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FOROmCUL USEONLY

Public Disclosure Authorized t-'1LCRU :C7Hh COPY R tepNo. P-5529-ANG ki:Xe-.r N.-. V- 55l;::94-A.NU.TIy> : ( i1- ALUVAI'EZ. C/ X;4 31,, J724 3/ AlI:-;1N

MEMORANDUMAND RECOMMENDATION

OF THE

PRESIDENTOF THE

INTERNATIONALDEVELOPMENT ASSOCIATION Public Disclosure Authorized TO THE

EXECUTIVEDIRECTORS

ON A PROPOSED CREDIT

OF SDR 28.3 MILLION

TO THE PEOPLE'S REPUBLICOF ANGOLA

FOR AN

Public Disclosure Authorized INFRASTRUCTUREREHABILITATION ENGINEERING PROJECT

JUNE 20h 1991 Public Disclosure Authorized

This documehatas * resicted ditsibuion and may be and by recpiens only In the peonmne of their oidalues cIotnsts may not oterwie be disclosed witho WorldBank athodzation. CURRENCYEQUIVALENT (as of March 31, 1991)

Currency Unit - New Kwanza (NKa)

Official Rates USS 1.00 8 NRa 60.0

FISCAL YEAR

January 1 - December 31

WEIGHTS AND MEASURES

1 meter (m) 8 3.2808 feet (ft) 1 kilometer (km) a 0.6214 miles (mi) 1 metric ton (tonnes) 8 1.023 short tons

GLOSSARY OF ABBREVIATIONS

AfDB Q African Development Bank CFBO Benguela Railway Company CFL Luanda Railway Company CPM Mocamedes Railway Company DANIDA = Danish International Development Agency DNA NNational Directorate of Waters DNCF - National Directorate for Railways. MINTEC DNMMP National Directorate for Merchant Marine and Ports, MINTEC DNOE Q National Directorate for Engineering Works, MINCONS DPOE Q Provincial Directorate for Engineering Works DTM 8 Directed Track Maintenance EEC European Economic Community ERAS G National Water and Sanitation Company EPAL 8 Luanda Provincial Water Company ERR Economic Rate of Return ETP 8 Public Transport Company FINIDA - Finnish International Development Agency GOA Q Government of Angola GPL Luanda Provincial Government HDM 8 Highway Design and Maintenance Model ICB International Competitive Bidding INE Angolan National Statistical Institute iNEA Angolan Highway Institute, MINCONS INP - National Institute for Physical Planning, MINPLAN IRI - International Roughness Index LPTS - Luanda Port Transport System MINCONS 8 Ministry of Public Vorks and Urban Developmentl!

I/Formerly the Ministry of Construction

MINFIN - Ministry of Finance MINPLAN Ministry of Planning MINTEC - Ministry of Transport and Communications - - man-mnorthe Musseques = Human Settlements on the Fringes of Urban Areas N.A. Not Applicable NBHN RNational Basic Highway Network NORAD 8 Norwegian Agency for Development Cooperation NPTS Namibe Port Transport System ODA Overseas Development Administration (U.K.) p.a. = per annum PER - Public Expenditure Review PIP - Priority Igvastment Program PPF - Project Preparation Facility PRE - Economic Recovery Program (1989-1990) SADOC - Southern Africa Development Coordination Conference SATTC 8 Southern Africa Transport and Telecommunications Commission TA a Technical Assistance TEU - Twenty-foot equivalent units TOR TTerms of Reference UICL - Urban Infrastructure of the City of Luanda UNCTAD - United Nations Conference on Trade and Development UNDP - United Nations Development Programme VOC - Vehicle Operating Cost VPD * Vehicles Per Day 10OR0ICIL USE ONLY

PEOPLE'S REPUBLIC OF -ANGOL INFRAETRUCTURBREHABILITATION (;0DIBERINGIRE) PROJECT

Table of Contents

Credit and Project Summary ...... 1

Part I - COUNTRYPOLICIES ANDTBANK GROUP ASSISTANCE STRATEGY 1

Background ...... a ...... Economic* Financial and Social Perfonmance ...... 2 Attemptsat EconomicRefom ...... 4 Recent Political Developments...... 6 Central DevelopmentIssues and Prospects ...... 7 Bank Group Country Assistance Strategy and Operations . . . 8

artII - THECRDIT ...... 11

Rationalefor IDA Involvement.. . .9..0 e .....* * # . 12 ProjectObjective ...... 12 ProjectD uscription... o . . . .a .* .$ 12 Project Cost and Tfimetable ...... 13 Agreemets dt...... 13 Aenefits...... 13 Risks ...... 14 Er.virorntal Aspects ...... 14 Recomendation ...... 14

SCHEDULS

A. Summary Project Cost and FinSUcing Plan ...... 15 B. ProcurementHethods and Disbursements .. . . . 16 C. Timetable of Key Project ProcessingEvents . . . 18 D. Status of Bank Group Operations in Angola . . . 19

Thisdocument has a stcd disibution and maybe ued by reipientsonly in theperforMINre of their offial dutie its contentsmay not othrwe be dilosd withoutWodd ank authorization. TECHNICALJNNE TO Tog DllRAMM OP THE . . . . 20

overviewr ....* 21 Detailed Pro,1ect Descrfption A.1. Project Components

a. The Namibe Transport System

(i) Port of Namibe ...... 23 (ii) Caminho de Ferro de Mocamedes (CPM) . . . . 29

b. The National Basic Highway Network ...... 37

c. The Luanda Transport System

(M) Port of Luanda ...... 43 (ii) Caminho de Ferro de Luanda (CFL) . . . . . 50

d. Urban Infrastructure

(i) Water Supply, Sewerage, Storm Drainage and Solid Wastes Disposal of Luanda ...... 58 (ii) Land Use Strategy Plan and Musseque Upgrading ...... 63

A.2 Technical Assistance and Training ...... 68

A.3 Detailed EstlmatedCostedCoat...... 70

Prolect Administration and ImDleaentation

R.1 Procurement and Disbursement Arrangements . . . . * . 72

B.2 Environmental Aspects ...... 75

B.3 Project Execution ...... 77

B,b fuporvision Plan ...... * ...... 82

3.5 Implementatio Plan ...... 84

Map IBRD #22945 PEOPLE'S REPUBLIC OF ANGOLA

INFRASTRUCTUREREHABILITATION ENGINEERING PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: People's Republic of Angola

Beneficiaries: The Ministry of Planning, the Ministry of Transport and Communications, the Ministry of Public Vorks and Urban Development, the State Secretariat for Energy and Water, and the Luanda Provincial Government.

Amount: SDR 28.3 million (USS 37.7 million equivalent)

Termst Standard IDA terms, with 35 years maturity

Onlendinx Terms: Standard IDA

Financing Plans Local Foreign Total a of Total

(US&million)

Government 4.8 - 4.8 11.3 IDA - 37.7 37.7 88.7

Total 4.8 37.7 42.5 100.0 mm- mm

Economic Rate of Return: Not Applicable

Staff Appraisal: None

Mao: IBRDt 22945 oW tEl ITEAONL DEVELOUDITASSOCIATQON TO TM mEECUTIE DIRCSRS ONA PROPOSEDCREDIT tO ANGOLA _10AAN IMMALUMMUR REULITATIOK ETNINEERIif CREDIT

1. The following memorandum and recommendation on a proposed engineering credit to Angola for SDR 28.3 million (US$ 37.7 million equivalent)is submittedfor approval.The proposedcredit would be on standardIDA terms with 35 years maturity. It would help to financean engineeringtechnical assistance project. Part I of the presentdocument describesthe country'spolicies and the Bank'sassistance strategy. It drawsupon the latestCountry Brief for Angola,which was distributedto the Executive Directors in January1991, as well as an IntroductoryEconomic Review (ReportNo. 7283-ANG)which was distributedto the ExecutiveDirectors in June 1990. Part II describes the credit, the rationalefor IDA involvement,project objectives, agreements reached and the risks of the operation.

PAR? I - COUNTRYPOLICIES AND UANRGROUP ASSISTANCE STRA5DGY Backaround 2. Angola,with a populationof about 10 million,growing at an annual rate of about 2.8 perceAt,is one of the richestcountries in Africa in terms of natural resourceendowment (e.g., oil, diamoads, and fertile land). At the same time, its economyis one of the most distortedof the continent.-Since independence in 1975,the countryhas developedan economy highlydependent on incomefrom oil. Availablestatistics on Angolaare poor and shouldbe treatedwith caution. GNP per capita,which is estimatedat US$620in 1989,is closelylinked to oil prices. The oil sectorrepresents abouthalf of the GDP. In 1991,oil exportearnings were aboutUS$3 billion, or aboutUS$300 per capita. The oil industry,developed as an enclave,has grown rapidlysince 1975, and by early 1991, oil productionreached about 460,000barrels per day. By contrast,the non-oilsector's performance has been poor since independence.It is estimatedthat non-oilsector's output growthper capitahas been negativesince the early 1980's. Angola,which was an importantnet exporterof agriculturalproducts before independence, has in recentyears been increasinglydependent on food imports (and food aid) to supplyits urban population.The capacityutilization of existing and the developmentof new manufacturingindustries has been severely affectedby the lack of inputs,spare parts and maintenanceservices, as well as by a distortedpolicy environment.

S. The Government'sfailure to revivethe economyafter independence is largelyexplained by three factorsi(i) a fifteen-yearold civil war, which has made much of the countryside too insecure for agricultural production and transport,has required heavy military expenditures (contributingto chronicallylarge fiscal deficits,despite substantial revenuesfrom oil), and has destroyeda substantialpart of the economicand socialinfrastructures (ii) unusually severehbman resource constraints, due -2- to the massive exodus of Portuguesesettlers at independence; and (iii) misguided economic policies which have created a highly distorted system with a formal economy (largely public) managed by administrative controls, and a large parallel economy (mostly private). Ebconomic. Financial and Social Performance 4. Since independence, the Angolan economy has been ravaged by a long and costly civil war and by severe distortions commonly observed in centrally- plannedeconomies. The fall of domesticproduction and agriculturalexports that occurredafter independencewas primarilycaused by the destructionof the country'sstock of human and physical capital, and aggravatedby macroeconomicpolicies which favoredconsumption. In responseto adverse domestic conditionsand external shocks which reduced the country's resources,the Governmentresorted to rigidprice controlsand a systemof administrativelyallocated foreign exchange, instead of appropriateprice policies (exchangerate adjustments,corrections in relativeprices) and fiscaladjustments. An expansionarymonetary policy maintained the levelof domestic consumption,mostly in the urban areas, at the expense of investments to Increase the productive base of the economy. 5. In many cases, officialprices have not been changed since independence,and the few price adjustments which have taken place have been very modest when compared with increases in the nominalpurchasing power of the population. As a consequenceof these pricingpolicies, the domestic productionof many goods has been discouraged,relative prices have been severely distorted,waste in the consumptionof some goods has been stimulated,and wide gaps have appearedbetween the demandand the supplyof practically all goods and services. The exchange rate, which has been pegged to the US$. was unchanged at 29.92 Kx per USS between 1975 and March 1991, when it was adjustedto 60.00NKx per US$. Exchangerates prevailing in the parallelmarket have, however, sometimes been as high as a hundredtimes the 6fficial rate. In the absence of adequate adjustments, the exchange rate became overvalued and excess demand for foreign exchange was curtailed throughadministrative controls. As a result of these noliciesand the hostilities,investment in the non-oil sector droppel substantially, traditionalagricultural exports practically disappeared, non-oil domestic output per capita declined,and the country became almost exclusively dependenton oil and diamondexports for its foreign exchange earnings. la.o To compensatefor the shrinkingd-m fnon-oil)"'ic production per capita, growing imports financed by oil income supplied the country with consumption goods. Government policies encouraged consumption through widespread consumer price subsidies,the accumulationof sizeablefiscal deficits and a system of remuneration 'in kind" to Governmentpersonnel. More specifically, to protect the purchasing power of workers in the formal sector, particularly civil servants,the Governmentintroduced a systemof 'buyingrightss in officialshops (suppliedwith importedconsumer goods) in partiallieu of cash paymentsof wages. Throughthis system,a relatively small portion of the populationhas access to the bulk of the country's imported consumer goods, at prices that are substantiallybelow those prevailingin the parallelmarket. Governmentemployees, in turn,trade part of these goods in the parallelmarket for food and consumptiongoods which are unavailable in official shops (e.g., vegetables, fish, etc). - 3 - Manufacturingenterprises also sell partof theirproducrion at low pricesto theirown ewployees,who also trade on the parallelnarket. 7. Lack of financialdiscipline is a seriousproblem at all levels of public administration and enterprises. A growing part of the formal economyhas been financedthrough oil revenues, which in recent years have providedover 80 percentof governmentincome. In spiteof the rapidgrowth of oil revenuessince 1986, the budgethas consistentlybeen in deficitas non-oil revenue declined continuously, while expenditures remained at high levels. A large share of government expenditure, including most of the militaryexpenditure, is outsidethe budget. It is estimated that military expendituresrepreser.' about 25 percentof GDP. In 1988-90,the overall budget deficit (includingextra budgetary expenditure)was on average equivalentto about one quarterof GDP at official ices. However,the underlying deficit valued at more realistic prices i stimatedto be lower (about12 percent). 8. Throughout the post-independenceperiod, an accommodating monetarypolicy fully monetized the country'ssizeable fiscal deficits. As a result,a growingexcess liquidityrapidly emerged but its inflationary lmpact did not show up in the officialprice indices because of the administrativelycontrolled official prices. These policiesled to the emergenceof widespreadparallel marketss price differentialsbetween the officialand parallelmarkets rapidly attained 2,0002 to 10,0002. This,in turn, reinforcedthe existing incentivesto divert resourcesfrom the officialto the paralleleconomy. Money substitutes(such as importedbeer) and bartertook On an increasing role in internaltrade, further complicating the management of monetary policy. Annual inflation in the parallel market is estimatedto have reachedthree-digit levels during 1987-90. 9. Foreign and domestictrade have been hamperedby rigid and pervasiveGovernment regulations and restrictions.There is a predominance of inefficientpublic enterprises, not only in manufacturing,but also in foreigntrade, wholesaling, and in the retailnetwork. Althoughthere are some privateent, -rises, their role in providingcompetition to the public sectoris weak, becauseof the administrativeallocation of importsand fixed profitmargins imposed by the Government.Agricultural production has been particularlyaffected by the war, the shortcomingsof the trade system,and the disappearanceof bush traders. In the earlierperiod of its economic history,when the countrywas not engulfedin armed conflicts,bush traders had played an importantrole in the marketingand distributionsystem by pro-idingconsumer goods in exchangefor agriculturalproducts. 10. Angola'sexternal debt at end-1989is estimatedat over US$7 billion(including US$1 billionin interestarrears), of which about US$3.5 billionwas owed to the SovietUnion, US$2.8 billion to Paris Club and other Western creditors (mainly Brazil and Portugal), and the remainder to Eastern Europeancountries and Cuba. Externaldebt representsabout 100 percentof GDP. About one-thirdof the total debt is military. In June 1989. the Soviet Union rescheduledits loans on favorableterms (10 yeaz.sand 3 percent),including arrears and maturitiesfalling due through1990. In July 1989, the Paris Club rescheduledalmost US$0.5 billion in arrears and maturitiesfalling due throughSeptember 1990; the otherWestern creditors rescheduled their own debt on the sameterms, The remainingmaturity profile - 4 - is unfa:orable, with paymentsbunched over the period 1991-93. Thus, scheduleddebt servicewould absorbabout one-third of projectedexports of goods and services in 1991-93. Assumingfurther Soviet rescheduling at termscomparable to thoseof 1989,and "Torontoterms" for Westerncreditors, overalldebt-servicing capacity of the existingdebt couldbe sufficientto handle the flow of debt-servicepayments in the medium term, without compromisingthe long-termdebt profile of the country.However, the problem of arrsarswill in itselfrequire an orderlyresolution. Given the above, Angola'scapacity to serviceadditional debt at non-concessionalterms is very limited. 11. The socialconditions prevailing in Angolaare poor by African standards. This is the combinedresult of the civil war, inappropriate policies,rapid migration to the citiesand emigrationof skilledmanpower. Life expectancyat birthhas been estimatedat 44 years,the izifantmortality rate is 288 per thousand,less than 30 percent of the populationhas access to healthservices and safewater, and despitethe Government'sachievements in the field of education,the adult literacyrate is still 41 percent. Disparityin socialconditions among various regions are substantial,as a resultof the war-induceddestruction. Poverty in the ruralareas is acute. In additionto the stagnationin economicactivity, the main contributing factorsfor ruralpoverty are: the interruptionof normallinks to the cities , the drasticdecline of inter-regionaltrade, lack of incentivegoods, and the lack of accessto socialservices.

12. These factors particularlyaffect women, consideringtheir predominantinvolvement in agriculturalactivities, and their greater relativeneed for socialservices. Nevertheless,womelln access to basic educationalopportunities has been expandedand the currentlevel of literacy amongwomen, although still low at 33 percent,is substantiallyhigher than in earlieryears. Also, the Governmenthas adopteda more meritocratic approachto the assignmentof responsibilitiesby genderthan is the case in most other Sub-SaharanAfrican countries. Vomen figureprominently in the civilservice, including in high-levelpositions.

Atteunts at Econoic Reform 13. Recognizing that Angola's economic distortions and imbalances are due in large part to inapDropriate economic policies, the Government announced in 1987 an ambitious program of Economic and Financial Restructuring (SEP). The basic objectives of the program were to stabilize the economy and Improve production incentives by adjusting price levels (including the exchange rate) in the formal economy. The proposed reforms, had they been implemented, would have constituted a major departure from the way the economy had been managed and included:Ci) a limited adjustment of the exchange rate, which would have still left a wide margin between the officialand the parallelexchange rates; (ii) a reductionin the budget deficit,and a correspondingreduction in inflationaryfinancing; (iii) a program for restructuringpublic enterprises through divesture and liquidation;(iv) reform of the financial sector by encouragingthe establishmentof comuercialbanks and ensuringgreater availability of credit to the private sector;and (v) limitingprice controlsto only selected essential goods. v 5 -

14. Whlileths overalldirection of proposedreforms was appropriate, the measuresgenerally did not go far enoughto addressthe main structural distortions,notably in the area of the exchangerate. In any event,with the exceptionof a more accommodatingattitude towards parallelmarket activities,there has been little progressto date in implementingthe program. Since 1988, severallaws were audpted that attempted to providea broad frameworkfor structuralrefonm, but most of them have not been applied. A new packageof measures,including a 100 percentdevaluation, combined with wage increasesand price liberalizationwas announcedin early 1990 as part of a New ActionPlan. The exchangerate adjustment,however, was postponedfor over a year and the decontrolof most pricesis yet to be implemented.

15. A recent 'currency reform' in September1990 (creationof a new currency aid tight limits on convertibility from the old currency) temporarilybrought down the priceson the pArallelmarket. Hovever, this attemptto reduceexcess liquidity proved unsustainable. The experiencewith this 'reform"further undermined the public'salready shaky confidence in the Government'smanagement of the economy. Inflationis acceleratingand the gap betweenofficial and parallelexchange rates is wideningto the range which existedprior to the 'currencyreform". Yet anotherattempt to put forth a more consistentand comprehensiveset of stabilizationmeasures was made recentlyas part of the annualplan for 1991. While reaffirmingthe Government'scoumitment to adjustmentand reform,this plan still does not representthe kind of comprehensiveand crediblepackage of reforms which would be needed to address the fundamentaleconomic distortions of the Angolaneconomy. For example,the 100 percentdevaluation implemented in Marrch1991, is insufficientto addressthe substantialovervaluation of the New Kwanza. 16. The absenceof concreteand coherenteconomic reform measures to date may be attributedto variousfactors, including3 (i) the Government's preoccupationwith the war and, more recently,with an intensifyingpeace process (see paras. 18 and 19); (ti) the strongvested interestsin the existingsystem; (iii) the uncertaintywith regardto the politicalimpact of reforms;and (iv)weaknesses in economicmanagement, especlally the limited capacity for designingand executingdetailed action programswithin a consistentmacroeconomic framework, and the inadequatecoordination between the principalactors in the policymaking process. 17. A table summarizingAngola's economic performAnce since 1986 is presentedbelow. As has already been noted, however, it is based on statisticalinformation whose accuracy is suspect.After decades of warfare, it is highly likely,for instance,that the data for the non-oilsector is misleadinglyhigh. Strengtheningthe statisticalbass is one of the objectivesof the EconomicManagement and CapacityBuilding Project presented to the Board on June 19, 1991. - 6 -

anvilo Seleted EconoMIcIndicatoro ...... _- ..(se.) (Pr°oj.)

REAL MM RATES CDA Rp 12.1 12.1 15.2 1.5 2.6 oil 28.2 28.1 24.7 0.8 4.7 non-otl 2.6 -0.5 2.6 2.2 0.4 GDPIc.itO 9.8 9.8 12.4 -1.8 0 non-0I DP/cxplta a -8.8 0 40.6 -2.4 t>INL MM RklUE !/ Expott RAtE -40 0 8 21 -8 Import onto -1? 8 48 -0 -44 RATIOS DebtServte/Xgnfe . .. 40 42 40

ro Invetment/op ...... GrossDomestic Savings .. . .

Govt revenue/GOPc 48 84 2 29 Govt*xpendituro so 46 60 S4 Overalldeficit/GOP -10 -12 -26 -26 Currentaccount (s lliIon) -808 449 -409 -20 Currentaccount/ODP -4 8 -5 a INDICESg/ Consuer price j 108.0 108.0 127.7 127.7 Ral exchangerat .. . ..

