Language: English Original: French

AFRICAN DEVELOPMENT BANK GROUP

PROJECT: MULTINATIONAL /: ROAD REHABILITATION AND TRANSPORT FACILITATION ON THE LOME – CINKANSE- CU9 CORRIDOR

COUNTRY: TOGO/ BURKINA FASO

PROJECT APPRAISAL REPORT Date: February 2012

Team Leader: M. NDIAYE DIOP, Transport Engineer, OITC.1 Team Members L. EHOUMAN, Socio-Economist, GHFO J. P. MEGNE EKOGA, Transport Economist, OITC.1 B. YOUGBARE, Infrastructure Specialist, BFFO P. C. OUEDRAOGO, Procurement Specialist, BFFO K. ROT-MUNSTERMANN, Resource Mobilization Appraisal Officer, ORMU Team C. AHOSSI, Regional Procurement Coordinator, ORPF

M. L. KINANE, Environmentalist, ONEC.3 A consultant, Transport Economist, Regional Director: J. K. LITSE, ORWA Sector Director : A. OUMAROU, OITC Sector Division J.K. KABANGUKA, OITC.1 Manager :

Messrs. B. TRAORE, Lead IPPF, ONRI.0 P. RUGUMIRE, Transport Engineer, OITC.1 Peer P. MORE NDONG, Transport Engineer, OITC.2 Reviewers A. BA, Agro-Economist, OSAN.3 A. DIAW, Programme Officer, ORCE

TABLE OF CONTENTS

1 PROJECT STRATEGIC THRUST AND RATIONALE ...... 1 1.1 Project Linkages with Regional and National Strategies and Objectives ...... 1 1.2 Rationale for Bank’s Involvement ...... 1 1.3 Donor Coordination ...... 2

2 PROJECT DESCRIPTION ...... 3 2.1 Project Objectives and Components ...... 3 2.2 Technical Solution Adopted and Alternatives Explored ...... 4 2.3 Project Type ...... 5 2.4 Project Cost Estimates and Financing Arrangements ...... 5 2.5 Project Area and Beneficiaries ...... 8 2.6 Participatory Approach to Project Identification, Design and Implementation ...... 8 2.7 Bank Group Experience and Lessons Reflected in Project Design ...... 9 2.8 Key Performance Indicators ...... 10

3 PROJECT FEASIBILITY ...... 10 3.1 Economic and Financial Performance ...... 10 3.2 Environmental and Social Impacts ...... 11

4 PROJECT IMPLEMENTATION ...... 14 4.1 Implementation Arrangements ...... 14 4.2 Monitoring and Evaluation ...... 16 4.3 Governance ...... 17 4.4 Sustainability ...... 18 4.5 Risk Management ...... 19 4.6 Knowledge Building ...... 20

5 LEGAL FRAMEWORK ...... 20 5.1 Legal Instrument ...... 20 5.2 Conditions Associated with Bank’s Involvement ...... 20 5.3 Compliance with Bank Policies ...... 21

6 RECOMMENDATION...... 21

APPENDIX I: COMPARATIVE SOCIO-ECONOMIC INDICATORS OF TOGO AND BURKINA FASO APPENDIX II: TABLES OF BANK PORTFOLIO IN TOGO AND BURKINA FASO APPENDIX III: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT PARTNERS IN TOGO AND BURKINA FASO APPENDIX IV: MAP OF PROJECT AREA

LIST OF TABLES No. TITLE Page Table 2.1 - Project Components ...... 3 Table 2.2 - Alternative Solutions Explored and Reasons for Rejection ...... 5 Table 2.3 - Project Cost Estimates by Component (in UA million) ...... 5 Table 2.4 - Project Sources of Financing (in UA million) ...... 6 Table 2.5 - Project Cost by Expenditure Category (in UA million) ...... 7 Table 2.6 - Expenditure Schedule by Component (in UA million) ...... 7 Table 2.7 -Expenditure Schedule by Source of Financing (in UA million) ...... 7 Table 3.1 -Summary Economic Analysis ...... 11

Currency Equivalents November 2011

UA 1 = USD 1.58591 UA 1 = EUR601 1,553331.13271 UA 1 = CFAF 743.009

Fiscal Year 1 - 31 December

Weights and Measures

1 metric tonne = 2204 pounds 1 metre (m) = 3.28 feet 1 millimetre (mm) = 0.03937 inch 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

ADB : AADT : Annual Average Daily Traffic ADF : African Development Fund CPF : Women’s Empowerment Centre CSP : Country Strategy Paper CST : Sector and Thematic Commission CTM : Joint Technical Committee CTS : Blood Transfusion Centre CU9 : Community No. 9 DCPTT : Department for WAEMU Community Planning, Transport and DGR : General Directorate of Roads DGSCN : General Directorate of National Statistics and Accounts DGTP : General Directorate of Public Works EBID : ECOWAS Bank for Investment and Development ECA : Economic Commission for ECOWAS : Economic Community of West African States ERR : External Rate of Return EU : FER : Road Maintenance Fund FSF : Fragile States Facility ILO : International Labour Organization INSD : National Institute of Statistics and Demography IsDB : Islamic Development Bank KfW : Kreditanstalt fürWiederaufbau(Reconstruction credit institution) LI : Labour Intensive HT/HD : Exclusive of Tax/Exclusive of Customs Duty MID : Burkina Faso Ministry of Infrastructure and Road Development MTPT : Ministry of Public Works and Transport

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MTS : Bank’s Medium-Term Strategy for 2008-2012 Period NPV : Net Present Value OPA : Observatory of Abnormal Practices PA : Project Area

PACITR : Community Road Transport Infrastructure Action Programme PAL : Lomé Port Authority PIMU : Project Implementation Monitoring Unit UTA : Agricultural Transformation Unit PPP : Public Private Partnership PRSP : Strategy Paper RBCSP : Results-Based Country Strategy Paper RN1 : Highway No. 1 SAFER : Société Autonome de Financement de l’Entretien Routier SCADD Accelerated Growth and Sustainable Development Strategy STD : Sexually Transmitted Disease UA : Unit of Account UNDB : Development Business UNDP United Nations Development Programme UNFPA : United Nations Fund for Population Activities Veh/d Vehicles per day VOC : Vehicle Operating Cost WADB : West African Development Bank BTP : Public Works and Civil Engineering WAEMU : West African Economic and Monetary Union WHO : Health Organization

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PROJECT INFORMATION SHEET Client Information Sheet Recipients/Borrowers : Togo and Burkina Faso

Executing Agencies : (i) Ministry of Public Works in Togo, through the General Directorate of Public Works; (ii) Ministry of Infrastructure and Road Development in Burkina Faso, through the General Directorate of Highways (iii) West African Economic and Monetary Union (WAEMU) Commission, through the Department for WAEMU Community Planning, Transport and Tourism, which will ensure overall project monitoring at the regional level and monitoring of the implementation of the transport facilitation component

Financing Plan

Amount in UA Million* Burkina Source of Financing Togo Faso Total Instrument ADF Loan (Country allocation) 6.33 6.33 Project Loan Institutional and Rehabilitation ADF Grant (Country allocation) 10.81 26.67 37.48 Support ADF Loan (allocation for regional 11.36 Project Loan operations) 11.36 ADF Grant ( allocation for regional Institutional Support and 19.42 40.00 operations) 59.42 Rehabilitation Institutional Support and FSF Grant to Togo 21.50 21.50 Rehabilitation ADF Loan (from cancellation) 0.105 2153 21.64 Project Loan Institutional Support and ADF Grant (from cancellation) 17.93 17.93 Rehabilitation IsDB 9.46 9.46 Project Loan KFW 7.92 7.92 Grant EU/African Trust Fund Grant 1.03 1.03 2.06 Grant Private operators 2.58 1.03 3.60 Equity capital WADB Loan 13.42 10.54 23.95 Project Loan EBID Loan 7.77 5.78 13.56 Project Loan WAEMU 0.48 0.46 0.93 Grant UNFPA Grant 0.17 0.17 Grant GOVERNMENT of Togo 10.50 10.50 Investment Budget GOVERNMENT of Burkina Faso 2.66 2.66 Investment Budget TOTAL 114.93 135.54 250.47

* At exchange rate of: UA 1 =CFAF 743.009

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ADF and FSF Key Financing Information Loan/Grant Currency Unit of Account (UA) Interest Type Not applicable Interest Rate Margin Not applicable Service Charge for ADF Loans 0.75% per annum on disbursed but unrepaid amount Commitment Charge for ADF Loans 0.5% on undisbursed loan amount, commencing 120 days after signature of Loan Agreement Other Charges Not applicable Tenor (ADF Loans) 50 years Grace Periods and Repayment of ADF 10 years Loans FRR, NPV (baseline scenario) Not applicable ERR, NPV (baseline scenario) 27% and CFAF 284 billion for the entire project

Duration – Main Milestones (expected) Activities (Month, Year) Concept Note Approval January 2012 Project Approval June 2012 Completion December 2016 Last Disbursement December 2017 Last Repayment June 2062

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EXECUTIVE SUMMARY Project Overview This project concerns the Lomé-Ouagadougou CU9 Road Corridor which forms part of the priority highways of the West African Economic and Monetary Union (WAEMU) community road network. The nearly 975 km-long corridor comprises road sections with different levels of service. The project consists in the rehabilitation of 303 km of road in very bad or bad condition, with 150 km in Togo and 153 km in Burkina Faso, as well as the improvement of transport facilitation along the corridor. The expected outcomes are increased transit traffic and , reduced general transportation costs, improved road safety, and the creation of jobs for youths and women.

The project will be implemented in five (5) years, and its total cost is estimated at UA 250.47 million (exclusive of tax and customs duty), including provision for physical contingencies and price escalation. The Bank Group (ADF and FSF) will contribute UA 175.66 million. The other donors are EBID, WADB, IsDB, KFW, UNFPA, EU/Africa Trust Fund, private operators, WAEMU and the two Governments. In view of the regional nature of the project, its economic and social benefits will accrue directly or indirectly to all users of the corridor, and the inhabitants of the direct and extended PA which covers Togo and a large part of Burkina Faso, and . The beneficiary population participated in the project design and made a technical and financial contribution to the construction, management and maintenance of some related infrastructure.

Needs Assessment The Lomé-Cinkansé-Ouagadougou CU9 Corridor is the backbone of Togo’s road network, and the only road linking all the regions of the country. The corridor is also very important for the sub-region’s landlocked , particularly Burkina Faso, because the Lomé Port Authority (PAL) is currently the primary transit port for its overseas trade. The corridor is in quite an advanced state of degradation with 38% of its stretch in a very bad or bad condition and 13% in a poor condition. Since the maintenance thresholds of some sections of the corridor have been exceeded, the urgent rehabilitation of this road is therefore the only possible alternative. Similarly, efforts undertaken to make Lomé Port attractive and competitive should be sustained by eliminating obstacles to traffic on the corridor.

