ROADS PROJECT IMPLEMENTATION SCHEDULE ANNEX 4 YEARS QUARTER 1 st 2 nd 3 rd 4 th 1 st 2 nd 3 rd 4 th 1 st 2 nd 3 rd 4 th B: CIVIL WORKS Preparation and Approval of Tender Documents Call for of tenders Reciept of tender Evaluation of Tenders Approval of Evaluation Award of contract Commencement of works Completion of works C: INSTITUTIONAL STRENGTHEING AND CAPACITY BUILDING Preparation and Approval of RFP Preparation and Approval of the Shortlist Issue of RFP Reciept of RFP Evaluation and Approval by ADF Award of Contract Commencement of Consultancy Services Completion of Consultancy Services

55

56 TANZANIA ZANZIBAR ROADS PROJECT SUMMARY TRAFFIC AND ECONOMIC ANALYSIS ANNEX 5 Page 1 of 4 a) Methodology and Assumptions for Economic Evaluation i) Methodology Appraisal has been made using the HDM IV model developed by the International Study of Highway Development and Management tools. The HDM IV allows modeling over the analysis period of 20 years of each of the links and for the whole project the interaction between traffic volume and composition, road condition, geometry and characteristics and vehicle operating costs for the with and with out project scenarios. The base year for economic evaluation is taken as 2005, the year in which construction is assumed to commence with a construction period of 18 months and first year of traffic in 2006 with analysis period going up to All appraisal components have been inputted into the model in USD; output values are in Tanzania shillings (TZS) at a current rate of exchange at appraisal in July, For economic analysis, financial construction and maintenance costs have been converted into economic costs by applying a conversion factor of 0.81*. This is a standard conversion factor which has been estimated and adopted by the World Bank and other donors for Tanzania for the transport sector. Details on how this factor is arrived at are in the PID. The measures of project worth used are the EIRR, NPV & BCR at 12% discount rate given the opportunity cost of capital of 12.0% in Tanzania. b) Appraisal Assumptions i) Maintenance Strategies Maintenance of the existing road has been intermittent. The maintenance strategies incorporated into the economic evaluation are as follows: Without project do minimum: which is essentially the historic maintenance practice strategy comprising routine maintenance of a grading frequency of once a year and spot re-gravelling of 30m3 per km per year. With project paved standard: involves routing maintenance, patching 50 percent of the damaged surface each year, and an overlay every 8 years. ii) Residual Values Residual values are likely to have analytical significance and have been assumed as 10.0% of original investment capital; thus credited to the project in the final evaluation year of National Planning parameters based on Economic and Sector work ( ) for the 10 Y-RSDP (2001/02 210/11)

57 iii) Costs and Benefits Annex 5 Page 2 of 4 The costs taken into account are the Road Agency costs in the with and with out project scenarios which include both the cost of maintenance and the investment cost of upgrading the gravel road to an asphalt surface standard. These costs taken into account include the base cost for civil works plus the physical contingencies, consulting services for supervision of works and for project audit as indicated in Chapter 4. The financial contingencies, which do not constitute consumption of economic resources, are not taken into account. The benefits taken into account in the analysis include road user benefits which include voc benefits accruing to normal and generated traffic on the 6 link roads; an insignificant diverted traffic on Mahonda Mkokotoni road (see 4 of 4), and travel time savings in the with and with out project scenarios. Accidents cost benefits resulting from the road improvement have not been taken into account as the profile and frequency of accidents is not available. The details on the estimation of each category of benefit and the streams of costs and benefits over the evaluation period are in the Project Implementation Document (PID). C) Results of Benefit Cost Analysis i) The Base Case Results of the Base Case Benefit Cost Analysis, on the basis of the medium traffic forecast indicated an Economic Internal Rate of Return (EIRR) of 19.4% that is above the opportunity cost of capital of 12.0% for Tanzania. Though one of the road links has an EIRR of 9.5% yet this link is still acceptable on the basis of network density and social-service coverage that it would support in its zone of influence. Detailed results of the Base Case results on the basis of all measures of economic worth for the six link roads and for the project as a whole are as indicated here under. HDM IV run results are in the PID. Summary of Base Case Economic Evaluation Results (US$ million, Years ; discounted to 12.0%) Road link& Section Estimated Project Cost (2005) Project Costs, Discounted to 2003 Discounted Benefits Value, 2003 NPV BCR EIRR (%) Mfesenisini Bumbwini: Kinyasini Tunguu Zanzibar Dunga Zanzibar Fumba Mahonda Mkokotoni Paje Makunduchi Over all network of six link roads Source: ADF Appraisal Mission July/August 2003

