Document of The World Bank Report No: 21495-BU PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 31.3 MILLION (US$ 40.0 MILLION EQUIVALENT) TO THE REPUBLIC OF BURUNDI FOR A PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT December 28, 2000 Country Department 09 Water and Urban II Africa Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective December 6, 2000) Currency Unit = Burundi Franc (FBu) FBu 1 = US$0.0012 US$1 = FBu 836 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AGETIP Agence d'Execution des Travaux d'Interet Public BURSAP Burundi Social Action Project CAP Community Action Plan CAS Country Assistance Strategy CPAR Country Procrurement Assessment Review DAF Director of Administration and Finance DCMA Delegated Contract Management Agency DG Director General DRC Democratic Republic of Congo EA Environmental Analysis GPN General Procurement Notice ICB International Competitive Bidding IDA International Development Association MPWE Ministry of Public Works and Equipment NGO Non-Governmental Organization OAU Organization of African Unity PCF Post Conflict Fund PER Public Expenditure Review PIM Project Implementation Manual PMRs Project Monitoring Reports PPF Project Preparation Facility SSA Sub-Saharan Africa SMEs Small and Medium Enterprises SPN Specific Procurement Notices SWAA Society for Women Against AIDS TOR Term of Reference TS Technical Secretariat UN United Nations Vice President: Callisto E. Madavo Country Director: Emmanuel Mbi Sector Manager: Letitia A. Obeng Task Team Leader: Eustache Ouayoro BURUNDI PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 3 2. Key performance indicators 3 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 5 C. Project Description Summary 1. Project components 5 2. Key policy and institutional reforms supported by the project 6 3. Benefits and target population 7 4. Institutional and implementation arrangements 7 D. Project Rationale 1. Project alternatives considered and reasons for rejection 8 2. Major related projects financed by the Bank and other development agencies 9 3. Lessons learned and reflected in proposed project design 10 4. Indications of borrower commitment and ownership 10 5. Value added of Bank support in this project 11 E. Summary Project Analysis 1. Economic 11 2. Financial 11 3. Technical 12 4. Institutional 12 5. Environmental 13 6. Social 15 7. Safeguard Policies 15 F. Sustainability and Risks 1. Sustainability 16 2. Critical risks 17 3. Possible controversial aspects 18 G. Main Loan Conditions 1. Effectiveness Condition 18 2. Other 19 H. Readiness for Implementation 19 I. Compliance with Bank Policies 19 Annexes Annex 1: Project Design Summary 20 Annex 2: Detailed Project Description 24 Annex 3: Estimated Project Costs 29 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 30 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 32 Annex 6: Procurement and Disbursement Arrangements 33 Annex 7: Project Processing Schedule 42 Annex 8: Documents in the Project File 43 Annex 9: Statement of Loans and Credits 44 Annex 10: Country at a Glance 46 Annex 11: Supervision Plan 48 MAP(S) IBRD 30118 BURUNDI PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Project Appraisal Document Africa Regional Office AFTU2 Date: December 28, 2000 Team Leader: Eustache Ouayoro Country Director: Emmanuel Mbi Sector Manager: Letitia A. Obeng Project ID: P064961 Sector(s): UY - Other Urban Development Lending Instrument: Specific Investment Loan (SIL) Theme(s): Poverty Reduction; Urban Poverty Targeted Intervention: N Project Financing Data [ I Loan [Xp Credit [1 Grant [ Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): 40.00 Proposed Terms: Standard Credit Grace period (years): 10 Years to maturity: 40 Commitment fee: 0.5 Service charge: 0.75% Fn_ancing lan: Soure LOCal Foreign Tt BORROWER 0.24 0.00 0.24 IDA 25.47 14.53 40.00 LOCAL GOVTS. (PROV., DISTRICT, CITY) OF BORROWING 1.31 0.00 1.31 COUNTRY Total: 27.03 14.53 41.56 Borrower: GOVERNMENT OF BURUNDI Responsible agency: MINISTRY OF PUBLIC WORKS AND EQUIPMENT Address: 1 Av. des Palmiers B.P. 1860 Bujumbura, Burundi Contact Person: S.E. Gaspard Ntirampeba, Ministre des Travaux Publics et de l'Equipement Tel: (257) 21 0572 Fax: Email: Other Agency(ies): AGETIP BURUNDI Address: c/o Ministry of Public Works and Equipment Contact Person: Deogratias Nkurunziza, Directeur Gdneral Tel: (257) 24 1616 Fax: (257) 24 34 23 Email: agetipbu@cbinf.com Estimated disbursements ( Bank FYIUS$M): o ffix"2001 0$;~2O02j~ 2003 B 004 2005 2006. Annual 4.00 8.00 8.00 8.00 8.00 4.00 Cumulative 4.00 12.00 20.00 28.00 36.00 40.00 Project implementation period: 5 years Expected effectiveness date: 06/30/2001 Expected closing date: 12/31/2006 OCS PDF- R. M. -2 - A. Project Development Objective 1. Project development objective: (see Annex 1) The overall development objective of this project is to contribute to the peace process and reconstmction of Burundi through generation of productive, labor-intensive employment. Specifically, the project will assist in: (a) Supporting a newly created Delegated Contract Management Agency - Agence Burundaise de Travaux d'Interet Public (AGETIP BURUNDI) - to expedite the implementation of economically and/or socially beneficial public works projects; (b) Generating employment through labor-intensive public works and promoting Small and Medium Enterprise (SME) participation through cost-effective execution of public works projects; and (c) Building institutional capacity at the municipal level to identify, prioritize, operate and maintain sub-projects. 2. Key performance indicators: (see Annex 1) C Number of person-months of work created; * AGETIP BURUNDI fully operational and effective; and = Technical Secretariat (TS) fully operational and effective, and presents sub-projects portfolio to AGETIP BURUNDI six months before implementation. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: IDA SecM99-491 Date of latest CAS discussion: 10/05/1999 (Interim Strategy) An Interim Strategy for Burundi was circulated to the Board as background in conjunction with the BURSAP II project. Burundi has a population of 6.4 million (1997) and is growing at 2.9 percent per year. The population density of 215 persons per square kilometer is the second highest in Africa. Hutus comprise the large majority of the population, Tutsis and Twa the remainder. Since 1962, when Burundi gained its independence, the country has erupted in ethnic violence, with massacres occurring in 1965, 1972, 1988, 1991 and 1993. The 1993 intemal conflict degenerated into genocide, which killed over 150,000 persons and displaced more than 600,000. Beginning in 1994, a "convention" govemment (negotiated under UN and OAU auspices) administered the country under a democratically elected Parliament. This govemment was unable to provide intemal security, and was overthrown in a military-led coup d'Etat in 1996. Progress is being made in political reconciliation and in establishing security. Internally, a transition constitution has been promulgated, under which a coalition transition government has been established and the national assembly broadened to 121 members to include all political parties and civil society representatives. Externally, negotiations involving 19 political parties, Govemment and the National Assembly have been taking place in Arusha, Tanzania over the past two years, culminating in the signature of a peace accord on August 28, 2000 under the mediation of President Nelson Mandela. The peace agreement addressed the need for a formula to ensure security for all and equitable representation of all ethnic groups in politics, the armed forces, the civil service and the judiciary. The peace process is deeper than the signature of a peace accord at Arusha, as the Govemment and people of Burundi are actively pursuing reconciliation at the community level. Amelioration of the underlying causes of ethnic violence requires addressing inequitable access to economic as well as political resources. The country's - 3 - reconstruction and development needs are enormous, and poverty, malnutrition, and deterioration in health and education services must be urgently addressed. The international community has responded to calls by late President Nyerere (first mediator of the peace talks), President Mandela, UN Secretary General Annan and others (December 11-12, 2000) by pledging over US$440 million in emergency humanitarian, reconstruction and long-term development assistance to Burundi. Donors have promised possible increases in development assistance in 2002 if the peace pmcess holds and Burundi puts in place a strong economic reform program. As the conflict had rendered the 1995 CAS obsolete, the Bank prepared an Interim Strategy (Report 19592-BU) to guide actions over the next 24 months. The Interim Strategy constructs an integrated framework for the Bank and other donors to address poverty and malnutrition, taking into consideration the underlying factors and proximate causes of conflict in Burundi and the triggers leading to repeated violence. It proposes economic stabilization and supports the peace process. The strategy draws on the Bank's experience in dealing with conflict and post-conflict situations to prevent further worsening of poverty and to stabilize the economy as the peace process evolves. The Interim Strategy rests upon three pillars. The first, promoting governance, ownership of peace, reconciliation and reconstruction, supports a participatory approach to rehabilitating village-level economic and social infrastructure damaged or destroyed by the conflict. The second, creating productive employment, is designed to boost purchasing power and give a broad segment of the population an economic stake in reconciliation. It also provides a vehicle for the eventual reintegration of demobilized combatants. The third, restoring key imports and essential social services, facilitates private sector recovery and provides resources for operating the rehabilitated infrastructure in health, education, agriculture and return of displaced households. An Emergency Economic Recovery Credit, estimated at US$35 million was granted by the Bank to Burundi in April 2000 to stabilize the economy and facilitate private sector recovery. The objectives of the interim strategy, which are supported by this project include: (a) promoting govemance and ownership of the peace process; (b) creating productive employment; and (c) restoring key imports, basic infrastructure and social services. The project aims at promoting govemance and ownership of the peace process through employment creation, by providing labor-intensive SME activities including, among others, building and rehabilitation of roads, markets, drainage, health centers, anti-erosion structures, schools, water supply, and so forth. The employment generated will provide purchasing power to returning refugees and displaced people, demobilized combatants, landless laborers, SME owners, consultants and others, thereby helping to reduce some of the alienation that triggers conflict. Furthermore, the project provides imported inputs and focuses on preservation of previous investments in the social sectors and development and reconstruction of commercial infrastructure destroyed during the war. 2. Main sector issues and Government strategy: Context: Burundi's infrastructure and service sectors have been seriously affected by episodes of violent conflict. The country is emerging from a conflict which has resulted in the destruction of physical assets, the disruption of trade links, the loss of human capital and the flight of investment capital. The lack of investment, maintenance and management (exacerbated by heavy rainfall during the past seven years) have led to considerable deterioration of basic infrastructure. Sector Issues: Currently, most investment projects focus on rehabilitation of primary economic infrastructure and not on secondary infrastructure at the municipal level. The municipalities have limited resources to repair municipal assets, such as roads, markets, drainage, health centers, anti-erosion -4 - structures, schools, water supply, and so forth. In order to revive economic activity in their localities, three key sector issues need to be addressed and these are to: i) rehabilitate or construct basic infrastructure; ii) build and strengthen project implementation and maintenance capacity; and iii) establish transparent processes for project selection and implementation. Government Strategy: With the aim of creating employment while rebuilding and rehabilitating the country's infrastructure, the government's strategy is to increase the capacity of municipalities by decentralizing the identification, selection and programming of sub-projects; delegate project management from the public sector to AGETIP BURUNDI; and facilitate private sector recovery and capacity building through their execution of sub-projects. 3. Sector issues to be addressed by the project and strategic choices: This project will focus on providing basic municipal infrastructure and services. The project will also support capacity building at the municipal level and enable them to prioritize and select sub-projects, where appropriate, through community participation. This will not only build capacity at the municipal level but also ownership of sub-projects, and consequently, ensure their sustainability. The execution of sub-projects will be carried out by private contractors and consultants recruited by AGETIP BURUNDI. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The proposed project comprises of four components, which are as follows: (A) Sub-projects Implementation and Capacity Building for Employment Creation: This component will finance, for five years, the rehabilitation and construction of basic infrastructure at the request of municipalities (in consultation with their communities). These sub-projects will be aimed at constructing and rehabilitating roads, markets, drainage, health centers, anti-erosion structures, schools, water supply, and so forth, as well as other social infrastructure in market towns and main urban centers not financed under BURSAP II, a Bank-financed Social Fund project operating in rural areas. In addition, this component will strengthen the financial and operational capabilities of AGETIP BURUNDI (through the execution of sub-projects) and finance equipment and operating costs for the first five years of AGETIP BURUINDI. Under this component, the Technical Secretariat's main function will be to help municipalities in identifying and programming sub-projects, preparing feasibility studies of these sub-projects, and a final list of selected sub-projects to be implemented by AGETIP BURUNDI. AGETIP BURUNDI will be responsible for training programs in financial management, business development and technical skills improvement for SMEs (Contractors/Entrepreneurs). (B) Institutional Building: Under this component, a Technical Secretariat (TS) will be established at the Ministry of Public Works and Equipment (MPWE) and staffed by a director, an engineer, an accountant or financial specialist, and an environmentalist. The TS will be responsible for providing technical assistance, advisory services and training to municipalities in sub-project identification, programming, operation and maintenance. The TS will also be responsible for disseminating information by launching information, education and communication campaigns to help municipalities better understand eligibility criteria for sub-project identification, preparation and implementation. - 5 - (C) Support for the Prevention of HIV/AIDS: This component will support the fight against the spread of HIV/AIDS, by including a community information and education program, aimed at construction workers, inter-city truck drivers, seasonal workers, displaced people, prostitutes, and so forth, in localities where sub-projects are being implemented. The themes, which will be developed in the information and education programs, will lean on existing frameworks already developed by youth and women's associations in Burundi. The Technical Secretariat will be responsible for the implementation of this component, and will partner with and delegate its delivery to UNAIDS, Red Cross, Society for Women Against AIDS, and other NGOs. Under this component, a study for the identification of a multi-sectoral program for HIV/AIDS will be prepared. (D) Project Monitoring: Under this component, the project will provide funds for limited studies and surveys (mainly Beneficiary Assessments). Project monitoring will be the responsibility of AGETIP BURUNDI and the Technical Secretariat. The Finance and Technical Directors, with the support of consultants, independent auditors, and the staff of the Technical Secretariat will be responsible for project monitoring. A. Sub-project Imnplementation & Other Urban 33.26 80.0 31 .75 79 4 Capacity Building for Employment Development Creation B. Institutional building Non-Sector 4.54 10.9 4.50 11.3 Specific C. Support for Prevention of HIV/AIDS 1.00 2.4 1.00 2.5 HIV/AIDS D. Project Monitoring Non-Sector 1.75 4.2 1.75 4.4 Specific PPF Refund 1.00 2.4 1.00 2.5 Total Project Costs 41.55 100.0 40.00 100.0 Total Financing Required 41.55 100.0 40.00 100.0 Note: Indicative Costs include government's contribution of US$0.24 million dedicated to operating costs and municipalities' contribution of US$1.31 million dedicated to public works. 2. Key policy and institutional reforms supported by the project: The project will help the Government to take a comprehensive approach to the development of local infrastructure and basic urban services. This will be achieved by (i) generating employment for returning refugees and demobilized combatants, using labor-intensive methods to rebuild and rehabilitate the country's infrastructure; (ii) supporting the decentralization process through building the capacity of municipalities, particularly for identification, programming, operation and maintenance of sub-projects; (iii) assisting the newly created AGETIP BURUNDI in sub-project implementation reform to move away from public sector execution through force accounts; and (iv) facilitating private sector recovery and capacity building through their implementation of sub-projects. - 6 - 3. Benefits and target population: Benefits: These include: (a) increased employment for individuals, particularly the youth, returning refugees and demobilized combatants; (b) revival of small and medium-scale construction companies, consulting finns, etc., through contracts; (c) increased efficiency in the execution of public works, together with greater development impact of such works; (d) strengthened private sector capacity to manage contracts; (e) improved access to municipal infrastructure, such as roads, markets, drainage, health centers, schools and water; (f) increased employment and income for women through self-employment in micro-enterprises; and (g) increased capacity building of municipalities and participating NGOs in planning, monitoring, and financial accounting. AGETIP BURUJNDI will also ensure transparency in procurement, resulting in lower unit costs, increased number of participating firms, increased firm sizes, and ultimately, increased technical capacity of firms, as demonstrated by other AGETIPS in Sub-Saharan Africa (SSA). This project will also temporarily increase personal incomes and build institutional capacities in the process. In addition, technical capacity will be enhanced by insisting on performance in order for contracts to be paid, by standardizing procedures, and by improving efficiency and providing quick disbursing quality work. The skills developed by small and medium-sized firms and their employees will enhance opportunities for new work. Target Population: The project will focus on areas where there is great demand for basic services; typically, in under-served or unserved urban areas. It will cover market towns, main urban centers and activities not funded through the Burundi Social Action Project (BURSAP II). The project will benefit returning refugees, displaced and landless people, demobilized combatants, and women living in these localities. 4. Institutional and implementation arrangements: Implementing agency: The Technical Secretariat will be responsible for global oversight of the project without interfering with the day-to-day management of AGETIP BURUNDI. The TS will prepare an annual work program of approved sub-projects for transmission to AGETIP BURUTNDI and will also consolidate progress and financial reports of the project. AGETIP BURUNDI will implement sub-projects during the five years of project execution and capacity building activities for SMEs. The institutional building component will be under the responsibility of the Technical Secretariat. The Technical Secretariat will partner with and delegate the delivery of the HIV component to UNAIDS, Red Cross, Society for Women Against AIDS, and other NGOs. The Technical Secretariat will monitor the implementation of the HIV component. The project monitoring component will be implemented by AGETIP BURUNDI and the Technical Secretariat. The Finance and Technical Directors of AGETIP BURUNDI, with the support of consultants and independent auditors, will play significant roles in project monitoring. Under this component, funds will be provided for limited studies and surveys (mainly Beneficiary Assessments). Procurement There is no Country Procurement Assessment Review (CPAR) for Burundi. So far, experience has shown that procurement procedures in Burundi do not conflict with Bank guidelines; furthermore, national procurement law and practices allow IDA procedures to take precedence over any provisions in national regulations. All civil works will be contracted by AGETIP BURUNDI in line with Bank guidelines. - 7 - Financial Management One of the key actions in the area of financial management for the project has been the selection of the Director of Administration and Finance (DAF). An action plan has been prepared to ensure that the preparation of quarterly Project Monitoring Reports (PMRs) will begin at least 18 months after project implementation. The DAF will choose this accounting system from two software programs currently being reviewed for approval by the Bank as recommended financial management software for all AGETIPS. The DAF will ensure that the accounting system established in the initial stages of the project is capable of generating the data required for the PMRs. A Manual of Financial Procedures for Burundi, incorporating financial controls, financial reporting, disbursement, and procurement has already been prepared by a consultant and will be reviewed and cleared by a Bank Financial Management Specialist. The Borrower's establishment of a financial management system for the project in form and substance satisfactory to the Association is a condition of effectiveness. Financial Reporting: Annual financial statements of the project will be prepared in accordance with accounting principles acceptable to IDA. The financial statement will include, at the minimum, a statement of sources and use of funds, a special account reconciliation statement and a balance sheet. Financial statements will be submitted to IDA no later than six months after the end of the fiscal year. Auditing: AGETIP BURUNDI's activities will be subject to annual technical audits (carried out separately from financial audits) by a highly qualified consultant, selected through a competitive process acceptable by IDA. Every six months, special accounts and SOEs will be audited; this is in addition to the annual audits of the special accounts, SOEs and financial statements of AGETIP BURUJNDI and the Technical Secretariat. Supervision: Once every four months, supervision missions will be carried out during the first two years of project activities, and thereafter, once every six months depending on project performance. During these missions, a selective post review of contract awarded below the threshold will apply to at least one in four contracts. Staffing: The Director General (DG) has already been hired as a consultant and was involved in appraising this project. Recruitment of the DAF and the Technical Director, followed a transparent process acceptable to IDA. The terms of reference (TOR) to start the consultation for the creation of the Technical Secretariat at the Ministry of Public Works and Equipment have been prepared. AGETIP BURUNDI's Manual of Procedures and Project Implementation Manual (PIM): The Manual of Procedures is based on the new, standardized AGETIP/AFRICATIP Manual of Procedures. Procurement thresholds for these manuals have been aligned to those defined in Annex 6 of the PAD. The submission of the PIM, which includes AGETIP BURUNDI's manual of procedures in form and substance satisfactory to IDA, will be a condition of effectiveness. D. Project Rationale 1. Project alternatives considered and reasons for rejection: One altemative, which was rejected, was to entrust the implementation of the project to a public sector agency; instead, it was decided to delegate contract management to a semi-private agency by creating AGETIP BURUNDI. The reason for this choice is the weak implementation capacity and cumbersome procedures of the Central Govemment agencies and municipalities. - 8 - The preferred new generation of AGETIPS, operating on a standardized, long-term approach with more capacity building elements was also considered. However, given the post conflict situation, limited local capacity and little possibility for comprehensive community decision-making in Burundi, it was agreed that it is too early to move to this way of operating. A Social Fund was also considered as an alternative. This option was rejected because Social Funds are found to be more effective in rural and semi-rural settings and for small-scaled sub-projects, and this has been demonstrated by the two Social Fund projects implemented by Twitezimbere in Burundi, BURSAP I and H. In addition, a review of Twitezimbere revealed that beneficiaries, size, type and financing deal with smaller-sized sub-projects (less than $75,000 per commune), and not with medium-sized sub-projects in urban centers and market towns to be financed under this project. This project will concentrate on market towns, and urban centers, and medium- and large-scaled basic infrastructure, and a social fund would not be appropriate. Another altemative that was considered was whether to invest in strengthening the capacity of an existing NGO, such as Twitezimbere, which implemented the first Social Action Project (BURSAP I) and is currently implementing BURSAP II. However, this altemative was dropped to avoid overloading Twitezimbere. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). 