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P095978
Page 1 40113 PROJECT INFORMATION DOCUMENT (PID) Project Name Nepal Village Micro Hydro Carbon Offset Project Region South Asia Sector SASSD Project ID P095978 Borrower(s) Implementing Agency Alternative Energy Promotion Center Environment Category [] A [X ] B [ ] C [ ] FI [ ] TBD Safeguard Classification []S 1 [X ] S 2 [ ] S 3 [ ] S F [ ] TBD Date PID Revised May 7, 2007 Date of Appraisal Authorization April 27, 2007 Estimated Date of ERPA Signature June 17, 2007 1\. Country and Sector Background Nepal has vast hydro resources, which represent a source of potential wealth\. Commercially exploitable hydropower generating potential is estimated to be about 43,000 MW\. However, despite this large potential, only about 600 MW has been developed so far\. Based on the 2001 census, 40 percent of Nepal's households have access to electricity, but disparity in access is stark\. While over 90 percent of the urban population is connected to the grid, it is estimated that only 27 percent of rural households have access to electricity\. 1 Nepal’s 10th National Plan aims to increase the electrification rate to 55 percent through both grid extension and non-grid options including micro-hydro and solar\. This emphasis on power development followed the adoption of the Hydropower Development Policy in the early 1990s which, combined with changes in electricity legislation and the opening up of the power sector to local and foreign private investments, was intended to make institutions operating in the power sector efficient and creditworthy, as well as increase the participation of the private sector in the provision of electricity services of the people\. Under this policy and regulatory framework, Government of Nepal (GoN) has been able to attract some private (foreign) investments in power generation, yet there is an increased recognition that more needed to be done to attract private capital in the sector and to improve the efficiency and creditworthiness of Nepal Electricity Authority (NEA), the central Government owned grid operator, generator and distributor\. 1 Nepal Country Strategy on Integration of Energy and Rural Development Policies and Programme -Water and Energy Commission Secretariat of the Government of Nepal, December 2005\. Page 2 The revised Hydropower Development Policy of 2001 was intended to address many of the outstanding issues preventing achievement of the sector objectives\. It envisaged an increased involvement of private investors in the production, distribution, and management of electricity while recognizing the need for continued institutional and structural changes in the power industry\. The revised Policy called for the creation of a more competitive environment for private sector participation, including introduction of more transparent and investment friendly procedures\. The development of small hydro projects and district level projects under decentralized schemes in hilly and remote areas were also highlighted as areas to be developed with support of a subsidy scheme implemented by the Alternative Energy Promotion Center (AEPC)\. Finally, the Policy directed that increased attention be paid to the social and environmental aspects of hydroelectric development to ensure that adverse effects on the environment and communities are minimized\. While progress has been made on several fronts during the initial years of policy implementation, there was a growing realization that increasing access to remote areas though decentralized schemes required additional specialized efforts\. Furthermore, implementation of some elements of the hydropower policy, such as private sector participation, were hampered by country economic and security risk, and the lack of adequate domestic capital market, issues which were beyond the control of the power sector itself\. To assist the GoN in meeting its sector objectives, the World Bank approved a Power Development Project consisting of a $75\.6 million IDA credit in 2003\. Discussions were initiated with the World Bank in late 2004 to prepare a complementary Carbon Offset project whose revenues would provide additional financial support to AEPC’s village micro-hydro program, further increasing rural access to modern energy sources in Nepal\. 2\. Objectives The proposed development objectives of the Carbon Offset Project are: Reduce global emissions of carbon dioxide\. Increase access to modern energy from renewable energy sources\. The Carbon Offset project complements the ongoing World Bank Power Development Project by providing additional support for the achievement of its development objectives, in particular the objective of improving access of rural areas to electricity services\. The overall development objectives of the Power Development Project are: (a) develop Nepal's hydropower potential in an environmentally and socially sustainable manner so as to help meet electricity demand, (b) improve access of rural areas to electricity services, and (c) promote private participation in the power sector as a way to improve sector efficiency and to mobilize financing for the sector's investment requirements\. The objectives of this World Bank Carbon Offset Project are therefore consistent with the developmental and poverty reduction objectives of GoN\. 3\. Rationale for Bank Involvement Page 3 This Carbon Offset project will facilitate greenhouse emission reductions and support the development of the international market mechanism for trading Emission Reductions (ERs), developed under the framework of the Kyoto Protocol\. The Nepal Village Micro Hydro project consists of sale of ERs to the Community Development Carbon Fund (CDCF) which provides carbon finance to small-scale CDM projects in the least developed countries and poorer areas of all developing countries\. The CDCF actively seeks to reach countries and communities that are neither presently benefiting from development through carbon finance nor are likely to benefit greatly from it in the future\. The CDCF also seeks to support projects which include, as a measurable output, the provision of goods and services that will lead to improvement in the social welfare of the communities involved in the projects\. The sale of emission reduction credits to the CDCF will allow for full implementation of the micro-hydro program by generating additional resources to allow for expanded coverage of the program beyond the original target of 25 districts, and will improve program sustainability by reducing reliance on donor assistance for implementation of future phases of the program\. Higher level objectives to which the project contributes The project is consistent with the CAS for Nepal and supports the PRSP, particularly through providing support for the development of the rural economy and by increasing access to modern energy sources\. 4\. Description The Project will support the development of micro-hydropower mini-grids to meet the electricity and motive power needs of the rural people of Nepal through provision of subsidy assistance and program technical support\. The project will build on the successes achieved under the UNDP Rural Energy Development Program (REDP) by extending electrification activities to 40 districts, including 15 that were not covered under the first phase of that program\. It will also bring together the rural electrification activities supported through the micro-hydro component of the World Bank Power Development Project and the donor-financed Energy Sector Assistance Program (ESAP II) to expand the total target level of new micro-hydro installations by 15 MW by utilizing the CDM revenues to help meet un-financed program implementation and subsidy costs\. The project seeks to develop a viable off-grid micro-hydropower market for villages which will not be served by the national grid for at least 5 years\. It would offer support on both the demand and supply sides by providing information and social mobilization support, technical training, and investment subsidy (representing 40 to 70 percent of the initial investment) to communities, and market information and business development support services to micro-hydro construction and supply companies\. The micro-hydro plants will be installed by pre-qualified private sector companies who will receive subsidy payments, technical assistance and credit support\. The plants will be managed by the communities themselves or by the private sector providers\. Meters will be installed on each unit, and operating costs will be recovered through tariffs based upon installed demand for residential users and energy use for larger rural enterprises\. Page 4 The program will scale-up the promotion of off-grid micro-hydropower plants less than 100 kW utilizing Peltic systems (up to 3 kW) to supply power for domestic and institutional lighting and larger micro-hydro systems which can power agro-processing mills, saw mills and other electric machinery for small cottage industries\. It is anticipated that 15,000 kW from 750 micro- hydropower plants will be installed between 2003 and 2010, providing access to electricity to an estimated 142,000 households\. Thirty four schemes generating 589 kW have already been commissioned under this program, although these schemes are not eligible for early start crediting and will thus not claim early start emissions reductions under the carbon offset project\. This project falls under the small-scale CDM project activity with total electricity generation within the limit of 15 MW\. The project will lead to reduced GHG emissions by: Replacement of kerosene for lighting; Replacement of diesel fuel used for agro-processing and other productive use applications\. Average household electricity consumption post installation of the micro-hydro units is estimated to be 27 kWh/month, of which 18 kWh will be used for lighting and 9 kWh will be used for productive uses\. The cost of the above investment projects Project Cost US$ Million Project Component Program Cost 28\.4 Program Development cost including project appraisal costs, AEPC subsidy, technical assistance, and program management\. Installed costs 26\.9 Sponsor’s plant investment (loan, labor, other contributions) Other costs 3\.8 HRD, Goods, Incremental operating costs TOTAL 59\.1 5\. Financing Source: ($million) GoN 2\.26 Domestic borrowings/Equity investment 26\.9 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT IDA GRANT 9\.4 UNDP 3\.57 DANIDA/NORAD 14\.3 Carbon Finance 1\.9 Financing gap \.65 TOTAL 59\.08 Implementation Page 5 The project will be implemented by the Alternative Energy Promotion Center (AEPC) with technical assistance provided by UNDP REDP program\. Funding will be provided by the World Bank, DANIDA/NORAD through the ESAP Phase II program, GoN, equity contributions and in-kind contributions from the communities, and carbon finance revenues\. AEPC will assume overall management of this project\. The REDP project support units will provide project implementation support and technical assistance to the participating communities and the private sector providers\. Actual implementation of the micro-hydro installations will be managed by local governments, i\.e\., District Development Committees (DDC) and the Village Development Committees (VDC), and will involve formation of a micro-hydro functional group (MHFG) at each participating community to guide implementation and operation\. AEPC will extend grants and other project support funds to a District Energy Fund (DEF) managed by District Development Committees for financing approved micro-hydro project proposals\. Funds are released from the DEF only after the acquisition of land for the power house, securitization of the right of way for the canal and distribution lines, and the collection of collateral for any required local loans\. Investment grants or subsidies are then released based on output verification, while other costs such as for social mobilization, training, etc\. are paid on an actual cost basis\. Expenditure statements submitted through the DDCs to AEPC, who confirms eligibility of expenditures\. Partnership arrangements The Alternative Energy Promotion Center (AEPC), under the Ministry of Environment, Science and Technology is devoted to the development and promotion of renewable and alternative energy technologies in Nepal\. Established in 1996 by a Government Cabinet Order, the objective of AEPC is to popularize and promote the use of renewable energy technology to raise living standards of the rural people of Nepal, to protect the environment and to develop commercially viable alternative energy industries in the country\. Acting as an intermediary institution between the operational level NGOs/ private promoters of renewable energy and the policy deciding levels in relevant ministries, AEPC’s activities include renewable energy policy formulation and planning and facilitating the implementation of the policies/ plans\. The REDP shall provide continuing technical assistance support to AEPC in the implementation of the village micro-hydro project\. The Grant Agreement covering the Second Phase of the Energy Sector Assistance Program (ESAP II) was signed in March 2007\. Joint funding for this program will be provided by the Danish International Development Agency (DANIDA) and Norway (NORAD)\. 5\. Monitoring and evaluation of outcomes/results Monitoring and evaluation will be undertaken through two mechanisms, the World Bank supervision of the ongoing Power Development project and through the specific monitoring plan for Verification of Emissions Reductions that will be developed in the CDM Project Design Document\. The monitoring parameters of the CDM program shall include the number of kWh produced by each micro-hydro unit as measured by the individual meters, and the number of households connected to the micro-hydro plant\. AEPC will be accountable for overall reporting on implementation progress, preparation of financial monitoring reports, and preparation of Page 6 audited project accounts\. REDP district stall shall conduct regular monitoring of the installed plants\. AEPC shall also conduct enhanced verification and quality assurance activities\. A monitoring and verification plan for the community benefits of the program will be developed as required by the CDCF\. It will be built upon the existing M&E activities undertaken by AEPC under the World Bank Power Development Project and the annual impact assessment reports\. 6\. Sustainability Sustainability of the micro-hydro village electrification systems is primarily linked to the sustainability of the MHFGs, the community mobilization process and the transparency of operation throughout the life of each sub-project\. Previous experience with the first phase of the REDP shows that the community mobilization program has been effective, and that system failures have been few in number\. However, there are a number of areas where processes (and therefore sustainability) would be further enhanced, e\.g, (i) further strengthening of the community mobilization process, (ii) improve the formalization of micro-hydro functional groups; (iii) improve procurement practices; and (iv) improve the benefit monitoring and evaluation process\. Moreover, an enhanced benefit monitoring and evaluation program is being implemented as part of the World Bank Grant program, with the secondary aim of providing early feedback of system failure and malfunction\. Extensive training for the operation and maintenance (O&M) staff (two operators and one manager selected from the local community) assigned to each system is being provided through the World Bank project, in both technical aspects of system operation and in bill collection, disconnection for non-payment, record keeping, accounting, etc\. O&M staff are engaged prior to commencement of construction, are required to sign pledges that prevent them from leaving for other opportunities once training is completed, and are required to assist with system construction, plant installation and commissioning\. 7\. Lessons Learned from Past Operations in the Country/Sector The Carbon Finance Project will incorporate lessons learned from the initial implementation results of the Power Development Project and the previous phases of the UNDP REDP project\. Recent experience in Nepal has demonstrated that delivery of infrastructure services to rural communities is more effective and sustainable when beneficiaries are able to actively participate in project planning and design\. Accordingly, the village electrification component adopts a community-driven approach, which involves the community through every stage of the development process including, inter alia, organization development, woman's empowerment, skills enhancement, capital formation, technology promotion and environmental management\. 8\. Environmental Issues and Safeguard Policies The environmental impacts of micro hydro projects are generally small, with the main impacts being (i) the partial de-watering of a section of riverbed from the intake until water is returned to the river downstream of the powerhouse, and the consequent effect on aquatic life in the Page 7 dewatered section; (ii) potential ground / soil erosion caused by flushing flows discharged from sedimentation basins and by overflows at the forebay, (iii) potential ground instability caused by canal/pipe construction and leakage from canals; (iv) cutting of forest cover to make way for construction works, and (v) cutting of trees for use as power poles\. Considering the small size of these sub-projects, it is not anticipated that there will be any road construction\. In the unlikely event there are unanticipated impacts, the environmental mitigation plans developed for each sub-project will address the problems with suitable mitigation measures\. Safeguard Policies Triggered by the Project Yes No Environmental Assessment ( OP / BP / GP 4\.01) [ X ] [ ] Natural Habitats ( OP / BP 4\.04) [ X ] [ ] Pest Management ( OP 4\.09 ) [ ] [ X ] Cultural Property ( OPN 11\.03 , being revised as OP 4\.11) [ ] [ X ] Involuntary Resettlement ( OP / BP 4\.12) [ ] [ X ] Indigenous Peoples ( OD 4\.20 , being revised as OP 4\.10) [ ] [ X ] Forests ( OP / BP 4\.36) [ X ] [ ] Safety of Dams ( OP / BP 4\.37) [ ] [ X ] Projects in Disputed Areas ( OP / BP / GP 7\.60) [ ] [ X ] Projects on International Waterways ( OP / BP / GP 7\.50) [ ] [ X] 9 List of Factual Technical Documents World Bank Nepal Power Development Project, Project Appraisal Document, 2003 Rural Energy Development Programme, Project NEP/02/001, Annual Progress Reports 2003/5 Energy Sector Assistance Program (ESAP I) Progress Reports, Ref\. No\. 104\.Nepal\.802, 2003/5 Nepal Micro-Hydro Carbon Finance Document, December 2005 Nepal Micro-Hydro Promotion by Alternative Energy Promotion Centre (AEPC), CDM-SSC- PDD (Version 02), April 2007 10 Contact point Mudassar Imran Jeremy Levin 11 For more information contact: The Info Shop The World Bank 1818 H Street, NW Washington, D\.C\. 20433 Web: http://www\.worldbank\.org/infoshop
APPROVAL
P009057
 Second Small & Medium Scale Industry Report No: ; Type: Report/Evaluation Memorandum ; Country: Turkey; Region: Europe And Central Asia; Sector: Small Scale Enterprise; Major Sector: Industry; ProjectID: P009057 The Turkey Second Small and Medium Industry Project, supported by Loan 3067-TU for US$204\.5 million equivalent, was approved in FY89\. The loan was closed in FY97, following a one year extension, and US$2\.2 million was cancelled\. The Implementation Completion Report (ICR) was prepared by the Europe and Central Asia Regional Office\. The Borrower’s contribution is included as Part III\. The project objectives were to assist further in the expansion of small and medium scale industries (SMIs), improve their competitiveness, increase their export capacity, and strengthen the financial intermediaries providing credit to the sector\. The loan resources were to finance lines of credit to finance SMI investment, and a diversified technical assistance (TA) program\. The TA was to strengthen the project appraisal and supervision capabilities of financial intermediaries\. Other TA components that directly addressed the SMIs dealt with: (i) improvement of the quality of SMI products for exports; (ii) promotion of industrial standards; and (iii) further development of the statistical database on the SMI sector in Turkey\. After a good start, loan disbursement decreased considerably in 1993 as a result of weak market demand, high interest rates and competing Government subsidized credits\. In 1994, the loan was restructured to allow financing of permanent working capital, preshipment export finance and leasing\. In addition, loan proceeds could be onlent on a single currency basis in US dollars as well as DMs with an adequate premium over their LIBOR rates\. Following the restructuring, loan utilization increased substantially and the objectives of the credit component were reached\. The technical assistance program was on balance successful, but the quality improvement and the statistics components will require further financial and technical support to be sustainable\. The ICR, which is of satisfactory quality, rates the project outcome as satisfactory, achievement of institutional objectives as substantial, sustainability as likely, and Bank and Borrower performance as satisfactory\. OED concurs with this evaluation\. The lessons derived from this operation focus on project lending in an uncertain macroeconomic environment\. Free standing permanent working capital loans with long term maturities can be vital for enterprises in economies where banks are reluctant to provide term lending in an inflationary environment\. A credit line can be satisfactory in an inflationary environment for export-oriented enterprises if loans are made in foreign exchange\. No audit is planned\.
APPROVAL
P113117
Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I\. Basic Information Date prepared/updated: 10/14/2008 Report No\.: AC3899 1\. Basic Project Data Country: West Bank and Gaza Project ID: P113117 Project Name: FOOD PRICE CRISIS RESPONSE PROGRAM - Additional Financing to Social Safety Net Reform Project Task Team Leader: Samira Ahmed Hillis Estimated Appraisal Date: September 2, 2008 Estimated Board Date: November 14, 2008 Managing Unit: MNSHD Lending Instrument: Emergency Recovery Loan Sector: Other social services (100%) Theme: Global food crisis response (P) IBRD Amount (US$m\.): 0\.00 IDA Amount (US$m\.): 0\.00 GEF Amount (US$m\.): 0\.00 PCF Amount (US$m\.): 0\.00 Other financing amounts by source: Borrower 0\.00 Special Financing 5\.00 5\.00 Environmental Category: C - Not Required Simplified Processing Simple [X] Repeater [] Is this project processed under OP 8\.50 (Emergency Recovery) or OP 8\.00 (Rapid Response to Crises and Emergencies) Yes [X] No [ ] 2\. Project Objectives To mitigate the impact of the continued socio-economic crisis on a subset of the poorest and most vulnerable households\. An additional objective would be to strengthen MOSA’s institutional capacity to manage cash transfer programs\. 3\. Project Description The proposed Additional Financing grant (out of the Food Price Crisis Response Trust Fund - FPCR-AF) gives the Palestinian Authority (PA) the opportunity to scale up its existing safety net instruments to demonstrate its commitment to the poorest and most vulnerable population groups in the West Bank and Gaza\. The Grant would finance one payment of $200 to about 25,000 of the poorest households that have been adversely affected by the recent increase in food prices\. These households will be selected using the SSNRP poverty targeting database using a “proxy means test” (PMT) to determine household eligibility\. The proceeds of the additional financing grant will finance only cash benefits to poor households under component 1 of the SSNRP\. Page 2 4\. Project Location and salient physical characteristics relevant to the safeguard analysis West Bank and Gaza\. 5\. Environmental and Social Safeguards Specialists 6\. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4\.01) X Natural Habitats (OP/BP 4\.04) X Forests (OP/BP 4\.36) X Pest Management (OP 4\.09) X Physical Cultural Resources (OP/BP 4\.11) X Indigenous Peoples (OP/BP 4\.10) X Involuntary Resettlement (OP/BP 4\.12) X Safety of Dams (OP/BP 4\.37) X Projects on International Waterways (OP/BP 7\.50) X Projects in Disputed Areas (OP/BP 7\.60) X II\. Key Safeguard Policy Issues and Their Management A\. Summary of Key Safeguard Issues 1\. Describe any safeguard issues and impacts associated with the proposed project\. Identify and describe any potential large scale, significant and/or irreversible impacts: N\.A\. 2\. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: N\.A\. 3\. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts\. N\.A\. 4\. Describe measures taken by the borrower to address safeguard policy issues\. Provide an assessment of borrower capacity to plan and implement the measures described\. N\.A\. 5\. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people\. N\.A\. B\. Disclosure Requirements Date Page 3 Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP\. If in-country disclosure of any of the above documents is not expected, please explain why: N\.A\. C\. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? N/A Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? N/A All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? N/A Have costs related to safeguard policy measures been included in the project cost? N/A Does the Monitoring and Evaluation system of the project include the N/A Page 4 monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? N/A D\. Approvals Signed and submitted by: Name Date Task Team Leader: Ms Samira Ahmed Hillis 10/14/2008 Environmental Specialist: Ms Banumathi Setlur 10/14/2008 Social Development Specialist Ms Fatou Fall 10/14/2008 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Hocine Chalal 10/14/2008 Comments: The project has been transferred to the TTL on September 23, 2008\. Sector Manager: Ms Roberta V\. Gatti 10/14/2008 Comments:
APPROVAL
P131202
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 ٓ 41 42 43 39 40 ٓ 41 42 43 44 45 44 46 47 48 49 50 51 52 53 54 55 ï‚ ï‚ ï‚ 56 57 58 59 60 61 62 ï‚ ï‚ 63 ‫‪ï‚‬‬ ‫مسؤولية المشتريات‬ ‫العتبة‬ ‫المشتريات المعالجة من الوزير‬ ‫دون ‪ 05555‬دوالر أميركي‬ ‫مراجعة مسبقة من ديوان المحاسبة‬ ‫دون ‪ 00555‬دوالر أميركي‬ ‫إدارة المناقصات‪ ،‬ما لم يتم توفير استثناء خاص من مكتب رئاسة الوزراء‪ ،‬وفي هذه الحالة‪ ،‬تحصل‬ ‫أكثر من ‪ 00555‬دوالر أميركي‬ ‫وزارة االتصاالت على صالحية معالجة النشاØ‪\.‬‬ ‫‪ï‚‬‬ ‫‪ï‚‬‬ ‫‪ï‚‬‬ ‫‪o‬‬ ‫‪o‬‬ ‫‪o‬‬ ‫‪64‬‬ ï‚ ï‚ 65 ï‚ ï‚ ï‚ ï‚ ï‚ ï‚ 66 67 \.1 \.2 68 \.3 69 \.4 70 ï‚ ï‚ ï‚ ï‚ 71 ‫‪ï‚‬‬ ‫‪ï‚‬‬ ‫التقديرات حول الموارد‬ ‫المهارات الضرورية‬ ‫التركيز‬ ‫التوقيت‬ ‫منسق المشتريات واإلدارة‬ ‫استحداث‪/‬تعزيز محور‬ ‫أول ‪ 12‬شهراً‬ ‫المالية والمحور‬ ‫وفريق اإلدارة المالية ‪MiHub‬‬ ‫والمشتريات‬ ‫الفرق الفنية الخبيرة‬ ‫وضع األنشØØ© المختلفة‬ ‫(المختبر‪ ،‬المحور‪ ،‬المنافسات‬ ‫حول التØبيقات على الخليوي‬ ‫المالحظات‬ ‫عدد الرحالت‬ ‫عدد أسابيع عمل الكادر‬ ‫المهارات الضرورية‬ ‫واشنØن‬ ‫رحالت ميدانية عند االقتضاء‬ ‫ً‬ ‫‪ 11‬أسابيع عمل سنويا‬ ‫رئيس فريق المهام‬ ‫المكتب القØري‬ ‫رحالت ميدانية عند االقتضاء‬ ‫‪ 5‬أسابيع عمل سنويا‬ ‫ً‬ ‫المشتريات‬ ‫واشنØن‬ ‫رحالت ميدانية عند االقتضاء‬ ‫‪ 8‬أسابيع عمل سنويا‬ ‫ً‬ ‫أخصائي اإلنترنت عبر الخليوي‬ ‫المكتب القØري‬ ‫رحالت ميدانية عند االقتضاء‬ ‫ً‬ ‫أسبوعا عمل سنويا‬ ‫أخصائي التعليم والتدريب‬ ‫المكتب القØري‬ ‫رحالت ميدانية عند االقتضاء‬ ‫‪ 5‬أسابيع عمل سنويا‬ ‫ً‬ ‫أخصائي اإلدارة المالية‬ ‫واشنØن‬ ‫رحالت ميدانية عند االقتضاء‬ ‫أسبوع عمل واحد‬ ‫الدعم القانوني‬ ‫‪72‬‬ 73 74 75 76 77 78 79 80 81 82 83 84 85
APPROVAL
P119295
51759 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Project Name Karnataka Wind Power Carbon Finance Project, India Region South Asia Sector SASDE Project ID P119295 Borrower(s) NA Implementing Agency Acciona Wind Energy Pvt\. Ltd\. (AWEPL), a 100% subsidiary of the Spanish Acciona group of companies, i\.e\. Acciona Energia Internacional, S\.A\. and Acciona, S\.A\. Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared 19 November 2009 Date of Appraisal 26 October 2009 Authorization Estimated Date of ERPA 21 December 2009 Signing I\. Country and Sector Background The total installed power generation capacity in India at the end of the 10th Plan was 132329\.21MW which included 7760\.60MW from renewable sources of energy\. Keeping in view the existing energy deficit of 11%, peak deficit of 12% and the envisaged growth of 9% in the Eleventh Plan, the target of capacity addition in the Eleventh Plan period is an ambitious 78577MW, almost three and a half times the actual capacity addition during the Tenth Plan\. India is also committed to achieving the desired growth in power sector in a clean, green and sustainable manner\. Given this and the need to maximally develop domestic supply options as well as the need to diversify energy sources, renewable energy sources remain important to India's power sector\. The Eleventh Plan target for renewable power is addition of 14000MW capacity which includes 10500MW wind based power\. II\. Objective The proposed development objectives of the Carbon Offset Project are: Contribute to sustainable development by providing renewable power to the Karnataka State electricity grid and reduce greenhouse gas emissions caused by reliance on fossil fuels Reduce global emissions of carbon dioxide\. The objectives of this World Bank Carbon Offset Project are consistent with the developmental and poverty reduction objectives of the Government of India\. III\. Rationale for Bank involvement This Carbon Offset project will facilitate greenhouse gas emission reductions and support the development of the international market mechanism for trading Emission Reductions (ERs) developed under the framework of the Kyoto Protocol\. The final commissioned project cost is US$45\.11 million (1US$=Rs\.47\.86) which is financed from a debt to equity ratio of 61:39\. The O&M costs are around 1% per annum\. As per Project Design Document (prepared for CDM registration), the project IRR without considering CDM revenues is 11\.93% and with CER revenue @9 per CER, is 13\.65%1\. This is stated to barely meet the return criteria factoring the risk premium\. Acciona has executed a 10 year Power Purchase Agreement with Bangalore Electricity Supply Company Limited (BESCOM) for sale of electricity at a fixed rate (no escalation) of Rs\.3\.40 per unit (kWh)\. At present, this is the only revenue stream available\. The sale of emission reduction credits to the World Bank-executed Spanish Carbon Fund will make the implementation of the project more financially viable, by providing an additional revenue stream\. This will provide increased financial comfort to the project and lead to development of renewable energy based power in the region\. This project is consistent with the India Country Assistance Strategy in that it augments the generation of power while ensuring environmental sustainability and leads to reduction of poverty by providing employment and economic opportunities to the local population\. IV\. Description The project consists of two 29\.7MW wind power plants located in Arasinagundi (13\.20MW) and Anabaru (16\.50MW), in Davangere district of the Indian state of Karnataka, owned by Acciona Wind Energy Private Limited (AWEPL), a 100% subsidiary of the Spanish Acciona group of companies, i\.e\. Acciona Energia Internacional, S\.A\. and Acciona, S\.A\. The delivery of the power plants was done by Vestas Wind Technology India Pvt\. Ltd, who are also the Operations and Maintenance (O&M) contractors\. The plants are commissioned and under operation - Arasinagundi since June'08 and Anabaru since Sept'08\. The electricity generated from the project is supplied to the Karnataka Power Corporation Limited (KPTCL) sub-station at Hiremallaholle, and from there to the state grid\. The project was registered as a Clean Development Mechanism (CDM) project with the CDM Executive Board on 20 November 20082\. The first verification of Certified Emission Reductions (CERs) is under process3\. A Letter of Intent (LoI) has been executed between the International Bank for Reconstruction and Development (IBRD) acting as the trustee of the Spanish Carbon Fund and AWEPL for the transaction of 178,917 Certified Emission Reductions (CERs) generated from the Project from 1 January 2010 until 31 December 2012\. 1 As per the Project Design Document prepared for CDM registration 2 Project Reference no\. 1949 3 The final Monitoring Report was submitted to CDM Executive Board by BvQI with Request for Issuance on 9 October 2009 for the First Verification Report for CERs\. The completeness check is pending by UNFCCC after which the documents will be hosted for the mandatory disclosure period of 15 days for review prior to CER issuance\. AWEPL has executed a 10 year Power Purchase Agreement (PPA) with Bangalore Electricity Supply Company Limited (BESCOM) for sale of electricity at a fixed rate (no escalation) of Rs\.3\.40 per unit (kWh)\. The tariff from 11th year onwards will be decided by Karnataka Electricity Regulatory Commission (KERC), and BESCOM can exercise its option to procure electricity at the KERC determined tariff, else AWEPL can enter into agreement with a third party\. Carbon revenues are necessary for improving financial viability of the project as they will provide additional financial comfort to the project sponsor\. This in turn would provide encouragement to other investors in the area and would be in line with the larger Government of India objective of scaling up the share of renewable energy in Indian power sector\. Monitoring and evaluation will be undertaken through the specific plan for Verification of Emissions Reductions included in the Clean Development Mechanism (CDM) Project Design Document\. AWEPL will be responsible for periodic verification, certification, preparation and submission of verification reports\. V\. Financing (US$ million4) Source: Equity 17\.59 Local Financial Institutions 27\.52 Total 45\.11 VI\. Implementation AWEPL is responsible for overall implementation of the project including periodic verification and certification of emission reductions, preparation and submission of verification reports\. The Operation and Maintenance is presently contracted out to Vestas India Pvt\. Ltd\. who also delivered the two projects\. The present O&M contracts are valid for 2 years and cover day to day operations, scheduled/unscheduled plant/33kV transmission line maintenance\. AWEPL is considering the continuation of the arrangement beyond this period\. VII\. Sustainability The project activity will achieve the objectives of sustainable development by ­ Substituting electricity generated using conventional fossil fuel with wind energy based power Mitigating the emission of GHG (CO2) as wind is a renewable source of energy Conserving coal and other non-renewable natural resource The project is in line with the policies of Ministry of New and Renewable Energy, India, as it contributes its share towards achievement of the 11th Plan target of 10,500 MW of renewable wind energy by 2012 4 1US$= Rs\.47\.86 Increasing the share of renewable energy in the regional grid Reducing pollutants like SOX, NOX etc associated with other power plants Contributing towards reducing power shortage in the state of Karnataka Generate local employment and other economic activity in areas near the project Help to bridge India's energy deficit Contributing to the growth of Wind Energy sector in India VIII\. Lessons Learned from past experiences in the country/sector This project draws from previous World Bank operational experiences and analytic and advisory work in renewable energy, especially wind energy\. The project applies an approved small-scale CDM Methodology utilized by several CDM projects registered with the UNFCCC\. IX\. Safeguard Policies (including public consultation) The project triggers the World Bank's Environmental Assessment Policy (OP/BP 4\.01) and was designated a Category B as the potential negative environmental impacts of the project are site specific and manageable with the proposed mitigation measures\. The table below lists the applicable World Bank Safeguard Policies\. Safeguard Policies Triggered by the Project Yes No TBD Environmental Assessment (OP/BP 4\.01) [X] [] Natural Habitats (OP/BP 4\.04) [] [X] Pest Management (OP 4\.09) [] [X] Physical Cultural Resources (OP/BP 4\.11) [X] [] Involuntary Resettlement (OP/BP 4\.12) [] [] Indigenous Peoples ( OP/BP 4\.10) [X] [] Forests (OP/BP 4\.36) [X] [] Safety of Dams (OP/BP 4\.37) [] [X] Projects in Disputed Areas (OP/BP 7\.60)5 [] [X] Projects on International Waterways (OP/BP 7\.50) [] [X] Piloting the Use of Borrower Systems to Address Environmental [] [X] and Social Issues in Bank-Supported Projects (OP/BP 4\.00) Overall, the project will have positive impact on the global environment due to reduction in the Green House Gas emissions\. There may be some localized adverse impacts in the project area which are being mitigated through the implementation of several mitigation and enhancement measures by the project sponsors\. Key measures include: plantation in about 30ha of land in lieu of plantation in the project site, provision of gully checks and on-site plantation, underground cabling within site to minimize potential visual impacts and hazard to birds, and implementation of a systematic waste management plan\. Consultations were held with the various stakeholders during project preparation and PDD formulation\. 5 By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas The project activities are not expected to adversely impact the local communities\. However, Acciona has proactively been adopting a strategy to help the local people, particularly the tribal and other vulnerable communities, in accessing the project benefits including wage employment\. An environmental and social assessment (ESA) report documenting the environmental and social measures undertaken during project construction and addendum updating the current conditions have been prepared\. The executive summary of the ESA has been translated into the local language Kannada and is being locally disclosed in the Gram Panchayat offices of the two villages where the two subprojects are located\. The project sponsor is also considering the possibility of hosting the ESA report along with its executive summary on their website\. X\. List of Factual Technical Documents Project Design Document (PDD) Integrated Safeguards Data Sheet (ISDS) Environmental and Social Assessment (ESA) Report and Addendum to ESA for both sites Letter of Intent between International Bank for Reconstruction and Development and Acciona Wind Energy Private Limited, India\. XI\. Contact Point Kavita Saraswat ksaraswat@worldbank\.org Fax: +91 11 41177849 70 Lodi Estate New Delhi ­ 110021 India\. XII\. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D\.C\. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http://www\.worldbank\.org/infoshop
APPROVAL
P000354
Document de La Banque Mondiale A N'UTILISER QU'A DES FINS OFFICIELLES Rapport No\. 3448-CM RAPPORT D'EVALUATION CAMEROUN PROJET FORESTIER 22 decembre 1981 " J Region Afrique de l'Ouest Agriculture 2 TRADUCTION NON-OFFICIELLE A TITRE D'INFORMATION Le present document fait I'objet d'une diffusion restreinte, et ne peut etre utilise par ses destinataires que dans I'exercice de leurs fonetions officielles\. Sa teneur ne peut etre autrement dhulguee sans I'autorisation de la Banque Mondiale\. CAMEROUN PROJET FORESTIER RAPPORT D'EVALUATION Table des matieres Pages 1\. INTRODUCTION \. 1 A\. Generali tes \. 1 B\. Le secteur forestier et l'economie 1 a) Contribution a l'economie \. 1 b) Ressources et industries forestieres \. 2 c) F inancement du secteur 4 d) Institutions et formation \. 5 e) Objectifs, strategies et politiques 7 f) Role de la Banque et des autres agences d'aide exterieure 8 I I\. ZONE DU PRO JET 9 III\. LE PROJET \. 11 A\. Obj ecti fs \. 11 B\. Caracteristiques detaillees \. 12 a) Plantation d'Edea \. 12 b) Plantation de la SEMRY \. 14 c) Plantation de Ngaoundere \. 15 d) Services de production de graines \. 15 e) Renforcement du FNFP \. 16 f) Renforcement de la DEFC \. 16 g) Etudes et preparation d'un eventuel projet de suivi\. 17 IV\. ORGANISATION ET GESTION \. 18 A\. Generalites\. 18 B\. Dispositions en matiere de plantation 18 Le present document fait l'objet d'une diffusion restreinte\. 11 ne peut etre utilise par ses destinataires que dans l'exercice de leurs fonctions officielles et sa teneur ne peut etre divulguee sans l'autorisation de la Banque mondiale\. Table des matieres (suite) Pages C\. Renforcement du FNFP \. 20 D\. Renforcement de la DEFC \. 20 E\. Formation \. \. 21 F\. Suivi et evaluation retrospective \. 22 G\. Production de graines et liaison avec les services de recherche \. 22 V\. COUTS ET DISPOSITIONS FINANCIERES \. \. 24 A\. Estimations des coOts du projet 24 B\. Financement envisage \. \. 24 C\. Condi tions de retrocession \. 26 D\. Passation des marches \. 28 E\. Decaissement \. \. 28 VI\. PRODUCTION, DEBOUCHES ET RESULTATS FINANCIERS \. 31 A\. Production \. \. 31 B\. Debouches et commercialisation \. 31 C\. Resultats financiers \. 33 VII\. AVANTAGES, JUSTIFICATION ECONOMIQUE ET RISQUES \. 36 A\. Avantages \. 36 B\. Justification economique \. 36 C\. Risques \. 40 VIII\.ASSURANCES ET RECOMMANDATIONS \. 41 ANNEXES Tableaux Tableau 1 Estimations des coOts du projet Tableau 2 Plan de financement envisage INTRODUCTION A\. Generalites 1\.01 Le Gouvernement camerounais a demande a la Banque de l'aider a financer un projet forestier quinquennal dans les provinces du Centre-Sud et du Nord, d'un cout estimatif de 35,5 millions de dollars\. Le projet portera sur l'amenagement de trois plantations et d'une unite de produc tion de semences ameliorees, et fournira une assistance technique au Fonds national forestier et piscicole (FNfP), qui est responsable des programmes de reboisement de l'Etat, ainsi qu'une aide logistique et technique a la Direction des eaux et forets et des chasses (DEPC) qui est charg~e de la cote et de la perception des impOts forestie~s\. Le projet sera Ie premier projet benefi ciant d'une aide de la Banque a porter exclusivement sur Ie secteur forestier au Cameroun\. 1\.02 Le projet a ete identifie en fevrier-mars 1979 par une mission sec torielle du Programme de cooperation fAO/Banque mondiale et en novembre 1979 par une seconde mission d'identification; il a ete prepare par une mission du Programme de cooperation qui s'est rendue au Cameroun en mai-juin 1980\. Le present rapport a ete etabli a la suite du sejour effectue au Cameroun, en janvier-fevrier 1981 par une mission d'evaluation de la Banque composee de MM\. John Russell, Robert Fishwick, Robert Crown et Christopher Ward\. MM\. Sean Magee et frank Dorward (CDC) ant participe a l'evaluation de la composante plantation d'Edea\. B\. Le secteur forestier et l'economie a) Contribution a l'economie 1\.03 La Republique Unie du Cameroun s'etend sur 1 200 km, du golfe de Guinee au sud-ouest au lac Tchad au nord; elle a une superficie de 475 000 km2\. On y trouve un vaste eventail de conditions climatiques allant de la zone sahe lienne a l'extreme nord a la foret tropicale humide au sud, qui rend pos sible une agriculture diversifiee et lui permet presque, a l'heure actuelle, de subvenir a ses besoins alimentaires\. Les forets couvrent environ 33 millions d'hectares\. le pays doit exploiter de plus en plus ses reserves de petrole et de bauxite mais son developpement industriel est encore dans une grande mesure fonde sur l'agriculture et la foresterie, et repose sur Ie traitement des pro duits de base, tels que Ie cacao et les palmistes, et de la transformation des grumes en bois d'oeuvre, en bois deroule, en contreplaque, et en pate de bois\. les industries alimentaires representent 45 % du chiffre d'affaires total du secteur industriel\. D'un autre cOte, bien que les ressources forestisres soient considerables et que des permis d'abattage aient ete accordes pour 7,7 millions d'hectares en 1977/78, on estimait que la valeur ajoutee dans ce secteur n'etait que de 8 % de la production agricole nette et 4 % du PIB\. - 2 1\.04 Les investissements d'infrastructure ant porte sur l'amelioration du reseau routier, et en particulier des pistes rurales indispensables au mouve ment des produits agricoles, sur la modernisation du reseau ferroviaire trans camerounais, sur l'expansion des installations portuaires de Douala, et l'etude des possibilites d'amenagement d'un nouveau port a Rocher du Loup entre Kribi et Campo\. Ces investissements faciliteront Ie transport en vrac des produits de base de gros volume, tels les produits forestiers qui a l'heure actuelle sont surtout ex partes a l'etat brut\. D'un autre cOte, Ie developpement des installations de transport dans Ie sud-est, au se trouvent un grand nombre des for@ts les plus riches du pays, a pris du retard\. 1\.05 La population, estimee a 8,3 millions d'habitants en 1979, augmente d'environ 2,3 % par an, et plus de 40 % des Camerounais sont ~ges de mains de 15 ansa Sur une population adulte de 5 millions de personnes, 74 %, soit 3,7 millions, travaillent dans Ie secteur rural et environ 25 % ant des emplois urbains\. La densite varie enormement entre les regions : dans la province de l'Ouest et certaines parties de la province du Nord, elle atteint 200 habitants au plus au km2 , alors quIa l'autre extreme dans la province de l'Est, elle nlest que de 3 habitants au km2 Selon les projections, en llan 2000 la popu lation atteindra 16 millions d'habitants, dont pres de la moitie vivront dans des villes\. Cette croissance va creer une tres forte demande de materiaux de construction et de bois de feu, surtout dans les regions de grande concentra tion rurale au l'acces dlautres sources d'energie est limite et coOteux\. 1\.06 Le PNB etant estime aujourdlhui a 4,4 milliards de dollars, Ie revenu par habitant est de 518 dollars\. Le PNB a progresse au rythme d'environ 4,5 % par an entre 1970 et 1975 et 7,1 % par an entre 1975 et 1980\. Les revenus par habitant ant augmente d' environ la moitie de ces taux\. Mais entre 1980 et 1981, la croissance du PNB n'a ete que de 3,5 %\. Cette chute est due a la baisse du cours des produits de base exportes, cafe et cacao notamment, et au ralentisse ment des investissements\. Le taux d'inflation, qui etait en moyenne de 6,2 % entre 1969 et 1973, est passe a 11,8 % entre 1974 et 1978 et est aujourd'hui d'environ 12 %\. Le Gouvernement slest fixe pour objectif de retablir un taux de croissance de 6 % dans Ie cadre du Quatrieme Plan national (1976/77-1980/81) et, pendant la merne periode, a porte son budget d'investissements initiale ment prevu pour 685 milliards de francs CFA (2,5 milliards de dollars) a 930 milliards de francs CFA (3,4 milliards de dollars)\. Au cours des quatre premiers Plans, 14 % uniquement des investissements realises par l'Etat et le secteur prive avaient ete consacres a l'agriculture et au developpement rural\. Cette proportion est recemment passee a environ 16 % et lIon s'attend que les credits budgetaires affectes a l'agriculture augmentent encore dans Ie cadre du Cinquieme Plan, aujourd'hui en preparation\. b) Ressources et industries forestieres 1\.07 On estime que la for@t couvre 33 millions d'hectares, soit les deux tiers de la superficie du pays: 18 millions d'hectares de for@t dense, et 15 millions d'hectares de savane et ripisylves\. Cependant, on conna1t mal la qualite et le volume du bois exploitable dans ces forets puisque 700 000 ha seulement ont ete inventories\. La FAD a fait un inventaire de 176 000 ha dans - 3 la for@t du Deng-Deng, ~ui montre que les volumes commercialement exploitables peuvent atteindre 160 m a l'hectare; des etudes de la futaie tropicale humide autour d'Edea et les resultats obtenus au moment du de mar rage de la scierie de la Cellucam ont montre que le volume utilisable pour le projet de pate a bois 3 est d'environ 190 m a l'hectare\. Toutefois, a cause de la diversite des essences, les petits echantillonnages sont des indicateurs peu fiables, et ac tuellement la production moyenne des exploitations forestieres n'est que d'en 3 viron 10 m a l'hectare\. 1\.08 En 1978/79, des permis d'exploitation portant sur 7,7 millions d'hec tares ont ete attribues a une centaine de concessionnaires travaillant dans quelque 200 concessions concentrees dans les trois provinces du Centre-Sud (3,3 millions d'hectares), de l'Est (2,8 millions d'hectares) et du Littoral (1 million d'hectares); les 600 000 ha de concessions restants se trouvent dans les provinces de l'Ouest et du Sud-Ouest\. Environ la moitie des concessions ont moins de 50 000 ha, superficie inferieure a la moyenne de l'Afrique de l'Ouest, et 10 % sont de grandes concessions entre 200 000 et 250 000 ha\. Environ 10 % des societes forestieres sont des entreprises mixtes ou publiques\. Malgre les encouragements de l'Etat aux entreprises locales, des compagnies etrangeres detiennent des concessions sur 70 % de la superficie exploitee\. En 3 1978/79, la production de grumes a ete de 1,6 million de m , soit une augmen tation importante par rapport au 1,3 million de m 3 de l'anneee precedente\. 3 La production annuelle pourrait passer a 2 millions de m pratiquement sans nouvel investissement\. 1\.09 L'integration verticale tres poussee (abattage, traitement et commer cialisation des grumes) est encouragee par des textes officiels qui exigent que les concessionnaires exploitant plus de 10 000 ha fassent subir un premier traitement aux grumes\. En 1977/78, quelque 75 scieries ont produit environ 3 3 250 000 m de bois scie, dont 75 000 m ont ete exportes\. 11 existe ac tuellement deux usines produisant du bois de deroulage et deux autres sont en construction\. En 1977/78, la production de bois deroule a ete de 40 000 m , 3 dont 90 % pour l'exQortation\. Le marche interieur a absorbe la plus grande 3 partie des 30 000 m de panneaux de particules et de contreplaque\. 1\.10 Dans le cadre de la politique officielle visant a accroitre la valeur ajoutee interieure du secteur et, a long terme, a approvisionner en papier 1e marche interieur, une usine de pate a papier a ete creee a Edea (carte BIRD 15692) par la Societe cellulose du Cameroun SA (Cellucam) en 1980\. La Cellucam est une entreprise d'investissement d'economie mixte dont l'Etat, par l'intermediaire de la Societe nationale d'investissement (SNI) et de quatre aut res organismes plus petits, est le principal actionnaire (67 % du capital social)\. Les autres actionnaires sont la Banque islamique de developpement (12 %), Voest-Alpine (6 %), la Societe luxembourgeoise de financement pour l'Afrique (5 %), 1a Societe europeenne d'investissement industrie1 en Afrique (3 ra) et deux particuliers (7 %)\. Voest-Alpine (Autriche) a installe l'usine et fournit l'assistance technique necessaire a son exploitation\. Svenska Cellulosa AB, le plus grand fabricant suedois de pate a papier et de papier, fournit les debouches\. L'usine peut produire 122 000 tonnes de pate au - 4 sulfate blanchie par an, et sa production provient a l'heure actuelle d'une for~t naturelle de 160 000 ha de feuillus au nord d'Edea contenant environ 100\.000 ha de for~t exploitable\. Du point de vue technique, l'abattage des arbres et la preparation de la pate sont d'excellente qualite et l'usine a commence a produire de la pate blanchie en janvier 1981\. La pate produite est d'une qualite acceptable sur les marches mondiaux pour les pates a fibre courte, et il est probable que la Cellucam degagera des benefices d'exploita tion en 1983 lorsqu'elle travaillera a 100 ~ de sa capacite reelle\. Cependant, malgre ses atouts techniques et la qualite de sa production, la Cellucam fait face a des difficultes financieres\. La hausse des coats a fait passer les investissements d'environ 165 millions de dollars a 350 000 millions de dollars a la fin de 1980; cette augmentation a ete financee par des credits fournisseurs et des credits de banques commerciales a court terme\. Le rembour sement de ces credits devant se faire au cours des cinq prochaines annees, la Cellucam vient de negocier des accords de refinancement avec ses actionnaires et les banques commerciales\. La participation de la Cellucam au projet envi sage sera regie par un contrat d'execution, qui a ete discute au cours des negociations (par\. 4\.02)\. 1\.11 Lorsque les plantations du projet seront arr1vees a maturite, la Cellucam achetera Ie bois produit\. Elle en retirera certains avantages : au lieu de preparer la pate a bois a partir de feuillus tropicaux d'essences diverses, comme elle Ie fait aujourd'hui, elle sera approvisionnee en bois de taille et de densite uniformes, situe a des distances raisonnables de l'usine, et plante en rangs reguliers\. Le coat de l'abattage et du transport du bois jusqu'a l'usine pourrait ~tre reduit d'environ 33 ~ par rapport au coat d'ex ploitation des forets naturelles, et Ie coat de la transformation par tonne de pate baisserait d'environ 20 ~ par suite de la reduction du temps de prepa ration et du traitement chimique\. De plus, les plantations envisagees contien dront des pins qui ne poussent pas naturellement dans la foret tropicale; or Ie pin donne une pate a longue fibre, indispensable a la production de papier, qui se vend sur les marches mondiaux a 8 % de plus que la pate a fibre courte, du type actuellement produit par la Cellucam\. Ainsi, la politique de la Cellucam d'utiliser du bois cultive en plantation au lieu de for~t naturelle accroltra la valeur ajoutee interieure et ira dans Ie sens de la strategie sectorielle de l'Etat (par\. 1\.19)\. c) Financement du secteur 1\.12 D'une maniere generale, Ie secteur prive a pu facilement obtenir des financements pour les entreprises forestieres et, jusqu'a present, l'exploita tion a ete dominee par des compagnies etrangeres\. Cependant, outre les inves tissements dans la Cellucam, la SNI a pris des participations au capital social d'un certain nombre d'entreprises de transformation du bois\. Au cours du Plan quinquennal 1976/77-1980/81, les investissements prevus pour Ie secteur fores tier etaient de 21,7 milliards de francs CFA (80 millions de dollars), fournis a 80 ~ par Ie secteur prive\. La contribution de l'Etat a en grande partie ete affectee a des actions de reboisement et a des plantations d'enrichissement executees par Ie FNFP\. - 5 1\.13 L'Etat tire des recettes du secteur forestier par l'intermediaire : i) de deux impots annuels payes par les concessionnaires (la redevance com munale et la redevance de reforestation); ii) de charges codifiees pour l'oc troi ou Ie renouvellement des concessions; et iii) des redevances per~ues sur Ie cubage du bOis exporte ou traite dans Ie pays\. La loi specifie que la tota lite de la redevance de reforestation et des charges codifiees et 55 % des redevances per~ues sur Ie bois coupe sont affectees au programme de reboisement de l'Etat\. Cependant, bien que Ie nombre des concessionnaires et la superficie des concessions soient restees relativement stables depuis 1977, et que Ie vo lume de grumes transformees et exportees ait augmente, les redevances per~ues ont baisse : en effet, les redevances sur Ie bois coupe ont ete mal calculees pres de la moitie de la recolte n'a pas ete comptee dans l'assiette de l'im pot - et les reglements portant sur les redevances et les charges annuelles et quinquennales ont ete mal appliques\. En consequence, au 30 juin 1980, envi ron 1,5 milliard de francs CFA (5,6 millions de dollars) des charges et des redevances mises en recouvrement n'avaient pas ete acquittes\. Cette somme est presque egale aux recettes per~ues en 1979/80, et represente environ Ie double des arrieres au 30 juin 1978\. De plus, plus de 64 % des impayes etaient dus par Ie tiers des concessionnaires exploitant des superficies superieures a 100 000 ha\. Cela s'est produit parce que les sanctions legales dont dispose Ie Gouvernement pour percevoir les arrieres n'ont pas ete rigoureusement appli quees\. De plus, Ie manque de ressourCes materielles et financieres pour Ie calcul et la perception des redevances et des charges, et la lourdeur de l'ap pareil administratif ont reduit l'efficacite des organismes responsables\. Mais depuis avril 1981, l'Etat fait un vigoureux effort pour encaisser ses arrieres et, au moment des negociations, il avait recouvre environ 500 millions de francs CFA (1,9 million de dollars)\. En outre, pour eviter qu'une telle situa tion ne se reproduise, il a commence a mettre en place de nouvelles procedures administratives et de nouvelles structures hieerarchiques\. Au cours des nego~ ciations, Ie Gouvernement a convenu de prendre toutes les mesures necessaires pour percevoir d'ici au 31 decembre 1982 les redevances et charges qui etaient exigibles au 31 juillet 1980\. II s'est engage a prendre a l'avenir les mesures voulues pour que les redevances et charges forestieres soient correctement calculees et per~ues dans les 12 mois suivant la date de calcul\. l 'Etat affec tera des fonds pour renforcer la Direction des eaux et for@ts et des chasses (DEFC), tant du point de vue logistique que materiel (par\. 3\.13)\. En cas de besoin, il emploiera des consultants pour l'aider a appliquer strictement les nouveaux reglements; il continuera a employer des cadres superieurs de la DEFC exclusivement charges de calculer et de percevoir les charges et redevances dans les cinq grandes provinces forestieres\. d) Institutions et formation 1\.14 le Ministere de l'agriculture (MINAGRI) est charge d'elaborer la politique forestiere et d'assurer la surveillance du secteur\. II exerce ses responsabilites par l'intermediaire de deux organismes : Ie premier est la DEFC, responsable de la planification du secteur, y compris de la direction des programmes de replantation, de la gestion des for@ts domaniales, et de - 6 la supervlslon de toutes les exploitations forestieres\. Bien que la DEFC soit chargee de calculer et de percevoir les redevances et charges sectorielles, ses depenses de fonctionnement sont financees par des credits budgetaires, et son budget d'investissement par Ie FNFP\. Cela la laisse chroniquement a court de fonds d'exploitation, et sans pratiquement aucune latitude pour renforcer son soutien logistique\. Elle emploie 880 personnes\. Trois bureaux se trouvent a son siege a Yaounde: Etudes et programmes (planification et statistiques), Production et industries forestieres (supervision quotidienne et calcul et per ception des charges et redevances) et Faune et environnement\. Compte tenu de ses responsabilites, les locaux et Ie materiel dont dispose la DEFC sont insuf fisants, ce qui explique en partie les carences de son contr61e financier\. La DEFC va disposer de l'autorite necessaire pour imposer les penalites voulues en cas de retard dans les paiements des redevances et charges\. La DEFC est representee dans chaque province\. A l'echelon Ie plus bas de la hierarchie on \.trouve Ie Poste forestier, tenu par un agent technique justifiant d'une annee de formation : il est charge de mesurer et de marquer les grumes a la sortie des concessions\. Il y a normalement un poste par arrondissement, ce qui n'est pas suffisant pour couvrir convenablement les regions ou plusieurs concessions sont exploitees\. Les postes sont groupes en sections dirigees par des tech niciens justifiant de deux ans de formation; ces sections coincident en gros avec les departements, qui comptent en moyenne huit concessions\. Le chef de section est charge de recueillir et de presenter sous forme statistique les renseignements des concessions sur Ie volume de bois recolte\. Mais les chefs de section n'ont pas les moyens de transport necessaires pour aller verifier sur Ie terrain les volumes de bois declares par Ie poste/le concessionnaire, ce qui rend leur contr61e peu efficace\. Au niveau de la province, Ie bureau de la DEFC - dirige par Ie Conservateur provincial - est charge de verifier Ie travail des chefs de section, de calculer les redevances et charges dues sur Ie bois recolte, et de verifier leur versement\. Cependant, les sieges provin ciaux n'ont ni les moyens de transport ni les installations voulus pour tra vailler d' une fa~on efficace\. Des mesures seront prises dans Ie cadre du pro jet pour remedier a cette situation (par\. 3\.13)\. 1\.15 Le FNFP est un organisme public autonome responsable de l'execution du programme de replantation\. Environ 90 % de ses fonds viennent directement des redevances et charges versees par les concessionnaires a la DEFC\. Le FNFP est dirige par un conseil d'administration ou siege Ie Directeur de la DEFC, mais il dispose d'une autonomie considerable\. Les operations du FNFP, dirigees par un petit bureau a Yaounde, sont tres decentralisees : Ie pays est divise \. en chantiers qui correspondent, dans une grande mesure, aux provinces\. Dans chaque chantier, un chef de chantier supervise un certain nombre de chefs de base en fait charges de l'execution des programmes de plantation\. Jusqu'a present, Ie programme de plantation du FNFP a ete modeste; environ 2 500 ha par an, dont 60 % en plantations d'enrichissement dans les futaies tropicales, et Ie reste en plantations dans la zone de la savane\. Du point de vue technique, les resultats ont ete mediocres : les taux de perte enregistres dans les nou velles plantations sont eleves, l'entretien y est faible et Ie travail generale ment lent et coOteux\. La baisse des recettes provenant des redevances et charges, qui sont tombees d'un maximum de 1,1 milliard de francs CFA - 7 (4,1 millions de dollars) en 1978 a 700 millions de francs CFA (2,6 millions de dollars) en 1980, a egalement cause de graves problemes budgetaires au FNFP\. Cependant, gr~ce au renforcement envisage de ses capacites techniques, finan cieres et administratives (par\. 3\.12), Ie FNFP devrait devenir un instrument efficace d'execution de la politique officielle de regeneration des plantations\. 1\.16 La grave penurie de cadres et de techniciens justifiant d'une bonne experience sur Ie terrain, dont souffrent la DEFC et Ie FNFP, nuit a la bonne administration et au developpement du secteur\. L'Ecole nationale superieure agronomique de Nkolbisson pourvoit aux besoins de formation des cadres\. Cette ecole peut diplOmer 16 etudiants par an, ce qui est suffisant pour les besoins futurs du Cameroun\. Le college de Mbalmayo forme actuellement 10 techniciens par an, ce qui est egalement suffisant pour satisfaire les besoins previsibles\. Cependant, ces diplomes - et Ie personnel deja en poste - ont, avant tout, be soin de suivre des stages pratiques dans des exploitations techniquement bien gerees Ie projet leur en donnera la possibilite\. 1\.17 Les stations de recherche et les plantations produisent aujourd'hui a petite echelle des semences hybrides de pin et d'eucalyptus, mais aucun orga nisme n'est charge d'importer, de certifier, de selectionner et de reproduire des semences de bonne qualite\. II en resulte que les hybrides disponibles actuellement commencent a perdre leur vigueur, parce que l'on ne s'efforce pas de trouver ni de diffuser des semences de la meilleure origine possible pour les essences exotiques\. Dans Ie cadre du projet cette tache serait confiee au FNFP\. 1\.18 Les inter~ts des industries forestieres sont representes aupres du Gouvernement par Ie Syndicat des exploitants forestiers, qui participe regulie rement a des reunions d'information avec la DEFC et Ie MINAGRI\. e) Objectifs, strategies et politigues 1\.19 les objectifs du Gouvernement dans Ie secteur forestier tela qu'ils ont ete definis par des lois passees en 1973 et 1974 sont les suivants etendre les superficies des for~ts domaniales classees; assurer l'exploitation rationnel1e et planifiee des for~ts; regenerer les for~ts par des plantations d'enrichissement dans la for~t dense et par Ie reboisement dans les savanes; et accroltre Ia valeur ajoutee interne gr~ce au traitement des grumes\. Etant donne l'etat actuel du secteur, ces buts sont juges raisonnables\. Cepen dant, Ies resultat ont ete inegaux\. Le classement de nouveaux perimetres avance lentement, la regeneration n'atteint m~me pas la moitie du rythme prevu, et les taux de survie sont faibles\. Le pourcentage de la valeur ajoutee interieure est de 20 % inferieur au niveau souhaite\. Ces resultats sont - 8 d'autant plus decevants que les objectifs etaient modestes et des sommes consi derables ont ete allouees a leur realisation\. Cette situation se perpetue sur tout parce que les cadres du FNFP qui devraient organiser et suivre l'execution des programmes n'ont pas les competences techniques requises sur Ie terrain\. f) ROle de la Bangue et des autres agences d'aide exterieure 1\.20Ce sera la premiere fois que la Banque participera a un projet exclu sivement consacre au secteur forestier au Cameroun\. Toutefois deux projets de developpement rural - Ie Projet de developpement rural des plateaux de l'Ouest (Cr\. 784-CM) et Ie Projet de developpement de la province du Nord (Cr\. l075-CM, Prat 1919-CM) - comportent des volets forestiers visant a encourager Ie reboise ment a petite echelle et la lutte contre l'erosion\. Las programmes des pla teaux de l'Ouest avancent bien et Ie volet reboisement dans la province du Nord vient de demarrer\. Le projet s'inscrit dans la logique du Document de politique generale du secteur forestier, publie par la Banque, qui dit que les planta tions forestieres industrielles, du genre de celles qui sont proposees ici, ont une place dans la strategie forestiere globale du pays au meme titre que les petits projets forestiers et qu'il est indispensable de renforcer les institu tions travaillant dans ce secteur\. 1\.21 Le secteur forestier du Cameroun a egalement beneficie d'une assis tance bilaterale pour la formation des techniciens forestiers a Nkolbisson, et pour la recherche forestiere\. Le programme pilote de boisement actuellement en cours dans la zone de la SEMRY (carte BIRD 15692) permet d'identifier des essences et fournit des renseignements precieux qui seront utilises dans Ie projet\. Dans Ie cadre d'un autre accord bilateral, Ie Cameroun re90it une assistance technique dans les domaines de la politique sectorielle et de la photographie aerienne pour l'etude, la classification et l'inventaire de la Foret; tous ces elements completeront Ie projet\. - 9 II\. ZONE DU PROJET 2\.01 Localisation: Le projet portera sur la plantation d'arbres dans troia regions separees et differentes du point de vue ecologique, et renforcera la production de semences ameliorees dans quatre perimetres\. Les plantations couvriront 11 000 ha, dont 8 800 a Edea, dans Ie sud-ouest qui approvisionne ront l'usine de pate a papier de la Cellucam en bois de pate cultive indus triellement\. Mille hectares seront plantes pres de Ngaoundere sur Ie plateau d'Adamaoua pour la production en bois d'oeuvre et en poteaux electriques qui s'ajoutera a celIe d'une plantation de 600 ha existante; 1 200 ha plantes pres de Maga, dans Ie nord, viendront s'ajouter a la plantation de 600 ha de bois de feu que la SEMRY est en train d'etablir (par\. 1\.21)\. II existe dans ces deux dernieres zones des terres disponibles pour Ie boisement, et etant donne la rarete du bois dans la region, cette utilisation des sols est economiquement souhaitable\. Tous les sites envisages, indiques sur la carte BIRD 15692, sont desservis par de bonnes routes, par des liaisons aeriennes regulieres vers les regions de Ngaoundere et Maga (Maroua) et par des communications regulieres\. 2\.02 Topographie et sols: La topographie et les sols de ces trois regions sont differents\. A Edea, 75 % des terres peuvent etre plantees, Ie reste consistant en collines rocailleuses, en marecages, ou en rives escarpees de cours d'eau\. Les sols de la foret ont un bon ecoulement, ils sont profonds, souvent tres lessives et acides\. A Ngaoundere, Ie haut plateau (1 500 m d'altitude) a un relief legerement ondule coupe de vallees rocheuses; les sols y sont generalement profonds, et lion y trouve des affleurements de granite qui constitue la roche mere\. A Maga, Ie terrain est plat et avant que la SEMRY ne construise une digue de retenue, la region etait souvent inondee pen dant la saison des pluies, a l'exception de quelques lIes sur lesquelles les villages sont construits\. Les sols sont des limons fortement tasses recouvrant du sable ou du sable recouvrant des limons tasses\. 2\.03 Vegetation: Au sud de la region d'Edea se trouvent des forets tro picales a feuillage persistant, qui ont ete exploitees d'une maniere selective\. La vegetation de Ngaoundere est la savane boisee au sol couvert de canche gazon nante perenne\. A Maga, on ne trouve que des graminees annuelles sur les plaines alluviales et, sur les lIes, une savane arboree tres clairsemee\. 2\.04 Climat : A Edea, la pluviosite annuelle est en moyenne superieure a 2 500 mm, les taux d'humidite y sont tres eleves, et la saison seche ne dure que deux mois\. Ngaoundere re~oit environ 1 600 mm de pluie par an et a une saison seche de six mois\. Maga re~oit environ 750 mm de pluie par an, et la saison seche dure six mois\. Les temperatures ne freinent pas la croissance vegetale\. La temperature maximale moyenne annuelle oscille entre 40 0 C a Maga et 24 0 a Ngaoundere\. Le taux Ie plus faible d'humidite relative (10 % en pleine saison seche) a ete enregistre a Maga\. - 10 2\.05 Infrastructure: Les trois plantations sont situees pres de peri metres en exploitation\. A Edea, on utilisera les routes forestieres, les ate liers, les bureaux, les services sociaux et autres de la Cellucam (par\. 4\.02)\. A Ngaoundere, Ie projet permettra d'ameliorer la pepiniere, Ie magasin et les bureaux du FNP\. A Maga, les ateliers et les services de la SEMRY sont de bonne qualite, et la pepiniere qui y existe sera maintenue (par\. 4\.05)\. 2\.06 Population : Edea a une population d'environ 55 000 habitants, et a la peripherie des 160 000 ha de la concession de la Cellucam, se trouvent de nombreux villages\. La ville de Ngaoundere compte environ 45 000 habitants\. Lorsque Ie Deuxieme projet SEMRY sera termine, on prevoit qu'environ 60 000 personnes vivront dans les nouveaux villages de la region\. A ce jour, la Cellucam a ~te en mesure de recruter la main-d'oeuvre dont elle a besoin dans la region d'Edea, en appliquant Ie SMIG\. On pourra trouver les 525 hommes annees de main-d'oeuvre locale supplementaire necessaires aux plantations du projet, ce qui representera environ 33 % de la main-d'oeuvre totale de la 'Cellucam pendant les periodes de pointe; les ouvriers seront egalement payes au SMIG\. A Ngaoundere et a Maga, la main-d'oeuvre necessaire aux programmes de plantation sera egalement disponible\. - 11 III\. LE PROJET A\. Objectifs 3\.01 Le projet aura pour principaux objectifs : a) d'accrottre la contribution du secteur forestier a l'economie natio nale grace a l'amenagement de 11 000 ha environ de plantations de pins et d'eucalyptus, essences qui ne font pas partie de la flore du pays; et b) d'accroftre l'aptitude des organismes publics competents a pour suivre la regeneration reguliere des for~ts en renfor~ant leurs services techniques charges du reboisement et a accrottre leurs recettes grace a l'application diligente de la reglementation en vigueur en matiere de redevances et d'impOts forestiers\. 3\.02 II y aura deux types de plantations: d'une part, des plantations de reboisement des zones de futaie naturelle exploitees par la Cellucam pour la fabrication de pate, ce qui permettra a cette entreprise de tirer avantage, en definitive, du bois de plantations (par\. 1\.11); d'autre part, de nouvelles plantations (plantations en blocs et for~ts communales pilotes) dans les regions de savane ou l'on manque de bois\. 3\.03 Le developpement des institutions sera etroitement lie a l'amenage ment des plantations envisagees\. Les services techniques publics pourront \. etre ameliores, d'une part, en faisant participer Ie personnel d'exploitation du FNFP (par\. 1\.15) aux programmes de reboisement, ce qui leur procurera de l'experience en cours d'emploi, et d'autre part en creant des vergers a varie tes de graines ameliorees\. II sera egalement prevu de renforcer directement les services d'exploitation, de planification et de suivi du siege du FNFP\. L'Etat sera mieux a m~me de recouvrer les redevances et impOts forestiers grace au renforcement direct des services operationnels de la DEFC (par\. 1\.13), laquelle est chargee notamment de cette fonction\. II s'agira d'ameliorer imme diatement l'aptitude de la DEFC a calculer et a percevoir les impOts et les redevances\. 3\.04 En cinq ans, Ie Projet financera : a) l'amenagement d'une plantation de 5 200 ha environ de pins et de quelque 3 600 ha d'eucalyptus dans la zone du projet d'Edea\. Les travaux seront effectues par la Cellucam sous la supervision du FNFP et permettront de fournir a l'usine de cellulose du bois de qualite superieure et uniforme; b) l'amenagement d'une plantation de 1 000 ha environ d'eucalyptus en blocs d'une superficie allant de 50 a 200\. ha et de 200 ha de bois de forets communales pilotes pres de Maga (SEMRY)\. Cette operation sera effectuee par la SEMRY et visera a produire du bois de feu pour les menages et du perchis pour la construction; - 12 c) l'amenagement par Ie FNFP d'une plantation de 750 ha de pins et de 250 ha d'eucalyptus a Ngaoundere qui produira des grumes pour Ie sciage, et la construction de poteaux electriques; d) la creation, au sein du FNFP, d'un service charge de l'amenagement de vergers a graines ameliorees de 11 ha dans quatre sites; e) la fourniture de services specialises (16 hommes-annees) qui ne sont pas actuellement disponibles au Cameroun, pour la gestion des planta tions et Ie contrOle financier du FNFP et de la SEMRY; f) la fourniture du soutien logistique, materiel et operationnel neces saire a la DEFC pour qu'elle soit mieux a meme de calculer et de percevoir les impOts et les redevances; et g) l'octroi de fonds pour la realisation d'etudes specialisees compre nant la preparation d'un eventuel projet de suivi et pour contribuer a financer la formation appropriee, a l'etranger, d'un personnel selectionne\. B\. Caracteristiques detail lees a) Plantation d'Edea 3\.05 Le programme de plantation de 8 800 ha a Edea permettra de planter des pins et des eucalyptus dans des zones de forets tropicales que la Cellucam a deboisees pour fabriquer de la cellulose\. Par consequent, la Cellucam finira Ie defrichement et construira des pistes qui seront par la suite utilisees pour les travaux de plantation\. Le projet financera les frais relatifs aux operations d'andainage et de brulage des residus qui ne peuvent pas servir a la fabrication de cellulose\. Ces operations seront effectuees avec les moyens mecaniques appropries et laisseront un site de plantation couvrant 85 % environ de la superficie initialement exploitee\. La preparation et Ie reboisement suivront des que possible afin de minimiser les frais de desherbage\. Le programme quinquennal d'exploitation forestiere, de defrichement et preparation de la terre et de plantation se deroulera comme suit : - 13 - Annee 1 Annee 2 Annee 3 Annee 4 Annee 5 Total ------------------------(en ha)----------------------- Exploitation forestiere (non financee par le projet) 2 200 3 000 3 000 3 000 3 000 14 200 Defrichement et preparation 1 350 1 500 2 200 2 500 1 250 8 800 Plantation 000 1 100 1 900 2 500 2 500 8 800 Entretien (avec les 400 ha plantes prealablement; entretien cumule) 1 200 2 300 4 200 6 700 9 200 9 200 11 faudra pour effectuer un desherbage approprie etablir un programme d'entre tien (les superficies cumulees figurent dans Ie tableau ci-dessus)\. Une pepi niere sera creee pour fournir de jeunes plants\. 3\.06 Les pins choisis pour etre plantes sont l'essence Pinus caribaea, variete hondurensis, qui dans le milieu d'Edea devrait enregistrer une crois 3 sance moyenne annuelle de 18 m sur ecorce par ha et atteindre en 14 ans la taille appropriee pour etre abattue\. Les eucalyptus seront des Eucalyptus urophylla qui se regenerent a partir de leurs propres racines apres l'abat tage (rejets de taillis) et ont presente au cours de tests effectues a Edea 3 une croissance moyenne annuelle de 25 m sur ecorce par ha\. Pour cette variete, l'abattage pourra avoir lieu a la dixieme annee\. Des variations de croissance moyenne annuelle allant de 15 a 29 m3 par ha ont ete enregistrees a Edea pour P\. Caribaea et la croissance moyenne annuelle a atteint jusqu'a 40 3 m par ha pour E\. urophylla selon la provenance\. On poursuivra les tests de provenance dans le cadre du programme normal de plantation\. 3\.07 Le projet financera l'achat de gros materiel pour les travaux sup plementaires de defrichement et de preparation de la terre, de materiel d'en tretien de plantation et de vehicules; les travaux de construction de bureaux supplementaires et l'achat de materiel pour les pepinieres; l'entretien des routes d'exploitation forestiere et le coat de la main-d'oeuvre recrutee\. Pour 8viter d'installer des infrastructures de soutien (garages, ateliers de reparation et magasins pour les pieces detachees) faisant double emploi, celles-ci seront louees a la Cellucam sur la base de leur coat reel\. Les chefs de section de plantation et les contremaitres du FNFP seront detaches a Edea OU ils travailleront sous la direction de la Cellucam\. lls recevront une formation en cours d'emploi pour la direction d'une equipe de travail et la gestion des sites des plantations dans le cadre d'un programme organise par la Cellucam et elabore d'apres un programme deja utilise pour la formation des directeurs de sites d'exploitation forestiere et des contre maitres (par\. 4\.09)\. La Cellucam sera payee pour ce service et pour les services de gestion comprenant notamment la gestion globale du programme de - 14 plantations et du personnel, la coordination des operations de plantation et des activites d'exploitation forestiere et la passation des marches\. Le Gouvernement et Ie FNFP concluront un contrat juge acceptable par la Banque, et dont la Cellucam aura fixe les modalites\. Les points qui seront inclus dans ce contrat ant ete examines avec les services officiels et la Cellucam au cours de l'evaluation et un projet de contrat sera discute au cours des negociations\. La signature de ce contrat sera une condition d'entree en vigueur du pr~t (par\. 4\.02 et 4\.03)\. b) Plantation de la SEMRY 3\.08 Dans Ie cadre du programme quinquennal de plantation du projet, 1 000 ha d'eucalyptus (E\. camaldulensis) seront amenages ainsi que des blocs d'autres essences sur des terres non irriguees de la zone du projet Semry II, ce qui sera la suite logique du programme pilote commence avec une assistance bilaterale (par\. 1\.21) et qui a ete couronne de succes\. Dans Ie cadre du pro jet, des fonds seront accordes en quantite suffisante pour financer Ie materiel et les depenses supplementaires d'exploitation necessaires pour la construction de pistes, la preparation des terres (labour du sous-sol) et l'amenagement de pepinieres pour executer Ie programme\. Le personnel comprendra un fares tier recrute au niveau international, ayant l'experience voulue de l'amenagement de plantations en zone aride pour diriger les plantations en blocs et l'execution d'un programme de bois de village pilotes (par\. 3\.09)\. Du personnel supplemen taire de direction sera detache du FNFP\. Bien que la zone du projet SEMRY dis pose de terres suffisantes pour les for@ts, les cultures vivrieres irriguees et en sec, on financera une etude pedologique detail lee au 1:20 000 qui per mettra a la SEMRY d'etablir un plan d'utilisation des terres et, a cette occa sion, de determiner l'emplacement a reserver aux cultures forestieres appropriees\. 3\.09 Un programme pilote visant a amenager des bois de village sur 200 ha pour produire du bois de feu destine a l'usage domestique et a la vente, du bois de service et du fourrage sera egalement entrepris dans Ie cadre du pro jet\. Le programme interessera des groupes d'exploitants organises en previ sion de la creation de cooperatives dans les zones de peuplement nouvellement creees par la SEMRY\. Ces groupes recevront gratuitement des jeunes plants (notamment des plants d'arbres fuitiers et fourragers) et 20 ha environ de terres preparees qu'il subdiviseront en parcelles individuelles de 0,5 a 1 ha\. Chaque famille d'exploitants plantera et entretiendra sa parcelle\. Les femmes seront un groupe cible particulierement approprie pour cette activite\. Le travail aux champs sera organise et supervise par Ie personnel du FNFP detache a cette fin aupres de la SEMRY\. Un accord adapte au cas de chaque groupe sera negocie entre la SEMRY/le FNFP et les exploitants; il definira les droits fan ciers, les obligations des exploitants pour ce qui est de la plantation, de l'entretien et de la lutte contre les incendies et les animaux et fixera la date avant laquelle tout abattage sera interdit\. L'accord precisera egalement Ie prix du bois sur pied qui sera per~u par Ie FNFP au moment de la coupe pour couvrir les frais initiaux de preparation de la terre\. Le Cameroun ne dispose pour ainsi dire d'aucun personnel experimente pour guider l'evolution d'un tel programme bien que certains travaux soient actuellement effectues dans Ie cadre - 15 du Projet de developpement agricole des hauts plateaux de l'Ouest (Cr\. 784-CM) finance en partie par l'IDA\. Par consequent, Ie personnel du projet effectuera des visites periodiques dans les hauts plateaux de l'Ouest dans Ie cadre de sa formation en cours d'emploi\. En ce qui concerne Ie manque d'experience pour ce type de projet, les autorites ont donne l'assurance au cours des negociations que l'on n'effectuerait pas de travaux sur les forets communales avant qu'un plan d'action relatif a leur execution comprenant des dispositions contrac tuelles avec les exploitants n'ait ete approuve par la Banque (par\. 8\.01(a))\. c) Plantation de Ngaoundere 3\.10 Le programme de plantation qui sera finance dans Ie cadre du projet comprendra la plantation d'un bloc de 200 ha par an, pendant cinq ans, qui viendra s'ajouter au programme normal de plantation du FNFP de 50 ha environ dans cette region que Ie FNFP poursuivra apres Ie demarrage du projet\. Comme les plantations actuellement en cours, les plantations du projet seront etab lies sur des terres classees "terres forestieres" conformement aux procedures administratives habituelles et appartiendront a l'Etat\. Les operations de plantation qui seront effectuees dans Ie cadre du projet permettront d'ajouter au patrimoine forestier 750 ha de pins (P\. kesiya et P\. caribaea) et 250 ha d'eucalyptus (E\. grandis et E\. cloeziana)\. Le defrichement se fera mecanique ment afin d'extraire completement les souches et de bien preparer Ie sol et Ie FNFP vendra Ie bois de recuperation de la savane (environ 4 000 m3 par an) a des acheteurs prives, en tant que bois de feu\. On agrandira les pepinieres existantes pour produire les jeunes plants necessaires\. La plantation se fera selon des plans de travail annuels approuves par Ie FNFP et la Banque (par\. 8\.01 (c))\. Les fonds prevus dans Ie projet financeront l'achat du mate riel supplementaire, des vehicules de service et les pepinieres necessaires\. Comme les nouveaux sites seront de plus en plus eloignes de Ngaoundere, des campements modestes seront construits sur les plantations pour Ie personnel participant a l'entretien et a la protection des plantations\. d) Services de production de graines 3\.11 Un service de production de graines sera cree au sein du FNFP; il sera charge : d'importer des graines d'arbres forestiers et d'en etablir l'inven taire; d'organiser et d'executer en collaboration etroite avec les services de recherche forestiere une serie de tests de provenance portant sur toutes'les essences de plantation importantes; de mettre en place des stations de production de semences d'eucalyp tus et de pins dans chaque region ecologique importante du pays\. Onze hectares environ de P\. caribaea, P\. oocarpa, P\. kesiya, - 16 E\. grandis, E\. urophylla, E\. deglupta et E\. cloeziana seront plantes dans quatre stations; d'effectuer un examen systematique de toutes les plantations amena gees afin de selectionner des individus superieurs desquels des bou tures seront prelevees pour creer des vergers a graines clonals\. Comme exercice de formation pour les pepinieristes, des boutures seront faites a partir de l'essence camerounaise Triplochiton et cinq hectares supplementaires seront plantes avec cette essence pour la production de clones destines aux futures plantations; et d'utiliser toutes les techniques appropriees existantes en matiere de genetique forestiere et de reproduction arboricole\. La realisation de ce programme demandera du temps et a la fin des cinq ans d'execution du projet, Ie service de production de graines commencera a peine a fonctionner\. la formation du personnel local sera une fonction importante de ce service; des consultants experts dans ce domaine aideront a mettre en place ce service et a etablir son programme de travail\. les tech niques habituelles de creation de plantations et de pepinieres seront utili sees pour la production de plants a partir de graines\. les techniques connues pour faire monter des boutures seront egalement employees\. e) Renforcement du FNFP 3\.12 Dans le cadre du projet, le FNFP disposera de 12 hommes-annees envi ron d'assistance technique ainsi que du materiel necessaire, ce qui lui permet tra de renforcer ses activites dans les domaines suivants : planification annuelle du travail et suivi des resultats, gestion financiere et gestion des diverses plantations\. Des efforts dans ces trois domaines sont indispensables a la reussite du projet mais l'amelioration de la gestion financiere du FNFP est d'une importance vitale pour administrer les interets financiers de l'Etat dans la plantation d'Edea\. f) Renforcement de la DEFC 3\.13 On ameliorera l'efficacite de la DEFC en finan~ant : tout d'abord, l'achat de vehicules et de materiel pour donner au personnel la mobilite necessaire et lui permettre d'effectuer des inspections sur Ie terrain et de verifier les operations d'exploitation forestiere et d'enregistrement du bois abattu; en deuxieme lieu, l'achat de materiel de bureau et de calculateurs pour etablir et contrOler de maniere plus efficace les avis d'imposition et la perception des impOts et des redevances; et enfin, la remise en etat des bureaux et des cases de passage sur Ie terrain pour Ie personnel charge de la cote et du contrOle des impOts\. De plus, des fonds seront prevus pour fi nancer 45 hommes-mois de services de consultants a recruter en fonction des be soins (par\. 