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Language: English Original: English PROJECT: MOMBASA - NAIROBI – ADDIS ABABA ROAD CORRIDOR PROJECT PHASE II COUNTRIES: KENYA & ETHIOPIA PROJECT APPRAISAL REPORT Date: June 2009 Team Leader: A. OUMAROU, Transportation Engineer, OINF.2 Team Members N. KULEMEKA, Socio-Economist, OINF.2 D. KIDANE, Infrastructure Specialist, ETFO Appraisal Team T. OPIYO, Infrastructure Specialist, KEFO Sector Manager: J. RWAMABUGA, OINF.2 Sector Director: G. MBESHERUBUSA, OINF Regional Director: D. GAYE, OREA/OREB R. SHERMAN Procurement Specialist, ORPF.1 L. EHOUMAN Transport Economist, OINF.1 Peer Reviewers P. KARANI Environmental Officer, OWAS M. AJIJO Consultant Transport Economist, ONRI TABLE OF CONTENTS I. STRATEGIC THRUST & RATIONALE ................................................................................................ 1 1.1. PROJECT BACKGROUND.......................................................................................................1 1.2. PROJECT LINKAGES WITH COUNTRIES STRATEGIES AND OBJECTIVES ..............................1 1.3. KEY DEVELOPMENT ISSUES.................................................................................................2 1.4. RATIONALE FOR BANK’S INVOLVEMENT...............................................................................2 1.5. DONORS COORDINATION......................................................................................................3 II. PROJECT DESCRIPTION ....................................................................................................................... 3 2.1. CORRIDOR DEVELOPMENT PROGRAM AND PHASING.........................................................3 2.2. PROJECT DEVELOPMENT OBJECTIVES................................................................................4 2.3. PROJECT COMPONENTS .......................................................................................................4 2.4. TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED .........................5 2.5. PROJECT TYPE......................................................................................................................6 2.6. PROJECT COST AND FINANCING ARRANGEMENTS ..............................................................6 2.7. PROJECT’S TARGET AREA AND BENEFICIARIES ..................................................................7 2.8. PARTICIPATORY PROCESS FOR PROJECT DESIGN AND IMPLEMENTATION ........................8 2.9. BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN...........................9 2.10. KEY PERFORMANCE INDICATORS ..................................................................................10 III. PROJECT FEASIBILITY................................................................................................................... 10 3.1. ECONOMIC AND FINANCIAL PERFORMANCE.......................................................................10 3.2. ENVIRONMENTAL AND SOCIAL IMPACTS............................................................................11 IV. IMPLEMENTATION.......................................................................................................................... 12 4.1. IMPLEMENTATION ARRANGEMENTS ...................................................................................12 4.2. MONITORING .......................................................................................................................14 4.3. GOVERNANCE .....................................................................................................................14 4.4. SUSTAINABILITY ..................................................................................................................15 4.5. RISK MANAGEMENT.............................................................................................................16 4.6. KNOWLEDGE BUILDING .......................................................................................................17 V. LEGAL INSTRUMENTS AND AUTHORITY ..................................................................................... 17 5.1. LEGAL INSTRUMENT............................................................................................................17 5.2. CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION ..................................................17 5.3. COMPLIANCE WITH BANK POLICIES ...................................................................................18 VI. CONCLUSIONS AND RECOMMENDATION................................................................................ 