Value added for the Bank The Bank’s involvement is justified by the fact that: (i) this project will help to achieve the objective of its Regional Integration Strategy (2009-2012) which consists in providing assistance in the form of investment, technical assistance and expertise to countries, so as to facilitate the construction of priority regional infrastructure; (ii) the Bank’s support will strengthen its last operations on this corridor (Lomé-Notsé Road Project in Togo implemented before the crisis of the 2000s) and the Bank’s private sector operation in 2011 as part of the extension of PAL’s container terminal; (iii) it has solid experience in similar regional projects in Africa in general and in in particular. The project will therefore enable Togo to fully play its vital role as inter-State trade road corridor for hinterland countries (Burkina Faso, Mali and Niger). v

Knowledge Management To really draw lessons from this project, a monitoring-evaluation mechanism will be put in place by the executing agencies through the Directorates of Statistics which will be responsible for monitoring the project and PRSP indicators. Indeed, the definition of key impact indicators before project start-up and impact assessment at the end of the project will help to generate useful data on the outputs and outcomes. The lessons, experiences and knowledge to be drawn from the implementation of this project will be managed from a database in the executing agencies and WAEMU, and will be disseminated in annual reports and on the Bank’s Website. The database will effectively facilitate management of all knowledge acquired during the implementation of project activities.

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Results-Based Logical Framework

Country and Project Name: Togo/Burkina Faso - Road Rehabilitation and Transport Facilitation on the Lomé-Cinkansé-Ouagadougou CU9 Corridor Project goal: Support economic and social development and regional integration

PERFORMANCE INDICATORS RISKS/ MEANS OF OUTCOME CHAIN Indicator MITIGATION MEASURES Baseline Case Target VERIFICATION (including ISC)

Contribute to the efficiency of Volume of intra-community 10 million tonnes in 2011 19 million tonnes in 2016, representing a Statistics prepared by the road transport sub-sector so trade in WAEMU zone 7% annual growth WAEMU

as to support implementation of the Regional Economic Programme (REP), economic

and social development, and IMPACT regional integration in WAEMU zone

1. Outcome 1 : Increased Volume of traffic on the 1.56 million tonnes in 1.91 million tonnes in 2016, or 4% Statistics prepared by the three Risks: transit traffic on the corridor corridor transiting through 2011 increase per year hinterland countries (Ministries (i) The juxtaposed border checkpoint at PAL to or from Burkina in charge of transport, Cinkansé is not fully operational; (ii) Faso, Niger and Mali Shippers’ Councils and application of axle-load regulations in the two Carriers’ Unions of Burkina States is not effective; (iii) persistent Faso, Mali and Niger), Lomé harassment on the corridor due mainly to lack Port Authority and project of a single security for transit operations; and impact monitoring-evaluation (iv) delay in upgrading the existing road

OUTCOMES reports funds in both countries to second generation road funds with sufficient autonomous resources.

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PERFORMANCE INDICATORS RISKS/ MEANS OF OUTCOME CHAIN Indicator MITIGATION MEASURES Baseline Case Target VERIFICATION (including ISC)

2. Outcome 2 : Reduced 2.1. Average transit time on 2.1. 6 days in 2011 2.1. 3 days from 2016 Statistics prepared by the three general transportation costs on the Lomé – Ouagadougou hinterland countries (Ministries Mitigation Measures the Lomé- Ouagadougou CU9 corridor by heavy vehicles in charge of Transport, These risks will be mitigated by: (i) the fact corridor 2.2. Border crossing time Shippers’ Councils and that WAEMU and both States have 2.3. Average vehicle 2.2. 2 days in 2011 2.2. 3 hours from 2016 Carriers’ Unions of Burkina undertaken to adopt appropriate measures to operating cost (light-duty 2.3. In 2011: VOC LDV Faso, Mali and Niger), Lomé make the check point operational through the and heavy vehicles) = CFAF 219 /km and 2.3. In 2016 : VOC LDV = CFAF 171 Port Authority and WAEMU newly established ad hoc commission 2.4. Transit documents VOC HV = CFAF /km and VOC HV = CFAF 784 /km Observatory of Abnormal comprising all stakeholders; (ii) the fact that processing time 1.078/km Practices. axle-load control is now carried out upstream 2.5. Number of check points 2.4. 2 days in 2011 2.4. 2 hours in 2016 Transport Facilitation impact by installing axle scales at all loading points 2.5. 11 check points monitoring-evaluation reports (before exiting Lomé Port, the from Ouagadougou to factory, cargo areas, etc.); (b) installing axle Lomé and 19 from Lomé 2.5. In 2016, the number of check points scales across all West African countries; (c) to Ouagadougou is reduced by 70% minimum compared to securing shipments by accelerating 2011 containerization and sealing which prevent the modification of shipments during transit; and (d) management of weighing stations 3. Outcome 3 : (i) 3. (i) Percentage of the 3. In 2011 (i) 0% of RF 3. As from 2016: (i) at least 3% of RF Statistics prepared by the Road entrusted to autonomous entities with a Mechanisms for the creation of revenue of Road revenue ; (iii) 30% of resources are allocated each year for non- Funds, Ministries of Women’s performance contract; and (e) monitoring of jobs for youths are Maintenance Funds people in the rural areas of mechanized routine maintenance Affairs and women’s the application of regulations by commissions established ; ; and (ii) women’s allocated each year for non- the PA live at two- contracts signed between RFs and youth associations, in which development partners are living conditions are mechanized routine kilometre walk from a road EIGs or associations ; (ii) 500 temporary Socio-economic impact stakeholders; (iii) the regular sensitization of improved ; and (iii) improved maintenance contracts fit for traffic jobs are created ; (iii) women’s incomes monitoring-evaluation reports policy-makers through OPA reports, the goods accessibility signed with youth EIGs or increase by at least 20% ; (iv) 50% of tracking and radio-communication system and associations ; (ii) number of people in the rural areas of the PA live the interconnection of customs data processing temporary jobs created; (iii) two kilometres away from a road fit for systems provided for in the project, as well as income generated by traffic the institution of a single security for transit women and percentage of operations ; and (iv) the fact that both products and goods countries have undertaken to establish second transported on foot by generation road funds for which the budgetary women ; (iv) percentage of allocation from taxes on products is people in the rural areas of yet to be transformed into a levy with a the PA living two mechanism for the direct collection and kilometres away from a payment of resources from the levy into the road fit for traffic

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PERFORMANCE INDICATORS RISKS/ MEANS OF OUTCOME CHAIN Indicator MITIGATION MEASURES Baseline Case Target VERIFICATION (including ISC)

4. Outcome 4 : Road accidents 4 Time taken to treat road 4 As from 2016, 25% reduction in the Statistics prepared by Road Road Fund account. The establishment of this and time taken to provide care accident victims time taken to treat casualties Safety Services of both levy mechanism is being monitored by the

to casualties on the corridor are countries development partners of both countries, and

reduced will be a condition attached to this project.

Output 1 : – Blitta - Road sections rehabilitated N/A 1. (a) 300 km (of which 150 in Burkina Project appraisal, supervision, Aouda and KoupélaBittou – Faso and 150 in Togo) ; (b) 3 km of progress, monitoring- Risks: Cinkansé-Togo Border road Mogandé access roads and 5 km of evaluation, audit, completion (i) increase in the cost of works in relation to sections are rehabilitated paved road network in in and impact assessment reports the estimated budget; (ii) long procurement Burkina Faso deadlines and delays; (iii) delays in the mobilization and disbursement of counterpart Output 2 – 1. (i) Rural road section N/A 2. (i) 42 km in Burkina Faso and 65 km contributions by the countries; (iv) fiduciary 1. Related works carried out and bridge; (ii) number and and a 120m-long bridge at Alemondji in risk due to the absence of an accounting surface of rest areas and Togo; (ii) 10 ha of rest area for drivers software and delay in recruiting an external parking lots; (iii) number of on the corridor in Burkina Faso and 10 auditor socio-economic facilities ha of parking lot extension at Adétikopé

built or rehabilitated; (iv) for the Port in Togo; (iii) 2 CPFs in Mitigation Measures

number of interim transport Burkina and 2 CPFs in Togo, 10 These risks will be mitigated by: (i) the modes, and agricultural and information stands with 5 in each availability of comprehensive implementation fish products processing units country and 1 market at Anié in Togo; studies updated in 2011, a realistic cost

OUTPUTS provided; and (v) number of (iv) two blocks with ambulance estimate based on similar work contracts temporary jobs created equipped at and in launched between 2010 and 2011, sufficient Togo and one block and 2 ambulances provision for price escalation, Advance equipped at Tenkodogo and ; and Procurement Actions that will reduce the time (v) lots of small interim transport modes between the conduct of studies and the start- and UTA for women’s groups in up of works, and measures taken to ensure Burkina Faso; 500 jobs created broad competition during bidding; (ii) provision of support to the executing agencies Output 3 : Sensitization on Number of people 3. At least 1000 people are sensitized by N/A in both countries by a technical assistance that road safety, environmental sensitized on HIV/AIDS, 2016 will provide a procurement expert in good protection, and HIV/AIDS and environmental protection, time and close assistance by the Bank’s compliance with axle load and road safety offices in both countries to the executing regulations carried out

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PERFORMANCE INDICATORS RISKS/ MEANS OF OUTCOME CHAIN Indicator MITIGATION MEASURES Baseline Case Target VERIFICATION (including ISC) Output 4 : Feasibility studies Final study reports N/A 4. (i) 5 study reports are validated agencies will likely mitigate these risks; (iii) on the rehabilitation of Lomé- the fact that since Burkina Faso is eligible for Blitta railway line and a dry full financing (100%) of the project cost port at Bllitta in Togo, (exclusive of tax and custom duty) by the feasibility studies on the Bank, its counterpart contribution to Ouagadougou in components to be funded by ADF was Burkina Faso ; studies on the reduced to bearing the operating costs of the development of public works Project Implementation Monitoring Unit since sector SMEs in Burkina Faso the country is eligible for 100% project and Orodara-Kpuéré (361km) financing by the Bank. Concerning Togo, the road in Burkina Faso and expected total counterpart contribution for the studies on PPP activities to be entire project of about CFAF 7.6 billion, or carried out under the project about CFAF 2 billion annually, is bearable are conducted when compared to CFAF 2.3 billion spent each year on the maintenance of road sections Output 5 : The training of Number of youths trained in 0 5. (ii) At least 200 youths trained in road of the corridor. To secure counterpart youths in road maintenance road maintenance maintenance resources, the opening of a counterpart through training worksites is contribution account and its regular carried out replenishment with resources is a condition for this project; (iv) the project provides for the Output 6 : A system for real Coverage in km of the cargo 0 km 6. At least 1400 km of Lomé- procurement of accounting software and time tracking by GPS tracking and radio- Ouagadougou- highway are training in its use, as well as the reinforcement technology and radio- communication system completely covered by a single cargo of PIMUs by accountants and bookkeepers. communication of the tracking and radio-communication movement of cargo in transit is system installed on the corridor established

Output 7 : Customs capacity (i) Rate of computerization (i) The customs data 7. (i) All customs documents on transit built of customs operations; (ii) processing systems of both on the corridor are processed by customs data processing countries are not yet computer; (ii) Migration to ASYCUDA systems of both countries are interconnected customs data processing systems and interconnected and improved the interconnection of the customs data to cover transit; and (iii) processing systems of Togo and Burkina number of customs officers Faso are effective, and double customs and stakeholders of the declarations at the border are transport system trained. eliminated; (iii) 300 customs officers as well as customs clearing agents and operators of the transport sector are trained on the use of ASYCUDA x

PERFORMANCE INDICATORS RISKS/ MEANS OF OUTCOME CHAIN Indicator MITIGATION MEASURES Baseline Case Target VERIFICATION (including ISC)

