PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB4381 Second Port Cities Development Project Project Name Public Disclosure Authorized Region AND NORTH AFRICA Sector Sub-national government administration (30%); General industry and trade sector (30%); General transportation sector (20%); Power (20%) Project ID P088435 Borrower(s) GOVERNMENT OF REPUBLIC OF Government of Yemen Sana’a Yemen, Republic of Implementing Agency Port Cities Development Program National Coordination Unit Khormaksar Public Disclosure Authorized Aden Yemen, Republic of Tel: (967-2) 239-171/2 Fax: (967-2) 239-165 [email protected]/[email protected] Ministry of Planning and International Cooperation Yemen, Republic of Environment Category [] A [ X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared March 10, 2010 Date of Appraisal March 9, 2010 Authorization Date of Board Approval May 25, 2010 Public Disclosure Authorized 1. Country and Sector Background

Yemen is the poorest country in the Middle East and North Africa (MENA) Region with a Gross National Income (GNI) per capita of US$950 (2008). Almost 40 percent of Yemen’s estimated population of 22.4 million lives below the poverty line. High gender inequality, high fertility rates coupled with a population growth rate of 3 percent per annum1, makes for immense human development challenges. Yemen ranks 140th out of 182 countries on the 2009 Human Development Index (HDI), and the achievement of the Millennium Development Goals (MDGs) by 2015 appears to be difficult, with the possible exception of the goal for universal primary education.

Yemen is a fragile state confronted with daunting internal and external economic challenges,

Public Disclosure Authorized including conflict. Economic activity is depressed as public expenditures are declining due to a decline in revenues. Hydrocarbon resources are being exhausted. Economic distress is aggravated by the costs from internal conflict since 2004, and a growing water crisis that already

1 World Bank (2008) Development Data Platform, World Bank. ranks amongst the worst in the world2. Yemen suffers from serious shortcomings in government capacity, limiting the state’s ability to develop and implement policies, take appropriate timely actions, absorb resources, and ultimately deliver services to its citizens3. With oil currently accounting for 27 percent of Gross Domestic Product (GDP) and 90 percent of merchandise exports, Yemen’s external challenges include: fluctuations in oil prices on the world market; the global economic crisis; reduced foreign direct investment (FDI) and remittances4 especially from the Gulf; a reduction in external financing; instability in the Horn of Africa; and an increase in sea piracy which has had a negative impact on maritime and offshore activities.

Diversifying economic growth by reducing economic dependence on oil is of high priority for the Government of Yemen (GoY). Despite its high contribution to GDP, Yemen’s oil sector provides employment for only about 18,000 workers and small enterprises dominate the economy. The rate at which private enterprises are created across the economy is slow, as is the amount of employment generated – only 2.5 new jobs are created per 100 enterprises5. Since the adoption of the 2006-2010 Third Development Plan for Poverty Reduction (DPPR), the GoY has scaled up its efforts to spur non-oil growth. With a focus on agriculture including fisheries, commercial ports, manufacturing, and services, the GoY has sought support from the World Bank Group (WBG), including the International Finance Corporation (IFC), to identify and support the implementation of reforms in all these sectors to enhance private sector growth in the non-oil sectors.

Key Sector Issues

Yemen’s rapid rate of urbanization is an enormous opportunity for growth and faster poverty reduction. About 70 percent of the value added in Yemen’s economy is located in urban6 areas that are home to about 6.7 million people. Almost one fifth of this urban population lives below the poverty line, with over half of them without access to basic urban services living in informal settlements. Urbanizing at 4.8 percent per annum - higher than the national population growth rate of 3 percent per annum - Yemen will cross the 50 percent urbanization mark by 2035, and its urban population is expected to exceed 25 million.

