Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No: 67350-KE

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR 193.5 MILLION (US$300 MILLION EQUIVALENT)

TO THE

REPUBLIC OF

FOR A

NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT

Public Disclosure Authorized July 9, 2012

Transport Sector Country Department AFCE2 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Public Disclosure Authorized Bank authorization.

CURRENCY EQUIVALENTS

(Exchange Rate Effective April 30, 2012) Currency Unit = Kenya Shillings (KES) KES 85.15 = US$1 US$ 1.5506 = SDR 1

FISCAL YEAR July 1 – June 30

ABBREVIATIONS AND ACRONYMS

AADT Average Annual Daily Traffic ADT Annual Daily Traffic AFD Agence Française de Developpement (French Development Agency) AfDB African Development Bank BRT Bus Rapid Transit CBD Central Business District CCN City Council of CEO Chief Executive Officer CO Country Office CPS Country Partnership Strategy DG Director General EASA East African School of Aviation EATTFP East Africa Trade and Transport Facilitation Project EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union GAP Governance Integrity Improvement Action Plan GDP Gross Domestic Product GHG Green House Gas GoK GPN General Procurement Notice HDM-4 Highway Development and Management Model HIV Human Immunodeficiency Virus/Acquired Immune Deficiency /AIDS Syndrome IA Implementing Agency IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICT Information Communication Technology IDA International Development Association IFMIS Integrated Financial Management Information System IFR Interim Financial Report

INT Department of Institutional Integrity INTP Integrated National Transport Policy IT Information Technology JICA Japan International Cooperation Agency JKIA Jomo Kenyatta International Airport KACC Kenya Anti Corruption Commission KCAA Kenya Civil Aviation Authority KENAO Kenya National Audit Office KeNHA Kenya National Highways Authority KeRRA Kenya Rural Roads Authority KES Kenya Shillings KM Kilometer KRC Kenya Railways Corporation KTSSP Kenya Transport Sector Support Project KURA Kenya Urban Roads Authority LIB Limited International Bidding LRT Light Rail Transit M&E Monitoring and Evaluation MD Managing Director MoF Ministry of Finance MoR Ministry of Roads MoT Ministry of Transport MRT Mass Rapid Transit MRTS Mass Rapid Transit Study MTR Mid Term Review NAMSIP Nairobi Metropolitan Services Improvement Project NCB National Competitive Bidding NCTIP Northern Corridor Transport Improvement Project NMT Non Motorized Transport NMTA Nairobi Metropolitan Transport Authority NPV Net Present Value NUTRIP National Urban Transport Improvement Project NUTRP Nairobi Urban Toll Road Project ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PAP Project Affected Persons PC Project Coordinator PDO Project Development Objective PIT Project Implementation Team POC Project Oversight Committee PPDA Public Procurement Disposal Act PPOA Public Procurement and Oversight Authority PPP Public-Private Partnership PS Permanent Secretary QCBS Quality and Cost Based Selection RAP Resettlement Action Plan

RTSA National Road Transport and Safety Authority RSIP Road Sector Investment Plan RVR SBD Standard Bidding Documents SOE Statement of Expenses SIL Specific Investment Loan STC Short-Term Consultant SPN Specific Procurement Notice TA Technical Assistance ToR Terms of Reference UoN University of Nairobi US$ United States Dollar VPD Vehicles per day

Regional Vice President: Makhtar Diop Country Director: Johannes Zutt Sector Director: Jamal Saghir Sector Manager: Supee Teravaninthorn Task Team Leader: Josphat O. Sasia

REPUBLIC OF KENYA

National Urban Transport Improvement Project

TABLE OF CONTENTS Page

I. STRATEGIC CONTEXT ...... 1 A. Country Context ...... 1 B. Sectoral and Institutional Context ...... 2 C. Higher Level Objectives to which the Project Contributes ...... 13

II. PROJECT DEVELOPMENT OBJECTIVES ...... 14 A. Project Development Objectives...... 14 B. Project Beneficiaries ...... 14 C. PDO Level Results Indicators ...... 15

III. PROJECT DESCRIPTION ...... 15 A. Project Components ...... 15 B. Project Financing ...... 18 C. Lessons Learned and Reflected in the Project Design ...... 19

IV. IMPLEMENTATION ...... 20 A. Institutional and Implementation Arrangements ...... 20 B. Results Monitoring and Evaluation ...... 22 C. Sustainability...... 23

V. KEY RISKS AND MITIGATION MEASURES ...... 23 A. Risk Ratings Summary Table ...... 23 B. Overall Risk Rating Explanation ...... 23

VI. APPRAISAL SUMMARY ...... 24 A. Economic and Financial Analyses ...... 24 B. Technical ...... 24 C. Financial Management ...... 24 D. Procurement ...... 25 E. Social (including safeguards) ...... 26 F. Environment (including safeguards) ...... 27

Annex 1: Results Framework and Monitoring ...... 31

Annex 2: Detailed Project Description ...... 33

Annex 3: Implementation Arrangements ...... 51

Annex 4: Operational Risk Assessment Framework (ORAF) ...... 79

Annex 5: Implementation Support Plan ...... 83

Annex 6: Economic and Financial Analysis ...... 86

Annex 7: Environmental and Social Safeguards ...... 96

Annex 8: Map ...... 113

PAD DATA SHEET REPUBLIC OF KENYA NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT (P126321) PROJECT APPRAISAL DOCUMENT

. AFRICA AFTTR

. Basic Information Date: July 9, 2012 Sectors: Urban Roads and Highways (85%), Railways (5%), General transportation sector (10%) Country Director: Johannes Zutt Themes: Infrastructure services for private sector development Sector Supee Teravaninthorn/ (20%), other urban development (10%), city-wide Manager/Director: Jamal Saghir infrastructure and service delivery (70%) Project ID: P126321 EA Category: B - Partial Assessment Lending Instrument: Specific Investment Loan Team Leader(s): Josphat O. Sasia Joint IFC: No

Borrower: Republic of Kenya Ministry of Finance The Treasury P. O. Box 30007-00100 Nairobi, Kenya Tel: (254-20) 2252299 Fax: (254-20) 2240045 Responsible Agency: Kenya National Highways Authority (KeNHA) Contact: Eng. Meshack Kidenda Title: Director General Telephone No.: 254208013842 Email: [email protected] Responsible Agency: Kenya Urban Roads Authority (KURA) Contact: Eng. Joseph N. Nkadayo Title: Director General Telephone No.: 254202508033 Email: [email protected] Responsible Agency: Kenya Railways Corporation (KRC) Contact: Mr. Nduva Muli Title: Managing Director Telephone No.: 254202210111 Email: [email protected] Responsible Agency: Ministry of Roads (MoR) Contact: Eng. Michael S. M. Kamau Title: Permanent Secretary Telephone No.: 254202723155 Email: [email protected]

i

Responsible Agency: Ministry of Transport (MoT) Contact: Dr. Cyrus Njiru Title: Permanent Secretary Telephone No.: 254202729800 Email: [email protected]

Project Implementation Start Date: August 3, 2012 End Date: December 31, 2018 Period: Expected Effectiveness Date: December 3, 2012 Expected Closing Date: December 31, 2018 Project Financing Data(US$M) [ ] Loan [ ] Grant Term: Standard IDA terms, with a maturity of 40 years, including a grace period [X] Credit [ ] Guarantee of 10 years For Loans/Credits/Others Total Project Cost (US$M): 413.11 Total Bank Financing (US$M): 300.00

Financing Source Amount(US$M) BORROWER/RECIPIENT 113.11 International Development Association (IDA) 300.00 Total 413.11

Expected Disbursements (in USD Million) Fiscal Year 2013 2014 2015 2016 2017 2018 Annual 7.00 30.00 60.00 70.00 75.00 58.00 0.00 0.00 0.00 Cumulative 7.00 37.00 97.00 167.00 242.00 300.00 0.00 0.00 0.00

Project Development Objective(s) The Project Development Objectives (PDO) are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

Components Component Name Cost (USD Millions) A. Support to Kenya National Highways Authority (KeNHA) to Upgrade 223.26 the Urban Road Transport Infrastructure. B. Support to Kenya Urban Roads Authority (KURA) and Kenya Railways 59.70 Corporation (KRC) to Develop Selected Mass Transit Corridors.

ii

C. Institutional Strengthening and Capacity Building. 17.04

Compliance Policy Does the project depart from the CPS in content or in other significant respects? Yes [ ] No [ X ]

Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ]

Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X

. Legal Covenants Name Recurrent Due Date Frequency Subsidiary Agreement Effectiveness Financing Agreement Reference Article IV 4.01 (a) Description of Covenant A Subsidiary Agreement has been executed on behalf of the Recipient and each of the Project Implementing Entities. Name Recurrent Due Date Frequency Counterpart Funds Account Effectiveness Financing Agreement Reference Article IV 4.01(b); and Schedule 2 Section I G (2) Description of Covenant The Recipient has opened and deposited into the Project Counterpart Funds Account: (a) an initial amount equivalent to KES 30,000,000; and (b) thereafter, prior to the commencement of each calendar quarter, the amount of counterpart funding agreed with the Association to be provided for such quarter pursuant to the quarterly interim unaudited financial report for the Project provided by the Recipient for the preceding quarter.

iii

Name Recurrent Due Date Frequency Project Implementation Manual Effectiveness Financing Agreement Reference Article IV 4.01 (c); and Schedule 2 Section I.H(1) Description of Covenant The Recipient has prepared a Project Implementation Manual satisfactory to the Association. Name Recurrent Due Date Frequency Retroactive Financing Retroactive Financing Financing Agreement Reference Schedule 2 Section IV B(1) Description of Covenant No withdrawal shall be made for payments made prior to the date of the Financing Agreement except that withdrawals up to an aggregate amount not to exceed SDR 3,300,000 equivalent may be made for payments made prior to this date but on or after November 30, 2011 for Eligible Expenditures. Name Recurrent Due Date Frequency Project Coordinator December Dated Covenant Financing Agreement Reference Schedule 2 Section 1 A(2) 31, 2012 Description of Covenant The Recipient, through MoR, shall appoint or recruit a Project Coordinator with qualifications and experience and under terms of reference satisfactory to the Association. Name Recurrent Due Date Frequency National Road Transport and Safety Authority and December Dated Covenant the Nairobi Metropolitan Transport Authority 31, 2014 Financing Agreement Reference Schedule 2 Section V (1) Description of Covenant The Recipient shall establish and thereafter maintain the National Road Transport and Safety Authority and the Nairobi Metropolitan Transport Authority, both under terms of reference and with resources satisfactory to the Association, supported by qualified and experienced staff in adequate numbers. Name Recurrent Due Date Frequency Budgetary Modules March 31, Dated Covenant Financing Agreement Reference Schedule 2 Section 2013 V (2) Description of Covenant The Recipient shall ensure that KeNHA‘s and KURA‘s budgetary modules are customized to move from a manual to an automated budgetary control system under terms of reference and in a manner satisfactory to the Association.

Team Composition Bank Staff Name Title Specialization Unit Josphat O. Sasia Lead Transport Specialist Team Leader AFTTR

iv

Farida Khan Operations Analyst Operations Analyst AFTTR Dahir Elmi Warsame Senior Procurement Specialist Procurement Specialist AFTPC Gibwa A. Kajubi Senior Social Development Specialist Social Development Specialist AFTCS Felly Akiiki Kaboyo Operations Analyst Operations Analyst AFTTR Noreen Beg Senior Environmental Specialist Environmental Specialist AFTEN Nightingale Rukuba-Ngaiza Senior Counsel Counsel LEGAF Wolfgang Chadab Senior Finance Officer Finance Officer CTRLA Shamis Salah Operations Analyst Operations Analyst AFCE2 Svetlana Khvostova Operations Analyst Environmental Specialist AFTSG Solomon Muhuthu Waithaka Senior Highway Engineer Senior Highway Engineer AFTTR Josphine Kabura Ngigi Financial Management Specialist Financial Management AFTFM Peter Warutere Senior Communications Specialist Communications Specialist AFRSC Lucy Kang'arua Program Assistant Program Assistant AFCE2 Charlene D'Almeida Team Assistant Team Assistant AFTTR Victor Mengot Transport Specialist Road Safety AFTTR Vasile Nicolae Olievschi Railway Specialist Railway Expert AFTTR Paul Guitink Transport Specialist BRT Expert (Consultant) AFTTR Consultant Traffic Engineer Traffic Engineer AFTTR Consultant PPP Specialist PPP Expert AFTTR Consultant Urban Specialist Urban Transport Expert AFTTR Non Bank Staff Name Title Office Phone City

Locations Country First Location Planned Actual Comments Administ rative Division Kenya

v

REPUBLIC OF KENYA

National Urban Transport Improvement Project

PROJECT APPRAISAL DOCUMENT

I. STRATEGIC CONTEXT

A. Country Context

1. Kenya has recorded a comparatively higher economic growth after two decades of low growth. In 2010, the Kenyan economy grew by 5.7 percent, arising mainly from a recovery in agriculture and industrial outputs and a relatively balanced growth across all the sectors. Growth prospects have improved. Inflation declined to below five percent in 2010 and investor confidence grew rapidly, contributing to the doubling of the level of activity at the Nairobi Stock Exchange. However, a recent rise in inflation, averaging 14 percent in 2011 compared to 3.9 percent in 2010, and the impact of drought slowed this growth to 4.3 percent in 2011.

2. The total population of Kenya has increased rapidly over the last 30 years, and it is continuing to urbanize. The population was 15 million in 1979 and increased to 38.6 million in 2009, with an average annual growth rate of 2.5 percent in the recent past. The population in urban areas is now 32 percent, up from 15 percent in 1979, and it is projected to reach 19.1 million or 37 percent in 2020 and 29.8 million or 47 percent in 2030 (Table 1). Similarly, the population of the city of Nairobi was 828,000 in 1979 and now stands at over three million or 25 percent of the urban population, and it is projected to reach 5.2 million in 2020. The high population growth experienced in urban centers is due to several economic and social factors. The number of urban dwellers increased in search of employment and schooling opportunities as market forces attracted labor to the urban areas from rural areas, where the returns to labor are considered relatively lower. The higher standard of living and relative better access to basic public services in urban areas compared to rural areas has worked as a catalyst for urban migration. This has placed a tremendous strain on urban services, including transport, ultimately affecting both economic productivity and citizens‘ quality of life. In parallel, the transport sector is rife with externalities such as traffic accidents, noise and pollution associated with fuel emissions.

Table 1: Kenya’s Population (in millions) Actual Projected Category 1979 1989 1999 2009 2020 2030 Rural 13.0 17.6 18.7 26.1 32.9 33.4 Urban 2.3 3.9 10.0 12.5 19.1 29.8 Total 15.3 21.5 28.7 38.6 52.0 63.0 Urban (percentage) 15% 18% 35% 32% 37% 47% Source: Kenya National Bureau of Statistic, Census Reports, Various

1 3. Vision 20301, Kenya‘s long-term development strategy, aims at transforming Kenya into a middle-income country. Under its economic pillar, gross domestic product (GDP) is expected to grow at 10 percent per annum. This calls for the removal of bottlenecks for growth through reforms and increased investment in infrastructure, including Information Communications Technology, to unlock existing potential and productivity, promote competitiveness, and improve access to public services, all of which are necessary to transform Kenya from a low- to a middle-income country by 2030. Urban areas, as the engines of economic growth, would play a crucial role in the realization of this vision. The World Bank‘s Country Partnership Strategy (CPS), its 2008-09 Multi-Donor Infrastructure Diagnostic for Kenya, and its 2006 Poverty Assessment all support this agenda, given that improved infrastructure is associated with the movement out of poverty.

4. Significant growth in GDP (about 75 percent) is attributed to economic activities in Kenya‘s urban areas, mainly through the growth of manufacturing and services. Poverty in urban areas has, on the other hand, increased with the mushrooming of informal settlements in major towns. Hence, establishing a medium- to long-term vision on the role of urban areas in supporting Kenya‘s effort to develop to a middle-income country will inevitably become a policy priority.

5. Much of the effort of the Government of Kenya (GoK) to accelerate economic development is focused on geographical ―growth poles‖ such as Nairobi, , , and - the largest urban centers with the highest industrial activity. They are all located along the Northern Corridor, Kenya‘s most important transport route, and a crucial artery for its land-locked neighbors. Most of the Northern Corridor road has either been recently improved or improvement is underway. This corridor forms part of the main arteries in major towns. The main challenge is that the sections of this corridor adjoining major towns and often passing through them are heavily congested and require capacity expansion. In Nairobi, the GoK attempted to respond to this challenge by offering a section of the corridor to the private sector for expansion and tolling, through a concession, under the Nairobi Urban Toll Road Project (NUTRP), which was to be supported by the World Bank Group. Unfortunately, this offer attracted limited interest from the private sector, and the concessioning process took an inordinate time (about eight years), during which period circumstances changed significantly both at the project and country level, leading the GoK to cancel the process. The congestion in the Northern Corridor through Nairobi remains one of the major bottlenecks on the flow of traffic to Nairobi‘s Central Business District (CBD), Jomo Kenyatta International Airport (JKIA) and neighboring countries.

B. Sectoral and Institutional Context

6. , as in other countries performs two key roles: (a) it connects Kenya to the world economy; and (b) it links people to economic and social activities within Kenya. Kenya can only compete effectively, if its international gateways and associated infrastructure

1 The is the national long-term development blue-print that aims to transform Kenya into a newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 in a clean and secure environment.

2 are of international standards. The quality of Kenya‘s transport infrastructure and services has been improving over the last five years, after many years of under-investment. Its continued improvement, as well as the enhancement of policy reforms, should be a priority. Reversal of the policy reforms, existing policies and approaches can only lead to failure of the sector, as the basic institutional structure is undergoing major transformation. New approaches are needed, including utilizing the private sector much more extensively and much more effectively.

(a) Institutional and Policy Reforms

7. Major policy and institutional reforms have been implemented in the transport sector. These include, among others: (a) the creation of three new autonomous road authorities by clarifying the ownership of national, rural and urban roads; (b) separation of policy formulation from execution of programs; (c) creation of oversight and regulatory capability in aviation and maritime sub-sectors; (d) provision of greater transparency and accountability in the use of designated resources such as the over US$300 million generated annually from a fuel levy for road maintenance; (e) enactment of new policies (e.g. a roads policy, which did not exist previously); (f) the enhancement and management of the fuel levy funds for road maintenance without interruption and across all parts of the country; (g) provision of financial autonomy to the aviation sub-sector entities; and (h) the development and adoption of a 15-year road sector investment plan (RSIP). In recognition of the importance of the provision of quality infrastructure to support economic growth prospects, the GoK in its RSIP 2010–2024 has allocated significant resources toward improvement of transport infrastructure. For instance, transport sector budgetary allocation as a share of total GoK expenditure increased from 9.5 percent in FY2004 to 14 percent in FY2010.

8. Although the GoK is implementing a number of reforms across the transport sector (including in roads, aviation, railways, and maritime, with the support of the Bank) in an effort to improve sector performance, the urban transport has lagged behind the other sub-sectors. Urban areas now face institutional challenges, insufficient staff capacity, and an inadequate framework for transport policy and planning, lack of transport corridor management, and inadequate operations and maintenance budgets. This has contributed to the inadequate attention paid to urban transport issues, including the existing complex and weak institutional oversight and regulatory capacity and inadequate investments in urban transport infrastructure and services in Kenya‘s major towns for over two decades.

9. The current institutional framework for urban transport involves several entities with partial and sometimes overlapping and contradictory mandates and responsibilities, posing serious coordination challenges. Table 2 lists several institutions involved in urban transport matters fragmented among as many as 15 organizations.

3

Table 2: The Current Institutional Arrangements for Urban Transport No. Organization Responsibility 1. Ministry of Transport (MoT) Formulation of the national transport policy and transport sector administration 2. Ministry of Roads (MoR) Formulation of the national road policy and road sub- sector administration 3. Ministry of Local Government Administering and supporting the Local Authorities and formulating the national policy on urban development 4. Ministry of Nairobi Administering and formulation of the development Metropolitan Development polices for the Nairobi metropolitan area 5. Ministry of Lands Land administration and supporting the Local Authorities 6. Traffic Police Enforcement of traffic regulations 7. Kenya National Highways Development and maintenance of national roads Authority (KeNHA) 8. Kenya Urban Roads Authority Development and maintenance of city and municipal (KURA) roads 9. Kenya Rural Roads Authority Development and maintenance of rural and small (KeRRA) towns roads 10. Kenya Railways Corporation Development and oversight of railways (KRC) 11. Rift Valley Railways (RVR) Operational management of railways (concessionaire) 12. Kenya Revenue Authority Registration of vehicles 13. Local Authorities Development and management of local and urban areas 14. Transport Licensing Board Licensing and route allocation of public transport 15. Kenya Roads Board Administration of the Road Maintenance Levy Fund

10. The draft Integrated National Transport Policy (INTP) of 2004, which has been approved by Cabinet and sent to Parliament for discussion and endorsement (but is not yet adopted), supports reforms in the urban transport management structure by, among other things: (a) setting up a National Road Transport and Safety Authority (RTSA) and increased support for the National Road Safety Plan; (b) setting up a Nairobi Metropolitan Transport Authority (NMTA); and (c) establishing the legal and regulatory framework for railways. Both the proposed National Urban Transport Improvement Project (NUTRIP) and Nairobi Metropolitan Services Improvement Project (NaMSIP) will support the implementation of these efforts.

11. The road transport industry in Kenya includes large companies and individual owner- operators; it is competitive and tariffs are determined by market forces. The industry responds quickly to changes in demand, road conditions and regulations. However, private bus and matatu (mini-bus) operators numbering over 16,000 in Nairobi, have operated in an environment with minimal regulation to the extent that at present there is indiscipline and disregard for safety and the environmental regulations. While the intention is not to over-regulate the public transport sector, there will be an urgent need by NMTA to bring more discipline and enforcement of safety

4 and environmental regulations for matatu operations, thereby creating resistance to this change. Similarly, the City Council of Nairobi (CCN), which currently manages traffic and parking in the city, stands to lose that authority once this responsibility is transferred to NMTA, and may resist such changes. Resistance to change could slow down the pace of transformation.

12. Existing urban transport arrangements (as discussed above) are likely to evolve in the short- to medium-term as the new constitution (2010) and the agreed reforms are implemented, thereby affecting the institutional and implementation arrangements of NUTRIP. Modifications may be required to respond to these changes as they ensue. Notwithstanding these challenges and pending changes, urgent action is needed now to tackle the highly congested situation in Nairobi and other towns. Hence, some degree of acceptable flexibility for adjustments to be made during implementation is allowed in the design of the project.

13. The draft INTP and the new constitution provide the long-term vision on the likely governance structure in the urban transport subsector. Even though the INTP can be seen as contributing to the establishment of even more entities, including the RTSA and the NMTA that will be supported by NUTRIP, the existence of these new institutions will improve the governance structure in urban transport. For instance, the objective of the proposed NMTA, in the case of Nairobi, is to place all the public transport issues such as licensing, regulating public transport, and traffic management under one agency, while all national road safety matters will be placed under the proposed RTSA. The new constitution recognizes two categories of roads, national and county, which calls for further changes in governance structures based on a devolved rather than a centralized system of government (as was the case under the old constitution), implying a further realignment of the mandates of Kenya National Highways Authority (KeNHA), Kenya Rural Roads Authority (KeRRA) and Kenya Urban Roads Authority (KURA) since most of the urban and rural roads could fall under the category of county roads.

14. The new constitution (2010) does not specify the requisite organizational structures for GoK institutions and agencies, and there is likely to be some consolidation of ministries at the national level and devolution of some powers and responsibilities to the county governments. NUTRIP recognizes these uncertainties and makes provision for possible restructuring at or before the Mid-Term Review (MTR) to adjust the implementation arrangements when the need arises. In readiness for the implementation of the new constitution and the looming changes, the GoK has responded by establishing an inter-ministerial committee for the transport sector to review and recommend a governance structure consistent with the new constitution, and to harmonize and rationalize the current institutional arrangements and functions, taking into account the recommendations of the draft INTP and the roads policy, and other relevant policy documents. The committee has started its work, facilitated under the Bank-financed Kenya Transport Sector Support Project (KTSSP). Even if changes are recommended, the transition is likely to take three to four years before capacity is built in the counties and new institutions take over their responsibilities. Having recognized this risk, the project allows for any restructuring that may be needed during implementation.

5 (b) Road Transport

15. The basic urban road network is still the one designed in the 1970s. For instance, in Nairobi, the road network was designed for less than one million inhabitants, but it is now contending (largely unsuccessfully) to handle three times that number of inhabitants in the city. The urban road network, excluding those sections of national highways which traverse urban areas, is about 12,549 km, or eight percent of the total road network (Table 3), which supports 32 percent of the total population and the generation of 75 percent of GDP in the country. The result is massive congestion, and frequent episodes of serious gridlock, which will render Nairobi unsuitable as a business destination unless it is addressed.

Table 3: Distribution of Kenya’s Road Network by Agency (in km unless specified) Agency Paved Unpaved Total % share Kenya National Highways Authority (KeNHA) 6,783 6,904 13,687 8.5 Kenya Rural Roads Authority (KeRRA) 2,268 127,799 130,067 80.8 Kenya Urban Roads Authority (KURA) 2,140 10,409 12,549 7.8 Kenya Wildlife Service (KWS) 6 4,577 4,583 2.9 Total 11,197 149,689 160,886 100 Percentage share (%) 7 93 100 Source: Road Inventory and Condition Survey, Ministry of Roads, 2009

16. Decongestion of the main artery (Northern Corridor) that passes through the middle of Nairobi and the development of new infrastructure surrounding the city is critically important to Nairobi‘s future as a modern growth-generating urban capital. Achieving decongestion would help to achieve that vision. The 2006 Japan International Cooperation Agency (JICA)-financed Nairobi master plan study estimates the cost of sub-performance of intersections at KES 22.59 billion annually (2006 prices). This is a major cost to the economy.

17. Similarly, the draft INTP of 2004 indicates that 91.8 percent of Nairobi‘s road transport arteries operate over their design capacities, resulting in frequent day-long traffic jams. It recommends encouraging a shift to large capacity vehicles by public transport operators and to redesign the urban traffic flows and create dedicated infrastructure for the exclusive use of large capacity buses, i.e., a Bus Rapid Transit (BRT) system. The Mass Rapid Transit Study (MRTS) of 2011, financed by the African Development Bank (AfDB), identified nine corridors as potential BRT routes, based on travel demand forecasts for 2030 consistent with Vision 2030. The proposed NUTRIP will finance the preparatory work, feasibility and detailed designs, including Environmental and Social Impact Assessments (ESIAs), for selected BRT corridors, covering both the engineering and operational features that constitute a BRT system. Upon completion, the designed BRT system would lay the ground work for a successor urban transport operation, possibly to be supported by the Bank and other development partners.

18. Poor town planning serves to exacerbate the urban transport problem. For instance, on an ordinary day, it takes an average of more than one hour for commuters living less than 10 km away to reach the CBD of Nairobi. Motorization is increasing, with about 1.62 million vehicles in 2011 compared to 591,000 in 2000 on Kenyan roads (an average growth rate of about nine

6 percent per annum), of which over 40 percent are private cars, most of them used in urban areas. Public transport vehicles such as buses and mini-buses registered a growth rate of about five percent per annum during this period. Vehicle ownership rates, congestion, and emissions are expected to increase significantly through the next 20 years, with average travel speeds and accessibility continuing to decline. Poor drainage system leads to roads flooding for long periods of time, causing congestion and mobility difficulties, particularly for the vulnerable groups including pedestrians, children, women and other road users. Without immediate investment in urban transport infrastructure, traffic management and services, the average trip speed (all modes) will decline and also the average roundtrip journey time to work will increase. Accordingly, the economic cost of a ―do-nothing‖ scenario is likely to run into billions of shillings per annum in terms of opportunity cost and lost productivity, due to time wasted in traffic jams.

19. Urban entities face institutional weaknesses such as insufficient staff capacity, inadequate framework for transport policy and planning, lack of transport corridor management, and inadequate operations and maintenance budgets. Yet, mobility and accessibility provided through efficient and affordable urban transport is recognized as a catalyst for higher productivity, greater access to economic opportunities, and social inclusion. Across urban transport modes in low- and medium-income countries, public transport plays a pivotal role to enhance city efficiency— hence the provision of an efficient public transport infrastructure becomes critical.

20. The ineffective institutional structures and weak legal and regulatory framework have impacted negatively on the quality, reliability and safety for the public transport users, particularly in urban areas. In addition to poor public transport services, the inter-modal linkages and connectivity are minimal, if any at all. The highly unregulated matatus (mini-buses) are the backbone of the public mass transport system. Studies indicate that matatus carry about 33 percent of urban commuter traffic, while about 47 percent of residents of Nairobi walk to their places of work (MTRS, 2011). In the Nairobi metropolitan area, it is estimated that public buses carry about 350,000 - 400,000 passengers per day (about 19 percent) and the balance is commuter rail.

(c) Rail Transport

21. The railway network is skeletal and offers negligible public transport services at present. The draft INTP of 2004 summarizes the as manifesting the following features: (a) weak corporate governance and lack of managerial independence; (b) comparatively high operational costs; (c) inadequate investments in infrastructure and operations; (d) outdated railway technology; and (e) political interference in resource allocation and loss of commercial customers. In 2006, Kenya Railway Corporation (KRC) concessioned the rail services to Rift Valley Railways (RVR), giving RVR the exclusive right to operate rail freight and commuter services, thereby shifting the operational function and risks to the concessionaire. In accordance with the concession agreement, RVR was to operate the commuter rail services until June 30, 2012. Recently, the GoK approved an extension of this agreement for RVR to operate passenger trains for an additional period of three years.

7 22. Commuter rail has been providing some morning and evening peak-hour passenger services since 1992, carrying about one percent of passenger traffic. However, the rail system is rapidly deteriorating, due to inadequate funding, unclear management structures and poorly defined service provision (especially passenger services), resulting in serious infrastructure maintenance backlogs and overage and worn-out rolling stock. Development of a comprehensive and coherent urban transport system is therefore, required including good inter-agency coordination. NUTRIP and NaMSIP, also financed by World Bank, seek to address some of these issues.

23. Urban rail commuter passenger services in Nairobi city are offered on three routes with all the trains terminating at the central railway station. Most people are not linked to railways. Motive power for passenger services is provided from the concessionaire’s (RVR) pool of aged diesel locomotives that are poorly suited for the purpose.