Soure:t PlanninnMlnitnry. Dank and IMF Staff Estioate.. Baegdon onstant1986 Kwanza prices. Basedon currentUS$ priesr. :/ Currentrevenue, excluding grant. Totalexpenditure. Howvor, the largedifferen betwen officialand oarketpries make. It difficultto iterprt these,number. afteradjusting for prleodistortions in 1986,the deficitwould be 12 percentof GOP. ¢11986=M0 LuandbOfficial Prics

RecentPolitical Dewelogments

2.. War, be it to seek independence from Portugal or between the Government and UNITA(National Union for the Total Independence of Angola) in the post-independence period, has been the dominant fact of life in Angola for decades. The Governmmnt has, in March 1991, opened the door for a multiparty system through a revision of the constitution. In May 1991, a cease-firebetween MPLA (People's Movement for the Liberation of Angola - the Governmentparty) and UNITA forces was initialled, and so far, respected. The cease-fireis part of a comprehensiveagreement setting up a detailed timetablefor the integrationof the two armiesinto a nationalAngolan army, for the opening of the politicalsystem, and for the organizationof multipartyelections at all levelsof governmentbefore the end of 1992. The implementationof both the militaryand politicalaspects of the agreement would be monitoredby a "Political-MilitaryCoomission' comprising, besides - 7 -

the Governmentand UNITA, representativesfrom Portugal (whichacted as mediator)and the US and the Soi.&etUntion (both acted as observers). It would be assistedby a UnitedNations force of about600. Signatureof the peace agreementwas finalizedon May 31, 1991. 19. Thesedevelopments clearly constitute a major breakthrough.For the first tina since independence,an end to the civil war is clearlyat hand. Tf successful,this processwould also significantlyimprove the prospectsfor bettereconomic management, including the reallocationof a largeamount of publicresources from the mi1Ltaryto developmentuses. Over the shortterm, a numberof remainingmilitary and politicalissues will have to be solved. Among these,the orderlydemobilization of about 150,000 soldiersfrom both armiesis likelyto constitutea major challenge. CentralDevelonment Issues and Prosnects 20. The medium-termeconomic prospects of Angola depend on five factors. First,the conclusionof the civilwar, which, in additionto the heavyhuman cost, absorbs large amounts of financialresources and interferes with economicactivity. Second, the speed and determinationwith which economicpolicy reforms are undertaken,is crucialto restoringconfidence in the government'sability to manage the economy. Third, the urgent rehabilitationof the economicand social infrastructure,which has been heavilydamaged by decadesof war. Fourth,there is a need to get the economy-- especiallyits non-oil productive sectors (e.g., agriculture) back on its feet. And finally,there is a need to overcomethe constraintson longer-termdevelopment imposed by the shortageof skilledpersonnel and by environmentaldegradation. With peaceand an appropriatepolicy environment, Angolahas considerablegrowth potential in the mediumterm, in view of its abundantnatural resource endowment. 21. There is still, however, considerableuncertainty about the prospectsfor economicrecovery in the shortterm. Even if the war comes to an end, it will likely take some time beforethe countrysideis secureand .hero 4t wn affectivetransition to a peacetimeeconomv. In addition,during the 18 monthspre-electoral period which is expectedto followthe formal ceasefire,the prospectthat the GoverAmentwill be able to concentrateon improvingeconomic management is uncertain.The end of the war may also not resultin lmmediatesavings of resources;demobilization will take time,the integrationof the Governmentand UNITA forcesinto a nationalarmy may requireadditional spending, and thereare substantialcosts associated with the resettlementof displacedpeople. Moreover,while there are large benefitsto be gainedfrom the rehabilitationof Infrastructure,realizing them will take time and requirelarge investments.Finally, despite the Government'srenewed commitment to economicreform, weak economicmanagement is a serious constraint. Therefore,capacity building &ad technical assistance.. of the sort the proposedproject would provide-- will be crucialin strengtheningpolicy formulation and implementation.

22. In view of theseuncertainties and the Bank'slimited country knowledgeat this stage,growth prospects and externalresource requirements are difficultto assesswith any degreeof accuracy. However,given the e=pectedsubstantial reconstruction needs and skilledmanpower constraints, it is clearthat internationalassistance will be crucialduring the postwar - 8 - reconstructionphase. This asslstancewould have to consistmainly of economicpollcy advice, technical assLstance in generaland pre-investment studiesIn particular,and financialaid for infrastructurerehabilitation and development,as wvll as for facilitatingthe transitionto a peacetime economy.

Iank Groun Countrr Assistance Stratezi and Onerations 23. Angola joinedthe Bank Group in September 1989 and the proposed InfrastructureRehabilitation Engineering Project would be the second operation in the country. The relationshipbetween the Pank and Angolais, therefore,still at an incipientstate, and has not yet reachedthe scopeand intensitythat is rrevalentin the case of long-standingmembers of the institution.The Bank'sfirst strategicpriority is, therefore,to further nurturethis relatlonshipover the comingmonths by broadeningthe dialogue on the country'sdevelopment needs with the Angolanauthorities and the non- governmentalsectors through lending operations, economic and sectorwork, and aid coordination. As contact between the Bank Group and Angola expands, confidence will grow and the dialogue can mature into the type of partnership typical of other Borrowers.

24. A broader dialogue would pave the way for the Bank to pursue the objective of promoting economlc growth with equity in Angola. To achieve these objectlves, the Bank would follow an assistance strategy based on: (i) buildingcapacity in economlc management and helping prepare pre-investment studies; (ii) facilitatingthe transitionto a peacetimeeconomy; (iii) helpingrehabilitate the devastatedeconomLc and socialinfrastructure; and (iv) supporting the process of economic reform by helping in the design and implementation of macroeconomic and sector policies needed to stabilize the economy and restore production incentives. The Bank vould use considerable flexibility in desigaLng lts lending and economic and sector work programs in Angola, in view of the uncertainty surrounding the economic and political sltuation in the country. The volume of lending and the number of operations will depend on the Government's progress in implementing the needed economic policy reforms, on the restoration of peace, securlty and political stability,and on the abilityof the countryto effectivelyabsorb Bank assistance.

25. Lend4na Strate&v. The lending program for the period FY91-93 comprises an average of two operatlons per year. The lending strategy revolves around three elements. The inltial focus will be on technical assistanceand pre-investmentoperations. Subsequently, the programwould expandto high-priorityrehabilitation and investmentprojects, particularly in Infrastructureand the socialsectors. Eventually,if the Government implements appropriate policy reforms, the Bank would also consider adjustment lending, lf the country needs quick-disbursement assLstance. 26. The first two operations in the Angola lending program would provide technical assistance, training and engineering services. They include the Economic Management Capacity Building project already approved and the proposedInfrastructure Engineering project to provideassistance in formulatingpolicies, strategies and detailedpre-investment studies for the rehabilitation of key transport and urban infrastructure systems. Technlcal assistancecomponents are also includedin other proposedprojects, notably support to Improveplanning and Implementationcapacity In the social sectors. 27. The second element of the Bank's lending strategyinvolves assistancefor rehabilitationand reconstructionof the economicand social infrastructureand developmentof the productivesectors. Buildingon experienceto be gainedwith the plannedsocial sector rehabilitation project and proposedsector work in educationand relatedfields, several operations focussingon human resourcedevelopment (especially of women) will be considered.Rehabilitation projects are beingprepared in the urban,energy and transportsectors, where the need for immediaterehabilitation can be clearly identified. This includes improvementof essential urban infrastructure(e.g., water, sanitation and solid waste) in the Lobito/Benguelaarea to reducesevere public health hazards, and to ensure the viabilityof otherLobito corridor investments. Based on the completed energy assessmentand a follow-upreview of the power sectorinvestment program,a proposedoperation in the energysector would help to rehabilitate high prioritypower infrastructureand support the financialrehabilitation of the power utilities. In transport,in additionto the pipelineof investment projects which would emerge from this operation, the Bank would focus on the Lobito/Benguelarail corridor by rehabilitatingpresent corridor infrastructure to enable the system to handle medium-term transit and national traffic demand, and establishthe basis for futureupgrading and expansionof the network. 28. The third elementof the Bank's lendingstrategy consists of financial support,if needed, for the Government'seconomic adjustment program, once the authoritieshave demonstrateda clear commitmentto comprehensivereforms by makingsufficient progress in adopting key policy measures. 29. PerformanceMonitorinA. The size of the Investmentoperations, as well as the speed at which they could be processedwould dependon the evolvingsecurity situation, and on the Government'sprogress in adopting sectoral reforms and improving implementation capacity. lhen the incentive framework in the productive sectors improves, the Bank would undertake catalytic investments in these sectors through Industrial restructuringand agricultural rehabilitation operations. Greater security in the rural areas wvould be an essential conditionfor agriculturaloperations, including protection of the environment. Government performance in implementing the Economic Management Capacity Building project would also be an element taken into account to determine the size and composition of future lending. Performance in macroeconomic management will be evaluated with respect to actions designed to correct the overvaluation of the exchange rate, liberalize prices, stabilize public finances, improve production incentives, and disengagethe State from productiveand commercialactivities. The volume of eventual quick-disbursingassistance would dependon the country's financing requirements, which would themselves be highly dependent on the evolution of the price of oil. 30. Economicand SectorWork. The key objectivesof the economicand sector work programare to supportthe policydialogue with the Government and to provide the intellectual underpinnings for the Bank's lending operations. As executing agencyfor UNDP,the Bank undertook, in 1989-90, an - 10 -

IntroductoryEconomic Review of Angola and an Energy Assessment. Following the completion of these reports, the Bank's economic work has focussed on selected issues of economic reform, which has provided an input to the Economic Management Capacity Building Project. A major report on Trade, Pric~e,and Wage Reform has been discussedwith the Governmentin March 1991, and will be distributedto the Executive Directors shortly. In the future. the Bank plans to deepen its macroeconomicdialogue (includingthrough joint missions with the IMF) by initiating reviews of public expenditure and of public enterprises. Sector work will focus on acquiringand broadening the Bank's sector knowledge (in the productive and social sectors), thus contributingto an expanding lendingprogram and dialogue on sectoral policy issues.

31. Donor Coordinationand Relationswith the IMF. Many donors have been providing assistanceto Angola for some time. As the Bank builds up its presence in Angola, however, it can be expected to play a coordinatingrole because of its multisectoralexperience, as well as the overview providedby its economic and sector work. In parallelwith the potentialbuild-up of the lending program and the deepening of the understanding of Angola's economy, the Bank also plans to intensify its aid coordinationefforts. One of the objectives of the Economic ManagementCapacity Building Project is to help coordinate,where necessary, the various donor efforts in certain key areas of technical assistance. A central concern of this coordinationeffort is to avoid duplicationof technicalassistance activities. The Bank has also been coordinatingclosely with the IMF in carryingout its initialpolicy dialogue with the Government,and with the UNDP and bilateraldonors in preparing the componentsof the capacity building project.

32. SummaryAssessment. Angola has made little progress in realizing its considerabledevelopment potential because of: (i) a destructive,costly, and-protractedcivil war; (ii) a severe lack of skilled personnel,and (iii) misguided policies and weak economic management, as well as an inadequate legal and regulatory framework. The Bank's strategy is to *spring open" a relationshipwith this new member by engaging the authoritiesin a dialogue on the country'sdevelopment needs, supportingcapacity building,helping to rehabilitatethe devastatedeconomic and social infrastructure,facilitating the transitionto a peacetimeeconomy, and supportingthe processof economic reform. The pace and scope of the Bank's assistanceprogram will depend on Angola's progress towards peace and security, implementationof economic reforms and improvementsin absorptivecapacity. The initial focus wil.lbe on an active economic and sector work program and technical assistance lending operations focussing on capacity building, notably in economic management, and preparation of pre-investment studies. If the security situation improves significantly, a wider range of activities in infrastructurerehabilitation would be supported. If the Governmentimproves the incentive frameworkin the productivesectors, the Bank would expand its operations and bring forward investmentsin sectors such as agricultureand industry. Finally, the Bank would consider adjustmentlending, dependingon the progress in implementingcomprehensive macroeconomic policy reforms as well as on the country'sfinancing requirements, which would largelyhinge on the price of oil. - 11 -

PART11 - MEECREDI

33. A recenteconomic review of Angola (ReportNo. 8906-ANGof June 29. 1990)has definedthe actionsand prioritiesfor the economicrecovery of Angola. Studiesby the Southern Africa Transportand Telecoummnications Commission(SATTC) have furtheridentified the problemsof the transport infrastructuresector. The need for rehabilitationof the infrastructure sectoris one of the main areasof concern. The taskwould requirelong lead times and carefulpreparation of the necessaryactions. The proposedcredit supportsthe objectivesof the countrystrategy and the EconomicManagement Capacity Building TechnicalAssistance Credit (Report No. P-5525-ANG) recentlyapproved by the ExecutiveDirectors, by addressingthe need to formulatewithin the infrastructuresector, a PriorityInvestment Program (PIP),and enablingsector institutions to participatein PublicExpenditure Reviews (PER). 34. The infrastructuresector is one of the major casualtiesof the long lasting civil strife and economicmismanagement of Angola.The lack of adequate funding for the maintenance, rehabilitation and expansion of existing facilities led to deterioration of the infrastructure. Controlled prices, absence of effective cost recovery and unclear institutional responsibilitiesresulting in lossof localtechnical and managerialcapacity made the situationworse. Decay and decapitalizationare widespreadin the sector. Inadequaciesin infrastructurehave becomea majorbottleneck to the developmentof Angola'seconomy and to improvementsin the qualityof daily life. Thus, it is urgentto restorecapacity and to build a pipelineof projectsaimed at the rehabilitationand cost effectiveoperation of the infrastructuresector in Angola. 35. $The.. adequacy. and,reliability of Angola'sbasic infrastructure, such as highways,ports, railways, and that of majorpopulation centers like the capital city of Luanda, are fundamentalto the country'seconomic recovery. Before independencein 1975, Angola's transport and urban infrastructuresupported and fostered the developmentof significant agriculturalproduction and processing,and other industrialand comercial activity. An exampleof good constructionand maintenancebefore the onset of the civil war is the continued existence of much of the basic infrastructurein 1991,although it is deterioratingrapidly because of yeats of low maintenance, war-related damage and severe overcrowding in major urban centers such as Luanda. Deferred maintenanceis the consequenceof n-sufficLentinstitutional capacity coupled with minimal allocation of physicaland financialresources over the last 15 years. Rehabilitation ratherthan outrightreconstruction is stillpossible with a substantialcost advantage. The country needs lmmediate assistance through sizable rehabilitationinvestments, organizational restructuring, human resource development, management and operations improvement, and other related inputs. 36. The severeproblems of Angola'sinfrastructure sector are not relatedsolely to the lack of investments,equipment and spare parts, or institutional capacity. The macroeconomic and sector policLes in force in Angola since independence have aggravatedthe difficulties.The over-valued local currency, for instance, cheapensimports, depressesexports, and creates a scarcity of foreign exchange. Demand for foreign exchange far - 12 -

exceeds its supply, leading to forced allocationswhich do not reflect real economicpriorities. This is one of the main reasonsfor the lack of spare parts which, In the long term, has rendered Inoperablesubstantial investments in equipment withinthe sector. Truckingcompanies have solved this problem in part by enteringthe parallel market to obtain spares which allow them to operate,also In the parallel market, so they can recuperate their costsand turn a profit.

37. The lack of institutional capacity requires financing of technicalassistance to prepareand programinvestments, study the policy changesrequired and developthe necessarycapacity. On-the-job training of local staff, augmented by formal training on specific topics, also calls for technical assistance and skills currently In short supply In Angola. Ratlonale for IDA Involvement 38. This projectwould be a key element in the Government's program of economicand financialrestructuring. IDA's involvementIn its financing would providebadly needed leadershipin promotingInstitutional reform, Introducingcost recovery, strengtheninginfrastructure agencies, and coordinatingpotential donor supportto transportand urban rehabilitation. As a resultof IDA participation,the processof capacitybuilding In the form of institutional,manAgement and operationalimprovement and training would support investmentprogramming in the sector and would precede rehabilitation. ProjectObsective 39. The primaryobjective of the projectwould be to supportthe economic recovery and further development of Angola infrastructure by mesans of the -rehabilitation of key transport and urban systems, and assistance in the formulation of policies, strategies, rehabilitation plans, and programs of continuing maintenance. Prolect Descriotion

40. The project would consistof the following principal elements: (1) economic and financial feasibility and basic engineering studies and environmentalassessments for the rehabilitationand maintenanceof the National Basic Hihway Network (1511), the Namibe Port Transport System (MPTS), comprising the Port and the Mocamedes Railway, the Urban Infrastrueture of the City of Luauda (UICL) and the tu:-n P*rt° r^---eport System (LPTS), comprising the Port and the Railway; (2) final design and preparationof tenderdocuments for selectedpriority investments identified in the above studies;(3) technicalassistance for the Ministryof Planning and Luanda ProvincialGovernment (urban), the Ministry of Transport& Communications (ports and railways) and the Ministryof Public Works and Urban Development (highways); (4) human resource development and initial training programs in critical categories for public and private sector (contractors) personnel; (5) repair or replacement of some equipment elements of the systems;and (6) provisionof office and residentialfacilities, including office equipment,vehicles, spare parts and supplies for consultantsand governmentagencies involved in the project.The projectwas designed taking Into account lessons from experienceunder technical - 13 - asistece (TA) projects Ln Aftica as reportedto the Boardlf. (Detailed descriptionof project components is provided la the Technical Annex (Part A)). Ptoject Cost mod Timtbl 41. Total estimated costs of the project would be US$42.5million equivalent,of which US$37.7million would be In foreignexchange. Because of the internalsituation of Angola, a significantphysical contingency allowancehas been included.The projectcost sumary and the financingplan are in ScheduleA. Amountsand methods of procurementand disbursement,as well as a disbursementschedule are In ScheduleB. A time-tableof key projectprocessing events ti In ScheduloC. A projectImplementation plan Is in the TechnicalAnnex (PartB).

Aareeaments 42. Conditionsof effectivenessares (1) executionby the Government of implementationagreements setting outt (a) the specificministries and agenciesresponsible for executionof project components,(b) necessary coordinationmechnisms, and (c) countorpartto be made availablefor work and trainingon the projectland (2) compltionof satisfactoryarrangements for project coordinatiog,Including the establishmentof a projectunit, selectionand controllingof Its key staff (AnnexB-3), and a plan and timetablefor the provisionof housingand offliesthat projectconsultants vould use. Section 3.3 of the TechnicalAnnex on project executiongives detailsof coordinationand managerialaspocts. Projectcovenants include: (1) preparation of an action plan to implement cost-basedtariffo, deregulate and privatizetruasport; (2) formulationof an Investmentprogram for the infrastructure sector; (3) identificationof initialpolicy, organisation and funding mechaAisms necessary for the futuro developmentof the sector; and (4) auditing,monitoring and reportingrequirements; and (5) openingof a project account in US$ for governmentcontrlibution to projectfinances. At a requiredmid-term review,no later than eighteonmontha after credit effectivenessand priorto furtherdisbursementa, the Governmentand IDAwill evaluateand agreo ont (1) carrying-outffnal designsbased on completed feasibilitystudiea, and (2) statusof covenantsabove and identificationof additionalsteps required.

*,. TX. need to establish full cost recovery in the infrastructure sector is a crucial requirement for Its effective operation and maintenance. This is reflected In all terms of refrence for the studies to be financed by this operation. An action plan will addrses the deregulation of tariffs and placement of all operations in the sector on firm comercial basis. Training, capacity building, and Institutional development will improve the performance of sector agencies. Development of an investment program for the infrastrueture sector will follow. The rehabilitation investments prepared under this project will correspond to a first time-slice of the investment

ZJO1D Report 08573: Free-standing Technical Assistance for Institutional Development In Sub-SaharanAfrica, April 1990. - 14 - program. The combined benefits of these undertakings are I (1) to contribute to the cost effectiveness and control of public expenditure In the Infrastructure sector; (2) to assist in the development of priorities in the Infrastructure rehabilitation process; and (3) to initiate the restoration and development of institutional capacity in the sector. Risks

44. Little coordination exists between Government agencies and state enterprises responsible for the project components. This lack of coordination and limited institutional capacity constitute the main source of risk for the project. However, the project's infrastructure systems were operational and relatively cost-effective until 1975. They have the potential to becom so again once the internal security situation improves. Their future economic and flnancial viastlity depends upon flexibility in the formulation and adoption of comprehensive rehabilitation strategies through feasibility studies, technical assistance, and cost recovery policies. Staff training, provision of basicequipment and support services will help Improve the local capability for planning and execution, but donor coordination will be required during their implementation. Full attainment of project objectives will depend on: (1) the pace of capacity development; (2) the close supervision and follow-up of the projectby IDA; and (3) the effective management of tochnical assistance. The emphasis on technical assistance (section A.2 of Technical Annex) and the implementation agreements, necessary to the preparation and coordination of the rehabilitation program, will greatly reduce project risks. The potential benefits outweigh the risks discussedabove. Enviromeantal Aspeats 45. All project components have provisions for carrying out onvironmental assessments of the rehabilitation works to be studied. A specialist working at the central coordiating office at the planning dminstry will coordinate environmental aspects of the project. The project will also finance the expertise necessary to review existing legal and regulatory framewrk, and to propose modifications necessary to enhance the legal foundations for future work in defense of the environment in Angola. The actions to be studied under this project will have a positive environmental impact (section B.2 of the Technical Annex). Reccuiendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit.

Barber S. Conable President

Attachments Washington, D.C. June 20, 1991 1s - ScheduleA Pape 1 of I

INFRASTRUCTUREREHABILITATION ENGINEERING CREDIT SummaryProiect Cost and FinancingPlan EstimatedCost ProiectsCategaries Local Loreian Total (US$million) 1. Studies 0.92 6.59 7.51 2. FinalDesign 0.3S 3.75 4.10

3. Technical Assistance 1.08 8.36 9.45 4. InitialTraining 0.16 1.52 1.68 5. Basic Equipmentand Spares 0.71 7.15 7.86 6. Administration& LogisticsSupport A. OfficeEquipment and Supplies 0.23 0.9S 1.18 B. Vehicles 0.08 0.68 0.76 C. Housing O.36 1.46 1.82 7. Base Cost 3.89 30.46 34.35 PhysicalContingenciesll 0.55 4.24 4.78 Price contingencies 0.37 3.00 3.37 Total ProjectCost2J 4.80 37.70 42.50

FINANCIPGPLAN Local Foreign Total ofg Total (us0miiiion)

Government 4.8 - 4.8 11.3 IDA - 37.7 37.7 88.7 TOTAL 4.8 37.7 42.5 100.0

;/ Includesthe possibleeffect of forcemajeure causes due to the internalsecurity of Angola.

