AFRICAN DEVELOPMENT BANK

Authorized

Disclosure

Public

TUNISIA

ROAD INFRASTRUCTURE MODERNIZATION PROJECT

OITC DEPARTMENT

Public Disclosure Authorized

September 2015

Translated Document

TABLE OF CONTENTS

Currency Equivalents ...... i Fiscal Year ...... i Weights and Measures ...... i Acronyms and Abbreviations ...... i I. STRATEGIC THRUSTS AND RATIONALE ...... 1 1.1 Project Linkages with Country Strategy and Objectives ...... 1 1.2 Rationale for Bank Intervention ...... 1 1.3 Aid Coordination ...... 2 II. PROJECT DESCRIPTION ...... 2 2.1 Project Objectives and Components ...... 2 2.2 Technical Solution Adopted and Alternatives Explored ...... 5 2.3 Project Type ...... 5 2.4 Project Cost and Financing Arrangements ...... 5 2.5 Project Target Area and Beneficiaries ...... 7 2.6 Participatory Approach for Project Identification, Design and Implementation ...... 9 2.7 Bank Group Experience and Lessons Reflected in Project Design ...... 9 2.8 Key Performance Indicators 10 III. PROJECT FEASIBILITY ...... 10 3.1 Economic and Financial Performance...... 10 3.2 Environmental and Social Impacts ...... 11 IV. PROJECT IMPLEMENTATION ...... 13 4.1 Implementation Arrangements ...... 13 4.2 Monitoring ...... 15 4.3 Governance...... 15 4.4 Sustainability ...... 16 4.5 Risk Management ...... 17 4.6 Knowledge Building ...... 17 V. LEGAL FRAMEWORK ...... 17 5.1 Legal Instrument ...... 17 5.2 Conditions for Bank Intervention ...... 18 5.3 Compliance with Bank Policies ...... 19 VI. RECOMMENDATION ...... 19

Appendix I: Tunisia’s Comparative Socio-economic Indicators Appendix II: Table of AfDB Portfolio in Tunisia Appendix III: Major Related Projects Financed by the Bank and Other Development Partners in Tunisia

LIST OF TABLES Table 2.1: Project Components ...... 3 Table 2.2: Alternative Solutions Explored and Reasons for Rejection ...... 5 Table 2.3: Project Estimated Cost by Component, Exclusive of Taxes ...... …….6 Table 2.4: Project Sources of Financing ...... 6 Table 3.1: Economic Analysis Results…………………..…………...... 12

Currency Equivalents (June 2015) Unit of Account (UA) 1 = TND 2.72673 Unit of Account (UA) 1 = EUR 1.26755 Unit of Account (UA) 1 = USD 1.3905 EUR 1 = USD 1.0841

Fiscal Year 1 January – 31 December

Weights and Measures

1 metre (m) = 3.28 feet 1 millimetre (mm) = 0.03937 inch 1 kilometre (km) = 0.62 mile

Acronyms and Abbreviations

AfDB African Development Bank AFESD Arab Fund for Economic and Social Development AFTURD Association of Tunisian Women for Development Research AGTF Africa Growing Together Fund ANPE National Environmental Protection Agency BCT Central Bank of Tunisia BT Billion Tonnes BTP Public Works and Civil Engineering CETEC Construction Techniques Testing Centre CFP Country Financing Parameter DDR Directorate of Regional Development DET Directorate of Engineering Studies DGDR General Directorate of Regional Development DGPC General Directorate of Highways DPFEG Directorate of Women’s Empowerment and Gender Equality DPFRE Directorate of Rural Women’s Empowerment DREHAT Regional Directorate of Infrastructure, Housing and Spatial Planning EIA Environmental Impact Assessment ERR Economic Rate of Return ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan GDP Gross Domestic Product GENIS Road Maintenance Management by Service Level GHG Greenhouse Gas HDV Heavy Duty Vehicle I-CSP Interim Country Strategy Paper INS National Institute of Statistics JICA Japanese International Cooperation Agency MARHP Ministry of Agriculture, Water Resources and Fisheries MDICI Ministry of Investment Development and International Cooperation MEDD Ministry of Environment and Sustainable Development i

MEHAT Ministry of Infrastructure, Housing and Spatial Planning MFFE Ministry of Women’s Affairs, Family and Childhood MIC-TAF Middle Income Countries Technical Assistance Fund NPV Net Present Value OECD Organisation for Economic Cooperation and Development ONSR National Road Safety Observatory PADRCE Regional Development and Job Creation Support Programme PAP Project Affected Person PDAI Integrated Agricultural Development Project PIA Project Impact Area PMIR Road Infrastructure Modernization Project PP Procurement Plan RPF Resettlement Policy Framework SDAG Sub-directorate of General Affairs SEA Strategic Environmental Assessment STA Tunisian Highways Management Corporation TND Tunisian Dinar UA Unit of Account UGO Management by Objectives Unit UNDP United Nations Development Programme USD United States Dollar VOC Vehicle Operating Cost WB World Bank

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Project Information Sheet

Client Information Sheet BORROWER : Tunisia

EXECUTING AGENCY: Ministry of Infrastructure, Housing and Spatial Planning

Financing Plan Source of Financing Amount Instrument

AfDB EUR 144 million Loan

AGTF EUR 46.12 million Loan MIC/TAF UA 1.2 million Grant Government EUR 191.63 million Self-financing

TOTAL COST EUR 383.26 million

Key AfDB and AGTF Financial Information

Loan Currency Euro (EUR) Interest Type Floating base rate with a free fixing option Floating Base Rate Euribor 6 months Contractual Margin 0.60% (60 basis points - bps) Financing Margin Bank financing margin relative to Euribor 6 months. This margin is revised on 1 January and 1 July, yearly Service Charge Not applicable Administrative Fees Not applicable Other Charges None Tenor 20 years Grace Period 5 years

Timeframe – Main Milestones (Expected) Activity Date Concept Note Approval April 2015 Loan Agreement Negotiations August 2015 Board Presentation October 2015 Effectiveness December 2015 Closing Date 31 December 2020 Completion Report February 2021

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Executive Summary

1. Project Overview: the Road Infrastructure Modernization Project (PMIR) is aimed at completing actions embarked on in the late 90s to upgrade Tunisia’s classified road network. It seeks to rehabilitate 719 kilometres of classified roads, most of which are in the country’s inland governorates (West, Centre-West and North-West) that, unlike the coastal regions, are less equipped with economic infrastructure. PMIR should also upgrade some civil engineering structures on the classified network to make them more resilient to the effects of climate change and give them features that are consistent with the service level and the expected traffic on the network.

Through the counterpart contribution, PMIR will finance the periodic maintenance of 2 500 kilometres of classified roads that were upgraded under previous road projects funded by the Bank (Road Projects II, III and IV), the Tunisian Government and other donors over the past decades. The surface course of these roads, the average age of which is 10 to 15 years and which have been regularly maintained since they were commissioned, now needs to be replaced or reinforced in order to extend the lifespan of the roads.

Through a grant, PMIR will also back efforts to modernize the management of Tunisia’s road network by conducting a study on the upgrading of the road sub-sector aimed at commercializing road management and sustaining road maintenance financing. In addition, it will fund the establishment of a carriageway design catalogue for Tunisia, taking into account the country’s climatic conditions and the available road construction materials.

The total cost of the project, net of taxes and duties, is estimated at EUR 386.26 million. It will be financed to the tune of: EUR 191.63 by the State of Tunisia, EUR 144 million by an AfDB loan; EUR 46.12 million (USD 50 million) by a loan from AGTF resources; and EUR 1.5 million (UA 1.2 million) by a TAF/MIC grant.

2. Needs Assessment: PMIR is consistent with Tunisia’s road network upgrading priority programme. Its implementation will: (i) improve user mobility on the classified road network by reducing transport constraints resulting from the narrowness and structure of carriageways; (ii) contribute to protecting the existing road network, while fostering intra- and inter-regional trade and reducing regional social disparities; and (iii) reduce accidents and improve road infrastructure resilience to the effects of climate change.

PMIR is in line with the Bank’s Ten-year Strategy (2013-2022) and Tunisia’s Interim Country Strategy Paper (I-CSP 2014-2015), especially its second pillar on “Infrastructure”. The project is in keeping with two objectives of the Bank’s Ten-year Strategy, namely inclusive growth and transition to green growth. The project design is aligned with the inclusive growth objective as it is hinged on improving road network quality, especially in Tunisia’s underprivileged regions.

3. Bank’s Value Added: PMIR will consolidate previous Bank operations in the road sub- sector. The Bank has contributed to rehabilitating and modernizing over 4 000 km of roads, as well as constructing more than a hundred civil engineering structures over the past fifteen years. Thanks to previous Bank operations, the proportion of classified roads with a carriageway width of 7 metres or above has increased from 40% to close to 63%. To continue this trend, the Government is requesting Bank co-financing for this operation.

4. Knowledge Building: the establishment of key impact indicators prior to project start- up and impact assessment at project completion will help to generate useful information on PMIR outputs and outcomes. Such knowledge will be managed from a database at the General Directorate of Highways (DGPC) and disseminated through annual reports and the Bank’s website.

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RESULTS-BASED LOGICAL FRAMEWORK Country and Project Name: Tunisia–Road Infrastructure Modernization Project Project Goal: Improve the quality of the classified network and the conditions of user traffic in the target areas.