24. Furthermore, locomotives are shared with freight services that take priority in rail access and locomotive power allocation, resulting in frequent cancellation of passenger services. Thus, the reliability and quality of passenger operations are limited by the condition of the infrastructure network, the lack of adequate rolling stock, and the higher priority given to the potentially profitable freight rather than the passenger services. This is one of the risks to be addressed and is the basis of further reforms in the rail sub-sector, requiring the establishment of modalities that will facilitate equitable access for freight and passenger services. On top of this, commuters still spend a lot of time changing from one mode of transport to another because of a lack of intermodal terminals that would facilitate rapid and convenient change of transport modes. As a result, railway modal share in urban passenger transport stands at 22,000 passengers per day (one percent of public transport demand), despite the potential demand for rail services in densely-populated urban areas served by the core network. The development of a regulatory framework for railways is in progress under the Bank-financed KTSSP.

25. KRC operations are governed by the KRC Act and its operations are also subject to the provisions in the State Corporations Act and the Exchequer and Audit Act. Therefore, guidelines that are issued from time to time on the operations of the State Corporations by the GoK influence the management and operation of the KRC and occasionally inhibit management‘s decision-making process through directions from various GoK agencies.

26. Although the KRC Act does not limit further privatization of railway operations, the Kenya Concession Agreement between the GoK, KRC and RVR works against it. The Agreement is not based on the principle of open access to newcomers in the commuter rail market. Since RVR is responsible for rail freight operations and maintaining the infrastructure, it is inevitable that priority will be given to the freight trains, the more profitable business. Assuming access is granted to a new private service provider, RVR, as the provider of track maintenance, will set the maintenance priorities and grant the right for accessing the track at a fee. The Bank-financed KTSSP is therefore providing assistance for reforming the railways sub- sector, by developing a legal and regulatory framework that will encourage the development of a competitive, efficient railway system anchored in a transparent contractual relationship between the GoK and KRC for services to be provided, directly or via concession contracts, covering

8 (multi-annual) infrastructure maintenance contracts, public service contracts and compensatory mechanisms for the procurement of passenger rolling stock.

(d) Bus Transport

27. BRT systems are emerging all over the world, including in the United States of America, Latin America and Europe, because of their relatively low implementation costs. For instance, construction costs for BRT are estimated at about 10 percent of metropolitan rail construction costs and 30-50 percent of light rail (tram) construction costs, with passenger volumes between 10,000–40,000 passengers per hour in each direction, depending on the system layout characteristics. However, it should be emphasized that successful introduction of BRT systems, based on Bank experience elsewhere, requires strong political commitment to deal with deep vested interests linked to the provision of conventional, inefficient transport services.

28. Studies aimed at addressing urban public challenges have been carried out in Nairobi in the recent past. For instance, the MRTS for the Nairobi metropolitan region (2011) and a study on the master plan for urban transport in the Nairobi metropolitan area (2006), financed by JICA, highlight some of the main transport-related challenges facing major towns and cities in Kenya, which include: worsening traffic congestion; institutional segregation and inadequate financial resources; poor public road transport systems; noise and air pollution (greenhouse gas emissions) from vehicles in the major towns; and high accident rates (with Nairobi recording over 2,000 fatal accidents annually over the last four years and about 3,000 people dying annually from all road crashes on Kenyan roads). Mass transit systems, building capacity, and streamlining institutional arrangements could help address part of this challenge. The relevant activities will be supported under NUTRIP.

29. The MoT has been building support for the establishment of NMTA through consultations, such that the Cabinet has approved the INTP. The INTP calls for the creation of NMTA and RTSA and introduction of high-capacity buses (phasing-out matatus), among other recommendations. Component B under the project (Support to KURA and KRC to Develop Mass Transit Corridors) includes preparatory work for the introduction of BRT systems and measures to involve the matatu owners and private bus operators in participating in the provision of these services. The measures would include franchises to run larger buses on BRT routes while focusing mini-buses on feeder routes, learning from the experience of similar efforts in Dar es Salaam, ; South Africa; and Nigeria among other African countries. In order to develop an integrated urban public transport system, the GoK has plans to reform further the railway subsector, particularly with regard to the establishment of a clear regulatory framework to support and deepen private sector participation over and above the current railway concession. The process of selecting a consultant to support the implementation of this decision has begun, with financing from the Bank-financed KTSSP.

30. Given the experience on BRT systems elsewhere, and in an effort to improve urban public transport, the GoK has decided to incorporate mass transit systems measures recommended by various studies in the improvement of roads in Nairobi, such as the Northern Corridor through Nairobi (part of Component A of NUTRIP). For this reason, the consultant carrying out the detailed designs, with GoK financing, for upgrading of the JKIA-Rironi road

9 section has been instructed to include BRT systems in the detailed designs. The upgrading works will be financed under NUTRIP. It is probable therefore that the JKIA-Rironi BRT corridor will be ready for development much earlier than the rest, calling for possibly additional financing under NUTRIP. In addition, KURA is preparing short-term traffic management measures for the Nairobi CBD that could be implemented as part of the BRT preparation, which could include the provision of sidewalks, pedestrian crossings and direct and safe pedestrian and bicycle routes, and could also encompass the establishment of a CBD traffic management control center.

(e) Road Concessions and Tolling

31. In an effort to promote private sector participation in financing and managing road infrastructure, the GoK offered a section of the Northern Corridor road passing through Nairobi for tolling. The Bank financed the advisory services for this concession under NCTIP. The process began in 2003 and it was not until 2007 when the bids were invited, under another IDA- financed project. This followed the outcome and recommendations of feasibility studies conducted by internationally recruited consultants. While three firms were pre-qualified, only one consortium submitted a bid. The sponsors had requested the World Bank Group, among others, for partial financing of the capital investment and provision of guarantees against political risks. However, the World Bank Group could not support the consortium after it emerged that significant changes had occurred over the intervening period (nine years) at both project and country level, rendering the implementation of the project untenable. As a result, the GoK decided to terminate the concessioning process.

32. An important lesson learned from the ―failed‖ concession is the risk involved in structuring Public Private Partnerships (PPPs) for toll roads on a single project-by-project basis. It took three years to undertake the initial pre-feasibility studies, a further four years to prepare and invite bids for the concession and another two years to do the due diligence on the sponsors, yet in the end, the concession agreement was not signed. If the same process is used on the next toll road to be constructed, the risk is high that it could also fail and a significant amount of time and effort would be lost.

33. KeNHA is mandated through the Kenya Roads Act (2007) to charge tolls, to establish or acquire subsidiary corporations and enter into agreements with any state-owned or other entities to promote its business of delivering road infrastructure and services. It is therefore suggested that the initial effort be spent to: (a) carry out an option study on private sector participation in managing and financing road investments; and (b) implement the recommendation of the option study and prepare the requisite bidding documents. The study will inform the GoK of the preferred option after examining the alternative ways to enhance KeNHA‘s capacity in mobilizing private sector financing and structuring PPPs in an expeditious and efficient manner. For this purpose, NUTRIP provides for selection of a consulting firm with experience to support KeNHA to develop the concept and formulate alternative strategies to create such a capacity in KeNHA. Thereafter, NUTRIP will support KeNHA to implement the selected strategy, drawing on the lessons from and recent experiences of other road authorities tasked with similar responsibilities, such as the South African National Roads Agency, Rajasthan Infrastructure Development Corporation of India, Thailand Expressway Authority and others focused on

10 raising private sector financing for viable toll roads and tendering competitive contracts for construction of the high speed facilities and managing toll collection.

34. In parallel to the above effort, the ongoing KTSSP supports a comprehensive study of the entire Northern Corridor in Kenya from Mombasa to Malaba, including aerial mapping, with the aim of: (a) identifying a suitable alignment for a multi-lane high speed facility (preferably a controlled access expressway); (b) estimating costs on the basis of preliminary designs; (c) packaging suitable sections for PPP; and (d) developing a timetable for completing the entire highway in a fixed time period. As the strategy for enhancing KeNHA‘s capacity for developing PPPs and mobilizing private sector is adopted, delivering the Mombasa-Malaba multi-lane expressway in stages could become the first priority.

(f) Governance

35. Governance in the transport sector has been challenging, but significant improvements have been made in the recent past. Risks included complex institutional arrangements; unclear responsibility and ownership arrangements of the road networks; collusion and other forms of bid rigging; fraud during implementation; and overloading of vehicles that destroyed the road infrastructure, among others. To mitigate the risks and enhance integrity, the Bank and the GoK, with the guidance of the Integrity Vice Presidency (INT), agreed on a Roads Sector Governance and Integrity Improvement Action Plan (GAP), which is being implemented under NCTIP, and where appropriate, has been adopted for the ongoing KTSSP financed by the Bank.

36. The GoK has implemented or is implementing the agreed GAP actions. For instance, new autonomous road authorities have been established, thereby clarifying the institutional arrangements in the road sub-sector. There is now public dissemination of road programs and opportunities. Contract awards are published; and international standards of practice for management of large contracts are gradually being adopted, even for GoK-funded contracts (e.g. an independent consultant is appointed as the ―Engineer‖ on all major construction works). In addition, reinforcement of procurement regulations and road maintenance manuals have been developed and are in use.

37. The oversight functions are also being strengthened. Parliament has approved the establishment of a regulatory body for the construction industry (National Construction Authority) with powers to register contractors, monitoring their performance and publishing names of poor performers and those that are debarred. Similarly, Parliament has approved the strengthening of the regulatory body for consulting and practicing the engineering profession (Engineers Board of Kenya), with powers to register professionals and engineering firms, assess their qualifications, monitor their performance, and exercise the right to sanction poor performance or unethical behavior. Transparency and accountability are also improving, such that a new road policy was enacted that clarified the institutional arrangements in the road sub- sector and adopted a long-term road sector investment plan. Lastly, in-depth analysis of the cost of road construction is improving. Cost estimation manuals have been developed and launched; construction unit costs are investigated and estimated more rigorously; and bids under both Government- and donor-funded projects are subjected to much higher levels of scrutiny than before, and bids are invited without pre-qualification to reduce chances of collusion.

11 38. Implementing a combination of these GAP measures in the road sub-sector has therefore resulted in improving the business environment, increasing competition, and the GoK obtaining comparatively more competitive bids than before (from two to three bids to over nine on average), with some final prices below the engineer‘s estimates. Similarly, NUTRIP, where appropriate, will adopt relevant aspects of the GAP: in particular unit costs will be rigorously investigated and estimated; stringent due diligence will be done of bidders, consultants and suppliers; bids and qualifications will be subjected to much higher levels of scrutiny; use of post- qualification of bidders for large works contracts will be continued; and the ―Engineer‖ will be the independent works supervision consultants.

(g) Sector Investments Plans

39. The urban public transport services currently offered do not cater to the needs of the majority, who still walk to their places of work. To improve delivery of transport services in the country, a 15-year (2010-2024) Road Sector Investment Plan (RSIP) has been developed and adopted with clear priorities, and a 50-year transport master plan (involving all modes of transport with a specific 10-year investment plan) is proposed to be prepared to complement the agreed institutional and policy reforms. The selection of a consultant to develop the 50-year transport master plan is underway and the assignment will be funded through the Bank-financed NCTIP. In addition, targeted studies have been carried out, including feasibility of mass transit systems and a road network master plan for Nairobi.

40. These studies have recommended priority interventions, such as improving existing road corridors; constructing critical complementary missing road links; developing mass transit corridors, including commuter rail and BRT systems; addressing the poor drainage system in urban areas; and providing safe and direct facilities for Non-Motorized Transport (NMT). The studies are focused on, but not limited to, improvement of public transport access which is required to address the high traffic congestion that is having serious economic consequences on reducing labor productivity, leading to losses in GDP and contributing to an already deteriorating situation of air pollution. The Bank supports the implementation of the 15-year RSIP, which includes urban transport investments such as those proposed under the NUTRIP. However, there is no coherent urban transport sector strategy to support the development of an efficient urban transport system, including BRT systems and commuter rail services. NUTRIP will therefore support its development.

Rationale for Bank Involvement

41. The urban transport subsector has received little attention for almost three decades. Accordingly, the myriad and complex issues related to the provision of urban public transport services and infrastructure remain largely unaddressed, compared to the other transport sub- sectors where the World Bank has been engaged for a longer period and significant reforms have been carried out, leading to improvement of delivery of services. The recent re-engagement by the World Bank in the urban transport sub-sector has enhanced the momentum of the GoK in addressing urban public transport issues, including agreeing to implement reforms that have posed a significant challenge in the past. This will also consolidate and build on the benefits achieved in other sub-sectors in Kenya‘s transport sector, notably roads and aviation, with World

12 Bank assistance.

42. The World Bank has experience from other countries in developing mass transit corridors such as BRT and Light Rail Transit (LRT) systems, particularly in creating the requisite implementation and regulatory capacity, and this experience could be shared and offer relevant lessons. Furthermore, to enhance network continuity and consistency, construction works are ongoing to upgrade some of the major road arteries in Nairobi, such as: (a) the road, (b) the eastern bypass, (c) the northern bypass, (d) the southern bypass, and (e) the junction on Airport North Road/Outer Ring Road. It is therefore critical that the adjoining section of the Northern Corridor through Nairobi (namely JKIA turnoff–Rironi, which forms the main road artery) is improved, complemented by improvement of other junctions and effective traffic management measures. The NUTRIP will support expansion of this corridor.

C. Higher Level Objectives to which the Project Contributes

43. The proposed project will support Kenya‘s economic development strategy, and address the mounting pressures on the major urban centers (mainly Nairobi) as well as road and related transport infrastructure, while also laying the foundation for developing an efficient urban public transport system (see map for the project area in Annex 8). This will help to: (a) increase capacity of the urban road network, rationalize the use of scarce road space, and improve traffic flows and reduce traffic accidents along the key road artery, partly caused by heavy vehicles travelling to and from the port of Mombasa; (b) promote the development of Nairobi‘s economy, focusing on satisfying the transportation demands going in and out of the city, including proper management of trucks in the city; (c) connect efficiently with the other urban traffic infrastructure systems currently under construction (Thika road to the north, and the eastern and southern bypasses); (d) prepare a model mass transport system aimed at providing affordable and efficient public transport services in urban areas, particularly for serving the low-income populations, especially in the CBD of Nairobi and along the developed high density corridors; and (e) build the operational and managerial capacity and efficiency of urban transport agencies in dealing with urbanization and transportation.

44. The project is also aligned well with the Bank‘s Africa Strategy,2 which is built on the foundation of governance and public sector capacity. The proposed institutional reforms and technical assistance interventions will significantly improve governance in the urban transport sector, especially by consolidating the various fragmented functions under one autonomous institution, namely the proposed NMTA. It will be further enhanced by the adoption of the INTP as the main framework for public sector investments in transport; capacity will be enhanced through the provision of targeted technical assistance to improve the delivery of public transport services. Furthermore, the project supports the key pillar of the Africa Strategy, namely, competitiveness and employment, by improving the business environment in Nairobi and other urban areas through reduction of traffic congestion and transport costs in addition to creation of jobs, not only during the construction phase but also as a result of the multiplier effect of an improved economy.

2 Africa‘s Future and the World Bank‘s Support to It, The World Bank, March 2011

13 45. The proposed NUTRIP will build on recent positive changes in the transport sector and will deepen and support the implementation of the ongoing policy and institutional reforms; the implementation of the 15-year investment program in the road sub-sector and mass transit systems; implementation of the INTP; and implementation of the Bank‘s Country Partnership Strategy for Kenya, which emphasizes developing an efficient transport system needed for a modern economy.

II. PROJECT DEVELOPMENT OBJECTIVES

A. Project Development Objectives

46. The Project Development Objectives (PDO) are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote private sector participation in the operation, financing and management of transport systems.

47. Objective (a) would be achieved by financing the improvement of the Northern Corridor road section from the JKIA turnoff through Westlands to Rironi road, i.e., through central Nairobi, as well as associated service roads and major junctions; by improving the access road to JKIA; and by building the Kisumu bypass.

48. Objective (b) would be achieved by helping to establish and build the capacity of a public urban transport authority, with responsibility for coordinating and regulating public transport, recommending policies on pricing and investments, financing equipment and related traffic management systems to rationalize the use of urban road space, and facilitating smoother traffic flows in Nairobi (including traffic signaling systems). The authority will also be responsible for conducting the feasibility and detailed engineering and operational designs for selected pilot BRT corridors in Nairobi, including their integration with other public transport modes (predominantly feeder buses and commuter rail) and improved accessibility to public transport stations and stops for NMT; and for preparatory work for improving selected commuter rail lines and congested road sections in urban areas.

49. Objective (c) would be achieved by the GoK offering one BRT corridor and one commuter line for operation to the private sector, and KeNHA developing and adopting a preferred option of building its capacity in private sector participation in managing and financing road investments.

50. The improvement of public urban transport would support the mobility of the low-income populations in urban areas who comprise the main users of public transport; reduce traffic congestion, reduce transport costs, travel time, air pollution and improve service delivery to citizens.

B. Project Beneficiaries

51. The improvement of parts of the Northern Corridor road through Nairobi will support decongestion of Nairobi, facilitate improved road access to Nairobi‘s international airport, facilitate regional and international trade, and lay the foundation for the development of mass

14 transit systems that would benefit the low-income populations in the project area and beyond. The major road corridors serve high potential, productive and populous areas, particularly Nairobi, with a population of over three million and home to the largest industrial base in the country. The Northern Corridor is also the main transport backbone for Eastern Africa, linking , Tanzania, , Rwanda, Burundi and Eastern Democratic Republic of Congo to the port of Mombasa.

52. The main beneficiaries of the identified road, public transport and traffic management improvements are the road users, including businesses, and local communities in the project area. Based on the 2006 traffic figures, about 300,000 direct beneficiaries, of which about 40 percent are female (road users excluding bicycle riders), use these road sections per day. The travel time along these road sections is expected to fall by at least 30 percent and vehicle operating costs are expected to be reduced by 25 percent with the proposed improvements; and the provision of road-side amenities, including bicycle tracks, pedestrian crossings, service roads along the selected road sections, and improvement of junctions will enhance road safety. Finally, strengthening the capacities of the institutions in the transport sector will enhance the delivery of services to all Kenyans.

C. PDO Level Results Indicators

53. The PDO results indicators are as follows:

(i) Reduction in average travel time from the junction for Jomo Kenyatta International Airport (JKIA) to Rironi road; (ii) Reduction in vehicle operating costs from the junction JKIA to Rironi road; (iii) Number of road users per day (of which % female) directly benefitting from the project; (iv) Improved institutional capacity in the urban transport sub-sector through establishment of the NMTA, RTSA and development and use of urban public transport rules and regulations; (v) PPP promotion and development of private sector opportunities in the transport sector; and (vi) Number of road crashes reduced along the road from JKIA to Rironi road.

III. PROJECT DESCRIPTION

A. Project Components

54. The project activities will support: (a) the implementation of policy and institutional reforms in transport, particularly urban public transport; (b) the creation of institutional capacity to provide oversight and regulatory functions to support the delivery of urban public transport services; (c) the preparation of appropriate investment interventions that would promote urban public mass transit systems; and (d) financing infrastructure improvements to decongest major towns necessary to support Kenya‘s long term development strategy (see Annex 2 for details).

15 55. Component A: Support to KeNHA to Upgrade the Urban Road Transport Infrastructure (total cost US$311.15 million, of which IDA US$223.26 million). The selected road sections are among the top priorities in the RSIP. This component will involve:

(a) Expanding and upgrading the Northern Corridor road section through Nairobi from JKIA turnoff to Rironi road, as well as associated service roads and access roads; all through provision of goods, works and services. (b) Constructing the Kisumu northern bypass road. (c) Constructing and rehabilitating non-motorized transport facilities, including foot paths, cycle tracks, pedestrian bridges and underpasses. (d) Carrying out feasibility and detailed engineering design studies of roads adjoining major towns and studies for improvement of traffic flows through provision of technical advisory services. (e) Strengthening the capacity of KeNHA by: (i) supplying and installing a management information system; (ii) developing a safeguards framework for the road sector; (iii) carrying out an option study on private sector participation in managing and financing road investments; (iv) implementing the recommendation of the option study and preparing the requisite bidding documents; and (v) improving its capacity for contract management, monitoring and evaluation through training and provision of technical advisory services. (f) Strengthening the capacity of the External Resources Department and the State Law Office to support effective management of the Project, through training and provision of technical advisory services. (g) Supervising road works constructed under Component A of the Project and provision of technical advisory services. (h) Establishing a program to address Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) in all the roads contracts, through provision of goods and services.

56. Component B: Support to KURA and KRC to Develop Selected Mass Transit Corridors (total cost US$80.46 million, of which US$59.70 million IDA). The activities under this component of the project--which include carrying out feasibility studies and detailed engineering designs and preparation of bidding and contract documents for works and associated facilities as well as selection of private sector operators to provide large capacity buses for a BRT system and rolling stock for a commuter rail system—are a precursor for a successor project. The follow-on activities could materialize in the short to medium term. This therefore requires (i) the GoK simultaneously to prepare an urban public transport development strategy and address the associated regulatory and oversight issues associated with the provision of urban public transport; as well as (ii) flexibility in the financing plan, including a possibility of additional financing.

57. Under this component, the feasibility studies on the proposed BRT systems will include an ESIA which will evaluate environmental issues associated with direct and indirect impacts during the planning, construction, and operation phases, and outline its implementation in relation to other aspects of project preparation, design, and implementation. Similarly the feasibility studies on the proposed commuter rail lines will include an ESIA for the construction

16 of the high-density commuter railway line and its associated facilities. The EIA will address environmental impacts which may arise from construction and operation activities and provide a mitigation plan to prevent or minimize adverse impacts. This component will comprise two sub components, B1 and B2.

58. Sub-component B1. KURA (sub-total cost US$64.83 million, of which US$47.77 million IDA). This component will involve:

(a) Carrying out a range of feasibility studies, including detailed designs, and preparing bidding documents for selected Bus Rapid Transit (BRT) road corridors through provision of technical advisory services. (b) Providing public transport and associated services through provision of technical assistance. (c) Developing and implementing a scheme to decongest major urban areas through provision of goods, services and works. (d) Carrying out activities to improve traffic management, including construction of traffic control centers, provision of traffic management Information Communication Technology (ICT) solutions, all through the provision of goods, works and services. (e) Implementing regulatory reforms to rationalize the provision of public transport services and strengthen the management of public transport operations, through provision of services. (f) Constructing the Meru bypass roads. (g) Strengthening the capacity of KURA to implement urban transport reforms through training and provision of goods, services and technical assistance. (h) Building the capacity of KURA‘s staff in traffic planning, management, regulation and involvement of private sector in financing urban transport infrastructure and relevant services, through provision of services and training. (i) Carrying out: (i) feasibility and detailed engineering design studies of missing road links in major towns, (ii) a study and also developing an urban transport plan for the city of Mombasa, and (iii) a study for the improvement of traffic flows of major towns, all through provision of technical advisory services. (j) Supervising road works construction in Sub component B1 of the project, through provision of technical advisory services. (k) Establishing a program to address HIV/AIDS in all the roads contracts, through provision of goods and services.3

59. Sub-component B2. KRC (sub-total cost US$15.63 million, of which US$11.93 million IDA). This component will involve:

(a) Carrying out feasibility studies and detailed designs; and preparing the necessary bidding documents for construction of selected commuter rail systems in Nairobi and other major towns through provision of technical advisory services. (b) Preparing bidding and contract documents for the selection of private sector operators providing commuter rail operations and associated services; through provision of advisory services.

3 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the project.

17 (c) Supplying and installing information systems (IT) and building the capacity of KRC in IT, management of private sector involvement, planning, management of contracts including for concessionaires; and other oversight functions; all through provision of goods, training and services.

60. Component C: Institutional Strengthening and Capacity Building (total cost US$21.50 million, of which US$17.04 million IDA): This component will support and deepen the implementation of reforms in the transport sector with a major focus on urban transport. This component has two sub components, C1 and C2.

61. Sub-component C1. Ministry of Transport (sub-total cost US$16.90 million, of which US$13.44 million IDA). This component will involve:

(a) Implementing selected activities in the Integrated National Transport Policy agreed with the Association, including establishing and developing the capacity of the proposed National Road Transport and Safety Authority to carry out its functions, all through provision of goods, works, and services. (b) Establishing and strengthening the capacity of the proposed Nairobi Metropolitan Transport Authority to carry out its functions through provision of goods and services. (c) Strengthening the capacity of the East Africa School of Aviation, and promoting private sector participation in the aviation sub-sector, through provision of technical advisory services. (d) Carrying out urban transport sub-sector studies, and providing technical advisory services. (e) Building the capacity of MoT staff to carry out their responsibilities, through training and provision of technical advisory services.

62. Sub-component C2. Ministry of Roads (sub-total cost US$4.60 million, of which US$3.60 million IDA). This component will involve:

(a) Strengthening the capacity of MoR staff to carry out its responsibilities, including monitoring and evaluation of the Project, through training, provision of goods and services. (b) Building the capacity of the newly established National Construction Authority and preparing the implementing regulations for the National Construction Authority Act (2011), through provision of goods and services. (c) Building the capacity of the newly established Engineers Board of Kenya and developing the implementing regulations for the Engineers Act (2011), through provision of goods and services.

B. Project Financing

63. The GoK is financing fully the project preparatory feasibility and detailed designs and associated environmental and social assessments related to the road works contracts. It will also finance the incremental operating costs for implementing the project, as well as the expenditures related to any resettlement, land acquisition, compensation and relocation of public utilities to pave the way for construction works along the selected corridors. The rest of the activities of the

18 project will be financed jointly by IDA (80%) and GoK (20%), as summarized in Table 4 and detailed in Annex 2, Table 2.

1. Lending Instrument

64. The lending instrument chosen for this project is a Specific Investment Loan, because it will support rehabilitation of specific economic, social and institutional infrastructure. The activities against which funds are to be disbursed are well-defined and specific.

2. Table on Project Costs and Financing Plan

Table 4: Project Cost and Financing (Preliminary Cost Estimates) Project Component Estimate IDA Financing GoK* Cost US$m (% of (US$m) (US$m) total) A. Support to KeNHA to Upgrade the Urban Road Transport Infrastructure

Sub-total for Component A 311.15 223.26 74.4 87.89 B. Support to KURA and KRC to Develop Selected Mass Transit Corridors B1. KURA 64.83 47.77 15.9 17.06 B2. KRC 15.63 11.93 4 3.70 Sub-Total for Component B 80.46 59.70 19.9 20.76 C. Institutional Strengthening and Capacity Building C1. MoT 16.90 13.44 4.5 3.46 C2. MoR 4.60 3.60 1.2 1.00 Sub-Total for Component C 21.50 17.04 5.7 4.46 Total Costs and Financing Required 413.11 300.00 100 113.11 Of which: Physical Contingencies 23.90 17.51 5.8 6.38 Price Contingencies 28.84 20.68 6.9 8.17 Note * Overall, GoK will finance 27 percent of the total cost of the project, which include expenditures associated with implementation of the RAPs and relocation of services on road corridors to be expanded and or rehabilitated.

C. Lessons Learned and Reflected in the Project Design

65. Experience with Bank financed projects in the transport sector and their implementation record in Kenya presents a number of useful lessons:

(a) The choice of project activities should reflect the priorities of the Government, potential beneficiaries and other stakeholders to ensure ownership. Under the KTSSP, the GoK financed project preparation, including the feasibility and detailed designs and associated environmental and social assessments; while under the NCTIP, a GoK-established inter- ministerial committee steered the reform process successfully; (b) Under NCTIP and KTSSP, project preparation and implementation are mainstreamed within the operations of the entities responsible for the roads and aviation functions. This

19 has helped build institutional capacity and ownership, thereby assuring sustainability after completion of the projects. NCTIP and KTSSP benefited from this approach, which will be replicated in the proposed NUTRIP; (c) The necessary policy, institutional, procurement and financial management reforms implemented or underway in the sector have arisen from sustained dialogue and consultations in defining and agreeing on them under the leadership of GoK. Therefore, follow-on operations, appropriately timed, are required to bolster the gains from policy and institutional reforms that have been initiated under previous operations and require completion or enhancement; (d) Project preparation, design and supervision effort need to reflect sustained dialogue between IDA and GoK. Reporting, auditing and accountability measures should begin early to ensure timely detection and remedy of implementation problems; and (e) NCTIP was the first major transport project financed by the Bank after a long break in its lending program to the transport sector, and it was necessary to build capacity in the implementing agencies to manage externally financed major projects. However, key success factors that have been incorporated from the experience of NCTIP and KTSSP are: (i) advance preparation of design and bidding documents for the major civil works contracts; (ii) involvement of INT advisory services during preparation of the project; and (iii) more intensive and continuous implementation support from the Bank‘s Country Office in Kenya to resolve issues and constraints in a timely fashion.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

66. Project execution will be carried out by five implementing agencies (Annex 3, figure 1 for a schematic illustration), namely, KeNHA, KURA, KRC, MoT and MoR. Except for KURA, the four other agencies are currently implementing Bank-financed projects, though a number of the project staff in KURA also have working experience on Bank-funded operations. The MoR will be responsible for overall project coordination and each implementing agency will be responsible for the implementation of its respective component or subcomponent of the project. The project will be mainstreamed into the operations of these institutions and form an integral part of their operations and investment programs.

67. The project will be implemented as follows:

(a) Component A: KeNHA (b) Sub-component B1: KURA (c) Sub-component B2: KRC (d) Sub-component C1: MoT (e) Sub-component C2: MoR

68. Project Oversight Committee (POC): The GoK has established the POC to (a) provide strategic and policy guidance for Project implementation; (b) liaise with the Mass Rapid Transit (MRT) Consultative Committee; (c) review and approve annual work plans for the Project; and (d) review project financial reports. The POC will comprise the Permanent Secretary (PS) of MoT, a representative of the Ministry of Finance, Chief Executive Officers (CEOs) of all the

20 project implementing entities and the Permanent Secretary of MoR, who shall also be chair of the POC. The process of establishing the POC falls under the administrative procedures of the GoK. Accordingly, the PS, MoR, has written to all the members comprising the POC formalizing this arrangement.

69. Project Coordinator (PC): To promote effective implementation, oversight and coordination of the project, the GoK will by December 31, 2012, appoint or recruit for MoR a PC with qualifications and experience under terms of reference satisfactory to the Association. The PC will be responsible for the overall coordination of and reporting on the project, providing strategic oversight and preparation of project reports and acting as the secretary for both the POC and MRT Consultative Committee. Until such a time as the PC for NUTRIP is selected, the one currently coordinating the activities of both the Bank-financed NCTIP and KTSSP will act in this position during the intervening period.