I Excludes taxes and duties. Schedule B Pape I of 2

INRShUIR REaD!TAtZCNENOeaNIR@ EXRSCEO!?D Prosuraot Mehodaand Olebu 1semns

Prolet gi.k ISC I U 1M. W.LL. .OMAL a (USlQ. I Iton) t. 1. Studles 6.90 0.0 21 (0.") (0.59) 2. Final Deign 4.85 4.68 it (8.75) (8.75) U. 1. Tehnical Assistance 12.27 12.21 29 (0.8.) (8.30) 2. InitialTraintng 1.90 1.99 5 - ~~~~~ ~~(1.52) (1.52) LUt. 1. Bsac Squlpat & 2.60 0.14 0.47 9.89 22 Spares (1.92) (4.69) (0.84) (7.15) 2. AdmlnistratIon A Lio5ltiS Support a. Offico Equipmant a 8uppltoo 410.00 0.29 1.15 8 (6.50) (6.60 (.0.1) b. Vehlale. 0. 610 0.90 a (0.49) (S.10) (0.00) a. Housing V 0.76 .00 0.85 1.0C 4 (ivi lworks) (0.10) (0.0?) (0.28) n,. 1. R.financlngof PPF 1.5S 1.50 8 (1.50) (1.0 V. 1. TotaI Projet cost S." 0.14 1.40 0.41 1.W5 42.0 190 (2.57) (4.69) (0.06) (20.84) (1.50) (80.40)

Notel The flgure. In pronthes ar t rtspeotlveamouns f inaned by IDA. N.A. i Not applicable. \a Contract for consulOtng service and tchnill asss"ltane.

/ A portion to be dtoermln duringprojet ImplOntationmay use local shopping mthode.

V/ Housln eponditure will .. tly financelports of prefabricatedunlts and thelr subsequetiInstallation. Only smat construction Itemsore expeabed.Dlosurascnt willI b conditionedto oeldenceof 1epa titleto the landby the spncies concerned. - 17 - Schedule S Atm ~ ~~~~Pape2 of 2

OZSRWSENENBy 96miAa iaga

1. StuIes0$ "(t1 '* Flnnl Desgn . n (ot totI) it. I. Techntcsl Asslstne e.80 in (of totol) 2. Initial Training .52 we (of tot1) II. 1. s1c Iqu4_IPs A Sp re .1 we (of toerlgn) 2. AdministrationA Logistes Spport a. Office Iquipmnt a SupplesJ UN9 (oft f,e.ip) b. Vehicles 0.6 106 (of foreign) o. "ouesnt 0.28 1lM (ot foreign) IV. 1. Reinsncing of PF 1.0 Mountduo 1. Unu locsted 7.24

TO"aI Coat 87.70

tin uwMlIon) hnL!I D Sum~~9&11LMaaL

10 co St, 101 1.02 1.01 t.? Jun s0, 102 8.00 4.07 lm0 18 De SIS, 102 7.1 11.28 29.0 Jun 8g, 199 7.59 10.02 49.9 194 Dc" 81, 199 7.21 2.94 60.1 Jun S, 1994 6.44 82.48 99.2 19 . 81, 194 a.u 80.1, 96.9 .. 51, 1995 1.54 87.70 19.0

)/insne. In part by mV 18 Schedule C Page 1 of 1

INFRASTRUCTUREREHABILITATION ENGINEERING CREDIT

Timetable of ley Project ProcessintEvents

1. Time taken to prepares 12 months

2. Prepared by: IDA (AF61N and AFSIN)

3. First IDA missions Reconnaissance- February 1990

4. Identificationmissions May 1990

S. Preparationmissions: October and December 1990

6. Appraisal missions February 1991

7. Negotiations: May 1991

8. Planned effectiveness: October 1991

IDA Staff. Coultans ad Others Involved

1. Reconnaissance through identificationsMessrs. Sam, Alvarez, Chavez (AF6IN),Kedia (AFTIN),Radankrishnan (Port Consultant).

2. Preparations Messrs. Blanc, Wildt (AF3IN), Alvarez (AP61N), Gopalkrishnan, Kedia (AETIN), Mac Nair (Urban Planning Consultant), Morra (Training Consultant).

3. Appraisal: Alvarez (APGIN), Taborga, Wildt (APSHY), Karlsson, Kedia (AFTIN), Genta Pons (LEGAW), Lara-Resende (Environmental Consultant), Mac Nair (Urban Planning Consultant), Bernero (GOA Consultant).

4. Reviewers: Gattoni, Kohriki, Nayak (AFTIN).

5. Logistic support inAngolat United Nations Development Programme, Lobito Corridor Authority.

6. Managing Division Chief. M. Blanc Department Directors F. Aguirre-Sacasa. _ 19 -

Schedule D Page 1 of 1

SOWMS OP UKB GROX_PSASONS

(May 31, 1991)

The proposed credit which follows the EconoamicManagement CapacityBuilding presented to the ExecutiveDirectors on June 19, 1991, vould be the secondBank Group operationin Angola. "uazsuuS'R a o iMa www MIlox INW EY5n

- oz - - 21 -

SIlIMIRASRC?h SECTOR An Overview

?g'aneuort 1. Angola'sbasic infrastructurehas strongcolonial antecedentsand is presentconfiguration, though not its condition,is essentiallyunchanged since independence.In 1975, the systemhad a comprehensivemodal mix which includedrail, highway, air, cabotageand shipping,and providedan excellentopportunity for potentialtransit facilitiesto match or facilitateeconomic development. A distinctive, lateralthree rail-portcorridor system -- north,central and southern- - supportedby feederroad networksdominated the modal pattern. Additionalhighways provided very basicnorth-south provincial links, as well as accessto nationalborders. The air sector,which then linked all key provincialcities, subsequently has becomethe only dependable means of passengerand lightfreight transit over much of the country, becauseof the securitysituation. 2. In 1987,Angola's transport infrastructure comprised 75,000 km of roads,2,500 km of railways,3 internationaland 3 cabotageports and a hierarchyof 31 airports. An estimated12,000 non-military trucks and 400 buses,40 locomotives,11 long distanceships, 10 cabotage vesselsand 21 aircraftoperated infrequent modal servicesat low levels of efficiency.Rail and port systemsform distinctivecorridors, which previouslyran eastwardsfrom Luandato Malange(a distanceof 430 km) in the north,Lobito to Luau (1,350km), a point closeto the Zairian borderin the centralheartland, and Namibeto Menongue(750 km) in the south. Regionsare linkedto these corridorsby 8,000km of paved highwayand 67,000km of secondaryand feederroads, which, together with the air services,provide the main means of north-southtravel. Cabotagecurrently accounts for 180,000tons of freightbetween the four main ports and has potential for substantial growth. The Cabinda enclave is dominated by the oil industry and the non-petroleum infrastructure is small. 3. Statisticson the systemunder the Ministryof Transportand Communications(MINTEC) show totalfreight traffic for 1986 amountingto approximately3 milliontons, aboutthree quartersof the volumefor 1985,with the road and maritimesectors compensating to a limited degreefor the continuingdecline In rail traffic. In 1987, the number of passengerscarried fell below 25 million,following a declinein bus services which offset improvements in rail and air transit demand. The total value of M1NTEC-controlled transport and communications services in 1987 was an estimated Km 17,631 million, of which S12 came from road services, 302 from air and the remainder divided fairly evenly among the other modes and communications.

4. Patterns of urban development in Angola since independence have been determinedmainly by the disruptiveeffects of the war. Guerrillawarfare and economicsabotage, including the widespread use of antipersonnelmines, have destabilizedagricultural activities and - 22 - forcedthe ruralpopulation to seek safetyin protectedurban sites. Rural urbanmigration in responseto economicfactors is thus heavily distortedby thesewar-induced population movements. The urban populationhas risenfrom an estimated151 of the total populationin 1970 to 23Z In 1985, althoughno recentcensue dta are availableat the national level. However, most observers agree that urban population growthhas been rapid since 1974. This growth is particularly evident in the capital city of Luanda, where the population has risen from 450,000 in1975 to 1.3 millionIn 1985. 5. The large influxof migrantshas overburdenedthe capacity of urban Infrastructureand publicutility systems leading to a marked decline in both servicestandards and servicecoverage. Lack of managerial and technlcal cadres, limited equipment, and the precarious financial condition of public utility companies have resulted in deterioration of the systems inherited from the Portuguese In 1975. These same factors, combined with rapid and unplanned urban settlement, have caused service coverage to fall. With only limited investment since inependeace and grossly lnadequate maintenance, the basic urban services of water supply, sewage, sanitation, and refuse collection are mow in a critical state. The vlrtual absence of any urban planning or sites and services provision exacerbates this situation. Much of the urban expansion since 1975 has consisted of a proliferation of self- builthousing In unplanned and largely unimproved communities (musseques) on the fringesof the main urbancenters. 6. In sum, the infrastructure of Angola is In need of rehabilitation, maintentace, and upgrading. Otherwis, it will become a major bottleneck to economlc development. - 23 - Ann Pag. 1 of 6 INF*ASSRVCTUREREHABILSTATION ENGINEERING If(IR PROJECT DETAILE PROJECTT)j3RI?1ZQJj PORT OF NAMIBECOMPONENT

CURRENTSIT_AT1ON

1. The comercial port of Nsamibeis the third-ranking port of Angolaand the principalfishing harbor. It to locatedIn the south- eest cornerof Baia do Namibe. The minerals and oil port of Sacomar lies in the north-eastcorner. Sacomar port Is under the soameport administrationas Namibe. A Director General administers the Port of Namibe assisted by managerial and technical officers in different sectionsand departments. The port employs a staff of about 1,500 poople. The anchoragein Baia de Namibeis good,with easy approach from the sea. Minimumdepth in the approachis 10.5 a to the camercial quay. 2. The main port facilitiesinclude a total of 875 m gravity wall stone quay with depthsvarying from 10.3 a for the deep sea traffic to 6.0-3.0m for coastaltraffic and smalllocal craft. Two cargo shads,together 7,1200 m2, are situated behind the deep-sea wharf. Open storageareas are availablebehind the coastal wharf and betweenthe sheds. The inland boundaryof the port area iS, however,restricted by a continuoussandstone cliff about 40 a high, virtuallylimiting the width of the back-upareas.

3. In .1990,Port of Nadibe handled 206,700 tons of general cargo,mainly Imports(902), for the Namibehinterland. Traffic throughputof the port has been growingat about 7X a year, on average, from 1980 to 1990. In 1973 the coastaltraffic amounted to less than 202 of the total imort-exporttraffic. In 1988 and 1989 the sharewas 53 anGddropped to 321 during iift. Containertriffic hu. increased from 8S in 1986 to 152 in 1990,equivalent to 27,200tons of imported cargo. Containerisationhas increasedby almost302 a year duringthe post 5 years that the port has handledcontainers. This growth,in turn, has causedsubstantial operational difficulties in the port. 4. A major problemaffectiag the quay operations Is the settlementappearing on considerableportions of the apron surface, particularlyunder the Lner railsof the shore cranes. Pavementon the port roads and storagearoas has worn badly becauseof neglected maintenanceand beavy loadsstemning from the icreased container traffic.

5. The cargo handling equipment ls old and has lackedproper maintainanes. The management cited technical inadequacies, shortcomings In the engineering department, and the lack of spare parts as main causes of these problem. Equipment availability io currently less then 202. Due to this extremely low equipment availability the port does not have enoughequipment to handlethe currenttraffic, particularly the - 24 - Annex Al-aCt) Page 2 of 6 increasingnumbers of containers.There is one ship-to-shorecrane, which can lift 22 tons, to handlecontainers at the quayside,but settlementof the quay apronhampers Its perfotmance.The port has only one containerhandling machine, which ceanlift and transportthe containersfrom the quay to the yard,but this equipmentIs now out of operationand needsmajor rehabilitation.Fortunately, a private truckingcompany in Namibeoperates one 42-tonforklift truck, and the port hires it to handlecontainers. 6. Increasedcontainer traffic and shortageof equipmenthave completelycongested the port at the open storageareas. The container dwell time is extremelyhigh, more than 300 days, on average,for Importsand exports. The port is holdingmore than 3,000 containers, which is beyondits storagecapacity, and containersare scattered throughout the port wherever space can be found. 7. With the exception of 1983, the port of Namibe has operated at a nominal profit since independence. However, the positive net operating income recorded may be misleading because depreciation does not reflect the present value of assets. Additionally, few Investments have gone into the port during the period, creating a rather run-down impression in the port's Infrastructure and equipment. Besides, the institution has not developed Its staff enough to ensure efficient management of port operations, equipment, maintenance and further expansion. LONG-TERMOBJECTIVES OF PORTOF NANIBS 8. The Namibe Transport System, comprising the ports of Namibe and Sacomar. the Mloamedes Railway and the road from. Lubango to the Angolan/Namibla border at St.Clara/Oshikango, is fundamental to the development of SouthernAngola or the Nsmibe hinterland. This region includes the provinces of Namibe, Huila, Cunene and Cuando-Cubango, one- third of the area of Angola with great potential for mining and agriculture. The Namibe Transport System also offers a shorter, and possibly more economical rail cum road route for imports and exports for Northern Namibia. The northern section is the most densely populated region of Namibia and offers a substantial potential for the development of agriculture and agro-industries. 9. The long terms goals and objectives of the port of Namibe are (1) to optimize the use of existing facilities and (2) to develop the port infrastructure, acquisitions and management to cater to existing traffic as well as anticipated growth. The strategy to attain these goals relies on increasedproductivity and cost effectivenesswith the generation of sufficient revenues to cover costs. Cost control also is a major Input in evolving a competitive tariff vis-a-vis other regional ports to sustain the market and lncreseo earnings. - 25 - AniexA2-a(i2 Page 3 of 6 IRE PROJECTCONPONENT OBJECTIVES AND STRATEGY 10. The first step in achievingthese objectivesio to evolvea long-term plan comprisang (1) investmentsfor rehabilitationof existing facilities and acquisition of new assets; (2) operations improvementst organization restructuring; (3) introduction of a cost-basedtariff structure;(4) human resourcedevelopment; and (5) systemsimprovements through a development study. The study recomnendationswould form the basis for preparation,appraisal, and eventualapproval of a port rehabilitationand modernlzation project. The IRE project would include technical assistanceto improveport operationsand equipment maintenance and repairs and to train human resources. The project would lay the basis for a more effective planning and implementation of the main rehabilitation and modernization program. COMPONENTDESCRIPTION 11. The proposal for IRE for port of Namibe containsthe following components: (1) Study A feasibility and basic engineering study with an environmental assessmentfor the rehabilitationnd Wmaintonance of port of Namibe.The studywill definethe minimumshort-term measures -- maagerial, operational, investment -- onablingthe port to optimize the use of existing facilities. The study also will explore how to create a commercially viable entity free from reliance on Government support, and will propose development options for the port'. infrastructure to bandle existing traffic as well as anticipated growth for the period 1991-1995. The study will furthor determine the feasibility and the optimm program of investments In further upgrading and possibly expansion of the port facilities up to the year 1004. The study will give special emphasisto traffic forecasts, strategies, £wman resource development as well a tariff structure, foreign exchange requirement and allocation. The TOR for the port study is combined with the required study for the Mocamedes railway in order to preparea developmentprogramme for the NadibeTransport system. Estimatedcost of the combinedstudy for the railwayand the port is US$ 0.86 million inel.US$ 0.375million for the port component. (2) TechnicalAssistance Operations and maintenance shortcomings are evident in all port activities. In some categories, particularly mechanical equipment, the problems have become serious. Although lack of spare parts and skilledstaff is the main cause, the root problem appears to lie in the institutional, administrative and managerial aspects of port operations.Control and regulation,formulation of policies - 26 - Page 4 of 6 *nd objectives, organisational structures and planning mechanisms are less effective than they would othemwis be. The Importance of maintenane and Its costs reonot fullyrecognised. Budgetsat the goverment and port level have failed co providesufflcient funds to cover thesecostl, although this has resulted,in part, from lack of accurateinformation on costs. Furthermoreexcessive control from government ministries $mpa$rsthe port'sability to manage its operational and maintoenaee functions This is most evident In the approval of purchase orders for spare or replacement parts, where it very often takes soveral months, or longer,before an order eventuallycan be placed. Technical assistance Is necessary for port operations, equipment maintenance and port administration In ordor to lmprove the skills of staff within tbesedepartments and to introduce improved operational and administrativesystemS. The technical ssistance experts will Identifyurgently needed spare parts and effectiveways to procure them as well, discussingtaproved methods to superviserepairs and to maintain equipment. The project provides 60 man-monthsof technical assistance in the following areasI - port operations 24 months - equipment maintenance 24 months - administration/finance 6 months - procurmeuntlsupplieslstores 6 months stAmated cost Us$ 0.99 million. (3) Tra1nina The port does not have enough sWkilled personnel for an enterprise seeking to modernize its equipment and to Introduce new operating techniques. The initial training will be on-the-job sossions conducted by technical assistanco experts. The consultant for the feasibility study will develop a detailed training plan, based on the manlyiss of existing personnel propared by the port of Namibe cooperating with the tochnlcal assistanc expetrts. The general objective of the trainingplan wouldbet (1) to Improvethe __~ptc-les of staff who can benefit fos fnvrther training; (2) to train new staff to either replace those who will retireor ncrease the lovel in accordance with port of NamLbe's development plan for the concerned pteriod; and (3) to improve the management and organization skills of managers and supervisors. The most urgent training need will be implementedduring the firstphase of the ITE-project. Estimated cost US$ 0.13 million. (d) Xgui,mentls,,are parts RadLo-communication equipmnt is the only major item proposed for purchase under this component. Urgently required spare parts and - 27 - AnnexAl-&LI. Pasg 5 of 6

om* essential work-shoptools havo been lncludedto rehablltate 4 fork lift trucks, one container handler, one tug boat end the weigh bridge connected to on of tho rail tracks In the port which are Lmportant for granite exports. The technical assistant oxperts together with the port'o technical personnel will establish final Identification of these itets. The technical ssistanee xperts will *lso a*lot In preparing appropriate procurement documents for approval by IDA. Estimated cost Us$ 1.06 million. (e) Loatstics Suisort

An acute shortag of houses exLste in amib. to accommodate the techniSal assistance exprts and the consultant for the feasibility study. Port of amibe has managed to make available one 4 bedroom house for the project period. The house, however, has to be equipped with furniture and kitchen oquipment as well as some upgrading of the water supply system. Furthenmore, four vehicles and some basic office equipment are needed for the tecbnlcal assistants and consultant. Estiated cost US$ 0.23 million. CONPONENTCOST 12. The sumary of the cost for the port project would be as follows: (US$ million) you Local Total - Study (0.375 ml In railwaystudy) 0 0 - TechnLcal Assistance 0.90 0.09 0.99 - Trainin 0.12 0.01 0.13 - Equipmeantspareparts 0.96 0.10 1.06 - Logistics support 0.20 0.03 0.23 Sub-total 2 18 0.23 2.41 Physicaland pricecontingencies 0.58 0.05 0.63

TOTAL 2.76 0.28 3.04 . ease

COPNENT SC 13. The credit for the IRE project io expected to be effective by Occober1991. Terms of Referencefor the feasibility study have alreadybeen agreedto and a shortlist of potentialconsultants as well a. letter of Invitation io under preparation for Bank approval. It is anticipated that the study will be completed within 7-8 months after the contract with the selected consultant i awarded. Procurement of equipment and spare parts and technical assistance and training would -28 - Annex Al-aCi) Page 6 of 6 begin two to four monthsafter the creditis effectiveand continuefor two years.

COMPONENT5E ITS 14. The Port of Namibehas currentlyexceeded the storage capacityof containers because of the poor equipment availabilityand the extremelyhigh dwelltime of more than 70 days for importedfull containersand 300 days for empties. 15. High dwell time is expensive.Each additionalday that a full importcontainer spends in the port costs the economyan estimated USS 5, the capitalcost of the goods,and anotherUS$ 3-4 in demurrage chargesto the containerowner (assumingthe containeris not returned within 21 days of discharge):i.e. a totalof US$ 8.50. With current importvolume of 2,250 twenty-footequivalent units (TEUs),and the extremelyhigh dwell time, this representsa cost to the Angolaneconomy of US$ 1.4 millionper nnum. More importantlyin the long run, high dwell time reducesthe effectiveoperation and capacityof the port. Ship'swaiting time and freightcosts would both rise and, once the port has reachedfull capacity,it would lose all additionaltraffic. 16. It is anticipatedthat the IRE projectwill contributeto a reductionof containerdwell time by 502 over the projectperiod of two years,which would allow the port to receiveincreased container traffic and reducethe annualcost to the Angolaneconomy from the US$ 700,000a year that it experiencesnow. 17. A major benefitwould also derivefrom the IRE projectin the reductionin the totalnumber of ship berthdays and the numberof days that ships spendwaiting for a berth. Althoughthe Angolaneconomy will not receiveimmediately the full benefitof the savingsin ship's time, ultimatelyit will be passedon in the form of lower freightrates and demurrage charges. - 29 - Annex Al-s(ii) Page 1 of 8

INFRASTRUCTUREREHABILITATION ENGINEERING (IRE) PROJECT CAMINHODE FERRODE KOCA_4EDES(CFRO COMPONENT

INTRODUCTION 1. The Namibe Port Transport System, comprising the ports of Namibe and Sacomar and the Mocamedes Railways (CFM), is fundamental to the development of southernAngola or the Namibehinterland including the provincesof Namibe, Huila,Kunene and Ruando-Kubango.This area is abouta thirdof the countryand, has depositsof many mineralsand stonessuch as copper,lead, zinc, marble, graniteand kaolin. The area also offersgreat potential for (1) developmentof agriculture,(2) establishment of agro-industries,and (3)export of agricultural productsto other regionsof Angolaand overseas. DESCRIPTIONOF 1THE NETWORK 2. CFM has a total routelength of 907 km of which 756 km comprisesthe main line betweenNamibe and Menongue.Construction of the 756 km longmain line commencedin 1905 and was finallycompleted, along with the branch line from Lubangoto Chiange,in 1961. Railsat firstwere 600 mm gaugebut builderslater changedthe trackageto 1067 mm. To exploitthe iron-oremines at Jamba and Cassinga,a branchline was constructedin 1966-67.The branchline connected Entrocamento,a main line station525 km from Namibe,to Jamba (17 km from Entrocamento)and th_n extendedto Tchamina(96 km), a stationclose to the Cassingamines.