Output 8: Capacity of (i) Number of equipment; (i) 5 computer hardware sets and 4 executing agencies (ii) number of support vehicles procured for each executing strengthened and project experts; and (iii) number of agency and 5 computer hardware sets for monitoring-evaluation and reports produced and project monitoring officers of the project auditing carried out validated donors at DGCOOP in Burkina Faso; (ii) 2 long-term experts and short-term experts made available to each executing agency; (iii) 4 financial audit reports per country; 2 technical audit reports per country; a baseline case report and an impact report per country at project completion, a transport facilitation baseline case report and an impact report at project completion are produced

COMPONENTS

1.Road Works RESOURCES IN UAMILLION 2. Related Works Road Works: 178.04 3. Support for Transport and Regional Trade Facilitation Related Works: 14.51 4. Support for the Transport Sector Support for Transport Facilitation: 12.01 5. Support for Project Management Support for the Transport Sector: 5.97 Support for Project Management: 2.16

ACTIVITÉS CLÉS ACTIVITÉS Provision for Physical Contingencies and Price Escalation : 37.78 TOTAL RESOURCES: 250.47

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Implementation Schedule

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REPORT AND RECOMMENDATION FROM MANAGEMENT TO THE BOARDS OF DIRECTORS CONCERNING PROPOSED GRANTS AND LOANS TO TOGO AND BURKINA FASO TO FINANCE THE PROJECT FOR ROAD REHABILITATION AND TRANSPORT FACILITATION ON THE LOMÉ-CINKANSE-OUAGADOUGOU CU9 CORRIDOR

Management submits the following report and recommendation concerning a proposal for the award of: (i) a UA 30.23 million ADF grant to Togo and a UA 84.60 million grant to Burkina Faso; (ii) a UA 17.80 million ADF loan to Togo and a UA 21.53 million loan to Burkina Faso; and (iii) a UA 21.50 million FSF grant to Togo to finance the Project for Road Rehabilitation and Transport Facilitation on the Lomé-Cinkansé-Ouagadougou CU9 Corridor.

1 PROJECT STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with Regional and National Strategies and Objectives

This project falls within the WAEMU transport sector strategy one of whose key missions is to facilitate the promotion of inter-State land transportation corridors, in particular sea access roads for the three landlocked WAEMU Member States. Hence, it is included in the Community Road Transport Infrastructure Action Programme (PACITR) and is therefore part of the Union’s eleven priority corridors. The WAEMU Commission has financed the technical, economic and environmental feasibility studies on the Atakpamé-Kara road section on the corridor in Togo, as well as the construction of the Juxtaposed Check Point at Cinkansé in Burkina Faso, at the border with Togo. The project is also in line with the ECOWAS Transport Facilitation Programme, which seeks to foster cross- border movement.

The project is also consistent with Togo’s Poverty Reduction Strategy Paper one of whose priority thrusts is operations in the transport sector and more precisely the Lomé-Cinkansé (RN1) corridor. It is in line with Burkina Faso’s Accelerated Growth and Sustainable Development Strategy (SCADD) which mainly seeks to open up the country by developing road infrastructure and improving the transport logistic chain. The project is also consistent with the transport sector visions and policies of both countries and the Regional Economic Communities, namely WAEMU and ECOWAS. 1.1.3 The project is consistent with the Bank’s Strategy Paper for Togo (CSP 2011-2015), one of whose two pillars is “economic infrastructure development”. This pillar’s objective is to more effectively connect economic zones within Togo and the Togolese economy to the West African regional economic space so as to boost economic growth. This project is also fully in line with Burkina Faso’s 2012-2016 CSP whose first pillar is “the development of core economic infrastructure to boost growth”

1.2 Rationale for Bank’s Involvement

The Bank’s involvement is justified by the fact that: (i) the project is consistent with its medium-term strategy (MTS) for the 2008-2012 period which prioritizes infrastructure while also laying emphasis on regional integration and the fragile States ; (ii) the Lomé-Ouagadougou corridor is one of the major international highways opening up Burkina-Faso and therefore plays a key role in its economic development; and (iii) it plays a leading role in the implementation of NEPAD activities and it has many years of experience in the implementation of regional projects.

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The Bank’s involvement in the project is also justified by the fact that it is in line with the Bank’s Regional Integration Strategy Paper (RISP) for West Africa (2011-2015) whose first pillar is “connection of regional markets” and is included in the RISP indicative programme. This document indicates that the integration of transport, energy and infrastructure services is an important complement to markets, goods and factors integration policies. The project is also in keeping with the Programme for Infrastructure Development in Africa (PIDA) because of its importance for regional integration, its technical and economic feasibility, its preparation which is totally completed and its impact on the economic development of the area. The project complements the action of development partners (-Ouagadougou-, Bamako-, Bamako-, etc. corridors) and WAEMU (Cinkansé, Malanville, etc. PCJ) in the sub-region to strengthen sea access facilities for landlocked countries (Almaty Agreement).

This project is also backed by ECOWAS and WAEMU letters of support, as well as a joint request by the Togolese and Burkina Faso Governments. The Bank’s involvement in this project will strengthen its last actions on the corridor, particularly the Lomé-Notsé Road Rehabilitation Project in Togo before the crisis in the 2000s and the Bank’s private sector loan in 2011 to extend the container terminal of the Lomé Port Authority (PAL). It will complement the actions of other donors (China, WADB, EU, etc.) that funded sections of the corridor and WAEMU which financed the construction of the juxtaposed border check point at Cinkansé.

1.3 Donor Coordination

In Togo, the authorities established an institutional mechanism for development policy coordination, monitoring and evaluation (DIPD) in December 2010. Within this context, a formal donor coordination mechanism for sector growth support infrastructure was established. In the transport sector, Togo has no sector programme or a formal partner coordination mechanism. The Bank is funding a transport sector development strategy study which is expected to be completed at end 2012. However, in the meantime, the Bank, which was designated as lead Technical and Financial Partner in the sector and Vice-Chair of the Infrastructure Sector Committee, is in regular contact with all the development partners. The Bank’s Office in Togo, which played an active role in mobilizing co-financiers (EBID and WADB), will help to strengthen coordination.

In Burkina Faso, is coordinated through the General Directorate of Cooperation within the Ministry of the Economy and Finance. In the transport sector, coordination is ensured through the Transport Sector Programme and periodic coordination meetings between donors in the sector. TFPs active in Burkina Faso are organized around a troika, which acts as an interface with the Government for dialogue on the Accelerated Growth and Sustainable Development Strategy (SCADD). As regards infrastructure, the theme “Economic Infrastructure” of the Sector and Thematic Commission (CST) serves as a sector consultation framework, and the proximity of the Bank’s Office in Burkina Faso will help to strengthen coordination.

In WAEMU, coordination is carried out through the Regional Economic Programme and Community Infrastructure and Road Transport Steering Committees of Member States. This second Committee comprises the representatives of the transport system stakeholders of Member States and donors in the sector. In addition, for the implementation of this project, a Joint Technical Committee will be set up,

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and donors will, as at project appraisal, undertake joint supervision and mid-term review missions.

2 PROJECT DESCRIPTION

2.1 Project Objectives and Components

The present situation is as follows: (i) 38% of the corridor road is in a bad or very bad condition ; (ii) the juxtaposed border check point at Cinkansé the construction and equipping of which was totally financed by WAEMU is entrusted, in concession, to a private operator but it is not yet fully operational; (iii) there are persistent customs controls, despite improvements, because of problems associated with the lack of a single security for transit operations, the interconnection of the customs data processing systems of both countries which is not yet effective, and the lack of a GPS goods tracking system (for details on constraints related to transport facilitation, see Technical Annex A.4).

The project’s objective is to help lift the above-mentioned barriers so as to contribute to the efficiency of the road transport sub-sector, as well as foster economic and social development and integration in West Africa. To achieve this objective, the project activities are grouped into five components summarized in the table below. Table 2.1: Project Components No. Component Name Estimated Cost Component Description in UA Million A REHABILITATION OF 209.80 A.1 - In Togo : (i) Rehabilitation of the Atakpamé-Blitta (102 THE CORRIDOR km) and Blitta-Aouda (48 km) road sections; ROADS A.2 - In Burkina Faso: (i) Rehabilitation of the Cinkansé-- Koupéla road section (150km) and development of 3 km of Mogandé access road; A.3 - In both countries : (i) environmental impact mitigation measures; (ii) sensitization on STIs-HIV/AIDS, road safety and compliance with axle load; and (iii) works control and supervision B RELATED 17.09 B.1 - Development of related rural roads in Togo (55 km) and FACILITIES reconstruction of the 120-metre bridge at Alémondji and its access roads and in Burkina Faso (42 km); B.2 - Development of 5 km of paved roads at Tenkodogo in Burkina Faso B.3 - Rehabilitation of social infrastructure; B.4 - Support to women in the form of interim transport modes and agricultural products processing units; B.5 - Road safety support, including the construction of rest areas for drivers on the corridor in Burkina Faso and the construction of equipped blood transfusion blocks (CTS) in both countries; B.6 - Related works control and supervision C TRANSPORT AND 14.16 C.1. Support for the Customs Data Processing System, and TRANSIT training of customs officers and customs clearing agents of both FACILITATION countries ACTIONS AND C.2. Studies to prepare documents for the establishment of PPPs MEASURES under the project 3

C.3. Installation of goods tracking and radio-communication facilities on the corridor through a PPP C.4. Support for Lomé Port Authority (Relocation of the parking lot for used vehicles to Adipoké through PPP) in Togo C.5. Supply and installation of axle-load scales in both countries C.6. Control and supervision of road transport and transit facilitation works in both countries C.7. Monitoring-evaluation of transport facilitation impacts in both countries D INSTITUTIONAL 7.04 D.1 - Study on the rehabilitation of the Lomé-Blitta railway line SUPPORT FOR THE and a dry port at Blitta in TOGO TRANSPORT SECTOR D.2 - Feasibility study on the Ouagadougou dry port in Burkina Faso D.3 - Study on the development of public works and civil engineering SMEs in Burkina Faso D.4 - Final design of the Orodara-Kpuéré road (361km) in Burkina Faso D.5 - Technical assistance to DGR of MID in Burkina Faso and to the Ministries of Transport and Public Works of Togo D.6 - Support for the Youth Employment Creation Programme E PROJECT 2.38 E.1 - Project socio-economic impact monitoring-evaluation IMPLEMENTATION E.2 - Technical, road safety, accounting and financial audits MANAGEMENT AND E.3 - Equipping of Executing Agencies MONITORING E.4 - Operation of Executing Agencies E.5 - Operation of the Joint Technical Committee (CTM)

2.2 Technical Solution Adopted and Alternatives Explored

Initial studies on the project roads were conducted between 2006 and 2009, and then updated in 2011. In Togo, the geometric features of the horizontal alignment of the road were maintained except at the entrance to the town of Blitta, where they were improved to ensure the safety of users and roadside dwellers. The road surface will consist of: (i) a sub-base course of an average thickness of 20 cm obtained by the in situ recycling of the existing pavement plus fill materials and its treatment with cement; (ii) a 10 cm thick coarse aggregate asphalt base course; and (iii) a 5 cm thick bituminous concrete coating. Under the project, 55 km of rural roads will be rehabilitated, and the bridge reconstructed with reinforced concrete at Alemondji with its 10 km of access roads.

