Document of The World Bank Public Disclosure Authorized Report No. T 7402-ET TECHNICAL ANNEX FOR A CREDIT OF SDR 180.2 MILLION Public Disclosure Authorized (USD 230.0 MILLION EQUIVALENT) TO THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA FOR AN EMERGENCY RECOVERY PROJECT Public Disclosure Authorized November 9, 2000 Public Disclosure Authorized CURRENCY EQUIVALENT (exchange rate effective as of November 9, 2000) Currency Unit = Ethiopian Birr US$1 8.25 GOVERNMENTFISCAL YEAR July 8 - July 7 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CSWs Commercial Sex Workers DPPB Disaster Prevention and Preparedness Bureau DPPC Disaster Prevention and Preparedness Commission EDP Ethiopian De-mining Project EEPCo Ethiopian Electric Power Cooperation EMSAP Ethiopia Multi-Sectoral HIV/AIDS Project ERA Ethiopian Roads Authority ERP Emergency Recovery Project/Program ERPMU Emergency Recovery Program Management Unit ESRDF Ethiopia Social Rehabilitation and Development Fund FMU Financial Management Unit H-IMA Humanitarian Mine Action ICB International Competitive Bidding ICR Implementation CompletionReport IDA International Development Association IDPs Internally Displaced Peoples ILO International Labour Organization Kebele The kebele is the lowest administrativeauthority in the regional government hierarchy in Ethiopia MEDaC Ministry of Economic Development and Cooperation NCB National Competitive Bidding NGO Non-governmentalOrganization OAU Organization of African Unity PIP Project ImplementationPlan QCBS Quality and Cost Based Selection RSDP Road Sector Development Programme RTF Rehabilitation Task Force TGE Transitional Government of Ethiopia Tabia The tabia (known as kebele elsewhere in Ethiopia) is the lowest administrative authority in the regional govemrnent structure in the Tigray Region TGE Transitional Government of Ethiopia TRRA Tigray Rural Roads Authority UJNDP United Nations Development Program UNMAS United Nations Mines Action Service UXO Unexploded Ordnance WFP World Food Program Woreda The woreda corresponds to a district under the regional administration structure in Ethiopia Vice President Callisto E. Madavo Country Director Oey Astra Meesook Sector Manager Jeffrey S. Racki Task Team Leader Robert J. Roche ETHIOPIA - EMERGENCY RECOVERY PROJECT TECHNICAL ANNEX Table of Contents I. BACKGROUND AND STRATEGY.............................................................. I A. Circumstances of the Conflict .............................................................. I B. Humanitarian Impact .............................................................lI C. Damage Assessment.............................................................. 4 D. Economic Impact.............................................................. 5 E. Government Response.............................................................. 6 F. International Response.............................................................. 7 II. IDA RESPONSE AND STRATEGY.............................................................. 8 A. Elements of IDA Response.............................................................. 8 B. Rationale for IDA Involvement............................................................. 10 C. Lessons Learned from the Previous Ethiopia Emergency Recovery and Reconstruction Project.......................................................... 10 D. Lessons Learned from Previous Bank Involvement in De-mining Projects ................1 I 111. PROGRAM DESCRIPTION AND IMPLEMENTATIONARRANGEMENTS ....... 11 A. Program Objectives.......................................................... 1I B. Program Coverage and Implementation Period ...........................................................12 C. Program Costing and Financing.......................................................... 12 D. Rationale for ERP Design........................................................... 13 E. Overall Program Implementation Arrangements.......................................................... 16 Appendix la: Household Rehabilitation.20 Appendix I b: Rehabilitation of Community Infrastructure.34 Appendix 2: Hiv/Aids Prevention, Care and Support.36 Appendix 3: Support for De-Mining Activities.40 Appendix 4a: Rehabilitation/Improvement of Road Infrastructure.44 Appendix 4b: Reconstruction/Rehabilitation of Power Supply Infrastructure.52 Appendix 5: Procurement................................................. 54 Appendix 6: Financial Management, Auditing and Reporting .............................................58 Appendix 7: Monitoring And Evaluation and Social and Environmental Aspects............... 60 Appendix 8: Project Cost and Financing................................................. 62 Schedule A: Timetable of Key Project Processing Events ................................................. 