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Emergency Assistance Project Report and Recommendation of the President to the Board of Directors Project Number: 41105 June 2007 Proposed Asian Development Fund Grant Solomon Islands: Emergency Assistance Project CURRENCY EQUIVALENT (as of 12 June 2007) Currency Unit – Solomon Islands dollar/s (SI$) SI$1.00 = $0.1411 $1.00 = SI$7.0897 ABBREVIATIONS ADB – Asian Development Bank ADF – Asian Development Fund AusAID – Australian Agency for International Development EA – executing agency EARP – environmental assessment and review procedures EC – European Commission EMMP – environmental management and monitoring plan GDP – gross domestic product ICB – international competitive bidding IEE – initial environmental examination LBES – labor-based equipment supported MID – Ministry of Infrastructure Development NCB – national competitive bidding NDC – National Disaster Council NDMO – National Disaster Management Office NDP – National Disaster Plan NERRDP – National Economic Recovery, Reform, and Development Plan NGO – nongovernment organization NTF – National Transport Fund NTP – National Transport Plan NZAID – New Zealand Agency for International Development OECD – Organisation for Economic Co-operation and Development PCERP – Post-Conflict Emergency Rehabilitation Project PMCBU – project management and capacity building unit RAP – recovery action plan SIEE – summary initial environmental examination SIRIP – Solomon Islands Road Improvement Project SOE statement of expenditures TA – technical assistance TAT – technical advisory team TTF – transport task force UNDAC – United Nations Disaster Assessment and Coordination Team UNDP – United Nations Development Programme UNOCHA – United Nations Office for the Coordination of Humanitarian Affairs NOTES (i) The fiscal year of the Government and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars unless otherwise stated. Vice President C. L. Greenwood Jr., Operations 2 Director General P. Erquiaga, Pacific Department (PARD) Director I. Bhushan, Pacific Operations Division, PARD Team leader R. Guild, Senior Transport Specialist, PARD Team members R. Adhar, Senior Project Implementation Officer, PARD E. Brotoisworo, Senior Safeguards Specialist, PARD C. Png, Office of the General Counsel CONTENTS Page GRANT AND PROJECT SUMMARY i MAP v I. THE PROPOSAL 1 II. RATIONALE: ANALYSIS, PROBLEMS, AND OPPORTUNITIES 1 A. Disaster Overview 1 B. Damage Assessment 1 C. Economic Impact 2 D. Government’s Response 3 E. Development Partners’ Response 4 F. ADB’s Proposed Response 5 G. Lessons Learned in Disaster Management 6 H. Rationale for the Project 7 III. THE PROPOSED PROJECT 8 A. Impact and Outcome 8 B. Components and Outputs 8 C. Special Feature 9 D. Project Investment Plan 9 E. Financing Plan 9 F. Cofinancing 10 G. Implementation Arrangements 11 IV. TECHNICAL ASSISTANCE 14 V. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS 14 A. Economic Impacts 14 B. Poverty Reduction Impact 15 C. Social Impacts 15 D. Environmental Impacts 16 E. Project Risks and Mitigation 16 VI. ASSURANCES 18 VII. RECOMMENDATION 20 APPENDIXES 1. Design and Monitoring Framework 21 2. Cost Estimates and Financing Plan 23 3. Subproject Eligibility Criteria 24 4. Implementation Schedule 27 5. Master Procurement Plan 28 6. Outline Terms of Reference for the Project Management and Capacity Building Unit 30 7. Technical Assistance for Strengthening Disaster Recovery Planning and Coordination 33 8. Summary Poverty Reduction and Social Strategy 40 9. Summary Initial Environmental Examination 44 10. Guidelines for Project Performance Monitoring Indicators 63 11. Resettlement Framework 65 SUPPLEMENTARY APPENDIXES (available on request) A. Damage Assessment B. Government’s Initial Recovery Strategy C. Initial Environmental Examination—New Georgia South Road D. Sample Subproject Documentation—New Georgia South Road E. Social and Poverty Impact Analysis—New Georgia South Road F. Environmental Assessment and Review Procedures GRANT AND PROJECT SUMMARY Recipient Solomon Islands Classification Targeting classification: General intervention Sector: Multisector Subsectors: Transport and communications; water supply, sanitation, and waste management Themes: Sustainable economic growth, inclusive social development, environmental sustainability Subthemes: Fostering physical infrastructure development, human development, global and regional transboundary environmental concerns and issues Environment Category B. An initial environmental examination (IEE) was Assessment undertaken. The summary IEE is in Appendix 9. Project Description The Project will rehabilitate essential infrastructure that was damaged by the earthquake and tsunami in Choiseul and Western provinces, including (i) about 35 kilometers (km) of rural and town roads, along