Project Information Document (Pid) s11

PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB3216 Project Name Southern West Bank Solid Waste Management Project (SWMP) Region MIDDLE EAST AND NORTH AFRICA Sector Solid waste management (85%); Sub-national government administration (15%) Project ID P105404 Borrower(s) PALESTINIAN AUTHORITY – Ministry of Finance Implementing Agency Southern West Bank Joint Services Council for Solid Waste Management Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared July 19, 2007 Estimated Date of September 2, 2008 Appraisal Authorization Estimated Date of Board December 1, 2008 Approval

1. Key development issues, client strategy and rationale for Bank involvement a. The Public Health and Management Challenges Unsanitary and uncontrolled disposal of solid wastes has been a serious public health and environmental hazard of great concern to the Palestinian people in the West Bank and Gaza. It is a substantial threat to public health as a result of random and unsanitary dumping and burning causing air pollution, potential infiltration of polluted leachate in the water supply aquifers, damage to valuable agricultural land and natural landscape, and a habitat for breeding vector- transmitted diseases. The deterioration of the solid waste management services is a part of a general degradation in the financial ability and institutional capacity of local governments to manage public services. Despite the difficulty in identifying suitable sites for sanitary landfills within the Palestinian Authority (PA) administered area, a sanitary landfill has already been constructed covering the northern West Bank and a second sanitary landfill is being designed for the middle West Bank, while this proposed project is aimed at establishing the third sanitary landfill for the southern West Bank region to complete the coverage of the entire West Bank.

Institutionally, there are several central and local agencies involved in the solid waste management at different levels. These agencies are represented by the Ministry of Local Government (MOLG) which regulates and oversees local governments performance1, the Ministry of Planning (MOP) which is responsible for overall development and national and regional planning including that related to siting of large infrastructure such as new landfills, the Environmental Quality Authority (EQA) who is responsible for ensuring environmental protection through regulating, licensing and monitoring major pollution sources including landfill sites2; and finally the local governments represented by the municipalities and village councils which are responsible for municipal solid waste management including collection and

1 As mandated by the Local Government Law of 1997. 2 As mandated by the Environment Protection Law of December 1999. disposal. Despite the clear delineation of responsibilities and mandates, these institutions lack the financial and technical means to implement development and service delivery plans as well as enforcement of laws and regulations.

The overall situation of solid waste management (SWM) in the proposed project area, namely the southern West Bank covering Bethlehem and Hebron governorates, is below acceptable standards due to weakened local governments as a result of the deteriorating political and economic conditions affecting municipal finances, constrained SWM institutional framework, and inadequate infrastructure for proper disposal of solid waste. The following is a brief description of the main issues:

Deteriorating solid waste management (SWM) service quality. The municipal services quality particularly related to waste collection and disposal is at unacceptable levels. According to a Bank survey of municipal service delivery3 in the Middle East and North Africa Region (MENA), SWM service has received the most negative feedback out of the four investigated services (electricity, water, wastewater and solid waste). Negative feedback related to the incomplete service coverage, absence of collection schedule, collection strikes and uncontrolled dumpsites. Specifically, 90 percent of those surveyed in Bethlehem have expressed their dissatisfaction with the quality of municipal services related to collecting and disposal of solid waste.

Inadequate capacity of existing disposal sites. Today, there are no sanitary landfill sites in the southern West Bank. It is estimated that about 60 percent of the 600 tons of waste generated per day is being disposed of at Abu Dis/Al-Eizariyya (in the Jerusalem Governorate) and Yatta (in the Hebron Governorate) dumpsite sites. Both of these dumpsites lack adequate, sound, and environmentally friendly waste management techniques, and are already operating at their full capacity, and, therefore, are expected to be closed in the near future. The remaining 40 percent of the waste generated in the southern West Bank is either being burned at local dump sites or randomly dumped on valuable agricultural land or natural landscape, and along road sides.

Declining Local Governments revenues. A recent World Bank study on municipal finances in WBG4 based on a survey of 52 municipalities shows a declining trend in local government (LG) revenues over the past six years. A major factor contributing to this decline is the inability of many households to pay for electricity and water service, as a major source of revenue to the LGs and cross-subsidy of the solid waste management service. The survey showed that West Bank LGs have experienced nearly a 20 percent drop in revenues per capita.

Scale – efficiency for SWM. Solid waste management costs generally cover planning, capital investments, operating, maintenance and monitoring. For such systems to operate effectively, adequate equipment and facilities must be provided. However, limited LG revenue tends to focus on labor costs and the purchase of consumables. As a result, equipment are poorly maintained and have become too old and inadequate to provide reliable service. It is also often the case that municipalities practice unsafe disposal by open dumping and burning techniques to reduce

3 Municipal Management and Local Governance: A Service Delivery Perspective, March 31, 2007 4 Intergovernmental Fiscal Relations and Municipal Finance Issues in West Bank and Gaza, World Bank Policy Note, June 2006 disposal cost. Specifically to southern West Bank, the small population size of municipal areas together with high waste management cost including that at the landfill makes it impossible to deliver this service economically and efficiently independently (currently the cost of SWM service at selected municipalities in Bethlehem and Hebron comprises between 11 and 27 percent of their annual budget). Therefore, the decision to establish joint services councils to enable cost sharing of SWM in Bethlehem and Hebron in June 2006 and May 2007 respectively, represents good practice and one step in the right direction. However, thus far neither council has yet been able to achieve the economy of scale to become financially and operationally efficient.