Economic diversification at the same time that Yemen is urbanizing, presents an even greater opportunity for growth. As the country urbanizes and the economy transforms, different cities will attract production and people at different speeds7. Reforms will enhance private sector growth in the non-oil sectors, and increase economic density in and around cities already experiencing rapid growth, particularly port cities, transforming these places to regional growth centers. Entrepreneurs will locate in close proximity to high economic density places to exploit economies of scale, because these places will matter not just for access to goods and services, but

2 Yemen has one of the lowest rates of per capita fresh water availability (135 cubic meters /capita/ year compared to the MNA average of 1,250 cubic meters / capita / year). Water Sector Support Project, World Bank, Jan. 2009. 3 “Yemen’s Top 10 priorities: A Presentation Organized for Prime Minister Ali Mujawar, Friday July 24, 2009.” 4 The value of expatriate remittances ranged between US$1- US$1.3 billion per annum during the period 1995-2005 ( DPPR, 2006-2010). 5 Education Sector Study, World Bank (2005). 6 “Urban” is defined in Yemini statistics as capital Sana’a, Aden City, Capitals of Governorates, Centers of Districts, and every settled community of 5,000 or more inhabitants. 7 If current urbanization trends continue, Sana’s could be home to 4.8 million people, Hodeidah to 1.1 million, and to 1.23 million people, to 0.61 million, and Aden to 1.57 million by 2025 (World Urbanization Prospects, 2007). also for access to ideas. As this transformation occurs, Yemen’s agglomeration index, the lowest in the MENA region, will increase8. The spatial location of this increase, however, will very likely be influenced by the availability of water resources. Coastal areas are better endowed, but coastal aquifers are also deteriorating.

Five cities account for roughly half of Yemen’s urban population and the challenge of urban management, especially in these five biggest cities, will only grow. These cities are Sana’a, the capital city with 1.8 million people or about 30 percent of the urban population, Aden the primary port city with 0.59 million people, Taiz with 0.46 million people, Hodeidah with 0.41 million people, and Makulla with 0.23 million people9. Almost three quarters of the urban poor population of Yemen is concentrated in these five cities. If current urbanization trends continue, by 2025, Sana’a could be home to 4.8 million people, Hodeidah to 1.1 million people, Taiz to 1.23 million people, Mukalla to 0.61 million people, and Aden to 1.57 million people10. The demand this growth will create for employment and services is of concern, as Yemen’s informal sector is very large currently accounting for 27 percent of GDP. Except for Sana’a, however, the other cities lack an institutional arrangement that could enable an integrated and cohesive approach to development in these cities, so that their growth and poverty reduction potential could be maximized.

Three of the five main cities are coastal port cities, and the impacts of agglomeration are already evident in these three cities. These port cities are Aden, Hodeidah and Mukalla and already have multimodal transport links that are critical for commerce. These three cities together are attracting more than a quarter of Yemen’s total rural-urban migration, and are growth magnets in their respective Governorates. For example, Hodeidah is home to about one fifth of its Governorate’s population, and Makulla city is home to almost a quarter of the Governorate’s population. is entirely urban. Another manifestation of the agglomeration effect, is the amount of Yemen’s cargo that passes through these three cities: Aden’s port handles 62 percent of Yemen’s cargo, while Hodeidah and Makulla handle 24 and 6 percent respectively. Additionally, while Aden port has the capacity to capture a share of the regional transshipment market and therefore contribute to further economic densification, Hodeidah and Makulla already serve specific industries like grain, oil, fish, minerals etc.

Rapid urban economic and population growth, however, is leading to more congestion due to inadequate economic and social infrastructure, negatively impacting the efficiency that comes with agglomeration. Infrastructure demand has exceeded supply with respect to almost all urban services in these cities. Most striking are the efficiency losses from existing infrastructure assets that are the backbone to sustain the urban economy. For example, more than half of Yemen’s fish exports come from Hodeidah Governorate – yet the port is severely congested, struggling to

8 “Agglomeration index” measures the proportion of population living in an area with a population density of 150 people/square kilometer which is also no more than an hour’s travel time from a city, thereby providing an objective measure of agglomeration, as worldwide there are no standard definitions of urban and rural. Reshaping Economic Geography, World Development Report 2009 9 Yemen 2004 Final Census. 10 World Urbanization Prospects, 2007. handle a demand that is more than six times its design capacity11. Aden’s municipal markets supply basic staple shopping needs for over almost three quarters of the city’s population which is sourced from within 100 miles of Aden12. These urban-rural linkages suggest that the multiplier effects from having a vibrant local produce market structure in Aden are significant13. Yet, congestion inside the markets makes regular cleaning impossible, and the unhygienic conditions are a public health risk. Makulla, the capital of Hadramout Governorate, one of the poorest regions in Yemen, is the gateway to the valley that has cultural World Heritage sites. Air traffic at its airport has been growing at 20 percent per year for the last three years and this trend appears likely to be sustained. However, current demand has already outstripped the existing capacity. This congestion in all these key assets of the local economy is only going to worsen.