PERFORMANCE INDICATORS MEANS OF RISKS AND MITIGATION RESULTS CHAIN Baseline VERIFICATION MEASURES Indicator Target Situation Contribute to promoting an 8% average annual 0.35 BT (2015) 0.49 BT (2020) National efficient and high quality growth of the daily Institute of transport system to sustain transit of goods Statistics; O/D growth and create conditions transported by road conducive to enhanced export between 2015 and 2020 (ii) 0% (i) 5%, with a 5% survey on competitiveness HDV traffic on heavy goods

average vehicle traffic;

Transport Master Plan

Study IMPACT Traffic conditions are improved (i) Reduction (%) of the (i) 0 (i) 20% DGPC reports Risks: and secured on the classified road average travel time on (i) Risk of late expropriation for network the rehabilitated network layout rectification and (719 km) construction of the Thala bypass due to the numerous actors (ii) Average vehicle (ii) TND 0.52/km194 (ii) TND 0.39/km involved in the process of freeing operating cost (VOC) the rights-of-way; (ii) Security risk, especially in border (iii)State of the classified (iii) 75% (iii) 85% in 2020 areas; road network: share of (iii) Lack of works monitoring the paved road network (iv) 38 (iii) 30 logistics in regional directorates. in good condition Mitigation Measures: (iv) Number of accidents per ONSR statistics (i) The optimization of national

million vehicles/km OUTCOMES

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Increased efficiency in road sub- The indicators will be To be determined by To be determined by the Road sub-sector procedures is underway to limit sector management and planning. determined by the upgrading the study study upgrading study the number of stakeholders and study and will be based on reduce timeframes; the following results: (ii) The Government has taken (i) Improvement of the measures to secure border areas. internal efficiency of road There will be close works administration; (ii) Improvement of road monitoring in coordination with maintenance financing and regional authorities; programming; and (iii) Recruitment of technical (iii) Optimization of road assistance missions to back

sub-sector spending. DREHAT.

Development of the classified (i) Length of rehabilitated (i) 0 km (i) 345 km completed in DGPC reports network: 719 km of roads in 21 roads 2018 and the rest (379) in governorates (ii) Rate of classified roads 2020 with width 7 m and above (ii) 63% (ii) 70% developed and reinforced Periodic maintenance of the Length of reinforced roads 0 km 2500 km between 2015 DGPC reports classified network: 2500 km of and 2020 roads in 24 governorates Construction of civil Number of civil engineering 0 12 civil engineering DGPC reports engineering structures: structures constructed structures completed in 23 civil engineering structures 2018 and the rest (11) in covering a distance of 2710 lm to 2020 be constructed in 20 governorates The bridge is reconstructed, No Yes The bridge over the old GP 17 in including its access roads Jendouba is reconstructed to improve access to basic social services by women and children

in the project impact area Structuring road network: Length of roads constructed 0 km 7.3 km DGPC reports construction of the 7.3 km-long Thala bypass in Kasserine

Governorate OUTPUTS

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Technical assistance: (i) study (i) Study conducted (i) No (i) Yes on the upgrading of the road sub- (ii) Catalogue adopted (ii) No (ii) Yes sector; and (ii) study on the (iii) No (iii) Yes (iii) A road sub-sector establishment of a carriageway gender action plan is design catalogue prepared and adopted

Beneficiaries Direct project beneficiaries Reports (i) Men (i) 0 (i) 968 000 (ii) Women (ii) 0 (ii) 643 000 (iii) Total (iii)0 (iii)1 611 000 (iv) Number of temporary jobs created, 15% of them (iv) 0 (iv) 4120 (618 of for women (v) 0 them for women) (v) Number of student (v) 100 (at least 50 engineers or technicians of them women) trained, 50% of them women

A. Road Works A: EUR 381.40 million Sources of Financing B. Technical Assistance B: EUR 1.58 million AfDB: EUR 144 million C. Project Management C: EUR 0.28 million AGTF: EUR 46.12 million Total: EUR 383.26 million MIC-TAF: UA 1.2 million Government: EUR 191.63 million

Total: EUR 383.26 million

KEY KEY ACTIVITEIS

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ROAD INFRASTRUCTURE MODERNIZATION PROJECT IMPLEMENTATION SCHEDULE 2015 2016 2017 2018 2019 2020 Description Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Approval and Effectiveness Board of Directors Signing of loan and grant agreements Effectiveness Lifting of Conditions Precedent to 1st Disbursement A. Road Works A.1 Upgrading of the classified road network 1st tranche 2nd tranche A.2 Periodic maintenance of the classified network 1st tranche 2nd tranche A.3 Construction of civil engineering structures 1st tranche 2nd tranche A.4 Structuring road networks B. Technical Assistance B.1 Study on sub-sector upgrading B.2 Study on carriageway design catalogue C. Project Management

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REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL TO GRANT AN ADB LOAN AND AN AGTF LOAN, AND AWARD A MIC-TAF GRANT TO FINANCE THE ROAD INFRASTRUCTURE MODERNIZATION PROJECT IN TUNISIA Management submits the following Report and recommendation concerning a EUR 144 million ADB loan, an EUR 46.12 million AGTF loan and a UA 1.2 million Middle Income Countries Technical Assistance Fund (MIC-TAF) grant to the Republic of Tunisia to finance the Road Infrastructure Modernization Project in Tunisia.

I. STRATEGIC THRUSTS AND RATIONALE 1.1 Project Linkages with Country Strategy and Objectives 1.1.1 Over the two decades preceding the 2011 revolution, Tunisia recorded remarkable growth of about 5% (between 1995 and 2008) partly sustained by huge investments in the road sub-sector. However, this growth was not inclusive as the prosperity it brought about mainly benefited the coastal areas that already generated nearly 85% of the country’s wealth, to the detriment of the hinterland regions and the countryside. In addition, the fruits of this growth did not help to improve public services or create economic opportunities in the hinterland regions, thereby giving rise to a feeling of social exclusion among the population. These disparities have resulted in poverty rates of up to 29% in the Centre-West regions compared with the low poverty rates of 5%-7% in the Centre- East and Greater Tunis regions. The Government retained the improvement of transport infrastructure as a key lever for promoting investment in underprivileged regions and connecting them to economic activity centres.

1.1.2 Since the 2011 revolution, the country has made significant progress in establishing a new sustained, inclusive and sustainable development model. The new Government’s strategy and five- year plan to operationalize it are being finalized. However, it is clear that reducing regional disparities and improving living conditions in the underprivileged regions will be two of the main pillars of this new strategy. This project is based on an interim strategy of the Ministry of Infrastructure in the road sub-sector, the purpose of which is to continue with upgrading operations undertaken in the sub-sector since the nineties by incorporating Government’s new focus on improving connectivity with the hinterland regions.

1.1.3 Hence, supporting the country’s expected strong economic and social growth requires measures to improve infrastructure in order to stimulate trade by developing, among other things, poorly served destinations and to contribute to reducing transport costs. In this regard, the Government intends to implement an extensive road network upgrading programme, which includes this project. The programme estimates investment needs by 2030 at TND 30 billion, or EUR 14 billion. The priority phase of the programme valued at TND 2.13 billion will be financed by four donors, including the Bank.

1.2 Rationale for Bank Intervention 1.2.1 The project is in line with the Bank’s Ten-year Strategy (2013-2022) and Tunisia’s 2014- 2015 Interim Country Strategy Paper, especially its second pillar on “Infrastructure”. It is indeed consistent with two objectives of the Bank’s Ten-year Strategy, namely inclusive growth and transition to green growth. The project design is aligned with the inclusive growth objective as it is hinged on improving the quality of the road network, especially in Tunisia’s underprivileged regions. Infrastructure rehabilitation and maintenance will contribute to private sector and local SME promotion, as well as job creation for youths. In addition, the project will improve the provision of transport services to regions with high agricultural value added, thereby contributing to food security in Tunisia. 1

1.2.2 The Road Infrastructure Modernization Project (PMIR) will consolidate previous Bank operations in the road sub-sector. The Bank has contributed to rehabilitating and modernizing over 4 000 km of roads, as well as constructing more than a hundred civil engineering structures over the past fifteen years. Thanks to previous Bank operations, the proportion of classified roads with a carriageway width of 7 metres or above has increased from 40% to close to 63%. To continue this trend, the Government is requesting Bank co-financing for this operation.

1.2.3 PMIR is consistent with Bank-funded operations in Tunisia. It will enhance the impact of ongoing investments and those earmarked for the various governorates of the country through the Integrated Agricultural Development Project (PDAI), the Rural Drinking Water Supply Project and the Regional Development and Job Creation Support Programme (PADRCE) currently on the drawing board. Its technical assistance component is complementary to ongoing studies financed by the Bank with Middle Income Countries Technical Assistance Fund resources, namely the National Transport Master Plan Study (PDNT) and the Road Safety Strategy Study.

1.3 Aid Coordination 1.3.1 Tunisia’s road sector donor coordination mechanism is not yet formalized. The DGPC organised a meeting between DGPC and the various donors in March 2015, at the end of which the principle of holding periodic meetings was adopted. The PDNT study financed by the Bank will help to provide a framework for dialogue between donors and the Government on the priorities of the transport sector, in general, and the road sub-sector, in particular. Given its rich experience in Tunisia’s transport sector, the Bank will play a key role under Government leadership.

1.3.2 Technical and financial partners (TFPs) fund different operations in Tunisia’s road sub- sector. Thus, the Arab Fund for Economic and Social Development (AFESD) lays emphasis on rural roads and strengthening of the classified network, while the European Investment Bank (EIB) and the Japanese International Cooperation Agency (JICA) focus on major cities and highway projects. The World Bank, which has not financed any operation over the past decade, plans to support the upgrading of 136 km of national and regional road corridors.

II. PROJECT DESCRIPTION 2.1 Project Objectives and Components

2.1.1 PMIR’s goal is to improve the quality of the classified road network and conditions of user traffic in the target areas. Its sector objective is to contribute to promoting an efficient and high quality transport system in order to sustain growth and create conditions conducive to enhanced export competitiveness.

2.1.2 PMIR is consistent with Tunisia’s road network upgrading priority programme. Its implementation will improve user mobility on the classified road network by reducing transport constraints resulting from the narrowness and structure of carriageways. In addition, its implementation will contribute to protecting the existing road network, while fostering intra- and inter-regional trade and reducing regional social disparities. Lastly, it will reduce accidents and improve road infrastructure resilience to the effects of climate change. To achieve these objectives, project activities have been grouped into the components summarized in the table below.