18 6.1 CONCLUSION........................................................................................................................18 6.2 RECOMMENDATIONS ...........................................................................................................19 ETHIOPIA – COMPARATIVE SOCIO-ECONOMIC INDICATORS ..........................................................20 KENYA – COMPARATIVE SOCIO-ECONOMIC INDICATORS ...............................................................21 KENYA - BANK GROUP ONGOING PROJECTS AS OF MAY 2009.........................................................22 ETHIOPIA - BANK GROUP ONGOING PROJECTS AS OF MAY 2009....................................................23 KENYA - RELATED PROJECTS FINANCED BY THE BANK AND OTHER DONORS...............................24 ETHIOPIA - RELATED PROJECTS FINANCED BY THE BANK AND OTHER DONORS..........................25 MAP OF PROJECT AREA ...................................................................................................................26 MOMBASA-NAIROBI-ADDIS ABABA ROAD CORRIDOR DEVELOPMENT PROGRAM .........................27 COUNTRY AND SECTOR BRIEF .........................................................................................................28 LESSONS LEARNED...........................................................................................................................36 PROJECT DETAIL COSTS ..................................................................................................................37 IMPLEMENTATION ARRANGEMENTS................................................................................................39 FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS................................................41 PROCUREMENT ARRANGEMENTS.....................................................................................................43 AUDIT ARRANGEMENTS ...................................................................................................................46 SUMMARY OF FINANCIAL AND ECONOMIC ANALYSIS .....................................................................47 ENVIRONMENTAL AND SOCIAL ANALYSIS ........................................................................................49 PROJECT PREPARATION AND APPRAISAL ........................................................................................57 APPLICATION OF THE BANK ROAD UNIT COST STUDY RECOMMENDATIONS.................................58 Currency Equivalents As of 01.04.2009 1 UA = 1 SDR 1 UA = 1.4674 USD 1 UA = 119.696 KES 1 UA = 16.2183 ETB Fiscal Year 8 July – 7 July (Ethiopia) 1 July – 30 June (Kenya) Weights and Measures 1metric tonne = 2204 pounds (lbs) 1 kilogramme (kg) = 2.200 lbs 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = 0.03937 inch (“) 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres Acronyms and Abbreviations ADB African Development Bank KeNHA Kenya National Highway Authority ADF African Development Fund KES Kenya Shilling ADT Average Daily Traffic KPA Kenya Ports Authority AFD Agence Francaise de Developpement KRB Kenya Roads Board AIDS Acquired Immune Deficiency Syndrome LC Local Cost ASAL Arid & Semi Arid Lands MoFED Ministry of Finance and Economic Development CBO Community Based Organization MTP Medium Term Plan COMESA Common Market for Eastern & Southern Africa NACC National AIDS Control Council EAC East African Community NEPAD New Partnership for Africa's Development EIRR Economic Internal Rate of Return NGO Non-governmental Organization ERA Ethiopian Roads Authority NPV Net Present Value ESAP Environmental and Social Assessment Procedures OPADC Oromia Pastaralist Area Development Commission Plan for Accelerated and Sustained Development to End ESIA Environmental and Social Impact Assessment PASDEP Poverty ESMP Environmental and Social Management Plan PAP Project Affected Persons ETB Ethiopian Birr PCR Project Completion Report EU European Union PID Project Implementation Document FE Foreign Exchange PS Permanent Secretary FTA Free Trade Area RAP Resettlement Action Plan GOE Government of Ethiopia RFP Request for Proposals GOK Government of Kenya RRA Rural Roads Authority GPN General Procurement Notice RSDP Road Sector Development Program HDM Highway Design and Maintenance Standard Model SPN Specific Procurement Notice ICB International Competitive Bidding STI Sexually Transmitted Infection IDA International Development Association TA Technical Assistance IGAD Intergovernmental Agency for Development TEU Twenty-foot Equivalent Unit JICA Japan International Cooperation Agency VOC Vehicle Operating Costs i Loan Information Client’s information BORROWERS: ETHIOPIA KENYA EXECUTING AGENCY: ETHIOPIAN ROADS AUTHORITY KENYA NATIONAL HIGHWAY AUTHORITY Financing plan Source Amount (UA) Instrument ADF 210,000,000 Loan EUROPEAN UNION 76,000,000 Grant GOV. OF ETHIOPIA 16,820,000 Counterpart GOV. OF KENYA 26,180,000 Counterpart TOTAL COST 328,760,000 ADB’s key financing information Loan currency Unit
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