Deteriorating environment health quality: In the absence of evidence on vector transmitted diseases resulting from poor SWM practices in the project area, the on-going waste picking and scavenging practices at the Hebron dumping site are signaling a possible deterioration in public health. Today, there are between 20 - 30 pickers and scavengers at this site with age ranging between 10 and 40 years who could be at risk and could extend such risk to their own families and communities. Though there are no specific statistics from the project area, the international experience has shown that 40 percent of dumpsite pickers end up with abnormal Pulmonary function; while high rate of the pickers develop intestinal parasite infection; and 70 percent of those of young age have 2.5 times higher blood lead levels (as per WHO lead guidelines) than those in controlled slum children.

b. Palestinian Authority Strategy and Commitment The PA has been addressing SWM issues within the scope of the Palestinian Mid-Term Development Plan (2006-2008) and the EQA strategy. The PA’s strategy is based on three main pillars: (i) strengthening the municipal service delivery capacity by enhancing the management and financial capabilities of local governments; (ii) encouraging municipalities to promote joint regional institutions for the delivery of SWM services to realize the economy of scale which is inherent to the sector; and (iii) establishing three regional sanitary landfill sites in the West Bank. The first is being funded by the Bank and will cover the northern West Bank while the second is being funded by the German Bank for Development (KfW) and will cover the central West Bank, and the third, which this proposed project is expected to finance, is located in the southern West Bank.

During the April 2007 identification mission, the PA represented by the EQA, the Ministries of Planning, Finance and Local Government, and key stakeholders from the southern West Bank region have expressed their commitment to address as a priority the need to jointly resolve deficiencies in solid waste management. The local level commitment was secured after the pre- identification mission in March 2007 by the signing of a memorandum of understanding (MOU) to establish the Hebron Joint Services Council under the chairmanship of the Hebron Municipality, the commitment of the Bethlehem JSC to work closely with the Hebron JSC under an umbrella organization structure namely the Southern West Bank Joint Services Council for Solid Waste Management (JSC). There is consensus among all stakeholders that delivering a satisfactory SWM service can only be achieved through strengthening of the administrative structures, provision of new environmentally sound solid waste transfer stations and a sanitary landfill site, closing of unsanitary dump sites following environmentally sound approaches, improving collection services at the local level, and pooling of revenues through the provision of joint services. c. Rationale for Bank Involvement The Bank has been involved in development programs in the West Bank and Gaza since early 1993 when the Bank was asked by the sponsors of the Middle East Peace Talks to undertake an assessment of the development needs and prospects for the economy of the West Bank and Gaza Strip. Since then, the Bank has administered Multi Donors Funds and provided IDA administered credits and grants in support of the programs recommended by such assessments. While there is no Country Assistance Strategy as defined by Bank policies since West Bank and Gaza is not a member country of the Bank, the country management team provides the Board with regular updates and strategy notes on the Bank’s portfolio and pipeline project in the WBG. It was confirmed to the team that the next such briefing/strategy note is scheduled to take place during the Second Quarter of FY08 and will feature solid waste management as a priority area for the Bank.

The Bank has considerable global, regional and West Bank and Gaza experience in similar solid waste management projects. Locally, this proposed project builds on the successful achievements thus far of the on-going Bank-funded Solid Waste and Environment Management Project (SWEMP) for the northern region of the West Bank. These achievements include the establishment of a Joint Services Council for Solid Waste Management in Jenin governorate, the construction of a sanitary landfill which now will serve some 500,000 people in the northern West Bank, rehabilitation and closure of some 50 open dumpsites, supply of waste collection bins and trucks and carrying out a public awareness campaign. The learning will benefit the design and implementation of the new project under a very complicated and difficult political and security environment. The project team’s focus on building local governments’ commitments and a strong management team, designing a simple and realistic project, having a solid understanding of issues, and being responsive to the changing working environment during project implementation has contributed effectively to achieving the project objectives. The institutional, financial and technical aspects of the project, which are working well in the northern West Bank region, could also be replicated in the southern West Bank region.