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Table 2.1 Project Components (amounts in EUR million) Component Estimated No. Sub-components Name Cost A.1 Development of the classified network through the rehabilitation of a total of 719 km of roads in 21 governorates A.2 Periodic maintenance of a total of 2 500 km of classified roads in the country’s 24 governorates A.3 Construction of 23 civil engineering structures covering 2 710 lm in 20 governorates A.4 Development of structuring road networks relating to the construction of the 7.3 km-long Thala bypass in the Kasserine A Road Works 381.40 Governorate; A.5 Works supervision and control, including: (i) works supervision and coordination of various activities by DGPC and DREHATs; and (ii) technical control of all works, including missions for technical assistance to the project owner for construction of civil engineering structures and roads, and road safety audit A.6 Freeing of project rights-of-way and displacement of utility networks (water, electricity, gas, telecommunication, etc.) B.1 Study on the upgrading of the road sub-sector to improve sub- Technical sector institutional and operational management B 1.58 Assistance B.2 Study on the preparation of a carriageway design catalogue

Project C.1 Monitoring and evaluation C 0.28 Management C.2 Financial audits Total Project Cost 383.26

2.1.3 Development of the classified network (A.1): development works on the classified network will concern the rehabilitation of 43 road sections of a total length of 719 km in 21 governorates of the country. More than half of the length to be rehabilitated (375 km) is in the country’s inland governorates, namely: Béja, Jendouba, Kef, Siliana, Kasserine, Sidi Bouzid, Tataouine, Gafsa, Kébili and Tozeur. The works will comprise the widening of carriageways to 7.60 m or dual carriageways, and mainly consist in: (i) waterproofing and resizing carriageways (construction of shoulders on banks of widened carriageways); (ii) reinforcing carriageway structures to a total thickness between 25 cm and 35 cm (for areas where the structure is weak) with thick bituminous gravel (BG) and/or crushed gravel (CG) or humidified reconstituted crushed gravel (HRCG), as appropriate ; (iii) laying asphalt concrete surfacing of an average thickness of 8 cm or of any other suitable surfacing; (iv) reinforcing drainage and sanitation structures; and (v) installing safety and protection devices, including vertical and horizontal road signs. These works could include the displacement of utility networks to widen the carriageways and correct the alignment of corners considered dangerous while remaining as far as possible within the limits of existing road rights-of-way.

2.1.4 Periodic maintenance of the classified network (A.2): these works which will cover Tunisia’s 24 governorates comprise: (i) the laying of asphalt concrete surfacing or of any other suitable surfacing; (ii) the reinforcement of drainage and sanitation structures; and (iii) the installation or replacement of safety and protection devices, including vertical and horizontal road signs.

2.1.5 Entirely financed by the Government, this sub-component will comprise the periodic maintenance of 2 500 km of classified roads which were upgraded under previous road projects funded by the Bank (Road Project II, Road Project III and Road Project IV), the Government and other donors over the past decades. The surface course of these roads, the average age of which is 10 3

to 15 years and which have been maintained regularly since they were commissioned, now need to be replaced or reinforced in order to extend the lifespan of the roads. These roads were identified through a carriageway inspection by the Regional Directorates of Equipment, Housing and Spatial Planning (DREHATs) and deflection measures to determine their capacity to withstand traffic.

2.1.6 Construction of civil engineering structures (A3): the construction works of 23 civil engineering structures in 20 governorates will comprise deviations, where applicable, to the new crossing sites identified, the construction of approach structures to civil engineering structures and actual structures which will be either beneath-the-road reinforced or pre-stressed concrete slab or girder bridges spanning between 40 lm and 320 lm.

2.1.7 This sub-component seeks to improve road infrastructure resilience to the effects of climate change by upgrading some civil engineering structures (bridges and culverts) or crossings (submersible sills), the hydraulic features of which no longer correspond to the peak flows observed during storms (hundred-year flood). It also seeks to widen the existing civil engineering structures the geometric features of which are not consistent with the expected service level on the classified road network.

2.1.8 Development of structuring road networks (A.4): this involves the construction of a 7.3 km- long bypass in the west of the town of Thala between PK 174 and le PK 182 on GP17. The new bypass will comprise a 7.6 m-wide two-way road with two 2.75 m-wide shoulders.

2.1.9 The centre of Thala town in the Kasserine governorate is the scene of many deadly accidents involving heavy duty vehicles that face a lot of difficulties crossing the town owing to the steepness and narrowness of the carriageway. The existing bypass constructed several decades ago cannot be used by trucks because of its geometric features, which are ill-adapted to such vehicles. Therefore, this component addresses the need to improve road traffic and safety conditions. It will enable heavy-duty trucks plying the Kef-Kasserine road to cross the Thala area under improved safety conditions and at reduced operating costs.

2.1.10 Works supervision and control, including road safety audit (A.5): the Construction Techniques Testing Centre (CETEC) will carry out the geotechnical control of all project works under an agreement signed with MEHAT. The control and supervision of the classified road network development and reinforcement works will be directly undertaken by DREHATs. The executing agency will use consulting firms to control and supervise civil engineering structure rehabilitation and construction works. Road safety audit services are included in works supervision services.

2.1.11 Freeing of rights-of-way and displacement of utility networks (A.6): entirely financed by the State, this component will involve compensating project affected persons (PAPs) and displacing utility networks (water, electricity, gas, telecommunication, etc.).

2.1.12 Road sub-sector upgrade study (B.1): this study will conduct a critical analysis of the current organization and financing of the road sub-sector, and propose measures to improve the existing system. In particular, the study will examine the issue of road construction and maintenance financing. It will also produce the elements required to make the choice of establishing or not establishing (opportunity study) new entities to commercialize road management and sustain road maintenance financing. It will cover all State entities involved in the road sub-sector (DGPC, DREHAT, STA, CETEC, etc.). In addition, the study will develop an action plan to mainstream gender-related aspects into the road sub-sector.

2.1.13 Study on the establishment of a carriageway design catalogue (B.2): this study will develop a methodology for characterizing and classifying the various types of carriageways. The catalogue thus produced will be a handy working tool for DGPC. 4

2.2 Technical Solution Adopted and Alternatives Explored 2.2.1 Technically, the project is designed to address the capacity constraints (width and structural condition of carriageways) of the classified road network which currently does not provide a suitable service level in view of the volume of traffic and the rapid growth of heavy duty vehicle traffic responsible for the rapid deterioration of carriageway structures and the heightened risk of accidents. Hence, the road sections retained under the project were identified based on the mismatch between their current service levels and the traffic demand and/or the need to improve them.

2.2.2 Technical and economic feasibility studies and preliminary designs have been reviewed to confirm the viability of the works to be carried out for road and civil engineering structure development and the Thala bypass. The transverse profiles adopted for town and village crossings correspond to the existing profiles.

2.2.3 The technical design of all the sub-projects complies with recognized international standards. The construction of engineering structures seeks to waterproof the classified network on routes that can become impassable in bad weather conditions. Their design and sizing also comply with recognized international standards. The structures were selected based on the optimized comparison of the various possible types and alternatives. The Thala bypass is a new structure which complies with the appropriate technical standards and for which two alignment proposals were examined.

2.2.4 The alternative solutions explored and reasons for their rejection are given in the table below:

Table 2.2 Alternative Solutions Explored and Reasons for Rejection Alternative Solution Brief Description Reasons for Rejection Reinforcement of GP 17 Widening and reinforcement of This alternative would increase nuisances in Thala across Thala the national road across the town town centre and the risk of accidents owing to of Thala to accommodate HDV intense HDV traffic. traffic Thala bypass alignment Bypassing Thala on the East This alignment is significantly more costly due to the large surface areas to be expropriated and the geometric configuration of the land. Chip seal-coating for Double coating This type of surfacing is not consistent with the regional roads to be traffic level observed on regional roads, the rehabilitated aggressiveness of which requires asphalt concrete.

2.3 Project Type The project is a stand-alone investment operation with the following proposed financing instruments: (i) an AfDB loan; (ii) an Africa Growing Together Fund (AGTF) loan; and (iii) a Middle Income Countries Technical Assistance Fund (MIC-TAF) grant.

2.4 Project Cost and Financing Arrangements 2.4.1 The total project cost, exclusive of taxes and customs duties, is estimated at TND 824 million, or EUR 383 million. This cost comprises an 8% provision for physical contingencies and a 7% provision for price escalation, and will be financed as follows: EUR 191.63 million by the State of Tunisia; EUR 144 million through an AfDB loan; EUR 46.12 million (USD 50 million) through an AGTF loan; and EUR 1.5 million (UA 1.2 million) through a MIC- TAF grant. Project cost by component, source of financing and expenditure category are shown in Tables 2.3, 2.4 and 2.5 below.

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Table 2.3 Project Estimated Cost by Component, Net of Taxes (in EUR million) EUR Million Components Foreign Local Currency Total Exchange Road Works

A1. Development of the Classified Network 48.81 113.89 162.70

A2. Periodic Maintenance of the Classified Network 116.22 0.00 116.22

A3. Construction of Civil Engineering Structures 11.71 27.33 39.04

A4. Development of the Thala bypass 2.37 5.53 7.90

A5. Works Supervision and Control, including Road Safety Audit 4.19 0.00 4.19

A6. Freeing of Rights-of-Way and Displacement of Utility Networks 10.72 0.00 10.72

Technical Assistance

B1. Road Sub-sector Upgrade Study 0.18 0.40 0.58

B2. Study on the Establishment of a Carriageway Design Catalogue 0.18 0.72 0.90

Project Management

C1. Monitoring and Evaluation 0.14 0.00 0.14

C2. Financial Audits 0.12 0.00 0.12

Base Cost 194.64 147.87 342.51

Physical Contingencies (8% of cost of works) 5.03 11.74 16.77

Price Escalation (7% of base cost) 13.62 10.35 23.98

Total Physical Contingencies and Price Escalation 18.66 22.09 40.75

Grand Total 213.29 169.97 383.26

Percentage 55.65 44.35 100.00

2.4.2 The project will be financed by the Government to the tune of EUR 191.63 million and by the Bank for the same amount, including MIC-TAF grant resources. The counterpart contribution represents 50% of the total project cost. This contribution is in line with the guidelines and recommendations contained in the policy on expenditures eligible for Bank Group financing approved in March 2008, and which the Bank currently uses to determine the maximum level of its commitment to participate in implementing projects in Tunisia.

