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Report No: 35554-NR

PROJECT APPRAISAL DOC

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IN THE AMOUNT OF SDR 4.5 MILLION (USS6.46 MILLION EQUIVALENT)

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A PROPOSED CREDIT TO THE REPUBLIC OF

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Public Disclosure Authorized (USS5.5 1 MILLION EQUIVALENT)

FOR A

WEST AND CENTRAL AIR TRANSPORT SAFETY & SECURITY PROJECT

IN SUPPORT OF THE FIRST PHASE OF THE PROJECT’S HORIZONTAL ADAPTABLE PROGRAM LENDING

MARCH 28,2006

Transport Africa Regional Office

Public Disclosure Authorized 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 authorization. CURRENCY EQUIVALENTS

(Exchange Rate Effective 3/15/2006)

Currency Unit = US$1 CFAFranc = 544.61 Guinean Franc = 4,475.00

FISCAL YEAR January 1 - December31

ABBREVIATIONS AND ACRONYMS ADB African Development Bank APL Adaptable Program Lending ASECNA Agence pour la StcuritC de la Navigation Aerienne en Afrique et a Madagascar CAA Civil Aviation Authority CEMAC Economic and Monetary Community ofCentral Africa COSCAP Cooperative Development ofOperational Safety and Continued Airworthiness ECOWAS Economic Community of Western African States EU European'Union . FAA Federal Aviation Administration () IASA International Aviation Safety Assessment (done by the FAA) IATA International Air Transport Association ICAO International Civil Aviation Organization IDA International Development Association IFFAS International Financial Facility for Aviation Safety PIE Project Implementation Entity SARP ICAO's Standards And Recommended Practices SDR Special Drawing Rights TSA Transportation Security Administration (United States) US$ United States Dollar USA United States ofAmerica UEMOA Union Economique et Monttaire Ouest Africaine WCA West and (Region) WTTC World Travel and Tourism Council Y? Yamoussoukro Decision

- Vice President: Gobin T. Nankani Country Managermirector: Mark D. Tomlinson Sector Manager: C. Sanjivi Rajasingham Task Team Leaders: Pierre Pozzo di Borgo & Charles E. Schlumberger AFRICA West and Central Africa Air Transport Safety & Security Project

Page

A . STRATEGIC CONTEXT AND RATIONALE ...... 1 1. Countries and sector issues ...... 1 2 . Rationale for Bank involvement ...... 2 3 . Higher level objectives to which the project contributes ...... 4 B. PROJECT DESCRIPTION ...... 4 1. Lending instrument ...... 4 2 . Program objectives and phases (if applicable) ...... 5 3 . Project development objective and key indicators...... 5 4 . Project components ...... 6 5 . Lessons learned and reflected in the project design...... 8 6 .. Alternatives considered and reasons for rejection ...... 9

C . IMPLEMENTATION ...... 9 1. Partnership arrangements ...... 9 2 . Institutional and implementation arrangements...... '...... 9 3 . Monitoring and evaluation of outcomes/results ...... 10 ... 4 . Sustainability...... 11 5 . Critical risks and possible controversial aspects ...... 11 6 . LoadCrediVGrant conditions and covenants ...... 12

D . APPRAISAL SUMMARY ...... 14 1. Economic and financial analyses ...... 14 2 . Technical ...... :...... 15 3. Fiduciary ...... 17 4 . Social...... '17 5 . Environment...... 18 6 . Safeguard policies...... 18 7. Policy Exceptions and Readiness ...... 19 Annex 1: Country and sector background ...... 20 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 27 Annex 3: Results Framework and Monitoring ...... 29 Annex 4: Detailed Project Description...... 35 Annex 5: Project Costs ...... 46 Annex 6: Implementation Arrangements ...... 51 Annex 7: Financial Management and Disbursement Arrangements...... 57 Annex 8: Procurement Arrangements ...... 72 Annex 9: Economic and Financial Analysis ...... 83 Annex 10: Safeguard Policy Issues ...... 90 Annex 11: Project Preparation and Supervision ...... 93 Aonex 12: Documents in the Project File ...... -95 Annex 13: Statement of Loans and Credits ...... 96 Annex 14: Countries at a Glance ...... 98 Annex 15: Current safety oversight and accident situation of air transport in WCA ...... 102 Annex 16: Country selection process ...... 103 Annex 17: MapsNo. 34661, 34662. 34663. 34664 ...... 107 AFRICA AFTTR

Date: March 16,2005 Team Leader: Pierre Pozzo di Borgo Country Director: Mark D. Tomlinson Sector: Air Transport (100%) Sector Managermirector: C. Sanjivi Themes: Air Transport Safety and Security Rajasingham compliance (P); Regional integration (S) Environmental screening category: Partial Assessment Lending Instrument: Adapt Safemard screening cqtegory: Limited impact Lending LodCredit/Grant Supplemental Project Information Supplemental ID: Team Leader: Sector ManagerDirector: Sectors: Themes: lancing Data Estimated Implementation Period (Bank FY) Commitment 1 Closing

Burkina Faso, 09/30/2006 1 12/31/2009 , Guinea, Mali

INTERNATIONAL DEVELOPMENT 0.00 7.10 7.10 ASSOCIATION - GRANT FOR GUINEA rn r- ,.c A" -.Iotal .1.3w I 35.3 I 53.w/ Content For Guarantees: [IPartial Credit [IPartial Risk [IBoth Partial Credit & Risk

Nature of Under1

Terms of IDA Guarantee:

Maturity with Guarantee: Bank Group Participation: [IIFC 11 MIGA

Project implementation period: 2006-2010 Expected effectiveness date: September 30,2006 Does the project depart from the CASs in content or other significant respects? [ ]Yes [XINO Re$ PAD A.3 Does the project require any exceptions from Bankpolicies? Re$ PAD D. 7 [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [XINO Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? [XIYes []No Ref: PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Re$ PAD D. 7 Project development objectives Ref: PAD B.2, Technical Annex 3 The project development objectives are as follows: a) Improve Civil Aviation Authorities’ (CCAs) compliance with International Civil Aviation Organization (ICAO) safety standards, b) Increase CAAs’ Compliance with ICAO’s security standards, and c) Enhance main international airports’ compliance with ICAO’s security standards. ion Re$ PAD B.3, B.4 and Technical Annex 4 The project indudes the following components:

1. : this component will y for: a) the adoption tion of harmonized aviation code and regulations and the creation of s civil aviation agencies through the provision ofconsulting services; b) the of civil aviation staff in the areas of civil aviation security and safety ts; C) the acquisition of basic communications and inspections equipments ways radios, inspection vehicle, computers. etc.), and d) the procurement of uipment (e.g., relevant ICAO’s manuals, directives, online library, training

2. This activity will involve opment of security s (national, airports and programs), provision of security equipment at the primary airports and capacity building. The main areas of focus of this program will be: a) the implementation of measures to reinforce security at the various airport accesses (identification equipment, security cameras, patrol vehicles, communications systems and reorganization ofpassenger flows); b) the rehabilitation of existing airport fences and security patrol routes; c) the rehabilitation and/or construction within existing airport building premises of crisis centers, including acquisition of necessary communication and surveillance tools to equip these centers; d) the training of airport security personnel; e) the development of airport security through the acquisition of passengers and cargo X-ray machines; f) the acquisition and rehabilitation of navigational aids and communications systems; and g) the development of financial means to finance airport security improvements (i.e., airport security fees). 3. Others: This activity, entitled “others”, is meant to encompass: a) the implementation of Resettlement Action Plans (RAPS)in conjunction with the rehabilitation of security fences at these facilities; b) the financing ofproject operating costs covering inter alia annual financing audits and day-to-day management; and c) money set-aside as non- allocated to cover any uncertainties regarding planned project activities.

Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 10 Environmental Assessment (OP/BP/GP 4.01) Involuntary Resettlement (OP/BP 4.12) Cultural Property (OPN 11.03, being revised as OP 4.1 1)

Boat3 presentation: None. CreditdGrant effectiveness: Re$ PAD C. 6.3 0 : The Administrative, Financial and Accounting Manual, in form and substance satisfactory to the Association, has been adopted by the Recipient; 0 Burkina Faso: An external auditor with qualifications, experience and terms of referenct satisfactory to the Association has been appointed by the Recipient in accordance with thc provisions of Section I11 of Schedule 2 to this Agreement; Cameroon: The Subsidiary Agreement, in form and substance satisfactory to the Association, has been duly executed on behalf ofthe Recipient and the Project Implementing Entity; Cameroon: The inistrative, Financial and Acco ing Manual, in form and substance satisfactory to the Association, has been adopted by the Recipient and the Project Implementing Entity; Cameroon: A Designated Account has been established by the Project Implementing Entity in accordance with the provisions of Section 2.04 ofthe General Conditions; Cameroon: An account has been opened by the Project Implementing Entity in a financial institution satisfactory to the Association and under terms and conditions satisfactory to the Association, and an initial deposit of CFA Francs 100,000,000 has been made by the Project Implementing Entity in such account; Cameroon: A financial management system, in form and substance satisfactory to the Association, has been established by the Project Implementing Entity; Cameroon: A record-keeping system, in form and substance satisfactory to the Association, has been established by the Project Implementing Entity for purposes of Project implementation; Cameroon: Project Implementing Entity personnel have been provided training, in form and substance satisfactory to the Association, in financial management and procurement procedures; Cameroon: An external auditor with qualifications, experience and terms of reference satisfactory to the Association has been appointed by the Project Implementing Entity in accordance with the provisions ofSection III ofSchedule 2 to this Agreement; Mali: The Subsidiary Agreement, in form and substance satisfactory to the Association, has been duly executed on behalf ofthe Recipient and the Project Implementing Entity; Mali: The President and members ofthe Directorate ofthe Project Implementing Entity have been appointed by the Recipient; Mali: The financial management system ofthe Project Coordination Unit has been revised to the satisfaction of the Association, including so as to permit the fulfillment of financial reporting requirements under this Agreement; Covenants applicable to project implementation: Re$ PAD C. 6 0 A technical and financial auditor acceptable to the Bank is appointed by not later than September 30,2006; 0 Financial report on the activities of the CAAs is ished to the Bank not later than six months after the end of each fiscal year. To this end, the report shall include statements of revenue collected, statements ofexpenses and statement on expenses relating to security and safety activities; 0 A report on the use of the airpofi security tax is ank not later than six months after the end of each fiscal year; 0 Midterm and end ofproject security audits carried out by the ICAO are provided to the Bank for analysis; 0 A report describing results of the airport crisis simulation exercise, including comments on from ICAO’s certified experts who observed the exercise is submitted to the Bank ee months ofeach annual crisis exercise. First airport crisis exercise is to be carried out by no later than June 30, 2007 with the exception ofCameroun for which the deadline is September 30th, 2007; 0 Quarterly reports containing information pertaining to rate ofillegal objects, as defined by the ICAO, seized from passengers by airlines security are submitted quarterly to the Bank starting at the time ofeffectiveness ofthe credits (Le., Burkina Faso and Mali ) and grants (i.e., Cameroun and Guinea); and 0 Copy of decree or law creating an autonomous Civil Aviation Authority is submitted to the Bank by no later than June 30,2007 for Guinea and December 3 1,2007 for Burkina Faso (i.e., does not apply to Cameroon and Mali).

A. STRATEGIC CONTEXT AND RATIONALE

1. Countries and sector issues

Today, air transport accounts for up to 40% ofworld trade by value. It plays a significant role in the economic development of countries. In Africa, where poor road, port and railway infrastructure often constrains the rapid and efficient movements of high value goods earmarked for export, air transport holds both a potential for growth and a role for the economic development of the continent. For now, however, reality has not met expectations and air services in Africa, and especially in West and Central Africa (WCA), continue to be inefficient, expensive and unreliable.

In order to address these shortcomings, African Ministers responsible for civil aviation adopted on November 14th, 1999 the Yamoussoukro Decision (YD) on the liberalization of access to air transport markets in Africa. It is enforceable continent-wide since it was endorsed by the African Union Heads of State under the African Union treaty framework in 2000. The Decision’s primary aim is to liberalize intra-&can air transport. In order to achieve this goal without compromising safety and security standards, the region Civil Aviations and Airport Authorities (CAAs) must be capable to collectively reach International Civil Aviation Organization’s (ICAO) standards in these areas. ICAO’s Standards and Recommended Practices (SARP) are complemented by Annexes 1, 6, and 8 ofthe Chicago Convention on International Civil Aviation in the case ofaviation safety, and Annex 16 in the case of aviation security.

The main safety’ issues facing WCA’s air transport sector today include the lack ofa compliant and enabling legal framework as well as a critical shortage in qualified inspection manpower (see Annex 1 for more details). In WCA, fewer than six (6) countries out of twenty-three (23) are . considered to have the required level of Civil Aviation Administration capacities. The current . situation results in the presence of “junk companies” whose operations distort the air transport . market, prevent access to the world market for local African airlines and contribute largely to WCA high accident rates. According to ICAO’s statistics, the WCA region air trans ort accident rate was thirty (30) times higher than ofthe US during the past years (see Annex 15)P .

In terms of security3: currently, fewer th five of WCA’s numerous international airports are, compliant with world standards. Indee” -nost WCA international airports lack basic access control to runways and terminals as well as adequate security procedures. This situation endangers WCA’s air transport network security, resulting in sky-high insurance costs and high internal security costs for airlines. Moreover, in a post 91’1 1 environment, it risks isolating WCA even further from main air trade flows.

Although the YD is a continent wide initiative, in WCA its implementation has resulted in the signing of an implementation memorandum of understanding as well as, in November 2001 , in

ICAODefinition of Air Transport Safety: A condition in which the risk of harm or damage is limited to an acceptable level. * In 2005 alone, out of 35 fatal accidents and the 1,269 related deaths worldwide, Sub-Saharan Africa (SSA) accounted for 13 of these accidents and 374 of these deaths or 37% and 29% of the World’s total, respectively. These figures compare to SSA’s share ofthe world’s total departure.of only 4.5%. ICAO Definition Air Transport Security: A combination of measures and human and material resources intended to safeguard civil aviation against acts of unlawful interference.

1 the creation of two Secretariat Units within the Economic Commun’ity of West African States (ECOWAS)4 and the Communaute Economique et Monbtaire d’ Afrique Centrale (CEIVUC)~. Additionally, in 2003, the Region’s ministers of Transport agreed to support the following initiatives: 1) the revision d h~onizat~onof air trans ort legal and institutional frameworks at each country level, 2) the development of a new mechanism for effective regional technical and safety regulation, 3) the creation of a regional economic regulatory framework to address competition, market access, consumer protection, and 4) the upgrading of security standards for each country as well as WCA’s main airports. In order to fund these initiatives, a scale up in donors and government support is required.

2. Rationale for Bank involvement

The Bank was instrumental in the adoption of the YD and later supported through successive regional IDF Grants the adoption of common policies in safety and air transport regulations in WCA. However, the Bank along with regional institutions as well as other international lenders had to acknowledge that most WCA States did not and would not, in the foreseeable fkture, have the financial and human resources to comply with either US or ICAO’s safety and security requirements unless external assistance were provided to em. Moreover, even when a State did prove its ability to comply with ICAO’s requirements, its capacity to maintain compliance and retain qualified personnel remained questionable as illustrated, unfortunately, by the Ghanaian CAA’s loss ofits US Federal Aviation Administration (FAA) category Icertification in April of 2005. Accordingly, the Bank in coordination with regional institutions and other international lenders adopted a comprehensive approach to globally address these problems by supporting: 1) the establishment of regional mechanisms to oversee safety and security standards in member countries and, 2) the financing ofnational safety and security support programs to enhance local CAA’s ability to comply with ICAO’s standards. This approach is in line with the Regional Integration Assistance Strategy (RIAS) for , adopted in August 2, 2001, and for Central Africa, adopted in February 6, 2003, as well as the Africa Action Plan adopted in September 6, 2005, in as much as it promotes, through regional integration, regional exchanges and economic growth.

0 Establishment of regional mechanisms: Three Cooperative Development of Operational Safety and Continued Airworthiness (COSCAP) projects were signed in 2003 and 2004 between the ICAO and the West Afiican Economic and Monetary Union (UEMOA6) countries, the ICAO and the Accord countries (i.e., Non-UEMOA countries within ECOWAS) and the ICAO and the CEMAC countries. These COSCAP projects whose implementation was initially delayed due to financing issues are now in the process ofbeing executed following the award of grants from the African Development Bank (ADB) and the French Government. Over the next 3 years, ECOWAS and CEMAC member countries will therefore benefit, at no cost to them, from technical assistance in the area of aviation safety. This assistance, however, will be restricted mainly to specific training and technical advisory services as COSCAP projects’ resources are limited (i.e., each project’s budget is less than

The ECOWAS countries are , , , , , Burkina Faso, Guinea, Guinea-, , Mali, Cote d’Ivoire, , , , ’ The CEh4AC countries are Cameroon, , , , , The Republic ofCongo, The LIEMOA countries are Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo

2 US$4 million) and their scope currently excludes aviation and airport security. Nevertheless, the COSCAP projects represent an important first stepping stone towards the creation within UEMOA, ECOWAS and CEMAC of regional aviation security and safety agencies whose future sector oversight roles will be paramount to ensuring that each country CAAs achieve and maintain minimal compliance with ICAO’s standards. 0 Financing of national safety and security components: In spite of the long term goal of establishing regional aviation safety and security agencies in WCA, the enforcement of aviation safety and security will remain in the foreseeable future a national endeavor, if only for legal reasons7. Accordingly, it is critical that known shortcomings affecting national CAAs aviation safety and security oversight capacity as well zis airport security personnel and infrastructure be addressed at a national level because regional aviation safety and security reflects each country’s achievements in these areas. This critical linkage between national and regional aviation safety and security is confirmed by a review of passenger traffic flows to/from selected WCA countries that shows that in 2004, with the exception of Nigeria, more than 75% of all WCA passengers were regionally and internationally bound (see Table 1 below).

Country

I World Bank, 2006 Table 1: Passenger traffic distribution in 2004 at selected WCA airports

In order to implement the approach described previously, the Bknk will take on the responsibility to finance the regional project’s national security and safety components as its local presence, ongoing transport projects and flexible lending instruments make it well suited to tackle the project’s financial tie., security investment) and institutional issues (Le., security arrangements, CAA’s reforms regional pooling of resources) simultaneously in most WCA countries. Meanwhile, support from other donors (e.g., the European Union (EU), ADB) and sector specific organizations (e.g., ICAO, US FAA) will be directed at ensuring the success of the COSCAP projects as a necessary initial step towards the creation of regional security and safety agencies. The Bank, however, will welcome any initiatives from others donors to finance the project’s national activities as it will not be able to answer requests for financing from all WCA countries at once.

According to the 1944 Chicago convention, aviation regulation remains a sovereign activity. Until this approach is altered, air safety and security will continue, to be managed at national levels.

3 s involvement in this project is also warranted by: 1) the project’s economic e support it lends to further regional integration. Admittedly, any project’s hard to quantify. In the present case, however, there is a clear linkage ts in air transport security and safety and lower travel costs (see hex9). . Indeed, air carriers registered in countries with higher safety and security standards benefit from greater market access that stimulates competition. In WCA, where air service frequency is pact could be especially important on tourism trade, a key sector for the elopment. Additionally, improved safety and security will translate into e WCA countries of each other’s carriers; thus strengthening regional es, the countries involved will, be#adoptingand using hamonized aviatktion which will enhance the safety and security of the air transportation f harmonization could not be achieved if the project were not done at a regional level. h light of the above, there is ample evidence that the project meets all the Bank’s regional eligibility criteria as: 1) it involves more than three countries, 2) its economic and social benefits amed carriers services and lower transport costs that promote national and regional tourism and trade growth, 3) it supports ongoing regional initiatives to enhance aviation security and safety levels within WCA countries &e., COSCAP projects) which, in turn, enhance the implementation ofthe YD (ie., pan African air transport liberalization), and 4) it funds national activities which have clear externalities as overall WCA countries’ air safety and security depend s achievement in these areas and most WCA countries’ air traffic is a significant intra regional market share.

3. Higher level objectives to which the project contributes

The project higher objective is to create a safe and secure environment for air transport in WCA that will allow African airlines to competitively access regional and worldwide markets with the to support sustainable economic growth region-wide. This higher objective is the New Partnership for Africa’s Development (NEPAD) Infrastructure Short an, the Yamoussoukro Decision as well as the Bank’s Africa Action Plan.