3. In orderto carrythe predictedhigh volumeof Ironore trafficand operatespecial purpose wagons with an axle loadof about20 tons,the trackwas relaid from the mines to the Sacomarport with 45 kglm rails. The line was also regraded,curve alignmentswere carriedout and the Chela variant,connecting Chela to Chanjaby passingLubango, was constructedresulting in a savingof a distanceof 33 km. As a resultof thesechanges, 595 km of trackis fittedwith 45 kg/m rails and the rest, 312 km, with 60 lb/ydrails. 4. Originallysteel sleepers were provided,but duringrelaying of the main line,these have been changedto woodensleepers. The woodensleepers have %AzLV&Ma&ad wit,hage and in, criticalsectluus, have been replacedwith used steelsleepers. The line is ballastedto varyingdepths with localgranite. All bridgesare designedfor 20-tonaxle loads. Bridgeson Namibe- Lubango- Jamba route are in good condition. Four bridges on Menongue line and one on the Cassings branch line have been sabotaged. 5. CFM has 35 main line and 8 shunting locomotives. Sixteen of the main line locomotivesare dieselelectric of U-20-Ctype suppliedby GeneralElectric and 19 are diesel hydraulicof H 1500 type suppliedby Krupp. Of the GE locomotives,six are in service,six can be repairedand four may have to be scrapped.Seventeen of the Krupplocomotives require overhauling. All shunting locomotivesare dieselelectric. CFM has a totalof 1,416wagons of which 94i are specialpurpose wagons for transportingiron ore. Approximately1,040 - 30 -

Annex Al-a(ii) Page 2 of 8 wagons,out of a totalof 1,416,are tn service. Out of a totalof 33 passenger coaches, 29 ore in service althoughtho condition of 17 coaches is very poor. With the paoenger trafficgrowing, the shortageIn th. supplyof coaches is posing a seriousproblem. 6. The mainworkshop at LubangoIs well-equipped. The workshop has good facilitiesfor machining,casting and forging. The workshopcan be gearedto manufacturefor otherenterprises. There is an acuteshortage of trainedstaff. The large variety of deigns of locomotives used on CNNhas added to the problem of maintenance. Exchange of Xrupp locomotives with GE locomotives of the Luanda Railway(CFL) can work to the advantage of both railways. The diesel shed at Namibe is well-equipped. CFN has a total staff strength of 1600. 7. Overhead open line wire circuit is used for communications. Train controlis centralized at the controloffice at Lubangostation. The posts and line wire on the Sacomar - Lubango - Jamba and Cassinga routes were completely reconstructed in 1966 with a three-pair circuit which Is used for block working, train control,inter-station and line side coumunications.The circuitsare workingoffectively except in the Carvalhais- CeasingaMine section,where the line has been sabotaged. The old open wire circuit on the section from Entrocamento to Menongue is not operational. OPERATIONALAND FINANCIAL PERFOUNANC 8. Details of operatinSg and financial performance of CFN for the last ten years, i.e., 1981 to 1990, are given in Table 1. The operatingratio between cost and income has, since 1984, been less than 100, indicating a surplus of income over cost. The ratio Wa as low as 502 during 1989 but deterioratedto 752 during 1990, mainlr because of a decline in passenger traffic after the currency reform of 1989. Part of the surplusresulted, however, from: (1) very low allocation, only about two percent of the total ewponditure, for maintenance spares as a result of which major assets - locomotives, track, passenger coaches and maintenance equipment - are In a totally run-down condition; and (2) very low charge to depreciation due to not revaluing assets. Appropriate allocations on these two components of cost coupled with heavy capital costs, such as debt service charges, dividend on equity and increased depreciation', that would need to be incurred subsequent to undertaking heavy investments for rehabilitating the railway system, are likely to place CFMs'future profitability under considerable strain, 9. Passengertraffic - around2 milliona year since 1986- droppedto 1.4 millionduring 1990. Freighttraffic, also around0.2 milliontons and 45 millionnet-ton-km (ntkm) since 1986, droppodto 0.15million tons and 35 million atkm In 1990. As a result,the revenuesa well as the operatingratio dropped

S Cumwcyrm.axtigo CaM,sftdhIntpomyrduunhftotmonyhdmuAanndpurchsfgpow

a Cuwny, Mm b noouWsadn ba ad noIably fr debte or pamentof ddeds. - 31 -

Annex Al-afii) Page 3 of 8 sipgificantly.More effectiveoperations planning and aggressivemarketing for returnexport freight traffic can enablethe systemto surpasssubstantially the previoustraffic levels. The incrementalcost for suchmarketing would be quite low". CFM also needs to plan to transport containertraffic, currently almost nil. Partlyas a resultof this constraint, CFK carried only 202 of the cargo handledby the port during1990. The levelof accountsreceivable is, currently, quite high, with heavy amountsdue from governmentdepartments and public enterprises. 10. Seriousconstraints to CPm's utilizationof its full capacityand increasingits share of freightand passengertraffic include: (1) poor availabilityand reliabilityof itsmain line locomotivesand passengercoaches; (2) systems and procedures falling Into disuse; and (3) most important, substantialdilution in the skilllevel and competenceof staffat all levels-- managerial,supervisory and operating.CPM's current staff strength of 1904 (32 managerial,150 supervisoryand 1722 workers)is higherthan necessaryon the basis of reasonableproductivity and efficiencynorms but the percentageof competentstaff is quite low. Human resourceand organizationdevelopment, and reestablishmentof systemsand proceduresshould Set the highestpriority in any strategyto enhancethe commercialviability of CFM.

LONQ4UEMOEJEC2IVEB O? CPM I1. Efficientand cost-effectivetransport capability is crucialto the economic growth of the southern region. Identifying and developing the right mix of transport modes for various types of traffic li absolutely essential to achievethis goal. With the inter-modalcompetition increasing, CFM's share of traffic,both passengerand freight, would dependupon the extentto which CIM can provide efficientand cost-effectiveservice. An intensiveprogram of efficiencyimprovement and costreduction by CPM is essential.In the long-tenm, CPH needs to pursuetwo main, thoughliter-related, objectivest (1) establishing adequate c-ap.CILy to enable CP4 to carry its due share of local and transit -- to and from Namibia -- traffic by implementing a plan comprLesng rehabilitation of existing assets, marginal new investments, and improved operating efficiency; and (2) evolvingand implementinga strategyand a plan for CFM to operateas a commerciall,'viable entity.

iP kOIIINEN?r.- i OC$WQN=RA3D 5 12. CFM component of IRS project aims at (1)understanding CFM's future role in the transportationsector; (2) establishingthe basis for preparation, appraisaland eventual implementationof a project for the restructuringof CPRt and (3) concentratingupon human resourceand organizationaldevelopment and systemsimprovement. A feasibilitystudy will attemptto establishthe techno- economic feasibilityof various transport options and the task of evolving a long-term action plan. For human resourceand institutionaldevelopment during the projectperiod -- while the feasibilitystudy is being carried out -- a

a CFMUts eady negotfn to eor ftat of0 wnlwhsern foma WMeof tonnereknt hasa po*ia of madh a WMvlof110 n*mnh - 32 -

AnnexAl-a(ii) Page 4 of 8 programof training,technical assistance, computerization and logisticaland administrativesupport would be implemented. Equipmentrehabilitation and locomotivemaintenance elements, also a part of the CPM componentof the IRE project,would help CRM to increaseits capacityto carrymore traffic. Such improvementsalso would help in reestablishingsystems pertaining to quality assurance,spare parts management,procurement of materials and services, maintenancemanagement, and costing,as well as providingopportunity for staff to get trainingin real work situations. IRE projectalso would lay the basis for a more effectiveand speedierimplementation of the main rehabilitation projectby exposingthe organizationto the complexitiesof projectmanagement. COMPQ%N?NDESCRIPTION 13. The IRE projectpertaining to CFM has six main components: (1) feasibilitystudy; (2) technicalassistance; (3) training; (4) equipment rehabilitation,including locomotive overhaul and maintenance; (5) computerization;and (6) logisticaland administrativesupport. FeasibilityStudy

14. The majorobjectives of comprehensivefeasibility study for CFM would include (1) forecastingthe totaldemand for the transportof short and long distancepassenger and freighttraffic in the southernregion of Angola; (2) estimatingCPM's logicalshare of each type of traffic,based on comparative economiccosts of competingmodes of transportunder differentscenarios of efficiencyand productivity;(3) evolving a long-termstrategy and an actionplan to enable CRHbecome commercially viable at some reasonable point in the future, (such a strategy would focus on operations restructuring and improvement, cost reduction,rehabilitation of existingassets, new investments,human resource development,organization redesign, optimal pricing linked to trafficforecasts and trafficdemand elasticity, and capitalrestructuring): and (4) establishing the frameworkof a Memorandumof Understanding between CFH and GOA settingforth their respectiveauthority and obligationsfor meeting the objective of commercialviability. This understandingwould addressissues pertaining to pricing,foreign exchange allocation, reorganization, staff changes, implementing schemesfor motivating staff, and creatingrules and proceduresfor the efficient runningof the railways. (The same studywill coverthe operationof the port of Namibeas describedin sectionAl-a(i)). TechnicalAssistance (TA)

15. Since independenceCFM did not have the advantageof technically qualifiedand experiencedpersonnel. As a result,systems and proceduresin almostall the departmentsrequire review, and updating.Common responsibilities of differentexperts under TA programwould include:(1) improvingsystems and proceduresand implementingthem; (2) establishing improved nomse of performance and recommending measures for achieving them; (3) training the staff at the management level; (4)undertaking detailed training needs analysis to encourage preparationof appropriatetraining programs; (5) computerizationof the process of operationsplanning and performancemonitoring; and (6) implementingthe acceptedrecomendations of the commercialviability study. Six expertsPre - 33 - Annex Al-a(11) Page S of a proposedto participatein the TA program. The extent and scope of theair specificresponsibilities, in additionto those mentionedabove, would be as follows$

(1) Locomotiveand Rollinz Sto¢k Maintenances (a) establishingand Implementing optimal preventive maintenance schedules; (b) introducingsystem of qualityassurance;(c) undertaking equipment and processaudit and initiatingimprovements; (d) and resolving recurrent maintenance problems;(18 months). (2) Locomotlveand RollintStock Maintenances Same as abovepertaining to electricalsystems on locomotivesand rollingstock; (9 months).

(3) Onerations: (a) establishing and implementing optimal train running schedules and yard management practices; (b) Improving the levels of vagon turnaround and locomotive utilizationg and (e) facilitating Improvement In infrastructure and methods of handling cargo through discussion with users; (18 months). (4) Track Maintenance: (a) introducingsystem of Directed Track Maintenance;(b) undertakingequipment and process audit and initiatingimprovements; and (c)undertaking analysls of derailments and initiating measures for lmprovement including better maintenance of sharp curves; (18 months).

(5) Suipl1esDevartments (a) undertaking a survey of all non-moving, slow-movingand obsoleteitem and recommend action; (b) introducing preparationof a storesbudget in discussionwith user departments; and (c) undertakingequipment and process audit and initiating Improvment;(9 months). (6) Finance Departments (a) facilitatingpreparation of annual departmentall activity budgets; (b) introducing systems for eost control; and (c) undertaking assets inventory and revaluation; (9 months). Trainin

16. Four training experts are proposed for employmeent f^-rnne m"onths each. Their responsibilities would include: (1) designingspecific training programvand preparationof course materialfor differentgroups of staff, grouped on the basis of education and experience level, age and training needs; (2) preparing training material for selected staff to act as traiters and conduct training progrsms for them; (3) conducting pilot training programs along with the selected staff to act as trainers; (4) based on the feod-back, refine and fitalize the training programs; and (5) recommending advanced training programs and modes of training for specialized staff. Staff groups to be included for training under this program arot (1) operating staff, such sas,train staff, stationmasters, train controlstaff, and train checkingstaff; (2) locomotive - 34 - Annex A1-a(ii) Page 6 of 8 maintenance, both in the workshop and the depotg, and operating staff; (3) rolling stock maintenance staffJ and (4) staff for msaitenance of track and track equipment. Eauiument Rohabilitation 17. New Ecuioment: No new equipment is proposed for purchase under this project. However, the agreement provide for procureme_t of spare parts to ree.8oo1ioun (1) an inductionfurnace; (2) locomotivetesting equipment; and (3) calibrationequipment. A few sets of tools alsowill be Included. 18. Loeowotive Maintenance: Four of the 16 main line General Electric locomotives are currently out of co.idesion, two because of accidents and two for major defects. These locomotives are of U-20-C type fitted with an engine of 2150 H.P. The comierial viability study, under Its terms of reference, would make recomuendations concerning the fealbility and modality of recomissioning these locomotives.The mount of US$1.25million has been set side for the overbaul of some or all of these ocomotivesif t (1) the overhaulis considered feasibleboth technicallyand economically;and (2) trafficgrowth trends are consiatent with forecats.

19. Four personal cemputer *ystie n, wlth appropriate extenions, printers and software, are proposed for inetallation to improve the process of planning and to monitor prformance in the following departmentst (1) locomotive and rolling stock maittensace workshop; (2) operations; (3) suppliesIand (4) civil engineering. l-o1is0ca1 and Administrative Buoot 20. ?or Implementation of the project components of the commereial viabilt- setudy, TA and training, 12 to 15 erpetz et-- be In plate at one tim In Lubango, the headquarters of C0M. Boeuse of the auto shortage of housing In the city, C01 will have to undertake construction of prefabricated houses and equip them with furniture and flttings. Use of pro-fabricated house should be considered to save til Moreover, for these exports also would need renovated offices. C0Manbnageom- would determin details of the number of houses to be built and equipped. A provision of US$ 0.45 million has boen made for houaing and a provisionof US$0.1 millon for vehiclos.

21. The totalbase foreigncost of the component would be US$4.79 million includingthe cost of the feasibilitystudy for both CFM and the port of Namibe and US$5.93 million includingof physical and price contingoncles. The correspondinglocal costs would amount to US$0.68as bsoe cost and US$0.88 millionincluding contingencels. (Details of costsof vatiouselements and the bais of procurementare In Table 2). - 35 - Annx A1-a(Aii Page I of 8

22. The credit for the IREproject o eoxpectedto be effective by October 1991. Angolan counterparts already have prepared terms of referenceof the comercial viability study for the Namibe Port Transport System acceptable to IDA. After obtaining the necessary Bankapproval for short list of consultants and the Letter of Invitation, 4INTECc"A invite offers and complete technical evaluation and prepare to negotiate the final contract. Consislering tho mobilisationperiod, the study Can begin by November 1991 and finih by June 1992. TA and tradaing components could begin by Karch 1992 and end by September 1993.

23. Even before the comencementof IRE, CFM has agreedto increasethe locomotive assignment for freight traffic from the current two to four and thus lncrease the freight-carrying capacity from 150,000 tons a year to 250,000 tons a year, assuming the traffic is avaiLable. CF1 also would be in a position to commencethe return traffic of granite for export at a level of 3000 ton a moth and gradually increas It to 10000 tons a month by Deemiber 1991.

24. Implementation of the IRE project s oxpected to result In the following benefIts i (1) sustainfreight-carrying capaioty of SSO,000tons a year of Uports and 180,000 tons a year of exportsl (2) neraseo passenger trafftc by 252 as a result of mproved aintenance and availability of locomtives and coaches and prevento of tickt-leo travelling' (3) improve performano resulting In an increas of revenue and decrease I unit operatingcosts and reduction in the operating ratio from the 1990 figure of 752 to about 602'; (4) begin to reestablish systm and procedures, computerisation of performance monitoring, and training of staff; and (5) most mportant, establish a strategy anda clear plan for CFM to becoma coamercially viable entity.

UftthsmesWabsdUmWnb9udle (o)heb CfenF&Fud pa(11A)- PAetoftis6IUWetaleMng&lWff fafamfmtfeMoned euiafl ' mnS m,iooepalU. wufieounnrdasn wumouemrlomlori vau udbeu jnelkn us aparWsuunderOi Sprouot. Hort4owesmeravmli _aonio uqir nelah_m h*ms3l *r4_pmsmteednm_r hbhlm m bo -n meows Amex Al-a(U) -36 -Paso o Table 1 -Opertang and Fb cal Perommanceof CFM

Ye7 Fright tif Passger itrafc imiI cs pritF opaatki Tomns Tonne-km asPnger Puss-mn IZ KZ KZ RaUo housand mWloathmlo and milllor mUtton.nfljn Percon 1181 265 82 1540 100 192 237 .45 123 1912 2S1 a8 1398 118 232 250 418 108 13 ISO 39 1627 128 209 243 34 116 184 171 43 1849 138 498 396 102 80 t185 Igo 52 2040 148 552 278 274 50 1988 194 47 2140 159 476 279 197 59 17 202 .45 2016 136 S 58 291 227 56 1988 259 58 1636 138 507 306 201 60 1989 250 59 1817 151 646 318 328 49 1390 152 36 1355 118 403 305 e8 76 Note: Shwpdrop in owmei 1990 is WNueii byCF totempora drp Ih purdiabi pow ofraO usresuln fromIroducim dofnew airrena dunn 1090.Oltn paymweta transportt migoby rudc wmadenwmdMecv _ b,w,weret

D.t.s for 1990 llaKZumgln) income %~~~~~ofTot &M Ms %ofTotal Traffi 2612 70 Salade 177 58 FreghtTranc e5 24 OtherRemunerlon 50 16 26 6 kwl 33 11 SparePats 5 2 Depudion 40 13 -,olal 403 100 Tolal 305 100

Table 2 - Estimated Cost and procurement basis of the IRE Project-CFMcomponent EstimatedCost Basisof Procurement Proect Ements Foreign Locl Total tCB UB Others Tota (US$mdUlon) Sides 0.75 0.11 066 0.75 0.75 Te aweddiAults" 1.48 0.22 1.68 1.48 1.48 lbW 5054 0O8 062 0.54 0,54 Eqmnt 017 0.02 0.19 0.17 Q17 Locamotl&A*OfU t 125 0.18 1.44 1.40 025 1.25 E*ment 0.07 .01 0.08 0.07 0.07 LoglsliSuppolt 055 0.0 0.61 0.2 027 0AS Pot Toal aeCost 4.79 O.6 OA? 0.24 1U 3.2 7 9 RVI" CMA _gwit 0.72 0.10 0.82 Pdo Es_don Q42 O.e 0.48 Totl 593 0.64 6.77 0.30 1.5w 4.05 5.92 %dTold 6 2n 68 100 - 37 -

AnnexAl-b Page 1 of 6 ANGOLA

INFRASTIUCTUREREHABILITATION ENGINEERING (IRE) PROJECT

DETAILEDPROJECT DESCRIPTION

NATIONALBASIC HIGHWAYNETWO0

CURRENTSITUATION 1. Angola's basic highway infrastructureremains essentially unchangedsince independencein 1975. The civil strife in subsequent years caused the departureof the majorityof the skilledPortuguese highway personnel and resulted in a continuingdecline of the highway network condition. 2. In 1987, Angola'shighway network consisted of an estimated 75,000km, of which 8,000 were asphaltand 4,000 were surfacedwith gravel. The paved and gravel portionsof the network,together with approximately18,000 kmn of earth roads,provide the basic economic, administrative,and strategiclinks between the nationalcapital, Luanda, and the provincialcapitals and municipalcenters. These roads also provide access to railroads,port and airport facilities,and to Internationalborder crossings. In the future,this 30.000-kmnetwork, known as the "NationalBasic Highway Network* (NUN), will probablybe the scope of respoAsibility of a new national highway agency recently organized with the assistance of international consultants. The new agency resembles the general structure of the former autonomous highway commission of Angola (JAXA) which was abolishedin 1975. Since then, responsibilityfor highwaysin Angola shifted between severaldepartments ud*~~~-- -~~ ttS.1.~ .. L- can- .** ~r 4 rud Ua.IViL;e.j. 01. the go-wer"ment. ... ' St S-5 throughout the country, the government made little or no effort to manage the overall highway sector. The new Angola Highway Institute (IDEA) began operations in November 1990. 3. The staff of INEAcurrently consists of one graduate engineer, a tecanical specialist, a secretary, amd an" epatriate te&a-±c±n. Additional personnel, consisting of nine engineers, a geologist, an economist, a lawyer,nine techniciansand nineteenadministrative support staff, has been requestedin the proposedINEA operating budget from April to the end of FiscalYear 1991. Thesepersonnel are availablewithin the existingstaff of the Ministryof PublicWorks and Urban Developmentt lMINCONS)and other governmentagenciesienterprises.

4. As part of a short study for the creation of INEA, a Portugueseconsulting firm retainedby MINCONSsurveyed the locationand condition of highway equipmentbelonging to MINCONS. The survey

I Formerly the MinLstry of Construction - 38 -

Annex Al-b Page 2 of 6 determinedthat, of 736 piecesof equipmentidentified, 21% were usable, 61S were not operational,and the operationalcondition of 182 of the units was not known. Informationobtained from INEA indicatesthat a large numberof MINCONS'road equipmentfleet was purchasednew in 1980- 81, but that a significant*umber of units did not functionmore than 1,500bours, becauseof improperoperation or lack of maintenance,or both.