70. Mass Rapid Transit Consultative Committee. The development and oversight of urban public transport systems such as the MRT and BRT is multi-disciplinary, with a myriad of transport-related activities to be completed concurrently. Thus, a strong institutional structure to deal with these issues is imperative to facilitate inter-ministerial coordination on technical and decision-making levels, so that consistency between engineering and associated construction works, operational and regulatory aspects is created. For this reason, the GoK has established a MRT Consultative Committee, with the responsibility for providing such technical and policy advice to the POC on matters related to urban public transport like MRT, including BRT. The committee will include, inter alia, the Roads Secretary (as chair), representatives of MoT, the Ministry of Local Government, KeNHA, KURA, KRC, the Matatu Owners Association, the Matatu Welfare Association, private bus operators, the Director of City Planning of the City Council of Nairobi, the Chairman of the Nairobi Central Business District Association, the Director of Physical Planning, the Traffic Commandant, the Kenya Private Sector Alliance, and the City Engineer of the City Council of Nairobi. The MRT Consultative Committee may co-opt other key stakeholders if need arises. As is the case with the process of establishing the POC, the PS MoR, as the Chair of the POC, has written to all the organizations that are represented on the MRT Consultative Committee to nominate officials.

71. Project Implementation Teams (PITs). Each implementing agency will appoint a PIT, which will be empowered to manage the day-to-day activities of its components of the project. All the PITs will comprise regular staff of the implementing agencies. Each PIT will be headed by a Team Leader and will comprise members with the appropriate skills and adequate experience and qualifications. The Team Leader will report directly to the Chief Executive Officer (CEO) of KeNHA, KURA and KRC, or to the PS of MoT, as appropriate. The members of all PITs have already been appointed, and the World Bank will be consulted prior to any changes in PIT membership. PIT duties and responsibilities are elaborated in Annex 3.

72. These implementation arrangements take into account the experience learnt from other World Bank financed projects in Kenya. Adequate capacity building on operational BRT components will be provided to the KURA PIT through internationally-recruited technical assistance and training. Keeping infrastructure and operations components in one agency facilitates good coordination in the preparation of the various BRT components. Once the

21 proposed NMTA is established, the KURA PIT could be transformed into the Public Transport Department as part of the Authority.

73. The impact of implementing the new constitution and agreed reforms: The implementation arrangements are likely to change in the short- to medium-term as the new constitution and agreed reforms are implemented, which could also lead to delays as the new Government reorganizes itself, including by consolidating ministries and departments. Modifications are therefore likely to arise to respond to these changes. The changes that are likely may involve merging or changing roles or having new institutions altogether, such as the proposed NMTA, that could be involved in the implementation of the project. These uncertainties are noted and therefore possible restructuring at or before the MTR may have to be carried out to adjust the implementation arrangements accordingly.

B. Results Monitoring and Evaluation

74. Monitoring of project performance will be carried out by a consultant (an accredited university consulting unit) and some of the risks identified in the Operational Risk Assessment Framework will be assessed and taken into account. This will be complemented with the results framework and monitoring arrangements provided in Annex 3. The main outcome indicators will be the reduction of travel time and transport costs on the Northern Corridor road traversing Nairobi and creation of institutional and regulatory capacity in the urban transport sub-sector. Baseline information is already available for some of the indicators. Other performance and outcome indicators that will be closely monitored are related specifically to the institutional reforms to be achieved in the urban transport sub-sector.

75. The Government has proposed to engage one of the accredited universities in Kenya with adequate experience as the monitoring and evaluation (M&E) consultant under a contract with MoR, but working in close collaboration with KeNHA, KURA, KRC and MoT. This arrangement has worked well under NCTIP, with the University of Nairobi (UoN) as the M&E consultant. In the process of collecting and analyzing data, the country has benefited enormously by assigning this task to UoN. So far, 33 students have utilized the information for their academic work, and graduated at post-graduate level, while another 26 students are in the process of doing so. The task has built local M&E capacity and also strengthened the link between academia and the road construction industry. Meanwhile, KeNHA, KURA, KRC, MoT and MoR have M&E and Communications units in their organizational structures, that will complement these efforts and work closely with the selected university.

76. The Communications Specialists from KeNHA, KURA, KRC, MoT and MoR in conjunction with the Communications specialist on the Bank‘s task team, based in the country office in Kenya, have developed a communications strategy, similar to the case for NCTIP and KTSSP, which will be rolled out before the start of execution of works (details in Annex 5). The communications have fielded a recognizance visit to the project sites, and have planned subsequent visits to record interviews and initiate dialogue with potential beneficiaries. This is particularly important for sub-component B (Support to KURA and KRC to Develop Mass Rapid Transit Systems) as an engagement-feedback mechanism for regular dissemination of information on the progress of these activities to the public.

22 C. Sustainability

77. The GoK has set aside resources in carrying out preparatory work, including the feasibility studies, environmental and social assessments and detailed engineering designs for the road contracts. The activities of the project will be mainstreamed in the operations of the implementing agencies and the project implementation team will comprise in-house staff. These actions have reinforced Government‘s ownership of the project - hence ensuring sustainability. Furthermore, the benefits of the project are likely to be sustained in light of the recent reforms in the transport sector, which already are showing encouraging results, including clear ownership and institutional arrangements in the road sub-sector; establishment of a regulator for the construction industry and strengthening of the regulatory function of the engineering profession. The establishment of the proposed NMTA will streamline further the provision of urban public transport infrastructure and services, while creation of the RTSA will streamline the road safety matters thereby creating sustainable capacity to address these challenges.

78. All the above factors contribute extensively to ensuring that the benefits of the project will be sustained. Moreover, maintenance of the improved roads infrastructure under the project is assured through the regular funding from the Road Maintenance Fund managed by the Kenya Roads Board which has benefitted extensively under the Bank financed NCTIP and KTSSP in strengthening its role and capacity.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Risk Rating Stakeholder Risk High Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Moderate - Social and Environmental Moderate - Program and Donor Moderate - Delivery Monitoring and Sustainability Moderate Overall Implementation Risk High

B. Overall Risk Rating Explanation

79. The overall implementation risk is rated high because of the potential risks that include the uncertainties regarding the possible changes in the institutional set up in the transport sector and implementation arrangements arising from the execution of the newly adopted Constitution; the forthcoming elections and the transition to a new Government accompanied with

23 reorganization of the institutional setting of the public sector thereafter; and likely resistance from transporters and bus operators to the introduction of any new regulatory framework for public transport, phasing out matatus and CCN required to cede its current responsibility of traffic management and parking management to the proposed NMTA. These risks could slow down the implementation of the project. The risk mitigation measures are explained in the Overall Risk Assessment Framework (ORAF) in Annex 4.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

80. Detailed studies of the various road sections to be rehabilitated or improved under the project are underway. The total length of the major roads to be constructed, namely, JKIA Turnoff-Westlands-Rironi and associated service roads, Kisumu bypass and Meru bypasses, amount to about 93 km of which some road sections have six lanes and include construction of multi-lane fly-overs. Based on existing studies, the traffic levels range from about 1,700 vehicles per day (vpd) to over 8,000 vpd with one section (12 km) having nearly 80,000 vpd along JKIA to Nairobi city centre. Most of the road sections are those previously earmarked for improvement under the defunct NUTRP, which was dropped, and their economic justification is sound, while the rest are sections of roads adjoining major towns, with comparatively high levels of traffic. According to the previous economic feasibility studies done for each road section, albeit at different times, the economic rates of return (ERR) ranged from about 17 to 65 percent and the estimated net present value (NPV) at 12 percent discount rate was about US$80 million for road works costing about US$200 million (details in Annex 6). Given that the economic growth in the country has been in the range of 5 to 7 percent per annum in the last five years and is expected to grow between 5 and 7 percent per annum in the future, the traffic volumes are likely to grow at around 7 to 10 percent per annum.

B. Technical

81. The road design standards being applied under the project will conform to the latest design practices. The standards and specifications compare well with international practice. Where traffic levels are expected to exceed the generally-accepted capacity of the existing lanes, the road sections would be widened (see details in Annex 6, Table 2). The BRT operational designs and proposed PPP financing structure will take into consideration the lessons learned and best practices from successful BRT projects in other major cities (e.g. Curitiba, Bogota and Lima).

C. Financial Management

82. A financial management assessment of KeNHA, KURA, KRC, MoT and MoR, the entities implementing the project, was conducted. MoT, MoR, KeNHA and KRC are currently implementing the NCTIP, EATTFP, and the KTSSP with a total IDA contribution of US$960 million. There are no overdue audit reports. The financial management residual risk rating for MoT, MoR, KeNHA, KURA is assessed as moderate whereas that of KRC is assessed as substantial. Details on the Financial Management arrangements for this project are included in Annex 3.

24 83. On the basis of the assessment, it is recommended that both KeNHA and KURA address the system challenges experienced in generation of financial reports by customizing their budgetary modules by moving from a manual to an automated budgetary control system by March 31, 2013.

84. To ensure that funds are available during project implementation, the credit effectiveness condition will require the GoK to deposit an initial amount of KES30 million of the GoK counterpart funding into the project operating account for component A of the project and thereafter to replenish the account on a quarterly basis throughout the project implementation period. The other Financial Management actions to be taken during project implementation are included in the Financial Management action plan shown in Annex 3.

85. The PITs will oversee the Designated and Project Accounts, verify invoices, and approve payments. The PITs will also prepare all financial management reports, financial statements, reimbursement requests and other relevant documentation as required by their respective management and IDA. The PITs will ensure that the respective agencies‘ financial statements are audited as required and that contracting, procurement, disbursement and financial management is carried out and reported efficiently. Documentation supporting project-related disbursement and financial transactions would be maintained by each PIT for inspection by IDA, the GoK, and the Kenya National Audit Office (KENAO) (see Annex 3 for details).

86. Retroactive financing: A provision of up to US$5 million has been made to cover eligible expenditures incurred on or after November 30, 2011 (i.e., during the 12-month period before signing of the Credit, which is expected by the end of September 2012).

D. Procurement

87. A Procurement Risk Assessment has been completed. Procurement activities will be carried out by the five implementing agencies, of which two are GoK ministries and three are state-owned institutions, namely MoR, MoT, KeNHA, KURA, and KRC. KeNHA, KURA and KRC are state-owned institutions. Each of the five implementing agencies has constituted a PIT, which reports to the CEO of its respective agency. A PIT includes among other professional staff a PIT leader and a procurement officer. With the exception of KURA, the other four agencies are implementing three ongoing IDA-funded projects (NCTIP, EATTFP, and KTSSP) through the same PITs. Because KURA is an offshoot of MoR, most of its technical staff and especially members of the PIT of the proposed project are staff that have gained experience in project implementation under the three ongoing projects before they were moved to the road agencies.

88. Being cognizant of the experience gained by the implementing agencies from the ongoing projects, and deployment of the same PITs of the ongoing projects for the implementation of the proposed project, the overall project risk for procurement is ―moderate‖.

89. A first General Procurement Notice (GPN) for the project was published in the DgMarket website on May 3, 2012. The GPN will be updated annually for any outstanding International Competitive Bidding (ICB) and large consultancy services contracts, as appropriate. Specific Procurement Notices (SPN) for goods and works to be procured under ICB and National Competitive Bidding (NCB) and for consultant services will be advertised in at

25 least one national newspaper of wide circulation and internationally for ICB contracts. Wherever needed, training will be offered to enhance the skills of the PIT procurement staff. Procurement plans for the first 18 months have been prepared (details in Annex 3) and will be updated at least annually. In addition, a project implementation manual will be prepared by Credit effectiveness, a draft of which has been submitted to the Bank and is under review.

90. Procurement will be carried out in accordance with the World Bank‘s Guidelines, particularly, Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011; and Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011. Kenya‘s public procurement law, the Public Procurement and Disposal Act of 2005 (PPDA), that governs purchase of works, goods and services using public resources by central Government entities, local authorities, state corporations, education institutions, and other Government institutions, will also be taken into account. It should be noted that some provisions of PPDA are not fully consistent with the World Bank procurement guidelines and Consultants Guidelines, and therefore these provisions of PPDA will not be applied for the implementation of this project (details in Annex 3). The Anti-Corruption Guidelines, namely, the ―Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants‖, dated October 15, 2006 and revised in January 2011, shall apply.

91. Procurement methods to be applied to the purchase of all project goods, services and works will be specified in the Procurement Plan, including the circumstances under which the methods may be used. The methods for works and goods will include ICB, Limited International Bidding (LIB), NCB, Shopping, and Direct Contracting. In case of consulting services, the methods will include Quality and Cost Based Selection (QCBS), selection under Fixed Budget, Consultants Qualifications, Least Cost Selection, Single Source Selection, and Selection of Individual Consultants, consistent with procedures provided in paragraphs 5.2 and 5.3 of the Consultant Guidelines. World Bank review of procurement decisions will be provided in the Plan for those contracts that shall be subject to Prior Review.

92. Training: Each of the implementing agencies will prepare and endorse their respective annual training program for financing under the project and submit it to the Bank for review and clearance. The program will identify, inter alia: (a) the training envisaged; (b) the personnel to be trained; (c) the selection methods of institutions or individuals conducting such training; (d) the institutions conducting the training (if already selected); (e) the duration of the proposed training; and (f) the cost estimate of the training. Reports by each trainee upon completion of training would be mandatory.

E. Social (including safeguards)

93. Social and environmental benefits. In addition to social and environmental impacts requiring mitigation, the project will generate significant social and environmental benefits. The social benefits will accrue from opportunities for short-term employment during construction, but there will also be long-term benefits from increases in road safety and time saved. The travel time along road sections contained in the project is expected to fall by 30 percent and vehicle

26 operating costs are expected to be reduced by 25 percent with the proposed improvements; and the provision of road-side amenities, including bicycle tracks, pedestrian crossings, service roads along the selected road sections, and improvement of junctions will enhance road safety. The details on social aspects of the project are in Annex 7.

94. Road safety issues are a major concern in Kenya that claims a total of nearly 3,000 lives annually. This project will complement the efforts under NCTIP and KTSSP, where a National Road Safety program has been developed and approved by the GoK. Under the project, attention will be given to increasing awareness of road safety through information provision and education of adults as well as children along the selected road corridors. The design of the project will include widening of the existing road in critical places to allow for bicycle paths and pedestrian sidewalks to enhance safety in selected areas.

95. The reduction in traffic congestion along the JKIA – Nyayo Stadium route will reduce the current practice of motorists taking shortcuts along residential roads adjacent to the Nairobi National Park, which increases air pollution in the Park and causes distress to wildlife. Smooth traffic flow also has strong greenhouse gas reduction benefits and reduces local air pollution. Nitrogen oxide4, carbon dioxide, and carbon monoxide emissions are likely to be reduced by a factor of two or three due to the reduction of repetitive stop-starts and the duration of idling.

F. Environment (including safeguards)

96. The project‘s anticipated social and environmental impacts have triggered Bank Operational Policy OP 4.01 (Environmental Assessment), as well as OPs 4.12 (Involuntary Resettlement) and 4.11 (Physical Cultural Resources). The environment category of the project is B – Partial Assessment – as the proposed activities, which for the most part involve rehabilitation/expansion of existing roads within the right of way (in addition to some relatively short bypasses that will not traverse natural habitats), will have moderate and reversible impacts. Overpasses will be constructed largely within the existing right of way. Detailed descriptions of environmental and social compliance measures are provided in Annex 7.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Pest Management (OP 4.09) X Indigenous Peoples (OP/BP 4.10) X Physical Cultural Resources (OP/BP 4.11) X Involuntary Resettlement (OP/BP 4.12) X Forests (OP/BP 4.36) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

4 Nitrogen oxides (NOx) act as indirect greenhouse gases by producing the tropospheric greenhouse gas 'ozone' via photochemical reactions in the atmosphere. Carbon dioxide is a primary greenhouse gas. Chronic exposure to carbon monoxide is associated with increased risk for adverse cardiopulmonary events.

27 Environmental Characteristics of Project Areas

97. Component A (a): JKIA Turnoff-Westlands-Rironi Road Improvement. The project area is mainly built up, and so there will be minimal or no animal species that will be displaced. Although a 2 km section of the road expansion from JKIA to Nyayo Stadium does run parallel to the Nairobi National Park, there is a buffer provided by an industrial estate between the road and the boundaries of the Park. Therefore, the road works will not impose additional stress on wildlife, though construction waste should be disposed off well outside the vicinity of the National Park.

98. Component A (b): Kisumu bypass. The escarpment occurs in the form of rounded shapes on the east side of the Kisumu- (A1) Road, at which point they taper into piedmont plains that form a gentle Kanyakwar valley that meets the bulk-hill on which Kisumu city is built. The hills do not have a gazetted forest except at Scarp 9 near Jans Senior Academy, where a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps along which the bypass road corridor is planned.

99. Component B1 (f): The Meru bypass road generally traverses through rolling topography with a general altitude of 1,700 meters at the Western bypass and 1,500 meters at the Eastern bypass. Both bypasses cross River Kathita and several small perennial streams. The river and the streams originate from Mount Kenya and intersect the project road, flowing eastwards as tributaries of the River Tana. The project is in the vicinity of the Imenti Forest, which is one of many small remnant patches of the forest in which fragmented elephant herds shelter, threatened by a burgeoning human population of agriculturalists who are not sympathetic to their presence. The Imenti Forest lies east of Mount Kenya between the towns of Embu and Meru and today a small herd of elephants (probably no more than about 50) shelters within, surrounded by human settlement and isolated from their Mount Kenya brethren. Illegal logging within the forest itself is inflicting further pressure on this small band of surviving elephants, whose future is questionable unless safe passage for them can be arranged by way of a corridor so that they can reach the Mount Kenya forests. The proposed bypass does not traverse the forest but follows the edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not affecting the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry Service has an electric fence which prevents access to the Imenti Forest.

100. Environmental Impacts. Potential environmental impacts may include soil erosion and disturbance of water flows, water pollution, traffic disruption, noise, gaseous and dust pollution and temporary disturbance of flora and fauna (mainly during the construction phase). In the case of the improvement of the Northern Corridor road (namely JKIA Turnoff-Westlands-Rironi road section through Nairobi and associated service roads and major junctions) some mature trees (though not indigenous species) will be lost as a result of road widening. The magnitude of tree cutting in these urban areas is not sufficient to necessitate the preparation of a Forest Management Plan, or to trigger the Bank‘s Operational Policy on Forests, OP 4.36. Nevertheless, it is important to undertake replacement tree planting liaising with Kenya Forestry Service and local municipality authorities with responsibility for maintaining roadside verges and vegetation.

28 101. Mitigation measures. KeNHA will liaise with the Kenya Forestry Service, CCN and Kisumu Municipality on replacement tree-planting activities. Since the expected negative impacts will relate to the construction phase of the project, mitigation and support measures will be incorporated in the relevant clauses in the contract documents for the road sections. Such clauses include, among others, provisions for appropriate measures for storage, handling, transportation and disposal of all waste material; provision of adequate sanitary facilities; rehabilitation and surface restoration of borrow pits; basic training in construction health and mitigation measures against spread of Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS); and sustainable seeding and tree growing to restore vegetation to its original condition; and extraction of water. A matrix of environmental impacts and mitigation measures is provided in Annex 7.

102. In the case of road rehabilitation, OP 4.11 (Physical Cultural Resources) is also being triggered. Construction will take place in proximity to areas of cultural, historical, and religious significance (the museum at Provincial Commissioner‘s House, Uhuru Park, and the Nairobi Synagogue). Guidelines for ―chance finds‖ procedure will be integrated into the contracts for construction. These include development of a cultural property management plan if physical cultural resources are found or adversely affected (although this is not expected to be the case, and consultations have already been held with stakeholders and their concerns about the construction process have been noted and addressed).

103. Disclosure of Safeguards Documents. All the Environmental and Social Impact Assessments (ESIAs) and Resettlement Action Plans (RAPs), including an Environmental Social Management Plan (ESMP) for roads sections to be rehabilitated or constructed, have been cleared by the World Bank and were disclosed in the Bank‘s InfoShop and in-country (details in Annex 7, Table 10). The draft terms of reference for the ESIAs for development of the BRT corridor and the commuter rail network were also prepared and disclosed in the Bank‘s InfoShop and in-country on KURA‘s and KRC‘s websites. The implementing agencies have staff with adequate experience and qualifications to manage environmental and social matters associated with their respective infrastructure expansion and rehabilitation components. All construction projects will adhere to the rules and regulations of National Environmental Management Authority, and all necessary permits will be obtained prior to construction.

104. Borrower’s Capacity to Implement Safeguards. KeNHA has substantial experience in the preparation and implementation of ESMPs and RAPs in compliance with previous Bank standards, conducted under earlier Bank-financed projects, including NCTIP, KTSSP and EATTFP. KeNHA has qualified Social Specialists with experience in implementing OP 4.12. The Environmental Specialist has undertaken preparation and monitoring of ESIAs for Bank- financed projects at both KeNHA and previously at the Kenya Power and Light Company. Although KURA has less in-house experience, they have recently hired an Environmental Specialist, and the ESIA submitted and cleared for the Meru bypass was of a high standard.

105. Stakeholder consultations. Stakeholder consultations were conducted for Project Affected Persons (PAPs) as well as local businesses, farms, and public institutions (schools, care homes, etc.) along the route. Dates of consultations are provided in Annex 7, Table 7. Key concerns were: dust pollution from construction; construction waste disposal; loss of customers

29 due to limited accessibility to shops, petrol stations, and hotels during construction; limited accessibility to a religious institution (Nairobi Synagogue); road safety during construction; and adequate compensation for land acquisition. Monitoring will be undertaken to ensure proper environmental impact mitigation measures are in place (frequent watering of roads; disposal of waste away from residential and market areas; adequate safety signs and safe crossing points; provision of access points to businesses, institutions, and houses of worship). Compensation issues will be addressed through the implementation of the RAPs.

30 Annex 1: Results Framework and Monitoring KENYA: National Urban Transport Improvement Project

Results Framework Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

Cumulative Target Values Responsibility Description

Baseline Data Source/ for Data (indicator PDO Level Results Indicators Unit of Measure Frequency

Core 2012 Methodology Collection definition 2013 2014 2015 2016 2017 2018 etc.) Indicator One: Reduction in Time in hours 3 3 3 2.5 2.4 2.2 2.1 Quarterly Quarterly and Supervision Average average travel time from Annual Consultant/ travel time Junction Jomo Kenyatta progress M&E by saloon car International Airport (JKIA)- reports/Field consultant during Rironi road. survey morning and evening rush hour. Indicator Two: Reduction in Cost per km (US$) 1.5 1.5 1.5 1.4 1.3 1.2 1.1 Quarterly Quarterly and Supervision As vehicle operating costs on for a heavy truck Annual Consultant/ determined Junction JKIA-Rironi road. progress M&E using the reports/Field consultant HDM-4 survey model. Indicator Three: Direct Quarterly Quarterly and Supervision Based on the beneficiaries: Annual Consultant/ ADT, type Road users per day (of which % Number in thousands 300 300 300 300 350 380 380 progress M&E of vehicles female) (% female) (40%) (40%) (40%) (40%) (40%) (40%) (40%) reports/Field consultant and average survey occupancy rate.

Indicator Four: Improved Quarterly Quarterly MoT/ institutional capacity in the Yes/No progress M&E urban transport sub-sector 1) No No No Yes Yes Yes Yes reports consultant 1) Nairobi Metropolitan Transport Authority 2) No No No Yes Yes Yes Yes

(NMTA) established and functional; 2) National Road Transport 3) No No No Yes Yes Yes Yes and Safety Authority (RTSA) established and

31 Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

Cumulative Target Values Responsibility Description

Baseline Data Source/ for Data (indicator PDO Level Results Indicators Unit of Measure Frequency

Core 2012 Methodology Collection definition 2013 2014 2015 2016 2017 2018 etc.) functional; 3) Urban public transport rules and regulations developed and in use.

Indicator Five: PPP promotion and opportunities in the transport sector developed.

1) Offer one Bus Rapid Transit (BRT) corridor for Public Yes/No 1) No No No No Yes Yes Yes Quarterly Quarterly and MoR/MoT/ Private Partnerships (PPP); Annual M&E 2) Offer one commuter rail line 2) No No No No No Yes Yes progress consultant for PPP. reports/Field 3) Institutional setup within survey KeNHA (Kenya National 3) No No No No No Yes Yes Highways Authority) for the promotion of PPP in financing and management of road infrastructure and services developed and adopted. Indicator Six: Number of road Percentage reduction To be 0 0 10 12 14 15 Annually KeNHA M&E crashes reduced along Junction (%) collected progress Consultant JKIA-Rironi Road* report INTERMEDIATE RESULTS Intermediate Result (Component A): Support to KeNHA to Upgrade the Urban Road Transport Infrastructure

Intermediate Result indicator Km 0.0 0.0 0.0 18.0 80.0 100.0 118.0 Annually KeNHA/ M&E One: Length of roads Kenya Urban consultant rehabilitated (non-rural) Roads

Authority (KURA) progress

32 Project Development Objectives (PDO): The Project Development Objectives are to: (a) improve the efficiency of road transport along the Northern Corridor; (b) improve the institutional capacity and arrangements in the urban transport sub-sector; and (c) promote the private sector participation in the operation, financing and management of transport systems.

Cumulative Target Values Responsibility Description

Baseline Data Source/ for Data (indicator PDO Level Results Indicators Unit of Measure Frequency

Core 2012 Methodology Collection definition 2013 2014 2015 2016 2017 2018 etc.) report

Intermediate Result indicator Km 0.0 0.0 0.0 5.0 20.0 30.0 38.0 Annually KeNHA/ M&E Two: Length of roads KURA consultant constructed (non-rural) progress report Intermediate Result indicator Annually KeNHA/ M&E Three: Road length in good and KURA consultant fair condition as a percentage of progress the total classified network in Cumulative report the project area [non-rural, Percentage (%) 60.0 60.0 65.0 70.0 75.0 80.0 80.0 Northern Corridor (Mombasa – Malaba/Busia) 930 km

Intermediate Result (Component B): Support to KURA and KRC to Develop Mass Rapid Transit Corridors

Intermediate Result indicator Yes/No No Yes Annually KeNHA/ M&E One: Draft Bill for NMTA KURA consultant presented to parliament, and progress rules and regulation for urban report public transport developed Intermediate Result (Component C): Institutional Strengthening and Capacity Building Intermediate Result indicator Yes/No No No Yes Annually KeNHA/ M&E One: Draft legal, institutional KURA consultant and regulatory framework for progress PPP in transport developed report Intermediate Result indicator Number No No No No 1 1 1 Annually KeNHA/ M&E Two: Feasibility and (a) BRT (KURA) consultant engineering designs studies Progress completed to acceptable (b) Commuter rail No No No No 2 2 2 report standards line *Baseline data will be collected by the M&E consultant by March 31, 2013

33 Annex 2: Detailed Project Description KENYA: National Urban Transport Improvement Project (NUTRIP)

1. The Government of Kenya (GoK) has developed a long-term investment plan for the road sub-sector, the Road Sector Investment Plan (RSIP). The plan includes identified priority interventions which are needed to support the achievement of Vision 2030. One of the priority areas is to address the high traffic congestion that is having serious economic consequences, including losses in Gross Domestic Product (GDP), and contributing to increases in the cost of doing business in the country. The priority interventions include improving existing road corridors; constructing critical complementary missing road links; and developing and expanding the commuter rail and Bus Rapid Transit (BRT) systems to improve urban public transport.

Urban Infrastructure and Services

2. Urbanization in Kenya has been growing rapidly since independence, but without being met with commensurate urban infrastructure and services. In major cities, availability and efficiency of urban transport is an important factor in development of social and economic activities. Currently, urban transport is facing challenges of fast rates of population and spatial growth, a low and unstable revenue base, low and uneven income levels among the inhabitants and high rate of growth in vehicle ownership among a small but significant minority, while the majority remains captive to poorly provided public transport and Non- Motorized Transport (NMT). Motorization in Kenya increased to about 1.62 million vehicles in 2011, compared to 591,000 in 2000 (Table 1). Private cars represent over 40 percent of this growth, and private vehicles are predominantly used in urban areas. In response to this rapid growth in motor vehicles, the Government‘s Road Sector Investment Plan (RSIP) 2010-2024 allocates significant resources towards urban road infrastructure expansion and improvement in an attempt to build a way out of frequently occurring traffic gridlocks.

Table 1: Number of Registered Vehicles by Type (in ‘000s) Vehicle type 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Motor cars 245 255 270 286 308 329 373 411 450 500 553 596 Vans, picks- ups 159 163 167 173 180 184 195 203 210 220 227 234 Lorries, Truck and heavy vans 58 59 60 62 64 66 70 75 81 91 96 102 Buses and mini-buses 39 43 47 50 56 60 50 56 62 85 90 92 Motor and auto-cycles 45 46 47 49 54 57 63 79 130 253 370 510 Trailers and tractors 13 14 14 15 16 17 40 42 43 27 31 34 Other motor vehicles 32 32 33 33 34 35 28 31 33 45 50 55 Total 591 611 638 669 711 750 819 897 1,009 1,221 1,418 1,623 Source: Kenya National Bureau of Statistics, Statistical Abstracts, Various (for 2000-2009 figures) and Kenya Economic Survey, 2012 (for 2010-2011 figures)

34 3. The most important road-based public transport services are provided by privately-owned overcrowded, over-aged and unreliable buses and matatus (mini buses) that operate in a virtually „laissez-faire‟ environment. These unregulated services form the backbone of the Nairobi public transport system, with matatus carrying about 33 percent of commuter traffic while public buses cater for only about 3 percent. There are in Nairobi in excess of 16,000 matatus and larger buses, many of which are individually owned and operated (mostly with hired drivers). This largely unregulated public transport environment has led to an unsustainable cut-throat competition that compromises vehicle and passenger safety and comfort, environmental conditions, as well as reliability of services. The use of large numbers of low-capacity matatus along the main transport corridors has further resulted in a daily battle for scarce road space. This inefficient use of road space is further aggravated by a lack of traffic management; interventions are piecemeal and poorly coordinated between stakeholder agencies.

Traffic Management Interventions for Nairobi

4. The convergence of road networks in the Central Business District (CBD) of Nairobi; poor road networks; the increasing number of vehicles; poor timing of traffic signals; and attitudes of road users create overwhelming traffic jams. Consequently, the traffic demand frequently exceeds the capacity of roads to handle the traffic. Low-cost traffic management tools are required to improve the existing roadway capacity. The City of Nairobi has some form of traffic management in place. To date, the emphasis has been on traffic signalized junctions, junction improvements, and one-way traffic lanes, which provide benefits to the motorized vehicular traffic.

5. Traffic management studies and activities: The institutions responsible for traffic management in the City of Nairobi have inadequate capacity in planning and executing measures (such as installing traffic lights, cabling, and a control room) to deal with congestion. In this regard, a consultancy to assist KURA is intended to explore the prospect of introducing short- to medium-term and long-term traffic management interventions to facilitate the smooth flow of traffic within the extended CBD of Nairobi. Some short-term interventions proposed include minor junction improvements, rehabilitation of existing traffic lights, slip roads construction, installing a control room, cabling and associated works.