58 ii) Sensitivity Analysis Annex 5 Page 3 of 4 Sensitivity testing has been made on the results of the base case EIRR of 19.4% estimated for the project. The results given in the table hereunder indicated that in all cases, the project is satisfactorily robust for Zanzibar with an EIRR of over 12.0%. Sensitivity Analysis on Base Case EIRR % Change from Scenarios % Base case Base Case 19.4 Capital Cost increased by 10.0% Benefits reduced by 10.0% Combination, 10% increased cost and 10% decrease in benefit In addition to the sensitivity tests above, switch values for investment costs and benefits have been calculated as part of economic viability analysis. The switch value for capital investment cost and for Road User Benefits, which would result in an EIRR of 12.0% or NPV of zero for the project, has been estimated. A more than 66.5% increase in investment cost indicated that the project would not be economically viable while a more than 39.9% reduction in road user benefits will not make the project attractive. Traffic levels (Road User Benefits) constitute the most critical factor to watch. However a central traffic growth assumption has been used which is about half of current traffic growth rate indicating that viability of the project would not be threatened. Construction costs would also not go up to more than 66.5% as project cost estimates are based on detailed engineering design study and physical contingency provision of about 10.0% has been taken into account in the economic analysis. Switch Values for Investment Costs and benefit for EIRR of 12.0% and NPV = 0. Switch values for construction cost & benefit Switch values for construction cost & benefit Case (EIRR of 12.0%) NPV = 0 USD mn. Base Case - EIRR 19.4% Capital Investment cost 66.5% 0.0 Road User Benefits % 0.0

59 Annex 5 Page 4 of 4 A) Project Base Traffic 2001 (AADT) Project Road & Section Mfenesini Bumbwini Mfenesini Mangapwanib Jct. Mangapwani Jct, - Mangapwani Mangapwni Jct. - Bumbwini Kinyasini Tunguu Kinyasini South Mchangani Mchagani Dunga Dunga South - Tunguu Zanzibar Dunga Zanzibar (Amani) Kianga Kianga Kidimni Kidimini - Dunga Zanzibar Fumba Zanzibar (K. Samaki) EPZ Jct. EPZ Jct. - Fumba Passenger Vehicles Goods Vehicles Total Vehicles Motor Cycles Mahonda Mkokotoni Paje - Makunduchi Source: Zanzibar Roads Study Report, April 2002/ADF Appraisal Mission, July/August Grand Total B) Vehicular Traffic Forecast ( ) (AADT) Road link & Section Mfesenisini Bumbwini: Mfenensini Mangapwani Jct Mangapwani Jct. Mangpwani Mangapwani Jct. - Bumbwini Kinyasini Tunguu Kinyasini South Mchangani Mchagani Dunga Dunga South - Tunguu Zanzibar Dunga Zanzibar (Amani) Kianga Kianga Kidimni Kidimini - Dunga Zanzibar Fumba Zanzibar (K. Samaki) EPZ Jct. EPZ Jct. - Fumba Mahonda Mkokotoni Paje - Makunduchi Source: Study Consultant and ADF Appraisal Mission, July/August 2003

60 ANNEX 6 Page 1 of 4 ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN SUMMARY Project Title: ZANZIBAR ROADS PROJECT Country: TANZANIA - ZANZIBAR SAP PROJECT NUMBER: P-TZ-DB0-015 Department: ONIN Division: ONIN.3 CATEGORY: 1 a) Brief description of the project and key environmental and social components The project consists of the following components: (i) Construction works for four bridges and upgrading of five gravel roads in 5 districts, to asphalt concrete standard, with 6.0 m wide carriageway and with 1.0m to 1.5m wide shoulders on each side for a total length of km. This includes the following road sections: Zanzibar Town (Manzizini)-Fumba Road (17.81 km); Kinyasini-Tunguu Road (26.77 km); Zanzibar Town (Amani)-Dunga Road (12.75 km); Mfenesini-Bumbwinini Road (13.10 km); Paje- Makunduchi Road (17.0 km); and Mahonda-Mkokotoni (4 bridges - the road is financed by Government). (ii) (iii) Consultancy services for: Supervision of construction works; and Project Audit Services, and Institutional Strengthening and Capacity Building for MOCT by providing Technical Assistance and Training. In their current condition, the roads are in a highly deteriorated condition and have negative economic and social effects: a) Economic effects of current bad roads: loss of productive time; restricted access to markets and possibly greater dependence on middlemen; additional product cost and possible loss of product quality; reduced employment in catchments area; disincentive to women to become engaged in selling, traditionally the male role; and b) Social effects of current bad roads: restricted freedom of movement; barrier to ready accessing of health or education facilities; reduced amenity and standard of living. The overall benefits and positive impacts of the project aim at alleviating, reducing and eliminating these problems that are namely remoteness from Zanzibar and the other administrative centers, remoteness from markets, difficulties of accessing health and education facilities, all these impede the people of the area from sharing in the development and increasing prosperity of their island. b) Major environmental and social impacts The without project scenario for these roads shows: 1) Increased isolation as this already remote and extremely poor area is unable to participate fully in the island s economy; 2) Inability to participate fully in planned tourism growth, impeded by poor access. Increased conflict between growth in tourism, as already established along the northern stretch of the coast, and traditional society and 3) Increasing social isolation and further depressing of standard of living and quality of life as population continues not to be able to readily access health, education and other facilities in either Makunduchi or Zanzibar Town. Impacts are expected from Quarrying, Land-take, Bridging of the Mwera, embankment, ecology and conservation, noise, pollution and waste, and possible gender issues. The impacts are generally considered tolerable as adequate mitigation measures are proposed, and an Environmental and Social Management and Monitoring Plan (ESMMP) framework is included in the EIA report, that lays out activities, timing and institutional responsibilities. During the course of the project MOCT s Senior