In Burkina Faso, the geometric features of the horizontal alignment of the Koupéla – Bittou - Tenkodogo – Cinkansé –Togo Border road were maintained. The road surface will consist of: (a) Koupéla – PK 76,00 Section : (i) a sub-base course of an average thickness of 20cm obtained by the in situ recycling of the existing pavement plus fill materials and its treatment with cement; (ii) an 8 cm thick coarse aggregate asphalt base course ; and (iii) a 5 cm thick bituminous concrete costing; (b) PK 76,00 to PK 149,328 Section and the 3 km of Mogandé access road: (i) a laterite gravel sub-base course of an average thickness of 20 cm and its treatment with cement after stripping the existing coating and base course; (ii) an 8 cm thick coarse aggregate asphalt base course; and (iii) a 5 cm thick bituminous concrete coating. In Burkina Faso, the project also provides for the construction of 6 concrete bridges and 5.2 km of pavestone urban roads, as well as the rehabilitation of 42 km of rural roads.

The technical alternative solutions explored and reasons for their rejection are summarized in Table 2.2

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below. Table 2.2: Alternative Solutions Explored and Reasons for Rejection

Alternative Solution Brief Description Reason for Rejection

(i) Durability of the pavement system deemed to be less compared to a bituminous aggregate base course, especially considering the traffic The base course will be TOGO comprising mainly heavy vehicles; (ii) composed of crushed aggregate Crushed aggregate base course difficulties in in situ implementation of a instead of bituminous aggregate homogeneous mixture of the final material; and (iii) cost margin between the proposed solution and the alternative solution not very significant

BURKINA FASO The base course will be (i) Durability of the pavement system deemed composed of crushed aggregate to be less compared to a bituminous aggregate Crushed aggregate base course instead of bituminous aggregate base course, especially considering the traffic comprising mainly heavy vehicles; (ii) difficulties in in situ implementation of a BURKINA FASO This solution is different from homogeneous mixture of the final material; and the one adopted ; a new cement- A 40 cm sub-base course (iii) cost margin between the proposed solution treated sub-base course will be obtained by treatment of 25 cm and the alternative solution not very significant implemented after stripping the lateritic aggregate on the spot existing coating and base course and 15cm cement-treated borrow lateritic aggregate

2.3 Project Type

This project is an investment operation. Donor operations in transport infrastructure in Togo and Burkina Faso are generally implemented through this type of operation. Some activities will be implemented through Public Private Partnership.

2.4 Project Cost Estimates and Financing Arrangements Project Cost by Component

The overall project cost (exclusive of tax and customs duty), including provision for physical contingencies and price escalation, is estimated at UA 250.47 million, equivalent to CFAF 185.34 billion, at an exchange rate of UA 1 = CFAF 743.009.

Table 2.3: Project Cost Estimates by Component (in UA million) Foreign Local % Foreign Component Total Exchange Currency Exchange A – Road Rehabilitation 142.42 35.62 178.04 80.00% B- Related Facilities 11.61 2.90 14.51 80.00% C – Transport Facilitation 9.61 2.40 12.01 80.00% D- Institutional Support for the Transport Sector 4.78 119 5.97 80.00% E – Project Management 0.92 1.24 2.16 42.69%

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Base Cost 169.33 43.35 212.69 79.62% Provision for physical contingencies 16.89 4.27 21.16 79.81% Provision for price escalation 13.25 3.37 16.62 79.74% Total 199.48 50.99 250.47 79.64%

Financing Arrangements

The project will be jointly financed by the Bank (ADF – Togo and Burkina Faso country allocations, resources from cancelled loans and grants, resources allocated to regional operations and FSF); IsDB, KFW, WADB, EBID, private operators, EU-Africa Infrastructure Trust Fund, WAEMU, UNFPA and the Governments of Burkina Faso and Togo, as indicated in Tables 2.4 and 2.5 below. The Bank is in joint financing with KFW and in parallel financing with the other donors. The EBID and the Bank appraised the project at the same time. The WADB appraised the project in April 2012 with a view to presenting it to its Board of Directors before the end of 2012. The IsDB is expected to confirm its contribution to the financing of the project in November 2012. The WADB loans to both Governments and, to some extent, those of the EBID, will be subsidized by WAEMU in order to make them more concessional. Confirmation of mobilization of the financing of other donors is a condition for this project.

Since Burkina Faso is eligible for 100% project financing by the Bank, its counterpart contribution to the financing of components funded by the ADF has been reduced to payment of the operating costs of the Project Implementation Monitoring Unit (for justification see Technical Annex A.4). Togo’s counterpart contribution to components financed by the Bank in Togo (UA 7.61 million) accounts for 10.94% and will be used in paying the operating costs of the Project Implementation Monitoring Unit, part of the cost of road works, and compensation expenses. The opening of counterpart contribution accounts and their regular replenishment with resources from both countries is a condition for this project.

Table 2.4: Project Sources of Financing (in UA million)

UA Million Sources of Financing % Foreign Exchange Local Currency Total ADF GRANT 94.69 20.15 114.84 45.85% ADF LOAN 32.70 6.62 39.32 15.70% FSF GRANT 19.68 1.82 21.50 8.58% IsDB LOAN 8.38 1.08 9.46 3.78% KFW GRANT 6.34 1.58 7.92 3.16% EU-AFRICA TRUST FUND 1.64 0.41 2.06 0.82% PRIVATE OPERATORS 2.88 0.72 3.60 1.44% WADB 22.18 1.77 23.95 9.56% EBID 10.84 2.71 13.56 5.41% WAEMU 0.93 0.93 0.37% UNFPA 0.14 0.03 0.17 0.07% Government of TOGO 10.50 10.50 4.19% Government of BURKINA FASO 2.66 2.66 1.06% Total 199.48 50,.99 250.47 100%

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Table 2.5: Project Cost by Expenditure Category (in UA million)

UA Million % Foreign Expenditure Category Local Foreign Total Exchange Currency A – Goods 2.00 0.50 2.50 80.00% B –Works 151.80 37.95 189.75 80.00% C – Services 14.03 3.51 17.54 80.00% D – Miscellaneous 1.51 1.40 2.90 51.92% BASE COST 169.33 43.35 212.69 79.62% Provision for physical contingencies 16.89 4.27 21.16 79.81% Provision for price escalation 13.25 3.37 16.62 79.74% COUT TOTAL 199.48 50.99 250.47 79.64%

Table 2.6: Project Expenditure Schedule by Component (in UA million) Component 2012 2013 2014 2015 2016 Total A – Road Rehabilitation 0.01 47.25 65.86 57.72 7.19 178.04 B- Related Facilities 2.90 4.35 5.80 1.45 14.51 C – Transport Facilitation 0.32 1.07 4.51 4.17 1.94 12.01 D- Institutional Support for the Transport Sector 0.73 1.56 2.03 1.48 0.19 5.97 E – Project Management 0.51 0.60 0.36 0.32 0.36 2.16 Base Cost 1.57 53.37 77.12 69.50 11.14 212.69 Provision for physical contingencies 0.16 5.31 7.67 6.91 1.11 21.16 Provision for price escalation 0.12 4.17 6.03 5.43 0.87 16.62 Total 1.85 62.84 90.82 81.85 13.12 250.47 Total in % 0.74% 25.09% 36.26% 32.68% 5.24% 100.00%

Table 2.7: Project Expenditure Schedule by Source of Financing (in UA million)

Sources of financing 2012 2013 2014 2015 2016 Total ADF GRANT 1.11 31.75 44.13 35.26 2.60 114.84 ADF LOAN 11.79 15.73 11.81 39.32 FSF GRANT 0.13 5.73 7.81 7.04 0.79 21.50 IsDB LOAN 1.89 3.78 3.78 9.46 KFW GRANT 2.38 3.17 2.38 7.92 EU-AFRICA TRUST FUND 0.41 0.62 0.62 0.41 2.06 PRIVATE OPERATORS 1.44 1.44 0.72 3.60 WADB 4.79 7.19 9.58 2.40 23.95 EBID 2.71 4.07 5.42 1.36 13.56 WAEMU 0.02 0.06 0.33 0.33 0.20 0.93 UNFPA 0.05 0.05 0.03 0.03 0.17 Government of TOGO 0.09 2.44 3.64 3.40 0.93 10.50 Government of BURKINA FASO 0.10 0.53 0.75 0.97 0.32 2.66 Total 1.85 62.84 90.82 8.85 13.12 250.47 Total in % 0.74% 25.09% 36.26% 32.68% 5.24% 100%

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2.5 Project Area and Beneficiaries

The corridor extends from the Lomé Port up to Ouagadougou, thus covering National Highway No. 1 in Togo and National Highway No. 16 in Burkina Faso. The works concerning transport facilitation and development of related facilities will be carried out along the corridor, that is in the 5 and in the Centre, Centre-East and Central Plateau . Regarding road works, the project direct impact area (PIA) is located in the Plateaux and Central Regions in Togo, as well as the Centre-East Region in Burkina Faso. The PIA population covered by the project is 1 993 036 inhabitants, with 1 006 402 women in Togo, and 1 223 956 inhabitants with 649 122 women in Burkina Faso. Most of the people are women (51%) and especially youths aged less than 30 years (about 70% of the population) who are hard hit by unemployment and underemployment. However considering the regional nature of the project, the extended impact area covers Togo and a large part of Burkina Faso, Mali and Niger.

The incidence of poverty is fairly high in the PIA: the poverty prevalence rate is 77.7% in Central Region and 56.2% in Plateaux Region in Togo, while it stands at 46.6% in Burkina Faso. Most of the PIA is located in rural areas, even though some of the places are urban centres. The main economic activity of the project area is , which employs about 80% of the working population in both countries, followed by trade. This predominance of agricultural employment is characterized by seasonal unemployment and low productivity.

The project will have a significant positive impact on the activities of the PIA population in general and on those of women and youths, in particular, as it will improve their employability, increase job offers in the public works and civil engineering sector, strengthen commercial activities, enhance socio-economic infrastructure accessibility, and reduce travel time and general transportation costs. The most significant expected positive outcomes are : (i) improvement of transportation conditions and access to basic social services, markets and production zones for the conveyance of products and goods through roads, road networks, rural roads and structures rehabilitated by the project ; (ii) better knowledge of best practices relating to road safety, reproductive health, micro-business management techniques, environmental safety and risk of the spread of STIs through sensitization campaigns and information kiosks; (iii) increase in the incomes of youths and women as a result of training and creation of employment opportunities; (vi) construction of secured marketing infrastructure at Anié which will improve conditions under which women sell their products; and (vii) better management of road accident victims as a result of the construction of equipped blood transfusion centres.

2.6 Participatory Approach to Project Identification, Design and Implementation

During the updating of studies in the two countries and Bank preparation and appraisal missions, participatory meetings were organized in Lomé and Ouagadougou, as well as in the regions crossed by the road so as to identify the needs and concerns of the beneficiaries. The meetings were organized with WAEMU, all services of ministries and government agencies operating in the transport sector, the local population, stakeholders of the transport system, the , donors and development partners operating in the transport sector. During all the meetings, efforts were made to: (i) collect available information and data to analyze the sector situation; (ii) collect information on donor operations so as to avoid duplication and strengthen coordination; and (iii) define the project components based on the

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needs, strategies and priorities. During project implementation, this collaboration will be pursued, particularly for the implementation of facilitation measures and related facility works, preparation of training programmes for youths and women under national employment creation programmes, as well as for validation of the various study reports. In both countries, the Project Implementation Monitoring Units (PIMU), control firms and contractors should, depending on their respective prerogatives, enlist the services of the various stakeholders so as to facilitate implementation and ownership of the project outcomes.