6. Improvement of traffic management systems: Enhancement of traffic management measures through the acquisition of goods and services such as the control centre, traffic management Information Communication Technology (ICT) solutions and traffic signalization are required urgently. A study on traffic management for the extended CBD of Nairobi is necessary to determine the scope of implementation of the many types of traffic management interventions required (e.g., junction improvements, one-way operations, traffic signal coordination, and ICT integration in various aspects of traffic management).

35 Commuter Rail

7. Commuter rail is providing peak-hour passenger services in the morning and evening since 1992, carrying about one percent of passenger traffic. However, the system is loss-making and faced with enormous challenges and unclear management structures and poorly defined service provision expectations, resulting in serious infrastructure maintenance backlogs and over-aged and dilapidated rolling stock.

Non-Motorized Transport

8. The Mass Rapid Transit Study estimates that 47 percent of Nairobi residents walk to their places of work while only about four percent use bicycles. Bicycle traffic, popularly known as ―Boda Boda‖, is used more in the smaller towns and in rural areas, where the terrain permits, because without appropriate bicycle infrastructure, it is relatively safer to use it in areas with low motorized traffic volumes. In addition to poor and deteriorating road conditions in the urban centers, there is lack of other road infrastructural facilities like footpaths for pedestrians to make walking safer, separate lanes for cyclists or other immediate means of transport, or fly-overs and bypasses to improve traffic flows. In recent years, motorcycle taxis have gained popularity on non- arterial roads situated away from the city centre.

Drainage

9. Major towns experience serious flooding almost on an annual basis during the long rains, and at times even during the short rains. This is mainly because of the blockage during long dry spells coupled with inadequate maintenance and low capacity of such drains. There is need therefore to provide for adequate storm water drainage under all the road works components as well as stand-alone components for trunk storm water drainage. This will alleviate the problems encountered during the periods when roads get flooded for long spells of time, causing congestion and mobility problems for vulnerable groups including pedestrians, children, women and mobility-constrained road users.

10. When flooding occurs on urban roads, accidents are frequent and sometimes fatalities result from such episodes, which could be prevented with a working drainage system. The use of open drains in built-up areas, which is one of the main causes of storm water drainage-related accidents, should be addressed. Where closed drains are used, such drains should be so designed as to be able to carry the flow for the entire design life of the road.

11. Some of the reasons for drainage problems include: non-provision of adequate discharge points, encroachment by formal and informal businesses operating over open drains and thus causing blockage and inadequate way leaves for storm water drains. Separation of storm water and foul water sewers would also be desirable where they have been connected.

36 12. Trunk storm water drainage has been recognized as an important feature in the 15 year (2010-2024) RSIP and is considered in the short-, medium- as well as long-term program. All the components with an activity on road construction, rehabilitation or improvement under the project will pay attention to drainage.

Urban Transport Development

13. Given the serious congestion in Nairobi and the need to address it urgently, the Government offered a section of the Northern Corridor road adjoining Nairobi for tolling. The Bank financed the advisory services under the Northern Corridor Transport Improvement Project (NCTIP). The process began in 2003 and it was not until 2007 when the bids were invited, under the defunct Nairobi Urban Toll Road Project (NUTRP). This followed the outcome and recommendations of feasibility studies conducted by internationally-recruited consultants. The scope of works consisted of improving six road sections, including Uhuru Highway (total of 77 km), and constructing a bypass (29 km) as an alternative to a tolled urban stretch of 25 km. The scope of works comprised the rehabilitation of the existing multi-lane dual carriageways, construction of an elevated four lane highway over Uhuru Highway, and construction of a new two-lane bypass which would be upgraded to a four-lane dual carriageway over time. While three firms were pre-qualified, only one consortium submitted a bid. The sponsors had requested the World Bank Group, among others, for partial financing of the capital investment and provision of guarantees against political risks. The World Bank Group could not support the consortium after it emerged that prevailing circumstances had changed significantly and that executing the project as designed was no longer tenable. As a result, the Government decided to terminate the process of concessioning and thereafter approached the World Bank for assistance to finance some of the critical road infrastructure investments that were envisaged under the concession.

14. The circumstances surrounding the planned concession investments have changed significantly, given the long period (nine years) the whole process took before its ultimate termination. For instance, the traffic level has continued to increase; some sections of the roads under NUTRP have been constructed with alternative sources of finance, including from China; new road corridors and missing links have either been constructed or are nearing completion with financial support from the European Union (EU), Japan International Cooperation Agency (JICA) and China, such as the eastern and northern bypasses; and new commercial and industrial development areas have come up which require new configurations of access.

15. Accordingly, it became prudent to re-assess the impact of all these changes, including updating the economic analysis to establish whether there are better alternatives to constructing an elevated highway along the section of the Northern Corridor over Uhuru Highway from the Nyayo Stadium roundabout to the Westlands roundabout (approximately 7 km), including expansion and rehabilitation of the existing road sections, and whether construction of an overpass (or underpass) at the critical roundabouts is still the most appropriate option, along with investing in the balance of interventions identified earlier to address the congestion problem along the main road

37 artery through Nairobi. This will be verified by undertaking a traffic study of Nairobi and its environs, taking into account all the other investments currently ongoing or planned on the Nairobi urban road network.

16. While a reliable accident data collection and analysis system does not exist, the number of road accidents, injuries and fatalities in Kenya is high and increasing. Recent data does not exist, but in 2001, Kenya counted 44 fatalities per 10,000 vehicles, compared to 1.4 in Great Britain, while West African countries at a similar stage of development were at the 25 per 10,000 vehicles range.

17. Given the complexity and time that is required to prepare for the improvement of urban public transport systems, the National Urban Transport Improvement Project (NUTRIP) will initially focus on improvement of transport infrastructure that is critically a bottleneck and at the same time finance the preparatory work for the provision of efficient public transport services, focusing on mass transit systems that can provide affordable mobility and accessibility to the majority of the urban low income population. NUTRIP will comprise the following components, with the details shown in Table 2.

18. Component A: Support to KeNHA to Upgrade the Urban Road Transport Infrastructure (total cost US$311.15 million, of which IDA US$223.26 million). The selected road sections are among the top priorities in the RSIP and were part of the defunct NUTRP. This component will involve:

(a) Expansion and upgrading of the Northern Corridor road section through Nairobi from Jomo Kenyatta International Airport (JKIA) turnoff to Rironi and the associated service roads and access roads, all through provision of goods, works and services. (b) Construction of the Kisumu Northern Bypass road. (c) Construction and rehabilitation of non-motorized transport facilities, including foot paths, cycle tracks, pedestrian bridges and underpasses. (d) Carrying out feasibility and detailed engineering design studies of roads adjoining major towns and studies for improvement of traffic flows, through provision of technical advisory services. (e) Strengthening the capacity of KeNHA by: (i) supplying and installing a management information system; (ii) developing a safeguards framework for the road sector; (iii) carrying out an option study on private sector participation in managing and financing road investments; (iv) implementing the recommendation of the option study and preparing the requisite bidding documents; and (v) improving its capacity for contract management, monitoring and evaluation, through training and provision of technical advisory services.

38 (f) Strengthening the capacity of the External Resources Department and the State Law Office to support effective management of the Project, all through training and provision of technical advisory services. (g) Supervision of road works constructed under Component A of the Project and provision of technical advisory services. (h) Establishment of a program to address Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) in all the roads contracts, all through provision of goods and services.5

19. Component B: Support to KURA and Kenya Railways Corporation (KRC) to Develop Selected Mass Transit Corridors (total cost US$80.46 million, of which US$59.70 million IDA). The activities under this component of the project will comprise carrying out feasibility studies and detailed engineering designs and preparation of bidding and contract documents for works and associated facilities as well as selection of private sector operators to provide large capacity buses for a BRT system and rolling stock for a commuter rail system. The details are as follows:

(a) Bus Rapid Transit (BRT) Systems

20. BRT systems involve comparatively low construction costs, and so they are springing up all over the world, including the USA and Europe. Successful introduction of BRT systems requires strong political will and a clear and enforceable legal and regulatory framework to deal with the vested interests, indiscipline, and disregard to safety often manifested in the provision of transport services. In this context, the identification of a strong leader or champion who can overcome resistance and reconcile various interests is very important (e.g., Mayor in Curitiba or Mayor in Bogota) is critical. Furthermore, implementing agencies must design comprehensive consultative processes with all urban (transport) stakeholders, disseminating empirical information that can educate the public and other key stakeholders on the potential benefits and cost effectiveness which mass transit systems such as BRTs offer. Sufficient time is required for dialogue and to reach consensus, and to prepare adequately the identified interventions before implementation.

Main Characteristics of the Proposed BRT system in Nairobi

21. Feeder routes: The general concept for the proposed Nairobi BRT system is anchored in a trunk-feeder system, similar to the successful BRT systems in Curitiba, Bogota and Quito. High-capacity buses will provide services on segregated bus-lanes in the median of trunk corridors, complemented by feeder buses (which can be normal buses or matatus) transferring passengers at terminals or other designated stops. Successful identification and integration into the BRT system of feeder bus routes requires a meaningful consultation process with bus and matatu owners/operators that must be initiated at the early stages of BRT system design.

5 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the project.

39 22. Main design features: Incorporating lessons learned and best practices from BRT systems in other countries, the Nairobi BRT will include the following criteria, among others:

 Fully segregated and exclusive BRT lanes, predominantly in the median of major transport corridors.  Predominant use of high-capacity buses with low green house gases emissions.  System design capacity of a minimum of 20,000 passengers per hour per direction (which can be expanded by adding bus overtaking lanes and upgraded system management information).  High performance board/alight specifications for buses.  Access to station platforms only with valid fare-card.  Stations with central platforms and at-level boarding of buses, thus reducing stopping time and increasing access comfort.  Pre-board fare collection.  Average speeds between 20-40 km/h  Overtaking lanes at stops and stations, allowing express services.  Bus lane features that restrict vehicle breakdown delays to a minimum.

23. Proposed BRT corridors: The MRTS has identified nine BRT corridors which, if developed, will serve the most densely populated and low income parts of the larger Nairobi. The eastern part of Nairobi is one such area. The main corridors identified to serve this area include Jogoo road, Outering road, Juja road and Thika road. These corridors form a network. For instance, the Jogoo road corridor (traversing Kaloleni, Umoja and Kayole) with a length of about 21 km has the densest traffic and passenger demand in Nairobi, with a forecast travel demand of 424,680 persons in 2030; and it is connected to the Juja Road corridor, Outering and Thika corridors in Nairobi. The other key corridors include Mombasa road, that would partly serve Jomo Kenyatta International Airport (JKIA) and the southern part of Nairobi, the key ‗growth pole‘ for greater Nairobi.

24. The BRT corridors that will be considered under this project include Juja road and Mombasa-Uhuru Highway-Waiyaki Way road segment. Since the expansion works on Mombasa Road-Uhuru Highway-Waiyaki Way will be financed under the project, it is prudent to incorporate the BRT system in the designs at this stage rather than later. Meanwhile, most of the traffic on Juja road joins Jogoo road, Thika Highway, and Uhuru Highway-Waiyaki Way, and it is logical that this network is developed simultaneously for integration of the system. African Development Bank (AfDB) will finance the designs for Jogoo road, while the EU, Agence Francaise de Developpement (AFD) and JICA have expressed interest in participation under parallel financing.

25. The design of the proposed BRT corridors will be based on the concept of a fully separated BRT dual carriageway to be located in the median of the existing roadway, with overtaking lanes at stations and stops. Passenger facilities will include an inter- modal terminal at Central Railway Station, an intra-modal BRT/feeder terminal, and a BRT bus depot and workshop with refueling facilities for which the location(s) will be

40 determined at detailed engineering stage. On the operational side, the BRT system will be designed as a closed system, using high-capacity articulated buses, and prepaid access only (via prepayment at terminals, stations and stops).

26. The geometric design of the first BRT corridors described above will provide segregated bus lanes, NMT facilities, and improvement to adjacent traffic lanes to enhance the BRT image. Because of differences in right-of-way at various sections, geometric designs and features may differ. The designs will provide adequate drainage facilities to prevent environmental degradation through erosion. To maximize uninterrupted operation along the BRT corridor, in particular at intersections, the engineering designs will optimize traffic flows along the corridor

27. Along the BRT corridor, new stops will be constructed at 500 to 600 meter intervals, featuring raised platforms to allow bus entry/alighting at level and to reduce stopping time for boarding/alighting. Terminals will be constructed at the endpoints of the BRT corridors and at locations where passenger demand and/or inter-modal transfers require additional services. Tickets will be purchased upon entering the stops/stations and the stops/stations will protect passengers from weather influences (sun, rain) by means of a canopy. Pedestrian access to terminals, stations and stops will be facilitated via secured at-level crossings or footbridges with due attention to the needs of mobility constrained persons (handicapped, elderly) and children. Pedestrian walkways at station access routes will also be improved. The nature and scope of pedestrian (access) facilities and walkways will be determined in the detailed designs.

28. NUTRIP will support the preparation of the first comprehensive BRT route and will involve carrying out feasibility and detailed (engineering) design and studies, including the associated Environmental and Social Impact Assessment (ESIAs), on Mombasa/Waiyaki Way and Juja roads in Nairobi. It will also support the preparation of draft contracts and bid packages for the BRT operator(s), the fare collector and the funds manager, including provision of the specifications for high-capacity (articulated) buses and fare collection equipment concurrently.

29. Regulatory Framework for a BRT system: NUTRIP will support the identification of regulatory reforms that are necessary to structure and rationalize the provision of public transport services. The modalities of conducting the BRT engineering and operational design studies will be based on the most beneficial approach to the country, taking into account the existing capacity and expertise to coordinate the concurrent preparation of the various inter-linked activities required to design a BRT system. For instance, by opting for an all-inclusive multi-disciplinary study to be conducted by a consortium of international and local firms that combine all required BRT expertise, managerial skills to coordinate all activities into a coherent and consistent BRT system design will largely rest with the consortium. The assignment could cover: (i) preparation of a roadmap for public transport development as the foundation for a comprehensive BRT system; (ii) passenger and revenue forecasting; (iii) detailed engineering and operational designs; (iv) BRT system management and delivery planning; (v) financial and economic appraisal; (vi) environmental/social impact

41 assessments; and (vii) preparation of bid documents for civil works and operational component, which will include contracts for BRT services such as supply and operation, fare collector, fund manager, and technical specifications for fare collection system.

30. Planning for future BRT infrastructure must be anchored in the transport master plan for Nairobi. Preparation of such a plan will be essential. The plan will provide the basis for all planned and future transport services and infrastructure activities. More specifically, new transport services and all designs for construction/rehabilitation of transport infrastructure must incorporate compatibility with (future) transport components included in the Master plan (e.g. extension of BRT lanes, new commuter rail services, development of pedestrian and bicycle routes, etc). The Ministry of Nairobi Metropolitan has commissioned a traffic management study and it is recommended that KURA takes stock of the scope of this study. Contingent upon KURA‘s findings, further support for strengthening traffic management in Nairobi may be defined, possibly including traffic modeling within the context of BRT operations to optimize the use of scarce road space.

(b) Commuter Rail Services

31. Kenya Railways Corporation (KRC) operations are governed by the KRC Act and its operations are also subject to the provisions of the State Corporations Act and the Exchequer and Audit Act. Therefore guidelines that are issued from time to time on the operations of the State Corporations by the GoK influence the management and operation of the KRC and occasionally could inhibit decision-making processes through directions from various GoK agencies.

32. In 2006, the GoK concessioned the operations of its national railway network to Rift Valley Railways (RVR), a private operator. The term of the concession is 25 years for freight and five years for passenger services. The concessionaire is expected to operate freight and passenger services and maintain the full network, whereby the mainline is to be maintained at least to class-three track standards. The passenger services concession was due to expire on June 30, 2012 but has been extended by an additional three years. In support of creating an efficient commuter rail network as stipulated in Vision 2030, KRC has initiated the process of modernizing, developing and expanding the existing network in the Greater Nairobi Metropolitan Area.

33. Urban rail commuter passenger services are offered during morning and evening peak hours in Nairobi city on three routes (central station to ; ; and Stoney Athi) with all the trains terminating at the central railway station. The services currently offered do not cater for the needs of the majority, who still walk to their places of work. Most people are not linked to railways and the rail infrastructure on the core commuter network is in poor/fair condition with clear maintenance backlogs. Passenger services are provided using over-aged and worn-out coaches with seats falling to pieces, no lighting and in some cases no glass in windows. Motive power is provided from the concessionaire’s (RVR) pool of aged diesel locomotives that are poorly suited for the purpose. Furthermore, these locomotives are shared with freight services that take priority in allocation resulting in cancellation of passenger services. Thus, the reliability

42 and quality of operations is limited by the condition of the infrastructure network and the lack of adequate rolling stock.

34. In addition, commuters still spend a lot of time changing from one mode of transport to another because of a lack of intermodal terminals that would facilitate rapid and convenient change transport modes. As a result, railway modal share in urban passenger transport stands at 22,000 passengers/day (one percent of public transport demand), despite the potential demand for rail services in densely populated urban areas crossed by the core network.

35. RVR‘s Annual Report for 2010/2011 notes an increase in the number of passengers transported during this period, both mainline and commuter, amounting to 29 percent, with the number of passenger kilometers increasing by 11 percent. Whereas mainline passenger transport noted a drop of three percent in the number of passengers during this period, commuter transport noted a growth of 32 percent, amounting to 6,679,786 passengers annually as compared to 5,059,179 in 2009/2010. Revenue generated by passenger transport amounted to US$3.3 million, about six percent of total revenue, while freight transport accounted for US$53 million or 93 percent of total revenue. In FY2010/2011 RVR recorded a total loss of US$17.9 million, with an accumulated loss on June 30, 2011 of US$92 million.

36. Even without counting on a transparent contractual framework for services to be provided, careful attention must be given to the engineering of the financial architecture for the rail commuter services, including the development of a realistic business model for rail commuter operations.

37. Despite the low levels of service noted above, rail commuter transport in Nairobi grew in 2010/2011 due to an increase in trains run from eight to 14 daily, using the existing resources; opening of a new route to Stony Athi; and an increase in the number of coaches from 50 in 2009/2010 to 62. Hence, rail commuter transport in Nairobi has proven to have growth potential, but the poor financial performance of RVR and the lack of transparent service contracts (both for maintenance and passenger operations) between the Government and KRC (or the concessionaire) are likely to raise concerns within the private sector regarding the financial viability of embarking on the provision of rail commuter services. This is likely to result in potential operators requesting additional financial compensations to cover their risks, such as compensation for public service obligations and/or compensation for the purchase of new rolling stock that the operator must provide. Therefore, KRC will require contract passenger rail business (financial) expertise to assess commuter rail financial performance and viability in full detail, and a legal and regulatory framework that would allow for open access to the track and support the existence of a competitive railways sub-sector.

38. A market demand analysis study on the improvement of the existing rail network for commuter services is being supported by InfraCo6. Preliminary results indicate that

6 InfraCo is a subsidiary of Private Infrastructure Development Group (PIDG), supported by Development Partners, including UK, Germany, World Bank, IFC and others.

43 certain sections of the core rail network that are critical to providing a comprehensive geographic coverage are not viable without injection of public sector financing. The study concludes further that, out of the existing lines, the Thika line has the highest actual ridership and potential demand, and is therefore a priority for upgrading.

39. To make commuter rail services viable, significant public sector contribution to the capital costs will be required, in particular for upgrading of the rail infrastructure on the three routes including signaling. As for the provision of the rolling stock, the study sees several opportunities (e.g., a leasing agreement with rolling stock providers instead of buying outright the rolling stock). Comprehensive feasibility and detailed engineering designs and studies of both the infrastructure and operations of a commuter rail service have not been carried out. Accordingly, the GoK has requested the involvement of the Bank to finance some of these activities.

40. The KRC/Infraco 2010 report provides preliminary information for commuter rail modernization in Nairobi. The plan involves expanding the rail commuter network in Nairobi and its environs and identifies a ―core network‖ covering about 100 km and an expanded system that will cover another 82 km. The activities that have been identified by KRC for possible Bank support include feasibility and detailed engineering designs and studies of the existing lines and stations; provision and installation of a new signaling system enhancing line capacity; provision and installation of a communication system for train control; provision and installation of a fare collection system; capacity building and training of KRC staff; and procurement of a track recording car for monitoring of track quality in operation.

41. NUTRIP will support some of these activities. The proposed Component B of the project (Support to KURA and KRC to Develop Mass Transit Corridors) will involve carrying out feasibility studies and detailed engineering designs for selected commuter rail lines, and preparation of bidding and contract documents for works and associated facilities as well as selection of private sector operators to provide large capacity buses for a BRT system and rolling stock for a commuter rail system are a precursor of a proposed follow on activities that would possibly be financed by the Bank.

(c) Environmental and Social Impact Assessments (ESIAs) on the proposed BRT systems and Commuter rail lines

42. It should be noted that the feasibility studies and detailed engineering designs for both the proposed BRT systems and commuter rail lines will include an evaluation of environmental issues associated with direct and indirect impacts during the planning, construction, and operation phases, and outline its implementation in relation to other aspects of project preparation, design, and implementation. These feasibility studies on the proposed commuter rail lines will include assessing the construction of the high density railway line and its associated facilities. Therefore, the ESIA will address environmental impacts which may arise from construction and operation activities and provide a mitigation plan to prevent or minimize adverse impacts.

44 43. On the basis of the foregoing background, this component will include two sub- components as follows:

44. Sub-component B1. KURA (sub-total cost US$64.83 million, of which US$47.77 million IDA). This component will involve:

(a) Carrying out a range of feasibility studies including detailed designs and preparing bidding documents for selected Bus Rapid Transit (BRT) road corridors, through provision of technical advisory services. (b) Providing public transport and associated services, through provision of technical assistance. (c) Developing and implementing a scheme to decongest major urban areas, through provision of goods, services and works. (d) Carrying out activities to improve traffic management, including construction of traffic control centers, provision of traffic management Information Communication Technology (ICT) solutions, all through provision of goods, works and services. (e) Implementing regulatory reforms to rationalize the provision of public transport services and strengthen the management of public transport operations, through provision of services. (f) Constructing the Meru bypass roads. (g) Strengthening the capacity of KURA to implement urban transport reforms through training and provision of goods, services and technical assistance. (h) Building the capacity of KURA‘s staff in traffic planning, management, regulation and involvement of private sector in financing urban transport infrastructure and relevant services, through provision of services and training. (i) Carrying out: (i) feasibility and detailed engineering design studies of missing road links in major towns, (ii) a study and developing an urban transport plan for the city of Mombasa, and (iii) a study for the improvement of traffic flows of major towns, all through provision of technical advisory services. (j) Supervising road works construction in sub-component B1 of the project, through provision of technical advisory services. (k) Establishing a program to address HIV/AIDS in all the roads contracts, all through provision of goods and services7.

45. Sub-component B2. KRC (sub total cost US$15.63 million, of which US$11.93 million IDA). This component will involve:

(a) Carrying out feasibility studies and detailed designs, and preparing the necessary bidding documents for construction of selected commuter rail systems in Nairobi and other major towns, through provision of technical advisory services.

7 The HIV/AIDs program is for all road contracts under Component A and Sub-component B1 in the project.

45 (b) Preparing bidding and contract documents for the selection of private sector operators providing commuter rail operations and associated services, through provision of advisory services. (c) Supplying and installing information systems (IT) and building the capacity of KRC in IT, management of private sector involvement, planning, management of contracts including for concessionaires; and other oversight functions; all through provision of goods, training and services.

46. Component C: Institutional Strengthening and Capacity Building (total cost US$21.50 million, of which US$17.04 million IDA): This component will support and deepen the implementation of reforms in the transport sector with a major focus on urban transport. This component has two sub-components, C1 and C2.

Institutional and Policy Reform

47. The institutional framework for urban transport provision involves several entities with partial and sometimes overlapping and contradictory mandates and responsibilities. These fragmented institutional mandates contribute to a dilution of scarce financial resources, leading to under-investment in transport facilities. The various entities involved in urban transport include: the Ministry of Roads (MoR), responsible for formulation of the national road policy and road sub-sector administration; the Ministry of Local Government, responsible for administering and supporting the Local Authorities (LAs) and formulating the national policy on urban development; the Ministry of Transport (MoT), responsible for formulation of the national transport policy and transport sector administration; the Ministry of Nairobi Metropolitan Development; the Ministries of Lands, and Housing, responsible for administering and supporting the Local Authorities; the Kenya National Highways Authority (KeNHA), responsible for development and maintenance of national roads; the Kenya Urban Roads Authority (KURA), responsible for development and maintenance of urban roads; the City Council of Nairobi (CCN) and local councils; the Kenya Railways Corporation (KRC) and Rift Valley Railways (RVR). With urban transport mandates and responsibilities spread across a multiplicity of institutions with overlapping or even contradictory policies, urban transport management is fragmented and often not transparent.

48. New constitution and governance structure. The current set up is likely to change as the new constitution (2010) and the agreed reforms are implemented, thereby altering the institutional and implementation arrangements of NUTRIP. Amendments to the project design may be required during implementation to reflect these changes. The draft INTP and the new constitution provide a framework for the governance structure that is likely to emerge in the foreseeable future for the urban transport sub-sector. The proposed NMTA, in the case of Nairobi, will allow for placing all public transport issues such as licensing, regulating public transport and traffic management under one agency, and similarly all national road safety matters will be under the proposed RTSA.

49. NUTRIP will support the development of an effective framework of management and control that requires an organizational structure that clarifies responsibilities and

46 accountability through a clear separation between regulator, manager and operator. The regulator sets the policy and operational guidelines (through regulation) but carries little or no operational risk. The manager is in charge of ‗system management‘, ensuring compatibility of road based public transport and commuter rail transport, and it takes the operational risk, contracting service providers (operators) using transparency and affordability as guiding principles (e.g. public service contracts). The operator runs the services and usually bears some risks, as agreed in the contract.

50. Government policy principles for urban transport reform: Confronted with the rapidly deteriorating urban (transport) environment, the GoK has identified the institutional principles necessary to address arrangements for relationships between various levels of Government, as well as the structure for non-governmental or statutory bodies and the private sector.

51. The traditional way of organizing public transport services is through regulation of operators through permits or licenses, aiming at the creation of a level playing field that facilitates fair intra- and intermodal competition. The large number of operators that provide public transport services in Nairobi, for instance, makes public transport regulation, management and enforcement a daunting challenge. Therefore, successful implementation of an efficient mass urban transport system will hinge on structural reforms of the actual urban transport sector, aiming at intra-and intermodal integration and the creation of a level playing field that facilitates fair competition between modes. In this context, the main institutional and regulatory constraints for establishing and managing an integrated and sustainable urban traffic and public transport system should focus on addressing the following:

(a) Lack of a comprehensive urban traffic and transport strategy. Development of such a strategy originates in the consolidation of various urban traffic and transport policies. The urban transport strategy must prioritize mass public transport and intermediate means of transport and will provide guidance to the Nairobi Metropolitan Transport Authority in formulating short, medium and long term actions; (b) Incomplete legal and regulatory framework. Strengthening and consolidation of the legal and regulatory framework is indispensable for the establishment of adequate technical, institutional, financial and socio-environmental conditions for the concessioning and operation of separated bus-corridors, feeder routes, and rail commuter services. This includes re-regulation of matatu services and careful consideration of affordable public service obligations for BRT and commuter rail service providers; (c) Weak institutional capacity of public agencies and weak professional capacity of operators involved in public transport provision. Strengthening of institutional capacity and training of public and private urban transport professionals will facilitate the proposed reforms and rationalization of the sector; and (d) Lack of sufficient enforcement and control capacity within the metropolitan structure. Compliance with laws, regulations and route concessions to be introduced depends on reliable enforcement and control mechanisms.

47

52. Operational set up of public transport. Whereas the central government has to take the lead in formulating a comprehensive urban traffic and transport strategy, the other issues call for a structural reform of the urban transport sector. Urban transport sector reforms must be anchored in a clear separation of the roles of owner, regulator, manager and operators. Such separation is best based on the principle that responsibilities are assigned according to what each entity does best.

53. Under such circumstances, therefore, the GoK will be the owner of the public transport system assets and make sure the assets are maintained and utilized to their optimum capacity. The regulator will provide operational guidelines, based on the Government‘s transport strategic policy, and ensure that funding mechanisms are in place (budgets, subsidies, public service contracts). This task is to be conducted by the Nairobi Metropolitan Transport Authority (NMTA), being the Government‘s representative for implementation of the urban transport component of the INTP.

54. The formation of the proposed NMTA will have to ensure that all urban transport stakeholder interests are represented at the board level so as to guide the line agencies (road, rail) responsible for system management and operations appropriately. Clarification on the operational set up will be required. For instance, the manager will be either that of a ‗BRT business manager‘ or ‗commuter rail business manager‘ or, if a wider network is managed (e.g. feeder services), that of a ‗system manager‘. Guided by the strategic policy set by the NMTA, the manager will develop tactical policies to manage the business of public transport efficiently and effective. The system manager will contract the operation of the public transport mode (BRT, commuter rail service) through a performance-based contract to operators who perform services according to the contract specifications. The manager will have the end responsibility for the performance of the business and as such will monitor and enforce the conditions of the contract. The role of the operator will be to perform the services according to the specifications and standards of the contract. The contract will also define the responsibilities and duties of both the principal (manager) and the client (operator) and so will provide the basis for investments.

55. The GoK is implementing a number of reforms across the transport sector including in roads, aviation, railways, and maritime, with the support of the Bank, in an effort to improve sector performance, though urban transport is lagging behind the other sub-sectors. The institutional strengthening component under NUTRIP will therefore address the regulatory, monitoring, and control functions of the urban public transport. Building upon the Government‘s urban traffic and transport strategy, the project will support: (a) the development and implementation of an integrated public transport policy that covers all modes and that includes the required regulatory and policy framework, its administration, operation, monitoring and control; (b) the formal creation, technical assistance and training of the Nairobi Bus Rapid Transport entity under the proposed NMTA as the responsible entity for the BRT operations; (c) technical assistance and training of the NMTA entities responsible for public transport regulations, public

48 transport monitoring, control and enforcement; and (vi) capacity building/strengthening for monitoring and evaluation of the project and all its components.

56. The proposed project will support further the development of an effective framework of management and control, which requires an organizational structure that clarifies responsibilities and accountability through a clear separation between regulator, manager and operator. The regulator will set the policy and operational guidelines (through regulation) but carry little or no operational risk. The manager will be in charge of ‗system management‘ (e.g. road based public transport, commuter rail transport) and take the operational risk, contracting service providers (operators) using transparency and affordability as guiding principles (e.g. public service contracts). The operator will run the services and will usually bear some risks, as agreed in the contract.