0~~~~~~~~~ T La1jtest Supervision - Sector Issue Prc - | only) Implementation Development Bank-financed Progress (IP) Objective (DO) Poverty alleviation Social Action Project (BURSAP I - Cr. 2494-BI) Closed. Second Social Action Project S S (BURSAP II - Cr. 3287-BI) Ongoing Infrastructure Water Sector Supply Project S S (Cr. 2288-BI) Ongoing Urban Development Urban Development Project (Cr. 1968) Closed Other development agencies IFAD Rural Development Project (Ongoing) AfDB Transport Project (Closed) IPIDO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) -9- 3. Lessons learned and reflected in the project design: Experience in other countries shows that with delegated contract management the cost of works may be 20 to 25 percent lower than with traditional methods. The lessons learned by the Bank from establishing 12 AGETIPS in SSA, as well as its Africa Regional Action Plan to improve these AGETIPS, were used in the project design. Lessons learned from these AGETIPS include: (i) Avoid overloading the agency and provide appropriate support in early years; (ii) Ensure transparency in contract award and project implementation; (iii) Ensure that the ownership of sub-projects is with beneficiaries, who are ultimately responsible for maintenance, including ensuring capacity for maintenance; and (iv) Separate programming and project selection tasks from implementation. These lessons are reflected in the selection of beneficiaries and activities, and in the choice of creating a delegated contract management agency to promote employment creation. The proposed project also drew lessons from the implementation of BURSAP I, which emphasized simplicity in sub-project design. Avoid overloading the agency and provide substantial supervision in early years. It is important not to overload the new agency and to provide extra support in the early years. Accumulated experience has shown that AGETIP BURUNDI's effectiveness will depend on several factors, such as administrative autonomy, coordination with public administration agencies, flexible and transparent procurement and quick disbursement procedures, a participatory approach, and rigorous but simple procedures. These characteristics were included in the design of AGETIP BURUNDI by restricting its activities in Bujumbura and the main regional towns in the first year, and providing technical assistance and consultant support. Ensure transparency in contract award and project implementation. The implementation manual provides detailed steps to ensure transparency in contract award. Contracts are awarded after a competitive bidding process, either national or international, depending on the value of the sub-project. Ownership of sub-projects. Sub-projects will be identified and prepared by municipalities with the help of the Technical Secretariat. One of the criteria for accepting sub-projects will be the assurance that municipalities have developed a mechanism for operating and maintaining sub-projects once completed. This will enhance ownership, management and maintenance of sub-projects. Separate programming and project selection tasks from implementation. Sub-project identification and programming tasks are done by municipalities. The selection of sub-projects is done by a separate entity, the Technical Secretariat, while implementation is entrusted to AGETIP BURUTNDI. 4. Indications of borrower commitment and ownership: A study tour was organized by the Government to draw lessons from the experiences of similar projects in Senegal, Mali, Benin and Niger. In addition, the Government created a project preparation team, and requested a Project Preparation Facility (PPF) to carry out studies and other activities for project processing. The Govemment recruited AGETIP BURUNDI's Director General so that he could actively participate in the appraisal of this project. The Government also took the following measures before appraisal: (i) identified the sub-projects to be implemented in the first year, and (ii) drafted the Manual of Procedures and the Project Implementation and Accounting Manuals. All of the above documents have been received by IDA. These documents will be reviewed by Bank Specialists before being adopted. Government's signing of Ordinance No. 530/907, November 16, 2000, to create AGETIP BURUNDI is another indication of its commitment to and ownership of this project. - 10- 5. Value added of Bank support in this project: The Bank has provided technical support in introducing the concept of delegated contract management in Burundi, and has extensive experience with AGETIP projects in SSA. The design of this project incorporates lessons learned and best practices in the 12 AGETIP projects implemented in SSA. Recommendations from audits of these 12 AGETIPS and the Africa Regional Action Plan were also taken into account in the design of this project. The Bank's contribution will serve as a catalyst in the future for other donors' support and ensure quality and transparency of the process. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) * Cost effectiveness O Other (specify) The Public Works and Employment Project will support a variety of sub-projects. A cost-benefit or cost-effectiveness methodology will be used to screen proposals. However, for most sub-projects, cost-effectiveness analysis will be used, since these sub-projects will not have an easily quantifiable revenue stream. Also, because benefits will be measured in non-monetary units, such as number of beneficiaries, the approach will use a maximum unit cost per beneficiary criteria, labor content and community contribution. These criteria will be reviewed annually to incorporate experience gained in implemented sub-projects. A matrix summarizing the type of appropriate analysis to undertake is in Annex 4, and an outline of sub-project justification, including the set of selection criteria will be in the Implementation Manual to be used in sub-project appraisal. In such cases, the standard "with" and "without" project comparisons will be used to measure incremental economic benefits arising from the project. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR= % (see Annex 4) For many of the sub-projects with large environmental benefits, calculation of the rate of return will be difficult, therefore, cost effectiveness calculations will be used. For those sub-projects with market price outputs relatively easy to assess, cost benefit analysis will be applied. This will apply to income-generating, commercial infrastructure projects (markets, bus terminals, abattoirs, and so forth). Fiscal Impact: Some of the sub-projects, such as drainage and access roads are public goods, and therefore, no cost recovery is envisaged through direct user charges. Nevertheless, some indirect recovery may be possible through property taxes. In the case of revenue-generating sub-projects, such as markets, slaughter houses and lorry parks, user fees will be charged. This project is expected to increase the revenue generating capacities of municipalities. In addition, a detailed operation and maintenance plan (including sources of financing) will be developed for each sub-project, indicating incremental operations and maintenance costs, and expected revenues. Counterpart funds. Recognizing that Bunmdi is coming out of a civil war and that IDA is responding to an emergency situation, the level of poverty is such that it is not possible to expect large contributions from the communities. Therefore, local entities are required to contribute five percent of the cost of sub-projects in kind (labor, construction materials, and so forth) while the Government of Burundi would contribute five percent of total IDA credit. Government's annual contribution will be provided on a semi-annual basis in - 11 - accordance with tho annual implementation program needs. A first year contribution of US$25,000 will be requested before credit effectiveness. 3. Technical: The project will introduce the concept of delegated contract management in Burundi. This will increase the implementation capacity of municipalities and help redefine their roles. Sustainability of completed sub-projects will be assured by the participation of municipalities in their identification. Assurance by communities and municipalities that sub-projects will be operational and maintained will be criteria for selection of sub-projects. Municipalities will be assisted by the Technical Secretariat in developing maintenance arrangements and establishing maintenance fund accounts, to which monthly or yearly contributions will be made, thus ensuring that facilities maintenance needs are met in subsequent years. The project will give small enterprises an opportunity to learn and grow, which will increase construction capacity in this area; it will strengthen NGOs in their role as community development catalysts and existing training institutions in their capacity to train different levels of govemment and civil society in implementing their activities in an efficient manner. This project will require contractors with labor intensive and managerial capabilities and diverse technical skills to undertake building and rehabilitation of roads, markets, drainage, health centers, anti-erosion structures, schools, water supply and so forth. The project also requires civil engineering consulting firms to design and supervise works. Therefore, a study to assess the level of support and capacity of SMEs and NGOs was financed from the Project Preparation Facility. This study concluded that there is some capacity from local consultants and contractors; therefore, the project will provide support through technical training for contractors to enhance their capacity. In addition, AGETIP BURUNDI will use existing vocational training facilities in Burundi and in neighboring countries to improve management capacity. AGETIP BURUNDI will act as a professional contract management agency and take remedial actions, such as contract cancellation, and previous termination of a contractor will be one of the post-selection criteria for future evaluation of bids. As part of its capacity building activities, AGETIP BURUNDI will annually update the roster of contractors and consulting firms based on performance on previous projects. The preparation of this roster will be done in a transparent manner. Participation in bidding will not be limited to contractors and consulting firms on the roster. 4. Institutional: 4.1 Executing agencies: The implementation arrangements for the project are based on similar operations financed by IDA in Africa, where public works are executed through the contracting out approach, by an AGETIP-type agency (AGETIP BURUNDI) acting as a Delegated Contract Management Agency (DCMA). This model has been adapted to the Burundi context to ensure that it functions effectively. Procedures for the daily management of AGETIP BURUNDI are included in a Manual of Procedures. A convention to be signed between AGETIP BURUNDI and the Govemment will spell out duties and responsibilities of both parties. The signing of this convention will be a condition of project effectiveness. 4.2 Project management: Sub-project implementation will be carried out by AGETIP BURUNDI. The Technical Secretariat will manage the institutional building component of this project. The Govemnment has created AGETIP BURUJNDI, in a manner satisfactory to IDA, and a Manual of Procedures guiding its day-to-day activities has been prepared and should be cleared by IDA before credit effectiveness. The terms of reference to start - 12- the consultation for the creation of the Technical Secretariat at the Ministry of Public Works and Equipment have been prepared. 4.3 Procurement issues: A procurement capacity assessment was carried out during the appraisal mission. Since AGETIP BURUTNDI was not in place at that time, the assessment took into consideration the procurement experience of World Bank financed projects in Burundi, and particularly Social Action Projects I and II (Cr. 2494-BU 1993-1999 and Cr. 3278-BU 2000-2004). Agreed upon actions between the Government and the World Bank have been completed by the Govemment. The appointment of AGETIP BURUNDI's Director General and Technical and Financial Directors have been done in a manner satisfactory to IDA. An action plan to build the capacity of AGETIP BURUNDI's management team was agreed to during project preparation and appraisal and includes: (i) procurement training for senior staff in Dakar; and (ii) procurement supervision as well as support and guidance provided by the Burundi Country Office. 4.4 Financial management issues: Financial Management There is no financial management system in place as this is a newly created agency. The establishment of a new system is a condition of effectiveness. One of the key actions in the area of financial management for the project has been the selection of the Director of Administration and Finance (DAF). An action plan has been prepared to ensure that the preparation of quarterly Project Monitoring Reports (PMRs) will begin at least 18 months after credit effectiveness. The DAF should ensure that the accounting system, established in the initial stages of the project, is capable of generating the data required for the PMRs. 5. Environmental: Environmental Category: F (Financial Intermediary Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. A consultant conducted an environmental analysis (EA) to (a) develop a framework for the environmental assessment of future sub-projects (with a focus on, for example, a description of existing circumstances in the sub-project area, an assessment of potential impacts on the population, flora, fauna, hydrology, geology, and the preparation of recommendations designed to mitigate potential impacts prior to and during the implementation of sub-projects); and (b) identify potential environmental and social impacts of some future sub-projects (protection of river banks, street paving, drainage, construction of markets and related infrastructures). While the majority of future sub-projects are expected to have positive environmental and social impacts (less severe flooding, less sedimentation, less soil erosion, increased economic activities, improved traffic safety), the EA report noted that (i) the continued use of quarries as a source of construction material for street paving sub-projects could lead to the loss of agricultural land; and (ii) constructing new markets and related infrastructures could lead to a loss of land and other assets among individuals and families living in the immediate vicinity. Discussions with the Ministry of Environment during appraisal led to the development of an environmental and social monitoring plan. This plan addresses environmental and social impacts, the effects of construction activities, and the need to strengthen the capacity of the Ministries of Environment and of Mining to monitor sub-project activities and conduct country-wide inventory of existing quarries. 