2.7 Bank Group Experience and Lessons Reflected in Project Design

This project draws on the Bank’s great experience in implementing multinational infrastructure projects, the main difficulties of which are associated with: (i) the multiplicity of project players who generally have weak technical and operational capacity; and (ii) country and REC weaknesses in procurement, mobilization of counterpart contributions and performance monitoring. To remedy these inadequacies, the project intends to provide support to existing project management units in each country and to the Joint Technical Committee (CTM) of the project.

The Bank’s active portfolio in Togo, following resumption of cooperation based on the interim strategy (I-CSP), comprises five projects, including one road project. Lessons learned from the implementation of the interim strategy include the need to take into consideration the fragile nature of institutions in formulating and implementing operations in Togo. Furthermore, the scope of challenges to be faced requires the strengthening of synergies between development partners through formal and more frequent consultations so as to encourage the country to conduct reforms that would enable the transport sector to play its role as catalyst for growth and poverty reduction. The Bank has already mobilized financing to support the Government in developing a transport sector programme. The reports of the study, which are expected at the end of 2012, will help to establish a more efficient consultation framework for partners involved in the sector. The design of this project took institutional weaknesses into consideration, and provided for technical assistance to support the Ministries of Public Works and Transport in procurement and monitoring of project implementation. The assistance of the Bank’s Country Office will help to ensure closer project monitoring.

The Bank’s active portfolio in Burkina Faso comprises a total of sixteen operations, including two national transport and two multinational projects. Lessons learned from completed and ongoing projects can be summarized as follows: (i) delays in the procurement process; (ii) poor quality of studies; (iii) delays in the disbursement of counterpart contributions for investments, as well as equipping and operation of Project Implementation Units; and (iv) dispersal and great mobility of Project Officers. For this project, the following mitigation measures: (i) technical assistance to support procurement and implementation monitoring, as well as reinforced monitoring of project progress by the Bank’s Country Office; (ii) availability of comprehensive implementation studies updated in 2011 and a realistic cost estimate based on similar construction contracts under execution (in 2010 and 2011) and a provision for price escalation and physical contingencies during project implementation; (iii) the counterpart contribution was reduced and its effective mobilization will be followed up ; and (iv) the establishment, within the DGR, of a Project Monitoring Unit which will be exclusively responsible for the project, and for which the Bank has given its no-objection opinion on the CVs.

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2.8 Key Performance Indicators

The identified key performance indicators and expected outcomes at project completion figuring in the results-based logical framework are as follows : (i) volume of intra-community trade in WAEMU Zone; (ii) volume of traffic on the corridor transiting through PAL to or from Burkina Faso, Niger and Mali ; (iii) average transit time of the Lomé – Ouagadougou corridor by heavy vehicles, border crossing time, average vehicle operating cost, transit documents processing time, and number of check points on the corridor ; (iv) percentage of revenue of Road Maintenance Funds allocated each year for non- mechanized routine maintenance contracts signed with youth EIGs or associations; (v) number of temporary jobs created ; (vi) women’s income generated by agricultural produce processing activities and/or activities initiated following practical training in CPFs; (vii) percentage of people in the rural areas of the PIA living two kilometres away from a road fit for traffic; and (viii) time taken to treat road accident victims. The baseline case for these indicators as defined in the logical framework will be verified, and an evaluation will be conducted at mid-term and at the end of the project by the General Directorate of Statistics and National Accounts (DGSCN) in Togo, the National Institute of Statistics and Demography (INSD) in Burkina Faso, and a consulting firm to be recruited by WAEMU to monitor indicators related to transport facilitation.

Apart from these output and outcome indicators in the logical framework, there are also project implementation performance indicators which will be monitored. They were retained in line with the Bank’s institutional performance indicators; they are: (i) deadline for effectiveness and fulfilment of conditions precedent to the first disbursement of funds; (ii) procurement deadlines; (iii) average project status indicator (IP); and (iv) disbursement rate trend in relation to the expenditure schedule. These indicators will be monitored during supervision missions and in the day-to-day management of the project.

3 PROJECT FEASIBILITY

3.1 Economic and Financial Performance

The economic evaluation was carried out using the HDM IV model based on a cost/benefit analysis between the without- and with-project situations over a 20-year period, and a 12% discount rate. This evaluation resulted in economic rates of return (ERR) per road section varying from 24% to 35%, and a Net Present Value (NPV) varying from CFAF 11 to 58 billion depending on the road section. Details on each section are provided in the table below. A sensitivity test (a 10% increase in project cost and a 10% reduction in benefits) shows the ERR varying from 20% to 27% depending on the road section. The project is therefore economically viable. The table below summarizes the project economic analysis; the detailed analysis is appended hereto.

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Table 3.1: Summary Economic Analysis

Tenko Koupéla/ PK76- Aouda- dogo- Economic Atakpamé- PK54- Blitta- PK135- Tenkodo Cinkan Sokodé- PK76 Parameters PK54 Blitta PK135 Aouda go sé Kara (Burki Analyzed (Togo) (Togo) (Togo (Togo) (Burkina (Burkin (Togo) na Faso) a Faso) Faso) Economic Rate of 35% 35% 24% 28% 29% 27% 29% 27% Return (ERR) Net Present Value (NPV) in CFAF 58 52 21 11 33 39 20 50 Billion ERR Sensitivity Test (+10% variation in 27% 27% 20% 23% 24% 23% 26% 24% costs and -10% in benefits)

3.2 Environmental and Social Impacts Environment

The project is classified by the Bank under Environmental Category 2, taking into account: (i) the nature of works to be undertaken (rehabilitation of existing roads with the route being more or less the same, except at a few specific places for reasons of safety and average size of works); (ii) the location of the project in relatively environmentally-insensitive areas; and (iii) the low intensity of direct and indirect impacts that the project can generate. Comprehensive environmental and social impact assessments with their Environmental and Social Management Plans (ESMP) were prepared and validated by the Burkina Faso and Togolese Ministries in charge of the Environment. The project’s ESMP was posted on the Bank’s Website on 10 May 2012.

The negative environmental impacts can be easily mitigated and limited to the construction period. In each country, 120 ha of compensatory planting is recommended on hillsides and areas prone to erosion, as well as borrow sites to be restored. Roadside trees will be planted along the entrances and exits of towns concerned by road works (Atakpamé, Blitta, Sotouboua and Sokodé for Togo, and Koupela, Liguidi-Malguem, Kampayargo, Lioulgou, Mogande, Bitou and Tenkodogo for Burkina Faso) using the labour-intensive approach recommended by national youth employment programmes; they will embellish the road landscape and create income-generating activities for youths. Road Safety

The Lomé-Ouagadougou Road Corridor is one of the most accident-prone in the sub-region for several reasons: (i) the existence of dangerous areas such as the Alédjo and Défalé faults in Togo where the geometric features of the road do not comply with accepted norms and standards; (ii) the behaviour of drivers and state of vehicles; and (iii) lack of adequate mechanisms for the rapid evacuation and treatment of road accident victims. In March 2010, the United Nations General Assembly adopted Resolution A/RES/64/255 in which it proclaimed 2011-2020 the Decade of Action for Road Safety so as to stabilize and then reduce the number of deaths due to road accidents worldwide by intensifying sensitization campaigns at national, regional and global levels. Accordingly, efforts have been initiated 11

on the corridor with ongoing construction of road sections bypassing the critical sections with faults in Togo, with financing from Eximbank of China.

The project design includes measures to improve road safety through: (i) compliance with road safety regulations and technical standards in force concerning road signs, slopes, road banking and deviations; (ii) the construction of driveways in temporary parking lots and roadside rest areas for drivers; (iii) road safety sensitization campaigns for road users and the local population; and (iv) the conduct of road safety audits at start-up, during and after completion of works. To ensure expedient treatment of road accident victims, the project, in agreement with WHO, intends to support health facilities located along the corridor (Dapaong and Sokode in Togo, and Tenkodogo and Zorghoau in Burkina Faso) by constructing Blood Transfusion Centres (BTC) with small blocks equipped with a blood bank and an ambulance. The recurrent costs will be subsequently be borne by the Governments with WHO support. Climate Change

Climate change was considered during project design, with the boxing up of the road and sizing of water supply structures taking into account the rainfall pattern in the project area. Furthermore, concerning road works, the following measures will help to mitigate the effects of climate warming: (i) restoration of borrow pits along the road and related rural roads through systematic tree planting and plant regrowth, and (ii) planting of trees on both sides of the road. About one hundred hectares of hillsides and erosion-prone areas as well as borrow pits to be restored will be reforested. Gender Issues

In Togo and Burkina Faso, women account for 51% of the PIA population as against 49% for men. According to the latest study on poverty and vulnerability in Togo conducted in 2007, the unemployment rate for women (9.9%) is much higher than for men (5.6%). Agriculture and trade are the main activities carried out by women in Togo. In the agricultural sector, Togolese women earn only 10% of the income derived from the fruits of their labour. This is due to unequal access to the means of production. Trade is the main source of income for 53.2% of Togolese women.

Poverty in Burkina Faso mostly affects the rural population and women. The incidence and severity of poverty are higher among women than men (52% as against 48%). This inequality stems from the economic marginalization of women, especially in rural areas where their living conditions are particularly affected by limited access to inputs compounded by the level of inaccessibility of the area and lack of means of transportation. The marketing of agricultural produce is an important source of income and employment for urban women in the centre-east region.

The health situation of women in the PIA is rather alarming. Some 72% of women in the Burkina Faso PIA mentioned lack of money for treatment and 54% distance to a health service as major impediments to access to . The rate of HIV prevalence among women (1.6%) is almost twice the rate among men (0.9%). There is also a high rate of HIV/AIDS prevalence among women in Togo. An estimated 30.5% of Togolese girls aged 15 to 19 are infected compared to 8.1% of boys in the same age group.

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The project implementation will have a positive impact on the status of women by: (i) improving access to socio-economic infrastructure, particularly health centres; (ii) increasing women’s incomes, particularly during the operation phase by facilitating the sale of goods and supply of inputs. To strengthen the positive impacts of the project in terms of economic empowerment of women, the following measures have been taken: (i) the construction and rehabilitation of four women's centres (CPFs) along the corridor; (ii) the installation of information kiosks for women and other users along the corridor dealing with all issues related to inter-State transit; (iii) the construction of equipped modules in Anié market to increase women's incomes; and (iv) the provision of interim modes of transportation and minor equipment for the processing of agricultural produce for women's groups in the project area in Burkina Faso so as reduce their drudgery and increase their productivity.

The women’s centres (CPF) will help to build women’s capacities through targeted training and information, education and communication activities to be carried out by the United Nations Fund for Population Activities (UNFPA) in the promotion of reproductive health, including HIV/AIDS prevention and violence on women. Special emphasis will be laid on the availability and dissemination of information on cross-border trade to enable female vendors to cross the border more systematically without being attacked or harassed. To mitigate the effect that increased traffic on the corridor may have on the spread of HIV/AIDS and other STDs, as well as the increase in road accidents in the area, sensitization campaigns on environmental protection, road safety, HIV/AIDS and STDs, and compliance with axle load limitations will be carried out within the framework of the project. Social Situation and Youth Employment

The youth and women’s employment situation is a great cause for concern. The indicators show that 65.4% of the unemployed in Burkina Faso are below 24 years of age, and more than 30% of Togolese youths are unemployed. Given the magnitude of the problem, it has been proposed that this project be implemented as a pilot project of the Joint Initiative of the (AU), the African Development Bank (ADB), the United Nations Economic Commission for Africa (ECA) and the International Labour Organization (ILO) so as to promote job creation for youths in Africa.