DESCRIPTION

Since the readiness and needs ofthe 23 WCA countries to receive support from the project vary significantly (see Annex 16), it was decided to select a horizontal Adaptable Program Lending to allow for countries to join the project under three (3) successive phases bility criterion. These criterion are: 1) the creation of an administratively and mous national civil aviation agency, 2) the use of aviation security andor e purpose of financing its civil aviation agency and, 3) the attainment of e of compliance level with ICAO’s standards in the areas of aviation security as improved airport security.

4 The programasmain objective is, as indicated above, to create a safe and secure environment for CA project. Accordingly, while the program will be initiated un , Cameroon, Guinea and Mali, it will, within three years of commencement, ional phases. Phase I1 may include Benin, Chad, Cote d’Ivoire, Gabon, Nigeria, Senegal and The Gambia, for an estimated investment cost of US$ 59.4 million (see Annex 16) while Phase I11 may encompass the Central Afiican Republic, a1 Guinea, Ghana, Guinea Bissau, Liberia, Sierra Leone, Sao Tom6 & Principe estimated investment cost of US$ 60.1 million (see Annex 16). It is recognized however, that since individual countries will have different time frames for meeting the regional commitments for this financing, some countries may come forward sooner than others, and should not be Constrained by this phasing priority. Furthermore, since a set of standardized project activities in aviation security and safety and airport security will be used to integrate any country interested in the program, every joining nation will do so under similar terms. The same logic will apply to the program admissibility criteria that were made, by design, to be easily achievable. The intent in this case was to foster the broadest possible participation in the program of WCA’s 23 countries as it was recognized that the larger the number ofparticipants, the more potent the program’s impact on regional aviation security and safety.

3. Project development objective and key indicators

g Project Development Objectives (PDOs) are, within each participating country, to: 1) Improve CAAs’ compliance with ICAO’s safety standards, 2) Increase CAA’s compliance with ICAO’s security standards, and 3) Enhance main international airports’ compliance with ICAO’s security standards. In order to measure attainment of these PDOs, the following key outcome indicators whose target values are presented in Annex 3 will be used for each country participating in the project:

0 PDO 1 - Improve CAA’s compliance with ICAO’s safety standards: 9 Compliance rate with ICAO aggregate safety standards based on ICAO’s audits; P Percentage oftechnical personnel in compliance with ICAO’s safety standards; and P Total CAA’s budget amount. 0 PDO 2 - Improve CAA’s compliance with ICAO’s security standards: P Compliance rate with ICAO’s aggregate security standards based on ICAO’s audit; P Percentage of CAA’s ICAO’s certified security inspectors trained during the last three years; 9 Level ofCAA’s budget dedicated to security; and P National Security Plan compliance with ICAO’s standards. 0 3 - Enhance main international airports’ compliance with ICAO’s security standards: 9 Percentage ofairport security personnel with three or more years ofexperience; > Number of serious problems recorded during annual airport crisis exercises; and P Percentage of embarking passengers stopped in possession of illegal objects, as defined by the ICAO, by airlines security personnel.

Additionally, when applicable, the following longer term key outcome indicators will be used to e project’s impact:

5 0 CAA is certified category 1 by the US FAA; 0 Main international airports are certified for direct flights to the United States by the US Transport Security A inistration (TSA); 0 No airlines registered in participating countries is listed on the European Union’s black list; and 0 Overall WCA airline accident rate has decreased.

Few outputs indicators will be used for project monitoring purposes as the project’s main investment focus is on CAAs’ personnel skills and airport security equipment rather than works and the level of investment dedicated to that lat‘ef‘purpose is very limite&fi.e., less than US$ 4 million per country for the initial four countries) as it covers only rehabilitation of existing airport fences andor ai ort security patrol routes.

4. Project components

The project supports the ongoing development of a regional Air Transport Program within the context ofthe YD implementation. As such, it complements the work that will be undertaken by regional institutions (with donors’ support) in the area of Air Transport Economic Regulation harmonization, while primarily focusing on airport and aviation safety and security. The two Secretariat Units located within ECOWAS and CEMAC will have overall &e., regional and national) project management responsibilities in order to promote effective coordination and harmonization at the regional level. However, national project component will effectively be implemented independently by designated entities within each country. Furthermore, the project will be financed through the regional program, with country allocations funding one third (1/3) of its cost and regional funding financing two thirds (2/3) of its costs in recognition of the . positive externalities ofthe project (see Table 2).

Out of the 23 eligible countries that comprise the WCA region, seven were initially excluded in 2004 during the selection process. This was done either because these countries were evaluated as having back then sufficient national capacity to meet ICAO’s safety and security standards (i.e., Senegal, Ghana, Nigeria and Cape Verde) on their own or were simply under disbursement suspension from Bank’s projects (i.e.. C6te d’Ivoire, Togo and Central African Republic), Among the 16 remaining countries, -: Burkina Faso, Cameroon, Guinea and Mali were selected to participate in the project Phase Ibased on a six-criterion evaluation matrix’ (see Annex 16). The remaining countries were judged at the time ofproject design to have CAAs too weak to participate in the project with a reasonable chance ofsuccess or/and did not express any interest in joining the project. Accordingly, they were put either in the second or third project phase with a view ofjoining the project in or after 2007. By then, it is expected that donors’ support to the regional institutions will focus primarily on supporting the transfonnation of the COSCAP initiatives into sustainable regional security and safety oversight agencies while national project components will likely remain unchanged.

These factors are: 1) Aviation sector financial capacity, 2) aviation sector safety ratings, 3) aviation sector security ratings, 4) country’s need for project assistance, 5) project expected impact on aviation activities growth, and 6) country’s capacity to implement.

6 4.1 Strengthening of CAAs safety and security oversight capacities (US$7.20 million)

8 As shown in Table 2, below, overall cost ofthis project component will be US$ 7.20 million and will finance each country's CAA technical assistance necessary mainly for:

0 The adoption and utilization of harmonized aviation code and regulations and the creation of autonomous civil aviation agencies' through the provision ofconsulting services; 0 The training of civil aviation staff in the areas ofcivil aviation security and safety oversights; 0 The acquisition ofbasic communications and inspections equipments (e.g., two-ways radios, inspection vehicle, computers, etc.), and 0 The procurement of library equipment (e.g., relevant ICAO's manuals, directives, online library, training materials, etc.).

World Bank, 2006 Table 2: Indicative project costs (in US$ millions)

4.2 Improvements in airport security and safety standards (US$23.25 million)

This activity will involve establishing appropriate aviation security legislation, development of security programs (national, airports and airlines programs), provision of security equipment at the main international airports, replacement of navigational aids at the primary airports and capacity building. The main areas of focus ofthis program will be:

0 Implementation of measures to reinforce security at the various airport access (identification' equipment, security cameras, patrol vehicles, communications systems and reorganization of passenger flows); 0 Rehabilitation ofexisting airport fences and security patrol routes; 0 Rehabilitation andor copstruction within existing airport building premises of crisis centers, including acquisition of necessary communication and surveillance tools to equip these centers; 0 Training ofairport security personnel; 0 Development of airport security through the acquisition of passengers and cargo X-ray machines;

These new agencies are to be created by no later than January 1'' 2007 in Burkina Faso, and Guinea. Cameroon Civil Aviation Agency is already autonomous both financially and administratively. Mali Civil Aviation Agency was created by Decree in December 2005 but is not yet functional. Creation of these agencies are at the same time a COSCAP project legal covenant at the regional level, and a legal covenant of the World Bank IDA Credits.

7 a Acquisition and rehabilitation ofnavigational aids and communications systems, and 0 Development of financial means to finance airport security improvements (i.e., airport security fees).

4.3 Others (US$4.62 million)

This activity will cover mostly:

0 Implementation of Resettlement Action Plans (RAPS) in conjunction with the rehabilitation ofsecurity fences at these facilities; 0 Financing of project operating costs covering inter alia annual fidancing audits and day-to- day management; and 0 Money set-aside as non-allocated to cover any uncertainties regarding planned project activities.

Potentially adverse social impacts to be induced by the implementation ofmme stringent airport premises access rules were identified in social assessments. The impacts are contained within the fenced security perimeter ofthe airport property and limited to three types: a) impacts on illicit income generating activities (vegetable gardening), b) impacts on prohibited access to tarmac (trespassing of tarmac), and c) .impacts on a couple of housing structures. These impacts were . identified at , and Yaounde international airports in Guinea and Cameroon, respectively.

The expected cost of the all three RAPS is US$ 805,000 with US$ 125,000 for the airport of Conakry, US$ 38,000 for the airport of Douala and US$ 642,000 for the airport ofYaounde. In Cameroon, US$ 591,000 of the RAPS’ costs will be borne by the local CAA while in Guinea Conakry airport’s RAP cost will be paid for by the Bank,

5. Lessons learned and reflected in the project design

Since this is the first regional aviation security and safety project in the Africa region, no precedents exist that could be used to rely on during the project design phase. However, previous experience with sector project implementation records, including other regional projects in other sectors (e.g., AbidjadLagos corridor HIVlAids project) in WCA countries still provide a number of useful lessons. Among them are: a Project design must reflect the intent, interest and priorities of the beneficiaries and the stakeholders to ensure ownership of the project and particularly the reform processes. Evidences of this ownership are found in the establishment of three COSCAP agreements in WCA covering all four countries included in this project as well as regionally backed reforms (by UEMOA, ECOWAS and CEMAC) of existing civil aviation agencies. a Project design must be coordinated with other donors in order to ensure consistency in the goals and expected outcomes of projects within the same sector. The project was developed in close cooperation with all the donors agencies involved in the aviation sector in WCA. As such, it reflects consistencies of views and objectives as they pertain to the civil aviation sector ofAfrica.

8 0 Project .'design must emphasize capacity building of project agencies. Experience in WCA countries confirms that sustained project impact depends on well-managed, well- financed executing agencies. The proposed project reflects this preoccupation as it seeks to ensure long term sustainability of results through the creation of adequately financed and staffed CAAs.

6. Alternatives considered and reasons for rejection

The only alternative to the regional, approach recommended to develop adequate air transport safety and security would have been an individual country by country approach. Similar examples of the former type of approach (e.g., in Central America) have shown that a regional approach is indeed the preferred option as small countries are unable to gather on their own the necessary resources to meet ICAO's security and safety standards. Furthermore, by linking national activities to regional ones, more incentives are given to Governments to carry out necessary sector reforms.

C. IMPLEMENTATION

1. Partnership arrangements

The project regional component (i.e., COSCAP projects) will hlly be financed through grants obtained from other bi or multilateral donors. As shown in Table 3, the grant financing is already secured. The national components will also benefit from support ofbilateral technical assistance or aid, especially that of the US in the countries which are members ofthe Safe Skies initiative (Mali, Cameroon) and ofFrance when there is an existing cooperation in Security.

World Bank, 2006 Table 3: COSCAP projects financing sources

2. Institutional and implementation arrangements

9 ion of the project regional component (Le., COSCAP) will be overseen by the e two regional organizations: ECOWAS and CEMAC (see Figure 1) while ation of the national components will be managed by existing national ion Entities (PIES) in Burkina Faso Mali and by local CAAs in Guinea se of Burkina Faso and Mali, tec a1 management of the project, as in Guinea, will be handled by local CAAs as they possess unique technical f aviation. It was decided to rely on existing transport PIEs, whenever these existed, in order to reduce project disbursement and financial risks. This decision also reflected the need to mitigate upcoming project management capacity uncertainties related to the transformation of these CAAs into autonomous Civil Aviation Agencies (Le., in Burkina Faso and Guinea) during project implementation, in 2007,.

cia1 and procurement assessments for the CAAs and PIEs have resulted in the plans designed to address the shortcomings identified in their respective ement capacities (see Annexes 7 and 8). Disbursements will be centralized in each case in one designated account managed by the national implementing agency. Progress reports for each agency will be submitted to the overseeing ministries (i.e., transport ministry) who will transmit them to the Bank as specified in each country Project Implementation Plan.

International

World Bank, 2C Figure 1: Project institutional and financial relationships

The credits in Mali and Burkina Faso and the grants in Cameroun and Guinea include the provision for retroactive financing of S R 190,000,220,000, 5 10,000 and 245,000, respectively.

10 These amounts will be used to finance eligible expenditures, excluding works, incurred before credit and grant approval on or after October lst,2005.

g and evaluation of outco

The evaluation of outcomes will be done primarily through ICAO’s safety and security audits, although in some cases like airport security, project impact will be measured using data collected by each CAA (see Annex 3 for details). The participating countries will share ICAO’s audit reports with the Bank. In order to preserve the confidentiality of the data presented in these audits, however, the indicators used by e Bank will only assess globally each country’s , compliance with ICAO’s safety and security standards rather than identify individually the standards that have not been complied with. Nevertheless, discussions held with governments during the project monitoring will cover specifically standards that have not been complied with, so as to secure the projected improvement in overall compliance rates. Every participating country will get at least two ICAO’s safety and security audits at project mid-term and at project closing.

4. Sustainability

The key success sustainability factors are: (i)institutional reforms have been implemented (e.g., creation of autonomous Chis), (ii)the necessary safety and security infrastructure and oversight capabilities have been established in the form ofpotent national and regional safety and security agencies, (iii)appropriate financing mechanisms (e.g., user fees) have been developed and adopted to sustain local and regional institutional oversight and securityhafety infrastructure capacities. These factors are translated into project outcome indicators and legal covenants in order to secure project long term sustainability (see.Annex 3 and Section 6.4).

5. Critical risks and possible controversial aspects

The primary risk concerns the implementation capacity of some CMs. This is particularly true in cases where institutional reform has to take place and autonomous CAAs are not yet in existence. This issue has been addressed by designating implementing agencies with a proven, record in previous Bank-financed projects to cover the fiduciary aspects of project implementation, or by requiring substantial strengthening in these agencies procurement and finance staff capabilities. Accordingly, this risk is rated as moderate.

Another risk is the limited ability of CMs to aggressively enforce security and safety national operators such as airlines and airports. Fortunately, CAAs leverage in these areas will be strengthened by the creation of regional aviation security and safety agencies. Indeed, the African Development Bank (ADB) grant provided to ECOWAS, UEMOA and CEMAC to finance the three COSCAP projects in WCA requires the creation by June 2008 of three regional safety agencies. A subsequent grant to finance COSCAP activities centered on aviation security is also programmed with a similar PDO (i.e., creation of regional security agencies). Finally, the current crackdown by European nations on unsafe airlines (e.g., suspension in September 2005 of ’ access to the French airspace) is forcing

11 African governments to take aviation security and safety seriously. Nevertheless, this risk is rated as substantial.

An additional risk concerns the ability of CAAs to achieve full administrative and financial autonomy so as to ensure project sustainability. Full autonomy of CAAs is both a PDO of the ADB grant to ECOWAS, UEMOA and CEMAC as well as of this project. Furthermore, UEMOA’s directive imposes on Burkina Faso and Mali the creation of autonomous CAAs before the end of 2005. Finally, as shown in Annex 3, one of the monitoring indicators for this project will be the proper use of existing or planned aviation security taxes to finance security related costs for airpork and CAAs alike. Accordingly, this risk was rated as moderate.

A final risk is attributable to the social impact that tougher airport access rules can have on local populations. To mitigate this risk which has been identified at Conakry, Douala and Yaoundk international airports, detailed social impact studies as well as RAPShave been carried out. Furthermore, airport security perimeter footprints have been redefined to limit the size, and thus the impact on local populations, of the securitized areas. These mitigations measures have lowered this risk significantly at all three targeted airports. Therefore, this risk is rated as moderate.

. Based on the ratings given to the four above listed risks, overall risk for the project is rated as moderate.

6. Loan/Credit/Grant conditions and covenants

6.1 The conditions for negotiations of the IDA credits

None.

6.2 The conditions for Board approval

None.

12 for effectiveness of the IDA creditdgrants (above standard effectiveness fied in the General Conditions)

Burkina Faso

Imdementincz Entitv

has been made

The conditions for creditdgrants effectiveness are applicable on a country by country basis. As .such, as soon as a country has fulfilled all its conditions ofeffectiveness, it will be entitled to initiate its own project disbursement activities. Additionally, in order to mitigate implementation riskddelays, each country has been given up to 120 days to lift any ofits conditions for credib'grant effectiveness instead ofthe usual 90 days. Accordingly, it is expected that the conditions listed in table 4 will be lifted prior to September 30,2006 -credit/grant deadline applicable to all countries.

6.4 Legal covenants

13 These covenants will apply to each country participating in the Phase Iof the project. They are:

cal and financial auditor acceptable to t is appointed by not‘ later than

Financial report on the activities of the CAAs is hed to the Bank not later than six months after the end of each fiscal year. To this eport shall include statements of revenue collected, statements of expenses and statement on expenses relating to security and safety activities; A report on the use of the airport security tax is shed to the Bank not later than six months after the end of each ff scal yew; Midterm adend of project security audits carried out by the ICAO are provided to the Bank

cribing results of the airport crisis simulation exercise, including comments on the report from ICAO’s certified experts who observed the exercise is submitted to the Bank within three months of each annual crisis exercise. First airport crisis exercise is to be carried out by no later than June 30, 2007 with the exception ofCameroun for which the deadline is September 30th, 2007; Quarterly reports containing information pertaining to rate of illegal objects, as defined by the ICAO seized from passengers by airlines security are submitted quarterly to the Bank starting at the time of effectiveness of the credits (i.e., Burkina Faso and Mali ) and grants (i.e., Cameroun and Guinea); and Copy of decree or law creating an autonomous Civil Aviation Authority is submitted to the Bank by no later than June 30, 2007 for Guinea and December 31, 2007 for Burkina Faso (i.e., does not apply to Cameroon and Mali).

D. APPRAISAL SUMMARY

1. Economic and financial analyses

The need for expanding and improving air services and markets in Afiica, to which this project will contribute, has been acknowledged by the NEPAD. It is recognized that improvements and expansion of aviation infrastructure can make a significant contribution to facilitating inward investment in tourism and developing non-traditional exports with relatively high value added content in Africa. These cannot take place, however, without adequate security and safety of aviation operations. Accordingly, this project has the potential to indirectly impact the long term macro-economic growth prospects of A can economies by: a) ensuring the sustainability of other investments in the sector (e.g., airport facilities expansion, airlines services deregulation), b) promoting tourism activities, c) enhancing overall investment climate (Le., inward investment levels), and d) expanding exports trade.

While Annex 9 details these potential impacts, it is necessary to underscore that among all ofthe world’s regions, Africa is the most dependent on aviation services when it comes to tourism activities with, according to the World Travel Tourism Council (WTTC), almost three (3) million direct and indirect tourism jobs supported by air services in 2004. In the initial four countries covered by the project, 192,000 jobs and US$ 1.2 billion in annual tourism revenues are linked to the safe and secure operations of air carriers (see Figures 2 and 3 in Annex 9).

14 Additionally, anywhere from 5:l to 8.0% ofthese four countries’ total capital investment depend . on tourism activities (see Figure 4 in Annex 9). Likewise inward investment levels as well as international market access to WCA countries high value perishable agricultural goods such as cherry tomatoes and flowers are highly affected by e level of security and safety of airlines operations to/from and within WCA. As such, the project can be viewed as an important building stone in the overall economic development strategy ofthe WCA countries.

2. Technical

Activities to be funded under the project have been divided in the following seven categories:

CAApersonnel training; CAA equipment; Aviation communicatiodnavigational aid equipment; Airport passengers, cargo and luggage screening equipment; Crisis center equipment; Airport infrastructure; and Miscellaneous.

CAA personnel training

This activity will entail training in: a) aviation security, b) aviation safety, c) airworthiness issues, d) pilot certification, e) screening equipment technology know-how and maintenance, f) information technology as well as English (for the francophone countries). In order to ensure maximum impact a “train the trainers” philosophy will be used whereby a selected few personnel will be identified to receive training so as to become effective inspectors and trainers in their . respective field. This will allow them to disseminate their knowledge to other members of the . CAA and security personnel deployed at the airports. Such approach will not only ensure that a . critical number of CAA employees will have basic skills to properly enforce ICAO’s standards but also avoid that no a single individual has a specific knowledge within each CAA. Training under items a) and d) may be extended to airport authority or security personnel, who may not always be part of CAAs.

As shown in Table 5 below, the intens 19 sf the training required will vary from one CAA to another based on already existing personnel skills.

Total project cost for this activity is estimated at US 2.75 million. World Bank, 2006 Table 5: Project cost by activity category and by country (in US $ millions)

Most ofthe equipment that will be acquired under this project category will be for setting up or strengthening technical libraries, training centers and IT/computer networks. Additionally, personnel access control systems as well as patrol and inspection vehicles will be purchased to enable CAA inspectors to carry out their missions.