5.2 What are the main features of the EMP and are they adequate? - 13 - The EMP consists of plans for mitigation, monitoring and capacity development as listed below; these plans are considered adequate under the proposed project. (a) A mitigation plan identifies (i) environmental and social impacts, such as deforestation, soil erosion, water pollution, dust, noise, traffic safety problems, loss of land and other assets due to the continuous exploitation of quarries and construction activities, including markets and related infrastructures; and (ii) positive impacts of the proposed civil works on the banks of the Muha, Mpimba and other rivers in Bujumbura. (b) A monitoring plan focuses on the rehabilitation of existing quarries, development of a country-wide inventory of existing quarries, environmental guidelines for construction activities, as well as on environmental assessments prior to the establishmnent of new quarries and some sub-projects. A resettlement and compensation framework has been prepared, used in screening all sub-projects and applied during sub-project implementation. (c) Resettlement is not anticipated in any of the 18 sub-projects identified for the first year of project implementation. Sub-projects in subsequent years will be demand-driven by local govemments (in consultation with their communities). During the life of the project, social assessments will be carried out for sub-projects, and if resettlement/compensation plans are required, these documents will be submitted to the Bank for approval. The resettlement/compensation framework will be applied (should the need be identified) through social assessments. (d) A capacity development plan addresses the need of the Ministry of Environment to develop environmental assessment procedures, to train staff responsible for the development of inventories of existing quarries, and to strengthen its capacity to monitor the implementation of environmental assessment recommendations as well as the implementation of works on the Muha, Mpimba and other rivers. 5.3 For Category A and B projects, tirneline and status of EA: Date of receipt of final draft: Date of receipt of final draft EA: May 2000 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Consultations were held with representatives and residents of Buyenzi, and with the Govemor and merchants of the province of Mwaro at the construction site in Karama. Additional consultations were recommended with the communities involved in sub-projects. However, during appraisal it was decided that the proposed project would focus on urban areas where sub-project decisions would be made mostly by govemment organizations (municipalities) and that additional community consultations were not needed at this time. Also, due to the uncertain security situation in the country, field visits were not undertaken at the time of appraisal. Consultations will be held as necessary for subsequent years once future sites have been identified. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? The Ministry of Environment will be responsible for monitoring the implementation of the EMP. Implementation arrangements for the involuntary resettlement fiamework and social assessments of sub-projects will be included in the Implementation Manual. - 14- 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The project is expected to support reconciliation by mobilizing diverse groups to work together for their common benefit. The aim is not only ethnic reconciliation, but also to create a supportive environment for the reintegration of retuming refugees and intemally displaced persons. During implementation, the project will finance activities in larger municipalities (Bujumbura, Gitega, Ngozi, Mwaro, and so forth), which have more capacity to prepare sub-projects for submission to the Technical Secretariat. The rest of the municipalities will be assisted by the Technical Secretariat in finalizing the design of sub-projects to be executed. The H1V/AIDS component will support the fight against V/AIDS in Burundi. 6.2 Participatory Approach: How are key stakeholders participating in the project? Municipalities and ministries will be directly involved in the selection of sub-projects presented to AGETTP BURUNDI for financing. Essentially, all requests will be assessed by the Technical Secretariat to ensure that they meet the eligibility criteria and that they will be operational and maintained once built. Communities will be involved in building and maintaining these sub-projects where appropriate. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The project supports consultations and collaboration with NGOs and other civil society organizations. Ownership and govemance of the peace process will be promoted through a participatory approach involving all strata of the population in building, operating and maintaining sub-projects, thereby giving voice to all groups and contributing to social cohesion and the peace process. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? NGOs and civil society participated to ensure that all stakeholders are involved. The project will sub-contract the building of sub-projects to SMEs, and information, education and campaign (IEC) activities to NGOs. This will increase the revenue base of local NGOs, especially those working to reintegrate displaced people and provide employment for returning refugees. Female-headed households have also increased due to the prolonged war in Burundi. Therefore, the project aims to have women directly benefiting and/or implementing at least a reasonable number of sub-projects. The skills development training component of the project will benefit unemployed youths, contractors and women, who are among the most vulnerable groups in the society. 6.5 How will the project monitor performance in terms of social development outcomes? Annual reviews will measure the project's social development outcomes by putting a monitoring process in place. Social and beneficiary assessments as well as audits will be conducted on a regular basis. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) O Yes 0 No Natural habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) O Yes * No Pest Management (OP 4.09) 0 Yes 0 No Cultural Property (OPN 11.03) 0 Yes 0 No - 15 - Indigenous Peoples (OD 4.20) O Yes * No Involuntary Resettlement (OD 4.30) O Yes * No Safety of Dams (OP 4.37, BP 4.37) 0 Yes 0 No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. N/A F. Sustainability and Risks L. Sustainability: Sustainability of sub-projects is contingent upon (i) adequate management for operation and maintenance, and (ii) adequate funding for operations and maintenance. These contingencies may be achieved through (a) the Government's ability to redefine its role and provide support to municipalities; (b) the use of beneficiary assessments for yearly reprogramming; (c) the twansparency in allocation and management of resources; (d) the identification and selection of sub-projects by municipalities (in consultation with their conmmunities) thereby building ownership; and (e) the preparation of operation and maintenance plans by municipalities. - 16 - 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk :iskska_g R ;i Measure From Outputs to Objective There is a breakdown in the peace process M Employment creation and skills development, and the intensification of civil conflict. especially for unemployed youths, will help reduce the triggers leading to repeated violence. Sub-projects will be executed in areas largely free of civil violence. There are no effective contributions from M Since some sub-projects will be directly relevant sector ministries for operations demanded by Central and Municipal and periodic maintenance governments, this risk is minimized. However, (e.g. funding for teachers or nurses to the Technical Secretariat will demand operate schools and hospitals). supporting documents for operations and maintenance provision to ensure complementarity and that infrastructure demanded by municipalities and ministies will be provided with operational resources. This secretariat will also help municipalities develop operating and maintenance plans. SMEs will not have the absorptive M Technical support to contractors on construction capacity to execute sub-projects and sites is one of the activities included in the benefit from training. capacity building component. AGETIP BURUNDI will also use existing vocational training facilities in Burundi and in neighboring countries to improve management capacity of SMEs. Population will not use newly constructed N Burundi is in a post conflict situation, therefore, or renovated basic infrastructure as their most basic infrastructure need to be rebuilt or priorities may be different. rehabilitated thereby creating ample demand. Media campaigns will be used to inform the. public of the need to be involved in their municipalities' selection of sub-projects. Government and Technical Secretariat M Government will sign convention with AGETIP will interfere with AGETIP BURUNDI's BURUNDI as a condition of project operations. effectiveness. Sub-projects will be identified by municipalities and therefore ensure municipal ownership and eligibility. From Components to Outputs - 17- Sub-projects are not implemented in a M AGETIP BURUNDI will act as a professional timely manner, within budget and of contract management agency and will have acceptable quality. technical audits to assure quality control. Remedial actions, such as contract cancellation, will be taken on SMEs that deliver sub-standard sub-projects. AGETIP BURUNDI operating costs are M AGETIP BURUNDI's MIS will allow for close not kept low (below 8% of the costs of monitoring and control of operating costs. This sub-projects). will be closely followed by Bank Supervision missions. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: None. G. Main CreditConditions 1. Effectiveness Condition (i) the AGETIP BURUNDI Convention has been executed on behalf of the Borrower and AGETIP BURUNDI in form and substance satisfactory to the Association; (ii) the Borrower has adopted the PIM, including AGETIP BURUNDI's Manual of Procedures, in form and substance satisfactory to the Association; (iii) the Borrower has established: (i) a financial management system for the Project in form and substance satisfactory to the Association; and (ii) caused AGETIP to establish a financial management system for implementation of the project; (iv) the Borrower has appointed financial auditors under terms and conditions acceptable to the Association; (v) the Project Account has been opened and the initial amount of US$25,000 equivalent has been deposited; (vi) the Borrower has created TS and has appointed four key staff (a director, an engineer, an accountant or financial specialist and an environmentalist) under terms and conditions acceptable to the Association; and (vii) the AGETIP BURUNDI Work Program Agreement for the first Project Year between AGETIP BURUNDI and TS has been executed on behalf of AGETIP - 18- BURUNDI and TS, in fonn and substance satisfactory to the Association. 2. Other [classify according to covenant types used in the Legal Agreements.] (a) that the Project Agreement has been duly authorized or ratified by AGETIP BURUNDI and is legally binding upon AGETIP BURUNDI in accordance with its terms; (b) that the AGETIP BURUNDI Convention has been duly authorized or ratified by the Borrower and AGETIP BURUNDI and are legally binding upon the Borrower and AGETIP BURUNDI in accordance with their terms. H. Readiness for Implementation 1 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. [l 1. b) Not applicable. Z 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 1 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. D2 4. The following items are lacking and are discussed under loan conditions (Section G): I. Compliance with Bank Policies Z 1. This project complies with all applicable Bank policies. L 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Eustache Ouayoro Letitia A. Obeng Emmanuel Mbil Team Leader Sector Manager Country Director - 19- Annex 1: Project Design Summary BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Promoting ownership and Increased access to basic 2001 household survey and Security situation will improve governance of the peace infrastructure and jobs. subsequent quantitative and stabilize. process; creating productive surveys. employment; and restoring Government will continue to key imports, basic emphasize governance of the infrastructure and social peace process and employment services. creation as key policy objectives and make available counterpart funds. Project Development Outcome / Impact Project reports: (from Objective to Goal) Objective: Indicators: To generate productive, Increased infrastructure Employment records of SME's Use labor-intensive methods labor-intensive employment constructed and rehabilitated, and counts on sub-project to implement sub-projects. mainly aimed at demobilized and employment generated. implementation sites. combatants and retuming refugees to help in the Government and Technical reconstruction of Burundi, Secretariat will not interfere thereby contributing to the with AGETIP BURUNDI's peace process. decisions. - 20 - |--~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.. ... . ...