Table 2.4 Project Sources of Financing (in EUR million)

% Total Source of Financing Local Currency Foreign Exchange Total

AfDB 15.98 128.02 144.00 37.6% AGTF 5.38 40.74 46.12 12% MIC-TAF 0.30 1.20 1.5 0.40% Government 191.63 - 191.63 50.0% Total Project Cost 213.29 169.97 383.26 100%

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2.4.3 AfDB1 resources cover the entire foreign exchange portion and part of the local currency portion of the project cost. Specifically, AfDB resources cover 79% of the pre-tax costs2 of the development (Sub-component A.1) and civil engineering structure (Sub-component A.3) and structuring road network (Thala bypass, Sub-component A.4) construction works, and 95% of the pre-tax costs of the Technical Assistance component through a MIC-TAF grant.

2.4.4 The counterpart contribution amounting to EUR 191.63 million represents 50% of total pre- tax project cost and covers 89% of the local currency portion of the project cost. It will finance: (i) 100% of periodic maintenance costs (Sub-component A.2); (ii) 100% of the costs of freeing rights- of-way and displacing utility networks (Sub-component A.6); (iii) 21% of the pre-tax costs of the development ( Sub-component A.1) and civil engineering structure (Sub-component A.3) and structuring road network (Thala bypass, Sub-component A.4) construction works; (iv) 100% of the costs of services for works execution supervision and control, and technical control missions (Sub- component A.5); (v) 5% of the costs of the Technical Assistance component; and (vi) 100% of the costs of the Project Management component.

2.5 Project Target Area and Beneficiaries

Project Impact Area

2.5.1 PMIR has a national scope and its impact area covers the 24 governorates grouped into Tunisia’s six geographic regions, namely:(i) North-West (NW): Jendouba, Béja, Le Kef and Siliana; (ii) North-East (NE): Bizerte, Tunis, Ariana, Manouba, Ben Arous, Zaghouan and Nabeul, (iii) Centre-West (CW): Kairouan, Kasserine and Sidi Bouzid; (iv) Centre-East (CE): Sousse, Monastir, Mahdia and Sfax; (v) South-West (SW): Gafsa, Tozeur and Kébili; and (vi) South-East (SE): Gabès, Médenine and Tataouine.

2.5.2 Economically, Tunisia recorded a growth rate of 2.4% in 2013 and 2.3% in 2014, which fell below official projections and those of the 2012 financial year (3.9 %). Growth projections for 2015 stand at around 1%. The worsening security situation, the fragile social context, stagnation in the Euro zone (the country’s leading client and supplier) and a 3.3% decline in agricultural production account for this slowdown.

2.5.3 Economic activity in the north and centre of Tunisia is dominated by industry, tourism, agriculture and fisheries. Industrial activities are generally located in the coastal area and concern manufacturing in the textile and leather, automobile and electronic components, electrical components, agri-business, chemical and pharmaceutical products and, to a lesser extent, mineral extraction, quarries and construction materials sectors. The governorates of Greater Tunis (Tunis, Ariana, Ben Arous and Manouba), Bizerte, Sousse and Monastir are the major economic and industrial centres.

2.5.4 Concerning tourism, the Sahel governorates (Sousse, Monastir, Mahdia) as well as the cities of Hammamet in Cap Bon region and Tabarka on the North-West coast have a hotel capacity currently estimated at over 180 000 beds, with a potential of 30 million bed-nights yearly and more than 150 000 jobs.

2.5.5 Industrial activity in the South region is centred on mineral resources and the creation of free industrial and trade zones in Zarzis in the south. Tourism is also a very flourishing sector with an average growth rate of more than 10% and about 1.8 million tourists annually in the Médenine (Djerba Island and Zarzis) and Tozeur governorates. Saharan tourism in the Tozeur and Kébili

1 AfDB resources comprise the AfDB loan, the AGTF loan and the MIC-TAF grant. 2 Including provisions for physical contingencies and price escalation. 7

governorates is increasingly becoming a highly promising niche for the future. Cereals, dates and olives are the main crops produced. The dominant activities are: farming and stockbreeding, and date production, the average harvest of which has stood at 107 000 tonnes over the past five years.

2.5.6 In 2013, commercially-traded services value added increased by 4.1% with a significant infrastructure (particularly transport) sector contribution of 3.8%, which demonstrates PMIR’s role in improving regional and inter-regional trade. It should also be noted that the bulk of project operations are in rural areas where the main economic activities are farming and stockbreeding.

Project Beneficiaries

2.5.7 The project will benefit the entire population, particularly people in the North-West (Béja, Jendouba, Kef, Siliana and Zaghouan), Centre-West (Kasserine, Kairouan and Sidi Bouzid) and South (Gafsa, Kebili, Tozeur and Médenine). Relative inadequate basic infrastructure, especially roads, in the Sidi Bouzid, Siliana and Kasserine governorates and some regions of the South is to blame for the slower rate of socio-economic development, compared to the coastal areas. These areas, which engage in agriculture and mixed farming, and to a lesser extent, industry and services, have the highest unemployment rates in the country (about 20% compared to 16% at the national level).

2.5.8 Road users will benefit from the improved state and capacity of classified roads reflected in reduced vehicle operating costs, greater comfort to users and reduced risk of injury and deaths due to traffic accidents.

2.5.9 The inhabitants of Thala town will benefit from a bypass that will ease inter-regional road transit traffic and improve the quality of life of the local population as well as road safety. Road users will profit from a reduction in travel time as well as savings in terms of vehicle operating costs.

2.5.10 The public works and civil engineering (BTP) industry, which includes road construction, will benefit from the work contracts that will be executed under PMIR. This is a highly strategic and vital sector for the Tunisian economy in view of its ripple effect on economic growth. In fact, with an annual turnover above TND 3 billion and about 250 000 jobs, 50 000 of which are permanent, it is the fourth largest sector of the economy after textiles, industry and agriculture. It is estimated that 4120 temporary jobs will be created mainly for youths during works implementation and the project duration.

2.5.11 The project will support integrated rural development programmes, cultural, ecological and Saharan tourism development projects, the Gafsa Mining Basin Economic Renewal Project, including ongoing programmes to establish free industrial and trade zones in the country (Zarzis Port in the South, industrial zones and logistics platforms in Kairouan in the Centre, and in Béja, Jendouba and Kef in the North-East and West). It will help to open up agricultural production areas by linking them to the classified road network.

2.5.12 The reinforcement of intra- and inter-regional economic integration and the reduction of travel time and transport costs on the classified network, in general, and on project road sections, in particular, will have a very significant positive impact on the activities of the people in the project impact area (PIA), particularly women and youths. The most expected immediate impacts are: (i) reduced travel time; improved conditions of transport to markets, health facilities, schools, etc.; and (iii) increased income for women farmers and traders. The time gained will be reinvested in productive activities such as farming and handicrafts, where women feature prominently. In addition, latest studies show that school dropout among girls in rural areas is partly due to transport conditions and factors. Thus, the upgrading of roads could lead to improved transport services from the localities to schools, thus reducing the dropout rate among girls. 8

2.6 Participatory Approach for Project Identification, Design and Implementation 2.6.1 During consultations held with the beneficiary population during the study design phase, the people in the PIA underscored the relevance of PMIR and the positive impact it will have on their standard of living. In addition, they hoped that the following complaints would be addressed: the upgrading of feeder roads to agricultural areas and rehabilitation of rural roads. These complaints had already been partially addressed by the Government through the financing of a 389-kilometre complementary rural road programme under Road Project VI. These investments will be complemented by rural and agricultural feeder road projects envisaged under the DGPC’s Priority Programme (c.f. Table 1.3). 2.6.2 During the project appraisal mission, discussions were held with various stakeholders and institutions, notably the Directorate of Women’s Empowerment and Gender Equality (DPFEG) of the Ministry of Women’s Affairs, Family and Childhood (MFFE); the National Environmental Protection Agency (ANPE) of the Ministry of Environment and Sustainable Development (MEDD); the Directorate for Promotion of Rural Women’s Empowerment (DPFRE) of the Ministry of Agriculture, Water Resources and Fisheries (MARHP); and the General Directorate of Regional Development (DGDR) of the Ministry of Investment Development and International Cooperation (MDICI). Besides the decentralized technical services of MEHAT, the mission held meetings on the ground with the population, main road users and stakeholders of the Tunisian transport system. These participatory meetings were organized in the Kasserine and Jendouba governorates. The mission also held meetings in Tunis with the Association of Tunisian Women for Development Research (AFTURD). DGPC will continue consultations with the people, particularly those residing directly around the project’s rights-of-way. The participatory approach will be continued during project implementation, particularly during work site coordination meetings and the establishment of the baseline situation for project impact monitoring. 2.7 Bank Group Experience and Lessons Reflected in Project Design 2.7.1 During the 1997-2011 period, the Bank financed five successive road projects. Two of the projects (ADB V and ADB VI) are ongoing while the other three, including Road Project IV, which was completed in late 2012, are closed. Two of these five projects (Classified Road Network Improvement Projects – Phases 1 and 2) were listed in 2004 and 2006, respectively, as projects with exemplary performance (OPEV prize).The third project was completed in 2009 and the completion report deemed it satisfactory, despite the delay in its implementation. 2.7.2 The key lessons learned from the outputs of previous and ongoing Bank operations in the road sub-sector in Tunisia can be summarized as follows: (i) project outcomes are not enhanced due to lack of latest data on the road network and failure to disseminate results among network managers and road users; and (ii) although rights-of-way clearing and/or utility network displacement operations prior to the commencement of rehabilitation works are limited, their implementation is increasingly difficult and hinder the execution of works. 2.7.3 Unlike previous projects, PMIR has provided for the establishment of a monitoring and evaluation mechanism to: (i) collect and manage information on the status of implementation of the various project components; (ii) establish the baseline situation to monitor the impact of the road sections rehabilitated and engineering structures constructed; and (iii) conduct a project impact assessment at project completion, using the same methodology followed when establishing the baseline situation. 2.7.4 The clearance of project rights-of-way was incorporated into PMIR design. The alignment of the Thala bypass was selected in order to minimize expropriation. Similarly, classified road rehabilitation works, except corrections to road alignment, are in the available rights-of-way. Lastly, the analysis of risks likely to affect smooth project implementation has recommended measures for mitigating the risk related to delays in the clearance of rights-of-way (cf. paragraph 4.5.1).