The East African Aviation School (EASA)

57. The project will support enhancing further the capacity of the EASA, which is currently a directorate of the Kenya Civil Aviation Authority (KCAA), in an effort to transform it into a stand-alone self-sustaining institution. This is part of the planned restructuring of KCAA, which involves separating the regulatory function from its service provision responsibilities. EASA is responsible for providing training for aviation personnel not only within Kenya but also for a number of countries across Africa. The support EASA has received through the Bank-financed NCTIP has enabled it to offer new and advanced courses in aviation, which has generated demand from all over Africa that the school is unable to meet. The proposed support under this project of US$6 million toward EASA is not only to enable it respond to the growing training needs in the aviation sub-sector but also to prepare it for eventual de-linking from KCAA. The US$6 million will finance the acquisition of training equipment such as air traffic control training simulators and expanding and equipping its library, to cater for both students and the teaching staff.

58. Component C will therefore support and deepen the implementation of reforms in the transport sector, with a major focus on urban transport, and will involve two sub- components:

59. Sub-component C1. MoT (sub-total cost US$16.90 million, of which US$13.44 million IDA). This component will involve:

(a) Implementing selected activities in the Integrated National Transport Policy agreed with the Association, including establishing the proposed National Road Transport and Safety Authority and building its capacity to carry out its functions, all through provision of goods, works, and services. (b) Establishing the proposed Nairobi Metropolitan Transport Authority and building its capacity to carry out its functions, through provision of goods and services.

49 (c) Strengthening the capacity of the East Africa School of Aviation and promoting private sector participation in the aviation sub-sector through provision of technical advisory services. (d) Carrying out urban transport sub-sector studies and provision of technical advisory services. (e) Strengthening the capacity of MoT staff to carry out their responsibilities, through training and provision of technical advisory services.

60. Sub-component C2. MoR (sub-total cost US$4.60 million, of which US$3.60 million IDA). This component will involve:

(a) Strengthening the capacity of MoR staff to carry out its responsibilities, including monitoring and evaluation of the Project, through training and provision of goods and services. (b) Building the capacity of the newly-established National Construction Authority and preparing the implementing regulations for the National Construction Authority Act (2011), through provision of goods and services. (c) Building the capacity of the newly established Engineers Board of Kenya and developing the implementing regulations for the Engineers Act (2011), through provision of goods and services.

50 Table 2: Preliminary Costs (including contingencies) and Financing

Financing Proportions IDA GOK Civil works 80% 20% Consulting services 80% 20% Goods/Equipment 80% 20% Training 100% 0% Cost Est& Financing Plan (US$M) Base Contin- Component Category Cost gencies Total IDA GoK A. Support to KeNHA to Upgrade the Urban Road Transport Infrastructure 1. JKIA junction-Southern Bypass junction (7 km, 6 lanes) and associated interchanges, service and access roads (8 km) Works 37.18 6.82 44.00 35.20 8.80 2. Southern Bypass junction-James Gichuru road junction (12 km) including 9 interchanges and elevated highway (4 km) Works 114.08 20.93 135.00 108.00 27.00 3. James Gichuru junction-Rironi (26 km of which 7 km 6 lanes and 19 km 4 lanes) Works 54.08 9.92 64.00 51.20 12.80 4. Kisumu Northern Bypass (9 km) Works 8.45 1.55 10.00 8.00 2.00 Sub- total: Construction works 213.79 39.22 253.00 202.40 50.60 5. Updating Designs and Supervision of works (a) JKIA junction-Southern Bypass Cons 1.84 0.16 2.00 1.60 0.40 (b) Southern Bypass-James Gichuru junction Cons 3.68 0.32 4.00 3.20 0.80 (c) James Gichuru junction-Rironi Cons 1.66 0.14 1.80 1.44 0.36 (d) Kisumu Northern Bypass Cons 0.64 0.06 0.70 0.56 0.14 Sub-total: Supervision of works 7.82 0.68 8.50 6.80 1.70 6. Promotion of Private Sector participation in Road sub-sector Cons 3.68 0.32 4.00 3.20 0.80 7. Feasibility and detailed design and studies for improvement of road arteries adjoining major towns 7.36 0.64 8.00 6.40 1.60 8. Capacity Building and Technical Assistance Cons 3.40 0.30 3.70 2.96 0.74 9. Training of KeNHA, External Resources Department (MoF) and State Law Office staff Training 1.38 0.12 1.50 1.50 0.00 Sub-total: Other consulting services 15.82 1.38 17.20 14.06 3.14 Activities Funded fully by GoK 10. Operating costs Op 1.45 - 1.45 0.00 1.45 11. Feasibility and detailed designs studies of JKIA junction- Southern Bypass-junction; Southern Bypass-James Gichuru junction; James Gichuru-Rironi; Kisumu Bypass and Machakos Turnoff-Konza ICT City 5.00 - 5.00 0.00 5.00 12. Implementation of RAPs and relocation of public utilities associated with works contracts 26.00 - 26.00 0.00 26.00 Sub-total: Activities funded fully by GoK 32.45 - 32.45 - 32.45 Total for component A (KeNHA) 269.88 41.27 311.15 223.26 87.89

51 Base Contin Total IDA GoK Component Category Cost gencies B. Support to KURA and KRC to Develop Selected Mass Transit Corridors 1. KURA (a) Feasibility and design studies of selected Bus Rapid Transit (BRT) Corridors & preparation of bidding documents for BRT services operations Cons 8.45 1.55 10.00 8.00 2.00 (b) Feasibility and design studies of selected missing road links in Nairobi and other major towns Cons 6.76 1.24 8.00 6.40 1.60 Goods/ (c) Improvement of Traffic Management systems works 15.21 2.79 18.00 14.40 3.60 (d) Construction of Meru Bypass roads (21 km) Works 12.68 2.33 15.00 12.00 3.00 (e) Supervision of construction of Meru Bypass (21 km) Cons 0.92 0.08 1.00 0.80 0.20 (f) Study and developing an urban Transport Master Plan for Mombasa Cons 1.84 0.16 2.00 1.60 0.40 (g) Institutional Strengthening, Technical Assistance (TA) and modernizing management information systems and ICT Cons 1.84 0.16 2.00 1.60 0.40 (h) Traffic management studies and activities Cons 2.58 0.22 2.80 2.24 0.56 (i) Training of KURA Staff Training 0.67 0.06 0.73 0.73 0.00 (j) Operating costs Op 0.90 - 0.90 0.00 0.90 (k) Implementation of RAP associated with works contract (GoK) 4.40 - 4.40 0.00 4.40 Sub-total: Sub component B1 (KURA) 56.24 8.59 64.83 47.77 17.06 2. KRC (a) Feasibility and detailed design and studies for selected Commuter and Light rail routes in Nairobi and other major towns Cons 9.20 0.80 10.00 8.00 2.00 Cons/ (b) Institutional Building, TA and advisory services goods 3.68 0.32 4.00 3.20 0.80 (c) Training of KRC staff Training 0.67 0.06 0.73 0.73 0.00 (d) Operating costs Op 0.90 - 0.90 0.00 0.90 Sub-total: Sub component B2 (KRC) 14.45 1.18 15.63 11.93 3.70 Total for Component B 70.69 9.77 80.46 59.70 20.76 C. Institutional Strengthening and Capacity Building 1. MoT (a) TA for strengthening: (i) the National Road Transport and Safety Authority and the National Road Safety Program; (ii) the Nairobi Metropolitan Transport Authority; (iii) the East African Cons School of Aviation; and (iv) support PPP activities in aviation /Goods/ industry works 6.90 0.60 7.50 6.00 1.50 (b) Urban Transport sector studies, including, among others, the development of an urban transport sector strategy; and promotion of PPP in the provision of transport services Cons 3.68 0.32 4.00 3.20 0.80 Cons/ (c) Road safety interventions Works 4.42 0.38 4.80 3.84 0.96 (d) Training and capacity building Training 0.37 0.03 0.40 0.40 0.00 (e) Operating Costs 0.20 - 0.20 0.00 0.20 Sub-total: Sub component C1 (MoT) 15.56 1.34 16.90 13.44 3.46 2. MoR (a) Project Monitoring and Evaluation and sector coordination Cons 2.76 0.24 3.00 2.40 0.60 (b) Capacity building and Technical Assistance and support Cons/ implementation of NCA Act and Engineers Act Goods 0.92 0.08 1.00 0.80 0.20 (c) Training 0.37 0.03 0.40 0.40 0.00 (d) Operating Costs Op 0.20 - 0.20 0.00 0.20 Sub-total: Sub component C2 (MoR) 4.25 0.35 4.60 3.60 1.00 Total for Component C 19.81 1.69 21.50 17.04 4.46 Grand Total Components (A, B, C) 360.39 52.72 413.11 300.00 113.11

52 Annex 3: Implementation Arrangements KENYA: National Transport Improvement Project (NUTRIP)

Project Institutional and Implementation Arrangements

A Project Administration Mechanisms

1. The Kenya National Highways Authority (KeNHA), Kenya Urban Roads Authority (KURA), Kenya Railways Corporation (KRC), the Ministry of Transport (MoT) and the Ministry of Roads (MoR) will be responsible for implementing the project. KeNHA is responsible for the management of all national roads in Kenya; KURA is responsible for all urban roads, KRC is responsible for the development and oversight of railways, MoR is responsible for policy and technical standards pertaining to roads sub-sector issues; and MoT is responsible for other transport matters. A significant scope of the project covers the road sub-sector comprising mainly of improvement of road infrastructure and related facilities. KeNHA, KURA, and KRC, parastatals with independent Boards of Directors outside the central Government, will implement 95 percent (in terms of cost) of the project and the balance (five percent) will be implemented by MoR and MoT.

2. The overall project implementation arrangements are illustrated in figure 1 and the details are provided in section IV of the main text. The MoR will be responsible for the overall project coordination and each implementing agency will be responsible for the implementation of its respective component or subcomponent of the project. Except for KURA, the four other agencies are currently implementing Bank-financed projects, though a number of its project staff have working experience on Bank funded operations. The project will be mainstreamed into the operations of these institutions and form an integral part of their operation and investment program.

3. The project will be implemented as follows:

(a) Component A: Support to KeNHA to Upgrade Urban Road Transport infrastructure. (b) Component B: Support to KURA and KRC to Develop Selected Mass transit Corridors as follows:  Sub-Component B1: KURA  Sub-Component B2: KRC (c) Component C: Institutional Strengthening and Capacity Building Assistance as follows:  Sub-Component C1: MoT  Sub-Component C2: MoR

53 Coordination and Oversight Arrangements of the Project

Figure 1: Implementation Arrangements

NUTRIP PROJECT OVERSIGHT COMMITTEE

MASS RAPID PROJECT TRANSIT COORDINATOR CONSULTATIVE COMMITTEE

KENYA NATIONAL MINISTRY OF MINISTRY OF KENYA URBAN KENYA RAILWAYS HIGHWAYS ROADS TRANSPORT ROADS AUTHORITY CORPORATION AUTHORITY PIT PIT PIT PIT PIT

54 4. Lessons Learned. The implementation arrangements incorporate the lessons learnt from other World Bank financed projects in Kenya. For instance, NCTIP was a first major transport project financed by the Bank after a 10-year break in its lending program to the transport sector and it was imperative to build capacity in the implementing agencies to manage major projects. Therefore, adequate capacity building on operational BRT components will be provided to the KURA PIT through internationally recruited Technical Assistance (TA) and training. Keeping infrastructure and operations components in one agency facilitates good coordination in the preparation of the various BRT (sub-) components. Once the proposed NMTA is established, the KURA PIT could be transformed into the Public Transport Department as part of the Authority.

Composition of the Project Implementation Teams (PITs)

5. As regards implementation of Component A, the Director General (DG) of KeNHA has appointed a Team Leader for the PIT with experience and successful track record in implementation and management of Bank financed projects. The KeNHA-PIT Team Leader will report to the DG of KeNHA. The members of the team who will manage the day-to-day activities of the KeNHA components will include: Team Leader; Pavement/Materials Specialist; Social Development Specialist; Engineering/Design; Environmental Specialist; Procurement Specialist; Financial Specialist; Construction Specialist; Economist; BRT Specialist; and Public Private Partnership (PPP) Specialist.

6. To implement Sub-component B1, the DG of KURA has appointed a Team Leader for the PIT with experience in implementation and management of Bank financed projects. The KURA-PIT Team Leader will report to the DG of KURA. The members of the team who will manage the day-to-day activities of the KURA sub component will include: Team Leader; Pavement/Materials Specialist; Social Development Specialist; Engineering/Design; Environmental Specialist; Procurement Specialist; Financial Specialist; Urban Transport Specialist; Institutional Specialist/Economist; and Private Public Partnership (PPP) Specialist. An experienced international BRT Specialist will be contracted to advise the team on the preparation of the BRT system operational activities, to be done concurrently with the engineering designs.

7. As for the implementation of Sub-component B2, the Managing Director (MD) of KRC has appointed a Team Leader for the PIT with experience in implementation and management of Bank financed projects. The KRC-PIT Team Leader will report to the MD of KRC. The members of the team who will manage the day-to-day activities of the KRC sub component will include: Team Leader; Social Development Specialist; Engineering/Design; Environmental Specialist; Procurement Specialist; Financial Specialist; and Railway Planning Specialist; Institutional Specialist/Economist, and PPP specialist. The PPP specialist can possibly be shared with KURA, as several of the issues to be tackled overlap.

8. As regards the Sub-component C1, the PS, MoT will appoint a Team Leader for the PIT. The MoT PIT Team Leader will report to PS of MoT and will manage the day- to-day activities of Sub component C1. The members of the team will include: Team

55 Leader; Procurement Specialist; Financial Management Specialist; Transport Economist; Institutional Specialist; Principal, East Africa School of Aviation; an Economist from Kenya Civil Aviation Authority (KCAA); and Road Safety Specialist.

9. To implement Sub-component C2, the PS, MoR will appoint a Team Leader for the PIT. The MoR PIT Team Leader will report to the PS of MoR. The members of the PIT will include: Team Leader; Procurement Specialist; Financial Management Specialist; Economist/Monitoring and Evaluation Specialist; and Civil Engineer (Planning).

The Terms of Reference (ToR) for the Project Coordinator

10. The PC will be responsible for the following:

(a) Provide overall project coordination and reporting; (b) Ensure timely production of joint overall project implementation progress reports and dissemination of necessary information; (c) Report to the POC all projects related matters, any difficulties/bottlenecks and policy; matters that may hinder smooth project preparation and implementation; (d) Convene meetings, chaired by Roads Secretary (MoR) with Team Leaders on a quarterly basis during project implementation; (e) Ensure that adequate coordination exists with all other PITs and MoF as required; and (f) Secretary to the POC and MRT Consultative Committee.

The Terms of Reference (ToR) for the Team Leaders

11. The Team Leaders will provide the overall leadership of their respective component(s) of the project, and will be responsible for the following:

(a) Manage the day-to-day operations of their respective component(s); (b) Plan, direct, control and coordinate activities of the project under their management; (c) Monitor the commitment of their respective organizations to the project; (d) Monitor the performance of consultants and contractors in accordance to agreed contractual obligations; (e) Implement the project in accordance to the overall plan of operations and activity schedules and report changes thereto; (f) Ensure that there is structured and consistent monitoring of progress of implementation, including the regular reports, and audit reports; and (g) Ensure project progress reports are submitted to the Project Coordinator (PC) in a timely manner.

56 The ToR of the Project Implementation Teams

12. The PITs will carry out the following pre-contract and project management activities:

Pre-award Activities

(a) Prepare the project implementation plan; (b) Follow up on all actions agreed with the World Bank related to project preparation; (c) Invite bids according to World Bank procedures; (d) Select consultants according to World Bank procedures; (e) Prepare project contractual documents; (f) Prepare bidding documents and or request for proposals as appropriate; (g) Conduct evaluation of bids and or proposals; (h) Undertake contract negotiations; (i) Facilitate issuing of letters of awards; and (j) Liaise with World Bank as well as other PITs and other key stakeholders as part of coordination role.

Project Management Activities

(a) Discuss and agree with the consultants, suppliers, contractors, and key stakeholders, where appropriate (e.g. matatu associations, bus operators, City Council of Nairobi (CCN), etc.) detailed project activities; (b) Facilitate the mobilization of contractors and consultants and delivery of goods; (c) Facilitate import clearance; (d) Supervise and monitor consultants and contractors; (e) Supervise project implementation at all levels; (f) Draw up procedures for receiving, verification and payment of invoices on timely basis; (g) Ensure timely payments to consultants, contractors and suppliers; (h) Preparation and submission of progress reports; (i) Ensure that financial audits are carried out in time; (j) Ensure all safeguard policies are adhered to; and (k) Keep and maintain all project records, reports and information.

The ToR for the Oversight Committee (POC)

13. Responsible for overseeing the overall project preparation and implementation, the POC will: (a) Provide strategic and policy direction on matters relating to project preparation and implementation;

57 (b) Ensure the effective performance of the MRT Consultative Committee on public transport and facilitate the establishment of the proposed NMTA and National Road Transport and Safety Authority; and (c) Provide support and resolve any constraints that may hamper project implementation and which would require interventions from other ministries or arms of the Government.

14. The POC will meet at least quarterly and MoR will provide the secretariat.

A. Financial Management, Disbursements and Procurement

(a) Financial Management

15. The Bank‘s financial management team conducted a financial management assessment of KeNHA, MoT, MoR, KRC and KURA - the entities implementing the Project. MoR, MoT, KRC and KeNHA are currently implementing the NCTIP, EATTFP, and KTSSP. There are no overdue audit reports. The objective of the financial management assessment was to determine whether the financial management arrangements (a) are capable of correctly and completely recording all transactions and balances relating to the project; (b) facilitate the preparation of regular, accurate, reliable and timely financial statements; (c) safeguard the project‘s entity assets; and (d) are subject to auditing arrangements acceptable to the Bank. The assessment complied with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010 and the Banks FM Unit (AFTFM) Financial Management Assessment and Risk Rating Principles. The overall residual risk rating is moderate for KeNHA, KURA, MoT and MoR hence the project will have an on-field supervision at least once a year, while substantial risk for KRC and hence an on-field supervision of at least twice in a year.

The following are the financial management arrangements for the project.

Budgeting arrangements

16. KeNHA: The budgeting process is deemed adequate. The budgeting process follows the GoK procedures titled; Government Financial Regulations and Procedures. In addition, KeNHA has its own procedures manual entitled ‗Financial Policies, Guidelines & Procedures Manual dated July 1, 2009‘. The Finance Committee of the Board reviews the budget before forwarding to the full Board for adoption and approval. It is then submitted to the MoR for inclusion in the mainstream budget before it is submitted to the MoF for inclusion in the National Budget. KeNHA uses SAGE Pastel accounting system; however, the budgetary controls module is not fully operational and they have to do it manually in excel. Currently, there is a consultant on the ground that is fine-tuning the uncompleted or the partially completed modules. KeNHA should ensure that the budgetary module is operationalized by March 31, 2013. This is a dated covenant.

58 17. MoR and MoT: The budgeting process is deemed adequate. The budgeting process follows the GoK procedures titled; Government Financial Regulations and Procedures. The budget for 2012/13 was prepared on two platforms; the old system and the Hyperion and was uploaded into the re-engineered Integrated Financial Management System (IFMIS) supported by the Bank. The re-engineering of IFMIS started in February 2011 and is being driven by the directorate of IFMIS at Treasury. A consultant has been selected following Bank‘s no objection and the contract is being finalized before signing. The assessment of the budgeting module for adequacy can only be assessed thereafter.

18. KURA: The budgeting system will be consistent with the GoK‘s budgeting system and integrated in the parent Ministry‘s budget cycle. The Authority‘s budget is prepared and approved by the full board before it is submitted to the MoR for inclusion in the mainstream budget before it is submitted to the MoF for inclusion in the National Budget. Any adjustment to the budget is done through the Revised Estimates. Budget monitoring at the Authority is done through the capture of all vote heads in the Excel work sheet and manual commitment done on any payment being done. This manual system is subject to errors and omissions. Further, budget execution is monitored through the monthly expenditure reports compiled by the Authority for each vote head and reviewed by the responsible managers. The budget system is deemed adequate for purposes of the Project.

19. KRC: Budgeting at KRC is done by departmental managers. Budgeting guidelines are documented in the Government Financial Regulations and Procedures manual. Budgeting is done manually in excel. The budget process starts with the project coordinator/head of department who comes up with the budget for the project for the coming year and forwards to the budget committee in the KRC. The budget committee (members are the heads of department) consolidates the budget into a single corporation budget and forwards to the KRC board for approval. After the board‘s approval the budget is forwarded to the MoT. The MoT will review and forward it to the MoF where the budget is moderated based on estimated revenues and then it is consolidated with the Kenya National Annual budget for approval by the National Assembly.

20. The budget is broken into quarterly budgets and actual expenditure is compared with the budget and any variances explained. These revised budgets are incorporated into the GoK supplementary budget. After the budgets are approved these are loaded into Navision (an Enterprise Resource Planning system used by KRC since 2009). The budgeting arrangements are considered adequate for this project.

Accounting arrangements

21. KeNHA: Accounting staff are adequate in terms of numbers, qualification and experience. The current designated project accountant for NCTIP will also handle the proposed National Urban Transport Improvement Project (NUTRIP). KeNHA uses both the GoK procedures and own developed procedures entitled ‗Financial policies, Guidelines & Procedures Manual‘. These are considered adequate. KeNHA is currently using SAGE Pastel accounting system. However, the financial reports for the projects

59 cannot be generated directly from SAGE; the system captures KeNHA transactions as a whole. Manual intervention is required to come up with project reports. A system‘s consultant is on board customizing the system to enable them generate project reports directly without manual intervention.

22. MoR and MoT: These line ministries use GoK procedures titled; Government Financial Regulations and Procedures which are considered adequate. The staffing is considered adequate. MoR has an External Resources section that deals with donor funded projects. The Accountant General at Treasury has plans of revamping all External Resources Sections in all ministries to make them more effective. The current designated project accountants for KTSSP will also handle the NUTRIP. The new Chart of Accounts will enable ministries generate project accounts directly from the re-engineered IFMIS.

23. KURA: The accounting department at the Authority is not adequately staffed. However, the Authority is having a phased employment to strengthen the staffing level. The department is headed by the General Manager, Finance and Administration assisted by the Manager (Finance). The Authority also has 13 Senior Accountants with 10 heading the Accounting of the 10 Regional Offices and three in the headquarters. All the staffs are graduates with the relevant professional qualifications. KURA has appointed a senior accountant who will handle all the financial aspects of NUTRIP.

24. The Authority has an approved Financial Policies and Procedures Manual developed in June 2009. The manual is considered adequate for the project.

25. KURA is currently using SAGE Partner 2009 for accounting and financial reporting. However, the system has challenges in generation of financial reports as it is a lower version. It also lacks important modules such as budgetary module. KURA will be expected to address the system challenges by March 31, 2013. This will be a dated covenant. These arrangements together with the mitigation measures on identified weaknesses are considered adequate for the project.

26. KRC: There is adequate accounting staff capacity. Of the eight staff in accounting department based at headquarters, one has a post graduate qualification, six are CPAs (K), and two have intermediary accounting qualifications. In addition, there are more accounting staff at Railway Training Institute and the regional accountants in charge of the contracts in the regions. All the staff in accounting have at least five years of experience. Navision (an Enterprise Resource Planning system) is in full use for accounting process.

27. KRC has appointed project accountants who will handle all financial aspects of NUTRIP.

60 Internal control and internal auditing arrangements

Internal Auditing

28. KeNHA, KURA, MoT and MoR all have a strong internal audit function with audit committees in place to address issues raised by both internal and external audit reports but the audit committee of MoR and MoT are ineffective due to factors like membership (drawn from staff), regularity of meetings, follow up of audit findings, and ownership of the Committees by the line ministries. This is expected to change with the new Public Financial Management bill. In KRC, the internal auditors have been pre- auditing but the management has implemented phase 1 of the exit plan. The pre-auditing impairs the auditors‘ independence and may be a sign of ineffectiveness of internal control systems.

Internal Control Systems

29. KeNHA, KURA, KRC, MoT and MoR have adequate financial management manuals documenting the internal control systems to be used under the project. From the latest audit report of KRC, it is evident that the internal control system is weak. The auditor issued a qualified opinion on the following grounds that point to weak internal control systems: technical insolvency due to accumulated losses; inability to fairly ascertain the value of property, plant and equipment; illegal allocation of various parcels of land by the Commissioner of Lands, inability to confirm the receivables balance as at June 30, 2010, long outstanding debts whose recoverability is in doubt and failure to include investment of shares in the financial statements as required by Generally Accepted Accounting Principles.

30. The accounts of KRC have been prepared on a going concern basis given the decision by GoK to convert the outstanding long debts and accrued interest into equity vide a letter dated February 15, 2012.

31. KRC is a public enterprise established by an Act of Parliament and mandated to provide rail and inland waterways transport. An amendment of the Act in 2005 saw KRC concede railway operations to Rift Valley Railways (RVR) from November 1, 2006 for 25 years for freight services and five years for passenger services in a private capacity as a concession.

Governance and Accountability issues

32. All the entities have existing policies on Governance and Anti-corruption. In addition, the new constitution has devoted a chapter on governance issues. Staff and stakeholders in these entities are guided by these policies in combating corruption and unethical business conduct.

61 Funds flow and disbursement arrangements

33. Banking arrangements: The Ministry of Finance (MoF/Treasury) will be required to open five Designated Accounts denominated in United States Dollars while the KeNHA, KURA, KRC, MoR and MoT will each open a Project Account denominated in Kenyan Shillings. Both accounts will be opened in a or commercial banks acceptable to International Development Association (IDA). Details of these accounts once opened and the signatories are to be submitted to the Bank. Counterpart funding from the GoK is to be remitted into separate project operating accounts which entities receiving counterpart funding will be required to open.

34. Funds Flow Arrangements: The project will adopt the transaction based Statement of Expenditure (SOE) method of documentation and disburse through the reimbursement to the designated account. The Bank will give an initial advance with a ceiling. Subsequently, the implementing entities will submit their SOE and the Bank will process the withdrawal applications and deposit funds into the Designated Account. Funds will then be transferred from the Designated Account at MoF into the project accounts at the KeNHA, KURA, KRC, MoR and MoT and payments in relation to project eligible expenditures can be made from these accounts. Each of these implementing entities will be submitting their own withdrawal application to the Bank through the MoF.

35. Retroactive financing: The GoK has advanced the preparation and implementation of some activities of the project. Therefore, a provision of up to US$5 million has been made to cover eligible expenditures incurred on or after November 30, 2011.

36. Risks in the funds flow process. The Kenya portfolio has been facing delays in the transfer of funds from the Designated Account held at the MoF to the project accounts held by the implementing entities due to the many approval levels the payment request has to go through. In addition, there have been delays in the transfer of Government counterpart funds especially for infrastructure projects and this is likely to affect this project too. In NUTRIP, Government counterpart funding is about US$113 million of the project while IDA is financing US$300 million. As a condition of effectiveness, the GoK will be required to remit into the project operating account an initial amount equivalent of KES 30 million for Component A. Subsequently, the GoK should remit the rest of the funds on a quarterly basis for the duration of the project. This will be monitored by the Financial Management Specialist through the quarterly Interim Financial Report (IFR).

62 Funds Flow Chart

Figure 2: Funds Flow for the Implementing Entity

GoK Counterpart WORLD BANK (IDA) PROJECT Funding ACCOUNT in KES in Central DESIGNATED Bank of ACCOUNT in Exchequer Kenya/ or Project Operating USD at Central (Central Commercial Account in KES in Bank of Kenya or Bank of Banks Central Bank or Commercial Kenya) (MoR, MoT, Commercial Banks (MoR, Banks (MoR, KES KURA, KenHA, KURA, KRC, MoT, KURA, KRC, KRC, KeNHA) KeNHA) KenHA)

Project transactions paid in both local and foreign currency

37. Disbursement arrangements: The transaction based disbursement SOE will be used for the project. Other methods of disbursements particularly Direct Payments and Special Commitments (letters of credit) are encouraged in cases of huge contracts. Details concerning disbursements will be spelt out in the project‘s disbursement letter that will be issued by the Bank.

Financial Reporting Arrangements

38. KeNHA, KURA, KRC, MoR and MoT will prepare quarterly un-audited IFRs for the project in form and content satisfactory to the Bank, which will be submitted to the Bank within 45 days after the end of the quarter to which they relate. The contents and format of the IFRs have already been agreed between the Bank and the implementing entities.

39. The main schedules in the IFR will include: (a) Statement of Sources and Uses of Funds; and (b) Statement of Uses of Funds by Project Activity/Component.

40. The project will also prepare the projects annual accounts/financial statements within three months after the end of the accounting year in accordance with accounting standards acceptable to the Bank. The audited financial statements and management letter should be submitted to the Bank within six months after the end of the accounting year. The entities will prepare their accounts in accordance with International Public Sector Accounting Standards.

63 Auditing Arrangements

41. The office of the Auditor General (previously KENAO) is primarily responsible for the auditing of all Government projects. The standard audit terms of reference with Auditor General‘s Office are sufficient for this project. Kenya National Audit Office (KENAO) will audit NUTRIP annual financial statements prepared by MoT, MoR, KURA, KRC and KeNHA using the International Standards on Auditing. The audited financial statements will be submitted to the Bank within six months after the end of the fiscal year along with the management letter and management response thereto.

42. KeNHA/MoR: There are no overdue audit reports. The audit reports for NCTIP MoT for fiscal year (FY) 2011 received an unqualified opinion while that of KeNHA was qualified. The qualification for NCTIP KeNHA was on commitment fee charged on IDA undrawn funds, though this is a normal charge as long as the Credit remains undisbursed. All the same, a clearance certificate has been received from KENAO. The other key issues raised in the management letter of KeNHA relate to interest on delayed payments attributable to funds flow delays, under expenditure on Nyamasaria-- road and maintenance of two project accounts for MoR (which implemented the component before KeNHA took over) and KeNHA. The reconciliations between MoR and KeNHA were done and the inactive MoR bank account closed.

43. Meanwhile, the EATTFP KeNHA received a qualified opinion on grounds of inaccuracies in the Financial Statements. Other issues raised by the auditor included deficit in budgeted expenditure explained by long procurement procedures and incomplete project implementation framework of participating countries, maintenance of two project accounts for MoR (which implemented the component before KeNHA took over) and KeNHA. KeNHA submitted the required reconciliations to KENAO and a clearance certificate issued, and the inactive MoR bank account closed.