4\.08) et pour l'exploitation adequate des vehicules et des bureaux\. - 17 g) Etudes et preparation d'un eventuel projet de suivi 3\.14 Dans Ie cadre du projet, il est prevu de recruter, en fonction des besoins et apres accord entre Ie Gouvernement, la 8anque et la CDC, des con sultants a concurrence de 43 hommes-mois; il s'agira d'experts en matiere de croissance, protection et utilisation de la for~t\. Au dossier du projet figurent des mandats qui pourraient servir de directives en la matiere\. De plus, apres un examen a mi-course de l'etat d'avancement du projet, on pour rait commencer la preparation d'un eventuel projet de su~v~ pour lequel Ie financement des services de consultants a concurrence de 12 hommes-mois sera prevu\. - 18 IV\. ORGANISATION ET GESTION A\. Generalites 4\.01 Les institutions du secteur de la foresterie, a savoir Ie FNFP et la DEFC (par\. 1\.14 et 1\.15), seront chargees de l'organisation et de la ges tion du projet\. Ces organismes recevront Ie soutien necessaire pour atre a marne d'assumer les responsabilites supplementaires resultant de l'execution du projet (par\. 3\.12 et 3\.13)\. Le FNFP conclura avec la Cellucam et la SEMRY des accords speciaux pour la mise en place des plantations d'Edea et de la SEMRY et s'occupera seul de la creation de la plantation de Ngaoundere et du service de production de graines ameliorees\. Les specifications techniques des facteurs de creation et d'entretien figurent dans Ie dossier du projet\. B\. Dispositions en matiere de plantation 4\.02 L'element correspondant a la plantation d'Edea sera execute par la Cellucam, qui assumera Ie r61e d'entrepreneur pour la plantation des arbres pour Ie compte du FNFP\. Le FNFP retrocedera les fonds du projet et fournira Ie personnel de terrain qui fera temporairement partie de celui de la Cellucam\. La Cellucam organisera et executera les operations de plantation, et assurera la coordination avec ses activites d'abattage de grumes a pate\. L'Etat sera donc proprietaire des arbres plantes au cours du programme quinquennal et que la Cellucam achetera a un prix de bois sur pied approprie (par\. 6\.03) lorsque les arbres auront atteint liege optimal des grumes a pate\. Ces dispositions formeront la base d'un contrat qui sera conclu entre Ie Gouvernement et Ie FNFP d'une part et la Cellucam d'autre part\. Un projet de contrat a ete examine au cours des negociations; la signature d'un contrat juge satisfaisant sera une condition d'entree en vigueur du pret (par\. 8\.02(b))\. 4\.03 L'accord entre Ie Gouvernement, Ie FNFP et la Cellucam comprendra egalement les dispositions detaillees relatives a l'execution du projet\. Les plans de travail annuels et les budgets, Ie recrutement des consultants et la nomination aux postes cles du service de reboisement de la Cellucam seront exa mines et soumis a l'approbation d'un comite directeur compose de representants de la Cellucam, du FNFP et du Gouvernement, qui etudiera toutes questions ou problemes se posant au cours de l'execution de cet element et fera des recom mandations a ce sujet\. La Cellucam preparera des plans de travail et des bud gets detailles, recrutera Ie personnel de terrain, prendra les dispositions voulues en matiere de passation des marches, detiendra et gerera les avoirs du projet au nom du FNFP et etablira une comptabilite trimestrielle (non verifiee) et annuelle (verifiee) et des rapports sur l'etat d'avancement du projet\. Le FNFP detachera aupres de la Cellucam du personnel de direction sur Ie terrain - 19 qui sera organise selon l'organigramme presente ci-apres et contrOlera la comptabilite et l'avancement du projet avec Ie personnel sur Ie terrain\. Le FNFP remboursera la Cellucam de ses frais effectifs enregistres pour les tra vaux de reboisement qu'elle execute dans Ie cadre du projet\. De plus, Ie FNFP verser a a la Cellucam pour les services de soutien des paiements perio diques dont Ie montant sera determine conformement aux dispositions de l'ac cord et proportionnel aux travaux de plantation realises\. Cette depense couvrira Ie pourcentage des frais gene raux de la Cellucam et des frais de ges tion de la Direction de la foresterie imputable au programme de plantation\. Ce pourcentage sera determine d'apres une formule qui tiendra compte des aug mentations des frais d'exploitation de la Cellucam et des effectifs par rap port a ce qu'ils etaient avant Ie projet, a l'exclusion du travail de l'usine\. Une estimation du montant des versements a effectuer a la Cellucam pour les services de soutien sera incluse dans Ie budget annuel qui sera soumis a l'ap probation des copr~teurs au plus tard Ie 31 mars precedant Ie debut de l'exercice du projet (par\. a\.Ol(c»\. Le FNFP nommera un comptable pour Ie contrOle des fonds du projet utilises par la Cellucam\. 4\.04 La Division de la forest erie de la SEMRY executera l'element de reboisement SEMRY\. Un forestier recrute au niveau international, ayant des qualifications jugees acceptables par la Banque, dirigera les travaux\. II sera aide de deux adjoints detaches du FNFP dont l'un sera charge de l'element de plantation en blocs et l'autre du programme pilote de bois de village\. La Division de la foresterie sera administree conformement aux reglements de la SEMRY selon lesquels des rapports sur l'etat d'avancement seront presentes regulierement et des comptes seront etablis a l'intention du FNFP pour etre inclus aux etats financiers consolides du projet\. Elle choisira les sites devant etre reboises d'apres Ie plan d'utilisation des terres (par\. 3\.0a)\. Elle etablira et suivra les plans de travail annuels et les budgets qui seront approuves par Ie FNFP et la Banque (par\. a\.Ol(c» et fera en sorte que la SEMRY entretienne les pistes et recrute de la main-d'oeuvre, maintienne et comptabi lise les avoirs du projet\. Le FNFP detachera des contremattres de site et des contrema1tres d'equipes aupres de la SEMRY pour effectuer des travaux sur Ie terrain et mettra a la disposition du projet les conseils techniques du Directeur de plantation charge de la supervision (par\. 4\.06)\. Un accord juge acceptable par la aanque, precisant notamment Ie programme de plantation, ses specifications techniques ainsi que les responsabilites administratives du FNFP et de la SEMRY, sera conclu entre Ie FNFP et la SEMRY\. Sa signature sera une condition prealable au decaissement des fonds afferents a cet element (par\. 8\.03)\. Les avoirs residuels provenant du projet pilote en cours, finance par l'aide bilaterale, pourront etre utilises pour Ie projet\. 4\.05 L'execution de l'element concernant Ie bois communal pilote de la SEMRY sera souple et fera une large place aux principes de base qui ant ete couronnes de succes dans d'autres projets de foresterie villageoise finances par la Banque (par\. 3\.09)\. On assurera les services d'un consultant specia liste en sociologie economique, recrute pour une courte periode pour analyser la mise en oeuvre du programme et veiller a son expansion et a sa reproduction\. - 20 C\. Renforcement du FNFP 4\.06 L'aptitude du FNFP a executer les programmes de regeneration des for~ts du Gouvernement sera accrue, tout d'abord gr~ce a la formation en cours d'emploi des ingenieurs et des techniciens du FNFP qui seront detaches pour travailler a l'amenagement de plantations financees dans Ie cadre du pro jet (par\. 4\.09), ensuite gr~ce au renforcement de la direction financiere et technique du siege du FNFP\. Un directeur/ingenieur forestier recrute au niveau international sera charge, en tant que directeur du programme, d'eta blir des programmes de reboisement annuels detailles au sein du FNFP, dans Ie cadre : i) des directives etablies pour Ie FNFP; ii) des limites imposees par les ressources disponibles; et iii) des besoins renouvelables d'entretien et de replantation\. D'autre part, il mettra sur pied un systeme de visites perio diques, site par site, avec enregistrement des donnees pour verifier l'etat d'avancement, identifier les goulets d'etranglement et etablir la base des prochains programmes annuels de plantation\. Un comptable du projet recrute au niveau international sera charge de mettre en place un contrale financier, d'en superviser l'application, de rediger des rapports pour chaque element du projet et d'ameliorer, gr~ce aux conseils qu'il pourra donner et a sa colla boration avec la direction et les comptables du FNFP, Ie contrale financier et l'etablissement des etats financiers du FNFP\. Enfin, un Directeur de planta tion charge de la supervision, recrute au niveau international et residant a Garoua, introduira site par site avec les directeurs des plantations exis tantes du FNFP des techniques ameliorees et choisira les essences et les res sources appropriees aux conditions microecologiques particulieres a la pro vince du nord\. II supervisera l'application des nouvelles methodes\. II assurera aussi la liaison avec Ie personnel de recherche forestiere de l'IRA afin de donner des conseils sur les besoins en matiere de recheche et de faire adopter les techniques ayant donne des resultats prometteurs\. Tout Ie personnel recrute au niveau international, y compris Ie Directeur de la fores terie de la SEMRY (par\. 4\.04), aura des qualifications et une experience jugees acceptables par la Banque et fournira ses services pendant quatre ans, dans Ie cadre d'un mandat detaille figurant dans Ie dossier du projet (par\. 8\.01(b»\. D\. Renforcement de la DEFC 4\.07 Le Directeur de la DEFC ameliorera, par l'intermediaire du Service de l'exploitation et des industries forestieres, l'aptitude de la DEFC a calculer les impats et les redevances du secteur forestier et a en assurer Ie recouvre ment\. Dans chacun des sieges des cinq provinces ou des concessions forestieres sont actuellement en exploitation (ouest, sud-ouest, littoral, centre-sud et est), des cadres ont ete nommes pour calculer les impOts et redevances et s'occuper de toutes les questions fiscales, dans la province, et les autorites ont donne l'assurance que ces responsables seraient en poste pendant toute la periode d'investissement du projet (par\. B\.Ol(d»\. Le responsable de chaque bureau provincial de la DEFC (Ie Conservateur) sera charge d'organiser, au sein - 21 de la province, des visites regulieres des chefs de section 8 leurs postes respectifs et aux concessions faisant partie de leur section; des visites regu lieres effectuees par des agents du siege permettront 8 leur tour d'exercer un contrdle sur ces deplacements\. Des rapports trimestriels de ces activites sur Ie terrain seront prepares et soumis au siege de la DEFC ou Ie Chef du Service de l'exploitation et des industries forestieres sera charge du suivi et du contrOle\. 4\.08 Les autorites ont considerablement ameliore Ie recouvrement des impOts et mettent en oeuvre de nouvelles mesures pour renforcer cette tendance\. De plus, elles ont donne l'assurance qu'un specialiste du calcul de l'assiette des impOts forestiers et de leur mise en application, recrute au niveau in ternational, serait employe pendant une periode de 24 hommes-mois environ pour aider Ie Directeur de la DEFC 8 mettre en oeuvre les mesures\. Des services de consultants en administration publique pour une duree de six mois environ seront egalement finances\. Enfin, comme l'application de sanctions peut soulever des problemes juridiques en ce qui concerne les concessionnaires, des fonds seront disponibles pour assurer les services d'un conseiller juridique (8 concurrence' de 15 mois) au cours de la periode d'investissement de cinq ans, en vue d'aider selon les besoins la DEFC 8 traiter avec l'industrie forestiere\. Tous les con sultants auront des qualifications et une experience jugees acceptables par la Banque\. E\. Formation 4\.09 Le personnel local sera essentiellement forme en cours d'emploi au cours des operations de plantation en cours\. Un programme de detachement par rotation de superviseurs de site et de contremaitres du FNFP aupres de la Cellucam et de la SEMRY sera organise et suivi par Ie Directeur du FNFP avec l'assistance du Directeur du programme d~nt les services seront finances dans Ie cadre du projet (par\. 4\.06)\. Les detachements, qui porteront sur des perio des de deux 8 trois ans selon les besoins des organismes beneficiaires et du FNFP, auront pour objectif de donner aux 50 ingenieurs et techniciens supe rieurs du FNFP la possibilite de travailler soit 8 la Cellucam, soit 8 la SEMRY, pendant les cinq ans de la periode d'investissement du projet\. Au FNFP, Ie comptable du projet sera charge d'ameliorer les services de comptabi lite du FNFP et les techniques employees par Ie personnel du FNFP et de les porter 8 des normes jugees acceptables pour l'execution du projet\. Ces normes sont decrites dans Ie dossier du projet\. On prevoit egalement de financer la participation (pour une duree de 12 hommes-mois environ) du personnel selec tionne du FNFP et de la DEFC 8 des seminaires specialises 81'etranger\. - 22 F\. Suivi et evaluation retrospective 4\.10 Au FNFP, Ie Directeur du programme (par\. 4\.06) etablira une proce dur~ de suivi des operations de plantation qui servira de base a l'etablis sement des plans de travail et des budgets annuels\. Pour ce faire, les contre ma1tres devront presenter des rapports hebdomadaires d'activites et d'utilisa tion des ressources aux directeurs de site, les directeurs de site des rapports mensuels a l'intention des directeurs de zones et ces derniers des rapports trimestriels consolides a l'intention du siege\. Chaque superviseur devra periodiquement effectuer une visite de contrOle aux services relevant de sa supervision\. Le Directeur de plantation charge de la supervision (par\. 4\.06) examinera les rapports mensuels etablis sur les sites\. Le contrOle des flux financiers sera place sous la responsabilite du service de comptabilite du FNFP qui comprendra un comptable residant a Edea, charge de la comptabilite de la plantation d'Edea\. 4\.11 La DEFC restera responsable du suivi des questions fiscales concer nant Ie secteur de la foresterie\. Le Directeur, par l'intermediaire de chaque Conservateur provincial, veillera desormais a ce que les techniciens en fores terie, les chefs de section et les responsables designes du siege provincial, par ordre hierarchique, effectuent des visites de contrOle periodiques des exploitations forestieres\. 4\.12 Le personnel renforce du FNFP et de la DEFC aura notamment pour tache d'evaluer periodiquement l'etat d'avancement du projet\. Pendant la deuxieme partie de l'annee 3 du projet, une evaluation du projet ami-course sera effectuee par des consultants dont les qualifications, l'experience et Ie mandat auront ete juges acceptables par la Banque\. Les recommandations emises dans cette etude seront examinees par les services officiels, Ie FNFP, la DEFC et la Banque et serviront notamment de base a la preparation, a 1'annee 4, d'un eventuel projet de suivi\. G\. Production de graines et liaison avec les services de recherche 4\.13 Le service de production de graines qui sera cree au sein du FNFP (par\. 3\.11) poursuivra les travaux d'apres les resultats des tests d'elimina tion qui ont ete menes avec succes pendant de nombreuses annees par 1'IRA/CTFT a Mangombe et ailleurs et qui ont permis d'identifier des essences pouvant convenir au Cameroun\. Le service de production de graines continuera a coope rer et a echanger des informations avec ces chercheurs\. Au debut du projet, des consultants recrutes pour trois mois aideront a etablir Ie programme de travail; celui-ci sera mis a jour chaque annee grace a un mois de services de consultants\. Des terres et des services de plantation et d'entretien se ront mis a la disposition du projet dans Ie cadre des programmes de plantation prevus par Ie FNFP a proximite des quatre sites du projet\. - 23 4\.14 Dans chaque plantation, des essais de rendement des arbres de dif ferentes provenances seront egalement effectues dans le cadre des elements de production\. Le Directeur de plantation charge de la supervision du FNFP et le Directeur du programme prepareront ces essais en liaison avec les responsables de l'IRA\. Le siege du FNFP entretiendra des contacts etroits avec les servi ces de recherche de l'IRA, en particulier a propos de la province du nord ou de nombreux sites du FNFP tres differents sur le plan ecologique sont plantes simultanement\. Le FNFP consultera egalement l'IRA en ce qui concerne les besoins en matiere de recherche appliquee\. - 24 v\. COUTS ET DISPOSITIONS FINANCIERES A\. Estimations des coOts du projet 5\.01 Le coOt total du projet pendant la periode d'investissement de cinq ans est estime a 9 602 millions de francs CFA (35,5 millions de dollars), dont 4 374 millions de francs CFA (16,2 millions de dollars) en devises\. Ce devis comprend un mont ant estimatif de 632 millions de francs CFA (2,3 mil lions de dollars) d'impOts identifiables\. Les droits d'importation identi fiables des fournitures importees destinees a l'execution du projet ont ete exclus, en prevision de la decision du Gouvernement d'exonerer de ces droits lesdites fournitures\. Le coOt du projet netd'impots s'eleve donc a 8 970 millions de francs CFA (33,2 millions de dollars), dont 49 % en devises\. 5\.02 Les estimations de couts sont fondees sur les prix de janvier 1981 et comprennent : i) des provisions pour imprevus de 10 % sur les b~timents et de 5 % sur tous les autres couts, a l'exception des frais de personnel, des honoraires des consultants et des services de gestion a propos desquels aucune provision pour imprevus n'a ete calculee; et ii) des provisions pour hausse des prix calculees en fonction des previsions d'augmentation des prix suivantes : 1981 1982 1983 1984 1985 1986 CoOts en monnaie 12 12 12 12 nationale Couts en devises 9 8,5 8,5 7,5 7,0 6,0 Les provisions sont egales a 44 % des couts de base ou a 31 % du cout total\. Les couts estimatifs du projet sont recapitules dans Ie Tableau 1 ci-dessous et figurent de maniere detaillee dans Ie dossier du projet\. B\. Financement envisage 5\.03 Le projet sera finance par la Banque (pret de 17 millions de dol lars), la Commonwealth Development Corporation du Royaume-Uni (CDC) (pret de 7,4 millions de dollars) et par l'Etat (11,1 millions de dollars)\. La reparti tion de ce financement figure au Tableau 2\. Le pret de la Banque financera Ie cout en devises du projet (11,6 millions de dollars)\. II financera egale ment 1,3 million de dollars de coOts marginaux relatifs au renforcement de la DEFC et du FNFP que lion considere justifies compte tenu de l'importance du bon fonctionnement de ces deux organismes\. Le financement total de la Banque couvrira 51 % des coOts du projet nets d'impots\. - 25 - Tabl\. !\.timatlona daa eoGts du Projet e" \. lIIIo"\. de lelA en lrJ1 ilion\. de dollan 1Ion"\.Le lIo"nd\. Dev1& Nationale Devises Totd NaUo\.le Of:Yb Totd % !U\.nu du I"IIFP PlaotatioQ4 c'£4e\. Vlhieule mat~rl\.1 et b;tl~"ea 68 864 932 0\.3 3\.2 3 \.5 91 III't\.ti\.e"t\. relauta \.u" pla"taUolIA \.ill! 1080 1!!l \.2\.:\.! ~ ~ 1!1\. 260\.5 1944 4549 9\.7 7\.2 16\.9 43 nneationa SEMI'!: II (Maaa) Vfbie,,1\. mater lei at bit1ment\. 33 108 141 0\.1 0\.4 0 \.5 80 11:IY\.ti\."U relaut\. pla"t\.tio\.,\. \.ill -Y\. \.ill\. ~ 0\.3 1& 11 216 189 40\.5 0\.8 0\.7 1\.5 47 nant\.tions d\. tls_ndh/! Vfbieulaa, materlel at batiment\. lJrre\.U\."ts rel\.tib a \. plant\.tio"\. ill 7 S4 2i 61 ill hl -* 0\.2 \.!!\.:\.! 0\.2 ~ 67 12\. 144 108 252 0\.5 0\.4 0\.9 44 S\.rvlc\. de !roductlon d\. sral~e\. amelioree\. Vfbleul\., materlel et bidmenu 21 27 48 0\.1 0\.1 0\.2 SO 11:IYaaciaa\.anta r\.l\.Ub au" plantatio"\. 2! -1! -!l \.2\.:l\. hl hl 11 79 " 133 0\.3 0\.2 O\.S 40 AI"l"t\."\.e technlgu\. Yihieul\. Per\.annel\. cccs"ltallta et 1 9 10 -\. -\. -\. -\. 90 exploit\.tloo de\. vehi¢ula\. -1 6 \.ill\. 630 ill 636 - \. 1:\.L 2\.3 Ll I\.3 2! q'l total partie1 de \.nt\.nta J"IIFP 3050 2975 S966 11\.3 10\.1 22\.1 49 Soothn tochn19"e at "atlrld 1 1\. Due Ytbieule", materlal at bitlmanta 98 210 368 0\.3 1\.0 1\.3 77 CoUu d' expl"tt\.Uon \.uppl\.ntal\. 139 \.ill\. \.ill\. !!\.:\.L 2\.J!\. b1\. !\.L ec eOl\\.8ulCanta 237 486 723 0\.8 1\.8 2\.6 69 \.,\. CoGt 4e loa\. tctal 3287 3402 6689 12\.1 12\.6 24\.7 Sl Prov1don\. Prov idon\. 1>0ur impdvua 49 108 157 0\.2 Provlda,," pour hau8\.e de prix 0 0\.6 61 1892 864 2756 1\.& 1\.:1\. 10\.2 11 1941 972 2UJ 7\.2 3\.6 10\.8 33 ceNt t!)tal du Proj\.c S228 4314 9602 19\.3 16\.2 3S\.5 46 1101\.- da 50,000 dollar - 26 5\.04 Le pr~t de la Banque sera octroye au Gouvernement pour une duree de 20 ans avec un differe d'amortissement de cinq ans, au taux d'interet en vigueur au moment de la presentation du projet au Conseil des Administrateurs\. Le pret de la Banque sera retrocede au FNFP et a la DEFC sous forme de dons\. Le pret de la CDC devrait ~tre octroye aux m~es conditions que Ie pret de la Banque et financera 30 % des coOts estimatifs de l'element representant la plantation d'Edea\. Pour que Ie pret de la Banque prenne effet (par\. 8\.02(a)), il faudra que les conditions auxquelles est subordonnee l'entree en vigueur du pret de la CDC soient remplies\. C\. Conditions de retrocession 5\.05 Comme il a ete convenu au cours des negociations, Ie Gouvernement mettra a la disposition du FNFP et de la DEFC, sous forme de don, taus les fonds necessaires (montants des prets de la Banque et de la CDC et la quote part de l'Etat) pour executer Ie projet (par\. 8\.01(e))\. Bien que Ie FNFP soit sur Ie plan juridique un organisme autonome, ses activitees se bornent a l'exe cution des programmes de plantations du Gouvernement et il n'est donc pas motive sur Ie plan commercial\. II s'ensuit que l'octroi de prets subsi diaires au FNFP ne serait pas justifie\. En ce qui concerne la DEFC, les prets subsidiaires sont inutiles puisqu'il s'agit d'un organisme public\. Pour que Ie pret de la Banque entre en vigueur, Ie Gouvernement devra ouvrir pour chacun des elements du projet des comptes separes qui serviront a financer les frais de fonctionnement en monnaie nationale; d'autre part, l'execution du projet ne pourra commencer qu'apres qu'il aura depose aces comptes un montant d'au moins 400 millions de francs CFA pour la plantation d'Edea, 35 millions de francs CFA pour la plantation de la SEMRY, 25 millions de francs CFA pour la plantation de Ngaoundere; 12 millions de francs CFA pour Ie siege du FNfP et 33 millions de francs CFA pour la DEFC (par\. 8\.02(c))\. Le compte de Ie plantation de Ngaoundere sera ouvert au siege du FNFP et les fonds de la DEFC seront deposes a un compte subsidiaire du FNFP pour la DEFC\. Ces comptes seront reapprovisionnes au cours de l'annee par les fonds prove nant des prets de la Banque et de la CDC et au debut de l'exercice par la contribution de l'Etat conformement a l'approbation des budgets pour les ele ments du projet\. Le FNFP supervisera Ie flux des fonds du projet pour les cinq elements\. En plus de la contribution supplementaire de l'Etat envisagee pour l'element de Ngaoundere, Ie FNFP maintiendra les fonds de fonctionnement destines au programme de plantation en cours de Ngaoundere a leur niveau de 1981 (40 millions de francs CFA; 148 000 dollars)\. Pour minimiser les frais supplementaires de defrichement apres l'abattage, Ie programme de reboisement envisage dans les plantations d'Edea commencera vers Ie milieu de 1981\. Un financement retroactif pour ces activites sera accorde a concurrence de 1 million de dollars sur Ie pret de la Banque; des contributions de l'ordre de 700 000 dollars pour la CDC et de 700 000 dollars pour l'Etat seront prevues pour couvrir les depenses enregistrees apres Ie ler juillet 1981\. -2'7 Tableau 2 Plan dL, financement envisage (eu millions de dollars) Bank CDC Etat Total Plantations d'Edea Vibicules, materiel et batiments 2\.9 2\.2 5\.1 lavestissements relatifs aux plantatioUJ 7\.1 S\.2 6\.9 19\.2 10\.0 7\.4 6\.9 24\.3 Plantations de Semry II (Maga) Vebicules\. materiel et batiments 0\.4 0\.1 0\.5 Amenagement des plantations et couts 0\.7 0\.8 1\.5 d lexploitation 1\.1 0\.9 2\.0 Plantation de Ngaoundere Vihlcules, materiel et batiments \ 0\.2 0\.1 0\.3 luveatfasements relatifs aux plantatlona 0\.4 0\.7 1\.1 0\.6 0\.8 1\.4 Service de production de semences amelior~es Vebicules\. materiel et batiments 0\.1 0\.1 0\.2 lDvestissements relatifs aux plantations 0\.2 0\.3 0\.5 0\.3 0\.4 0\.7 Assistaneetechnique au FNFP _ 1t Vihlcules 0\.1 0\.1 Personnel, consultant et 2\.7 0\.5 3\.2 exploitation des vehicules 2\.8 0\.5 3\.3 SoutienTechnique et materiel a la DEFC Vibicules, materiel et bitiments 1\.3' 0\.4 1\.7 Couts d'exploitation supplementaires 0\.9 1\.2 2\.1 et consultants 2\.2 1\.6 3\.8 Total 17\.0 7\.4 11\.1 35\.5 Pourcentage du total 48 21 31 100 Total du finsncement il\. I' exclusion des tax~s_\.::\.17::\.:\.;:\.o_ _ _ _-\.:\.7:\.,;\.4;:\._ _ _\.;8:::,\.:\.,:8::\.-_ _ _-\.:3:\.:3:\.:\.:,\.=2:\.-_ Pourcentage du total il\. l'exclusion des tax~ __~5_1________2_2 ____________7___________ _ 2 l_0_0___ \." Moina de 50\.000 dollars - 28 D\. Passation des marches 5\.06 Les marches d'un montant egal a au moins 100 000 dollars, portant principalement sur l'achat de gros materiel, seront passes dans Ie cadre d'un appel a la concurrence internationale conformement aux directives de la Banque\. Les fournitures achetees selon ces procedures devraient atteindre un montant total de 5,2 millions de dollars environ (financement de la Banque : 3,3 mil lions de dollars)\. Les achats seront groupes dans la mesure du possible pour tirer Ie maximum d'avantages d'achats en grandes quantites\. Les marches d'un montant inferieur a 100 000 dollars mais superieurs a 50 000 dollars seront attribues sur appel d'offres dont la publicite est faite localement tandis que les marches d'un montant egal ou inferieur a 50 000 dollars seront passes sur la base d'offres de prix emanant de trois fournisseurs au moins ayant bonne reputation\. Ces marches devraient atteindre un montant total de 1,1 million de dollars (financement de la Banque : 700 000 dollars)\. Les travaux de prepa ration de la terre et de construction de pistes forestieres qui doivent etre etroitement coordonnes avec les operations de plantation ne se pretent pas a une passation de marche par appel a la concurrence et seront donc effectues en regie par les organismes de plantation respectifs du projet (2,9 millions de dollars; financement de la Banque : 800 000 dollars)\. Les petits bati ments 9values a 200 000 dollars (financement de la Banque : 100 000 dollars) des plantations d'Edea, de la SEMRY et de Ngaoundere seront egalement cons truits en regie\. Cependant, pour la construction des elements de la DEFC et du service de production de graines, les marches d'une valeur de 700 000 dol lars (financement de la 8anque : 500 000 dollars) seront attribues dans Ie cadre d'adjudications avec publicite locale, conformement a des procedures jugees acceptables par la Banque\. Les marches relatifs a l'assistance tech nique (294 hommes-mois) dont Ie coat total se monte a 3,2 millions de dollars environ (financement de la 8anque : 3,1 millions de dollars) seront attribues conformement a des procedures portant sur Ie recrutement au niveau interna tional\. Tous les mandats, qualifications et contrats des specialistes devant etre recrutes conformement aux directives du Groupe de la 8anque, seront juges satisfaisants par la 8anque\. Quelque 18,2 millions de dollars de de penses pour Ie projet (principalement coats de fonctionnement et salaires du personnel local) (financement de la 8anque : 7 millions de dollars) ne se pre tent pas aux procedures d'appel d'offres et seront engages conformement a des pratiques prudentes et bien etablies qui sont satisfaisantes\. Les versements effectues par l'Etat a la Cellucam pour les services de gestion seront determi nes selon les principes de finis dans Ie contrat de gestion envisage avec la Cellucam (par\. 4\.02 et 4\.03) et se monteront a 4 millions de dollars environ (financement de la 8anque : 1,5 million de dollars)\. E\. Decaissement 5\.07 Le pret de la Banque sera decaisse sur une periode de sept ans (voir Annexe Tableau 1)\. Ce calendrier de versement est fonde sur l'expe rience de la Banque en matiere de decaissement de prets au Cameroun\. Le pret de la Banque financera les depenses du projet comme suit : - 29 Millions de dollars Decaissement (%) 1\. Plantations d'Edea Vehicules, materiel et b§timents 2,3 60 Coats d'investissement des plan tations, y compris Ie coat du personnel local et les depenses de la Cellucam 7,4 35 2\. Plantation de la SEMRY (Maga) Vehicules, materiel et b§timents 0,4 75 coats d'investissement de la plan tation, y compris Ie coat du personnel local 0,6 50 3\. Elements du FNFP a) Plantation de Ngaoundere Vehicules, materiel, b§timents 0,2 75 Coats d'investissement de la plan tation, y compris Ie coat du personnel local 0,1 35 b) Production de graines Vehicules, materiel, b§timents 0,2 75 Coats d'exploitation supplementaires 0,1 35 c) Assistance technique et services de consultants Vehicules et coats d'exploitation 0,1 60 Personnel expatrie 2,4 100 4\. Soutien technique et materiel a la DEFC Vehicules, materiel et b§timents 1,2 75 Coats d'exploitation supplementaires 0,4 35 Services de consultants expatries 0,4 100 5\. Non affecte TOTAL - 30 - Les decaissements relatifs aux travaux de genie civil, a l'achat de vehicules et de materiel, aux versements effectues a la Cellucam pour les services de soutien et aux services de consultants se feront sur presentation de pieces justificatives\. Les decaissements relatifs aux coats de plantation pour Ie projet, y compris les salaires du personnel local, seront effectues sur pre sentation de releves de depenses certifies\. Les pieces justificatives qui ne seront pas presentees avec les demandes de retrait seront mises en suspens et tenues a la disposition des missions de supervision de la Banque pour examen\. II faudrait prendre des dispositions appropriees pour verifier les depenses financees sur presentation de factures\. 5\.08 Le comptable du projet, qui sera recrute pour Ie siege du FNFP (par\. 4\.06), sera charge de la comptabilite et du contrOle financier des ele ments du FNFP et coordonnera la preparation des demandes de retrait de fonds emanant du pr~t de la Banque pour tous les elements du projet\. 5\.09 Comptabilite, audit et etablissement de rapports\. Le FNFP tiendra, conformement a des pratiques comptables appropriees, les ecritures se rappor tant aux elements du FNFP et necessaires pour enregistrer la situation finan ciere de chaque element et leurs coats detailles d'exploitation\. La compta bilite des elements des plantations d'Edea et de la SEMRY sera confiee aux ser vices comptables de la Cellucam et de la SEMRY; cependant, des comptes separes seront tenus pour ces elements et seront contrOles par Ie FNFP\. Les systemes comptables actuellement utilises par la Cellucam et la SEMRY suivent les proce dures de comptabilite analytique appropriees a l'etablissement de releves de depenses et de balances d'inventaire mensuelles exigees par Ie FNFP, comme il sera precise dans les accords d'execution qui seront signes pour ces elements (par\. 4\.02 et 4\.05)\. Le comptable du projet au FNFP conseillera egalement la DEFC sur les ameliorations a apporter a la comptabilite et a l'etablissement de rapports\. Le FNFP tiendra pour l'ensemble du projet une comptabilite con solidee qui recapitulera les balances d'inventaires mensuelles\. 5\.10 les comptes du projet tenus par Ie FNFP feront l'objet d'une veri fication comptable effectuee chaque annee par un expert-comptable independant dont les qualifications et Ie mandat seront juges acceptables par la Banque\. le rapport de l'expert-comptable sera presente a la Banque dans les quatre mois suivant la clOture de l'exercice du FNFP\. De plus, les experts comptables de la Cellucam fourniront chaque annee un releve indiquant les couts reels des services rendus par la Cellucam a la plantation d'Edea au cours de l'exercice precedent\. 5\.11 Le FNFP et la DEFC soumettront chaque trimestre au Gouvernement et a la Banque des rapports sur l'etat d'avancement presentant les depenses reelles et celles prevues au budget et indiquant les travaux realises et les objectifs pour Ie trimestre a venir pour chaque element du projet\. - 31 VI\. PRODUCTION, DEBOUCHES ET RESULTATS FINANCIERS A\. Production 6\.01 Apres la periode d'investissement du projet, les plantations commen ceront a produire comme suit : Abattage (nombre Production (en d'hectares milliers de m3 Categorie Annee du pro,jet par an) par an) Bois a papier 15-26 (pins) 520 136 Plantation d'Edea 15 et 23 1 800 588 (eucalyptus) 16 et 24 1 800 401 Bois de chauffage et bois de construction 6 14 (pins et 19 400 Plantations de la SEMRY) et de Ngaoundere ) 15 23 eucalyptus) 22 ) 25 29 (pins) 150 47 B\. Debouches et commercialisation 6\.02 La Cellucam utilisera comme matiere premiere (par\. 1\.11) du bois de plantation au lieu du bois en provenance de la foret naturelle; Ie debouche pour Ie bois de la plantation d'Edea est donc assure\. L'abattage du bois a papier sera contrOle de sorte que de l'annee 15 a l'annee 26 du projet (1995 a 2006), la Cellucam pourra compter sur Ie bois de plantation pour satisfaire 100 % de ses besoins annuels en bois a longues fibres (pin) et pres de 100 % de ses besoins en bois a fibres courtes (eucalyptus)\. Pour passer completement de l'utilisation de la futaie tropicale au bois de plantation, et pour atteindre un objectif de production de 80 % de pate blanchie a courtes fibres et 20 % de pate blanchie a longues fibres, Ie Gouvernement et la Cellucam continueront de l'annee 6 a l'annee 11 du projet a planter un nombre suffisant d'eucalyptus (2 500 ha environ par an)\. 6\.03 La Cellucam paiera Ie bois sur pied un prix negocie pour les arbres de plantation venus a maturite, qui sera determine suivant les principes pre cises dans Ie contrat d'execution passe entre la Cellucam et Ie Gouvernementl FNFP (par\. 4\.02)\. Ces principes, examines au cours des negociations, permettront - 32 a l'Etat, d'une part, de recouvrer la totalite du cout de plantation et d'entretien et, d'autre part, d'obtenir un taux de rentabilite positif apres ajustement pour inflation\. De plus, il a ete convenu que la Cellucam devrait acheter Ie bois de plantation dans un certain lapse de temps suivant la venue a maturite des arbres\. D'autre part, il a ete convenu que si Ie prix du bois sur pied excedait la valeur du bois determinee sur la base du prix paritaire a l'importation, la Cellucam pourrait ajourner ses achats d'un an\. Pour illus trer Ie principe de recouvrement des coats si lion prend comme base les coats estimatifs du projet aux prix de 1981 et si lion fixe arbitrairement a 2,5 % Ie taux de rentabilite reel des investissements, Ie prix du bois sur pied 3 3 devrait depasser 2 820 francs CFA la m (10,44 dollars Ie m ) d'ou un cout du bois livre a la Cellucam de 6 120 francs CFA Ie m 3 3 (22,67 dollars Ie m )\. Ce prix du bois livre se situe dans la fourchette des prix que paieRt actuelle ment les producteurs de pate a papier dans de nombreux pays developpes (de 3 15 dollars a 30 dollars Ie m )\. 6\.04 La production de bois des plantations en blocs de la SEMRY sera ab sorbee par Ie marche de Maga qui comprend la zone de la SEMRY, ou la demande devrait s'accroitre de 5 % par an, et ou il y a penurie de bois par suite de L'augmentation naturelle de la population et de la reinstallation recente de 25 000 personnes environ (quelque 4 000 familIes) dans la zone de la SEMRY\. La production des plantations aidera a satisfaire la demande croissante de cette region qui devrait augmenter de 30 000 m3 d'ici a l'annee 5 du projet\. Compte tenu des possibilites d'ecoulement, la moitie environ du bois sera vendue sous forme de bois de feu et l'autre moitie sous forme de bois de service\. La SEMRY et Ie FNFP annonceront la vente de droits d'abattage sur des exploi tations de tailles differentes et Ie bois sera vendu sur pied a des bacherons, sous contrat\. Les prix planchers du marche acceptables seront superieurs a un prix plancher du bois sur pied qui sera au moins suffisant pour couvrir les frais de creation et d'entretien de la plantation estimes a 1 800 francs CFA 3 3 Ie m (6,67 dollars Ie m ) aux prix de 1981, ce qui represente actuellement 15 % environ de la valeur moyenne actuelle sur Ie marche des eucalyptus sur pied dans la region\. A partir de l'annee 6 du projet, les villageois paieront egalement pour Ie bois sur pied des bois communaux un prix payable au moment de la coupe, ceci pour permettre au FNFP et a la SEMRY de recouvrer Ie coat de preparation du sol (par\. 3\.09)\. D'apres les coats estimatifs du projet, 3 3 ce prix atteindra au moins 760 francs CFA Ie m (2,80 dollars Ie m ) au prix de 1981 et Ie montant a verser correspondra a la recette provenant de la vente d'une petite quantite de bois sur les marches locaux\. 6\.05 D'apres les possibilites de marche de la region de Ngaoundere, 5 % de la production d'eucalyptus pourrait etre consacree a la construction de poteaux electriques, 25 % au bois de construction et 70 % au bois de feu\. Pour les pins, la moitie de la production provenant des eclaircies effec tuees de l'annee 7 a l'annee 19 du projet pourrait servir de bois de feu et l'autre moitie de bois de service\. Au moment de la coupe rase, la moitie des pins pourrait fournir des grumes de sciage\. La consommation annuelle 3 de combustibles dans la region de Ngaoundere est estimee a 55 000 m et la demande devrait augmenter de 4,5 % par an jusqu'en 1990\. Par consequent, - 33 3 les 4 000 m supplementaires de bois de la savane arbustive qui seront disponibles grace au defrichement effectue dans Ie cadre du projet et la 3 production annuelle supplementaire de 8 400 m disponible apras l'annee 6 du projet seront rapidement absorbes\. L'envergure du marche des poteaux de ligne, lequel absorbe actuellement environ 700 m3 par an dont la majeure partie est deja fournie par les plantations du FNFP a Ngaoundere, devrait augmenter d'environ 15 ~ par an au fur et a mesure que d'autres lignes seront installees dans la province du nord\. La production supplementaire de poteaux prevue, qui est de 225 m par an, est inferieure a la demande supplementaire 3 de 850 m 3 par an qui sera enregistree chaque annee apras l'annee 6 du projet et sera donc immediatement absorbee\. La production supplementaire de bois de 3 service, 1 125 m par an, sera egalement inferieure a la demande supplemen 3 taire prevue de 6 500 m par an apras l'annee 6 du projet\. Bien qu'il n'existe pas actuellement de scierie a Ngaoundere, il ne devrait pas ~tre difficile de 3 commercialiser les 48 000 m de grumes de pins pour la construction disponibles a l'annee 25 du projet si lIon considare que la demande actuelle de bois de 3 sciage dans la province du nord depasse 50 000 m par an\. Le FNFP commercia lisera Ie bois de plantation par l'intermediaire des bOcherons locaux, sous contrat, comme il Ie fait actuellement au nom du Gouvernement\. Les prix du bois sur pied devraient continuer a ~tre superieurs aux niveaux moyens neces saires pour permettre de recouvrer la totalite des coOts et inter~ts,estimes 3 3 a 1 700 francs CFA Ie m (6,30 dollars Ie m ) pour Ie pin et a 1 200 francs CFA Ie m 3 3 (4,44 dollars Ie m ) pour l'eucalyptus (par\. 7\.06)\. C\. Resultats financiers 6\.06 Les flux financiers de llEtat relatifs aux plantations et au projet ont ete estimes de la maniare suivante : \. i) les coOts des elements du projet ont ete estimes chaque annee avec les provisions et les impots, comme dans Ie dossier du pro jet, avec en plus les couts renouvelables afferents a la periode suivant l'execution du projet; ii) les recettes comprennent les impOts indirects, les revenus des plantations de Ngaoundere et de la SEMRY estimes aux prix courants du marche (par\. 7\.06), et les revenus de la plantation d'Edea estimes aux prix minimums du bois sur pied permettant de recouvrer la totalite des coOts et d'atteindre un taux de rentabilite nomi nal (par\. 6\.03); tous ces montants sont ex primes en prix courants; iii) l'estimation du montant du service de la dette est fondee sur Ilhy_ pothase selon laquelle Ie pret de la CDC serait accorde aux m~mes conditions que celui de la Banque (par\. 5\.04); et iv) les recettes supplementaires enregistrees par suite de l'amelioration du calcul et de la perception des redevances et impots forestiers due au renforcement de la DEFC ont ete exclues des calculs\. » - 34 D'apres ces hypotheses, les resultats financiers sont les suivants : Projet, plus ser vice de la dette PlantationsL1 Projet/ 2 moins impOts Annee ou les recettes annuelles sont posi tives pour la pre miere fois annee 7 annee 7 annee 14 Periode d'amortissement (annees jusqu'au pre mier flux de tresore rie cumule positif) 15 15 16 Investissement cumule (en milliolls) $ 28,4 $ 34,0 $ 30,0 /1 Les trois elements de plantation\. /2 Plantations plus la DEFC et le FNFP\. Les resultats financiers sont presentes en detail dans Ie dossier du projet\. l 'Etat devrait amortir son investissement en 16 ans au plus s'il reussit a ameliorer Ie recouvrement des impOts et des redevances per~us aupres du secteur forestier\. Avec l'amelioration des procedures administratives et de la perception des impOts et des redevances leves sur la recoite connue de bois, les recettes pourraient augmenter de 1 000 millions de francs CFA par an (3,7 millions de dollars), ce qui permettra de disposer chaque annee de revenus supplementaires (SOD millions de francs CFA environ, soit 1,9 million de dol lars) suffisants pour financer Ie coat du reboisement pendant 7 des 13 annees au cours desquelles le flux de tresorie cumule de l'Etat sera negatif\. 6\.07 les taux de rentabilite financiere du projet seront determines en grande partie par le prix du bois sur pied qui sera negocie entre Ie Gouver nement et la Cellucam pour Ie bois de la plantation d 'Edea\. Le tableau ci apres presente les taux de rentabilite pour differents prix du bois sur pied 3 a Edea, allant de 12 dollars Ie m (prix approximatif qui permettrait a 3 l'Etat de recouvrer les coOts) a 57 dollars Ie m (prix paritaire a l'im portation) (par\. 7\.05)\. Si lIon considere que Ie coat de la recolte et du 3 transport du bois de plantation a l'usine est de 13 dollars Ie m environ (par\. 6\.03), Ie Gouvernement pourrait appliquer un prix allant jusqu'a 18 dol 3 lars Ie m de bois sur pied et enregistrer une rentabilite financiere allant jusqu'a 9,8 % sur l'investissement total sans pour cela que Ie coOt du bois de la Cellucam soit superieur au coat plafond habituellement enregistre ailleurs par des entreprises de pate a papier efficaces\. Un accord sur les prix, satisfaisant pour les deux parties, pourra probablement etre conclu entre la Cellucam et Ie Gouvernement\. - 35 TAUX DE RENTABILITE FINANCIERE/l --------Taux de rentabilite financiere--------------------- Projet plus service de Prix du bois sur Elements de la dette pied a Edea Edea SEMRY Nqaoundere plantation moins impots (en dollars par m ) _____________________________ % 3 _____________________------- 12 5,2 18,0 18,1 8,1 7,1 18 7,9 II II 10,0 9,8 24 9,9 " " 11 ,3 11 ,8 30 11,5 " " 12,5 D,2 48 14,9 " " 15,3 17,2 57 16,1 " " 16,6 18,4 11 L\.es flux d'avantages nets ont ete calcules sur la meme base que le flux de tresorerie de l'Etat (par\. 6\.06) mais aux prix de 1981\. - 36 VII\. AVANTAGES, JUSTIFICATION ECONOMIQUE ET RISQUES A\. Avantages 7\.01 Dans Ie cadre du projet, Ie programme de plantation de 11 000 ha don nera des resultats immediatement quantifiables, a savoir : i) une production 3 supplementaire annuelle egale en moxenne a 19 000 m de bois de l'annee 6 a l'annee 14 du projet, et a 26 000 m' de l'annee 15 a l'annee 29, essentielle ment dans la grovince du nord qui conna1t une penurie de bois; et ii) 330 000 m par an de bois abattu de l'annee 15 a l'annee 29 a Edea 3 (par\. 6\.01)\. Cela permettra a la Cellucam de n'utiliser en fin de compte que du bois de plantation de qualite uniforme, d'ou une diminution d'environ 33 % environ des coats de la recolte et de 20 % environ du coat de la fabrication de pate et une augmentation de la valeur de la pate a fibres longues et courtes par rapport a la valeur actuelle (par\. 1\.11)\. II s'ensuivra une ame lioration des resultats financiers de la Cellucam d~nt l'Etat, principal actionnaire, sera Ie beneficiaire\. ,De surcro1t, des graines ameliorees d'eucalyptus provenant des vergers I graines finances par Ie projet seront disponibles apres l'annee 6 et des graines ameliorees de pin apres l'annee 10\. Cet element du projet fournira environ la moitie des graines necessaires pour executer les futurs programmes de plantation du FNFP, ce qui est d'autant plus avantageux que Ie desequilibre entre l'offre et la demande mondiales pourrait limiter les futurs programmes de plantation\. 7\.02 Le principal avantage indirect du projet envisage sera Ie renforce ment des deux principaux organismes du secteur forestier, Ie FNFP et la DEFC\. Le projet mettra en place la base necessaire pour assurer un suivi et un contrdle ameliore a terme de l'exploitation forestiere et pour l'etablisse ment de programmes de regeneration bien fondes sur les plans economique et technique\. Le renforcement de ces organismes sera avantageux dans l'immediat sur Ie plan financier: d'une part, la perception des impdts et des redevan ces s'ameliorera et, d'autre part, des economies seront realisees grace a la mise en oeuvre de programmes de reboisement plus rentables, executes par Ie personnel du FNFP forme dans Ie cadre du projet\. Enfin, Ie projet permettra d'acquerir davantage d'experience dans Ie domaine de la foresterie villageoise qui est l'un des elements cles grace auxquels il sera possible de freiner la degradation des ressources forestieres en zone seche (par\. 3\.09)\. B\. Justification economigue a) Analyse et taux de rentabilite economigue 7\.03 L'analyse economique du projet est limitee a trois elements de plan tations productives representant 81 % du coat total du projet, a savoir les plantations d'Edea, de la SEMRY et Ngaoundere et a l'assistance technique accordee au FNFP et representant 7 % des coats du projet \. L'Etat beneficiera d'avantages importants decoulant du service de production de graines ameliorees, - 37 mais qui sont de par leur nature similaires aux efforts de recherche a long terme dont les avantages et les coats ne sont pas quantifies aux fins d'ana lyse economique\. De plus, les avantages dont beneficiera l'Etat grace a l'amelioration de la DEFC sont des avant ages financiers; il s'agit en effet de paiements de transferts dont la valeur economique nlest pas calculee\. Deux analyses ont ete faites sur la plantation d'Edea; la premiere porte sur la plantation de 8 800 ha prevue dans Ie projet et la deuxieme, sur Ie programme de reboisement de 24 000 ha qui permettra a la Cellucam d'utiliser du bois de plantation\. La variation du taux de rentabilite economique de la plantation dlEdea dans Ie cas ou lion exclurait la Cellucam comme debouche est analysee dans Ie paragraphe consacre aux risques du projet (par\. 7\.11)\. 7\.04 Les coats et les vantages ont ete estimes aux prix constants de 1981\. Tousles coats sont ex primes nets d'impOts et tous les coats autres queles coats de main-d'oeuvre comprennent des provisions pour imprevus ap propriees (par\. 5\.02)\. La part des coats d'investissement et des coats de fonctionnement autres que ceux dela main-d'oeuvre qui represente des services et des biens non commercialises a ete multipliee par un facteur de conversion standard de 0,77 pour obtenir des prix frnco frontiere et pouvoir ainsi Ie com parer a des biens et services commercialises\. On a egalement ramene les trai tements et salaires de la main-d' oeuvre qualifiee travaillant dans les planta tions d'Eaea, qui sera payee selon Ie SMIC aux niveaux des prix franco frontiere, en les multipliant par Ie facteur de conversion standard 0,77\. La main-d'oeuvre saisonniere non qualifiee travaillant dans les plantations d 'Edea sera payee aux niveaux de sal aires les plus bas permis par Ie SMIC\. Cependant, pour l'analyse economique, Ie coat de la main-d'oeuvre est evalue selon des salaires compa rabIes aux salaires payes pour un travail similaire, realise dans des condi tions comparables dans Ie cadre de projets de plantations agricoles de la re gion\. Le coat de la main-d'oeuvre saisonniere qualifiee et non qualifiee travaillant dans les plantations de la SEMRY et de Ngaoundere est evalue au taux salarial dumarche, net d'impOt, qui traduit actuellement la valeur de rarete de la main-d'oeuvre en periode de pointe\. 7\.05 On a estime la valeur des pins sur pied a la plantation d'Edea d'apres Ie prix des copeaux de bois de pin importes livres a l'usine de pate a papier tout en tenant compte des couts d'abattage et de dechiquetage du bois de plan 3 tation au m Le resultat est une valeur economique du pin sur pied de 57 dol 3 lars Ie m aux prix de 1981\. En fonction des projections recentes de la si tuation commerciale mondiale future, ce prix est majore de 0,5 % par an en termes reeels\. La valeur economique des eucalyptus a ete calculee directement comme etant egale au coat de la recolte d'eucalyptus, lequel est inferieur a celui de la recolte de bois de feuillus de la for§t naturelle, auquel sont venus s'ajouter les economies realiseees sur les coats de fabrication de la pate par suite de l'utilisation de bois de plantation de qualite uniforme (par\. 7\.02)\. Le resultat est une valeur economique estimative des eucalyptus 3 sur pied de 12 dollars Ie m - 38 7\.06 La valeur des eucalyptus sur pied a la 5EMRY est estimee a 53,40 dol 3 lars Ie m C'est la valeur moyenne ponderee du bois de service (50 %) et du bois de feu (50 %) calculee en soustrayant des prix du marche les coats estimatifs de l'abattage et du transport\. 5i lIon considere que Ie bois de la 5EMRY est ecoule localement sur des marches qui ne sont pas, pour la plupart, reglementes, les valeurs monetaires sur Ie marche local sont en fait les valeurs economiques du bois\. Le bois abattu par les proprietaires de par celles dans les bois communaux a egalement ete evalue a ce prix\. D'apres les estimations, la valeur des eucalyptus sur pied a la plantation de 3 Ngaoundere est de 44 dollars Ie m , ce qui correspond a la valeur ponde ree du bois de feu, de service, et des grumes pour poteaux de ligne sur pied, calculee a partir des prix du marche dont on a deduit les couts d'abattage et de transport\. La valeur des pins sur pied est estimee a 3 10 dollars Ie m de llannee 7 a l'annee 10 du projet, et a 15 dollars Ie 3 m de l'annee 11 a l'annee 20 du projet, ce qui represente les prix moyens ponderes des bois de service, de feu et du petit bois de sciage\. Au moment de la coupe rase des pins qui serviront de bois de sciage, entre l'annee 25 et 3 l'annee 29, leur valeur sera de 24,50 dollars Ie m Les marches locaux de bois de feu, de service et de sciage ne sont soumis a aucune reglementa tion de sorte que les valeurs monetaires sur Ie marche local correspondent aux valeurs economiques du bois\. Les poteaux de ligne seront vend us a la 50NEL, societe nationale d'electricite, a 77 dollars environ la piece (aux prix de 1981) pour ~tre utilises dans la province du nord\. Ce prix est une approximation de la valeur paritaire a llimportation de poteaux de bois traite qui ant ete vendus recemment au niveau international a des prix allant de 174 a 264 dollars la piece, deduction faite, d'une part, des frais de transport qui se montent a environ 30 % de la valeur (pour Ie calcul du prix CFA Douala) et, d'autre part, des frais de transport se montant a 50 % de la valeur (pour fixer un prix local a Ngaoundere)\. Le calcul des prix economiques est presente dans Ie dossier du projet\. 7\.07 D'apres les hypotheses susmentionnees, les taux de rentabilite eco nomique des elements du pro jet sont les suivants - 39 - Taux de rentabilite economique Valeur de substitution a 12 % % du coOt estimatif en l20urcentage en l20urcentage du I2rojet en % des coOts des avantages Elements Plantation d'Edea (projet) 70 13,9 20,9 -17,3 Plantation d'Edea (programme) 13,7 15,7 -13,6 Plantation de la SEMRY 7 19,1 67,7 -40,4 Plantation de Ngaoundere 4 19,0 88,1 -46,8 Projet (3 plantations plus Ie siege du FNFP) 88 13,9 19,0 -16,0 Les flux de couts et avantages detailles utilises figurent dans Ie dossier du projet\. b) Sensibilite 7\.08 Le taux de rentabilite du projet n'est dans l'ensemble que peu sen sible aux modifications des coOts et avantages reels\. Comme il est indique au paragraphe 7\.07, il faudrait une augmentation generale des coOts reels de 19 % ou une baisse des avantages reels allant jusqu'a 16 % pour que Ie taux de renta bilite economique tombe a 12 %, c'est-a-dire au niveau representant Ie coOt estimatif d'opportunite du capital\. De surcroit, les deux plantations situees dans la zone aride, celIe dela SEMRY et celIe de Ngaoundere, ne sont que tres peu sensibles aux modifications des coOts et des avantages\. Les facteurs ci apres, qui pourraient avoir une influence sur Ie taux de rentabilite econo mique de la plantation d'Edea, sont particulierement importants : a) l' augmentation du I2rix reel du l2in : \.si la valeur economique du pin n'augmentait pas de 0,5 % par an comme prevu (par\. 7\.05), Ie taux de rentabilite economique du projet tomberait de 13,4 % a 13,2 %; b) un retard dans Ie I2rogramme des 121antations : des retards dans Ie programme d'abattage de la futaie tropicale de la Cellucam ralenti raient Ie rythme de plantation, d'ou un recul de la date a partir de laquelle Ie projet commencera a produire des avantages\. Dans un - 40 tel cas, de nombreux couts pourraient etre evites, mais un ajour nement d'un an dans la realisation des avantages par rapport aux couts du projet est une eventualite qui n'est pas a ecarter, et un tel retard ferait tomber Ie taux de rentabilite economique de 13,4 % a 13 %; et c) la variation des rendements : les estimations des rendements qui sont a la base du projet envisage sont conformes aux rendements obtenus au cours des tests de provenance effectues dans la region d'Edea\. Neanmoins, si les conditions microecologiques changent, les rende ments peuvent varier\. Si Ie rendement diminue de 10 %, Ie taux de rentabilite economique tombera a 13 % et une diminution des rende ments de 20 % pourrait se traduire par un taux de rentabilite econo mique de 12,2 %\. C\. Risgues 7\.09 La reussite du projet envisage n'est menacee par aucun risque _tech nique majeur au inhabituel\. Les risque normaux d'incendie dans des planta tions de zone aride et de maladies ant ete pris en compte, comme i l se doit lars de la conception du projet et des fonds ont ete prevus pour assurer une protection adequate\. Les techniques de plantation envisagees ant e~e utili sees dans plusieurs pays d'Afrique de l'Ouest avec succes, dans des conditions climatiques d'aridite et d'humidite similaires\. Des techniques mains eprou vees visant a creer des bois individuels (par\. 3\.09) seront utilisees dans Ie cadre d'un projet pilote et les risques qui peuvent exister sont d'ordre socio economique plut6t que technique\. 7\.10 La Cellucam sera Ie principal debouche pour Ie bois des plantations financees dans Ie cadre du projet et un participant important a l'execution du projet, bien que l'Etat soit proprietaire du bois qui sera plante et soit charge d'etablir les modalites appropriees pour Ie calcul des prix du bois sur pied dans Ie contrat avec la Cellucam (par\. 8\.02(b»\. De plus, une analyse du cash-flow projete de la Cellucam indique que la Cellucam sera a meme de payer un prix du bois sur pied raisonnable lorsque Ie bois sera pret a etre abattu\. Cependant, dans Ie cas au la Cellucam ne constituerait pas un debouche pour Ie bois de plantation du projet, ce qui est peu probable, la production des plan tations de pins et d'eucalyptus pourrait etre exportee sous forme de parti cules de bois, de grumes de sciage pour la construction et de poteau x de ligne\. Si 20 % du bois de pin etaient vendus sous forme de bois de construction et 80 % sous forme de particules de bois pour l'exportation, et si 5 % du bois d'eucalyptus etaient vendus comme bois de service et poteaux de ligne et 95 % sous forme de particules de bois, l'Etat pourrait vendre les arbres plantes 3 dans Ie cadre du projet a 12 dollars environ Ie m aux prix de 1981\. Ce prix serait suffisant pour permettre a l'Etat de recouvrer la totalite des couts et obtenir un taux de rentabilite de 2,5 % sur son investissement (par\. 6\.03)\. - 41 VIII\. ASSURANCES ET RECOMMANDATIONS 8\.01\. Au cours des negociations, Ie Gouvernement a assure: a) qu'aucune activite ne serait effectuee dans les bois communaux avant qu'un plan d'action pour executer un tel programme n'ait ete soumis a la Banque et approuve par cette derniere (par\. 3\.09); b) que des responsables ayant des qualifications et un mandat juges accep tables par la 8anque seraient recrutes suivant les procedures decrites dans les "Directives pour l'emploi de consultants par des emprunteurs de la 8anque mondiale et par la 8anque mondiale en tant qu'Agence d'exe cution" pour les postes de directeur de programmes, de comptable du pro jet, et de directeur de plantations charge de la supervision pour Ie FNFP et de directeur de la foresterie pour la SEMRY (par\. 4\.06); c) que les plantations d'Edea, de la SEMRY et de Ngaoundere seraient ef fectuees conformement aux plans de travail et aux budgets annuels presentes a la 8anque pour approbation Ie 31 mars de chaque annee precedant la mise en oeuvre du programme (par\. 3\.10, 4\.03, 4\.04); d) que des responsables nommes pour calculer les impots et redevances et s'occuper du controle de leur perception dans chacune des cinq provinces seraient en poste pendant toute la periode d'investissement du projet (par\. 4\.07); e) qu'il mettrait a la disposition de la DEFC et du FNFP suffisamment de fonds pour executer Ie projet, les fonds etant octroyes sous forme de dons a la DEFC et au FNFP qui tiendra des comptes separes pour chaque element du projet et qui reapprovisionnera ces comptes au cours de l'annee en utilisant pour cela des fonds provenant des pr~ts de la Banque et de la CDC, et au debut de l'exercice a l'aide de sa contribution, conformement au budget approuve pour les divers ele ments (par\. 5\.05); et f) qu'il prendrait toutes les mesures necessaires pour percevoir d'ici au 31 decembre 1982 tous les impots et redevances forestieres dus et en souffrance depuis Ie 31 juillet 1980 et pour assurer que tous les impots forestiers et redevances seront par la suite correctement calcules et seront per~us dans les douze mois suivant leurs calculs respectifs (par\. 1\.13)\. 8\.02 l'entree en vigueur du pr~t sera soumise aux conditions preala bles suivantes : - 42 a) toutes les conditions prealables a l'entree en vigueur du pret de la CDC auront ete remplies (par\. 5\.04); b) Ie contrat entre la Cellucam et l'Etat/FNFP, juge acceptable par la Banque et precisant les modalites de mise en place de la plantation d'Edea, aura ete signe (par\. 4\.02); c) Ie Gouvernement aura etabli des comptes du projet separes pour chacun des elements de plantation et depose aces comptes 400 mil lions de francs CFA (1,5 million de dollars) pour la plantation d'Edea; 35 millions de francs CFA (130 000 dollars) pour la SEMRY; 25 millions de francs CFA (90 000 dollars) pour la plantation de Ngaoundere; 12 millions de francs CFA (40 000 dollars) pour Ie siege du FNFP; et 33 millions de francs CFA (120 000 dollars) pour la DEFC, montants qui representent les frais d'exploitation affe rents a ces elements pendant une periode de six mois (par\. 5\.05)\. 8\.03 La signature d'un accord juge satisfaisant par la Banque, conclu entre Ie FNFP et la SEMRY et precisant les dispositions a prendre pour mettre en place Ie programme, sera la condition prealable au decaissement des montants correspondant a des couts concernant l'element de la SEMRY et qui peuvent ~tre finances dans Ie cadre du pret (par\. 4\.04)\. 8\.04 Sous reserve des conditions susmentionnees, Ie projet justifie l'octroi par la Banque d'un pret de 17 millions de dollars\. - 43 ANNEXE Tableau 1 CAMEROUN - PROJET FORESTIER Etat Estimatif des Decaissements (en millions de dollars EU) Annees Fisca1es Decaissements Pourcentage de et Trimestres (BIRD) Decaissements cumu1es Decaissement AF 83 Septemb re 1982 0\.2 0\.2 1 Decembre 1982 0\.4 0\.6 4 Mars 1983 0\.4 1\.0 6 Juin 1983 0\.5 1\.5 9 AF 84 Septembre 1983 0\.7 2\.2 13 Decembre 1983 0\.7 2\.9 17 Mars 1984 0\.8 3\.7 22 Juin 1984 0\.9 4\.6 27 AF\. 85 Septembre 1984 0\.9 5\.5 32 Decembre 1984 0\.9 6\.4 38 Mars 1985 0\.9 7\.3 43 Juin 1985 0\.9 8\.2 48 AF 86 Septemb re 1985 0\.9 9\.1 54 Deceml:J'e 1985 0\.8 9\.9 58 Mars 1986 0\.8 10\.7 63 Juin 1986 0\.8 11\.5 68 AF 87 Septemb re 1986 0\.7 12\.2 72 Decemb re 1986 0\.6 12\.8 75 Mars 1987 0\.6 13\.4 79 Juin 1987 0\.5 13\.9 82 AF 88 Septembre 1987 0\.5 14\.4 85 Decembre 1987 0\.5 14\.9 88 Mars 1988 0\.5 15\.4 91 JUin 1988 0\.5 15\.9 94 AF 89 Septembre 1988 0\.3 16\.2 95 Decembre 1988 0\.3 16\.5 97 Mars 1989 0\.3 16\.8 99 Juin 1989 0\.2 17\.0 100 ~Y11 - PHQJID' FOflESTIm Annexe Tableau 2 Cash Flov de 1 'Etatll (en million de FCrA) InTeat1!;sen:ellts Recettes r6aultant du proJet SurElus ProJet \. l"!nance1llent du ProJet Cash Flow let de l'Etat Colnposante Autres COlli- ColTlllosante SOIW- Taxes indi- Sous\. Service de Plantation '$I ColllPosante ( financement /IIlnEes f?slIIltea FNFP\. Dt~C \. \. total PllllltationaY rectes !I Total reguia) ~!!I la dette ;V Net Annue! Ct:\.nru1 s ti t 1982 1398 223 400 2021 130 130 (1891) 243 76 168 (1,723) (1,732) 1983 1050 156 126 1332 90 90 (1242) 891 69 822 (420) (2,152) 1984 1605 168 81 1860 122 122 (1738) 1350 162 1,188 (550) (2,702) 1985 1922 240 239 2401 160 160 (2241) 1350 30'1 1,041 U,200) (3,902) 1986 1844 44 100 1988 130 130 (1858) 1134 457 1,591 (267) (4,169) 1981 252 252 21 21 (231 ) 810 1,169 (359) (590) 4,759) 1988 28 11 39 39 1i2T (492) (453) 1989 1,113 (5,212) 389 389 389 189 1;060 (811) (482) (5,694) 1990 452 452 452 (1,009) (557) (6,251) 1991 1,009 532 532 532 957 (957) (425) (6,676) 1992 539 539 539 1993 906 (906) (367) (7,043) 145 145 11\.5 855 (855) (710) (7,753) 1994 358 358 358 803 (803) ~445) (8,198) 1995 815 815 815 1996 752 (752) 63 (8,135) 6968 6968 6968 100 (700) 6,268 (1,867) 1991 5389 5389 5389 1998 649 (649) 4,740 2,873 1810 1810 18]0 598 (598) 1,212 4,085 1999 1356 1356 1356 2000 546 (546) 810 4,895 1591 1591 1591 495 (495) 1,096 5,991 2001 2011 2011 2011 2002 443 (443) 1,568 1,559 1924 1924 1924 1,924 9,483 +: 2003 1930 1930 1930 +: 2004 1,930 11,413 6629 6629 6629 6,629 18,043 2005 4601 4601 4601 2006 4,601 22,643 2435 2435 2435 2,435 25,076 2001 1000 1000 1000 2008 1,000 26,078 862 662 862 862 26,940 2009 861 867 867 2010 861 21,807 873 873 673 813 28,680 11 CoUts tiennent compte inflation elements rapport d'evaluation pendant periode develop~ment proJet\. Ensuite, 6% pour devises et toutes recettes et 12% pour coOts locaux pendant periode d'investisaement {Juaqu'en 1995; ensuite composanteB plantations refletent surplus cumule}; a partir de 1996, en terDles constants 1995\. E! Fiche proJet indique composition de ces flux, qui sont retletea ici en termes neta\. 3/ TaxeE indirectea identitisbles aur depenses du proJet, a l'exclusion dea recettea d'impOta eventuela du secteur torestier - resu1tant de 1\. composante DEFC\. !I Tableau 1 - Et\.t eatimatif des decaissementa (pret Bnnque)\. II est \.ssu\.e que pret CDC ser\. decaiaae parallelement A prat Bnnque\. 'iI Service de Is detto de 1& fiche du proJet\. 21 avril 1$161\. N G E R HAD UN ITED REPUSLI C OF CAMEROON FORESTRY PROJECT \. PROI'OSEO PROJEC'T PI\.Af<I'TA'TIONS I'A()IIItOSEO f'ROJECr SiEO PAOOUCTION AREAS 8 OlRECT1OH DES E\.-\.oX £T "OREn; HEADQUAIIHRS FNFf' HEAOOU""l1I'1:S ~ PHFP SU&\.$"l'A'TIQNS !\.!l FNFP Pt\.AHTAT10HS fA 18RO ASSISTED ACTIYITIl:S WITH fOftESTRY FORESTI'I:V JlE$AA~ liRA' STATIONS 'A\fED ROADS GRAVEL ROAOS IiART~ FOAOS ftAILROAOS "-800'- ISOH'iI:TS IN-\. NIGERIA ECOLOGICAL ZONES §llilllill! SAHEL SOUO"N \ SOUDANIANi HIGHLANDS \"\.SOUDA\.N!AN-GU!NEAN ~AN-GUINEAN TRANSITION G",N~_~, FOREST \ / ~~j~~C:Al IIN>lUI GUlNU{ J r IS' () CONGO
APPROVAL
P123783
PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No\.: AB6209 VN-VAHIP additional financing Project Name Region EAST ASIA AND PACIFIC Sector Health (50%);General agriculture, fishing and forestry sector (20%);Solid waste management (10%);General public administration sector (10%);Other social services (10%) Project ID P123783 Borrower(s) THE SOCIALIST REPUBLIC OF VIETNAM Implementing Agency Ministry of Health 138A Giang Vo Street Vietnam Tel: (84-4) 6273-2273 Fax: (84-4) 3846-4051 Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared January 9, 2011 Date of Appraisal January 20, 2011 Authorization Date of Board Approval June 30, 2011 1\. Country and Sector Background The Vietnam Avian and Human Influenza Control and Preparedness Project is co-financed by an IDA Credit (SDR 13\.5 million, US$20 million equivalent), an Avian and Human Influenza Facility Grant (US$10 million), a Japan PHRD Grant (US$5 million), and the Vietnam Government (US$3 million)\. The Credit and Grant were approved on March 13, 2007 and became effective on August 23, 2007\. The Project was restructured once in June 2010 to re- allocate funds among the Disbursement Categories\. The original Project’s Closing Date was December 31, 2010\. A second extension of six months from June 30, 2011 to December 31, 2011 was approved by the Bank management recently\. The Project Development Objective (PDO) is to increase the effectiveness of Government services in reducing the health risk to poultry and humans from avian influenza in eleven high priority provinces and thus contribute to addressing highly pathogenic avian influenza (HPAI) at the national level by (i) controlling the disease at source in domestic poultry; (ii) early detection and response to poultry and human cases; and (iii) preparing for the medical consequences of a human pandemic\. This is in line with and supports the implementation of Vietnam’s plans for the medium to long-term control of avian and human influenza as outlined in the Integrated National Operational Program for the Avian and Human Influenza 2006 – 2010 (The Green Book), and is fully consistent with the approach envisaged under the Global Program for Avian Influenza and Human Pandemic Preparedness and Response (GPAI)\. The Project is being implemented jointly by the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Health (MOH), with MARD as the lead ministry for the overall management of the Project, MARD for Component A activities and MOH for Component B activities\. Out of a total cost of US$38 million, US$21 million is under the management of MARD and US$17 million is under the management of MOH\. It consists of three components: (a) HPAI Control and Eradication in the Agricultural Sector; (b) Influenza Prevention and Pandemic Preparedness in the Health Sector; and (c) Integration and Operational Program Plan (OPI) Coordination, Results Monitoring and Evaluation, and Project Management\. Component A, which is for animal health and managed by MARD, covers 11 selected Provinces\. Component B, which is for human health and managed by MOH, covers 8 out of the same 11 Provinces\. Component C is jointly managed by MARD and MOH\. The Project is being implemented jointly by MARD and MOH, with MARD as the lead ministry for the overall management of the Project and for Component A activities and MOH managing Component B activities\. It consists of three components: (a) HPAI Control and Eradication in the Agricultural Sector; (b) Influenza Prevention and Pandemic Preparedness in the Health Sector; and (c) Integration and Operational Program Plan (OPI) Coordination, Results Monitoring and Evaluation (M&E), and Project Management\. Component A is managed by MARD and covers 11 selected Provinces\. Component B is managed by MOH and covers 8 out of the same 11 Provinces\. Component C is jointly managed by MARD and MOH\. 2\. Objectives The Project Development Objective is to assist the Recipient to increase the effectiveness of public services in reducing the health risk to poultry and to humans from avian influenza in selected provinces, through measures to control the disease at source in domestic poultry, to detect early and respond to human cases of infections, and to prepare for the medical consequences of a potential human pandemic\. 3\. Rationale for Bank Involvement The VAHIP is due to close on December 31, 2011\. However, the threat from emerging infectious diseases (EIDs), including influenza A (H5N1), has not been adequately reduced\. The on-going threat justifies additional investment into measures to reduce the risk posed by poultry and to improve the capacity of health services and pandemic preparedness\. A majority of high impact infectious diseases that have recently affected humans have arisen at the animal-human- environment interface and significantly impact animal and human health, livelihoods and development\. More specifically, as predicted at the time VAHIP was prepared, HPAI viruses of the H5N1 subtype are still entrenched in Vietnam, despite the improvements made\. Although the frequency and scale of H5N1 outbreaks has been reduced, they could flare up if close attention to control and prevention is not maintained\. The recent human influenza A (H1N1) pandemic demonstrated the need for pandemic preparedness\. By June 30, 2011, the original VAHIP would have invested in strengthening of animal health systems in 135 Districts in 11 Provinces, and strengthening human health systems in 28 overlapping Districts in 8 of the 11 Provinces\. The proposed AF is consistent with the draft National Strategic Plan for Avian and Human Influenza for 2011- 2015\. An extension of VAHIP will support the updated National Strategic Plan by strengthening the human health system (Component B) in a larger number of Districts while keeping the same "one-health" approach that underpinned the original VAHIP\. The AF also recognizes the importance of some key activities under Component A (HPAI Control and Eradication in the Agricultural Sector) which will receive continued support in order to consolidate and scale up the project impact on the ground\. On the basis of the foregoing, the Government has requested AF from the Bank to narrow the financing gap in order to achieve these goals\. Description The AF will keep the original components\. Component A – HPAI Control and Eradication in the Agricultural Sector ($2 million) will be managed by MARD Department of Animal Health to supplement government support to the program\. Component B Influenza Prevention and Pandemic Preparedness in the Health Sector and Component C Project Management (total $18 million) will be managed by the CPMU of MOH\. Component A – HPAI Control and Eradication in the Agricultural Sector Sub-component A1: Strengthening of Veterinary Services: Under the existing VAHIP, good progress has been made in: (a) improving the quality management of the nine national and regional veterinary laboratories to ensure that they have the necessary capacity and capability to perform all necessary testing for avian influenza to international quality standards and in improving their biosafety facilities, and (b) improving the commune-based early warning and disease reporting in 90 districts in 11 project provinces through the provision of training for commune animal health workers (CAHW) and supporting monthly meetings between district veterinary stations and CAHW\. To consolidate the impact on the ground, the AF will support the operation of seven regional labs and two central labs, and costs associated with commune-based early warning and disease reporting e\.g\. training, meetings between DVO and CAHWs\. Sub-component A2: Enhanced Disease control\. Under the existing VAHIP, good progress has been made in (a) upgrading Ha Vi live bird market in Hanoi and some selected live bird markets and slaughterhouses in project provinces, (b) constructing a poultry destruction and disposal site in Lang Son for smuggled poultry; and (c) developing bio security standards for smallholder- and commercial farms\. The achievements under VAHIP have provided a foundation for future control and prevention of avian influenza along the production and market chains\. The AF will include continued support to strengthening operations of Ha Vi live bird market in Hanoi and culling and disposal site in Lang Son for smuggled poultry for another 2 years (a testing period) to ensure smooth operations of the facilities as they have just been completed\. Sub-component A3: Disease surveillance and epidemiological investigations: Under the existing VAHIP, good progress has been made in (a) introducing a market-based and risk-based surveillance approach; and (b) improving the quality of surveillance activities, including sampling, laboratory analysis, data analysis, and reporting\. As HPAI viruses are continuing to circulate in the natural environment and poultry flocks, the AF will support risk-based disease surveillance and epidemiological investigations at local levels\. Sub-component A5: Emergency Outbreak Containment Plan: The current VAHIP has provided disinfectants, supplies, and basic equipment for effective outbreak containment in- and outside the 11 project provinces\. Provincial and district rapid response teams have been established in all project provinces\. Joint simulation exercises prove to be very useful for improving coordination between animal health sector and human health sector in responding to epidemics\. These also helped improve responding capacity of commune, district, and provincial levels to respond and control other emerging diseases such as H1N1, malaria, dengue fever, etc\. To consolidate experience and lessons, and deepen the impacts, the AF will finance stockpiles of emergency supplies and simulation exercises\. Component B - Influenza Prevention and Pandemic Preparedness in the Health Sector Sub-component B1: Improving Surveillance and Response System: Evidence in Vietnam suggests that the weakest part of the response systems tend to be at the grass-root level, and cross-sectoral collaboration at the district and commune levels is one of the critical factors to strengthen the response systems\. Under the existing VAHIP, good progress has been made in (a) developing and piloting an improved surveillance system in Project Provinces; (b) establishing and operating rapid response mechanisms; and (c) improving surveillance capacity\. The AF will focus on filling the gaps in human health sector in these areas while supporting the collaboration of animal health and human health in surveillance and joint simulation\. The AF will support improvement of the quality of disease surveillance and expand the coverage of the internet-based (infectious) disease reporting system in 54 additional project districts in the eleven Project provinces\. It will also support multi disciplinary Rapid Response Teams (RRTs) pilots in a few selected districts to improve the linkage between the surveillance systems in animal and human health sectors\. Sub-component B2: Improving Technical Quality and Efficiency of Curative Care Preparedness: Under the existing VAHIP, good progress has been made in (a) reviewing and updating technical guidelines and training materials on influenza clinical management (diagnosis and treatment), infection control, management of patients with respiratory failure, and operation of mechanical ventilation systems; and (b) improving capacities to control infection in hospitals at central, Provincial and District levels\. This component will scale up the pilot activities under (a) and (b) in 54 additional project districts\. It will also support development and implementation of health sector pandemic preparedness plans at District level, piloting establishment of human influenza (HI) surveillance in two to three Provinces, and upgrading isolation wards in three Provinces\. The new activities are aimed at improving hospital infection control and health sector pandemic preparedness at District level\. Sub-component B3: Strengthening BCC and Risk Communication for Emerging Infectious Diseases: Under the existing VAHIP, good progress has been made in (a) training for Provincial, District, commune and village health workers in BBC skills and provision of equipment for Provincial and District communications units; and (b) conducting community awareness, information, education and communication campaigns\. The AF will scale up training on BCC and other campaigns at the community level in 54 additional districts\. In addition, it will finance the development and piloting of risk communications models through: (i) developing national Risk Communication Plan (RCP); (ii) developing a toolkit for risk communication on EIDs; (iii) training of spokespersons within health sector; and (iv) impact evaluation skills for preventive medicine staff\. Sub-component B4: Strengthening the Preventive Health System at the Local Level: Strengthening the capacity of District health systems would improve the country’s overall capacity in early detection and early response to HAPI or similar infectious diseases\. Identification of a significant number of avian influenza outbreaks in Vietnam was promoted by identification and reporting of human infection of HPAI (H5N1)\. Such a strategy is particularly important when the country is running vaccination campaigns that may prevent large scale of deaths among domestic poultry\. Investments under VAHIP in the 28 pilot Districts have improved the District preventive medicine system in selected Provinces and demonstrated good impact on helping control H5N1, H1N1 and other emerging epidemic diseases\. In the AF, the pilot model developed under VAHIP will be replicated in 54 additional Districts in the eleven Project Provinces to improve the emergency response capacity at District preventive medicine centers, including provision of equipment and training of staff\. Component 3 - Coordination, Monitoring and Evaluation, and Project Management: This component will support Project management, monitoring and evaluation, and coordination between agriculture sector, human health sector and other concerned agencies implementing the Integrated and Operational Program Plan (OPI)\. At the central level, MOH will be the lead Ministry for the overall management and implementation of AF project\. The Central Project Management Unit (CPMU) in MARD will be replaced by the Department of Animal Health (DAH) as implementer of AF funded activities under Component A\. A Designated Account (DA) will be opened at DAH\. A Project Team including a Director, a Sr\. Technical Expert, and an Accountant will be appointed to manage and implement project activities\. This team will also provide technical guidance to project provinces through provincial animal health specialists seconded to PPMUs to implement animal health related activities and coordinate with human health sector\. Results Monitoring and Evaluation, and incremental operating costs of DAH for the AF implementation will be covered by the AF\. The CPMU in MOH will be responsible for the implementation of human health related activities and coordination with DAH in MARD\. It will manage the Project Designated Account in the CPMU, procurement of goods and consulting services, Project monitoring and evaluation, Project reporting, and Project audit\. At the provincial level, the PPMUs under the on-going project will continue to implement the AF project activities\. The directors of the PPMUs will be directors of the Department of Health in respective provinces\. It will consist of project coordinator, procurement officer, accountant, and project assistants\. One staff from the agricultural sector will be seconded to the PPMU\. This arrangement is believed to be appropriate for better inter-sectoral cooperation\. The AF will finance the costs associated with project implementation and management including coordination and M&E\. Financing Source: ($m\.) BORROWER/RECIPIENT 2 International Development Association (IDA) 10 AHI Facility (Grant) 13 Total 25 Implementation The project management structure at central and provincial levels will also remain unchanged\. The central Project Coordination Units (PCUs) of the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Health (MOH) will be responsible for the implementation of the activities in animal health sector and human health sector under the AF project respectively\. The Ministry of Health will be the lead agency for implementation of the AF project, instead of the Ministry of Agriculture and Rural Development\. At the provincial level, the joint Provincial Project Management Units (PPMUs) in 11 project provinces will be responsible for implementation of the AF project\. Provincial Department of Health will be the lead agency for implementation of the AF project in respective provinces\. Safeguard Policies Experiences from the Project show that the AF, with a continuation of existing activities, is not expected to have any large-scale, significant and/or irreversible environmental and social impacts as it is focused largely on capacity building and strengthening readiness for dealing with outbreaks of avian influenza and preventing or reducing possible human infections by strengthening emergency preparedness and response\. In addition, the AF Project continues to incorporate in its design other beneficial measures such as upgrading the regional/central laboratories, improving bio-security in farms and hygiene in live bird markets and strengthening the culling and disposal sites\. With respect to the health sector, similar activities in additional districts will continue to be supported, as well as equipment, and training to improve the capacity, preparedness and readiness to respond, along with strengthening the curative care systems in the Provinces and Districts\. These will have positive impacts on human health and the environment\. Since the activities remain largely unchanged, the AF is still assigned an Environmental Category of B\. Among the Bank’s safeguards policies, only OP 4\.01 (Environmental Assessment) and OP 4\.10 (Indigenous People) are triggered\. The Bank’s policy on Pest Management is not triggered since the Project: (a) will not procure any pesticides; and (b) will not promote an increase in the use of pesticides increase\. However, the chemicals to be used for the disinfection of farm facilities/personal protection equipment will be evaluated on a case-by-case basis for conformity with OP 4\.09 for Pest Management\. Similar to the parent Project, the AF will not trigger the policies of OP 4\.04, OP 4\. 36, OP 4\.11 on Natural Habitat, Forest and Physical Cultural Resources respectively given that no activities affecting the natural habitat, forest and cultural resources are proposed\. Contact point Contact: Lingzhi Xu Title: Senior Operations Officer Tel: (202) 473-2803 Fax: Email: Lzxu@worldbank\.org For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D\.C\. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: pic@worldbank\.org Web: http://www\.worldbank\.org/infoshop
APPROVAL
P162165
 ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫وثيقة معلومات البرنامج‬ ‫مرحلة تحديد المÙ?اهيم | تاريخ اإلعداد ‪/‬التحديث‪ 21 :‬أوت ‪ | 2018‬التقرير عدد‪PIDC168310 :‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫المعلومات األساسية‬ ‫أ‪ \.‬المعلومات األساسية حول البرنامج ‪OPS TABLE‬‬ ‫اسم المشروع‬ ‫عرÙ? المشروع األصلي (إن وجد)‬ ‫م ّ‬‫Ù?‬ ‫م ّ‬ ‫عرÙ? المشروع‬ ‫Ù?‬ ‫البلد‬ ‫مشروع إصالح قØاع المياه‬ ‫‪P162165‬‬ ‫الجمهورية التونسية‬ ‫Ù?ي تونس‬ ‫التاريخ التقديري الجتماع المجلس‬ ‫تاريخ التقييم التقديري‬ ‫المنØقة‬ ‫هل يوجد عنصر تمويل‬ ‫‪-20‬ديسمبر ‪2018-‬‬ ‫‪-27‬نوÙ?مبر ‪2018-‬‬ ‫الشرق Ø§Ø£Ù„ÙˆØ³Ø ÙˆØ´Ù…Ø§Ù„ Ø£Ù?ريقيا‬ ‫مشروع االستثمار Ù?ي هذه‬ ‫العملية‬ ‫مجال التدخل‬ ‫الوكالة المنÙ?ذة‬ ‫المقترض (المقترضون)‬ ‫أداة التمويل‬ ‫قØاع المياه‬ ‫الشركة الوØنية الستغالل وتوزيع‬ ‫وزارة التنمية واالستثمار والتعاون‬ ‫تمويل البرنامج وÙ?قا للنتائج‬ ‫المياه ‪SONEDE‬‬ ‫الدولي ‪MDICI‬‬ ‫الهدÙ? المقترح لتØوير البرنامج (األهداÙ?)‬ ‫تحسين األداء المالي والتشغيلي للشركة الوØنية الستغالل وتوزيع المياه وجودة الخدمة المقدمة للعمالء باإلضاÙ?Ø© إلى تأمين إمدادات المياه Ù?ي تونس‬ ‫الكبرى والحد من الخسائر Ù?ي واليات Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨ المختارة‪\.‬‬ ‫التكلÙ?Ø© والتمويل‬ ‫‪FIN_SRC_TABLE1‬‬ ‫ملخص (مليون دوالر أمريكي)‬ ‫‪300\.00‬‬ ‫تكلÙ?Ø© البرنامج الحكومي‬ ‫‪150\.00‬‬ ‫مجموع تكلÙ?Ø© التشغيل‬ ‫‪150\.00‬‬ ‫مجموع تكلÙ?Ø© البرنامج‬ ‫‪0\.00‬‬ ‫مكون تمويل مشروع االستثمار‬ ‫‪0\.00‬‬ ‫تكاليÙ? أخرى‬ ‫‪150\.00‬‬ ‫مجموع التمويل‬ ‫‪0\.00‬‬ ‫Ù?جوة التمويل‬ ‫التمويل (مليون دوالر أمريكي)‬ ‫‪150\.00‬‬ ‫تمويل مجموعة البنك الدولي‬ ‫‪150\.00‬‬ ‫إقراض البنك الدولي‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫‪150\.00‬‬ ‫مجموع التمويل من ØرÙ? غير مجموعة البنك الدولي والتمويل من عمالء غير الحكومات‬ ‫‪150\.00‬‬ ‫رأس المال الخاص والتمويل التجاري‬ ‫‪150\.00‬‬ ‫منه رأس المال الخاص‬ ‫ب‪ \.‬المقدمة والسياق‬ ‫سياق البلد‬ ‫‪ \.1‬تونس هي بلد Ù…ØªÙˆØ³Ø Ø§Ù„Ø¯Ø®Ù„ بلغ عدد سكانه ‪ 11\.4‬مليون نسمة ÙˆÙ…ØªÙˆØ³Ø Ø§Ù„Ù†Ø§ØªØ¬ المحلي اإلجمالي للÙ?رد ‪ 3700‬دو‬ ‫الر أمريكي Ù?ي عام‬ ‫ع البلدان نمواً Ù?ي منØقة الشرق Ø§Ø£Ù„ÙˆØ³Ø ÙˆØ´Ù…Ø§Ù„â€¬ ‫‪ \.2016‬خالل العقد األخير‪ ،‬بلغ Ù…ØªÙˆØ³Ø Ø§Ù„Ù†Ù…Ùˆ االقتصادي ‪ ،٪5‬مما جعل تونس من بين أسر‬ ‫إÙ?ريقيا‪ \.‬وقد أحرز البلد أيضا تق دما كبي ا‬ ‫ر Ù?ي مكاÙ?حة الÙ?قر‪ ،‬حيث انخÙ?ض معدل انتشار الÙ?قر إلى النصÙ? بين عامي ‪ 2000‬و‪ ،2015‬من‬ ‫أكثر من ‪ 32‬Ù?ي المائة إلى ‪ 15‬Ù?ي المائة‪ ،‬كما انخÙ?ض مستوى الÙ?قر المدقع بحوالي النصÙ? خالل نÙ?س الÙ?تر‬ ‫ة‪ \.‬وتمثل التÙ?اوتات الجهوية Ù?ي‬ ‫قديما‪ ،‬حيث كانت المعدالت المسجلة Ù?ي الشمال الغربي ÙˆØ§Ù„ÙˆØ³Ø Ø§Ù„ØºØ±Ø¨ÙŠ تقارب ضعÙ? المعدل الوØني‪ \.‬وقد تر‬ ‫اجعت نسبة‬ ‫هذا المجال ً‬ ‫تحديا ً‬ ‫قا لمؤشر جيني‪ ،‬إلى ‪ ،٪31‬من ‪ Ùª36‬Ù?ي عام ‪ \.2005‬دخلت تونس اآلن حقبة سياسية جديدة Ù?ي ظل‬ ‫عدم المساواة‪ ،‬التي يتم قياسها وÙ?ً‬ ‫ة ‪\.2019-2015‬‬ ‫الجمهورية الثانية بعد اعتماد دستور جديد وتم تنظيم أول انتخابات ديمقر‬ ‫اØية النتخاب رئيس جديد ومجلس نواب جديد للÙ?تر‬ ‫ة‪ ،‬أدى االضØر‬ ‫اب االجتماعي والسياسي‬ ‫ات‪ ،‬تظل التحديات االجتماعية واالقتصادية كبير‬ ‫ة‪ \.‬Ù?ي السنوات األخير‬ ‫غم من هذه اإلنجاز‬‫‪ \. 2‬على الر‬ ‫إلى تباØؤ النسق االقتصادي‪ ،‬حيث انخÙ?ض نمو الناتج المحلي اإلجمالي من Ù…ØªÙˆØ³Ø â€ª Ùª3\.2‬بين عامي ‪ 2006‬و‪ ،2016‬إلى ‪ Ùª2‬Ù?ي عام‬ ‫‪ \.2016‬ومن المتوقع أن يرتÙ?ع بشكل متواضع إلى ‪ Ùª2\.7‬Ù?ي عام ‪ \.2018‬وصلت نسبة البØالة العالية إلى ‪ Ùª 15\.5‬Ù?ي عام ‪ 2017‬على‬ ‫أة (‪ \.)Ùª 28‬تم احتواء العجز المالي لمستوى‬ ‫غم من انخÙ?اض مشاركة اليد العاملة لحوالي ‪ ،٪ 50‬ويرجع ذلك أساسا إلى ضعÙ? مشاركة المر‬‫الر‬ ‫أقل من ‪ Ùª 5‬من الناتج المحلي اإلجمالي Ù?ي عام ‪ ،2015‬وذلك بÙ?ضل االنخÙ?اض الحاد Ù?ي أسعار النÙ?Ø Ø§Ù„Ø¹Ø§Ù„Ù…ÙŠØ© وبالتالي انخÙ?اض إعانات‬ ‫دعم الØاقة‪ \.‬وبقي اإلنÙ?اق المتكرر Ù…Ø³ÙŠØ Ø§â€¬ ‫ر على اإلنÙ?اق العام‪ ،‬بما Ù?ي ذلك األجور التي ارتÙ?عت إلى ‪ Ùª 13\.4‬من الناتج المحلي اإلجمالي (من‬ ‫‪ Ùª 12\.8‬Ù?ي عام ‪ )2014‬لتصل إلى ما يقرب من ‪ Ùª 50‬من إجمالي اإلنÙ?اق‪ \.‬كما تواصل Ø§Ù„Ø¶ØºØ Ø¹Ù„Ù‰ النÙ?قات الر‬ ‫أسمالية وهو ما انعكس Ù?ي‬ ‫بØØ¡ تنÙ?يذ االستثمار‪\.‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫‪\.3‬تسيØر الحكومة التونسية على الشركات المملوكة للدولة Ù?ي القØاعات اإلنتاجية والخدمية‪ ،‬حيث توظÙ? ‪ Ùª4\.5‬من السكان النشØين‪ ،‬مع‬ ‫زيادة بنسبة تزيد عن ‪ Ùª50‬منذ عام ‪ 2011‬كاستجابة Ù„Ù„Ø³Ø®Ø Ø§Ø§Ù„Ø¬ØªÙ…Ø§Ø¹ÙŠ المتواصل‪ \.‬وقد أدى العجز المتز‬ ‫ايد‪ ،‬الذي يمثل ‪ Ùª4\.4‬من الناتج‬ ‫المحلي اإلجمالي (المؤسسات غير المالية التي تملكها الدولة) Ù?ي ‪ ،2013‬إلى زيادة كبير‬ ‫ة Ù?ي التحويالت إلى هذه المؤسسات من حوالي ‪٪2‬‬ ‫جية للمؤسسات التي تملكها الدولة‬‫من الناتج المحلي اإلجمالي Ù?ي عام ‪ 2010‬إلى ‪ Ùª7‬Ù?ي عام ‪ \.2013‬وÙ?ي عام ‪ ،2015‬وصلت الديون الخار‬ ‫التي تضمنها الحكومة إلى ‪ Ùª12‬من الناتج المحلي اإلجمالي‪\.‬‬ ‫غة بين الحكومة والعديد من الشركات‬‫‪ \.4‬على هذه الخلÙ?ية‪ ،‬هناك حاجة ملحة لتحسين حوكمة وأداء الشركات التي تملكها الدولة‪ \.‬توجد حلقة مÙ?ر‬ ‫ي محدود للغاية‪ ،‬مما يحد من قدرتها على زيادة اإلير‬ ‫ادات أو‬ ‫التي تملكها الدولة‪ ،‬حيث تتمتع الشركات المملوكة للدولة باستقالل مالي وادار‬ ‫ج‪ \.‬للتعامل مع ذلك‪ ،‬تضØر الحكومة لزيادة آليات الرقابة المسبقة‪ ،‬وهو ما يؤدي إلى‬‫التحكم Ù?ي التكاليÙ?‪ ،‬وهو ما يضعها Ù?ي وضع مالي حر‬ ‫تÙ?اقم انعدام المساءلة‪ ،‬مما يؤدي إلى الحاجة إلى زيادة اإلعانات واعادة رسملة الشركات التي تملكها الدولة‪Ù? \.‬‬ ‫ويعتبر اإلØار القانوني القديم الذي‬ ‫ار الداخلي‪ \.‬وقد واÙ?ق مجلس‬ ‫ال عن الكثير من هذا الخلل‪ ،‬حيث أنه يقيد ويبØئ عملية صنع القر‬ ‫تعمل Ù?يه الشركات التي تملكها الدولة مسؤو‬ ‫اء Ù?ي نوÙ?مبر ‪ 2015‬على "استر‬ ‫اتيجية إصالح المؤسسات التي تملكها الدولة" لزيادة المساءلة بين الحكومة والمؤسسات التي تملكها الدولة‬ ‫الوزر‬ ‫والتي لم يتم تنÙ?يذها بالكامل بعد‪\.‬‬ ‫اكة بين القØاعين العام والخاص وتعتزم استخدام هذه الØريقة ا‬ ‫كثير لتØوير‬ ‫ر بتعزيز Ø¥Øار‬ ‫ها القانوني والمؤسسي للشر‬ ‫‪ - 5‬قامت تونس مؤخ ا‬ ‫بنيتها التحتية‪ \.‬إن السجل التاريخي للشر‬ ‫اكات بين القØاعين العام والخاص متواضع بشكل عام ويعكس التÙ?ضيل التاريخي لتوÙ?ير خدمات البنية‬ ‫ة‪ \.‬Ù?ي قØاع مياه الشرب‪ ،‬لم يتم التوقيع حتﯽ اآلن علﯽ‬ ‫اض Ø¨Ø´Ø±ÙˆØ Ù…ÙŠØ³Ø±â€¬ ‫مدÙ?وعا بإمكانية الوصول القوي إلى اإلقر‬ ‫ً‬ ‫التحتية عبر القØاع العام‬ ‫اكة بين القØاعين العام والخاص‪ ،‬ولï®?ن الحï®?ومة والشركة الوØنية الستغالل وتوزيع المياه تعتزم إنشاء محØØ© التحلية المﮭمة‬ ‫اتÙ?اقيات الشر‬ ‫التالية (Ù?ي المﮭدية) من خالل Ø®ØØ© نظام البناء والتشغيل وتحويل الملكية‪ \.‬تم إصدار قانون جديد للشر‬ ‫اكة بين القØاعين العام والخاص Ù?ي‬ ‫اكة بين القØاع العام والقØاع الخاص على مستوى رئاسة الحكومة‪ \.‬وبينما تلعب هذه الهيئة ًا‬ ‫دور‬ ‫عام ‪ ،2015‬وتم إنشاء الهيئة العامة للشر‬ ‫اكة بين القØاعين العام والخاص ألصحاب المصلحة‬ ‫مهما‪ ،‬إال أنها تواجه الكثير من الصعوبات Ù?ي توÙ?ير الخبر‬ ‫ة الالزمة Ù?ي معامالت الشر‬ ‫ً‬ ‫Ù?ي القØاع العام الذين تنقصهم الخبر‬ ‫ة Ù?ي هذا المجال‪\.‬‬ ‫السياق القØاعي (أو متعدد القØاعات) والمؤسسي للبرنامج‬ ‫‪ -6‬تبلغ موارد المياه المتجددة Ù?ي تونس ‪ 405‬متر مكعب ‪ /‬ساكن ‪ ، /‬وهو مستوى أقل من عتبة ندر‬ ‫ة المياه المØلقة‪ \.‬ومن المتوقع أن يؤدي‬ ‫رر‬ ‫ة‪ ،‬وتقليل هØول األمØار‪ ،‬وزيادة تقلبات Ø³Ù‚ÙˆØ Ø§Ø£Ù„Ù…Øار‪ ،‬مما يؤدي إلى زيادة استهالك المياه وانخÙ?اض‬ ‫تغير المناخ إلى زيادة درجات الح ا‬ ‫ي مسؤولية اإلشر‬ ‫اÙ? على قØاع المياه وتعبئة الموارد المائية وحÙ?ظها وادارتها‪ \.‬وقد‬ ‫ة الÙ?الحة والموارد المائية والصيد البحر‬ ‫زر‬‫المخزون‪ \.‬وتتولى و ا‬ ‫مكنت االستثمار‬ ‫ات الرئيسية Ù?ي البنية التحتية لتونس باستغالل معظم مواردها المائية الشحيحة‪ ،‬واستغالل ما يقرب من ‪ Ùª100‬من الموارد‬ ‫ي المحاÙ?ظة على‬‫المتجددة‪ \.‬ومع ذلك‪ ،‬Ù?ستحتاج تونس Ù?ي المستقبل إلى موارد مياه إضاÙ?ية لضمان زيادة المخزون‪ ،‬كما سيكون من الضرور‬ ‫التدابير المتعلقة بالØلب لمواصلة التحكم Ù?ي استخدام المياه‪ \.‬جميع سكان المناØق الحضرية لديهم إمكانية الوصول إلى مياه الشرب األساسية‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫على األقل‪ ،‬Ù?ي حين أن هذا الرقم ينخÙ?ض إلى ‪ Ùª83‬بالنسبة لسكان الريÙ?‪ \.‬وÙ?يما يتعلق بالصرÙ? الصحي‪ ،‬تستخدم نسبة ‪٪ 89‬من األسر‬ ‫اÙ?ق صرÙ? صحي محسنة‪ ،‬لكن هذا الرقم ينخÙ?ض بالنسبة للمناØق الريÙ?ية‪ ،‬حيث يستخدم أكثر من نصÙ? األسر المر‬ ‫احيض‬ ‫الحضرية مر‬ ‫(‪ ،)Ùª56‬Ù?ي حين يستخدم ‪ Ùª 20‬البيار‬ ‫ات‪\.‬‬ ‫‪ \.7‬الشركة الوØنية لالستغالل وتوزيع المياه هي المؤسسة الوØنية العمومية للمياه التي توÙ?ر مياه الشرب إلى ‪ Ùª100‬من سكان المناØق‬ ‫الحضرية Ù?ي تونس ونحو ‪ Ùª50‬من سكان الريÙ?‪ \.‬تم إنشاؤها Ù?ي عام ‪ ،1968‬ولديها أكثر من ‪ 2\.7‬مليون عميل اليوم‪ ،‬وهي توز‬ ‫ع أكثر من‬ ‫‪ 650‬مليون متر مكعب Ù?ي السنة‪ ،‬وتبلغ قيمة مبيعاتها السنوية نحو ‪ 170‬مليون دو‬ ‫الر‪ ،‬ولديها ‪ 6600‬موظÙ?‪ \.‬قامت الشركة الوØنية لالستغالل‬ ‫وتوزيع المياه بتØوير البنية التحتية الهامة لإلنتاج واإليصال والتوزيع التي سمحت لتونس بالوصول إلى مستويات عالية من الوصول على‬ ‫ة دون انقØاع Ù?ي الخدمة‪ ،‬وتوÙ?ير مياه ذات جودة عالية تتماشى مع المعايير الدولية‪ \.‬الديوان الوØني للتØهير هو المسؤول عن‬ ‫مستوى األسر‬ ‫مر‬ ‫اÙ?ق الصرÙ? الصحية الوØنية‪\.‬‬ ‫‪ -8‬تعرضت النتائج التقنية الممتاز‬ ‫ة التي حققتها الشركة الوØنية الستغالل وتوزيع المياه منذ إنشائها للخØر خالل العقد الماضي بسبب االختالل‬ ‫الكبير Ù?ي توازنها المالي‪ \.‬Ù?ي عام ‪ ،2016‬لم تحصل الشركة الوØنية الستغالل وتوزيع المياه على إعانات تشغيلية‪ ،‬ولكن الدولة كانت تغØي‬ ‫أس المال ‪0\.35‬‬ ‫اتها‪ \.‬وبلغت ديونها ‪ 441‬مليون دينار تونسي والعائد على األسهم ‪( 0\.01‬د‪\.‬ت) وبلغت نسبة الديون إلى ر‬ ‫جزً‬ ‫ءا من استثمار‬ ‫دينار‪ \.‬وقد أثر هذا الوضع المالي الهش على صيانة بنياتها التحتية وقوض االستثمار‬ ‫ات الجديدة الضرورية‪ \.‬على سبيل المثال‪ ،‬ارتÙ?ع إجمالي‬ ‫المياه المهدور‬ ‫ة للشركة الوØنية الستغالل وتوزيع المياه من ‪ Ùª22‬Ù?ي عام ‪ 2003‬إلى ‪ Ùª33‬Ù?ي عام ‪ ،2016‬مع مستويات أعلى من ‪ Ùª45‬Ù?ي‬ ‫اء هذا الخلل هو زيادة الÙ?صل بين التسعير‬ ‫ة ÙˆÙ…ØªÙˆØ³Ø ØªÙƒÙ„Ù?Ø© المياه‪ \.‬منذ عام‬ ‫مناØق معينة من ÙˆØ³Ø ÙˆØ¬Ù†ÙˆØ¨ البالد‪ \.‬وكان السبب الرئيسي ور‬ ‫‪ ،2006‬كانت هناك زيادات Ù?ي التسعير‬ ‫ة Ù?Ù‚Ø Ù?ي أعوام ‪ 2010‬و‪ 2011‬و‪ 2013‬و‪ ،2016‬وكانت هذه الزيادة غير كاÙ?ية لسد الÙ?جوة المالية‪\.‬‬ ‫قد يؤدي التدهور المستمر لألداء المالي والتشغيلي إلى التأثير Ù?ي جودة الخدمات المقدمة وقدر‬ ‫ة الشركة الوØنية الستغالل وتوزيع المياه على‬ ‫إدار‬ ‫ة أصولها على النحو األمثل‪\.‬‬ ‫ات كبير‬ ‫ة‪ ،‬ال سيما Ù?يما يتعلق بتعزيز وتوسيع البنية األساسية لإلنتاج‪ ،‬مثل محØات‬ ‫‪ -9‬تتØلب زيادة عدد السكان والØلب على المياه استثمار‬ ‫ى‪ ،‬على سبيل المثال‪ ،‬من المتوقع حدوث نقص Ù?ي عام ‪ 2022‬إذا‬‫تحلية المياه وشبكات توزيع المياه Ù?ي المناØق الريÙ?ية‪ \.‬بالنسبة لتونس الكبر‬ ‫ة‬ ‫ي مع ذلك‪ ،‬تحتاج الشركة الوØنية الستغالل وتوزيع المياه إلى زيادة جهودها لتحسين إير‬ ‫اداتها التشغيلية وادار‬ ‫لم تزدد Øاقة العرض‪ \.‬وبالتواز‬ ‫أصولها‪ ،‬Ù?ضالً عن تحديث إجر‬ ‫اءاتها التشغيلية‪ \.‬هناك حاجة ملحة إلى إعادة تنظيم الشركة بالنظر إلى اليد العاملة المتقادمة التي تستخدمها‬ ‫ى التي يتعين معالجتها مواØن الضعÙ? التشغيلية‬ ‫ومغادر‬ ‫ة عدد كبير من الموظÙ?ين للتقاعد Ù?ي السنوات القليلة المقبلة‪ \.‬وتشمل المسائل األخر‬ ‫زر‬ ‫ة الÙ?الحة باإلضاÙ?ة‬ ‫مثل تدهور أداء الشبكة وزيادة الخسائر التجارية بسبب عدادات المياه القديمة؛ وعدم االستقاللية عن السلØØ© المشرÙ?Ø© وو ا‬ ‫إلى المركزية المÙ?رØØ© والتركيز الضعيÙ? على خدمة العمالء‪\.‬‬ ‫‪ \.10‬أعدت الحكومة والشركة الوØنية الستغالل وتوزيع المياه برنامج أمن إمدادات المياه لتحقيق األهداÙ? الثالثة التالية‪:‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫(Ø£) ضمان السالمة المالية Øويلة األجل للشركة الوØنية الستغالل وتوزيع المياه وتحسين أدائها التشغيلي‬ ‫(ب) تحسين جودة الخدمات المقدمة وتعزيز العالقات مع العمالء‬ ‫(ج) تأمين وتعزيز الوصول إلى مياه الشرب على المستوى الوØني‬ ‫ات دينار تونسي (‪ 1\.5‬مليار دو‬ ‫الر بسعر الصرÙ? الحالي) ويستند البرنامج إلى‬ ‫‪ \.11‬تقدر تكلÙ?Ø© برنامج أمن إمدادات المياه بنحو ‪ 4‬مليار‬ ‫ي لتأمين وتعزيز البنية التحتية لمياه الشرب‪\.‬‬ ‫الركيزتين التاليتين‪ )1( :‬استر‬ ‫اتيجية اإلصالح Ù?ي برنامج أمن إمدادات المياه و (‪ )2‬برنامج استثمار‬ ‫يتماشى برنامج أمن إمدادات المياه مع "استر‬ ‫اتيجية اإلصالح الخاصة بالمشاريع التي تملكها الدولة" التي اعتمدتها الحكومة Ù?ي عام ‪\.2015‬‬ ‫وتشمل أهداÙ? برنامج دعم قØاع المياه وتحديث المر‬ ‫اÙ?ق‪ ،‬وتعزيز جودة الخدمات المقدمة للعمالء‪ ،‬وضمان السالمة المالية والحÙ?اظ على‬ ‫ة التجارية واإلدار‬ ‫ة المالية وخدمات‬ ‫األصول‪ \.‬ويتم ذلك عن Øريق تنÙ?يذ Ø®ØØ© عمل تستند إلى التحسينات Ù?ي العمليات وادار‬ ‫ة األصول واإلدار‬ ‫ة الموارد البشرية‪ \.‬ويشمل برنامج االستثمار استثمار‬ ‫ات Ù?ي تعبئة المياه غير المالحة والمياه المالحة غير التقليدية عن‬ ‫تكنولوجيا المعلومات وادار‬ ‫Øريق التحلية؛ وتعزيز شبكة إمدادات المياه؛ ودمج جز‬ ‫ء من المناØق الريÙ?ية Ù?ي شبكة الشركة الوØنية الستغالل وتوزيع المياه؛ وتحسين أداء‬ ‫شبكات النقل والتوزيع؛ وتعزيز أنظمة اإلنتاج‪\.‬‬ ‫اكة مع البلد ‪ /‬استر‬ ‫اتيجية مساعدة البلد‬ ‫العالقة مع Ø¥Øار الشر‬ ‫اكة مع البلد للÙ?تر‬ ‫ة ‪ ،2020-2016‬الذي يستند إلى األركان الثالثة التالية‪ )1( :‬استعادة بيئة مواتية‬ ‫ح مع Ø¥Øار الشر‬‫‪ - 12‬يتواءم البرنامج المقتر‬ ‫للنمو االقتصادي المستدام وخلق Ù?رص عمل يقودها القØاع الخاص ؛ (‪ )2‬تقليل الÙ?وارق الجهوية و(‪ )3‬تعزيز أكبر لالندماج االجتماعي‪ \.‬وقد‬ ‫ح على أنه أحد أهداÙ? السنة المالية ‪ 2018‬Ù?ي Ø¥Øار الركن الثاني‪ ،‬وهو ينضوي بصÙ?Ø© خاصة تحت تحسين‬‫ح بوضو‬‫ع المقتر‬ ‫تم إدر‬ ‫اج المشرو‬ ‫الوصول إلى الخدمات وجودة الخدمات Ù?ي المناØق المتأخر‬ ‫ة تنمويا‪\.‬‬ ‫ح Ù?ي الركائز الثالثة إلØار الشر‬ ‫اكة مع البلد من خالل‪ )1( :‬تحسين البيئة المواتية لمشاركة القØاع الخاص من‬ ‫ع المقتر‬‫‪ - 13‬يساهم المشرو‬ ‫خالل تحسين الجدار‬ ‫ة االئتمانية للشركة الوØنية الستغالل وتوزيع المياه (‪ )1‬؛ (‪ )2‬تحسين الحصول على خدمات المياه ونوعيتها Ù?ي المناØق‬ ‫ة تنمويا (الركن ‪ 2‬من Ø¥Øار الشر‬ ‫اكة مع البلد) ؛ و (‪ )iii‬زيادة المساءلة بين للشركة الوØنية الستغالل وتوزيع المياه والحكومة ومواØنيها‬ ‫المتأخر‬ ‫ز من الحوكمة‪ ،‬وهي المسألة األساسية Ù?ي Ø¥Øار الشر‬ ‫اكة‬ ‫ع جز‬ ‫ء ال يتج أ‬ ‫اكة مع البلد)‪ \.‬باإلضاÙ?Ø© إلى ذلك‪Ù? ،‬‬ ‫يعتبر المشرو‬ ‫(الركن ‪ 3‬من Ø¥Øار الشر‬ ‫مع البلد‪\.‬‬ ‫اتيجية مجموعة البنك الدولي للشرق Ø§Ø£Ù„ÙˆØ³Ø ÙˆØ´Ù…Ø§Ù„ Ø£Ù?ريقيا "اإلدماج االقتصادي واالجتماعي من أجل السالم‬ ‫‪ \.14‬يتماشى البرنامج مع استر‬ ‫ع إلى ضمان خدمات مستدامة لمياه الشرب لسكان‬ ‫واالستقر‬ ‫ار" من خالل دعم دعائمها األولى حول تجديد العقد االجتماعي‪ \.‬ويهدÙ? المشرو‬ ‫تونس‪ ،‬مما يعزز ثقة المواØنين Ù?ي قدر‬ ‫ات القØاع العام‪ \.‬كما يهدÙ? إلى تحسين محورين للمساءلة‪ )1( :‬بين الشركة الوØنية الستغالل وتوزيع‬ ‫المياه وعمالئها من خالل منح الشركة استقالال تشغيليا أكبر‪ \.‬و(‪ )2‬بين الشركة الوØنية الستغالل وتوزيع المياه والحكومة من خالل االتÙ?اق‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫على أهداÙ? محددة لتحسين األداء‪\.‬‬ ‫‪ - 15‬يتواءم البرنامج أيضا مع نهج زيادة التمويل من أجل التنمية‪ ،‬الذي يرمي إلى تعزيز االستخدام الرشيد للموارد العمومية الشحيحة‬ ‫ي وتقليص عبء الدين العام على العمالء‪ ،‬مع توÙ?ير خدمات أساسية مستدامة وبأسعار‬ ‫ة من أجل استقØاب أكبر لر‬ ‫أس المال التجار‬ ‫والميسر‬ ‫اء إصالحات قØاعية تشمل اآلليات التنظيمية والتسعيرية والمؤسسية التي من شأنها أن تحسن الجدار‬ ‫ة‬ ‫ع إلى إجر‬‫معقولة‪ \.‬ويهدÙ? هذا المشرو‬ ‫ي Ù?ي المستقبل‪\.‬‬‫االئتمانية للشركة الوØنية الستغالل وتوزيع المياه‪ ،‬مما يسهل وصولها إلى التمويل التجار‬ ‫األساس المنØقي لمشاركة البنك واختيار وسيلة التمويل‬ ‫‪ \.16‬للبنك شر‬ ‫اكة Øويلة األمد مع للشركة الوØنية الستغالل وتوزيع المياه مبنية على تمويل البنية التحتية األساسية‪ \.‬تمت المواÙ?قة Ù?ي عام‬ ‫ع إمدادات المياه Ù?ي المناØق الحضرية" الذي تألÙ? من قرض إلى للشركة الوØنية الستغالل وتوزيع المياه وتمت المواÙ?قة‬‫‪ 2005‬على "مشرو‬ ‫ي إعداد تقرير اإلنجاز‪ \.‬وقد أدى ذلك إلى تحقيق‬‫ع Ù?ي ‪ 30‬جوان ‪ 2018‬ويجر‬‫على تمويل إضاÙ?ي Ù?ي عام ‪ \.2014‬تم االنتهاء من المشرو‬ ‫إنجاز‬ ‫ات مهمة Ù?يما يتعلق بإعادة تأهيل شبكات توزيع المياه Ù?ي عدد من المدن متوسØØ© الحجم وكذلك الحÙ?اظ على إمدادات المياه على مدار‬ ‫ى Ù?ي‬ ‫غم من الØلب المتز‬ ‫ايد الهام‪ \.‬ومع ذلك‪ ،‬لم ينجح تمويل البنك الدولي والجهات المانحة األخر‬ ‫ى‪ ،‬بالر‬‫ع لتونس الكبر‬‫الساعة Øوال األسبو‬ ‫ة أعاله Ù?ي السنوات األخير‬ ‫ة‪ ،‬وحالتها المالية حساسة Ù?ي‬ ‫مساعدة للشركة الوØنية الستغالل وتوزيع المياه على التعاÙ?ي من التحديات المذكور‬ ‫الوقت الحالي‪\.‬‬ ‫اض لمساعدة للشركة الوØنية الستغالل وتوزيع المياه Ù?ي تحسين أدائها‪ \.‬أو‬ ‫الً‪ ،‬نظم‬ ‫ر عدداً من اإلجر‬ ‫اءات التي تتجاوز اإلقر‬ ‫‪ \.17‬اتخذ البنك مؤخ اً‬ ‫ا‬ ‫مؤتمر للمانحين Ù?ي مرسيليا تم Ù?يه تقديم احتياجات االستثمار لبرنامج‬ ‫البنك Ù?ي عام ‪ 2014‬بالشر‬ ‫اكة مع الشركة الوØنية الستغالل وتوزيع المياه‬ ‫أمن إمدادات المياه بقيمة ‪ 1\.5‬مليار دو‬ ‫الر أمريكي إلى عدد من المانحين الذين قدموا من حيث المبدأ اتÙ?اقيات لتمويل مشاريع محددة‪ \.‬ثانياً‪،‬‬ ‫ة ‪ ،2016-2015‬قام البنك بتمويل در‬ ‫اسة تÙ?صيلية لتوÙ?ير مسار للشركة الوØنية الستغالل وتوزيع المياه الستعادة توازنها المالي‪ ،‬من‬ ‫Ù?ي الÙ?تر‬ ‫خالل الجمع بين العديد من التدابير من جانب كل من الشركة الوØنية الستغالل وتوزيع المياه والحكومة‪ ،‬والذي كان أحد المدخالت الرئيسية‬ ‫Ù?ي اإلصالحات المدرجة Ù?ي برنامج أمن إمدادات المياه‪\.‬‬ ‫ع هي أداة تمويل‬‫حة لتمويل هذا المشرو‬ ‫‪ -18‬استناداً إلى تقييم مÙ?صل لبرنامج دعم قØاع المياه ومناقشات مع النظر‬ ‫اء‪ ،‬Ù?إن األداة المالية المقتر‬ ‫البر‬ ‫امج وÙ?قا للنتائج وذلك لألسباب التالية‪:‬‬ ‫•برنامج الحكومة‪ \.‬شاركت الحكومة الشركة الوØنية الستغالل وتوزيع المياه Ù?ي تقديم Øلب للبنك لدعم برنامج حكومي واضح‪ ،‬برنامج أمن‬ ‫إمدادات المياه‪ ،‬مع أهداÙ? ووسائل واضحة (مادية و‬ ‫ال مادية على حد سواء) لتحقيق تلك األهداÙ?‪ \.‬تمت المواÙ?قة على برنامج أمن إمدادات‬ ‫ة الÙ?الحة‪ \.‬ومن‬ ‫زر‬ ‫ي ‪ )2018‬ومن قبل نظير‬ ‫ه المباشر Ù?ي الحكومة‪ ،‬و ا‬ ‫المياه من قبل مجلس الشركة الوØنية الستغالل وتوزيع المياه (Ù?ي Ù?يÙ?ر‬ ‫المقرر عقد اجتماع حكومي (مجلس الوزر‬ ‫اء المضيق) لمناقشة قØاع مياه الشرب‪ ،‬حيث سيتم اعتماد هذا البرنامج المتوقع لخريÙ? ‪ \.2018‬يعد‬ ‫تمويل البر‬ ‫امج وÙ?قا للنتائج األداة المناسبة Ù?ي هذا السياق ألنه Ù…Ø±ØªØ¨Ø Ø¨Ø¨Ø±Ù†Ø§Ù…Ø¬ حكومي عام وليس بمعامالت محددة‪\.‬‬ ‫• تنÙ?يذ اإلصالحات‪ \.‬تدعم أداة تمويل البر‬ ‫امج وÙ?قا للنتائج تنÙ?يذ اإلصالحات المؤسسية‪ \.‬سوÙ? تؤدي هذه اإلصالحات إلى تحديث الشركة الوØنية‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫الستغالل وتوزيع المياه‪ ،‬وتحسين أنظمة المعلومات‪ ،‬وتعزيز جودة الخدمات المقدمة للعمالء‪ ،‬ودعم الوضع المالي‪ ،‬واإلدار‬ ‫ة المثلى لألصول‪\.‬‬ ‫وبدون هذه اإلصالحات‪ ،‬سوÙ? تتعرض االستدامة المالية للشركة الوØنية الستغالل وتوزيع المياه للخØر وستنخÙ?ض جودة الخدمات المقدمة‬ ‫للعمالء بدرجة كبير‬ ‫ة Ù?ي السنوات القليلة القادمة‪\.‬‬ ‫امج وÙ?قا للنتائج أنظمة الحكومة (اإلدار‬ ‫ة المالية والمشتريات والضمانات االجتماعية والبيئية)‪ \.‬وقد‬ ‫• األنظمة الحكومية‪ \.‬يستخدم تمويل البر‬ ‫ءا من Ø¥Øار اإلنÙ?اق سليمة من الناحية‬‫ات التي تشكل جزً‬‫أظهرت التقييمات األولية التقنية واالئتمانية وتقييمات الضمانات ما يلي‪ )1( :‬االستثمار‬ ‫ات المؤسسية‬ ‫يز للقدر‬ ‫ات حواÙ?ز قوية‪ ،‬وتدابير دعم‪ ،‬وتعز ا‬ ‫اتيجي؛ (‪ )2‬سيتØلب التنÙ?يذ الناجح لالستثمار‬‫التقنية وذات صلة على المستوى االستر‬ ‫ع االستثمار؛ (‪ )3‬لقد أظهر‬ ‫للتغلب على بعض الصعوبات التي واجهتها مؤخ ا‬ ‫ر الشركة الوØنية الستغالل وتوزيع المياه Ù?ي تنÙ?يذ تمويل مشرو‬ ‫تقييم أنظمة للشركة الوØنية الستغالل وتوزيع المياه بشأن المشتريات واإلدار‬ ‫ة المالية والضمانات أنها متوائمة عالمياً مع الممارسات الدولية‬ ‫الجيدة شريØØ© وضع بعض التعديالت التي سيتم تنÙ?يذها من خالل Ø®ØØ© عمل البرنامج‪\.‬‬ ‫• المدÙ?وعات المرتبØØ© بالنتائج‪ \.‬يتم صرÙ? تمويل البر‬ ‫امج وÙ?قا للنتائج بمجرد تحقيق النتائج‪ \.‬وبالنظر إلى الوضع الحالي الهش المالي‬ ‫الذي تعاني منه الشركة الوØنية الستغالل وتوزيع المياه واإلصالحات الالزمة للتغلب على هذا الوضع‪ ،‬هناك حاجة إلى حواÙ?ز قوية لكل‬ ‫ة األجل التي ستؤتي ثمار‬ ‫ها على المدى‬ ‫من الحكومة وللشركة الوØنية الستغالل وتوزيع المياه لتنÙ?يذ بعض اإلصالحات الصعبة قصير‬ ‫ات ضرورية لكن وليست بالضرور‬ ‫ة سهلة‬ ‫رر‬ ‫ا‬ ‫حاÙ?ز قويا التخاذ ق ا‬ ‫المتوسØ‪ \.‬ويمثل تمويل البر‬ ‫امج وÙ?قا للنتائج وليس Ù?Ù‚Ø Ø¨Ù†Ø§Ø¡ على المدخالت‬ ‫التنÙ?يذ‪\.‬‬ ‫ات نتائج مستوى أهداÙ? تØوير البرنامج‬ ‫ج‪ \.‬أهداÙ? تØوير البرنامج ومؤشر‬ ‫أهداÙ? تØوير البرنامج‬ ‫‪ \.19‬تحسين األداء المالي والتشغيلي للشركة الوØنية الستغالل وتوزيع المياه وكذلك جودة الخدمات المقدمة للعمالء وتأمين إمدادات المياه Ù?ي‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€ª\.‬‬ ‫ى والحد من الخسائر Ù?ي و‬ ‫اليات مختار‬ ‫تونس الكبر‬ ‫ات نتائج مستوى أهداÙ? تØوير البرنامج‬ ‫مؤشر‬ ‫ات أهداÙ? تØوير البرنامج المقترحة هي (‪ )1‬نسبة التشغيل (‪ )2( ،)٪‬نسبة الديون (‪ )3( ،)٪‬حل شكاوى العمالء Ù?ي غضون ‪24‬‬ ‫‪ \.20‬مؤشر‬ ‫اليات‬ ‫ع‪ )5( ،‬كميات المياه المحÙ?وظة Ù?ي و‬‫ى الذين يحصلون على المياه على مدار الساعة Øوال أيام األسبو‬‫ساعة (‪ )4( ،)٪‬سكان تونس الكبر‬ ‫ع (العدد) ونسبة اإلناث منهم (‪\.)Ùªâ€¬â€¬â€«Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€ª )6( ،‬المستÙ?يدون المباشرون من المشرو‬ ‫‪ \.21‬سيدعم البرنامج مجاالت النتائج الثالثة التالية‪:‬‬ ‫‪ \.i‬ضمان سالمة الوضع المالي للشركة الوØنية الستغالل وتوزيع المياه على المدى الØويل وتحسين أدائها التشغيلي‬ ‫‪\.ii‬تحسين جودة الخدمات المقدمة للعمالء وتعزيز العالقات معهم‪،‬‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€¬ ‫ى على المدى الØويل وتشجيع االستخدام الÙ?عال للمياه Ù?ي و‬ ‫اليات مختار‬ ‫‪\.iii‬تأمين إمدادات المياه لتونس الكبر‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫جات) حسب مجال النتائج التي تم‬ ‫ات األولية (أهداÙ? التنمية والمؤشر‬ ‫ات المتوسØØ© وكذلك المخر‬ ‫‪ \.22‬Ù?يما يلي قائمة (غير شاملة) بالمؤشر‬ ‫ات مرتبØØ© باإلنÙ?اق‪ ،‬وأي مؤشر‬ ‫ات‬ ‫ات بشأن المؤشر‬ ‫ات التي سيتم استخدامها كمؤشر‬ ‫رر‬ ‫تحديدها لقياس اإلنجاز‬ ‫ات‪ \.‬سيتم أثناء اإلعداد اتخاذ الق ا‬ ‫ات التي سيتم تضمينها Ù?ي Ø¥Øار نتائج البرنامج‪ \.‬تم تحديد المجموعة األولية من المؤشر‬ ‫ات‬ ‫سيتم استيعابها Ù?ي Ø®ØØ© عمل البرنامج‪ ،‬وأي المؤشر‬ ‫بناء على التقييم التقني للبرنامج وسيتم مناقشتها بالتÙ?صيل مع الحكومة التونسية أثناء اإلعداد‪\.‬‬ ‫ً‬ ‫نØاق النتائج ‪ : 1‬ضمان سالمة الوضع المالي للشركة الوØنية الستغالل وتوزيع المياه على المدى الØويل وتحسين أدائها التشغيلي‬ ‫‪ \.1‬نسبة التشغيل (‪)٪‬‬ ‫‪ \.2‬نسبة الديون (‪)٪‬‬ ‫‪ \.3‬تعدل تسعير‬ ‫ات المياه سنويا على أساس نتائج نموذج مالي متÙ?ق عليه‬ ‫‪ \.4‬معدل التحصيل‬ ‫‪ \.5‬توقيع عقد األداء بين الدولة والشركة الوØنية الستغالل وتوزيع المياه‬ ‫‪ \.6‬تستÙ?يد الشركة الوØنية الستغالل وتوزيع المياه من استثناء من القانون ‪( 9-89‬المادة ‪ 22‬ثالثاً) للحصول على مرونة تشغيلية أكبر‬ ‫نØاق النتائج ‪ :2‬تحسين جودة الخدمات المقدمة للعمالء وتعزيز العالقات معهم‬ ‫‪ \.1‬حل شكاوى العمالء Ù?ي غضون ‪ 24‬ساعة (‪)٪‬‬ ‫ي والجهوي‬‫‪ \.2‬إعداد وتنÙ?يذ نظام تعويض المظالم على المستويين المركز‬ ‫‪ \.3‬إعداد استر‬ ‫اتيجية االتصاالت والمعلومات‬ ‫ي)‬‫‪ \.4‬تمت المواÙ?قة على الهيكل التنظيمي الجديد للشركة الوØنية الستغالل وتوزيع المياه (بما Ù?ي ذلك إنشاء قسم تجار‬ ‫اÙ? على المشاريع االستثمارية (الدر‬ ‫اسات األولية والمواصÙ?ات التقنية)‬ ‫‪ \.5‬معدل در‬ ‫اسات التعاقد من الباØن لإلعداد واإلشر‬ ‫ع تجريبي لتحلية المياه وÙ?ق نظام البناء والتشغيل وتحويل الملكية‬‫‪ \.6‬إØالق عملية مناقصة لمشرو‬ ‫ة Ù?ي الوسØ‬ ‫ى على المدى الØويل وتشجيع االستخدام الÙ?عال للمياه Ù?ي و‬ ‫اليات مختار‬ ‫نØاق النتائج ‪ :3‬تأمين إمدادات المياه لتونس الكبر‬ ‫والجنوب‬ ‫ع‬‫ى على خدمات المياه على مدار الساعة Øوال أيام األسبو‬‫‪ \.1‬حصول سكان تونس الكبر‬ ‫اليات مختار‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€¬ ‫‪ \.2‬كميات المياه المحÙ?وظة Ù?ي و‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫ى‬‫‪ \.3‬كميات المياه اإلضاÙ?ية التي يتم إنتاجها لصالح تونس الكبر‬ ‫اليات مختار‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€¬ ‫‪ \.4‬المياه المهدر‬ ‫ة Ù?ي و‬ ‫د‪\.‬وصÙ? البرنامج‬ ‫حدود تمويل البرنامج وÙ?قاً للنتائج‬ ‫Øورت الحكومة والشركة الوØنية الستغالل وتوزيع المياه برنامج أمن إمدادات المياه مع األهداÙ? الثالثة التالية‪ )1( :‬ضمان‬ ‫‪\.23‬‬ ‫سالمة الوضع المالي للشركة الوØنية الستغالل وتوزيع المياه على المدى الØويل وتحسين أدائها التشغيلي‪ )2( ،‬تحسين جودة الخدمات‬ ‫المقدمة للعمالء وتعزيز العالقات معهم‪ ،‬و(‪ )3‬تأمين وتعزيز الوصول إلى مياه الشرب على المستوى الوØني‪ \.‬تدعم حدود تمويل البرنامج‬ ‫ى على المدى الØويل‬ ‫وÙ?قاً للنتائج الهدÙ?ين األول والثاني وكذلك جز‬ ‫ء من الهدÙ? الثالث المتمثل Ù?ي تأمين إمدادات المياه لتونس الكبر‬ ‫اليات مختار‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€ª\.‬‬ ‫وتشجيع االستخدام الÙ?عال للمياه Ù?ي و‬ ‫ي‪ ،‬وتحسين أدائها التشغيلي واستعادة‬ ‫يهدÙ? برنامج إصالح برنامج أمن إمدادات المياه إلى تعزيز قدر‬ ‫ة الشركة واستقاللها اإلدار‬ ‫‪\.24‬‬ ‫توازنها المالي‪ \.‬كما يهدÙ? إلى تحديث الشركة وتعزيز جودة الخدمات المقدمة لعمالئها وضمان سالمة وضعها المالي والحÙ?اظ على‬ ‫أصولها‪ \.‬وسيتØلب هذه البرنامج التز‬ ‫اما واضحا من كل من الحكومة والشركة الوØنية الستغالل وتوزيع المياه لتØبيق البرنامج بشكل Ù?عال‪\.‬‬ ‫ات دينار تونسي (‪ 1\.5‬مليار دو‬ ‫الر أمريكي) ويضم ‪9‬‬ ‫تقدر قيمة برنامج إصالح برنامج أمن إمدادات المياه بحوالي ‪ 4‬مليار‬ ‫‪\.25‬‬ ‫ى‪،‬‬‫عية (انظر الجدول ‪ \.)1‬وقد تم بالÙ?عل تمويل المكونات الرئيسية لبرنامج إصالح أمن إمدادات المياه من الجهات المانحة األخر‬‫مكونات Ù?ر‬ ‫ى‪ )2( ،‬مكون المحاÙ?ظة على المياه الذي يهدÙ? إلى تحسين أداء الشبكة الذي تدهور بشكل‬‫باستثناء (‪ )1‬تأمين مياه الشرب Ù?ي تونس الكبر‬ ‫ى (المكون ‪ ،)1‬واالستثمار المتعلق بتخÙ?يض الÙ?اقد‬ ‫كبير خالل العقد الماضي‪ \.‬سيدعم تمويل البرنامج االستثمار‬ ‫ات المتعلق بتونس الكبر‬ ‫المائي Ù?ي جنوب ÙˆÙˆØ³Ø Ø§Ù„Ø¨Ø§Ù„Ø¯ (المكون ‪ ،)2‬وتمويل اإلصالحات المتوخاة (المكون ‪\.)3‬‬ ‫ح بتمويل ‪ 150‬مليون دو‬ ‫الر أمريكي من برنامج إصالح أمن إمدادات المياه من خالل نهج ثالثي‬ ‫سيقوم برنامج التمويل المقتر‬ ‫‪\.26‬‬ ‫المحاور يركز على ثالث نØاقات من النتائج‪:‬‬ ‫سوÙ? يشجع نØاق النتائج ‪ 1‬اإلجر‬ ‫اءات لتحسين الوضع المالي للشركة الوØنية الستغالل وتوزيع المياه على المدى الØويل وتحسين أدائها‬ ‫•‬ ‫ال تشمل هذه اإلجر‬ ‫اءات زيادة الرسوم Ù?Ù‚Ø Ø¨Ù„ أيضاً اعتماد نموذج مالي لجعل تعديالت الرسوم أكثر موضوعية ويمكن توقعها‬ ‫التنظيمي‪ \.‬و‬ ‫مسبقا‪ -‬على عكس الØريقة المعتمدة اليوم ‪ -‬وادخال صيغ Ù?هرسة Ù„Ø±Ø¨Ø Ø§Ù„ØªØ¹Ø±ÙŠÙ?ات بتØور تكاليÙ? المدخالت (على سبيل المثال أسعار‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫ة المالية الداخلية والمحاسبة التحليلية‪ \.‬وأخي اً‬ ‫ر‪ ،‬سيتضمن نØاق النتائج هذا إعداد‬ ‫الكهرباء)‪ \.‬كما سيركز نØاق النتائج هذا على تحسين اإلدار‬ ‫وتوقيع عقد أداء بين الدولة والشركة الوØنية الستغالل وتوزيع المياه‪ ،‬باإلضاÙ?Ø© إلى احتمال منح الشركة المزيد من المرونة التشغيلية‪\.‬‬ ‫سيركز نØاق النتائج ‪ 2‬على تحسين جودة الخدمات المقدمة للعمالء وتعزيز خدمة العمالء‪ \.‬الهدÙ? العام هو جعل الشركة الوØنية الستغالل‬ ‫•‬ ‫امية إلى‬ ‫ة على التÙ?اعل بØريقة ذكية مع الشكاوى الواردة منهم‪ \.‬يمكن أن تتضمن اإلجر‬ ‫اءات الر‬ ‫وتوزيع المياه أكثر توجهاً نحو العمالء وقادر‬ ‫ى يمكن أن‬‫ي‪ ،‬وتحديث الهيكل التنظيمي للشركة‪ ،‬وتنÙ?يذ آلية تعويض المظالم‪ \.‬هناك أيضاً تدابير أخر‬ ‫تحقيق هذا الهدÙ? إنشاء قسم تجار‬ ‫ات التي ال تمتلك الشركة بالضرور‬ ‫ة‬ ‫تساعد Ù?ي تحسين جودة الخدمات المقدمة‪ \.‬وتشمل هذه التدابير تنÙ?يذ بعض الدر‬ ‫اسات المتعلقة باالستثمار‬ ‫ة مقارنة بالنسبة لها عن Øريق ØرÙ? خارجي‪ ،‬أو تحديد متى تكون الشر‬ ‫اكة بين القØاعين العام والخاص أكثر كÙ?اءة Ù?ي تقديم خدمات‬ ‫ميز‬ ‫ع وÙ?ق نظام البناء والتشغيل وتحويل‬‫المياه‪ ،‬مع التركيز على محØات التحلية ومحØØ© المهدية‪ ،‬الذي يتم التخØÙŠØ Ù„Ù‡Ø§ حالياً لتكون أول مشرو‬ ‫الملكية‪\.‬‬ ‫ى‪ ،‬ودعم االستخدام الÙ?عال لموارد المياه Ù?ي ÙˆØ³Ø ÙˆØ¬Ù†ÙˆØ¨â€¬ ‫يهدÙ? نØاق النتائج ‪ 3‬إلى تغØية الØلب المتز‬ ‫ايد على مياه الشرب Ù?ي تونس الكبر‬ ‫•‬ ‫ة الحالية‬ ‫ر أكبر‪ \.‬إذا لم يتم توسيع القدر‬ ‫البالد‪ ،‬حيث تكون المياه شحيحة بشكل خاص وهوامش تكلÙ?تها مرتÙ?عة ‪-‬نظ اً‬ ‫ر ألن التحلية تلعب دو اً‬ ‫ى Ù?من المتوقع أن يصبح نقص المياه حقيقة واقعة بحلول عام ‪ \.2022‬سيتم بناء محØØ© جديدة إلنتاج المياه غرب تونس‬‫Ù?ي تونس الكبر‬ ‫اءات نقل مياه كبير‬ ‫ة والبنى التحتية الخاصة بتخزين المياه من شمال البالد حيث تتوÙ?ر موارد المياه‬ ‫(باجة) حيث تستكمل الحكومة إجر‬ ‫ايد للسكان على المياه Ù?ي العاصمة تونس والبلديات المجاور‬ ‫ة‪ ،‬كما ستوÙ?ر الماء لمنØقة‬ ‫السØحية‪ \.‬ستغØي المحØØ© ا لجديدة الØلب المتز‬ ‫اقتصادية واجتماعية كبير‬ ‫ة قيد التØوير (مرÙ?Ø£ تونس المالي)‪ \.‬ستساهم عملية إعادة تأهيل محØØ© إنتاج المياه القائمة‪ ،‬ال سيما الوحدتين اللتين‬ ‫تم بناؤهما Ù?ي عامي ‪ 1970‬و‪ ،1983‬Ù?ي ضمان توÙ?ير المياه على المدى الØويل من هذه المحØة‪ \.‬سيتم Ø®Ù?ض نسبة المياه المهدر‬ ‫ة عن‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€ª \.‬تعاني بعض هذه الو‬ ‫اليات حالياً من‬ ‫Øريق الحد من الخسائر المادية والتجارية على حد سواء Ù?ي الو‬ ‫اليات المختار‬ ‫ادت الخسائر بشكل كبير خالل العقد الماضي‪ \.‬هناك مناقشات جارية إلعداد عقد قائم على األداء مع مشغل‬‫خسائر تصل إلى ‪ ،٪50‬وقد ز‬ ‫ى‪ ،‬والذي سيشمل األنشØØ© التالية‪ :‬الكشÙ? عن التسربات واصالحها‪ ،‬تحسين إدار‬ ‫ة الشبكة‪ ،‬إعادة تأهيل Ø®ØوØ‬ ‫خاص لمدينة صÙ?اقس الكبر‬ ‫األنابيب‪ ،‬استبدال توصيالت الخدمة وعدادات المياه الخاØئة وتحديث قاعدة بيانات العمالء‪\.‬‬ ‫سيتم تحديد وتعريÙ? مجموعة من المؤشر‬ ‫ات الوسيØØ© أثناء اإلعداد لقياس وتتبع النتائج الوسيØØ© أو الخØوات المتداخلة Ù?ي أهداÙ?‬ ‫‪\.27‬‬ ‫تØوير البرنامج‪ ،‬بما Ù?ي ذلك المؤشر‬ ‫ات لضمان تØبيق كل من الØرÙ?ين‪ ،‬الحكومة والشركة الوØنية الستغالل وتوزيع المياه‪ ،‬لعقد األداء‬ ‫ى‪\.‬‬ ‫ة Ù?ي Ø§Ù„ÙˆØ³Ø ÙˆØ§Ù„Ø¬Ù†ÙˆØ¨â€ª ،‬وتلبية الØلب المتز‬ ‫ايد على المياه Ù?ي تونس الكبر‬ ‫مثل التعديالت على التسعير‬ ‫ات‪ ،‬وخÙ?ض كميات المياه المهدور‬ ‫ة الÙ?الحة والموارد المائية والصيد‬ ‫زر‬‫ة التنمية واالستثمار والتعاون الدولي‪ ،‬وو ا‬ ‫زر‬ ‫سيتم تحديد نوعين من المؤشر‬ ‫ات بعناية بالتشاور مع و ا‬ ‫ات المرتبØØ© باإلنÙ?اق‪ ،‬والتي يشار إليها باسم "المؤشر‬ ‫ات المرتبØة‬ ‫ة المالية والشركة الوØنية الستغالل وتوزيع المياه‪ \.‬أو‬ ‫ال المؤشر‬ ‫زر‬‫ي‪ ،‬وو ا‬‫البحر‬ ‫ى" غير المرتبØØ© باإلنÙ?اق‪ \.‬سوÙ? يدÙ?ع إنجاز المؤشر‬ ‫ات المرتبØة‬ ‫باإلنÙ?اق" وثانيا تلك التي يشار إليها باسم "نتائج المؤشر‬ ‫ات الوسيØØ© األخر‬ ‫باإلنÙ?اق البنك لتقديم األموال المخصصة للبرنامج وهي األموال التي ستكمل الموارد من الحكومة التونسية والشركة الوØنية الستغالل وتوزيع‬ ‫المياه لتنÙ?يذ جميع أنشØØ© البرنامج المتصلة بنØاقات النتائج المذكور‬ ‫ة أعاله‪\.‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫ه‪ \.‬الÙ?حص البيئي واالجتماعي األولي‬ ‫[اآلثار البيئية واالجتماعية المحتملة؛ المعرÙ?Ø© والÙ?هم العام لنظام البرنامج إلدارة المخاØر واآلثار البيئية واالجتماعية؛ واإلØار الزمني إلØالق تقييم‬ ‫النظم البيئية واالجتماعية بما Ù?ي ذلك التشاور بشأن مشروع تقييم األنظمة واإلÙ?صاح عنه]‪\.‬‬ ‫‪ \.28‬تصنيÙ? المخاØر البيئية معتدل‪ \.‬وليس من المتوقع أن تحÙ?ز استثمارات البرنامج أي آثار بيئية أو اجتماعية Øويلة األجل ال يمكن عكس‬ ‫مسارها‪ \.‬من المتوقع أن تكون اآلثار ‪ /‬المخاØر البيئية واالجتماعية السلبية محدودة النØاق وأن تكون محددة Ù?ي مكان العمل‪ \.‬وبالتالي‬ ‫سيتم التعامل معها Ù?ي مواقع مكان العمل‪\.‬‬ ‫‪ \.29‬تصنيÙ? المخاØر االجتماعية معتدل‪ \.‬ليس من المتوقع أن يكون لالستثمارات Ù?ي Ø¥Øار البرنامج آثار اجتماعية سلبية كبيرة‪ \.‬وستشمل‬ ‫االستثمارات إنشاء محØØ© لمعالجة المياه‪ ،‬وإعادة تأهيل شبكة الشركة الوØنية الستغالل وتوزيع المياه Ù?ي مناØق مختارة للحد من الخسائر‬ ‫التقنية واستبدال العدادات وإصالحها لتحديد الخسائر التجارية‪ \.‬وبينما يمكن أن تنØوي هذه األنشØØ© المتعلقة بالبناء على حيازة األراضي‬ ‫إال أن التأثيرات ‪ /‬المخاØر االجتماعية ستكون محدودة ويمكن التحكم Ù?يها‪ \.‬قد ال تنتج أي آثار اجتماعية سلبية من جزء اإلصالح Ù?ي‬ ‫البرنامج‪ ،‬الذي يتكون من تعزيز األداء المالي والتجاري واإلداري للشركة الوØنية الستغالل وتوزيع المياه‪\.‬‬ ‫‪ \.30‬سيتم إعداد تقييم النظام البيئي واالجتماعي‪ ،‬والتشاور حوله‪ ،‬والكشÙ? عنه قبل التقييم‪ \.‬وسوÙ? يدرس تقييم النظام البيئي واالجتماعي نØاق‬ ‫وسياق وتأثيرات البرنامج المحتملة من منظور بيئي واجتماعي‪ \.‬كما سيتضمن استعراض أنظمة اإلدارة البيئية واالجتماعية والقدرات‬ ‫التنÙ?يذية للهيئات الحكومية المعنية التي ستشارك Ù?ي البرنامج وتقييم مدى تواÙ?قها مع المبادئ والسمات األساسية المحددة Ù?ي اإلجراءات‬ ‫التشغيلية رقم ‪ \.9\.00‬سيتضمن محتوى تقييم النظام البيئي واالجتماعي‪ ،‬على سبيل المثال ال الحصر‪ ،‬ما يلي‪ )1( :‬وصÙ? موجز للبرنامج‪،‬‬ ‫بما Ù?ي ذلك األهداÙ? والعالقات بين برنامج الحكومة وتمويل البرنامج وÙ?قا للنتائج؛ (‪ )2‬المخاØر واآلثار والÙ?وائد البيئية واالجتماعية‬ ‫المحتملة‪ ،‬بما Ù?ي ذلك أي قضايا محتملة تتعلق بحيازة لألراضي؛ (‪ )3‬الترتيبات واآلليات المؤسسية القائمة للتعامل مع المخاØر البيئية‬ ‫واالجتماعية المحتملة؛ (‪ )4‬تحديد المجاالت التي ينبغي للمؤسسات المنÙ?ذة تحسين اإلجراءات واألداء Ù?يها و (‪ )5‬مدخالت التقييم المتكامل‬ ‫للمخاØر‪\.‬‬ ‫‪ \.31‬يتم استبعاد تدخالت الÙ?ئة أ‪ \.‬ومع ذلك‪ ،‬سيتم Ù?حص استثمارات البرنامج بعناية لتقييم ما إذا كانت أي تدخالت من الÙ?ئة (Ø£) مدرجة‪ \.‬لن‬ ‫ء عليه‪،‬‬ ‫ءا من البرنامج‪ ،‬كما هو منصوص عليه Ù?ي اإلجراءات التشغيلية ‪/‬أÙ?ضل الممارسات ‪ ،9\.0‬وبنا ً‬ ‫تكون مثل هذه االستثمارات جز ً‬ ‫سيحرص الÙ?ريق على أال تتسبب االستثمارات المخØØ Ù„Ù‡Ø§ Ù?ي أي آثار بيئية أو اجتماعية معاكسة تكون حساسة أو Øويلة األجل أو ال‬ ‫يمكن عكس مسارها كما سيحرص أن تكون التأثيرات خاصة بالموقع‪ ،‬ويمكن عكسها Ù?ي الغالب ويمكن التخÙ?يÙ? منها بÙ?عالية باستخدام‬ ‫الموارد المحلية‪\.‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫التواصل‬ ‫البنك الدولي‬ ‫دانييل كاموس دوريال‬ ‫االسم‬ ‫قائد Ù?ريق‬ ‫المنصب‬ ‫خبير اقتصادي Ù?ي البنية التحتية‬ ‫المنصب‬ ‫البريد االلكتروني ‪dcamos@worldbank\.org‬‬ ‫‪5360+4244‬‬ ‫رقم الهاتÙ?‬ ‫محمد Ù?اضل نداو‬ ‫االسم‬ ‫قائد Ù?ريق‬ ‫المنصب‬ ‫المنصب‬ ‫خبير Ù?ي إمدادات المياه والصرÙ? الصحي‬ ‫البريد‬ ‫‪mndaw2@worldbank\.org‬‬ ‫‪5772+4413 /‬‬ ‫رقم الهاتÙ?‬ ‫االلكتروني‬ ‫المقترض‪/‬العميل‪/‬المستÙ?يد‬ ‫وزارة التنمية واالستثمار والتعاون الدولي‬ ‫المقترض‬ ‫مديرة‬ ‫المنصب‬ ‫كلثوم الحمزاوي‬ ‫للتواصل‬ ‫البريد االلكتروني ‪k\.hamzaoui@mdci\.gov\.tn‬‬ ‫‪0021671892653‬‬ ‫رقم الهاتÙ?‬ ‫الوكاالت المنÙ?ذة‬ ‫الشركة الوØنية الستغالل وتوزيع المياه‬ ‫الوكالة المنÙ?ذة‬ ‫مدير الدراسات‬ ‫المنصب‬ ‫عبد الرؤوÙ? النويصر‬ ‫للتواصل‬ ‫البريد االلكتروني ‪a\.nouicer@sonede\.com\.tn‬‬ ‫‪0021671494341‬‬ ‫رقم الهاتÙ?‬ ‫للمزيد من المعلومات‬ ‫البنك الدولي‬ ‫‪1818 H Street, NW‬‬ ‫‪Washington, D\.C\. 20433‬‬ ‫الﮭاتÙ?‪(202) 473-1000 :‬‬ ‫‪Web: http://www\.worldbank\.org/projects‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫الصÙ?حة ‪ 1‬من ‪14‬‬ ‫البنك الدولي‬ ‫مشروع إصالح قØاع المياه Ù?ي تونس )‪(P162165‬‬ ‫‪ 21‬أوت ‪2018‬‬ ‫‪ 1‬من ‪14‬‬
APPROVAL
P154219
Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) Report Number: ICRR0022182 1\. Project Data Project ID Project Name P154219 Deposit Insurance Strengthening Project Country Practice Area(Lead) Bulgaria Finance, Competitiveness and Innovation L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) IBRD-85960 31-Dec-2018 319,734,000\.00 Bank Approval Date Closing Date (Actual) 18-Mar-2016 31-Dec-2019 IBRD/IDA (USD) Grants (USD) Original Commitment 327,465,000\.00 0\.00 Revised Commitment 327,465,000\.00 0\.00 Actual 319,734,000\.00 0\.00 Prepared by Reviewed by ICR Review Coordinator Group Paul Holden John R\. Eriksson Christopher David Nelson IEGFP (Unit 3) 2\. Project Objectives and Components DEVOBJ_TBL a\. Objectives The Objective of the project (PDO) was to strengthen the financial and institutional capacity of the Borrower so as to enable it to meet its deposit insurance and bank resolution obligations\. (Financing Agreement, p\. 5)\. The ICR (p\. 8) notes that “the Borrower” refers to the Bulgarian Deposit Insurance Fund (BDIF)\. Page 1 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) The objective can be parsed into two key outcomes: ï‚ Outcome 1: Strengthen the financial capacity of the BDIF ï‚ Outcome 2: Strengthen the institutional capacity of the BDIF b\. Were the project objectives/key associated outcome targets revised during implementation? No c\. Will a split evaluation be undertaken? No d\. Components Initially the project specified only one component, which was “strengthening the financial and institutional capacity of the BDIF, (estimated total cost at appraisal US$327\.47 million equivalent; actual financed cost was US$319\.743 million)\. However, this was parsed into two components in the PAD to reflect the two outcomes of the PDO, (ICR,pp\.8-9[JE1] ) although in the Loan Agreement (p\. 5) it is shown as one component\. The first component aimed to strengthen the financial capacity of the BDIF in order to be able to have sufficient financial capability to meet disbursement requirements in the event of a further bank failure\. In 2014, a failure of the fourth largest bank in the country had drained the liquidity of the BDIF\. The failure necessitated the payout of EUR1\.9 billion (ICR p\. 6), with the assistance of a government loan\. The payout exceeded the EUR 1\.07 billion of accumulated reserves of the BDIF by a substantial margin, leaving it with only EUR232 million in reserves by March 2015, which would have been insufficient to cover payouts in the event of a further bank failure\. The component was to be achieved through meeting ten Disbursement Linked Indicators (DLIs) on which disbursements of the tranches of the loan were based\. The first group of these involved measures to increase the reserves of the BDIF to the equivalent of one percent of covered deposits\. The second group of DLIs involved the recovery of assets from the bankrupt bank in order to further augment reserves of the BDIF\. The third set of DLIs involved securing a backstop loan to be drawn in the event of a bank failure requiring additional disbursement of reserves\. This loan could not be from the World Bank since the objective of this set of DLIs was to broaden the sources of funding\. The second component aimed at strengthening the institutional capacity of the BDIF\. The measures to be taken were based on the recommendations of the International Association of Deposit Insurers (IADI), which focused on improving the ability of the BDIF to recognize and respond to potential banking sector problems through sharing information between the Bulgarian National Bank (BNB) and the BDIF\. In Page 2 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) addition, an Independent Asset Quality Review of the Commercial Banks in Bulgaria was being undertaken, the results of which were to be shared with the BDIF\. An additional sub-component was the improvement of the ability of the BDDIF to engage in deposit payouts and bank resolutions in the event of bank failure\. [JE1]The ICR is clear that the PAD split the PDO in two\. This is important since if It was only the ICR that did so, assessing the efficacy of achievement of each sub-PDO separately, rather than just the original PDO, could be questioned\. It is not clear in what document and when only the one PDO was cited\. Perhaps in the Financing Agreement (FA)? e\. Comments on Project Cost, Financing, Borrower Contribution, and Dates The total cost of the project at appraisal was estimated at EUR300 million ($327\.465 million equivalent)\. The actua amount disbursed was $319\.734 million, with the difference being accounted for by exchange rate fluctuations\. The was financed through World Bank Investment Project Financing\. Disbursements were as follows: ï‚ A EUR100 million advance payment plus EUR150 million on the achievement of five DLIs; ï‚ A further disbursement of EUR50 million during project implementation\. While there was no co-financing, the borrower also secured a loan of EUR300 million from the European Bank for Reconstruction and Development (EBRD)\. The borrower did not contribute to the financing of the project because of the liquidity crisis\. Dates: Relevant dates were; Approval, March 18, 2016; Loan effectiveness June 28, 2016; Original closing Decem 2018\. There was a level 2 restructuring on December 6, 2018 which extended the closing date to December 31, 20 when the actual closing occurred\. The restructuring also changed the results framework but did not change key ou targets\. Page 3 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) 3\. Relevance of Objectives Rationale PDOs were relevant for the World Bank Country Partnership Framework (CPF) for 2017-2022 under Area One, Strengthening Institutions for Sustainable Growth (CPF p\. 16), one of the three objectives of which is “improved resilience and stability of the financial sector”\. It goes on to add (p\. 18) “A pivotal dimension of the WBG support under this Objective is a financing instrument to the BDIF “ The PDOs remained relevant\. The 2019 Country Learning Review (p\. 1) states: “The main program areas of the CPF remain relevant…in the financial sector, additional support for institutional strengthening of the deposit insurance scheme”\. The contribution of the project supported strongly the compliance of the BDIF with the core principals of the IADI\. The relevance of objectives is rated “high”\. The banking system was in crisis and there was a substantial risk of loss of confidence in financial institutions, which could have resulted in a financial meltdown\. Rating Relevance TBL Rating High 4\. Achievement of Objectives (Efficacy) EFFICACY_TBL OBJECTIVE 1 Objective Strengthen the financial capacity of the BDIF Rationale The results chain for this objective involved strengthening the financial capacity of the BDIF through rebuilding its reserves, which had been completely depleted by the payouts associated with the failure of the KTB bank\. The rebuilding of reserves was to occur through: i\. The collection of premiums in 2016 and 2017 from the remaining commercial banks\. This had been the mechanism for funding the BDIF in the past, but premiums had not taken balance sheet risks of the banks into account\.; ii\. Going forward, premium payments would be adjusted for risk so that banks with riskier portfolios would pay additional amounts; iii\. The loan from the World Bank: Page 4 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) iv\. An additional loan of EUR300 million from the EBRD; v\. Recovery of assets from KTB, the failed bank\. Recovery of assets under item (v) was complicated by the fact that shareholders of KTB contested in court the withdrawal of the banking license\. Since assets could only be sold by the BDIF once the banking license was withdrawn, rebuilding reserves through this channel was delayed\. Initially, a requirement of the World Bank loan had been that asset recovery would lead to the BDIF having a reserves to deposit ratio of 1\.5 percent\. This was changed in the restructuring to one percent on the basis that the court case was outside the control of the BDIF\. This also changed the requirement of one of the DLIs regarding the recovery of assets from the bankrupt KTB Bank\. However, the ICR (p\. 13) notes that the case had been ongoing for more than two years and that the resources were “already in a KTB bankruptcy account at the BNB and could not be used for purposes other than the recovery of creditors”\. Furthermore, asset recovery from KTB was assisted by amendments to the Bank Bankruptcy Law (BBL) that were undertaken specifically for this purpose\. The rebuilding of the financial capability of BDIF was in accordance with the findings by the IADI that the “assessment recommends that the authorities should aim for expedited replenishment of the deposit insurance fund” (ICR p\. 9)\. The BDIF essentially had negative reserves since payouts had exceeded its accumulated reserves\. The total payout amounted to EUR1\.9 billion, compared with the accumulated reserves of the BDIF of EUR1\.07 billion, with the balance covered by the government loan\. This allowed for the reimbursement of 95 percent of insured deposits and 102,250 of insured depositors by the end of February 2015\. There was no evidence of malfeasance in the payouts to depositors\. The ceiling on the amount of each payout to KTB depositors was in accordance with the EU deposit insurance directive of EUR100,000\. There were also exclusions on payouts to shareholders (shareholders with more than five percent voting power, members of the bank management and supervisory board, directors, auditors, together with closely related parties, and sophisticated investors such as government institutions, municipalities, pension funds and insurers (Interview with the TTL)\. The outcome indicator for this PDO was that BDIF reserves reach the equivalent of one percent of covered deposits in the absence of bank failures compared with a baseline of 0\.75 at the end of December 2015 (ICR p\. 26)\. The original target had been 1\.5 percent\. The target was formally revised to one percent on December 17, 2018\. However, by the completion of the project, actual reserves amounted to the equivalent of 2\.16 percent\. The target was exceeded\. Page 5 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) The rating for this objective is “high” on the basis that not only did the rebuilding of reserves go ahead in a satisfactory manner in spite of the court case, but also that by completion of the project, reserves were double the target amount\. In addition, all protocols for payouts were observed\. Rating High OBJECTIVE 2 Objective Strengthen the Institutional Capacity of the BDIF Rationale The causal chain for this objective involved the following measures that were designed to strengthen the institutional capacity of the BDIF: i\. An updated information sharing agreement between BDIF and BNB on the financial status of commercial banks that would increase the amount of information available to the BDIF regarding the financial health of the institutions whose deposits it insured; ii\. BNB shared with BDIF the results of its Asset Quality Reviews of the commercial banks, which would have a similar effect as the previous measure; iii\. The BDIF conduct a survey of the public awareness of its role in order to build knowledge and confidence in the banking system; iv\. That the BDIF prepare a contingency plan that would be operationalized in the event of future bank failures so that it could act expediently in a time of crisis\. These measures were all put in place and plausibly relate to strengthening the institutional capacity of the BDIF\. Additional measures for institutional strengthening of the BDIF were put in place and monitored by the project team as part of ensuring the DLI conditions were met\. These contributed to institutional strengthening and included contingency planning, information sharing with the regulator and the collection of risk based premia as contributions to the BDIF (ICR, p\. 12)\. The outcome results indicator was that the BDIF perform “its legally mandated technical functions, including in any future bank failures in which its resources are utilized”\. The technical functions of the BDIF were Page 6 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) achieved compared with these not being in place at the outset of the project\. They were based on the recommendations of the IADI\. However, this outcome indicator also partly refers to future actions that did not take place within the life of the project\. The project team maintained (interview with the TTL) that “it is still possible to assess the improvement in institutional capacity based on the progress achieved in specific areas that required strengthening at the time of project preparation, according to the IADI assessment”\. The measures that were put in place strengthened the institutional capacity of the BDIF\. However, the outcome indicator chosen did not measure this\. Given these minor shortcomings, the rating for this objective is Substantial\. Rating Substantial OVERALL EFF TBL OBJ_TBL OVERALL EFFICACY Rationale The first outcome indicator was met and exceeded by the end of the project, so that in the event, the reduction of the reserve to deposit ratio that occurred as part of the restructuring was not needed\. With regard to the institutional strengthening of the BDIF, the measures required were all put in place by the end of the project, though the evidence base for institutional transformation is limited\. The second outcome indicator was achieved, except for that portion relating to future actions, which were impossible to achieve since they related to future bank failures, the occurrence of which were not possible to know\. Navigating these indicator issues makes it difficult to be certain of the institutions long term capacity to deal with future bank failures\. With a "High" rating for objective 1, strengthening the financial capacity of the BDIF and a "Substnatial" rating for strengthening the institutional capacity of the BDIF, the overall efficacy rating is Substantial\. Page 7 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) Overall Efficacy Rating Substantial 5\. Efficiency The ICR (p\. 17) indicates that economic rates of return (ERR) were not estimated as part of the analysis of project efficiency, since the nature of the project did not lend itself to such calculations\. Nevertheless, efficiency was based on a scenario analysis that compared what might have occurred if the BDIF had not received the World Bank loan\. The analysis identified the positive “chain effect” that consisted of: ï‚ Obtaining the EBRD loan that probably would not have been granted if the World Bank loan had not occurred; ï‚ Being able to repay the government loan, that carried a significantly higher interest rate than the World Bank loan\. The rebuilding of reserves, the restoration of confidence in the financial system, and the improvement in the regulatory structure occurred significantly faster as a result of the policy actions in the World Bank loan\. Efficiency is therefore rated substantial\. Efficiency Rating Substantial a\. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) 0 Appraisal 0  Not Applicable 0 ICR Estimate 0  Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated\. 6\. Outcome Page 8 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) With a high rating for relevance of objectives, a substantial rating for efficacy and a substantial rating for efficiency, the overall outcome rating is Satisfactory a\. Outcome Rating Satisfactory 7\. Risk to Development Outcome The greatest risk to the banking system of Bulgaria was that the project not go ahead\. With the fourth largest bank in the country having failed and the confidence in other banks in the financial sector weakening, there was a high degree of systemic risk that could have resulted in a more general banking collapse\. Furthermore, the PAD (p\. 6) points out that the failure of KTB exposed weaknesses in the supervisory framework of the BNB, further casting doubt on the ability of other banks to weather the storm that had begun with KTB’s failure\. The risk to achieving the development outcome was reduced not only by strengthening the BDIF but also by improving the overall regulatory structure of the financial system, including the cooperation between the BDIF and the BNB\. Nevertheless, increasing the equity portion of the balance sheets of the commercial banks would further reduce the risks to the system\. 8\. Assessment of Bank Performance a\. Quality-at-Entry The design of the project was sound against a background of the severe pressure on the financial system of Bulgaria\. There was ambiguity in some of the DLIs and the design of the project did not fully consider the possibility of delays in the recovery of assets from KTB bank\. Since the shareholders of KTB opposed the removal of the banking license, resolution was delayed\. Asset recovery could only occur once the banking license had been withdrawn\. The process was complicated and necessitated the issue being considered by a court system that was unfamiliar with bankruptcy issues\. This could possibly have been foreseen when the project was being designed, but it is difficult to envisage any changes in the outcome\. Apart from this issue, the project was well designed to assist the BDIF weather the storm through which it was going\. The project was not without risks, in particular arising from the possibility that the Bulgarian authorities would not have the ability and willingness to implement the necessary measures\. The inclusion of the DLIs ensured that disbursements would only take place once certain conditions had been Page 9 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) met\. This reduced risks by incentivizing the BDIF and the BNB to expedite the necessary reforms and upgrading of processes in order to ensure the timely disbursement of funds\. The soundness of the project prepared against a background that included the possibility of systemic meltdown as well as strong project design contributed to a satisfactory quality at entry Quality-at-Entry Rating Satisfactory b\. Quality of supervision The continuity of the World Bank team was a strength of the project\. It enhanced supervision and strengthened the working relationship with the client institutions, thereby contributing to the success of the project\. Although the BDIF had not had previous experience with similar projects (ICR p\. 23), this continuity built up a level of trust that resulted in ongoing communication and discussions between the BDIF and the project team\. The ICR points out (p\. 23) “The achievement of each DLI was verified by the BDIF and confirmed by the WB team and independent performance auditor\.” The ICR also points out that although technical assistance was not part of the project, the World Bank team worked closely with the BDIF to provide in-depth comments on documents prepared by this staff, particularly those related to the DLIs\. The ICR notes (p\. 23) that the BDIF placed substantial value on this support\. The close working relationship that developed between the Bank team and the two key institutions as a result of strong supervision contributed to the outcome\. All necessary steps were taken to ensure that the policy actions were implemented and the support of the Bank team was highly valued\. The quality of supervision is therefore rated highly satisfactory\. Quality of Supervision Rating Highly Satisfactory Overall Bank Performance Rating Satisfactory 9\. M&E Design, Implementation, & Utilization Page 10 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) a\. M&E Design The design of the M&E framework for the financial strengthening of the BDIF was in the main, clear\. The causal chain linking prior actions with outputs and the outcome was easily derived\. Since the project linked to disbursements to the achievement of the DLI indicators, which were in general clearly specified and unambiguous, the M&E framework provided a system of control that was relatively clear-cut and not open to alternative interpretations that could have led to conflict\. Furthermore, a verification process was put in place to independently certify that the DLI's had been achieved, which further reduced the potential for disagreement over what had been achieved\. With regard to the outcome indicator that measured the achievement of the institutional strengthening of the BDIF, the indicator referred not only to actions that had been achieved (that the BDIF perform its legally mandated technical functions) but also future actions (including in any future bank failures in which its resources are utilized)\. Having an indicator that related to future bank failures outside the time frame of the project essentially nullified its usefulness, especially since the policy actions were designed to limit further failure of banks\. Nevertheless, with respect to institutional strengthening, the project linked the recommendations of the IADI to the PDO, which again allowed for arm’s length criteria to be utilized\. b\. M&E Implementation Since the M&E framework related closely to the achievement of the DLI's, it was not difficult to ascertain the extent of progress against the PDO that related to the financial strengthening of the BDIF\. The ICR notes (P\.22) that for each DLI achieved, a notification letter was submitted by the BDIF\. In addition, progress reports were submitted that outlined achievements in the preceding period as well as plans for the next period\. These were then discussed as part of the supervision missions\. c\. M&E Utilization The ICR (p\. 22) states “The WB team had to confirm achievement of DLIs based on evidence provided by the BDIF as per the verification protocol, and the discussions during missions allowed the team to make the decision about extending the project closing date and revising one of the PDO indicators\.” Apart from the selection of an indicator that was of little use, as described above, the M&E framework made a substantial contribution to the success of the project\. M&E Quality Rating Substantial 10\. Other Issues Page 11 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) a\. Safeguards No environmental or social safeguards were triggered by the project b\. Fiduciary Compliance The ICR (p\. 22) notes that financial records and audit reports were inspected by a Financial Management Specialist on a regular basis and there were no findings of non-compliance\. c\. Unintended impacts (Positive or Negative) In order to speed up the recovery of assets from KTB, the BBL was amended, which strengthened the institutional framework for the financial system\. An unintended positive impact of the project was an improved bankruptcy framework\. d\. Other N/A 11\. Ratings Reason for Ratings ICR IEG Disagreements/Comment Outcome Satisfactory Satisfactory Bank Performance Satisfactory Satisfactory Quality of M&E Substantial Substantial Quality of ICR --- Substantial 12\. Lessons The ICR offers the following lessons with some modification of language by IEG: Results based financing, particularly when combined with an effective results framework that involves unambiguous success criteria can be a powerful instrument to achieve PDOs\. In Bulgaria, project design ensured that disbursements occurred upon achievement of clearly specified criteria that were independently verified\. Although funds were used to bolster the financial position of the Page 12 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) BDIF, they also resulted in the financial strengthening of the institution as well as enhancing its institutional capabilities\. This could be a valuable lesson for World Bank operations directed at supporting deposit insurance schemes\. In the design of projects in which disbursement depends on achieving DLIs, it is important to consider the implications of indicators, the achievement of which are beyond the direct control of the borrower\. In Bulgaria, the process of bankruptcy of KTB had to go through the courts, which led to delays in its liquidation and recovery of assets\. This is an issue that needs to be considered at the preparation stage of the project\. IEG offers an additional lesson: The importance of continuity in project teams is often overlooked\. Continuity ensures that confidence is engendered and that unforeseen issues that inevitably arise during the course of a project can be resolved in a timely manner\. In Bulgaria, continuity of the project team contributed substantially to the successful completion of the project\. 13\. Assessment Recommended? --- 14\. Comments on Quality of ICR The ICR is well written and describes the issues faced by the World Bank and the BDIF clearly\. It describes well the challenges facing the BDIF as the implications of the failure of KTB Bank spread through the financial system\. Its description of the DLIs is clear and notes how these contributed to the achievement of the PDOs\. More discussion of the institutional issues would have been welcome, but overall it is a sound document\. a\. Quality of ICR Rating Substantial Page 13 of 14 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Deposit Insurance Strengthening Project (P154219) Page 14 of 14
APPROVAL
P000340
Document of The World Bank FOR OFFICIAL USE ONLY Report No\. 6808 PROJECT COMPLETION REPORT CAMEROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT (CREDIT 776-CM) May 29, 1987 Western Africa Projects Department Agriculture D This document has a restricted disiribution and may be used by recipients only in the performance of their official duties\. Its contents may not otherwise be disclosed without World Bank authorization\. CA}IEROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT CURRENCY EQUIVALENTS US $1: At Initiation CFAF 245 At Completion CFAF 350 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AGRRD World Bank Rural Development Division CFAF Westafrican Franc Zone Currency Unit CODES Branch Committee (Comite de Succursale) CODEVI Village Development Committee (Comitt6 de Dgveloppement Villageois) COGEST Management Committee (Comig de Gestion) DEP Studies and Planning Department (MINAGRI) EPL Local Progress Enterprise (Entreprise de Progres Local) ERAP Inputs Supply Center (Entreprise Regionale d'Approvisionnement des Paysans) FNFP National Fund for Forestry and Fisheries (Fonds National Forestier et Piscicole) FONADER National Fund for Rural Development (Fonds National de Developpement Rural) IITA International Institute for Tropical Agriculture IPD Pan-African Institute for Development (Institut Pan-Africain de Developpement) MINAGRI Ministry of Agriculture ONAREST National Research Organization (Office National da la Recherche Scientifique et Technique) PMB Produce Marketing Board (Office National pour la Commercialisation ues Produits de Base - ONCPB) PROVIV Commercial Food Crop '\.arketing Organization SODECAO Cocoa Development Society (Socigtg de Dgveloppement du Cacao) USAID US Agency for International Development ZAPI Integrated Priority Action Areas (Zones d'Actions Prioritaires Integr6es) Fiscal Year (Government and ZAPI): July 1 to June 30 MOR OMCIAL US ONLY THE WORLD BANK Washtngton\. D\.C\. 20433 U\.S\.A\. Office of DiecIt\.ewtaI Opetton t atuarnf May 29, 1987 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Cameroon Zapi Integrated Rural Development Pro1ect (Credit 776-CM) Attached, for information, is a copy of a report entitled "Project Completion Report on Cameroon Zapi Integrated Rural Development Project (Credit 776-CM)" prepared by Western Africa Regional Office\. Further evaluation of this project by the Operations Evaluation Department has not been made\. Attachment Ram K\. Chopra for Yves Rovani This document has a rstricted distributon and may be usd by rcipients only in te performance of their official duties\. Its contents may not otherwe be diclsed without World ank autborutlon\. CAMROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT CREDIT 776-CM PROJECT COMPLETION REPORT Table of Contents Page No\. BAsrc DATA SHEET PREFACE ii EVALUATION SUMMARY ±1± I\. INTRODUCTION I II\. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL 3 III\. PROJECT IMPLEMENTATION 5 IV\. PROJECT PERFORMANCE 13 V\. PROJECT IMPACT 21 VI\. FINANCIAL PERFORMANCE AND ECONOMIC RE-EVALUATION 23 VII\. INSTITUTIONAL DEVELOPMENT 26 VIII\. BANK AND BORROWER PERFORMANCE 29 IX\. CONCLUSIONS AND PROPOSITIONS 31 ANNEXS HAP IBRD 12998R CAMEROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT CREDIT 776-CM PROJECT COMPLETION REPORT Preface The following is a Project Completion Report (PCR) of one of three rural development projects financed by the Bank in Cameroon in 1978\. Two other projects were identified at the same time as this project: (i) the Rural Development Fund Project (Credit 723-CM) which was audited in 1986 (Report No\. 6282 dated June 17, 1986); and (ii) the Western Highlands Project (Credit 784-CM) which was completed in 1984\. The ZAPI Integrated Rural Development Project (Credit 776-CM) was appraised in March 1977 and was approved on March 7, 1978\. The credit became effective on October 4* 1978 and amounted to US$8\.5 million compared with an estimated overall project cost of US$12\.2 million equivalent, of which the foreign exchange component amounted to US$4\.9 million\. The project's closing date was extended from June 30 to December 31, 1984\. The Government of Cameroon was the Borrower while the ultimate recipient of the credit was the development company Integrated Priority Action Areas (East ZAPI)\. Final disbursement reached 92% of the total credit amount and the remaining US$0\.7 million was cancelled\. The PCR was originally prepared by the Government with the assistance of consultants\. The Western Africa Regional Office finalized the attached PCR based on a review of the appraisal report (No\. 1737a-CM) dated February 17, 1978, the President's Report (No\. P-2190-rC') dated February 22, 1978, the Credit Agreement dated April 17, 1978, project files, and interviews witb Bank staff\. A completion mission visited the country in March 1986\. A draft PCR was sent to the Borrower on April 1, 1987, for comments\. Comments received from the Borrower are attached as Annex 10\. This project has not been subjected to an audit by OED\. - Ii - ZAP1 nUERY RAL DREPT PROJ CRD? 776-01 PROJECT COOKLRMTON REPORT BASIC DATA SUIT KEY PROJECT DATA Appraisal Actual or Actual as 2 of Estimsta Estimated Actual App raI 3s1 1aapI/ Project Costs (US$ million) 12\.2 12\.8 1OO Credit Amount (US$ million) 8\.5 7\.8 92 (US$0\.7 a cancelied Date Board Approval 3/07/78 - Date Effectiveness 10/04/78 - Date Physical Components Completed: 12/31/83 06130/85 Proportion then completed 100S 302 30 Closing Date 06/30/84 12/31/84 Institutional Performance Good Poor Agronomic Performance Good Poor Nuober of Direct Beneficiaries 85,000 CUMULATIVE DISBURSEMENTS FY79 FY80 FY81 PY82 m3 PYSA FY85 Appraisal Estimate (USS million) 1\.0 4\.9 6\.1 7\.3 8\.3 8\.5 8\.5 Actual (US$ million) 0\.2 2\.9 4\.5 5\.9 6\.1 6\.1 7\.8 Actual as 2 of Esttiate 20 59 73 81 74 72 92 Date of Final Disbursement 12/16/85 MISSION DATA 41 No\. of fandays Specializatlons Perf\. 3/ Types of mission Date Persons in Field Represented 1/ Ratina 2/ Treai Problems (a-7fyr\. Ident\./Prepart4on 4/76/ Pra-Appraisal I 11/76 - - - - - - Pre-Apprala l II 2/77 - _ _ _ _ _ AppraieAl 3/77 8 25 - - - - Post-Appraisal 9/77 3 18 ,f,c - - - Supervision 1 1/79 4 15 a,o\.f,a 2 1 FH Supervision 2 6/79 1 18 a 2 2 in Supervision 3 6/80 4 15 a,a,a,f 2 1 tqt Supervision 4 11/80 3 13 ps,af 2 2 FP Supervision 5 4/81 4 17 p\.a\.a,Soeio 2 1 FM Supervision 6 10/81 3 13 p\.a,Div\. Ch\. 2 1 FM Supervision 7 5/82 2 18 poo 2 3 FKT Supervision 8 2/83 1 15 a 3 3 FMK Supervision 9 10/83 2 13 a 3 2 ENT Supervision 10 6/84 3 9 *,eof 3 1 Pt Supervision 11 t1/84 2 5 a,s 3 1 FT Completion 5/85 1 4 f - - - Completion 3/86 3 8 b - - ena EPn Ela E- E3M Eau ESm ElM El ElM Elm mu \.,#* _ 88\.1 88\.0 9\.1 Aepmi_i 7$\.6 29\.7 104\.5 Nesetlatia 5at18 18\.1 8\.7 \.e6 2Z\.6 61\.4 36\.5 12\.2 21\.C 7\.2 12\.5 20\.5 ouX 1~~ 9 1\. \. I \. t e\. TOAl JS\.St 135\.8 2\.6 36\.6 28\.6 91\.4 U\.s 12\.8 21\.6 7\.2 12\.6 496\.5 OtMER PROJECT DATA Borrower Government of Cameroon Executing Agency Zapi East Fiscal Year July 1 to June 30 Nate of Currency FCFA Currency Excbange Rate: Appraisal Year Average 245 FCFA * US$1\.0 Intervening Years Average 329 FPFA * US$L\.0 Completion Year Average 380 KCFA * US$1\.0 Preceding Project None Pollow-on Project None l/1 a * agrticulturist; b * agricultural economlst; c a financial analyst; d - economist; e * rural enginaer; f - agronomist\. 2/ 1 - problem-free or minor problem\.; 2 m oderate problems and 3 - major problems\. 3/ 1 - improving; 2 * stationary; and 3 w deteriorating\. / P * financia,; M managerial; T - tachnical; P * political\. - iii - CAMEROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT CREDIT 776-CM PROJECT tOMPLETION REPORT Evaluation Summary Introduction The project was designed to build upon an approach to rural development in the less populated areas of Cameroon which had been initiated on a pilot scale in the late 19609\. The "Zones d'Actions Prioritaires Integrees" (ZAPIs) were planned as non-profit farmers organizations responsible in specified zones for all activities necessary to promote overall commercialized development including organizing credit, inputs, training and marketing\. As such, the project was in line with two major elements of the Cameroonian rural development strategy:_ (a) decentralization of development activities to incorporate local self-governing organizations where feasible; and (b) the expansion of export crops in harmony with improving food crop production\. Objectives The project was designed to extend ZAPI activities into five priority zones of the Eastern Province with the objective of improving the production and marketing of cocoa, robusta coffee and food crops, and of diversifying its operations with the development of social services\. The project was to reorganize and expand extension services, develop an applied research program on food crops and a crop protection service, reorganize ZAPI's management structure, expand staff training, upgrade and expand coffee processing plants and transport infrastructure, improve commercial management, and construct rural water points and health centers\. Project operations involved coordinating the provincial services of three ministries; feeder roads were to be constructed under a parallel project (1494-CM)\. Total project costs were estimated at US$15\.0 million\. The IDA credit was for US$8\.5 million\. Implementation Experience The project ran into problems from the outset\. An objective of the project had been to maintain ZAPI as an independent entity and to provide funds to expand its activities and improve its efficiency, and, thereby, to enable it to eventually be able to support the expanded program from its own cash flow\. However, the development of functions extraneous to its primary responsibilities, and a rapid doubling of staff overstretched the already rather weak management, and controls - iv - deteriorated\. The abilities of the different provincial services to support project actions varied considerably\. Furthermore, ZAPI's financial position had deteriorated before the start of the project, and the initial infusion of Government funds was used to pay off debt already incurred\. Because of the cash flow problem, the construction program was delayed and subsequently a significant part, which was considered least essential, was eliminated\. The program for modetnizing coffee processing, and expenditures for strengthening ZAPI operations were un'ertaken as programmed, although with delayed timing\. Actual disbursements against the credit of US$8\.5 millon were US$7\.8 million covering 522 of project costs\. The final disbursement was made in December 1985, and the balance of US$700\.000 was cancelled\. Almost 75Z of the amount disbursed was for vehicles, equipment, and operating costs\. Results A formal re-estimation of the economic rate of return was not attempted because of lack of data, but it is clear that it would be substantially lower than the 25% calculated at appraisal\. While coffee production reached appraisal estimates, cocoa production has only increased slightly and, because of delayed installation, the output of the coffee factory and quality levels have been below projections\. Food crop _ production is uncertain\. At the same time, project costs were 25% above appraisal estimates\. Long-term benefits from the project will, however, be realized from (a) nurseries which supply improved planting material; (b) coffee and coffee plantings which would have not been undertaken without the project; (c) the improved food crop varieties which were identified; and (d) the improvements in coffee quality and marketing procedures which are slowly being realized\. However, ZAPI has not been strengthened overall as an institution and, in fact, became unwieldy\. The additional staff have not been moulded into an effective organization, especially iu extension, and administration and financial controls remain weak\. Sustainability ZAPI is not now financially self-sustaining and shows no prospect of generating sufficient funds to support the organization developed under the project\. Findings and Lessons In common with many other area-based projects, this was too complex for the modest and young organization which was called upon to implement it\. Consequently, it was overwhelmed\. The premises of the project that firstly the major constraint to agricultural development in the province was farmers' lack of knowledge of available techniques and that, secondly, this deficiency could be made up by adding a field staff to disseminate this knowledge onto a nascent commercially-oriented organiza- tion dealing with farmers, were shown not to be valid\. An approach which may have yielded better results would have been: (a) to concentrate more directly on improving the efficiency of commercial practices and operations of ZAPI which might have ensured its viability; and (b) to have concentrated on pilot agricultural productOon operations and, thus, slowly expanded the organization on the basis of proven activities\. In retrospect, action to reduce the complexity of the project and sharpen its focus during its early stages when the problems were identified, might have had a major positive impact on the subsequent performance\. CAMEROON ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT (Credit 776-CM) I\. INTRODUCTION Bank Group Lending 1\.01 The project was the Bank Group's twelfth lending operation for agriculture and the first area development project in Cameroon\. It fol- lowed six tree crop projects (oil palm and rubber - totalling US$93\.6 million), specialiged projects, for: rice (two totalling US$5\.7 million), livestock (US$29\.1 million), and cocoa (US$6\.5 million), and a rural development fund project (US$7\.0 million)\. The Agricultural Sector 1\.02 Agriculture provides a livelihood for about 75% of Cameroon's population and, at appraisal in 1977, it contributed 35% to GDP and 70% of the value of total exports, principally as cocoa, coffee and cotton\. About 90% of agricultural production originates from the traditional smallholder sector (including coffee and cocoa production), and 10% from, mainly state owned, oil palm and rubber plantations\. 1\.03 Cocoa and coffee are the principal smallholder cash crops in Cameroon, each producing exports of about 100,000 tons per year from an estimated total production area of 600,000 ha\. Low average yields of about 250 kg/ha from cocoa and 250 kg to 400 kg/ha from Arabica and Robusta coffee reflect ageing plantations, inadequate cultivation and poor treat- ment against pests and diseases (capsid attack and Black Pod disease on cocoa and scolytes attack on Robusta coffee) set in a context of unattrac- tive producer price incentives\. 1\.02 Until the mid 1970s actions for improving food crop production were largely overshadowed by the emphasis on export crops\. Cameroon is self-sufficient in food, relying on traditional staple crops of roots (cassava, yams etc\.,), cereals (maize, sorghum and millet) and vegetables, occasionally supplemented with livestock products\. In the mid 1970s, however, the Government started actions to improve food crop production, specifically to ensure adequate supplies for the growing urban population\. 1\.05 Production inputs, which were about 50% subsidised, were generally supplied by the provincial Ministry of Agriculture (MINAGRI) delegations but frequently poorly timed and inadequate in quantities\. The MINAGRI delegation in Eastern Province also organized field extension and crop protection services\. Primary marketing for cocoa and coffee was generally the responsibility of farmer cooperatives while licenced traders were mainly responsible for buying, bulking and transporting for exportation by the Produce Marketing Board (PMB)\. -2- Project Origin 1\.06 The "Zones d'Actions Prioritaires Integrees" (ZAPIs) were initi- ated in 1966 under the second five-year plan\. They were planned as non-profit farmers' organizations responsible in specified areas (zones) for all activities necessary to promote overall commercialized 4qvelopment, including animating the population, as well as organizing credit, inputs supply, training, and produce marketing\. The ZAPI movement commenced with developments in five zones in the Center-South region in 1966\. "ZAPI de l'Est" (ZAPI) is a development company which was created by Presidential Dectee in 1972 under MINAGRI supervision, with the major objective of progressively developing a peasant-directed cooperative type structure\. It was, therefore, considered an appropriate institution for implementing a development project for the Eastern Province\. 1\.07 The basic organizational focus of the ZAPIs was the village, typically representing a group of about 100 farmers who nominated a leader as their contact farmer and created their own representative committee (CODEVI)\. Groups of about 12 villages (1000 farmers) coordinated them- selves into "surccursales" (approximately sector level) which each elected a committee (CODES)\. Some three surccursales combined to create a central organizational unit (at zone/department level), called the "enterprise du Progres Local-EPL" again with an elected management committee (COGEST)\. The COGEST formed the main point of contact for ZAPI (and, therefore, the project) management\. The ZAPI Director General organized and coordinated the day to day operation of ZAPI services in line with plans and budgets approved by the surccursales, provided the central focus for production services, including inputs supply centers (Enterprise Regionale d'Approvisionnement Paysans-ERAP), training and extension services\. 1\.08 The ZAPIs were attached to the MINAGRI from whom they contracted production services through the provincial delegation and obtained subsidy funds for inputs (at uniform levels with other farmers in the country)\. Farmers paid an init\.ial subscription (CFAF 1,000) on joining ZAPI, thereby creating a capital base\. This was complemented by annual receipts from fees charged for inputs and marketing services; these were intended to cover the administrative costs of the ZAPI\. 1\.09 The project represented a step in an evolutionary strategy from central towards regionally controlled development of the agriculture sector\. The project embodied two key strategies underlying the Cameroon Government's national development plans: (i) the decentralization of sectoral developments to rural areas, incorporating local self-governing organizations and restricting the demand for fiscal support from Govern- ment; and (ii) the expansion of export crops in harmony with improving food crop production\. The project was one of a set of rural development efforts in Africa analysed as part of a research project in the early 19709 which led to the Bank publication "The Design of Rural Development" (Uma Lele 1975)\. It was designed to test new approaches to the productive -3- development of the poorest rural populations in line with the special focus in Bank lending followinh the 1973 Annual Meeting\. This project was, therefore, of particular interest for the Bank\. II, PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL 2\.01 Identification and Preparation\. In early 1976, an AGRRD/RMWA reconnaissance mission identified Eastern Cameroon as a relatively impoverished area of the country (per capita income estimated at US$85, versus about US$250 per annum for the entire country)\. Eastern Province, one of the most isolated area in Cameroon, had been seriously neglected in previous development efforts and laeked most amenities (roads, schools, hospitals and water supply)\. As a result, cor-munications were difficult, the rate of illiteracy was high and health standards were poor\. Agriculture had been neglected and the population was not dynamic\. 2\.02 An AGRRD mission in April 1976 identified ZAPI as an appropriate development vehicle through which improved small farmer support services could be delivered\. Preparation of the ZAPI Eat Integrated Rural Development Project (the project) was coordinated by the ZAPI Est Director General during 1976 under the auspices of the Planning Department of MINAGRI (DEP) which organized a technical commission to decide on the components\. The Bank closely supervised the preparation process, including hiring specialist consultants (using PPF) to advise on coffee processing/ economics, fisheries, health, rural water supply, and feeder road aspects\. An inter-ministerial orientation committee was esLablished to ensure coordination between sectors\. The Bank also organized a socio-economic study covering the proposed project area\. Two pre-appraisal missions by the Bank (11/76 and 2/77) helped Government to finalize the preparation report\. 2\.03 Appraisal and Negotiations\. A five-man mission completed field appraisal work in March 1977 and a post appraisal mission visited Cameroon in September 1977 to confirm the project's organizational and applied research aspects and to prepare for negotiations\. Negotiations were held in Washington at the end of January 1978 and finalized on Febritary 10, 1978 following agreement of a Government's request to increase t\.e total credit by US$500,000 (to US$8\.5 million) to finance costs for additional technical assistance personnel\. The credit was approved by the Board on March 28, 1978 and it became effective on October 10, 1978\. 2\.04 Bwnk Supervision\. The project was one of a series of integrated rural development projects in all regions which were supported by IDA in early/mid 1970s\. These projects had three common features; they were: (i) targeted at the poorest and most neglected populations; (ii) involved a range of productive and social investment choices for the target popula- tion; and (iii) centred on self-help community management and autonomous operation\. Because of the project's innovative objectives, responsibility - 4 - for its preparation and initiation was conferred on the Rural Development Division (AGRRD) of the Central Projects Staff (CPS)\. This continued from 1976 until 1982 when supervision of the ongoing project was taken over by WAP Department\. Project Description 2\.05 The project was designed to consolidate and extend the ZAPI activities in five priority zones of the Province with the objective of improving the production and marketing of cocoa, Robusta coffee, and food crops and diversifying its operations with the development of social services\. The Project's objectives were centred on balanced crop production, the organization, processing and marketing of cocoa and Robusta coffee, and social developments\. It was expected to directly beunefit 13,200 farm families whose average net farm incomes were to increase from US$490 to US$720 per year\. The social developments were expected to benefit some 85,000 people\. The Agrinultural Production objectives for existing crops involved diffusing improved production technology through: reorganized agricultural training, extension, and inputs services (including crop protection service for caysid control in cocoa; and cocoa/coffee seedling nurseries)\. To help counter the dominance of export crops production, specific provisions were included for: (i) initiating bottomlands rice production; (ii) developing applied research programs to improve production, storage and processing of food crops grown under traditional systems; (iii) introducing fish culture; and (iv) providing rural credit\. (a) The Institution Development objectives involved: (i) reorganizing ZAPI's management structure to manage an expanded action program; (ii) enlarging ZAPI's subscribed capital and constructing offices and other facilities; (iii) providing training opportunities for ZAPI staff; (iv) strengthening and transforming peasant group structures into farmer-run organizations and associations; and (v) establishing a monitoring and evaluation system\. (b) The Processing and Marketing provisions involved: (i) upgrading and expanding the coffee processing plants; (ii) improving the transportation and storage infrastructure; (iii) increasing the efficiency of ZAPI's commercial management; (iv) stimulating commercial operations for supply and distribution (farm inputs consumer goods and pharmaceutical products)\. (c) The Socio-Economic Developments included: (i) improving access to primary health facilities; and (ii) constructing rural water points\. 2\.06 Particular features concerning these services were: (i) the signing of conventions with existing government agencies for implementing components and providing services which were exogenous to ZAPI's normal operations: (ii) the accent on actions for women and young farmers; and (iii) the emphasis on detailed monitoring and evaluation to guide the ZAPI management and analyse the project impact\. 2\.07 The added need to improve the feeder roads system was expected to be met by the "Feeder Roads Project" (Loan 1494 CM)\. This project was approved in November 1977, with the intention of enabling the Department of Roads of the Ministry of Equipment (MINEQ) to build, develop, upgrade and maintain some 540 km of roads in the project zone\. The project was expect- ed to build and maintain about 280 km of roads serving the plantations through a small roads unit which was to be set up with financing from the Feeder Roads Project\. III\. PROJECT IMPLEMENTATION Effectiveness and Start-up 3\.01 The credit became effective or\. 10/04/78, seven months after signature\. By July 1978, the initial developments were encouraging: Government provided FCFA 470 millions for ZAPI Est's capital increase (75% higher and 2 months earlier than stipulated in the credit agreement)\. Conventions were promptly signed with ONAREST (research component), Ministry of Health, and the FNFP (filsheries component) anri staff were transferred to the project\. The Administrative Council was established with the Governor of Eastern Province as president\. Consultants (Planning Assistance) were hired to help initiate the work programs and budgets\. 3\.02 Conversely, unqualified personnel at field and office levels and logistical problems for credit processing by ZAPI resulted in procurement delays and a slow start-up for the extension and training components\. Lack of collaboration within the Bank and between the Bank and the Government agencies concerned delayed the procurement of road building machinery and building of the training center\. Better training and closer attention by Bank supervision missions could have reduced these delays\. 3\.03 Two fundamental problems became apparent at project start-up and persisted throughout the implementation period\. The first concerned the calibre and rapid expansion in numbers of ZAPI staff, where the incumbent personnel, who were technically experienced but lacked formal training, were superseded by younger graduates with limited practical experience and less knowledge or commitment to the ZAPI philosophy and for whom status and material gains predominated\. At field level, the number of (men and women) extension workers was increased to meet project objectives\. As a result, within a year of start-up the ZAPI staff increased from 200 to 483, in principle with the approval of ZAPI management, the Government and IDA\. The result was that a relatively small and united team was replaced by a -6- large "community" in which strains and rivalries surfaced between different groups and many of the new recruits could not relate to the farmers or their aspirations\. 3\.04 The second fundamental problem concerned ZAPI's cash flow\. At appraisal it was expected to avoid financing problems by: (i) the capital increase for ZAPI; (ii) the creation of a special account with an initial deposit of FCFA 150 milliom$, which would be regularly replenished; and (iii) the advance payment of subsidies\. Although Government respected its initial obligations, both the capital increase and the initial deposit served to pay-off outstanding debts\. Therefore, there was no operating fund to meet the initial demands for project expenditures, a problem which worsened over time and was exacerbated by inexperienced project management (para 4\.04) and the start-up of ZAPI's marketing services\. Had ZAPI's capital and financial situation been more thoroughly analysed at appraisal, the impact of this problem could have been significantly lessened\. Revision 3\.05 As early as the second supervision mission, the project manage- ment proposed some modifications, including: abandoning of the planned extension to other zones and shortening the duration of the project from five to four years in order to take account of the depreciation of the dollar and domestic inflation in Cameroon\. Although the former was accepted, the shortening of the project implementation period was declined by the Bank at that time, because it was considered too early in the operations\. Subsequent progress showed that project forshortening could not have been justified by lack of funds\. Nonetheless, fundamental changes ma\.de were in the construction program in PYI, with the elimination of a uumber of buildings that were considered nonessential in the light of the financial crisis with which ZAPI was faced (the ZAPI headquarters in Bertoua and the Training Center were not built, the number of storaga sheds and pro-pharmacies and health centers was reduced and the planned buildings were not provided for research nor for the 24 technical support centers)\. 3\.06 As far as the individual components are concerned, the swamp rice program started late and was abandoned, ostensibly because of the lack of farmer interest\. Fish culture was much reduced due to reorganization of the Ministry of Livestock\. Although ZAPI was supposed to take over responsibility for pest and disease control in the project area, it decided to leave it in the hands of the crop protection service of the provincial delegation of MINAGRI\. 3\.07 Accounting and financial control problems existed from the outset\. Eventually, faced with project management's inability to submit reliable accounting statements at the proper time, the Bank suspended disbursements from May 1983\. This continued until restricted disbursements resumed early in 1985 specifically for: (i) completing the audit of the accounts up to 1983; (ii) hiring an expatriate Administrative and Financial -7- Director for ZAPI (9/1984 to 12/1985); and (iii) employing consultants for preparation of the completion report and for reviewing technical operations\. On termination of the project (final disbursement 12/16/85) $700,000 of credit (audited) was cancelled\. Implementation Schedule 3\.08 According to the initial supervision reports and annual reports submitted by ZAPI, the development plan started well, despite some delays\. However, the situation rapidly deteriorated mainly due to poor coordination, cash flow problems, deficits on commercial operations and excessively high expenditures, and this led to a state of crisis and a change of general manager in September 1982\. The new General Manager reduced the project objectives and made his top priority the improvement in commercial operations\. To some extent, this objective has been achieved and marketing operations now appear to be profitable, although it is not possible to confirm this due to the present state of the accounts\. 3\.09 Regarding the project components directly administered by ZAPI, the coffee processing program (construction of the Belabo plant and modernization of the other plants) was implemented between 1980 and 1982\. The expenditures for vehicles, equipment, technical assistance, training and monitoring and evaluation were also completed, but without any lasting impact on ZAPI\. The construction program was cu-rtailed as indicated above\. 3\.10 With regard to the programs sub-contracted by ZAPI, it should be noted that the applied research program (ONAREST/IITA) was carried out on schedule and well done despite the decision against constructing the agreed facilities\. Conversely, the health and family fish ponds programs en- countered delays and were only partially completed\. The feeder roads component, financed under Loan 1494 CM, only came into operation in mid- 1980\. However, there was insufficient specification in mvehinery procurement, and the road construction equipment subsequently proved to be too light for the tropical forest conditions in Eastern Province and, therefore, the project was ineffective\. 