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2.8 Key Performance Indicators

2.8.1 Project performance will be measured using the performance indicators outlined in the results-based logical framework. The key project performance indicators are: reduced average travel time on the rehabilitated network; reduced vehicle operating costs; the share of the classified road network in good condition; the number of traffic accidents per million vehicles/kilometre; the efficiency in road sub-sector management and planning; the number of direct project beneficiaries, including women; and the number of temporary jobs created.

2.8.2 The project performance indicators will be included in the quarterly reports of DGPC, which will be responsible for the technical management of the project. Project performance will also be monitored during Bank field visits and supervision missions in order to take corrective measures.

III. PROJECT FEASIBILITY 3.1 Economic and Financial Performance

3.1.1 Economic analysis was conducted for all project road sections and engineering structures using the cost-benefit method, which compares the “with project” and “without project” scenarios. The analysis period is 20 years for rehabilitation works, the Thala bypass and engineering structures. A residual value of 30% was considered at the end of the analysis period. The costs are for routine annual and periodic investment and maintenance expenses every six years. The project benefits are assessed based on the difference in generalized transport costs between the “with project” and “without project” scenarios, namely: operating costs and cost of vehicle travel time for road sections (including those comprising engineering structures).

3.1.2 The vehicle operating costs (VOC) were calculated based on the “VOC” module of the Highway Design and Maintenance (HDM-4) model, depending on the features of the vehicles, the geometric parameters of the roads or feeder roads, and the wear and tear of their surface over time. Determining the average technical characteristics of roads and feeder roads (roughness, sinuous trend, total vertical drop, etc.) is based on detailed knowledge of the project road sections and the levels of improvement envisaged.

3.1.3 Current traffic volumes vary between 1 500 and 14 000 vehicles per day, depending on road size, with an average proportion of heavy duty vehicles of 15%. The volume forecasts for each of the road development works was made on the basis of the socio-economic and demographic trends in their impact areas. The annual growth rates retained vary from 2.5% to 6.9% and 2% to 7.5%, respectively, for the movement of people and goods. Regarding induced traffic, an overall conservative rate of 10% of normal traffic was retained.

3.1.4 Project Economic Performance: the economic analysis showed economic rates of return (ERRs) of between 14% and 26%. The highest rates concern the road sections to be rehabilitated due to relatively lower investment costs compared with those for “engineering structure” and “structuring road network” components. The overall project economic rate of return is 23.4% and the net present value (NPV) of 8% is TND 751 274 000. The results of the economic analyses show that the entire project makes a gain of 23% on VOCs, compared with the baseline situation.

3.1.5 Sensitivity of Project Economic Performance: the robustness of these outcomes was tested by varying the two key parameters of investment costs and benefits. Accordingly, a 10% increase in construction costs with a 10% decrease in benefits reduces the ERR slightly from 23.4% to 20.9%, thus confirming that the project is economically viable.

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Table 3.1 Economic Analysis Results Scenario ERR (%) NPV (TND 1 000) Base (1) 23.4 751 274 + 10% construction costs (2) 22.2 718 504 - 10% benefits (3) 22.1 643 567 Sensitivity test: (2) + (3) 20.9 612 746

3.2 Environmental and Social Impacts Environment 3.2.1 The project has been classified under Environmental Category 13. The environmental impact assessments (EIAs) related to the rehabilitation of the classified network and the construction of engineering structures are not subject to the opinion of the National Environmental Protection Agency (ANPE). For its part, the 7.3-kilometre long Thala bypass, which is a new structure, is subject to ANPE’s opinion. In accordance with Bank requirements, a strategic environmental assessment (SEA) of all PMIR components, which includes all EIAs, has been prepared and submitted to ANPE for information and dissemination, particularly to the network of NGOs in Tunisia. It also includes the environmental and social management framework (ESMF) as well as the environmental requirements to be included in the specifications for contractors. In addition, a Resettlement Policy Framework (RPF), which describes the compensation process to be broken down into specific resettlement plans for sub-projects for the expropriation and procurement required for project implementation, has been prepared. 3.2.2 The main expected negative impacts concern: (i) water quality, which will not be significantly impaired; (ii) dust emissions and vehicle exhaust fumes that will affect the local population are very small and temporary; and (iii) deforestation will be very limited. Sites of interest will not be affected by the project. Ultimately, the negative impacts will be limited to work site nuisances that can be mitigated successfully by properly organizing the work site and implementing the appropriate environmental measures set out in the specifications for contractors. 3.2.3 MEHAT, through DGPC, will be the Project Owner. Its regional branches (DREHATs) will be responsible for works execution and control (Project Supervisor) and will each recruit a project supervision and monitoring officer. The officers will use ANPE’s decentralized bodies. Climate Change 3.2.4 The project has been classified under Climate Category 2. Some platforms of the existing roads and structures retained under the project are prone to frequent and unpredictable floods due to the effects of climate change, particularly in the North-West, Centre and, to a lesser extent, South regions. Such floods interrupt traffic flow. The improvement and replacement of submersible aprons with engineering structures as well as the raising of the water surface profile will seek to increase their resilience and cushion the negative effects of climate change. It is worth noting that this project complements Road Projects V and VI and reinforces the network’s resilience to the effects of climate change. 3.2.5 In addition, project-related developments will make for free flowing traffic on Tunisia’s classified road network and contribute to fuel-efficient running of vehicles, leading to minimum greenhouse gas (GHG - CO2) emissions, compared with the “without project” scenario, where emissions are concentrated at congestion points with numerous stops and starts.

3 The summaries of the Environmental Strategic Assessment Study (ESAS) and the Resettlement Policy Framework (RPF) were approved and published on the Bank’s website on 1 July 2015. 11

Gender

3.2.6 The rights of Tunisian women have been consolidated since independence, thanks to a broad institutional framework, the inclusion of gender in planning, and affirmative action. The Personal Status Code adopted in 1956 abolished the traditions of polygamy, repudiation, and the duty to obey. It also instituted mutual consent to marriage and a legal procedure for divorce. Hence, it gave women a new place in Tunisian society and in the Arab world in general. Tunisia is ranked 17th out of 52 African countries in the Gender Equality Index established by AfDB. According to this ranking, Tunisia occupies the first position in the Maghreb region, ahead of Algeria which is ranked 21st and Morocco 26th.

3.2.7 Tunisia has made the revitalization of the role of women and their active participation in development one of the key components of its vision for society. The presence of women in all sectors of activity tends to enshrine the principle of gender equality. However, unemployment among women and young graduates is escalating, inducing them to leave their regions of origin to settle in coastal cities in search of greener pastures. About 60% of the road development works earmarked concern regions that are hardest hit by unemployment so as to improve the level of infrastructure endowment and linkage to economic poles. Therefore, these investments will improve women’s access to economic opportunities, particularly in the textile, tourism, handicrafts and agricultural sectors, where they feature prominently.

3.2.8 Women are still under-represented on the labour market, accounting for a quarter of the active population (3.2 million in total); their unemployment rate (23%) is higher than that of men (13%). Sectors characterized by job insecurity and underemployment are dominated by women. Moreover, they receive much lesser pay than men (a difference in remuneration of more than 30%), except in the public service. Lastly, women’s labour market participation declines after age 30.

3.2.9 The reconstruction of the metal bridge on the former GP 17 at Jendouba has been included in the project particularly to improve the living conditions of women who face numerous problems of security and hardship, particularly at night, in addition to isolation. Furthermore, the construction of the Thala bypass is a key project component that will have a significant impact on women, children (pupils) and the elderly. The use of the Thala bypass by large tank trucks and utility vehicles will significantly reduce the number of accidents and enable women to improve their petty trade on road sides. Furthermore, to increase the project’s social impact, particularly on women and youths, DGPC will launch an initiative to support engineering students and technicians carrying out their end-of- course research projects or internships on the project components. Every year, DGPC will, in collaboration with the relevant schools and training institutions, select about fifteen youths, or about one hundred youths, 50% of them girls, on a parity basis, before the end of the project. DGPC, universities and training institutions will examine the selection of topics as well as the implementation modalities.

3.2.10 Lastly, the project will not affect the family structure of local residents and will not disrupt the distribution of roles within the family, in which women in particular play a major part.

