RESTRUCTURING PAPER ON A

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank RESTRUCTURING PAPER ON A Report No: AR PROPOSED PROJECT RESTRUCTURING OF ARGENTINA BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II LOAN No AR BOARD APPROVAL DATE: JUNE 28, 2007 TO THE PROVINCE OF BUENOS AIRES WITH THE GUARANTEE OF THE ARGENTINE REPUBLIC SEPTEMBER 8, 2011

2 ABBREVIATIONS AND ACRONYMS AF APL APL1 APL2 DPV HT IERR ISR IMPH IRI MS PAD PDO PP RP RPF TBA WSS Additional Financing Adaptable Program Loan First Phase of the APL (P105288) Second Phase of the APL (P105288) Provincial Road Agency High Traffic Internal Economic Rate of Return Implementation Status Report Index of Household Material Deprivation Investment Roughness Index Moderately Satisfactory Project Appraisal Document Project Development Objective Project Paper Provincial Roads Resettlement Framework Trenes de Buenos Aires (Buenos Aires Trains) Water Supply and Sanitation Regional Vice President: Pamela Cox Country Director: Penelope J. Brook Sector Manager: Guang Zhe Chen Task Team Leaders: Carlos E. Velez / Elisabeth Goller 2

3 ARGENTINA: BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II CONTENTS Page I. SUMMARY... 4 II. PROJECT STATUS... 4 III. PROPOSED CHANGES... 4 ANNEX 1: RESULTS FRAMEWORK AND MONITORING... 9 ANNEX 2: REALLOCATION OF PROCEEDS ANNEX 3 SOCIAL ASSESSMENT

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5 ARGENTINA: BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II I. SUMMARY RESTRUCTURING PAPER 1. This is a level one restructuring in order to trigger the involuntary resettlement safeguard policy (OP/BP 4.12). In addition, the following changes have been made: (i) revising the scope of selected Project activities to adapt them to the current financial situation; (ii) revising the outcome indicators to better account for the revised Project scope and to facilitate monitoring of progress towards achieving the Project development objectives; and (iii) extending the Project s closing date by 18 months to August 15, 2013 to allow for the completion of all ongoing works. II. PROJECT STATUS 2. The overall purpose of the US$520 million Buenos Aires Infrastructure Sustainable Investment Development Adaptable Program Loan (APL) is to improve infrastructure services in the Province of Buenos Aires within a framework of fiscal responsibility. The APL 1 (P088032) and APL 2 (P105288) Projects support the return to a sustainable path of economic growth, poverty alleviation, and increase in social equity. 3. The Project Development Objective (PDO) of APL 2 is to improve the social and environmental welfare of approximately five million people through an improved provision of transport, water supply and sanitation (WSS), and drainage services. 4. Project implementation and progress towards achieving the PDO have consistently been rated satisfactory. To date, ten out of 16 road works and one out of 15 WSS interventions have been finalized satisfactorily. The remaining road works and the WSS interventions are respectively 69% and 77% completed. The road network is in good condition, providing better mobility to thousands of people. The WSS works have provided access to sewerage lines to more than 27,000 people. The drainage work is under execution. Under the institutional components, one of the 13 main activities is completed, one is ongoing, five are in the bidding phase, and six are in the planning phase. The Project has disbursed US$ million (78% of the loan), most activities have been contracted, and current commitments amount to about 90% of the loan funds. III. PROPOSED CHANGES 5. The March 2011 Mid-Term Review (MTR) revealed a need for Project restructuring. In particular, the MTR showed that it was essential to: (i) trigger the involuntary resettlement safeguard policy; (ii) revise the scope of some Project activities due to financial constraints; (iii) revise the outcome indicators to better account for the revised Project scope; and (iv) extend the Project s closing date by 18 months. The proposed changes are described in detail below. 4