44. KRC: In the audit of FY June 2010, KRC received a qualified opinion on grounds of technical insolvency due to accumulated losses; inability to fairly ascertain the value of property, plant and equipment; illegal allocation of various parcels of land by the Commissioner of Lands, inability to confirm the receivables balance as at June 30, 2010, long outstanding debts whose recoverability is in doubt and failure to include investment of shares in the financial statements as required by Generally Accepted Accounting Principles (GAAPS). The accounts of KRC were however prepared on a going concern basis on the support from Government and creditors. In particular, GoK has converted the outstanding long debts and accrued interest into equity (conveyed by GoK to KRC in a letter dated February 15, 2012). Furthermore, KRC has prepared a time bound action plan on how it intends to address the issues raised in the audit report to their conclusion.

45. KURA: In the financial year (FY) June 2010, KURA received an unqualified audit opinion.

46. The GoK regularly discloses the project audit reports to the public in the spirit of being transparent.

64 47. The audit reports that will be required to be submitted by the implementing entities and the due dates for submission are shown in the table below.

Table 1: Audit Reports and Due Dates Audit Report Due Date MoT, MoR, KURA, KRC and KeNHA Within six months after the Annual audited financial statements and Management Letter for end of each fiscal/financial the project (including reconciliation of the Designated Accounts year. with appropriate notes and disclosures and management letter responses).

Financial Management Action Plan

The following actions need to be taken in order to enhance the financial management arrangements for the Project.

Table 2: Important Due Dates Action Date due by Responsible 1. Preparation of the Project Implementation Manual Effectiveness GoK 2. GoK remitting into the project account initial Effectiveness GoK deposit of KES 30 million for Component A (KeNHA) as counterpart funding. 3. KURA budgetary modules are customized to move March 31, 2013 KURA from a manual to an automated budgetary control system in a manner satisfactory to the IDA. 4. KeNHA budgetary modules are customized to March 31, 2013 KeNHA move from a manual to an automated budgetary control system in a manner satisfactory to the IDA.

(b) Procurement Arrangements

A. General

48. Procurement for the proposed project would be carried out in accordance with the World Bank‘s “ Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011; and Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January 2011” and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described below. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for post-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

65 institutional capacity. In addition, an overall project implementation manual will be prepared before the effectiveness of the Credit.

49. Procurement of Works: Works procured under this project would include: construction of roads along the Northern Corridor and Meru bypass at an estimated total cost of US$268 million of which 80 percent will be financed from the Credit. The procurement will be done using the Bank‘s Standard Bidding Documents (SBD) for all International Competitive Bidding (ICB) and National SBD agreed with or satisfactory to the Bank. Post-qualification will be carried for all civil works ICB contracts unless agreed otherwise between the Borrower and IDA and reflected in the respective annual procurement plan. Bids for large works contracts will be invited without pre- qualification, consistent with the Governance Action Plan (GAP). Some small works to improve urban public transport may be undertaken and the use of the framework agreements could apply. The type and cost for such works will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual procurement plan.

50. Procurement of Goods: Goods procured under this project would include: Information Communication Technology (ICT) goods (hardware and software), and traffic management-related equipment. The procurement will be done using the Bank‘s SBD for all ICB and National SBD agreed with or satisfactory to the Bank. The project proposes to introduce new initiatives in the provision of an efficient urban public transport and the use of framework agreements may be used to implement some actions such as traffic management measures on an urgent basis. The nature and budget for such goods will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual procurement plan.

51. Procurement of non-consulting services: Non-consulting services are envisaged under the project. The type and budget for such services will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual procurement plan.

52. Selection of Consultants: Consulting firms will be hired for feasibility studies, designs and supervision of construction contracts while individual consultants will be employed for technical assistance (TA) services. Shortlists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Public universities will be competitively selected for monitoring and evaluation (M&E) activities under the project. The project includes some complex issues and new initiatives that will be piloted in Kenya including BRT. Therefore procurement under public private partnerships; services of public universities; and Indefinite Delivery Contracts (IDCs) or Price Agreements (PAs) are likely to be used. The specific method of procurement to be used and more detailed cost estimates for such services will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual procurement plan.

66 53. Operating Costs: The GoK will finance operating costs from its own contribution to the project and will follow its national procurement and administrative procedures for acquiring goods and services required for the implementation of the project. The GoK will also pay for costs associated with any resettlement, land acquisition, compensation and relocation of services.

54. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procured, are presented in the procurement plan.

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

55. Procurement activities will be carried out by five implementing agencies: two Government ministries and three state-owned institutions, namely MoR, MoT, KeNHA, KURA, and KRC. KeNHA, KURA and KRC are state-owned institutions. Each of the five implementing agencies has constituted a PIT which reports to the CEO of their respective agencies. A PIT staff includes among other professional staff a PIT leader and a procurement officer. With the exception of KURA, the other four agencies are implementing three ongoing IDA-funded projects which are: the NCTIP, East Africa Trade and Transport Facilitation Project (EATTFP), and KTSSP through the same PITs. Because KURA is an offshoot of MoR, most of its technical staff and especially members of its PIT of the proposed project are former MoR staff that have gained a vast experience in project implementation under the three ongoing projects.

56. An assessment of the capacity of the implementing agencies to implement procurement actions for the project was carried out by the Procurement Specialist on the team. The assessment reviewed the organizational structure for implementing the project and the interaction between the project‘s staff responsible for procurement duties and management of their respective agencies.

57. Being cognizant of the experience gained by the implementing agencies from the ongoing projects, and deployment of the same PITs of the ongoing projects for the implementation of the proposed project, the overall project risk for procurement is ―moderate‖.

58. The key issues and risks concerning procurement for implementation of the project have been identified and require enhancement include systemic weaknesses in the areas of: (a) accountability of procurement decisions; (b) procurement record keeping; (c) capacity of procurement staff; (d) procurement planning; (e) procurement process administration including award of contracts; (f) contract management; and (g) procurement oversight. The corrective measures which have been agreed upon are:

(a) Prepare a Procurement Guide that: (i) defines the roles and responsibilities of all offices that will be involved in any aspect of procurement implementation of the project; (ii) set out the sequence and timeframe for the completion of procurement decisions of all individual players as well as for coordination of the contribution

67 of the players in procurement implementation; and (iii) establish service standards for processing of payments to contractors and suppliers. (b) Develop and agree with the Bank by September 30, 2012 a procurement training plan for the PIT. (c) Align the preparation processes of procurement plans, work plans and budget estimates. (d) Establish separate effective tracking systems of: (i) Procurement plan implementation and (ii) processing of payments to contractors and suppliers. (e) In consultation with the Public Procurement and Oversight Authority (PPOA) and KENAO, ensure that procurement audits by PPOA and financial audits by KENAO are conducted jointly.

59. Kenya has a public procurement law, the Public Procurement and Disposal Act of 2005 (PPDA) that governs purchase of works, goods and services using public resources by the central Government entities, local authorities, state corporations, education institutions, and other Government institutions. Under the PPDA, the PPOA has been established in addition to the Procurement department in the MoF. The PPDA sets out the rules and procedures of public procurement and provides a mechanism for enforcement of the law. Some provisions of PPDA are not fully consistent with the World Bank procurement guidelines and Consultants Guidelines, and therefore these may not be applied for the implementation of this project without modification. These provisions and their respective modifications are:

(a) PPDA 55(2): instead, the tender submission date shall be set so as to allow a period of at least 30 days from the later of: (i) the date of advertisement, and (ii) the date of availability of the tender documents. (b) PPDA 4(2)(c): instead, Recipient‘s Government-owned enterprises shall be allowed to participate in the tendering only if they can establish that they are legally and financially autonomous, operate under commercial law and are an independent agency of the recipient‘s Government. (c) The Recipient shall use, or cause to be used, bidding documents and tender documents (containing, inter alia, draft contracts and conditions of contracts, including provisions on fraud and corruption, audit and publication of award) in form and substance satisfactory to the Association. (d) PPDA 61(4): instead, extension of tender validity shall be allowed once only, and for not more than thirty (30) days, unless otherwise previously agreed in writing by the Association. (e) PPDA 66 (3)(b): instead, evaluation of tenders shall be based on quantifiable criteria expressed in monetary terms as defined in the tender documents. It shall not be based on a merit points system. (f) PPDA 39: instead, no domestic preference shall be used in the evaluation of tenders. Therefore, as a result of the non application of PPDA 66(3)(b) and 39, contracts shall be awarded to qualified tenderers having submitted the lowest evaluated substantially responsive tender. (g) PPDA 67: instead, notification of contract award shall constitute formation of the contract. No negotiation shall be carried out prior to contract award.

68 (h) PPDA 91: instead, shopping procedure will apply for each low value contracts, in lieu of Direct Procurement, except as otherwise previously agreed in writing by the Association. (i) Regulations 47: instead, the two envelope bid opening procedure shall not apply.

C. Procurement Plan

60. The implementing agencies prepared, at appraisal, 18-months procurement plans for project implementation which provide the basis for the procurement methods. The plans were consolidated and discussed and agreed between the Borrower and the Project Team and will be posted 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. The review by World Bank of procurement decisions will be provided in the procurement plan for those contracts that shall be subject to Prior Review.

D. Frequency of Procurement Supervision

61. Based on the capacity assessment of the implementing agencies, it was recommended that two supervision missions would carry out post-review of the procurement actions, as most of the contracts are large and will be subject to the Bank‘s prior review.

69 KENYA NATIONAL URBAN TRANSPORT IMPROVEMENT (NUTRIP)

PROCUREMENT PLAN (THE FIRST 18 MONTHS) I. GENERAL

1. Project information: Country: Kenya Borrower: Republic of Kenya Project Name: National Urban Transport Improvement Project (NUTRIP) Project ID: P126321

2. Bank‘s approval Date of the procurement Plan: May 23, 2012 3. Date of General Procurement Notice: May 3, 2012 4. Period covered by this procurement plan: Fiscal Year 2012-2014 (18 months)

II. WORKS

1. Prior Review Thresholds Threshold for No Procurement Method Procurement Method Prior Review (US$) 1. ICB  5,000,000 All 2 LIB All values All 3. NCB < 5,000,000 None 4. Direct Contracting All values All 5. Shopping <100,000 None

Note: ICB = International Competitive Bidding LIB = Limited International Bidding NCB = National Competitive Bidding

2. Post-qualification of bidders: Post-qualification will be carried out for all civil works contracts unless specified otherwise.

3. Framework Agreements: The use of Framework Agreements will apply. The type and cost of works will be defined and agreed between the Borrower and IDA prior to their inclusion in the procurement plan.

70 4. Procurement Packages with Methods and Time Schedules

Domestic Review Expected Pre- or Ref. Contract Proc. Preferen by Bank Bid- Post Comments No. (Description) Method ce (Prior / Opening qualif. (yes/no) Post) Date COMPONENT A (SUPPORT TO KeNHA TO UPGRADE URBAN ROAD INFRASTRUCTURE ALONG THE NORTHERN CORRIDOR: IMPLEMENTED BY KeNHA) Bidding Capacity enhancement of documents 1. A104 from Southern ICB Post No Prior Jan 2013 expected to Bypass- James Gichuru be ready in road (12 km) Nov 2012. Bidding Capacity enhancement documents April 2. from JKIA-Southern ICB Post No Prior expected to 2013 Bypass road (15 km) be ready in Feb 2013. Bidding Capacity enhancement of documents A104 from James Gichuru April 3. ICB Post No Prior expected to road Junction- Rironi 2013 be ready in (25 km) Feb 2013. Bidding documents 4. Kisumu Northern Bypass ICB Post No Prior Jan 2013 expected to (9 km) be ready in Nov 2012. SUB-COMPONENT B1 (SUPPORT TO KURA: IMPLEMENTED BY KURA) Bidding Construction of Meru documents ICB 5. Bypass roads (21 km) Post No Prior Oct 2012 expected to (1) be ready in June 2012.

III. GOODS AND NON-CONSULTING SERVICES. 1. Prior Review Thresholds:

Threshold for Procurement No Procurement Method Prior Review Method (US$) 1. ICB  500,000 All 2 LIB All values All < 500,000 3. NCB None >70,000 4. Shopping <70,000 None 5. Direct Contracting All values All 6. Framework Agreements All values All

71 Note: ICB = International Competitive Bidding LIB = Limited Competitive Bidding NCB = National Competitive Bidding

2. Framework Agreements: The use of Framework Agreements will apply. The type and cost of goods will be defined and agreed between the Borrower and IDA prior to their inclusion in the procurement plan.

Pre or Domestic Review Expected Ref. Contract Proc. Post Preferen by Bank Bid- Comments No. (Description) Method qualific ce (Prior / Opening ation (yes/no) Post) Date SUB-COMPONENT B1 (SUPPORT TO KURA: IMPLEMENTED BY KURA) Bidding documents 1. Traffic signaling ICB Post No Prior Oct 2012 expected to equipment be ready in Aug 2012. Bidding documents 2. ICT software and ICB Post No Prior Jan 2013 expected to hardware be ready in Nov 2012. SUB-COMPONENT B2 (SUPPORT TO KRC: IMPLEMENTED BY KRC) Bidding documents ICT software and 3. NCB Post No Prior Dec 2013 expected to hardware be ready in June 2013. Bidding documents 4. Track recording car LIB* Post No Prior Dec 2013 expected to be ready in June 2013. SUB-COMPONENT C1 (SUPPORT TO MoT: IMPLEMENTED BY MoT) Bidding ICT software and documents March 5. hardware for NMTA and ICB Post No Prior expected to 2014 RSA be ready in Dec 2013. Supply and installation of Bidding 3-D Air Traffic Control documents 6. simulators for East Africa ICB Post No Prior Feb 2013 expected to School of Aviation be ready in (EASA) equipment Nov 2012.

72 Pre or Domestic Review Expected Ref. Contract Proc. Post Preferen by Bank Bid- Comments No. (Description) Method qualific ce (Prior / Opening ation (yes/no) Post) Date Bidding Supply for assorted documents 7. equipment for EASA NCB Post No Prior Oct 2013 expected to Library be ready in Aug 2013. SUB-COMPONENT C2 (SUPPORT TO MoR: IMPLEMENTED BY MoR) ICT software and Bidding hardware for National documents Nov 8. Construction Authority ICB Post No Prior expected to 2012 and Engineers Registration be ready in Board. Sept 2012

* LIB will be used in respect of specialist software and other proprietary items for which there are only a few known suppliers

III. SELECTION OF CONSULTANTS

1. Prior Review Threshold:

Threshold for Selection Method Proc. Method Prior Review (US$) Quality and Cost Based Selection 1. No Limit ≥ 200,000 (QCBS) (Firms) 2. Least Cost Selection (LCS) No Limit ≥ 200,000 3. Fixed Budget Selection (FBS) No Limit ≥ 200,000 4. Quality Based Selection (QBS) No Limit ≥ 200,000 5. Consultants qualification (CQS) ≤ 300,000 ≥ 200,000 6. Single Source (Firms) No Limit All 7. Single Source (Individual) No Limit All

Note : QCBS = Quality and Cost Based Selection. LCS = Least Cost Selection CQS = Consultant Qualification Selection FB = Fixed Budget Selection SSS = Single Source Selection IC = Individual Consultant

1. Shortlist comprising entirely of national consultants: Shortlist of consultants for services, estimated to cost less than US$200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

73

2. Accredited universities in Kenya: One of the accredited universities will be selected to provide monitoring and evaluation (M&E) services.

3. Public Private Partnerships: Procurement under PPPs will apply for activities related to the provision of transport infrastructure and services. The cost for such services will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual procurement plan.

4. Indefinite Delivery Contracts or Price Agreements: The services for which contracts will apply will be defined and agreed between the Borrower and IDA prior to their inclusion in the updated annual Procurement Plan.

5. Procurement Packages with Methods and Time Schedules

Review Expected Ref Description of Assignment Selection by Bank Proposals No. Comments Method (Prior / Submission

Post) Date COMPONENT A (SUPPORT TO KeNHA TO UPGRADE URBAN ROAD INFRASTRUCTURE ALONG THE NORTHERN CORRIDOR: IMPLEMENTED BY KeNHA) Consultant Services for Design Review, RFPs to be Works Supervision; 1. QCBS Prior Feb 2013 issued in Dec Southern Bypass- James Gichuru road 2012 Junction Consultant Services for Design Review, RFPs to be 2. Works Supervision; QCBS Prior April 2013 issued in Feb JKIA-Southern Bypass 2013 Consultant Services for Design Review, RFPs to be 3. Works Supervision; QCBS Prior April 2013 issued in Feb James Gichuru road Junction -Rironi 2013 RFPs to be Feasibility and design studies for four 4. QCBS Prior Dec 2012 issued in Nov major towns‘ arterial connections 2012 RFPs to be 5. Kisumu Northern Bypass QCBS Prior Dec 2012 issued in Nov 2012 TOR under 6. Detailed design of Mombasa - Malaba QCBS Prior July 2012 preparation SUB-COMPONENT B1 (KURA: IMPLEMENTED BY KURA) Consultant Services for Feasibility detailed Engineering design and studies (including traffic management studies for RFPs to be 7. Nairobi CBD), BRT Operations Plan for QCBS Prior Sept 2012 issued in August a Bus Rapid Transit System Route for 2012 Nairobi starting at Haile Selasie Avenue through Ring Road Pumwani, Ring Road

74

Review Expected Ref Description of Assignment Selection by Bank Proposals No. Comments Method (Prior / Submission

Post) Date Ngara, Juja Road, Komarock Road and ends at the junction of Kangundo Road and Komarock Road. Also included is part of Outering Road from Kangundo Road Junction to Juja Road Junction (25 km). RFPs to be Consultancy services for works 8. QCBS Prior Aug 2012 issued in August supervision for Meru bypass (21km) 2012 Consultancy services for Urban Transport Master Plan Study of RFPs to be Mombasa municipality. The project 9. QCBS Prior Sept 2012 issued in Aug. study area is in Mombasa and comprises 2012 the Island, Mainland North, South and West. SUB-COMPONENT B2 (KRC: IMPLEMENTED BY KRC) Feasibility and detailed engineering designs and studies

(a) Existing commuter rail lines routes in Nairobi and preparation of bidding documents for both works and commuter rail operator. RFPs to be March 11. QCBS Prior issued in Dec. 2013 (i) Nairobi to , 48.2 km line 2012 (ii) Makadara to Thika, 56 km line (iii) Makadara to village, 8 km line (iv) Embakasi to Lukenya, 30 km line

(b) Metro and light rail in Nairobi Feasibility and detailed engineering RFPs to be designs and studies of Nairobi Freight March 12. QCBS Prior issued in Dec corridor bypass from Embakasi station to 2013 2012 Dagoretti station 35 km line Feasibility and detailed engineering designs and studies for: (a) proposed commuter rail line routes in Mombasa RFPs to be

13. QCBS Prior July 2013 issued in March (i) Mombasa station to Moi 2013 international airport; airport line (5 km) (ii) Mombasa to Mtwapa line (20 km) (iii) Mombasa to Diani line (35 km)

75

Review Expected Ref Description of Assignment Selection by Bank Proposals No. Comments Method (Prior / Submission

Post) Date (iv) Mombasa to Mariakani line (40 km) (b) Metro and light rail system Feasibility and detailed engineering RFPs to be issued 14. designs and studies for proposed QCBS July 2013 in March 2013 commuter rail line routes in Kisumu Technical assistance and advisory services related to the selection of private RFPs to be 15. sector operators and associated service – QCBS Prior July 2013 issued in March Nairobi, Mombasa and Kisumu 2013 Commuter rail

SUB-COMPONENT C1 (MoT: IMPLEMENTED BY MoT) RFPs to be Consulting services for the development 16. QCBS Prior Dec 2012 issued in Oct of urban transport strategy 2012 Development of a strategy on PPPs in RFPs to be issued 17. QCBS Prior Dec 2012 financing airport infrastructure in Oct 2012

SUB-COMPONENT C2 (MoR: IMPLEMENTED BY MoR)

RFPs to be issued 18. Monitoring & Evaluation consultant QCBS Prior Aug 2012 in August 2012

62. Training: Each of the implementing agencies will prepare its annual training program as part of the project annual work plan before submission to the Bank for concurrence. The program will identify, inter alia: (a) the training envisaged; (b) the personnel to be trained; (c) the selection methods of institutions or individual conducting such training; (d) the institutions conducting the training, if already selected; (e) the duration of the proposed training; and (f) the cost estimate of the training. Report by the trainee upon completion of training would be mandatory.

B. Environmental and Social (including safeguards)

63. The project‘s anticipated social and environmental impacts are provided in detail in Annex 7.

64. The Annex also includes, among others, the Bank‘s Operational Policy triggered, the description of project location, and the resettlement and compensation anticipated under the project. Details on the total project affected persons, stakeholder consultations, potential environmental impacts, proposed mitigation measures and the social impact of the Resettlement Action Plans, Borrower‘s capacity to implement safeguards and an update on disclosure of safeguard documents are also provided.

76 C. Monitoring & Evaluation (M&E)

65. Results will be monitored by a team of experts from one of the accredited universities in Kenya. The selected university will sign a contract with MoR and will work in close collaboration with KeNHA, KURA, KRC and MoT. The indicators and results for monitoring including the reduction of travel time and transport cost on the proposed road corridors are provided in the Results Framework. The baseline information will be available before the beginning of construction, in case those indicators for which the information is not available. The consultants will provide both semi and annual reports.

66. The works contracts will be supervised by independent consultants selected competitively. The consultants will oversee the day-to-day progress of works on the site and to certify each payment invoice, including compliance by the contractor with all technical specifications, environmental and social mitigation plans, and contractual provisions.

67. Communications Strategy: To supplement the work of the M&E consultant (accredited university in Kenya), the communications specialist on the task team, based at the Country office, in collaboration with the relevant units in the project implementing entities have prepared a communications strategy for the project. The key aspects of the strategy include:

(a) Communication Needs Assessment The core communications team comprising of World Bank and the implementing agencies will conduct a communications needs assessment among stakeholders, beneficiaries, agencies and partners of NUTRIP. This will be necessary to receive critical feedback for developing a strategic communication program. The assessment will be carried out during the period June – August 2012.

(b) Strategy Plan and Design The Communication Strategy will focus on the project‘s deliverables that reflect the strategic pillar of creating efficient infrastructure services that will increase Kenya‘s regional competitiveness, achieve high and equitable growth, and create quality jobs especially for the fast growing urban population. These expectations are aligned specifically with Kenya‘s transport sector objectives, and more broadly with Kenya‘s Vision 2030, the Bank‘s Country Partnership Strategy for Kenya and the Bank‘s Africa Strategy.

(c) Institutional Implementation Arrangements The Coordinator for the project in MoR will oversee the implementation of the Communications Strategy during the life of the project and beyond.

(d) Monitoring and Evaluation The Coordinator for the project will regularly monitor progress on the implementation and effectiveness of the strategy, and work with the inter-agency

77 oversight committee in addressing critical issues identified in the course of the project implementation. The committee will regularly brief all the agencies involved in the project.

(e) Budget This strategy will initially be implemented over a three year period (2012-2015) at an estimated cost of US$75,000 and at Mid-Term Review of the project, an assessment on the progress will be carried out to determine if additional funds will be needed to scale up the strategy.

78 Annex 4: Operational Risk Assessment Framework (ORAF) KENYA: National Urban Transport Improvement Project (NUTRIP)

Project Stakeholder Risks Rating High Description: Private bus and matatus (mini-buses) Risk Management: Adequate measures will be included in the project to involve the operators operated in an environment with minimal matatu owners in participating through franchises to run larger buses on BRT routes and regulation to date, to the extent that at present there is focusing mini-buses on feeder routes, learning from the experience of similar efforts in Dar- indiscipline and disregard for safety and environment. es-salaam, Tanzania, Johannesburg , South Africa, Lagos and Nigeria, among others. These operators are likely to resist introduction of stringent enforcement of the traffic rules; phasing-out Ministry of Transport (MoT) is building support for NMTA through consultations, such that of matatus; introduction of large capacity buses; and already the Cabinet has approved the Integrated National Transport Policy (INTP), now corridor exclusivity that will be required for successful before Parliament for approval, which calls for the creation of NMTA. The new constitution operation of a sustainable mass transit system. also offers opportunities as it introduces devolved governance structures that will support the establishment of NMTA. CCN which currently manages traffic and parking in the city, stands to lose that authority once this Project stakeholders, in urban areas and other users of the identified transport corridors responsibility is ceded to Nairobi Metropolitan want them improved given the high economic, environmental and social cost of traffic Transport Authority (NMTA), and may resist this congestion and the likely benefits to be accrued following successful completion of the change. project. Resp: Government Due Date: Stage: All Status: Ongoing and Bank Continuous Implementing Agency Risks (including fiduciary) Capacity Rating: Substantial Description: The implementation of the new Risk Management: In case drastic changes in the institutional arrangements occur much constitution and agreed reforms may change the earlier than Mid Term Review, an early restructuring will be warranted, though, going by institutional set up and implementation of the project. past experience - when Kenya National Highways Authority (KeNHA) was established after Some of the implementing agencies could be merged or reforming the Ministry of Roads (MoR) - the changes resulting from the new constitution change roles or new entities introduced creating some are likely to be implemented over an extended period with sound arrangements for the uncertainties in the short and medium term. transition. In addition the PITs involved in MoT, MoR, KeNHA, KURA, the key implementation agencies, are likely to remain more or less intact and move into any new structure, should there be some consolidation of ministries. Kenya Urban Roads Authority (KURA) has recently been established (2007) and has not implemented a The proposed implementing agencies KeNHA, MoR and MoT, with few exceptions, Kenya Bank funded project. This may pose moderate risk Railways Corporation (KRC) and KURA are well staffed and experienced in implementing related to implementation capacity. donor financed projects requiring only some further capacity building effort in specialized

79 areas. Internationally qualified consultants will be engaged to carry out detailed design and supervision of works, and where necessary to enhance the capacity of the implementing agencies. Resp: KeNHA, KURA, KRC, MoR, Due Date: MoT and Bank’s Stage: All Status: Ongoing Continuous Task Team.

Governance Rating: Substantial Description: Governance in the transport sector has Risk Management: The results of implementing the GAP measures in the road sub-sector been challenging. Risks in the sector include unclear seem to contribute to improving the business environment, increasing competition and GoK institutional arrangements; collusion and other forms obtaining comparatively more bids than before (from two-three bids to over nine), with of bid rigging; fraud during implementation; weak some prices below the Engineer’s estimates. Therefore, the relevant aspects of the GAP will oversight and regulatory capacity for urban transport be adopted, in particular unit costs will be rigorously investigated and estimated; stringent (details in the agreed Governance Action Plan (GAP) due diligence of bidders, consultants and suppliers; bids and qualifications will be subjected being implemented under NCTIP). to much higher levels of scrutiny; and use of post qualification for large works contracts; and the “Engineer” will be the works supervision consultant and not the “Employer”. Road authorities are currently developing their internal monitoring, control and compliance systems. The implementation of the GAP has raised the necessary attention of the importance of The current approval procedures still involve the MoR governance and integrity issues in the transport sector. and MoT which poses a risk of delays, duplicity of accountability and temptation to revert to old Stringent due diligence measures during procurement will be undertaken including the use bureaucratic ways of conducting business unless of post-qualification criteria, independent review by a procurement specialist of large works monitored closely. contracts and intensified Bank supervision.

Procurement and financial management systems continue to be strengthened through ongoing Bank financed projects in Kenya. The probability is declining due to execution of sector policy, institutional reforms to enhance transparency, accountability and sector performance. This has contributed to greater public scrutiny and recent results from a number of contracts illustrate increased competition and competitive prices offered by bidders.

Resp: Bank’s project Due Date: Stage: All stages Status: Ongoing team Continuous

80 Project Risks Design Rating: Moderate Description: Inadequate data and information on Risk Management: Technical assistance will be used to facilitate generation of the required urban transport systems and multiplicity of agencies data, where necessary. Creation of the NMTA will reduce the number of decision-making involved in urban public transport lead to less than points and enhance stakeholder coordination. optimum designs and delays in decision-making. The proposed project has diverse implementing agencies with different levels of experience and capacities. Standard practice of using internationally qualified consultants to do feasibility studies and detailed designs of major project components and use of familiar technology in civil works makes the likelihood of design failure very low. Resp: Government Due Date: Stage: All Status: Ongoing and Bank Continuous Social & Environmental Rating: Moderate Description: Project Affected Persons not satisfied Risk Management: Resettlement Action Plans (RAP) with adequate provisions on with compensation arrangements impede site grievance redress mechanism will be prepared consistent with the Bank’s guidelines. handover and construction schedules, thereby delaying Implementation will also draw on recent country and Bank experience in applying OP4.12 project benefits. Involuntary Resettlement in Kenya drawing from recent urban and transport projects, which worked well.

The Environmental Impact Assessments (EIA) that have been carried out for some of the road sections show there are no significant and irreversible impacts of major civil works largely because they are rehabilitation or reconstruction of existing assets and confined largely to the existing right of way. Resp: KeNHA, KURA Stage: Due Date: Status: Ongoing and KRC Implementation Continuous Program & Donor Rating: Moderate Description: The forthcoming general elections divert Risk Management: Infrastructure and decongesting major urban areas is the stated attention of project implementing agencies and key priority of both coalition partners in the Government of Kenya (GoK). The project is a high staff and priorities change when the new Government priority for the GoK. The GoK had shown commitment and offered part of the road sections takes over. for tolling with bi-partisan support in parliament.

Insufficient coordination among development partners Through the existing donor coordination arrangements, the Bank will maintain a close that are supporting activities in urban public transport dialogue throughout project preparation and implementation to ensure that development initiatives in Kenya lead to duplication and conflicting partner support is consistent with the Government’s vision. directions on policy and institutional reform matters. Resp: Government Due Date: Stage: All Status: Ongoing and Bank Continuous

81 Delivery Monitoring & Sustainability Rating: Moderate Description: Counterpart funds are not released in a Risk Management: Keep counterpart funding requirement to a reasonable level for all timely manner and in adequate amounts. activities. Budgetary allocation and releases would be closely monitored and reported in the quarterly Financial Monitoring Reports. Monitoring and Evaluation (M&E) capacity is still weak leading to delays in taking corrective actions in a The proposed implementing agencies are reasonably experienced in managing complex timely manner. projects and would be further strengthened under the project.

The project will support the strengthening of M&E functions in the implementing agencies and will be complemented by an M&E consultant (one of the accredited universities). Resp: Government Due Date: Stage: All Status: Ongoing and Bank Continuous Overall Risk Rating Implementation Risk Rating: High Comments: Risks include the uncertainties regarding the possible changes in the institutional set up in the transport sector and also implementation arrangements arising from the execution and aligning them to the newly adopted Constitution ; the forthcoming general elections and the transition to a new Government thereafter could slow down implementation; and likely resistance from transporters and bus (or mini-bus) operators to introduction of any new regulatory framework for public transport, phasing out matatus and CCN resistance to cede its current responsibility of traffic management and parking management to the proposed NMTA.