Other evidence of insufficient economic and social infrastructure is the size of the “informal” city when compared with the ‘formal”. Hodeidah is relatively better endowed with water resources amongst the five big cities. Hodeidah’s population is increasing by almost 25,000 people every year, with 60 percent of the increase coming from migration. A quarter of its current population is already living in informal settlements14. In another fifteen years when the population grows to almost a million people, its existing informal settlements are expected to densify with an additional 200,000 people, as there is no more vacant public land in the city. The existing inequity and exclusion within the city in terms of access to basic shelter and services, will increase, creating high risks of social strife and civil unrest which are usually accompanied by high social and security costs.

The spatial implications of economic diversification have been well recognized in Yemen for some time, although the pace of reforms needed to facilitate economic density has been lagging. The GoY launched an ambitious program for the development of its port cities in acknowledgement of their role in the macro economy as well as their potential to spur local and regional economic growth due to the economic relationships that penetrate deep into the hinterland of the port cities. To assist the GoY, the Port Cities Development Program (PCDP) was approved by the Bank’s Board as a three phase Adaptable Program Loan (APL) in 2003. It aimed to facilitate over twelve years, engagement with “the public and private sectors, developing soft skills and capacities carrying out reforms at the local and national levels, and upgrading the quality of infrastructure facilities and services locally.” Implementation of the first phase of the APL was delayed by three years, reforms at both the national and local level remained elusive, and conditions conducive for private sector led growth in these cities did not materialize15. This was partly because of the complexity of the project’s design, and partly because the assumptions of progress towards decentralization were unrealistic. However, “upgrading the quality of infrastructure facilities and service locally” was quite successful and

11 The artisanal fiberglass boats wait a day, and the larger wooden boats of the artisanal fishermen, wait 1 to 4 days. 12 City of Aden Master Plan 2005-2025. Prepared by Halcrow under Port Cities Development Program (2005). 13 The multiplier effect could range between 1.5 to 2. This is a conservative multiplier effect assumed for Aden, given that studies of similar multiplier effects in Canada and Georgia in the U.S. suggest that local market multipliers can be in the range of 2 to 2.66. If 25 percent of produce is lost on average in street trading, but 20 percent can be gained from the existence of and improvements to an existing market facility, the benefits can result in a net savings of 5 per cent of the total value of the produce sold (PCDP II August 2006, Carl Bro and Dar Al Omran) 14 Hodeidah Urban Upgrading Study, Monika El Shorbai and David Sims, September 2008 15 Conducive conditions for private sector growth in these cities would have required the adoption of a legal and regulatory framework for economic zones, as well as reforms in the power sector. demonstrated promising results, as the investments were small and well targeted. For example, US$1.2 million in upgrading the Sirah Fish Market has led to a 233% increase in the number of fishing boats that dock at the market, a 360% increase in the number of fish sellers, and a doubling in the number of fish restaurants in the vicinity of the improvements16.

Triggers to move forward to the second phase of the APL were met, but sufficient stability and an enabling environment for economic diversification does not as yet exist in Yemen. Moreover, sustained changes in institutions, organizations, and behavior, key to successfully implementing an APL for urban development, is not feasible in the current environment, particularly given the slow progress on economic zone reforms and framework for independent power provision envisaged in the first phase. Furthermore, progress on decentralization remains slow and requiring politically and economically difficult reforms at a time when the risks of fiscal deficits and internal conflict are high.

The three cities are nevertheless growing, as are the urban management challenges in them, due to unclear divisions of responsibilities between government agencies and overlapping control over property control and management. The current Yemeni public administration system consists of three levels: the center, 22 sub-national units called governorates, and 332 local districts. District heads are elected, and these elected officials, known as the District Council, elect the Governor. Yemen’s Local Authorities Law # 4 of 2000 transferred considerable administrative and fiscal responsibilities to local authorities, including for budget preparation and accounting, development of physical and economic plans, raising local revenues, and execution of local public works. However, these articles of the law have not been implemented.