Overall cost for this activity is estimated at US$4.35 million (see Table 5).

. Aviation equipment

Aviation equipment will be oftwo different kinds. It will either entail communication equipment for CAA personnel or cover navigational aids including GPS based approaches systems, control tower communication system and electronics. Most of that equipment will be installed in non- ASECNA countries (i.e., Guinea and the Gambia in phase 2) as CAAs in these countries are also responsible for air traffic control functions unlike their ASECNA counterparts.

Total cost for this activity is estimated at US$2.55 million (see Table 5).

Screeninv eauipment

In order to strengthen airport security a significant number of screening equipment for passengers, luggage and cargo will have to be either replaced or installed at the project countries’ main airports. About half ofthe total investment cost ofthis activity is earmarked for Cameroon as this country has two ofthe six main international airports (i.e., Douala and Yaound6) included in the project (i.e., the other ones are Conakry, , Banjul and airports). Investment take into account the heavy investment already supported by bilateral donors after September 11 (US essentially).

Total cost for this activity is estimated at US$4.65 million (see Table 5).

Crisis centers

Field missions have revealed that none of the airports surveyed either had a crisis management center or a properly equippe one. Accordingly, it was decided to include funding in the project to create or upgrade each international airport crisis center in order to meet ICAO’s requirements on this issue.

Total cost for this activity is estimated at US$2.40 million (see Table 5).

Airport infrastructure

Airport infiastructure deficiencies are one of the major causes why the airports included in this project do not currently meet international security and safety standards. Indeed, investment

16 needs were found to be particularly dire when it 'came to airport fencing, closed circuit television monitoring systems, airport outside lighting systems, remote aircraft parking and security patrol routes around the airport perimeter.

Total cost for airport infrastructure upgrade is estimated at US$ 13.75 million (see Table 5).

Miscellaneous

This last project cost category covered various items such as consulting services related to CAA reform and capacity strengthening, definition of GPS approaches; financial audits of CAA accounts, ICAO's audits, acquisition of aviation support services and equipment such as meteorological ones, RAPSas well as unallocated fimds to cover any variances in future project - investment and acquisition costs.

Total cost for these items is estimated at US$4.62 million (see Table 5).

3. Fiduciary

The overall assessment of fiduciary risks for this project has been rated as moderate. Although, this rating hides differences among each country risk ratings (see Table 6 below), whenever fiduciary risks have been deemed substantial in a country, specific actions have been recommended (see Annexes 7 and 8) and made a condition ofcredit effectiveness.

World Bank, 2006 Table 6: financial and procurement risks assessment

Implementing agencies will be responsible for reporting (including preparation of FMRs) to both Governments and the World Bank their respective project activities.

4. Social

Potentially adverse social impacts to be induced by the implementation of more stringent airport premises access rules have been identified in social assessments. These impacts are contained within the fenced security perimeter of each airport property and limited to three types: 'a) impacts on illicit income generating activities (vegetable gardening) and b) impacts on prohibited access to tarmac (trespassing of tarmac); c) impacts on a couple of housing structures. These impacts were identified at Conakry, Douala and Yaounde international airports in Guinea and Cameroon, respectively. Actions taken to mitigate the impacts include: social impact assessment and preparation of ResettlementRehabilitation Action Plans (RAP) for all three airports. These assessments were disclosed by the Bank's Infoshop in November 2005.

17 In Conakry; Guinea, the social assessment identified 280 individuals growing vegetables inside the fenced security premises of the airport. Their farming, constitute key income generating activities for their livelihood as revealed by a social assessment. The RAP has made provisions

for compensation based on replacement value of harvest to be lost with all 280 farmers to be I compensated. In addition, the RAP makes provisions for vocational training of project affected persons (PAPS) so as to enable them to acquire skills in other income generating activities. In this later case, particular attention will be given to elderly and female headed households.

Total estimated cost for the RAP is US$ 125,000. Public consultations with key stakeholders (community leaders, local government officials, project affected persons and airport officials) were carried out prior to the social assessment. Additional public consultations were conducted during the social assessment. A Non Government Organization (NGO) carried out the social assessment and likewise, the preparation of the RAP. An NGO will also provide the vocational training planed in the RAP. In Douala, Cameroon, the delineated and partially fenced security perimeter of the airport property was found to host few activities that were not related to air transport. Adverse social impacts ofthe project are limited, therefore, to one residential house and an illicit access trail to a graveyard. A RAP has been prepared with total estimated cost for the mitigation measures listed in the RAP ofUS$ 38,000. Public consultations with key stakeholders (community leaders, local government officials, project affected persons and airport officials) were carried out prior and during the social assessment.

In YaoundC, Cameroon, the airport is located outside the city, in contrast to Conakry and Douala. The social assessment established that adverse impacts of the project will include: termination of trespassing of tarmac by the populations living in neighboring villages and the closing of a . contested and partly demolished Virgin Mary Sanctuary located inside the security fence of the airport. Mitigation measures listed in the RAP include: a) an eight kilometers airport bypass earth road and, b) the relocation ofthe sanctuary to a nearby church, about 1 km from the airport fence. Estimated cost for the mitigation measures is US$ 642,000. Public consultations with key stakeholders (community leaders, church officials, local government officials, project affected persons and airport officials) were carried out prior as well as during the social assessment. The access road will be funded by the Government as a contribution to the project.

5. Environment

No sensitive environmental issues will be raised by the project impIementation as construction activities will only cover: a) refurbishing ofexisting space in airport and CCAs buildings as well as b) rehabilitation of existing airport fences. However,. all construction activities will be subjected to mitigation plans to reduce the adverse impact on construction personnel, local populations and the environment.

6. Safeguard policies

, The proposed category is B. OPBP 4.01.The environmental impacts are not expected to be “significant” and a full EA is therefore not required. Regarding Involuntary Resettlement (OPBP 4.12), RAPSwere prepared as part ofthe project preparation work for YaoundC, Douala

18 and Conakry airports. The Yaounde RAP proposes as one of its medium term improvement measures the cpnstruction of an 8-km unpaved road to maintain access to the city center foF population living near the airport fence once the current access route is closed by the rehabilitation of the ai ort fence. An assessment of the potential sca e of the environmental impacts that will be generated by this new road will be carried out before notice to proceed for the road construction is issued. The initial survey carried out by the Government of Cameroon as part of the follow up of the RAP has not led to the identification of any wildlife and sensitive natural habitat issue in this peri-urban area, nor to that of resettlement. Likewise, the relocation of a religious shrine 1 km from airport fencing is to be funded at Yaoundt airport (OPBP 4.1 1) and was covered in the Yaoundt RAP study. The plans for addressing cultural property will be prepared and disclosed as part ofthe EA Report and RAPS.

7. Policy Exceptions and Readiness

The project does not require any exceptions fiom Bank policies.

19 Annex 1: Country and sector background

The 23 countries of Western and Central Africa represent a total land area of over 9 million square kilometers, i.e. about the size of Canada, with a combined population of281 million, i.e. about 4.5 % ofworld population. Most countries belong to the low income group, with per capita national incomes ranging from US$ 130 (Sierra Leone) to US$600 (CGte d’Ivoire). Only two countries, Cape Verde and Gabon, have a per capita income in excess ofUS$ 1,000.

1. The air transport market

As the air transport market is linked to the volume of the economy, traffic genera&ion is rather low in the Region; the countries with the highest per capita and global income (or GDP) are also those where the higher air traffic figures are recorded.

Domestic air transport markets

The domestic air transport market is non existent or marginal in some ofthe smallest countries of the sub-region, with the exception ofthe island states such as Cape Verde. Other countries have a limited domestic air transport market; only one country, Nigeria, has a really important domestic air transport industry.

Due to the lack of comprehensive statistics about regional air traffic estimates have been provided. The highest volume of regional traffic for the year 2004 is recorded in Senegal, with more than one million regional passengers, followed by and Mali. Nigeria generates less regional traffic than Mali, Ghana or Cameroon, probably because the size of its economy makes it more self-sufficient than its neighbors’; other factors may be security and facilitation problems as well as the weakness of Nigerian flag carriers on the regional market. Among individual routes, . - comes first with about 200,000 passengers. Other routes with sizeable traffic . volumes are Dakar-Bamako, Dakar-, Bamako-Abidjan; and Douala-. Actually, three high traffic density areas emerge: the Lagos-Accra--Banjul corridor; the Dakar- Bamako-Abidj an corridor and the Douala-Libreville-Pointe Noire corridor. By contrast with these high traffic density areas, traffics in the Sahel area and in Central Africa’s landlocked countries are minimal. Economic links are the main driving force behind the inter-state market. Non-business or government related ai. ~rdsffic is restricted to individuals in the higher income bracket.

The collapse ofAir Afrique, subsequent abolition ofbarriers to market entry set by the Yaoundk Treaty, and the entry into force ofthe Yamoussoukro Decision affected the economic context of inter-state air transport but did not substantially alter these traffic patterns.

20 Continental markets

Traffic with North Africa has developed steadily, capitalizing on traditional trade links (especially between and Senegal) and common culture. Maghreb airlines also offer attractive alternatives for onward connections to , North America and the Middle-East. However, traffic volumes remain modest.

The major routes with Southern Africa traffic are to and from . Traffic with Eastern Africa comprises an important proportion ofconnecting traffic continuing to the and South Asia.

Intercontinental market

The intercontinental market is dominated by the traffic flows to and from Europe. It has steadily increased over the recent years at an average annual growth rate of nearly 12%, Le. about the double of the world average during the same period. The collapse oftwo ofthe Region’s major airlines, Air Afkique and Nigeria Airways, may have affected individual routes but had no negative impact on total traffic. Elimination of services on some routes was quickly substituted

21 by alternative routings, demQnstrating that there is some degree of competition between the carriers (at least on markets served by more than one long haul carrier).

B The current overall traffic volume with Europe is estimated at about 4.6 million passengers annually. The country with the largest air traffic with Europe is Nigeria (just under one million passengers p.a.), closely followed by Senegal, (over 800,000 annual passengers). Cape Verde ranks third with about half a million passengers, followed by Ghana. All other countries trail behind with traffic volumes under 300,000 Passengers and most under 100,000. The first 4 countries (Nigeria, Senegal, Cape Verde and Ghana) account for about two-thirds of the total traffic recorded between Europe and the Region’s 23 countries.

Among the European countries with scheduled air links with the Region, ranks first with about 2 million passengers, i.e. just below the 50% mark; UK is second with about one million, and Portugal third with about 400,000 passengers. France-Senegal and UK-Nigeria are the two major routes with over one-half million passengers. CGte d’Ivoire has lost its traditional rank among the West African states.

Tourism traffic is important on routes to Senegal, the Gambia and Cape Verde and remains marginal elsewhere.

The Middle-East market is growing, especially with the increasing role ofDubai as a trade hub between West Africa and Asia. A large number of charter flights is also operated every year during the Hajj period bilgrimage to ). Much ofthe traffic with the Middle-East is carried as sixth freedom via European or North African connections, traffic data based on direct air services tend to underestimate this market. Much ofthe traffic with the Americas is also carried via sixth-freedom connections. Direct traffic has fallen down because all major US carriers phased out their services to the Region whereas and Nigeria Airways, once the Region’s major operators on the transatlantic route, disappeared from the market. South Afr-ican’s fifth freedom services provide the major direct link between the Region and North America.

22 Total air traffic of the 23 states 11 million passengers p.a., (without double-counts) of which about 9 mil~~onon international routes, i.e. less than 2% of the World total Out of this total, about 5 million are recorded inside the region: 3 million as inter-state and 2 million as domestic. Nigeria’s domestic traffic is 3 to 4 times larger than its traffic with the rest ofthe Region. Long haul traffic totals 6 million, of which Europe represents two-thirds (4.6 million) and the rest of Africa about one million.

Fares and costs

Airfares in the Western and Central Africa Region are considered up to 50% higher than world averages, thus hampering the development of traffic and the Region’s economies. Historically, protectionist policies granting monopoly rights to state-owned airlines contributed to keep fares high. These barriers are now gone and new airlines were created in large numbers, but the size ofthe market remains small because ofthe low per capita income and barriers to the development of the tourism industry. This has an impact on air fares through less competition and higher costs, as fixed costs are spread over a smaller number of passengers, fleets and equipments are underutilized, etc. Jet fuel and other consumable goods used in air transport often have to be imported and are subject to all the extra costs associated with imported goods in developing countries. This is even worse in landlocked countries where jet fuel must be trucked over long distances from the ocean ports.

According to airlines, airport landing fees and air navigation (ATM) charges in the Region are more expensive than elsewhere in the world. The underutilization of equipment and facilities because of low traffic is a key factor to these higher costs.

High interest rates make the cost of aircraft acquisition higher, especially for “undercapitalized” airlines. Too many of the Region’s airlines just do not have enough equity to support safe and sustainable operations ; national regulatory authorities sometimes issue Air Operator Certificates without fully screening the applicants’ financial fitness. Low safety and security are also responsible for much higher insurance premiums.

The competitive context

With the elimination of the YaoundC Treaty system and the coming into force of the Yamoussoukro Decision, many ofthe most heavily trafficked routes in the inter-state market are now operated by more than two carriers: 6 on Bamako-Dakar, 4 on Abidjan-Lagos, 3 on Douala- Libreville, 4 on -Lomk, etc. However, such routes are not many, even tough they carry the largest part of the traffic. Most other routes are served by only one or two carriers. On intercontinental routes, there is competition on the higher density routes: 9 carriers on Lagos- Europe, 5 on Accra-Europe, 7 scheduled carriers on Dakar-Europe (plus an even larger number ofcharter operators and 6th freedom connections offered by North African airlines). On the other hand, from to Europe there is only one carrier, with just one weekly service.

2. The Region’s air transport industry

23 The first three actors on the Region’s air transport market, , and KLM, are not based in the Region. Out ofthe first ten, representing an aggregate of4.8 million seats annually, i.;. 60% of the total supply on the market, only two airlines are based in the eroon Airlines and ) and two on the Continent outside the Region (Ethiopian and South African), illustrating the relative weakness ofthe Region’s airline industry.

Burkina Faso Only one airline is listed in Burkina Faso’s registry, , with a fleet ofone Fokker 28 FK 4000 and one 3 19 and a staff of9 1. It links Ouagadougou with Dakar, Bamako, Abidjan, Cotonou and bmk; it also operates a domestic link with Bobo-Dioulasso.

Cameroon Cameroon has an active commercial aviation sector, with several private carriers engaged in charter operations in connection with the oil industry. The national carrier, Cameroon Airlines operates a fleet of two B767, 4 narrow-body jets and a few smaller aircrafts. Its domestic network extends from Douala and Yaoundt to the northern tip of the country and also serves Ndjamena. It also operates to regional destinations such as Lagos, Dakar, Abidjan and Libreville. Its long-haul destinations comprise and Johannesburg.

Guinea Air Guinte operates regional links with a fleet ofone B737 and two smaller aircraft. Mali STA-Mali (operating as “TransAfrica Airways”) has been in existence for over 20 years as an air taxi and has extended its operations to regional routes with two DC9 jets. STA also attempts to penetrate the long haul market. Smaller carriers operate air taxi and feeder services.

The infrastructure sector comprises ATM service providers, airport authorities and airport management companies, and ground handling organizations. More than half the Region’s countqies are members ofASECNA. The organization was established in 1959 as “multinational statutory body” with its headquarters in Dakar and provides Air Traffic Services for the upper space international airports. The Robertsfield ACC is another multinational body operating ATM services for Guinea, Liberia and Sierra Leone, with its headquarters relocated at Conakry. Ghana, Cape Verde and Nigeria have their own ATM organizations.

Most ofthe Region’s arts are part of the public sector with some cases ofpartial privatization through concession arrangements or service contracts. Ground handling services are either provided in monopoly or left to each airline’s initiative.

The role of air transport in the Region’s development

The macro-economic weight of air transport in the Region can be estimated between 4 and 5 billion Dollars, of which about 60% for the traffic to and from Europe, whereas inter-state and domestic traffic represent respectively about 15 % and 8%.

Specific economic sectors would benefit from the improvement of air services: tourism, . agriculture (especially for the export of off-season fruit and produce), and manufacturing

24 supply of spare parts and the movement of maintenance crews). Air transport ernative for communications to landlocked or isolated communities, where it etition of cheaper land transport. It also provides job oppo-ties for , especially in the technical and managerial specialties. Pilots and crewmembers are only the most conspicuous examples of such jobs. This is of particular importance ia Western and Central African countries which experience high rates of unemployment among higher education graduates.

ts and current trends

. TheYamous

The Yamousssukro Decision (YD) came into force on 12 August 2002, after a This has not immediately revolutionized the air transport business egal status ofthe air carriers’ rights, in particular on fifih freedom se d party” carriers (i.e. carriers that are not nationals ofeither country on a sector between two countries) now offer fifth freedom services; it even happens that some sectors are only served by fifth freedom carriers. On some heavily trafficked routes, the number of carriers now operating can be quite high, thus ensuring effective competition, whereas providing more travel and connection opportunities to consumers and a choice of schedules. All in all, the industry’s executives and Civil Aviation officials are, on the average, rather satisfied that “the system works’” and they feel relieved compared to what they feared when the YD came into force one year ago.

The collapse of Air Afrique and the end of the YaoundC Treaty

Air Afrique’s possible collapse has been considereda likely event ever since the early 1990s. All attempts to save the multinational carrier through “financial restructuring” eventually failed and the company had to stop its operations and file for bankruptcy on 8 February 2002. Air Afrique’s market share had consistently gone down from 1997 to 2002 and its traffic decreased even on sectors where total traffic was growing steadily. During the same period, Cameroon Airlines and were doing comparatively better on their own markets. This illustrated Air Afrique’s ility to appeal to customers. As an immediate consequence, all speculations about, . “revising” or “updating” the Yaoundt Treaty became irrelevant. Discussions about “reviving” the multinational airline under a different form have so far been unsuccessful..

Consolidation forces in Europe’s air transport industry

Without going into details, the huge weight ofthe traffic to Europe as well as at the market share of European carriers in the Region’s air transport business, events affecting Europe’s airline industry always have an impact for the Region. Air transport liberalization of the 1990s.i~ progressively reshaping the structures of Europe’s airline industry and transport patterns. Next steps are expected be the “pooling” of traffic rights with the United States and possibly with some of West and Central Africa’s’ sub-regional groupings. As a result of this consolidation process, three carriers: Air France-KLM, British Airways and Lufihansa altogether hold 30 % of West and Central Africa’s air transport business.

25 The emergence of new carriers

The emergence of new carriers has quickly provide a substitute to Air Afrique’s inter-state services in West and to a lesser extent Central Africa. They operate smaller aircraft, offer higher frequencies and schedules better suited to the demand. They also own their fleet, are determined to “play by the rules’’ (comply with safety regulations, apply stable schedules and stable fare structures) and operate with a long term perspective. Some have the technical backing of a strong partner, such as Maroc for and Air France for . These recent developments now confirm that the collapse ofAir Afrique was far from being a disaster for the Region’s air transport. On the opposite; this event was an encouraging opporhmity for the emergence of a new, private sector dominated, business minded and responsible air transport industry, although still vulnerable, more specifically for the landlocked states ofCentral Africa.

Prospects

Among the most widely used projections in the aviation community, there are these of the aircraft manufacturers and these of IATA. According to Airbus Industries’ projections, intra- Africa traffic would grow at an annual rate of about 4% for the next 15 years; Africa’s traffic with USA and Asia would grow at nearly 5% until 2009 and at about 4% for the following decade; growth of the traffics with Europe and the Middle-East would be in excess of 4% p.a. According to Boeing’s projections the world’s GDP should grow at the annual rate of 3 % over the 2000-2019 period, air traffic at the annual rate of4.8 % and airfreight at the rate of6.4 %.

26 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

COSCAP Project (Cooperative Development of Operational Safety and Continued Airworthiness)

Major donors including the ADB, the French Cooperation and the EU have agreed to finance under a grant agreement three COSCAP projects in WCA with one covering the UEMOA + countries, one covering the CEMAC countries and one covering the non UEMOA countries within ECOWAS (also know as the Banjul Accord). These projects complement at the regional level the national activities that will be funded by this project.

These COSCAPs’ main objective is to enable West and Central Africa to integrate the international civil aviation network by enhancing its civil aviation security along the lines ofthe Yamoussoukro Decision policies. To achieve this objective, the following goals need to be reached:

0 Ensure reinforcement of aviation security and safety supervision capacity within the civil aviation institutions. 0 Establish economic and technical rules for aviation security in line with the recommendations ofthe ICAO so as to enhance security and efficiency within the civil aviation sub-sector. 0 Reduce the general costs ofair transport.