82

Annex 5: Implementation Support Plan KENYA: National Urban Transport Improvement Project (NUTRIP)

Focus of Supervision

1. Implementation support will focus on actions that are critical for project success. In particular, emphasis will be placed on quality of works; technical compliance; timely payment to contractors, suppliers and consultants; timely award of contracts; and adherence to implementation schedules. Continuous supervision will be encouraged given that most of the Bank‘s task team members are based in the Kenya country office. This will therefore enable continuous and cost-effective supervision of the project.

2. Upstream reporting, auditing and accountability, and technical compliance measures to ensure early detection and remedy of problems through ongoing oversight of the project implementation activities will be emphasized. For civil works contracts, there will be speedy review of project implementation progress reports prepared by the engineering supervision firms that will perform the day to day independent certification of the quality of work, payment certificates and compliance with contract terms.

3. In case of procurement documents subject to prior review, these will be carefully reviewed by both the technical expert(s) and the Senior Procurement Specialist on the team to ensure that they comply with the project‘s technical requirements and the Bank‘s procurement and consultants guidelines.

4. The Financial Management Specialist will carry out periodic reviews of the project‘s five implementing agencies‘ financial management systems and controls and where necessary will conduct reviews of statements of expenditure and monitor the availability and adequacy of the counterpart funds as reported in the quarterly Financial Monitoring Reports/Interim Financial Reports. These reviews will be utilized for improving the implementing agencies‘ systems and performance in these areas.

5. Before each supervision mission, the project implementing agencies will submit to the Bank, a detailed consolidated project implementation progress report which will provide the status of the project activities and identify all implementation issues facing the project. These reports combined with site visits will be the basis for reaching agreement with the client on the activities for the upcoming period and resolution of implementation issues facing the project.

Mode of Supervision

6. The Task Team will undertake supervision as follows:

(a) Where necessary, provide technical, procurement and financial management support to the project‘s implementing agencies from the country based team; (b) Quarterly supervision reviews of the project, including visits to the project sites. The review teams will comprise an engineer, procurement specialist,

83 financial management specialist, communications specialist, environmental specialist, transport specialist Bus Rapid Transit (BRT), railways specialist, social development specialist and the task team leader; (c) Annual fully fledged supervision missions involving all the key task team members; (d) The communications specialist on the team will prepare a brief on the implementation status of the project and post it on the external country office website semi-annually; and (e) Similarly, the communications specialist on the team will assist the Kenya National Highways Authority, Kenya Urban Roads Authority, Kenya Railways Corporations, Ministry of Transport and Ministry of Roads to prepare brief implementation progress reports of the project, and post them on their websites.

Monitoring

7. On the side of the Government of Kenya (GoK), the capacity of the implementation agencies is augmented by technical assistance and consultant services, particularly in the areas of designs, supervision, project coordination, monitoring and evaluation, and user surveys. The annual Monitoring and Evaluation (M&E) reports produced by the M&E consultants (an accredited university in Kenya) will be discussed at workshops with stakeholders, both during their preparation and on finalization. This will be particularly important for engaging the matatu and private bus operators regarding the proposed reforms in the urban public transport systems.

Budget

8. The above activities would require both the Bank and the GoK‘s management to allocate adequate resources for their staff to be able to carry out comprehensive project supervision. Inadequate resources will hamper the implementation of the proposed intensive follow up and monitoring required for mitigating the potential risks identified.

(a) What would be the main focus in terms of support during implementation:

Time Focus Skills Needed Resource Estimate Partner Role

First Technical review Civil engineering, 45 staff-weeks of Bank No partner twelve of bidding urban transport, staff plus 26 staff- involved but the months documents, institutional, railways, weeks of Short Term information will proposals and bid PPP, financial Consultant (STC). be share by other and technical management, development evaluation reports procurement, an Approx.US$250,000 involved in urban and review of independent transport in technical reports technical/procurement Kenya (feasibility and specialist and design study communication reports)

84 12-48 Technical review Civil engineering, Annually, 30 staff- months of bidding urban transport, weeks of Bank staff documents, financial management, plus 18 staff-weeks of proposals and M&E, social STC. supervision of development, railways, works, and procurement and Approx. US$190,000 technical reports communication per annum Other

(b) Skills mix required.

Skills Needed Number of Staff Number of Comments Weeks/annum Trips/annum Team Leadership 26 4 site visits (local) Country Office (CO) staff Civil engineering 10 4 site visits (local) STC [International] Urban transport 8 2 site visits STC (International) Procurement 5 2 site visits CO Social Development 2 2 site visits CO staff M&E 2 2 site visits STC (local) Financial management 5 2 site visits CO staff Environmental 3 2 site visits HQs staff Railways 6 2 site visits STC (International) Communications 2 4 site visits CO staff

(c) Partners

Name Institution/Country Role JICA AfDB, French Japan, France, AfDB, Other development partners are interested in Development Agency (AFD) and EU supporting urban transport activities in Kenya under and European Union (EU) parallel financing. There is therefore need for appropriate coordination and harmonization of assistance to avoid duplication.

85 Annex 6: Economic and Financial Analysis KENYA: National Urban Transport Improvement Project (NUTRIP)

I. Economic and Financial Analysis

Road Sections

Rehabilitation of the Jomo Kenyatta International Airport (JKIA) –Westlands- Rironi; Kisumu Bypass and Meru Bypasses

1. The economic analysis was carried out on the above road sections. These road sections have low capacity and are in a poor condition and are scheduled for reconstruction/ rehabilitation/upgrading under this project. Table 1 shows the existing situation and pavement structure and road conditions for the respective road sections.

Table 1: Existing Pavement Structure and Road Conditions Package Name Package Road Current Condition Constituents Length Kilometer (Km) Package 1: Mombasa road 7.3  Pavement geometric cross section poor (no paved JKIA Junction from JKIA shoulders), access to roadside buildings unsafe to Southern Interchange to  Pavement structural strength inadequate for long Bypass Junction Nairobi Southern term usage and associated Bypass junction  Facilities for non motorized traffic crossing highway roads (A104) non-existent Airport South 2.8  Pavement structure in advanced state of Road (C59) deterioration due to exhaustion of service life  Pavement geometric cross section inadequate for traffic  Facilities for non motorized traffic non existent Access road from 3.6  Existing pavement in need of periodic maintenance Mombasa Road intervention to JKIA  Road service levels low during peak traffic periods Passenger due to congestion Terminal (B10)  Facilities for non motorized traffic poor Access road from 2.0  Existing access lanes in poor condition and layout Mombasa Road poses hazard to Nairobi Inland Container Depot Package 2: Mombasa road 3.0  Pavement geometric cross section poor (no paved Southern from Nairobi shoulders) Bypass junction Southern Bypass  Pavement structural strength inadequate for long to James junction to term usage Gichuru Road Langata Road  Facilities for non motorized traffic crossing highway inadequate Mombasa 3.8  For traffic load, severe congestion Road/Uhuru  Pavement geometric cross section poor in relation to Highway from function Langata Road  Pavement structural strength inadequate for long Roundabout to term usage

86 Package Name Package Road Current Condition Constituents Length Kilometer (Km) Museum Hill  Facilities for non motorized traffic crossing highway interchange inadequate Chiromo Road 1.6  Pavement geometric cross section poor in relation to from Museum function Hill Interchange  Pavement structure in advanced state of to Westlands deterioration due to exhaustion of service life Roundabout  Facilities for non motorized traffic crossing highway inadequate Waiyaki Way 3.1  Pavement structure in advanced state of from Westlands deterioration due to exhaustion of service life Roundabout to  Facilities for non motorized traffic crossing highway James Gichuru inadequate Road Package 3: Waiyaki Way 13.0  Pavement structure in advanced state of James Gichuru from James deterioration due to exhaustion of service life Road to Rironi Gichuru Road to  Facilities for non motorized traffic crossing highway Southern Bypass inadequate junction at Gitaru A104 from 12.2  Pavement structure in advanced state of Southern Bypass deterioration due to exhaustion of service life junction at Gitaru  Facilities for non motorized traffic crossing highway to Rironi inadequate Package 4: Kisumu Northern 9.0  Missing bypass for Kisumu City Construction of Bypass Kisumu Northern Bypass Package 5: Western 11  Pavement structure is earth Meru Bypasses Eastern 10  Pavement structure is earth

2. The above road sections are currently unfit to serve their intended purposes and are scheduled for reconstruction/rehabilitation under this project. Table 2 shows the projected traffic pavement load classes for different sections of the project road in accordance with the Kenya Road Design Guidelines.

87 Table 2: Traffic Load Classes Package Name Package Constituents Road Pavement Traffic Load Classes Length (Km) Package 1: JKIA JKIA Interchange to 7.3 Class T O: over 60 million cumulative equivalent Junction to Nairobi Southern standard axles in 15 years Southern Bypass Bypass junction Junction and (A104) associated roads Airport South Road 2.8 Class T O: over 60 million cumulative equivalent (C59) standard axles in 15 years Access road from 3.6 Class T O: over 60 million cumulative equivalent Mombasa Road to standard axles in 15 years JKIA Passenger Terminal (B10) Access road from 2.0 Class T 2: 3- 10 million equivalent standard axles in 15 Mombasa Road to years Nairobi Inland Container Depot Package 2: Mombasa road from 3.0 Class T O: over 60 million cumulative equivalent Southern Bypass Nairobi Southern standard axles in 15 years junction to James Bypass junction to Gichuru Road Langata Road Junction Mombasa Road/Uhuru 3.8 Class T O: over 60 million cumulative equivalent Highway from Langata standard axles in 15 years Road Roundabout to Museum Hill interchange Chiromo Road from 1.6 Class T O: over 60 million cumulative equivalent Museum Hill standard axles in 15 years Interchange to Westlands Roundabout Waiyaki Way from 3.1 Class T O: over 60 million cumulative equivalent Westlands Roundabout standard axles in 15 years to James Gichuru Road Package 3: James Waiyaki Way from 13.0 Class T O: over 60 million cumulative equivalent Gichuru Road James Gichuru Road to standard axles in 15 years Junction to Rironi Southern Bypass junction at Gitaru A104 from Southern 12.2 Class T O: over 60 million cumulative equivalent Bypass junction at standard axles in 15 years Gitaru to Rironi Package 4: Kisumu Kisumu Northern 9.0 Class T 2: 3- 10 million equivalent standard axles in 15 Northern Bypass Bypass years Package 5: Meru Western 11 Class T 3: 1-3 million equivalent standard axles in 15 Bypasses years Eastern 10 Class T 3: 1-3 million equivalent standard axles in 15 years

3. The proposed interventions for each of the road section comprises of the following:

88 Table 3: Proposed Interventions Package Name Package Constituents Road Proposed Interventions Length (Km) Package 1: Mombasa road from JKIA 7.3  Provision of facilities for non motorized traffic JKIA Junction Interchange to Nairobi  Increase in number of lanes from current six (2 to Southern Southern Bypass junction carriageways x 3 lanes) Bypass junction (A104)  Strengthening of existing pavement and associated  Reconfiguration of access to roadside buildings roads and Inland Container Depot Airport South Road (C59) 2.8  Reconstruction of existing pavement  Construction of second carriageway within existing ROW  Grade separation where Airport South Road meets access road to JKIA Passenger Terminal  Provision of facilities for non motorized traffic Access road from Mombasa 3.6  Periodic maintenance of existing pavement Road to JKIA Passenger  Widening from four (2 lanes x 2 carriageways) Terminal (B10) to six lanes (2 carriageways x 3 lanes)  Provision of facilities for non motorized traffic  Improvement of facilities for securing access to the airport Access road from Mombasa 2.0  Reconfiguration and reconstruction of access Road to Nairobi Inland road network leading from A104 to the Nairobi Container Depot Inland Container Depot Package 2: Mombasa road from 3.0  Provision of facilities for non motorized traffic Southern Nairobi Southern Bypass  Increase in number of lanes from current six (2 Bypass junction junction to Langata Road carriageways x 3 lanes) without land acquisition to James  Strengthening of existing pavement Gichuru Road  Grade separation for Popo Road junction Junction  Reconfiguration of access to roadside buildings Mombasa Road/Uhuru 3.8  Construction of overpasses/viaduct with down Highway from Langata ramps and access ramps as necessary Road Roundabout to  Provision of facilities for non motorized traffic Museum Hill interchange Chiromo Road from 1.6  Provision of facilities for non motorized traffic Museum Hill Interchange  Increase in number of lanes from current six (2 to Westlands Roundabout carriageways x 3 lanes)  Reconstruction of existing pavement  Reconfiguration of access to roadside buildings  Overpass/viaduct at Westlands Roundabout Waiyaki Way from 3.1  Provision of facilities for non motorized traffic Westlands Roundabout to  Increase in number of lanes from current six (2 James Gichuru Road carriageways x 3 lanes) where practical without land acquisition  Reconstruction of existing pavement  Overpass/viaduct at Westlands Roundabout  Grade separation for James Gichuru junction  Reconfiguration of access to roadside buildings

89 Package Name Package Constituents Road Proposed Interventions Length (Km) Package 3: Waiyaki Way from James 13.0  Provision of facilities for non motorized traffic James Gichuru Gichuru Road to Southern  Increase in number of lanes from current six (2 Road Junction Bypass junction at Gitaru carriageways x 3 lanes) where practical without to Rironi land acquisition  Reconstruction of existing pavement  Reconfiguration of access to roadside buildings A104 from Southern Bypass 12.2  Provision of facilities for non motorized traffic junction at Gitaru to Rironi  Reconstruction of existing pavement including service roads Package 4: Kisumu Northern Bypass 9.0  Construction of bypass Kisumu  Construction of facilities for non motorized Northern traffic Bypass  Installation of grade separated interchange at junction with B1 Package 5: Western and Eastern 21  Construction of a bypass. Meru Bypasses

4. Benefits expected to accrue from improvement activities include savings to be made by motorists on vehicle operating costs, travel time costs and environmental costs.

Assumptions

5. Net benefits were computed using the Highway Development and Management Model (HDM-4), which simulates highway cycle and vehicle operation condition and costs for multiple road design and maintenance alternatives. The discount rate was set to 12 percent and the evaluation period to 20 years. Maintenance and reconstruction costs were estimated in financial and economic terms (net of taxes and subsidies), economic cost being on average 80 percent of financial costs. Vehicle fleet characteristics and economic unit costs were defined for six vehicle classes reflecting 2010 costs which are given in Table 4.

Table 4: Typical Unit Road User average Costs (US$/vehicle-km 2008) Roughness IRI Car Light Medium Heavy Matatu Buses Truck Truck Truck 2 0.313 0.351 0.583 1.083 0.318 0.635

4 0.310. 0.370 0.615 1.142 0.328 0.635

6 0.329 0.400 0.667 1.249 0.345 0.728

8 0.346 0.428 0.715 1.350 0.366 0.796

10 0.372 0.460 0.771 1.470 0.395 0.887 12 0.401 0.497 0.833 1.601 0.429 0.989

14 0.432 0.536 0.899 1.735 0.466 1.094

16 0.464 0.577 0.965 1.871 0.504 1.202 Typical Unit Road User Costs composition for Roughness =2.0 IRI (US$/vehicle-km)

90 RUC component Car Light Medium Heavy Matatu Buses Truck Truck Truck Fuel and Oil 0.083 0.120 0.179 0.346 0.110 0.219

Tires 0.003 0.023 0.023 0.039 0.003 0.023

Parts and Labor 0.049 0.127 0.245 0.389 0.108 0.157

Depreciation and Interest 0.162 0.064 0.100 0.269 0.043 0.078

Crew time 0.000 0.017 0.035 0.038 0.017 0.094

Passenger and cargo time 0.017 0.000 0.000 0.002 0.037 0.139 Total 0.313 0.351 0.583 1.083 0.318 0.635 *Matatu =mini-bus with 14 passengers

Working Time

6. The value of working time for a car passenger was estimated considering an average economic annual income of KES 180,000 per annum and 2000 working hours per year (250 days at eight hours), and the value of working time for a public transport passenger was estimated as twice the minimum wage rate. The value of non-working time was considered as 25 percent of working time and the percentage of work journeys to be 35 for cars and 25 for public transport. The value of cargo time has been estimated on the basis of an average cargo value of US$400 per ton and cost of working capital of 15 percent. The following table presents typical road user costs of different roughness levels, in US$ per vehicle-km, and typical road user costs composition for road roughness equal to two International Roughness Index (newly constructed asphalt surface).

Road Maintenance Unit Costs

7. Table 5 shows the typical road maintenance costs which were considered in the HDM-4 analysis.

Table 5: Maintenance Unit Costs Road Work Units Economic Cost (USD) 5 cm overlay M2 20 Patching M2 20 Other Routine maintenance Cost per year 500

Road Sections

8. Five packages were formulated each of which comprises a number of homogenous sections. Table 6 presents the road section lengths, the proposed road works and estimated financial base investment costs (2008 prices for which an update is underway).

91 Table 6: Road Section Characteristics Secti Road Section Section Work Description Base Base Unit on Name Length Cost (M Cost (M No. (km) US$)* US$/ km) Package 1: JKIA junction-Southern Bypass and associated roads 1. Mombasa road 7.3  Provision of facilities for non motorized 37.18 2.4 from JKIA traffic Interchange to  Increase in number of lanes from current six Nairobi Southern (2 carriageways x 3 lanes) Bypass junction  Strengthening of existing pavement (A104)  Reconfiguration of access to roadside buildings and Inland Container Depot 2. Airport South Road 2.8  Reconstruction of existing pavement (C59)  Construction of second carriageway without land acquisition  Grade separation where Airport South Road meeting access road to JKIA Passenger Terminal  Provision of facilities for non motorized traffic 3. Access road from 3.6  Periodic maintenance of existing pavement Mombasa Road to  Widening from four (2 lanes x 2 JKIA Passenger carriageways) to six lanes (2 carriageways Terminal (B10) x 3 lanes)  Provision of facilities for non motorized traffic  Improvement of facilities for securing access to the airport 4 Access road from 2.0  Reconfiguration and reconstruction of Mombasa Road to access road network leading from A104 to Nairobi Inland the Nairobi Inland Container Depot Container Depot Package 2: Southern Bypass Junction to James Gichuru Road Junction 1. Mombasa road 3.0  Provision of facilities for non motorized 114.08 9.92 from Nairobi traffic Southern Bypass  Increase in number of lanes from current six junction to Langata (2 carriageways x 3 lanes) without land Road acquisition  Strengthening of existing pavement  Grade separation for Popo Road junction  Reconfiguration of access to roadside buildings 2. Mombasa 3.8  Construction of overpass/viaduct with Road/Uhuru downramps as necessary Highway from  Provision of facilities for non motorized Langata Road traffic Roundabout to Museum Hill interchange 3. Chiromo Road 1.6  Provision of facilities for non motorized from Museum Hill traffic Interchange to  Increase in number of lanes from current six Westlands (2 carriageways x 3 lanes) Roundabout  Reconstruction of existing pavement

92 Secti Road Section Section Work Description Base Base Unit on Name Length Cost (M Cost (M No. (km) US$)* US$/ km)  Grade separation for Riverside Drive junction  Reconfiguration of access to roadside buildings  Overpass/viaduct at Westlands Roundabout 4. Waiyaki Way from 3.1  Provision of facilities for non motorized Westlands traffic Roundabout to  Increase in number of lanes from current six James Gichuru (2 carriageways x 3 lanes) where practical Road without land acquisition  Reconstruction of existing pavement  Overpass/viaduct at Westlands Roundabout  Grade separation for James Gichuru junction  Reconfiguration of access to roadside buildings Package 3: James Gichuru Road Junction to Rironi 1. Waiyaki Way from 13.0  Provision of facilities for non motorized 54.08 2.14 James Gichuru traffic Junction to  Increase in number of lanes from current six Southern Bypass (2 carriageways x 3 lanes) where practical junction at Gitaru without land acquisition  Reconstruction of existing pavement  Reconfiguration of access to roadside buildings 2. A104 from 12.2  Provision of facilities for non motorized Southern Bypass traffic junction at Gitaru  Reconstruction of existing pavement to Rironi including service roads Package 4: Kisumu Northern Bypass 1. Kisumu Northern 9.0  Construction of bypass 8.45 0.94 Bypass  Construction of facilities for non motorized traffic  Installation of grade separated interchange at junction with B1 Package 5: Meru Bypasses 1. Meru Bypass  Construction of a bypass to bitumen 25 0.51 Western 11 standards. 2. Meru Bypass 10  Construction of a bypass to bitumen Eastern standards. *Updating of costs underway

Traffic Data

9. Table 7 shows the projected traffic data for the project roads. The growth rates used were derived from historical and economic data and are shown in Table 7.

93 Table 7: Projected Average Annual Daily Traffic (AADT) 2012 No. Road Section AADT (vpd)

Package 1: JKIA junction-Southern Bypass 1. JKIA – Southern Bypass (2005=48913)* 73547 2. JKIA Airport Access (2006=5480) 7773 3. Airport South Road (2006=8940) 12682

Package 2: Southern Bypass to James Gichuru Road Junction 1. Southern Bypass – Langata (2005=58471) 87919 2. Langata – Museum (2005=80890) 121629 3. Museum – Westlands (2005=53774) 80856 4. Westlands James Gichuru (2005=27163) 40843

Package 3: James Gichuru Road Junction to Rironi 1. James Gichuru – Road (2005=27163) 40843 2. Naivasha Road – Rironi (2005=11463) 17236

Package 4: Kisumu Northern Bypass 1. A1/B1 to Mamboleo (2009=6963) 8293 2. Kisumu Northern Bypass (2009=1770) 2108

Package 5: Meru Bypasses 1. Western Bypass (2010=800) 899 2. Eastern Bypass (2010=766) 861 Note: Figures in parentheses refer to the AADT by road section and respective year the data was collected.

Table 8: Adopted Future Growth Rates Vehicle Category Growth Rate (%) JKIA-Rironi Kisumu Meru Bypass Bypasses Saloon cars 6 6 6 Station wagons 6 6 6 Pick-up, Vans 6 6 6 Matatu, Minibus 6 6 6 Bus 5 5 5 Light Goods Vehicles 5 5 5 Medium Goods Vehicles 5 5 5 Heavy Goods Vehicles 5 5 5

Economic Evaluation

10. HDM-4 analysis was carried out for two different works. These include: (a) ―Without‖ project case basically involving minor routine and periodic maintenance such as grass clearance, pavement patching and crack sealing; and (b) ―With base case scenario‖ basically involving widening and construction of a new pavement and subsequent routine and periodic maintenance.

11. Sensitivity Analysis was undertaken for each of the sub-sections and compared with the ―base case scenario‖ as follows:

94 (a) High capital cost scenario assuming that the cost of capital and that of recurrent works will be 20 percent higher than the base case scenario costs;

(b) Low benefits scenario assumes that accrued benefits will be 20 percent lower than the base case scenario benefits; and

(c) High capital cost and low benefits scenario which assume that the cost capital and that of recurrent works will be 20 percent higher than the base case scenario and accrued benefits will be 20 percent lower than the base case scenario benefits.

12. The Net Present Value (NPV) and the Economic Internal Rate of Return (EIRR) for the reconstruction are shown in Table 9.

Conclusion

13. These results show that each of the five road sections are economically viable (positive NPVs and EIRR>12%), even under the worst situation when both costs go up by 20 percent and the benefits go down by 20 percent.

Table 9: Summary of NPV and EIRR Road Section Benefits (US $ M) NPV(US$ M) EIRR (%) Package 1: JKIA junction to Southern Base Case 469.97 65.4 Bypass Costs up by 20% 454.7 57.7 Benefits down by 20% 390.57 58.7 Costs up by 20% and 375.3 51.6 Benefits down by 20% Package 2: Southern Bypass to James Base Case 190.5 36.6 Gichuru Road Junction Costs up by 20% 170.1 30.7 Benefits down by 20% 132 29.5 Costs up by 20% and 111.6 24.7 Benefits down by 20% Package 3: James Gichuru Road Junction Base Case 148.6 33.9 to Rironi Costs up by 20% 132.1 28.8 Benefits down by 20% 102.3 27.7 Costs up by 20% and 85.8 23.3 Benefits down by 20% Package 4: Kisumu Northern Bypass Base Case 53.3 23 Costs up by 20% 44.4 20.2 Benefits down by 20% 33.7 19.6 Costs up by 20% and 24.9 16.9 Benefits down by 20% Package 5: Meru Bypasses Base Case 11.6 17.2 Costs up by 20% 7.1 14.8 Benefits down by 20% 5.6 12.4

95 Annex 7: Environmental and Social Safeguards

Operational Policy (OP) 4.01, OP /Bank Procedure (BP) 4.11 and OP/PB 4.12

Environmental Safeguards

1. The Project‘s anticipated social and environmental impacts have triggered Bank Operational Policy (OP) 4.01 (Environmental Assessment), as well as OPs 4.12 (Involuntary Resettlement), and 4.11 (Physical Cultural Resources). The environment category of the project is B – Partial Assessment – as proposed activities, which for the most part involve rehabilitation/expansion of existing roads within the right of way (in addition to some relatively short bypasses that will not traverse natural habitats) will have moderate and reversible impacts. Overpasses will be constructed largely within the existing right of way.

Table 1: Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ X] [ ] Natural Habitats (OP/BP 4.04) [ ] [ X] Pest Management (OP 4.09) [ ] [ X] Indigenous Peoples (OP/BP 4.10) [ ] [ X] Physical Cultural Resources (OP/BP 4.11) [ X] [ ] Involuntary Resettlement (OP/BP 4.12) [ X] [ ] Forests (OP/BP 4.36) [ ] [ X] Safety of Dams (OP/BP 4.37) [ ] [ X] Projects on International Waterways (OP/BP 7.50) [ ] [ X] Projects in Disputed Areas (OP/BP 7.60) [ ] [ X]

Description of Project Locations and Resettlement/Compensation

2. Component A (a). Construction of additional lanes on Jomo Kenyatta International Airport (JKIA)-Likoni-James Gichuru-Rironi road (A104).

3. The proposed project shall have several components that include providing additional lanes, dualling of an existing road, constructing a new access roads and rehabilitation of existing road. The specific components of the project include the following:  Construction of additional two (2) lanes from JKIA-Nyayo Stadium (approx. 12 km).  Construction of an elevated roadway with two (2) lanes on either side from Nyayo Stadium to Museum Hill Roundabout (approx. 4 km).  Construction of additional two (2) lanes from Museum Hill Roundabout to Uthiru (approx. 12 km).  Rehabilitation of the existing carriageway from Uthiru to Rironi (approx. 18 km).  Dualling of Airport South Road (approx. 3 km).  Construction of access road to the proposed Barabara Plaza (approx. 2 km).

96  Construction of access road to Inland Container Depot (approx. 2 km)  Widening of access to JKIA Airport (approx. 2 km).

4. The additional lanes will largely use the available space in between the roads of the Highway from JKIA to Uthiru covering a total distance of approximately 28km. The various selected roads earmarked for either construction, expansion, provision of an elevated roadway or rehabilitation have been identified by Kenya National Highways Authority (KeNHA) as important sections that require urgent attention in order to reduce the frequent, unpleasant and the high cost of traffic congestion.

5. Project Affected Persons (PAPs). The census was conducted in the project area and the cut-off date was March 2, 2012. The total number of vendors in the census that will be compensated is 344. These vendors have 238 spouses and 740 children who are dependents and not vendors, resulting in a total number of 1,322 Project Affected Persons (PAPs). None of the PAPs have any recognizable legal right or claim to the land they are occupying as they are carrying out business on public land (road reserve). These informal businesses at the roadside include vending fruits, vegetables, soft drinks, magazines, second hand clothes and shoes, plants and toys. The majority of these vendors have temporary wooden stands for their businesses while some place their merchandise on plastic paper or mobile hand carts that are quickly taken away for safe keeping at the end of each day‘s activities Only a few PAPs have properly constructed kiosks which they securely close at night with merchandise inside them.

6. There will be no land acquisition for this section. Works will be within highway way leave. No residential or permanent business premises shall be affected by the proposed project. Refer to Table 2.

Table 2: Summary of the Location, Vendors, Affected Structures and PAPs Location Type of Businesses Total No of Commercial PAPs PAPs Vendors Structures Adults Children 1. Westlands Area 29 6 Car Park, Car Wash, Taxi 46 30 76 Bay, Bus Park 2. Kangemi Bridge 189 5 Vending fruits, vegetables, 330 486 816 clothes, transport, shoe shiners, soft drinks, eggs, potatoes, onions, grocery 3. Uthiru Junction 18 18 Vendors selling fruits, 22 21 43 (Uthiru-Naivasha vegetables, soft drinks and Road Junction) confectionery 4. Uthiru 23 23 Vending fruits, vegetables, 41 55 96 Corporation near electrical, clothes, fish Footbridge (omena), tailoring, cereals 5. 87 Junction 4 4 Vendors selling shoes 7 5 12 clothes, soft drinks, plants and confectionery 6. Stage 87 9 9 Vending shoes, clothes, 14 15 29 fruits, vegetables, sweets, cigarettes, sodas 7. Kinoo 56 59 Vending fruits, vegetables, 93 96 189 charcoal and clothes

97 8. Gitaru 9 9 Vending sodas, snacks, 16 14 30 cigarettes, sweets, calling cards, water, fruits and vegetables 9. Airport South 7 Mobile trolley Vendors selling fruits, soft 13 18 31 Road at junction / temporary drinks, confectionery and with North stand / Motor motorbike transport Airport Road bikes 10. Nyayo Stadium Few Mobile Temporary Hawkers - - - Mobile Hawkers & selling, magazines & Hawkers newspaper newspapers, fruits, vendors accessories and toys Total 344 133 582 740 1322

7. Income Restoration. There shall only be one main type of income restoration, namely Non-Land Based (arising from loss of business structures and businesses). Displacement of persons will be largely at locations next to the highway. For the wooden stands and kiosks, valuation has been done at Full Replacement Cost, plus the cost of transporting building materials to an alternative site where the PAPs may work, as well as the cost of any labor and contractors‘ fees. GoK has also included the loss of income for a period of six months before business picks up at the alternative site. Those without stands (who display their goods on the ground), movable carts, and taxis, will be compensated for loss of business for a period of six months before business picks up at the alternative site.

