Public Disclosure Authorized Document of The World Bank Report No: 65071-CM Public Disclosure Authorized Public Disclosure Authorized RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE SECOND ADDITIONAL FINANCING (CREDIT 4987-CM) BOARD APPROVAL DATE: JUNE 23, 2011 FOR THE CEMAC - TRANSPORT-TRANSIT FACILITATION PROJECT TO THE REPUBLIC OF CAMEROON October 20, 2011 Public Disclosure Authorized Transport Sector Country Department AFCC1 Africa Region
ABBREVIATIONS AND ACRONYMS ADF AF BM-BAD CEMAC EC EMP ESIA EU GoC GoS IDA MINTP OP/BP PDO RAP SDR TA African Development Fund Additional Financing World Bank-African Development Bank Economic and Monetary Community of Central Africa European Commission Environmental Management Plan Environmental and Social Impact Assessment European Union Government of Cameroon Government of Spain International Development Association Ministry of Public Works Operations Policy/Bank Procedure Project Development Objective Resettlement Action Plan Special Drawing Rights Technical Assistance Regional Vice President: Obiageli Katryn Ezekwesili Country Director: Yusupha B. Crookes Sector Manager: Supee Teravaninthorn Task Team Leader: Nicolas Peltier-Thiberge
REPUBLIC OF CAMEROON PROPOSED RESTRUCTURING OF THE SECOND ADDITIONAL FINANCING (CREDIT 4987-CM) FOR THE CEMAC TRANSPORT/TRANSIT FACILITATION PROJECT P 079736 CONTENTS DATA SHEET... i A. SUMMARY... 1 B. PROJECT STATUS... 2 C. PROPOSED CHANGES... 3 Annex 1: Revised Estimate Of Project Costs... 6
REPUBLIC OF CAMEROON CEMAC TRANSPORT/TRANSIT FACILITATION PROJECT SECOND ADDITIONAL FINANCING (CREDIT 4987-CM) DATA SHEET Restructuring Restructuring Type: Level two Last modified on date : 10/21/2011 Status: Draft 1. Basic Information Project ID & Name P125915: 3A-CEMAC Transp Transit Facil (FY07) Country Africa Task Team Leader Nicolas Peltier-Thiberge Sector Manager/Director Supee Teravaninthorn Country Director Yusupha B. Crookes Original Board Approval Date 06/26/2007 Original Closing Date: 01/31/2013 Current Closing Date 01/31/2016 Proposed Closing Date [if applicable] EA Category B-Partial Assessment Revised EA Category EA Completion Date 09/30/2006 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised IDA 112.00 112.00 Plan Africa (parallel co-financing) 0.00 11.49 Total 112.00 123.49 3. Borrower Organization Department Location Republic of Cameroon Cameroon i
4. Implementing Agency Organization Department Location Ministry of Public Works Cellule BM-BAD Cameroon Ministry of Infrastructure Chad CAMRAIL Cameroon Ministry of Public Works Road Fund and Ministry Central African Republic 5. Disbursement Estimates (US$m) Actual amount disbursed as of 10/21/2011 0.00 Fiscal Year Annual Cumulative 2012 6.00 6.00 2013 20.00 26.00 2014 40.00 66.00 2015 36.00 102.00 2016 10.00 112.00 Total 112.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package. N 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The project development objective is to facilitate regional trade among the CEMAC member states and improve the Central African Republic, the Republic of Cameroon and the Republic of Chad s access to world markets. Activities to be supported are grouped under the following two components. This second additional financing also includes unallocated funds for an amount of US$14.7 million. First component. Roads and Bridge Infrastructure Improvement and Road Safety in the Corridors (US$92.5 million). Second component. Transport Sector Institutional Strengthening and Operating Costs (US$4.8 million) 7b. Revised Project Development Objectives/Outcomes Not applicable The project development objective remains unchanged. Two output indicators are modified to account for ii
the reallocation of funds which should result in 15 km additional of road rehabilitation on the corridor Douala N Djamena. iii
REPUBLIC OF CAMEROON CEMAC TRANSPORT/TRANSIT FACILITATION PROJECT SECOND ADDITIONAL FINANCING (CREDIT 4987-CM) RESTRUCTURING PAPER SUMMARY 1. The Economic and Monetary Community of Central Africa (CEMAC) Transport/Transit Facilitation Project is a regional program with activities in Cameroon, Chad and the Central African Republic. This program is supported by the International Development Association (IDA), the European Commission (EC), the African Development Fund (ADF), France, Japan and Islamic partners. The CEMAC sub-region is constituted of six member states: the Republic of Cameroon, Central African Republic, Republic of Chad, Republic of Congo, Equatorial Guinea, and Gabon. The original credit amount was approved by the World Bank Board of Executive Directors on June 26, 2007, became effective on December 5, 2007 with a closing date of January 31, 2013 for a total amount of SDR132.9 million (US$201 million equivalent) of which SDR97.2 million were to be spent in Cameroon (Credit number 4337-CM). A first additional credit financing was approved on November 5, 2009, became effective on April 8, 2010 with a closing date of January 31, 2015, for an amount of SDR138.6 million (US$217 million equivalent) of which SDR95.8 million is for Cameroon (Credit number 4659-CM). A second additional credit financing was approved on June 23, 2011 for a total amount of SDR70.7 million (US$112 million equivalent) for Cameroon. The financing agreement for the second Additional Financing (AF) is scheduled to be signed on October 27, 2011. 