As mentioned earlier, except for Sana’a there is no “city government” with the powers and mandate over revenues or expenditure, neither service delivery, nor land and asset management. Cities cannot develop flexible regulations for land use conversions, or adapt their land and real estate assets to meet changing market demands in their respective jurisdictions to facilitate growth and job creation. As a result of a lack of clearly defined responsibilities and the lack of transfer of assets to local governments, government property holders have no financial or administrative incentives to manage their assets. Existing city assets therefore do not deliver services for their design life, and the services provided by government agencies are inadequate. Taken together these factors inhibit the capacity of cities to attract investors and spark development, and result in foregone revenues for the local government.

Within this existing context, a recent initiative that holds promise has been the development of an asset management strategy for Aden17. As a result of this initiative, the potential for revenue generation has become more specifically recognized by the different government agencies for the first time. Institutional change initiated by this work is being observed very closely by the other two port cities. The initiative has distilled an opportunity to build on existing good practices for asset management that already existed in Aden.

16 Implementation Status Report for PCDP, August 2009. 17 Asset Management Strategy for Aden, Urban Institute, 2009. In response to the growing infrastructure needs of Yemen’s port cities, this project will upgrade infrastructure that contributes to the local economy and reduces inequity in service delivery. In order to ensure sustainability of these investments, the project will support the scaling-up of management practices using the private sector, an innovation that is home grown and working well in the current context.

2. Objectives

The project's development objective is to improve access to and the efficiency of, select public infrastructure in the three port cities of Aden, Hodeidah and Mukallah. By achieving this objective, the project will contribute to enhancing the economic productivity of the three cities.

3. Rationale for Bank Involvement

The Bank's urban lending engagement in Yemen over the last twenty year focused largely in Taiz. PCDP was the first operation to support three other cities - the port cities of Aden, Hodeidah and Mukalla. There has been a substantial amount of analytic work and numerous studies completed by both the urban unit as well as other parts of the World Bank Group. Substantial knowledge has thus been generated on a broad range of urban topics18. An integrative Economic Sector Work (ESW) report to support the GoY develop an urban strategy for Yemen is planned to be completed by June 2011. This ESW is expected to shed light on the kinds of institutional arrangements that may be appropriate for the five big cities, given that the decentralization that has been underway in Yemen since 2000 is not expected to deepen dramatically over the medium term. A uniform model of decentralization may not be the most appropriate model, and the ESW will aim to answer two important questions: first, what will efficient decentralization in Yemen look like? And second, how should the Bank engage in the future, through multiple-city projects, or single- city projects? The need to stay focused on Aden, Mukalla, and Hodeidah is expected to remain valid. The ESW would inform on the nature of the Bank’s engagement in Sana’a given its municipal status as well as donor interest in the capital city. It will also take into account the findings from the on-going disaster risk assessment studies in Yemen19 which have already highlighted that urban populations in Yemen are increasingly vulnerable to natural disasters. Apart from informing the future of the Bank’s engagement in Taiz, the ESW will include a candid assessment of what seems to have worked well in terms of the Bank’s support for urban development in Yemen, and distill lessons for the future.

The Bank’s substantial experience with supporting urban development in cities of the developing world, coupled with its capacity to support sizable investment over a long period, is a distinct comparative advantage of the Bank. Its capacity to facilitate and sustain engagement with clients during transition periods which are often lengthy is an additional comparative advantage. The Bank’s cumulative analytical work on urbanization and spatial development will help place the

18 These studies are on land, investment climate, housing, city strategies for upgrading for Sana’a, Taiz and Hodeidah, competitiveness assessments for the three port cities, city development strategies for the five main cities, master plans for Adenm Hodeidah and Mukallah, etc 19 Three risk assessment studies are under-way and expected to be completed by June 2010: a National Probabilistic Risk Assessment, a risk assessment profile for Sana’a, and a risk assessment profile for Hadramout and Al Mahara. port cities’ challenges and opportunities in the broader context of Yemen’s spatial transformation.

4. Description

The Project has the following components:

Infrastructure Development (US$29.6 Million). This component will finance works, goods and services in the three port cities as follows: (i) Hodeidah: Improvements to the Al Haly Fishing Port and provision of basic public services in Al Beida Al Shimaliya, an informal settlement, and refurbishing office space and equipment for the One-Stop Facility for the General Investment Authority (GIA); (ii) Aden: Improvements to four municipal markets , Sheikh Othman, Mansoura and Maala district markets; and (iii) Mukalla: Expansion of the passenger terminal building, cargo area and hangars, and improvements to runway lights; improvements to fifteen road intersections in the city, and refurbishment of the office space and equipment for the GIA One-stop Facility.