To attain these objectives, the following issues need to be addressed:

0 Harmonization, elaboration and adoption of technical regulations for civil aviation security and safety; 0 Three autonomous and functional Regional Agencies for Aviation Security (RAAS) must be created and the air transport security supervision capacities must be enforced; 0 The capacity for coordination and follow up on the Yamoussoukro Decision must be enforced ; and 0 Capacities for follow up and management of Regional Economic Communities (REC) must also be enforced.

27 Project Name COSCAP

Region West and Central Africa

Project Cost US$ 19.37 million (value of December 2004) - Communaut6 Economique et Mon6taire d’Afrique Centrale (CEMAC) Project Executives I - West Africa Economic and Monetary Union (UEMOA) - Economic Community of West African States (ECOWAS) - ADB : US$6.74 million - French, UE, KFFAS coop: USS6.98 million - Others (Boeing, Airbus, FAA.. .): US$ 1.OO million Donors - CEMAC: US$ 1.17 million - ECOWAS/GAB: US$ 1.17 million - UEMOA: US$ 1.05 million - Governments: US$ 1.25 million May 2005

Project duration 37 months,

28 Annex 3: Results Framework and Monitoring

Results Framework for project components

PDO Outcome Indicators Use of Outcome I Information 1) Improve CAAs’ compliance Compliance rate with ICAO’s safety standards rates with ICAO’s safety Percentage of technical personnel in compliance with ICAO’s standards safety standards Total CAA’s budget level

Compliance rate with ICAO’s security standards Aeasure improvements in. 1) 2) Improve CAAs’ compliance Percentage ofCAA’s ICAO’s certified security inspectors :Us’ compliance rates with rates with ICAO’s security trained during the last three years CAO’s security and safety standards Level ofCAA’s budget dedicated to security tandards, 2) targeted airports ecurity levels, and 3) Percentage ofairport security personnel with three or ustainability ofthese 3) International airports’ more years ofexperience mprovements. compliance with ICAO’s Number ofserious problems recorded during annual security standards airport crisis exercises Percentage ofembarking passengers stopped in possession ofillegal objects as defined by the ICAO by private airlines security personnel. Results Indicators for Each Component Use of Results Monitoring

0 Compliance rates with ICAO’s Compliance rate recorded in ICAO’s safety audit safety standards reaches at least: 0 70% in Burkina Faso 77% in Cameroon 0 70% in Guinea 0 70% in Mali

Percentage of technical personnel in ,Technical personnel compliance rate recorder in ICAO’s [dentify problems and compliance with ICAO’s safety safety audit in standards reaches at least: B associated solutions CAAs 0 50% in Burkina Faso safety oversight capacity 0 50% in Cameroon 0 50% inGuinea 0 75% inMali CAAs’ annual budget CAA’s total budget level reaches at

e US$ 1.6 million in Burkina

e US$ 6.0 million in Cameroon

0 US$0.7 million in Guinea

29 Intermediate Results Results Indicators for Each Component Use of Results Monitoring One per Component Component aviation security Compliance rates with ICAO’s security standards reaches at Compliance rate recorded in ICAO’s security audit least: 75% in Burkina Faso 50% in Cameroon 20% in Guinea 40% in Mali

of CAAs’ ICAO certified Percentage of ICAO certified security inspectors as per dentify problems and pectors trained during the CAAs’ annual operational report ssociated solutions in CAAs ecurity oversight capacity 50% in Cameroon 50% in Guinea

CAAs’ annual budget t level dedicated to

mllion in Cameroon

Percentage of airport security Percentage of security personnel trained as per CAAs’ personnel with at least three or annual operational report

30% in Cameroon 60% in Guinea 50% in Mali

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Percentage of embarking passengers stopped in possession Private airlines security quarterly reporting to CAAs of illegal objects as defined by the ICAO by private airlines security personnel: < 3% in Burkina Faso < 3% in Cameroon <: 10% in Guinea

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Annex 4: Detailed Project Description

Burkina Faso Aviation Sector and Proiect Components

A. Overview

Burkina Faso aviation sector has traditionally played a minor role within the country’s transport infrastructure. This limited role is in part the reflection of the limited wealth ofthe country, the proximity of two large regional hubs (Le., Abidjan and Dakar) which serve as gateways to the rest of the region as well as to Europe, and the weakness of the national airlines (ie., Air Burkina).

Recent developments within the sector have been positive with, among other things, the privatization of Air Burkina in February of 2001. Likewise, the Government has embarked, for now several years, in various attempts to commercialize the operations of its two main airports (i.e., Ouagadougou and Bobo Dioulasso airports). As it stands today, total air traffic in Burkina stands, however, at less than 300,000 passengers per year, with about 90% of that total handled by Ouagadougou airport. Overall sector revenues (excluding airlines and refueling companies’ revenues) reached about FCFA.2 billion in 2002 (or about US$ 4 million) with most of this money being generated primarily by overflight and airport charges fees.

Today, ASECNA continues to provide air traffic control services for the Burkina airspace as well as manages Burkina’s two largest international airports (i.e., Ouagadougou and Bobo Dioulasso). The overall sector oversight is ensured, however, by the Direction GCnQale de 1’Aviation Civile et de la MCteorologie (DGACM).

B. Issues

A host of issues affect day-to-day operations of the aviation sector in Burkina. Among the most pressing ones are:

0 The capability ofthe DGACM to fulfill its missions, even the most basic ones. As it stands, most of the DGACM budget goes to meteorological activities not related to aviation. ’ Likewise, as a government agency, it depends for its funding on the Government’s budget, thus is suffering from recurrent funding shortages. Finally, it does not have either the manpower or the required administrative independence to effectively oversee the sector. 0 The private operator, Air Burkina, has committed to upgrade its fleet from the current Fokker 28 airplanes it operates (two of them) to a mix of leased Airbus 319 and 320 by next year. Since these airplanes’ technology will be decade ahead ofthe one currently found on Fokker 28, significant concerns exists so as to the ability of the DGACM to certify pilots and crews of these newer aircraft as well as deliver airworthiness certificates. 0 The current location of Ouagadougou international airport has always been viewed as less than adequate for growth, safety and security reasons as the airport is situated is the heart of downtown. Nonetheless, based on current traffic levels, and in spite of Government’s strong determination to find a solution to this problem (i.e., build a new international airport outside of the Capital City), it is likely that the current airport will remain in operations for many

WCA Board Package PAD March 30-Clean (Final Version) 35 Pnnt-Version March 3 1,2006 years to come. With this reality in mind, important security concerns exist so as to access to control to the airport existing facilities.

C. Project national components

Based on the observations made during preparation and appraisal missions as well as the data provided by the local aviation authorities, a specific investment program for the airport of Ouagadougou as well the DGACM was developed. This investment program represents an answer to the issues raised. These are::

0 For the airport of Ouagadougou:

o Passenger flows - the existing apron is too small to allow for passengers transfer to-from the terminal from-to the parked aircraft by bus. As a result, passengers walk to/from parked aircrafts creating instances when both embarking and disembarking passengers can be mixed on the apron. This problem pales in comparison, however, with the problem related to the open storage of passengers’ checked luggage between the arrival and departure halls of the passenger terminal. Although access to this luggage is presumably secured, the Bank’s experts have noticed that existing storage system is not sufficiently so. o Passengers’ luggage inspection - two X-ray machines are currently deployed at the airport, While one is used to screen checked luggage, the other is utilized for scanning carry-on luggage. Both machines appear to be operating within normal parameters. Nevertheless, the absence of a third machine as back-up in the event ofthe failure ofone of the two existing machines raises concerns. Additionally, in its current configuration, the passenger terminal is too small to accommodate a third machine. The acquisition of this additional equipment would, therefore, need to be preceded by a review of location options. Finally, there is an urgent need to strengthen the training ofthe X-ray machine operators who have, thus far, only benefited from basic training in the use of these machines. o Cargo area - the current set up is woefully inadequate as it does not provide for secured post-inspection cargo and mixes arriving and departing cargo. Furthermore, in the absence of an X-ray machine and bomb detectors, embarking cargo is currently not’ scanned as it should. o Airport fencing and roads - although the airport area is surrounded by a continuous concrete fence, its height in many places does not meet ICAO’s standards. Likewise, no all terrain vehicles are available to patrol the fence and no service road is built to facilitate these patrols. . Besides, existing perimeter roads need to be rehabilitated, and new ones have to be constructed in order to facilitate circulation of the vehicles and airplanes within the airport. o Parking - the aviation parlung needs to be rehabilitated and a new car parking for airport personnel needs to be built o Airport crisis center - the airport has a rudimentary crisis center which, unfortunately, is not equipped properly to manage a crisis, should it occur. Furthermore, location of the crisis center within the airport terminal itself is not optimal as it is easily

WCA Board Package PAD March 30-Clean (Final Version) 36 Print-Version March 3 1, 2006 accessible to anyone and does not provide the necessary isolation for this type of sensitive function. ges - currently, none of the personnel, might they be airport or law enforcement personnel working at the airport carry a personal identification badge. While the DGACM has budgeted for badges acquisition, these badges will not allow for electronic reading, thus limiting the possibility to install electronic doors throughout the airport area.

For the DGACM:

o Technical library - the DGACM does not have per se a technical library with up to date material which would allow it to carry out efficiently its supervisory role. o IT system - No such system is currently deployed within the DGACM. All procedures and management is paper based which hinders greatly the ability of the DGACM to carry out its missions. o Personnel skills - the personnel lacks basic knowledge in a host of areas, including aviation medicine, airport security and safety, aircraft security and safety, etc.

On the basis ofthe shortcomings and needs previously identified, an investment list covering the national needs of the aviation sector in Burkina Faso was developed with total investment estimated at US$ 6.46 million as folIows:

WCA Board Package PAD March 30-Clean (Final Version) 37 Print-Version March 3 1,2006 Cameroon Aviation Sector and Project Components

A. Overview

Cameroon aviation sector has traditionally been dominated by the National Carrier Cameroon Airlines (CAMAIR), which used to have an extensive role in domestic and regional air traffic. However, its continuous difficulties for the last 14 years have led to a quasi disappearance of domestic links and seriously weakened regional linkages in Central Africa. Except intercontinental flights to Europe operated by European carriers, regional traffic to and from Cameroon are scarce due to the conjunction of CAMAIR situation and the disappearance of Air Afrique, which used to be the of Chad, CAR and Congo. Though Douala used to be the hub of Central Africa, this position is somehow contested by Libreville in Gabon, though the national carrier Air Gabon has not been able to benefit from CAMAIR’Ssituation due to its own internal problems.

Traffic in Cameroon averaged 800,000 passengers in 2003, Douala airport accounted for close to 80% of the country’s total passenger traffic and Yaoundt for the rest of it. This figure marked at the time a decrease in passenger flows, which has even significantly decreased, since to average a little bit above 600,000 passengers. Apart from the installation of X-ray machines as well as other type of detection equipment financed by the US funded Safe Skies Initiative program in Douala and Yaoundt, no investment has been carried out in recent years in Cameroon since the . commissioning ofthe Yaoundt Nsimalen airport in the early 90’s.

Today, the aviation sector in Cameroon is organized around three entities:

0 The Cameroon Civil Aviation Authority (CCAA). It has been set up as an operationally and financially autonomous authority when the new Civil Aviation Code was approved in 1998. It relies on two levies (Security and Civil Aviation taxes) paid by outgoing international passengers. The level of this levy should allow financial stability to the CCAA, but this situation has not happened as the main career CAMAIR has never paid its airport dues. CCAA also manages the secondary airports not handle by the ADC. 0 The Airport Authority of Cameroon (i.e. Atroports du Cameroun - ADC): ADC currently manages the 7 main airports in Cameroon, among which only one or two (Douala and maybe’ Yaoundt) can be considered as potentially profitable. ADC is a private company operating under a 15 years concession agreement, ASECNA, CAMAIR, several minority shareholders and the government. Atroports de Paris, which used to carry 30% of the shareholding, withdrew from ADC management in 1997 and sold its shares to the government at no cost in 2005, and ADC has operated and been managed like a parastatal since 2000. The financial situation of ADC does not allow for any investment on the platforms, and probably doesn’t allow for proper maintenance. ADC has a complex financial relationship with CAMAIR, which operates all the ground handling services in the main airports under a mandatory subcontract with ADC. ADC apparently does not suffer from CAMAIR’S dire financial situation (apart from the decrease in traffic) as it compensates the non-payment of airport fees by not paying CAMAIR its share of the ground handling revenue.

WCA Board Package PAD March 30-Clean (Final Version) , 38 Print-Version March 3 1,2006 The ASECNA. It provides meteorological services for Cameroon airports, overflight air traffic control, grounds and approach control at the airports ofYaoundk, Douala and , as well as fire fighting services at both ofthese airports.

B. Issues

A host of issues affect day-to-day operations of the aviation sector in Cameroon. Among the most pressing ones are:

The capability of CCAA to fulfill its missions. CCAA structure and aviation code are roughly consistent with ICAO’s requirements, though the procedures and part of the regulations still have to be designed and subsequently implemented. CCAA does not have the necessary Human Resources means to cany out effectively safety oversight and airworthiness certification, and probably partially lacks expertise to review foreign carriers’ pilots and aircraft licenses. The main need is for flight inspectors. This may be dealt with within the framework ofthe COSCAP project. Its technical library is not up to date but it has an IT system, which is relatively satisfactory. As CCAA is responsible for fire fighting in the airports not managed by ASECNA in this respect, CCAA believes that it needs several vehicles to ensure adequate safety in these platforms. In addition to its statutory obligations, the CCAA must also provide air traffic control services at airports other than those of YaoundC, Douala and Garoua, for a total non recoverable annual cost ofUS$ 1.82 million. Airport infrastructure condition in Douala: the current condition of the Douala Airport is extremely weak: the terminal is close to 30 year old and needs a major overhaul, and its design doesn’t fit with current security standard. The Douala runway and taxiway are currently close to causing safety concerns given their disrepair. Any short-term security equipment investment in Douala maybe offset by the infrastructure condition Implementation of security mocedures: the security measures applied in Cameroon are not consistent with international standards, with inadequate procedures, inadequate staffing and insufficient training. Enforcement of existing procedures is also sometimes problematic. This translates in lack ofrespect for access restrictions, and insufficient control ofprohibited objects in spite ofrecent investment by the US Safe Skies initiative. ,Major reshuffling of the regulations as well as political will are pre requisites for any sustainable improvement ofthe situation. Security investment shortfalls: The Douala Airport fence is not consistent with international standards and needs to be completely to comply with these standards. The Yaoundk fence is open in a few places but would need very little investment to comply with international standards. The main issue is to find alternate access to the City center to population neighboring the airport, which would require the construction of an access road. None of the airports currently have an operating neither secure access control system nor any CCTV surveillance system.

C. Project national components

Based on the observations made during preparation as well as the data provided by the local aviation authorities, a specific investment program for the airports as well the CCAA was developed. This investment program represents an answer to the issues raised. These are:

WCA Board Package PAD March 30-Clean (Final Version) 39 Print-Version March 31,2006 0 General institutional set up

The project agreed to fund institutional studies to finalize the sector reform implemented since 1998 and the adoption ofthe Civil Aviation Code

For the CCAA Safety function:

o Technical library - the CCAA does not have per se a technical library with up to date material, which'would allow it to carry out efficiently its supervisory role. o Training equipment - CCAA currently doesn't have adequate' training, equipment tQ fulfill its missions. o Set up of GPS approaches for secondary airports: this measure is thought to have a large potential impact on safety for small planes, which account for a large share of accidents in Africa. o Personnel skills - the personnel lacks basic knowledge in a host of area, including aviation medicine, airport security and safety, aircraft security and safety, etc.

0 Airport Security investment:

o The Douala fence has to be rebuilt, and an access path along the fence is necessary. Small investment are needed inside both Douala and Yaoundk terminal to fix access control, and very little investment would allow for the fixing ofthe Yaounde fence, provided that the issue of access for neighboring populations be solved (this will be tackled using government/CCAA funding, the project providing the background studies); o On the cargo terminal side, the current X-ray machines need to be put to use. Likewise, the layout ofthe terminals needs to be revisited in order to ensure that inspecting cargo is ' secured prior to loading onto an airplane. o Proper training need to be administered to law enforcement agents deployed at the airport in order for them to make good use of the detection material at their disposal and a centralized oversight oftheir activity should be considered in order to foster coordination and efficiency ofaction. o Airport crisis center - the airports don't have such a center. o Personnel IT - currently, none ofthe personnel, might they be airport or law enforcement' personnel working at the airport cany a personal electronic ID badge. It was agreed to include in the project a comprehensive access controVCCTV system including authorized staff ID.

0 Airport safety:

I o The condition of Douala terminal and runway are currently a threat to safety (runway and taxiways) and security (terminal). The project agreed to finance the needed studies to undergo the platform's rehabilitation.

WCA Board Package PAD March 30-Clean (Final Version) 40 Print-Version March 3 1,2006 On the basis of the shortcomings and needs previously identified, an investment list covering the national needs ofthe aviation sector in Cameroon was developed with total investment estimated at US$ 16.00 million, including US$1.5 million of self funding by CCAA, as follows:

Investment elements t I CCAA Personnel training I 0.60 I 1 CCAA euuipment (including IT) I 0.90

1 Airwort infrastructure I 8.10

WCA Board Package PAD March 30-Clean (Final Version) e 41 print-Version March 3 1,2006 Mali Aviation Sector and Project Components

The World Bank Team has learned during the negotiations, which took place end fiom February 28 to march 2, 2006, that the DNAC had been terminated and replaced by the ANAC (Agence Nationale de I’Aviation Civile) by the law No. 05-066, dated December 26, 2005. As the DNAC’s staff has been transferred to the ANAC, all the evaluations of the DNAC can be applied to the ANAC, included the evaluation of the financial and procurement capacities. The coming pages must be read taking into account those elements.

A. Overview

Mali aviation sector has traditionally played a minor role within the country’s transport infrastructure, although the sheer size of the country as well as the geographic dispersion of its main cities should have promoted greater level ofdomestic air traffic. The weakness ofthe sector reflects, in part, the lack ofmarket success of both private and national airlines in Mali over the recent past &e., the national carrier was liquidated in 2003). Also, it underscores the impact that the proximity of two large regional hubs (i.e., Abidjan and Dakar) which serve as gzteways to the rest ofthe region as well as to Europe has on Malian carriers.

With about 423,000 passengers in 2003, Bamako airport accounted for more than 90% of the country’s total passenger traffic. This figure which marks a 25% increase in passenger flows from year-to-year ranks Bamako airport among the medium size airports of West Afkica. Over the last couple of years, the airport has benefited from a series of investment programs in response to: a) Mali hosting international events such at the African Nations Soccer Cup and b) installation of X-ray machines as well as other type of detection equipment as part of the US funded Safe Skies Initiative program. Recent attempts to concession the airport to a private concessionaire have failed repeatedly, thus leaving to the State for now the responsibility to finance any future investment at the airport.

Today, the aviation sector in Mali is organized around three entities:

0 The Civil Aviation Directorate (i.e. Direction Nationale de 1’Aviation Civile - DNAC). The DNAC, whose mission is to oversee the aviation sector, is in charge of certifying and delivering operational licenses to airline operators and pilots. It must also ensure that existing aviation rules, regulations as well as airport operations are in compli&ce with the ICAO’s guidelines on safety and security. At the end of 2003, DNAC was overseeing a registered airplane fleet of 13 and a total of 62 pilot licenses. Because ofits lacks offinancial resources and administrative independence, DNAC, like so many other civil aviation authorities in Africa finds itself unable to carry out some ofthe most basic missions assigned to it as shown by the results of the most recent ICAO and FAA audit conducted in Mali. Accordingly, $e Malian government is seriously considering transforming the DNAC in an administratively and financially autonomous entity in compliance with UEMOA and IACO’s directives so as to strengthen its capacity. 0 The Airport Authority of Mali (i.e. Aeroports du Mali - ADM): M currently manages all ofMali airports. It is a state-owned company with commercial and industrial status with 250 employees and a turnover in 2002 of FCFA 1.8 billion (i.e. or about US$ 3.6 million). Since

WCA Board Package PAD March 30-Clean (Final Version) 42 Print-Version March 3 1,2006 the process for selecting a private concessionaire to manage the Bamako airport that was launched in 2002 and 2003 has failed, ADM should retain its managing responsibility over the airport system for years to come. 0 The ASECNA. It provides air navigation safety and security services to Mali airports.