2. The Government of Cameroon (GoC) has requested and obtained from the Plan Africa-Cameroon program financed by the Government of Spain (GoS) a Trust Fund grant in an amount of US$11,489,423 to finance the reconstruction of the Tilde bridge, currently a critical transit bottleneck located in Northern Cameroon on the corridor Douala N Djamena. The reconstruction of this bridge is one of the activity currently included in the second AF and this program therefore needs to be restructured to reflect the parallel financing arrangement and to reallocate freed IDA funds to other road rehabilitation works to be performed on the corridor (in particular the partial rehabilitation of the road Maroua Dabanga). At the time of Board approval for the second AF, the World Bank Board of Executive Directors had been informed that parallel financing from Plan Africa might become available to finance rehabilitation works of the corridor. 1 3. This Project Paper seeks the approval of the Country Director to restructure the second AF, accounting for the availability of parallel financing funds from the Plan Africa to finance the Tilde bridge, and to reallocate the freed IDA funds to finance 1 See page 12 of the Project Paper of the second AF: The GoC has also approached the Plan Africa program, financed by the Government of Spain, to provide funding for the project and help contribute to the ultimate objective of having 100 percent of the corridor in good or fair condition. 1
selected rehabilitation or spot intervention works on the targeted corridor, in accordance with the project s development objective. The proposed restructuring has been requested by the Government of Cameroon (GoC), in a letter dated October 13, 2011. PROJECT STATUS 4. As a result of the coordinated efforts of the GoC and members of the donor community (IDA, EC, ADF, France, islamic lenders), more than half of the Douala N Djamena road corridor is currently characterised as being in good to fair condition. When planned and on-going works are completed (the latest in 2015), that proportion should reach 90 percent, provided the early rehabilitated sections receive adequate levels of maintenance. The proposed restructuring will contribute to addressing the most critical needs on the remaining 10 percent of the corridor by rehabilitating deteriorated sections of the roads/corridor. Corridor Table 1: Status of Roads on the Corridors Roads in good to fair condition Roads with on-going works Roads with planned works Roads in poor condition and with no financing identified Km % km % Km % km % Douala N Djamena (1,842 km) 952 52 283 15 366* 20 254** 14 Douala Bangui (1,433 km) 706 49 225 16 435*** 30 67 5 * The Ngaoundéré Garoua road is only partially improved - with financing from IDA, on its most deteriorated section (10 km) and on four critical bridges. A full periodic maintenance is still needed in order to fully upgrade that road section. ** The second AF would finance the rehabilitation of 60 km and finance spot interventions on the remaining 194 km. *** These include the emergency maintenance and spot improvement contract on Bangui Baoro. A heavier road improvement intervention is still needed in order to fully upgrade that road section. 5. Implementation Performance. The mid-term review performed in April-May 2011, concluded that the program was progressing in a satisfactory manner, particularly in Cameroon and CAR. Progress towards the achievement of the Project Development Objective (DO) was rated Moderately Satisfactory (MS) while overall Implementation Progress (IP) was rated Satisfactory (S). In Cameroon, both the IP and the DO ratings were rated S, while in CAR, IP was rated S and DO was rated MS. Performance in Chad is lower (MU for IP and MS for DO) due to low disbursements. 6. Financial execution. As of September 30, 2011, almost a third (30 percent) of the project s funds have been disbursed (including original financing and the first AF). For Cameroon, the disbursement rate is 29.6 percent. Only one major contract for the initial and first additional finance, which finances the rehabilitation of the road Dabanga Kousseri, remains at procurement stage. Table 2: Project s Financial Execution as of September 2011 Available amount Disbursed Committed Country (original project and first AF) US$ % disbursed US$ % committed US$ million million million Cameroon 297 87.8 29.6 213.6 71.9 2
