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Municipality of Lipkovo Project Appraisal Document Regulation of Part of Matejachka River

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Municipality of Lipkovo Project Appraisal Document Regulation of Part of Matejachka River MUNICIPALITY OF LIPKOVO PROJECT APPRAISAL DOCUMENT REGULATION OF PART OF MATEJACHKA RIVER Municipal Services Improvement Project Municipal Services World Bank Skopje, October, 2019 1 Table of Contents Summary ................................................................................................................................................. 8 1 Project description ......................................................................................................................... 10 1.1 General information on the municipality of Lipkovo .............................................................. 11 1.1.1 Demographic profile ...................................................................................................... 13 1.1.2 Economic and social profile .......................................................................................... 15 1.2 General description of the Project ......................................................................................... 18 1.2.1 Current situation ............................................................................................................ 18 1.2.2 Future situation .............................................................................................................. 19 1.2.3 Project goals .................................................................................................................. 20 1.2.4 Project beneficiaries ...................................................................................................... 21 1.2.5 Financial data ................................................................................................................ 21 1.2.6 Knowledge and experience of the Municipality of Lipkovo ........................................... 21 1.2.7 Conclusions ................................................................................................................... 23 2 Social assessment ........................................................................................................................ 24 2.1 Social study ........................................................................................................................... 25 2.1.1 Social diversity and gender ........................................................................................... 25 2.1.2 Institutions, rules and behavior ..................................................................................... 26 2.1.3 Stakeholders ................................................................................................................. 27 2.1.4 Citizens engagement .................................................................................................... 27 2.1.5 Social risks .................................................................................................................... 28 2.2 Other fields of considerations ................................................................................................ 28 2.3 Resettlement issues .............................................................................................................. 29 2.4 Conclusion on the project potential success and recommendation ...................................... 29 3 Environmental assessment ........................................................................................................... 31 3.1 Project activities with environmental impact ......................................................................... 34 3.2 Sensitive receptors and environmental impacts from the Project ......................................... 34 3.3 Environmental mitigation plan for the project for regulation of Matejachka River ................. 39 3.4 Environmental monitoring plan for the project for regulation of Matejachka River ............... 42 4 Technical solution ......................................................................................................................... 45 4.1 General .................................................................................................................................. 46 4.1.1 Street Lighting ............................................................................................................... 52 4.2 Alternative solutions .............................................................................................................. 53 4.3 Benefits ................................................................................................................................. 54 4.4 Exploitation and maintenance ............................................................................................... 54 5 Financial analysis .......................................................................................................................... 55 5.1 Project cost ............................................................................................................................ 56 5.2 Loan repayment .................................................................................................................... 57 5.3 Review of the account ........................................................................................................... 57 5.4 Analysis of the financial feasibility of the project ................................................................... 60 [2] 5.4.1 Time horizon .................................................................................................................. 60 5.4.2 Limitations of the analysis ............................................................................................. 60 5.4.3 Initial investment............................................................................................................ 60 5.4.4 Projection of operating cash flows ................................................................................ 60 5.4.5 Operating costs ............................................................................................................. 61 5.4.6 Replacement costs ........................................................................................................ 61 5.4.7 Inflation .......................................................................................................................... 62 5.4.8 Discount rate ................................................................................................................. 62 5.4.9 Residual value ............................................................................................................... 62 5.4.10 Results of the financial analysis .................................................................................... 63 5.4.11 Sensitivity analysis ........................................................................................................ 65 5.5 Conclusion ............................................................................................................................. 65 6 Economic cost and benefit analysis .............................................................................................. 66 6.1 General information ............................................................................................................... 67 6.1.1 Scope and purpose of the analysis ............................................................................... 67 6.2 Identification and valuation of relevant costs and benefits ................................................... 67 6.2.1 Costs ............................................................................................................................. 67 6.2.2 Quantifiable Benefits ..................................................................................................... 68 6.2.3 Valuation of benefits ...................................................................................................... 71 6.2.4 Unquantifiable benefits .................................................................................................. 71 6.3 Results from the cost-benefit analysis .................................................................................. 73 6.4 Sensitivity analysis ................................................................................................................ 74 6.5 Conclusion ............................................................................................................................. 74 7 Risk analysis ................................................................................................................................. 75 7.1 Technical risks for the municipality ....................................................................................... 76 7.2 Financial and cost-benefit risks for the municipality.............................................................. 76 8 Recommendations ........................................................................................................................ 78 9 Annex ............................................................................................................................................ 80 9.1 Decision of the Municipality of Lipkovo for long-term loan .................................................... 81 9.2 Decision for determination of locations for demolition waste ................................................ 82 9.3 Table for Matejachka River ................................................................................................... 83 [3] List of Tables Table 1 Altitude,
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