B. Issues

A host of issues affect day-to-day operations of the aviation sector in Mali. Among the most pressing ones are:

0 The capability ofDNAC to fulfill its missions. As it stands, most ofthe DNAC activities are limited by the weaknesses of the national aviation code which is not in line with ICAO’s standards. Additionally, due to limited personnel and financial resources, DNAC does not have the necessary means to cany out effectively its licensing work for pilots and aircraft as well as lack expertise to review foreign carriers’ pilots and aircraft licenses. Its technical library is not up to date and it does not have an IT system per se. 0 While the airport of Bamako benefit from a remote location, away from the city center, its vastness can be a handicap when it comes to securing access to its premises. More specifically, the airport concrete fence, while it protects the entire airport perimeter is breached on certain points by river beds which, when they run dry (most of the year), can provide direct access onto the airport premises to large vehicles. Additionally, an unknown numbers offarmers are growing vegetables within the airport premises which not only results in permanent breach of airport access security but also encourages dangerous bird activities. Also, the service road that runs along the airport concrete fence is incomplete in some areas or simply runs to far back from the fence to provide an efficient mean ofintervention for the law enforcement personnel. Finally, the airport is the site of an unusually large number of . mature trees which represent in the same way that birds do a threat to airline operations. 0 The sharing of Bamako airport premises between military and civilian personnel tie., an airbase located on the airport) is also a source of problem as access to the airport is not coherently managed by a single entity. For now, it appears that very little cooperation exists between civilian and military entities in order to ensure that the airport accesses are tightly secured. 0 In spite of the availability of state- -the art X rays and detection machines at both the passenger and cargo terminals, operations of these machines is sub-optimal and their users lack the proper training and skills to make full use oftheir capabilities. In addition, the access to the VIP lounge is currently not secured, thus weakening the overall access control process at the airport. 0 Personnel access to the airport is not monitored using electronic ID badges and the far too numerous law enforcement agencies’ personnel which operates at the airport does not coordinate efficiently their activities, thus weakening their overall impact on airport security.

C. Project national components

In order to define the various project national components, a Bank’s expert visited in March 2004 Mali. During his visit, he toured the Bamako international airport and met with the sector various stakeholders so as to determine the scope of the project security and safety national

WCA Board Package PAD March 30-Clean (Final Version) 43 Print-Version March 3 1,2006 ditionally, he collected information using surveys designed to assess airport security and DNAC investment requirements as well as DNAC’s role, responsibilities and capacity.

praisal mission was undertaken in November 2005 in order to finalize both the ional components ofthe projects as well as the ventilation ofthe investments t other objectives. Based on the observations made by the Bank’s experts in e appraisal mission, as well as on by the local aviation authorities, a specific investment program for the airport and the DNAC was developed. This investment program represents an answer to the issues raised during the experts’ visits to Mali. These are:

0 For the airport of Bamako:

o Airport fencing and perimeter roads-The concrete fence needs to be sealed in several locations and a proper access road needs to be built. Additionally, vehicles and communications systems are required for the local. law enforcement personnel to patrol the airport perimeter and a television system is needed to monitor activities within the terminal passenger. Besides, existing perimeter roads need to be rehabilitated, and new ones have to be constructed in order to facilitate circulation withidaround the airport. o Detection equipment-On the cargo terminal side, the current X-ray machine needs to be put to use and a backup one needs to be acquired. Likewise, the layout of the terminal needs to be revisited in order to ensure that inspecting cargo is secured prior to loading onto an airplane. Moreover, as far as passengers control is concerned the airport lacks of proper X ray scanners for luggage, and the inspectors do not have adequate portable metal detectors. o Training-Proper training needs to be administered to law enforcement agents deployed at the airport in order for them to make good use ofthe detection material at their disposal and a centralized oversight oftheir activity (i.e., High Authority) should be considered in order to foster coordination and efficiency of action. o Airport crisis center - the airport needs such a center to be constructed and equipped with communication basic devices (TV, Audio and IT equipment, Internet etc.. .) o Personnel badges - currently, none of the personnel,, might they be airport or law’ enforcement personnel working at the airport carry a personal electronic ID badge. These badges need to be acquired in order to permit the installation of electronic doors throughout the airport area.

o Technical library - the DNAC does not have per se a technical library with up to date material which would allow it to carry out efficiently its supervisory role. o IT system - No such system is currently deployed within the DNAC. All procedures and management is paper based which hinders greatly the ability ofthe DNAC to carry out its missions.

WCA Board Package PAD March 30-Clean (Final Version) 44 Print-Version March 31,2006 o Personnel skills - the personnel lacks basic knowledge in a host of area, including aviation medicine, airport security and safety, aircraft security and safety, maintenance etc.

On the basis of the shortcomings and needs previously identified, an investment list covering the national needs of the aviation sector in Mali was developed with total investment estimated at US$ 5.51 million as follows:

WCA Board Package PAD March 30-Clean (Final Version) 45 Print-Version March 3 1,2006 Guinea Aviation Sector and Project Components

A. Overview

Guinea aviation sector has traditionally played a minor role within the country’s transport infrastructure. The weakness ofthe sector is partly explained by the following facts: the limited wealth of the country; the priority gven to road sub-sector within transport sector, especially during the previous decade; and especially, the low priority given to the civil aviation sector, compared to social sectors needs, as the Government’s financial resources are scarce.

’s civil aviation industry is currently a relative small one, with around 300,000 passengers per year. The main traffic is concentrated at the international airport ofConakry, and the rest is split among the airports of Lab&, Kankan, N’zQkkork and Siguiri.

The Government of Guinea, with the support ofthe World Bank, undertook institutional reforms in the sector to separate regulatory and supervisory functions from operations. The industry is supervised and regulated by the Direction Nationale de 1’Aviation Civile (DNAC), which is incorporated within the Ministry ofTransport. DNAC is composed oftwo Departments: the Air Transport Department, and the Infrastructure and Air Navigation Department. It doesn’t have specific unit in charge of aircraft operations. DNAC is directly supervising five aircraks, seventeen pilots, and four airlines. Eleven foreign air carriers are also operating international flights to and from Guinea.

The most important airport in Guinea, the international airport of Conakry, has been concessioned to the Sociktk de Gestion et d’Exploitation de I’Akroport de Conakry (SOGEAC), a private company, which also has the monopoly of ground handling assistance in this airport. Guinea recently benefited from the Safe Skies initiative with the American Government, and the airport of Conakry has been equipped with several security screening materials.

The country’s air traffic control in the national airspace, as well as the operation and the management of the inland small airports have been granted to the Agence de la Navigation Aknenne (ANA).

B. Issues

Being a simple unit within the Ministry of Transport, the. DNAC doesn’t have the necessary financial and operational autonomy to hlfill its duties efficiently. Uns risingly, the DNAC:

- cannot have enough financial resources to fulfill its national and international duties. Besides, the budget allocated to the DNAC is not individualized; - has not been able to recruit for quite a long time, and consequently will lack experienced personnel to fill senior positions when they become vacant; they can’t also keep the skilled personnel to carry out the technical tasks that should normally be ensured by a

WCA Board Package PAD March 30-Clean (Final Version) 46 Print-Version March 3 1,2006 civil aviation authority, as the private industry is offering better salary and work conditions; - does not have sufficient capacity to supervise the safety and security issues as well as to carry out the policy of liberalization announced by the Government in the civil aviation sector; - has no means to plan and carry out initial and recurrent trainings for its technical personnel; - does not have basic materials to do their daily job (computers, telephones and other means ofcommiuzication, means oftransportation, etc.).

Guinea has adopted a Civil Aviation Code since 1995, but no regulations related to its application have been published. In the meantime, many clauses of the Code became obsolete, and more consistency with the international standards is required.

With regard to airport equipments, SOGEA and ANA are remarkably well equipped. But for SOGEAC, the problem raised is related more to: (i)the personnel’s capacity to operate and maintain the sophisticated equipments at the airport; and indeed, to (ii)the political will of the Government to enforce the law in protecting the airport from the illegal entries, especially by the . population living around the airport perimeters.

C. Project national components

The Bank and the Ministry of Transport identified the following project components: ,

0 Institutional component:

The Project will help the Guinea government to set up a strong civil aviation authority. To this end, the following components were identified:

o Creation of an autonomous Civil Aviation Authority (CAA), in accordance with ICAO’s recommendations. This subcomponent will include a preliminary study which will analyze the current institutional arrangements (with four main entities involved in the civil aviation and air transport sectors -DNAC, ANA, FIR Roberts, ’ SOGEAC), partly based on the results ofthe audit of the ANA. Then, the consultant will suggest the best arrangements for the new CAA to be established (the adequate structure, key job descriptions, budget -including the possible sources ofrevenues, the level and choice ofthe possible fees, and the main charges); o Financial and tec ical audits ofthe Air Navigation Agency (ANA); c o Update of the country’s Civil Aviation Code and the related regulations. Following the examples of several member States of the Banjul Accord Group, Guinea may adopt the ICAO’s Model Civil Aviation Regulations, and tailor them to its needs, with the support of one or two international consultants; o Trainings, especially in management (adapted to the context of air transport liberalization and to the new status ofan autonomous authority), and indeed, in safety and security oversight. The DNAC will submit a detailed training program to the Bank;

, WCA Board Package PAD March 30-Clean (Final Version) 47 Print-Version March 3 1,2006 o Compensations for the resettled persons, after the closure of the airport area to any unauthorized activity within the airport. The Government already financed the study for a Resettlement Action Plan; o Financing ,of the project’s operating costs and acquisition .of equipments for the DNAC, including two service vehicles.

Safety component:

o A study will be financed by the project in order to determine the best alternative for the renewal of the NAVAIDS systems (especially, ILS and their VOR-DME Doppler, acquired about ten years ago): either a complete renewal, or a modernization with kits ofsome oftheir components; o Acquisition/ retrofit of NAVAIDS equipments, based on the above-mentioned study, with an option for a GNSS approach; o Acquisition of meteorology equipments (SADIS - Satellite Distribution System - and SIOMA - Airport Meteorology Observation Integrated System);

Security component:

0 Construction of the perimeter roads: the project will finance the construction of the road outside the airport, in order to desenclave the population living in its vicinity, and the road inside the airport, for security agents patrolling. However, the works for the construction of the road inside the airport will not begin until the SOGEAC rehabilitates the fencings which should be conforming to ICAO’s standards; 0 Construction ofan access road; 0 Acquisition of a ’screening material for cargo, to complete the installation of . equipments for luggage control already supplied by the United States; 0 Acquisition oftwo supplemental lights to facilitate the area’s security surveillance in the night, as the apron has insufficient lighting system. The electric power (for primary and rescue supplies) available at the airport is sufficient to absorb the additional charge without requiring modification; 0 Acquisition of two vehicles equipped with VHF and two motorbikes for security

patrols; 6% 0 Acquisition of equipments 101 the airport crisis center, and rehabilitation of an isolation aircraft parking position; 0 Elaboration ofan Airport Emergency Plan; 0 Construction of guards’ booths and access path.

On the basis of the shortcomings and needs previously identified, an investment list covering the national needs of the aviation sector in Guinea was developed with total investment estimated at US$ 7.10 million as follows:

WCA Board Package PAD March 30-Clean (Final Version) 48 Print-Version March 3 1,2006 viation eaumment

WCA Board Package PAD March 30-Clean (Final Version) 49 Print-Version March 3 1,2006 Annex 5: Project Costs

WCA Board Package PAD March 30-Clean (Final Version) 50 Print-Version March 3 1,2006 Annex 6: Implementation Arrangements

1. Regional Coordination

The implementation of the project is done on a country basis, based on the arrangements agreed with each government. The African Development Bank and other donors are funding all activities relevant to the regional coordination of the project, and which are implemented by the respective RECs (UEMOA, ECOWAS and CEMAC Secretariat Therefore, the fiduciary elements of this coordination are not spelt out in this Annex, which focuses mostly on implementation arrangements of the four credits funded under the project. No project-funded activity per se necessitates simultaneous involvement of two or more countries’. In Mali and Burkina Faso, existing PIEs as well as the ANAC in Mali will manage procurement and disbursement activities on behalf of the local CAAs. The PIES are already managing IDA projects and are, therefore, fully versed in World Bank procedures. However, whenever deemed necessary, additional staffing will be recruited. In Guinea and Cameroon, national CAAs will manage the project fiduciary and procurement aspects as there are no existing PIEs upon which they can rely. Both entities will have to get their staff trained on World Bank procedures. In all four cases, the oversight ministries will be the transport ministries.

2. Cameroon Component

’ The Project will be implemented by the CCAA through a Project Implementation Team (PIT) established by the Director General, with participation of the ADC. The PIT will be led by a Team Leader, who is holding a specific full time position within the organization. The Team Leader will report to the Director General ofthe CCAA.

’ The performance of the PIT will be reviewed jointly by the Director General on a regular basis and by the Bank missions at least twice a year. Remedial measures will be taken in case of problems or non-performance.

The PIT has been established on the basis of terms of reference and staff with the necessary qualifications and experience acceptable to the Bank. The Bank will review any proposal of change within the PIT members. The PIT will be empowered and accountable for implementation of the project on a day-to-day basis in line with procedures governing project preparation and implementation.

Oversight: Overall oversight of the project will be by a Project Steering Committee (PSC) chaired by Representative of the Ministry of Transport. It will provide overall oversight, policy direction and resolve any issueshottlenecks that may ensue to hamper project preparation and implementation. The PIT Team Leader, senior sector officials, and a representative of the Permanent Secretary Ministry of Finance will participate in the PSC meetings. The Ministry of Transport will provide the secretariat.

I The Terms of Reference and the list of members of the PIT and PSC have been agreed upon before negotiations.

WCA Board Package PAD March 30-Clean (Final Version) 51 Print-Version March 3 1,2006 Scope of Services for the Project Implementation Teams (PIT), and the Project Steering Committee (PSC)

‘ These are described in detail, and are arranged similarly in other countries, though their description will not be included in each country’s respective section.

Project Implementation Teams (PIT)

The Project Implementation Team was established in CCAA and will undertake the day-to-day management of the Project based on the applicable provisions of the Financing Agreement and the Project Agreement between IDA and CCAA. The proposed composition of the members of PIT is given below:

Team Leader Procurement Specialist (1 CCAA, 1 ADC) Financial Specialist (1 CCAA, 1 ADC) Safety Specialist Security Specialist Human Resources Specialist Archive specialist Engineering specialists (1 CCAA, 2 ADC)

Project Steering Committee (PSC)

The PSC will be responsible for overseeing the overall project preparation and implementation. It will provide the channel through which the project will inform the Ministries top management about the progress, prevailing bottlenecks, and policy direction required for smooth preparation and implementation ofthe project. Specifically, the membership will be as follows:

0 President, Ministry of Transport or its representative; 0 Two representatives from the CCAA; 0 One representative from the ADC; 0 Two qresentatives from the Ministry ofEconomy and Finance; 0 One representative from the “Caisse Autonome d’Armortissement” of the Ministry of Finance; 0 One representative from the Planning Ministry; and,

0 The project Coordinator.

Responsibiliges of PSC

The PSC wil%be responsible for:

0 Providing support and resolving any constraints that may hamper project implementation and would require interventions from other ministries or arms of the Government.

WCA Board Package PAD March 30-Clean (Final Version), 52 Print-Version March 3 1,2006 0 Providing policy direction on matters relating to the project preparation and implementation. 0 Cany out risk assess ciary risks relate roject implemefitation, in consistency with the current dialogue between the World Bank and the government on governance issues.

The PSC will meet at least quarterly.

Responsibilities of the PIT

Specifically, the PIT will undertake the following project management activities:

Prepare the project implementation plan; Select consultants accordingly to World Bank procedures; Invite bids according to World.Bank procedures; Prepare project contractual documents; Prepare bidding documents; Conduct evaluation ofbids; Undertake contract negotiations; Facilitate issuing of letters ofawards; Liaise with World Bank as part ofcoordination role ; Discuss and agree with the consultants, suppliers and contractors detailed project activities; Facilitate the mobilization ofcontractors and consultants; Facilitate import clearance, where applicable; Supervise and monitor consultants and contractors; Supervise project implementation at all levels; Draw up procedures for receiving, verification and payment ofinvoices on timely basis; Ensure timely payments to consultants, suppliers and contractors; Timely prepare and submit progress reports; Ensure that financial audits are carried out in time; Ensure all safeguard policies are adhered to; and Keep and maintain all project records, reports and information.

Responsibility ofPIT Team Leader

The Team Leader shall provide the overall leadership ofthe project.

Specifically, the Team Leader shall:

Manage the day-to-day activities; Plan, direct, control and coordinate the activities of their components; 0 Implement the project in accordance to the overall plan of operations an schedules and report changes thereto;

WCA Board Package PAD March 30-Clean (Final Version) 53 Print-Version March 3 1,2006 0 Monitor the performance of consultants, suppliers and contractors in accordance to agreed contractual obligations; 0 Ensure that there is structured and consistent monitoring ofprogress of implementation, including the regular reports, and audit reports.

The arrangement has been designed to ensure that the proposed project is implemented smoothly and speedily without compromising on quality, transparency and fiduciary responsibilities of the Government, and the World Bank.

3. Guinea Component

The Project will be implemented by the Department of Civil Aviation or DNAC (Direction Nationale de Z’Aviation Civile), within the Ministry of Transport, through a Project Implementation Team (PIT), designated as Cellule de Gestion du PRSSAC, established by the Minister of Transport, with the participation ofthe Economic Monitoring Department, from the Ministry of Transport. The PIT will be led by a Coordinator who is holding a specific full time position within the DNAC. The Coordinator of the PIT will report to the Project Steering Committee and the Minister ofTransport.

The performance of the PIT will be reviewed jointly by the Minister of Transport or its representative on a regular basis and by the Bank missions at least twice a year. Remedial measures will be taken in case ofproblems or non-performance.

The PIT has been established on the basis ofa ministerial decision (arrgtk ministkriel) in January 2006, and has staff with qualifications and experience acceptable to the Bank. The Bank will review any proposal of change within the PIT members. The PIT will be empowered and accountable for implementation of the project on a day-to-day basis in line with procedures governing project preparation and implementation.

Scope of Services for the Project Implementation Team (PIT)

To this end, the Project Implementation Team will undertake the day-to-day management ofthe, Project based on the applicable provisions of the Financing Agreement. The composition of the members ofthe PIT is given below:

0 The Coordinator ofthe Cellule de Gestion du PRSSAC; 0 A Procurement Specialist; 0 A Financial Specialist; A Safety Specialist; 0 A Security Specialist; and 0 A person in charge ofthe Monitoring and Evaluation ofthe Project.

In some instances, the same individual might act in a dual role.

WCA Board Package PAD March 30-Clean (Final Version) 54 Print-Version March 3 1,2006 Specifically, the PIT will undertake the following Project Management Activities:

Prepare the project implementation plan; Select consultants accordingly to World Bank procedures; Invite bids according to World Bank procedures; Prepare project contractual documents; Prepare bidding documents; Conduct evaluation ofbids; Undertake contract negotiations; Facilitate issuing ofletters ofawards; Liaise with World Bank as part ofcoordination role ; Discuss and agree with the consultants, suppliers and contractors detailed project activities; Facilitate the. mobilization ofcontractors and consultants; Facilitate import clearance, where applicable; Supervise and monitor consultants and contractors; Supervise project implementation at all levels; Draw up procedures for receiving, verification and payment ofinvoices on timely basis; Ensure timely payments to consultants, suppliers and contractors; Timely prepare and submit progress reports; Ensure that financial audits are carried out in time; Ensure all safeguard policies are adhered to; and Keep and maintain all project records, reports and information.

Responsibility of the PIT Coordinator

The Coordinator ofthe Cellule de gestion du PRSSAC shall provide the overall leadership ofthe project .

Specifically, the Coordinator shall:

Manage the day-to-day activities; Plan, direct, control and coordinate the activities oftheir components; Implement the project in accordance to the overall plan of operations and activity schedules and report changes thereto; Monitor the performance of consultants, suppliers and contractors in accordance to

agreed contractual obligations; &d ' Ensure that there is structured and consistent monitoring of progress of implementation, including the regular reports, and audit reports.

The arrangement has been designed to ensure that the proposed project is implemented smoothly and speedily without compromising on quality, transparency and fiduciary responsibilities ofthe Government, and the World Bank.