3\.11 Although the major problems (especially the cash flow shortages, poor accounting methods, the losses on commercial operations, ZAPI's dependence on the Department of Agriculture for pest and disease control measures, and the delays in the feeder roads program) had become evident by 1979, no effective remedial measures were implemented, despite: (i) the presence of technical assistance (particularly on the accounting and finance sides); (ii) the completion of additional marketing studies; (iii) the establishment of a monitoring and evaluation studies; and (iv) the fielding of regular and intensive IDA supervision missions and many meetings with the Government\. By and large, the lack of follow-through from these provisions resulted from the inexperience of the technical assistance team, ZAPI management's inability to implement changes, and on -8- excess of "benefit of the doubt" in Bank and central Government\. The deteriorating situation was evident and decisive reorganizational action was needed\. Reporting 3\.12 The monitoring and evaluation system provided for regular reports at all levels (daily, weekly, monthly, quarterly, twice-yearly and yearly), which was probably, unnecessarily ambitious\. Summaries of the various data are presented in the annual project reports prepared by the monitoring and evaluation unit\. This practice had already been followed by ZAPI Est for several years prior to project initiation and, by and large, the project adopted the same indicators and the same method of presentation (including the hiring of specialists)\. The major shortcoming of these reports was they included only technical indicators and no financial analysis\. The latter (generally late and often of doubtful reliability) were provided by the administrative and financial management\. Procurement 3\.13 There are no detailed procurement records because of poor accounting and financial controls and the dearth of associated progress reports\. Supervision and disbursement records indicate that procurement -s, generally in compliance with the credit agreement, although, bulking of oiaers and ICB for contracts exceeding US$100,000 were not rigorously respected\. However, acceptable deviations resulted from: (a) Preference being given to local suppliers who could provide spare parts and after-sales service (the cost of keeping a defective piece of equipment idle usually exceeds any savings on the purchase price); and (b) preference was given to splitting between two or more suppliers first to avoid creating a monopoly vis-a-vis the project, and second so as not to overload the after-sales service capacity of any one supplier\. If the cost of local purchases of imported goods is included, foreign purchases ran slightly above the appraisal estimates\. 3\.14 Project Management complained of financial problems and delays In project implementation due to the reimbursement procedures\. However, this would have been minimized by streamlining and by more extensive use of the direct payment procedure\. Moreover, the financial problems raised seem to be due more to the fact that the proposed revolving fund was diverted to cover commercial losses rather than to provide working capital\. Total Project Cost and Financing Resources 3\.15 The design of the accounting system used by ZAPI did not differentiate between costs related to commercial operations (\.including share of overhead), costs associated with activities envisaged under the project, and other possible costs (other projects or specific subsidies)\. Furthermore, the cost accounting system does not provide data in a usable from, e\.g\. costs of commercial operations by reference to the PMB 1/ scale and by activity center, project costs by reference to the classification system used in the appraisal report\. 3\.16 An audit report on the ZAPI accounts up to June 30, 1983 did not present detailed analyses of all annual costs and commercial receipts (although this analysis is now being made)\. The analysis of project costs given in the 1983 auditors' financial report refers only to the reimbursement requests sent to IDA, which account for less than half of the financing assistance received by ZAPI during the project implementation period\. In addition, it was not possible to determine whether this analysis was based on the total costs submitted for reimbursement or on the share reimbursed by IDA\. Therefore, it has only been possible to estimate the final cumulative cost and to compare it with the estimates given in the appraisal report\. (Tables 1-3 in Annex 3 summarise the estimates of project financial operations)\. The more detailed analyses will be made as part of the final audit of project accounts for 1983/84 and 1984/85\. 3\.17 Project costs totaled US$15\.0 million equivalent, including the following estimated relative contributions from Government and IDA sources up to 1984: Original Actual Allocation Disbursement US$000 US$'o00 Government of Cameroon 3,730\.0 7,200\.0 IDA 8,500\.0 7,799\.3 Total 1230\.0 142 This summary, which excludes Government's contributions to ameliorate the ZAPI Est debts accummulated prior to project initiation in 1978, indicates 1/ The PMB (Produce Marketing Board - Office Nationale pour la Commercialisation des Produits de Base ONCPB) is responsible for coordinating and organizing the purchase and exportation of most export crops: coffee, cocoa, cotton, palm oil, and groundnuts\. - 10 - that between 1978 and 1984, the Government's contributions to ZAPI opera- tions (US$7\.2 million equivalent) was nearly double the predictions at appraisal\. 3\.18 The following table compares actual credit disbursements with credit funds allocated in the appraisal budget: Orghial Actal Actual to Allocatitm x of Total D2xrmmt X of Total Alloatim Cateoy/kI ptlqn M$'000 Allcation US$ 00( DdisWrs u UB$'000 1\. Civil 4Wbrks 1,400\.0 16 335\.1 4 (1,064\.9) 2\. Vedcles and RpAp\. 2,640\.0 31 2,868\.1 37 228\.1 3\. Technical Assist\. and Trahn*g 1,610\.0 19 1,698\.1 21 88\.1 4\. Operating Costs 2,820\.0 33 2,868\.0 37 48\.0 5\. Refund of Proj\. Facility 30\.0 1 30\.0 1 - Total Disburs ent 8,500\.0 10D 7,799\.3 100 (700\.7) Credit Fund Cancelled (12/16/85) 700\.7 Total Credit Fund 8500\.0 This analysis indicates that: i) the severe cut-back on construction proposals was unnecessary: ii) expenditures on vehicle/equipment purchase and operating costs exceeded the appraisal budget by approximately US$276,000; and iii) the technical assistance and training expenditures also exceeded provisions\. 3\.19 The project cost was approximately 30% above the original esti- mate\. The cost overrun was financed by Government's fiscal budget\. However, lack of rigorous financial control on the part of the Government and of monitoring of the use of its financial resources (either directly or through audited annual accounts or status reports) boosted unproductive costs\. To avoid this problem in future, it will be necessary to introduce precise methods to ensure stricter monitoring of the use of financial resources granted by MINAGRI to the projects and organizations under its supervision\. This need is being tackled within the DEP as part of the agriculture component of the Second Technical Cooperation Project(Cr\. 1168-CM) by the appointment of a financial analysis specialist\. - 11 - Performance of Consultants, Suppliers and the Borrower A\. Consultants 3\.20 The Project Appraitsal provided for about seren man years of technical assistance; including 36 months for an admiListrative and financial director and 48 months designated for short-term consultancies on technical and organization aspects\. The Government retained a group of consultants (Planning Assistance from Utah) to coordinate this work\. Their prime objective was to help improve the organization of ZAPI and to develop a monitoring and evaluation scheme\. They also organized studies on tech- nical aspects of the project and particularly, for coffee processing and ZAPI's commercial operations\. 3\.21 The consultant group devised and installed a number of planning and control devices but, by and large, these were too theoretical and sophisticated for the calibre of project management\. Although they operated partially and provided information for progress reports, they were not self-sustaining and ceased with the consultants' departure in 1983\. The consultants also made proposals for planning systems, job descriptions and work monitoring for the ZAPI employees\. However, this was largely unimplemented because the consultants proved incapable of providing a guidance tool with simple technical indicators and financial performance charts\. 3\.22 An expatriate financial director, assigned by the consultant group for three years, endeavoured to improve the accounting system and financial controls\. However, this was done without rectifying ZAPI's inherent capital crisis, improving its financial controls, or deciding a precise action plan with Government for resolving the considerable debt problems which existed at project initiation\. Several efforts to rectify this situation were attempted during project implementation with the assistance of foreign auditors, but with little success\. The Bank should have been far more decisive in requesting strong Government action on this matter\. 3\.23 For monitoring and evaluation, although a credible baseline study was made, the report was presented only in May 1981 after two years of project operation, thereby negating the possible impact\. During this period, project operations were being monitored and a follow-up study(in 1982) focussed on crop yields and raised many useful questions and revealed a number of discrepancies between different sets of production data\. This report, as with the periodic M & E analyses (para 4\.21) were neither assimilated by project management nor applied to subsequent (re)planning exercises\. 3\.24 Among the technical studies undertaken, the proposal for coffee processing although feasible, implied extensive charges to previous - 12 - operations without proposing appropriate pilot actions, phasing, or training for farmers and ZAPI personnel\. Under the new ZAPI Director General, appointed in 1982, a system of decentralized coffee hulling is being introduced, although this was not considered in the processing study\. A study for developing ZAPI's commercial operations proposed new grading and pricing schedules for coffee\. However, these were never adequately applied (possibly because they were not fully understood or accepted by the relevant Government authorities) and because the lack of financial analysis in ZAPI resulted in the PMB reimbursing less than the actual processing costs\. 3\.25 Because of the lack of progress by the ZAPI Training Unit, the new Director General decided to amploy a specialist organization to run courses for in-service training and farmer animation\. Therefore, from 1983 to 1985, INADES (based in Yaounde) organized a series of correspondence and field courses related to the farm production cycle\. These appear to be run reasonably well but the themes are rather vague due to negligible liaison with the ZAPI Technical Department\. 3\.26 The Project Completion Report, prepared by Project Management (assisted by consultants Louis Berger) was inadequate; its recommendations focussed on the need for more studies and more technical assistance rather than suggesting reasons for lack of results and proposing remedial actions\. B\. Contractors and Suppliers 3\.27 Although the majority of the constructions proposed under the project were cancelled (para\. 4\.02) the following buildings were completed: one cooperative office, three rural training offices, seven stores, one health center, and seven dispensaries\. These buildings all involved simple structures and despite some delays, were satisfactorily completed using local contractors\. Similarly, the construction of a new coffee processing plant (at Belabo) and improvements to existing coffee hulling plants were satisfactorily completed, the former through ICB involving a local contractor and the latter witn local construction companies\. 3\.28 The construction of village water-points, although less than proposed (33 springs piped compared with 82), were well executed by the MINAGRI provincial rural engineering service (Genie Rural)\. Conversely, the similar convention with the MINEQ feeder road service upgraded only 72 km of roads (of 540 km proposed) and provided no subsequent maintenance\. 3\.29 The foreign and local suppliers of goods and materials all performed satisfactorily, albeit with considerably delays compared with appraisal proposals\. C\. The Borrower 3\.30 After its initial support, in the absence of positive progress - 13 - Government became reluctant to comply with demands from ZAPI's management\. Although, the Government fulfilled the major part of its undertakings (increase in capital, recruitment of staff, substantial subsidies', these were often paid late and not as scheduled\. 3\.31 It appears that the Project was the subject of controversy inside the principal ministries and institutions concerned (MINAGRI, MINPLAN, and PMB'\. This led to antagonism which included the associated organizations (Ministries of Health and Livestock), and might have been inevitable in view of the complexities involved\. However, had Government been more attentive to the need for rationalisation physical operations and project coordination (as proposed several times by Pioject Management and IDA supervision missions), the situation would have improved\. Such rationali- zation might have included: dissociating the different components to a series of pilot actions, in the most suitable locations, including, for crop production: focusing extension advice, improving the delivery of Inputs, and streamlining marketing operations\. 3\.32 In the event, since 1983 Government authorities have almost totally ignored communications on or from ZAPI, including the new Director General's reorganization proposals (presented in December 1982)\. There has been no regular field supervision or financial analysis by the MINAGRI Planning Division (DEP), and the ZAPI Administrative Council (which is statutarily required to meet bi-annually) has not been convened since March 1984\. IV\. PROJECT PERFORMANCE Strategy 4\.01 When compared with the underlying philosophy which sought firstly to accelerate development in Eastern Province by integrating development through a model that could be applied, at least partially, to all depart- ments in the region, and secondly to give farmers' associations a larger management role, the project cannot claim to have achieved any significant improvement over the original state of affairs\. Facilities for rural development have changed little and agricultural prodtictivity fell short of the objectives\. The various ZAPI operations are no better coordinated and the collaboration between different regional organizations has not been strengthened\. The proposed establishment of new ZAPI's was abandoned because of the need for economies, and the farmers' associations in the village (CODEVIs) still deal only with local coffee and cocoa collection and credit, as they did 15 years ago, and still have only a mainly advisory role at the zone cooperatives (EPL) level\. In effect, the provisions for project development were weighted in favor of physical and institutional, rather than production or commercial objectives\. - 14 - Physical Development 4\.02 The project included provisions (totalling US$1\.8 million or 152 of total costs) for the construction of offices, training, research and health facilities, coffee processing plants, stores, water-points and feeder roads\. Because of the previous neglect in Eastern Province, this was important for achieving accelerated development\. Annex 4, Table 4-1 shows that less than 30% of these construction were realized\. This resulted partly from poor planning and coordination but mainly because of the decision taken in PY1 to reduce this component in order to economize on credit funds (para 3\.05)\. In view of the dearth of facilities in general in the region, this decision adversely affected both the implementation of the components concerned and the sustainability of the services involved, and was a significant influence in reducing project staff morale\. Institutional Development 4\.03 The ZAPI organigram is shown in Annex 4 (Figure 1)\. Institution development was the central focus of the project and involved over 40X of budgeted project costs: training, extension/cooperatives, and ZAPI Management 20% (US$929,000 and technical assistance 22% (US$1\.1 million)\. At appraisal, no fundamental reorganization was considered necessary and, in fact, the institutional focus, involving four aspects of ZAPI's operation: organization and management, training, extension, and monitoring and evaluation, represented a reasonable institutional basis for project implementation\. (a) Organization and Management 4\.04 Despite of the increase in its capital base, (para 3\.01) and the support services provided by technical assistance agents and consultants and the training program, ZAPI's organization and management capacity has not improved\. The project was plagued by inability to recruit personnel from the region with experience and competence to implement a complex development program in a previously neglected area\. This problem was reflected in the calibre of the two directors general and, particularly in ZAPI's departmental directors (agricultural production, finance and admini- stration, and marketing)\. This lack of experience also reflected in the accounting system (para 3\.11) and persisted throughout the project imple- mentation period\. It proved equally difficult to recruit competent indivi- duals from outside the region, particularly because of the lack of amenities\. 4\.05 It has been impossible to obtain balance sheets and ,in fact, the accounting year end of June 30 was inappropriate for management accounting, because it divided two cropping years\. Separate operating accounts are not available either for the marketing operations or for the semi-autonomous agencies (for food crops: PROVIV, and for consumer supply stores: ERAP)\. - 15 - At best, only an approximation can ae attempted using non-accounting procedures\. 4\.06 Despite the initial objective to strengthen ZAPI's overall management during project implementation, the organizational structure changed several times and there was frequent turnover of key personnel (e\.g\., seven cases where the post changed four times and 13 cases where the post changed three times)\. No key post was held by the same person throughout the project implementation period\. Inevitably, this discontinu- ity obstructed the development of an effective management organization\. 4\.07 At the time of the PCR mission, some improvements had been achieved (particularly in the marketing department)\. However, even now, although ZAPI's management team meets regularly and operates in an organ- ized fashion, there is a lack of forward planning and dynamism\. The operational relationship between ZAPI headquarters and the zone coopera- tives (EPLs) is unclear, particularly with regard to the degree of autonomy and the real responsibilities of the EPLs; the headquarters staff have very little regular contact with work in the field and the general impression is that of a cumbrous machine that is merely ticking over\. Whole sect'ons of the staff (especially those concerned with extension work and the women's programs) no longer have operational goals or work programs and consider themselves neglected and despised by the management\. In fact, the project appraisal was far too vague on the objectives and mechanisms for developing the cooperative movement; phased training and organizational development programs should have been planned for each zone\. 4\.08 On the other hand, for key decisions, the ZAPI management itself is still very dependant on the bodies responsible for decision-making, (for example, the Administration Council, which has not met for two years and for supervision i\.e\., the DEP)\. Suggestions and requests from ZAPI man- agement generally receive no response from Government\. (b) Training Activities 4\.09 The project was intended to establish a rural development train- ing center to develop a capacity in the ZAPI Training Unit for providing: (i) a variety of residential courses for ZAPI staff and farmers; (ii) technical support for district cooperative organizations; and (iii) sem- inars and training programs for Government departments and agencies from Eastern Province and for similar operations in the West Africa Region\. Provisions were also included for senior staff training at specialist centers l't Cameroon and abroad\. 4\.10 The training center was axed during the economies decided in PY1, thereby seriously impairing the fundamental objective of the training component\. Although the Training Unit continued to operate (with technical assistance) and some training courses were organized for project staff, this had no lasting effect and largely failed to help improve farmers' - 16 - operations because of the lack of coordination and supplies of inputs\. With the arrival of the new Director General in 1982, it was decided to contract in-service and farmer training to a specialist training group INADES (see para 3\.24)\. 4\.11 Regarding training for senior project personnel, 28 staff bene- fitted (10 in 1981/82 and 18 in 1982/83)\. Of these, six of the second group attended extended courses in Europe and twelve attended shorter courses in Cameroonian institutions\. Some of the trainees from the extend- ed courses left ZAPI after their training and therefore, the project did not diractly benefit\. Also, as this training involved four different centers, it is difficult to assess how much of the improvement was due to the appropriateness of the training course for the ZAFI work and how much to the per3onal qualities of the trainees\. However, this type of training helped to broaden the outlook of a number of the staff, and improved their ability to do their job (particularly in the organization and management field)\. The effect of the short training courses was rather limited because they were not linked closely enough with the actual work and were not based on discussions of results achieved and problems encountered, and because the monitoring and evaluation data were not available in time\. 4\.12 With regard to training of farmers, it was intended to institute routine training schemes\. In fact, this was restricted to the few visits by members of the cooperatives' management committees to other rural development in Cameroon and to short training sessions\. These sessions could be extremely effective when linked with specific problems, for example, preparation of the marketing year statements and keeping the various management records connected with this work\. (c) Extension Activities 4\.13 (i)\. Field Extension Services The project was intended to establish a "training and visit" type extension program and to develop specific programs for women and young farmers\. The system has worked rather intermittently and with varying degrees of success\. The problems associated with a lack of personal transport and the decision not to bul;d the training center tended to be used as excuses for inefficient work\. When the means of transport were available, they were most frequently used for travel outside the zo-\.e ad for purposes other than work, which led to the motorcycles for agents based in the villages being withdrawn and replaced by bicycles, which in itself provided an excuse for not meeting work plans\. 4\.14 To some extent, this reflected the poor management controls\. However, in reality, the extension problem was more fundamental: with regard to coffee and cocoa, the project did not introduce any significant new technical innovations beyond those that had been recommended for the last 20 years, mainly because of a lack of detailed production themes$ - 17 - unreliable inputs supply and inconsistent extension advice\. 2/ The potential for demonstration plots (using farmer leaders) was not well developed\. Most of the established farmers in the original zones were convinced that the recommendations were well-foun\.ed and the main problems were more related to the unaveilability of inputs and the poor organization of pest and disease control services than with the extension advice\. The program for women was only partially effective (para 4\.17) and the program for young farmers was not carefully followed; in fact, the project was unable to discourage rural exodus by young people\. 4\.15 (ii)\. Physical Inputs Supply\. The supply of selected cocoa seed pods and coffee plant cuttings, for which the only sources were the Nkoevone, Abond Mbang or Barong Bitang agricultural stations, left much to be desired, in both quality and quantity, and ZAPI's attempts to establish its own nurseries were no more successful (although these operate reason- ably well now--albeit still producing insufficient quantities)\. Deliveries of fertilizer from the MINAGRI credit organization (FONADER) were irregular or insufficient (partly for reasons of national policy which limited the quantities available according to the amount of the subsidy, but also in retaliation against ZAPI for using the farm3rs' credit repayments to offset its own cash flow problems)\. 4\.16 (iii)\. Crop Protection Service Concerning the supply of knap- sack sprayers, a variety of types were available due to variation in the results of procttrement bidding and the ups and downs of the manufacturers' agencies in Cameroon\. Of these types supplied, half were regularly out of operation due to minor problems, generally involving the unavailability of spare parts\. The pest and disease control unit that was to be set up under the project was funded but was not taken over by ZAP! and remained under the pest control service of the provincial Department of Agriculture\. The ZAPI management, the extension workers and the farmers accuse the Depart- ment of favoring the non-ZAPI zones, of providing sporadic and late services, and failing to keep accurate records of the areas treated\. Certainly, no reliable data is available for the actions of the provincial pest control service and the lack of increased production from Eastern Province belies any supposed progress during project implementation\. If the proposal to establish a central unit at Doume, had been implemented, or, better still, had an organization been set up based on the zone cooperatives (EPLs) and coordinated by their management committees, the dependence on an outside agency could have been avoided and ZAPI would have been fully responsible for ensuring efficient crop protection, 2/ For example, in 1973, the research staff and the farmers seemed to be interested in a new idea, shade trees (in particular, PLAMINGIA) which apparently had a very favorable effect on yields\. The idea was never mentioned again\. - 18 - 4\.17 (iv) Assistance to Women The project proposed expanding the women's programs by the recruitment of a female extension worker and a female social worker at each of the technical assistance centers\. The precise content of the proposed extension program for women was not de- fined\. In the economic return calculations, an estimated annual increase of 6% was attributed half to better marketing opportunities due to improve- ment of the roads and half to a reduction in storage losses, also connected with improvements in transportation\. The extension program for women farmers was therefore not expected to have any direct effect on production\. E 4\.18 In fact, the women', ^rogram was substantially reduced over project proposals and the dist\.-ction between social work and agricultural extension was dropped\. The female extension workers, who had very little knowledge of agriculture (mainly through INADES correspondence course) tried to work in cooperation with the research service on the testing and distribution of new varieties\. However, since no arrangements were made for groups of women farmers to propagate the new varieties, supplies were very short\. Credit for fertilizer or other inputs for food crops was unavailable\. Moreover, the female extension workers, apparently on the advice of the research service, devoted their efforts to promoting single crop cultivation and row-cropping, despite the fact that research in the zone itself had demonstrated the value of mixed cropping and that single row-cropping increases women's labor without any corresponding increase in production\. Finally, no arrangements were made for iaproving marketing of additional foodcrop supplies\. 4\.19 (v) Research The potentially valuable results of the project's research component (for example, the development of a variety of maize resistant to certain viruses) were not disseminated to farmers, due to poor liaison between the research services and ZAPI, the lack of credit and the absence of a seed production program with women's groups, the cutting back of the women's programs, and the failure to link higher production with increased marketing opportunities\. 4\.20 The project's basic technical/production problems, whether related to coffee, cocoa or food crops, lay in the quality of the technical advice, the effectiveness of the inputs supply, the availability of credit, and the crop marketing arrangements\. It is pointless developing a large staff of extension workers and training and equipping them, if the techni- cal themes have not changed for 20 years and are already generally accepted by the farmers who do not put them into practice only for lack of inputs, equipment and spare parts or because they must await the pest and disease control teams from the provincial department of agriculture\. (d) Monitoring and Evaluation 4\.21 The project envisaged establishing a monitoring and evaluation system to provide information for both management and planning\. A unit was - 19 - in fact established, with staff at ZAPI headquarters, an agent in each EPL and permanent and temporary survey workers\. Training and supervision of the unit was provided through consultancy visits of experts from Planning Assistance in collaboration with DEP - which was intended to coordinate the M and E activities\. The monitoring and evaluation unit produced reasonable quality work\. However, as the baseline study was delivered late and was rather too broad in scope, it failed, to provide a basis for comparison\. 4\.22 In 1982, two studies were undertaken which attempted to calculate production and yield data for the major crops in the project area\. Unfortunately, the findings leave more questions unanswered than they resolve and inspire very little confidence since the production figures arrived at are four or five times greater than the recorded quantities marketed\. 4\.23 In addition to its other work, the monitoring and evaluation unit carried out regular surveys of planters, the most recent of which suggested that rural exodus from Eastern Province is increasing\. It made a number of srecial surveys, for example, to obtain the farmers' opinions about fertilizer in the two EPLs where they had shown some reluctance in using it\. The unit was also responsible for compiling data as a basis for preparing the pro-ress reports, however, this information lacked consistency\. The major failing of the monitoring and evaluation unit was the overemphasis on monitoring the work of the ZAPI employees in terms of the amount of time given to each activity, a task that properly belonged to the technical divisions, and therefore neglected what should have been its main function, namely, the compilation of production records and impact data to provide guidance to management\. At the present time, the ZAPI Study and Programming Division has been abolished and some remaining elements of the monitoring and evaluation activity have been transferred to the Technical Division\. Marketing, Processing, Credit and Supplies (a) Marketing and processing of Coffee and Cocoa 4\.24 In 1967 the Government authorized ZAPI to market coffee in unprocessed/cherry form, an innovation which was well received by the planters because it enabled them to sell their coffee in the village instead of having to travel and wait, often for days, to have it hulled by private traders\. Responsibility for local collection was very soon taken over by the village associations and was performed fairly efficiently\. The cherry coffee was shipped for hulling to the three ZAPI plants (at N'Ka, Doume and Angossas)\. In 1976, ZAPI also assumed responsibility for exporting coffee\. ZAPI acquired a reputation for poor quality coffee which, together with its lack of export experience and inadequace controls, led to difficulties in disposing of the stocks (often meaning delays of up to two years), as well as losses due to damage and theft during storage and transport and the rejection of some consignments because of poor quality\. - 20 - 4\.25 With the start of the project, the practice of buying coffee in cherry form continued, but with emphasis on improving quality\. The three coffee processing plants, whose design and equipment were outmoded, were replaced or modernized under the project\. A new plant, with mechanical sorting, electronic grading and packaging facilities, was constructed on the railb,ad at Belabo\. Despite some installation delays and certain adjustment and maintenance problems (lack of spare parts when required due to cash flow difficulties), the plant and equipment are now operating well and the management is good\. However, the quantities currently being processed are economically inadequate\. The project also provided financing for marketing studies, but these emphasized the failings of the ONCPB price schedule and organization, rather than focussing on the need to improve ZAPI's operations\. 4\.26 In the case of cocoa, the CODEVIs were respoDsible for collection at the local level\. ZAPI sold the quantities purchased to exporters, with very narrow operating margins and without taking full advantage of the PMB price schedules\. Food Crop Marketing 4\.27 Trials with marketing food crops in Eastern Province started in the Doume EPL in 1983\. On this basis, a semi-autonomous body, named PROVIV, was established with financial and technical assistance from the Swiss cooperation agency for constructing a central multi-purpose storage and handling center at Bertoua and for financing the purchlase and operation of trucks\. Although PROVIV had a chequered career, it addressed an import- ant problem for farmers who had difficulties in finding outlets for surplus produce\. However, it was not a commercial succeds\. The staff was too big (and still is despite the further cuts in 1986); the administration was bureaucratic and there was a lack of proper working procedures (no operat- ing accounts)\. Moreover, the marketing operations were not commercially oriented, there was inadequate supervision, and constant shortage of liquid funds (the revenues were swallowed up in the ZAPI overheads) and of working capital\. The operation could have been financially profitable if: (i) the market areas were carefully selected; (ii) the volume of food crops brought to market were anticipated in terms of the numbers both of preferred customers and of sales outlets; (iii) the turnover of stocks is efficiently handled; and (iv) major cuts in labor costs are achieved and payment of the remaining staff is made, at least partially, by results\. Commercialization of Inputs Supply 4\.28 The handling of supply and distribution of goods by the semi- autonomous body, called ERAP (e tablished in 1973 - para 4\.02), suffered similar operational inefficiencies to PROVIV\. Especially during the marketing season, the planters' demand for building materials (corrugated iron and cement), farm tools, spare parts, and some basic consumer items like soap and kerosene, are very large\. When ERAP cannot supply these - 21 - needs, farmers resort to private traders, who offer them comprehensive support (pre-harvest loans, marketing, sale of consumer goods)\. Here, too, attempts are being made to improve operations, e\.g\. a reduction in the range of goods sold, the introduction of wholesale buying from a few suppliers with payment after 60 or 90 days, sales of old stock at auction\. But even these efforts will not transform ERAP to profitable operation until there is: (i) a major reduction in staff (an energetic team of three or four people would be more than enough at Bertoua/Belabo); (ii) the introduction of comprehensive operating procedures; and (iii) the EPL retail stores are transferred to the farmer's organizations\. Agricultural Credit 4\.29 ZAPI has always provided credit services, first with its own funds, then as intermediary using FONADER funds\. Loans were made for a variety of putrose: agricultural inputs, rehabilitation of plantations, housing construction, and schooling\. At the present time, the only type of credit available is for agricultural inputs and for schooling\. The organi- zation responsible for making loans and collecting the payment in ZAPI is the CODEVI (Village Development Committee) and because payments are deduct- ed on a group basis at the time of cocoa/coffee marketing, the farmers' repayment rate has been consistently between 85X and 95%\. One of the most serious problems has resulted from the tendency by ZAPI management to divert credit funds repaid by farmers to finance its own operating expenses instead of reimbursing FONADER\. Sometimes, this resulted in credit funds being unavailable for the following year\. Another cause of dispute has been the low mark-up of return for the services performed by ZAPI (1% of the interest rate), which in inadequate to cover the direct expenses involved\. Credit operations should have been reorganized to provide larger operating margin and to leave the profit with the farmers' organizations (EPL), which would serve to cover bad debts and to create a revolving fund which could be lent by the farmers' organizations for the various needs not covered by FONADER loans\. V\. PROJECT IMPACT Production 5\.01 The dearth of reliable data makes it difficult to determine the project's impact on production\. ZAPI purchased and marketed some 5,000 tons of Robusta coffee in 1984/85 compared with 3,000 tons in 1978/79\. If this level of purchases is sustained or improved, it would represent positive impact\. However, the statistics for total coffee (and cocoa) sales from Eastern Province show no significant change in recent years\. It is conceivable that the project's actions prevented a decline in cocoa and Robusta coffee production which might otherwise have occurrea due to generally poor incentives\. Alternatively, it is more likely that the - 22 - increased purchases resulted from ZAPI's improved marketing performance, indicating that some smallholders have switched from private traders\. Project actions were focussed more on coffee than cocoa production, despite the fact that both have similar production areas in Eastern Province and the smallholders prefer cocoa\. The quantity of cocoa handled by ZAPI was static throughout the implementation period\. 5\.02 Despite repeated requests by IDA supervision missions, there were never any reliable basic in icators, such as the total number of coffee and cocoa trees, the distribution between young plantations not yet in produc- tion, plantations in production and abandoned plantations, or typical yields for different ecological areas\. The various data on areas and yields show discrepancies of up to twice as much between the appraisal report and the various papers prepared by the monitoring and evaluation unit\. In these circumstances, it is difficult to assess the impact of the project on production or to try to identify key indicators from which progress could be determined\. Annex 5, Table 5-1 contains a summary of the estimates of the cumulative production situation\. However, this contains a number of inaccuracies and is only, therefore, indicative\. For example, the estimated area of new plantations (which reached 2,636 ha for cocoa and 826 ha for coffee in 1984) is based on the number of seed pods or plants distributed and not on the number of plants established\. Again, the productive versus the planted areas are unknown, a factor which could have a profound effect on determining average yields\. 5\.03 In fact, although technically feasible, due to the under-develop- ed status of agriculture in Eastern Province, the decision to purchase coffee in cherry form and to centralize hulling operations was premature without extensive trials and essential streamlining of organization and training for ZAPI operators and farmers\. A comparative study should have been made into the possibility of buying green coffee and decentralizing hulling (see para 5\.06)\. A particularly worrying aspect of the whole coffee marketing operation was the inability, at any time during project implementation, to improve the efficiency of the flow from collection through processing to exportation, due to inadequate marketing operations\. As a result, an operation that could have made a profit continued to make losses and there was no positive action to resolve the problem\. Belatedly, ZAPI management is now reorganizing coffee marketing\. 5\.04 Similarly, there is no reliable data for trends in food crop production in the project area\. Bottomlands rice production was not sustained and has, in fact, been ignored since the Director General was replaced in 1982\. This component could have made a contribution with better focus during its conception and planning, and more attention during execution\. The priority locations, optimum areas and organization of planters should have been examined in far more detail, as should have the best crop varieties\. Farmers did not favor rice, but high unit value vegetable fruit products could have been profitable (even with the problem of evacuation to demand centers, e\.g\. Yaounde 250 km by air, road or rail)\. - 23 - The development of fish ponds also failed to materialize more because of inappropriate planning and inadequate development attention, than because of low potential or lack of interest\. 5\.05 From a financial and economic viewpoint, instead of developing a profit-making operation, coffee and cocoa marketing operations demanded more funds throughout the implementation period, thereby exacerbating ZAPI's overall cash flow problems\. A report produced by the ZAPI Commercial Division in 1986, calculated that, out of the total ZAPI debt, estimated at US$6\.8 million, about 60% consists'of the accumulated deficits on the marketing operations\. The new Director General (1982) gave priority to this problem: the accumulated coffee stocks were sold and exportation was phased out, first by contracting with a private exporter and then by entering into an agreement with PMB\. Through detailed discussion on the coffee and cocoa baremes (price schedule), the management has succeeded in obtaining complete pre-financing of its coffee crop by PMB plus reasonable margins for both products, delivered to Douala\. These arrangements should make it possible to convert ZWI's marketing operations to produce a profit of about CFAF 350 million in a normal year\. 3/ 5\.06 ZAPI is now establishing a series of decentralized coffee hulling units located in strategic centers (a total of 17 processing units is proposed), purchasing only hulled coffee 4/ \. According to the provi- sional estimates, the savings resulting from an improvement in quality, from application of the real extraction rate 5/ and from reduced trans- port cost should be enough to make the operation profitable (the planned investment, which has probably been underestimated, amounted to CFAF 120 million (US$350,000 in 1984 terms)\. The capital investment for processing plants under the project probably represents one of its most favorable aspects, and tha quality of marketed coffee has improved significantly\. However, it is worth noting that the Belabo factory (which includes elec- tronic grading and densimeters) is far too sophisticated for current national policy, which does not allow higher prices for top quality coffee\. 3/ Estimates by ZAPI's Commercial Division; there has been no discussion as yet with the Administration and Finance Division on the detailed distribution of costs (in particular, the share of ZAPI overheads to be charged to the marketing operation)\. 41 Or possibly in some cases a combination (cherries and hulled coffee), since it appears that the large-scale planters prefer to sell their coffee hulled and the small planters in cherry form, to avoid long period of waiting for small quantities to be hulled\. 5/ ZAPI is obligated to apply a theoretical processing rate of cherry coffee/green coffee of 0\.58 whereas the real rate is nearer 0\.56\. - 24 - Nonetheless, the project was positive in stimulating improvements in coffee quality, especially when the world market is becoming more and more competitive\. Hopefully, the continuing dialogue with Government and studies on producer prices (and subsidies) will provide incentives for a majority of farmers to improve their cultivation product quality\. Research 5\.07 The project's research component was partly effective\. An applied agricultural research capability, orientated to the eastern forest region, was created where none existed before\. Achievements included: (i) completion of basic studies and presentation of reports (soils analysis/- mapping, crop varieties, socio-economic survey), (ii) trials of food crop varieties from the region, selection and multiplication of seeds/planting materials (maize, groundnut, cassava), and (iii) the development and organization of a research center\. Regrettably, due to cancellation of the building program and the premature stop on operating funds, this research ability is not firmly implanted and important research topics have been dropped\. However, the national crop research ins\.itute (IRA) is providing some recurrent financing and the work will hopefully be revitalized under the national Agricultural Research Project (IBRD/PY87)\. VI\. FINANCIAL PERFORMANCE AND ECONOMIC RE-EVALUATION Financial Results 6\.01 A summary of the operating accounts for the period July 1, 1978 to June 30, 1984 a comparative table of costs for the 1984/85 crop year are shown Annex 6\. Since the project costs were not posted separately from commercial costs and the latter were not analyzed on the same basis, only a global comparison can be made between actual financial results and the appraisal projections (see para 3\.16)\. 6\.02 The financial resources received from Government during the project implementation period (July 1, 1978 to June 30, 1984) totalled CFAF 6\.8 billion (US$18\.9 million), including a loan of CFAF 1 billion and a capital increase of CFAF 0\.4 billion, as compared with CFAF 3 billion (US$8\.3 million) envisaged in the appraisal report\. In addition, there were cumulative losses of CFAF 2\.4 billion (US$6\.6 million)\. Therefore, the total Government financing provided to ZAPI during this period was as follows: - 25 - CFAF billions 1S$ Million - Total funds advanced 6\.805 - Less loan and capital increase 1\.380 - Net financial provision 5\.425 - Plus cumulative operating losses 2\.355 total Government financing 7\.780 21\.6 6\.03 Review of the provisional results for 1984/85 shows that: Mi) the annual deficit to maintain ZAPI's existing operations rose to about US$2\.3 million (compared with about US$0\.7 million before the start of the project); (ii) cocoa production has remained virtually unchanged; (iii) coffee production handled by ZAPI has risen from 3,000 tons in Year 1 of the project to nearly 5,000 tons in 1984/85\. Factors affecting these results were: i) the 1983/84 drought, which reduced coffee production to 16% of the previous year's figure; ii) lack of monitoring of the use of project funds, including diversion of funds for equipment to the financing of operating deficits; and iii) general lack of monitoring of expenditures, which resulted in increases in numbers of personnel to compensate for inefficiency, and increases in salaries and benefits out of proportion to the receipts expected from the commercial operations\. As a result, ZAPI now has a very inefficient superstructure which cannot be financed out of current revenue\. A detailed analysis of complete project costs will be made when the accounts for FY 1983/84 and 1984/85 are audited\. Further development proposals for Eastern Province should be postponed until this situation is clarified (see letter to Government 04/16/86 - Annex 9)\. Financial clauses 6\.04 Although the appraisal report mentions a number of commitments as regards management and monitoring measures that were to be introduced before and during the preject, none of them were fully carried out\. This was primarily due to lack of managerial capacity and financial resources in ZAPI, the associated organizations, and DEP, agency, a fact which was not sufficiently analysed during the appraisal\. 6\.05 The financial control measures stipulated for the credit funds were unfortunately not extended to the finances received from Government\. Moreover, in the absence of coordinated monitoring by the supervisory organization of the use of funds from all sources, some expenditures may have been financed twice\. The progress reports mentioned in the appraisal report were not submitted regularly and the annual accounts were audited only globally, toward the end of the project\. - 26 - Economic Re-evaluation 6\.06 It is premature for a full calculation of the project's rate of return, since several investments have not yet begun to produce results\. Nevertheless, some elknents, when compared to the estimates, show that the real rate of return will be substantially lower than the 25% calculated at appraisal\. For example: i) project costs were more than 25% over appraisal estimates, and certain components were not implemented or fell short of expected targets; ii) ZAPI's annual deficit has more than tripled; iii) although coffee prodqction rose and met the appraisal targets for years 6 and 7, the increases in yield under the project are not substantially greater than those for the rest of the region or the country; iv) cocoa production has not increased significantly; and v) although improvements have started in PY5, the benefits from processing and marketing are not yet apparent, because of the under-utilization of coffee processing equipment and the higher operating costs which are not being offset by an inerease in revenue due to higher quality\. 6\.07 The lack of data and the delayed impact from some components make it difficult to calculate an economic rate of return for the project\. However, taking into account the negative aspects outlined above, an ERR of about 0% can be predicted, for the following reasons: (a) Long-term bene- fits will be realized from: (i) nurseries established under the project which continue to operate; (ii) new cocoa and coffee plantings which would not have been created without the project; (iii) applied research develop- ments, especially with food crop variety; and (iv) improve quality and handling efficiencies from the coffee processing and marketing developments should eventually be positive; and (b) Government preparedness to enforce the accounting and financial control measures proposed in the audit report and associated studies made in 1985/86\. 6\.08 The Bank's appraisal report or working papers should have includ- ed more detailed analysis and projection of ZAPI's balance sheets and operating accounts, from the period proceeding the start of the project and through project maturity (say PYIO)\. This would have indicated the expected improvements in financial results and projected cash flow estimates of how the expected return would be distributed among the various partners in the development project, i\.e\. the growers, ZAPI and the Government (through increases in direct revenues or those of state agencies, e\.g\. PMB)\. This analysis would have underlined the importance of government policy changes to ensure the expected returns\. - 27 - VII\. INSTITUTIONAL DEVELOPMENT General 7\.01 The project's institutional development involved three aspects: a) for the ZAPI management b) for Government and the implications for developments outside the five project operational zones; and (c) for the development of farmers' organizations\. Although fundamental to the project objectives (and to the IDA's justification for%support), the last aspect was not isolated as a specific target\. 7\.02 (a) External Impact - In ZAPI's relations with the outside world, it is difficult to identify the specific responsibilities of each agency\. However, it is evident that, contrary to its charter as a development agency, and despite the many activities that were financed by the project, ZAPI does not play any coordinating role regional development\. It is still dependent on the provincial Department of Agriculture and there is a lack of collaboration\. It no longer has regular contacts with the Livestock Department (which has taken over the fisheries program), with the Ministry of Health, or with the Ministry of Equipment (feeder roads)\. Contacts with the research agencies are still only occasional and have not led to regular exchanges between research staff, extension workers and farmers\. 7\.03 On the national level, relations with PMB have improved considerably and those with FONADER are somewhat better\. Contacts with the DEP (the principal interlocator between ZAPI and MINAGRI) are less frequent than in the past, and proposals put forward by ZAPI often receive no reply\. Since the accumulated debt has not yet been paid off, relations with the banks and the suppliers have not improved\. Lastly, the Administrative Council which has not met for two years, has shown itself disinterested in or incapable of either preventing the crisis or managing it and equally unable to take timely decisions about reorganization\. 7\.04 (b) ZAPI Management - As it was the major focus of the project, the internal difficulties have already been analyzed in Chapter III\. In summary the factors that prevented the objectives being realized during project implementation were: (iv) (v) the ZAPI staff more than doubled (200 on the paid staff in 1977; and, despite declarations and statements of intention, the number has been continued at about 450 since 1979) without having any significant effect on the number of planters reached or the quantity of cocoa/coffee produced; (vi) the financial resources provided by Government to ZAPI (which was about US$0\.3 million between 1970 and 1974 and - 28 - increased to US$0\.6 million when the project was launched), escalated to US$1\.7 million annually during the project implementation period\. In addition to the special credits requested for paying off previous debts (some US$8\.3 million), the proposed ZAPI budget for 1985-86 included a request for US$1\.7 million equivalent for operations and equipment\. These increases far exceeded the rate of inflation; (ii) the ability of the ZAPI Administration and Finance Division to prepare accounting documents on time has not improved, and even those produced are invalid for management guidance; (iii) the monitoring and evaluation system has not been maintained and it does not provide the key indicators that would give guidance to the management; (iv) the training programs have almost come to a halt, with the exception of the INADES correspondence courses for planters and junior staff; (v) the extension program is almost ineffectual, lacking any innovative technical ideas, or assistance for improving the distribution of inputs and goods, or the efficiency of pest and disease controls\. Extension work among women on growing food crops did not develop any lasting impact; (vi) the administration is generally weak; there is little coordination between the divisions; in the Head Office there is tension between the various grades of staff; there is little contact between the Head Office and the EPLs, and the definition of the responsibilities as between Head Office, EPLs, and farmers' organizations is unclear, and the junior staff have become disillusioned; and (vii) the decision not to build the proposed ZAPI headquarters and other facilities, which means that the staff continues to work in old and unsuitable offices\. Since 1984 the Commercial Division has been quite active; it has formulated a policy and laid down operating and supervisory procedures\. 7\.05 (c) Farmers' Organizations - The farmers' organizations, which were quite active when the project started (especially the CODEVIs and the management committees at EPL Level), have little progress during recent years\. They have not taken on any new economic or technical responsibili- ties\. They were not fostered to manage any profitable operations, which - 29 - might have given rise to new commercial activities\. Their only source of funds is the payment of CPAF 1\.400 (US$4\.0) per ton as commission to the CAMA (commission d'achat des marches autog6rfs independent purchasing committee) and the "bonipoids" (weight difference bonus) 6/ 7\.06 The project seems to have had largely negative effects on farmer groups which are: i) disillusioned by constantly hearing the dogmatic statement "ZAPI business is your business," while experience has shown that they have no share in decision-making 7/ ii) frustrated with a project from which it appeared that all the money issued for the staff (vehicles, buildings - which are often not utilized) without improving the situation of the planters; and the undesirable effects of the money poured into the project\. This financial distortion (where "the project" is regarded as an endless source of money) has led to the elimination of voluntary labor and the disappearance of the traditional standards for payment\. Similarly, the farmers' leaders ("contract" farmers) in the CODEVIs considered that the training given by the project ought to lead to a civil service position or, at least, some remuneration for effort\. 7\.07 The search for a "participatory" dialogue, disconnected with the management by the farmers' organizations of specific profitable economic activities, can only lead to conflict\. The ZAPI management now proposes to change the EPLs into cooperatives; but its efforts to kindle interest in cooperatives by social lectures have been feeble and inadequate\. Management and Organization Consultants 7\.08 The management and organization consultants were handicapped by the inactivity in most government and parastatal institutions\. This had the following results: (i) socio-political motivations prevailed over technical or economic considerations within ZAPI (the project); (ii) power was appropriated for personal ends at various hierarchical levels of ZAPI (iii) there was a lack of discipline and aversion on the part of management to taking disciplinary action, given the socio-political environment; and (iv) there was lack of decision-making, disciplinary action and efficient supervision on the part of the General Management, the Administrative 6/ The difference caused by rounding down the weight in kgs\. to the next lower whole number, between the weight for which planters are paid, and the weight actually bought\. 7/ "When we go to Bertoua and see how things are actually run, and how we received, how can we believe that ZAPI is really our business?" (Meeting with peasant representatives)\. - 30 - Council and the supervisory organizations, which weakened the consultants' creditability and effectiveness\. 7\.09 In response, the tendency of the consultants was to accommodate these problems or to try to bypass the organization and delegate work to outside assistance\. None of the consultants seem to have offered to suspend work pending resolution of the negative situation regarding the project operations and this possibility appears not to have been proposed by supervision missions\. VIII\. BANK AND BORROWER PERWORMANCE 8\.01 Project Justification and Objectives _ This project analysis shows a few points of positive impact, particularly the applied research work and coffee processing/marketing, distinct pointers to negative impact (e\.g\. farmers' groups), and little evidence of either sustainable opera- tions or constructive pointers for future developments in Eastern Province\. However, none of this was due to faulty basic objectives or Justification\. The focus on Eastern Province as a neglected region was entirely valid (and still is), the need to encourage balanced expansion and upgrading of cash and food crops production is still pertinent, and, above all, the search for sustainable, self-financing, farmer organized rural development (with minimal Government intervention) remains sociologically and economically desirable\. The objectives were not realised because of: i) inadequacies in identification, analysis and phasing, and indecisive guidance during implementation, on the Bank's side; and ii) neglect and recalcitrence regarding and policy requirements, organization of inputs services, appro- priate staffing and monitoring/supervision, on Government's side\. 8\.02 Identification and Phasing - The expectation of achieving the anticipated development in Eastern Cameroon in five short years was based on three fallacies: (i) although the neglected situation and the serious lack of basic infrastructure in Eastern Province were recognized, these constraints were not realistically reflected in the development objectives; (ii) it involved too many components (infrastructure, produc- tion, processing/marketing, and social services); and (iii) it involved collaboration between organizations from five technical ministries all with different degrees of pre- paredness and commitment (a common fault with Bank projects prepared at that time)\. - 31 - 8\.03 Four basic faults are apparent in the Bank's thinking at that time: (M) the motivation seems to have come more from the idealism and euphoria of the Bank's thrust in the mid 1970s, than from the lessons of past experience and realistic analy- sis; (ii) the project's conception resulted from the expectation (real or perceived) that an arbitrary economic rate of return was paramount, irrespective of the fundamental difficulties to be tackled; (iii) the concept of integrating the development of several different sectoral ministries which, therefore justified additional Bank input (from a special division - AGRRD), so as to provide a guide for accelerated rural development in other similar areas; and (iv) the belief that lack of knowledge on the part of farmers was a major constraint to crop production\. 8\.04 The project preparation process appeared to be ideal: it extended over two years, was organized by the ZAPI management, coordinated by MINAGRI/DEP, supervised by several IDA missions, and included as a number of specialist studies\. Unfortunately the prices did not analyse, in sufficient detail organizational or management capacity of ZAPI's manage- ment, or ZAPI's true financial situation; two factors which were keystones to the end result\. 8\.05 A more realistic project design might have reflected the limit- ations and included pilot actions only in an initial three year period\. This should have involved: institution strengthening (for ZAPI and the provincial delegations of sectoral ministries)* definition of precise production packages, detailed infrastructure planning, technical/organizational surveys to determine the best approach for achieving the sociological objectives, focussed training for project personnel to counter the previous neglect in Eastern Province, and emphasis on improving efficiency of ZAPI's commercial operations\. These technical and organizational changes should have been accompanied by phased policy changes (on producer prices and input supplies)\. That these weaknesses were not questioned at appraisal, might have resulted from the fact that the same IDA team was responsible throughout the process (and, indeed, into the eary years of supervision)\. 8\.06 Implementation Guidance - It is commendable to anticipate the need for additional supervision during the start-up of a new type of project (both to assure strong initiation and for the Bank's own learning experience)\. However, irrespective of its usefulness, the IDA's initial - 32 - supervisory time was exorbitant (36\.3\. 23\.6 and 43\.9 man-weeks in FY 79, 80 and 81 respectively)\. 8\.07 Although the financial, organizational and policy problems were evident from the early supervision missions, for more than four years (1978-1983) IDA repeatedly suggested solutions and proposed action by Government but received no substantive reaction\. In response to the inertia, more positive action to effect change by simplifying the objectives and reducing the tempo, or, at the extreme, to cancel the credit, would have been appropriate\. One reason for not taking firmer action was probably the project's "experimental" nature, another was the lack of close dialogue with all of the ministries concerned\. The position of AGRRD in isolation from the regular projects and programs operations for Cameroon was an impediment\. It is also possible that the familiarity of the supervisory staff in its dealings with project management, as demonstrated in successive post-mission letters, weakened the appearance of objectivity of their work and the scope for firmness of action\. 8\.08 The basic lack of dynamism in the project supervision was exacerbated by the inappropriateness of the consultant group who, although academically qualified and imaginative, lacked practical experience of project management and problem solving\. 8\.09 Borrower Performance - The Government's involvement in project preparation, through continuous input from MINAGRI/DEP and an interminis- terial coordinating committee, was more thorough than with any other Bank group financed project (before or since)\. Unfortunately, this active involvement declined after appraisal: there was little initiative by cooperating ministries (Health, Livestock* and Equipment) to prepare for or to develop their specific components - and DEP failed to provide the essential start-up coordination in Yaound6\. 8\.10 In fact, despite its statutory obligation for supervising and evaluating projects, the DEP appears to have played a steadily decreasing role in the project\. Without this link, there was no way that the central policy and organizational changes could be realized; specifically concerning: producer prices and handling payments for cocoa and coffee; regulation of ZAPI's debts and provisions for recurrent expenditures; adequate and timely supplies of inputs and crop protection services; and actions to assure key investments (particularly buildings)\. Added to this was the confusion of titular responsibility, which occurred in mid project between MINAGRI and MINPLAN; this worsened the lack of support\. There was ample evidence (from project performance and repeated Bank communications) of ZAPI's financial difficulties and personnel problems (numbers, ethnic interests and misuse of funds), yet Government elected not to take action\. - 33 - IX CONCLUSIONS AND PROPOSITIONS Conclusion 9\.01 General - The general conclusions on the results of the ZAPI Est Integrated Rural Development Project are summarized below\. These reactions were conveyed to Government by letter to the Minister of Agriculture on April 16, 1986 (Annex 9-a)\. 9\.02 The ZAPI Est Development Company operated reasonably effectively from its conception in 1967 until 1976 when performance deteriorated due to: commencing export operations on its own behalf, the precipitation of financial problems, and inexperienced and untrained management\. The project was intended to help resolve these problems and to trigger accelerated development in Eastern Province\. 9\.03 The project had a positive impact with respect to applied research and seed production, the construction and rehabilitation of coffee processing factories, and training for middle level staff\. However, by and large, the ZAPI experience epitomises the problems of multi sector "integrated" rural development projects, especially in relatively isolated and less favored regions\. The following points were particularly salient to this project: (i) the project included too many diverse components involving services from five technical ministries as well as a significant building program; (ii) the project actions were initiated before the implementing authority (ZAPI Est) was organizationally prepared, a problem which was never surmounted even after the ZAPI Director General changed in 1982; (iii) the associated organizations of the ministries outside agriculture (health, roads, livestock and research) in the project area were even less prepared than ZAPI Est, were somewhat reticent, and were not actively coordinated; (iv) the central MINAGRI services (for inputs supplies) were inadequate throughout the implementation period; and (v) finally, the central Government was never strongly committed to the project: titular responsibility changed from the Ministry of Plan to the Ministry of Agriculture during implementation, the calibre of project management staff was always wanting, and financing was consistently inadequate\. 9\.04 On the Bank's side, problems resulted from: - 34 - (i) a certain idealism concerning the project's strategy for autonomous development (cooperatives); (ii) indecisive action by successive supervision missions to rectify persistent management and financial faults; and (iii) overemphasis on economic viability as opposed to allowing adequate time in the first instance for institution building, e\.g\. by 3-5 year start-up phase\. 9\.05 Detailed Aspects - The project has had limited real impact on production, despite a large increase both in staff and in the costs (which continued after the end of the project)\. At the institutional level, there has been no improvement in the internal organization, while the extension, monitoring and evaluation, and training programs have either had little lasting impact or have been abandoned\. ZAPI did not take advantage of the project to establish itself as the regional coordinator of development activity\. Finally, no positive improvement has been made in the develop- ment of farmers' organizations relative to operations prior to 1978\. 9\.06 These observations should, however, not lead to the abandonment of the two fundamental concepts which led the Bank's original support for the project, namely, coordinated rural development centered on farmers' participation\. However, if it is to succeed, coordinated rural development must be founded on a hard core of profitable economic activities, for which the necessary skills are available, supported by sufficient management ability to react very rapidly to changing circumstances\. There must be a clear division of responsibility between the farmers' organizations and the development company and there must be a continuous training program for the farmers, linked with day-to-day activities\. None of these conditions were to be seen in the project\. There were a number of economic and social activities, but they were in juxtaposition and not integrated, and they were not placed in an order of priority\. At the beginning, management was ZAPI's weak point; it was unable to come to grips with the marketing system, and the farmers' organizations had neither an incentive to run their operations well, nor the possibility of making profits that could be reinvested, since all the trading profits were absorbed by ZAPI's running costs\. Furthermore, rhetoric aside, there was no clear division of functions between the farmers' organizations and the development company, nor a medium-term plan for a gradual transfer of responsibility, backed by a training program\. - 35 - A 3 Table 3-1 &Zy f Prfit & Lou Acumt For Petod July 1, 1970 to Jun 30 1985 (in \.O0D CPA kem) PROJECT PERIOD 1977/78 1978/79 1979180 1980181 1981/82 1t9/3 193/4 Sj 11/85 185/86 (1) ~~~ - -Ws-_ _ (2)3 (3)14 -o -2-7 Sa1mofodsurcoma 674511 634768 7 1063837 4700 511381 4 2 625260 Lo eDa of oid 356556 558381 675944 1865903 757 151 479092 4093027 752622 a Mg = WC& DI 117955 96387 7 61 ( 2006) (42451) 3282" 279675 (127362) Sam of ,c p proam ic w q 1 865 589 2 195 657 4 073 153 4 216 758 3 730 60 4 811 662 20 592 671 2 113 01 Pnbctun t* tinto stok 353 709 396 646 461 032 761 682 117 221 (1 487 238) 1 653 052 527 912 1 537 253 2 690 4 611 746 5 476 366 4 855 630 3 356 713 22 526 39 2514 351 Thtuar pM&Xtoim - 5 309 1 564 31 000 830 - 38 703 - s9w* pmfit 149085 94 718 31 176 - 7 197 36 824 319000 543 intmt\. 6 dividsds 4 755 4 402 1 519 4 871 5 512 27 520 48 579 1 542 Pvia u td b - - - - 53 - 536 - TM mm 1 691 093 2 793It 4646605 512 237 4 869 705 3 421 057 2 933 216 516 436 RI \. rbbls b 6s lies 911 133 1 415 282 4 148 077 4 396 240 3 914 844 1 211 197 15 996 773 2 399 649 Trwrt 206 696 196 513 156509 114 375 123 778 121465 919 338 100 507 Other seWAva 205 07 317 650 178 903 310 245 245 659 177 655 1435 199 139 890 9A\. y qeat1 wes 108 684 286 521 58 038 45 545 49 606 575 265 1 123 659 54 692 Staff expW 269 230 378 217 378990 329 326 426029 516428 2 289228 463493 Rates 6 T 71755 684 609 522 797 31 651 669 986 1222 232 3 487 030 4 04 latest pud 51 693 186 855 167 044 93 621 193 585 168 779 861 577 1 609 Dqmr _iatim 85637 201 741 175 370 413 70& 363 535 139894 1 379966 174 250 s_ CUolo& STEM 1 900 837 3 667 388 5 785 816 6 018 792 5 987 022 4 132 915 27 492 778 3 338 094 Erxcu an g 94o eof dimi:U (- 3) - 7 000 53 473 - - 60 470 - aYE l 2 (- 209 747) ( 874 269) (1 132 11) ( 453 082)(1 117 317) ( 711 858) (4 499 084) ( 821 658) (lWtD ES_nQG 325 096 703 032 992 681 312 060 489 144 150 000 2 972 813 254 875 IUDlC N=2 115 349 ( 171 237) ( 140 130) ( 140 222) ( 628 173)( 561 858) (I 526 271) ( 566 973) Preo ryaw 147 210 299 286 269 809 153 311 529 916 319 400 1 718 852 190 246 - - duq(-731 947) ( 684 650) ( 157 570) ( 289 156) ( 282 002) ( 408 573) (2 53 898) ( 46 000) Dl of fixed ts 1 762 1 000 2 386 1390 40 10 6 58 6 608 N ult (- 467 626) ( 555 681) ( 25505) ( 274 677) ( 380 219) ( 651 021) (2 354 729) ( 415 929) pwr\. SuAw\. per sdui of Plizaa amm 250 000 369 241 408 587 1 242 130 30 175 40 681 861 803 3 23D 617 260 000 260,000 -t for miiw aplctlw atod fer In d me\. - - - - ( 467 578) ( 467 578) +316 522 +151 056 250000 369241 408587 1 242 130 30 175 iO681 394225 2763039 576522 411 056 Diffsm ( 44145) +294445 ( 249449) + 4 685 +448463 ( 244 225) +209 774 (321 647) Qi\.tity of coom pnvb&W (Tom) nta 1 613 1 462 1 755 1 601 1 001 1 460 - of coffcinee I=n Qla d) n/a 5 096 5 575 4 858 7 735 1 225 8 413 - of pro_sdcoffs* 0") n/a 2 986 3 111 3 089 4 324 696 4 950 Coffee nuy= 58,b 55,8 63,6 55,9 56,8 58,8 (1) pFm tot vecelwd\. (2) Pwial fixir with aatelm of coffee sals and de"pscatl of fi samts\. (3) Akmts for ti lt 6 &ad qxte of 1985/86 not yet wailable\. - 36 - AM 3 Table 3-2 C- ZAPI lNII IEIQIM PTW Sdw&\.le of fNnmtAdl SaicM (in\. O000 M from C"A) Frcal MI/m NlMD am DM (S A ) SM1 MM L _ r\. CPTL GM Year OP Invt\. Total b t\. t\. Totdr Ot ti wt\. TM\.td erg\. lh_et\. t l0 UrYN G00t\. WLM 1967/68 42,0 42,0 - 42,0 42,0 4,0 46,0 68/69 45,0 45,0 45,0 45,0 45,0 69/70 52,0 52,0 52,0 52,0 52,0 70/71 81,1 81,1 81,1 81,1 81,1 71/72 91,0 91,0 91,0 91,0 91,0 72/73 - - - - 0,8 102,4 103,2 73/74 101,0 101,0 101,0 101,0 101,0 74/75 119\.0 119,0 119,0 119,0 119,0 75/76 165,0 165,0 165,0 165,0 - 165,0 76/77 200m0 2m0,0 m0,o 200,0 2,0 77/78 250,0 250,0 250,0 250,0 250,0 SI?AL 1 146,1 1 146,1 - - - - - - 1146,1 - 1 146,1 0,8 106,4 1 253,3 1978/79 260,0 260,0 69,0 25,5 94,5 40,2 23,6 63,8 369,2 49,1 418,3 330,0 798,3 79/80 2D,o 5O,0 700,0 208,6 351,4 560,0 408,6 851,4 1 260,0 1 260,0 80/81 950,0 50,0 1 000,0 292,1 222,0 514,1 1 242,1 272,0 1 514,1 1 514,1 81/82 100,0 200m 300,0 208,2 9,8 218,0 308,2 209,8 518,0 518,0 82/83 - 500,0 500,0 40,7 32,1 72,8 40,7 532,1 572,8 1 000,0 1 572,8 1 510,0 1 250,0 2 760,0 818,6 640,8 1 459,4 40,2 23,6 63,8 2 368,8 1 914,4 4 283,2 1 000,0 - 380,0 S 663,2 83/84 200,0 - 200,0 661,8 280,0 941,8 861,8 280,0 1 141,8 1 141,8 84/85 260,0 150,0 410,0 - - - 260,0 150,0 410,0 410,0 85/86 260,0 350,0 610,0 - - - 260,0 350,0 610,0 610,0 SE= 2 230,0 1 750,0 3 980,0 1 480,4 920,8 2 401m2 40,2 23,6 63\.8 3 750,6 2 694_ 6 445,0 1 00 380,0 7 82,_0 MM ML 3 376,1 1 750,0 5 126,1 1 480,4 920,8 2 401,2 40,2 23,6 63,8 4 896,7 2 694,4 71591,1 1 000,0 0,8 486,4 9,078,3 ut; S 4 596,1 3 203,2 7 799,3 -37- AU 3 Tobl 3-3 khuyals of Rda win_t Iplkatla by ham of bpwAiuwe a s Mo\.ued b Zqi-#\. bz n 4p CA FivDm) Tahi1C&1 COrastb out fr\.-Paoj\.ct- Iwlicat1m~ civul wa,* zw4unt VehIdma Assistuc frIj*InI ningaotAl CO,t TOTAL Declarmd Nmba X CA I CAT 2A CAT 2 8 C 3A CAT 3 C 4 CAT 5 U AK Z Paosved 1978-79 Ito 13 629 424 1239 617 23 625 209 55 611 205 431 987 13 01058 94 547 050 94547 050 1979-80 14 to 32 3 707 976 298476 386 49 19589 95 876 146 2 50505 110202 782 559976685 559967 65 198041 33 to 51 55 994 058 143 753 463 22 201 273 60 768 132 16 134 149 215 227 79 514 070 865 514 078 865 1981/82 52 to 68 7 614 383 2 165 484 - 102 796 871 10 774 864 96 603 402 217 934 984 217 954 984 1082/83 69 to 77 75 541 1399107 30 680 078 13 9150 2 783 26 24 305 864 72 835 355 73 931 299 1983/84 78 t 81 - - 32 487 221 3 082 408 - ^ 191 142 923 226 712 552 226 712 769 1984/85 82 to 93 41 129 527 17 997 181 21 880 697 5 239 445 328 65 310 953 8R7 397 32962 386302 727 1985/86 94 to 110 - 72 222 917 94 338158 46 452 054 - 104 603 212 317 616 381 Tl)UAS (CFA FrW) 109 150 909 537 254 155 274 408 506 383 417 761 32 960 715 1 064 050 428 - 2 401 242 474 tgWd at Dr\. 31, 1985 lb\. 98 0D(IM (3 90D 000) ( 3 900 0O lb\. 100 ZAPIFAST (89 077 693) ( 624 509) ( 89 702 202) NO\. 107 (R ID1 (2 100000) ( 2 IODOO) No\. 108 ZAPI S (3D 000 000) (3000 0OD) No\. 109 CDM (6 775 000) ( 6 775 O) et rewved at De\. 31, 19SI (aFA Frams) 109 150 909 537 254155S 185 330 813 370 642 761 32 960 715 1 033 425 919 - 2 268765 272 Goat per lAd B__ latter of Fab 6\.1986 (US$) 335,070,38 2 868 121,26 1 698 102,92 2 868 205,70 30 000,00 7 799 320,26 - 38 - AM 3 Table 3-4 ZAPI D 1D mam DEIVarW rm= QCarism of Maieted miA Actua Costa of Cocoa NWd Coffee Naiwatlna (F"1A IWO9) Facto Caldata Cost Actual Coat _alez 0ated Coffee ootal Direct WIt t Total ___ P _ofit ANDOM 28 050,0 9 965,5 38 015,5 41 936,2 5 748,3 47 684,5 + 9 669,0 2D 606,5 DLTA8 9 288,0 1 802,7 11 090,7 35 085,8 700,7 35 866,5 + 24 775,0 11 027,5 DNtAlG 22 815,0 1 806,0 24 621,0 38 157,1 3 412,0 41 569,1 + 16 948, 15 517,5 IXR)~ 22 498,5 2 255,2 24 753,7 44 992,9 2 513,5 47 506,4 + 22 752,7 19 817,0 WMNG 11 029,5 3 351,6 14 381,1 47 404\.9 2 645,5 50 050,4 + 35 669,3 6 256,2 I3EUJ)U4X= 44 072,0 8 674,9 52 746,9 56 021,1 6 680,0 62 701,1 + 9 954,2 36 187,0 LS IE: ZAU (ioq,erstives 137 753,0 27 855,9 165 608,9 263 598,0 21 780,0 285 378,0 + 119 769,1 109 411,7 BELAED 146 010,0 - 146 010,0 108 221,1 43,603,1 151 824,2 + 5 814,2 61 679,5 M =1 48,670,0 - 48 670,0 246 775,4 - 246 755,4 + 198 105,4 97 846,2 332 433,0 27 855,9 360 288\.9 683 977,6 65 383,1 683 977,6 + 323 688,7 269 937,4 Coma Purdse - 569 961,3 569 961,3 567 317,6 - 567 317,6 - 2 643,7 - CoffeeFordu 2 106 555\.1 - 2 106 555,1 2 050 548,2 - 2 60 548,2 - 56 06,9 - G-rqe - - - 65 383,1 (65 383,1) - - - H&P wters Costs 2438-988,1 597 817,2 3 036005,3 3 381843,4 -0- 3 301043,4 + 265038,1 268 937,4 - - 424 641,2 - 424 641,2 + 424 641,2 - 2 438 988\.1 597 817,2 3 036 805,3 3726 484,6 - 3726484,6 + 689679,3 268 937,4 LoS For the Cwpai (lt ieiid HA & Plf and before fd AsMew Dgprv ) 420 741,9 689 679,3 689 679,3 k2ts: - Oe for 1984/85 wre eatluted at 172,3 ilUicm aid le f EW & PW at 30 ud1\.nUw, = ui the odr sid hmmlens reesivable e aily 260 WJim CFA frama\. - Actal Trarnport cost tarUge e iitu) w alLoced o the basis of the Tnsort shre ImIided In the calculaed eost\. - 39 - Table 4-1 ZAPI INTEGRATED RURAL DEVELOPMENT PROJECT Physical Development Indicators Appraisal Project Construction Type Objectives Achievements 1) Headquarters offices ZAPI Est Headquarters Buildings 937 m2 0 District cooperative (EPL) headquarters 3x343 m2 1x424 m2 offices 2) Training Rural Development Training Centers 1182 m2 0 3) Extension Farmers' Training Centers 24x102 m2 3x104 m2 District cooperative (EPL) extension 5x16 m2 0 offices 4) Foodcrop Research Staff house lx170 m2 0 Field building 2x20 m2 0 5) Consumer Supply Stores (ERAP) and Marketing Centers District cooperative (EPL) stores 6x250 m2 2x162 m2 Village shops 4xlOO m2 0 Woodsheds 5x25 m2 2x46 m2 Reserve store 8xSO m2 5x130 m2 6) Health Facilities Health Center 3 1 Maternity Annex 1 0 Prepharmacy 14x25 m2 7x62 m2 Prepharmacy store lx50 m2 0 7) Water Supply Developed springs 82 33 New wells 6 0 8) Feeder Roads Improve and maintain (km) 540 72 Construct and maintain (km) 280 0 9) Coffee Plants New coffee processing plant 1 1 Improvement of small hulling plants 3 3 Installation of new hulling plants 2 1 CAMEROON INTEGRATED RURAL DEVELOPMENT PROJECT - ZAPI ORGANIZATIONAL CHART \. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - - - - - - - - - - - - - - -- 3 -\.~A\.sp WI\. $_ \.e sigm I WGiWS~iS~& WI\. ZAP) ZpAcuP~4 CA-teF I 0-5V\.WP 25 Vw I * U~~PhdO_ A*v* b - j ~ *~o**Im"' _o,t~[51 *L' I 0_ef I I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~O _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I S\. - \.o Vd_1r _ Et_ \. v~~\.1sF 1*(o Eb - 41 - XS T" 5-1 2W1 L4S1 E9A!W MtAL IND 1W Pr ndati e Co t P D m f2 1D3 PM4 PY5 PY6 197I /1979 1979/198D 198D/1961 1981/1982 19w2/193 1983/198 1977/1978 AP AC to AC AP AC4t AC AD AC If AC I) rxffea Total am In prodkis (hl\.)/ 11500 6700 11S00 670D 11500 6700 11500 6700 11500 670 11500 6700 11600 Feti aple tD t oif (t2/422 92D 443 IOOD 462 IO0 1177 1160 0 132D 815 132D 1200 NW p1aah vitldxt fttilser (aM\. ha) - 12 50 27 150 84 30D 227 500 643 50O 826 NWpluseijv1th ftril2r (OAU\. hb) 50 0 150 0 300 0 500 0 500 0 Total rw plase (emu ha 9/ - 12 100 27 300 84 600 227 1ODD 643 100 826 )1kta\. le cafttf pudmad by 2I (t) 2304 2800 3670 2840 2955 21Y0 3226 292D 3018 3Q40 420D 304O 710 Maktathle ffee p d In Ent\. It,\. (t) 7928 8724 8818 10675 8151 20of the p o pt\.m 1, pzd- W by Z2WI 292 421 33S 292 372 hf ybi 2o tb ret\. P n A/ 288 317 320 395 296 harap YIld of du ZAP2 a kajlsW1 20D 418 319 423 257 429 280 436 261 453 365 453 IQ'J 2Ctoal er prtci 11500 6600 11500 660 11500 6600 11500 6640 11500 660D 12987 66D 12300 NVe platn (andt tI\.J 8/ 259 20D 814 600 1260 IO00 1602 1400 2248 140D 2636 Totam wifth bot c ',aetrol (lv)= 568a 3300 8047 6600 5043 6600 3067 660D 6950 66C0 663 S with better cpwid am 49S 50 702 I0S 44S IQ 272 100 5 I=2 502 Cbow Pmel by 2UWI (t) 1143 1980 1546 2150 1613 2310 1460 2310 1707 2360 160D 2360 1000 om prod in thI Eat\. Pen,inoe (t) 7928 8724 8818 10675 8UI1 2 of tlbg pwvince prahut\. pars by Wb MIi4n 18 La 13S 21 Aveeqa yield of the prwilme (taibI) "193 212 215 265 198 *rp yield of the zAP a0 (lrha)- 99 300 134 325 140 350 126 350 14 347 123 347 lBttmim* Rim om-7-Q 9 dated)- - 3D 0 90 0 110 0 110 110 New d rom m ta (xmdxted)= 30 0 30 0 105 0 18D 0 180 180 Incrental prodcntios (t) - 21 45 74 234 402 402 402 PRuddyua by 2A1ZJ (t= 129 5 10 7 0 4) Tnlad Plebar iam \.,,212 -lb\. l i W 212 212 103 150 103 212 103 212 103 212 103 212 212 lb\. TM ftily pos- - - 29 42\.4 59 40D 70 695 1 136 tOQO 1OOO rotat au of ad g bump pand e) 42\.4 42\.4 21\.5 4\.5 21\.5 42\.4 21\.5 42\.2 21\.5 42\.4 21\.5 42\.4 42\.4 totares, of wa fadly b (os) - - 5\.2 10\.6 12\.0 14\.2 21\.4 22\.5 3D\.0 22\.5 30\.0 30\.0 46\.9 Ttd a 42\.4 4U\.4 26\.7 21\.2 32\.1 54\.4 35\.7 44\.0 72\.4 44\.0 72\.4 72\.4 Pm&wtin of adetiu brp (t) 12\.7 12\.7 6\.4 6\.7 10\.7 29\.7 10\.7 63\.8 15\.0 42\.4 \.4\. 42\.4 42\.4 dc of nm fsdly PM" t, - 3\.2 5\.3 18\.0 9\.9 42\.4 15\.7 45\.0 N\.L 45\.0 45\.0 129 32\.1 Total pMoutim (t) 12\.7 12\.7 9\.6 27\.9 16\.0 47\.7 20\.6 74\.5 3D\.7 87\.4 LA\. 87\.4 A/ t apraisa do to s a" of coffa tn prabatias w eatimmed at 6700 ha; h \. accordin tD tu book data sumy caid aot by UiP !E unittdhe total uvs in prodi1ction isdr be abt 1150D be\. *Ala th 1984 ptubal Osm* bad 19\.411 be\. I At pralual it stiatd that by by3 M ab 402 of do totl e wuld mimve am WpLicatm of dbot 400 Is\. of a frtilzr 0h bit the aAs ow d 253\. by P4 the djectivw to fertIlIz bot 43S of di total a it w fertilie we applil\. By PY4 do 227 ha pIwAal gaiat a objectiv of 60 ha or 37S; bh r, thi b plobay arsgrated, efz dt lm plated to e*tted an the base of yetr plats ailable ie tIn n Ia \. 4/ Ta fiwa d thats V) do CAMP yiels wm owretiaee at appralsali ii) yielids within t poject mm ae m r dbrt die aes ; ad 1 2W'I pura asly dust aadslzd of th ?evs'a codta ad ass-fifth of ts s pm&Ctimu 5/ 7T1um of 1983 dtu*t\. i/ At qpralel ee total ses of oa in pr-dmation mm estitd at 6XO ha bat acwonia to dt bauc da am it sild rar be do 11500 hb, tAl thu 1964 ^IlAltal cow\.u dind 32\.400 h\. 7/ Tm fig asly inicetiv slw daiy we bad an dot r of yae cooa plaits allable in asa e\. i ci pd amtol ha st bon improved wler the pn ,ece\. ZAP! did sot tde am eo aticqWad t nt a \. / It _s nt very melitic duet by f3 oe better capddi atol idil own tda total a 'tth mom 1I0 Thee fie a d thret wa little tweet a the rim prodoctian &iiw p?Oi\.e biql_tati im/ Tv qytity of pay psrsm by IWV decrased fea U29 t In PYO to 7 Cm in PY4\. 12 At appraiel it - eatlatd dat 212 bmTp pads with a total asm of 42\.4 ha adss In the p aect m ordis to the psasil epuame for inlaild fi the _ umar of barra pads ms 103 iuAtad of 212 xd tho totl m 21\.5 bsat of 42\.4 ha\. Uk/ Atcorig to ZAP'\. ataft dxt SU of dt 136 fay pa% that hs bb carsd ar the pject am atea l project s\. T i\. T 5' podmal fti im&Atd by tdh mb-project _ ad aom cavalusted\. - 42 - Annex 9-a Son Excellence Jean-Baptiste Yonke Ministre de l'Agriculture Yaoundg Cameroun Subject: ZAPI Est Integrated Rural Development Project (Cr\. 776-CM) Final Sugervision Mission Mr\. Minister, We have just completed our final supervision mission for the above project and are now writing the project completion report for information of the Bank and the Government of Cameroon\. We would like to arrange a meeting between all relevant parties within the next few months to review the completion report in detail\. In the meantime we would like to share with you the main conclusions from the mission's round-up meeting, on February 25, 1986, for which Mr\. Kamga the Director of the MINAGRI Planning Department was President\. 1\. Principal Conclusions at Project Termination For the main part, the objectives of the project (institutional development; agricultural production - cocoa, coffee and food crops; processing and marketing developments; and socio-economic developments) have not been realised\. The main reasons for this lack of achievement are as follows: i) The project had too many components involving the services of five technical ministries (Agriculture, Livestock, Health, Public Works, and Research)\. ii) The ZAPI Est was a weak organisation at the outset of the project and was therefore not capable of implementing the physical developments without considerable preparatory reorganization and training\. No time for this evolutionary development was allowed for in the scheme of development for the project\. iiI) The organisations in Eastern Province responsible for the associated components (agricultural production services, rural water points, fisheries, health, feeder roads, and research) were less prepared than ZAPI Est to implement their respective developments\. iv) There was a lack of dynamic, innovative management at the head of ZAPI Est throughout the project Implementation period, as a result of which, the organisation, suparvision and coordination was totally insufficient\. Associated with this, ZAPI Est's Administrative Council met only infrequently and failed to give strict directives to project management\. - 43 - v) There was a lack of detailed work planning and budgeting and the monitoring, and evaluation was weak and the limited results which were produced were ignored\. As a result, the project proceeded in a vacuum which, inevitably, resulted in paucity of management information which has also affected the thoroughness of the ex-post evaluation\. vi) A situation of inadequate accounting and weak financial controls in ZAPI Est persisted throughout the project\. This resulted in a serious financial situation involving losses of Government funds, some of which are still unexplained - as was identified in the reports produced by the consultant accountant (Mr\. P\. Gista)\. vii) The development of permanent training facilities for ZAPI Est personnel and for other project staff, and for farmers was not realised; viii) The Government was not strongly committed to the project, as shown by: the titular responsibility changed between the Ministries of Plan and Agriculture during implementation; the failure to appoint experienced and competent management staff; and the persistent lack of financial resources; ix) The supporting services of the Ministry's Agricultural Department, especially for crop protection treatment for coffee and cocoa, but also for fertilizers, were constantly insufficient (in quantity and quality) and badly timed\. x) The marketing of coffee and cocoa was poorly coordinated and supervised by the Produce Marketing Board (ONCPB)\. 