61 ANNEX 6 Page 2 of 4 Project Counterpart and Coordinator and the Director of Women s Affairs should maintain liaison with the district administration, the Shehias, the communities and women. Road rehabilitation and improvement will very largely be able to be achieved within existing right of way corridors with two exceptions: At Mazizini on the Fumba road, which will be diverted onto the alignment of an existing gravel road to pass to the north and east of an earlier extension to the airport runway before rejoining the former alignment at Kisauni; Minor realignments requiring new right of way acquisition where safety is an issue, where sight lines and/or road geometry are poor. Land loss is expected at almost all road stretches with varying importance from a road stretch to another. Compensation for land loss will be applied according to GOZ procedures. There is awareness in Government as in the community that previous examples of unacceptably delayed compensation payments cannot be repeated. The Mwera river system lying west of center in the island is an important groundwater recharge area. It lies in and forms part of the Bumbwini corridor. The aquifer here is thought to be a steps and stairs type. Groundwater resources are vulnerable to pollution from any wastes discharged anywhere in the area, as the largely sand and coral derived soils are generally very permeable. The water table is relatively high and fresh water at about 20 meters depth overlies brackish. The water table at Mwera is higher, found at about 18 meters. A special EIA study has been carried out for the Mwera bridge area. Regarding the sensitive marine and coastal ecosystems, four habitats are critical among the coastal and marine ecosystems: The coral reefs surrounding virtually the whole island with the greatest width and most pristine condition being off the east coast were the reefs are as wide as 1-2 kms. It is thought that the reefs rank among those with the greatest biodiversity in East Africa. The mangrove forests are more heavily exploited in Unguja than Pemba and there have been losses in biodiversity (productive coastal fishing is closely associated with mangrove) and resource. There are no mangroves in the relatively un-indented coastline south of Paje with its greater exposure to the sea. Sea-grass beds which have a value as fish nurseries and habitat Sandy beaches in general use for fishing activities etc and some of which are important sea turtle nesting sites. It is important that there be ongoing liaison throughout the project between the various stakeholders. It is proposed that MOCT s Senior Project Coordinator and the Director of the Department for Women s Affairs in the Ministry of Youth, Employment and Women form the main publicized points of contact and project monitors. This is essentially a benign project which with careful design and good supervision, should generate impacts on the physical environment and on people which are at best negligible and at most, tolerable. Furthermore this is the first infrastructure project in Zanzibar where there has been consultation. The consultation exercise was extremely successful and concerns and perceptions about the project were well articulated and have helped to shape this assessment. The assessment is thus reasonably robust and the main potential impacts have all been considered.