8. Since the majority of the vendors have temporary structures (refer to Table 3) where they carry out their business activities, KeNHA will negotiate with the vendors for appropriate relocation to an area as close as possible to where they are currently carrying out their businesses. For those with slightly bigger kiosks, KeNHA will assist with appropriate relocation of such structures within the area to allow for project implementation. All the vendors support the proposed road project and request for timely notice and assistance for relocation to any appropriate site within the area.

Table 3: Informal Business Structures to be Affected by the Road sections Site Location Type of Commercial Structures/Facility Total Number of Structures 1. Westlands Area Bus Stage, Matatu Stage, Taxi Bay, Public 6 Toilet, Billboards 2. Kangemi Bridge Metal shelter, wooden 5 3. Uthiru Junction (Naivasha Road Junction) Temporary Sheds 18 4. Uthiru Corporation (Near Footbridge) Temporary Wooden Stands 23 5. 87 Junction Temporary Sheds 4 6. Stage 87 Wooden sticks with polythene sheet 9 7. Kinoo Wooden Stand, wooden stand with 59 polythene sheet, Wooden Kiosk, Metallic Stand 8. Gitaru Wooden sticks with polythene sheet 9 9. Airport South Road at Junction with Airport Temporary Sheds. Mobile trolley and - North Road motor bikes 10. Nyayo Stadium Mobile Hawkers and Newspaper Vendors - 11. Middle space between the two roads of the Billboards and Trees highway from JKIA to Uthiru Total 133

98 9. The project will greatly improve road usage, reduce traffic congestion, minimize the losses associated with excess use of fuel during hold-ups and also significantly reduce accidents. The introduction of the proposed additional lanes and grade separation will improve traffic flow, enhance road safety and reduce/eliminate inconveniences which currently are commonplace in the Nairobi Central Business District (CBD) and its immediate environs.

10. JKIA – Rironi RAP Estimate (Table 4). The RAP is estimated to cost KES106, 577,400 (approximately $US1,268,778.5).

Table 4: Resettlement Cost Estimates Valuation Cost Nr Structure (KES) 1. Structures 2,714,000.00 2. Loss of business profit (for six months) 34,830,000.00 3. Trees 23,000,000.00 4. Relocating billboards, road signs, bus stop 2,400,000.00 5. Relocating street lights 14,000,000.00 6. Cost of Monitoring & Evaluation (5%) 3,000,000.00 Sub-Total 1 77,230,000.00 Contingency (15%) 11,584,500.00 Sub-Total 2 88,814,500.00 Inflation (20%) 17,762,900.00 Grand-Total 106,577,400.00

11. Component A (b). The 9 km Kisumu Northern Bypass. Kenya National Highways Authority (KeNHA) is planning to construct a new road to link Mamboleo to Otonglo (approximately 9 km). The bypass starts at Mambo Leo Junction of Kisumu- Kakamega (A1) Highway. After Mambo Leo Junction, the bypass goes through a quarry field, and then heads towards Kanyakwar Hills at Riat Tor (Hill). Then it curves around the Kogony Hill, passes in front of Jans Senior Academy and runs for about 1 km. After curving out westward after Tor 9, it crosses Riat-Paradise Murram road 100 meters to the south of Abuson Shop. After avoiding the eastern flank of the Abuson River, the bypass then runs southwards in a straight line. It crosses Kisumu – Butere rail line before ending on an Intersection on Kisumu-Kisian (B1) Road at a point about 400 meters to the east of Kotetni Primary School fence. The new alignment will traverse private land that is mostly used for agricultural purposes.

12. A total of 1,441 PAPs will be affected along this road 9 km section (refer to Tables 5 and 6). The bulk of the compensation will be acquisition of small pieces of land to attain the right of way required for the 9 km long, 110m wide reserve for the brand new road. The 1441 persons are impacted through the purchase of 99 Ha of land. The purchase is therefore for small parcels of land belonging to PAPs. 249 PAPs with 1124 dependents will need to move permanently off the land. The balance of 46 landowners and 22 dependents are only affected through partial loss of land. No PAPs will be moved temporarily. Since the road is on a new alignment passing through virgin settled land, temporary loss of business will not be experienced. There are no roadside temporary structures affected and there are no squatters. The PAPs will be compensated (i) at full

99 market replacement values for loss of land and all non-land assets, such as houses/structures, trees, crops, and other immovable assets that are situated on the acquired land; and, (ii) for costs of physical location in cases of homestead loss; loss of temporary income by business operators and their employees; and, loss of rental income from houses/structures built on acquired private land.

Table 5: Summary of Project Affected Persons by the Mamboleo to Otonglo Road Item Description No. 1. Number of affected persons on the 9 Male: 174 km Mamboleo to Otonglo road Female: 87 Institutions: 13 Unknown: 21 Total 295 2. Affected Land Parcels Hectarage 99 Ha. 3. Number of persons whose structures Male: 133 are affected: Female: 52 Learning Institutions: 3 Total: 188 4. Number and types of structures Permanent 150 affected Semi-Permanent: 242 Temporal: 165 Total: 557 5. Number of businesses affected and Male 43 owned by: Female 20 Total: 63

13. There were a total of 295 households (refer to Table 6) affected as follows:-. PAPs enumerated were 1441. These consisted of PAPs who are land owners, land and structures owners, tenants of businesses, employees of businesses, residential tenants and dependants.

Table 6: Summary of Households Affected by the Mamboleo to Otonglo Road Item Total Disaggregation Number 1. Households whose head was identified by name 130 Male 86 and the size household established Female 41 Institutions 3 Total 130 2. Household whose head was identified by name but 144 Male 88 whose household size was not established Female 46 Institutions 10 Total 144 3. Households whose head was not identified by name 21 Unknown nor household size established 4. The total number of households established in 295 individual parcels of land along the 9 km road 5. Of the 130 Households in (a) plus the 144 1,441 household heads in (b), the total number of PAPs established

100 14. Component B (e). The Meru town bypass roads (Western B6-C482-B6 and (Eastern B6-C92-D482-C91) is approximately 21 km long of single carriageway, two- lane 6.5 meters wide, and bitumen surfaced road with 1.0 meters shoulders on each side. The existing road is a narrow gravel road averaging 4 meters wide that will be upgraded to bituminous standards. It will traverse Ntakira, Mpuuri and Ntima locations on the Western bypass and Igoki and municipality location on the Eastern bypass in Imenti North district of Eastern Province of Kenya. The major items of works to be executed under the contract include the following:

 Setting out, referencing and taking cross sections;  Site clearance and removal of top soil;  Earthworks;  Constructing drainage structures (box and pipe culverts including protection works);  Construction of pavement comprising bitumen surfacing, cement stabilised base and improved material sub-base;  Works necessary for the safe and convenient passage of traffic through the works;  Provision of road furniture e.g., signs, guardrails, marker posts, wire fencing, etc.; and  Operations ancillary to the main works, such as the construction of offices, laboratories and staff housing, accommodation works, relocation of services, the operations in quarries and borrow areas, the provision of water supply, the diversion of existing services.

15. The design of the road includes facilities such as lay-bays, bus bays and widening at market centres along the road. PAPs enumerated were 823 (refer Table 7). These consisted of PAPs who are land owners, land and structures owners, tenants of businesses, employees of businesses, residential tenants and dependants.

Table 7: Census of PAPs for Meru Bypass Category Unit Number Land PAP 440 Land and structures PAP 60 Business tenants PAP 15 Employees of business PAP 2 Residential tenants PAP 9 Subtotal, number of PAPs to be compensated 526 Dependants PAP 297 Total PAP 823

16. The bulk of the compensation will be for small pieces of land to expand the road on each side. Thirteen land parcels out of 500 will be fully acquired necessitating eight families to be fully relocated and five will lose full pieces of land. The household members for the eight families to be fully displaced are 36. 440 land parcels will be

101 acquired partially for compensation since the remaining land portions can still be utilized productively and economically.

17. Five public meetings were organized by the Consultant in collaboration with the local administration and the Kenya Urban Rural Authority (KURA) Upper Eastern Regional Office. These consultations along with dates, venue and attendance sheets are recorded in the Resettlement Action Plan (RAP).

18. Failure to understand and manage social issues can have enormous economic costs, cause significant damage to the reputations of organizations involved and even put entire investments at risk. Some of the common social risks that can impact on project outcomes are summarized as follows:

 Social support systems are left behind.  Loss of social/business network e.g. Loss of contacts for procurement of business materials.  While new business opportunities may be found, such opportunity may pose risks such as disruption of way of life to host community, emergent new ways of life such as rise in prostitution, drug use and crime rate.

The proposed RAPS are designed to mitigate these social risks.

Environmental Characteristics of Project Areas

19. Component A (a). The project area is mainly built up therefore there will be minimal or negative animal species that will be displaced. Although a 2 km section of the road expansion from JKIA to Nyayo Stadium does run parallel to the Nairobi National Park, there is a buffer provided by an industrial estate between the road and the boundaries of the Park. Therefore the road works will not impose additional stress on wildlife, though construction waste should be disposed of well outside the vicinity of the National Park.

20. Component A (b). The escarpment occurs in the form of rounded shapes on the east side of Kisumu-Kakamega (A1) Road at which point they taper into piedmont plains that form a gentle Kanyakwar valley that meet the bulk-hill on which Kisumu city is built. The hills do not have gazette forest except at Scarp 9 near Jans Senior Academy where a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps along which the bypass road corridor is planned.

21. Component B (e). The road generally traverses through rolling topography with a general altitude of 1,700 meters at the Western Bypass and 1,500 meters at the Eastern Bypass. Both bypasses cross River Kathita and several small perennial streams. The river and the streams originate from Mt Kenya and intersect the project road, flowing eastwards as tributaries of the River Tana. The project is in the vicinity of the Imenti Forest, which is one of the many small remnant patches of the forest in which fragmented elephant herds shelter, threatened by a burgeoning human population of agriculturalists

102 who are not sympathetic to their presence. The Imenti Forest lies east of Mount Kenya between the towns of Embu and Meru and today a small herd of elephants (probably no more than about 50) shelters within, surrounded by human settlement and isolated from their Mount Kenya brethren. Illegal logging within the forest itself is inflicting further pressure on this small band of surviving elephants, whose future is uncertain unless safe passage for them can be arranged by way of a corridor so that the elephants can reach the Mount Kenya forests. The proposed bypass does not traverse the forest but follows the edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not affecting the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry Service has an electric fence which prevents access to the Imenti Forest.

22. In addition to the Environmental and Social Impact Assessment (ESIAs) prepared for the investment components, ToRs for environmental and social studies of the Bus Rapid Transit (BRT) and Commuter Rail Technical Assistance components have been prepared and disclosed May 6, 2012 in the InfoShop and May 28, 2012, in-country. The summary is provided in Table 10.

Environmental Impacts

23. Potential environmental impacts may include soil erosion and disturbance of water flows, water pollution, traffic disruption, noise, gaseous and dust pollution and temporary disturbance of flora and fauna (mainly during the construction phase). In the case of the improvement of the Northern Corridor road (namely JKIA-Turnoff- Westlands-Rironi road section through Nairobi and associated service roads and major junctions) some mature trees (though not indigenous species) will be lost as a result of road widening.

Mitigation measures

24. KeNHA will liaise with the Kenya Forestry Service on replacement tree planting activities. The magnitude of tree cutting in these urban areas is not sufficient to necessitate the preparation of a Forest Management Plan, or to trigger the Bank‘s Operational Policy on Forests, OP 4.36. Nevertheless, it is important to undertake replacement tree planting liaising with Kenya Forestry Service and local municipality authorities with responsibility for maintaining roadside verges and vegetation.

25. Since the expected negative impacts will relate to the construction phase of the project, mitigation and support measures will be incorporated in the relevant clauses in the contract documents, for the road sections. Such clauses include, among others, provisions for appropriate measures for storage, handling, transportation and disposal of all waste material; provision of adequate sanitary facilities; rehabilitation and surface restoration of borrow pits; basic training in construction health and mitigation measures against spread of Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS); and sustainable seeding and tree growing to restore vegetation to its original condition; and extraction of water.

103

26. In the road rehabilitation sites, OP 4.11 (Physical Cultural Resources) is also being triggered. Construction will take place in proximity to areas of cultural, historical, and religious significance (the museum at Provincial Commissioner‘s House, Uhuru Park, and the Nairobi Synagogue). Guidelines for ―chance finds‖ procedure will be integrated into the contracts for construction. These include development of a cultural property management plan if physical cultural resources are found or adversely affected (although this is not expected to be the case, and consultations have already been held with stakeholders and their concerns about the construction process have been noted and addressed). Table 8 below summarizes the project‘s potential environmental impacts and proposed mitigation measures.

27. Component A (b). The escarpment occurs in the form of rounded shapes on the east side of Kisumu-Kakamega (A1) Road at which point they taper into piedmont plains that form a gentle Kanyakwar valley that meet the bulk-hill on which Kisumu city is built. The hills do not have gazetted forest except at Scarp 9 near Jans Senior Academy where a small area is set aside for arboreal practice. Bush and shrubs occupy the scarps along which the bypass road corridor is planned.

28. Component B (e). The road generally traverses through rolling topography with a general altitude of 1,700 meters at the Western Bypass and 1,500 meters at the Eastern Bypass. Both bypasses cross River Kathita and several small perennial streams. The river and the streams originate from Mt Kenya and intersect the project road, flowing eastwards as tributaries of the River Tana. The project is in the vicinity of the Imenti Forest, which is one of the many small remnant patches of the forest in which fragmented elephant herds shelter, threatened by a burgeoning human population of agriculturalists who are not sympathetic to their presence. The Imenti Forest lies east of Mount Kenya between the towns of Embu and Meru and today a small herd of elephants (probably no more than about 50) shelters within, surrounded by human settlement and isolated from their Mount Kenya brethren. Illegal logging within the forest itself is inflicting further pressure on this small band of surviving elephants, whose future is uncertain unless safe passage for them can be arranged by way of a corridor so that the elephants can reach the Mount Kenya forests. The proposed bypass does not traverse the forest but follows the edge of the forest for about 2 km around Gitoro area before joining B6 road - hence not affecting the forests, or coming close to the wildlife sensitive sites. The Kenya Forestry Service has an electric fence which prevents access to the Imenti Forest.

29. In addition to the ESIAs prepared for the investment components, ToRs for environmental and social studies of the BRT and Commuter Rail Technical Assistance components have been prepared and disclosed May 6, 2012 in the InfoShop and May 28, 2012, in-country. The summary is provided in Table 10.

104 Table 8: Potential Environmental Impacts and Proposed Mitigation Measures Nature of Impact Mitigation measure taken or to be taken Slope failure o In sections with high filling along the roadside, all slopes to be cut at the natural angle of repose and bush grass planted. o Extremely steep hillsides to be protected by terracing, gabions, stone pitching and planting of ground cover vegetation o Side drains to be lined Altered o Re-vegetate with original vegetation as much as practical when the topography and construction is over landscape o To the extent possible, the engineering design to as much as practical blend with the natural landscape. o Material sites to be rehabilitated. o Plant trees 2-3 meters from road to provide shade and stabilize roadsides and river banks. Trees should not be planted on the inside of a curve where they might block the view of oncoming vehicles. Contamination of o Regular servicing and maintenance of construction equipment land and water o All applicable laws, regulations and standards for the safe use, from hazardous handling, storage and disposal of hazardous waste will be followed. materials and petroleum products o Hazardous materials will be stored within dedicated areas at work camps and marshalling yards in full compliance with regulatory requirements. Temporary storage of hazardous materials at remote sites must be located at a minimum of 100 meters from a waterway. o Areas dedicated for hazardous material storage shall provide spill containment and facilitate clean up through measures such as: maximum separation from sensitive features, e.g., rivers; clear identification of the materials present; access restricted to authorized personnel and vehicles only, and dedicated spill response equipment. o Storage sites for petroleum products shall be secured and signs will be posted which include hazard warnings, who to contact in case of a release (spill), and access restrictions and under whose authority the access is restricted will be posted. Establishment of o The contractor should prepare (for approval by the Engineer) a borrow Quarries and pit rehabilitation plan. Borrow Pits o Upon acquisition of all borrow sites, these should be fenced with wooden posts and an access gate erected. o Rehabilitate quarry sites and other material sites to discourage pounding which are mosquito breeding grounds. Exposed sites are also sites of water-borne disease transmission for both human and animals. o Upon decommissioning, site to be rehabilitated to the satisfaction of the Engineer.

105 Nature of Impact Mitigation measure taken or to be taken o Top soil (30 cm) should be piled up for use in rehabilitation of the diversion routes. o Waste excavated materials should be disposed off in a manner that ensures protection of waterways. o Re-vegetation of these sites with the previously existing vegetation. o The contractor to submit to the road engineer a camp and site office plan defining all facilities to be created. These include human waste disposal facilities and solid waste management facilities. o Ensure that all waste materials at the point of construction are transported to a place of safe disposal. Health impacts/ o Sensitise workers and the surrounding community on awareness, HIV/AIDS prevention and management of HIV/AIDS through staff training, awareness campaigns, multimedia, and workshops or during community Barazas. o Ensure that all construction machines and equipment are in good working conditions to prevent occupational hazards; lighting devices and safety signal device will be installed for night-time operations. o Contractor to provide all workers with appropriate protective clothing such as helmets and dust masks while working in dusty environment. o Work to minimize or altogether eliminate mosquito breeding sites. Non-critical o Liaise with wildlife and forestry officials and wildlife organizations, natural habitat and civil society, and community representatives to avoid ecological hot biodiversity loss spots, and to be sensitive to breeding and migration seasons, along road works (particularly along Imenti Forest). o Protect against poaching and theft of precious woods at camp sites. Water Pollution in o Avoid construction, especially heavy earthworks during heavy rains. natural water o Install grease traps for surface run-off in market centres. courses/Water conservation o Implement water use management and conservation plans at construction and camp sites. o Installation of soil erosion control devices, e.g., gabions and planting ground cover vegetation. Run-off o Grit traps will be incorporated as part of the drainage system. sedimentation o Planting of grass on the verges to reduce soil erosion and transport of suspended matter. Air pollution o In filling sub grade, water spraying is needed to solidify the material. generated through After compacting, water spraying should be regular to prevent dust. construction o The location and operation of asphalt batch plants need to be as far as activity, possible from residential areas- at least 500 meters from downward construction wind direction of asphalt mixing sites.

106 Nature of Impact Mitigation measure taken or to be taken machinery and o Operators should use personal protective equipment (PPE) such as vehicular traffic dust masks, boots, and protective eye wear. o Vehicles and construction machinery will be required to be properly maintained and to comply with relevant emission standards. o Surface dressing of diversions through population centres. o Regular dust collection, removal and water sprinkling at the asphalt mixing and cement stabilization yards. o Water should be sprayed during the construction phase, in the line and earth mixing sites, asphalt mixing site, and diversion roads. o Monthly maintenance of asphalt and stabilization plants. o Speed controls by temporary speed pumps on diversions where necessary. o Planting trees in the road reserve will help to filter out particulate matter emitted from exhaust fumes and dust. o Avoid night time construction when noise is loudest. Noise pollution o Operators should use protective personal equipment (PPE) such as helmets and ear mufflers. o Monthly maintenance of construction machinery. o Cleared vegetation, earth and stone will be properly disposed of so as not to block the water-ways. Change in natural o Avoid construction during heavy rains. drainage pattern o Planting of conservation vegetation to control erosion and consequently sedimentation. o The drainage facilities will be periodically cleared so as to ensure water flow. Roads pass near o As necessary, consult with National Museums of Kenya about Right areas of cultural, of Way of the proposed project. Chance finds procedures clauses will historic, and be inserted into all construction contracts, with the Supervising religious Engineer retaining responsibility for the enforcement of such clauses, significance and notification of appropriate cultural authorities in the event of archaeologically and/or culturally significant finds. Increased Traffic o At the start of construction of the road, it will be necessary to start a accidents sustained road safety campaign incorporating strict enforcement of the Traffic Act (e.g., driver training, removal of broken-down vehicles from the road, etc.) o Clearing of vegetation on the road reserve to improve sight distance and visibility. o Proper signage to warn motorists and others of any hazards. o The pavement of road shoulders within the sand harvesting areas will

107 Nature of Impact Mitigation measure taken or to be taken be designed to full-strength and to extra width for frequent trafficking and parking of tractors. o Guard rails will be provided in sections with steep slopes. o Installing clear road signs especially while approaching bends, junctions, bridges, and roadside settlements. o Appropriate road markings should be designed in locations where standards are compromised to warn drivers of safety hazards.

Social and environmental benefits

30. In addition to social and environmental impacts requiring mitigation, the project will generate significant social and environmental benefits. The social benefits will accrue from opportunities for short-term employment during construction, but there will also be long-term benefits from increases in road safety and time saved. The travel time along road sections under the project is expected to reduce by 30 percent and vehicle operating costs are expected to be reduced by 25 percent with the proposed improvements; and the provision of road-side amenities, including bicycle tracks, pedestrian crossings, service roads along the selected road sections, and improvement of junctions will enhance safety on roads.

31. Road safety issues are a major concern in Kenya that claims about 3,000 lives annually. This project will complement the efforts under the Northern Corridor Transport Improvement Project (NCTIP) and the Kenya Transport Sector Support Project (KTSSP), where a National Road Safety program has been developed and approved by the GoK. Under the project, attention will be given to increasing awareness of road safety through information provision and education of adults as well as children along the selected road corridors. The design of the project will include widening of the existing road in critical places to allow for bicycle paths and pedestrian sidewalks to enhance safety in selected areas.

32. The project will greatly improve road usage, reduce traffic congestion, minimize losses associated with excess use of fuel during hold-ups and also significantly reduce accidents. The introduction of the proposed additional lanes and grade separation will improve traffic flow, enhance road safety and reduce/eliminate inconveniences which currently are commonplace in the Nairobi CBD, Kisumu and Meru and their immediate environs. The reduction in traffic congestion along the JKIA –Nyayo Stadium route will reduce the current practice of motorists taking shortcuts through the Nairobi National Park or along residential roads adjacent to the park, which increases air pollution in the Park and causes distress to wildlife. Smooth traffic flow also has strong greenhouse gas reduction benefits and reduces local air pollution. Nitrogen oxide8, carbon dioxide, and

8 Nitrogen oxides (NOx) act as indirect greenhouse gases by producing the tropospheric greenhouse gas 'ozone' via photochemical reactions in the atmosphere. Carbon dioxide is a primary greenhouse gas.

108 carbon monoxide emissions are likely to be reduced by a factor of 2-3 due to the reduction of repetitive stop-starts.

Chronic exposure to carbon monoxide is associated with increased risk for adverse cardiopulmonary events.

109 Table 9: Summary of Social Impacts Covered in the RAPs Nature of works Land No of PAPs Cost of RAP Consultations acquisition (million) JKIA-Likoni - James Gichuru-Rironi Mostly informal traders 1 Road (A104): The proposed project shall Total 344 vendors to be compensated and KES106.6 Three have several components that include No 133 temporary structures affected. consultations on providing additional lanes, dualling of an (US$1.3 equivalent) February 29th and The 344vendors have 238 spouses and 740 existing road, construction of a new access March 2, 2012. roads and rehabilitation of the existing children (dependents). There will be no land Minutes and road. The additional lanes will largely use acquisition. Works will be within highway attendance the available space in between the roads of way leave included in the the highway from JKIA to Uthiru. RAP Approximate 51 kms of road sections. KISUMU Bypass: KeNHA is planning to Yes 1,441 PAPs KES1,055.3 Consultations 2 construct a new road to link Mamboleo to held during Otonglo (approximately 9 km). (US$12.87 census on April Construction of the Kisumu Northern equivalent) 23 through April bypass along the Northern Corridor. 30, 2012. New road 9 km. The affected population will be 526 persons Five (5) public 3 Meru Bypass: Construction of Meru 500 land to be compensated as follows: 440 to be KES372.0 meetings bypasses to decongest the town. The parcels with compensated for land only; 60 for land and organized by the existing road is a narrow gravel road estimated structures; and 26 are tenants to be paid a (US$4.4 equivalent) Consultant and averaging 4m wide that will be upgraded area of disturbance allowance. KURA on March to bituminous standards. The works to be 19.1ha will 10, and March executed under the contract comprise the be acquired. There are 297 are dependents. 11th, 2012 construction of approximately 21 km of single carriageway, two-lane 6.5 meters 13 land parcels will be acquired fully wide, bitumen surfaced road with 1.0 whereby 8 families with a population of 36 meters shoulders on each side. people will be fully resettled and 5 full pieces acquired. The bulk of compensation is for acquiring small pieces of land on either side of road for expansion. TOTAL COSTS OF RAPS KES1,533.9 (US$18.6 equivalent)

110

Borrower’s Capacity to Implement Safeguards

33. KeNHA has substantial experience in the preparation and implementation of Environmental and Social Management Plans (ESMPs) and RAPs in compliance with previous Bank standards, conducted under earlier Bank-financed projects, including among others, the Northern Corridor Transport Improvement Project, and the Kenya Transport Sector Support Project. KeNHA has experienced social specialists with experience in implementing OP 4.12 on staff. The environmental specialist has undertaken preparation and monitoring of ESIAs for Bank financed projects at both KeNHA and previously at Kenya Power and Lighting Company. Although KURA has less in-house experience, they have recently hired an environmental specialist, and the Environmental and Social Impact Assessment (ESIA) submitted and cleared for the Meru bypass was of a high standard.

Stakeholder consultations

34. Stakeholder consultations were conducted for all PAPs as well as local businesses, farms, and public institutions (schools, care homes, etc) along the route (roads). Dates of consultations are provided in Table 9. Key concerns were: dust pollution from construction; construction waste disposal; loss of custom due to limited accessibility to shops, petrol stations, and hotels during construction; limited accessibility to a religious institution (Nairobi Synagogue); road safety during construction; and adequate compensation for land acquisition. Monitoring will be undertaken to ensure proper environmental impact mitigation measures are in place ( frequent watering of roads; disposal of waste away from residential and market areas; adequate safety signs and safe crossing points; provision of access points to businesses, institutions, and houses of worship). Compensation issues will be addressed through the implementation of the RAPs consistent with Bank policy and standards.

Disclosure of Safeguards Documents

35. All the ESIAs and RAPs including an Environmental and Social Management Plan (ESMP), has been cleared by the World Bank and was disclosed in the Bank‘s InfoShop and in-country (Table 10). The draft Terms of Reference for the ESIAs for development of Bus Rapid Transit corridor and the Commuter Rail network were prepared and also disclosed both in the Bank‘s InfoShop and in-country. The implementing agencies have staff with adequate experience and qualifications to manage environmental and social matters associated with their respective infrastructure rehabilitation components. All construction projects will adhere to the rules and regulations of the National Environmental Management Authority (NEMA), and all necessary permits will be obtained prior to construction.

111 Table 10: Environmental and Social Safeguards Reports Item Road section/Commuter rail Clearance by the Disclosed in Disclosed in- no. Bank InfoShop Country Environmental and Social Impact Assessments (ESIAs) Expansion and improvement of the Northern Corridor road section 1. May 4, 2012 May 9, 2012 May 9, 2012 through Nairobi starting from JKIA turnoff-Westlands-Rironi 2. Kisumu Northern Bypass May 4, 2012 May 9, 2012 May 8, 2012 Meru Bypasses. Construction of approximately 20 km of single 3. carriageway, two-lane 6.5 m wide, April 23, 2012 April 24, 2012 April 24, 2012 and bitumen surfaced road with 1.0 m shoulders on each side. Resettlement Action Plans (RAPs) Expansion and improvement of the Northern Corridor road section 1. April 26, 2012 May 3, 2012 May 2, 2012 through Nairobi starting from JKIA turnoff-Westlands-Rironi Kisumu Northern Bypass: new road 2. to link Mamboleo to Otonglo May 6, 2012 May 9, 2012 May 9, 2012 (approx. 9 km). Meru Bypasses. Construction of approximately 21 km of single carriageway, two-lane 6.5 meters 3. May 7, 2012 May 9, 2012 May 9, 2012 wide, and bitumen surfaced road with 1.0 meter shoulders on each side. Terms of Reference (ToRs) Environment and Social Impact May 28, 2012 Assessments for development of Bus (disclosed on the 1. May 6, 2012 May 11, 2012 Rapid Transit Systems and websites of KURA Commuter Rail network and KRC)

112 NATIONAL URBAN TRANSPORT IMPROVEMENT PROJECT

MANDERA B9 B9

MOYALE

Turkana Mandera

LODWAR 2 Moyale A Marsabit

A

1

MARSABIT B9

Wajir West Pokot WAJIR

B 4 Samburu B 4 9 MARALAL B Trans Nzoia Marakwet B KAPSOWAR 2 Mt Elgon Isiolo B 9 2 B KAPSAKWONY Baringo ITEN A104 Lugari 4 B9 B9 TesoAMAGORO A Uasin Gishu B BUSIA B1 BUNGOMA 1 KABARNET ELDORET Keiyo 9 3 A104 ISIOLOB A Busia Kakamega Butere 4 Laikipia KAPSABET B Meru North MERU BUTERE KAKAMEGA MAUA B1 Nandi BYPASSES Siaya Koibatek MERU Vihiga A104 B5 B5 SIAYA NANDI HILLS 5 Meru Central B VIHIGA B B5 BONDO 6 Kisumu AWASI B OL JORO OROK Bondo 1 4 Tharaka Nyando B NAKURU MARIMANTI KISUMU Kericho Nyandarua Meru South 3 CHUKA A NORTHERNSuba KERICHO A104 GARISSA Rachuonyo KERUGOYAEmbu BYPASSSuba SINDO Nakuru Garissa NYAMIRALITEIN EMBU SIAKAGO Buret KirinyagB a

HOMA BAY 6 Suba KISII Nyamira Mbeere Homa Bay B3 Muranga MURANGA Mwingi A3 OGEMBO Kisii BOMET A3 Bomet A104 Maragua 1 Gucha MWINGI A B KENOL B KILGORIS 3 7 Migori B3 THIKA MIGORI NAROK A3 Kiambu Thika 1 B KIAMBU 7 A Trans Mara Kuria RIRONI Narok JOMO ISEBANIA Nairobi Machakos KITUI A109 KENYATTA INTL AMIRPORACHAKTO(JKIA)S HOLA B 7 Tana River IJARA B MASALANI A104 8 WOTE Kitui

7

B Kajiado Makueni Lamu A104 LAMU Lamu 7 Lamu B

NAMANGA

B

A109 8

OLOITOKITOK

MALINDI

TAVETA A23 WUNDANYI Taita Taveta

8 A109 B Kilifi Legend A109

DISTRICT HQ Mombasa Mombasa Kwale PROVINCIAL HQ KWALE Mombasa Clsfd_Roads A14 RoadClass A B KenyaDistrictBounndaries

ROADS TO BE IMPROVED UNDER NUTRIP

LAPSSET CORRIDOR