Technical Assistance and Training (US$1.8 Million). This component will finance consultants for: (i) training GIA staff in the use of new management information system (MIS) software in Hodeidah and Mukalla; (ii) local government asset management studies in Hodeidah and Mukalla; and (iii) workshops, training, and knowledge sharing initiatives for asset management amongst the local governments of the three cities, building on the experience with asset management under PCDP-I.

Project Management (US$3.6 Million). This component will finance: (i) Project Coordination Unit (PMU) incremental operating costs; (ii) peer learning and the systematic sharing of lessons for implementation amongst the PMU and other project implementation units in Yemen, annual audits of project accounts, and project monitoring and evaluation studies, as required for project implementation; and (ii) consultants for construction supervision.

5. Financing ($35.0m.) Source: IDA Grant BORROWER/RECIPIENT 0.0 IDA Grant 35.0

6. Implementation

The Ministry of Planning and International Cooperation (MOPIC) will be responsible for implementation, through its Project Management Unit (PMU)20 which has been well established for seven years in Aden. All fiduciary, safeguard, monitoring and reporting will remain

20 This Unit started out as being known as the National Coordination Unit, and was referred to as such in the Development Credit Agreement. The PMU was supposed to be responsible for B of the Project: Strategic and Physical Planning within Port Cities and the LEDD in Aden was to be responsible for Part A, Support for the Revitalization of Aden’s Economy, and Part C, Aden Local Government Capacity Building and Administrative Modernization. The DCA was amended on April 8, 2004 and accordingly the NCU became responsible for the implementation of PART B& C and LEDD Aden for Part A only, which is mainly civil works and hiring of the construction supervision consultants. In practice however, LEDD did not develop the capacity for procurement and financial management, and all aspects of project implementation and management have been performed by the NCU. It has therefore, over time, been referred to as the “PMU”, and it is proposed that it be officially referred to as the PMU under MOPIC for PCDP-II. centralized in this PMU. Focal PMU representatives have already been appointed during the implementation of PCDP-I, and are stationed in Hodeidah and Mukalla to coordinate the implementation of sub-projects in these cities with local government and beneficiaries. These representatives have cultivated relationships with technical counterparts in the local councils of these cities over the last year. Recruitment of contractors and supervision consultants for all civil works will be done by the PMU in Aden, with PMU staff in Hodeidah and Mukalla as members of the evaluation committee for procurement related to investments in their respective cities. In addition, for procurement related to the fishing port in Hodeidah for which designs have been prepared by the Fisheries Resource Management and Conservation Project (FRMCP), the Director General of FRMCP (or his representative) will also be a member of the evaluation committee for procurement related to this port. For procurement related to Rayyan Airport in Mukalla, the General Manager of the airport (or his representative) will be a member of the evaluation committee for all procurement related to the airport sub-project. The General Manager has provided all technical data and guidance to the design consultants during preparation. Procurement of all technical assistance will be done by the PMU staff in Aden as has been the case under PCDP-I, and worked well.

7. Sustainability

The proposed subprojects fall into three broad ownership categories:

(i) Trunk infrastructure assets that become part of the asset base of well established central government agencies that have a demonstrated track record of maintaining assets – these would be Rayyan Airport that is an asset belonging to the CAMA and road intersection improvements in Mukalla that are part of the road assets for the Ministry of Public Works and Highways MoPWH. (ii) A large subproject that is inherited by a central government agency which is receiving substantial institutional strengthening support to enable it to manage its assets sustainably - the Fishing port in Hodeidah which is an asset for the Ministry of Fish Wealth (MoFW) falls in this category. (iii) Municipal assets like the four municipal markets in Aden which have the potential, if managed properly, to be profitable operations for the local council in Aden; the provision of basic services in under-served settlements to improve equity and enable integration of the formal and informal parts of the city, as proposed in Hodeidah, expanding the customer base for municipal services which will become additional assets of the concerned local government departments.