5. The consultantalso surveyed the positionoce'pied, location, yearsIn presentposition, and qualificationsof highwaypersonnel working within tho MINCONS. The results indicatedthat of 973 individuals surveyedIn tbhrteenof the eighteenprovinces, 812 were qualifiedsand 192 were not qualifiedfor the positionsthey held. 6. The consultantconcluded that for new highway agency to und-rtakeroad rehabilitationand maintenancewith its own forces,it would requirea total of 2,570employes. They would consistof 150 for the Luandaheadquarters, 280 for regionaloffices and 2,140for provincial offices. The surveyfound that existingqualified candidates could fill only 750 of the neededpositions. This lack of quallfiedcandidates to fill current and futurerequiremnts for qualifiedhighway personnel is beyond the reach of a human resource development effort and an alternative approach is needed (para. 8). 7. An efficient highway system is critical for the economic recoveryand further development of Angola. During 1987 the highway sectorcarried approxztately 1.1 milliontons of cargo,representing 382 'of nationwidecargo movments. Duringthe some period,gmore than 16.2 mIlLion passengers,equivalent to 692 of all passenger movements nationwide traveled by road. The end of the war will enable GOA to apl_ment Its economic restructuring programs, and Intensify operating and finaiael& activity in all sectors. !IOwvar; m'. voahahS41tation and mainteance of the highwy frastructure lead the improvement process, the country's economic and financial perfomane will be severely hampered. fighway rehabilitation and maintenance, together with the necessary highway Institutional and mangnt improvements, are key ingredients to Angola's recovery. LOG-Tym OIJZCTMSIV 8. The purpose of organising INSA was to manage the planning, design, constructlon, rehablitation and maintenance of Angola's highway network. The long torm goal is for the Institute to become an autonomous organisation fully deriving its financial resources from user charges collected through a "highway fund" echanism under consideration by GOA. Since policy makers also antlcaipat that most highway maintenance and rehabilitationwork will be performedby contract,INEA would not hire more staff,nor buy equipmentfor directin-house operations. However, until the contractor industry develops sufficiently in Angola, INEAwould have to contractvork to foreign organisations. Some basic routine maintenancemay continueto be the responsibilityof in-houselabor and - 39 -

Annex Al-b Page 3 of 6 equipmentunder the directsupervision of INEA. Ultimately,INtA's staff would consist only of ongineorsand other professionals,surveyors, laboratory techniciamn, aid materials and construction inpectors. IRE PROJECTCOPONENT 0lJECTIVES 9. Considering these operatioal constraints for INtA, the proposed Infrastructure Rehabilitation Engineering Project(IRE) plans consulting services to conduct a highway management study and prepare a highwy rehabilitationand maintenanceprogram for the NationalBasic Highway Network(NB3N). The projectalso will providesupport and adviceto the newly formed INEA in settlng up the basic organisationaland administrativedepartments it requires.The consultingfirm will further identifyares" where INEAcan makemanagement and operational improvements with availableresources. Another objectivewill be to develop and initiate a staff development program to train INEA personnel and highway staff of local road contractors. The consultant will make an assessment of existing potential training facilities,lncluding the National Universityand othertechnical education training institutions and present recomendations. The IRS componentfor the NBHN also envisionsfinal design and preparation of tender documents for th, highest priority road sections -- estimated at 600 km. -- to be identifiedin the rehabilitation program. COMPONENTDESCRIPTION

Manatemnt Study 10. The highway maagemnt study element of consulting services will* (1) develop the necessary uanagement structure for lmplemntation and flnanaingof the rehabilitationand maintenanceprogram; (2) review and recommendImprovements to the technical,economic, and financial responsibilities and control mechanism. (3) review and recomend liprovements to existing staffLng plans, as well as other physical and financial resource requirements for INlA; (4) review and recommnd improvements as necessary for the implementationof INEA's policies, practices and procedureo,including design, construction and maintenance standards and specifications, environmental assessments, hlghway maintenance program linked to the highway condirionas ;raiCic surveys saa projections, user costs, and procedures for technical, economic and financial asessment of road projects; (5) develop procedures for location and condition surveys of all highway construction ntd aintenance equipmentpurchsed by GOA since 1975, includinganalysis of potential rehabilitation,end alternativesfor sellingor leasingsuch equipment; and (6) review and recommend Improvements in the procedures for procurement of consulting services, and for tendering of rehabilitation and maintenance contracts in complince with applicable Government regulations and international lending agencies' guldelines. This study will require an ostimated 20 man-months of expatriate consulting services. - 40 - Annex Al-b Page 4 of 6 Hixhwav Rehabilitation Study 11. The rehabilitationprogram development element of consulting services wills (1) carry out a comprehensivesurvey of highway rehabilitationrequirements in Angola;and (2) developa technicallyand economically feasible, environmentallysound, highway and bridge rehabilitationmaster plan for the NBHN, togetherwith the necessary highwaymaintenance program. Thiswill ensurethat properand continuous maintenancewill begin on rehabilitatedroads lmuediatelyupon completion of the rehabilitationwork. This elementwill requirean estimated30 man-months of expatriate consultant services.

Maintenance Manatement System Implementation and Trainint 12. Computerized data base management systems are not presently used in the nationalhighway department. As part of the scope of work to be accomplished under this component of the IRE project, local counterparts will receive on-the-job training in the use of computers and in highway managementsystems and procedures. 13. The consultingservices also will further:(1) designand guide the implementation of a comprehensive maintenance management system for INEA, including policies, practices,procedures and standards for planning,budgeting and supervisingroutine and periodicmaintenance operations;(2) based on the overall rehabilitationand maintenance program,conduct a trainingneeds assessmentand formulateand guide the implementationof a continuousstaff developmentand trainingprogram; (3) design and assist in the implementation of a program of technical and managerial assistance and trailnng for local consultants and contractors; (4) provide continuousassistance to INEA during the period of the contractin the overallmanagement of the Instituteand the NBHN, and in presentingthe rehabilitatio-nprogram to internationallending agencies for potential financial support. This component will require an estimated 70 man-months of expatriate technical assistance in the following functional areass

i ghway engineering . organization and management, . planning and budgeting: . environnental assessments, economics, . financlal management, . personnel trainig, field maintenance operations. TechnicalSkill Improvementof Local Counterparts

14. In order for INEA to absorbthe maximumamount of management, planning,and supervisionskills from the expatriateconsultants during their contract period, local counterparts will work with the consultant on a daily basis. (A list of the planned local counterparts to be assigned - 41 - Annex Al-b Page 5 of 6 by INEA has alreadybeen prepared).An estimatedUS$100,000 has been includedin this componentto cover the cost of short overseastraining courses-- lasting six to twelve weeks,probably in Portugal -- of the followingINEA personnels

. one planning engineer, . on economist, . one financialanalyst, . one mechanicalengineer, . one computerprogrammer, . one field project inspector, . two secretaries. Basic Eauitmentand Administrative/LotisticSuPport 15. The critical shortage of adequate housing for expatriate consultantstaff, and anticipateddifficulties in obtainingequipment -- delays of four to six months -- will require efforts to acquire these elements before consultingservices begin. A provisionof US$560,000has been includedin this componentfor consultant housing. Costs of basic equipment for trafficcounts, weight control, communications, as well as for office equipment and vehicles for consultants -- including operating costs -- amount to an estimated US$1.44 million. Since localprocurement of spareparts and suppliesis difficult,the foreigncurrency portion of this component's estimated cost includes an amount designed to make it possible to purchase and import these items from outside the country. Principal types of equipment -- and spare parts and supplies -- include: Vvehicles, office equipment such as computers and coplers, trafficcounters, weightcontrol scales, communicationssuch as telex, fax, radio. COMPONENTCOST 16. Costs of the highways component of the IRE Project will amount to an estimated base cost of US$8.47 million (US$0.90 million in local currency, with US$7.57 million in foreign currency) (see details in Section A3 and the suimmarybelow). - 42 -

Annx Al-b Psg. 6 of 6

ozeat EgtLmted Cost (Us$ million)

1. Studis 0 87 2. finl Desgn 4.10 3. TSchnical Assistance 1.40 4. Initial Tratnia 0.10 5. B"Sa Equipment & Spares 0.69 6. Admin.ILog$stlcSupport

A. Office Equipmt, Speres & Supplies 0.58 D. Vehicles 0.17 C. Housin for Conmultants O.S6

TOTAI 8.47 - 43 - Annes Alc(11 Pag I of 7 VRASMTRUCTUREREUABILITATION ENGINEIRING (IRE) PROJECT pESAILEDPROJECT DESCRIPMTOK PORTOF LUAND COMPONENT

CURRENTBITUATION 1. Port of Luanda is the main port of Angolg ond is known aS 'one of the finest harbors on the West Coast of Africa'. Depths In the wide entrance from the Atlantic Ocean vary from 24 m to 33 m, and In the large anchorage from 15 to 30 a. It is vell protected on its seavard side by Ilh de Cabo, a low narrow island about 6,5 km long, joined to the mainland at Lts south-west end by a causewy. 2. A Director GOneral, assisted by managerlal and technical officers In different sections and departmemts, heads the Port of Luanda. The port employed about 3,600 peopli as of January 1991, but plans to reduce the staff to approximately 1,0 0. TSh port curretly is negotiatinga contractwith a private steve ring company for operating actlvities. The contractprobably will b. effectivein the near future. S. The main existingport facilitiesInclude a total of 2,262a quay lengthwith a total of 55,000m2 coveredstorage areas In 18 cargo sbhds and warehouses. 4. Angolan authoritieshave used the year 1973 as a reference year when they compareport traffic developmentafter Independence. lI 1973, Port of Luanda bandled 1,414,000 tons of general cargo, 602 for export. Average traffic from 1977 to 1980 was about 750,000 tons a year. The traffic from 1960 to 1090 has been volatile. Dry cargo declinedup to 1982 but then ton"ge increased with a growth rate of about 72 a year from 1984 to 1990. To 1990 the port handled1,124,500 tons of general cargo,mainly imgorte(987,800 tonnes or 882). In 1973 the coastal traffic amountod to approximately 332 of the total traffic (import/export). Tn 1988 the share was 72, and increased to 1 during 1990. The composition of traffic also has changed. The increase in containerisation has beon particularly strong, increasing from less than 151 in 1984 to S52 in 1990, equivalentto 322,000tons of importedcargo (23,515 TWBs). Containerexport consists mainly of empties. 5. Uhereasoverall dry cargo-- excludingcabotage, oil and cement-- has Increasedat about 72 a year since 1984, container traffic has growa by more than 251 a year. This growth rate has caused substantial operationaldifficulties in ship-to-shoreactlvities as well as storage at the containeryard, resulting in extremely high dwell time of containersin the port. The numbersof containersIn the port, averaging10,000 In January,1991, alreadyexceeded the storage capacity. Excesscontainers are scattered throughout the port wherever space can be found. The figuresobtained during the appraisalmission indicatethat lmport/exportcontainers spend 80 days or more, on average,In the port. The totalnumber of containerson hand to 44 - Annex Al-c i) Page 2 of 7 considerablyhigher than the technical/operationalcapacity of the terminal and extremely high by international standards. 6. The main causes of the high container dwell time for import containersseem to be: (1) importers'shortage of fundsto pay customs dutiesand handling/storagecharges; (2) cumbersomecustoms clearance procedures;(3) slow onwardshipment by truckand/or rail; and (4) delaysin cargo handlingby the port of Luanda,including searching for specificcontainers resulting from a shortageof properequipment and lack of a containertracking system. 7. The cargo handlingequipment is old and has lackedproper maintenancefor many years,mainly because of a shortageof spareparts and skilledmechanics. The port'sstatistics indicate that by January 1991 less than 30 2 of the totalequipment was operational.The main reasonwhy the port has been able to continueoperating current traffic, particularlycontainer traffic, is that the shippinglines have provided their own shorehandling equipment to operatetheir vessels.

8. Civil structures-- quays,buildings, sheds, storage areas, roads, water supply,drainage, sewerage, electrical installations -- bear strikingsigns of neglectedmaintenance. Signs of neglectare particularlyevident in the old parts of the port but also are noticeablein the containerstacking yard and alongthe containerquays. 9. Accumulatedwaste all aroundthe port is hamperingcargo handling and storage. Scrap,including scrapped or damagedcargo and handling equipment,tend to remainin the port area,because no organized procedureexists for removalof these obstacles. 10. Port of Luanda'sincome statements for 1987-1990show that the port is operatingat a net profit,increasing from Rz 280 millionin 1987 to Kz 562 million in 1990. However,the net incomeis misleading since the depreciation-- Kz 30 million per annum -- does not reflect the actualvalue of all operationalassets. The tariffs,similar for all ports in Angola,are from 1985 and do not reflectthe actualcost of services.Port of Luandahas elaborateda new tariffstructure, but the Governmenthas not yet approvedit. LONG-TEE)(OBJECTIVES OF THE PORT OF LUAOFA 11. The long term goals and objectivesof the port of Luandaare (1) to optimizethe use of existingfacilities and (2) to developthe port infrastructure,acquisitions and management to cater for existing trafficas well as anticipatedgrowth. The strategyto attainthese goals dependson increasedproductivity and generationof sufficient revenuesto recovercosts. Cost controlalso is u major input in evolvinga competitivetariff to sustainthe marketand hence to improve earnings. -45 - Annex! l-c,Al Page 3 of 7 IRE PROJECTCOMPONENT OBJECTIVES AND STRATEGY 12. The first step in achievingthese objectives is to evolvea long- term plan. This plan shouldinclude (1) investmentsfor rehabilitation of existingassets and acquisitionof new assets;(2) operations improvements;(3) organizationrestructuring; (4) introductionof a cost based tariffstructure; (5) human resourcedevelopment; and (6) systems improvements through a developmentstudy. The studyrecommendations would form the basis of preparation,appraisal and eventual approval of a port rehabilitationproject. The IRE projectwould furtherinclude technicalassistance to help makingbadly neededimprovements in port operationsand equipmentmaintenance as well as trainingof human resources.Such assistancewould lay the basis for more effective planningand implementationof the main rehabilitationproject.

COMPONENTDESCRIPTION 13. The proposal for the IRE projectfor port of Luandacontains the following componentss (a) Study The overridinggoals of the port of Luandaare to optimizethe use of existingfacilities and to developthe port infrastructure, acquisitionsand managementto cater for existingtraffic as well as anticipatedgrowth. Over the past 15 years no major efforts have occurredto improvesystems in the port operationand management to cater to the changingenvironment, particularly concerningcontainerized traffic. The port of Luandaauthorities intend to re-examine the current infrastructure and equipment and to evaluate the expected increase in demand for port services to plan comprehensive development of the port of Luanda.

& a4.lor^ffi^+A+t-,y!Xse+^r ptt *e teeeA,z, i re'dc: tc:(X) preparean overallport developmentprogram for the periodfrom 1991 to 2004; (2) preparea programfor improvementin operations; and (3) recommend an appropriate financial strategy to expand port of Luanda's profitability. The studywill undertakedetailed traffic forecasts, operational analysis,final engineering of emergencyrehabilitation vork required,and preliminaryengineering investigations. The study also will make a finamcialand economicassessment of various developmentoptions available to port of Luandain order to determine the improvements necessary to enable the port to handle the trafficanticipated to the year 2004. thestudy will also explorethe possibilityfor diversificationwith the view to ensuringfinancial stability. Estimatedcost for the study is US$ 0.66 million. - 46 - AnnexAl-c(i) Page 4 of 7 (b) TechnicalAssistance Operationsand maintenanceshortcomings are evidentin all port activities.In some categories,particularly equipment and civil maintenance,the problemshave becomeserious. Authoritiessaid lack of spareparts and skilledstaff was the main cause,but the root appearsto lie in institutional,administrative and managerialproblems in portoperations. Control and regulation, formulationof policiesand objectives,organizational structures and planningmechanisms are less effectivethan they shouldbe. The importance of maintenance and its costs are not fully recognized. Budgeta at the government and port level have failed to provideappropriate funds to cover these costs,although this has resulted,in part,from lack of accurateInformation oan costs. Purthermoreexcessive control from government ministries Impairs theport's ability to manageits operational and maintenance functions.This is mostevident In the approvalof purchase ordersfor spareor replacementparts, where it often takes several months, or longer,before an ordereventually can be placed. Technicalassistance is essentialfor port administration/ operations, equipment maintenance, and civil works maintenance. Another goal of such assistance should be to improve the skills of staff withinthese departmentsas wellas to introduceimproved operationaland administrative systems which would aim at higher productivityof cargohandling and lowercargo dwell tine. The technicalassistance experts will help to Ldentifyurgently requiredspare parts and assistin procuringthem as wellas supervise-repairs-andmaintenance of equipmeut.Twelve man-months of proposed technical assistance for this port component has been tabled as unallocated. The rationale for this is to make it possible to call oanshort term experts during the Implementation of the projectto helpmeet special requirements. Some examples wouldinclude electrical engineering for ship-to-shorecranes, or hiringspecialists in storesand supply,finance and communication. The Portof Luandawill provide qualified local counterparts to workwith the foreignexperts. The counterpart and the foreign expert,with the supportof themanagement, will work towards the eventualphasing out of the technicalassistance position and the fullassumption by thecounterpart of the responsibilitiesrelated to the job position.The counterpartsshould be nominatedand in placebefore the foreignexperts will begin their services. Overseastraining of counterpartsmight be advisableso that counterparts and technical assistants are not separated for more than 202 of the periodof assistance. The componentprovides 70 man-monthsof technicalassistance in the followingareas: _ 47 - Annx Al-c(i Page 5 of 7 - port administrationloperations 24 months - equipment maintenance 22 months - civilworks maintenance 12 months - unallocated 12 months Estimatedcost US$ 1.25 million. c) Trainint

The port has too few skilled personnel for an enterpris, seeking to modernize its equipment and introduce new operating techniques. Technical assistants will provide on-the-job training and the consultant for the development study will develop a training plan. Data for the plan will come from analyses of existing personnel prepared by the port of Luanda in liaison with the technical assistance experts. Generalobjectives of the trainingplan will bes (1) to improve the competencies of staff who can benefit from furthertraining; (2) to trainnew staffto eitherreplace those who will retireor increasethe levelin accordancewith port of Luanda'sdevelopment plan for the concernedperiod; and (3) to improve the management and organization skills of managers and supervisors. The most urgent traainig need identified during the first year of implementation will be carried out during the second year of the IRE-project. Estimatedcost US$ 0.22 million.

(d) Eauipmentlsnarenarts

The total need for spare parts and equipment for the port of Luanda must be carefully assessed. This component therefore includes requirements (1) to keep the heavy fork lift trucks needed to handle containers at a reasonable high operational availability and (2) to rehabilitetwo Jonesmobile cranes, which have been in the port since1985 without being commissioned.The port of Luandahas agreedto put the mobilecranes into operation beforeany furtherrehabilitation begins. If necessary, authoritiescould transfercranes to Namibeport. Technical assistants,working with port staff,will identifyworkshop tools and equipment,civil maintenance equipment, spare part requirementsand communicationequipment before they submit the list to the Bank for approval. A consultant engaged by the port of Luanda completed a studyon computerizationof several departmentswithin the port and issuedit in 1990. This study will be reviewedby the consultantassigned to carryout the first phaseof the developmentstudy. The mid-termreview may include furtherdiscussions of financinginitial stage of the computerizationoroject.

Estimatedcost USS 1.29million. - 48 - AnnexAl-c(i) Page 6 of 7 (s) LoaisticeSu Dort There is an acute shortageof housesin Luandato accommodatethe technicalassistance experts and the consultantfor the development study. Port of Luanda has agreed to arrange for three fully f'2rnished prefabricated houses, to be erectedat a plot ownedby the port adjacent to the port area. The port also will provide six vehicles to transport the consultant for the study and technicalassistance experts during the projectimplementation. The port also will providebasic officeequipment.

Estimated cost US$ 0.46 million.

COMPONENTCOST 14. The summary of the cost for the port projectwould be as follows: (US$ million) Foreian Local Total _ Developmentstudy 0.60 0.06 0.66 - TechnicalAssistance 1.14 0.11 1.25 - Training 0.20 0.02 0.22 - Equipment/spareparts 1.18 0.11 1.29 - Logisticssupport 0.42 0.04 0.46 Sub-total 3.54 0.34 3.88 Physicaland price contingencies 0.94 0.01 0.95 TOTAL 4.48 0.35 4.83

COMPONENTSCHEDULE 15. The creditfor the IRE projectis expectedto be effectiveby October1991. Terms of Referencefor the developmentstudy as well as letterof invitationand shortlist of consultantshave been prepared and agreedon duringnegotiations for the credit. Plans call for completionof the developmentstudy within seven to eightmonths after the contractwith the selectedconsultant is awarded. Procurementof eauipment and spare parts and technical amsistan.e and tralning would begin twvoto four monthsafter the creditis effective and would continuefor two years. COMPONENTBENEPITS 16. The Port of Luandacurrently has exceededits storagecapacity of containersbecause of low productivityand the extremelyhigh dwelltime of more than 80 days on averagefor imports/exports.The low productivity stems from (1) shortage of equipment, (2) poor maintenance of the infrastructure,and (3) an inefficienttracking system. - 49 - AMine:A1cSi Page 7 of 7 17. High dwell time is expensive.Bach additionalday that a full Importcontainer spends in the port costs the economyan estimatedUS$ 5, the capitalcost of the goods,and anotherUS$ 3-4 in demurrage chargesto the containerowner if the containeris not returnedwithin 21 days of discharge,a totalof USS 8,50. Withcurrent import volume of 23,515TEUs, and the extremelyhigh dwelltime, this representsa cost to the Angolaneconomy of aboutUS$ 16 millionper annum. More Importantlyin the long run, high dwell time reducesthe effective operationand capacityof the port. Ship'swaiting time and freight costsvould both rise and, once the port has reachedfull capacity,it would lose all additionaltraffic. 18. A targetfor the IRS projectwould be to reducethe container dwell time by at least301 over the projectperiod of 2 years. This would allow the port to receiveanticipated increased container traffic and reducethe cost to the Angolaneconomy by US$ 4,800,000. 19. Anothermajor benefitof the IRE projectwould be a reduct!onin the totalnumber of ship berth days and the numberof days that ships spend waitingfor a berth. Althoughthe Angolaneconomy would not receive immedic.telythe full benefit of the savings in ship's time, lover freightrates and demurragecharges would help the countryin the long tern. - 50 - Anex-A-ctil) Page 1 of a

IXnnMCSWRR MAMTATION lSllllNe nX?¢ DITASLUDPECS DISCIIP!IO CGM=H DI RM Di LN (Cgm)UMtN

1. Luanda is the capital of Angola and a busy port with considerable potential for growth. The hinterland of Luanda includes the provinces of Zaire, Uige, Bongo, KEanaa-Norte, Maloage, Luanda-Norte and Luanda-Sul. The Luanda Railway(Cfl) comprises a main line and 4 branch lines totalling a length of 537 km. The main line links Luanda to the city of Malange, 424 km inland and 1153 m above sea level, is the inland terminal of CnL, a center of a rich agricultural area producing coffee, sisal, cereals, cotton, tobacco and bee wax. Coffee grows mainly In igse, Kvanza-Norte, Jwanza-Suland Bongo Provinces. The branch lines connect Luanda to Cacuaco (18 km), Maceques to Xikolo (9 km), Zenma to Dondo (55 ka), and Canhoca to Golungo (31 km). 2. In 1974 about 220,000 tons of coffee were exported through the port of Luanda, but because of war, production has fallen to less than 102. However, in 1984, coffee exports earned close to US$ 80 million. Other agricultural products exported at that time included cotton -- 120,000 tons in 1973 and 30,000 tons in 1984 -- and sisal -- 67,000 tons in 1974 and 20,000 tons In 1984. Among minerals, iron and manganese ores have been mined in Malange Province and known deposits of copper and uranium also exist. Before independence, scant development took place in the Angolan Industrial sector. only food processing industry in the Luanda, Catete, Dondo and Malano areas and after 1966 the textile industry in Luanda and Dondo were permitted to produce, mainly for domestic consumption. Now, considerable industrial development can be expected.