WCA Board Package PAD March 30-Clean (Final Version) 55 print-Version March 3 1, 2006 Oversight: Overall oversight of the project will be carried out by the Ministry of Transport or his Representative. He will provide overall oversight, policy direction and resolve any issueshottlenecks that may ensue to hamper project preparation and implementation. .

The Ministry of Transport or his Representative will be responsible for overseeing the overall project preparation and implementation. He will be informed about the progress, prevailing bottlenecks, and policy direction required for smooth preparation and implementation of the project. He will:

0 Provide support and resolve any constraints that may hamper project implementation and would require interventions from other ministries or arms ofthe Government; and 0 Provide policy direction on matters relating to the project preparation and implementation.

WCA Board Package PAD March 30-Clean (Final Version) 56 Print-Version March 3 1,2006 nex 7: Financial Management and Disbursement Arrangements

agement Systems aimed at supporting the implementing entities in deploying o produce the required outputs, with due regard to economy and efficiency. es manuals will be produced in each country to document the detailed FM project, ensure a robust internal control arrangement for the Project, and to cia1 reporting by each implementing agency. This manual will each country without lowering the overall standard.

1. A. Financial Management Assessment of the Country Implementing Agencies

1. Summary of Inherent (Country) and Control (Project) issues/Risks

COUNTRY Issues Mitigating measures 4 CFAA was carried out for Burkina Faso in October GoBF has clearly made great steps in lo01 and finalized in June 2002. The following are the improving frnancial management through the :omtry issues: Public Financial Management Reform Serious staffing problem in the public and private sector Program (PRGB), which sets out a accounting services resulting in a dramatic drop in the methodology for moving the process forward. quantity and quality of staff, These initiatives are significantly supported *Delay and irregularity in the audit of the public entities by the donor community. annual accounts because of a weak capacity of the A team of appropriately qualified and Public Sector Control Institutions, experienced staff will manage the project. Liquidity problem in the Public Treasury, which impacts Strong internal control procedures through on budget execution ofthe budget; the Procurement and Financial Management Weak non-financial assets management: absence of non manual will be in place; Periodic financial financial assets accounting and of annual physical monitoring reporting (subjected to kternal BUFUUNA inventory; audit and reviewed by the Bank) will be FASO Absence of an integrated computerized public circuit of prepared; and external audit performed. revenue. Existence ofPRGB. Significant progress has been made in its implementation, which is supported by the donor community. Besides PRGB, the Bank has put together an IDF to support Public Sector Control Institutions. The IDF should be effective in FY05 Existence of PRGB which is being implemented

The project risk from a FM perspective is considered as moderate but the risk will be mitigated by the implementation ofthe action plan

WCA Board Package PAD March 30-Clean (Final Version) 57 Print-Version March 3 1,2006 fie major country issues are corruption (Funds may *The project funds will be ring-fenced. Bank not used in an efficient and economical way and financial management ‘ and procurement :xclusively for purposes intended) and poor requirements will apply. governance. * Elaboration of a project agreement between the Government and CCAA The project issues include: Implementation of a project specific accounting Weak implementation capacity and the impact of software prior to Credit effectiveness (action these shortcomings on internal controls. plan agreed with CCAA) *Implementation of the Project by an Autonomous Provide new Accounting procedures manual Public Enterprise adapted to the project. *Existence of an Accounting software at the CCAA Select and recruit an audit firm for the audit of (Delta) with non-operational budgeting and the cost project accounts. analysis. In addition, the staff is not properly trained Evaluation of the CCAA’s audited statements by on the use ofthe system. the Bank prior to effectiveness CAMEROON *The existing administrative and accounting manual is based on the public accounting system principles established in 2001 and it has not been updated despite 2003 and 2004 changes in the CCAA’s organization. The manual remains an inadequate tool and the quality of its content does not meet bank’s requirements. After 5 years of existence of CCAA, the fust audits for 2001 to 2004 have just been drafted *Budgeting of the Counterpart Funds needs for the project

The project risk from a FM perspective is considered as substantial but the risk will be mitigated by the implementation ofthe action plan Weak implementation Capacities; Project institutional arrangement have to be Impact ofweak technical staff on internal control; finalized and integrated in the PAD; Non-availability ofcounterpart fund; Key staff will be trained on Bank procedures; Poor linkage between physical progress and Counterpart funds should be budgeted and made financial outcomes. available before project effectiveness; Absence ofIntegrated Financial Management Project Financial Monitoring Report should be GUINEA System (IFMS) prepared on a timely manner (quarterly). The DNA will have to be computerized to help in capturing revenue/expenditures of the Directorate The project risk from a FM perspective is considerec .s substantial but the risk will be mitigated- by the implementation ofthe action plan

WCA Board Package PAD March 30-Clean (Final Version) 58 Print-Version March 3 1, 2006 The overall conclusion of the Mali Country Set up clear organizational procedures with a dedicated Financial Accountability Assessment (CFAA) accountant to ensure the segregation of the two credit: carried out in 2002 and completed in 2003 is that manual of procedures, asset register, accounting and “the publicfinance management system is fairb supporting documents, archives . . .etc. coherent with relatively strong budget procedures implemented within a clear institutional setting with improving and strengthened control measures”. Itgoes on to add that “This reality should not hide malfunctions for which appropriate dispositions should be taken.” In MALI essence, the CFAA shows that significant progress has been made in the areas of financial management.

Specific project risk Since the project will be implemented by the exiting Bank-supported project (PACT) with acceptable FM capacity, the only risk could be the possible confusion in managing both credits. The project risk from a FM perspective is cons :red as moderate but the risk will be mitigated by the implementation of the action plan

WCA Board Package PAD March 30-Clean (Final Version) 59 Print-Version March 3 1,2006 2. Implementing Entity

Country Status Overall coordinating responsibility for the PRSSAC will be undertaken by the PMU ofthe PST 11-BF which will execute its mandate through the Steering Committee. The host ministry is Minist2re des Infrastructures, de I’Habitat et du Tourisme (MIHU). The PST 11-BF’s PMU team is composed mainly of key high skilled staff, including the Coordinator, a Coordmation Financial Officer (CFO), an Accountant, a M & E Specialist and a Procurement Specialist. Burkina Existing body Faso The PST 11-BF’s PMU has a fully integrated financial management system using appropriate software as well as a detailed manual of financial management procedures and chart of accounts, including the format, content and periodicity of the various financial statements to be produced. The PST 11-BF’s PMU will be required to update its financial management arrangements to take into account the PRSSAC’s implementation characteristics and will coach and assist the newly recruited accountant. The CCAA is the implementing entity ofthe project. The CCAA is an autonomous public enterprise applying private accounting rules and regulations. The accounting regulations of The Cameroon (QHADA system) are in conformity with the Generally Accepted Accounting Principles (GAAP). The CCAA’s accounting staffing is inadequate, and the financial statements, which are not published on a timely basis ‘includes only the profit and loss accounts (results of main Existing body Cameroon operations) - a balance sheet is not included. The CCAA’s accounts are presented every year but the first audits have just been submitted. Therefore, it is not advisable to integrate the Project data into the entity’s existing system. The project’s account will be separately presented by the staff appointed to the project unit. The Guinea Component of this project will be implemented by the Civil Aviation Directorate (DNAC). It is under the supervision of the Ministry oftransportation. It is well Guinea staffed but will need some training. The overall responsibility for the preparation and Existing body consolidation of financial reports will remain with the same unit. The FM Capacity of this PIE should be acceptable. The project will be housed and managed by the existing Cellule de Coordination du Projet Secoriel de Transports (CCPST) in charge of the coordination of the Projet Mali d ’Amdlioration des Corridors de Transports (PACT). Consequently the financial Existing body management & disbursement arrangements designed for PACT will apply to this regional project.

3. Flow of Funds

3.1 Bank accounts and disbursement procedures

The project will use entirely the transactions based methods of disbursement. To facilitate disbursements for goods, works, services, etc., IDA will make advances into a designated account for the project in each country to cover IDA’S share of eligible expenditures. To the extent possible, all eligible expenditures should be paid through the SA although the borrower may choose to pre-finance project expenditure and seek reimbursement from IDA. Also, the use

of direct payment and special commitments will be allowed, I as appropriate. A local project ’ account for the counterpart funds will also be opened (except countries which provide an in-kind counterpart contribution). All these accounts will be opened on terms and conditions acceptable to the Bank. The opening ofthese accounts is a condition ofeffectiveness.

WCA Board Package PAD March 30-Clean (Final Version) 60 Print-Version March 3 1,2006 The following table summarizes the nature of the bank accounts to be established and indicates the manner in which World Bank funds will flow into these accounts:

Country Accounts Flow of funds A Designated Account for The flows of funds will start by the Designated Account, which will be PRSSAC will be opened in at managed by PST 11-BF’s PIE. The IDA financing proceeds will be Burkina the BCEAO at Ouagadougou disbursed to the Designated Account. Funds deposited in the and will be managed by the PST Faso Designated Account will be used to finance eligible expenditures 11-BF’s PIE. relating to activities implemented by DGACM. For each category of disbursements; there will be clear eligibility criteria.

The project funds will be Disbursement would be made on the basis of incurred eligible maintained in a commercial expenditures. IDA would then make advances disbursement from the bank acceptable to the Bank as credit into the Borrower-operated Designated Account (DA) to expedite follows: project implementation. Upon credit effectiveness, the project would be required to submit a withdrawal application for initial deposit to the (i) Designated Account A for DA. The DA will be replenished through the submission of withdrawal activities financed from the applications on a monthly basis and will include reconciled bank Cameroon credit statements and documents as required until such time, (Traditional (ii) Project account B for the Procedures) as the Borrower may be eligible to report-based (FMR) counterpart funds. disbursement. Other acceptable methods of withdrawing of the credit are direct payment and special commitment. The CCAA will provide funding for the operating costs and of some specific activities under the project, but these will not be considered as counterpart funding. (i)Designated Account to be The two accounts would finance all project activities. located at the BICIGUI The authorized representative will sign all the checks. (ii)Project account (counterpart) Disbursement would be made on the basis of incurred eligible to be located at the same Bank expenditures. IDA would then make advances disbursement from the credit into the Borrower-operated Designated Account (DA) to expedite Guinea project implementation. The advance to the DA (700,000$) would be used by the Borrower to finance ‘the share of expenditures under the proposed credit. The FMS of the project will prepare all withdrawal application for SA replenishment. Counterpart funds will be provided by the govemment (i)Designated Account in To facilitate project implementation and reduce the vo!ume of FCFA at the ECOBANK ofMali withdrawal applications, one (1) Designated Account (DA) in local currency (FCFA) has been opened by the PIE at the ECOBANK of Mali on terms and conditions acceptable to IDA. The authorized allocation is FCFA 270 million for the DA. The allocation will cover about four months of eligible expenditures. PIE will be responsible for Mali submitting monthly replenishment applications with appropriate supporting documents for expenditures. To the extent possible, all of IDA’S share of expenditures should be paid through the DA. The DA 33 will be replenished through the submission ofWithdrawal Applications on a monthly basis and will include reconciled bank statements and other documents as required until such time as the borrower may choose to convert to report-based disbursement.

Each PIE will maintain an A Ledger Loan Account (Washington) in SDR to keep track of . drilldowns from IDA credit. The account will show (a) deposits made into the local bank by IDA, (b) direct payments, reimbursements or special commitments issued by IDA, and (c)

WCA Board Package PAD March 30-Clean (Final Version) 61 Print-Version March 3 1.2006 opening and closing balances.

3.2 Use of Statement of Expenses

SOE will be used for the following Payments or Countries contracts : Less than : - US$500,000 for works, - US$250,000 for goods, i Burkina Faso - US$ 100,000 for consulting firms - US$ 50,000 for individual consultants I Less than : - US$500,000 for works, - US$250,000 for goods, Cameroon - US$ 100,000 for consulting firms - US$ 50,000 for individual consultants Less than : - US$500,000 for works, - US$ 150,000 for goods, Guinea - US$ 100,000 for consulting firms - US$ 50,000 for individual consultants Less than : - US$500,000 for works, - US$ 150,000 for goods, Mali - US$ 100,000 for consulting firms - US$ 50,000 for individual consultants

The following table specifies the categories ofEligible Expenditures that may be financed out of the proceeds of the Financing (“Categsr ‘’>,the allocations of the amounts ofthe Credit to each. Category, and the percentage of expen,& aes to be financed for Eligible Expenditures in each Category for the four countries ofthe project:

WCA Board Package PAD March 30-Clean (Final Version) 62 Print-Version March 3 1,2006 Burkina Faso

(6) Unallocated 1,220,000 I TOTAL AMOUNT 6,460,000 1

Cameroon

Amount of the Credit Percentage of Expenditures to Category Allocated in US$ be Financed (1'I Goods 3.1 58.000 100

Guinea

Amount of the Credit Percentage of Expenditures to Category ' Allocated in US$ be Financed

* (6) Unallocated 217,000 j TOTALAMOUNT 7,100,000

WCA Board Package PAD March 30-Clean (Final Version) 63 Print-Version March 3 1,2006 -Mali

I (1) Goods 1.956.000 I 100 I

4. Detailed Financial Management arrangements

4.1 - Staffing arrangements

The following table summarizes the staffing arrangements for each country and indicates specific actions being undertaken to strengthen these.

Staffing charge of the project and especially all the Country Action I FM matters The PST 11-BF’ s PIE already has a team assigned to coordinate the Recruit new accountant and train PST 11-BF implementation (Coordinator, CFQ, Accountant, M & E herhim on Bank FM and disbursement Specialist and Procurement Specialist) with the right mix of procedures as well as accounting Burkina qualification but not of number. Because of the financial software, financial management manual Faso management workload due to several Partners’ financing and the and financial monitoring reporting. new financial management responsibility with regard to the I PRSSAC, the PST 11-BF’.s PIE will need another accountant. 1 The members of the PIE staff have been selected by the The Financial Management staff will Cameroonian Government and the selection is acceptable to the attend workshops and training sessions Bank. The project will be implemented by the accounting and on the new financial management finance staff of the CCAA and the ADC. This staff includes 2 computerized system before project Financial Management Staff. The FM staff qualifications and effectiveness. Accountants, experience are acceptable to the Bank. However, the existing staff of admkistrative, procurement,. monitoring Cameroon the project unit is not very familiar with World Bank procedures. and evaluation staff will also be trained They should attend the World Bank courses on Financial in procedures relating to the use of the Management and Disbursements. Credit (i.e. Designated Account, SOEs, Procurement, Fm etc.) and in Financial Management including internal controls, information systems and computer applications. Financial Management specialist is already in place. It has been Will need some training on Bank discussed and agreed during the last mission that this FMS will be procedures. This accountant will also need training on bank procedures. One additional accountant dedicated to this new project will be recruited.

WCA Board Package PAD March 30-Clean (Final Version) 64 Print-Version March 31,2006 .4.2 Accounting policies and procedures

It is required that the accounting system for the Project follows the Generally accepted Accounting Principles (GAAP) as enunciated in the International Accounting Standards . pronounced by the International Federation ofAccountants (IFAC).

The cash basis of accounting will be used by every PIE and the calendar year is January the lSt through December 31". The Chart pf Account.wil1 be drawn up using the cost tables of all participating countries. The Chart ofAccounts will facilitate the preparation ofrelevant monthly, quarterly and annual financial statements, including information on the following: ,

Total project expenditures Total financial contribution from each financier = Total expenditure on each project component/activity, and Analysis ofthat total expenditure into civil works, various categories ofgoods, training, consultants and other procurement and disbursement categories

In Burkina Faso, the financial management manual of the PST II-BF will be up-dated to insert the PRSSAC's chart ofaccount ofactivities.

In Guinea, the financial management manual of the Gateway project will be up-dated to insert the regional aviation project chart ofaccount.

Similarly, in Cameroon, the project records will be maintained under the private accounting des. However, the accounting manual elaborated in 2001 is outdated and does not reflect the policies and existing practices of the CCAA. The manuals will, be updated and a new chart of accounts developed to reflect the new activities ofthe CCAA, including the project activities.

In Mali, Accounting records will be maintained in dual currencies (i.e. CFA and SDR or US$).

4.3 Planning and Budgeting

Cash Budget preparation will follow the financial procedures manual. On an annual basis, the' unit responsible for FM (in consultation with key project implementation staff) will prepare the cash budget for the coming year based on the work and procurement plans for the year. The cash budget should include the figures for the year, analyzed by quarter. The cash budget for each quarter will reflect the detailed specifications for project activities, schedules (including procurement plan), and expenditure on project activities scheduled respectively for the quarter. (Guidance on the preparation ofbudgets is available in the Bank publication entitled "Financial Monitoring Reports: Guidelines to Borrowers"). The annual cash budget will be sent to the TTL at least two months before the beginning ofthe project fiscal year.

4.4 Fixed Assets and Contracts Registers

The FM unit of each PMU will maintain a Fixed Assets Register, which will be regularly updated and checked. A Contracts Register will also be maintained in respect of all contracts

WCA Board Package PAD March 30-Clean (Final Version) 65 Print-Version March 3 1,2006 with consultants and suppliers. The FS will prepare Contract Status Reports quarterly. Control procedures over fixed assets and contracts with consultants and suppliers will be in line with the Financial Procedures Manual.

4.5 Information system

In Burkina Faso, accounting software is installed and running well for the PST 11-BF. It is well customized and will be reviewed to take into account the PRSSAC’s chart of account of activities. A consultant will be required to update the FM and Procurement manual and the accounting software for the benefit of PRSSAC. Simplified terms ofreference for the selection of the Consultant would be proposed by PST 11-BF for to Bank’s approval. They should specify that the PST 11-BF’s financial management system would be up-dated for PRSSAC and be capable ofproducing the financial management reports described in the reporting and monitoring section. The completion ofthis assignment is set as condition ofcredit effectiveness.

In Cameroon, the accounting records are kept using a computerized double entry accrual- based system (Delta). Delta replaced in 2004 the accounting software used by the CCA, CIEL. Delta is partially functioning and does not cover budgeting and cost analysis. Ten persons within CCAA have been trained to use Delta but the accountant is still not satisfied with its performance. There is a need to provide the project with a specific computerized system.

In Mali, the existing computerized Financial Management System will be upgraded and customized consequently to take into the accounting system to be designed for the new project. The same applies for the existing manual of procedures, which will need additional developments to address any particularity

4.6 Reporting and Monitoring

Monthly, quarterly and annual reports will be prepared by the unit in charge of FM within the PIE.

It has been decided that, at the minimum, at the end of each quarter the following reports be prepared and submitted not later than 45 days after the end of each calendar quarter to the Bank:

Financial reports consisting ofamong other, sources and Uses of funds, Uses ofFunds by Project Activity, SOE withdrawal Schedule, when applicable Designated Account Statement (and reconciliation thereto) or Direct Payment schedules, Statement of actual and budgeted expenditures, cash flow projections; Physical Progress reports; and Procurement reports

In addition to the above quarterly reports, at the end of each financial year (end of December), Project financial statements should be prepared consisting of all the Financial reports listed above plus Statement of cash position for project ds from all sources, when applicable, statement reconciling the balances of the various Bank Accounts to the Bank Balances and notes . to the financial statement.

WCA Board Package PAD March 30-Clean (Final Version) , 66 Print-Version March 3 1,2006 For the Project, Sample I1from the Guideline to Borrowers on the preparation ofFMRs has been chosen as the format for the FMR.

In Burkina Faso, the FMRs and the annual project financial statements of the PRSSAC will be prepared separately from those ofthe host project, which is PST II-BF.

Guinea did not have specific FM Reporting; all ongoing projects are issuing a quarterly FM report.

4.7 Internal audit

It is required that the Project should have in place satisfactory internal audit arrangements to assist management in ensuring the continuing adequacy of and conformity with the project’s financial procedures and other due process.

In Burkina Faso, there is an internal auditor designated by the Minister of MIHU. He is located in the Ministry’s cabinet and is in charge ofthe entire transport sector progam and ofthe PST II- BF. He has been provided with an audit procedure manual and trained on Bank’s policies and procedures relating to disbursement, financial management and procurement (CESAGlDakar in September 2004).

In Guinea, the DNAC does not have an internal audit unit. The Financial Management perfonqance will be followed through Bank supervision mission, SQE Review missions and external auditor.

In Cameroon, the internal audit function does not exist in the CCAA. However, the function of management control is staffed. The absence of internal audit activity within the project will be mitigated by the quarterly assessment ofinternal control ofthe Project by the external audit. This activity will be included in the TQRs ofthe external auditor.