Project support in this connection is consistent with the national employment promotion strategies, particularly in the public works and civil engineering sector which absorbs much of the investment budgets of both countries, and should therefore contribute significantly to the achievement of the objectives of this Initiative. Project support to this Initiative will be through: (i) the inclusion of incentives for the use of local manpower in the bidding documents for works; (ii) taking into account provisions concerning procurement for related works with total allocations of CFAF 4.8 billion, and contract sizes that will enable local SMEs to participate in competitive bidding; (iii) the provision of practical training for a total amount of CFAF 1.65 billion so as to increase the employability of youths and women in road maintenance through "training worksites"; and (iv) the execution of labour-intensive works totalling CFAF 3.60 billion, such as the development of 5.5 km of pavestone roads on the Tenkodogo road network and the access road to Anié market. To ensure job sustainability and the integration of youths who will be trained, the Road Funds will include in their annual road maintenance programmes contracts to be signed with youth and women's associations for non-mechanized routine road maintenance works.

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Forced Resettlement

The project works will not require any major expropriation because they mainly concern the rehabilitation of road sections without significant change of the route, hence there will be no displacement of people. However, in Togo, 15 installations built with fragile materials for informal trade at the Blitta junction: sale of clothes, of fuel, or handicraft activity (two-wheel containers) or used as warehouses, will be relocated. Social facilities were also identified: shed used as office for "zémidjan" (motorcycle taxi) or transporters’ union in Blitta, and a space for prayer. All persons affected by the project, be they (legal or customary) owners on the project road area will be eligible for compensation. For each commercial building affected, the owner will be paid compensation in cash the amount of which will be equivalent to the cost of construction of a new building assessed at market price without considering depreciation. The resettlement cost totalling about CFAF 8 million will be entirely borne by the Togolese Government. The full payment of compensation for expropriation by the Togolese Government is a condition for this project.

4 PROJECT IMPLEMENTATION

4.1 Implementation Arrangements Executing Agency

This project, which is part of the WAEMU Commission’s Community Road Transport Infrastructure Action Programme (PACITR), will be implemented under the joint responsibility of Burkina Faso, Togo and the WAEMU Commission. Given that transport facilitation transcends individual States, Togo and Burkina Faso have agreed to: (i) delegate the monitoring and management of certain activities of the transport facilitation component as well as overall project implementation coordination to the WAEMU Commission; and (ii) transfer regional facilitation infrastructure and equipment to the Community’s heritage. The WAEMU Commission will rely on the Department of Community Planning, Transport and Tourism (DCPTT) through the Department of Infrastructure which has sufficient human resources. In addition, this Department has acquired sufficient experience in the implementation of similar projects. Submission of the agreement, which delegates project ownership to WAEMU, to the Bank is a condition for this project.

The executing agency in Burkina Faso is the Ministry of Infrastructure and Road Development (MID) through the General Directorate of Roads (DGR) which has adequate human resources. The project will use the Project Implementation Monitoring Unit established in 2009 within the DGR by Order No. 2008/0031/MID/SG/DGR. The Bank has already given its no-objection opinion on the CVs of the Unit's staff (Coordinator, Accountant, Road Engineer and Works Supervisor). A performance contract will be signed between the Director General of Roads and the Project Coordinator for the conduct of an annual performance evaluation. To better monitor the transport facilitation component, a focal point will be pointed for the Customs department, and another for the Department of Land Transport. The project provides for equipment and operating resources for the Unit, as well as the payment of monthly bonuses and allowances to the Unit’s staff and the focal points, in accordance with the legal provisions in force. In addition, the project also intends to support the DGR through technical assistance comprising two experts for a two-year period and short-term experts, including a procurement specialist.

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In Togo, project implementation monitoring will be based on the institutional mechanisms established under the Aflao/Sanvee-Condji Road Rehabilitation Project financed by the ADB. The Ministry of Public Works will be the executing agency, through the Project Implementation Monitoring Unit (PIMU) within the General Directorate of Public Works. This Directorate, which has adequate human resources, will appoint two engineers as Project Officers, one of whom will be the Project Coordinator. A performance contract will be signed between the Director General of Public Works and the Project Coordinator for the conduct of an annual performance evaluation. To ensure better monitoring of the transport facilitation component, a focal point will be appointed in the Department of Road and Railway Transport in the Ministry of Transport, and another in the Customs Department. The project provides for equipment and operating resources for the Unit, as well as the payment of monthly bonuses and allowances to the Unit’s staff and the focal points, in accordance with the legal provisions in force. In addition, the project also intends to support the DGTP and DT through technical assistance comprising two experts for a two-year period and short-term experts, including a procurement specialist.

The project will also use the institutional mechanisms that have already been established (Observatories of Abnormal Practices, National Road Transport and Transit Facilitation Committees, Regional Road Transport and Transit Facilitation Committee, and the PACITR Steering Committee). To ensure proper coordination of project activities, a Joint Technical Committee (CTM) will be established; the committee will comprise Directors in charge of Roads, Transport and Customs and representatives of the Ministries of the Economy and Finance (Cooperation/Permanent Secretariat), the Project Coordinators of both countries or their representatives, as well as those of DCPTT (DAIT and DTTM). The Committee will be coordinated by the DAIT of WAEMU. The CTM will be responsible for coordinating project implementation, solving any problems and ensuring smooth project implementation in the countries. It will meet at least twice a year in the two countries, on a rotational basis. The operating costs of the CTM will be borne by WAEMU. Establishment of the Joint Technical Committee (CTM) is a condition for this project. Procurement Arrangements 4.1.5 All goods, works and services financed by the ADF and the EU-Africa Infrastructure Trust Fund for this project will be procured in accordance with the Bank’s Rules of Procedure for Procurement of Goods and Works or, as appropriate, the Bank’s Rules of Procedure for the Use of Consultants (May 2008 edition), using appropriate Bank standard bidding documents. Under this project, the KfW has agreed to comply with the Bank’s procurement procedures. However, the Bank should favourably consider the following points raised by the KfW: (i) publication, at the expense of the KfW, of competitive bidding notices in NFA in Germany, in addition to the publication of competitive bidding notices in the UNDB; (ii) inclusion of standard commitment statements and KfW's standard advance contract start-up and successful completion guarantees in the works bidding documents after prior review by the Bank. Procurements entirely financed with counterpart contributions of the Togolese and Burkina Faso Governments as well as WAEMU and other donors will be undertaken in accordance with the procurement procedures of each country, WAEMU and other donors.

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Special Arrangements

4.1.6 On 7 February 2012, the Governments of Togo and Burkina Faso requested and obtained from the Bank, approval for advance procurement actions (APA) for: (i) road and related works; (ii) consultancy services for works control and supervision; (iii) consultancy services for socio-economic impact monitoring and assessment; (iv) consultancy services for transport facilitation impact monitoring and assessment, for which the ownership should be delegated to WAEMU Commission by Togo and Burkina Faso; and (v) technical assistance. Competitive bidding for the activities listed above is scheduled to be launched in April 2012. The Project Implementation Monitoring Unit (PIMU) of Togo's Ministry of Public Works and the Project Implementation Monitoring Unit of Burkina Faso's Ministry of Infrastructure and Road Development will be responsible for the procurement of works, goods and services. All the procurement documents and decisions will be subject to prior endorsement by the authorities in charge of public procurement in both countries, in accordance with the Public Procurement Code. The draft procurement plans prepared by the various PIMUs for procurements under their competence were submitted to the Bank for review and approval before the negotiations. Details of procurement methods, review procedures, national laws and regulations, national procurement systems and evaluation of executing agencies are presented in Technical Annex A.2. Disbursement and Auditing

4.1.7 The direct disbursement method will be adopted for works, the supply of goods, and consultancy services, as well as activities whose management has been delegated to WAEMU. The operating costs of the executing agencies and the Joint Technical Committee will be paid from national counterpart contributions and by WAEMU. Concerning auditing, annual project financial statements and accounts will be audited by an independent audit firm and reports related thereto will be forwarded to the Bank in accordance with the rules and procedures in force. Four audits will be conducted for this project for the 2012-2013, 2014 and 2015 and part of the 2016 fiscal years, as well as three technical audits. Financial Management

4.1.8 In both countries, the accounting services of executing agencies will be responsible for financial and accounting management. WAEMU will ensure the financial management of the transport facilitation component. During the assessment of the financial capacities of the executing agencies, a fiduciary risk was identified. To mitigate it, an accounting software will be acquired, the accounting and financial teams trained, procedures manuals prepared, and the staff of each implementation unit reinforced with an accountant and a bookkeeper.

4.2 Monitoring and Evaluation

Project monitoring and evaluation will include internal and external monitoring, Bank supervision missions, a mid-term review and a final evaluation, including the completion report of the executing agencies. Monthly and quarterly reports will be prepared on the execution of works by works control and supervision firms. The executing agencies will prepare and submit quarterly project implementation reports to the Bank. The Joint Technical Committee will also prepare and submit reports.

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Project impact monitoring will help to identify and analyze project implementation indicators that contribute to achievement of the expected outcomes. The General Directorate of Statistics and National Accounts (DGSCN) of Togo and the National Institute of Statistics and Demography (INSD) of Burkina Faso will, under the responsibility of Executing Agencies and through a service agreement, assess the socio-economic impacts of the project in the project direct impact area. A consultant to be recruited by WAEMU will monitor and evaluate the impacts of transport facilitation on the entire corridor.

4.3 Governance

The challenges to be faced regarding good governance of the transport sector include long delays and transparency in procurement, establishment of a baseline framework for investment planning, transparency in the financial management of infrastructure maintenance, and impediments to road traffic. Burkina Faso and Togo have adopted a new public procurement code which complies with the regulatory and legal framework as regards international standards, as well as with the provisions of the WAEMU Directive based on the principle of separation of regulatory and control functions (Public Procurement Regulatory Authority, General Directorate of Public Procurement and Procurement Commissions in each Ministry). Thus, the recent evaluation missions carried out by the Bank and the underscored the significant progress made in Burkina Faso and, indicted that, overall, increasing efforts are being made to align the national procurement system and procedures with international standards. Furthermore, to improve investment planning and programming, Burkina Faso in 2011 updated its transport sector strategy. In Togo, the Bank is financing the transport sector development strategy study, whose final reports are expected at the end of 2012.

The Governments of Togo and Burkina Faso are also aware of recurrent problems associated with the first generation road funds (financial mismanagement, lack of external audits, use of funds for unauthorized expenditures, embezzlement, and inadequate control). Consequently, they have initiated road maintenance reforms in accordance with the WAEMU Directive on the establishment of second generation Road Funds by developing strategies to optimize road maintenance, establishing road databanks for more transparent road maintenance programming, and setting up autonomous road maintenance funding bodies. In Togo, the Société Autonome de Financement de l’Entretien Routier (SAFER) (Autonomous Road Maintenance Finance Corporation) receives resources from road user charges, enjoys administrative and financial autonomy, has a board of directors comprising members from the public and private sectors, and is subject to regular financial and technical audits. Burkina Faso has taken measures to set up a second generation road fund, and has initiated discussions with partners on the terms and conditions for Burkina Road Maintenance Fund (FER-B) financing and administration which should be completed in 2013.