Feasible and effective management arrangements acceptable to the Bank and discussed and agreed upon during project preparation, are outlined below and will be confirmed during appraisal: (i) Rayyan Airport and road intersection improvements: Contracts for civil works under the first category estimated to be about US$12.0 million, whose designs respond to specifications provided by the civil aviation authority in Mukalla and public works (MoPWH), will be awarded after a Memorandum of Understanding (MOU) has been signed between the PCDP and the heads of CAMA and MoPWH respectively. Operation and Maintenance (O&M) of these investments is not considered to be risky, as these agencies have independent revenues and budgets, and a long established track record of both road maintenance and airport operations exist in Yemen. (ii) Hodeidah Fishing Port: O&M of the investments to improve functionality of the Hodeidah Fish Port (as with other ports that are being financed by the Bank under the FRMCP) is considered to be of high risk if the current inefficient management system at the port remains unchanged. Based on the sectoral dialogue with MoFW, and supported by the FRMCP, major institutional changes are taking place in the management of the fisheries sector. Part of the restructuring consists of the creation of decentralized fisheries authorities21 (FAs) in each of the coastal governorates to assume the responsibility of the MOF. The FA is to be governed by Board of Directors, and the board in Hodeidah will be chaired by the Governor. The FA will be responsible for revenue collection from all ports in the Governorate, and for big ports like the one under this project, the management of the port will be contracted out competitively to the private sector. Standard contracts are being prepared by change management consultants supported by the FRMCP. The Bank will confirm these arrangements during Appraisal.

(iii) Municipal markets: Building on the existing good practice for management of the Al- Qahira market, for which a three year contract was awarded to a private party in an auction conducted by the Governorate22 after its refurbishment, PCDP-II, taking into consideration the findings from the social assessment currently underway, will develop appropriate contracts for the operations and management of each of the markets. The project will support better management of these markets and improved revenues from the space in the market, which will allow for needed maintenance.

8. Lessons Learned from Past Operations in the Country/Sector

Lessons from PCDP-I reflected in the project’s design can be grouped around three main themes: (i) project objectives, design and implementation arrangements must be simple with measurable results defined by project Appraisal; (ii) the need for flexibility in project design in an uncertain political and social environment; and (iii) the importance of meaningful beneficiary consultation and participation.

Project objectives, design and implementation arrangements must be simple: The “overall purpose of the APL was to transform Yemen’s port cities into regional centers of economic growth by creating environments to support private sector investment and development”. The project’s objectives were to “assist the Borrower remove critical constraints to economic development and improve the environment for investment and economic growth and development within its port cities”. A logical link between the PDO and indicators was not established at design stage, nor were the systems for collecting the data. Urban projects tend to be inherently multifaceted. In the case of PCDP-I the bundling of multiple national level reforms with local economic development reforms in one operation proved difficult. The project’s

21 Staff for the FAs will be competitively recruited from the staff from MoFW. 22 The auction was held on 22 November, 2006 success also depended on progress on decentralization in Yemen23. Its design which coupled the integration of multiple components with multiple objectives in three geographical settings, made the project extremely complex to implement. Its ambitious design required coordination across more than fourteen agencies in three cities. This lesson has been incorporated in the project’s design as highlighted in the bullets below. • Incorporating the above lesson, the project is much more focused on the execution of simple infrastructure, than on reforms and big changes. The only reform element that the project will aim to institute relates to the sustainability of investments at the local level. Towards this end, the investments target existing and growing economic clusters. And the reform expectation is limited to requiring adequate O&M arrangements to be in place, for example with respect to the proposed municipal markets. • Through its focus on sustainability of services from municipal markets, the project also incorporates an important lesson from the Bank’s experience with projects that aimed to improve municipal management24. Municipal management has three dimensions: planning, finance, and service provision. Although a focus on improving municipal finance is unrealistic at this time, the ring fenced asset management tool embodied in a transparent auction for market management to deliver better services, as proposed under this project, will demonstrate good procurement practices and their links to healthier municipal revenues. • With respect to the investments that fall under the umbrella of specialized national agencies, there is an established practice of sustainability, as the Bank has financed for example, an airport in Yemen before, and it is maintained by the Airports Authority in Aden25 - sustainability has not been an issue. The same is the case with road improvements that have been maintained by the Ministry of Public Works and Highways (MoPWH).