6 Revision in the Scope of Project Activities 6. Changes in the Borrower s priorities, changes in financing sources, and delays in activity timelines led to the following changes in the scope of the project: (i) reduction in road rehabilitation and increase in road widening works; (ii) reallocation of funds from institutional activities to the WSS and drainage components; and (iii) elimination of several institutional activities under Components 4, 5 and The costs of road rehabilitation and widening in Argentina have increased substantially because of a sharp rise in the price of crude oil and related by-products, transport, labor and other inputs. Bid proposals have also been higher than the revised budget estimates, and in several cases the quantity of work items has been modified during execution. These cost increases in addition to the decision of the Borrower to prioritize a few road widening works over rehabilitation works have led the target for road rehabilitation to be reduced from 480 to 270 km under Component 1. The target of road widening works will be increased from 20 km to 35 km. Indicator Targets (in km) According to Proposed PAD Road Rehabilitation Non-Concessioned Interurban Primary Network Non-Concessioned Primary Paved Network in Conurbano Bonaerense Accesses to Ports 11 0 Accesses of Non-Concessioned Secondary Paved Network (Accesses to Communities) Road Widening and Rehabilitation As with the road works, the costs of WSS and drainage works have also increased. Funds freed by the elimination of a number of institutional activities were allocated to cover these cost increases. Consequently, the targets in terms of water supply service and sewerage service lines built remained substantially unchanged. 9. The institutional activities that will remain within the Project s scope are as follows. Under Component 4: (i) the design of master infrastructure investment plans and/or strategic infrastructure interventions; (ii) the preparation of infrastructure feasibility studies and/or final engineering designs; and (iii) the implementation of selected recommendations from the Coastal Erosion Control Study. Under Component 5: (i) analytical work to identify sectors and regions likely to play a fundamental role in provincial development; (ii) the design of territorial guidelines and/or policies aimed at improving competitiveness and employment opportunities; and (iii) the strengthening of the Borrower s institutional capacity to implement private sector development policies. Under Component 6: (i) the provision of technical support to the Provincial Road Agency (DPV), the Provincial Directorate for Water and Sewerage, and the Provincial Sanitation and Hydraulic Directorate to assist the Ministry of Infrastructure supervise and monitor subprojects, to plan and design future infrastructure investments, and to design and implement policies for the control of axle loads; and (ii) the provision of technical support to the 5

7 Borrower to strengthen agencies devoted to regulating and controlling the provision of public services and road safety. 10. The following institutional activities were eliminated from the Project s scope for the following reasons. Under Component 4: the traffic congestion solution study associated with the increase in port activities since the contracting of a Port Master Plan within the framework of APL1 made the study redundant. Under Component 5: the pilot implementation of policy recommendations from the competitiveness and employment studies because it has taken longer than expected to define these studies and the recommendations, which are the final result of the studies, will not be available in time to be implemented under this Project. Under Component 6: (i) the requirement for technical audits given that the implementation capacity of the agencies involved in the Project, especially the capacity of the DPV, has improved substantially; (ii) the implementation of an action plan generated from the institutional diagnostic of the DPV since this entity is now regularly monitoring road network conditions, is allocating adequate resources to road maintenance, and is moving towards results oriented management techniques through performance-based rehabilitation contracts; and (iii) the strengthening of the financial management system since, in carrying out this activity, the Borrower did not require new technologies or external consultants. 11. A comparison between the original and the proposed reallocation of Project costs by components is given in the table below. The reallocation of loan proceeds by expenditure category is presented in Annex 2. Project components According to PAD, but including cancellation* Proposed Project costs Financing Project costs Financing 1. Road Component Water and Sanitation Component 3. Drainage Component Engineering and Technical Studies 5. Competitiveness and Job Creation 6. Institutional Capacity Building TOTAL *US$ 5.9 million of the loan amount and the corresponding counterpart funds were cancelled from the Project. Revision of Results/Indicators 12. The target value for the outcome indicator for the preservation of high traffic road assets will be increased from a High Traffic Investment Roughness Index (HT IRI) of 3 to a HT IRI of 3.3 to align it with the target value of APL 1. The target values for the output indicators of 6