S. A Special Assistance Programm for Angola, including one for Luanda Port Transport System (LPTS), comprising CFL and the port of Luanda was prepared in 1988 by the Southern Africa Transport Communications Commission (SATCC). In the Special Assistance Programme for Angola, the rehabilitatLon projects for the railwaysand the hinterlandroad networkamounted to US$ 180 million. DISCaPTIOBOP THE UtWORK

4. Constructionof a 600 mu gauge railway from LuandaPort to Fuda, 45 km inland, was completed In 1888;later the gaugewas changed to 1 m and the line extended to Lucala (364 km) by 1899 and eventually to Malangc (424 km) by 1909. A 600 an gauge branch line was constructed from Canhoca to Golungo Alto in 1915. This 31 km branch climbs511 m, the last 17 km at an average of 1 in 38. Two other small branch lines were built from Luanda to Cacuaco(18 km) and from Mueeques to Klcolo (9 km). In 1944,a 5S km branchline was built to connect Dondo to the main line at Zenza. In 1960 the trackgauge was changedfrom 1 a to 3..6' (1067mm). 5. All sleepersare steel,some datingfrom 1906 and many have been repressedand punchedwith new belt holes to accommdate the changeof gauge. - 52 - AnnexAl-c(ii) Page 3 of 8 about 2500 is higher than necessaryon the basis of reasonableproductivity and efficiencynorms but the percentageof competentstaff is quite low. luman resource and organizationdevelopment. Rnd reegtablisbmentof systems and procedures,would requirethe highestpriority in designingany strategyfor turningaround CFL.

LOpGTS -OJETSOF 9. Efficientand cost-effectivetransport capability is crucialto the economic growth of the area of influence of Luanda and defining the right mix of transport modes for varioustypes of trafficis absolutelyessential. With inter-modal competition increasing, CFL's share of traffic, both passenger and freight,would dependupon the extentto which the railroad can provide efficient and cost-effectiveservice. Implementingan intensiveprogram of efficiency improvementand cost reductionby CFL is, therefore,of immediateimportance. In the long-termCFL shouldpursue two major inter-related,objectivess (1) establishingadequate capacity to carry its due share of local trafficby implementing a plan comprising rehabilitation of existing assets, marginal new investments, and improved operating efficiency; and (2) evolving and implementing a strategy and a plan to operate as a commercially viable entity. IRt P!_J* CT COHPONENTOBJECTIVES ANDSTRATEGY 10. The CFL component of the IRE project aims at defining CFL's future role in the transportationsector. One goal is to establishthe basis for preparation,appraisal, and eventual implementationof a project for restructuring CFL, concentrating upon human resource and organizational developmentand systems improvement. A- feasibilitystudy is designedto establishthe techno-economicfeasbillity of varioustransport options and to evolvea long-term action plan. A program of training, technical assistance, computerization and logisticaland administrativesupport will encourage developmentof human resources and instructions during the project period. Equipment rehabilitation and locomotive maintenance, also elements of the CFL component of the IRE project, wll help CPL to increase its capacity to carry more traffic. These activities also will help to reestablish systems related to qualityassurance, spare parts management, procurement of materialsand services, maintenancemanagement, and costing, and will provide opportunities for staff to get trainingin real work situations. The IRE project also would lay the basis for R more effective and speedier implementationof the main rehabilitation projectby exposingthe organizationto the complexitiesof projectmanagement.

CONPONENTDKSCRIPTIOI 11. The IRE projectpertaining to CFL has six main componentst(1) a feasibilitystudy; (2) technicalassistance; (3) training; (4) equipment rehabilitation including locomotive overhaul and maintenance; (5) computerization;and (6) logisticaland administrativesupport. - 53 - Annex Al-c(iL) Page 4 of 8

FeasibilityStudy 12. A comprehensivefeasibility study for CFL is aimed ats (1) forecastingthe total demand for the transportof short and long distance passengerand freighttraffic in the area of influenceof the capitalof Angola and estimatingCFL's logicalshare of each type of traffic,based on comparative economic cost8 of competing modes of transport under different scenarios of efficiencyand productivity;(2) evolving a long-term strategyand an actionplan to enableCFL to become commercially viable at some reasonablepoint in the future. Such a strategy should focus on operationsrestructuring and improvement,cost reduction,rehabilitation of existingassets, new investments, human resourcedevelopment, organization redesign, optimal pricing linked to trafficforecasts, traffic demand elasticity, and capitalrestructuring; and (3) establishing the framework of a Memorandumof Understanding between CFL and GOA setting forth their respectiveauthority and obligationsfor meeting the objectiveof commercialviability specifically with respect to the issues pertainingto pricing, foreign exchange allocation, reorganization, staff changes, implementing schemes for motivating staff, and creating rules and procedures for the efficient running of the railways. TechnicalAssistance (TA) 13. Since independenceCFL did not have the advantageof technically qualifiedand experiencedpersonnel. As a result systemsand proceduresin almostall the departmentsneed review,updating and reestablishment.Common responsibilitiesof differentexperts under TA programwould includes (1) iproving systemsand procedures and implementingthem; (2) establishing improved tormsof performanceand initiatingmeasures for achieving them; (3)training the Staffat the managementlevel; (4) undertaking detailed training needs analysis to facilitate preparation of appropriate training programs; (5) computerization of the process of operations planning and performance monitoring; and (6) implementingthe acceptedrecommendations of the commercialviability study. Your expertsare recommendedunder the TA program. Extentand scope of their specificresponsibilities, in additionto thosementioned above, would includes (a) Locomotiveand RollinaStock Maintenances (1) establishingand implementing optimal preventive maintenance schedules; (2) introducinga systemof qualityassurance; (3) undertaking equipment and processaudit and initiatingimprovements; and (4)and resolving recurrent maintenance problems (18 months). (b) Onerations: (1) establishing and implementing optimal train runningschedules and yard managementpractices; (2) improvingthe levels of wagon turnaroundand locomotiveutilization; and (3) facilitatingimprovement in infrastructureand methodsof handling cargo throughdiscussion with users (18 months). (c) Track Maintenance: (1) introducinga systemof DirectedTrack Maintenance(DTM), linking this with the purchaseof tracktrolleys; (2) undertakingequipment and process audit and initiating mprovements;and (3) undertakinganalysis of derailmentsand - 54 -

Amnex Al-c lW) Page 5 of 8 initiating measures for improvement including better maintenance of oharr curves (18 monthe).

(4) ProtectDocumentatlions (1) setting up a sectionfor keeping records of all studies, investigations, reports, and action plans; (2) computerizationof all records pertaining to progress In implementationof all action plans and recomendations; (3) setting up a system of monitoringprogress of projectsand programsland (4) finally facilitating the development of a project planning and monitoringsection (6 months). Trainina 14. The trainingprogram envisions employment of four trainingexperts for 6 months each. Theirresponsibilities would Include,for theirreopective areass (1) designingspecific training programsand preparationof course materialfor differentgroups of staff,grouped on the basisof educationand experiencelevel, age and trainingneods; (2) preparingtraining material for selected staff to act as trainersand conducttraining programs for thems (3) conductingpilot trainingprograms along vith the selectedstaff to act as trainers;(4) based on the foed-back,refining and finalising the training programs; and (5) recommending advanced training programs and mode of training for specialized staff. staff groups agreed for training under this program aret (1) operatingstaff, such as trainstaff, station masters, train control staff, and trainchecking stafft (2) locomotivemaintenance, both in the workshopand the depots,and operatingstaff; (3) tariff and pricing; and (4) stafffor maintenanceof track and trackequipment.

Basic Equiment and Spares 15. New-auipments New equipment to improve the quality of maintenance will be purchasedunder this project.The equipmentIncludes (1) one locomotive testingstand; (2) two numbersof calibrationequipment; and (3) onetest stand for performing running tests on traction motors. Track trolleys are also proposedto enableCIL to switchover to the systemof DTM. 16. LocomotiveMaintenance; Eight of the 17 main lineGeneral Electric and GeneralMotor locomotivescurrently are out of commission.These locomotives are the U 20 C type, fittedwith an engineof 2150 H.P. and are about 20 years old. The commercial viability study, under its terms of reference,would offer recommendationsconcerning the feasibillity and the modality of recommissioning these locomotives.A totalof US$1.2million has beenprovided for the overhaul of up to four of these locomotiveson conditionthat locomotiveoverhaul is considered techno-economically feasible and traffic grows as anticipated. Spare parts costing up to US$0.6 million have been proposedto enableCFL to maintain a high availability of locomotives. - 55 - Annex Al-c(Ui) Page 6 of S Comouterization 17. The projectproposes installation of fourpersonal computer systems, with appropriateextensions, printers and software.the goal is to improvethe processof planningand to monitorperformance in the followingdepartmentst (1) locomotiveand rollingstock maintenanceworkshop; (2) operations;(3) civil engineering;and (4) projectdocumentation section. Loglsticaland administrativeSupDort 18. To implementproject components of the commercialviability study, TA and training,12 to 15 expertscan be in place at one time in Luanda,the headquartersof CFL. Becauseof the acute shortageof housingin the city,CFL has undertakento buildnew houseson railwayland presentlylying vacant. The companyalso will providefurniture and fittings. CFL would need to use pre- fabricatedhouses to buildthem in a shorttime. Officesfor theseexperts also would requirerenovation. CFL managementwould work out detailsof the number of housesto be built and equipped.A totalof US$.lmillion has been provided to furmishhouses and officesand US$0.05million to purchasevehlcles.

COMPONENTCOST

19. The totalbase foreigncost of the CFL componentof the IRE project would be US$4.51million and US$5.59 million includingphysical and price contingencies.The correspondinglocal costs would amountto US$0.61as base cost and US$0.75million including contingencies. (Details of costsof various elementsand the basis of procurementare in Table 2.)

COMPONNT SCEDL 20. The creditfor the IRE projectis expectedto be effectiveby October 1991. Terms of Referenceof the commercialviability study for the LuandaPort TransportSystem are under preparation. After obtainingthe necessaryBank approvalfor a shortlist of consultantsand the Letterof Invitation,MINTEC can invite offers, complete technical evaluation, and prepare to negotiate and sign the contract. Considering the mobilization period, the study can commence by November1991 and finishby June 1992. TA and trainingcomponents could begin by March 1992 and end by September1993.

COMPONENTBENEPITS 21. Even before the comnencement of IRE, CFL has agreed to increase the locomotive assignment for freighttraffic from the currentone to threeenabling the additional container train to Dondo via Zenza to begin service and raise freight-carrying capacity from 53,000 tons a year to 140,000 tons a year. 22. Implementationof the componentwould result in the following beuefites(t) sustainedfreight-carrying capacity of 190,000tons a year of importsand equivalentreturn container traffic; (2) a 252 increasein revenue earningsfrom passenger traffic as a resultof a sustainedprogram of preventing - 56 - AmnexAl-ctii) Page 7 of 8 ticket-lesstravelling, estimated currently at about 50Z; (3) improved performanceresulting in an increaseof revenueand decreasein unit operating costs and reductionin the operatingratio from the 1990 figureof 1182 to less than 10OZ4s(4) a strongimpetus toward reestablishing systems and procedures. computerizationof performancemonitoring, and trainingof staff;and (S)most important,the availabilityof a strategyand a clearplan for CFZ to becomea comuerciallyviable entity.

9 noTem m a tshden Ikude. (a)stretenng the1the ougt(b) fncinhe uon imb" anwdeg ImIde n*be/u(o) ncesng th bWl ofpenates paMWger caugt tuttk and enfrcgt mW

tow cumwr au woud beundewsn a a sepwatshady und te tain pointL HobwsetheoxmeIl vibity deinitonwudrequire te ntruleofinanc alfume elaeenandmaor ehbllainfrmsown mour Annex A1-c(LL) 57 PagePofa

Table1 Operadonaland Finanel Pesormmneaof CFL Year Freilg tfif Passne tra.i Inom cost WaU 6pwI Tonno Tonne_i PassengerPasslkm KZ KZ KZ Ratlo - U san mdlion d miblion mililon j iojn M111on _r= 1081 118 32 3020 340 247 360 M113 146 182 g 20 3047 358 260 387 -127 149 1983 71 10 .2263 244 134 344 210 257 1984 64 17 1386 125 420 36 64 85 19i6 63 7 1291 16 62 330 d26 532 1068 21 2 16g8 19 73 290 .217 w 1987 46 1 919 22 8t 270' 189 333 188 54 3 63 20 146 321 175 220 im1 47 4 494 13 18 407 221 219 190 64 11 728 30 365 431 .6 118

Dtaefor IM1fw0 (an mn Income d ofTota %of Tota pase_P.oaff 207 87 a 7 335 78 RO8htT 67 16 COUeemunran 0 0 oer 91 26 km 2 6 SpPw~Sta fi5 1 2s~redi _830 7 _ .wn 33 a TOal 36 100 Total 431 100

Table 2 - Estimated cost and proourement basis of the IRE ProJect-CFLcomponent EstimatedCost Baiof Procuremnmt ProjectElEmutt Foreign Local Totl Ica LUB Others Toa - Q4s - Qti2-pi" Q46 frehii AsdsWe 1.080.36 0.160.05 0.41e4 0.361.08 0.36IAS r~~~~~~~~~a mXoof 0.41 Cie Om3 6q4pulpt 0.80 moo 0.68 0.60 0.60 LocomoU_mMalntutamnOs 1.60 024 204 1.44 0.38 1.80 o0O§6Qutpn 0.07 0o.1 0.08 0.07 0.07 LoglaUoSupport 0.15 0.02 0.17 0.15 0.1 PA4mtTokBas Cst 4.6 0.61 12 0.7 1.44 240 4.51 Phy0imiOantlngsnoli 0.08 0.AS 0.77 Pdos EscalatIon 0.41 mOo 0.46 Told 659 0.75 6.34 0.83 1.79 2.98 5.59 %CdTol' 16 32 6 100 -58 -

AnnexAI-d(i) Page 1 of 5 IIPARUC UZRZIvTATI0N EIGThMMM- (IDE)PROJRCT

URDNDUPXRASTRCTUIT

MA -8RSUPPLY. S .raGLSTN( NM BLl WSnS bISPOSALOF ,W C:urrentSituation 1. The city of Luandahas experiencedsignificant population growth in the last 20 yeara. From a population of about 450,000inhabitants at independence in 1975, the numbergrew to an estimated1.5 millionin 1988.with a per annum growth rate of about 102 in recentyears. Serioushealth and environmental problemsare counon. The city coverstoday an areaof approximately140 km2, and the urban densityvaries from about 100 to more than 1,000 inhabitantsper hectare.

2. The water supplysystem, under the responsibilityof the LuandaProvincial WaterCompany (EPAL), delivers water to the city fromRio Bengo. The systemhas two transmissionand treatmentfacilities with a total nominal capacityof 200.000m3 per day, and an averageproduction of 100,000- 140,000m3 per day. A third small facility,located to the west of the city,provides water to the municipalityof Viana,with a nominalcapacity of 17,200m3 per day and an actual productionestimated at about 10,000m3 per day. The totalavailable storage capacityis about 130,000m3. Nearlyhalf of it is not operatingbecause of a lack of pressureIn the networkor otheroperational problems. The distribution networkis about520 km long. No lay-outor as-builddrawings of the networkare availablewith EPAL. The numberof officialhouse connections amounted to 61,000 in 1989, with a total annual estimatedconsumption of 34 millionsm3. No informationis availableon illegalconnections, water lossesor unaccounted-for watervolumes. The generalefficiency of the waterdistribution network is very poor. As per accountingand cost-recovery,out of a totalvalue of water bills oi Sid million Ex in 1969,EPAL has recoveredonly Z22 millionXz. Out of 310 officialpublic stsad pipes existingin 1990,only 96 are functioningwhile the remaining 214 are out of servicefor variousreasons. A large part of the populationis served by parallel,public and private, systems of truck- distributedwater.

3. Sewerage and storm drainage system are the responsibility oi 4be ProvincialGovernment of Luanda (GPL). The networksare limitedand in poor condition. Severs and drains are generallyout of order, cloggedby solid domesticwastes and all kindsof urbanlitter. Effluents discharge directly into the sea or naturaldrains without any sewagetreatment. Individual sanitation systems, rangingfrom septictanks to dry pit latrines,are spreadwidely over all areasof the city. 4. The solid wastes collection and disposal system also ie the responsibility of the GPL. Managoment of the wastes collection and disposalsystem is presently sub-contractedto a foreign private company. The system should be improved in the urbanizedarea and extendedin the suburbs.A new sanitarylandfill should be studiedfor final disposalof solidwastes. - 59 - Annex Al-d(i) Page 2 of S 5. Duringthe last15 years,to improvethe abovedescribed situation, GOA has promotedan importantset of studies. Implementationhas been limitedand partial,hindered by lackof fundsand managementcapability. Consultants should review,evaluate, &t t updateall availablestudies. 6. Furthermore,GOA recentlyhas launchedseveral investment co-operation programswhich are operatingor scheduledto begin operatingduring the first semester of 1991. Other more limited programs are being consideredor implementedby the AfricanDevelopment Bank (AfDB), UN Organizations(UNICEF, 'WHO,etc.), bilateral cooperation programs and NGOs. All theseprograms should be consideredand taken into accountby the consultantsfor preparationof the studiesdescribed hereafter. Long-termObiectives of LuandaWater Sunpiw.SeweraLe. Storm Drainaae and Solid Wastes Disnosal Systems 7. The main long-termobjective of Luanda water supply,sewerage, storm drainageand solidwastes disposal systems should be attainmentof an appropriate level of service for the whole urban commnity. The basis for the service should be equity criteria, cost recovery, and consumers participation systems. The first step to achievethese objectivesis to elaboratea set of rehabilitation studies comprisingthe overall inastitutionaland organizationalstructure, comprehensiveplans for the upgradingand extensionof the systems,and an emergency program to be implemented in the immediate future. IRS ProiectSub-comnonent Obiectives and Strate.w 8. The rehabilitationstudy of the water supply,sewerage, storm drainage and solid wastes disposalsystems of the city of Luandawill have the following objectives: sl) to improvethe sector'sinstitutional and organizationalstructure and provide the necessaryoverall coordination of all ongoingand futureprograms; (2) to preparea co-ordinatedrehabilitation program of the sector's infrastructure; (3) to executethe preliminarystudies for a comprehensiveappraisal of a rehabilitationinvestment project; (4) to promotethe capacity-buildingand the institutionaldevelopment of the relatedagencies; and

(5) to help establishappropriate cost recoveryfor the sector.

Bub-com_oneMt Deecrintio I. The generalcoordination authority of the project,which is a componentof the broaderInfrastructure RehabilitationEngineering Project (IRE), will be - 60 -

AnnexAl-d(i) Page 3 of 5 vestedIn the CoordinationUnit withinthe NationalDirectorate for Investments and Construction(DNIC) of the Hlnistryof Plan (MP). The technical management authorityof the projectwill be with the NationalDirectorate of Waters(DNA). whlch,in this capacity.will act in strictcoordinatioa with GPL and hPAL. 10. The sub-componentwill comprisethe followingelements:

(1) a study of the generalinstitutional and organizationalset-up of the sectors

(2) short term master plans for the rehabilitation and expansion of the systems, including an emergency rehabilitation programs (3) preliminary engineering and feasibility studies for the identified priority camponents of the emergencyrehabilitation program for sewerage, storm drainage and solid wastes disposal; (4) preliminary engineering and feasibility studies for the rebabilitationand extensionof the water supply system; (5) financial and budget management,tariff structure,accounting system, human resources management and developmentstudies, formulation of by-laws for EPALs (6) elaborationof Terms of Referencefor final design and tender documents; (7) technicalassistance to DNA and EPALsand (8) initial training and basic equipment procurement for DNAand EPAL. The technicalassistance mentioned above under 10(7)will comprise the following: - one assistantto DNA for 24 months,for the generalco-ordination and implementationof the project,preparation of a country-widesector study, and formulationof a nationalwater codes

- two assistants to EPAL for 42 months, one to the General Director and one to the Technical Director (respectively for 24 and 18 months), for general management and institution building, technical management, operation and maintenance organizations - specialists in hydrology, hydrogeology, technical, and administrative specific fields for 18 months, in several missions of about one month each. GOA will providefor the above technicalassistance five furnishedand equippedoffice spaces, four vehLcles, and all relatedsupport staff and services for 24 months. 61 - Annes Al-d Page 4 of 5

Sub-coMnoent Cost 11. The totalbase cost of the foreignelement is estimatedat aboutUS$ 5.50 million,and at US$ 6.96million including of physicaland price contingencies. The correspondinglocal cost elementwould amountto US$ 0.63 millionincluding physicaland price contingencies. (Detailsof costs of variouselements a suamaryof the costs and the basis of procurement,are in Table 1, Annex Al- d(i)).