2\. Short-term Proposals for Remedial Actions At the end of the project, certain of the problems listed before had started to be improved, notably the marketing arrangements for coffee and cocoa\. However, the planning, supervision and coordination within ZAPI Est is still lacking\. As a consequence, the round-up meeting agreed on the following program of urgent remedial actions: i) Restrict the Government's investment and operating budget for ZAPI Est for the year 1986-87 to an absolute minimum biding management and financial reorganization\. ii) Analyze the competence of the entire personnel of ZAPI Est and Immediately reduce their numbers to the minimum necessary to assure the basic agricultural production and marketing services\. This will involve removing about 180 persons from the payroll of ZAPI Est\. iii) Complete the revision of the ZAPI Est accounts and balances for - 44 - the two years up to 30/6/85 and rectify the queries about outstanding funds (which were raised by the last audit and subsequent work of the consultant accountant - M\. Gista)\. Complete the audits up to the closing date of the IDA Credit 776-CM\. Because of the serious arrears, this exercise will involve the replacement of the chef comptable, revision of the work organization of the remaining accounting personnel, and the temporary employment of a competent audit company to expedite the work\. iv) Immediately introduce a system of work programming and budgets for each service of ZAPI Est, together with a simple but thorough system for monitoring actual progress and for preparing short but precise quarterly progress reports for information of the Ministers concerned\. v) Develop a basic agricultural production programme for the 1986-87 campaign involving realistic targets for numbers of farmers to be touched and the key locations involved, training programs and for the timely and adequate provision of inputs\. vi) Devise more detailed physical and financial stocks and sales controls for coffee and cocoa between the Marketing Department and the Financial and Administrative Department of ZAPI Est\. We believe that a team from the MINAGRI Planning Department (including the experts in place) should be able to effectively expedite this urgent programme with the assistance of an accounting/audit company and an experienced agronomist\. We recommend that the Administrative Council of ZAPI Est should assemble immediately to examine the problems of the society in detail and give specific directives for their resolution\. Thereafter, the Council should meet quarterly during the next year to review progress and advise the Minister on a long term development plan for Eastern Province\. 3\. Long term Proposals for Development in Eastern Province The Director of the MINAGRI Planning Department requested that the Bank prepare terms of reference for a study, to commence as soon as possible, for proposing a concise plan for future development in the Province\. This we will be pleased to do, and we will send you our draft proposals within the next few weeks\. Sincerely yours, Ben Thoolen Chief Agriculture Division D Western Africa Region _ 45 - ANNEX 9-b Page 1 Propositions for Future Rural Development in Eastern Province 1\. ZAPI should not be abandoned\. Instead, lessons shoul be drawn from the successes or failures of the past and the gains should be consolidated and ZAPI should revert in earnest to the original principles\. (a) First, it is essential to make a clear distinction between what can be expected of a public service undertaking (especially extension activities and the improvement of the position of women) and profitable commercial activities\. The former should be subsidized by the State; all the others should be shifted gradually to the cooperatives and their unions coffee processing, (coffee processing, marketing of coffee and cocoa, aiding the marketing of food products, supply of goods and inputs, and credit)\. (b) Second, using the items in the PMB price schedule and the detailed accounting statements, a number of additional activi- ties (collection 1/ hulling, transportation) could eventually be transferred either wholly or in part to the cooperatives (at least, to the more efficient ones), with the corresponding payments for services performed\. When there is only a partial transfer of activities and others are still carried out by ZAPI (e\.g\. maintenance of machinery, accounting, transporta- tion from Belabo to Douala), there must be a service charge that is clearly identified and paid for accordingly\. On the other side, the cooperative (at the EPL level) would have to accept the corresponding outlays, including those for the essential staff\. The manager of the EPL can become the manager of the cooperative, with a salary that can, if neces- sary, be paid wholly or partially by the State, especially for the smallest cooperatives\. 2\. The Administrative Council must be properly constituted, with a core of interested representatives from Eastern Province\. The choice of ZAPI General Manager must be left exclusively to this Council and should not be imposed by the State with prior approval from the super- 1/ For the crop year 1985-86, according to the price schedule for coffee, collection was paid at the rate of CFAF 19,334 per ton; hulling at the rate of CFAF 25,137 per ton, and transportation at the rate of CFAF 43,258 per ton\. 46 - ANNEX b-9 Page 2 vising Ministry" (Article 34 of Law No\. 73/15 dated December 7, 1973 confirmed by Article 42 of Decree No\. 74/874 dated October 29, 1974, which provides for making a government official available)\. The State should develop an effective supervisory role through the DEP\. 3\. With a prudent policy of accumulating reserves,(required by the recent PMB pricing regulations), the operating margins on both coffee and cocoa should enable the accumulation of reasonable surpluses\. A small part of these could perhaps be distributed in the form of bonuses to individuals; but the largest portion should be set aside as a credit security fund, for making loans for purposes not covered by FONADER credit, or for providing initial working capital for priority social developments or for making joint investments approved by cooperativen or by their village sections\. 4\. The feasibility for developing a cooperative union should be considered, with responsibility, for example, for sorting and grading the coffee, shipping coffee and cocoa to Douala, negotiating with PMB, the banks and FONADER (for credit), making wholesale purchases of goods for the ERAP central store, and for the work carried on by PROVIV (following reorganization to make it commercially efficient)\. Some of these activities should be fully commercialized and self-financing (ERAP and PROVIV), while grading and sorting are covered by specific line numbers in the PMB price schedule, and still others would come to be regarded as overheads, export profits, or insurance\. Until the cooper- ative union is formed, these tasks will have to continue to be carried out by ZAPI, but with entirely separate accounting for both revenue and expenditure\. 5\. The development company should receive financial assistance to carry on the work, with a smaller staff, of extension services, liaison with research groups, seed propagation in conjunction with farmers' groups, programs for women, pest and disease control, and education in cooperative principles and methods\. This last should be closely associated with day-to-day activities and should give priority to management questions, explaining the financial results to the cooperators as a vhole, and discussions on the possible uses of surpluses\. The provincial MINAGRI cooperatives service (COOP/MUT) should perform a supervisory role (supervising audits, ensuring adherence to the law, and providing assistance at General Meetings\. 6\. Until these arrangements have been effectively established, it would be pointless to extend the ZAPI areas or to restart export activities\. In the meantime, in order to make the factory at Belabo more profitable, ZAPI could, (as is already being discussed), make contracts with private traders that would enable the factory both to sort and to grade larger quantities\. - 47 - AhNEX 9-b Page 3 7\. At Government level, the underlying policy problems (which recur in most ara developmet projects), must be urgently resolved\. This includes: installing a systematic review sechanism for producer prices; streamlining the procurement, qualities, quantities and timing for farm inputs supplies (Including thb provision of crop protection services) on a couercialized basis; accelerating the exploitation of applied research work; and redefining the role of the MINAGRI provincial delegation\. Because of their fundaametal Importance and national significance the rosolution of theo problems should be the principal focus of the Bank's involve mn t in the Agricultural Sector\. Some small progress has been made In these ar"s In Bank dialogue with Government in recent years, and efforts should be redoubled to resolve the problems, possibly in the context of a sector adjustent loan\. - 48 - Annex 10 TRANSLATION OF COMENTS BY BORROWER Ministry of Public Health Republic of Cameroon Yaounde 27 April 1987 The Minister of Public Health Subject: Project Completion Report Cameroon-Integrated Rural Development Project ZAPI East (Credit 776-CAM) To: Mr\. Graham Donaldson Chief, Agriculture and Human Resources Division Operations Evaluation Department World Bank 1818 H St\. N\. W\. Washington, D\. C\. 20433 USA Dear Sir, I refer to your letter of April 1, 1987 attaching the above report for our comments\. I have the pleasure of informing you that I have the following observationss 1) The preparatory phase did not take sufficiently into account the local socio-economic aspirations, whi:h explains the lack of interest on the part of the beneiiciaries; 2) The intervention of five ministries (Health, Agriculture, Transport, Livestock Research) without preliminary definition of tasks has not been conducive to the coordination of act!-cies; 3) Working in parallel with the Produce Marketing Board, the project opted for managing marketing operations, while, at least initially, the project should have used an agency more experienced in these activities\. 4) Excepting some isolated actions in training traditional midwives, the health component has not appreciable progressed, especially in the construction of medicine dispensaries as foreseen in the Fifth Development Plan; - 49 - 5) the organization of management activities appeared cumbersome, which led to much effort given to decision making and its follow-up\. In nn=mary, the project concentrated too quickly in searching for economic results while neither staff nor beneficiaries were sufficiently prepared for the implementation of the project\. To maintain and reinforce the lessons learned, it would be desirable to reorient the strategy of these types of projects to new approaches: - Detailed preliminary studies - Sensitizing and mobilizing beneficiaries - Determination of what are the different tasks - Restructuring management - Staff training and appropriate programming Sincerely yours, Pr\. Victor Anomah Ngu MAP SECTION | l_\.r _ _ N I G E R / C H A 0 T ha b> n @ s ZK, n bA C H A D T~~~~~~~~ta W\.Od 8o,* S StffV excA,S~ Lafe ?~_\.X_ s , _ ,, <SUDA N LWAK CHA *D, \.* 8URKtNA,' ' - \.o ht\. * ,-- and tfhe k't ~tan,a F FASO (r\ , I r mn d\.an,0,n / Sand~~~~~~~~\. and 0~ bol,da~an d0o I~~~~~~~~ \ > /) Z N I GERIA ,\.-_ttontondt'arOosttus' \.z Z l~~~~~~~~~~~~~~~~~~~~~~~o )Z\. eJ5 QEP U 8' _ rof K\.tr o} _ ,<1,t50 ;,~ff 'h W\.4 R\.*and Ih\. NI ER IA /w 1 - \.4~ - _ > >1 ~ ~ ~ ~ ~ ~ ~~o jZ I< or / CETA PIA nremrtc ,cva > 0\. P'\., REPUBLIC , CAMEROON1% r2 1?m EQUATORA'j-4 GUINEA V\.-- Guinea~4: I PEOPLE'S Z A I REC H A '71 ~~ )REP\. Of\. \ AtLAANTIC GABON 1H 0 CFA A T\? f H CAMEROON ZAPI RURAL DEVELOPMENT PROJECTP0 PROJECT AREAS ZAPI ZONE BOUNDARIES -10- _ Paved roads _0 Grovel roods Earth roads 0 20 40 0 60 10,0 t20 140 160 F 'I --o-4- Railroads KILOMETERS i7; ° 0 2p 40 60 80 \. \. international airports MtLES \.Ports MLS\. -- --- Rivers - Provincial Boundories -*- International Boundaries | 5 C,i -1\ X,, g \\. - _ X / t t O N I G E R I A 4Nr- - arn\./ j J\/ O B T iNkmbat ) _ f K gMeigonga / ' \.-\.t / Mbengwt BambUi Kumbor BA tMENDA !OO <, r - - CENTRAL /,, Mome ;kxF 5J ;XH A F R I C A N GO , S Ul j/ 8gaogrMbOUdOUSA ,> - | \.) W F{5 b 4 - p 5 ~~cr\. O U TH8<2 R E P UB LI C Mundemba i yj ego RTo \.-\.>C >- 9z~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~T8afPgu, B-9S1! ) l~~~ boo ? ,, Esfko rTfAOUNDl! 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APPROVAL
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Document of The World Bank FOR OFFICIAL USE ONLY Report No\. 16694 IMPLEMENTATION COMPLETION REPORT BRAZIL ENDEMIC DISEASE CONTROL PROJECT Loan 2931-BR June 6, 1997 Social and Human Development Group Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties\. Its contents may not otherwise be disclosed without World Bank authorization\. CURRENCY EQUIVALENTS (as of June 5, 1997) Currency Unit = Real (R$) R$ 1\.00 = US$ 1\.07 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CODEPRO Coordenadoria de Gerencia de Projetos Project Management Coordination Unit COGEP Coordenadoria de Ger8ncia de Projetos Project Management Coordination Unit DALY Disability-Adjusted Life Years FIOCRUZ Fundacao Instituto Oswaldo Cruz Oswaldo Cruz Institute Foundation ENS Fundacao Nacional de Sauide National Health Foundation FSESP Fundacao Servicos de Saude Publica Public Health Services Foundation IBAM Instituto Brasileiro de Administra=ao Municipal Brazilian Institute for Municipal Administration IEC Information, Education and Communication IERR Internal Economic Rate of Return KAP Knowledge, attitudes and practices MOH Ministry of Health MPAS Ministerio da Previdencia e Assistencia Social Ministry of Social Security and Welfare NHF National Health Foundation NGO Non Government Organization PAHO Pan American Health Organization SES Secretaria Estadual de Sauide State Health Secretariat SUCAM Superintendencia para Campanhas de Saiude Puiblica Superintendency for Public Health Campaigns SUS Sistema Unico de Saude Unified Health System UNICEF United Nations Children's Fund Vice President Shahid Javed Burki Director Gobind T\. Nankani Country Sector Leader Alain Colliou Staff Memeber Alexandre V\. Abrantes FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT BRAZIL NORTHEAST ENDEMIC DISEASE CONTROL PROJECT Loan Number 2931-BR TABLE OF CONTENTS PREFACE \.1i EVALUATION SUMMARY \. ii PART I: FINDINGS AND LESSONS A\. Background \. 1I B\. Project Objectives \.3 C\. Project Implementation \.5 D\. Project Sustainability \.8 E\. Performance \.8 F\. Assessment of Outcomes \. 10 G\. Future Operations \.11 H\. Key Lessons Learned \. 12 PART II: STATISTICAL INFORMATION Table 1: Summary of Assessments \. 14 Table 2: Related Bank Loans/Credits \. \. 15 Table 3: Project Timetable \. 16 Table 4: Loan Disbursements: Cumulative Estimated and Actual \. 16 Table 5: Key Indicators for Project Implementation \. \. 17 Table 6: Key Indicators for Project Operation \. 18 Table 7: Studies Included in Project \. 19 Table 8a: Project Costs \. 21 Table 8b: Project Financing \. 21 Table 9a: Cost-effectiveness Analysis \. 22 Table 9b: Cost-benefit Analysis \. 23 Table 10: Status of Legal Covenants \. 25 Table 11: Compliance with Operational Manual Statements \. 26 Table 12: Bank Resources: Staff Inputs (SW, Actual) \. 26 Table 13: Bank Resources: Missions \. 27 Table 14: Documents in Project File \. 28 Map: IBRD Nos\. 21334 and 20434 This document has a restricted distribution and may be used by recipients only in the performance of their official duties\. Its contents may not otherwise be disclosed without World Bank authorization\. DEFINITIONS CHAGAS DISEASE: (American Trypanosomiasis) is a disease which occurs in Central and South America, is caused by a parasite known as Trypanosoma cruzi\. The disease is observed at any age, altough children are mainly affected\. The disease can present itself as a congenital, acute or chronic affliction, affecting mainly the heart and the gastrointestinal tract, and leading to dilatation of the heart, arrhythmia, heart failure, megaesophagus and megacolon, all of which result in severe disability and can lead to death\. Humans and marsupials are the major disease reservoir\. The disease is predominantly transmitted by vector bugs of the genera Triatoma, which are largely disseminated throughout rural areas of Latin America, where mud huts of the agricultural workers are their favorite habitats\. Transmission occurs predominantly at night, since the bugs attack only at night\. Other less usual methods of transmission are transplacental, blood transfusion and laboratory transmission from infected syringes or blood\. Residual insecticides applied to floors, walls and thatch will elimintate most vectors, but reinfestation can occur in a few months\. Chagas' disease flourishes only where socio-economic levels are low, and long-term control measures involve economic rehabilitation, in particular, better housing: thatched roofs and unplastered mud walls must be replaced with materials and designs where bugs find no harbor\. SCHISTOSOMIASIS is a disease caused by a species of parasites known as Schistosoma mansoni\. The disease causes a variety of symptoms affecting mainly the liver\. Severe forms can lead to liver failure and death\. There is a strong relationship between the intensity of infection (parasite load) and severity of the disease\. Patients eliminate the parasite's eggs through the feces\. When these eggs end in water they hatch and produce free living forms (miracidium) which invade some particular species of snails which act as intermediary hosts\. In the snails, the miracidia evolve into free swimming larval forms (cercariae) which abandon the intermediary host and on contact with humans penetrate the skin and migrate to the bowel and the liver\. Humans acquire the infection by wading, swimming, bathing or washing clothes and utensils in the streams containing free-swimming cercariae, which have developed in snails and penetrate the human skin\. Three species of snails (intermediary host) exist along the northeast Atlantic coast and in other focal areas throughout the country\. Control is based on diagnosis and treatment of patients with appropriate chemotherapy (oxaminiquine and praziquantel), avoidance of pollution of surface waters, elimination of the vector with moluscicides, prevention of human contact with the infected water, health education and community participation, ideally in an integrated approach\. LEISHMANIASIS is a disease caused by protozooa known as Leishmania\. The disease can present itself as a severe visceral disease (kala-azar), or as a chronic cutaneous or muco- cutanuous sore (Tegumentar American Leishmaniasis -- TAL)\. Kala-azar is predominantly a disease of children under 10 years of age\. The disease reservoir are dogs, humans and rodents\. The vector which transmits the disease from one reservoir to another in the Americas is the Lutzomia sandfly\. When the appropriate sandfly feeds on an infected dog or person, it ingests the parasite with the blood meal\. These develop in the sandfly into intermediate forms which are passed to the new hosts when they next feed\. In the new host the parasite reassumes its leishmania form and migrates to deep-seated organs such as the liver or the spleen (visceral leishmaniasis), or they go back to the skin\. Leishmaniasis control is based on identifying and treating infected persons, attacking the sandfly, as well as the animal reservoir of infection\. Pentavalent antiominals are the choice for treating kala-azar and TLA\. Sandfly bites can be partially avoided by sleeping on the upper floors of houses and using repellents\. IMPLEMENTATION COMPLETION REPORT BRAZIL NORTHEAST ENDEMIC DISEASE CONTROL PROJECT Loan Number 2931 -BR PREFACE This is the Implementation Completion Report (ICR) for the Northeast Endemic Disease Control Project in Brazil, for which loan 2931-BR in the amount of US$109 million equivalent was approved in June 1988 and made effective in December 1988\. In 1991, US$20 million and in 1993, US$ 7 million were canceled from the original loan amount reducing the loan amount to US$82 million\. The loan Closing Date was June 30, 1996\. The ICR was prepared by Alexandre Abrantes (Senior Public Health Specialist, LASHD), in collaboration with Claudia Rosenthal Dariush Akhavan, James Cercone (consultants), Renato Gusmao (PAHO) and Brenda C\. Enuton (Operations Analyst, LASHD)\. Assistance in the production of the report was provided by Sarah Menezes (Task Assistant, LASHD)\. It was reviewed by Alain Colliou (Country Sector Leader, LAl) and Orville Grimes (Projects Adviser, LA1)\. The Borrower provided comments that are included in the project file\. Preparation of this ICR began during the Bank's final completion mission, on July 10, 1996\. It is based on material in the project file\. The borrower provided reports and other materials and contributed insights through interviews\. ii NORTHEAST ENDEMIC DISEASE CONTROL PROJECT Loan Number 2931 -BR EVALUATION SUMMARY BRAZIL Introduction\. A significant portion of Brazil's territory is located in the tropical zone, where the environment is rich in vectors and reservoirs of communicable diseases\. Many of those have become endemic, primarily due to insufficient control measures, exacerbated by limited resort to treatment even for those diseases that are treatable\. At the time of project preparation, the health status in the Northeast was poor, as evidenced by the low life expectancy at birth of 51 years (65 years for the whole country), high infant mortality rate of 125 per 1,000 live births (67/1,000 for the whole country), and an exceptionally high prevalence of endemic infectious diseases including Chagas'disease, schistosomiasis, and leishmaniasis\. Endemic diseases were, and still are, responsible for a considerable burden of death, disease and disability, with direct and indirect economic impacts, such as high costs of medical and hospital care, low labor productivity and loss of productive years of life\. In the early 1980s, endemic disease control programs were short of resources, and covered less than one half of the population living in high endemicity areas\. In 1986, the Government of Brazil asked for the Bank's help in addressing the burden of disease caused by endemic diseases in Northeast Brazil\. The Bank was becoming familiar with such projects, as the health sector had made control of communicable disease a priority\. In Brazil, the Bank had already financed a malaria control component, within the Northwest Region Integrated Development Program - Health (Ln\. 2061-BR)\. This time, the Brazilian Government wanted to extend and strengthen its endemic disease control efforts in the Northeast, and to develop a successful management program within the Superintendency for Public Health Campaigns -- SUCAM, a federal agency represented in all 26 States, with 40,000 staff, which had general responsibility for endemic disease control in Brazil\. Project Objectives\. As originally conceived, the project's objective were to reduce the prevalence of Chagas'disease, schistosomiasis, and leishmaniasis in the Northeast, and bring the intensity of human infection to minimum levels where only epidemiological surveillance activities would be needed to keep these diseases under control\. This was to be done mostly through vector control\. A second objective was to strengthen SUCAM's capacity and efficiency to expand control activities in the Northeast\. A complementary objective was to support the MOH activities to reduce the occurrence of new AIDS cases\. The project involved five components: (1) prevention and control of disease transmission, i\.e\. vector control; (2) institutional development; (3) community mobilization; (4) operational research; and (5) AIDS prevention and control\. iii The project covered about 1018 municipalities in which the responsible vectors were prevalent, in nine Northeastern states (Alagoas, Bahia, Ceara, Maranhao, Paraiba, Pernambuco, Piaui, Rio Grande do Norte, and Sergipe), and in sections of the states of Minas Gerais, Goias, Parana, and Rio Grande do Sul\. The target high-risk population covered by the project was 12\.2 million for Chagas disease; 30 million for Schistosomiasis, and 8\.4 million for Leishmaniasis\. Implementation Experience and Results\. The project got off to turbulent start, due to political and institutional instability\. By the end of 1992, after five years of project implementation, only 34 percent of the loan funds had been disbursed\. Management was poor during the early years, and SUCAM was eventually dissolved and absorbed into another federal agency\. This happened at the time of the Collor government, under which there were four Ministers of Health and six different project managers\. The situation greatly improved after 1992, when the Bank and the Borrower agreed to a radical reorientation of the project\. The strategy was to target vector control on the basis of epidemiological information, and to complement traditional vector control with early diagnosis and vigorous treatment\. After 1993, implementation accelerated and the project ended 30 months after the original closing date with full disbursement and significant and positive impact on the incidence, the severity and the mortality of Chagas Disease, schistosomiasis and leishmaniasis\. Vector transmission of Chagas disease transmitted by TJ infestans has almost been interrupted as well as blood transfusion\. The 1995 kala-azar epidemic in Piauf and Maranhao was brought under control much faster than a similar epidemic which took place 10 years earlier, and the fatality rate was a fraction of what it had been in the previous epidemic\. Between 1988 and 1996, the project is estimated to have prevented about 18,500 deaths, which translates into about 520,000 disability adjusted life years (DALYs) saved\. With an US$140\.8 million investment involved, the project cost about US$558 per DALY saved, which places it among the high cost-effectiveness health interventions (Table 9a)\. The project saved about US$470 million in direct and indirect benefits with a total present net present value (benefits - costs = NPV)) of just over US$370 million, or 2\.5 times the total investment\. This corresponds to an internal economic rate of return (IERR) of over 500 percent and a pay back period of aproximately five years\. That is, by 1993, the project had already generated retums equivalent to the total investment of US$140 million over the period of 1988-1996 (Table 9b\.)\. Also important was the creation of a new scheme of management and accountability for health projects that did not exist previously, and the transfer of more power and authority for health programs to states and municipalities\. Many towns now have laboratories to make diagnoses, trained staff to administer treatments, and specialists who can control different vectors and reservoirs in infected areas\. Further, the project introduced management contracts, performance indicators, monitoring, supervision and evaluation, which are now common practices not only in the National Health Foundation regional offices, but also in state and municipal health secretariats\. iv Sustainability and Lessons for Future Operations\. The project leaves an extended Chagas control program, an expanded Schistosomiasis control program, and new knowledge of how to control kala-azar epidemics\. It leaves a network of equipped and staffed laboratories, as well as a better defined reference system and strengthened institutional capacity to deal with endemic diseases in the Unified Health System (SUS)\. Some states and municipal health secretariats are now ready to take responsibility for financing and organizing endemic disease control\. Changes in the SUS payment system, consisting in the reimbursement of traditional health promotion and disease prevention interventions carried out by states, municipalities or NGOs, ensure sustainable financing of the recurrent costs associated with endemic disease control\. BRAZIL NORTHEAST ENDEMIC DISEASE CONTROL PROJECT (Loan No\. 2931-BR) PART I: FINDINGS AND LESSONS A\. BACKGROUND Endemic Diseases\. This project was designed to assist the Government in a five-year program to arrest the increasing trends of three endemic diseases, Chagas' disease, schistosomiasis, and leishmaniasis in Northeast Brazil\. Endemic Diseases\. (a) Chagas'disease\. At the time of project preparation, there were about 6 million Chagas' disease patients in Brazil, of which 60 percent lived in the Northeast, and another 15 million more were at risk of contracting the disease by living in inadequate dwellings infested with the vector (Triatoma infestans)\. In addition, many more were at risk of getting infected through blood transfusions and transplacental infection\. The existing Chagas' Disease Control Program covered 2050 municipalities in 19 states, which had been identified as endemic areas by the 1981 national Chagas'serological survey\. In the absence of vaccines and effective pharmaceuticals suitable for large-scale treatment of Chagas' disease, interruption of transmission had to rely on insecticides to ensure vector control, blood donor screening and blood transfusion control, which had been proven successful in medium-scale trials in Brazil and in other countries\. Home improvements, to get the vector out of the household, was used as the long-term approach for solving the problem\. Between 1975 and 1986, the Program was able to reduce incidence to low levels in only 414 (20%) of those municipalities, and more than 60 percent of blood banks did not screen donors for Chagas' disease, due to lack of laboratory resources and technical staff\. (b) Schistosomiasis\. At the time of project preparation eight to ten million people were infected with the parasite and another 30 million were at risk of contracting the disease\. The disease occurred mostly along the Northeast Atlantic coast, where a particular species of snail which serves as the intermediary host to the Schistosoma mansoni parasite is very common\. The disease had been spreading to other areas in the Country, due to significant migrations of infected people, which led to the contamination of soil and waterways where the intermediary host snail existed\. The Brazilian Program for Schistosomiasis Control had been successful in controlling the disease in some areas, by using chemotherapy and application of molluscicides in infected waterstreams\. But, by 1986, the Program only covered about 40 percent of infested areas, i\.e\., in the states Minas Gerais and Bahia, due to lack of resources and organizational weakness\. 2 (c) Leishmaniasis\. The vector sandfly and the main disease reservoir (infected dogs) exist throughout the Northeast, including in many urban areas\. A 1985 serologic survey showed that all Northeast states had infected dogs, with a prevalence ranging from 1 percent in Paraiba to 50 percent in Piaui\. In the 1980s, Leishmaniasis Control Program activities had been reduced due to lack of resources and institutional weakness, thus leading to an alarming increase in new cases: between 1979 and 1985, the number of reported cases increased from 3,243 to 16,200 per year, 95 percent of which were reported in the Northeast\. Unreported new cases could easily have tripled this figure\. Over 8 million people were estimated to be at risk\. The National Leishmaniasis Control Program focused on vector control, i\.e\., using insecticides to eliminate sandflies, and elimination of infected dogs\. By 1996, however, the activities of the Program were restricted to relatively few and scattered areas in the Northeast, representing less than 25 percent of the endemic area\. (d) AIDS\. AIDS appeared in the mid-1980s as a new fatal viral disease which created a serious public health problem due to its explosive propagation in the country\. In 1987, there were 267 new cases reported in Brazil in only 4 months\. The onl\.- effective measures available were information, education and communication aimed at changing risky behavior, and HIV screening of blood donors and control of tranfusions\. At the time of project preparation, the three major federal institutions supervised by the Ministry of Health were responsible for endemic disease control in Brazil: the Superintendency for Public Health Campaigns (SUCAM), the Public Health Services Foundation (FSESP), and the Osvaldo Cruz Foundation (FIOCRUZ)\. States and municipalities played a minor role in endemic disease control\. SUCAM implemented nationwide programs of prevention, control and surveillance; it was semi-autonomous and was the lead agency for endemic disease control\. It was represented in each of the 26 states and employed over 40,000 workers\. The agency was noted for its strong staff and line organization, its excellent record in implementing endemic disease control programs, and, in particular, its ability to sustain programs in remote areas under difficult conditions\. In 1988, SUCAM created a Coordination Unit for Project Management (COGEP) to coordinate Bank-supported projects: the Northeast Endemic Disease Control (Ln\. 2931-BR) and the Amazon Basin Malaria Control Project (Ln 3072-BR)\. In 1991, SUCAM and FSESP were closed and their functions transferred to a new institution: the National Health Foundation (NHF), with headquarters in Brasilia\. The NHF created a special unit, CODEPRO (Coordenadoria de Gerencia de Projetos) to manage Bank- funded projects\. Brazil's Constitution of 1988 called for universal health coverage for all citizens\. This Constitution established the principles of a Unified Health System (SUS) which would publicly finance personalized health services for the entire population, to be provided through a decentralized network of public and private providers\. The SUS was created in 1990, and state and municipal governments have been progressively gaining more health care planning and management responsibilities, including those of endemic 3 disease control\. SUS hospitals and ambulatory networks did not have a tradition of diagnosing or treating endemic diseases\. Most endemic disease patients seeking care in a SUS facility were referred to SUCAM (later NHF) units\. B\. PROJECT OBJECTIVES Objectives\. The main objective of the project was to reduce the prevalence of Chagas'disease, schistosomiasis, and leishmaniasis to levels at which only epidemiological surveillance was needed to keep these diseases under control\. The project also aimed at improving the institutional capacity of SUCAM to carry out disease prevention programs in the Northeast\. The project would also assist the development of a National AIDS and STD Control Program\. Definition\. To achieve this goal the project would: (a) control the presence of disease vectors and intermediary hosts in the households and in neighboring environments, by applying pesticides and carrying out health education; (b) reduce the human reservoir of these diseases by early diagnosis and treatment of target population groups; (c) set up surveillance activities for populations at risk; (d) strengthen SUCAM's capacity and efficiency to expand control activities in the Northeast; and, (e) support the MOH activities aimed at reducing the occurrence of AIDS cases\. Cost and Timing\. At an expected cost of US$218 million to be supported by a US$109 million Bank loan, the project was made effective in December 1988, to be completed on June 30, 1993, and closed by June 30, 1994\. The project closing date was extended 24 months to June 30, 1996\. There were two cancellations from the original loan amount: US$20 million in 1991, and US$7 million in 1994\. Thus, the revised loan amount was US$82 million for Loan No\. 2931 -BR\. Achievement of Objectives\. As a result of the project, hospital admissions and deaths from Chagas' disease, schistosomiasis, and leishmaniasis have all decreased, suggesting a reduction in the incidence and/or a reduction in the severity of these diseases\. Vector and blood transmission of Chagas' disease was interrupted in large endemic areas\. The number of severe schistosomiasis cases and the respective mortality were significantly reduced\. The cyclical visceral leishmaniasis (kala-azar) epidemic, which occurred in 1995 in Piaui and Maranhao, was brought under control much faster and with many fewer deaths than a similar epidemic having occurred 10 years previously\. Chagas'disease\. The project reduced the incidence of transfusional Chagas' disease by 89\.7 percent, more than the 80 percent reduction which had been set as a target a the time of project preparation\. Hospital admission and mortality rates decreased significantly\. Vector and transfusion transmission have been interrupted in large endemic areas, and the Triatoma infestans (vector) have been eradicated from most States\. There are several indirect indications that transmission and incidence of Chagas' disease are decreasing: (a) between 1989 and 1995 alone, the prevalence of houshold infestation by 4 the T\. infestans fell by more than 20 percent; (b) between 1957 and 1995, the number of municipalities in the endemic area (i\.e\. 2,500 municipalities) where transmission has been interrupted rose from 414 to over 940, bringing the population at risk from about 70 million down to about 40 million; (c) between 1987 and 1995 the proportion of positive blood donor samples decreased from about 1 percent to less than 0\.7 percent; (d) between 1986 and 1996 the number of cases caused by transfusion of infected blood fell from 20,000 per year to about 500 per year; (e) between 1985 and 1995, the number of hospital admissions due to Chagas' disease decreased from about 751 to less than 123; and finally and most importantly (f) between 1975 and 1985, Chagas' disease specific mortality, for the age groups which could have benefited significantly from the project (i\.e\., aged 10-14 and 15-19), dropped by about 89 percent\. Schistosomiasis: Between 1988 and 1996, the number of hospital admissions due to schistosomiasis in the Northeast dropped from 2,900 to 1,400, and the number of hospital days dropped by 50 percent, from about 23,000 to 14,000, suggesting a reduction in incidence and/or a reduction in the severity of the disease\. During the same interval the schistosomiasis mortality rate dropped from 9\.8 to 5\.8 per million inhabitants, a 41 percent reduction, which is smaller than the 50 percent reduction target set at the time of project preparation\. Most of the Northeast region currently has a prevalence of only 25 percent from the figures of 1988, with some parts showing a lower prevalence of 5 to 10 percent\. Leishmaniasis: In 1995, the Northeast experienced an epidemic of kala-azar, one that has occurred cyclically every 10 years\. As a result, the number of cases jumped from 700 to 1,500 cases per year, which were observed in the late 1980s and early 1990s, to 3,600 in 1995\. The project was able to bring the number down to 2,500 in less than a year, and down to pre-epidemic levels in less than two years, much faster than during the epidemic which occurred ten years before\. In addition, and in spite of the epidemic, the kala-azar fatality rate dropped from 7\.9 per 100 cases in 1988, to 3\.51 per 100 cases in 1996, suggesting better diagnosis and treatment of cases\. The project did not manage to reduce the incidence of kal-azar by 30 percent as anticipated at project appraisal\. The epidemiological information on cutaneous leishmaniasis is scarce and does not allow for proper evaluation and does not allow to judge whether the project did reduce the incidence of the disease by 50 percent as estimated at project appraisal\. Rabies: although not part of the original project, and at the request of the Borrower, the Bank agreed that the activities of Rabies Control could be associated with those of canine leishmaniasis control\. As a result, the coverage of dog anti-rabies vaccination grew significantly from 56 percent in 1989 to over 83 percent in 1995, and the number of rabies cases dropped by 50 percent, from 57 in 1995 to 31 in 1995\. Institutional Development\. The project left a network of well-equipped public health laboratories in the Northeast and in Minas Gerais; a large pool of trained professionals (enough to staff all regional offices); and hundreds of trained middle level staff, not only in the NHF federal and regional offices, but also in state and municipal 5 health secretariats\. The project leaves an expanded Chagas and schistosomiasis control programs, and new experience in how to control a kala-azar epidemic\. In addition, many personal health care services of the Unified Health System acquired the capacity and the supplies necessary to diagnose and treat patients with Chagas' disease, schistosomiasis and leishmaniosis\. Furthermore, the project introduced a new management culture and instruments, including management contracts, performance indicators, monitoring, supervision, and evaluation\. C\. PROJECT IMPLEMENTATION Implementation and Major Factors Affecting Project Implementation\. The project tested two major approaches over the traditional endemic disease control programs which focused on the eradication of vectors and elimination of infected reservoirs\. First, the project began to target vector control to a limited number of municipalities and localities with the highest incidence of Chagas' disease, schistosomiasis, or leishmaniasis, as opposed to the traditional approach of making widespread use of insecticides and moluscicides to eradicate the vectors and reservoir snails\. Second, much more emphasis was put into early diagnosis and vigorous treatment of patients, both in the NHF facilities and in the health services of the Unified Health System (SUS)\. After a slow start and a 24-month extension of the closing date, the project used the full proceeds of the loan: Part A: Prevention and Control of Disease Transmission\. This component of the project executed 80 percent of funds, financing the application of pesticides, molluscicides, household sanitation and rehabilitation, the elimination of dogs infected with leishmaniasis, as well as the diagnosis and treatment of patients\. Activities were in most cases carried out in partnership between the SUCAM/NHF and municipal health secretariats\. In most cases, the former provided for the training, equipment and supplies, while the later provided the necessary community health workers\. The decentralization process of the activities involved in this strategy remains effective, and the local responsibility for the programs keeps growing\. (a) Chagas' disease: This subcomponent executed about 17 percent of project funds, five times more than had been anticipated at appraisal\. The project financed the purchase of insecticides, trained hundreds of field inspectors, which constitute the backbone of vector control, created a serologic surveillance system based on 12 reference laboratories, left one reference entomologic laboratory for the diagnosis and study of the Triatoma genera, controlled transmission via contaminated transfusions, and left a network of well-equipped personal health services which provide improved care for Chagas patients\. In the case of blood safety, public awareness and assistance from PAHO led Brazil to pass significant legislation in 1989 and 1993, while the project made it possible for increasing the proportion of transfusions for which the blood sample had been tested from 10 percent in 1987, to over 60 percent in 1996, which means that the potential infected transfusions dropped from 20,000 per year in 1987 to about 5,000 in 6 1996\. In addition, the project established endemic disease control partnerships between the federal agency (NHF/SUCAM) and numerous states and municipalities\. (b) Schistosomiasis: This subcomponent executed about 35 percent of project funds, close to what had been anticipated at appraisal\. The project allowed SUCAMINHF to extend its control activities to extensive endemic areas which previously had not been covered\. In Minas Gerais alone, the project extended coverage with schistosomiasis control activities from 30 to 380 municipalities\. The strategy adopted for the control of schistosomiasis included: (i) early diagnosis and treatment of infected people; (ii) basic household sanitation; and (iii) information, education and communication (IEC)\. Again partnerships with municipalities were key to the success of the operation\. The project installed laboratories, provided supplies and equipment and trained local agents to perform diagnostic tests and refer patients for treatment in the network of local health care services\. In addition, the project piloted the introduction of mass-treatment of schistosomiasis in school health programs, in municipalities with a high incidence of the disease\. The project also helped set up health promotion teams at the municipal level, which carried out significant amount of IEC activities\. The project showed that it is very difficult to eliminate low-level transmission with the traditional control approach\. Disease eradication depends very much on environmental and household sanitary conditions, and thus the project fostered collaboration with the environmental sector and provided for training of thousands of municipal sanitation agents in endemic areas\. (c) Leishmaniasis: This subcomponent executed about 28 percent of project funds, close to what had been estimated at appraisal\. In the case of cutaneous leishmaniasis, and given the paucity of epidemiological data, the project focused on establishing an adequate information system, on establishing laboratories capable of diagnosing the disease, and on training doctors and other health care personnel in the appropriate treatment of the disease\. In the case of kala-azar, the project set up a network of laboratories, provided equipment and supplies for controlling the sandflies, established a network of municipal kennels equipped for diagnosing and eliminating infected dogs, and established treatment protocols, trained doctors and other health care personnel in treating the disease\. Treatment of this form of the disease requires specialized medical expertise, which most physicians did not have\. Therefore, one of the main contributions of the project to the reduction of the incidence of this disease was the establishment, with the assistance of PAHO, of treatment protocols for kala-azar, training of medical personnel and the provision of the Glucantime, the effective chemotherapeutic agent, which is difficult to get because it is produced by only one company in the world\. The second largest contribution of this component was to establish a network of laboratories and kennels to diagnose canine leishmaniasis and eliminate infected dogs, the disease reservoir, from which humans get infected via the bite of sandflies\. For example, before the project, the city of Belo Horizonte could not process more than 3,000 canine serologic tests per month, while there was a need to carry out some 100,000 such tests\. Finally, the project financed the development and tested the use of a new serologic diagnostic method for canine leishmaniasis (TRALD), one which allows cutting the time taken to diagnose 7 the canine disease from days to minutes, and disposal of the infected dog on the spot, thereby reducing the transmission of the disease\. (d) Rabies and other\. as mentioned earlier, at the request of the Borrower the Bank authorized that the activities of Rabies Control be associated with those of canine leishmaniasis control\. As a result the rate of dog anti-rabies vaccination grew significantly from 56 percent in 1989 to over 83 percent in 1995\. Part B: Community Mobilization\. This component executed around 4 percent of project funds, a little less than originally estimated\. The project established state- and municipal- based information, education and communication (IEC) teams, and financed production of educational materials, such as posters, brochures, and videos, and supported community participation in endemic disease control programs\. Most of the educational activities were carried out by community health workers\. Part C: Operational Research\. This component executed about 0\.7 percent of project funds as had been planned\. Operational research was delayed mainly due to management problems at SUCAM/NHF and the lack of a tradition of collaboration between health services and academia\. In the latter part of project implementation, its importance for the improvement of institutions and programs was recognized and, by 1996, the project was funding 22 research and development projects (Table 7)\. Eighteen studies funded under the project were presented at the most important tropical disease forum in Brazil, resulting in 12 publications, and 4 abstracts, some of which were considered particularly innovative\. This component also financed a post-graduate scholarship program to strengthen the pool of endemic disease control specialists\. Part D: Institutional Development\. This component executed 16 percent of project funds, leaving (a) a large pool of trained personnel, (b) management information systems which allow monitoring the epidemiological situation and the execution of different program activities, and (c) improved public health service facilities, vehicles and equipment which make the endemic disease control programs viable\. These investments had been originally designed to apply to SUCAMINHF facilities only, but ended up benefiting municipal and state health secretariats which took more and more responsibility for endemic disease control as the project developed\. The project helped forge sound partnerships between the federal agency and state and municipal health secretariats, between academia and public health services, as well as new intersectoral collaboration between the health sector and the education and environment sectors\. Part E: AIDS ControL This component executed about 4 percent of project funds, financing the production of mass media campaigns and various educational materials, and the acquisition of equipment and supplies for blood banks and public health laboratories\. The project helped establish the National AIDS and STD Control Program and prepare a specific investment project which the Bank is now financing (AIDS and STD Control Project, Ln\. 3659-BR)\. 8 D\. PROJECT SUSTAINABILITY This project leaves behind a strong base from which Brazil can continue its already successful endemic disease control programs\. The infrastructure and equipment established by the project, all the staff of whom were trained by the project, and the experience gained in the fields of management and partnerships should not disappear now that the Bank's involvement has ended\. The introduction of endemic disease control activities among the expenditures reimbursable by the Unified Health System (SUS) will cover recurrent costs and further ensure sustainability\. The project put endemic disease control on the agenda of state and municipal governments, as well as on the agenda of other key agencies operating in the regions which are increasingly assuming responsibility for vector-borne disease control\. The project introduced a financing system by which the Unified Health System reimbursed municipalities for endemic disease control activities, making the decentralization of endemic disease control financially sustainable\. The project trained hundreds at the state and municipal levels, enabling a follow-up of all necessary activities, and the decentralization of health actions in the region\. These benefits were gained in spite of the fact that the project was implemented at a time of political and macroeconomic instability, of reduced technical and managerial capabilities, and changing and uncertain institutional environ-ments\. The project also leaves a culture of management and accountability which did not exist before\. Management contracts, performance indicators, monitoring, supervision and evaluation were introduced by the project and are now common practice not only in the regional offices of NHF but in state and municipal health secretariats\. E\. PERFORMANCE Borrower Performance\. Project management was poor during the early years of project implementation, due to frequent changes in Government\. In the early 1990s, a series of political appointees in a volatile political environment almost brought the project to a halt\. During the project's life, there were eight Ministers of Health\. These resulted in further changes at other levels of government, including six project coordinators in 1991 and 1992 alone, halting actions and decisions and thus delaying project implementation\. Also, priorities changed from one administration to another, and commitments made in prior administrations were not always maintained by others\. In its early stages, project implementation was also slowed by counterpart fund and procurement problems\. Counterpart funds were difficult to secure during the first part of project implementation, but have been adequate and timely since 1994\. The fact that the Bank allowed the use of Special Account funds to be used as advances, together with matching counterpart funds, facilitated disbursements, because there was no longer a 9 need for the counterpart funds to cover the full cash flow up to the reimbursement\. The project disbursed the full proceeds of the loan with only small deviations from the proportions agreed with the Bank for each disbursement category\. Intemational competitive bidding for insecticides and pharmaceuticals was extremely difficult because the international market is oligopolistic\. The interest groups involved are extremely powerful, and tried to invalidate the bidding procedure in court\. As a result, further large purchases of insecticides, pharmaceuticals, and specialized equipment were done using limited international bidding, through PAHO\. The latter process was very efficient: prices were very good, and the process was transparent\. But it took longer than six months between the request to purchase and the delivery of the goods, much longer than both the Borrower and the Bank had anticipated, but still within the time taken by other UN agencies such as UNICEF\. National competitive bidding at state and municipal levels was more effective than similar bidding at the federal level to purchase smaller quantities of goods, again because of the interests involved in a large federal bidding processes, and because the federal level was not able to plan and carry out procurement and distribution in a timely fashion, resulting in periods of lack of inputs alternating with others of inefficient stockpiling\. In 1992, project management became competent and stable and from 1993, showed excellent performance\. Some committed Northeast governors and mayors took responsibility for endemic disease control, developed state- or municipal-based endemic disease control programs and allocated local funds to communicable disease control\. At the federal level, strong support by the Minister and by the President of the National Health Foundation between 1993 and 1995 accelerated project implementation\. Bank Performance\. The Bank and the Borrower identified and prepared the project in much detail\. The staff appraisal document and the respective background documentation are very complete\. Retrospectively, we can now say that there were three significant flaws in terms of the objectives set for the project and project design\. First, neither the Staff Appraisal Report (SAR), nor the Loan Agreement, set measurable and realistic project outcome indicators which would have allowed closer monitoring and evaluation of development objectives\. The key indicators in the SAR consisted of process/output indicators, with a heavy emphasis on vector control (Table 6), which did not allow questioning whether the selected strategy was helping to reach the development objectives\. Second, there was no clear objective or strategy to reduce the severity and mortality of either schistosomiasis or leishmaniasis, as the focus of the programs was to eradicate the vectors and the infected reservoirs\. Third, the project design was too rigid and did not accommodate a quick response to epidemics which took place during the period of project implementation\. Between 1988 and 1996, the Northeast suffered several epidemics, including cholera and a very serious outburst of Dengue and, in both instances, the project was unable to support the swift response which was necessary, without having to make a major amendment of the loan agreement\. The Bank kept a steady level of project supervision from the early stages of project implementation, although it may have started with an excessive focus on vector control and 10 sometimes showed rigidity in the interpretation of the loan agreement\. This rigidity may have been warranted during the period of political and managerial instability\. Project supervision became more outcome-oriented and flexible after 1993, when the Borrower appointed competent and stable project management, turning the project into a very good performer\. From 1993, project supervision emphasized: (a) outcome indicators (i\.e\. reduced incidence, reduced mortality, reduced fatality rates, and reduced hospital admission rates), as opposed to project outputs (i\.e\., houses sprayed, stool or dog serum tests processed, etc\.) or inputs (i\.e\., procurement and disbursements); (b) diagnosis and treatment, in addition to traditional vector or reservoir control; (c) shifting the accountability for project performance from the PCU to states and municipalities; (d) intensive informal supervision through electronic mail with communications flowing to and from the PCU more than once a week (the project was one of the first to have an All-in-I account at the Bank's Resident Mission, and later switched to a Brazilian Internet server); and (e) flexible interpretation of the Loan Agreement to adapt to new environmental and political realities during the long period of project implementation\. F\. ASSESSMENT OF OUTCOME Between 1988 and 1996, the project is estimated to have prevented about 18,500 deaths, which translates into about 520,000 disability adjusted life years (DALYs) saved\. Given the US$140\.8 million investment involved, the project cost about US$558 per DALY saved, which places it among the high cost-effectiveness health interventions (Table 9a)\. The project saved about US$470 million in direct and indirect benefits with a total present net present value (benefits - costs = NPV)) of just over US$370 million, or 2\.5 times the total investment\. This corresponds to an internal economic rate of return (IERR) of over 500 percent and a payback period of aproximately five years\. That is, by 1993, the project had already generated returns equivalent to the total investment of US$140 million over the period of 1988-1996 (Table 9b)\. Chagas' disease\. The project is estimated to have prevented 12,500 cases of Chagas' disease, and 3,800 deaths, translating into about 72,900 DALYs saved, 48 percent from averted deaths and 52 percent from averted disability\. With an investment of about US$23 million, the component is estimated to have costed US$260 per DALY saved, which places it among those with highest cost-effectiveness ratio\. Even if we did not consider indirect economic benefits associated with the life years saved, the program would have returned US$2\.30 for each invested dollar\. The project saved a total of US$37 million in direct benefits associated with reduced treatment costs of Chagas' disease patients and another US$82 million in indirect benefits associated with foregone output saved\. The net present value of these benefits was US$50 million, which correspond to an internal economic rate of return (IERR) of 164 percent (Table 9b)\. Schistosomiasis\. The project is estimated to have prevented at least 3,400 schistosomiasis deaths, which translates into 67,000 DALYs saved\. With an investment of 11 about US$65 million the component is estimated to have cost US$980 per DALY saved, which puts it among the moderately good cost-effective interventions\. The project saved a total of US$6 million in direct benefits associated with reduced treatment costs of schistosomiasis patients and another US$87 million in indirect benefits associated with foregone output saved\. The net present value of these benefits was US$18 million, which correspond to an internal economic rate of return (IERR) of 56 percent (Table 9b)\. Leshmaniasis\. The project is estimated to have prevented 770 cases of kala-azar, and avoided 11,300 deaths, which translates into 380,000 DALYs gained\. With an investment of about US$53 million, the component costed about US$140 per DALY saved, which places it among the most cost-effective public health programs\. This analysis has to be read with caution\. For lack of a better model, the cost effectiveness analysis uses a general epidemic model to estimate the expected number of cases and deaths, one which assumes that the disease exists in an endemic state, that epidemics occur every ten years, and that incidence increases with every successive epidemic\. The model is robust for many epidemics, but may be speculative for leishmaniasis, given the general lack of understanding about the epidemiology of the disease\. The project saved a total of US$260 million in direct benefits associated with reduced treatment costs leishmaniasis patients and another US$494 million in indirect benefits associated with foregone output saved\. The net present value of these benefits was US$302 million, which correspond to an internal economic rate of return (IERR) of over 2,000 percent (Table 9\.b)\. The main reason for the relatively high estimates for the net present value of the component, and the consequently elevated rates of return, is that the deaths by kala-azar occur in very young children causing a loss of 30 to 35 DALYs per death, and deaths to the sequelae of Chagas, for example, occur at roughly 45 years of age, with an associated loss of about 20 years\. Additionally, the DALYs gained due to Chagas' prevention are spread over 20 years in the past and roughly another 25 to 35 years into the future, thus the effects of the discount factor (3% for the DALYs) are much more pronounced than in the case of kala-azar where the majority of the deaths averted are attributable to the period of the project and not in the distant future\. G\. FUTURE OPERATIONS Environmental and demographic conditions in the Northeast, i\.e\., poor household and environmental sanitary conditions, and the strong migration in and out of the region, will continue to favor the occurrence of communicable diseases which are endemic in the area\. State and municipal capacity to control such diseases has greatly improved, but is still weak in many places\. Some states and municipalities, such as Minas Gerais, Bahia, Pemambuco, and Ceara, are now able to take more responsibility for communicable disease control than before, but other states such as Alagoas will continue to need strong assistance from the federal level, i\.e\., from the National Health Foundation\. Bank support for a follow-up communicable disease control operation is thus justifiable\. Such a follow-up operation will probably (a) have broader objectives (i\.e\., include the control of 12 communicable diseases which cause a heavier burden of death and disability, which may vary by State, and allow for quick response to unexpected epidemics); (b) include demand- driven components to finance state and municipal communicable disease control subprojects; and (c) have an institutional development component to (i) strengthen the capacity of weaker states and municipalities, and (ii) assist in restructuring the National Health Foundation, from a federal vertical program organization toward a mostly regulatory, monitoring and technical assistance agency\. More broadly, conditions for future operations in the health sector are good\. Political, economic, institutional, and managerial conditions have improved significantly, and the country is much more capable of carrying out social programs with objectivity and efficiency\. With better-trained human resources and improved management capability achieved through this project and other health-related Bank projects, future health operations in Brazil should be implemented with fewer obstacles and in less time\. Future operations in the health sector, including those in the area of communicable disease control, should include efforts towards the decentralization and municipalization of health care activities through the SUS\. H\. KEY LESSONS LEARNED Through the experience gained during project implementation the following are the key lessons learned: (a) Chagas' disease: (i) the severity of the disease seems to be associated with reinfection\. When the program manages to eliminate the Triatoma from the household, the level of reinfection of patients decreases and the clinical course of the already infected person is more benign; (ii) it is possible to interrupt vector transmission with rigorous application of residual insecticides, on the basis of careful epidemiological stratification by municipalities and by community; (iii) the preferred vector, Triatoma infestans, is strictly domestic and does not become peridomiciliary; as a corollary, the vector can be eradicated through house improvements and targeted application of insecticides; (b) Schistosomiasis: (i) early diagnosis and vigorous treatment can reduce the severity of the disease; (ii) it is very difficult to completely eliminate low-grade transmission by means of diagnosis and treatment alone; eradication of the disease requires long-term solutions, including better home and environmental sanitation; (iii) adding the treatment of schistosomiasis to intestinal deworming in school health programs increases the cost-effectiveness and efficiency of the program; (c) Leishmaniasis: (i) the severity of kala-azar is closely associated with malnutrition; (ii) the new immunology-based, on the spot, diagnostic test for canine leishmaniasis (TRALD) is a valid and efficient alternative to the traditional diagnostic method; it allows immediate elimination of infected dogs which are the natural reservoir of 13 human disease; (iii) well-defined standard treatment protocols, training of health care personnel and supply of appropriate antimonials can control the spread of a serious kala- azar epidemic and reduce the severity and fatality of cases; (d) Management contracts, performance indicators, monitoring, supervision, and evaluation are crucial to successful project implementation\. There is also a need for further decentralized management and accountability; (e) Competent and stable project management is necessary for continuity of the project in a changing political environment\. In the early 1990s political appointees in a volatile political environment almost brought the project to a halt; (f) Government commitment is key for the project\. States with more committed governors were more successful than others\. At the Federal level, strong support by the Health Minister between 1993 and 1995 accelerated project implementation; (g) Training and other forms of institutional strengthening should be implemented at least at the same pace as investments in civil works and equipment; (h) Flexible project design and interpretation of the Loan Agreement are necessary so that projects can be adapted to new environmental and political realities which may arise during the long period of project implementation; (i) The Unified Health System (SUS) can play an important role in endemic disease control at two levels: first, by reimbursing health promotion and disease prevention activities carried out by municipalities, states and the National Health Foundation; and second, by providing early diagnosis and prompt treatment endemic diseases through the public and health care provider network contracted with the SUS; and (j) UN specialized agencies such as PAHO/WHO and UNDP can offer valuable technical assistance and facilitate project implementation in the areas of procurement and contracting\. 14 PART II: STATISTICAL INFORMATION Table 1: Summary of Assessments A\. Achievement of Objectives Substantial Partial Negligible NotApplicable Macro policies E li x Sector policies x a El Financial objectives O O O x Institutional development x El Ol El Physical objectives x O O O Poverty reduction O x O O Gender issues l O O x Other social objectives O x O E Environmental objectives O x O O Public sector management x Oi O Private sector development E l O x B\. Project Sustainability Likely Unlikelv Uncertain x n ° C\. Bank Performance Highly Satisfactory Satisfactory Deficie Identification n x g Preparation assistance x O O Appraisal 0 x Oi Supervision x Oi E] D\. Boffower Performance Highly Satisfactory SatisfacoI Deficient Preparation El x g Implementation X after 93 a X before 93 Covenant compliance x O C Operation n x 0 Highly Highly E\. Assessment of Outcome Satisfactory Satisfactory Unsatisfactory Unsatisfactory x x Disease Institutional 0 control development 15 Table 2: Related Bank Loans/Credits Loan/ Year of Credit Title Purpose Approval Status Preceding operations: Loan 2061-BR To improve the health status of Rond6nia's increasing 1981 Closed Northwest Region Integrated population with malaria control, extension of basic 6130/88 Development Program - Health services, training of health workers and operational research\. Loan 2448-BR To improve the Government's ability to address a 1984 Closed National Health Policy Studies variety of health needs through strengthening policy 12/31/89 formation\. Loan 2447-BR To improve the health status in five main target areas 1984 Closed Sao Paulo Basic Health Care and nine health districts in Greater Sao Paulo and 6/30/92 improve the cost-effectiveness of health services delivery within Greater Sao Paulo\. Loan 2699-BR NE Basic Health I To improve the health status of 3\.6 million small 1986 Closed farmers and other poor people living in specific areas 12/31/95 of the states of Minas Gerais, Bahia, Rio Grande do Norte, and Piaui\. Following operations: Loan 3072-BR Amazon Basin Malaria Control To reduce malaria transmission in Amazonia and 1989 Closed prevent its reintroduction to areas now under control\. 6/30/96 Loan 3135-BR NE Basic Health II To strengthen basic health services in selected low- 1989 Closing income areas of the Northeast and to reinforce Date implementation of sectoral reforms, including the 12/31/97 decentralization of financial resources and administrative authority within the NE states\. Loan 3659-BR AIDS & STD Control To strengthen AIDS and STD prevention and services, 1993 Closing and build up institutional capacity for AIDS and STD Date control at the Federal and State levels\. 6/30/98 Loan 4047-BR Health Sector Reform To improve the delivery of care under the Unified 1996 Closing Health System (SUS), which is the sole source of Date publicly subsidized care for the poor\. 12/31/00 16 Table 3: Project Timetable Steps in Project Cycle Date Planned Actual Date Identification April 1985 April 1985 Preparation June 1986 June 1986 Appraisal June 1987 June 1987 Negotiations November 1987 November 1987 Board Presentation February 1988 March 1988 Signing April 1988 June 1988 Effectiveness September 1988 December 1988 Midterm Review May 1993 Project Completion June 1993 December 1995 Loan Closing December 1993 June 1996 Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ million) FY 88 89 90 91 92 93 94 95 96 Appraisal Estimate 8\.0 24\.5 50\.0 76\.0 98\.0 109\.0 -- -- -- Actual -- 8\.0 11\.5 24\.8 33\.4 37\.0 48\.9 67\.0 77\.9 Actual as % of 33 23 33 34 34 60' 82 95' Estimate l US$27 million was canceled from the original loan amount of US$109 million; the percentage therefore was based on the revised loan amount of US$82 million\. 17 Table 5: Key Indicators for Project Implementation Indicators Actual Date Accomplished PMU organization and staffing September 1988 Accounting systems and procedures A substantial review of the financial management, accounting and audit aspects of the project was carried out in August 1989\. Annual action plan First plan received in December 1988 Financial Project Monitoring Manual March 1989 Project Implementation Manual June 1989 Annual progress report First report received in March 1990 Midterm review of the project May 1993 Scientific meeting to discuss and December 1995 disseminate results of operational research funded under the project\. 18 Table 6: Key Indicators for Project Operation I\. Key Operating Indicators in SAR Estimated Actual 1 \. Average number of houses sprayed/trip 6 to 15 6 to 15 2\. Daily average of houses sprayed/guard 2 to 5 2 to 5 3\. Daily average of stool tests processed/laboratory technician 200 200 4\. Daily average of treatments administered/guard 15 to 30 15 to 30 5\. Average number of dogs tested/trip 30 to 60 30 to 60 6\. Daily average of household visits/guard 15 to 30 15 to 30 7\. Monthly average of dogs eliminated/No\. tested positive 90% 90% 8\. Average cost per case diagnosed NA NA 9\. Average cost per case treated NA NA 10\. Average cost per death averted NA US$7,611 11\. Average cost per DALY saved NA US$271 19 Table 7: Studies Included in Project Study 1\. Comparative study of the use of Glucantime, Pentamidine and Aminosidine in the treatment of primary skin lesions caused by Leishmania braziliensis\. Philip Marsden\. Tropical Medicine Unit, Universtity of Brasiilia 2\. Evaluation of the Direct Aglutination Test for the serologic diagnosis of visceral leishmaniasis in the State of Para\. Fernando T\. Silveira\. Instituto Evandro Chagas/National Health Foundation 3\. Use of imumologic parameters for the evaluation of schistosomiasis and Chagas' disease surveillance and control programs\. Sumie H\. Shimizu\. Sao Paulo Institute of Tropical Medicine\. 4\. Evaluation of the Direct Aglutination Test for the serologic diagnosis of visceral leishmaniosis in the State of Ceara\. Hermenio Lima Filho\. Federal Unity of Ceara\. 5\. Impact of rapid reservoir elimination in the reduction of the prevalence of canine kala-azar in the Rio Curu Valley\. Marcus D\.M\. Braga\. Tropical Medicine Unit/Federal University of Ceara\. 6\. Chagas' disease morbidity and potential control in two areas in NE Brazil\. Jose R\. Coura\. Fundacao Oswaldo Cruz\. 7\. American Tegumentar Leishmaniasis in the State of Maranhao\. Clinical and epidemiologic characteristics\. Comparison between the systemic and lesional use of antimonial drugs in the treatment of skin lesions\. Jackson M\. L\. Costa\. Federal Universtity of Maranhio Medical School\. 8\. Eficacy of Chagas' Disease Control\. Case-control study\. Carlos M\. F\. Antunes and Mariangela Carneiro\. Federal University of Minas Gerais 9\. Chagas' Disease hospital morbidity in Brazil\. Susete B\. Franca\. Community Medicine and Nutrition Unit, NESCON, Federal University of Minas Gerais\. IO1\. Schistosomiasis morbidity in Queixadinha, Cari, Minas Gerais\. Federal 1University of Minas Gerais Medical School I11\. Medical care for Chagas' disease patients in the Unified Health System\. Proposal for evaluation\. Eliane D\. Gontijo\. Federal University of Minas Gerais\. 12\. Integrated research and development of American Tegumentar Leishmaniasis in the State of Sao Paulo\. Jose E\. Tolenzano\. Adolfo Lutz Institute\. Sao Paulo State Health Secretariat 13\. Leishmania donovani FML\. A new tool for the diagnosis and control of blood transfusions and for the development of vaccines against kala-azar\. Clarissa B\.P\. de Souza\. Federal University of Rio de Janeiro\. 14\. Evaluation of recombinant leishmania proteins for the development of vaccines and diagnosis of kala-azar\. Ronaldo A\. do Amaral\. Federal University of Rio Grande do Norte\. 20 15\. Clinical and epidemiological study of schistosomiasis in irrigation areas in NE Brazil\. Amaury D\. Coutinho\. Funda,ao Oswaldo Cruz/Pemambuco\. 16\. Production of fluorescein marked antibodies for the imunofluorescence- based diagnosis of kala-azar\. Sinval P\. Brandao\. Funda,cao Oswaldo Cruz/Pernambuco 17\. Ecology of lesihmaniasis vector sandlies in Bahia State\. Italo Sherlock\. Funda,ao Oswaldo Cruz/Bahia 18\. Epidemiology of kala-azar in Novo Mundo, Piaui\. Carlos H\. Neri Costa\. Federal Universtity of Piaui\. 19\. Epidemiology of acute Chagas' disease cases in the Sao Luis Island, Maranhao\. Triatoma rubrofasciata as the probable vector\. Sebastiao A\. S\. Valente\. National Health Foundation/Maranhao\. 20\. Use of PCR in the evaluation of the impact of specific treatment for Tripanosoma cruzi\. Mariane M\. A\. Stefani\. Federal University of Goias\. 21 Vaccination against visceral leishmaniasis and against muco-cutaneous canine leishmaniasis with semi-defined antigen from Leishmania braziliensis\. Mauro Marzochi\. Funda,ao Oswaldo Cruz\. 22\. Evaluation of DOT-ELISA recombinant test for the laboratorial diagnosis of canine kala-azar\. Ronaldo Amaral\. Federal University of Rio Grande do Norte\. 21 Table 8A: Project Costs Appraisal Estimate (US$M) Actual (US$M) Item Local Foreign Total Local Foreign Total Costs Costs Costs Costs I\. Control/Prevention of 83\.0 73\.5 156\.5 64\.6 60\.6 125\.2 Transmission II\. Community Mobilization 7\.7 2\.9 10\.6 3\.3 2\.8 6\.1 III\. Operational Research 1\.3 \.0\.2 1\.5 0\.9 0 3 1\.2 IV\. Institutional Development 20\.2 3\.6 23\.8 10\.8 13\.3 24\.1 V\. Control & Prevention of 6\.1 1\.6 7\.7 2\.4 5\.0 7\.4 AIDS TOTAL BASE COST 118\.3 81\.8 200\.1 82\.0 82\.0 164\.0 Physical Contingencies 6\.5 4\.7 11\.2 - - - Price Contingencies 3\.8 2\.9 6\.7 - - - TOTAL PROJECT COSTS 128\.62 89\.4 218\.0 82\.0 82\.0 164\.0 Table 8B: Project Financing Appraisal Estimate (USSM) Actual (US$M) Local Foreign Total Local Foreign Total Federal Government 109\.0 -- 109\.0 82\.0 82\.0 IBRD 19\.6 89\.4 109\.0 82\.0 82\.0 TOTAL 128\.6 89\.4 218\.0 82\.0 82\.0 164\.0 2 Excludes taxes of US$9\.4 million equivalent\. 22 Table 9a: Cost Effectiveness Analysis Summary\. 1988-1996 Endemic Disease Control Costs Program Project Chagas'Disease US$516\.7 million US$23 million Schistosomiasis US$140\.2 million US$65\.3 million Leishmaniasis US$95\.2 million US$52\.5 million Total US$140\.8 million Endemic Disease Control Effectiveness Chagas' Disease No of cases prevented 277,000 12,500 No of deaths prevented 85,000 3,800 No of DALYs saved 1\.6 million 72,900 Schistosomiasis No of cases prevented No of deaths prevented 7,300 3,400 No of DALYs saved 143,000 67,000 Leishmaniasis (kala-azar only) No of cases prevented 1,400 770 No of deaths prevented 20,500 11,300 No of DALYs saved 690,000 380,000 Total No\. of deaths saved 112,800 18,500 Total No\. of DALYs saved 2,433,000 519,900 Endemic Disease Control Cost-effectiveness Chagas'disease US$315 US$315 Schistosomiasis US$980 US$980 Leishmaniasis (kala-azar only) US$139 US$139 Average cost/DALY saved US$558 Note: Chagas' Disease Control Program analysis covers 1975 to 1995\. Schistosomiasis and Leishmaniasis Control Program analysis covers 1988 to 1996\. The cost figures are all converted into 1996 U\.S\. Dollars\. A three percent discount rate was applied for each year into the past and, in the case of benefits, into the future\. Effectiveness was measured in terms of burden of disease prevented, in disability adjusted life years -- DALYs\. The impact of the project is assumed to be proportional to part of the program investment financed under the project\. The estimate is conservative, as the project added value to the traditional ongoing program, by bringing in many of the program innovations, on both the technical and the managerial sides\. 23 The impact of the Leishmaniasis control subcomponent counts only the benefits associated with reducing incidence and mortality of kala-azar\. It does not account for the possible impact of the project on cutaneous leishmaniosis, nor does it include the benefits accrued from adding the rabies control to the subcomponent\. Table 9 b: Cost-benefit Analysis Summary\. 1988-1996 (US$ million) Investment/Cost Program Project Chagas' disease Total investment 517 23 Present value 503 16 Schistosomiasis Total investment 141 65 Present Value 100 47 Leishmaniasis Total investment 95 53 Present value 66 36 Total Project Investment 753 141 Total Project Present Value 668 99 Benefits Chagas ' disease Direct cost savings 828 37 Indirect cost savings 2119 82 Benefits, present value 1557 66 Net benefit, present value, (NPV) 1054 50 Schistosomiasis Direct cost savings 12 6 Indirect cost savings 187 87 Benefits, present value 139 65 Net benefit, present value, (NPV) 39 18 Leishmaniasis Direct cost savings 472 260 Indirect cost savings 897 494 Benefits, present value 615 339 Net benefit, present value, (NPV) 550 302 Total Project Benefits Direct cost savings 839 20 Indirect cost savings 3203 663 Benefits, present value 2310 469 Net benefit, present value, (NPV) 1642 371 Internal Economic Rate of Return (IERR) 89 535 The estimated quantitative benefits generated from the project are based on the observed reduction in morbidity and mortality in Brazil over the period 1988 to 1996\. The estimated reductions over the period of evaluation were converted into quantitative benefits in terms of a reduction in the demand for health services and a reduction in the burden of disease\. The estimates for the reduction in the demand for health care services 24 are evaluated based on the observed estimates of demand for ambulatory and hospital level services, in terms of frequency of utilization and cost per incident\. Reductions in the burden of disease are based on an analysis of the total Disability Adjusted Life Years (DALYs) saved due to the reduction in morbidity and mortality\. The reduction in the burden of disease is then translated into economic benefits by attaching the value of the average minimum yearly salary to each DALY, and discounting the stream of benefits using a discount rate of eight percent (8%)\. There are two reasons for selecting an 8% discount rate, a little lower than would be appropriate for a private investment project\. First, the highly redistributional nature of the project, demonstrated by a high proportion of the target population in the lowest tiers of the income distribution\. Second, the public goods nature of the investment provides justification for a discount rate different from the discount rate traditionally assumed for investments where the output is a private consumption good\. In order to determine the total Net Present Value of the project, and to calculate the observed rate of return, the benefits are then weighed against the investment costs of the project, both during the period 1988-1996 and, in the case of Chagas', over the period 1975 to 1996\. The analysis assumes a distribution of the estimated benefits between the program and the NE Endemic Disease Control Project that is roughly proportional to the share of expenditure attributable to the project relative to the overall program, the distribution of direct and indirect benefits over the period of evaluation\. Total project benefits were determined by converting the total DALYs saved and the reduction in health care services utilization into monetary terms\. The cost estimates used to determine monetary benefits related to reductions in the utilization undoubtedly underestimate the total economic value of the project given the fact that the estimates consider only the direct costs to the health care system\. Indirect costs, such as savings in time and transport costs, time costs for family members who look after the patient, and time and money costs of preventive action taken by households and the community are not considered in the present analysis due to a lack of data\. The analysis of the Chagas' disease program spans a period of 21 years, from 1975 to 1996, due to the chronic nature of the disease and the protracted period of evolution\. The respective project benefits and costs are prorated for the years of project implementation\. 25 Table 10: Status of Legal Covenants Original Revised L\.A\. Covenant Fulfillment Fulfillment Section Type Status Date Date Description of Covenant Comments 3\.01(a) 5 C Carry out project through Complied with\. SUCAM/NHF with due diligence and efficiency\. 3\.01 (b) 10 C Write Convenio with States\. Complied with\. Write Termo Aditivo to the Convenio with FIOCRUZ regarding the research component\. Write Termo Aditivo to Convenio with PAHO\. 3\.01c/d 10 C Not assign, amend, abrogate, or Complied with\. waive convenio without Bank authorization\. 3\.01(e) 5 C Hire staff required for project Complied with\. execution, directly or through States or Municipalities\. 3\.01(f) 5 C Ensure that project manager is Complied with\. acceptable to the Bank\. 3\.02 10 C Procurement and hiring of Complied with\. consultants according to Bank procedures\. 3\.03 10 C Complete a KAP survey Complied with\. regarding endemic diseases in the target States\. 4\.01(b) I C Have records and accounts for Complied with\. each fiscal year audited by independent auditors acceptable to the Bank\. 26 Table 11: Compliance with Operational Manual Statements [ N\.A\. Table 12: Bank Resources: Staff Inputs (SW, Actual) Stage FY Tota 86 87 88 89 90 91 92 93 94 95 96 97 1 Preparation 9\.0 80\. 4\.2 93\.5 3 Appraisal 12\.7 12\.7 Negotiations 7\.3 7\.3 Supervision 2\.6 14\.7 18\.5 13\.0 14\.0 9\.6 13\.6 7\.2 93\.2 Mid-Term Review 16\. 16\.7 I'TOTAL T9;\. 8 2 16'8 t \.A'T*' W 7 _tA *1_ 27 Table 13: Bank Resources: Missions Performnance Rating' *I Days in Specialized Stage of Project Cycle Month/ No\. of Field Staff Skills Impl\. Devt\. Year Persons Represented Status Objs\. Types of Problems Identification 3/85 4 12 PH, 0 Preparation 6/86 2 14 PH 9/86 7 12 PH, O, L 12/86 4 12 PH, P, F, 3/87 7 18 PH, P, M, 0, l ~~~~~~~~~~~~~F Appraisal 6/87 4 8 PH, P, 0, L, PLW** 4/88 5 6 PH, P, L, D, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ F _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __F Supervision: I 8/88 1 5 PH 1 1 II 2/89 1 17 PH 1 III 8/89 2 12 PH, IC I 1 8/89 1 7 F IV 3/90 1 12 PH, TD I I V 10/90 2 11 PH, E 2 1 M, F VI 4/91 1 14 PH 2 1 M VII 10/91 1 12 PH 2 1 M VIII 5/92 2 14 PH 3 1 M, L IX 12/92 2 12 PH 2 2 M, PR, F X 5/93 4 11 PH, ED 2 2 M, PR (Mid-Term Review) XI 12/93 2 14 PH, ED 3 2 L, M, F, PR, XII 7/94 3 12 PH, MS, ED S S F XIII 2/95 3 12 PH, ED, MS S S F, PR IX 4/96 1 7 PH HS HS Completion I I_I_ I * D = Disbursement specialist; E = economist; ED = endemic disease specialist; F = financial analyst; IC = IEC specialist; L = legal; M = management specialist; MS = malaria specialist; 0 = operations specialist; P = procurement specialist; PH = public health specialist; TD = tropical diseases specialist\. ** PLW = Project Launch Workshop 'Ratings: I/HS = minor problems 2/S = moderate problems; 3 = serious problems\. 2Types of Problems: L = legal; M = management performance; F = availability of finds; PR = procurement\. 28 Table 14: Documents in Project File 1\. Projeto de Controle de Doencas Endemicas no Nordeste -- PCDEN\. Acordo de Emprestimo No 2931\. Borrower/Government project completion report 2\. AnAlise de Custo-Efetividade do Componente de Doenca de Chagas no PCDEN, by Dariush Akhavan, November 1996\. Cost-effectiveness analysis of Chagas' Disease component\. 3\. AnAlise de Custo-Efetividade do Componente de Esquistosomose no PCDEN, by Dariush Akhavan, November 1996\. Cost-effectiveness analysis of schistosomiasis component\. 4\. Analise de Custo-Efetividade do Componente de Leishmaniose no PCDEN, by Dariush Akhavan, November 1996\. Cost-effectiveness analysis of leishmaniasis component\. 5\. Cost-benefit Analysis of the Brazil Northeast Endemic Disease Control Project, by James Cercone, May 1997\. 6\. Borrower's comments on the implementation completion report\. I IBRD 21334 (VENEZUELA *o * (FRENCH BR 4C I SSURINAME\GUIANAr BRAZIL C O L O M B I A Bo?1I \. EDaVI5SS /ON J fL AMAZON BASIN MALARIA CONTROL PROJECT MALARIA CONTROL PROGRAM , A=T A N t/C J f- P A4-- W0\.A<N I f/< C;4AQ= - RiORA 7' Z AEDONORTE \. resinCEARA /RO EDNRT \ PARAIBoA o Pessoa P E R U > < < gG0W 4 g ~~~~~~~B eA H I A :tSERGIPE -- \ t? A, _ | w ~~~~~~~~~~~BRASIUAL@% ±\. \ < ~B O L I VIA t 2 Goionio ? 5 oow 2 t ' ~~~~~~~~~~9 t g~~~~~~Ca p Tn6fibo Otoni r oaoo AU I ancndl g \ r _ _ > (!Z)MATO GROSSO~ - U\.-,OrOINAS G ERA1S1\. C\.1 - C i /'; C \ \ g CompoGrondee * Belo /ESPIRITO SANTO ) ii aOSL dJNb Rbo> Hrizonte\.-\. OThbworao ,rjiNric -20* ~< - *,o SAOA; i itoFr,o ° F/ANTCpmo A N p tz \ ~\PAR AGUAY \ , Canpins0 t\. D:o E JANEIRO fl C L 4 N (CHILE? \\. noSd 5o Pa°Io\. '~ RiodeJaneiro 8 / Santo \. P>RANA tOA (\. ;t )_ s Parnwago\.9==: Attack Phonse Priority I - _ ) j {[ 2 2_j~~~~~~~~~~~~~~ANTA CATARINA Attack Pirate Priority 11 SOUTH3-- \ r , > F¢rionoi°lis r |~~~~~~taja Under Sorceillonce dt~~~~~~~~~~' B N T IcL KI A R \. ~1¢ A ,9/ Vcoio °Tba o*Fnsoesiduol Tronstniucion 1Bl <*>,asl,¢ / r'a,n\.cn\.n\.,ceooc/ ,RIO GRANDE DO SUL4 '9 Notional Capital iona~~~cnc\.n,anc\.nin\. -/ 0 State Capitol\.s ERGIP AME'RICA - ~c-o^> | \on p t Alegret 7Trae\.ondonlas Salvador ( \.aen\.F\.nrc9l F on 1>- 2a' FP *oy KItOME IERi O t00 200 300 400 S200ae3anare _l'CrANv/ l rnon PJsoo) dotas0>J 'Legal Amoconio" Boundory e , OOF2 l X 0 f *\ i MIIES 0 W0~~~~~~~~~~~~6 6 2Io 300 *--International Bsoundaries k 0 t h FC C % 2 U R U G U AY ls -Riers 0 ;~~~~ ~ 0 L° IO£\.D O V\ I Ao4 0 ,__\. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~JAr\.IUAn 191/9 IBRD 20434 B R A Z I L NORTHEAST ENDEMIC DISEASES CONTROL PROJECT ® State Capitals Northeast Region Boundary ® National Capitol -- State Boundaries - -- International Boundaries 50 , 4 40° | VENEZUELA 0elemANA -Im PROGRAM FOR ' ( /FECGUYANA GUIANA aoLuis LEISHMANIASIS CONTROL 1t -L t' c tFRENCH GUIANA/\. :t COLOMBIA C ' QSURINAME/ (Fr\.) 'A Fortaleza 0~ MARANHA *< ~' C A %R R RARNO N I Area of Maps P NOR, t ess NORTHEAST J / - B R A Z I L ij7 j 4 ~ 0 PERU < REGION / 0 G AArocu U1 Bras il- GOIAS -®Solvodor k BOLIVIA \.(7 Brasilia 15 f PARAGUAY >\,t (t > 87 ~~~~~~~~~~~~~Goi6nia( g 2 Xt £) P A % U A Y L A G oi6 ni P ro ject A re a s ; / T0*OOflOflOPOfldr \.MINAS GERAIS ESPIRITO r §7 re\.~~~o'\.uoo,\.~~~~ SANTO20 'nanoue \.oooa,osdo\.e\. 20 Bela'-'~~~~~~~~~~~~~20 ARGENTINA o'inoSOTfctddB0w Beoio3 I ViAri2 \ zilNlU-l\AV FtY hll<WIF I ~~~~~~~~~~~~~~~~~~~~Horezonte Vit6ria CHILE 'URUGA \ZrvIAn ii ( v:zolrroWz\.rr: SAO PAULO j \.JRIO DE 0, , 300 MILES l JANEIRO ;, vUlVlN Vw--",Sao Paulo Rio oe 0 400 KILOMETERS 00 -a 4 t5 Janeiro 400 350 50° 450 40 ' 50b ' \. 45 ®Bel6m r- PROGRAM FOR @lBelI6n PROGRAM FOR Sao Luis SCHISTOSOMIASIS CONTROL 5 is CHAGAS CONTROL PF at)l-zoFrtaleza -50 AANA 50 K -5~ MARAIM14A H~~~~~~~~~~~~~~~M4ANIIp ~® CEAgA 50 RAD PARA \.' era*s\. BEAN00 Nata5 TerosR R Natal PARA 0 _ ;o Psw PARA 8 t ^ >t j~~~~~~~~'u~Joao Pessoa Joaox Pessoa IPIAI Fe cifRec,fe 9 J U IJN$)t% Recife °ca'u Aroca'u SE 3X\. GOAS 0 I ~~~~~~~~~~~~~~A-I GOIAS )j GOIAS ' aa ' OSalvador Brasilia 15 Broslia 15t Go,6n,onii3 ) / Project Areas; Goianiat Project Areas: \.0/X //a/ A UndeConlf F7 Under Control IITO New Control Activities MNAS GERAIS SIE RITO New Control Activities 100 -- / // ®~~~~~~~~~~~ 20tr "t0 (/ ®Vit6ria20 SAO PAULO RODE 0 300 MILES SAO PAULO 'RIRO DE \. 300 MILES 4 , S 0 400 KILOMETERS SaoPal Paulo Rio de R\.d ,, (3 45° Janeiro 315- 35° J' neiro 400 350 JULY 1987 IMAGING Report No\.: 16694 Type: ICR