In Mali, the internal audit fkction will not be carried out by a specific body but addressed by supervision mission supplemented by external auditors’ reviews. Specifically, a close follow-up . ofthe findings and recommendations of each management letter will suffice.

4.8 External audit

It is required that the accounts ofthe project be subject to an external audit either by the auditor general of the recipient country or by an independent audit firm. The selection and appointment ofthe external auditor and the TOR will be in accordance with the bank’s guidelines.

Audited Project Financial Statements will be submitted to the Bank within six months after year end (12/3l/n). The auditors will express an opinion on the Project Financial Statements in accordance with International Standards on Auditing.

WCA Board Package PAD March 30-Clean (Final Version) 67 Print-Version March 3 1,2006 In addition to the audit report, the auditors will be expected to prepare management letters giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the Bank agreement.

In Burkina Faso, since the total investment is estimated at US$ 6.46 million which is a small amount and the financial management is centralized at the PST 11-BF’ s PMU, the external auditor for the PST 11-BF may also perform the audit for PRSSAC. To this end, related contract may be amended and extended to cover this project. Bank positively appreciated the PST 11-BF’s audit report for 2003 and 2004. TORS will be prepared to amend the external auditor’s contract and this should be completed at the latest by effectiveness

Ln Guinea, the DNAC will be responsible for the preparation and implementation of annual financial and technical audits of the Project. The project financial statements will be audited annually by an independent auditor acceptable to the Bank in accordance with auditing standards also acceptable to the Bank. Audit reports ofreasonable scope and detail will be submitted to the Bank within six months of the end of the audited period. TOR have been prepared for the appointment at the latest by effectiveness of an external auditor acceptable to the Bank in Guinea. . In Cameroon, the CCAA accounts have not been audited by external auditors since it was established. However, partial financial statement statements provided by the CCAA are the 2003 accounts (the 2004 financial statements in still in the progress). The audit of 2001, 2002 and 2003 of CCAA must be finalized and audited, and the reports transmitted to the Bank prior to Credit effectiveness. CCAA will appoint external auditors separately for the project on a TOR acceptable to the Bank.

In Mali, a single opinion on the Audited Project Financial Statements will be required, in accordance with International Standards on Auditing (ISAs). The opinion will include the accuracy and the propriety of expenditures made under the SOE procedures and the extent to which these can be relied upon as a basis for credit disbursements.

WCA Board Package PAD March 30-Clean (Final Version) 68 Print-Version March 3 1,2006 Country Action Plan Planning Letter informing the MIHU’ s internal auditor on the existence ofPRSSAC Sept. 30,2006 Recruitment of an accountant and appropriate training on Bank’s disbursement Sept. 30,2006 mocedures I BURKINA Budget 2005 formulated and Designated Account opened I Sept. 30,2006 FASO FM manual and accounting software up-dated and related training for the newly I Sept. 30,2006

Open a Designated Account in a Commercial Bank Sept. 30,2006 Agree on format for FMRs and ability to prepare FMRs demonstrated Sept. 30,2006 Appropriate terms ofreference for the extemal auditors to be developed and Sept. 30,2006 CAMEROON aereed. Organize workshop for staff for procurement, disbursement and financial Sept. 30,2006 management procedures. Update the accounting and the auditing manuals Sept. 30,2006 Clear the backlogs ofthe Accounts (2001-2003) Sept. 30,2006

GUINEA

MALI

WCA Board Package PAD March 30-Clean (Final Version) * 69 Print-Version March 3 I,2006 6. Effectiveness conditions and supervision plan

6.1 Effectiveness Conditions

Country Conditions

The Administrative, Financial and Accounting Manual, in form and substance satisfactory to Burkina the Association. has been adoDted bv the ReciDient Faso An external auditor with qualifications, experience and terms ofreference satisfactory to the Association has been appointed by the Recipient in accordance with the provisions of Section I11 of Schedule 2 to the Financing Agreement The Subsidiary Agreement, in form and substance satisfactory to the Association, has been duly executed on behalf ofthe Recipient and the Project Implementing Entity. The Administrative, Financial and Accounting Manual, in form and substance satisfactory to the Association, has been adopted by the Recipient and the Project Implementing Entity A Designated Account has been established by the Project Implementing Entity in accordance with the provisions of Section 2.04 ofthe General Conditions An account has been opened by the Project Implementing Entity in a financial institution satisfactory to the Association and under terms and conditions satisfactory to the Association, Cameroon and an initial deposit ofCFA Francs 100,000,000 has been made by the Project Implementing Entity in such account A financial management system, in form and substance satisfactory to the Association, has been established by the Project Implementing Entity Project Implementing Entity personnel have been provided training, in form and substance satisfactory to the Association, in financial management and procurement procedures An external auditor with qualifications, experience and terms ofreference satisfactory to the Association has been appointed by the Project Implementing Entity in accordance with the provisions ofSection I11 ofSchedule 2 to the Financing Agreement Guinea None The Subsidiary Agreement, in form and substance satisfactory to the Association, has been duly executed on behalf of the Recipient and the Project Implementing Entity The President and members of the Directorate of the Project Implementing Entity have been appointed by the Recipient The financial management system ofthe Project Coordination Unit has been revised to the satisfaction ofthe Association, including so as to permit the fulfillment of financial reporting Mali requirements under the Financing Agreement An accountant with qualifications, experience and terms ofreference satisfactory to the Association has been appointed to the Project Coordination Unit in accordance with the provisions of Section 111 of Schedule 2 to the Financing Agreement An external auditor with qualifications, experience and terms of reference satisfactory to the Association has been appointed by the Project Implementing Entity in accordance with the provisions of Section I11 of Schedule 2 to the Financing Agreement

6.2 Supervision Plan

Financial management supervision will be carried out by the Financial Management Specialist (FMS) not only upon the Task Team Leader’s request but also on the risk-based approach. The FMS will also:

WCA Board Package PAD March 30-Clean (Final Version) 70 Print-Version March 3 1,2006 Conduct an FM supervision before effectiveness/disbursement; = Review the financial component of the eriodic monitoring reports; and,

Review the Audit Reports and Management Letters from the external auditors and follow-up on material accountability issues by engaging with the TTL, Client, andor Auditors. The following are some additional country-specific supervision arrangements.

In Burkina Faso, the first supervision mission will occur within three months after financing effectiveness. But prior to that, a clear understanding must be reached with the TTL on its work plan and on the risk-based approach.

In Cameroon, supervision will include a field supervision ofproject activities every six months.

In Guinea, there will be a total of two supervision missions a year. The fiduciary team (Procurement and Financial Management Specialists) will have to participate in these supervision missions.

In Mali, supervision will include participation in project supervision missions as appropriate. The Bank FMS in charge will monitor the timely implementation of the financial management . arrangements.

B

WCA Board Package PAD March 30-Clean (Final Version) 71 Print-Version March 3 1,2006 Annex 8: Procurement Arrangements

A. General

Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least ' annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. Where applicable, the Bank's Standards Biddings Documents for goods and works and Standard Request for Proposals for Consultants, as well as all standard evaluation forms, will be used throughout project implementation. Other bidding documents which do not follow Bank standards, including national bidding documents, may also be acceptable, provided they are reviewed by the Bank, prior to their first use.

Advertising: A comprehensive General Procurement Notice (GPN) will be prepared by the Borrowers and published in the United Nations Development Business online (UNDB online)

, and in the Development Gateway Market (dgMarket) to announce major consulting assignments and any ICB". The GPN shall include all works under ICB, all goods contracts under ICB, and all large consulting contracts (Le., those estimated to cost US$ 200,000 or more). In addition, a specific procurement notice is required for all goods to be procured under ICB and request for expression ofinterest for contract expected to cost more than US$200,000 shall be advertised in UNDB online and in dgMarket. An Expression of Interest (EOI) is required in the national gazette or a national newspaper or in an electronic portal of free access for all consulting firm services regardless of the contract amount. In the case of NCB", a specific procurement notice will be published in the national gazette or a national newspaper or an electronic portal of free access. Contracts awards will also be published in UNDB and dgMarket, in accordance with the Bank's Procurement Guidelines (para 2.60) and Consultants Guidelines (para 2.28).

Summary of Institutional Responsibility: The institutional responsibility for procurement for all countries has been agreed upon during appraisal.

Procurement of Works:

Works procured under this project would include primarily rehabilitation of airport fences, technical library space and training rooms at CAAs headquarters as well as construction of crisis room within existing airport passenger terminal facilities.

The procurement will be done using the Bank's Standard Bidding Documents (SBD) for all ICB and National SBD agreed with or satisfactory to the Bank.

loICB: International Competitive Bidding NCB: National Competitive Bidding

WCA Board Package PAD March 30-Clean (Final Version) 72 Print-Version March 3 1, 2006 Procurement of Goods:

er this project would include navigational aids, luggage, passenger and cargo screening machines, patrol and ambulance vehicles, video monitoring equipment, electrical generators, radios, computers and electronic ID badges. The procurement will be done using the Bank’s SBD for all ICB and National SBD agreed with or satisfactory to the Bank.

of non-consulting services:

This will cover primarily training classes for CAA personnel in the areas ofaviation security and , as well as screening and computer equipment maintenance.

Selection of Consultants:

Consulting services will include technical audit and reform study for some CAAs. Likewise, it will encompass drafting of national security plans, procedures manuals as well as engineering studies for patrol route, airport fence and airport terminal and runway rehabilitation. Short lists of consultants for services estimated to cost less than US$ 100,000 equivalent per contract may be composed entirely ofnational consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

. Operating Costs:

Only operating costs which will be financed by the project will cover equipment for the project liaison person at the CAAs whenever a PIE is used as a fiduciary agent.

Trainings, Workshops, Seminars and Conferences

Training, workshops, seminars and conferences attendance and study tours will be carried out on the basis of approved annual programs that will identify the general framework of training and similar activities for the year, including the nature oftraininglstudy tours/workshops, the number ofparticipants, and cost estimates.

B. Assessment of the agency’s capacity to implement procurement

Procurement activities will be carried out by existing PIEs in Burkina Faso and Mali. In Guinea and Cameroon the CAAs will manage procurement activities. Recommendations for strengthening PIEs and CAAs procurement staff have been made for each project following procurement capacity assessment reviews conducted by Bank’s procurement specialists.

The key issues and risks concerning procurement for implementation of the project have been identified and used to prepare an action plan (see Table below).

The overall project risk for procurement is moderate.

WCA Board Package PAD March 30-Clean (Final Version) 13 Print-Version March 31,2006 x X X X I x I I X I

X X

0 P X X X X

I

X X I X X -

X X X P

h X X E0 -. .-v1 * E X X

X X x

x

h X s x .-v1 9 X X

$M m C. Procurement Plan

The Borrowers, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team between June and September 2005 and is available at the offices of the respective CAAs. It will also be available in the project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

D. Frequency of Procurement Supervision

In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended supervision missions to visit the field at least twice a year to cany out post review ofprocurement actions.

1. Goods, Works, and Non Consulting Services

(a) List ofcontract packages to be procured:

For Burkina Faso:

Contract Estimated Procurement P-Q Domestic Review by Expected Comments (Description) cost Method Preference Bank Bid . (US$ 000) I I I (yes/no) I (Priormost) I Opening I

vehicles Acquisition of specific equipment (Portals and 2 electric barriers and X ray) Acquisition of specific equipment 3 (Commutative Equipment, Portico

3071 ICB No Prior 12/1/06 material 1 I 1 1 I

ICB Contracts estimated to cost above 500,000 US$ for works and 250,000 US$ for Goods per contract, 2 first NCB contracts and all Direct contracting will be subject to prior review by the Bank.

WCA Board Package PAD March 30-Clean (Final Version) 78 Print-Version March 3 1,2006 For Cameroon:

1 Acquisition of general I I ' II 1 I I 1 equipment include ICB NO No Prior 04/10/2007 2,133 training I

ICB Contracts estimated to cost above 500,000 US$ for works and 250,000 US$ for Goods per contract, 2 first NCB contracts and all Direct contracting will be subject to prior review by the Bank.

For Guinea:

ICB Contracts estimated to cost above 500,000 US$ for works'and 150,000 US$ for Goods per contract, 2 first NCB contracts and all Direct contracting will be subject to prior review by the Bank.

WCA Board Package PAD March 30-Clean (Final Version) 79 Print-Version March 3 1,2006 For Mali:

ICB Contracts estimated to cost above 500,000 US$ for works and 150,000 US$ for Goods per contract, 2 first NCB contracts and all Direct contracting will be subject to prior review by the Bank.

2. Consulting Services

(a) List of consulting assignments with selection methods and time scliedule. '

For Burkina Faso:

11 2 I 3 I 4 I 5 I 6 Ref. I Contract I Estimated IProcurement I P-Q I Domestic (Description) Method Preferen c e Bank Bid (yeslno) Date Technical studies and 1 crisis room construction 100 QCBS Prior I08/03/2006 1 works control Training of personnel on certification and pre 136 .QCBS Prior 10/19/2006 audit of the 1 1 I I 1 Ouagadougou airport Personnel Training on 85 ICB air security Personnel training in the 167 ICB I field of air security

WCA Board Package PAD March 30-Clean (Final Version) , 80 Print-Version March 3 1,2006 Consuttancy services estimated to cost above 100,000 US$ for firms and 50,000 US$ for individual consultants per contract and single source selection of consultants for assignments, regardless of the contract amount, will be subjected to prior review by the Bank.

For Cameroon:

2

3

4

Superyision for airport fence rehabilitation work

Consultancy services estimated to cost above 100,000 US$ for firms and 50,000 US$ for individual consultants per contract and single source selection of consultants for assignments, regardless of the contract amount, will be subjected to prior review by the Bank.

For Guinea:

WCA Board Package PAD March 30-Clean (Final Version) 81 Print-Version March 3 1,2006 Consultancy services estimated to cost above 100,000 US$ for fms and 50,000 US$ for individual consultants per .contract and single source selection of consultants for assignments, regardless of tht contract amount, will be subjected to prior review by the Bank.

For Mali:

~7 8 9 Contract Estimated Procurement P-Q Domestic Review by Expected Comments (Description) . Cost Method Preference Bank Bid (US% 000) (yesho) (PriorRost) Opening Date Training of inspectors in Licensing aeronautic 60 sss Prior n.a. personnel Financial and Accounting Amendment auditor to the contract for 40 1 thePACT 1

Consultancy services estimated to cost above 100,000 US$ for fms and 50,000 US$ for individual consultants per contract and single source selection of consultants for assignments, regardless of the contract amount, will be subjected to prior review by the Bank.

WCA Board Package PAD March 30-Clean (Final Version) 82 Print-Version March 3 1, 2006 Annex 9: Economic and Financial Analysis

Today West and Central Africa’s (WCA) air transport sector faces many safety issues and individually, most ofthe WCA States do not have the financial and human resources to comply with either US, European or ICAO’s safety and security requirements. In West and Central African countries, the regional Air Transport Program initiated by the Bank is aiming to enhance the compliance with security and safety international standards in support of the economic and social development in the Region. Specific economic sectors would benefit from the improvement of air services namely tourism, trade (manufacturing, agriculture) or employment.

Measuring the economic benefits of the implementation of the program would require forecast data about the quantitative impact ofputting in place measures that would strengthen safety and security of air transport in the targeted countries. No such information is available, however, and no cost-related data can be obtained to make relevant computations. Furthermore, the nature of the investments financed (i.e airport security infrastructure and equipment, safety and security training) make any quantification ofthese benefits difficult as these investments are among many others necessary to strengthen the aviation sector’s growth potential. Nevertheless, it is still possible to highlight today’s impact on the aviation sector globally in SSA countries based on available studies and surveys. More specifically the major impacts of the project would be on tourism, travel fares, trade and investment into Afi-ica.

Tourism in Africa - the role of aviation

In 2004, according to a World Tourism Organization (WTO) report, Africa accounted for 4 % of international tourist flows, or 30 million tourists. Among African countries, five, namely Morocco, Tunisia, and the Seychelles accounted for 60% ofthat ‘total (see Table l), while the four project countries (ie., Cameroon, Mali, Burkina Faso and Guinea) and WCA country represented only, respectively, 2.8% and 13.0% ofthat same total.

Source: see References Table 1: Tourism in Africa (2004)

Although African’s share of international tourism is limited, with nearly 3 millions jobs, it boats the third largest number of direct and indirect tourism employments linked to air activities

WCA Board Package PAD March 30-Clean (Final Version) 83 , Print-Version March 3 1,2006 worldwide (see Figure 1). Such number provides strong evidence of the unusually large dependency of Africa’s tourism activities on aviation services. Thus, Africa, and for that matter WCA countries depend, more than any other world’s regions or countries on aviation activities for their tourism activities.

7

6

5

u) E 4 24 ! -.- I , E 3

2

1

0 Asia-Pacific Europe Africa Latin America/ North America Middle East Caribbean

Source: OEF- WTTC, 2004 Figure 1: Tourism-related employment (indirect + direct) supported by air (2004)

Although the proportion of direct employment generated by tourism in the project’s four countries is relatively low when compared to other African countries (see Figwe 2), the size of direct employments in these other countries underscore the job creation potential of tourism activities in these four countries. Indeed, even at their current low levels, tourism activities in Mali, Burkina Faso, Guinea and Cameroon support cumulatively 192,000 jobs annually, or about 2% of their active population. More importantly, however, revenues generated by these activities accounted in 2004 for no less than US$ 1.2 billiodyear (see Figure 3) which represented then anywhere from 1.0 (Le., Guinea) to 14.7% (Le. Burkina Faso) of each country’s total exports revenues. Lastly, tourism activities in these four countries amounted that year from 5.1 to 8.0% of all investments. These numbers underscore the importance of tourism for these countries’ economy and, consequently, that of air transport ch is in all WCA the primary mode of transport utilized for international tourists to reach them. As such, any improvements in air safety and security, in as much as it should translate in lower air fare and greater air service frequency, can impact positively this sector; thus boost tourism related employment, revenues and investment. It is not by mistake that the dominant countries in the African tourism industry (i.e., the Group of five) all boast world class air carriers which are supported by world class civil aviation authorities and airport security and safety. Indeed, among this group of five, all but the

WCA Board Package PAD March 30-Clean (Final Version) 84 Print-Version March 3 1,2006 Seychelles which does not have national airlines, have civil aviation authorities certified Category Iby the US FAA and airports certified by the US TSA for direct flights to the USA.

7

800 18%

750 16?4 700

650 q4% 800

550 12% 500

450 10% 400 350 6%

300 6% 250

200 4% 150

100 2% 50

0 0%

Source: WTTC, 2004 Figure 2: Tourism industry direct employment in 2004

3,000 ___I____ -- i 2.600 i 2.500

2,000 E ~1,500

1,000

500

0 Morocco Tunisia Cameroon Mali Guinea Burkina Nigeria Faso (1998,

Source: WTTC, 2004 Figure 3: Annual tourism revenues (2004)

WCA Board Package PAD March 30-Clean (Final Version) 85 Print-Version March 3 1,2006 /- Dominican Republic 4.9% Kenya 4.8% Tunisia Gambia Cuba South Africa Morocco Mali Burkina Faso Cameroon Guinea Nigeria

0% 5% 10% 15% 20% 25% 30%

Source: W7TC 2004 Figure 4: Tourism capital investment as a percentage of total investment (2004)

AviatiodAirport safety and security - their impact on air services frequency and price

Air transport services in Africa, and especially WCA countries, are characterized by the scarcity of frequency offered as well as the high level of fares they command. As shown in Figure 5, for international flights of comparable times and distance, people traveling to/from Africa will pay anywhere from 40 to 138% more per miles flown in business class. Such difference in price reflects mostly the lack ofcompetition to/from Africa whereas non-African international carriers hold a dominant position on most international city pair services as local carriers, when they exist, cannot simply compete head-to-head with vastly larger European carriers in large part due to poor safety and reliability records that hamper their competitiveness. This situation is not, however, irreversible as shown by the successful growth of national, albeit partially privately owned, African carriers such as or Air Senegal International which have succeeded in competing head-to-head with European carriers with the correlated results of lowering air fares on these routes as well as increasing frequency. One key aspect of these success story is that both carriers have benefited from secured and safe airport infrastructure (i.e., both Dakar and airports are certified by the US TSA for direct flights to the US) as well as adequately competent technical oversi from their respective civil aviation authorities (i.e., Kenyan Civil Aviation Authorities is certified Level Iby the US FAA while Senegal’s is on the verge of obtaining this certification).