--,---- tlier.rtiy of Ob . ... .... ..........bn &Eataio Crt~a .r~tiE Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: A. Sub-projects Implementation and Capacity Building for Operating costs not exceeding AGETIP BURUNDI reports MIS in place and functioning. Employment Creation 8% of the amount of executed - Independent contract works; The Technical Secretariat and management agency Selection Committee prepare established (AGETIP maximum time spent from Annual technical audits portfolio of sub-projects BURUNDI). sub-project approval to timely and effectively. commencement of technical studies: 2 months; maximum number of days between reception of invoice andpayment: 15 days; minimum number of firms participating in bidding for sub-projects: 3; work on at least 50% of sub-projects commenced within 9 months of receipt of approved sub-projects from the Technical Secretariat. - Cost-effective provision of 75% of rehabilitated or Municipal data Contractors are qualified and priority infrastructure in constructed infrastructure able to implement quality selected areas. found to be operational and Annual beneficiary sub-projects in a timely properly maintained after assessments and direct manner. completion. measurements at the infrastructure level Household survey and municipal data -Number of jobs created. Over 25,000 average person- Municipal data Sub-projects implemented by days of employment created. local contractors have more impact on employment than those executed by bigger, capital-intensive enterprises. - 21 - B. Institutional Building - Municipalities have the Staff and officials of Annual beneficiary Local revenues will be capacity to identify, prepare, municipalities trained by assessments available for municipalities' operate and maintain Technical Secretariat on share of sub-project cost. sub-projects. sub-project identification, Audits preparation and Beneficiary population will programming: use newly constructed or 30 municipalities by 2003. renovated infrastructure and 80 Municipalities by 2006. demand for social services will emerge. Municipal revenue for O&M of sub-projects increased by 20% by 2006. - SMEs develop capacity to SME staff trained by AGETIP Annual financial and SMEs will have the absorptive implement sub-projects. BURUNDI on business technical audits capacity to implement projects administration, financial and benefit from training. management and technical skills improvement: 1000 person-days of training by 2003. 2000 person-days of training by 2006. C. Support for the Percentage of work sites Quarterly reports prepared by NGO's will have the capacity Prevention of HIV/AIDS receiving HIV/AIDS NGO's and information to disseminate appropriate awareness and prevention provided by UNAIDS. information. workshops: 65% of work sites by 2003. 85% of work sites by 2006. - 22 - Project Components / Iputs: (budget for oach ProJect reports (from Components to Sub-components cmponent) Output$) A. Sub-projects US$33.26 AGETIP BURUND)I pmgress Sub-projects are implemernted Implementation and Capacity reports in a timely manner and within Building for Employment budget. Creation B. Institutional Building US$4.54 Financial audits, AGETIP AGETIP BURUNDI is BURUNDI progress reports efficiently managed. C, Support for the Prevention US$1.00 Progress Reports of HIV/AIDS D. Project Monitoring US$1.75 Technical audits E- PPF Refinancing US$1.00 - 23 - Annex 2: Detailed Project Description BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT By Component: Project Component I - US$33.26 million Sub-projects Implementation and Capacity Building for Employment Cregtion: This component will finance a five-year program of public works for rehabilitation and construction of infrastructure and other municipal assets requested by municipalities. The basic sub-projects will be aimed at: (i) improving roads, markets, drainage, health centers, anti-erosion structures, schools, water supply, and so forth. (ii) financing AGETIP BURUNDI's equipment and operating costs under a delegated management contract to be signed with the Government. AGETIP BURUNDI will draw on the success and lessons learned from existing AGETIPs in SSA. The sub-projects will be carried out through a demand-driven and labor-intensive process, which will provide employment while rehabilitating infrastucture destroyed or not maintained in the past decade. This program will be based on priority sub-projects identified by municipalities and the central government, which will be implemented by the private sector through delegated contract management. The entire program will be managed by AGETIP BURUNDI, which has already been created. AGETIP BURUNDI will receive from municipalities the authority to manage on their behalf, contracts for implementation of sub-projects. Three agreements will be signed to clearly state the responsibilities of the different agencies: (i) the Government will sign a Delegated Contract Management Agreement with AGETIP BURUNDI ; (ii) the Government (TS) will also sign agreements with AGETIP BURUNDI to implement annual work programs; and (iii) agreements will be signed between the beneficiaries (municipalities) and AGETIP BURUNDI. AGETIP BURUNDI will use sample contracts for works, goods and consulting services included in the Manual of Procedures. Activities eligible for project financing include: construction, extension and rehabilitation of roads, markets, drainage, health centers, anti-erosion structures, schools, water supply, toilets, community centers. Eligibility criteria for each sub-project are presented in the Project Implementation Manual. Sub-project implementation must commence within four to nine months from the receipt of the sub-project portfolio from the Technical Secretariat. The application form for submission of sub-project proposal for approval includes information on implementing agencies, sub-project cost, benefits expected (including environmental impact assessment, operation and maintenance arrangements), as well as financial data, such as costs and cash flow forecast and location of the sub-project (see Annex 4-A). Completed- applications prepared by municipalities are then presented to the Technical Secretariat, where staff would verify the application form, supporting documents and compliance with eligibility criteria (appraisal checklist). The Project Implementation Manual gives details for eligibility, selection of sub-projects and beneficiary groups agreed with the municipalities during project preparation. AGETIP BURUNDI and municipalities will sign a "convention de matirise d'ouvrage deigu&e. " AGETIP BURUNDI will start sub-project preparation only after verifying with the TS that the beneficiaries' financial contributions, as specified in the convention, or agreement on what will constitute in-kind contributions (such as labor, sand, stones, and so forth) are in place. For inviting bids, awarding contracts and disbursing funds, AGETIP BURUNDI will follow procurement guidelines as stated in Annex 6 and in line with AGETIP BURUNDrs Manual of Procedures. For activities carried out by the TS, procedures for inviting bids, consultants, vendors and awarding contracts will follow guidelines spelled out in Annex 6. The PIM will include: (a) eligibility criteria for selecting - 24 - sub-projects submitted by local and central administrations for implementation; (b) procedures for inviting bids, selecting contractors, consultants and vendors (including prequalification if necessary), and awarding contracts; (c) internal organization for work supervision and control; (d) disbursement procedures; and (e) procedures for delivery of completed works. Project accounts will be audited once a year but special accounts and SOEs will be audited twice a year. Project funds will be replenished only upon presentation of properly documented records on the use of funds. AGETIP BURUNDI's board will have full authority to propose and implement any measures deemed necessary to achieve the project's objectives, including hiring and dismissal of AGETIP BURUNDrs management and staff. Implementation mechanisms: Sub-project Identification: - Municipalities prepare their annual plan of action with priority works, and prepare for each priority sub-project a "project form" along with supporting documents showing that this sub-project is eligible fQr funding. - The PIM gives details for eligibility, selection of sub-projects and target groups. - Municipalities submit consolidated annual or bi-annual programs to the Technical Secretariat. Municipalities will include operation and maintenance costs in their annual budgets. They will also come to an agreement (with the Technical Secretariat) on what constitutes their in-kind contribution (labor and building materials) and arrangements for their delivery during sub-project construction. - The Technical Secretariat will select sub-projects that meet the eligibility criteria and submit the list to AGETIP BURUNDI. - AGETIP BURUNDI will notify municipalities of approved sub-projects and the agreement on proposed "mai'trise d'ouvrage" (MOD). - AGETIP BURUNDI and relevant municipalities will sign a delegated management contract "convention de maztrise douvrage. " Sub-project Implementation: - AGETIP BURUNDI recruits, by open bid where appropriate, consultants to prepare technical design and bidding documents, except where this work has already been satisfactorily done by municipalities. - AGETIP BURUNDI publishes an invitation to bid for the implementation of sub-projects. - Works are executed by Small and Medium Enterprises and/or NGOs after bids have, been awarded. - AGETIP BURUNDI regularly inspects sub-projects in construction and promptly pays contractors in accordance with the terms of the contract. - AGETIP BURUNDI receives completed sub-projects and hands them to respective municipalities. - Any Ministry can also ask AGETIP BURUTNDI to execute works through a "Contrat programme." However, this will not be encouraged in the first two years while AGETIP BURUNDI is building its capacity. The project's intended beneficiaries are divided into four groups. First, there is the population at large benefiting from improved infrastructure and services. Second, there are the contractors, small enterprises and laborers, largely from the informal sector, who will execute the works. The project will be helpful to these groups to the extent that it will provide them with work and contribute to their transition from the informal to the formal sector. The third group of beneficiaries is the municipalities that will benefit from investments financed by the project. Finally, the project benefits a fourth group, the "maltres doeuvre" (architects, engineers, and consulting firms), that will be engaged in the sub-project preparation and supervision of works. - 25 - Package of Training Services for Small and Medium Enterprises in the construction sector - contractors/ repreneurs: (1) This sub-component would be implemented by AGETIP BURUNDI and will aim at increasing the technical and managerial capacity of small- and medium-sized indigenous firms in the building and construction sectors, selected through a competitive bidding process to implement sub-projects. Contractors will be charged a nominal registration fee for training. The rationale behind this sub-component is twofold: (a) most firms in the beneficiary groups are expected to be weak in terms of management, work organization, and technical skills, which may jeopardize successful implementation of the sub-projects they will be commissioned to carry out. The provision of some technical assistance to contractors is deemed an effective way of addressing this risk; and (b) conversely, firms which that will be awarded contracts are likely to be comparatively better than others, if the competitive selection process is effective. Therefore, with a view to strngthening comparative advantages, instead of randomly spreading assistance over the whole industry, these firms will be supported to improve the overall efficiency and competitiveness of the industry. (2) Several training programs will be offered under this, including: (a) a business administration and financial management program intended for entrepreneurs and their administrative staff; and (b) a work organization program, primarily designed for foremen, and various technical training courses to improve the workers skills. These training programs will be very practical and will take the form of on-the-job training. Potential beneficiaries will be free to accept or refuse this form of assistance, except in cases where technical assistance will be deemed necessary for successful implementation of the sub-projects and will, therefore, be a condition for contract award. (3) The establishment of an effective, technical and management assistance program for small- and medium-sized firms involved in project implementation will be delegated to an outside entity that will be contracted for this purpose. Terms of reference have been drafted to invite proposals from short-listed- - local consultants already identified to formulate an Action Plan that will be presented to IDA for its approval no later than three months after credit effectiveness. The agreed Action Plan will be updated annually to reflect the needs identified during supervision missions. Project Component 2 - US$4.54 million Institutional Building (including contingencies): Under this component, the project will provide technical assistance, training and support to: (i) the Ministry of Public Works and Equipment through the establishment of a Technical Secretariat; (ii) municipalities in sub-project identification, programming, operations and maintenance, monitoring, community partnerships and human resource development, (iii) NGOs orientation to help them to assist communities. - 26 - (i) Support to the Ministry of Public Works and Equipment through the Establishment of the Technical Secretariat This sub-component will support advisory services, human resource development and technical assistance, as well as some equipment to the Ministry of Public Works and Equipment. (ii) Technical Assistance for Capacity Building ofMunicipalities to Plan and Monitor Projects and Account for Resource Use This sub-component will be implemented by the Technical Secretariat to provide support to municipalities in preparing sub-project proposals, which will be appraised and cleared by the Technical Secretariat and submitted to AGETIP BURUNDI for funding. Under this sub-component, municipalities will receive training in identifying and preparing sub-projects. Municipal capacity will be developed on managing operations and maintenance funds for completed sub-projects and on preparing plans for improving services. This sub-component will also help in organizing a program to