7. Safeguards Performance. As per the latest ISR of June 22, 2011, the safeguards performance of the Project is rated as Satisfactory in Cameroon. Table 3: Latest Available Safeguards Performance Ratings (ISR- June 2011) Country Overall Environmental Natural Physical Cultural Involuntary Safeguards Assessment Habitats Resources Resettlement Cameroon Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory 8. Legal Covenants. Status in Cameroon. Legal covenants are substantially met in Cameroon, although with delays. In Cameroon, significant progress has, for instance, been achieved in implementing an axle load policy. This has been done with the support from the EU. Implementation is still ongoing particularly to ensure enforcement across the entire Cameroonian territory (particularly in Northern Cameroon). Earmarking of budget resources for road maintenance is also relatively secured, even though programming and execution of road maintenance contracts could still be improved. National customs statistics and the project s financial statements in Cameroon are now periodically published on a government website. In the port sector, the preparation of a roadmap for port sector competitiveness was completed in November 2009. Finally, the first governance report for the Cameroon portion of the project was received a year ago. No significant issues were reported. The second and third reports have been contracted and are expected by November 15, 2011. 9. Financial management. The recent financial management performance can be rated satifactory as all financial reports submitted to date are acceptable to the Bank and audit report conclude to an unqualified opinion. Furthermore, no significant internal control weaknesses were not raised. 10. Procurement. The last post procurement review of the project showed satisfactory compliance with Bank procedures. Implementing agencies employ qualified procurement specialists who have acceptable experience, thereby allowing them to deal effectively with project procurement matters. Both Project Implementing Agencies (Ministry of Public Work s (MINTP) cellule World Bank-African Development Bank (BM-BAD) and Cameroon Railway (CAMRAIL) include qualified technicians experienced in applying and implementing Bank procedures. PROPOSED CHANGES 11. New activities. The proposed restructuring will use the IDA resources freed by the parallel financing arrangement with Plan Africa in order to finance selected rehabilitation or spot intervention works on the targeted corridor. In particular, the proposed reallocation of funds will be used to finance the partial rehabilitation of the Maroua Dabanga road section which constitutes one of the most deteriorated sections on the corridor Douala N Djamena, and one of the very few sections with no financing identified. With the IDA funds freed from the parallel financing of the Tilde bridge by the Plan Africa program, it is expected that an additional 15km of road rehabilitation could 3
be performed. This will be a continuation of the Magada - Maroua road section (about 60 km), which is included in the second AF. The second AF will finance rehabilitation works as well as associated supervision and auditing activities, the eventual updating of design studies and safeguards mitigation instruments or measures. 12. Technical. The proposed infrastructure works do not represent major difficulties. Road standards will follow the same standards as applied in the rest of the corridor (7 meter platform with 1.5 meter shoulders), based on the conclusions of the existing design studies. Under the first additional financing, IDA is financing the paving of the Dabanga Kousseri section (72.75 km) as well as the improvement of a by-pass road in Kousseri (7.5 km). However, the Maroua Dabanga section (194 km) remains significantly deteriorated and with no funds identified to date to finance improvement/rehabilitation works. The proposed restructuring is expected to finance improvement works on critical points of this itinerary and/or rehabilitation activities on the sections of the road that are nearest to Maroua. 13. The activities that will be supported from the proposed reallocated funds will focus on the rehabilitation of already existing infrastructure. An Environmental and Social Impact Assessment (ESIA) covering the proposed road section was prepared by an EC-financed consulting firm and updated by the MINTP. This ESIA includes an Environmental Management Plan (EMP). The ESIA is in compliance with the applicable Bank safeguards policies and is therefore acceptable to the Bank. On March 23, 2011 prior to project appraisal the ESIA was disclosed in country. It was disclosed at the Bank Infoshop on April 15, 2011. The ESIA describes the environmental baseline situation before the rehabilitation works and the positive and negative impacts that will result from the investment and works. The ESIA states appropriate mitigation measures that will minimize the negative impact from investments with an estimation of a corresponding budget and a distribution of roles and responsibilities for each entity concerned with the implementation of the proposed mitigation measures. The ESIA stressed that the environmental and social mitigation measures should be embedded in the technical specifications of the works. A corresponding budget will be included in the costs of work and the selected contractor will have to undertake all recommended social and environmental measures. In addition to the safeguards studies which have been prepared for the proposed activities to be financed under the second AF, all the other safeguards instruments that have been completed, approved and disclosed for the original project and its first AF are still applicable. 14. Performance indicators. The proposed restructuring is expected to allow financing the rehabilitation of at least 15 km additional roads on the Maroua-Dabanga section. The results framework is therefore amended as follows: Table 4: Performance Indicators Indicator Baseline Progress Target values to date 2012 2013 2014 2015 11. Percentage of road in good condition as a share of total classified roads on the Douala- N Djamena corridor 40% 52% 4 60% (unchanged) 70% (unchanged) Initial: 82% Revised: 83% Initial: 90% Revised: 91% 12. Total roads rehabilitated by IDA, 0 km 36 km 70 km 120 km Initial: 300km Initial: 435km