WCA Board Package PAD March 30-Clean (Final Version) 86 Print-Version March 3 1,2006 6,000 10

9

5,000

4,000

s v) $ 3,000 -u Li

2,000

1,000

0 Paris-Dakar‘ Tokyo-Bangkok Pans-Abidjan* Pans-Dubai Paris-Brazza4le‘ Pans- SantoDomingo 1 -Business class fare +Flight time 1 West African long haul routes

Source: Iches, Michel: ‘%ir Transport in Western and Central Afiica :Fa& and Issues.” The World Bank Group, August 2003. Figure 5: Compared return fares on a sample of WCA and other long haul routes

A similar situation, although with even more pervasive effects exists in WCA regional aviation markets. Here competition is even more restrained as countries continue to protect jealousy their national carriers behind safety and security arguments in spite ofthe adoption ofthe YD whose main purpose was to fully liberalize regional traffic. Indeed, time and time again evaluations of the YD have shown that most countries were failing in implementing it with the worst offenders, such as Senegal, often hosting national champions. It has become amply clear, therefore, that any improvements in the general level of aviation safety and security in WCA would preclude most countries from using the safety and security arguments to restrict market access and, thus, result in increasing service frequency as well as, more than likely, lower air fares.

AviatiodAirport safety and security - their impact on investment

According to a survey made by the consultant agency Healey and Baker in 2003, at a worldwide level 56 % ofthe companies consider international air transport links to be an essential factor for locating businesses. Another survey made by IATA showed that 18% of businesses’ past investment decisions were directly affected by the absence of reliable, safe and secure air transport links. This suggests that providing SSA countries with minimum safety and secqity requirements in the civil aviation field can contribute to creating investment-attractive conditions for international companies.

WCA Board Package PAD March 30-Clean (Final Version) 87 Print-Version March 3 1.2006 An example of these investment-attractive conditions is the ability to negociate and to conclude partnerships: a survey made by the Aviation Services of the City of pointed out that while new technology, such as video or audio conferencing, can be useful, companies in the financial and business services sector still consider flying for face-to-face meetings to be essential for winning new business and developing clients’ relationships. However, among the Safety and Security Project’s objectives is that Airport authorities have adequate procedures in terms of passengers’ control. A survey made by IATA in 2005 on a poll of 5 countries (Chile, China, the Czech Republic, France, the US) demonstrated that more than 65% of businesses consider passenger air services as vital or very important for servicing or meeting consumer. Chinese firms for instance place the greatest reliance on passenger air services for servicing or meeting clients, with nearly 90% of their businesses reporting that they are vital or very important.

Also, overall, 85% of businesses report that passenger air services are at least sometimes important for their sales, with 70% considering them to be either vital or very important. This dependency on air services means that companies have incentives to locate their operations in the vicinity of major airports. Broadening the conclusions of this survey to WCA countries shows that the project could have significant benefits on the overall region’s investment climate.

Aviation/Airport safety and security -their impact on exports trade

A safe and secure air transport system is one ofthe major levers to sustain growth in the volume and the value of the goods. Indeed, worldwide, up to 40% of the value of international trade in manufactured goods is transported by air. However, 60% of air cargo is actually carried as belly czrgo by passenger airplanes. This means that air cargo rates are directly affected by the level of competition that exists on any given routes between passenger airlines. As such, favorable international air cargo rates to/fiom WCA cannot be secured ‘without a vibrant air passenger market which itself is subjected to the limitation imposed by low safety and security standards in the region. As shown by the example ofKenya and Senegal, selected high value perishable high value agricultural goods such as cherry tomatoes (Senegal) or flowers (Kenya) can only gain international market access if the countries where they are produced have direct and affordable air links with their export markets (Le., Western Europe in the case of Senegal and Kenya). Once more, such air services depend in large part on the level of air security and safety that the’ exporting countries maintain.

Conclusion

Improvements in WCA’s aviation security and safety standards will not in and by themselves increase tourist flows, inward international direct investment or international trade. However, they will undoubtedly be an important enabler of future growth in these activities as all depend heavily on the ease, affordability and access to the WCA market. The project should, therefore, be viewed as an important building stone in the overall economic development strategy of the WCA countries.

WCA Board Package PAD March 30-Clean (Final Version) 88 Print-Version March 3 1,2006 References

Air Transport Action Gro (ATAG), “The econo social benefits of air tr UTA, PriceWaterHouseCoopers : << Etude de la Mise en Place d’une Structure Autonome de gestion de 1’Aviation Civile en Rkpublique Dkmocratique du Congo. Projet de Rapport de la phase 1 )) (19 Aoat 2005) Iches, MicheI : “Air Transport in Western and Central Africa : Facts and Issues.” The World Bank Group, August 2003. UN Economic Commission for Africa: “Tourism in Africa and the Multilateral Trading System: Challenges and Opportunities.” Adrian Gauci, Vittorio Gerosa, Cornelius Mwalwanda United Nations Conference on Trade and Development, Economic Development in Afr-ica. “Rethinking the Role of Foreign Direct Investment”, United Nations, and New York 2005. WTO-S.A.F.E Program report: “The WTO strategy on Security and Facilitation Enhancement.” Assembly, 35‘h session. August 24,2004 West and Central Africa Air Transport Safety and Security Project: Project Appraisal Document, Minutes, Notes and Powerpoint presentation of the Decision Meeting. The World Bank, October 18,2005. -1

, WCA Board Package PAD March 30-Clean (Final Version) 89 Print-Version March 3 1, 2006 ' Annex 10: Safeguard Policy Issues

A. Environmental Assessments and Resettlement Action Plans

No significant environmental issues are anticipated from the project-financed airport security fences for all five project countries. Civil works of the project are limited to: a) strengthening existing security fences of the airports by rehabilitating and erecting new parts of the walls and b) refurbishing of existing space in airport and CAAs' buildings. Environmental imprints will be site specific to all fences. All construction activities, however, will be subjected to occupational safety mitigation measures, to reduce the adverse impact on construction personnel, local populations and work place environment

Social assessments and three Resettlement Action Plans (RAPS) have been prepared. Public consultations with key stakeholders (community leaders, church officials, local government officials, project affected persons and airport officials) were carried out prior to the social assessment. Additional public consultations were conducted during the social assessment.

These RAPS were submitted to the World Bank relevant Safeguards Unit for approval and clearance and were disclosed at World Bank's Infoshop in November 2005.

The Yaounde RAP proposes as one ofthe medium term improvement measures the construction of an 8-km unpaved road as mitigation for the longer access to the city center for population living near the airport fence when the access is closed by new fencing, which was discussed with the population during the RAP design. It was agreed during appraisal that the proposed unpaved road would be funded by the government as part ofits contribution to the project. It was further . . agreed that the proposed project would fund the environmental brief needed to comply with the Government of Cameroon and the World Bank safeguards policies. The GoC would similarly fund the relocation ofthe religious shrine from the airport.

An initial survey carried out by the Government of Cameroon in Dec 2005-Jan 2006 as part of the follow up of the RAP has not led to the identification of any wildlife and sensitive natural habitat issue in this peri-urban area, nc 18 "B that of resettlement. An assessment of appropriate' scale ofpotential environmental impactrs J1 however be made before notice to proceed with the road construction is issued, which is scheduled by year 3 ofthe project.

B. Safeguards - Related Risks

Potentially adverse social impacts to be induced by the implementation ofmore stringent airport premises access rules, were identified (OP/BP 4.12). The impacts are contained within the fenced security perimeter of the airport property and limited to three types: a) impacts on illicit income generating activities (vegetable gardening), b) impacts on prohibited access to tarmac (trespassing of tarmac), and c) impacts on a couple of housing structures. These impacts were identified at Conakry, Douala and Yaounde international airports in Guinea and Cameroon, respectively. The most severe impacts are in Conakry, Guinea. Actions taken to mitigate the

WCA Board Package PAD March 30-Clean (Final Version) 90 Print-Version March 3 I, 2006 impacts include: social impact assessment and preparation ofResettlement Action Plans (RAP) for all three airports.

C. Alternatives Considered to Minimize Adverse Safeguard -related Impacts

The design ofthe airport fences was modified to take into account mostly the safety and security impacts rather than the airport property boundaries, and therefore reduce the need to relocate activities and thereby, minimize adverse environmental end social impacts. The CAAs or airport authorities however often deal with encroachment issues in many areas, but these are not covered by the project scope.

D. Consultations with Various Stakeholders and Affected Groups

Stakeholders include: local government officials, community leaders, NGOs, church officials, project affected persons (PAPS), national government authorities and airport officials. Public consultations were carried out with these stakeholders prior to the environmental and the social assessment. The design ofthe fences will entail other sessions ofpublic consultations. E. Long-term Adverse Safeguard Impacts

The safeguards impacts identified are not expected to have any long term or cumulative impacts.

F. Assessment of Capacity and Commitment of Client to Address Safeguard Issues

As part of project preparation, the project countries covered costs for baseline study and social assessments. Likewise, Resettlement Action Plans were prepared and financed by the project countries.

6. Funding of Safeguard Mitigation Measures

Costs for covering safeguard mitigation measixes are included in the bills ofquantity.

H. Mechanisms to Monitor the Implementation of Agreed Mitigation Plans

The implementation of the RAPS will be launched prior to commencement of civil works. Supervision of project operations will include a social scientist and environment specialists. Project progress reports shall include environmental and social development outcomes.

I. References to Mitigation plans in the Project Legal Arrangements

The mitigation of adverse environmental and social impacts identified have been incorporated into the credit agreement and will be incorporated into contract documents.

WCA Board Package PAD March 30-Clean (Final Version) 91 Print-Version March 3 1,2006 b J. Supervision Arrangements including staffing and Resources

The project countries have participated in the Bank’s safeguards workshops for senior environmental staff of the countries; this has laid the foundation for sound environmental and social management.

WCA Board Package PAD March 30-Clean (Final Version) 92 Print-Version March 3 1,2006 Annex 11: Project Preparation and Supervision

Key institutions responsible for preparation ofthe project:

Bank staff and consultants who worked on the project included:

WCA Board Package PAD March 30-Clem (Final Version) 93 Print-Version March 3 1,2006 Bank funds expended to date on project preparation: 1. Bank resources: US$449,049.08 2. Trust funds: US$ 0.00 3. Total: US$449,049.08

Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$ 12,000 2. Estimated annual supervision cost: US$200,000

WCA Board Package PAD March 30-Clean (Final Version) , 94 Print-Version March 3 1,2006 Annex 12: Documents in the Project File

- Projet “COSCAP” pour la supervision de la securitC akrienne dans les Etats members de la CEMAC et de Sao Tome e Principe - Document Cadre (July 2000)

- Project Concept Note (December 2003)*

- Rapport d’6tude technique pour la construction de la cl6ture de l’akroport international de Douala (Septembre 2003)

- Project Information Document (January 2004)

- Questionnaire Banque mondiale pour I’amtlioration de la SCcuritC et de la Siiretk aeriennes (Mai 2004)

- OSTA Safety Audit of African Airlines (July 2004)

WCA Board Package PAD March 30-Clean (Final Version) 95 Print-Version March 3 1,2006 Annex 13: Statement of Loans and Credits

Original Amount in US$ Millions - Project FY Purpose GEF Cancel. ID - 2[3W] UEMOA: PO74525 2004 Capital Markets 0.00 I 96.39 1 0.00 0.00 0.00 Development 3A-HIV/AIDS PO74850 2004 for Abidjan 0.00 0.00 Lagos Transport [3S] Southern PO69258 2004 Africa Power 0.00 0.00 Market (APL1) Senegal River PO64573 2004 Basin GEF 0.00 0.00 0.00 5.26 0.00 - Project Regional HIVAIDS PO82613 2004 0.00 0.00 0.00 0.00 0.00 Treatment Project [3T] BEAC PO72881 2003 Regional 0.00 14.50 Oh0 0.00 0.00 Payment System 2Nile Transboundary PO70073 2003 0.00 0.00 0.00 8.00 0.00 Environmental Action [3~1 REGIONAL

PO63683 200 1 TRADE 0.00 ~ 5.00 ~ 0.00 0.00 FACILITATION 1: PROJECT Total: 0.00 294.49 13.26 0.00 393.05 I 2.48 I O.O(

WCA Board Package PAD March 30-Clean (Final Version) 96 Print-Version March 31, 2006 AFRICA STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars

WCA Board Package PAD March 30-Clean (Final Version), 97 , Print-Version March 3 1,2006 Annex 14: Countries at a Glance

Burkina Faso

Environment

infrastructure

Source: Wodd Development Indicators database, April 2005

WCA Board Package PAD March 30-Clean (Final Version) 98 Print-Version March 3 1,2006 Cameroon

Environment

infrastructure

Source: World Development Indicators database, April 2005

WCA Board Package PAD March 30-Clean (Final Version) 99 Print-Version March 3 1,2006 Guinea

Environment

infrastructure

Source: World Development Indicators database, Apn/ 2005

WCA Board Package PAD March 30-Clean (Final Version) 100 Print-Version March 3 1,2006 -Mali

Environment

infrastructure

Source: Wodd Development Indicators database, April 2005

WCA Board Package PAD March 30-Clean (Final Version) 101 Print-Version March 3 1,2006 Annex 15: Current safety oversight and accident situation of air transport in WCA

I 60 60

50

40

30

20

10

0 Asia Pacific Eastern and Europe Middle East North and South West and Southern Central America Central Africa America Africa

a Lack of Effective Implementation of SARPs (in percent) MAccident Rates in 2000 (per million of scehduled departures) \

This chart, which was prepared on the basis ofinformation received by ICAO, demonstrates the relationship between the lack of adequate air transport safety oversight and accidents. The left column for each region shows the percentage of findings (non-compliance) of ICAO’s audits of the regions CAA. The right column shows the accident rates of scheduled air traffic. For the chart we clearly can derive two conclusions:

1. Poor safety oversight correlates directly with high accident rates; 2. West and Central Africa region has the highest accident rate, about 30 times higher than the USA (for illustration: the US would have one major air crash every single week if they had the same safety record as WCA countries).

In order to successhlly address the safety issues of any cou&y, adequate safety oversight by the county’s Civil Aviation Authority must be the prime focus.

WCA Board Package PAD March 30-Clean (Final Version) 102 Print-Version March 3 1,2006 Annex 16: Country selection process

Tables 1 and 2 present the Project Team’s analysis and rationale for a phased approach based on each WCA country’s ability, willingness and expected benefit from participating in this project. Table 1 presents the evaluation criteria used to assess which country should be included in any or all ofthree project phases. These are, namely:

Financial capacity - in is case, the Project Team sought to estimate based on year 2000 air traffic volumes, the level ofresources that each airportkountry could derive from an average security fee of $3 per international passenger and $1 per domestic passenger. The level of ‘ these fees, while it varies from country-to-country and airport-to-airport, reflects Afiican averages and provides a good indication of the amount of resources that each airport or country could dedicate to ensure long term sustainability of security improvements that would result from project implementation. Safety - for this criteria, the Project Team used the rating employed by the US Federal Aviation Agency (Le., the International Aviation Safety Assessment program - IASA) to determine whether existing Civil Aviation Authority (CAA) in each of the project country had already reached an adequate level ofsafety compliance. Security - US Transport Security Agency (TSA) agency certification was used to assess whether a given airport was secured enough to allow for direct flights connection to/from the us. Need for Project Assistance - based on the outcome of the three previous criteria (i.e., financial capacity, safety and security) as well as the review of existing ICAO’s security assessment reports for 17 country’s airports, the Project Team assigned a rating scale ofhigh, medium or low need for project assistance to each country. Using this rating, one country: Cape Verde whose CAA is already USA certified and has direct flight rights with the US, was judged to not requiring assistance. All other countries, with the exception of Senegal, Gabon and the Gambia, saw their need for this project ranked high. Gabon and the Gambia’s medium rating came primarily from the fact that both countries CAA have relatively high level of resources and proven achievements track record. In the case of Senegal, the country CAA, the low rating was motivated by the fact that the country is close to obtaining its IASA certification from the US FAA. Project Impact on Aviation Activities Growth - this criterion was used in recognition of the fact that similar improvements in aviation safety and security would have different impacts in the countries included in the project. Like the previous criteria, a rating scale of high, medium and low was used. In this specific case, the Project Team reviewed each country.. to evaluate whether aviation security and safety improvements would spur aviation es growth because they would suddenly enable that country or that country’s main tional airport to: 1) promote international tourism more efficiently (i.e., lower airline insurance costs, thus lower the cost of tourism in this country - case of the Gambia), 2) maintain or enhance its status as a regional hub (i.e., case of Abidjan or Douala) or 3) strengthen international services to/from this country (i.e., case of Senegal and to a lesser degree of Congo, Central African Republic, Cameroon, Gabon, Guinea and Mali). For those countries which had received a low rating, the Project Team judged that the level of aviation activities in these countries were highly dependent on local economic and political conditions

WCA Board Package PAD March 30-Clean (Final Version) 103 Print-Version March 3 1.2006 and that, although highly desirable, improvements in aviation safety and security would not - make a significant difference in the level oftheir aviation activities. 0 Capacity to Implement - this last criterion was utilized to evaluate the risk associated with implementing the national component of the project. Like both previous criteria, a rating scale of high, medium and low was used. Individual country ratings were assigned based on the Bank’s prior experience in implementing projects in these countries as well as the Project Team specific knowledge of the respective program implementation capacity of local CAAs and airport authorities.

Using the results ofthis evaluation, the Project team assigned each country to none, one, two or three ofthe phases listed in Table 1 with:

0 Phase I:it includes the countries that the Project Team judged to be most ready, and where project assistance can immediately yield high returns. These are: Burkina Faso and Mali for the UEMOA COSCAP, Guinea for the Banjul Accord COSCAP and Cameroon for the CEMAC COSCAP. 0 Phase 11: It incorporates a second tier of countries which, although they need equally as much assistance from the project, are either less ready to receive immediate assistance. These countries are also the likeliest to be added in the subsequent phases ofthe project. 0 Phase 111: it takes into account all the remaining countries.

The Project Team proceeded then to develop estimates of the level of investment necessary to implement the project activities components of the project, with, however, the actual figures for the countries ofPhase I.Table 2 presents the results ofthis work. As can be seen, cost estimates were produced for each country’s CAA and airport-related components grouping the remaining ones in a last category called “other”.

For each country, the number of airports to be covered under the project was taken into account as well as Project Team knowledge of current airport security installations based on recent physical inspections of these facilities (e.g., Abidjan, Douala, Yaounde) or ICAO inspections reports. Using these cost item figures, total estimated cost to implement the national component of the project for the countries in Phases I,11 and 111 came, respectively, at US$ 33.8, 93.2 and

153.2 million. L

WCA Board Package PAD March 30-Clean (Final Version) 104 Print-Version March 3 1,2006

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k GourmaGourma ua o TombouctouTombouctou a RharousRharous z ()(Timbuktu) ’A BouremBourem L r GAOG A O e ge d Ni ToTo e é l ToTo AyunAyun GaoGao l KifaKifa LacLac NNiangayiangay a elel ’Atrous’Atrous NiafounkeNiafounke MenakaMenaka V ToTo NémaNéma HomboriHombori TondoTondo LacLac AnsongoAnsongo DéboDébo (1,155(1,155 m)m) NioroNioro NaraNara NampalaNampala ToTo 15° N 15° N dudu SahelSahel O DouentzaDouentza AbalaAbala R MOPTIM O P T I ToTo NiameyNiamey MoptiMopti KayesKayes O BandiagaraBandiagara K NionoNiono ToTo I NIGERN I G E R GoudiryGoudiry KAYESK AY E S L B ToTo a ulé KolokaniKolokani U SÉGOUS É G O U fi ao OuahigouyaOuahigouya n B SégouSégou i g r Ban O e ig ToTo K N SanSan KédougouKédougou KitaKita ToTo KeniebaKenieba NounaNouna BAMAKOBAMAKO KoulikoroKoulikoro BURKINAB U R K I N A KoutialaKoutiala FASOF A S O ToTo SiguiriSiguiri BougouniBougouni ToTo SikassoSikasso BoboBobo GUINEAG U I N E A SIKASSOS I K A S S O DioulassoDioulasso ToTo BENINB E N I N KankanKankan 10° N ToTo 10° N KorhogoKorhogo GHANAG H A N A This map was produced by the Map Design Unit of The World Bank. The boundaries,

O colors, denominations and SIERRAS I E R R A any other information shown on this map do not imply, on G LEONEL E O N E the part of The World Bank CÔTEC Ô T E DD’IVOIRE’ I V O I R E Group, any judgment on the O legal status of any territory,

TOGO T or any endorsement or acceptance of such 10° W 5° W 0° boundaries.

MARCH 2006