MSu-egW2not Schedule 12. Terms of Referencefor the studiesand technicalassistance comprised withinthe sub-componentare under preparation.After obtainingthe necessary bank approvalfor a shortlist of consultantsand the Letterof Invitation,DNA can invitethe offers,complete technical evaluation, and prepareto negotiate and sign the contract. Consideringthe mobilizationperiod, the projectcan cormenceby November1991 and finishby October1993.

Sub-comwoaentlensflts 13. Implementationof the IRS projectohould result in the followingbenefits: (1) improvedinstitutional, organizational and financialset-up of the sector, (2) overall coordinationof all ongoing and expected co-operation programsin the sector, (3) rehabilitationof the componentsretained in the emergencyplan, afterelaboration of the necessarymaster plan for each sub-sector,

(4) improvementsof DNA and EPAL managerialperfonmance, and (5) improvementof generalhealth and sanitationconditions of the populationof Luanda. - 62 -

Ariex Al-d(i) Page 5 of 5

LOW W a gm Tag bhwtldtdOMo Bastof Ptcroawmet - Eodond l

6adss 8.10 030 80 * too to TWouh Muluta 2M30 0.10 a40 * £0 £O0 T tN 0*0 Q20 0.0 0X3 Ibxb~~~m on Clio an am 040 O00 F d _ 8uppolt0a20 0.10 oJo oo~~~010.80 Prob Taw *ots s6 0.6 60 * 60 70 Pt1y 00*_Vn f 0AS 0O 0a0 Noa OC _ne 0.n 006 0.0

ldd 7.16 OAS 7.7* * 7.1 7.16 15dTod * * 100 100 -63 - Annex Al-d(U.) Page 1 of S INFRASTUCTURSRRBRILUSA?aON BRGINEEPING tIRE) PROJBCT

LA US SZ.PLAN MM MUSSER

CurrentSituation 1. The populationof Luandaestimated at 2 millionpeople in 1990 representsone-fifth of Angola's10 millionpeople and about45 of the total urbaninhabitants. The rapidgrowth of Luanda,averaging about 10 a year in the last decade,has overwhelmedthe capacityof an urbaninfrastructure designed for a colonialelite of 250,000persons. Some 701 of the presentpopulation live in overcrowded,informal settlementswithout piped water,adequate means of humanwaste disposal, adequatestorm drainage,electricity, solid waste collection,and sufficienthousing, schools and otherurban services. 2. A recentstudy found 761 of Luandahouseholds depend on public fountains, vendors, and means of water supply other than piped water although in some neighborhoods, this dependency reaches 100?. On average, water costsan estimatedUSS 1.00 ocr 200 liters.

*. The disposal of human excreta in Luanda was inadequate and presented a serious problem as early as the 19509. There is no sever system. Roughly 13S of the population disposes sewage by connection to the storm drain network ending in the Atlantic. Another 162, reportedly, have septic tanks. The remaining 702 of the urban population use shallow pit latrines prone to flooding in the rainy season. On averase, as many as 11 people share the use of a single latrine. The numberof householdswith pit latrinesvaries from 502 to 952 by barrio. Storm drainagein the mussequesdoes not exist. Kitchen and bath sullageare disposedIn the yards and passageways,creating eatendiw'gblack water ponds in soaw areas lacking drain outlet. 4. The firstplan for Luandain 1943 addressedonly the settlementneeds of the colonialpopulation. The nativepopulation was establishedin informaland un-servicedsettlements called musseques. The 1973 MasterPlan recognizedthe requirementfor new native settlement by designating barrio populares on the South African township model. The plan provided urban services, separate from the colonial city, in the few sitesthat were built. This plan did not extend services to the existing musseques.With the pressureof rapid urbanizationand informalsubdlvision of plots,the barriospopulares have grown. as have the oldermusseques, beyond the originalpopulation densities.They now resembleeach otherwith haphazardsubdivision of lots and poorlymaintained infrastructure.

5. A 1979 masterplan proposedclearing the mussequesand replacing them with medium and high rise apartments organized in - 64 - Annex Al-dii) Page 2 of 5 superblock configurations. Overly ambitious in their use of financial and other resources,these proposals remain unrealized. Basic urban services coverage remains the same to it was at the time of Independence.Subsequently in the early 1980s,the government encouraged new housing construction and urban expansion by returning the responsibility for building to the prospective householder. Termed auto construgSoO by the law of the same name, this programprovided building sites with regular streets and lots, and, for those who qualified,the rightto buy construction materials at official prices. Largelyappropriated by the middleclass and thosewith influential connections, this program did not provide essential services such as water and sanitation. 6. Effectively, urban planning and lnformed development of urban services are non-existent. The 1979 plan policy of eradicating the musseques emphasised public buildings and the aesthetics of design Instead,overlooking the Importanceof enviromentaland financial resources. The resultis a costlyurban developmentpattern for infrastructure servicing and one which is environmentally precarious. 7. The Goverament of the Province of Luaud (GPL) has limited capability for planning. Local development planning is a central government actlvity for the alleged reason that scarce personnel should be used efficiently.Devolution of the responsibility for planning to GPL, and understandingsachieved In discussionsduring the appraisal mission,are a first step. Therels nusufflcientprofessional staff to carry out planning. More critically, there is a lack of knowledge of the uses and procedures of land use planning, that would create a demand for it. These defiiencies can be remedied by beginniag to develop the capabilitiesof professionalsand techniciansby means of on-the-job trainingand work experience.The government has agreed to assign 10 professionalsand 26 techbicians to the study. They will come from the GPL, the NationalInstitute for PhysicalPlanning, and the GCodeol.c and Cartographic Institute. Urban Plannint in Luanda 8. The l13 Project will help reorient planning efforts In Luandatot (1) improve lnformation and data about urban land for developments(2) developawareness of environmntalprthlo,w and need for their corrections(3) improve planning skills including survey designand analyticskills; (4) transferplanning technology for the efficientassignment of land to uses; (5) anticipateinfrastructure needs and providecapacities to plan for thoseneeds; (6) introduce methodsof urban upgrading;and (7) developinstitutional capability. - 65 - Aox Al-dti¢) Page 3 of 5 233 ProtectComgonent Obiectives and Strate&S 9. The objectivesof the urban componentof IRE are tot (1) developan approachto the futureurban expansionof Luanda, which will manage land use while enhancingthe environmentand minimisinginfrastructure costs; (2) providemethods for the deliveryof affordable servicesaud upgradingof existingsettlements with full cost recovery; (3) carry out a feasibilityand final engineeringstudy and preparean urban upgradingprojects (4) createawareness of the need to correcturban onvironmentalproblems to improveliving conditlons and enhance public healths and (5) help establsh a sustainAble urban upgrading process.

10. The urban infrastructure component for the city of Luanda will finance a study whlch will prepare a lnd development plan, an urbma upgradLog pilot project,and a prioritylist of projectsfor subsequent project developmt work. Coordinated with water and sanitation master plan elements of the Luanai 23 component, the component consists of a two-year study which vlll Include institutional development and provlde traintig to government personnel at the national and provlncLal levels. 11. The urban land use and Infrastructure plan will, (1) define policies to guide future urban expansion and configure streets and other Infrastructures (2) project future population settlements and land uses (3) determine the extent of the needs for basic urban services; (4) desLgnate ways to enhance, or protect, publle health and the eavironments and (5) minimize the costs of provlding urban infrastructure. 12. The pilot muhseque upgrading project to be prepared under the study will demonstrate vays to lmprove the health, envlronmental, and living conditLons of the musseque inhabitants and designate ways to recover the costs of proposed investment. It will demonstrate that the improvement of existing urban settlements is poseLble and affordable, enlargingpossLbilities for greaterapplication of upgradingin Luanda. The study will propose litegrated actions to Improve condLtions for So to 40 thousand persons. 1. All training of approximately 40 counterpart staff conteplated will be on-the-job training. The consultant responsible for the study will train the counterpart staff by integrating them into the study team. The conoultant w1il attend to the formal trainLng needs - 66 - Annex Al-dtii) Page 4 of 5 whichmay becomeapparent. The only separatetechnical assistance considered under this componentis for environmentalexpertise totalling about twenty-eight man-months. (Described in section B.2). Datu Organization and ComDuterization 14. the use of computers is not widespreadin the GPL. The Introduction of computers, and on-the-job training in the use of software, will increase analytic capabilities and achieve increased productivity which will help relieve some of the problems posed by insufflcient numbers of qualified personnel. The study will assess the best ways to organizestudy data, records, reports, and otherdocuments, lncludingthe need for computerapplication for informationmanagement. Logistics Sunoort

15. Cost estimatesallow for threepre-fabricated houses for the five to six expatriatestaff who will carryout the studies. Thiswill prevent delays in establishing the team In housing-short Luanda. The amount totals US$ 180,000.

Comnonent C0ot

Cost in Millions US8

ITEM LOCAL POREIGN TOTAL

1. Studies 0.20 1.60 1.80 2.a. AdmLnistration & Logistics 0.50 0.03 0.08

9.h. Vbtelo 0.t1 004 0.05

2 c. Housing 0.00 0.20 0.20 Base Cost 0.26 1.87 2.13 mo_

Cgmgonent Schedule

16. After mobilisation of the consultants, the land capabilLty and environmental analysis will be completed In six monthst collection of general lad use and Infrastructure data for land use planning. definLtion and appraisal of alternative land developmeat strategies, and preliminary development of the selected plan will take 12 monthst the cad8stral, income and other surveys for the upgrading will be completed in 6 months; the feasibility study of the musseque upgrading project will be completed in 12 months; completion of all work, including detailed engineering for the upgrading project, will be achieved with the submLision of the draft final report at the end of 22 monthss and Am ex Al dfi= - 67 - Page S of 5

finaldocuments and reportswill be receivedat the end of 24 months from the stactof the study. The mid-termreview will reviewall work performedduring the first twelve months from the moment of deployment of the consultants. ,Comonent Benef its 17. Major benefitsanticipated by the studyare: (1) generationof populationprojections and other data, includingmapping of infrastructureconditions for land use and other planning vork, assembly of information in one place for efficientreferral for the study,and for other studiesand projectsbeing conductedin Luanda; (2) developmentof a land use plan takinginto consideration land-carrying capability to assist the coordination of government units and international agenciest (3) preparation of a project of urban infrastructure upgrading In a low income urban areas (4) increasedawareness oft (a) conceptsof environmental protectionor enhancementg(b) cost recoveryand abilityto pay; (c) linkageof infrastructureimprovements to public healthimprovements; and (d) on-the-jobtraining of public officials; (5) institutionaland proceduralchange, or recommendationsfor such change.

18. Implementationof the urbanplan and the upgrading project, would contributeto increasesin urbanincomes due to individualsavings of time, lowermorbidity, reduction of days of work lost and income foregone,lower health costs, and diminished exposure to environmental hazard. Constructionof the infrastructurefor mussequeupgrading would createjobs, directly and indirectly,producing income for both individualsand localgovernment. The infrastructureimprovements would supportcreation of smallenterprises, or make existingenterprises more competitive.The institutionsbrought into play by the componentand their responsibilitiesare detailedin aectil-3.3 o^ projectexecutlon. - 68 - Anex A.Z Page I of 2

INPRASTRUCTURERESAILI?TI MON UNGINRZXIGRNPROJECT

TECHNIC ASSISTAMCKAMND ATRINI Introduction 1. The IRS Project conceived as a TechnLeal Assistance Project to preparepriorLty rehabilltatlonwork of the Infrastructuresector in Angola, rests on the realizationby IDA and the GOA that there is a need to build instLtutionalcapacity pari-pasu with the preparatlonof the civilworks requlred. ProjectdesLgn has taken into accountthe findingsof ORD ReportNo. 8573 on TA projectsin Africa. 2. The lack of institutionalcapacity calls for expert assistanceon the engineeringdesign and feasLbilitystudy phases of the works to be undertaken.The preparation work itself gives a unique opportunityto addressthe lack of capabilltyissue. Most componentsof the project include, in additionto the consultantswho will do the studies,technical assistance to set up the proceduresand mechanisms necessaryto the follow-upand analysisrequired within the miaistries and sectoragencles involved. Such technicalasositance alone, will not be sufficLentto build-upthe capacityof these instLtutions,and training elements, both formal and on-the-job training, have been built into the project. S. The careful definition of the technLcal assLstance aspects of the project requires, nevertheless, a further ingredient to increase its chance of success,i.e., regular IDA supervlslon as well as country dialogue in the course of future economLc and sector ork. This section addressesthe areas to which specialattention has been paid, the resources applied to the task, and administrationand coordLnation aspects of the technlcal assistance and training included under the project. Section B.4 shows the supervisLonplan of the IRE project. Areas of SDeciallocus 4. In bringLngforth the IRE project,IDA paid particular attentionto the need tot

(1) brLig to bear relevant sector experience on the integratLon of project preparation with technical assiLtance,lnstitutional development, and staff developmentaspects of the project; (2) plan for a substantialsupervision Input to help detect as early as possibleimplementatLon difficultlesand proposecorrective actionst -69- Annox A-2 Page 2 of 2

(3) link the projectto futuresector work under discussionwith GOA, reflectedin the project'. conditionalitywhich orientsthe sectorinstitutions to the most pressingsector issues and to the best possibleuse of technical ssistanc.l (4) have termsof referencefully discussed for all key positionsfor technicalassistance In the courseof technical discuwsions at the time of negotiations; and (5) ensure that reporting associatedto the projectwill allow the analysis of the contributions made by the experts during project Implementation. 5. On the part of GOA, the salient features aret (1) a fitm comuitment to the transformation of the Angolan economy; (2) desire to adopt a long term strategy to introduce cost effectiveness and liberaliation of the infrastructure sector; (3) interest in establishing full cost recovery for all services as means to achieve cost effectiveness;and (4) full acceptance of the need to Import-- and borrow for -- the requiredexpertise and skills. Resources Allocated 6. The section A3 gives the resources allocated under the project to technical assistance and training for a total of US$ 14.26 million. This does not include estimates for the resource cost of on- the-job training when performed as part and parcel of the consultants work in carryingout studies. The actual figures will be known at the time of consultant selection. The costs of on-the-job training have been considered in the estimation of the study cost when this has been chosen as the best vehicle for such training. The total above underestimates io&ewvaat the actuwa resources devoted to technical assistane and training within IRE. Coordination and Administration 7. Responsibility for each component's technical assistance and training will rest with the component's coordinator. A training and staff development specialist will be part of the central coordinating team (Annex B-3 gives project execution arrngements) to assist In mattersconcerning the organizationand monitoring of planned activities to avoid duplicationand benefitfrom the complementaritieswhich may exist.The staffdevelopment specialist will be also responsiblefor the formulation of the staff development plan necessaryacross agenciesfor the eventualpreparation of sectoralInvestment programs and expenditure reviews. This teak will be performed In close coordination with the work to be carried out under the Economic Management Technical Assistance Project. Annex A-3 - 70- Page 1 of 2

IWPRASIRUCIRRUABUTATIUN EGiN I CREDIT DETAILE ESTIMATEDCOST Estimated Coat Projec Elements Local Forelon Toal Iemarke (US$ a IIIon) 1. Studios 1. NM 0.18 0.O9 0.87 It. NT O. Port 0.00 S." 0.00 Combinedwith CPU b. Reilway 0.11 0.76 0.80 I11. LPTS *. Port 0.05 0.6 S." v. Railay a 0.07 0.45 0.52 iv. UICL a. Watr Supply& Sanitation 0.J0 2.6 2.80 b. UrbanPlannlng 0.20 1.60 1.80 Sub-Total 0.02 6.59 7.51 2. Final oslgn 1. NM 0.86 8.75 4.19 I1. NPTS a. Port b. Ra11"ay Ill.LPTS a Port b. Railway iv. UICL a. WaterSupply a sanitation b. Urban Planning Sub-Totel S0. 8.76 4.10 S. Technical Assitancs I. NHN 10.8 1.O9 1.40 i1. NPTS a. Port 0.09 0.a0 O." b, Railwy 0.22 1.48 1.08 Ill.LTS a Port 0.11 1.14 1.25 b Railway 0417 1.06 1.25 iv. UICL a WaterSupply a Sanitatton 0.16 2.80 2.46 b. UrbanPlannlng 0.04 0.41 0.46 v. Project a. Coordinator 0.08 0.M6 0.94 Sub-Totel 1.10 0.20 10.80 4 Initial Tratning 1. Nam 0.10 0.10 II. NPTS . Port 0.01 0.12 0.18 b. itlway 0.08 0.64 0.02 Ilt. LPTS a. Port 0.02 0.20 0.22 b. Rai vay 0.06 0.6J 0.41 :v. UIL ,. ator hSupply £ Sanitation O.M0 0.20 0.20 b. UrbanPlanning Sub-Total 0.1, 1.62 1.0 S. Baic Equipmentand Spare I. NeH 0.60 0.69 0.69 It. NM S . Port 0.10 0.90 1.06 b. Ri lway 0.20 1.42 1.62 Ill.LP5 a. Port 0.12 1.10 1.29 b. Ra lwvy 0.80 2.40 2.70 lv. UICL a. Water Supply a Sanitation 0.00 0.50 0.30 b. UrbonPlanning Sub-Total 0.71 7.15 7. 6 Annex A-3 - 71- Page 2 OI 2

6. A4mnitOraton& Loototi.Support A. OtficeqtaIpmnt ad Supplies 1. Iom 0.50 0.58 I1. NTM a. Port 9.91 S." 09.9 b.RolIway 0.01 0.97 S."8 Ill. LMT . Port 9.9 0902 9 bR 0."9l91 0.07 0.09 I v. USXL *. Supply S Sanitation 0.10 .190 9.19 b. UrbanPlanning S." 0.98 S." v. Proet 9.96 0.98 S." Sub-Total 9.28 9.06 1.18 S. Vehtol.. 1. KUN 9.92 0.18 0.17 II. ?PT8O. Port 0.91 0.10 0.11 b. notlway 0.91 0.10 0.11 Mii. LPUST . Port 9.01 0.19 9.11 b.Ra lway 9.91 9.O 0.0 I*v. UICL a.Watr Supply A sanitation 0.00 9.2. 0.10 b. UrbanPlanning 9.91 0.94 0.96 V. ProJect 9.01 0.04 9.96 Sub-Total 0.0 O."0 0.76 C. ousinD i. NMN 9.9 *.56 0.60 i1. NMTS a.Port 0.91 9.09 9.06 b.Railey 9.96 9.46 0.50 ill. LPTS a.Port 0.96 0.89 O." b.Ra ilway .02 0.19 9.12 iv. UICL a. Water pply& Snltation b. UrbanPlanning 0.20 0.00 0.20 9.95 9.00 .96 Sub-Total 9.80 1.46 1.02 7. Be Coat 0.97 81.89 85.27 Physiel Contingenieso 0.46 8.40 0.59 Pr1o ontin noae 0.87 8.00 8.87 Total Projet Cost 4.69 87.70 42.59 as of teatuiwetx nd duties Annex B-1 - 72 - PPage of 3

ZIUPRAhCTUREURBUIXLTATION ENGDhhhRIN3 PROJECT

,JE CT AIHTANDt iOuNND MARNTA=

Procurement 1. Procurementcapabilities would be assuredby the central coordinationoffico in the Ministry of Planning and technical assistance (AnnixB-3, para. 1). Procurement la expectedto take place In agreement with the implementation schedule of the project. Nearly 702 of project procuremet will be subject to priorIDA review. No lese than six contracts for an aggregatevalue of US$10.62millionequivalent, Including contingencies, would be awarded on the basis of international competitive bidding (ICB),In accordance with the Bank's guidelinesfor procurement associated with consulting services andequipment. To the extent practical, contracts would be grouped in bid paekages estimated to cost the equivalentof US$500,000or more to permitefficient procurement. For the purposes of evaluation and comparison of bids under ICB, a preference of 152or the value of the applicablecustoms duties,whichever is lower,would be allowedfor materialand equipment manufacturedin Angola. Reviewof bid documents prior to contractwould be required for all consulting services contracts and for equipment contracts above US$75,000. 2. A number of small aiso contracts of leos than US$500,000 to importprefabricateod. housing units. and 8$100,000. for goods-and not likelyto attractforeign suppliero, way be awarded on the basis of competitivebids advertisedlocally, but also open to foreign firms. Agreement was reached during negotiations that a procurement seminar would be held in Angola before credit effectiveness and Bank staff would teole t ohetepr ty to review the borreoer'e procedures for advertising,public bld opening,clarity of evaluationcriteria, award to lowest bidder, non-exclusion of foreignbidders from participation, and need to obtainIDA's agreement the first time this procedure io utilized. These contractswould cover malnlys (1) officeequipment, furnitureand furnishingsfor consultantsend project coordination; and (2) minor rehabilitationof housing and office fel-rtt.,' consultants. In addition,loel shoppingfor contractsunder $10,000 will be allowed (para.6 below). 3. The Bank'sguidelines Including IDA reviewof short lists would be used to select the consultants for teachalcal assistance, training sad studies financed under the credit. 4. Locallyprocured goods as part of operating expenses, are not eligiblefor IDA procurement.These would be procuredfrom dealers on the basis of quotationsobtained locally. Annex B-1 - 73 - Page 2 of 3

Disbursements

5. The categoriesto be finaced out of the IDA credit and the amount and the percentageto be financed in each category are as followst

OiSSEIMT ST CATEGoRIES p15.lion) ProlectEleme-n. unt of cdit X of Eloible LsEditute*

I. 1. Studies 6.Ce s (Of tot1) 2. FlnalDsign 8.75 9 (oftotal) it. 1. TschnicslAssistance 0.80 ao1 (oftot I) 2. InitialTraining 1.52 268 (oi'total) III. 1. 9auICEquipment & Spreo 7.15 100 (offoreign) 2. Administration& Logietice Support a. Offie EquipmentA SUppi.eel/ 0.s 100(of foreign) b. Vehicleos 0.8 IN (offoreign) c. H4oueig/ 0.28 100 (offorelin) IV. 1. Refinancingof PFP 1.60 Amountdue 2. unellocated 7.24

TotaI Cot 87.70

6. Disbursementswould be asgainsta statement of expenditures (SOE) for: (1) any contracts valued under US$10,000; (2) operatitg costs; and (3) local training. Supportingdocumentation will be retained by the implementingagency and made available for review by the Bank during supervision. The anual audits of the project accounts would Include a separate opinion on the disbursements made under the SOE procedures. All other disbursements would be made against nonmal documentation submitted to the Bank. The schedule of credit disbursements, given in schedule C, is based on disbursementprofiles for technical assistance projects In Africa, Including the adjustments necessary to reflect refinancing of the PPF. The proposed completion date would be December 31, 1995, and the closing date June 30, 1996.

l/Financed in part by PPF - 74 - Annex B-1 Page 3 of 3 7. Disbursementsfor the projectwill be made withoutrecourse to a special account (revolving fund). To ensure availabilityof counterpartfunds, GOA will open a project account in U8 dollarstwo monthsafter effectiveness at a comorcial bank,with an initialdeposit of US$500,000to be replenishedevery six months,and to be managed exclusivelyby the projoctcoordination office. In the case of payments for techical assistance and consultantscontracts, procedure III of the Bank Guidelines will be followed (Sank Guidelines,Annex II, pars 11(i)). Monitoring,accounting and reportingwill be done as indicated in sectionB.3 on project execution.