non-rural (in Cameroon, Central African Republic and Chad) (unchanged) (unchanged) Revised: 315km Revised: 450km 15. Disbursement profile. Since the Tilde bridge reconstruction works are at a more advanced procurement stage than the envisaged Maroua-Dabanga partial rehabilitation works, the disbursement profile of the second AF is amended as follows: Table 5: AF Estimated Disburements AF Estimated Disbursements (Bank FY/US$m) FY 2012 2013 2014 2015 2016 Annual Initial: 12 Initial: 30 Initial: 30 Initial: 30 Initial: 10 Revised: 6 Cumulative Initial: 12 Revised: 6 Revised: 20 Initial: 42 Revised: 26 Revised: 40 Initial: 72 Revised: 66 Revised: 36 Initial: 102 Revised: 102 Revised: 10 Initial: 112 Revised: 112 16. The disbursement table will reflect the rehabilitation by Plan Africa, as follows. While the reconstruction of the Tilde bridge (Part 1(ii) of the Project in the Financing Agreement) is kept for monitoring purposes, the disbursement table is revised to reflect that this activity will not be financed with IDA funds. Category Amount of the Financing Allocated (expressed in SDR) Percentage of Expenditures to be Financed (1) Goods, works, non-consulting services and consultants services (including audits) and Training for Part 1and 2 of the Project, except for Part 1 (ii) of the Project (2) Operating Costs for Part 2 of the Project 60,600,000 100% VAT not included 800,000 100% all taxes included (3) Unallocated 9,300,000 TOTAL AMOUNT 70,700,000 17. Cross suspension clause. Since the execution of the Plan Africa program is critical to reaching the overall development objectives of the CEMAC Transport and Transit Facilitation program, the amended financing agreement for the second AF includes a cross-suspension clause in case the Plan Africa grant agreement is suspended for any reason. 5
Annex 1: Revised Estimate Of Project Costs Cameroon: Second Additional Financing (Credit 4659-CM) and Restructuring for the CEMAC Transport/Transit Facilitation Project 1. Below is an indicative list of project activities with their estimated amount taking into consideration the proposed restructuring: Table 1: Project Activities and their Estimated Amounts Activities Initial Estimated Amount (US$) Actual Estimated amount (US$) Estimated amount (US$) TFPlan Africa Component 1: Roads and bridge infrastructure improvement & road safety 92,500,000 92,500,000 Rehabilitation of Magada Maroua road 43,330,000 43,330,000 Supervision of Magada Maroua road works 2,160,000 2,160,000 Reconstruction of Tilde bridge 13,300,000 0 11,489,423 Partial rehabilitation and/or spot treatment of Maroua - Dabanga road 30,000,000 41,300,000 Updating design and safeguards studies Maroua - Dabanga road 200,000 200,000 Supervision of Maroua Dabanga road works 0 2,000,000 Supervision of Replacement or repair of crash/traffic barriers and signalisation 210,000 210,000 Replacement or repair of crash/traffic barriers and signalisation 2,500,000 2,500,000 Road safety assessment/audit along the Corridor 500,000 500,000 Other studies/audits and updating of existing studies 300,000 300,000 Component 2: Transport sector institutional strengthening & operating costs 4,800,000 4,800,000 Operating costs of MINTP s cellule BM-BAD (Project Implementing Agency) - - Office equipment 72,000 72,000 - Computer equipment 41,000 41,000 - Vehicles 93,000 93,000 - Gasoline 124,000 124,000 - Communications (Internet, telephone) 74,000 74,000 - Domestic travel and per diem 156,000 156,000 - Insurances 80,000 80,000 - Consultant fees accountant 74,000 74,000 - Consultant fees junior engineer 37,000 37,000 - Other consultant fees 22,000 22,000 - External audit 248,000 248,000 - Evaluation of staff performance and coaching 200,000 200,000 Institutional support to MINTP's social and environmental unit (equipment, training, consultant fees) Institutional support to MINTP's public procurement commission (equipment, training, consultant fees) 200,000 200,000 250,000 250,000 Promotion of sound road maintenance policies - Study on the optimal use of road maintenance fund's resources 200,000 200,000 - Road condition surveys 500,000 500,000 - Other studies to improve road maintenance policies 250,000 250,000 Promotion of road safety 6
- Design and implementation of car crashes database (envisaged 500,000 500,000 partnership with MINTP National Advanced School of Public Works (Ecole Nationale Supérieure des Travaux Publics) - Other road safety studies 200,000 200,000 Other studies to improve the efficiency and effectiveness of transport policies 646,000 646,000 Operating cost of Project s steering committee 124,000 124,000 Organization of workshops and events 90,000 90,000 Training 619,000 619,000 Unallocated 14,700,000 14,700,000 TOTAL 112,000,000 112,000,000 11,489,423 7