The project design also includes specific measures to mitigate governance risk to ensure that resources are used judiciously and for the purposes for which they are intended. In this regard, the project will provide technical assistance in procurement to the various executing agencies. Measures will be taken to minimize road harassment and time wasting along the corridor, and all procurements will be submitted to the Bank for prior review and approval. In addition, independent auditors will be recruited to carry out project financial and technical audits.

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To ensure good governance along the main roads in West Africa, ECOWAS and WAEMU set up the Observatory of Abnormal Practices (OPA) in 2005. The OPA, which now covers five corridors, including the Lomé-Ouagadougou corridor, helps to periodically record practices that hamper traffic fluidity and efficiency of transport systems. In recent years, OPA's activities, particularly on the Lomé- Ouagadougou corridor, have contributed to reducing illegal charges, excessive controls, and control- induced delays.

4.4 Sustainability

The sustainability of the road sections to be rehabilitated under this project will depend on the following three main factors: (i) the quality of work done; (ii) operation of the roads; and (iii) the level and quality of maintenance. To ensure compliance with quality standards during the construction phase, the works will be supervised and monitored by consulting engineering firms selected from among the most qualified, and which are familiar with similar projects. Furthermore, the technical solutions adopted took into account the volume and composition of current and future traffic, as well as the geotechnical characteristics of materials to be used. Lastly, project supervision by the Bank, as well as technical audit missions to be carried out by consultants, will help to better monitor the technical execution of works.

Pursuant to WAEMU Rule No. 14 on axle load and gross weight control, the two countries have: (i) set up agencies to control axle load and gross weight, in particular the Road Safety Authority in Togo and the National Road Safety Authority (ONASER) in Burkina Faso, and (ii) embarked on a process to interlink their road networks with axle scales, as well as at heavy loading points (ports, cement factories, etc.). The initial results are encouraging. Thus, since this mechanism was introduced in early 2011, the statistics compiled in December 2011 showed that the number of overloaded trucks dropped from 80% to 26% on average that year. These operations will be intensified to completely eliminate truck overloading.

Regarding the maintenance of the Community road network, Directive No. 11/2009/CM/UEMOA of 25 September 2009 to harmonize road maintenance strategies in Member States defines conditions for the establishment of road funds in Union Member States, their management, as well as provision of their resources. Member States had one year to comply with the Directive. To that end, in Togo, the Autonomous Road Maintenance Finance Corporation (SAFER) was established in 2011 and amendments to its constituent instrument were adopted in March 2012 to make it a second generation road fund. A charge of CFAF 35 per litre of fuel is paid directly into SAFER's account. Its administrative, supervisory and management organs are being set up. In Burkina Faso, the 2007 decree to set up the Burkina Road Maintenance Fund (FER-B) was amended in 2011 to initiate transition to a second generation road fund (though its organs have been set up, for the moment, all resources are derived from public budgetary allocations). The establishment, by Burkina Faso, of a road maintenance fund that enjoys full autonomy is a condition for this project.

In 2012, estimated resources amounting to CFAF 18 billion for FER-B and CFAF 9 billion for SAFER will normally be sufficient to meet routine road network maintenance needs in both countries. Both Governments have undertaken to supplement these resources through budgetary allocations for periodic road maintenance needs. The project roads and related rural roads form part of the classified road network in both countries, and are therefore eligible for financing by the Road Fund. Annual 18

maintenance requirements are estimated at CFAF 136 million, or 2% of the Road Fund resources in Togo, and CFAF 101 million, or 1% of the Road Fund resources in Burkina Faso. Submission of the road maintenance budget and a report on its use to the Bank by both Governments each year is a condition for this project.

4.5 Risk Management

The main risks that could hamper achievement of the project outcomes are: (1) the juxtaposed border checkpoint at Cinkansé is not fully operational; (2) the application of axle-load regulations in both States is not effective; (3) persistent harassment at checkpoints on the corridor due mainly to lack of a single security for transit operations; (4) delay in upgrading the existing road funds in both countries to second generation road funds with sufficient autonomous resources. The first risk will be mitigated by the fact that WAEMU and both States have undertaken to adopt appropriate measures to make this checkpoint operational through the newly established ad hoc commissions comprising all stakeholders. Evidence that the juxtaposed border checkpoint (PJC) is fully operational is a condition of this project. The second risk will be mitigated by: (a) the fact that axle-load and gross weight control is now carried out upstream by installing axle scales at all loading points (before exiting Lomé Port, the cement factory, cargo areas, etc.); (b) installing axle scales across all West African countries; (c) securing shipments by accelerating containerization and sealing to prevent the modification of shipments during transit; (d) the management of weighing stations entrusted to autonomous entities with a performance contract; and (e) monitoring of the application of regulations by commissions in which development partners are stakeholders. The third risk will be mitigated by the regular sensitization of policy-makers through OPA reports, the goods tracking and radio-communication system, and the interconnection of customs data processing systems provided for under the project, as well as the institution of a single security for transit operations. Amendment, by Togo, of the instrument on the inter-State road transit operations guarantee fund is a condition for this project. The fourth risk will be mitigated by the fact that both countries have, in accordance with WAEMU Directives, embarked on the establishment of second generation road funds.

Risks that may hamper project implementation are: (1) increase in the cost of works in relation to the estimated budget; (2) long procurement deadlines and delays; and (3) difficulties and/or delays in mobilizing counterpart contributions. The first risk will be mitigated by the availability of comprehensive implementation studies updated in 2011, a realistic cost estimate based on similar work contracts launched between 2010 and 2011, adequate provision for price escalation, Advance Procurement Actions that will reduce the time between the conduct of studies and the start-up of works, and measures taken to ensure broad competition during bidding. The second risk will be mitigated by the fact that the two executing agencies will be supported by technical assistance that will provide a procurement expert in good time and by the close assistance that will be provided by the Bank’s Offices in both countries to the agencies. The third risk will be mitigated by the fact that Burkina Faso's counterpart contribution to the components to be funded by Bank has been reduced considering that the country is eligible for 100% project financing by the Bank. As regards Togo, the expected total counterpart contribution for the entire project of about CFAF 7.8 billion, or about CFAF 2 billion annually, is bearable when compared to the CFAF 2.3 billion spent each year on the maintenance of road sections of the corridor. To secure counterpart resources, the opening of a counterpart contribution account and its regular replenishment with resources is a condition for this project. 19

4.6 Knowledge Building

The knowledge that would be acquired from project implementation will concern best road project management and monitoring and evaluation practices within a regional context. The best practices will be disseminated among project stakeholders through periodic meetings and briefing notes. The emphasis placed on project impact assessment is mainly intended to meet knowledge building needs. Indeed, the establishment of the baseline situation before the start-up of project activities will provide a basis for comparison in order to realistically assess the level of achievement of project impacts. The data for comparison will be derived from the evaluation of project outcomes upon the completion of works. The organization of a national workshop will help to disseminate knowledge acquired from the studies. It will also be necessary to focus on road maintenance through the mechanism that will be established to ensure investment sustainability.

The key knowledge and lessons learned will be managed from a relational database at the DGTP in Togo and the DGR in Burkina Faso. This database will effectively facilitate the management of all knowledge acquired from activities, outcomes, key outputs and lessons learned from this project. Summaries could be published on the Bank's website.

5 LEGAL FRAMEWORK

5.1 Legal Instrument The Bank will provide grants and loans to the Governments of Togo and Burkina Faso to help finance this project.

5.2 Conditions Associated with Bank’s Involvement A. Commitments Burkina Faso and the of Togo undertake to take appropriate steps to ensure that financial resources provided by other donors are made available in a timely manner.

B. Conditions precedent to Effectiveness of the ADF Grants and Loans to Togo and Burkina Faso and the FSF Grant to Togo

Effectiveness of the ADF and FSF grants shall be subject to signature of the related Protocols of Agreement by the Governments of Togo and Burkina Faso and the Bank. Effectiveness of the ADF loans shall be subject to fulfillment, by the Borrowers, of the conditions specified in Section 12.01 of the General Conditions.

C. Conditions precedent to First Disbursement of the ADF Grants and Loans and the FSF Grant (i) The Republic of Togo shall submit to the Bank: (a) evidence of opening two accounts for the counterpart contributions - one of them shall be for the operating resources of the Project Implementation Monitoring Unit and the other for its contribution to the financing of the works (paragraphs 2.4.3 and 4.5.2); and (b) evidence of the payment of compensation for expropriations (paragraph 3.2.13);

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(ii) Burkina Faso shall submit to the Bank evidence of replenishing the counterpart contribution account already opened for the operating resources of the Project Implementation Monitoring Unit (paragraphs 2.4.3 and 4.5.2); and

(iii) Burkina Faso and the Republic of Togo shall submit to the Bank the instrument establishing the Joint Technical Committee (CTM) and appointing its members (paragraph 4.1.4).

D. Other Conditions for the ADF Grants and Loans and the FSF Grant

(i) Burkina Faso and the Republic of Togo shall: (a) submit to the Bank, no later than 31 December 2012, the signed agreement delegating project ownership to WAEMU for the management of the goods tracking system and the monitoring and evaluation of transport facilitation impacts (paragraph 4.1.1), and (b) take appropriate steps to make the Cinkansé Juxtaposed Border Checkpoint (PCJ) operational no later than 31 December 2012 (paragraph 4.5.1);

(ii) The Republic of Togo shall submit to the Bank, no later than 31 December 2012, the signed instrument amending the text on the inter-State transit operations guarantee fund (paragraph 4.5.1);

(iii) Burkina Faso and the Republic of Togo shall submit the road maintenance budget and a report on its utilization each year to the Bank (paragraph 4.4.4);

(iv) Burkina Faso shall: (a) replenish no later than 31 March of each year the counterpart contribution account for the operating resources of the Project Implementation Monitoring Unit, (b) before the end of 2013, establish a road maintenance fund that enjoys full autonomy (paragraph 4.4.3);

(v) Burkina Faso and the Republic of Togo shall submit to the Bank no later than 31 January 2013 the financing agreements concluded with the WADB and EBID, and the Republic of Togo shall submit to the Bank no later than 31 December 2013 the financing agreement concluded with the IsDB (paragraph 2.4.2).

5.3 Compliance with Bank Policies This project is consistent with all applicable Bank policies.

6 RECOMMENDATION

Management recommends that the Board of Directors should approve the proposed: (i) UA 30.23 million ADF grant to the Government of Togo and UA 84.60 million ADF grant to the Government of Burkina Faso; (ii) UA 17.80 million ADF loan to the Government of Togo and UA 21.53 million ADF loan to the Government of Burkina Faso; and (iii) UA 21.50 million FSF grant to the Government of Togo, to finance this project in accordance with the conditions specified in this report.