with about 19 bridges and 35 culverts; (ii) about five wharves and jetties; and (iii) the Gizo town water supply and sanitation system. These estimates are subject to detailed damage assessments and cost estimates. The Project will be implemented via a sector approach. Rationale On 2 April 2007, a massive undersea earthquake triggered a tsunami that struck Western and Choiseul provinces. Islands in these two provinces suffered widespread damage to housing, infrastructure, schools, and medical facilities; and several villages were destroyed. An estimated 20,000 people of a total population of 90,000 have been affected, with about 5,000 people displaced and 52 dead. The Government’s damage and loss assessment, prepared with support from the Asian Development Bank (ADB), World Bank, and United Nations Development Programme (UNDP), is in Supplementary Appendix A. The affected area generates a disproportionate share of Solomon Islands’ national output and almost all of its tourism. The effects of the disaster thus have national economic implications. Recovery and rehabilitation will depend on restoring access to affected areas and maintaining public health. However, the disaster has worsened the ability of major producers and rural people to export agricultural and fisheries products, access markets and social services, support tourism, and enjoy safe water supplies. Negative impacts on growth, poverty, and social indicators are expected. The disaster also revealed the need to reduce the vulnerability of infrastructure to climate change and future disasters. ii Pro-poor economic growth, as well as improvements in social and health indicators, depends on recovery of the rural economy. Better transportation infrastructure and services are essential to removing barriers to market access, promoting rural production, strengthening public capacity to deliver services, promoting tourism, and reducing poverty. Improved infrastructure will also be less vulnerable to changing climatic conditions. The Government has requested ADB to help facilitate the recovery process and prepare the Project for reconstruction and rehabilitation. ADB has also provided a disaster recovery adviser to assist the Government in managing the transition phase. The Government’s initial recovery strategy is in Supplementary Appendix B. ADB’s country strategy and program update (2007–2009) for Solomon Islands identifies the development of transportation infrastructure and services as one of the two main areas for ADB assistance. Through other projects and technical assistance (TA), ADB is also addressing cross-sectoral infrastructure issues and technical capacity building. Existing and proposed projects will be prioritized and sequenced as appropriate to respond to the emergency, complement activities, and maximize benefits. As a post-conflict and heavily indebted country, Solomon Islands is eligible for grant financing from the Asian Development Fund (ADF). An ADF grant will leverage cofinancing from the European Commission (EC). Impact and Outcome The goal of the Project is to restore economic and social activities and accessibility in affected areas to pre-disaster levels. The purpose is to assist the Government in rehabilitating damaged infrastructure and make it less vulnerable to climate change and natural hazards. The rehabilitation of damaged infrastructure is expected to restore accessibility in rural areas, allow a resumption of economic activities and social services, and safeguard public health. Project Investment The investment cost of the Project is estimated at $9.75 million. Plan Financing Plan ($ million) Source Total Percent Asian Development Bank 4.95 50.75 European Commission 4.00 41.03 Government of Solomon Islands 0.80 8.22 Total 9.75 100.00 iii Grant Amount and ADB will provide a grant of $4.95 million from the ADF. The Terms Government of Solomon Islands will provide $0.80 million in counterpart contributions. The EC will provide grant cofinancing of $4.00 million equivalent, to be administered by ADB, for the road rehabilitation component. ADB and the Government will finance the remaining components and related costs Period of Utilization Until 30 June 2009 Estimated Project 31 December 2009 Completion Date Implementation The Project will be implemented over 2 years. The pre-rehabilitation Arrangements activities of detailed design, preparation of bidding documents, tendering, and awarding of contracts will start in August 2007. Civil works are expected to begin in December 2007, physical completion by 31 July 2009, and grant closing by 31 December 2009. Executing Agency Ministry of Infrastructure Development Procurement Procurement under the Project, including for ADB and Government- financed packages, will follow ADB’s Procurement
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