APPROVAL
P002019
Document of The World Bank FOR OMCIAL USE ONLY Rqrt No\. 5936 PROJECT PERFORMANCE AUDIT REPORT NIGERIA: FOURTH POWER PROJECT (LOAN 847-UNI) November 22, 1985 Operations Evaluation Department This decamedt lbw a -estricted distrilem mayO be age bY reciplmis oNlY la the Peforaande Of their allela ducles Incdel maW me adwerwise be diselend wihtod Werld Bank asbhtleaon\. FOR OMFICIAL USE ONLY PROJECT PERFOEMANCE AUDIT REPORT NIGERIA: FOURTR POWER PROJECT (LOAN 847-UNI) TABLE OF CONTENTS Page No\. Preface \. Basic Data Sheet \. III Evaluation Suamary \. \. v PROJECT PERFORMANCE AUDIT MEMORANDUM I\. PROJECT SUMMARY \. 1 II\. SUPPLEMENTARY COMMENTS \. 9 Distribution Planning and Expansion \. 11 Rehabilitation and Development Program \. 12 Self-reliance \.eo\. *\. 13 Institutional Reforms: Accountability and Autonomy \.0\.0 \. 18 Inter-agency Coordination \. 19 Staff Morale and Incentive Package \. 20 Sustainability of Power Supply Industry and Facilities \.o\.e\.e\.e\.s 20 III\. CONCLUSIONS \. 21 Annex Table 1 - 4 \. 23 Appendix I - Comments from NEPA \. 27 Appendix II - Comments from the Co-financier (CIDA) \. 30 PROJECT COMPLETION REPORT 1\. Introduction \. \. 32 2\. Project Preparation and Appraisal \.********** 33 3\. Project Implementation \. 37 4\. Operating Performance \. \. 48 5\. Financial Performance \. 48 6\. Institutional Performance and Development \. 49 7\. Project Justification \. 51 8\. Bank Performance \. 53 9\. Conclusions 0\.6000\.60060\.00\.00\.0\. 54 Thidocument hs a trded ditribuioU ad amy be ud by socipleets only in the perforMsge of thdew offici duti\. Its contents may not otherwis be disclosd without Word Bak atherladi\. TABLE OF CONTENTS (Cont'd) Page No\. ANNEXES: 1\. Estimated and Actual Project Costs \. 56 2\. Economic Justification \. \. \. \. 57 3\. Schedule of Supervision Missions \. 61 PROJECT PERFORMANCE AUDIT REPORT NIGERIA: FOURTH POWER PROJECT (LOAN 847-UNI) PREFACE This report presents the results of a performance audit of the Fourth Power Project (Loan 847-UNI)\. The Bank provided a US$76\.0 million loan, and the Canadian International Development Agency (CIDA), a US$ 0\.9 million grant\. Tae loan was made to the National Electric Power Authority (NEPA) and was fully disbursed on April 25, 1980 and closed by June 30, 1980\. This report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED), and a Project Completion Report (PCR) prepared by the Western Africa Regional Office\. The PCR was prepared by a consultant who reviewed Bank reports, project records and files\. He also prepared a detailed PCR for NEPA\. The PPAM is based on similar sources,1/ including the two PCRs prepared by NEPA and the Bank, and a three-week OED mission to Nigeria\. In reviewing the generation, transmission, and distribution components, the audit mission visited Kainji, Jebba, Ilorin, Oshogbo, Kano, Yola, Egbin and Lagos\. Many adjoining towns and villages were also visited including: New Bussa, Erinile-Offa, Bacita, Okinni village, Igbaye, Bichi, Dawakin-Tofa, Gaya, and Wudil\. In addition to meeting NEPA's field staff, several residential, commercial and industrial consumers and potential customers were interviewed\. The mission is grateful for the assistance provided to it by NEPA\. The PCR has examined the performance under the project with some emphasis on financial and institutional development\. While reviewing these issues, the audit has considered the project's economic justification and the sector's need for reform and rehabilitation measures, including: (a) distribution planning and expansion; (b) rehabilitation and development program; (c) self-reliance; 1/ Appraisal Report No\. PU-98, June 1972; President's Report No\. P-1108, June 1972; the Loan and Guarantee Agreements, June 1972; correspondence with the borrower, supervision mission reports, and internal Bank memoranda on the project issues contained in the Bank files; country economic memoranda, sector reports, and several studies by consultants\. (d) institutional reforms: accountability and autonomy; (e) inter-agency coordination; (f) staff morale and incentive package; and (g) sustainability of power supply industry and facilities\. Following normal OED procedures, copies of the draft report were sent to the country and the co-financier for comments\. Comments received have been reproduced in Appendices I and II and referred to in the audit report\. PROJECT PERFORMANCE AUDIT BASIC DATA SHEET NIGERIA: FOURTH POWER PROJECT (LOAN 847-UNI) KEY PROJECT DATA Appraisal Actual Total Project Cost (million US$) 126 178 Cost Overrun () - 34 Loan Amount (million US$) 76\.0 76\.0 Date Physical Components Completed 9/77 5/81 Proportion completed original completion date (%) - 75 Economic Rate of Return - Kainji Extension (%) 23 /a - 1972-78 Program (n\.a\.) 7a Financial Performance (min\.) 8% return 5% return /b Institutional Performance - below expectations OTHER PROJECT DATA Original Revisions Actual Plan First mention in files 1969 Government application 1971 Negotiations 5/72 Board Approval 6/29/72 Loan Agreement Date 6/30/72 Effectiveness Date 6/26/73 Closing Date 12/31/77 12/31/78 6/30/80 /c 12/31/79 Borrower: National Electric Power Authority (NEPA) Guarantor: Federal Republic of Nigeria Fiscal year of Borrower: ending March 31 (until 1980) Follow-on Projects: (1) Lagos Distribution Project (Power V) (2) Power Transmission and Distr\. Project (Power VI) Loan Numbers: (1) : 1766 -UNI (2) : 2085 - UNI Amounts: (1) : US$100 million (2) : US$100 million Loan Agreement dates: (1) : 2/19/80 (2) : 6/23/82 /a Because of the present underutilization of capacity no meaningful rate of return can be estimated\. /b Non-revalued asset base, PPAM, Annex Table 2\. /c Final disbursement was on 04/25/80\. MISSION DATA Month/ No\. of No\. of No\. of Date of Item Year weeks Persons manweeks Report Pre-appraisal 3-4/71 2 2 3 Pre-appraisal 10/71 2 2 4 Appraisal 1-2/72 5 3 15 6/16/72 9 22 Supervision I 12/72 2 3 5 1/09/73 Supervision II 11-12/73 3 2 4 1/18/74 and 3/29/74 Supervision III 6/74 1 1 1 7/03/75 Supervision IV 2/75 1 2 2 3/07/75 Supervision V 5/77 2 1 2 6/15/77 Supervision VI 1/78 1 1 1 2/23/78 Supervision VII * 6/78 1 1 1 6/28/78 Supervision VIII * 8/78 1 1 1 9/22/78 * In connection with pre-appraisal of Lagos Distribution Project\. -v- PROJECT PERFORMANCE AUDIT REPORT NIGERIA: FOURTH POWER PROJECT (LOAN 847-UNI) EVALUATION SUMMARY Introduction The Fourth Power project (Loan 847-UNI) was the Bank's first loan to the newly established National Electricity Power Authority (NEPA)\. The project bad generation, transmission and distribution components, including: two generating units (200 MW total capacity) at Kainji; a second 330 kV transmission line (420 km) from Kainji to Lagos; the expansion of distribu- tion networks and the establishment of new service centers in over 80 cities and towns; a study of power development strategy; and technical assistance to NEPA\. The Bank provided a US$76\.0 million loan, and CIDA, a US$0\.9 million grant\. The Bank loan was closed on June 30, 1980\. The project was physically completed in May 1981\. Objectives Since NEPA was a new organization, the project supported it with technical and financial assistance to meet the country's growing requirements for electrical energy\. It was also intended to help sustain the Authority's efforts in developing and reforming its management, system planning, operation, finances, and training program (PCR, para\. 2\.11)\. Implementation Experience Technically, the project was a success\. The 34% overall increase in project cost is mainly caused by distribution subprojects which had considerably expanded in scope (PPAM, para\. 20)\. These subprojects also experienced considerable time-overruns (5-36 months)\. On the whole, however, the time overruns are in line with similar experiences in several major oil exporting countries\. NEPA considers the performance of consultants, contractors, and equipment manufacturers to have been generally satisfactory\. Further, after clearing some initial misapprehensions, no significant procurement problem arose during the implementation phase (PCR, paras\. 3\.17-3\.20)\. The Bank experienced some difficulty in getting timely government approval for sending supervision missions (PCR, para\. 8\.03)\. - vi - Results An "investment that is quickly used to full capacity should have a high return" in Nigeria (PCR, para\. 7\.08)\. This is because the country is populous and large, with rich natural resources, requiring, in the medium- term, most of the additional supply capability created under the project, provided that the electricity supply industry is operated efficiently, the system reliability improves significantly, and the distribution network expands rapidly\. Without major reforms these objectives cannot be realized and the project's economic rate of return would be negative\. Because of water deficiency in dry periods, the additional generating capacity installed at Kainji is underutilized, and owing to maintenance/repair problems and other institutional weaknesses the expansion of the transmission grids has yet to yield appreciable gains in overall system reliability and efficiency\. Also, this project followed a strategy of providing electricity from the national grid in areas where the market for power is highly underdeveloped (forward linkage strategy)\. Such a development policy is hard to justify, unless: the reliability of electricity supply improves markedly, the size of captive market (auto-generators) sags spontaneously in response to cheaper and better public supplies, the system losses fall from over 30% to a reasonable level (12-14%), and the distribution networks in existing centers expand considerably (PPAM, para\. 13)\. Financial agreements, under the project, constitute a sound basis for a good financial management system\. The rate of return covenant could not be achieved\. Compliance, which was possible, would have required an average of 50% additional tariff increase in the period 1974-80 and a doubling of NEPA's rates in 1983\. Moreover, the Anthority and the Bank have yet to agree on a methodology to revalue assets (PPAM, para\. 23)\. NEPA's overall performance should be viewed in the light of: institutional development in a conglomerate society where the emphasis is on integration of diverse cultural groups even within parastatals; the oil syndrome, creating severe imbalances in the economy; and geographical disparity in income distribution (PPA14, paras\. 32-34)\. These macro-problems have affected, for example: the staff's career development, which has not been solely based on individual performance or merit; supplies of spares, skills and natural gas; and the Authority's investment decisions, often reflecting socio-political rather than economic objectives\. Sustainability Sustainability depends on NEPA's self-reliance, accountability, and autonomy\. Self-reliance has human-resource, know-how, and financial dimen- sions\. To secure it NEPA needs to develop a well-administered training program\. But so far it has disregarded the need for supportive Nigerian counterparts\. This indifference to training requirements cannot be remedied by the external funding of expatriate teams\. The Bank must make the establishment of such a training program a key provision of its future loan covenants (PPAM, para\. 49)\. In addition, the Authority must increase inter- nal savings through a series of measures\. A substantial increase in tariffs, - vii - although necessary, is insufficient\. Any tariff increase needs to be accom- panied with significant improvement in system efficiency\. Self-reliance also requires that the Government gradually eliminate fuel price and interest rate subsidies\. Once achieved, it would make NEPA accountable and help secure its autonomy (PPAM, para\. 63)\. Findings and Lessons Field visits in areas served by the project (PPAM, para\. 35) provided good evidence of hurdles impeding full utilization of capacity created under the project\. The visits confirm: (a) NEPA's impressive physical assets, largely underutilized and in need of maintenance/repair; (b) the economy's great dependence on auto-generators, emphasizing the existence of a large potential market, and the need for reliable and least-cost public supplies; and (c) a weak distribution network, the task of its rehabilitation and rapid extension posing the most severe development challenge to NEPA's management skill and technical competence\. If left unresolved, these problems would hamper the country's economic development\. The reform package to rehabilitate the sector and ensure the sustainability of power institutions and facilities is summarized in PPAM, para\. 80\. PROJECT PERFORMANCE AUDIT MEMORANDUM NIGERIA: FOURTH POWER PROJECT (LOAN 847-UNI) I\. PROJECT SUMMARY 1\. The National Electric Power Authority (NEPA) was established in 1972 by merging the Electricity Corporation of Nigeria (ECN), and the Niger Dams Authority (NDA)\. The new organization has been mandated to maintain an efficient, well-coordinated and cost-effective system of electricity supply in generation, transmission and distribution facilities throughout Nigeria\. To accomplish these objectives NEPA had to overcome formidable obstacles\. The oil boom triggered rapid expansion of demand for electricity supply\. But the Authority was new and had few well-trained and experienced staff to effectively respond to the demand upsurge\. 2\. During the appraisal of the Fourth Power Project (Loan 847-UNI), ECN and NDA prepared, with the help of the World Bank, a six-year investment program (FY1973-78)\. The Fourth Power Project, constituting an important part of the program, included: - Two new generating units (100 MW capacity each) at Kainji, with associated switchgears, a 330/132 kV substation, and reinforce- ment of four existing substations; - A second 330 kV transmission line (420 km\.) from Kainji to Lagos, plus four associated substations; - Expansion of distribution network in 43 cities, and electrification of 41 townships; - A study of power development strategy, including Kainji hydrology; preparation of a long-term expansion plan; and also design and specifications of the next generation station\. In addition, the project envisaged management studies, and technical assistance to NEPA\. 3\. These subprojects, reviewed in the ensuing paragraphs, became part of a massive expansion program which went far beyond the original six-year plan\. The extent of NEPA's investment in generation and transmission sub- sectors can be inferred from the following statistics\. The generation capa- city in operation expanded by about five-fold from 600 MW in 1973 to about 3,000 MW in 1985 with a further 2,300 MW under construction\.1/ 1/ See footnote 5\. Further, between 1973 and 1980 the Authority constructed 2,390 km of 330 kV lines, 2,810 km of 132 kV lines, nine 330 kV substations, and forty-seven 132 kV substations\. Currently, NEPA has about 9,000 km of 330 kV and 132 kV lines, twenty 330 kV substations, and eighty 132 kV substations\. Many transmission lines are lightly loaded, supplying state population centers throughout Nigeria\. -2- "Whereas the Bank participated in the financing of a substantial part of early additions, its contribution to those implemented after 1976 was small" - Borrower's PCR, para\. 4\.06\. 4\. This impressive physical infrastructure is underutilized, and provides an unreliable service\. The considerable increase in system losses and the rapid groath of captive capacity2/ suggest that tbe operating effi- ciency of the system needs to be upgraded\. Without a comprehensive sector rehabilitation program focusing particularly on quality and extension of service to the existing service areaa, many parts of the Fourth Power Project, which would continue to be greatly underutilized, will not have been justified\. 5\. The Kainj i multi-purpose dam, located on the Niger river, was Nigeria's principal source of power supply in the early 1970s\. The power house, at the site, was designed to accommodate 12 generators, each with 80 MW capacity\. Four of these units were installed in the 1960s with the Bank's financial assistance\. Two Kaplan-type generators, with 200 MW aggregate capacity, were built under the Fourth Pcwzr Project\. Another two propeller- type units, totalling 240 MW capacity, were installed later but without Bank assistance\. 6\. Currently, Kainji has 760 MW in installed capacity\. Of the six units, financed by the Bank (including the Fourth Power), three were out of service in February 1985, curtailing operable capacity to 500 MW\. Moreover, since the stored water behind the dam was very low, not all the operable capacity was being utilized: in February 1985, only 320 MN were being used as base load, and 360 MW3/ as peak load\. Thus because of the drou ht, the additional capacity, under the project, can be partially utilized\./ The repair work on the three units, which are out of service, will probably be completed in 1985\. Considering the possibility of long term subnormal water inflows, NEPA needs to assess the best way of using the 1,320 NW installed in Kainji and Jebba\.4/ Of this capacity currently about 500 NW is being operated for meeting the base load, and 650 YW for satisfying the peak load\. 2/ Auto-generators, established mostly by the manufacturing industry, provide for their critical needs, and are known as captive plants\. 3/ National Control Center, Oshogbo, February 26, 1985\. This assessment is based on hydro conditions prevailing at the time of audit mission in February 985\. Since then heavy rains have improved the hydro outlook\. 4/ The capacity at Jebba (6 x 93\.5 MW) is largely underutilized\. Since the water release from the Kainji largely determines Jebba's generation capacity, of the five completed units in February 1985, one or two operated at non-peak hours and three, periodically, at peak hours (February 26, 1985: 175 MNW base-load, and 270 MNW peak-load)\. - 3 - 7\. After the commissioning of Egbin and Shiroro, NEPA will have over 5,300 MW5/ of installed capacity, requiring probably some 1,300 KW (30%) in reserve margin\. For a good part of the projected reserve margin at peak hours, the system could depend on Kainji and Jebba provided that: peak demand expands at least twofold from the current level of 1,600-1,700 KW; the power stations and transmission system are well-maintained, and efficiently operated as an integrated system; they are not underutilized because of fuel shortages, notably natural gas; and stored water behind Kainji and Jebba is conserved to enable the full use of the reserve margin primarily as peaking and for coping with major system failures\. It will be several years before such a stage of development can be reached and the installation of the two generators under the project be vindicated\. 8\. Given the potential use of Kainji station for purposes of reserve margin, the selection of Kaplan-type units over the propeller-type generators has probably been wise\. This is because the Kaplan units can be operated flexibly, much below capacity if necessary\. In contrast, the propeller-type units must operate near full capacity\. A comparison of the two in Kainji, in terms of water usage per unit of energy generation, provides no conclusive evidence that one type enjoys a decisive operating cost advantage over the other\. The ability to use units below capacity would be handy when supplies are to be tailored, at the margin, to the size of additional loads because of unexpected system outages\. 9\. The construction of a second 330 kV line from Kainji to Lagos was envisioned by project consultants in 1964\. The line was to be completed when the peak demand of the interconnected grid had reached 1,200 MNW\. But the first line proved less relidble than NDA and consultants had assumed\. This was because numerous savanna fires in the area proved to be serious, disrupt- ing supplies\. For improving reliability, the Government advanced the comple- Clon of the second line by three years and this became a part of the Fourth Power Project\. 10\. In addition, Nigeria has constructed a third 330 kV line from Jebba to Oshogbo, providing a transmission capability far beyond what can currently be generated at Kainji, Jebba or even later from Shiroro\. Yet, as noted in 5/ Kainji 760 MW Delta 312 MW Jebba 560 MW Egbin 1,320 MW Shiroro 600 MW Others 70 MW Sapele 1,030 MW Afam 660 MW Total 5,312 MW For the short, and possibly medium-term, NEPA's system will be energy constrained because of low water level at Kainji and fuel supply limita- tions affecting Egbin\. Further, because of foreign exchange shortage and excess power capacity, installation of generators on Shiroro Dam, which has been completed, was deferred\. Therefore, effective capacity utilization would be gradual\. the PPAM, para\. 3, the infrastructure for a reliable electric supply industry has been put in place\. They must be maintained well and operated effici- ently\. Because of maintenance problems, weakness elsewhere in the system, and unmanageable fires, the fast growth of the transmission network did not improve reliability\. Almost every manufacturing firm and medium and large- sized commercial establishment must have auto-generators\. These sets are being used frequently and have replicated a major part of public investment in the electricity supply industry\. 11\. The distribution program, accounting for two-thirds of the proj- ect's actual cost, constituted the core of the Fourth Power\. The program included: reinforcement of the facilities in Lagos, and ten major towns; interconnection of some of these centers by 132 kV line, and the electri- fication of adjoining townships; extension of electricity to 73 towns, mostly through 132 kV lines, and also construction or reinforcement of distribution facilities at these centers\. PPAM, Annex lable 1 summarizes the scope of distribution program\. 12\. The extension of NEPA's service to power consumers has followed a forward, rather than a backward linkage strategy\. Many utility companies in developing nations have first developed their markets and distribution facil- ities, and after sufficient growth in loads to justify linkage to the national grid\. transmission lines were extended to such centers\. But NEPA has, in most ca3es, extended its transmission and sub-transmission lines to towns with inade\.qua:e distribution facilities\. This is true of, fc\.% example, most of the 73 towns electrified under the Fourth Power Project\. Also, the 330 kV super grids have been extended to fairly small load ceaers like Gombe, and Birnin Kebbi\. 13\. SAR states6/ "no detailed analysis has been made to determine whether, at the opportunity cost of capital, it would be cheaper in present worth, to connect the townships to the Kainji rather than to generate power locally by small captive generating units\. There are, however, strong rea- sons in judgment to believe that connection tc the network is the most econo- mic solution; incremental cost of Kainji power is very low, and due to high transp3rtation costs, poor maintenance, and small unit size, captive diesel power generation is very expensive\." This strategy has been costly\. NEPA's insta\.:1-d geaerating capacity, albeit eiecgy-constrainid (see foc;note 5), has so far a devEliped market for less than 1,700 M4 peak capacity\. This discrepency between distribution system End supply f\.?cilities is also in evidence at the transmission and subtransmission luvels\. Morcover, the attainable reliability at the generation and transmission levels is unmatched at the distribution end\. This is because, except for the Lagos market the Nigerian distribution networks are radial rather than ring systems\. The advantage of a ring over a radial system stems from the possibility of pro- viding power to the coasumer from both ends of a loop, but of course at extra cost\. The lack of reliability at the distribution level hinders efforts to 6/ SAR, Report Uo\. PU-98, Annex 9, para\. 2\. - 5 - diminish dependence on the captive power plants\. Therefore, unless system reliability greatly improves, the available capacity is better utilized, and the captive market sags spontaneously as cheaper NEPA power becomes avail- able, the forward linkage strategy of the Fourth Power Project would be hard to justify\. 14\. Nevertheless, NEPA displaced its own diesel generators in most places that were connected to the national grid\. These sets were later rein- stalled in isolated load centers, although in some major towns, (for example, Maiduguri and Kaduna) they were left to operate as standbys\. 15\. An additional benefit was the Authority's expanding distribution networks, which have been serving an increasing number of customers: 1973 1975 1978 1979 1980 Number of connections, 338 438 708 829 of which residential (265) (353) (590) (694) (in '000) Energy sales, 1,752 2,343 3,571 4,178 4,006 of which residential (633) (895) (1,496) (2,082) (in GWh) NEPA's generation and 2,108 2,906 4,592 6,500 power purchases (in GWh) Actual systems losses 16\.9 19\.4 22\.2 38\.4 as % of generation SAR's projection of 19\.5 18\.5 17\.0 16\.0 system losses Source: Borrower's PCR, paras\. 4\.11-4\.12\. 16\. During the 1973-79 period NEPA's customers increased 16% a year and its sales 15% a year\. In the year 1980 system losses reached a peak of 38\.4%, probably because of large unmetered consumption, resulting from "the substantial tariff increase of early FY 1980" - Borrower's PCR, para\. 4\.13\. System losses continue to be inordinately high\. 17\. NEPA prepared a power system development plan under the Fourth Power Project in 1976\. In addition to the completion of Sapele gas-fired steam plant (720 MW), the plan called for the construction of hydropower plants at Shiroro Gorge (600 MW) on the Kaduna river, and at Jebba (540 KW) on the Niger river\. Moreover, in reviewing the Niger river hydrology in November 1972, the consultant recommended the installation of at least four more units in addition to the generators partially funded by the World Bank - 6 - (Borrower's PCR, para\. 3\.81)\. Sapele and Jebba schemes, and the Shiroro dam have already been completed\. Generators have yet to be installed in Shiroro, and Jebba is short of one generating set\. Two additional propeller-type units have also been installed at Kainji (PPAM, para\. 5)\. 18\. The only Bank project item qualifying as management study was the valuation of NEPA's assets as of April 1, 1972\. Since then asset additions in the balance sheets are at cost\. NEPA has desisted from any further asset revaluation and has turned down revaluation methods proposed by the Bank\. 19\. According to the SAR, the cost of the Fourth Power Project was estimated at $126\.0 million, of which $76\.9 million was in foreign exchange (SAR, para\. 4\.05)\. The Bank funded $76\.0 million of the foreign exchange cost and CIDA the balance ($0\.9 million)\. Of the Bank loan, $73\.0 million (96%) was disbursed by mid-1977, six months before the original closing date\. Three more years were needed for disbursing the balance ($3\.0 mil- lion)\. The loan was closed on June 30, 1980\. 20\. The slow disbursement of the last $3\.0 million reflects the long delays experienced by several distribution schemes\. Otherwise, the Kainji extension and the completion of the second 330 kV transmission line fell 6-11 months behind the original schedule\. Together, the cost of generation and transmission components were 4-1/2 Z less than the SAR estimate\. The follow- ing table presents the project's time and cost overruns: Cost Overrun (% of SAR Estimate) Project Time over- Foreign Composition run (in Local Exchange Total (%) months) Cost Cost Cost SAR Actual Kainji extension 6-11 17 (-) 12 (-) 6 17 12 Reinforcement of 330 kV substations 20 100 17 40 3 3 Second 330 kV line 6 9 (-) 20 (-) 10 20 14 Distribution schemes 5-36 53 82 68 53 66 Power development studies - (-) 20 (-) 25 C-) 23 4 2 Management studies - - 32 22 3 3 40 31 34 100 100 Source: Borrower's PCR The actual cost and the completion dates of many distribution schemes cannot be compared with those in the SAR, because in most cases their scope had been significantly modified\. Given that Nigeria experienced significant price/ - 7 - cost7/ increases and operated under severe constraints, such as port conges- tion and skill shortages, the time and cost overruns are in line with similar experiences in several other major oil exporting LDCs over the same period\. 21\. Financial agreements with NEPA, under the Fourth Power Project, form a sound basis for a good financial management system\. The covenants require: (a) prompt valuation of assets; (b) at least an 8% rate of return on revalued assets; (c) methods of valuation and revaluation acceptable to the Bank; and (d) proper and timely audit of NEPA's accounts and financial statements by independent firms acceptable to the Bank and submission of the audited accounts to the Bank not later than four months after the end of each fiscal year\. 22\. The fixed assets of ECN and NDA, which were merged to form NEPA, were evaluated as of April 1, 1972 (Borrower's PCR, para\. 5\.13)\. Since 1972, however, the Authority's assets are presented in terms of their historical values\. 23\. The Bank and NEPA have yet to agree on a revaluation method\.8/ The SARs on the Fifth and the Sixth Power Projects present possible revalua- tion methods\.9/ PPAM Annex Table 2 illustrates the difference in NEPA's financial performance under a non-revalued and revalued asset base\. 24\. The table shows that NEPA could not generate enough revenue to satisfy the rate of return covenant\. Compliance with the terms of agreement would have required a tariff increase of about 50% during the 1974-80 period and about 100% in 1983\. 25\. Although tariffs increased greatly in 1979, the gap between the prevailing and the required rates has widened\. Because of heavy investments, still in the pipeline, the required rate increase will be more than 100%\. This assessment is reflected in the spread between the rates of growth of work in progress (WIP) and of net fixed assets in operation (NFA)\. As a proportion of NFA, WIP increased from 6% in 1973 to 98% in 1983; its annual growth rate being 56% during the ten-year period\. In contrast, NFA increased 16\.9% a year and power sales 13\.4% a year over the same period\. Further, in the absence of significant financial assistance from the Federal Government, the divergence between the WIP and the NFA growth rates would signal signifi- cant cash flow problems\. 71 17% p\.a\. in domestic market and 11% p\.a\. in foreign markets over the 1972-80 period\. In contrast to the actual price escalation, the SAR had allowed for 3% annual rate of price increases (SAR, para\. 4\.05)\. 8/ See NEPA's comments and OED notes, Appendix I, p\. 3\. 91 Report No\. 2502-UNI, October 1, 1979, Annex 7\.01, p\.3; Report No\. 3041-UNI, September 10, 1981, Annexes 6\.06-6\.09\. - 8 - 26\. NEPA's cash flow position is also aggravated by a large accumula- tion of unpaid bills\. The audit mission's field visits confirm the existence of serious administrative problems, already recognized by the Authority's Enquiry Committee on billing and collection:10/ meter readers often esti- mate electricity bills without reading the meters for several months\. This negligence is encouraged by not providing close supervision and control, and by not paying for the full cost of meter readers' visits\. Further, the unpaid bills pile up for several months\. As they grow so does the prospect of disconnections ending in permanent defaults\. 27\. As regards the timeliness of NEPA's audited accounts, the auditing of the 1982 financial statement is still incomplete\.11/ 28\. NEPA had little difficulty with procurement under international competitive bidding (ICB)\. Some problems arose at the outset, since a sub- stantial part of the procurement had begun before conclusion of the loan agreement\. Also, NEPA's staff were relatively inexperienced in following ICB guidelines\. Provisions, such as alternative finance clause in tenders, did not help either\. The Bank's 1973 supervision mission focused, therefore, on clarification of the ICB procedures, and resolution of the pending issues\. No significant procurement problems arose thereafter\. The Bank supervision missions were not readily welcome, however\. The PCR states that these mis- sions visited Nigeria at unusually long intervals (PCR, para\. 8\.03), chiefly because of delays in obtaining Government approval to such missions\. Cur- rently, mission visits are cleared satisfactorily by the Government and NEPA\. 29\. NEPA used consultants for the Kainji extension, the transmission project, the distribution program, the Kainji hydrology, and studies concern- ing management and power sector studies\. NEPA considers their performance satisfactory\. However, the Authority considers the failure of some auger- bored pile foundation along the Kainji-Lagos transmission line a result of faulty design rather than of deficient construction method (PCR, para\. 3\.30)\. 30\. Also the contractors and equipment manufacturers generally per- formed well\. There was -only one instance of a contractor not fulfilling his obligations and forcing NEPA to complete installation with its own workforce- - PCR, para\. 3\.32\. 31\. No major difficulty arose in the commissioning of Kainji extension and transmission systems\. One of the generators, commissioned in February 1976, ran without major interruption for six years, but was severely damaged 10/ The Enquiry Committee, established in May 1984, was to examine the billing and collection procedure and recommend measures for correct billings and expeditioas collections\. The Committee issued its report in November 1984\. 11/ See NEPA's comments, Appendix I, p\. 3\. in 1982 and has to be replaced\. NEPA is not fully satisfied with the perfor- mance of generators (PCR, para\. 3\.36)\. As regards distribution, many systems were overloaded nearly from the start because of the fast growth of demand and the delay which the program had suffered" - PCR, para\. 3\.37\. II\. SUPPLEMENTARY COMMENTS 32\. Despite NEPA's impressive physical assets, the Authority's past accomplishments are open to question\. This is because of sizeable underuti- lized capacity, high losses, lack of reliability of electricity supply, replication of a large part of public generation by auto-generators in the productive sector, and an inability to collect bills, establish an effective training and maintenance/repair programs, expand rapidly distribution ser- vices, and raise staff morale\. However, NEPA's performance needs to be assessed in light of major constraints and problems that also apply to other parastatals and have an adverse impact on the country's overall development efforts\. For example, it is important to develop in Nigeria, as it is in many other countries, a much stronger merit system whereby career development and promotion are closely linked to individual job performance\. In addition, a merit system should be supported by sufficient financial compensation to permit public sector institutions to compete effectively with the private sector, particularly at the management and higher skill levels\. Major advances in both of these areas will be essential for improving staff morale and for raising productivity\. 33\. The "oil syndrome" poses another problem in Nigeria\. The experi- ence of most oil-rich LDCs and Nigeria points to the difficulty of implement- ing a least-cost, balanced, and cost-effective program in an economic envi- ronment, severely constrained by manpower and institutional weaknesses, and by physical bottlenecks\. Rich windfall gains from petroleum exports encour- aged an easing of financial and economic disciplines\. Abundant foreign exchange income had shifted the development strategy towards the acquisition and construction of physical assets\. Human resource and institutional devel- opment as well as upgrading the quality of service have generally received scant attention\. NEPA's future growth strategyl2/ must, therefore, focus on neglected areas, especially: institutional and human resource development; expansion of the distribution services; balanced and cost-effective program- ming; and improved coordination within NEPA and with outside agencies\. 12/ The two follow-on projects have primarily focused on improving Lagos distribution system (Power V), the rehabilitation and expansion of the distribution network to 23 cities, and the construction of the Egbin interconnection line to the existing 330 kV grid (Power VI)\. Because of NEPA's needs for repair and rehabilitation of generation and transmis- sion facilities, the 23 cities distribution system originally envisaged in the Sixth Power Project was replaced by a rehabilitation program in September 1984\. - 10 - 34\. A third difficulty, exacerbated by the oil boom, is about NEPA's investment decisions, particularly concerning new transmission lines\. In the past, these decisions often reflected socio-political objectives, which led to, for example, the extension of power lines to areas before markets could be established\. These investments were frequently unaccompanied by an ade- quate provision of distribution facilities\. Nevertheless, the audit finds that NEPA has succeeded in building supply infrastructures and the backbone of a sound distribution network\. 35\. For assessing performance under the Fourth Power project, the audit mission visited several sub-project sites\. Since the project is sectoral in scope, comprising generation, transmission/subtransmission facilities, and some 73 distribution networks, these visits have provided the perspective for improving the utilization of facilities, created under the project, and rein- forcing their economic justification\. The visits confirm: (a) NEPA's impressive physical assets, largely underutilized and in need of maintenance/repair; (b) the economy's great dependence on auto-generators, emphasizing the existence of a large potential market, and the need for reliable and least-cost supplies; and (c) a weak distribution network, the task of its rehabilitation and rapid extension posing the most severe development challenge to NEPA's management skill and technical competence\. These problems, if left unresolved, would prevent the restructuring of the electricity supply industry into a dynamic and sustainable sector capable of supporting the country's economic activities\. The ensuing themes, emanating from field visits and discussion with Nigerian officials, concern: (a) distribution planning, and rapid expansion of service network necessary for tapping excess capacity in other parts of the system; (b) rehabilitation and development program concentrating on: mainte- nance/repair, de-bottlenecking, curtailment of system losses, upgrading service reliability and the quality of supply, and prepa- ration of a least-cost expansioa program; (c) measures supportive of NEPA's effort at self-reliance in human resource development and finance; (d) institutional changes to underpin the Authority's accountability and autonomy; (e) inter-agency coordination, notably with the Nigerian National Petroleum Corporation (NNPC), and Rural Electrification Boards (REB); and - 11 - (f) promotion of staff morale, through administrative reforms and introduction of an incentive package for NEPA's employees\. The following paragraphs review these issues\. 36\. Distribution Planning and Expansion\. Despite massive investment in generation and transmission sub-sectors, the distribution networks are in a rudimentary stageL3/ of development\. Still, 85-90% of Nigerians are without electricity supply, and the quality of service to those who are connected is poor\. Although the rehabilitation of generation and transmission lines requires considerable skill (PPAM, paras\. 41-47), the extension of a well- managed distribution network is more difficult and time-consuming\. Also, the lack of reliable socio-economic information necessary for service expansion renders efforts at a detailed analysis of demand and potential beneficiaries largely futile\. The following table compares recent efforts in this area: SALES PROJECTIONS (TWh)/a Forecasts by: 1987 1992 A\. NEPA, Jan\. 1985 7\.6 12\.4 B\. Consultants, Aug\. 1984 1\. Global - low 16\.0 26\.8 - medium 16\.5 28\.5 - high 17\.7 32\.2 2\. Semi-Global 11\.5 16\.7 /a Tera (T) = one trillion\. 37\. The growth of demand for public power supply is largely constrained by NEPA's inability to generate enough energy, extend service network, and improve the quality of supply\. For example, electricity sales suffer because of the limited availability of uninterruptible power, shortages of trans- formers, meters, poles, etc\., and a pervasive lack of interest, at local levels, in the potential beneficiaries\. Middlemen and private contractors often intervene to provide connection and internal wiring services, many of them defrauding potential consumers\. In brief, NEPA has yet to develop and promote a connection and internal-wiring package that could be provided inex- pensively and at a competitive price\. 13/ NEPA's network is quite extensive, comprising: 50,000 km\. of overhead lines, 4,000 km\. of underground cables, and over 9,000 transformers\. But many distribution systems are in poor condition, because of inadequate maintenance and/or lack of spare parts\. - 12 - 38\. Demand projections need to be based on a detailed analysis of socio-economic conditions in each district, with a focus on the demand of productive establishments in manufacturing, agriculture and tertiary sec- tors\. During its field visits the audit mission was struck by the absence of information\. Even in important population centers, key socio-economic data are unavailable\. In addition, the Authority must develop its own rural elec- trification (RE) data-base and program\. Currently, for electrification pur- poses, many large population centers are classified as rural\. Quite a few of them are also located in the proximity of subtransmission lines, awaiting service\. 39\. Advance preparation for the extension of distribution networks is, therefore, essential\. Expatriate consultants cannot remedy the weakness, since they also must have access to key socio-economic information, based on local surveys\. Distribution planning must, therefore, be introduced at the Authority's central office and at the 22 district headquarters\. 40\. Although a few REPA managers recognize the importance of distribu- tion planning, the requisite competence is absent at almost all levels\. In the districts the planning competence can probably be established under the district engineer\. But the capability, once developed, needs to be protected against day-to-day operational assignments that could deflect the planning staff from their main objectives\. The team must also receive active techni- cal and monitoring support from the NEPA headquarters\. 41\. Rehabilitation and Development Program\. Maintenance/repair jobs are more than a prioritized series of physical wears and tears, and defects that need correction\. A diagnostic team of expatriate consultants have already identified maintenance and repair works\. But the main task remains: the establishment of a maintenance and repair function within NEPA as an organized and effective operation\. Therefore, while rehabilitating the existing facilities, NEPA needs to strengthen its maintenance/repair unit, develop skills and the strategy necessary for an effective and continuous maintenance operation, and acquire spare parts in advance, making them read- ily available for planned maintenance and unforeseen outages\. 42\. More specifically, a considerable portion of the generation capacity (about 1,000 MW) is currently inoperative because of the unavail- ability of essential spare parts\. Morever, de-bottlenecking efforts need to focus on removing specific shortages in spare parts, skills and gas sup- plies\. Foreign exchange limitations have caused prolonged delays in obtain- ing supplies\. The establishment of an annual foreign exchange currency bud- get for the import of maintenance equipment and spare parts would mitigate supply availability\. The level of funds necessary for such imports should be based on an independent assessment of the Authority's requirement for a com- prehensive and effective maintenance and repair program\. Moreover, the acute shortage of skills has impaired maintenance/repair work\. The commissioning of Egbin thermal station, sharply escalating the need for technicians, is expected to exert added pressure on the supply of scarce skills\. Also, inadequate gas supply, beyond NEPA's control, has curtailed power production - 13 - in Afam\. More seriously, delays in building the Escravos-Lagos gas transmis- sion line will severely restrict supplies from Egbin for a few years\. 43\. As for the transmission grids, a comprehensive maintenance manage- ment system needs to be introduced, focusing on the establishment of targets, reporting systems, and audits\. The Transmission Division within NEPA needs to be strengthened for setting standards, monitoring equipment use, and pro- gramming maintenance/repair works\. Even in the distribution sub-sector reha- bilitation should take precedence over extension\. A key area, meriting con- siderable attention, is the elimination of transmission and distribution (T & D) losses\. NEPA's objective should be to pare down the loss rate from over 30% to a reasonable level (say 12-14%)\. Causes of the high loss could be overloading, poor maintenance, and unauthorized usages\. NEPA must precisely identify the cause, work out an action program to lower the loss rate, and establish a strong monitoring system to promptly accomplish the loss reduc- tion objective\. 44\. In addition, NEPA needs to maintain an inventory of essential dis- tribution equipment for undertaking a planned maintenance program\. Cur- rently, the Authority is seriously short of distribution transformers in many areas, resulting in load shedding and insufficient use of overhead facili- ties\. 45\. Maintenance/repair works would, no doubt, upgrade the quality of service\. System rehabilitation must, however, be followed by a least-cost expansion program\. As discussed elsewhere (PPAM, para\. 36), distribution networks should expand rapidly so as to ensure a more effective use of excess generation and transmission capacity\. They must also be converted, where possible, into cost-effective ring systems\. 46\. Given the excess capacity in generation and transmission sub- sectors, NEPA has enough time for the preparation of the next phase of an expansion program\. In addition to natural gas and petroleum, Nigeria has been endowed with considerable hydro-energy resources\. Although the Kainji and Jebba projects have cast doubts on the advantage to be gained from this potential, a balanced development program should encompass a continuing study of the country's hydro-resources, particularly small-scale schemes which could be supportive of a decentralized system of power supplies and supplies to remote areas\. The emphasis must, however, be on cost-effectiveness\. 47\. Self-reliance\. A sound self-reliance policy must be based on: (a) the development of a good technical staff, expertise, and know-how; and (b) the generation of sufficient internal savings to fund NEPA's debt service, a good slice of investment outlays and removal of interest rate and fuel subsidies\. - 14 - 48\. Human Resource Development\.14/ The Nigerian education system turns out graduates of acceptable quality for the Authority's operation\. However, NEPA is unable to attract, train, and retain a sufficient number of graduates because of intense competition from other sectors for high quality cadre\. Since 1976 the Authority is required to pay civil service salary scales, which are unattractive\. The private sector has been employing a good part of NEPA's experienced staff\. Although because of the recent downturn in the Nigerian economy the severity of competition for skills from the private sector has diminished, the private manufacturing sector still depends appre- ciably on expatriate staff for high professional, technical, and administra- tive tasks\. Some of these slots can be filled by NEPA employees\. A 1981 study5/ shows the basic salaries in the comparator organizations to be, on average, 80-100% more than in NEPA\. Therefore, these firms continue to attract qualified staff from NEPA\. 49\. The Fourth Power Project had no training component\. The Nigerian Government and NEPA had already concluded an agreement with a foreign con- sulting team in 1973, seeking assistance in management and training during the initial years of the Authority's operation\. The contract with the con- sulting team was for 1,200 man-months of services\. The head of the team functioned as Assistant General Manager, an adviser to the General Manager, and Chief of the Corporate Planning Division\. The team's main emphasis was on training\. They also helped introduce management tools and methods in various areas\. NEPA's management was, however, "somewhot disappointed at rather low level of communication and thus of know-how transfer achieved between the team and the higher echelon of NEPA- Borrower's PCR, para\. 6\.03\. But NEPA had also undertaken to appoint Nigerian counterparts to work with the team, and did not do so\. When the team left Nigeria, the Author- ity's training program suffered\. Under the Fifth Power Project, the Bank undertook to finance the work of another team (312 man-months)\. NEPA has, again, disregarded the need for supportive Nigerian counterparts and as the team will be completing its term by the end of 1985 no well-organized group will be left to assume the function\. This indifference to training require- ments cannot be remedied by external funding of the expatriate teams alone\. NEPA must display a keen appreciation of the importance of organizing an effective program by establishing a competent Nigerian team and supportive facilities, designed to meet the Authority's considerable skill require- ments\. The Bank should make the establishment of such a training program a key provision of covenants for any future loan, and then provide suitable matching funds to supplement NEPA's own efforts\. 50\. The Authority is currently short of top professional staff, both technical and administrative\. Although it has enough employees at the middle level (the artisan group), comprising roughly 30% of the work-force, they are 14/ See NEPA's comments, Appendix I, p\. 2\. 15/ NEPA, Salary Structure and Conditions of Service, from Final Report of a Consultant, September 1981\. - 15 - insufficiently trained\. This is because the artisan group receive inadequate in-service training and work supervision from the limited number of profes- sionals\. A 1982 study reveals that on many of the lines and substations wor\. standards were poor\. This has been partly because of the artisans' lack of knowledge or skill and more importantly because of lack of site supervision and discipline\. The study recommends that considerable improvement might result by introducing an experienced foreman/instructor linesman into each district\. Further, new thermal stations at Afam, Sapele, and Egbin have been and are being established\. Although equipment manufacturers have helped to train some of the required operators, these stations are short of qualified skills\. In brief, four priority training fields merit attention\. They con- cern: the professional class; the artisan group; the cadre needed for new fields; and the team of planners for preparation and monitoring of expansion programs\. Such a program needs to be closely monitored and periodically evaluated so that the right type of staff receive training; the program develops skills effectively; and possible abuses of the system are minimized\. 51\. After completing a few years of apprenticeship, NEPA's professional and engineering staff, numbering over 700, qualify for overseas training\. This does not mean that all professionals need to be sent abroad\. The program is desirable for at least three reasons: to acquire technical knowledge in new fields (for example for managing and operating efficiently Sapele, Afam, and Egbin stations); to expose staff to system maintenance, management and operation in other countries; and to improve staff morale\. Because of foieign exchange limitations, NEPA has de-emphasized its overseas training program\. Every year, at least 10% of NEPA's senior staff need to receive advanced training in foreign utility companies and similar centers\. The investment should help curtail system inefficiency, upgrade staff morale, and reduce dependence on foreign consulting services\. Overseas training will not be enough, however\. The 1982 study, referred to earlier, indicates severe shortages of qualified engineering staff at principal and senior engineering levels where a large number of positions are vacant\. Even if sufficient graduates join NEPA, a large training program will be required for them in Nigeria\. 52\. The NEPA staff belonging to the artisan class exceed 8,000\. They are craftsmen, operation and maintenance technicians, with a variety of skills\. They constitute the bulk of the Authority's technical field staff\. Each year, about 20% of this group need to be trained and retrained\. The existing training centers at Ijora and Kainji, and the supportive Nigerian staff, are woefully inadequate for this task\. The Authority needs new training centers at Afam, Kaduna, and Jos\. Also operation and maintenance training for steam power generation at Egbin and Sapele must be established and reinforced\. An effective training program for the artisan group must be prepared, involving: the determination of training requirements of each district for specific skills, reflecting the trainee's job performance and know-how; the preparation of suitable curricula with the help of consultants; the training and retention of a core of skillful Nigerian teachers; suitable accommodation for trainees coming from remote areas; and the periodic evaluation of the program's effectiveness\. - 16 - 53\. In addition, NEPA needs to train a team of planners for Lagos and district centers to program rehabilitation and expansion work (PPAM, paras\. 38-40), and to monitor and evaluate progress\. The training program should instruct trainees how to prepare a least-cost expansion program, and how they should collect and analyze key socio-economic information needed for arriving at sound judgment about the system's extension to new areas\. 54\. The Authority also has over 10,000 unskilled employees, many of them redundant16/ workers\. NEPA needs to increase the usefulness of this group by arranging a program for skill development in the regular Nigerian educational and training institutions throughout the country\. Incentives must be provided to the group to acquire the necessary skills\. 55\. Interest Rate and Fuel Subsidies\. Earlier, the audit referred to financial self-reliance (PPAM, para\. 47), which requires substantial tariff increases, prompt collection of unpaid bills (PPAM, paras\. 21-26), improve- ment in the system's operation and investment efficiency, and elimination of fuel and interest rate subsidies\. Financial self-reliance is, therefore, a complex objective\. The ensuing paragraphs (56-61) focus on the elimination of interest rate and fuel subsidies, and on tariff adjustment\. 56\. As shown in PPAM Annex Table 4, domestic loans financed the bulk of NEPA's investment during the period 1973-83\. "The majority of NEPA' loans have come from the Federal Government, on soft terms\. Interelst has been at 5%, with repayment over 25 years, including a five-year moratorium in inter- est, and a five-year grace period on principal repayments\. The effective interest rate on such loans (allowing for the interest moratorium) has been about 3%\.17/ But given that during 1973-83 prices in Nigeria increased 10-14% a year, Government has been subsidizing NEPA with an appreciably nega- tive interest rate (6-9% a year)\.18/ In the power sector the persistence of a negative real interest rate has been accompanied by an increase in unuti- lized capacity and possibly a desire on the part of NEPA for financial gains ensuing from investment in real resources\. An example of the gain follows: NEPA which could have borrowed, N 100 mn in say the year 1973 would have been committed to repay, at prevailing interest rates during the 1973-83 period N 134 an\. In contrast, the financial value of assets created by such an 16/ In several areas visited by the audit mission, NEPA's field offices had 6-7 employees\. In one instance 4 were watchmen, watching probably an idle old machine! in another place, again, 4 were classified as watchmen, but with hardly anything to watch\. 17/ SAR, Power VI Report No\. 3041-UNI p\. 32\. 18/ Real interest rate (r)= nominal interest rate (i), divided by inflation rate (p): r = (1+1 )\. -+-1 (L+4p ) - 17 - investment would have been N 300 man\. Positive interest rates19/ need, therefore, to be introduced for promoting economy, cost-effective investment, financial self-reliance, and possibly institutional autonomy\. 57\. Moreover, NEPA needs to pay fuel prices'9/ which reflect their economic opportunity cost\. Currently, high pour fuel oil used by NEPA is greatly subsidized\.20/ Similarly, the price of gas for Egbin need to reflect its netback value\. Already under the Gas Technical Assistance Project, a study is expected to determine the level and the structure of natural gas tariff\.21/ Since the long-run marginal cost of electricity supply in Nigeria will partly depend on the price of gas, power tariffs need to gradually reflect such costs\. 58\. Tariffs\. Power tariffs have not changed since August 1979\.22/ As discussed elsewhere (PPAM, paras\. 24-25) the prevailing rates are insuffi- cient to provide the sector with a reasonable rate of return and pay for the cost of capital, which currently is negative\. The objective of tariff adjustment should be: (a) to secure a steady improvement, in the medium-term, in the sector's financial performance; and (b) to achieve, shortly after realizing the financial objective and improving system efficiency, a tariff level reflecting the future cost of power supply\. 59\. This dual approach in reforming the tariff system responds suitably to the Nigerian needs, since, with the exchange rate distortion, subsidized capital and fuel costs, the low capacity utilization and a high system loss rate, the LRMC calculation is bound to be arbitrary\. Under the Fourth Power Project, the consultants had studied an LRMC pricing system\. A recent interim report presents questionable results because of several dubious assumptions\. 60\. NEPA should develop the know-how to continue refining, in-house, the LRMC pricing study, which needs to be based on a least-cost expansion program for an increasingly efficient electricity supply industry\. These 191 For NEPA's comments and OED notes, see Appendix I, p\. 2\. 20/ 1\.1 kobo/liter, ex-refinery prices or about 11% of the international cost, at official exchange rate\. See, Nigeria: Issues and Options in the Energy Sector, UNDP/World Bank Energy Sector Assessment Program, August 1983, p\. 132\. 21/ The President's Report on a $25 million Loan to NNPC, February 23, 1984, Report No\. P-3620 UNI, para\. 61\. 22/ See NEPA's comments, Appendix I, p\. 1\. - 18 - refinements should measure the divergence between the prevailing level/ structure of rates and the LRMC tariffs\. 61\. However, the immediate focus must be on a substantial increase in power rates, in real terms, so that an 8% financial rate of return on the sector's revalued assets is secured at the end of a four to five year period\. This gradual approach at securing the rate of return objective is necessary since NEPA's investments are highly underutilized and work-in- progress constitutes a considerable slice of the Authority's assets\. For achieving this objective, power rates need to be adjusted quarterly by combining23/ an index that accurately measures changes in the cost of capi- tal goods for the electricity supply industry (CGEL Index) with another component introducing a sustained rate of increase in tariffs, in real terms, so as to achieve the sector's overall financial objective\. The appropriate- ness of a sector-specific price index for capital goods stems from the need to recover investment cost by reflecting changes in such costs in the tariff level\. 62\. Institutional Reforms: Accountability and Autonomy\. The achieve- ment of financial self-reliance should be accompanied with NEPA becoming increasingly accountable and autonomous\. According to Onosonde Commission, accountability means parastatals achieving socio-economic goals in a cost- effective manner\. Objective criteria must, therefore, be devised for measur- ing performance in attaining stated goals\. "The principle of cost recovery or cost minimisation, as appropriate, must be rigorously enforced, and desir- able rates of return on total capital employed must be prescribed by Govern- ment\."24/ In its loan agreements with the Bank, the Government has already stipulated for NEPA the achievement of an 8% rate of return on revalued assets\. Therefore, the Authority's accountability can be interpreted to mean the achievement of the 8% rate of return objective in 4-5 years, accompanied by significant improvement in system efficiency\. 63\. Improved self-reliance and accountability should ensure greater autonomy\. NEPA needs to enjoy an autonomous employer status within the uni- fied grading system\.25/ Such a status would confer on it the freedom to 23/ Tariffs need to be adjusted as follows: First quarter: A price index, reflecting quarterly changes in the cost of capital goods, to be expressed in cedis, for the electricity supply industry (CGEL Index) + -1 1\.10\. Second quarter: CGEL Index\. Third quarter: CGEL Index + V 1\.10\. Fourth quarter: CGEL Index\. 24/ Presidential Commission on Parastatals, 1981, p\. 45\. 25/ Onosonde Commission recommended that unified grading system should be distinguished from the unified salary system; jobs in different parastatals should be re-evaluated to ensure that the right grade is maintained for each job; and each organization with an autonomous employer status should determine the pay or price for the job in accordance with factors relevant to its operations\. - 19 - price job levels with reference to prevailing rates in comparator organiza- tions in Nigeria\. 64\. In addition, NEPA needs institutional autonomy\. That means the Government and the supervising ministry would determine broad sectoral objec- tives and policies, but scrupulously refrain from dictating the project con- tent of expansion programs\. Since power projects must be least-cost and because they support development schemes, particularly in the manufacturing sector and need to be complemented by other investment schemes funded by different agencies, NEPA's investment decisions should be fully explained to the Nigerian planning and funding authorities (PPAM, para\. 67)\. Currently, the Authority's investment decisions \. are primarily determined by socio-political rather than economic considerations\. 65\. A series of important organizational changes within NEPA have also been identified by the British Electricity International Limited (January 1982)\. Implementation of these recommendations would greatly streamline the Authority's structure and help improve its performance\. 66\. Inter-agency Coordination\. Better coordination needs to be achieved at the federal level between NEPA and the Nigerian National Petroleum Corporation (NNPC), at the state level between NEPA and Rural Electrification Boards (REB), and within NEPA between the Distribution Division and Rural Electrification Department within the Commercial Division\.26/ NEPA reports to the Ministry of Mines, Power and Steel which is unable to provide inter-agency coordination\. For example, Egbin station is nearing completion but NNPC's Escravos-Lagos gas pipeline has yet to be constructed\. Thus the non-availability of gas would severely restrict the use of Egbin's capacity\. A suitable inter-agency coordinating mechanism should have obviated this problem\. 67\. The weakness is not remedied at the the federal level by the Federal Ministry of National Planning (FMNP), or the Federal Ministry of Finance (FMF)\. FMNP does not perform an effective planning function in the energy sector\. They have little information concerning the sector\. The energy parastatals are also not required to provide FMNP with information\. Although FMF allocates funds in hudget review sessions to parastatals, major decisions are made by the Economic and Finance Committee where six permanent secretaries, including FMNP's, decide on economic questions, often prior to any technical analysis by FMNP staff\. What is more, NEPA receives block allocation without being subject to project by project scrutiny of its investment program\. This lack of information concerning NEPA's operation at the federal planning center, and the uncritical processing of its investment program has hardly promoted institutional accountability or inter-agency coordination, notably with NNPC and REB\. 68\. Coordination o' extension planning with REB will become increas- ingly important as the electricity network gets extended beyond the existing load centers\. NEPA and REB's respective roles in planning and programming 26/ See NEPA's comments, Appendix I, p\. 2\. - 20 - service extension to potential beneficiaries (85-90%) is ill-defined and ambiguous\. Unless the problem is resolved, NEPA will not be able to formu- late a comprehensive and cost-effective distribution expansion program\. Moreover, NEPA's Rural Electrification Department need to form an RE unit within the Distribution Division which, as argued earlier, should be equipped to do an effective planning job (PPAM, para\. 36-39)\. 69\. Staff Morale and Incentive Package\. NEPA's staff receive modest pay which should be reassessed in light of salaries for corresponding jobs in the private sector (PPAM, para\. 48)\. The Authority should, however, be able to motivate, attract and retain staff not because of high monetary rewards, but primarily because they perceive NEPA as providing a good opportunity for career development and as giving an incentive package focused on their basic needs\. Elsewhere, the need for human resource and career development has been emphasized (PPAM, paras\. 48-54)\. A good training program should be supplemented by a work environment, where promotion and career development is based primarily on individual performance and merit (PPAM, para\. 32)\. A well-balanced incentive package is also necessary, including housing benefits and mass transportation facilities to work place\. To sum up, a strong and sustainable power sector requires an accountable but autonomous institution that is able to attract, train and retain a highly competent technical staff, necessary for achieving cost-effective investment and efficient operation\. 70\. Sustainability of the Power Supply Industry and Facilities \. The audit has argued for self-reliance, accountability, and autonomy\. They cons- titute the three pillars of a sustainable power supply industry\. 71\. Self-reliance has human-resource, know-how, and financial dimen- sions\. To secure it NEPA needs a well-administered training program, with an overseas content to familiarize key staff with the latest relevant develop- ments in technology\. It must also have an important local training compo- nent\. In addition, the Authority must increase internal savings\. A substan- tial increase in tariffs, although necessary, is insufficient\. Any tariff increase must be accompanied with significant improvement in system effici- ency\. For achieving this objective, the reform measures have to include: marked improvement in system reliability, an appreciable and spontaneous fall in captive plant requirements, the high utilization of generation and trans- mission capacities, a lowering of system losses from over 30% to a reasonable level (12-14% range), the extension of distribution network, accurate bill- ings, and the prompt collection of unpaid bills\. Self-reliance also requires the elimination of fuel price and interest rate subsidies\. As argued in PPAR para\. 63, self-reliance would make NEPA accountable and help secure its auto- nomy\. However, a sector rehabilitation and development program needs to be prepared to achieve these objectives (self-reliance, accountability and autonomy), and ensure the sustainebility of the power sector\. Such a pro- gram, which should be partly funded by a Bank loan, is summarized in PPAM, para\. 80\. - 21 - III\. CONCLUSIONS 72\. Physically, the Fourth Power Project was successfully completed, with distribution sub-projects greatly modified (PPAM, paras\. 5-16)\. The unreliability of power supply, the fuel constraints and the imbalances in system's facilities have impeded realization of the project's potential benefits\. 73\. The generating capacity at Kainji and Jebba are underutilized, because of water shortages\. Should the water problem persist the capacity can still be used chiefly as peaking reserve margin, subject to certain conditions (PPAM, para\. 7)\. Moreover, the expansion of transmission grids, under the project, has yet to produce appreciable gains in overall system reliability (PPAM, para\. 10)\. Also, the strategy of providing electricity from the national network to areas where the market for power is not yet developed cannot be justified without certain pre-conditions (PPAM, paras\. 12-13)\. 74\. Since NEPA experienced significant price escalation and operated under severe constraints, such as port congestion A skill shortages, the project's cost overrun is not excessive and the time overruns are in line with similar experiences in many major oil-exporting countries (PPAM, para\. 20)\. 75\. Of the Bank loan, $73\.0 million (96%) was disbursed by mid-1977\. Three more years were needed for disbursing the balance ($3\.0 million) - PPAM, para\. 19\. 76\. NEPA could not satisfy the rate of return (ROR) objective\. The covenant, which was reasonable, required an average of 50% rise in tariffs during 1974-80, and a doubling of rates in 1983\. Because of heavy investment, still in the pipeline, the required increase in tariffs will be more than 100% for an 8% ROR on revalued assets in the near-term\. Moreover, NEPA's cash flow position is aggravated by a large accumulation of unpaid bills; its audited accounts are also considerably behind schedule (PPAM, paras\. 21-27)\. 77\. As for implementation, NEPA considers the overall performance of consultants, contractors and equipment manufacturers to have been satisfactory (PPAM, paras\. 29-30)\. Further, after the clarification of procedures under the ICB, the Authority had no serious procurement problems (PPAM, para\. 28)\. The Kainji extension and transmission systems were commissioned without major difficulties\. But one of the generators, which went on stream in early 1976, was severely damaged in 1982 and the stator winding has to be replaced (PPAM, para\. 31)\. 78\. NEPA's performance needs to be assessed in the context of major challenges confronting Nigeria (PPAM, paras\. 32-34)\. These problems have inevitably overshadowed the Authority's operations\. For example, staff promotion could not be based exclusively on performance and merit\. Moreover, the sector has been short of spare parts, skills, and gas supply, and state - 22 - governments have often influenced NEPA's investment decisions, reflecting socio-political goals rather than economic objectives\. 79\. A sustainable power supply industry depends on self-reliance, accountability, and autonomy\. Self-reliance has human-resource, know-how, and financial dimensions\. To secure it NEPA needs to develop a well-adminis- tered training program\. So far the Authority has disregarded the need for supportive Nigerian counterparts\. This indifference to training requirements cannot be remedied by the external funding of expatriate teams\. The Authority must display a keen appreciation of the importance of organizing an effective program by a fully competent Nigerian team\. Also, the Bank needs to make the establishment of such a training program a key provision of any future loan covenants (PPAM, para\. 49)\. In addition, the Authority must increase internal savings through a series of measures\. Tariff increases need to be accompanied by significant improvement in system efficiency\. Self-reliance also requires that the Government eliminate gradually fuel price and interest rate subsidies (PPAM, para\. 63)\. 80\. Field visits in areas served by the project and discussions with Nigerian officials have shed light on major hurdles that impede improved utilization of capacity under the project\. The reform package to remove these obstacles and help to ensure system's sustainability include: (a) measures to secure NEPA's self-reliance, accountability and auto- nomy, focusing on reducing system losses, improving utilization rate and system reliability, collectit\.g unpaid bills, adjusting tariffs and eliminating fuel and interest rate subsidies (PPAM, para\. 70); (b) training of professionals, the artisan class, and the planning team (PPAM, paras\. 48-54); (c) distribution network rehabilitation and expansion; (d) institutionalization of maintenance and repair functions within NEPA (PPAM, para\. 41); (e) establishment of an annual foreign exchange currency budget for the import of maintenance equipment and spare parts; the level of the fund to be based on an independent assessment of NEPA's requirement for a comprehensive and effective maintenance/repair program (PPAM, para\. 42); (f) institutional reforms within NEPA for implementing the major recom- mendations of the British Electricity International, January 1982 (PPAM, para\. 65); (g) the institution of an effective planning system within the Federal Ministry of Planning, and within NEPA (PPAM, paras\. 66-67); and (h) a study of Nigeria's small hydropower potentials (PPAM, para\. 46) in support of a more decentralized and renewable energy supply system\. -23- ANNEX Table 1 DISTRIBUTION PROGRAM UNDER THE FOURTH POWER PROJECT Time Cost overrun overrun Name of the Scheme Description (in months) (Z) 1\. Lagos Metropolitan Seventeen 132/33/11 kV and Distribution 33/11kV substations, uprating Akangba-Maryland overhead line from 33kV to 132 kV and 20 km of new cable 24 72 connection\. 2\. Major Towns Lower voltage switchgears at 10 substations; transformers: seven 30 MVA 132/33 kV, three 132/33 kV, and four 15 MVA 132/11 kV\. 36 Not Comparable (NC) 3\. Aba-Calabar 110 km of 132 kV transmission line\. 5-24 68-122 4\. Oshogbo-Ilorin-Akure 132 kV lines, and electrification of 11 townships\. 6-12 NC 5\. Zaria-Funta-Gusau 132 kV lines, associated substations, and distribution facilities\. 13-36 NC 6\. Countrywide Electrification of 73 towns, Electrification including: more than 500 km Program of 132 kV lines to feed the new systems, 33 kV lines inter- connecting towns to the grid; 33/0\.415 kV transformers, corres- ponding switchgears and low voltage distribution facilities\. 14-36 NC Source: Borrower's PCR, paras\. 3\.36-3\.79 NEPA'S ASSETS, SALES AND RATES OF RETURN ON REVALUED AND NON-REVALUED ASSET BASE, 1973-83 (Assets in Million Nairao) Net Fixed Rate of Return NEPA's Grogs Net Fixed Work Total Revaluation Assets in Net Income (2) Sales Fixed Accumulated Assets in in Fixed Index 1/ Operation, Before Non-Revalued Revalued (CUb) Assets Depreciation Operation Progress Assets (1972-1) Revalued Interest Base Base 1973 1,750 460 132 327 18 345 118 386 17 6\.0 1974 2,020 465 149 316 34 350 157 496 15 4\.6 3\.4 1975 2,343 488 165 323 75 398 183 591 13 4\.1 2\.4 1976 2,707 518 180 338 157 495 197 666 14 4\.4 2\.2 1977 3,243 543 199 344 278 622 219 753 13 3\.7 1\.8 1978 3,571 729 201 528 395 923 248 1,309 14 3\.3 1\.4 1979 4,178 833 229 604 647 1,251 287 1\.733 22 3\.9 1\.4 1980 4,070 1,039 262 1,047 446 1,493 341 3,570 100 12\.1 3\.8 1981 5,627 1,825 369 1,456 674 2,130 374 5,445 148 11\.9 3\.2 1982 5,916 1,999 445 1,554 1,050 2,604 374 5,812 111 7\.4 2\.0 1983 6,150 2,067 528 1,559 1\.532 3,091 390 6,080 75 4\.8 1\.3 Annual Change (M) 13\.4 16\.3 14\.9 16\.9 56\.0 24\.5 12\.7 31\.7 1/ The International Financial Statistics (IFS) provides data on (a) the consumer price index in Nigeria, rnd (b) import unit values for developing countries (oil importers)\. The revaluation index is derived from the conaumer price index and the import unit value index\. Annual changes in these two indicators have been combined at a ratio of 3565, reflecting roughly the relative dependence of capital formation in the Nigerian electricity supply industry on the domestic and foreign sources of supplies\. Sources Borrover's PCR, Supervision Hisasion Reports, and IFS\. bi\. POWER RATES AND RATE OF RETURN (ROR) COVENANT (Revenues in Million Nairas) Additional Net Revenues Required Needed for Tariff/ Actual Compliance Power Power Rates Net Revenue Operating With the Sales (kobo/kWh) Increase Revenues ROR Covenant Total in GWh Existing Required (%) 1974 63 20 83 2,020 3\.1 4\.1 32 1975 70 30 101 2,343 3\.0 4\.3 43 1976 83 37 120 2,707 3\.0 4\.4 47 1977 97 44 141 3,243 3\.0 4\.3 43 1978 126 68 194 3,571 3\.5 5\.4 54 1979 166 100 266 4,178 3\.9 6\.4 64 1980 264 Ill 376 4,070 6\.5 9\.2 42 1981 403 216 619 5,627 7\.2 11\.0 53 1982 426 338 764 5,916 7\.2 12\.9 79 1983 434 398 832 6,150 7\.0 13\.5 93 M -26 - AMiEX Table 4 CHANGE IN NEPA'S ASSETS AND LIABILITIES, 1973-83 (IN MILLION NAIRAS) 1973-76 1976-80 1980-83 Total Assets 224 1,693 1,493 3,410 Fixed 151 998 1,597 2,746 Others 73 695 1/ (-) 104 664 Liabilities 224 1,693 1,493 3,410 Equity capital 38 139 383 560 Local loans 141 1,420 737 2,298 Foreign loans 15 15 171 201 Others 30 119 202 351 1/ Largely cash and bank baiances\. Source: Borrower's PCR, and Supervision Mission Reports - 27 - COMMENTS FROM THE COUNTRY APPERDIX I Page 1 of 3 NEPA's COMMENTS NATIONAL ELECTRIC POWSR AUHOKITY SL M^1~4 i\. 'epeber 20, 1?8 hir\. Y\. --atanabe, Director\. Operations Evaluation Lepartment, The -vorld Bank, I818 B ttreet, N\.W\., H-ashinton D\.C\. 20433, L\. S\. A \. Dear M'r\. V-atanabe, PROrMT P1ROR:'lC-c ; trDIT REPORT - FOURTH Pl\.EL PRc1C%T L3; N 847-V1Z1) 16eference your letter doted July 31, 1985, plea se find below our brief commeants on a few issues raised in the report\. The report on the whole seeff zit even if rather hard ots the ;uthority's overallperformance, alIven the conditionE (socL%l and economic mainly) under which XuM- has to render services on semi-commercial basis with its inhorent capital Intensive Investments typical of such on Industry\. L-nlike its counternarts In developed countries where Investments can directly be related to revenue returns with reasonable profit rer7ina, NEP operates under rather difficult and complex soclo-economic factors much outside Its control\. Comment on more specific issues are appended below: OED loLas (a) TAdff a The last Tariff revision was in 1979\. Consideerln the inflation- NEPA's races of return ary effects on prices in Nigeria, It Is obvious that a tariff (RORs) on revalued asset considered reasonable In 1979 would by 1985 have become base were much lower rhan inadequate to meet a reasonable rate of return\. Costs of t figures given In lnade~ateborrower's comments\. Since materials, labour have risen by at least 4 times\. Similary the i an inflationary env- income and expenditure accounts for the years 1981 to 1984 ronment RoRs\. derived from have been showing dwindling net profit, with the rate of return historical values, greatly of 9\.70%\. 10\.20%, 6\.75, 4\.65 and about 41 In 1980\. 1981, distort the real financial 1982\. 198! and 1984 respectively\. This trcrd scente reflect picture, the calulatlon the economic aeession In the country attectat most of the of such rates mst take f~OtIfl~the revalued rather than private sector as well\. It is therefore correct that the historical assets as theIr Electricity Tariff need to be substantially revised to make base\. B t a is possible for the Authority to meet at least the 8% return stipulates an OZ financial expected by the BRD\. rate of return on revalued assets (PPAR, par&\. 61)\. The Authority has indeed employed the services of EDF for a study which could result to the revision of the Electricity taritf The report on the EDF Study is expected to be received within a short time\. After the appraisal of the report the Management hopes to submit its proposal ta the Federsb wileitary Govrumoa for consideration\. - 28 - NATIONAL ELECTRIC POWER AUTHORITY APPENDIX I Page 2 of 3 (b) Fuel Price\.1!um1dx!