8 Component 1 on road rehabilitation and widening will be adjusted in the manner described in paragraph The outcome indicator to measure enhanced access to WSS services will also be revised because the original indicator was designed to measure the Project s impact on reducing waterborne diseases. The reduction of waterborne diseases is an outcome of improved WSS services, but it is not the most appropriate indicator of increased WSS access. The new outcome indicator will be the additional number of poor people with access to: (i) water connections; (ii) available sewerage service lines; and (iii) active sewerage connections. The Project s beneficiaries will continue to be poor neighborhoods as defined by the Index of Household Material Deprivation (Indice de Privación Material de Hogares, IPMH). This change was already implemented in the APL1; therefore, the indicators of the two APLs will become compatible. For the indicator of Component 2, the same overall target will be kept, but it will be separated into water supply and sanitation to allow for more accurate monitoring. 14. Component 3 is financing subprojects consistent with an integrated urban drainage basin approach. While the Bank is primarily financing the optimization and expansion of macrodrainage infrastructure (already contracted and under execution), the micro-drainage infrastructure investments will be financed by other provincial and municipal funds. The impacts in terms of flood persistence times (original indicator) will not be fully noticed until September 2013 because the micro and macro drainage will not be operating together until that time. Based on this context, the outcome indicator of improved flood management capacity will be removed. However, the component level indicator related to drainage (ha of improved drainage) will be kept and its target is expected to be achieved. 15. The Coastal Erosion Control Study, currently being developed in APL 1, is expected to be ready by early As a result of the late start of this study, investment designs will not be generated from this study. Therefore, the related indicator will be changed from creating investment designs to monitoring the implementation of selected recommendations resulting from the Coastal Erosion Control Study. A second indicator for Component 4 regarding the infrastructure master plans with corresponding feasibility studies and final engineering designs completed as part of the strategic framework will be dropped as the master plans were carried out by the Borrower without any involvement by the Bank, and it is currently not a priority for the Borrower to implement the corresponding feasibility studies and final engineering designs. 16. The indicator related to Component 5, 75% of key recommendations from the Strategic Evaluation of the Province (APL 1) implemented, will be removed since the related study was dropped from APL 1. For the second indicator, Economic Development Sector Studies completed, the target values will be reduced to adjust them to the Borrower s ability to reach them. 17. The indicators related to Component 6 will be changed to number of agencies benefiting from the project and number of activities to strengthen the agencies involved in the project due to the evolving needs of the Borrower in terms of institutional strengthening. 18. Annex 1 presents the revised results framework. 7

9 Triggering of Involuntary Resettlement Safeguard Policy 19. Given the nature of the Project, involuntary resettlement was not anticipated at the time of appraisal. However, a case of involuntary resettlement arose during implementation, and the Borrower handled it satisfactorily. Cases of involuntary resettlement in the future are unlikely, but they could arise during the implementation of Project components that require civil works. For this reason, in APL 2, the Borrower updated the Resettlement Framework (RPF) developed during the preparation of the Additional Financing Loan for the APL 1. This RPF, dated August 15, 2011, will be applied should any resettlement be necessary during the remaining life of the APL 2. The RPF includes the eligibility criteria for compensation and assistance that will be available to potentially affected people, as well as, dispute and resolution mechanisms. 20. As shown in detail in Annex 2, the resettlement implications of the road rehabilitation work contract modification on Provincial Road 4 include: (i) the relocation of five informal shops to enhance the accessibility of the Industrial Park Suárez; (ii) modifications to the entry to the Industrial Park; (iii) the reduction of 7.5 m wide and 100 m long area of grassland areas in a recreational park to build an access road; and (iv) the relocation of the entry to a construction materials shop. 21. The DPV has been addressing these impacts appropriately. They built five new, permanent shops to replace the displaced shops. They also modified the entry to the Industrial Park according to the needs of the firm. They enhanced the facilities of the recreational park to compensate for the reduction of grassland areas, and they designed a new entry to the construction materials shop to meet the needs of the owner. 22. The DPV consulted all affected people, companies and community organizations, and they are satisfied with the measures. The Infrastructure Project Coordination Unit of the Province s Infrastructure Ministry thoroughly documented the whole resettlement process in a consolidated report. The Bank considered the report to be in line with OP 4.12 since it includes the procedures and activities that were developed to mitigate and compensate for the adverse impacts, the action plan to cover the measures that have not yet been completed, and evidence that the affected people have been consulted and are satisfied with the adopted or planned measures. Extension of Closing Date 23. The closing date needs to be extended by 18 months (from February 15, 2012 to August 15, 2013), to allow for the completion of ongoing works. Administrative delays in the signing of the contracts, contract modifications, and contract extensions due to weather conditions have delayed the execution of the works under this Project. In addition to allowing for the completion of these works, the proposed 18-month extension will allow for important institutional studies to be carried out. 8