The Bank has also been successful in aide mobilization in the urban sector in general and that of solid waste management in particular. For example, the recently closed Emergency Municipal Services Rehabilitation project (EMSRP) has generated close to US$85 million of donor parallel financing while its second generation has already generated some US$40 million in parallel financing. Similarly, the SWEMP was able to attract a number of donors including the European Community (EC) who provided a grant of EURO 4 million and Italy who provided EURO 1.3 million towards the equipment and construction and management of transfer stations. The SWEMP was also able to generate donors financing such as KfW of similar interventions in particular in the central West Bank. Similarly, Japan’s International Cooperation Agency (JICA) is providing assistance to communities in the Jordan Valley towards SWM.

2. Proposed objective(s) The main objective of the project is to improve the municipal solid waste collection and disposal system in about 25 municipalities and surrounding local councils in the Southern West Bank.

3. Preliminary description The proposed Second Solid Waste and Environmental Management Project (SWEMP-2) in the southern West Bank region would build on the recent achievements of the first SWEMP including the establishment of a Joint Services Council, a regional approach for solid waste management and improved cost recovery mechanisms. The proposed project would be implemented by the southern West Bank Joint Services Council for Solid Waste Management (JSC) through its technical/administrative secretariat which will initially be created financed by the project as a Project Management Unit (PMU). The PMU would manage project implementation and coordinate the participation of key stakeholders and donors; it would also be responsible for monitoring and evaluation of the project during implementation and upon completion including preparation of the Implementation Completion and Results Report (ICR). The project scope would consist of:

Component 1: Institutional Strengthening (US$2.0 million): This component would support: a) institutional building of the High Joint Services Council for Solid Waste Management in Bethlehem and Hebron (the Council) and municipal and village councils; b) training to participating mayors in policy formulation in SWM, and training of municipal operational and administrative staff in effective solid waste management; c) EQA institutional strengthening in monitoring and reporting; and d) Project Management Cost which would support operational cost of the Project Management Unit (PMU) including salaries of contracted staff and office operations and maintenance cost.

Component 2: Infrastructure Development, Landfill Construction and Equipment Supply (US$15.0 million): This component would support the construction and initial operation of a sanitary landfill; waste collection and transport equipment and facilities; rehabilitation and closure of existing dump-sites including interim operational improvements for proper use during the period of construction of the new sanitary landfill; the construction/improvement of off-site infrastructure (access roads, water, wastewater, drainage and power supply); and the construction of solid waste transfer stations to optimize collection and transportation to the sanitary landfill site.

Component 3: Public Awareness (US$0.25 million). This component would finance the design and implementation of an awareness campaign in the southern West Bank (Bethlehem and Hebron governorates) communities. This campaign would aim to facilitate project implementation, public involvement in proper collection, recycling, establishing appropriate tariffs, and public support of new SWM policies. This component would also finance study tours of mayors and municipal staff in solid waste management.

Component 4: Innovation and Learning Intervention (US$0.75 million): The project would implement a number of pilots in the areas of waste minimization and recovery. This will be based on the findings and recommendations of specialized feasibility studies that the project will finance on waste minimization and recovery (recycling and composting), cost recovery, and promoting public-private sector partnerships.

The project cost, excluding land acquisition if any, is estimated in the order of about US$16-18 million equivalent. The project would be financed by an IDA grant of about US$10-12 million equivalent plus about US$6-8 million equivalent from donors. Initial consultations with donors have identified interest from the European Commission (EC), Japan and Italy to finance primarily equipment and technical assistance for local governments (a share of components 1 and 2). The Bank would then finance the construction and initial operation of the sanitary land fill and off-site infrastructure, institutional strengthening, public awareness and incremental operating cost (a share of components 1 and 2, and component 3). Land for the sanitary landfill site and transfer stations would be provided by the concerned stakeholders.

4. Safeguard policies that might apply This project is classified as “Category A” project which may trigger environmental and social safeguard policies OP/BP 4.01 and/or OP 4.12 respectively. Therefore and in order to identify and assess the extent of the environment issues a Feasibility Study and an Environment and Social Impact Assessments are planned to be carried out by the client including the preparation of an Environment Management and Monitoring Plan. The Feasibility Study, among others, will also identify the most suitable landfill site, the needed land for the project and the land ownership. This is in preparation of the assessment of whether or not OP 4.12, Involuntary Resettlement, would be triggered by the project. The site selection process will include minimizing triggering of OP 4.12 as an important criterion and, therefore, this would be avoided to the extent possible. Should the assessment identify any triggers a Resettlement Policy Framework (RPF) and a Resettlement Action Plan (RAP) would be prepared. Careful reviews and mitigation measures will be considered at the early stages of project preparation including strong community participation, consultation and engagement in the decision making especially related to the identification of the sanitary landfill and the transfer stations.

5. Tentative financing Source: ($m.) Borrower 0.5 Special Financing 12.0 Financing Gap 5.5 Total 18.0

6. Contact point Contact: Ibrahim Khalil Dajani Title: Senior Operations Officer Urban and Transport Unit Sustainable Development Department Middle East and North Africa Region Tel: (202) 458 9874 Email: [email protected] Location: Washington, DC