VWLA POSSBE ~ OFCWLT 1ES FMR PrOS£Seo

TI of Pcum Task C£". Pt1 mdiv. Con..

1. Study o Nationalalsc Hiohay Network including technlicl assietanceand trainng 2. Study of Nalbe Port/RalI Tran"sort System e Including technical assita nce and training 8. Study of LuandaPort includino technical a assntance and training 4. St"d% of Luand Railway tneluding technical a ="siourls N 1trntaing S. Study of Water SuppIly, Sewerae, Store a Drain&r a nd Solid Wasto Clapooal In Luanda 1neuin technical auSltace and training 0. Study of a LandUse ndMussque Upgrading e Strtegy Including tochnieal alssstance and training

7. TechnicalAsistance to ProjectUnlt 5 Includinggeneral advisor traintig advisor*duInistrativ/ffnanclcal advlor and endironeantaladvisor. S. Legaladvisor on environmentaletters - 75 - Page I of 2

INFRASTRUCUI$REIMILITATION ENGIN NG PROJECT BVIRONKEVTALASPECTS

1. Improvementof the urban envirormentand comervationof Angola'snatural environmet will be on inherentpart of the IRE Projects' objectives. Environmental rehabilitation should be a goal of each Project's component with a view to solutions based on both envlronmentally sound practices and sustasnable development. 2. The IRE Project refers only to rehabilitation of existing systems. Nowever, such rehabilitation sbould provide for correction of negative environmental impacts Incurred during prior implementation of the system rather than perpotuating the resulting problems. Each Project component contains provisions for environmental ssesment considering the rehabilitatlon vork both during and afterthe constructionperiod. 3. RebabilLtationstudies, upgrading and/or extension of existingsystems -- ports-rallway, highway, solid waste, sanitationlsewege and drainage, urban core -- shall either re-design or present alternatives to elements containing a negative effect on the environment. The proposed solutions should consider the degree to which dlrect and indirect negative impects justify such changes on the basis of long-term benefits to the Angolan society. 4. The Consultants for each Project component should identify any such areas. Identlfication of altornativo and/or corrections for existing systems hould follow, stressing long-term sustatnability of the system with speocal focus on low cost, easy saintenancesolutions, local labor, and local materials. Consultants should evaluate envLronomental and safety conslderations in the extension and/or establisbment of process" necessary to the various rehabilitation requirements. Tochnical Assistance S. Angola ha a weak logaland regulatoryframework, data or applicable information, and trained personnel to carry-on the onvironmental studies, coordination ad monitoring that the IRE Project requires. Technical asistane and training will be provided to build the Angolan capacity to perform environmental analyses, planalng and monitoring, and set the bae for updating environmental legislation and regulations.

6. A consultantwill directdevelopment of the data base to support nvironmentalassessments, planning and monitoring, and train the IMP? (National Institute for Physical Planning)counterparts. These counterparts, In turn, will develop the ame environmnatal capacity for Annex 8-2 76 - Page 2 of 2 the Provincial governments. PFinanced by the UICL component for two years, the consultant will also guide development of the lend management and environmaetal analysis elements. 7. A second consultant, financed under the UICL component for six months, will be stationed at the Ministerio do Plano (Planning Ministry) as part of the IRE Project coordination team. He will assist the GOA in the review of existing environmental legislation, propose and assist ln its update and in strengthening the institutional framework as necessary to the rehabilitation and conservation of the Angolan environment. The consultant also will provide guidelines and the legal and regulatory framework for support of the MI's components and assure adequate supervision, coordination and long-term environmental monitoring of the Project. -7 77 -- Annex B-3 Page 1 of 5

llNF UWrnlDtUR"IAIULITATIONS&sIGINURING PROJECT

PROJEC= EXMCUTION

COORDINATIONAND EMECUTION 1. There are seventeen ministries, national directorates, state enterprises and other governmental units thatwill benefitfrom the IRE Project in Angola, and will be involved in the coordination and executionof its four principal components. They are listed under Reporting and Monitoring in para. 6. Directcharge for generalcoordination and specific project components rests with the following ministriesothe Ministry of Planning (MINPLAN)as project coordinator; the Ministry of Public Works and Urban Development1 (MINCONS)and the Luanda ProvincialCommissariat (CPL), for the Urban Infrastructureof the City of Luanda (UICL)I the Ministry of Transportand Communcations(MINTEC) for the Namibe and Luanda Port Transport Systems (NPTS and LPTS)I andMINCONS for the National Basic Highway Network (ElHN). Each project component will be the responsibility of a specifically designated component coordinator. MINPLAN's National Directorate of Investments and Construction (DNIC) will be responsible for overall groiect coordination, and will chair a urolect steeringcommittee. The committee will include the three component coordinators as well an representatives designated by the Ministry of Finance and the Angolan Central Bank. It will meet twice a month to guide and direct the execution of the project during its period of effectiveness. Each component coordinator will develop action plans and schedules for each component, submit them for review by -the Steering Committee, -and-forward them to IDA for comments. 2. Implementation Agreements will be signed before effectiveness. These agreements will stipulate that CPL and responsible ministries will give individual component coordinators ample powers to manage, monitors, audit and report on the execution of their respectiv6 individual components. GUAhas designated the Ministry of Planning (MINPLAN)as its official representative in connection with projects supported by the International Development Association (IDA). For purposesof the IRE Project, MINPLANwill grant ample powers to DNIC for overallcoordination, monitoring, auditingand reporting operational and financialperformance to GOA and IDA as frequently*ad In the levelof detailto be agreed upon at IRE credit agreement negotiations and included in the implementation agreements. While urolect execution is scheduled for 30 montbs. a 42-month disbursement neriod has been retained. A mid-term review will take place eighteen months after effectiveness to examine the implementation of the project, decide on the items which should be retained in the investment program for the sector and select from these the projects for which final engineering will be carriedout. At this time, project financeswill be reviewedand reallocationof funds availableto the projectmay take placeas a result.

t Pormerlythe Ministryof Construction. - 78 - Annex B-3 Page 2 of 5 3. A urolect u_it will be establishedto provideoverall technical and administrative upport to the overall project coordintor sai to the project steering coumittee. Members will Include a noneral advisor, a traisn advisor, an administrativelfinancigadvisor, and an enviroggletal advisor. A single consulting fim would provide the personnel following applicable IDA guidelines. The specific responsibilities and operating procedures of the project unit, and the termsof reference (TOR) for these consulting services were agreed upon at negotiations.The projectunit will be in place and Its generaladvisor and administrative/financialadvisor selected and contracted, prior to effectiveness. It will operateon a regularbasis from the headquartersof DNIC in Luanda. However,the environmentaladvisor probably will devoteat least501 of his time with MINPLAN'sNational Institute of PhysicalPlanning (114W) to the development of environmentalpolicy, procedures and guidelinesfor the overalltransport and urban infrastructuresector. The general advisor will be responsiblefor coordination and monitoringof all technicaland managerial aspects of the project, with particular emphasis on monitoring compliance with component action plans and schedules,on procurement,and on overallsupervision of all studies and technicalassistance. The trainingadvisor will oversee all capacity buildingstudies, assure uniformity and efficiencyin all programs,and Identify and ensureapplication of localand externalstaff training resources available for the project. The Adminlstrativelfivancialadvisor will develop and lmplementa systemfor maintainingrecords and accounts withinthe Individual components and for the overall project, end will establishreporting procedures and periodic auditing arrangements as agreed between GOA and IDA. CONSULTING!R=ICES

4. OCAwill recruit consulting services for studies and technical assistance under Individual contracts or through consulting firms. Short lists,letters of lnvitations and TOR, as well as the qualifications,experience, terms and conditions of contractfor all specialistsand consultingfirms will be In accordace with IDA guidelinesand subjectto prior approvalby IDA (see sectionB.2). ACCOUNTINGAND AUDITS 5. GOA will establishconsolidated project accountlng, together with individualcomponent accounting. DNIC *nd the ProjectUnit will maintainrecords and accountsfor all projectcomponents, while the componentcoordiastors will maintain records and accounts for every element within each individual z=ronant. Accounting should adhere to accepted accounting principles and should record a'.1 project expenditures, commitments, reimbursements and status of project funds. Accounts and statements of expenditure will be subject to annual audit by independent auditors acceptable to IDA and submitted to IDA no later than six months after the close of the financial year. The audit report will include a separate paragraph on the auditors' opinion concerningthe smounts withdrawn on the basis of statments of expenditure. Accounting and auditing arrangements were agreed upon at negotiations. - 79 - AmmJ: Page 3 of 5 ORSING N-DMOITORI 6. 1Ea component coordintor should suit to the Chairma of the Project Steering c=mittee on a quarterly basis project component execution reports siarising progres attained, problems encounter", solutions proposed, and changes or adjustments to be made. The Comittee Wil review progr"s gainst plans an take appropriate corrective action. Agenda an minutes of Comittee metis will be prepared by the Project Unit and transitted to IDA to facilitae project superison. Rorti a auting artnd procedures have bee agreed upon at negotiations.

6.1. Ministris. directoratesz ad stote enterurlss directlyS loLved In the IRE uroect b G orsationl unit)} (i) ministry of Pu1lai

- ^ationalDirectorate of Investments and Construction, In Project Coordiator National Institute of Physical Planning (ii) Mimistry Of Tr_aport a C

- tureen of Planning, Luenda Port Troaport System sad Wulb. Port Trnporct System Componet Coordinator

- *-Rational- Directorate of Railways

- _Luand"Railway Ihomades Railway National Directorate of Merchant MIarne end Ports

- Porct of Nlmibe

- Port of Luada (iii) MifNistry of Public Vock Urba Devlpmet'

- Angola Nighway Institute, National BlateHighway Notwok Component Coordinator

'Foertly the Ministry of Construction. - 80 - Annex B-3 Page 4 of 5 (iv) LAtIud?r1o0vInl Go'rm.rent

- Office of the Deputy Governor for Technical Affairs, Urban Infrastructure of the City of Luanda, Component Coordinator

- Luanda Provincial Water Enterprise (v) State Sewretarlat for Energy and Water

- National Directorate of Water 6.2. GQA ministries.diLrectoratea and state enterprisesto be involvedIn the IRE yroiect(by iroiectcomponent):

($) NationalB ic igbeayNetwork (NME)

- MINISTRYOF PUBLICWORKS AND URBANDEVELOPMENT = AngolaHighway Institute, Coordinator (iL) XmibePort Transporttystem (NPTS)

- MINISTRYOF TRANSPORT& COMHUNICATIONS

- Bureau of Planning, Coordinator

- National Directorate of Railvays

- NationalDirectorate of Merchant Marine & Ports

- MocamedesRailway

- Port of Namibe

(iii) Luanda Port TransportSystem (LPTS)

- MINISTRYOF TRANSPORT& COMHUNICATIONS

- Bureau of Planning, Coordinator

- NationalDirectorate of Railways - NationalDirectorate of MerchantMarine & Ports

- Luanda Railways

- Port of Luanda - 81 - Anex B-3 Page 5 of 5

Uiv) Ur"a Infr.atzctaz of the City of Luanda (UICL)

- LUANDAPROVINCIAL GOVERDMEN

_ Office of the Dleputy Governor for Technical Affairs, Coordinator

- Luanda Provincial Water Enterprise

MINISTRY- OF PLANNING

- Natioal Institute of Physical Planning STATESECRETARIAT FOR ENERGYAND WATER

Natioal Directorateof Water

(v) IEIR Project Coordinatio

- MINISTRYOF PLNNING

- Nationl Directorate of Investmerts and Construction, Co - MINIST OF TRANSPORT& COHMNXCATIONS

- Bureau of Planning, LPTS and NPTS Coordinator - MINISTRYOF PUBLICWORKS AND URBAN DEVELOPMENT

- wAgolpHighway Institute, MMN Coordinator

- LUAIIDAPROVINCIAL GOVERNME

- Office of the Deputy Governor, UICL Coordinator - STATESECRETT FOR ENERGYAND WATER

- MINIsY OF NANCE

- GOLA CENTRAL sAN A==s B-4 - 82 PasP 1 of 2

SUPERVISIONPLAN

1. IDA SuDervisionInout Into Rev Actlvities.The total staff input of 72 staffweeks Indicatedin the table below is in addition to regularsupervision needs for the reviewof progressreports, procurement actions,correspondence, etc. (estimatedfor this projectto requirefour staffweeks per year for the durationof the project).

2. Borrower'sContributlon to Su2ervision.The borrowerwill contributeto the supervisioneffort as follows: (1) Progressreports are to be submittedas follows: (a) in the form to be discussedduring the first IDA supervisionmission$ (b) at the end of March and Septemberof each yearg and ,c) by the projectcoordinator who will consolidatethe reports prepared by the component coordinators assisted by the various contractors in charge of monitoring the implementationof the project.

(2) Project review and monitoringwill be the responsibilityof the project steering commlttee chaired by the Minister of Plannfing or his representative. in addition, day to day coordination of the projectwill be the responsibllity of the project coordinatorand the componentcoordinators.

(5) The project coordination office will be responsible for making all errangements necessary for IDA supervisionmissions and for providinginformation required by missions.For mLisions concentratingon specificcomponents specialist staff may be made availableby the componentcoordinator and the agencles concerned.

(4) Missionbriefings on arrivaland wrap-upmeetings, normally will be chaired by the Minister of Planning or his representative, with the participationof all component coordinators and the ministries concerned. 83- - Annex B-4 Page 2 of 2

IDA SUPERVISIONINTO KEYACTIVISIES Staff Approximate Expected input Dates mdesion (staff (ionth1hear) Activite composition weeks) 9-10191 Project start-up mission/ Task Manager, a review of letters of ProcMt.PAcctg, invitation to consiultants ?in. Repxttang snd time-table for further end component contract processing specialists 11-12191 Procurement review and Task Manager, 6 procurement seminar Procmt., Specialist 3-4/92 Review of contractors work Task Manager, 6 on all components, set-up comp. specialists. time-table for completion Country Officer of studies, ant action plans for covenant compliance 9-10192 Review of Draft Sector Task Manager, 6 Investment Programsad comp. specialists advance of studies Country Officer 3-4/93 Mid-term review. Review of Task Manager, 14 - al -contracts t-required comp. specialists governmental decisions, Disb.Off. ,Country decision on elements to Officer, Lawyer undergo final eng. design, allocation of project funds

7-8/93 Procurement review, Review Task Manager, 6 Sector Investment Program, cop. specialists De-control and Deregulation Plan, and privatisation time- tables 11-12/93 Reviewof progressin all 6 componets 1994-1995 Three supervision missions Task Manager, 10 per year, review implemen- comp. speciallsts each yr tationof project'slest stages,follow-up on covenants, and Identify/prepareInvestment projectsin the sector.

TOTAL 72 am - 84 - Annex B-5 Page 1 of 1

RWIAATO PLAN 1. WorldBank Apprai"alWoaton - Angola February9 - 28, 19 2. Revisionof Termsof Reforence (TOR's),and Leters of Invitation Apri 1 -12, lf91 8. RevisedTOR'* and LI'n submittedto the Ministry of Planning,Luands April12 -19, 1l9 4. TORe and LOX'ssubmitted to WorldBank Apil 19, 1991 6. TOR'sand LOI's rceived by WorldSank April28. 1991 a. IRE Project N 1 otaiotlono with WorldSank In WashI ngtn, D.MC. way 22 - 29,1991 7. Approvalof IRE ProjectCredit Agreemnt by the Oovernmentof Angola June 9, 19S1 8. Letters of Invitation to Project Coordination Consultants June 15, 1991 9. Letters of Invitatlon to IRE Consultants July 22, 1to1 10. Receptionof proposalsProjoct Coordination August1. 1991 11. Evaluation of proposals for Project Coordinatton Septemer I$ 191 12. Rceive proposals from IREConsultants October20, 1991 18. Ngotiation of contract for Project Coordination October15, 1991 14. Credlt Effectiveness October21, 1991 15. Signature ot contract for Project Coordination October80, 1991 10. Eveluation of IRE projoet proposals by Governmentof Angola,and reniew/opprovelby the World Bank Oct 21 - ODc 15, 1991 17. tosotiationswith IRE projectConsultants In Luands Jan 10 - FPe 29, 19 (of daysmaximum) 18. Governmentof Angola- Final IS/slanIRE project contracts with Consultants March1 - 15,1992 (so days maxim4m) 19. Start of IRE project Consultants In Angola ApetlUI, 1992 26. Complotionof Studies Jan - Jun, 199S 21. mid-tsr Revlew July 1998

22. Preosntatlonto IDA of an action plan to implement: Ocember 1998 Ji) Cost-basedtariffs; tt) Deregulation and privatizatton of the Transport Sector 28. Implementationof cost-bae*d tariffs may1994 24. Start of Privatization of the sector September1994 25. tnvestmentProgram for the Secor submittedto IDA November1994 26. Import of equi and spares, and carrylng out oft fInaI dsgOn JulI. 199 - D0". 19 27. PrQoectCompletion December81, 19M IBRD22945

---'-6A80 5 / RANGOLA INFRASTRUCTUREREHABILITATION ENGINEERING PROJECT CONGO TANZANIA PROJECTCOMPONENTS

0 MLAW* PROJECTCOMPONENTS- 0 SELECTEDTOWNS

ANGOA - MAIN ROADS 0 PROVINCECAPITALS

4& n )5TT NATION1AL CAPTAL ,, | ~~~~ZAMBIA * J-*- RAILWAYS MAIN ROADS

ZIOIRM00 tWA URBANINFRASTRUCTURE *-9- RAtLROADS

, | ec01540A w } "~ .&. AIRPORTS AULPtRJECT COMPONNtS SHOWN IN BID. A 12 a 4, PORTS

PR.OF ~~~~~~~~~~~~~~~~~PROVINCEBOUNDARIES

IAUNBR , , , / o T H E CO = IN1TERNATIONALBOUNDAPES

I0LtOlAETERS0 100 200 300 400 S00

M'BANZA~ ~ ~ ZIR

LUCAPAP* S

WA11DA NORTE MALAHJE

to OALATANDO LUANDA" ~~~~~~~MALANJE tC". SUt ( < t~~~~~UNDA U

SULI r4ft ~~~~~~~~~~~~~~~~~LUNDAUL T~ Wb.-b.0h0

,I NAN A LU t. 6

*~h , 16\ (

, \'12 T.7Whek+ NAMBIA K.

M4'd'( 1991 IBRD 22945

GABON Fit 4A ANGOLA PROJECT dR 7 INFRASTRUCTUREREHABILITATION ENGINEERING CONGO ZAiRE ; TANZANtA PROJECTCOMPONENTS

MALA_ PROJECTCOMPONENTS. 0 SELECTEDTOWNS

-, ,, ,ANOtMoN ROADS PROiNCE CAPITALS

i s 9 > - RAILWAYS MAIN ROADS

LUANoA @ URBAENINFRASTRUCTURE t-.-* RAILROADS NA w /Wb . tsAm>N ALLPROJECT COMPONENTS SHOWN INMO. +

_ %_ I t itW F~~~~~~~~~~~~~~~~~~~~~~ORTS

PRt2CONGO >PROVINCEao , THE BOUNDARIES tf if6 O (INTERNATIONAL,| BOUNDARIES

W 8 | i Y 0 0020000

_KiOMERS 0 I0O 200 300 400 51'C

.>REe + Jt J z Y t 20 24 XbZ,.rK V ~UIGE/ IE

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i''iirc t

> SUt > t LUNDA|UDA =T=Z CAM CU___A SIJ NOT R AIlANrIC I lBENGONGZ

LUJN (LUAN N MA AN l>eitiIJvL 2;t ~~~~~HUAAlBOA+'11 ATIANric~~ ~ ~ ~ ~ ~~~~~~~~~~MOXICIO ~ ~ ~ AMI E1ENGUEIATO I /

: I JY - - t 5--d ~MNONGUEs _ \ \+ 0 ZAMBIA 0 NAtStBE , BAGO )t\0

> Fo4 x \> ~HUI\C/A4i.

16 F < CUNeNE 7 J ~~~~~~~~~~~~~~~~~CUBANGOe 16 ' tEE

t kw ~~~~NAMIBIA_

12v16 20 24

MILil 19n1