10 ANNEX 1: Results Framework and Monitoring ARGENTINA: BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II Project Outcome Indicators High-traffic productive road assets preserved with an acceptable average roughness (HT IRI) to reduce operational and travel time costs, and avoided accumulation of future liabilities in the overall network (AVG IRI on total paved primary network) Additional poor people with access to water supply and sanitation services - People with water connections a - People with sewerage service lines b - People with active sewerage connections c Improved flood management capacity measured as flood persistence times Core D=Dropped C=Continued N= New R=Revised R R Baseline (Actual at the time of restructuring UoM number number Value HT IRI: > 3.14 AVG IRI: > Total: 8,208 - Water: 0 - Sewerage: 27,360 - Ac. Sewerage: 8,208 YR HT IRI: > 3.3 AVG IRI: > Total: 68,651 - Water: 35,000 - Sewerage: 210,764 - Ac. Sewerage: 33,651 Cumulative Target Values* YR HT IRI: > 3.3 AVG IRI: > Total: 143,755 - Water: 35,000 - Sewerage: 354,158 - Ac. Sewerage: 108,755 YR HT IRI: > 3.3 AVG IRI: > Total: 196,130 - Water: 35,000 - Sewerage: 354,158 - Ac. Sewerage: 161,130 D N/A N/A Intermediate Results YR4 N/A N/A N/A YR5 N/A N/A N/A Intermediate Result (Component 1): Rehabilitate and upgrade high priority segments of the provincial primary road network (interurban and urban), improve access to selected ports and communities and increase road safety. 9

11 Revised Intermediate Result (Component 1): No changes One: 270 Km of roads rehabilitated Two: 35 Km widened (4 lane road) Three: 2 Intersections enhanced R number N/A N/A R number N/A N/A C number N/A N/A Intermediate Result (Component 2): Increase water and sanitation for low income households Revised Intermediate Result (Component 2): No changes One: Number of water supply services lines built by the project in poor C number 7,309 9,114 9,114 9,114 N/A N/A neighborhoods (IPMH > 40 percent) Two: Number of sewerage service lines built by the project in poor C number 52,683 77,745 87,861 87,861 N/A N/A neighborhoods (IPMH > 40 percent) Intermediate Result (Component 3): Reduce the risk of flooding with structural and non-structural actions Revised Intermediate Result (Component 3): No changes 10

12 One: No. of ha provided with proper drainage Intermediate Result (Component 4): Prepare a pipeline of eligible investments ready for implementation Revised Intermediate Result (Component 4): Implement recommendations from Coastal Erosion Control study One: Implementation of at least one recommendation from the Coastal Erosion Control study Two: Infrastructure master plans with corresponding feasibility studies and final engineering designs completed as part of strategic framework C number N/A N/A R text Study under development Study under development Study finalized Recommendation under implementation D Intermediate Result (Component 5): Establish strategic priorities for infrastructure service development, in order to support the expected productive sector development Revised Intermediate Result (Component 5): Establish strategic priorities for economic development in order to support the expected productive sector development One: 75% of key recommendations from the Strategic Evaluation of D the Province (APL1) implemented Two: Economic Development Sector C number N/A N/A Studies completed Intermediate Result (Component 6): Strengthen institutional capacity at the provincial level to plan, procure, execute, regulate and control infrastructure development and services N/A N/A 11

13 Revised Intermediate Result (Component 6): No changes One: Number of agencies benefited from the project Two: Activities to strengthen the agencies involved in the project R number N/A N/A R number N/A N/A Core Indicators Roads rehabilitated, non-rural (km) Roads constructed, non-rural (km) Number of people in urban areas provided with access to improved water sources under the project New piped household water connections that are resulting from the project intervention Number of water utilities that the project is supporting X N number N/A N/A X N number N/A N/A X N number ,000 N/A N/A X N number 7,309 9,114 9,114 9,114 N/A N/A X N number N/A N/A a Assuming 100% connection rate. b Total available connections, 100% serviced area. c Active sewerage connections, using connection rate calculations. 12

14 ANNEX 2: Reallocation of Proceeds ARGENTINA: BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II Proceeds for the Argentina, Buenos Aires Infrastructure Sustainable Investment Development Project APL 2 financed under Loan IBRD 7472 AR, P will be reallocated as follow: Percentage of Amount of the Loan Allocated (USD) Expenditures to be Financed Category Current Category Revised Current Revised (1) Works and goods under Road Subprojects (2) Works and goods under Water and Sanitation Subprojects (3) Works and goods under Drainage Subprojects (4) Goods, consultants services and/or Nonconsultant Services under Parts 4, 5 and 6 of the Project (5) Training under Parts 4, 5 and 6 of the Project 101,100,000 (1) Works and goods under Road Subprojects 110,000,000 (2) Works and goods under Water and Sanitation Subprojects 32,400,000 (3) Works and goods under Drainage Subprojects 18,900,000 (4) Goods, consultants services and/or Non-Consultant Services under Parts 4, 5 and 6 of the Project 1,700,000 (5) Training under Parts 4, 5 and 6 of the Project TOTAL AMOUNT 264,100,000* TOTAL AMOUNT 264,100,000 *This includes a loan cancellation of USD 5,900,000 under Category (1). 101,100,000 79% 79% 112,900,000 79% 79% 36,700,000 79% 79% 12,700,000 95% 95% 700, % 100% 13