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APPENDIX I I. Comparative Socio-economic Indicators Togo/Burkina Faso - Development Indicators TOGO BURKINA FASO Developing Social Indicators Africa 1990 2011 * 1990 2011 * Countries Area (000 Km²) 57 274 30 323 80 976 Total Population (million) 3.7 6.2 9.3 17.0 1 044.3 5 732.2 Annual Population Growth (%) 2.5 2.1 2.7 3.0 2.3 1.3 at Birth – Total (years) 57.7 63.6 47.4 53.7 56.0 67.1 Rate (per 1000) 100.8 67.1 106.9 77.8 78.6 46.9 Number of Physicians (per 100 000 people) … 5.0 … 6.0 58.3 109.5 Births Attended by Trained Health Personnel (%) … 62.4 … 53.5 50.2 64.1 Child Immunization against (% of children aged 12-23 months) 73.0 84.0 79.0 94.0 77.9 80.7 Primary School Enrolment Ratio (% of Total) 95.8 139.6 30.1 75.6 100.4 107.2 Girls/Boys Primary School Enrolment Ratio (%) 64.4 89.9 63.2 91.0 90.9 100.0 Illiteracy Rate (% of population >15 years) … 56.9 … 28.7 65.1 80.3 Access to Safe Water (% of population) 49.0 60.0 34.0 76.0 64.5 84.3 Access to Health Services (% of population) 13.0 12.0 5.0 11.0 41.0 53.6 Value of HDI (Rank on 179 countries) … 162.0 … 181.0 n.a n.a Human Poverty Index HPI-1) (% of population) … 36.6 … 51.8 34.7 … TOGO BURKINA FASO Macroeconomic Indicators 2000 2009 2009 2010 2010 2011 GNI Per Capita, Atlas method (current USD) 328 527 493 544 551 … GDP (current USD million) 1 291 3 156 8 327 9 203 3 259 3 710 Real GDP Growth (annual %) -1.2 3.2 3.2 7.2 3.6 3.4 Real GDP Growth Per Capita (annual %) -4.1 1.0 0.2 4.1 1.5 1.3 Gross Domestic Investment (% of GDP) 15.9 18.7 21.1 21.9 20.1 21.1 Inflation (annual %) 1.9 1.9 2.6 -0.7 3.4 4.1 Budgetary Balance (% of GDP) -4.7 -2.8 -4.8 -5.8 -3.3 -2.5 Trade, External Debt and Financial Flows 2000 2009 2000 2009 2010 2011 Variation in Volume of Exports (%) -9.9 16.7 66.9 116.0 -5.3 2.8 Variation in Volume of Imports (%) 9.1 9.2 -10.7 33.9 -3.4 6.9 Variation of Terms of Trade 19.3 -0.1 -20.1 -12.4 -1.1 1.9 Trade Balance (USD million) -136.9 -413.0 -482.0 -129.5 -476.8 -569.2 Trade Balance ( (% of GDP) -10.6 -13.1 -5.8 -1.4 -14.6 -15.3 Current Account Balance (USD million) -112.4 -210.3 -352.6 -299.3 -225.0 -278.0 Current Account Balance (% of GDP) -8.7 -6.7 -4.2 -3.3 -6.9 -7.5 Debt Servicing (% of exports) 2.8 4.6 4.6 … 5.1 2.9 Total External Debt (% of GDP) 9.7 55.4 23.2 23.4 16.8 16.0 Total Net Financial Flows (USD million) 60.3 554.2 1079.7 … … … Net Official Development Assistance (USD million) 69.6 499.0 1083.9 … … … Net Direct Investments (USD million) 41.5 50.1 171.4 37.1 41.1 … International Reserves (months of imports of goods & services) 2.6 3.7 5.1 3.3 3.6 … Private Sector and Infrastructure Development 2000 2005 2000 2005 2010 2011 Time required to start a business (days) … 65 40 14 84 84 Investor protection index (0-10) … 3.7 3.7 3.7 3.7 3.7 Stationary telephone subscribers (per 1 000 inhabitants) 8.9 11.6 6.4 8.7 35.5 … Internet users (per 1 000 inhabitants) 10.4 80.2 44.6 346.6 406.9 … Asphalted roads (000) 31.6 … … … … … Goods transported by rail (million - km) … … … … … … Source: ADB Statistics Department Database, from national and international sources. * Most recent Year. Last updated: October 2011

APPENDIX II

Bank's Ongoing Projects Portfolio in Togo as at 31/3/2012 (Amount in Units of Account) Loan/Grant Closing Disbursement Project Name Approval Date Amount in Age Date Rate UA National Projects Portfolio Integrated Water Supply Information 1/12/2009 3/1/2011 1 340 212 35.05 2.08 System Aflao-Sanveecondji Road Project 1/13/2010 12/31/2012 25 250 000 20.00 1.08 Economic and Financial Governance 10/5/2010 12/31/2013 4 850 000 9.31 0.35 Support Economic and Financial Governance 10/5/2010 12/31/2013 4 360 000 0.00 0.35 Support Humanitarian Aid to Flood Victims 4/2/2009 500 1.86

Lomé Port Container Terminal 15/7/2011 60 000 000

Multinational Projects Portfolio Project for Rehabilitation of the Lomé- Road and Transport 5/10/2011 31/12/2016 4 810 000 0 Facilitation on the -Lagos Corridor Phase Bank's Ongoing Projects Portfolio in Burkina Faso as at 31/3/2012 Loan/Grant Disburse Project Name Approval Date Closing Date Age Amount in UA ment Rate

National Projects Portfolio Accelerated Growth Strategy and Business 20/9/2011 31/12/2012 50 000 000 50.00 0.53 Environment Support Programme Electrical Infrastructure Strengthening and Rural 7/7/2010 31/12/2014 25 150 000 1.03 1.73 Electrification Project Community Agricultural Fertility Investment 27/10/2004 30/6/2012 6 400 000 93.80 7.41 Project Small Dams Development Project 12/12/2002 30/6/2012 10 000 000 67.23 9.28 Gnagna and Kouritenga Rural Development 21/7/2006 31/12/2012 12 500 000 73.24 5.68 Support Project Project for Support to Institutions Responsible 27/10/2006 31/12/2012 2 460 000 87.74 5.42 for Public Resource Management Education V Project 16/7/2003 30/12/2012 17 000 000 66.01 8.69 Centre-East and North Regions Health 27/7/2005 31/3/2013 25 000 000 60.84 6.66 Development Support Project Rural Drinking Water Supply and Sanitation 24/7/2007 30/9/2013 20 000 000 37.36 4.68 Project Creation of Tsetse-free Zones 8/12/2004 30/6/2013 9 580 000 64.44 7.30 Multinational Projects Portfolio Air Safety Oversight Capacity Building Programme (COSCAP) (UA 4.6 million of 27/4/2005 30/6/2012 4 600 000 6.91 which UA 1.30 million for WAEMU) WAEMU/-Road Programme 1 (UA 68 million of which UA 3.5 million for WAEMU 19/11/2003 31/12/2012 68 000 000 71.33 8.35 and UA 23.62 million for Burkina Faso) ECOWAS and Development Support 29/9/2004 31/12/2012 10 000 000 60.08 7.49 Project Higher Education Support Project/WAEMU 24/7/2006 31/12/2012 20 000 000 23.59 5.67

APPENDIX II

Regional Market Reform Programme 4/12/2006 31/12/2012 4 000 000 39.45 5.31 Burkina Faso/Niger: Dori-Téra Road Project 21/10/2006 31/12/2011 12 700 000 94.3 5.43 Supplementary Loan to Burkina Faso to Finance 25/11/2008 30/6/2012 18 000 000 85.48 3.34 the (WAEMU/Ghana) Road Programme 1. Burkina Faso Sector Support Project 29/11/2006 31/12/2013 10 000 000 59.79 5.33

APPENDIX III

MAJOR RELATED PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT PARTNERS IN BOTH COUNTRIES

III-1 – BURKINA FASO

Financing Cost (in Loan Agreement Loan Agreement No. Project Name Source of Financing CFAF million Signature Date Expiry Date Excl. Tax) WAEMU/Ghana Road ADF (Loan and 1 49 636 12/10/2004 31/12/2012 Programme 1 Grant) WAEMU/Ghana Road 2 Programme 1 (Supplementary ADF (Loan) 13 139 14/7/2009 30/6/2012 Loan) Niger/Burkina Faso: Dori- ADF (Loan and 3 Téra Road Development 11 058 16/11/2006 31/12/2011 Grant) Project ABEDA, KFAED, Tarring of the Diébougou- IsDB, SFD, 4 Yegueresso Road and Hamélé 24 000 30/4/2007 2011 WADB, Burkina Slip Road Faso Reinforcement of the 5 IDA 60 555 8/7/2008 1/12/2013 Ouagadougou-Sakoinsé Road ABEDA. KFAED. Tarring of the - 6 IsDB, SFD, OPEC, 30 000 16/11/2008 2014 Dédougou Road Burkina Faso WAEMU own WAEMU own Rehabilitation of the funds (start of funds (deadline 7 Koupéla-Fada-Piega- Niger WAEMU 228 studies - 20 for conduct of Border Road June 2011 ) studies - 12 months)

III- 2 –TOGO Financing Cost (in Source of Loan Agreement Loan Agreement Project Name CFAF million Financing Signature Date Expiry Date Excl. Tax) Rural Roads Rehabilitation and Bridges WADB 4 300 22 May 2006 1 Nov. 2009 and Water Supply Structures extended to 31 Construction Project (6 structures) July 2011 FAIR-WAEMU 1 074 9 Sept.2006 7 June 2008 Aflao- Sanveecondji Road ADF 18 510 10 Feb.2010 31 Dec. 2012 Rehabilitation and Modernization Project (Port Roundabout-Avépozo section) Aflao-Sanveecondji Road Rehabilitation WB 13 000 7 April 2010 6 April 2015 and Modernization Project - Aneho-Fre section (7.76 km) Bassar-Kabou Road Development and BIE 6 691 2009 2011 Tarring Project (27.5 km) Kabou-Guerrinkouka Road Development Fund 6 920 24 March 2010 31 Dec. 2015 and Tarring Project (35 km) GuerrinKouka-Katchamba Road Tarring IsDB 5 600 16 April 2010 15 April 2013 Project (26 km) Dapaong-Borgou- Road WADB 40 000 24 May 2011 31 Dec. 2014 Development and Tarring Project (87 km)

Development of the Alédjo, Défalé and EXIM BANK 84 000 10 Dec. 2010 9 Dec. 2013 Tandjouaré-Cinkassé Slip Roads and the WADB 6 500 outer Lomé Slip Road (133 km) IsDB 90 500 Dapaong-Ponio-Fre-Burkina Road IsDB 4 518 25 Jan. 2009 30 July 2011 Tarring Project (38 km) WADB 8 465 4 Jan. 2013 Togo 632 Total 13 615 Kpalimé - Atakpamé Road BIE TOGO 8 580 2009 2011 Rehabilitation and Reinforcement Project (22 km) PONCIN Project for the construction of Fortis Bank 2 247.00 18 Aug. 2006 25 modular steel bridges on main earth EBID 4 500.00 22 Jan. 2011 21 May 2011 roads and rural roads (in 2 phases). 13 Togo 1 500.00 bridges for the first and second phases; Total 8 247.00 12 bridges for which financing should be sought. Technical and economic study of ADB 365 10 Feb. 2010 31 Dec. 2012 Community Road CU 19: Nyamassila- Bagou-Goubi-Bila-Kambolé Balanka- Benin-Fre Benin + the Balanka- Kouloumi and Koussountou-Goubi slip roads (180 km) Technical and economic study and FAIR-WAEMU 178 9 Oct. 2009 31 Dec. 2012 environmental and social impact assessment of Community Road CU 18: Ghana Border-Natchamba-Kéméridè- Kara- Kéméridè-Benin Border (115 km) Technical and economic study and EU 25.00 environmental and social impact EBID 708.00 10 March 2004 8 Jan. 2007 assessment of the - - extended to 31 Noepé Road: Ghana-Togo Bilateral Dec. 2012 Project (1.65 km)

APPENDIX IV

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