Social Issues

3.2.11 The project has been favourably welcomed by the people in the PIA because of the expected benefits, notably: (i) improved traffic conditions in terms of road safety year round; (ii) easier access to health facilities, schools and government offices by a large proportion of the rural population in disadvantaged areas; (iii) improved and enhanced marketing of agricultural products; (iv) reduction in soil erosion through waterproofing of roads; (v) creation of new sources of income for vulnerable groups; and (vi) creation of temporary jobs for the duration of the project. These positive impacts will reinforce those of the components of the ongoing Road Projects V and VI. 12

3.2.12 Unemployment rates are higher in the regions of the West compared with those in the coastal areas. At end-2010, Gafsa Governorate is said to have recorded an unemployment rate of 28.3% which is the highest in the country, i.e. more than twice the estimated national rate of 13%. The unemployment rates in the Tataouine and Kasserine Governorates were 23.6% and 20.7%, respectively. Concerning the unemployment rate of graduates, Gafsa Governorate is in the bottom position with 47.4%, meaning almost twice the national rate of 23.3%, followed by the Jendouba (40.1%), Sidi Bouzid (41.0%), Gabès (39.4%), Tataouine (39.1%) and Kasserine Governorates (38.9%).

3.2.13 The estimated USD 2 a day per capita per year poverty line in Tunisia now stands at 24.7%. This rate is more pronounced in the Centre-West and South-West regions. The National Institute of Statistics (INS) estimates the poverty line at TND 1 277 per capita per year in big towns, against TND 820 per capita per year in rural areas. However, the extreme poverty rate is estimated at TND 757 per capita per year in big towns and TND 571 per capita per year in rural areas. The distribution of poor people by social category shows that the highest poverty rates are among the unemployed (40.3%), followed by farm workers (28.9%). In contrast, the distribution of poverty rates by level of education shows that poverty is more prevalent among illiterate people (23.4%) than among people with primary (18.1%), secondary (7.2%) or higher (0.4%) levels of education.

Involuntary Resettlement

3.2.14 The total private land area affected by the project is 32 hectares, while plots of land affected are 157 in number. Land expropriation will not entail any displacement of people. Compensation plans by sub-project provide for the formation of an implementation committee attached to each DREHAT of the governorate concerned. This committee will be backed by external service providers.

IV. PROJECT IMPLEMENTATION 4.1 Implementation Arrangements

4.1.1 The project executing agency will be DGPC of MEHAT, which will be represented on the ground by DREHATs. DGPC and DREHATs will be in charge of: (i) preparing bidding documents; (ii) launching bid invitations for works and analysing the bids; (iii) awarding and managing works contracts; and (iv) ensuring the day-to-day supervision of works. DGPC will also recruit consulting firms to carry out assistance missions concerning the control of engineering structure and road development works. Furthermore, it will sign an agreement with CETEC to provide geotechnical services for the control of the quality of materials used and all works.

4.1.2 Procurement Arrangements: procurements under the AfDB/AGTF loan will concern road development works and the construction of engineering structures (in 23 governorates) and the Thala bypass. They will be done in accordance with Bank Rules of Procedure for Procurement of Goods and Works (May 2008 edition, revised in July 2012), using relevant Bank standard bidding documents. MIC-TAF grant resources will be used to finance two consultancy service contracts, namely: (i) the road sub-sector upgrade study; and (ii) the study on the preparation of a carriageway design catalogue. The consultancy services will be procured through a technical quality and cost- based selection method (QCBM) as set out in Section II of the Bank’s “Rules of Procedure for the Use of Consultants” (May 2008 edition, revised in July 2012).

4.1.2.1 The DGPC Directorate of Engineering Studies (DET) will be responsible for procurement under this project (it will prepare and implement the procurement plan approved by the Bank in accordance with the procedures retained), while DREHATs will supervise works and manage the contracts concluded at the end of various bid invitations. 13

4.1.2.2 An assessment of DGPC’s capacity was conducted to determine its ability to successfully implement procurements under the project. This assessment, which was carried out during project preparation, helps to highlight moderate risk for procurements with the appropriate mitigation measures recommended in Annex C. In fact, for several years, DET has been involved in various projects financed by the Bank and other multilateral development banks with similar rules. Relations between the various entities involved in the procurement process are deemed highly satisfactory. Thanks to the experience gained from previous projects financed by the Bank, DET has good knowledge of procedures and requirements for preparing Bank standard bidding documents and analysis report. 4.1.2.3 The procurement plan to be financed by the Bank was discussed and it is presented in Technical Annex C. A detailed version of this plan will be prepared and examined during loan negotiations. 4.1.2.4 Special Arrangements: in view of time constraints related to the Borrower’s schedule, some procurements may, at its request, be carried out through advance contracting, in line with Article 1.9 of Bank Rules of Procedure for Procurement of Goods and Works. In addition, to promote the development of local enterprises operating in the construction sector, it was decided, at the Borrower’s request, that national preference should be applied to all international competitive bids under this project. Thus, national preference will be implemented in accordance with the provisions of Annex 2 of Bank Rules of Procedure for Procurement of Goods and Works (May 2008 edition, revised in July 2012). 4.1.3 Financial Management and Audit Arrangements 4.1.3.1 Financial Management Arrangements: DGPC will implement the project and manage its resources. The Management by Objectives Unit (UGO) established in DGPC within the Road Projects V and VI implementation framework, will monitor and coordinate project execution. The project’s financial management system was evaluated in accordance with Bank guidelines. It covered aspects related to budget management, accounting, internal control, financial reporting and external audit. This evaluation considered the fiduciary risk assessment conducted in Tunisia in September 2013 as well as the conclusions of the audit and financial supervision reports of previous road projects implemented by DGPC. The evaluation identified a high initial fiduciary risk for the Bank concerning this project due mainly to: (i) the distribution of project activities over a large geographic area (21 governorates); and (ii) the poor financial management performance of previous road projects managed by UGO. Consequently, the following mitigation measures have been recommended: (i) entrust the financial management of the project to the Sub-Department of General Affairs (SDAG) of DGPC, strengthen its workforce and provide adequate financial monitoring tools; and (ii) centralize the payment of contracts co-financed by the Bank Group and counterpart contributions at DGPC. In addition, the following financial management arrangements have been adopted: the Sub-Department of General Affairs (SDAG) will be responsible for the financial management of the project, prepare requests for disbursements and quarterly financial reports, and draw up the project’s annual financial statements. 4.1.3.2 The project’s resources will be partly managed using the national public finance management system. Thus, expenditure financed with loan resources and counterpart contributions will be subject to national procedures concerning: (i) expenditure commitment using the ADEB system; (ii) ex-ante control by the expenditure control officer; (iii) settlement of expenditure by technical and accounting services after the reception of works and services; (iv) authorization of expenditure payment by the duly authorized voteholder (the Director of DGPC for the loans and grant, and the Director of Financial Affairs of MEHAT for counterpart contributions); and (v) for the loans, the use of the Central Bank of Tunisia (BCT) as the State’s financial officer for payments through the special account ordered by DGPC.

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4.1.3.3 DGPC uses a budgetary accounting system and does not keep the accounts of the projects it manages. Thus, project financial information will be compiled using a duly configured computer application to monitor resources by source of financing and expenditure by component and by category. Quarterly financial reports will be prepared based on the outline presented in the Annex. Annual project financial statements will be prepared in accordance with the Bank’s ToR. The project’s financial management will be supervised twice a year and quarterly financial reports will be reviewed. 4.1.3.4 Disbursement Arrangements: the disbursement of the two loans and the grant will be subject to the relevant Bank disbursement rules as set out in the Bank’s Disbursements Handbook. The project will use the special account method to pay eligible loan and grant expenditure. The direct payment and reimbursement methods could also be used to pay eligible expenditure. A specific method will be used per contract. Under the MIC grant, the direct payment method will be used to settle contracts in EUR or USD. Three special accounts will be opened in the Central Bank of Tunisia in the name of the project to receive AfDB loan resources, AGTF loan resources, and MIC- TAF grant resources, respectively. The accounts will be managed separately from the contributions paid by the Tunisian Government. 4.1.3.5 Auditing: an independent external auditor will audit project financial statements on a year- on-year basis, in accordance with the terms of reference for auditing investment operations financed by the Bank Group. The project audit reports, including internal audit reports, should be submitted to the Bank within six months with effect from the end of the financial year concerned. Furthermore, the project may be subject to verification by State control institutions. The Bank will obtain and review such control mission reports. 4.2 Monitoring 4.2.1 The project implementation schedule takes into account notably the Executing Agency’s relevant experience in the management of deadlines for the execution of works and that of the Bank in processing files of similar previous projects. According to projections, project activities are expected to begin upon the approval of the loan during the fourth quarter of 2015 and end at the close of the fourth quarter of 2019, for all components. The loan closure date is 31 December 2020. 4.2.2 Project monitoring will focus on the environment, social issues, the quality of works, the quality of studies (technical assistance component), general project management activities and compliance with various agreements and protocols. The Bank will field periodic supervision missions to ensure that the main deadlines are met, that deliverables and outcomes meet required quality standards and that mid-term reviews are carried out and quarterly reports prepared. 4.3 Governance 4.3.1 According to the “African Economic Outlook 2014” published by AfDB, the Organisation for Economic Cooperation and Development (OECD) and the United Nations Development Programme (UNDP), Tunisian public institutions are still solid, despite weaknesses in terms of effectiveness and efficiency, and a few issues of corruption. According to the Corruption Perceptions Index of Transparency International, the level of corruption remained stable between 2012 and 2013. In fact, Tunisia has lost two positions in the Corruption Perceptions Index ranking to occupy the 77th rank (out of 177 countries) while maintaining the same score of 41 points. The Bank’s country fiduciary risk assessment in 2012 (updated in September 2013 based on the most recent diagnoses public expenditure financial assessment – PEFA 2010) rated the risk at moderate overall (cf. technical annexes).