9. Safeguard Policies (including public consultation)

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [ ] [X] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [X] [ ] Indigenous Peoples (OP/BP 4.10) [ ] [X] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects in Disputed Areas (OP/BP 7.60)* [ ] [X] Projects on International Waterways (OP/BP 7.50) [ ] [X]

23 The goal that PCDP-I would establish Local Economic Development Departments (LEDD) which would develop institutional capacity to manage implementation of donor funded programs at the local level, did not materialize. This is in large measure because appropriate institutional arrangements for city management in Yemen do not as yet exist as the implementation of the decentralization law has not occurred. 24 Improving Municipal management for Cities to Succeed, A Study by the Independent Evaluation Group, World Bank, 2009 25 Airport Authorities are under the Civil Aviation and Meterology Authority (CAMA). * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties’ claims on the disputed areas 10. List of Factual Technical Documents

- Republic of Yemen: Urban Housing Sector Review (2008). - Republic of Yemen: A Long Term Plan for Sustainable development of Fish Wealth and Poverty Reduction based on the MDGs 2006-2015. (2005). - Republic of Yemen: A Tourism Strategy and a Tourism Development Plan (Year). - Government of Yemen, Ministry of Fish Wealth, “No. of Fishing Cooperatives Societies, Number of Fishermen, and Boats in Governorates (2003-2005) - Final Feasibility Report on Improvement of Mukalla International Airport at Rayyan (2009). - National Port Strategy. Prepared by Cornel Group under Port Cities Development Program (2009). - Power Sector Development Strategy (2009) - Republic of Yemen: Country Water Assistance Strategy, WB, 2005. - Republic of Yemen; 2004 Final Census. - Sana’a-A City Development Strategy. (2008). - Aden: Commercial Capital of Yemen. Local Economic Development Strategy (2008). - City of Aden Master Plan 2005-2025. Prepared by Halcrow under Port Cities Development Program (2005). - Mukalla: Gateway to the Hadramout. Local Economic Development Strategy (2008). - Hodeidah: Agro-Industrial Capital of Yemen. Local Economic Development Strategy (2008). - Hodeidah Urban Upgrading Study: Strategy and Action Plan (2008). - Revised and Upgraded Master Plans for Hodeidah and Mukalla. Prepared by Dar al- Handasah under Port Cities Development Program (2005). - Developing a Model Economic Zones/Industrial Estate Development Program in Yemen. Prepared by Ecorys- Research and Consulting and Business Mobility International under Port Cities Development Program (2009). - Demand and Infrastructure Study Sector L, Aden Free Zone. Prepared by Ecorys- Research and Consulting, Business Mobility International, and MAK-Yemen under Port Cities Development Program (2009). - [Republic of Yemen: Urban Housing Sector Review (2008). - Republic of Yemen: A Long Term Plan for Sustainable development of Fish Wealth and Poverty Reduction based on the MDGs 2006-2015. (2005). - Republic of Yemen: A Tourism Strategy and a Tourism Development Plan (Year). - Government of Yemen, Ministry of Fish Wealth, “No. of Fishing Cooperatives Societies, Number of Fishermen, and Boats in Governorates (2003-2005) - Final Feasibility Report on Improvement of Mukalla International Airport at Rayyan (2009). - National Port Strategy. Prepared by Cornel Group under Port Cities Development Program (2009). - Power Sector Development Strategy (2009) - Republic of Yemen: Country Water Assistance Strategy, WB, 2005. - Republic of Yemen; 2004 Final Census. - Sana’a-A City Development Strategy. (2008). - Aden: Commercial Capital of Yemen. Local Economic Development Strategy (2008). - City of Aden Master Plan 2005-2025. Prepared by Halcrow under Port Cities Development Program (2005). - Mukalla: Gateway to the Hadramout. Local Economic Development Strategy (2008). - Hodeidah: Agro-Industrial Capital of Yemen. Local Economic Development Strategy (2008). - Hodeidah Urban Upgrading Study: Strategy and Action Plan (2008). - Revised and Upgraded Master Plans for Hodeidah and Mukalla. Prepared by Dar al- Handasah under Port Cities Development Program (2005). - Developing a Model Economic Zones/Industrial Estate Development Program in Yemen. Prepared by Ecorys- Research and Consulting and Business Mobility International under Port Cities Development Program (2009). - Demand and Infrastructure Study Sector L, Aden Free Zone. Prepared by Ecorys- Research and Consulting, Business Mobility International, and MAK-Yemen under Port Cities Development Program (2009).

11. Contact point Contact: Deepali Tewari Title: Senior Municipal Development Specialist Tel: (202) 4730866 Fax: (202) 614 4022 Email: [email protected]

12. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: [email protected] Web: http://www.worldbank.org/infoshop