increase community participation in urban infrastructure project maintenance. This program will disseminate information in several cities, using local languages, logos, appropriate colors and music, to district chiefs, neighborhood committees, laborers and micro-entrepreneurs, which should lead to increased ownership of sub-projects by communities. The project will provide funding for the above activities, including a week-long media campaign culminating in a project launch workshop in order to sensitize the population on the project and increase ownership of sub-projects by the communities. (iii) NGOs orientation to help them to assist communities T;his sub-component will help sensitize domestic and foreign NGOs in participatory processes for sub-project identification and implementation. It will also help to develop coordination and complementarity among NGOs. Project Component 3 - US$ 1.00 million Support for the Prevention of HIV/AIDS This component will help in the fight against the spread of HIV/AID, by including a community information and education program, targeting high-risk groups, such as the youth and women. The themes, which will be developed in information and education programs, will be based on existing frameworks- - already developed by youth and women's associations in Burundi. The Bank is collaborating with UNAIDS in Burundi. It has been strongly recommended by UNAIDS to invest in a participatory diagnostic process to better sensitize and educate people on HIV/AIDS prevention. Taking into consideration that much of Burundi is still rural, the UNAIDS group has recommended in its action plan a program of "peer sensitization" to better disseminate relevant HIV/AIDS information. This program will also target workers who will be involved in building public works under this project. The first interv'ention will be targeted at those communities receiving the first tranche of sub-projects. In addition, this sub-component may also finance specific programs targeting mobile people, such as truck drivers, seasonal workers who live in town but still have their wives and children in rural areas, prostitutes, and so forth. Possible partners in the implementation of this sub-component include the Red Cross of Bunindi, the Society for Women Against AIDS in Burundi (SWAA-Burundi), and other NGOs actively working on HIV/AIDS prevention. Hospitals and health centers near sub-project implementation sites will be involved in HIV diagnostic and treatment. - 27 - This component will also finance studies and preparation activities for a future multi-sectoral WV/AIDS project to be financed by IDA and other donors. Project Component 4 - US$1.75 million Project Monitoring: Under this component, the project will provide finding for limited studies and surveys (mainly Beneficiary Assessments). The monitoring program will broaden the supervision scope. Given the wide margin of independence and initiative, which is deemed necessary to ensuring AGETIP BURUNDI's efficiency and effectiveness, close and continuous post monitoring are essential to ensuring that AGETIP BURUNDI use its autonomous decision-making powers in accordance with the agreed convention. Also, some features of the proposed project require the Government and IDA to jointly monitor progress of those components and take timely remedial measures as necessary. In order to make relevant information available in a manner, studies of the impact and performance of implemented sub-projects and beneficiary assessments will be carried out. - 28 - Annex 3: Estimated Project Costs BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT A. Sub-projects Implementation and Capacity Building for 20.30 9.09 29.39 Emplovment Creation B. Institutional Building 2.47 1.85 4.32 C. Support for the Prevention of HIV/AIDS 0.96 0.00 0.96 D. Project Monitoring 0.50 1.17 1.67 E. PPF Reimbursement 0.00 1.00 1.00 Total Baseline Cost 24.23 13.11 37.34 Physical Contingencies 1.71 0.69 2.40 Price Contingencies 1.21 0.61 1.82 Total Project Costs 27.15 14.41 41.56 Total Financing Required 27.15 14.41 41.56 Identifiable taxes and duties are 0 (US$m) and the total project cost, net of taxes, is 41.56 (USSm). Therefore, the project co.st sharing ratio is 96.25% of total project cost net of taxes. -29 - Annex 4: Cost Effectiveness Analysis Summary BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Summary of benefits and costs: Main Assumptions: Essentially, two sets of factors determine the type of analysis applied: the type of project and its size. For those projects whose benefits are measurable in monetary terms and whose output has a market price that is relatively easy to assess, cost benefit analysis will be applied. This will apply to income-generating, commercial infrastructure projects (markets, bus terninals, abattoirs, and so forth). In such cases, the standard "with" and "without" project comparisons will be used to measure the incremental economic benefits arising from the project. At the other extreme, there may be projects (for example in health and education sectors) whose benefits either do not have a readily accessible market price or are not easily measurable in monetary terms. In such cases, cost-effectiveness analysis will be used, with benefits being measured in non-monetary units, such as the number of beneficiaries. While the above analysis is unquestionably useful, it entails gathering and analyzing of a significant amount of data. For small municipal or community projects, the time and effort involved may be prohibitive and could result in excessive delays. Therefore, for smaller projects, a more simplified approach would be used. Annex 4-A: Type of Project Brief I . Project Name Specific name of the operation. Indicate the code of the project (subprogram and component). 2. Site Indicate if access to the site is difficult. 3. Duration Estimated duration of work and studies (in the event those are not available). 4. Description Technical description and list of works and their principal components with corresponding quantities (total surface to be built, number and use of beds... in a medical building, width and length of roads, length of tubes, number of small individual jobs). 5. Preparation Indicate if the site is available. Indicate if engineering studies are available. 6. Recipients Municipality of. and/or community of.. Description and estimate of direct or indirect beneficiaries. - 30 - 7. Justification Description of current situation and its problems. Description of the expected results. If it is an economic project: indicate the economic rate of return (to be calculated later on in the event of pilot project); or social project: indicate the social sectoral justification (school map for example), or income generation activity (markets): the rate of financial profitability. In all cases, calculate the cost by direct beneficiary. 8. Cost Estimated cost of works. 9. Employment Ratio total salaries/total cost Number of workstations during .............. months Men/month during construction Permanent jobs (if existing). 10. Environment Brief description of impact on the environment and possibly on public health. 1I. Management Description of planned management system. Description of management for a community or a private manager. 12. Participation Description of implemented participative process with the community during identification and definition of project. - 31 - Annex 5: Financial Summary BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Not Applicable - 32 - Annex 6: Procurement and Disbursement Arrangements BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Procurement General 1. There is no Country Procurement Assessment Review (CPAR) for Burnmdi, so far, experience has showrn that procurement procedures in Burundi do not conflict with Bank guidelines; fuirthernore, national procurement laws and practices allow IDA procedures to take precedence over any contrary provisions in national regulations. Guidelines 2. Procurement of goods and works required for the project and to be financed from the proceeds of the credit shall be governed by the Guidelines for Procurement under IBRD Loans and IDA Credit, published in January 1995 and revised in January and August 1996, September 1997 and January 1999. Consultant services contracts financed by IDA will be procured in accordance with the Bank's Guidelines for the Selection of Consultants by World Bank Borrowers (January 1997, revised in September 1997 and January 1999). The project implementation manual includes the manual of technical procedures drawn up for AGETIP agencies. AGETIP BURUNDI will also use standard AGETIP bidding and consultant proposal documents. Procurement Notices 3. A General Procurement Notice (GPN) with pertinent information on estimated contract opportunities scheduled during the next twelve months will be published in the UN Development Business (UNDB) and in a national paper of wide circulation. The GPN will be updated annually for ICB contracts, if any. Specific Procurement Notices (SPNs) will be required for goods and works contracts. For ICB contracts, if any, the SPN will also be advertised in the UNDB. For NCB, a general procurement notice will be advertised in a national paper of wide circulation, followed by SPNs when bids are launched. Such GPN will be updated annually. Contracts for consulting firms are estimated below US$200,000; consequently, the GNP for expressions of interest will be published only in a national paper of wide circulation. However, if foreign firms express interest in these bids, they will not be excluded from consideration. Procurement Capacity Assessment 4. The implementing agency will be "AGETIP BURUNDI A.S.B.L." A procurement capacity assessment was carried out during appraisal. Since AGETIP Burundi is not yet functional, the assessment focused on the recent procurement experience in small construction works fiom Social Action Projects I and II (Cr. 2494-Bu 1993-1999 and Cr. 3278-Bu 2000-2004). These social fund projects have been implemented since 1993 by a non-profit association "Twitezimbere A.S.B.L." After a difficult start, Twitezimbere achieved impressive results in terms of the number of sub-projects financed (556) as well as the quality of execution. The experience with Twitezimbere confirms the importance of the following lessons: (i) the need to recruit a qualified management team; (ii) the requirement to establish clear procedures, and simple and standardized technical documents which can be easily mastered by the parties involved in procurement activities; (iii) the necessity to set up a training program tailored to the needs of - 33 - the different partners (SME, national and local administration, associations of beneficiaries); and (iv) the importance of a close monitoring and rigorous selection of consultant firms in charge of designing (preparation of bidding documents) and supervising civil works contracts. 5. In view of Twitezimbere's experience, "AGETIP BURUNDI" was created in November 2000, as an AGETIP agency (Agence de Travaux d'nteret Public du Burundi (AGETIP BURUNDI), in line with other AGETIP-type agencies created in West Africa under Bank-financed operations, to handle larger sub-projects in the capital, main secondary towns and municipalities. The lessons learned from Twitezimbere have been incorporated in the project's design and AGETIP BURUNDI's operating procedures. AGETIP BURUNDI will operate as an independent non-profit association. The agency will be independent and private-sector oriented. Its Board consists of an administrator and key stakeholder representatives (the Mayor of Bujumbura, the Chamber of Commerce of Burundi, the Association of Engineers, Architects and Urban Planners). 6. AGETIP BURUNDI's Director General, Technical Director and Financial Director have recently been appointed in a manner satisfactory to IDA. The procurement capacity of the AGETIP BURUNDI management team and staff will be reinforced through: (i) training of senior staff at Bank sponsored procurement courses in Dakar, and (ii) close procurement supervision and guidance provided by the Burundi Country Office. A formal capacity assessment of AGETIP BURUNDI will be carried out by a Bank procurement specialist six months after start-up of operations, including a review and--if needed-an adjustment of the action plan to strengthen its capacity. Procurement Implementation Arrangements 7. AGETIP BURUNDI will be responsible for the procurement process, except: (i) the selection of sub-projects; and (ii) the capacity building sub-component in favor of municipalities and ministries involved in project execution. These tasks have been delegated to the Technical Secretariat which will be funded under the capacity building sub-component to help municipalities in the technical aspects of sub-projects, and set up in the Ministry of Public Works and Equipment. This Technical Secretariat will conduct feasibility studies, ensure that adequate provisions have been made for operations and maintenance, and that complementary support will be provided by relevant ministries. 8. AGETIP BURUNDI will follow procurement guidelines specified in this Annex, which will be in line with its own manual of procedures. A draft Manual of Procedures, including a manual of technical procedures with all standard technical documents for AGETIP agencies, was reviewed during appraisal. An updated version was discussed during negotiations. A final version, acceptable to IDA, will be a condition of credit effectiveness. 9. The TORs, and the short list of a consultant mission regarding the training program, will be prepared and made available before July 2001. The implementation of this program will be launched as soon as the Government, through the Technical Secretariat, and IDA have accepted the training prograrn and the budget. 