66 Schedule B: Status of Bank Group Operations for Ethiopia................................................. 67 Schedule C: Summary of IFC Programs for Ethiopia................................................. 68 MAP IBRD No.31158 I. BACKGROUNDAND STRATEGY A. Circumstances of the Conflict 1. On May 6, 1998, fighting broke out between the armed forces of the Governments of Ethiopia and Eritrea along the common border of the two countries. The conflict continued for more than two years and was characterized by relatively short bursts of extremely heavy fighting resulting in significant casualties. On June 18, 2000, the two governments signed an Agreement on the Cessation of Hostilities. 2. The Agreement on the Cessation of Hostilities was brokered by the Organization of African Unity (OAU) with the support of the United Nations, the United States, and the European Union. Under the terms of the Agreement, both parties agreed to cease all military attacks and seek a resolution to their disputes through peaceful and legal means. They also agreed to modalities of deployment, whereby Ethiopian troops would withdraw to positions under their civil administration prior to May 6, 1998, while the Eritrean army would maintain its troops at a distance of 25 km (defined as "artillery range") from Ethiopian positions. An international peacekeeping force, sponsored by the United Nations, would be established to patrol the area between the two re-deployed armies, to monitor the implementation of the Cessation of Hostilities Agreement and to support efforts to accommodatethe return of displaced civilians in both countries. 3. On September 15, 2000 the UN Security Council authorized the deployment of up to 4,200 peacekeepingtroops, including military observers to the region, and mandated the mission till March 2001. It is expected that all the military observers will be deployed shortly (some are already in place in both the countries). The redeployment of the Ethiopian and Eritrean troops is expected to begin within two weeks of the deployment of the peacekeeping troops. Eventually, an international body to be agreed by both countries will lead the settlement of disputes. 4. Prior to the war, the Government had reduced the size of military spending to less than 3 percent of its GDP. As a direct consequence of the conflict with Eritrea, outlays for defense expendituresincreased to 13.3 percent of GDP and the armed forces are now estimated to have increased about fourfold since 1998. B. Humanitarian Impact 5. The main areas of tension during the conflict on the Ethiopian side, along the 1,000 km border between the two countries, were: (i) Badme and Sheraro, in the western border area between the Tekezze and Mereb rivers (Western Zone of Tigray Region); (ii) Tsorona, Zalambessa and Alitena in the central border section (Eastern Zone of Tigray Region) near the main road leading from Ethiopia to the Eritrean capital of Asmara; and (iii) Bure in the eastern border section (Zone 1 of the Afar Region) on the main road to the Eritrean Red Sea port of Assab. These were among the main areas that people were displaced from. According to the latest estimates provided by the Government of Ethiopia, approximately 330,000 people were displaced in the Tigray Region and 34,000 from the Afar Region bringing the total number of Internally Displaced Peoples (IDPs) to about 364,000. These IDPs include people who were living within artillery range of the -1- Eritrean border and were displaced during May 1998-June 2000, either as a preventive measure or as a result of fighting in their areas of origin, and who were unable to return to their homes due to the presence of landmines and/or unexploded ordnance (UXO), proximity of their homes to Eritrean forces, or because their homes, water supply, or other essential resources and infrastructure were damaged or destroyed. These IDPs remain in settlements or are integrated locally with host families in areas close to their areas of origin, and are almost entirely dependent on humanitarian assistance. It is estimated that almost 50 percent of the total IDP population may still be displaced. 6. Another category of people include about 76,000 persons of Ethiopian origin who had been residing in Eritrea and have returned/been deported from there as a result of the conflict; another 33,000 are expected to come into Ethiopia in the near future which would bring the total number of deportees/returneesto about 110,000. The overwhelming majority of these returnees/deporteesare women, children and the elderly who have arrived with few possessions and most have no means of supporting themselves. 7. The Government also considers the conflict-affectedpopulation to include those families