15 ANNEX 3 Social Assessment ARGENTINA: BUENOS AIRES INFRASTRUCTURE SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT PHASE II 1. No resettlement implications were envisioned for this Project, but minor resettlement issues arose during Project implementation. As a result, the involuntary resettlement policy will be triggered. 2. The Borrower prepared a Resettlement Framework (RPF) during the preparation of the additional financing to APL1. In this framework the eligibility criteria, forms of compensation, and dispute resolution mechanisms that are available to potentially affected people are detailed. This RPF was updated, received by the Bank on August 15, 2011, disclosed in country on August 17, 2011, and published in the Infoshop on August 18, The RPF will be used in this operation. 3. In September 2010, the Borrower requested the Bank s no-objection to a modification of the road rehabilitation contract on Provincial Road 4. This modification called for the construction of a new viaduct over the General Mitre railway line in the Station of José León Suárez, Municipality of General San Martin. The Original Project included the rehabilitation of the existing viaduct. However, the Borrower realized that the rehabilitation would heavily affect the traffic flow in the area for a prolonged period of time. Therefore, they decided to construct an additional viaduct parallel to the existing one. The new viaduct will be made of concrete and will be approximately 500 m long and 8.5 m wide. 4. The Borrower carried out a thorough assessment of the impacts of the construction of the new viaduct. The temporary impacts include disturbances to the traffic flow, a temporary reduction of parking spaces, and increased noise and local pollution due to the construction works for (i) the businesses and inhabitants of the area to the west and east of the José León Suárez Station; (ii) 10 informal shops in the Sociedad de Fomento 12 de Octubre; (iii) the business in the Industrial Park Suárez; and (iv) the owner of the construction materials shop. 5. The permanent impacts include: (i) the relocation of five informal shops to enhance the accessibility to the Industrial Park Suárez; (ii) modifications to the entry to this industrial park; (iii) the reduction of grassland areas in a recreational park of 7.5 m per 100 m to build an access road; and (iv) the relocation of the entry to a construction materials shop. 6. The Borrower has been addressing these impacts appropriately. The temporary impacts of the construction works have been or are being addressed through the general precautions envisioned in the environmental management plans for the road works. 7. In terms of permanent impacts, the Borrower has already constructed five new and permanent shops, each of approximately 15 to 20 m 2, to replace the displaced shops. In March 2011, the new shops were near move-in condition. The Borrower also modified the entry to the Industrial Park according to the needs of the firm. This new entryway is already in use. To compensate for the reduction in grassland area, the Borrower used special equipment to 14

16 transplant a number of trees and planted additional ones. Similarly, the Borrower enhanced the recreational facilities by installing new chairs and tables and a playground for children. Part of the unused land at the northern corner of the affected area was transformed into a park, and the whole area was fenced to provide more security. Finally, the Borrower designed the new entry to the construction materials shop to meet the needs of the owner. In March 2011, this new entry still needed to be constructed. 8. The Borrower consulted all affected people, companies and community organizations, and they declared in writing that they are satisfied with the adopted or planned measures. 9. The Borrower documented the resettlement process in a consolidated report (Remediation Report filed in WBDocs). This report includes the following: A description of the Project Components that caused social impacts; The applicable legal and institutional frameworks; A description of the socioeconomic baseline; Identification of the affected land, people and activities; Measures to mitigate or compensate for adverse impacts; and Evidence that the affected institutions, companies and persons are satisfied with the measures and do not have any grievances. 10. The Bank considered the report in line with OP 4.12 since it includes the procedures and activities that were developed to mitigate and compensate for the adverse impacts, the action plan to cover the measures that have not yet been completed, and evidence that the affected people have been consulted and are satisfied with the adopted or planned measures. 15