- OED Notes Fuel price subsidy is a delibrate government policy and it Th audit sests that the is appUicable to every sector of Nigerian economy\. The NlgerUn Government size up report seem to suggest that NEPA should withdraw from this the extent of fuel subal- subsidy\. It Is unrealistic to expect NEPA to reject the dies nd e1-Imiunte them subsidy enjoyed by the Nigerlan citizens just In order to be gradually\. autonomous\. For the purposes of comparison it will suffice to compare NEPA with companies operating in Nigeria rather th3a foreign companies who might have their local advantage in terms of cost of production and cost of equipment for which NEPA has to Import possibly at hlhly inflated costs\. (c) Snhsidv n Interest Rate:- The audit recommads that the Nigerian Governstent charge a NEPA is a Government utility and its operations cannot be positive rather than a nega- completely discociated from Government policy\. 3overnment t I r policy often makerit mandatory for NPA to embark on projects lerin 56\.ratn (PPA aimed at promoting social policies of Government but which should present the Government do not necessarily fall within NEPA's priority and its financial with the cost of services for scope\. It is therefore fair if Government subsidtses the their waidatory projet\. Interest rate so as not to throw the burden of Jovernment A must Insist that these policy completely on the a costs are fully recovered frow\. the beneficiaries and/ (d) Transmission and DistrUnItion Logat It is obvious that 30% loss rate is abnormal and unacceptable\. The ikely sources of non-techrcal losses are beln2 identified though they could be sail to be largely due to over-loading, plifering, illegal connections etc\. \.Management has already as a first step commenced on consumer audit aimed at identifying all premises connected to NZPA mains, so that as a second step it will ensure that they are billed\. Other steps will then follow to achieve Improvement In billing and debt collection\. It Is also Intended that all power injection points will be metered so as to quantify the losses related to a given area and assess the viability of DIstrict ServiCe\. (4) Manower and 1rainine Poararme:- It is true that the Authority is short of middle and top profe- ssional staff\. Training is equally Inadequate\. Local traintg programme has to be exploited adequately, however\. overseas training which exposes personnel to new ideas, and practice In other countries will be undertaken\. However it should be noted that with the current service conditions even to sttract the right material for training is dilficult and worse still the economy seem to subtly regard NEPA as a training ground for staff of other services I (f) Inter aency Coordination:- As the eport has stated we have observed a few Instances which reveal Inadequate Inter -ency Coordination\. The Federal Military Government itself has indentiLfed this weakness and a delibrate attempt towards Intor Agarcy Coordination is being encouraged particulary La the next Development Plan 1986 - G99o\. - 29 - NATIONAL ELECTRIC POWER AUTHORITY APPENDIX I Page 3 of 3 OED Notes (g) Audtd Accounts:- The Accounts of 1982 has n3w been auditad but the Auditors are yet to conclude the don estic report\. The Audit of 1993 Accounts will -e co*npleted soon\. Vigorous efforts are being made to complte the audit of 1984 and 1985 accounts before the end of June 1985\. so as to meet the Nigerian Government directive\. (h) ftvaluation of Asts:- At present the Authority is preoccupied on rendering the audited Asset revaluation is essential accounts promptly and uo to date\. In vieA of the arreers of for an upward revision of accounts, It la advisable to be up to date on accounting ifs\. in an ueeding Instead of disaipatag energy on Assets revaluation\. As operation to the power sector soon as the accounting is up to date, about June 1986, that NEPA's assets are It Is anticipated that the two accounts will be prepared, properly revalued and a mean- one on historical basis and the other on the revalued ingful ROR, as recomended in current value of asstss the audit, is enforced\. fours sincerely\. Originif Signed BY: Ennr\. D\. A\. OYEYELE EnMr\. D\. A\. Oyeyale\. foro General p neanaeer\. cc: *4NEP' a aCe) cc: World Bank Resident Mission, Plot 1309A Karimu Kotun Street, Victoria Island\. ee: 44 (Fswer Agmnce canadienne de Canadan Intemationai - 30 - APPENDIX II dveoppemernt intemnaticnal Development Agency Page 1 of 2 u (Outec) HuO\. 0u@bc caaa Canada KAGG4 K1AOG4 COMENTS FROM THE CO-FINANCIER CIDA's COMMENTS AW-reowrce ow w 702/00126 September 24, 1985 BY COURIER Mr\. Yokinori Watanabe Director Operations Evaluation Department The World Bank 1818 H Street, N\.W\. Washington, D\.C\. 20433 Dear Mr\. Watanabe: Further to your letter of July 31, 1985, we have reviewed the World Bank Project Performance Audit Report on the Fourth Power Project in Nigeria (Loan 847-UN1) together with the Completion Report\. We have found both papers to be methodical and comprehensive and would like to congratulate your Department for a successful report\. Since the Canadian involvement in the project related enclusively to management consultancy and tiaining, you will understand that we have found the report's description of training and human resources problems (paras 47-54 of the Audit Report) to be particularly useful\. Fundamental to the Canadian contribution in the Fourth Power (and continuing into the Fifth Power) is the problem of a lack of counterpart staff\. The Canadian consultants have reportedly indicated that the number of Nigerians assigned to them for training was well below what they could absorb, especially during the first year of their task\. The problem is directly related to the level of pay, benefits and incentives available to NEPA staff\. We found that it is impossible to impart technology, train staff and institutionalize an efficient and self reliant organiz-tion when staff do not exist, are too busy with other duties to be seconded for training, or do not have the requisite capabilities, desire or incentive\. Further, any staff that it is possible to train under these conditions will immediately depart to achieve improved conditions elsewhere\. \.2 Canadra SEPZ - 31 - APPENDIX II Page 2 of 2 Until this problem of pay scales and other incentives can be resolved, little meaningful progress will be made in the essential area of modifying NEPA into an efficiently operating, self reliant organization\. As noted in the Report (pages 18-19) no progress on these critical items have occured to the date of the draft\. It is impossible to assess whether it would be feasible to build into any financing agreement a conditionality which could resolve this situation\. Increases in benefits as necessary to attract and retain staff with the required capabilities within NEPA would result in massive problems within all other agencies of the Nigerian Government\. An adjustment of benefits for all agencies would have a marked effect upon the national economy\. It appears from the report that a middle approach has been contemplated with increased benefits becoming available only to some essential agencies\. However, again it appears nothing has been accomplished in this area\. It is not feasible to stop all capital investment in electric system development either as a lever to impress on the Government of Nigeria the importance of this problem or during the period it takes for the Government to agree to institute changes\. It is however necessary to recognize this fundamental problem in the electric sector and every effort should be made to convince the Government of Nigeria, and NEPA, of the absolute necessity of resolving this problem, if an effective, efficient and self reliant utility is to be achieved with all of the important economic and developmental benefits which will accrue to it\. Until such can occur, it will be necessary to continue to include, as a condition of the funding availability, the technical assistance of offshore specialists in all elements of utility planning, engineering, management and operation\. Technology transfer and training elements can begin to be included when NEPA becomes capable of assimilating such elements\. The problem of local human resources continues to affect any development activity in Nigeria\. Despite this ongoing concern, we are pleased to note that the Bank considers the Fourth Power Project to have been a success on the whole and we share this assessment\. Your sincerely, \. a gton Country PVogram Director GhanalRegional Program Anglophone Africa Branch - 32 - NIGERIA FOURTH POWER PROJECT : LOAN 847-UNI COMPLETION REPORT 1\. INTRODUCTION 1\.01 This completion report reviews the implementation and effectiveness of the Fourth Power Project financed under US$ 76 million Loan 847-UNI made in 1972 to the National Electric Power Authority (NEPA)\. The project included the addition of two 100 MW units at Kainji hydro plant, 330 kV substation facilities, a second 330 kV transmission line from Kainji to Lagos, expansion of distribution systems, power development studies, management studies and technical assistance\. The report explores the background to the project, describes the implementation of the project and the problems encountered, reviews the project justification, and evaluates the performance of the borrower, consultants, contractors and the Bank during project implementation\. The Electric Power Sector 1\.02 In the early 1970's public electricity supply was the responsibility of Electricity Corporation of Nigeria (ECN) and Niger Dams Authority (RDA)\. Whereas ECN was developing and operating generation, transmission, and distribution facilities throughout the country, NDA was responsible for planning, implementing, and operating hydropower facilities on the Niger river (i\.e\. at that time the Kainji plant) and associated transmission facilities\. In the 1960's, the Bank had already played a significant role in the development of the power sector as it had assisted: - ECN with Loan 372-UNI (1964) for US$ 30 million to finance transmission and distribution facilities and - NDA with Loans 383-UNI (1964) for US$ 82 million and 572-UNI (1968) for US$ 14\.5 million to help finance the first stage of the Kainji hydropower plant\. In spite of this assistance, both entities' management and operations deteriorated during the second half of the 1960's and in particular during the civil war (1967-69) which, inter alia, dramatically worsened the utilities' shortage of competent managerial personnel\. Context of Project 1\.03 In 1970, in order to create the basis for improving the physical and administrative performance of the sector, Government, after discussions with the Bank, appointed a consultant to study the power supply industry to make recommendations on a possible merger of ECN and - 33 - NDA as well as on improving management\. In 1971, the consultant submitted a report outlining a new Government owned utility to be set un by consolidatiug ECN and NDA\. The new entity was to be provided with strong central management superimposed on a decentralized organizational structure\. The power sector consultant also pointed out the scarcity of competent staff and the need for recruiting additional highly qualified personnel for top positions\. The sector study became one of the main foundations for both the creation of NEPA and the Bank's Fourth Power Project in Nigeria\. Sources for this Repoit 1\.04 This completion report is essentially based on the Borrower's Completion Report dated May 1984 which in turn uses progress and completion reports by the consultants for the main project items\. The report also includes information from the Bank's supervision reports and files concerning this project as well as the two subsequent projects, Power V and VI (Loans 1766- and 2085-UNI)\. 2\. PROJECT PREPARATION AND APPRAISAL Origin and Preparation of Project 2\.01 In 1968-70, i\.e\. during the final implementation period of Kainji hydro (first stage) and in the aftermath of the civil war, demand growth rates were between 20 and 25% per year and at the same time institutional deterioration of ECN and NDA became alarming\. Meanwhile, the Bank was emphasizing economic development in Africa and a further operation in the Nigerian power sector seemed particularly promising\. Indeed, such a project could not only help this large sector implement an investment program that, in view of the fast demand increase, had to be large, but also assist in improving management and operations in the sector\. This would also permit Nigeria to reap the full benefits of the previous Bank operations\. 2\.02 In 1970 the Governsent agreed to have a consultant carry out the power sector study referred to in para\. 1\.02 above\. In early 1971, before the consultant submitted its report, the Government also agreed that the Bank, together with the managements of ECN and NDA should start to define the proposed project\. This essentially took place in the context of two pre-appraisal missions the Bank carried out in March/April 1971 and in October 1971\. When the first mission took place, the sector consul- Eaint had already reached preliminary conclusions\. During the second mis61on the Bank team was able to discuss the final report with the Nigerian authorities\. This led to the Government's decision to prepare the merger of ECN and NDA into a new authority, the National Electric Power Authority - NEPA - which was to start operations on January 1, 1972\. - 34 - 2\.03 In the course of the pre-appraisal missions, the Bank team and the specialists of the two utilities prepared an investment program for NEPA's first six years of operation\. This FY73-78 plan remained somewhat sketchy and subject to substantial uncertainty as, in the absence of detailed and coordinated development programs for ECN and NDA, the plan had to be based on the following rather general documents: - the second National Development Plan, - three consultants' reports on distribution reinforce- ment and electrification, and - a report on the electrification of 140 towns\. 2\.04 In January/February 1972, although Government had not yet implemented the merger of NDA and ECN, the Bank appraised the project\. The appraisal proved difficult due to the vagueness of the information available, which did not permit the mission to ascertain the investment program substantially beyond the level reached during the pre-appraisal\. However, given the rate of load growth even more serious power shortages undoubtedly would have occurred if the project had been delayed until all detailed engineering studies were completed\. The available financial data was inaccurate and out of date\. This was particularly the case for ECN, as the last audited accounts concerned the fiscal year ending March 31, 1970 (i\.e\. FY70) and the auditors' report qualified them as not fully representing the company's financial position\. 2\.06 The most serious obstacle to a full project appraisal was the Government's refusal to allow the Bank to study the legislation concerning the creation of NEPA before its formal approval\. Only in early May 1972, after the promulgation of Federal Decree No\. 24 (1972) setting up NEPA as of April 1, 1972, was the Bank in a position to ascertain that the legislation was such as to permit the Bank to complete project appraisal\. The creation of NEPA was a requisite for making the loan, as otherwise the Bank would have to lend to the Government, and the Bank's Loan Committee had declined such a solution\. 2\.07 A further subject of discussion was the necessity (perceived by the Bank) for NEPA to obtain expatriate management assistance for the first few years of its operation\. Originally, the Bank envisaged the appointment of three expatriates as General Manager, Assistant General Manager Planning , and Assistant General Manager Finance as a condition of effectiveness of the loan\. During negotiations in late May 1972 the Bank dropped the condition that the three top managers be expatriates\. However, it agreed with the Nigerians that loan effectiveness would be subject to NEPA signing an agreement, satisfactory to the Bank, with a management firm or a large public utility to provide a team of experts to assist and train NEPA's senior staff\. - 35 - 2\.08 During project preparation, some controversy arose in connection with the design of the Kainii extension\. The consultants NDA had hired for this sub-project, proposed propeller turbines as being more advantageous than Kaplan units which had been installed in the first stage development of the hydroplant\. Whereas the Bank agreed with the consultants, NDA, judging that the additional flexibility provided by Kaplan turbines was worth more than the cost difference, disagreed\. Finally, NDA prevailed and the Bank agreed to keep the Kaplan turbines in the Bank project\. A similar discussion occurred in connection with the transformers for which the consultants had suggested the same arrangement as for the existing units, i\.e\. the connection of two units to a single transformer\. However, NDA decided to adopt the more flexible solution assigning to each unit its own transformer\. The Bank also concurred to this lesser change\. 2\.09 Following the October 1971 pre-appraisal mission, further project preparation and appraisal had to be compressed into a relatively short schedule to achieve loan signing in FY72\. Nevertheless, it seems fair to note that, had the Bank insisted on a more detailed project preparation, the operation would have materialized about a year later as NEPA would have had to hire consultants to carry out at least the distribution extension and electrification studies\. Such a delay could have had a negative impact on the institutional development of the sector, as the management training assistance contract could well have been further postponed\. 2\.10 On June 30, 1972 the parties signed the documents for the US$ 76 million Loan 847-UNI at a 7\.25% interest rate, for a term of 25 years, including a 5 1/2 year grace period\. However, almost a whole year elapsed before loan effectiveness on June 26, 1973\. Project Objective 2\.11 The Bank project essentially pursued three goals: - to assist NEPA in financing and implementing a first stage investment program; - to help the new utility build up a management, operational, financial, and training capability that would make it able to operate successfully and meet the rapidly increasing demand; and - to support the Authority's planning of further development\. Through the achievement of these goals the project was meant to help provide Nigerian industry, commercial enterprises, as well as urban and - 36 - increasingly also rural dwellers with reasonably reliable electric energy in the quantity required and at reasonable cost\. Project Description 2\.12 The Bank project covered about one third of NEPA's total planned investment for FY73 to FY78\. It included the following items: A\. First Kainji Extension consisting of the addition of two 100 MW generating units (the fifth and sixth units in the sequence, Nos\. 11 and 12 in the layout) and associated switchgear, and a 330/132 kV substation at Kainji\. The units, which were expected to be commissioned in October 1975 and April 1976, respectively, were to bring the installed capacity of Kainji to 520 MW\. B\. Installation of additional transformers, capacitors, reactors, and related switchgear at the 330 kV substations of Akangba, Oshogbo, Onitsha\. and Kaduna\. These were to improve the reliability of the major substations of the system and to be completed by March 1977\. C\. Construction of a second 330 kV transmission line, about 420 km lung, from Kainji to Lagos and extension of the Kainji, Jebba, Oshogbo, and Akangba substations\. These facilities, which were expected to be completed by March 1977, were aimed at increasing the reliability of the power supply in Lagos\. D\. Reir\.orcement of the existing distribution system in 43 cities and towns, and electrification of 41 sizeable townships by connecting them to the Kainji grid\. The work was to be carried out during FY72 through FY77\. They were grouped into 10 schemes (for details see para\. 2\.02 of the Borrower's Completion Report): Lagos, Major Towns, Aba-Calabar, Onitsha, Oshogbo-Ilorin-Akure, Ibada\., Jebba-Bacita-Pategi, Zaria-Funtua-Gusau, Kano, and 15 other towns\. E\. Power development studies consisting of a review of the Kainji hydrology, preparation of a long-range (15 year) sector expansion program including feasibility studies of the projects for development during the next phase, and design specifications for the next generating plant\. F\. Management studies and technical assistance\. This item, which complemented the expected Canadian technical assistance program, included management studies by consultants and advisory services\. - 37 - 2\.13 Beyond the implementation of the physical items and the services listed above the project included the following measures: - In consultation with the Bank, NEPA was to determine, within 18 months of the connection to the National Grid of an area formerly served by a diesel station, whether it would hold the units in reserve at their existing site, move them to serve other isolated areas, or scrap them\. - Government was to set up NEPA's basic organization and management, in particular by appointing, in agreement with the Bank, the three top managers and implement with an expatriate management consultant or a large power utility a management assistance and training program (para\. 2\.07)\. - NEPA, once set up, was to define all internal procedures required for efficient operations\. 3\. PROJECT IMPLEMENTATION Conditions of Effectiveness 3\.01 Apart from the usual requirements for execution and ratification of the Loan Agreement, the latter included three special conditions of effectiveness concerning: - the appointment of NEPA's three top managers (para\. 2\.07), - the securing of management and training assistance (para\. 2\.07), and - the provision of ECN's and NDA's consolidated audited balance sheets as of March 31, 1972\. 3\.02 The Government met the second condition and part of the first in January 1973 by contracting a team of consultants for management and training assistance\. Included in the contract was the provision of an Assistant General Manager Finance and an Assistant General Manager Corporate Planning who at the same time was to be head of the consul- tant'steam and the special adviser to the General Manager\. At about the same time it appointed the former Chief Executive of NDA as General Manager of NEPA\. In view of the excellent qualifications of all the proposed managers, the Bank, though it originally had thought of an expatriate filling the top position, did not object to the appointments\. 3\.03 Although by early 1973 Government had fulfilled all three special conditions of effectiveness, the Bank had to postpone the limit - 38 - for effectiveness from December 27, 1972 as originally foreseen, in steps to June 29, 1973 mainly because the processing of the Loan Assumption Agreement took much longer than expected\. Finally, the loan became effective on June 26, 1973, i\.e\. about half a year later than planned\. Changes in the Project 3\.04 NEPA carried out parts A, B, C, and E of the facilities and services included in the Bank project essentially as foreseen during project appraisal\. A change of some substance occurred in part B (installation of additional transformers and switchgear at 330 kV substations) where NEPA, with Bank agreement, included a 90 MVA 330/132 kV transformer for the Benin substation, as detailed analysis of the system had shown the need for this addition\. 3\.05 The main changes occurred in part D of the project (reinforcement of distribution systems and electrification)\. As the basis for the appraisal was rather preliminary, it is not surprising that the thorough studies carried out after loan signature produced proposals for development significantly different from those originally envisaged\. The modifications mainly concerned the towns foreseen for priority electrification and hence the subtransmission systems feeding them\. The 132 kV-transmission system, however, remained as planned\. As the appraisal mission had anticipated the possible need for modifying the list of towns to receive a distribution system\. Schedule 2 (Project Description) of the Loan Agreement provided for the possibility of such changes\. Thus, the adjustments of the project description, once NEPA and its consultants had finally defined the priorities, proceeded without difficulties\. 3\.06 If there had not been any changes of substance in the project definition (except for those in the electrification component discussed above), the proportion of the Bank contribution to total cost for many items would have been much smaller than envisaged at appraisal\. This was mainly the case for items implemented in the latter part of the project period, in particular distribution extensions and electrification works\. Indeed, as a result of the first large increases in oi\. prices in 1973-74, the economic boom in Nigeria made costs soar\. Thus, the rates of inflation in 1974 to 1976 averaged 17% against an average of 3% in the appraisal estimates\. The impact of inflation was aggravated by the fact that many items suffered long delays in delivery\. Thus, the Bank had to become selective in the application of its funds to ensure that components in the project did not suffer from under-funding\. In agreement with NEPA, from 1975 onwards it allocated the funds not committed by that date to the country-wide electrification program aimed at maximizing the number of people having access to electricity in reasonable quantity and quality\. - 39 - Implementation Schedule 3\.07 NEPA commissionea units 11 and 12 at Kainji (Part A of the project) in February and August 1976, i\.e\. 6 and 11 months late, respectively\. The main reasons for the delays lay with the turbine manufacturer for both units and the generator supplier for unit 12\. Turbine manufacturing did not proceed at the speed expected, during overland transport of the turbine for unit 11 the transporter broke down, a grass fire damaged the wicket gates of unit 11, the turbine shaft of unit 12 was damaged during unloading at Lagos port and had to be returned to Europe for repair, and a similar accident occurred to the generator shaft, which the supplier had to ieplace\. 3\.08 The above delays refer to the contractual completion dates\. The schedule used for project appraisal foresaw completion in October 1975 (unit 11) and April 1976 (unit 12)\. Thus, with respect to these dates commissioning was only 4 months late for both machines\. The contractual schedule established by NEPA and its consultants for this project part foresaw a total design, manufacturing, transport, and erection time of 36 months which would have been tight under any circum- stances and was certainly too tight under those foreseeable in Nigeria\. 3\.09 For execution of part B of the project covering the extension of the 330 kV substations associated with the Kainji plant, NDA and later, NEPA carried out engineering, procurement, and supervision of the work with their own resources\. The facilities should have started operating at the same time as the three new units at Kainji\. Until early 1975 the contractors had incurred less than three month-' delay\. They completed the installations at Oshogbo, Onitsha, Kaduna, and Benin two to four months late, i\.e\. essentially in time for picking up the additional supply from Kainji\. However, in August 1975 the transformer for the Akangba substation feeding the Lagos area was damaged during delivery and the supplier had to return it to the factory for repair\. This increased the delay to 20 months, which was significant, as it impaired the planned improvement of supply in the capital city\. Here, though tight, the construction schedule does not seem to have been unrealistic\. 3\.10 For the engineering work of Part C of the project comprising the second 330 kV transmission line Kainji-Lagos and associated switchgear in \.33U kV-substations NDA had contracted an engineering consultant who NEPA retained\. At the time of project appraisal the schedule called for completion by March 1977\. Commissioning took place in May 1977, which was two months late with respect to this schedule but about six months later than foreseen in the contract, in which NEPA had insisted on a tighter schedula, which appears to have been somewhat too ambitious, though in this case, too, unforeseen difficulties arose\. First, the congestion in Lagos port, which peaked in 1975, delayed unloading by months\. Then, the contractor, faced with sky- rocketing costs on a contract with fixed prices for the imported - 40 - goods and service, considered prematurely terminating the contract\. Until NEPA and its consultants had persuaded the contractor to continue construction valuable time was lost\. The supplier of the additional substation equipment was also late but he completed the facilities before the line was ready\. 3\.11 As discussed in para\. 3\.05 the main changes with respect to the appraised project occurred in Part D concerning reinforcements of distribution systems and electrification\. Sections 3\.5 to 3\.10 of the Borrower's Completion Report analyze the implementation of this part in as much detail as the information available in late 1983 permitted\. In summary, it consists of three components: - The Countrywide Electrification Program established on the basis of the studies which NEPA consultants carried out in 1973; included in a first stage development the electrifi- cation of 73 towns; this was carried out under six contracts partly financed by the Bank\. - The reinforcement of existing distribution systems of which the most important part was the first stage of the Lagos Metropolitan Distribution Project essentially covered by one contract partly financed by the Bank; in most other distribution reinforcement projects included in the Bank project, NEPA constructed facilities at a voltage less than 33 kV with its own workforce or used contractors it supervised directly; though the Bank project also included these items, NEPA financed them out of resources other than Loan 847-UNI\. - The 132 kV transmission lines and switch ards connecting the new and reinforced distribution systems to the National Grid were carried out by NEPA assisted by consultants within the framework of contracts partly financed by the Bank\. 3\.12 For the reasons set forth in para\. 3\.05 it is impossible to meaningfully compare actual and forecast work progress and investment in the individual systems listed under Part D in para\. 2\.04\. However, the analysis of the implementation of the individual contracts discussed in sections 3\.5 to 3\.10 of the Borrower's Completion Report allows one to conclude that the contracts suffered delays ranging from 3 months to 3 years with respect to the contractual completion dates and that the main reasons for the delays were: - temporary scarcities of construction materials (cement, steel, wooden poles, etc\.); - 41 - - NEPA's difficulties in marshalling an adequate supply of distribution equipment; - difficulties arising from Nigeria's weak infrastructure (e\.g\. ports of Lagos and Port Harcourt); - lack of personnel for the work NEPA carried out itself; - the fact that the foreign exchange part of most contracts was on a fixed price basis which, after 1973-74, when world market prices were rapidly increasing, led several contractors into difficulties and made them reluctant to proceed; - changes in design during execution; - several strikes; and - difficulties with wayleaves\. The above delays, together with those mentioned earlier (in particular para\. 3\.10) made it impossible for NEPA to meet the demand and to improve the quality of supply\. Thus they were the main cause of the large increases in private captive plant (see para\. 4\.01) that took place during the project period\. 3\.3 Though NEPA carried out the four sets of studies included in Part E of the project, the Bank only financed the determination of the most desirable sequence of new generating plant, the preliminary design of the next addition (Sapele gas-fired steam plant) and the feasibility analysis of township electrifications\. This work also incurred some delays but they were limited and had no major consequences\. 3\.14 As CIDA financed the management assistance, the Bank's contribution to Part F of the project covering management studies was limited to financing the valuation of NEPA's assets as of March 31, 1972 carried out in 1974\. 3\.15 In general, project implementation was fraught with difficulties which had their origin in the following shortcomings: - Though officially NEPA started operating on April 1, 1972, it took all of that year and part of 1973 to get the new utility reasonably organized\. - Demand for electricity had already increased at high rates before 1973, but the oil boom starting in 1973-74 brought a dramatic and persistent call for increased supply\. Thus NEPA had to accelerate the construction of new facilities, which in turn required more resources, in particular - 42 - skilled personnel; however, during the entire project period, NEPA was sorely short of such staff\. - During practically the entire project implementation period NEPA had to operate in a general environment characterized by overtaxed national infrastructure and administration on the one hand and shortages in all types of resources except capital on the other\. - Prcject implementation had to start when sector planning was still only at a preliminary stage\. 3\.16 In reality, it seems there would have been little leeway for NEPA and the Bank to proceed differently\. They might have avoided some difficulties by more detailed planning before starting the project but this would have been at the expense of incurring even longer delays resulting, in turn, in further pressure from dissatisfied actual and potential consumers\. Procurement 3\.17 NEPA, in most cases assisted by consultants with extensive international experience, carried out procurement of the items financed by the Bank generally in accordance with the Bank's Guidelines for Procurement\. However, in the starting phase of the project, NEPA and the Bank had to overcome some difficulties, which took the form of incomplete or late submission of tender documents to the Bank, late comments by the Bank on documents by NEPA, and protracted discussion about some clauses\. The reasons for these difficulties were mainly related to: - Government policies or at least practices which were in contradiction to the Bank's Guidelines; - the fact that a substantial part of the procurement had already started before signing of the Loan and Guarantee Agreements and that, from the Nigerians' point of view, it was far from clear that the Loan would materialize in time to cover the items already in the pipeline before mid-1972; - some of the NEPA staff responsible for procurement not having had substantial previous exposure to international competitive bidding in accordance with the Bank's Guidelines; - The regionalization of the Bank which took place in mid-1972 and put new teams in charge of the operations in Nigeria in general and in NEPA in particular\. - 43 - 3\.18 The most important point of disagreement between the Bank and NEPA concerned NEPA's inclusion of a clause asking bidders for alternative financing in the tender documents for several contracts\. The Bank objected to this clause, but NEPA, having acted on the Government's instructions, could not comply with the Bank's requirements without Government's agreement\. Ultimately, the Government, NEPA, and the Bank agreed that the latter would not object to documents including the controversial clause for biddings taking place before November 15, 1973\. 3\.19 The Bank was justified in giving in to the Nigerians on the alternative financing clause as the analysis of the bids for the contracts for Parts A and B of the project had shown that the bidd,rs had not offered any attractive financing\. In fact, most of the competing firms had not offered any financing at all\. Therefore, it would appear that the clause did not discourage the invited firms from bidding and therefore did not limit competition to any notable degree\. 3\.20 In July 1972, immediately after regionalization, the Bank decided to send a supervision mission to Nigeria, primarily to clarify the procurement issues\. However, the Government asked the Bank to postpone such a mission\. It finally took place in December 1973 and was successful\. From then on, procurement proceeded without complications\. Costs 3\.21 In accordance with NEPA's investment plan as estimated at appraisal time, annual expenditures on new facilities and associated services were to increase from N 21\.4 million (US$ 32\.5 million) in FY73 to N 54\.8 million (US$ 83\.3 million) in FY78\. Actually, they greifrom N 22\.0 million (US$ 33\.4 million) to N 323\.7 million (US$ 515 million) within the same time span\. Table 2\.01 of the Borrower's Completion Report gives further details\. The main reasons for this discrepancy are the following: - The actual inflation rate over the period was on average about 13% against an estimated 3%\. - The high demand called for a large additional investment\. - Due to local constraints related to the boom starting in 1973-74, costs substantially increased even in real terms\. 3\.22 Annex 1 compares the estimated and actual project costs\. It shows that the Kainji extension and the second Kainji-Lagos line cost less than estimated mainly because the foreign exchange component, i\.e\. the cost of equipment and foreign services was lower than forecast\. This shows that the corresponding base line cost estimates were - 44 - essentially accurate\. The difference was of the order of the allowance for physical contingencies (about 10%) which, as no additions were necessary, NEPA did not need to use\. The influence of inflation was practically nil, as NEPA let the contracts on a fixed price basis for the imported goods and services and the main payments became due before the unforeseen inflation could substantially affect costs\. The local cost part exceeded the estimates because, on the one hand, base line costs were possibly underestimated and, on the other, the civil works' contracts were subject to escalation which became effective in the latter part of the contract period\. 3\.23 This also applies to the reinforcement of the 330 kV substations except that here all coscs were higher than estimated because of the addition of a transformer which NEPA installed in Benin\. 3\.24 It is impossible to compare in a meaningful way estimated and actual costs of distribution reinforcement and electrification as set forth in Annex 1 because the two sets of figures, though they concern the same type of items, do not refer to the same physical facilities\. The available information shows that the estimate underrated the base line costs because it was based on a technical concept\. The more detailed investigations carried out after the project started called for more expensive facilities and modified the estimate\. Furthermore, NEPA constructed and installed the items discussed here in the latter part of the project period i\.e\. after 1975\. Therefore, their costs were heavily affected by inflation not covered\.by the price contingency allowance included in the appraisal estimate (para\. 3\.21)\. 3\.25 The estimated and actual costs of the planned development and management studies do not allow a meaningful comparison either, as in part they cover different items\. Disbursements and Financial Sources 3\.26 As discussed in para\. 3\.21, from FY75 on, NEPA's annual investment was much higher than expected (see also Table 2\.01 of the Borrower's Completion Report)\. As at the same time the project period was longer than forecast, the contribution of the Bank in terms of total investment was much lower than expected\. Even in the original project period, i\.e\. FY1973-78, it amounted to only about 11% against 30% estimated at appraisal time\. 3\.27 Section 3\.15 of the Borrower's Completion Report discusses the actual Ydrawdown of the loan and the allocation of the used funds to the various categories\. At an early stage of project implementation it became evident that the electrification program would cost substantially more than expected\. As this type of investment has an immediate impact on the living standard of low income people, particularly in rural areas, the Bank and NEPA agreed that any excess funds from the loan account would be applied to the foreign exchange cost of electrification contracts (para\. 3\.06)\. This was done when the Bank decided not to - 45 - contribute to the financing of the civil works for the Kainji extension and again when, after thorough discussion, the Bank agreed not to cancel the amount originally earmarked to meet the foreign cost of the Kainji generators\. Indeed, after internatia -al competitive bidding for which a Japanese firm was the lowest evaluated bidder, the Government decided to finance the equipment through a Japanese line of credit offered in an entirely different context, i\.e\. not in connection with the alternative financing clause in para\. 3\.18 above\. 3\.28 From the approximately N 64 million (US$ 102 million) of the project not financed by the Bank, CIDA provided some N 3\.0 million (US$ 4\.8 million) whereas NEPA (thriugh internal cash generation) and the Government (through loans) contributed the rest\. Performance of the Consultants 3\.29 In connection with the Bank project, NEPA used the services of consultants for: - the Kainji extension; - several transmission projects; - the Aba-Calabar transmission project; - the Lagos Metropolitan Distribution Project, part of the Countrywide Electrification Program, and for the long range sector expansion program; and - the review of the Kainji hydrology\. 3\.30 The performance of the above consultants, most of whom had already worked for ECN and NDA, was satisfactory\. In connection with the design of the Kainji-Lagos transmission line difficulties arose when, after the completion of the facility, some auger-bored pile foundations failed (two cases occurred on another line not included in the Bank project)\. Apparently such foundations do not perform well in wet lateritic soil\. NEPA considered the failure a result of faulty design rather than of deficient construction methods\. It decided to reinforce all the foundations of the type that had shown tailures\. - 46 - 3\.31 Several of the consultants received payments owed them only after long delays\. This is surprising as NEPA could have drawn a large part of these sums from the Bank loan but failed to do so\. Performance of Contractors 3\.32 Sections 3\.2 to 3\.10 of the Borrower's Completion Report deal in detail with the performance of NEPA's contractors\. Taking into account the difficult circumstances prevailing during project execution, the equipment manufacturers performed reasonably well\. Indeed, the long delays several of them incurred were to a limited extent their responsibility\. There seems to have been only one instance of a contractor not fulfilling his obligations and forcing NEPA to complete installation with its own workforce, i\.e\. the supplier for transformers for Major Towns Scheme\. 3\.33 Two local companies carried out major contracts in the context of the Bank project\. Company A performed satisfactorily overall, though a Bank supervision mission felt that part of the delay incurred in connection with the Lagos Metropolitan Distribution project was\.-the result of the contractor's poor planning\. However, Company B worked poorly throughout, as it was inadequately staffed, financed, and equipped\. To complete the work (one lot of the Countrywide Electrifi- cation Program) NEPA had to bring in a foreign firm as "assisting subcontractor"\. 3\.34 Several local civil contractors carried out subcontracts for firms that had won packages involving supply, erection, and construction\. In several instances difficulties, in particular delays\. occurred in connection with such subcontracts, mostly because of poor management and lack of experience compounded by the difficult environment\. In the case of the Lagos Metropolitan Distribution Project the originally designated civil works subcontractor had to be replaced\. Performance of Borrower 3\.35 During the entire project execution NEPA was overtaxed\. In FY73 to FY75 it was struggling to get organized\. When, with the assistance of the consultant's team, management had substantially improved, NEPA was swamped by the demands which the dramatically increased investment program made on it on the one hand and the operating difficulties arising from the rapid increase in consumer demand on the other\. As it was not in a position to recruit, train, and retain enough skilled people (para\. 6\.03)\. it never had a chance to get abreast of events and had mostly to concentrate on avoiding the worst\. This resulted in many instances of late availability of construction sites, delayed project modifications, poor planning, and non-availability of crews to carry out the physical work for wh±ch NEPA was directly responsible\. Thus, there is little doubt that NEPA also contributed to the delays incurred in several project items\. - 47 - Operations 3\.36 During commissioning of the units of the Kainji extension the contractors had to correct only minor deficiencies and during the warranty period NEPA did not find any defects in the equipment, which ran without major interruption until, in 1982, the generator of unit 11 was so severely damaged that it had to be replaced\. The causes of the accident are the subject of an in-depth investigation the results of which were not available when this report was written\. Apart from this, NEPA is aot fully satisfied with the performance of the units (in partici::\.ar generator controls and the hydraulic pumps of the governors), as it has to replace the pumps far too often\. NEPA also feels that the expertise of the operation and maintenance personnel needs further im;irovement and is preparing an appropriate training program\. 3\.36 The equipment corresponding to the extension of 330 kV substations has worked satisfactorily since commissioning\. The same applies to the second Kainji-Lagos line after zontractor completed the reinforcement of the auger bored pile foundations in lateritic soil (para\. 3\.31)\. 3\.37 It is impossible to judge accurately the operation of the facilities covered under distribution reinforcement and electrification\. Whereas the transmission and subtransmission installations seem to have worked without major difficulties, many distribution systems were overloaded nearly from the start because of the fast growth of demand and the delay which the program had suffered\. Combined with this overload, substandard maintenance arising from NEPA's chronic lack of sufficiently skilled personnel resulted in many operational shortcomings\. Deficient equipment quality or installation cannot be identified as a factor contributing to these inadequacies\. - 48 - 4\. OPERATING PERFORMANCE 4\.01 Chapter 4 of the Borrower's Completion Report discusses the development of NEPA's operations in comparison with that expected at the time of appraisal \. An increase of demand substantially beyond that expected, a shortfall in the available supply capability and the resulting substantial amount of suppressed demand characterize these operations\. The deficit in availability in turn resulted from a combination of delays in the commissioning of new plant and failures in existing facilities\. As a consequence, customers installed an inordinately high amount of captive plant, recently estimated to exceed 600 MW\. 4\.02 These disappointing developments occurred even though NEPA's management, assisted by the consultant's team, achieved marked improvements particularly in the fields of management and information systems, operational planning, and financial control\. However, the stumbling block was the lack of implementation capability at lower echelons related to the difficulties NEPA experienced in finding, training and retaining the skilled staff it needed (para\.6\.03)\. 5\. FINANCIAL PERFORMANCE 5\.01 Chapter 5 of the Borrower's Completion Report discusses details of NEPA's financial performance which was characterized by: - after FY73, a return on net fixed assets between 3 and 5%, i\.e\. far below the 8% stipulated in Loan Agreement; FY80, the year immediately after two consecutive tariff increases (which about doubled the revenue per kWh), is an exception with a 12% return; - internal cash generation decreasing from 76% of capital expenditure to 7% and then increasing to 42% after implementation of new tariffs; - a current ratio decreasing to 1\.3 and then jumping to nearly 6\.0 after the 1979 tariff adjustment dramatically increased the cash account; - gross customers' receivables increasing from 4 to about 6 months' billings; - an investment program far in excess of that foreseen and increasingly financed through long term debt thus entailing an increase in the debt/equity ratio from about 30:70 to 80:20\. - 49 - 5\.02 The improvement in the revenue situation at the end of the project period, as satisfactory as it may appear, conceals numerous serious problems\. In 1980 NEPA's statistics show a sharp increase in energy unaccounted, which may be a result of the high level of unmetered consumption, perhaps a consequence of the tariff increase\. Furthermore, accounts receivable have consistently increased and reached a critical level reflecting persisting if not worsening collection problems\. 6\. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT Organization and Management 6\.01 Federal Decree No\. 24 of 1972 creating NEPA and defining its role and structure remained valid during the entire project period\. It seems quite adequate for pursuing the objectives the Government had set for NEPA, i\.e\. essentially to develop and maintain an efficient, coordinated and economic supply of electricity for all parts of the country\. The organizational set-up envisaged in the decree was adequate, too\. Neither the decree governing NEPA nor this set-up were at the root of the institutional problems that plagued NEPA especially during the second half of the project period and thereafter\. 6\.02 More problematic than the above decree was legislation that was not primarily directed against NEPA but seriously affected it, in particular: - the partial abrogation in 1977 (Enterprises Promotion Act) of the exemption NEPA had been granted from the obligation of all companies doing business in Nigeria to incorporate themselves in the country (see Borrower's Ccmpletion Report, para\. 3\.88), - the ordinances defining the procedures for the approval of awards and the granting of import licenses, and - the subjection of NEPA to civil service salary scales\. 6\.03 The first of the above measures restricted international competitive bidding but it did not affect the Bank project, as at the time it became effective all bidding under Loan 847-UNI was completed\. In the context of the Fifth Power Project (Loan 1766-UNI), Government agreed to exempt companies with contracts finar-Ced through the loan from incorporation\. The second measure did not substantially affect the Fourth Project either, as Government also implemented it late in the project period\. However,the third, decided in 1975, is the most important reason for NEPA's limited achievement of the project objectives\. Civil service salary scales, compared with remunerations in the private sector, were far too low for NEPA to attract and retain the skilled personnel it needed\. This problem still affects NEPA today\. - 50 - Many employees stay with NEPA only until they have received sufficient training to allow them to get better paid jobs in other sectors of the Nigerian economy\. The Bank was fully aware of the importance of the salary issue throughout the project period\. However, it could not address the problem, which affected all parastatals, in the context of a NEPA project alone\. Therefore, within the Sixth Power Project, the Bank asked for a comparative analysis of salary scales in the Nigerian economy as a basis for possible corrective measures\. Government appointed a commission under Mr\. Onosode to examine the problem in 1981 but declined to act upon its recommendations\. Up to late 1984, no progress of substance had occurred and NEPA's skilled staff losses continue\. 6\.04 Chapter 6 of the Borrower's Completion Report discusses the institutional aspec\.ts related to the Fourth Power Project in more derail\. It shows, in particular, that at the time of the project the management assistance program vas successful in introducing efficient management procedures and in Improving training both quantitatively and qualitatively\. Unfortunately, after project completion, improvement did not proceed further\. It seems that, on the contrary, the quality of management has again deteriorated, not so much at the top as at middle levels, where the difficulty in retaining qualified staff is most pruLLLct\. Covenants 6\.05 NEPA employed consultants to carry out the project (Section 3\.02 of Loan Agreement) and to prepare a long-range sector expansion program as well as feasibility studies for the next generating plant (Section 3\.08 of Loan Agreement)\. 6\.07 NEPA had a consultant carry out a valuation of NEPA's assets as of March 31, 1972 in accordance with Section 4\.05 of the Loan Agreement\. 6\.08 As already discussed in Chapter 5 above, NEPA never came near to meeting the rate covenant (Section 5\.05 of Loan Agreement) requiring the utility to earn a return on net fixed assets in operation of at least 8%\. 6\.09 After the fact, it is difficult to judge whether at any time in the past debt service coverage as defined in Section 5\.07 of the Loan Agreement was lower than 1\.5 and therefore called for NEPA to obtain Bank agreement for incurring further long term debt\. It seems that in FY77 and FY78 this was the case\. However, there appears to be no record that NEPA ever asked the Bank for such approval\. - 51 - 7\. PROJECT JUSTIFICATION Demand 7\.01 Chapter 4 of the Borrower's Completion Report compares forecast and actual energy generated and sold as well as the corresponding system loads\. It shows in particular that up to FY79 annual growth of generation deviated little from the average of 16\.2%, which is slightly lower than the 17% forecast\. Growth of sales, however, with an average 15\.6%, was somewhat lower than the 17\.5% expected\. This reflects an increase of the losses from about 17% of energy generated and purchased in FY73 to about 19% in FY 79 as against a forecast decrease from 19\.5 to 16\.5%\. Also between FY73 and FY79, peak load on the National Grid increased from 340 to 979 MW, whereas the appraisal report forecast a growth from 362 to 931 MW\. FY 1980 and to a lesser degree the following years show a striking departure from the above trends with total system losses about twice as large as those in preceding years\. In the second half of 1983, NEPA had not yet reached definite conclusions about the reasons for the anomaly\. However, it seems to be the result of large unmetered consumption\. 7\.02 In any event, even though the reliability of NEPA's data is limited, it is fair to state that the demand expected in 1972 materialized\. In fact, there always has been suppressed demand, be it in the form of connected customers not receiving as much power and energy as they required, or potential consumers that NEPA was not in a position to connect up\. The installation of captive plant in excess of 600 MW is a consequence of this situation\. Least Cost Solution 7\.03 The 1972 appraisal showed that the first Kainji extension was the least cost solution as the capital cost alone of the two additional hydro units was already lower than that of any thermal alternative\. This, of course, still holds after completion of the project, as the actual equipment cost was lower than that estimated at appraisal time, whereas, between 1972 and 1976, cost of thermal units underwent substantial increases\. The reservation made in the appraisal report that among the hydraulic turbine types propeller units would have represented the least cost solution still holds (para\. 2\.08)\. Indeed, the slightly greater efficiency of Kaplan turbines does not appear to justify the additional cost of such units and the benefits of their better flexibility are not easily quantifiable\. Moreover, it is worth noting that the next units NEPA installed at Kainji are of the propeller type\. 7\.04 Within the general transmission concept of NEPA, which NDA had determined and justified in the context of the first stage of the Kainji development, the second 330 kV Kainji-Lagos line was the least cost solution as there was no alternative to it\. - 52 - 7\.05 In 1972, the appraisal team had no detailed analysis available to show that the proposed distribution extensions and electrification represented the least cost solution to provide electricity to the corresponding areas of development\. The consultant's studies, conducted under this project, established this fact and also optimized the design\. As the actual costs of the projects executed are substantially higher than those estimated by the consultants in current terms but only some 10% higher in constant terms, it is fair to assume that after construction the consultants' conclusions remain valid\. Economic Return 7\.06 Applying the method which was used for the appraisal and which led to a return of 23% results, after project completion, in a comparable rate of 28% for the first Kainji extension\. However, this return is sensitive to changes in the basic assumptions\. A reduction of 10% in the assumed revenues from non-industrial consumers and a 10% increase in the rather uncertain transmission and distribution costs reduces the rate by 5 and 3 percentage points, respectively\. 7\.07 As the construction of the second 330 kV line Kainji-Lagos was justified essentially through further extensions of the Kainji plant, only the justification for the advancement of its construction by three years had to be established\. The evaluation set forth in the appraisal report demonstrated that the return for this early construction was about 12%\. The data used, however, was rather speculative\. At this time, similar data is still affected by high uncertainty\. However, qualitatively, it can be said that the frequency of faults observed were, in the years 1972-1975, rather in excess of the 17 per year used for the appraisal\. Therefore, it seems reasonable to state that the return on this part of the project is likely to be higher than that estimated in 1972\. 7\.08 Since the costs were unreliably established in the first place there is little point in trying to determine the return on the individual distribution expansion and electrification projects (para\. 3\.24) or on the sum of the programs\. Instead it seems more meaningful to calculate instead a return on the entire FY72-78 tranche of NEPA's investment program which includes over 95% of the above distribution and electrification program and a similar percentage of the Bank project\. This results in a rate of 12%, which, at first sight, is adequate\. It is evident that an investment that is quickly used to full capacity should have a high return\. Nevertheless, the above result should not lead to an exaggerated sense of satisfaction, as the implementation of the Fourth Power Project went in parallel with the deeply worrying increase in the installation of captive plant referred to in para\. 4\.01 with an associated loss to the Nigerian economy which substantially reduced the positive economic benefit of the investment program discussed here\. The above rate of return on the tranche of investment is not overly sensitive to a variation in the parameters as a 10% reduction in the estimated benefits only reduces it by 2\.5 percentage points\. - 53 - 8\. BANK PERFORMANCE Assessment of the Borrower's Implementation Capacity 8\.01 Early on in project preparation the Bank perceived the need for considerable outside assistance to NEPA's manaEiment in order to ensure that a Bank project had a reasonable chance of success\. The 100 man-year Canadian program agreed between Government and the Bank was adequate\. The fact that after some understandable initial difficulties the project progressed satisfactorily until about 1975 tends to confirm this judgment\. The less satisfactory performance after 1975, both In project implementation and in operations, to a large extent resulted from circumstances beyond NEPA's control, particularly the economic boom which overtaxed Nigeria's institutions and infrastructure\. 8\.02 Initially, the Bank had envisaged that NEPA's General Manager would be an expatriate\. However, in 1972, it agreed to the appointment of NDA's former Chief Executive to NEPA's top position\. This was a wise decision as the appointee proved very competent and later developments showed that a foreigner would never have had the ear of the Board and of the Government to the same extent\. Thus, this choice enhanced the Borrower's implementation capacity\. Supervision 8\.03 Annex 3 sets forth a schedule of the supervision missions the Bank carried out in connection with the project\. It is characterized by the unusually long intervals of 1, 1 1/2, and 2 years between full missions\. This was mainly due to delays in obtaining Government agreement to such missions\. Thus, the Bank had to delay the most important supervision mission (the second), which was to clarify the pending procurement issues, from mid-1973 to the end of that year\. The missions that took place towards the end of project implementation were supervisions that the Bank carried out in connection with pre-appraisal and appraisal of the Fifth Power Project in 1978, i\.e\. at a time when Government and NEPA's interest in cooperation with the Bank had increased again\. However, these late missions contributed little to improve project results\. Currently, mission visits are cleared satis- factorily by the Government and NEPA\. Working Relationship 8\.04 Relations between Bank staff and Government officials were generally good even though the relationship between the institutions was to some extent at arm's length throughout project preparation and implementation\. The latter is reflected in the Government's exceedingly - 54 - cautious response to the Bank's request for information about the content of the planned legislation concerning NEPA (para\. 2\.06), and to the Bank's request for permission to carry out supervision missions (para\. 8\.03)\. This reluctance was further increased once the oil boom started, as that on the one hand reduced the need for Bank financial assistance and, on the other hand, reduced the Bank's contribution to NEPA's investment program to a small proportion\. 8\.05 At the start of project implementation, relations with the Borrower were difficult, as its management was not properly organized until early 1973\. The fact that the various managers of the former ECN and NDA were in competition for the top positions in NEPA also made contacts delicate\. Once management was set up and initial difficulties overcome, in particular those in connection with procurement, working relationships with NEPA substantially improved\. 9\. CONCLUSIONS 9\.01 The project did not succeed in fully meeting all of the objectives set out in para\. 2\.11\. NEPA completed the physical part of the project, but it did so in rather loose cooperation with the Bank, although the latter often manifested its willingness to contribute to the solution of the many operational, organizational, and institutional problems that existed from the start and cropped up from time to time\. The main reason for this was the oil boom, which temporarily freed Nigeria from the need to seek financial support from development institutions\. As the economy thrived, the Government, which had always been quite reluctant to accept the conditions attached to Bank loans, became even more opposed to such conditions\. Therefore, the next Bank operation (Power V), that was supposed to assure the continuity of the policies and measures associated with the Fourth Power Project, did not materialize until October 1979, i\.e\. about four years later than planned in 1973\. 9\.02 The build-up of a strong management and training capability, though it occurred, did not result in a lasting improvement, mainly because NEPA's salary scales did not permit the utility to retain highly qualified and motivated staff in the numbers required\. The growth of demand, which was extraordinarily fast for a relatively large utility, also contributed to NEPA's inability to maintain the quality of management and financial control, however modest, it had attained after the first three years of the project\. The same factors hampered the improvement of NEPA's quality of supply which, in some parts of the country and particularly in Lagos, even deteriorated, making it exceedingly difficult to implement the tariff increases necessary to set the utility on a strong financial base\. 9\.03 The Bank's support of NEPA's planning activities was probably the most successful of the measures associated with the project, though in this area too, a more timely follow-up via an earlier Bank project - 55 - might have helped avoid the deterioration observed in recent years, and which the two successive Bank operations as yet have not succeeded in reversing\. 9\.04 In retrospect, with the benefit of hindsight, one might ponder the wisdom of proceeding with the loan given the reluctance of the Government to provide information required for project appraisal (para\. 2\.06) and the inadequate project preparation (para\. 2\.04)\. Given the importance of assisting in such a critical sector and the importance of institutional development it is difficult to argue that the Bank should not have proceeded\. It is also difficult to see what the Bank should have handled differently to assure the success of the project\. Indeed, whatever influence it could have had under the circumstances foreseeable at the time of appraisal was nearly eliminated when the economy unexpectedly soared as a consequence of the first round of large increases in oil prices making the Government further doubt the value of a close relationship with the Bank in the power sector\. Annex 1 NIGERIA FOURTH POWER PROJECT COMPLETION REPORT Estimated and Actual Project Costs million N (million US $) Actual Appraisal Estimate Cost Variation in Z of Estimate Local Foreign Total Local Foreign Total Local Foreign Total Part A: First Kainji extension 3\.4 9\.7 13\.1 2\.9 11\.0 13\.9 + 17 - 12 - 6 (2 units of 100 MW each (5\.4) (15\.5) (20\.9) (4\.3) (16\.8) (21\.1) and extension of sub- station Part B: Reinforcement of 330 kV 1\.4 2\.1 3\.5 0\.7 1\.8 2\.5 +100 + 17 + 40 substations (including (2\.2 (3\.4) (5\.6) (1\.0) (2\.8) (3\.8) Benin) Part C: Second 330 kV line 6\.2 9\.0 15\.2 5\.7 11\.2 16\.9 + 9 - 20 - 10 Kainji-Lagos (9\.9) (14\.4) (24\.3) (8\.6) (17\.2) (25\.8) Part D: Reinforcement of exis- 32\.8 41\.0 73\.8 21\.4 22\.5 43\.9 + 53 + 82 + 68 ting distribution sys- (52\.5) (65\.6) (118\.1) (32\.5) (34\.2) (66\.7) tem and electrification Part E: Power Development 0\.8 1\.5 2\.3 1\.0 2\.0 3\.0 - 20 - 25 - 23 Studies (1\.3) (2\.4) (3\.7) (1\.5) (3\.1) (4\.6) Part F: Management Studies 0\.8 2\.5 3\.3 0\.8 1\.9 2\.7 0 + 32 + 22 1\.31 (4\.0) (5\.3) 1121 (2\.9) (4\.1) Total 45\.4 65\.8 111\.2 32\.5 50\.4 82\.9 + 40 + 31 + 34 (72\.6) (105\.3) (177\.9) (49\.1) (77\.0) (126\.0) - 57 - Annex 2 Page 1 of 4 NIGERIA FOURTH POWER PROJECT COMPLETION REPORT Economic Justification 1\. Basic Assumptions 1\.01 For the computations to confirm that the executed sub-projects represent least cost solutions to meet the corresponding objectives and to determine the economic rate of return, the present report uses the following basic assumptions: Costs and benefits are expressed in constant 1978 Naira i\.e\. of the year when most of the project was completed\. - The computations use a shadow exchange rate of US$ 1\.25 to the Naira\. The market price for local labor was used as in Nigeria there was no unemployment of the type of skilled and semi-skilled manpower that NEPA required\. 2\. Least Cost Solution First Kainji Extension 2\.01 The total cost of the 200 MW extension was US$ 21 million, which corresponds to 105 US$/kW which is substantially less than the least expensive thermal alternative\. In 1978 prices, the latter cost in excess of 250 US$/kW\. Even taking into account that to make the alternative strictly comparable one might have to add to this one-third of the cost of the additional 330 kV line Kainji-Lagos, the unit capital cost of the extension would still not exceed 150 US$/kW\. Furthermore, considering that the operating costs of the thermal alternative would have been much higher than that of the hydro, it is safe to state that the first Kainji Extension was the least cost way of adding 200 MW of generating capacity\. If one assumes that a thermal plant of 130 MW would be capable of producing 800 GWh annually, i\.e\. the minimum output of the extension (which under normal circumstances can generate 1350 GWh annually), the capital costs of the hydro extension and the thermal alternative would, under the worst case for the extension, be about equal at US$ 30 million\. Second 330 kV Kainii-Lagos Transmission Line 2\.02 Within the general concept of the Nigerian transmission - 58 - Annex 2 Page 2 of 4 system, NDA's consultants had already demonstrated in the 1960's that a 330 kV system was the least cost solution for further development of the transmission network\. Therefore, the duplication of the existing line, once the latter's capacity was fully used, was the least cost expansion of the system within the overall concept of the grid\. Distribution Extension and Electrification 2\.03 At project preparation time, only general studies of these items existed\. Therefore, ECN hired consultants to study some of the sub-projects ultimately included in the Bank project, in particular, the Lagos Metropolitan Distribution Project, the Major Towns Scheme, and the Zaria-Funtua-Cusau Scheme\. These studies as well as those included in the Bank project mostly concerning electrification, set forth standards for such facilities in Nigeria\. Such standards describe the least cost alternative to provide the service in the quantity and quality desired within a uniform concept\. The qualitative standards were set on the basis of experience and judgment in agreement with the Bank\. They still seem reasonable, even if in many places the quality of supply is deficient, as the latter is mostly due to substandard maintenance and not to inadequate design and/or equipment\. 3\. Economic Rate of Return First Kainji Extension 3\.01 The appraisal team assumed that, of the 1350 GWh assignable to the extension, non-industrial consumers would use 650 GWh and industries 270 GWh, the remaining 270 GWh representing losses\. Costing the first tranche at the price customers were paying in 1972 and the second tranche at the cost of generation by captive plant led to a return of 23%\. 3\.02 The present analysis proceeds similarly\. However, the costs also include one third of the cost of the second Kainji--Lagos line, as the latter is required to assure a reasonable reliability but is only justified in connection with the further extensions\. For the non-industrial consumption, in accordance with NEPA's income statement, the cost of transmission and distribution is about 0\.025 N/kWh and the revenues in 1977 correspond to 0\.032 N/kWh\. On the basis of the 1983 Energy Sector Assessment generating costs by captive plant are at least 0\.025 N/kWh\. Therefore, the economic cost and benefit streams are as follows: - 59 - Annex 2 Page 3 of 4 Year 1973 1974 1975 1976 1977 1978-2002 (in million N) Costs Capital 3\.0 2\.0 5\.0 8\.0 3\.0 Operation 0\.2 0\.8 Transmission and 4\.0 16\.2 Distribution Benefits Revenue from non- industrial consumers 5\.0 20\.8 Savings on captive generation 1\.5 5\.7 3\.03 The resulting rate of return is 28% which is high but understandable as the revenues from non-industrial consumers (0\.032 N/kWh) are substantially higher than those assumed in 1972 (0\.024 N/kWh)\. However, the result is sensitive to changes of the parameters, in particular the cost of transmission and distribution (which is uncertain)\. A 10% increase in the latter reduces the return by some 3 percentage points\. It is even more sensitive to the tariff for non-industrial consumers as a decrease of this rate by 10% reduces it by 5 percentage points\. However, future tariffs are unlikely to be lower in real terms than those of 1978 used here\. Second Kainji-Lagos Transmission Line 3\.04 Originally, NDA and its consultants considered the commissioning of the second line necessary at the time when peak load in the interconnected system wculd have reached 1200 MW, which they forecast to be the case by about 1980\. However, as the reliability of the first line was much lower than expected, they proposed to advance construction of the second line by three years\. The Bank concurred and included the item in the Bank project\. The appraisal team demonstrated that advancing the installation of the line by 3 years yielded a return of at least 12% on the basis of the benefits of the increased reliability to industrial consumers valued at the shadow-priced salaries paid to workers to make up the production lost during power interruption\. However, the data used for calculating this return was rather uncertain\. The same still holds after completion of the project\. Nevertheless, it would seem that the 17 interruptions per year which the appraisal team used were exceeded at least twice between 1972 and 1975\. Furthermore, the cost of the line was lower than expected and the demand - 60 - Annex 2 Page 4 of 4 increased roughly in line with the forecast\. Thus it seems reasonable to assume that the rate of return on advancing the construction of the line by three years is probably higher than estimated in 1972\. 1972-78 Investment Program 3\.05 As set forth in para\. 7\.08 of the report, it is not worthwhile calculating a return on the distribution extension and electrification projects\. On the other hand, it is worth determining such a return on the 1973-78 tranche of NEPA's investment program\. This return corresponds to the discount rate equalizing incremental cost and incremental revenues related to the investment program\. The corresponding cost and benefit streams with operating cost calculated on the basis of NEPA's income statement and benefits on actual tariffs until FY79 and 0\.055 N/kWh (i\.e\. substantially lower than the FY80 rate of 0\.065 N/kWh) for the following years, are as follows: Fiscal Capital Cost Operating Cost Revenues Year (in million N) 1973 22 -- 1974 21 -- -- 1975 65 2 10 1976 116 5 20 1977 146 10 35 1978 324 15 50 1979 -- 20 70 1980 -- 27 118 3\.06 The resulting return is 12%\. It is rather sensitive to a change in the tariff prevalent from 1980 onwards, as a 10% drop in the rates reduces it by about 2\.5 percentage points\. However, a 10% increase in the operating costs reduces it only by about 0\.5 percentage points\. - 61 - Annex 3 NIGERIA FOURTH POWER PROJECT COMPLETION REPORT Schedule of Supervision Missions Date of Duration Mission Months since mission days staff previous mission 12/72 12 Engineer No\. 1 Fin\. Anal\. No\. 1 Economist No\. 1 12/73 20 Engineer No\. 1 12 Fin\. Anal\. No\. 1 06/74 6 Fin\. Anal\. No\. 1 7 02/75 7 Engineer No\. 2 8 Fin\. Anal\. No\. 1 05/77 10 Engineer No\. 2 27 01/78 10 Fin\. Anal\. No\. 2 8 06/78 5 Engineer No\. 2 5 08/78 1 Fin\. Anal\. No\. 3 2 The last three missions were carried out in connection with the pre-appraisal of the Power V Project\. 
APPROVAL
P007793
R E S T R I C T E D FILE COpy Report No\. P90 This document was prepared for internal use in the Bank\. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein\. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATIONS of the PRESIDENT to the EXECUTIVE DIRECTORS on a PROPOSED LOAN to the REPUBLIC OF PANAMA for a HIGHWAY REHABILITATION AND MAINTENANCE PROJECT in PANAMA July 1, 1955 INTERNATIONAL BAN\. FOR RECONSTRUCTION AND DEVELOP1'ENT REPORT A]CD RECOiMVENATIONS CF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF PANAMA FOR A HIGHWAY REHALBILITATION AYD 1AIIYTENANCE PROJECT 1\. I submit the following report and recommlendations on a pronosed loan of $5\.9 million to the Republic of Panama, to assist in financing a program for the rehabilitation of its highway system\. PART I - HISTORICAL 2\. At the request of the Government of Panama, a Bank mission visited Panama during August and September 1954 to study a 4-year program of highway construction prepared by the h;inistry of Public llorks\. After a study of the program and of the organization of the Highway Department of the Vinistry of Public Works, the mission concluded that a program of road construction weas premature and that it would be preferable for the Government first to under- take a program for the rehabilitation of the existirg highway system and to strengthen the highway organization\. 3\. These recommendations were adopted by the late President Remon as the basis of a new national highway policy for Panama, and he created in the Ministry of Public 'Torks a Comisi6n de Caninos, Aeropuertos y 1Niuelles (CAM) which was made responsible, among other things, for all matters pertaining to highways\. The new policy is fully supported by Dr\. Ricardo Arias who succeeded to the Presidency after the assassination of President Remon earlier this year\. 4\. As a first step in strengthening the highway organization, the Govern- ment, early in 1955, hired competent consultants and placed them in executive positions in the Highway Department of CAM\. Their first task was to prepare a report entitled "A 4-Year Program for Administrative Reorganization, Per- sonnel Training, Rehabilitation and Maintenance of Public Highways," which was presented to the Bank in April 1955\. 5\. This program appeared to be suitable for Bsnk financing, and formal loan negotiations began on June 15, 1955, with Mr\. Roberto Heurtematte, Comptroller General of the Republic of Panama, as the representative of the Government\. 6\. If the proposed loan of $5\.9 million were made, the total amount of Bank loans to Panama would be equivalent to '7\.39 million\. The Bank has already made the following loans to Panama- - 2 - "1\.2 million, 7-year, 4-5/8,0 loan of September 25, 1953 to the Instituto de Fomento Economico for agricultural machinery; $\.29 million, 8-year, 4-5/8% loan of September 25, 1953 to the Instituto de Fomento Economico for the construc- tion of a grain storage plant in Panama\. PART II - DESCRIPTION CF THE PROPOSED LOAN Borrower 7\. The Borrower wc,uld be the Republic of Panama\. Amount 8\. The loan would be in an amount in various currencies equivalent to %'5\.9 million\. Purnzose 9\. The proceeds of the loan would be used to provide the Borrower with the foreign currency for the financing of equipment, machinery, materials and services required for the following project which would be carried out by CAi"i: (a) the organization and strengthening of the Highway Department of CAM so that it will be able to carry out effectively the maintenance and the construction of public highways and roads in "anama; (b) a program for the selection and training of personnel to fill the administrative and supervisory positions created in the newly organized Highway Department, including the positions now held by the consultants, and a program for the traiiiing of skilled labor at all levels in proper methods of maintenance and construc- tion of highways and the operation, servicing and repair of equipment; (c) the reconstruction of approx\.imately 645 km of primary roads and 380 km of secondary roads, including improve- ment in base, pavement, surface, shoulders, bridges ard culverts\. The roads would be widened and re-aligned where necessary\. Interest\. Commission and Commitment Charges 10\. The loan would bear interest at the rate of 4-1/4% per annum, including the statutory commission of 1%\. The commitment charge would be 3/4 of 1% per annum and would accrue from the Effective Date of the Loan Agreement or 60 days after the Loan Agreement is sie ied, whichever is earlier\. Amortization 11\. The loan would be for a period of 9 years\. The loan would be serviced by semi-annual principal and interest payments beginning May 1, 1959 and ending May 1, 1964 as set out in Schedule I of the proposed Loan Agreement\. Legal Instruments and Legal Authority 12\. A draft Loan Agreement between the Republic of Panama and the Bank is attached (No\. 1)\. The following are points of special interest in the proposed Loan Agreement: (a) Section 5\.09 would require the Borrower to retain consultants satisfactory to the Bank who would serve as executives in the Highway Derartment in such posi- tions and for such periods as prescribed by the Banlc; (b) Section 5\.10 would require the Borrower to be guided by the recommendations of the consultonts with respect to the organization of the Highway Department and policies for the recruitment, training and dismissal of personnel; (c) Section 5\.11 would require the Borrower to bind itself not to undertake or execute any major project for the construction of new highways unless it had previously satisfied the Bank that the necessary funds to carry out this projpct were available\. For the purposes of defini-' tion, a pzoject costing more than 25,000 balboas would be considered to be a major project\. The Inter-American High- way would be excluded from the provisions of this Section\. 13\. The National Assembly of Panama has authorized the'Government to contract loans abroad up to 10 million balboas or their equivalent in other currencies\. 14\. The report of the Committee provided for irn Article III, Section 4(iii) of the Articles of Agreement is attached (No\. 2)\. Local Financing 15\. In order to ensure that there will at all times be sufficient funds to meet the local expenditures of the project, notwithstanding fluctuations in the collection of revenues allocated to highwray works, the Government of Panama, on June 15, 1955, entered into an agreement with the Banco Nacional de Panama whereby the Banco Nacional will open a special line of credit, for a 4-year period, for amounts up to the sum of 250,000 balboas (ap7roximately 3 months' requirement of local funds over the 4-year period of the program)\. Its validity would have to be affirmed in the legal opinion for the purposes of the Effective Date as specified in Section 7\.01 of the proposed Loan Agree- ment\. - 4 - PART III - APPRAISAL OF TIE PROPOSED LOAN 16\. A detailed appraisal of the project (No\. 3) has been distributed (R-886)\. Justification of the Prolect 17\. Except for activities connected with the Canal and the Canal Zone, the economy of Panama is almost wholly dependent on agriculture\. The main agricultural areas are some distance from the principal consuming centers and almost all produce has to be transported overland\. 18\. The poor condition of the existing roads causes excessive wear and tear on motor vehicles, high fuel consumption and slow transport service, all of which raise transportation costs\. High transport costs seriously reduce farm prices and remove the incentive to produce\. Poor roads also force farm- ers to limit output to products which can withstand the rigors of transport\. By improving and speeding up road communications, the project would have important and far-reaching effects on agricultural production and contribute substantially to the development of Panama\. 19\. The new establishment of a highway department organized to carry out permanent maintenance and construction of highways and the training of personnel to staff such an organization should improve the effectiveness and reduce the costs of future highway maintenance and construction\. Method of Procurement 20\. All equipment and materials bought abroad will be acquired on the basis of international bidding or shopping\. Economic Situation 21\. A rerort on the current economic position and prospects of Panama (W\.H\. 39-a circulated under Secretary's Memorandum 1-225 on April 6, 1955) outlined the advances in production achieved in recent years and indicated the need for more basic investment, especially in roads and power, to support further economic development\. It pointed out that government finances had improved over the previous two years, with higher revenues and a steep reduc- tion in the floating debt\. Service on public external debt (including the loan now proposed) will average about il\.8 million over the next five years\. This would not be a heavy burden on government finance nor on foreign exchange earnings\. 22\. As indicated in the economic report, recent treaty negotiations with the U\.S\.A\. have led to agreement for an increase in the Canal annuity from $430,000 to l,930,000, besides other provisions favorable to the economy, such as greater opportunities for Panama to supply the Canal Zone market\. The new treaty has been ratified by Panama and is now awaiting ratification by the U\.S\.A\. -5- Prospects of Fulfillment of Obligations 23\. The outlook for the satisfactory execution of the project is favor- able\. The work of the consultants hired by the Panamanian Government has started in a most promising way and there is every prospect that it will so continue\. 24\. The economic benefits which can be expected from the rehabilitation of the existing road system of Panama would fully justify the exnenditure and, indeed, compare more than favorably with any equivalent investment in any other sector of the country's economy\. 25\. I have every confidence that the Borrower should be able to meet its obligations\. PART IV - COMPLIANCE -JITH TIE ARTICIES CF AGREEIENT 26\. I am satisfied that the Droposed loan would comply with the require- ments of the Articles of Agreement of the Bank\. PART V - RECOMMENDATIONS 27\. I recommend that the Bank make to the Republic of Panama a loan in various currencies equivalent to $5\.9 million for a term of 9 years, with interest (including commission) at the rate of 4-l/4A per annum and on such other terms as are specified in the draft Loan Agreement, and that the Execu- tive Directors adopt a resolution to that effect in the form attached (No\. 4)\. Eugene R\. Black July i, 1955
APPROVAL