10. Recruitment procedures conceming consulting services are clear and well described in the manual of technical procedures. AGETIP BURUNDI will also benefit from the experience of the Social Action Project- Twitezimbere- (I & II ) and the Road Sector Project, which contributed to strengthening the capacity of local consulting firms. However, AGETIP BURUNDI will closely monitor the obligations and accomplishments of consulting firms, and their performance will be scrutinized in the technical audit. - 34 - Procurement plan II. The borrower submitted a detailed procurement plan for the first year, which includes relevant infonnation on civil works and goods. It was agreed that by October 1 of each year, AGETIP BURUNDI will submit a detailed procurement plan for the next year for IDA's prior review. The procurement plan will be updated at least once a year. The progress report forwarded to IDA will provide appropriate details on procurement progress. Procurement Methods 12. Civil Works contracts will include inftastructure, such as rehabilitation of urban roads, construction and renovation of markets, buildings, water supply and sanitation. All civil works contracts, costing more than US$25,000 per contract, up to an aggregate amount of US$12.48 million (or 48 percent of the total contract amount), will be procured through NCB, in accordance with procedures described in the manual of technical procedures acceptable to IDA. Contracts exceeding US$200,000 will be subject to ICB. 13. Small civil works contracts costing less than the equivalent of US$25,000 each, up to an aggregate amount of US$2.63 million (or 5 percent of the total amount of civil works contracts), may be procured on the basis of quotations obtained from at least three qualified domestic contractors. The contract will be awarded to the contractor who offers the lowest quotation, provided he has the experience and financial and technical resources to successfully complete the contract. 14. Goods contracts for furniture, equipment, vehicles and computers, estimated to cost US$100,000 or more, will be awarded by ICB. Goods estimated to cost less than the equivalent of US$100,000 per contract, up to an aggregated amount of US$0.22 million (or 60 percent of the amount), will be awarded through NCB using procedures acceptable to IDA. Small items for office equipment, supplies, small equipment and furniture locally available, costing up to US$10,000 per contract, and up to an aggregated amount of US$0.14 million (or 40 percent of the total contract amount for goods), will be procured on the basis of comparison of at least three quotations obtained from reputable suppliers. To the extent possible, goods and equipment to be purchased under the project will be combined into packages worth up to US$100,000. 15. Consultant Services financed by IDA will be for: (i) studies, architectural design, civil works supervision, preparation of bidding documents, accounting systems, financial management support, financial and technical audits; and (ii) consultancies on technical matters and training program--skills gap analysis, skills development-and training of staff, communities, and municipalities. For consultant services estimated to cost more than US$50,000 per contract, the Quality- and Cost-Based Selection (QCBS) method will be used. For financial audits costing less than US$50,000 per contract to an aggregate amount of US$150,000, the Least-Cost Selection (LCS) will apply. 16. Consultants services for small and simple services, such as training, community sensitization, etc. (estimated to cost less than the equivalent of US$50,000 per contract and up to an aggregate amount of US$4.3 million), will be selected on the basis of Consultants' Qualifications (CQ), by comparing consultants' experience and competence relevant to the assignment. AGETIP BURUNDI will advertise these consultancies in a national newspaper with wide circulation to obtain expressions of interest. 17. Services for small studies, which can be delivered by individual experts, such as technical audits (estimated to cost less than the equivalent of US$50,000 per contract and up to an aggregate amount of - 35 - US$0.25 million), will be selected through comparison of qualifications of Individual Consultants (IC) who have expressed an interest in the assignment or who have been approached directly because of their specific competence in the field. 18. Short-lists of consultants for contracts estimated to cost less than the equivalent of US$50,000 may be comprised entirely of national consultants, if a sufficient number of qualified firms (at least three) are locally available at competitive costs. This would particularly apply to contracts for architectural and engineering services. However, if foreign firms express an interest in these contracts, they will not be excluded from consideration. Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) 1. Works 12.47 12.48 2.63 0.00 27.58 (11.82) (11.82) (2.63) (0.00) (26.27) 2. Goods 0.00 0.22 0.14 0.00 0.36 (0.00) (0.22) (0.14) (0.00) (0.36) 3. Services 0.00 0.00 9.41 0.00 9.41 Consultant Services & (0.00) (0.00) (9.41) (0.00) (9.41) Training _ _ 4. Operating Costs 0.00 0.00 3.20 0.00 3.20 (0.00) (0.00) (2.96) (0.00) (2.96) 5. PPF 0.00 0.00 1.00 0.00 1.00 (0.00) (0.00) (1.00) (0.00) (1.00) Total 12.47 12.70 16.38 0.00 41.55 (11.82) (12.04) (16.14) (0.00) (40.00) "Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies 2 Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local govermnent units. - 36 - Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) . a1 A. Firms 4.70 0.00 0.00 0.15 4.31 0.00 0.00 9.16 (4.70) (0.00) (0.00) (0.15) (4.31) (0.00) (0.00) (9.16) B. Individuals 0.00 0.00 0.00 0.00 0.25 0.00 0.00 0.25 (0.00) (0.00) (0.00) (0.00) (0.25) (0.00) (0.00) (0.25) Total 4.70 0.00 0.00 0.15 4.56 0.00 0.00 9.41 (4.70) (0.00) (0.00) (0.15) (4.56) (0.00) (0.00) (9.41) 1\ Including contingencies Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Credit. - 37 - Prior review thresholds (Table B) 19. Civil works contracts exceeding the equivalent of US$100,000 will be subject to IDA's prior review procedures. In addition, the first three contracts below US$100,000 will be subject to prior review. For small works, the first three contracts below US$25,000 will be subject to prior review. All other contracts will be subject to post review by IDA during supervision missions and by auditors. 20. Goods contracts for an amount exceeding the equivalent of US$50,000 will be subject to prior review by IDA. The first three contracts below this level will also be subject to prior review. All other contract will be subject to post review by IDA during supervision mission and by auditors. 21. Consultant services. All terms of reference, regardless of contract cost, will be subject to prior review. All contracts at or above US$50,000 will be subject to prior review. The first three contracts below US$50,000 will be subject to prior review. The first three contracts for audits costing less than US$50,000 will be subject to prior review. Contracts with individuals, costing US$30,000 or more, will be subject to prior review. The first three contracts costing less than US$30,000 per contract will be subject to prior review. Table B: Thresholds for Procurement Methods and Prior Review' 1. Works > $200,000 ICB all contracts > $25,000 - < $200,000 NCB > $100,000 Small works < $100,000 first 3 contracts < $25,000 3 quotations first 3 contracts 2. Goods > $100,000 ICB all contracts >$10,000 - < $100,000 NCB > $50,000 Prior review <$50,000 first 3 contracts < $10,000 Shopping 3. Services Consultants Firms > $50,000 QCBS/LCS Prior review Audits < $50,000 LCS first 3 contracts Other < $50,000 CQ first 3 contracts Individuals > $30,000 IC Prior review < $30,000 IC first 3 contracts Total value of contracts subject to prior review: Overall Procurement Risk Assessment Average Frequency of procurement supervision missions proposed: One every 4 months (includes special procurement supervision for post-review/audits) - 38 - Procurement supervision and technical audit 22. During the first year of project activities, procurement specialists will supervise AGETIP BURUNDI every four months, and thereafter, once every six months provided project performance is satisfactory. During these missions selective post review will be carried out of contracts awarded below the threshold. AGETIP BURUNDI activities will be subject to annual technical audits (carried out separately from financial audits) by a qualified consultant, selected through a competitive process acceptable to IDA. Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 39 - Disbursement Allocation of credit proceeds (Table C) 23. The proposed IDA Credit will finance a five-year investment project according to the categories shown in Table C below. The credit closing date will be six months after the end of the fifth year, to allow payments of last invoices for contracts completed before the completion date. Table C: Allocation of Credit Proceeds 1. Goods 100% of foreign expenditures 90% of local expenditures (a) Technical Secretariat 0.14 (b) AGETIP BURUNDI 0.20 2. Consultant Services 100% (a) Technical Secretariat 4.14 (b) AGETIP BURUNDI 2.43 3. Sub-projects 25.24 100% of amounts disbursed 4. Operating Costs 90% (a) Technical Secretariat 0.99 (b) AGETIP BURUNDI 1.83 5. PPF Refinancing 1.00 6. Unallocated 4.03 Total Project Costs 40.00 Total 40.00 Sub-projects category amount includes consultant services for studies, design and oversight of works. Use of statements of expenditures (SOEs): 24. Disbursements of the credit will be fully documented when the submission of withdrawal application is received, except for expenditures valued at less than US$100,000 equivalent for civil works, less than US$50,000 equivalent for goods, less than US$50,000 equivalent for consulting firms, and less than US$30,000 equivalent for individual consultants, which will be made against SOEs, and available for examination by financial and technical auditors, and by IDA supervision missions. Applications for direct payments can be submitted for amounts exceeding 20 percent of the special account (initial deposit). Counterpart Funds, Project Account, and IDA support for Operating Costs 25. Government's counterpart funds (needed for 12 months) to cover the share of investment not financed by IDA, including advances for operating costs, will be deposited by the government in a Project Account (PA), no later than January 31 each year. Payment by the Government of the first tranche of US$25,000 equivalent is a condition of credit effectiveness. Special account: 26. To facilitate disbursements, the Govemment will open two Special Accounts (SA), one for - 40 - AGETIP BURUNDI and another for the Technical Secretariat at commercial Banks in Bujumbura for IDA's share of eligible expenditures. The authorized allocation for AGETIP BURUNDI's SA will be US$750,000 representing about three months of disbursement. IDA will make an initial deposit of US$375,000 equivalent upon credit effectiveness, and the balance will be made available as soon as cumulative disbursements reach SDR3,000,000. The authorized allocation for the Technical Secretariat will be US$250,000 representing about three months of disbursement. IDA will make an initial deposit of US$125,000 equivalent upon credit effectiveness, and the balance will be made available as soon as cumulative disbursements reach SDR1,000,000. IDA will replenish the SA upon receipt of appropriate documentation (satisfactory to IDA) for incurred eligible expenditures. Each replenishment request will be accompanied, as necessary, by up-to-date bank and reconciliation statements. IDA would carry out, at the end of the first year of implementation, a comprehensive assessment of the project's financial management to determine its adequacy and readiness for a new enhanced disbursement method (to be discussed with IDA at that time). Auditing 27. Accounting records will be maintained at AGETIP BURUNDI and the Technical Secretariat by designated financial staff. All procurement documents, contracts, and invoices would be maintained separately by the two agencies and made accessible to supervision missions and auditors. The TS and AGETIP BURUNDI will provide: (a) financial statements and audit reports by independent auditors (following International Auditing Standards) within six months after the end of the Government's fiscal year; and (b) reports on the construction program and technical audits by individual consultants within six months after the end of AGETIP BURUNDI's fiscal year. Financial auditors will also: (i) express separate opinions on SOEs and the SA; and (ii) perform semi-annual audits on the SOEs and SA and review the internal control system. Reporting 28. AGETIP BURUNDI will submit the following reports: (a) trimestrial progress reports; (b) an annual report and a proposed financing plan, four weeks before the annual review, and no later than September 30 each year; (c) an annual technical, financial and management audit, no later than six months after the end of AGETIP BURUNDrs fiscal year; and (d) relevant sections of the hnplementation Completion Report (ICR) three months before the closing date. The TS will provide consolidated reports on project implementation on the same frequency as AGETIP BURUNDI. Supervision 29. The project will require intensive supervision during the start-up phase when imnplementation arrangements would be put to the test. The first full IDA/donors' mission will take the form of a project launch workshop, at least three months after credit effectiveness, to establish the annual review cycle. In addition to the first annual review meeting, three supervision missions will be scheduled during the first project year to monitor progress and coordinate with Govermnent, and every six months thereafter. Supervision missions--comprising financial management and procurement specialists at least twice a year--will consist of field trips, including work sites, to review financial and management practices, bidding, and payment procedures. For each annual review, a full technical and financial audit of the project, as well as a beneficiary assessment, will be conducted. The mid-term review will take place 30 months after effectiveness. A detailed supervision plan is presented in Annex 11. - 41 - Annex 7: Project Processing Schedule BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Time taken to prepare the project (months) First Bank mission (identification) 04/17/2000 07/15/2000 Appraisal mission departure 09/25/2000 10/02/2000 Negotiations 11/25/2000 12/20/2000 Planned Date of Effectiveness 06/30/2001 Prepared by: Government of Burundi Project Preparation Committee Ministry of Public Wotks and Equipment Preparation assistance: IDA PPF - Two tranches for a total of US$1 million Bank staff who worked on the project included: Na0. 