4.3.2 In the road sub-sector, maintenance programming and budgeting uses an obsolete system based on DREHAT estimates and arbitration at the central level. This practice reduces the expenditure efficiency. To remedy these weaknesses and with donor support, DGPC plans to deploy a decision-making analytical tool (HDM-4) and to update its road database to have better knowledge 15

of its network. Hence, within the PMIR framework, provision has been made for the Bank to support the transport sector through an upgrade study whose findings will help to better diagnose the sector’s institutional and structural barriers. The study will make recommendations to overcome the problems identified and will propose measures to guarantee the highest level of accountability in the road sub- sector. The Bank will ensure the proper conduct of this study and support Tunisia in the subsequent implementation of reforms in the road and transport sub-sectors.

4.3.3 Road projects financed by the Bank and implemented by DGPC encountered no governance issues. However, audit reports were received late. In some cases, the reports were not fully compliant with the Bank’s terms of reference. Generally, DGPC followed Bank procurement and contract management procedures during past operations. The same procedures will be followed in this project.

4.4 Sustainability

4.4.1 Recurrent costs: project recurrent costs mainly consist of maintenance costs following the commissioning of various rehabilitated road sections and the engineering structures built. Thus, in accordance with the maintenance tasks regularly included and implemented under the MEHAT Maintenance Programme, and based on the maintenance strategy adopted, expenditure for the routine maintenance of the entire 3 225 kilometres of classified roads, including the 23 engineering structures, is estimated annually at about TND 1.5 million, based on an annual maintenance cost of TND 200/kilometre of road and 1% of the cost of the structures. This amount represents 2% of the maintenance budget for 2015, and is below the annual maintenance budget growth rate of about 5%/year for the 2010-2015 period.

4.4.2 Scheduled maintenance will involve the resurfacing of relevant road sections every 10 years. Thus, the cost of scheduled maintenance of the project road sections is estimated at TND 323 million, at the rate of TND 100 000/kilometre. These unit costs include all the necessary works, notably resurfacing of the shoulders and the laying of tack coat for asphalt.

4.4.3 Sustainability: project sustainability is assured in view of the fact that the maintenance of the rehabilitated road sections forming part of the classified road network is regularly included in and executed under the maintenance expenditures of the MEHAT road budget. As indicated in paragraph 4.4.1 above, the road maintenance budget has been growing substantially since 1997 (9.7%/year on average over the 1997-2004 period) and by 5%/year since 2004. Moreover, the maintenance works will be based on the maintenance strategy defined in paragraph 4.4.1 above and on good practices in view of the existence within DREHAT of an increasingly robust works inspection system.

4.4.4 To enhance the efficient use of resources allocated for road maintenance, DGPC has initiated a three-year pilot project to test the Road Maintenance Management by Service Level (GENIS) method. Unlike traditional contracts for road maintenance works, payments for GENIS- type contracts are based on measured outputs, reflecting the desired state of the roads that are the subject of contracts. If this approach produces positive results, it could be extended to the entire classified road network.

4.4.5 Under PMIR, the Government has decided to allocate substantial financial resources to preserve the capital invested in the road sub-sector. The service span of the roads retained under the periodic maintenance component (cf. paragraphs 2.1.4 and 2.1.5) will end soon. Thus, any delay in intervention may cause irreparable damage due to the increase in heavy duty vehicle traffic and the ageing of the pavement structures. In addition, PMIR’s technical assistance component will finance a road sub-sector upgrade study and another on the establishment of a carriageway design catalogue for Tunisia (cf. paragraphs 2.1.12 and 2.1.13).

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4.5 Risk Management 4.5.1 Given DGPC’s good technical capacity, its experience in implementing similar projects financed by the Bank and other donors, risks related to technical aspects and works execution are minor. Based on the experience of past road projects, the risk of works cost overrun is moderate, thanks to the tight control of unit prices and the strong competition in the road construction sector. The major risks that could affect the attainment of project objectives are presented below, with the mitigation measures planned.

4.5.2 Delays in clearing the rights-of-way for the construction of the Thala bypass: the mitigation measures proposed are as follows: (i) the identification of the investments to be made by PMIR has prioritized the road sections and engineering structures whose rights-of-way have already been cleared or whose expropriation process has reached an advanced stage. Most of the rights-of- way to be cleared under PMIR concern the construction of the Thala bypass (7.3 kilometres) in Kasserine Governorate and the rights-of-way for corrections to the road alignment (about 32 hectares and 157 plots); and (ii) national expropriation procedures are being optimized to streamline the number of stakeholders involved in the process and reduce delays.

4.5.3 Security risks, particularly in the Governorates of the West and border areas: the security risk is mitigated by measures taken by the Government to strengthen security in sensitive areas. The security situation in areas at risk will be closely monitored to ensure the safety of contractors in charge of works and permanent supervision teams which will be posted on work sites.

4.5.4 Lack of logistical resources for the control of works by DREHATs: this risk will be mitigated by the recruitment, under the counterpart contribution, of technical assistance missions to assist DREHATs in the supervision and control of works, depending on their scope.

4.6 Knowledge Building

4.6.1 The knowledge derived from project implementation will concern road project implementation and monitoring/evaluation good practices. Project implementation good practices will be disseminated among stakeholders during periodic meetings and through briefing notes. The emphasis laid on project impact assessment will seek particularly to meet knowledge building needs. The establishment of the baseline situation prior to the implementation of project activities will help to provide a yardstick for realistically assessing the level of achievement of project development objectives. The outcome of the project impact assessment carried out following works completion will provide comparative data. In this regard, the involvement of INS, which has proven expertise in this domain, is an opportunity and a source of hope for obtaining positive results.

4.6.2 The key knowledge and lessons learned will be managed at DGPC. There are also plans to establish a database at DGPC to facilitate the management of all knowledge accumulated on the activities, outcomes, main results and lessons from this project. Summaries could be published on the Bank’s website and, subsequently, the Tunisian Government’s website.

V. LEGAL FRAMEWORK 5.1 Legal Instrument The Bank will finance the project through the following instruments:

(i) An EUR 144 million AfDB Loan Agreement between the State of Tunisia and the Bank; 17

(ii) An EUR 46.12 million AGTF Loan Agreement between the State of Tunisia and the Bank; and

(iii) A Letter of Agreement between the State of Tunisia and the Bank for a UA 1.20 million Middle Income Countries Technical Assistance Fund grant.

5.2 Conditions for Bank Intervention

(A) Conditions Precedent to Effectiveness Conditions Precedent to Effectiveness of AfDB and AGTF Loan Agreements

5.2.1 The effectiveness of the loan agreements shall be subject to fulfilment by the Borrower of the provisions set out in Section 12.0.1 of the General Conditions Applicable to Loan and Guarantee Agreements of the African Development Bank. Conditions Precedent to Effectiveness of the Letter of Agreement of the Middle Income Countries Technical Assistance Fund Grant 5.2.2 The Letter of Agreement shall become effective on the date of its signature by both parties.

(B) Conditions Precedent to First Disbursement of Bank Resources Conditions Precedent to First Disbursement of AfDB and AGTF Loans 5.2.3 The Bank’s obligation to make the first disbursement of AfDB and AGTF loan resources shall be subject to effectiveness of the Loan Agreements, in accordance with Section 5.2.1 above and fulfilment by the Borrower of the following conditions: (i) Opening of a special account denominated in EUR in a bank acceptable to the Bank to receive AfDB loan resources (cf. Section 4.1.4.4); (ii) Opening of a special account denominated in EUR in a bank acceptable to the Bank to receive some AGTF loan resources (cf. Section 4.1.4.4).

Conditions Precedent to First Disbursement of Middle Income Countries Technical Assistance Fund Grant Resources 5.2.4 The Bank’s obligation to make the first disbursement of Middle Income Countries Technical Assistance Fund grant resources shall be subject to the following conditions: (i) Effectiveness of the Letter of Agreement, in accordance with the provisions of Section 5.2.2 above; (ii) Opening of a special EUR account in a bank acceptable to the Bank to receive grant resources. (C) Other Conditions 5.2.5 The Borrower shall, as work progresses, provide to the Bank’s satisfaction: Evidence of the compensation of persons affected by the project in the said area and/or procurement of the plots of land required for the construction of the Thala bypass, in accordance with the Environmental and Social Management Plan (ESMP), the Resettlement Policy Framework (RPF) and the relevant Bank rules of procedures, particularly the Involuntary Resettlement Policy.

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(D) Commitments 5.2.6 The Borrower shall undertake to fulfil the following conditions to the Bank’s satisfaction:

(i) Implement the project, RPF and ESMP, and ensure their implementation by its contractors, in accordance with national laws, recommendations, prescriptions and procedures contained in the ESMP, as well as the relevant Bank rules of procedure;

(ii) Not to initiate works in the area concerned without ensuring that persons affected by the project in the area have been fully compensated; and

(iii) Submit to the Bank half-yearly reports on the implementation of the ESMP and RPF, including, as appropriate, any deficiencies and corrective measures taken or to be taken.

5.3 Compliance with Bank Policies 5.3.1 The project complies with all applicable Bank rules.

VI. RECOMMENDATION Management recommends that the Board of Directors approve, subject to the conditions stipulated in this report: (i) The proposal to grant an EUR 144 million (UA 114 million) AfDB loan to Tunisia to finance the Road Infrastructure Modernization Project;

(ii) The proposal to grant an EUR 46.12 million (UA 36 million) AGTF loan to Tunisia to finance the Road Infrastructure Modernization Project;

(iii) The proposal to award a UA 1.20 million Middle Income Countries Technical Assistance Fund grant to Tunisia to finance the technical assistance component of the Road Infrastructure Modernization Project.