Dataset Card for World Bank Project Documents

Dataset Summary

This is a dataset of documents related to World Bank development projects in the period 1947-2020. The dataset includes the documents used to propose or describe projects when they are launched, and those in the review. The documents are indexed by the World Bank project ID, which can be used to obtain features from multiple publicly available tabular datasets.

Supported Tasks and Leaderboards

No leaderboard yet. A wide range of possible supported tasks, including varieties of summarization, QA, and language modelling. To date, the datasets have been used primarily in conjunction with tabular data (via BERT embeddings) to predict project outcomes.

Languages

English

Dataset Structure

Data Instances

Data Fields

  • World Bank project ID
  • Document text
  • Document type: "APPROVAL" for documents written at the beginning of a project, when it is approved; and "REVIEW" for documents written at the end of a project

Data Splits

To allow for open exploration, and since different applications will want to do splits based on different sampling weights, we have not done a train test split but left all files in the train branch.

Dataset Creation

Source Data

Documents were scraped from the World Bank's public project archive, following links through to specific project pages and then collecting the text files made available by the World Bank.

Annotations

This dataset is not annotated.

Personal and Sensitive Information

None.

Considerations for Using the Data

Social Impact of Dataset

Affects development projects, which can have large-scale consequences for many millions of people.

Discussion of Biases

The documents reflect the history of development, which has well-documented and well-studied issues with the imposition of developed world ideas on developing world countries. The documents provide a way to study those in the field of development, but should not be used for their description of the recipient countries, since that language will reflect a multitude of biases, especially in the earlier reaches of the historical projects.

Additional Information

Dataset Curators

Luke Jordan, Busani Ndlovu.

Licensing Information

MIT.

Citation Information

@dataset{world-bank-project-documents, author = {Jordan, Luke and Ndlovu, Busani and Shenk, Justin}, title = {World Bank Project Documents Dataset}, year = {2021} }

Contributions

Thanks to @luke-grassroot, @FRTNX and @justinshenk for adding this dataset.

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