62 c) Enhancement and mitigation program ANNEX 6 Page 3 of 4 Quarrying: needs Best Practice during works restoration post works, joint working with Department of Environment (DOE) and implementing lessons learnt from previous quarrying. After roads construction, the quarries should be rehabilitated to eliminate the risks of accidents, erosion, land slide, creation of diseases vectors breeding sites (mosquitoes & bilharzias). The responsibilities of this measure fall on MOCT with DOE, Dept of Commercial Crops, Fruits, Forestry and District Offices. Bridging & Embankments: because of the proximity of the wetlands, design for Mwera River Bridge was done with greatest care and full liaison with stakeholders. Best practice approach was adopted in all bridging works to avoid disturbance to watercourses, springs, and banks. Construction of the bridge should minimize erosion and silting. The bridge approach and the bank were properly shaped and plated/grassed. Responsibilities for proposals and implementation fall on the Consultant & the MOCT with DOE. Land Take: relocation/compensation procedures for loss/displacement are undertaken prior to project inception (first disbursement), with fullest inter-departmental coordination. A comprehensive study has been undertaken to identify the nature and level of compensation required, and a Resettlement plan prepared. Implementation of relocation/compensation is conditionality by AfDB. Responsibilities: limited Consultant input, MOCT spearheading inter departmental and community liaison. Ecology & Conservation: measures to inhibit soil or coastal erosion; preservation of important tree specimens; reducing small animal kills. As well measures should be taken to eliminate any threats on wetlands, groundwater resources and polluted runoff reaching the sea and coral belts. Proposals from Consultant, and implementation by DOE, DoF. Groundwater Resources: The importance of the Mwera river system as a recharge area means that extra care must be taken to ensure no spillages of toxic materials or wastes and that stringent waste disposal procedures from site are in place. The Department of the Environment and the Water Department must be fully consulted during design and there must be ongoing liaison with the District Office at Koani and the Shehias to ensure that any local water needs based on abstraction from the river are preserved. The main bridges will require some new piers within the streambed and normal construction techniques will control short-term sedimentation. Good site practice and proper disposal of wastes should ensure that there is no contamination. Consultation with the Water Department will ensure that seasonal or permanent springs are not interfered with by, eg any new embankments required. Noise, Pollution, Wastes: contractor Good Practice to be specified and supervised. Responsibilities: Consultant, MOCT. Gender: equal employment opportunity; safety for pedestrians, especially women, disabled, schoolchildren; women s market stalls at road junctions shall be promoted and expanded daradela routes. Responsibilities: MOCT, Min. Youth, Employment, Women. Villagers & Farmers: waiting areas and space for crop loads at feeder road junctions; design for loaded, foot and bicycle traffic; safety; expanded daradela routes. Provide safe market & small business areas along the roadside to avoid disorganized and risky implementations. Responsibilities: Consultant, MOCT. Liaison & Cooperation: ongoing coordination and consultation with shehia, villagers, women; Dept of Women, DOE, District Offices by Consultant, MOCT, Min Youth, Employment & Women, DOE. AfDB s attention is drawn to the importance of further assistance to ensure the fullest distribution of socio-economic benefit from the project and to ensure that the needs of the poorest are met: a) feeder road upgrade within the corridors of the five project roads; and, b) rehabilitation and upgrading of the Paje/Makunduchi road.

63 ANNEX 6 Page 4 of 4 d) Monitoring program and complementary initiatives Project Implementation Team will undertake monitoring in close collaboration with all the other stakeholders. During the various meetings conducted with sectors Environmental Commission, Forestry, Fisheries and Water Development Departments it appears that all of these departments have strong interest in monitoring and controlling the risks related to the project on the natural resources under their management authorities. The teamwork will include among other activities, participation in the borrow sites selection; monitoring and rehabilitation to make sure that the risks are minimized. e) Institutional arrangements and capacity building requirements The institutional arrangements and responsibilities are identified above in paragraph (c) enhancement and mitigation program. f) Public consultations and disclosure requirements Four district and village consultations were held with the assistance of the respective District offices and these were attended by District officers, Shehias (traditional society village leaders), selected villagers (including women s group representatives) and by the Director of Affairs for Women, Children and Youth. The Senior Counterpart and Project Coordinator chaired these meetings for the project. The Director of the Department of the Environment was consulted on the procedure on the environmental and social concerns. The officer responsible for Natural Resources Management participated in one of the site visits to further discuss key impacts, their handling and the Department s preferred approach to mitigation. It is noted that the roads project is the first in Zanzibar where there has been preparatory consultation with the Department of the Environment and where there has been district administrative and villager consultation. The format of this EIA Study therefore takes the needs of the Department into consideration as well as answering the African Development Bank s TORs to the greatest extent possible. g) Estimated costs For cost of mitigation of adverse impacts, only the cost of Resettlement can be seen standing alone. All the other costs of mitigation are imbedded in road design and construction. Cost estimate for Resettlement has been accurately determined in the Resettlement plan for a Total Compensation Amount of TSh.1, 462,571,559 (UA 1,015,905). h) Implementation schedule and reporting The Environmental and Social Management and Monitoring plan will be integrated to the project implementation guidelines, and implemented in accordance with the project schedule of activities as impacts and mitigation measures are dependant on the activities. The implementation will be reported in the project quarterly reports.

64 SUMMARY OF EXISTING PORTFOLIO ANNEX 7