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Appendix I: Tunisia’s Comparative Socio-economic Indicators Developing Developed Year Tunisia Africa Countries Countries

Basic Indicators GNI per Capita USD 2 Area (‘000 Km ) 2011 164 30,323 98,458 35,811 Total Population (million) 4500 2013 11.0 1,109.0 5,909.3 1,252.8 4000 Urban Population (% of Total) 2013 66.7 40.2 47.7 78.3 3500 Population Density (per Km2) 3000 2013 67.2 46.9 70.7 23.5 2500 GNI per Capita (USD) 2012 4 150 1 719 3 815 38 412 2000 Labour Force Participation – Total (%) 1500 2012-2013 35.4 37.4 67.9 72.1 1000 Labour Force Participation – Female (%) 2012-2013 27.3 42.5 38.6 44.6 500 0 Gender-Related Development Index Value 2007-2011 0.752 0.502 0.694 0.911 2004 2005 2006 2007 2008 2009 2010 2011 2012 Human Development Index (Rank among 187 Countries) 2012 94 ...... Popul. Living on Less Than USD 1.25 a Day (% of Population) 2008-2011 1.1 40.0 20.6 ... Tunisia Africa Demographic Indicators Population Growth Rate - Total (%) 2013 1.1 2.5 1.3 0.3 Population Growth Rate - Urban (%) 2013 1.4 3.4 2.5 0.6 Population < 15 years (%) Population growth Rate 2013 23.2 40.9 28.3 16.4 (%) Population >= 65 years (%) 2013 7.2 3.5 6.1 16.8 Dependency Ratio (%) 2013 43.1 77.9 52.4 49.9 3.0 Sex Ratio (per 100 female) 2013 98.3 100.0 103.3 94.4 2.5 Female Population 15-49 Years (%) 2013 28.0 24.0 53.1 45.2 2.0 Life Expectancy at Birth – Total (years) 2013 75.9 59.2 68.4 77.8 1.5 Life Expectancy at Birth – Female (years) 2013 60.4 60.3 70.3 81.2 1.0 Crude Birth Rate (per 1 000) 2013 17.2 34.8 21.2 11.2 0.5 Crude Death Rate (per 1 000) 2013 5.7 10.4 7.6 10.4 0.0 Infant Mortality Rate (per 1 000) 2013 15.1 61.9 39.8 5.5 2005 2006 2007 2008 2009 2010 2011 2012 2013 Under-five Mortality Rate (per 1000) 2013 16.6 97.4 56.3 6.6 Total Fertility Rate (per Woman) 2013 2.0 4.6 2.6 1.7 Tunisia Africa Maternal Mortality Rate (per 100 000) 2010 56.0 415.3 240.0 16.0 Women Using Contraception (%) 2013 65.1 34.9 62.6 71.3 Health and Nutrition Indicators Physicians (per 100 000 People) 2004-2011 122.2 47.1 117.8 297.8 Nurses (per 100 000 People) 2004-2011 328.0 132.6 202.7 842.7 Life Expectancy at Birth (years Births Attended by Trained Health Personnel (%) 2006-2011 94.6 52.6 66.3 ... Access to Safe Water (% of Population)) 2012 96.8 68.8 87.2 99.2 71 Access to Health Services (% of Population) 2000 90.0 65.2 80.0 100.0 61 Access to Sanitation Services (% of Population)) 51 2012 90.4 39.4 56.9 96.2 41 Percentage of Adults (aged 15-49) Living with HIV/AIDS 2012 0.1 3.9 1.2 ... 31 21 Incidence of Tuberculosis (per 100 000) 2012 31.0 223.6 144.0 23.0 11 1 Child Immunization Against Tuberculosis (%) 2012 99.0 83.0 81.5 96.1 2005 2006 2007 2008 2009 2010 2011 2012 2013 Child Immunization Against Measles (%) 2012 96.0 74.0 83.0 94.3 Underweight Children (% of Children under 5 years) 2005-2012 3.3 19.7 17.0 1.4 Daily Calorie Intake per Capita 2009 2 260 2 481 2 675 3 285 Tunisia Africa Public Health Expenditure (% of GDP 2010-2012 3.4 2.9 3.0 7.5 Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2012 109.7 101.9 109.4 100.9 Primary School - Female 2012 108.4 97.9 107.6 100.6 Infant Mortality Rate (Per 1 000) Secondary School - Total 2011-2012 91.1 47.4 69.1 100.2 Secondary School - Female 2011-2012 93.3 44.0 67.8 99.7 90 Primary School Female Teaching Staff (% of Total)) 2012 57.3 46.6 58.0 84.3 80 Adult Literacy Rate - Total (%) 70 2011-2012 79.7 62.0 80.3 99.2 60 Adult Literacy Rate - Male (%) 2011-2012 87.8 70.7 85.9 99.3 50 Adult Literacy Rate - Female (%) 2011-2012 71.7 53.7 74.9 99.0 40 Percentage of GDP Spent on Education 2010-2012 6.2 5.3 4.3 5.5 30 20 10 Environmental Indicators 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Land Use (Arable Land as % of Total Land Area) 2011 18.3 7.6 10.7 10.8 Annual Rate of Deforestation (%) 2000-2009 -0.2 0.6 0.4 -0.2 Forest (As % of Land Area) 2011 6.6 23.0 28.2 35.0 Tunisia Africa Per Capita Co2 Emissions (metric tons) 2010 1.9 1.2 3.0 11.6 Source: AfDB Statistics Department Databases; last update: May 2014 United Nations Population Division, World Population Prospects: The 2012 Revision; World Bank: World Development Indicators; UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports. For any given interval, the value refers to the most recent year available during the period Note: n.a.: Not Applicable; …: Data Not Available.

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Appendix II: Table of AfDB Portfolio in Tunisia De Closure Amount Name Financing Approval Disb. pt. Date (UAM)

OWAS2 RDWS Programme AfDB Public 31 Dec. 2017 12 Oct. 2011 82.00 30.86%

OWAS2 Treated Wastewater Quality Improvement Project AfDB Public 31 Dec. 2014 11 Jan. 2012 28.06 7.09%

OPSM APEX SME Line of Credit Facility AfDB Public 31 Dec. 2016 13 July 2011 33.41 53.78%

OITC2 Gabès - Ras Jedir Highway AfDB Public 31 Dec. 2017 21 June 2011 118.77 31.31%

OITC2 Road Project - VI AfDB Public 31 Dec. 2016 15 Sep. 2010 204.09 72.46%

ONEC1 Sanitation Restructuring Project AfDB Public 31 Aug. 2015 2 Sep. 2009 41.14 78.17%

OSAN1 Sector Investment Project AfDB Public 31 March 2015 11 Dec. 2008 19.81 65.17%

OITC2 Road Project - V AfDB Public 31 June 2015 11 June 2008 150.76 77.87%

OSAN1 Kairouan PDAI AfDB Public 31 July 2015 29 March 2006 15.40 77.28%

OSHD2 Sec. Education Support Project II AfDB Public 31 Nov. 2014 28 Sept. 2005 51.71 89.87%

OSAN1 North Gafsa Integrated Agricultural Development Project AfDB Public 30 June 2019 13 Feb. 2013 19.12 8.14%

AWF SINEAU AWF 31 Dec. 2014 22 Dec. 2009 1.71 71.13%

ESTA2 Statistical Capacity Building Programme II (SCB II) MIC 31 Dec. 2014 30 March 2011 0.49 49.87%

OSHD2 Cultural Industries Development Study MIC 31 Dec. 214 22 Nov. 2010 0.27 28.33%

OSGE2 Commercial Law Strengthening Project Preparatory Study MIC 31 Dec. 2014 24 Sep. 2010 0.32 100%

ORNA Micro-credit System Evaluation Study (BTS) MIC 31 June 2014 6 Jan. 2010 0.14 100%

OWAS2 Tunisia’s Sanitation Strategy Study MIC 30 Dec. 2014 4 Dec. 2009 57 53.03%

OSHD3 Emerging Re-emerging Diseases Study MIC 31 Dec. 2014 3 Nov. 2009 58 100.00%|

OSAN1 GDA Support MIC 31 Dec. 2015 20 Oct. 2009 59 17.46%

OWAS2 PCI Study in Greater Tunis MIC 31 Dec. 2014 6 Oct. 2009 58 43.62%

OSAN1 Grant - Gabès and Gafsa PDAI MIC 31 Dec. 2015 26 July 2012 38 48.14%

OSHD3 Health Services Export MIC 30 June 2014 10 Sep. 2009 53 88.85%

OITC E-Government and Open Government MIC 31 Dec. 2014 20 Dec. 2012 68 0.00%

OWAS2 Improvement of DWS Rate - Bizerte and Beja MIC 31 Dec. 2014 28 Sep. 2009 0.46 46.40

OWAS2 Zaarat Seawater Desalination Study MIC 31 Dec. 2014 5 Aug. 2009 0.64 53.79%

Grant for the Preparation of the “500-kilometre Agricultural Feeder Roads” OSNA MIC 31 Dec. 2016 18 Dec. 2013 79 0.00% Project

OITC2 Road Safety Strategy Study MIC 31 Dec. 2016 30 Sep. 2013 1.00 0.00%

OITC2 MIC 31 Dec. 2018 15 June 2014 0.80 0.00% National Transport Master Plan Study

ORNA Public Procurement Reform Action Plan Operationalization Support MIC 31 Dec. 2016 27 Dec. 2013 53 0.00%

OPSM NAWARA Gas Project AfDB - 17 June 2014 50 0.00%

ONEC1 Natural Gas Transportation and Distribution Network Development Project AfDB 0.00%

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Appendix III Major Related Projects Financed by the Bank and Other Development Partners in Tunisia

Donors Amount FE Projects Status AfDB 174 million EUR Road Project V 86% AfDB 236 million EUR Road Project VI 80% EIB 110 million EUR EIB V 68% EIB 163 million EUR PMR 10% Undergoing World Bank (WB) 200 million USD Road Corridors appraisal Undergoing AFESD 320 million TND Feeder Roads appraisal

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Annex: Map of Project Area

This map has been provided by the staff of the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown on this map do not imply on the part of the AfDB Group and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders.

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