0 i X E r: ,.g0X . 0 W . . .. Si .' ' ' y..g:.00 ,, g W:400 ti,0 . itEt :00000044200 ftELLL,00 Eustache Ouayoro Team Leader Jainaba Kah Urban Economist Pamphile Kantabaze Operations, Community Participation Gender, HIV-AIDS issues and Social Infiastructures Prosper Nindorera Operations, procurement Bernard Abeille Principal Procurement Specialist Isabella Micali-Drossos/Solange Aliali Lawyer Agnes Albert-Loth Disbursement Officer Abdul Haji Sr. Financial Management Specialist Emestina Attafuah Sr. Program Assistant Connie Kok Shun Program Assistant Sophie Hans-Moevi Team Assistant Leoncie Niyonahabonye Country Office Team Assistant: Community Development; Procurement & Disbursement Peer Reviewers Quality Assurance: Frannie Leautier, Director (INFDR) Jagdish Bahal, Sr. Urban Finance Specialist (AFTU2) Richard Verspyck, Lead Water & Sanitation Specialist (AFTU2) Alain Labeau, Sr. Transport Specialist (EASTR) Operations Support Review: Hedi Larbi, Lead Transportation Planner (AFTTR) - 42 - Annex 8: Documents in the Project File* BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT A. Project Implementation Plan B. Bank Staff Assessments 1. Project Information Document 2. Identification Mission Aide-Memoire and Back-To-Office Report 3. Minutes of the PCD Review Meeting 4. Preparation Aide-Memoire and Back-To-Office Report 5. Pre-Appraisal Aide-Memoire and Back-To-Office Report 6. Appraisal Mission Aide Memoire 7. Environmental Assessment and Management Plan 8. Financial Management 9. Procurement Capacity Assessment 10. Procurement Plan 11. Implementation Schedule C. Other 1. Studies to Set up Executing Agency, AGETIP BURUNDI 2. Manual of Procedures: Administrative and Accounting, Budgeting and Financing 3. Construction Industry Survey 4. Training Program for Small Contractors, Consulting Firms and Communes 5. Identification, Appraisal and Bidding Documents for Pilot Projects 6. Assistance to Communities for Rapid Project Assessments 7. Environmental Impact Methodology 8. Management Information System and Accounting Procedures 9. Community Mobilization Strategy 10. Training in Participatory Techniques 11. Cost Recovery Policies *Including electronic files - 43 - Annex 9: Statement of Loans and Credits BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Dec-2000 Dfference between expected and actual Odginal Armount in US$ Millions disbursements Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd P064556 2000 BI-EERC 0.00 35.00 0.00 4.59 -29.74 0.00 P064510 2000 Bi-Bursap 11 0o00 12.00 0.00 10.89 1.28 0.00 P038801 1995 EMERG. ASSIST PR.EAP 000 14.0 0.00 0.00 -0.24 0.00 P000216 1995 HEALTH/POPULATION 11 0o00 21.30 0.00 6.78 7.41 -0.89 P000237 1993 AGRI-BUSINESS PROMOT 0.00 3.10 2.96 0.00 2.73 0.00 P000227 1993 BI-Social Action 0.00 10.40 0o00 0.70 0.73 0.30 P000208 1992 SAL III 0.00 30.00 21.93 0.00 18.63 0.00 P000217 1992 WATERSUPSECTOR 0o00 3270 0.00 1.45 25.69 1.38 P000226 1992 PRIV SEC 0.00 17.00 10.03 0.00 9.57 0.67 P000219 1991 BI-EnergySectorRehab. 0.00 22.80 1.19 0.02 1.24 O.0 P000204 1990 Bui-Transport Sector 0.00 43.20 4.73 0.00 4.67 -2.05 Total: 0.00 242.10 40.84 24.44 41.97 -0.59 - 44 - BURUNDI STATEMENT OF IFC's Held and Disbursed Portfolio Dec-2000 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 2000 AEF V&F Export 0.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Portfolio: 0.44 0.00 0.00 0.00 0.00 0.00 0.00 0( Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic Total Pending Cormmitment: 0.00 0.00 0.00 0.00 - 45 - Annex 10: Country at a Glance BURUNDI: PUBLIC WORKS AND EMPLOYMENT CREATION PROJECT Burundi at a glance 9J12100 Sub- POVERTY and SOCIAL Saharan Low- Burundl Africa Income Development diamond* Population, mid-year (nmtiIons) 6.7 642 2,417 Life expectancy GNP per capita (Atfas metho, US$) 130 500 410 GNP (Atlas nethodo .US$ billions) 0.8 321 988 Average annual Frowth, 1993-89 Population (%) 2.1 2.6 1.9 / Laborforce (%) 2.4 2.6 2.3 Gpe I Gross Moat recent estimate (latest year available, 1993-99) capita \p/ enroliment Poverty (X of population below nahtonal poverty line) Urban population (X of total population) 9 34 31 Life expectancV at birth (yeasi) 42 50 60 lnfant mortalty (per 1,000 hle births 118 92 77 Child malnutrition (% of children under 5) .. 32 43 Access to safe water Access to improved water source (% of populatIon) .. 43 64 lliteracy % of populaton ae 15+) 53 39 39 Gross primary enrollment (% ofschool-age population) 51 78 96 -Buundl Male 55 85 102 Low-Incorm group Female 46 71 86 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1979 1989 1998 1999 Economic ratios GDP (US$ billiors) 0.8 1.1 0.9 0.7 Gross domestic investmentiGOP 14.9 16.5 8.8 8.0 Trade Exports of goods and services/GDP 14.2 9.7 8.1 8.8 Gross domestic savings/GDP 6.4 3.3 -2.9 -1.6 Gross national savings/GDP 5.3 14.3 2.6 4.2 Current account balance/GDP .. -2.1 -6.2 -3.6 Domestic / ie Interest payments/GDP 0.2 1.3 1.4 2.1 Savings Investment Total debtGDP 17A 79.0 128.7 157.6 avgs Total debt service/exports 3.7 36.4 73.7 88.9 Present value of debtGDP .. .. 71.3 Present value of debtexports .. .. 833.6 Indebtedness 1979-89 1989-99 1998 1999 1999-03 (avwrage annual growth) GDP 4.4 -2.9 -5.8 5.5 3.2 - Burundi GNP per capita 1.3 -4.5 -7.2 5.1 1.1 Low-Income group Export of goods and services 3.8 8.2 -4.0 35.9 17.3 STRUCTURE of the ECONOMY 1979 1989 1998 1999 Growth of investment and GOP (%) (%of GDP) 10 Agriculture 60.6 53.7 53.6 49.8 100 Industry 16.6 19.7 17.3 18.5 so / Manufacturing 10.5 13.3 6.9 7.9 Services 22.8 26.7 29.1 31.7 Private consumption 80.8 86.6 89.6 84.0 .50 General govemment consumption 12.8 10.2 13.3 17.6 - GDI e GDP Importsofgoodsandservices 22.7 22.9 19.8 18.3 (avergeM annual growth) 1979-89 1989-99 1998 1999 Growth of exports and imports (%) Agriculture 3.1 -1.6 4.7 -2.8 30 Industry 5.1 -6.2 -5.1 6.3 2 Manufacturing 5.9 -8.1 -10.8 4.9 Services 5.8 -1.3 8.7 -0.3 10o Private consumption 3.4 -5.3 21.1 -6.5 o A.. _ General govemment consumption 0.5 15.7 4.6 15.0 597 98 55 Gross dometbic investment 8.7 -2.7 45.8 10.9 -100 Importsofgoodsandservices 2.2 8.1 81.3 13.0 Exports -e lImports Gross national product 4.2 -3.0 -5.6 5.1 Note: 1999 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared vith its income-group average. If data are missing, the diamond will be incomplete. - 46 - Burundi PRICES and GOVERNMENT FINANCE DomestIc pnlces 1979 1989 1998 1999 Inflation (%) (% change) 40 - Consumer prices 27.8 11.7 12.5 3.5 30 - Implicit GDP deflator 26.1 14.8 23.7 -3.0 20 Govemment finance 10 (% of GDP, includes current grants) o Current revenue .. 21.1 17.4 18.3 -10 4 Current budget balance .. 6.2 -0.2 -3.0 GDP deflator * CPI Overall surplusideficit .. -4.3 -5.0 -7.6 TRADE (US$ millions) 1979 1989 1998 1999 Export and Import levels (USS mill.) Total exports (fob) .. 93 64 56 250 Coffee .. 75 51 44 Tea 6 9 8 200 Manufactures .. 4 0 1 iso Total imports (cit) .. 184 157 118 100 * Food .. 10 10 1 1 J Fuel and energy , 20 14 19 o Capital goods 6. 85 49 52 E Export price index (1995=100) .. 88 64 58 Import price index (1995=100) .. 85 88 89 EExports aImports Terms of trade (1995=100) .. 104 73 65 - BALANCE of PAYMENTS 1979 1989 1998 1999 Current account balance to GDP (%) (UlSS millions) Exports of goods and services 109 109 71 62 3- Imports of goods and services 178 256 174 129 Resource balance -69 -147 -102 -68 o - ' t l l _ _ l l 111 11 Net income -10 -18 -8 -9 97 Net current transfers .. 141 56 51 Current account balance .. -24 -55 -26 Financing items (net) 49 16 12 Changes in net reserves 7 -25 39 14 s Memo: Reserves including gold (US$ millions) 97 101 108 92 Conversion rate (DEC, locaVUS$) 90.0 158.7 447.8 563.6 EXTERNAL DEBT and RESOURCE FLOWS 1979 1989 1998 1999 (US$ millions) ComposItlon of 1999 debt (USS mill.) Total debt outstanding and disbursed 136 880 1,130 1,126 IBRD 0 0 0 0 G 14 IDA 25 328 708 599 F:95 Total debt service 4 43 55 57 E 152 IBRD 0 0 0 0 IDA 0 3 12 12 Composition of net resource flows aB. 59 Official grants 32 75 51 Official creditors 31 91 27 5 D:253 Private creditors 1 -6 42 53 Foreign direct investment 0 1 1 Portfolio equity 0 0 .. C :13 World Bank program Commitments 7 53 0 12 A - IBRD E - Bilateral Disbursements 11 45 32 15 B- IDA D- Othermultlateral F-Private Principal repayments 0 1 7 9 C- IMF G - Short-term Net fowv 11 44 25 6 Interest payments 0 2 5 5 Net transfers 11 42 20 1 Development Economics 9112/00 - 47 - Burundi Additional Annex No.: 11 PROJECT SUPERVISION PLAN No Date Objective Composition Duration SW 1. June Project Launch Workshop: Review of Team Leader, Urban 2 12 2001 performance indicators, project description, Specialist, Procurement AGETIP BURUNDI and Technical Specialist, Financial Secretariat organization and work plan, Management Specialist, procurement plan and procedures, Field Operations Officer, disbursement procedures, reporting formats, Environmental Specialist scope of technical and financial audits, environmental and resettlement plan. 2. Sept. Supervision Mission: Review of Team Leader, Urban 2 6 2001 procurement plan and procedures, works Specialist, Procurement execution, work plan, action plan on Specialist financial management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 3. Dec. Supervision Mission: Review of procurement Team Leader, Urban 2 10 2001 procedures and plan, works execution, work Specialist, Procurement plan, action plan on financial management, Specialist, Financial SOEs, AGETIP BURUNDI and Technical Management Specialist, Secretariat performance. Field Operations Officer 4. March Supervision Mission: Review of Team Leader, Procurement 2 6 2002 procurement procedures and plan, works Specialist, Financial execution and plan, action plan on financial Management Specialist management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 5. June Supervision Mission: Review of Team Leader, Procurement 2 6 2002 procurement procedures and plan, works Specialist, Urban Specialist execution and plan, action plan on financial management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 6. Dec. Supervision Mission and annual review: Team Leader, Procurement 2 6 2002 Review of procurement procedures and plan, Specialist, Urban Specialist works execution and plan, action plan on financial management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 7. June Supervision Mission: Review of Team Leader, Procurement 2 6 2003 procurement procedures and plan, works Specialist, Urban Specialist execution and plan, action plan on fnancial management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 8. Dec. Mid-term review: Accounting and Team Leader, Procurement 2 14 2003 disbursement procedures, progress on project Specialist, Urban Specialist, implementation, AGETIP BURUNDI and Financial Management Technical Secretariat performance, Specialist, Field Operations performance indicators, environmental and Officer, Environment social action plan, project impact, agreement Specialist, Operations on future actions. Assistant 9. June Supervision Mission: Review of Team Leader, Urban 2 8 2004 procurement procedures and plan, works Specialist, Procurement execution and plan, action plan on financial Specialist, Financial management, SOEs, AGETIP BURUNDI Management Specialist. and Technical Secretariat performance. - 48 - 10. Dec. Supervision Mission and annual review: Team Leader, Urban 2 10 2004 Review of procurement procedures and plan, Specialist, Procurement works execution and plan, action plan on Specialist, Financial financial management, SOEs, AGETIP Management Specialist, BURUNDI and Technical Secretariat Field Operations Officer performance. 11. June Supervision Mission: Review of Team Leader, Procurement 2 6 2005 procurement procedures and plan, works Specialist, Urban Specialist execution and plan, action plan on finacial nianagement, SOEs, AGETEP BURUNDI and Technical Secretariat perfomiance. 12. Dec. Supervision Mission and annual review: Team Leader, Urban 2 10 2005 Review of procurement procedures and plan, Specialist, Procurement works execution and plan, action plan on Specialist, Financial financial management, SOEs, AGETIP Management Specialist, BURUNDI and Technical Secretariat Field Operations Officer performance. 13. June Supervision Mission: Review of Team Leader, Procurement 2 6 2006 procurement procedures and plan, works Specialist, Urban Specialist execution and plan, financial management, SOEs, AGETIP BURUNDI and Technical Secretariat performance. 14. Dec Supervision Mission: Review of works Team Leader, Procurement 2 8 2006 execution, procurement, AGETIP Specialist, Urban Specialist, BURUNDI and Technical Secretariat Operations Assistant performance, performance indicators, targets and achievements, ICR preparation. _ - 49 - 28° X ° { }li r~ i l 40 _3_________ __4° DEMOCRATIC REPUBLIC °-' W This map was produced by the, , IIJX - X/ a Mop Design Lnitof The World Bank. OF CONGO }i2 i The boundaries, colors, denominations 1 and any other information shown on this t , / 1 1.,: st,l Q ¢, :-i-,w'l >ttubnz map do not imply, on the part of The l{.;t . > < :gZ./ w World Bank Group, any judgment an /X /02 0KLMTR c the legal status of any territory, or any1-jrfr t,L i -*2 Ii; _ endorsement or acceptance of such ,-,t,;27 I Kigoma 300 < 3]v 1O '0~~~~~~~~~~~~~~~~~~1U