Document of The World Bank

Public Disclosure Authorized FOR OFFICIAL USE ONLY

Report No: 28251-50

PROJECT APPRAISAL DOCUMENT

Public Disclosure Authorized ON A

PROPOSED LOAN

IN THE AMOUNT OF US$38.0 MILLION

TO THE

HASHEMITE KINGDOM OF JORDAN

FOR THE

Public Disclosure Authorized AMMAN DEVELOPMENT CORRIDOR PROJECT

April 30,2004

Finance, Private Sector and Infrastructure Mashreq Department Middle East and North Africa Region Public Disclosure Authorized

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 10,2004) Currency Unit = Jordanian Dinar Jordanian Dinar 0.709 = US$l.OO

FISCAL YEAR January 1 - December 31

ABBREVIATIONS AND ACRONYMS ADC Amman Development Corridor ADCP Amman Development Corridor Project AFESD Arab Fund for Economic and Social Development AMA Amman Metropolitan Area ARC Aqaba Railway Corporation ARR Amman Ring Road ARR- 1 Amman Ring Road Phase 1 CRMP Cultural Resources Management Plan DoR Directorate ofRoads EIB European Investment Bank EMP Environmental Management Plan FMR Financial Monitoring Report GAM Greater Amman Municipality GCD General Customs Department GoJ Government of Jordan HJR Hedjazi Jordan Railway IRR Internal Rate of Retum JD Jordanian Dinar JPMC Jordan Phosphate Mines Corporation KP Kilometric Point LARP Land Acquisition and Resettlement Plan (also means the Resettlement Action Plan) LOS Level of Service MoE Ministry of Environment MoF Ministry of Finance MoPIC Ministry of Planning and International Cooperation MoPWH Ministry of Public Works and Housing MOT Ministry of Transport NPV Net Present Value PIP Project Implementation Plan PMT Project Management Team PTC Public Transport Corporation QIZ Qualified Industrial Zone RAP Resettlement Action Plan (also means the Land Acquisition and Resettlement Plan) RFP Request for Proposals RMF Road Maintenance Fund ROW Rights-of-way SA Special Account TOR Terms of Reference voc Vehicle Operating Costs VOT Value of Time

Vice President: Christiaan J. Poortman Country ManagerDirector: Joseph P. Saba Sector Director: Emmanuel Forestier Sector Manager: Hedi Larbi Task Team Leader: Mohammed D. E. Feghoul FOR OFFICIAL USE ONLY JORDAN AMMAN DEVELOPMENT CORRIDOR Contents Page A . STRATEGIC CONTEXT AND RATIONALE...... 7 1. Country and Sector Issues ...... 7 2 . Rationale for Bank Involvement...... 10

3. Higher Level Objectives to Which the Project Contributes...... 11

B. PROJECT DESCRIPTION...... 11 1. Lending Instrument...... 11

2 . [IfApplicable] Program Objective and Phases ...... 11

3. Project Development Objective and Key Indicators...... 11

4 . Project Components...... 12

5. Lessons Leamed and Reflected in the Project Design...... 13

6. Altematives Considered and Reasons for Rejection...... 13

C. IMPLEMENTATION...... 14 1. Partnership Arrangements (if applicable) ...... 14

2. Institutional and ImplementationArrangements ...... 14

3 . Monitoring and Evaluation ofOutcomeslResults ...... 15

4. Sustainability ...... 15

5 . Critical Risks and Possible Controversial Aspects ...... 16

6 . Loan Conditions and Covenants ...... 17

D . APPRAISAL SUMMARY ...... 17 1. Economic and Financial Analyses ......

2 . Technical...... 18

3 . Fiduciary ...... 18

4 . Social ...... 20

5 . Environment ...... 20

6 . Safeguard Policies ...... 21

7 . Policy Exceptions and Readiness ...... 21

Annex 1: Country and Sector or Program Background ...... 22 Annex 2: Major Related Projects Finan ...... 30 Annex 3: Results Framework and Monitoring ...... 31 Annex 4: Detailed Project Description ...... 33 Annex 4A: Detailed Description of Road Component ...... 36

This document has a restricted distribution and may be used by recipients only in the performance of their official duties, Its contents may not be otherwise disclosed [without World Bank authorization. Annex 4B: Description of Inland Port Component ...... 44 Annex 4C: Restructuring ofTrucking Industry ...... 46 Annex 5: Project Costs ...... 48 Annex 5A: Financial Summary ...... 49 Annex 6: Implementation Arrangements ...... 50 Annex 6A: Decision Establishing the Steering and Executive Committees. and the Technical Unit ...... 53 Annex 7: Financial Management and Disbursement Arrangements ...... 55 Annex 8: Procurement ...... 63 Annex 9: Economic and Financial Analysis ...... 69 Annex 10: Safeguard Policy Issues ...... 81 Annex 10.A: Environmental Management and Cultural Resources Management Plans ...... 81 Annex 10.B: Summary of the Land Acquisition and Resettlement Action Plan ...... 116 Annex 11: Project Preparation and Supervision ...... 146 Annex 12: Documents in the Project File...... 147 Annex 13: Statement of Loans and Credits ...... 148 Annex 14: Country at a Glance ...... 149 Maps: IBRD No. 32998 IBRD No. . 32999 JORDAN JO-AMMAN DEVELOPMENT CORRIDOR PROJECT APPRAISAL DOCUMENT MIDDLE EAST AND NORTH AFRICA MNSIF Date: April 30, 2004 Team Leader: Mohammed D. E. Feghoul Country Director: Joseph P. Saba Sectors: Roads and highways (100%) Sector Director: Emmanuel Forestier Themes: Other trade and integration (P) Sector Manager: Hedi Larbi Project ID: PO8 1505 Environmental screening category: Full Assessment Lending Instrument: Specific Investment Loan Safeguard screening category: Significant impact

[XILoan [ ]Credit [ ]Grant [ 3 Guarantee [ ]Other:

For Loans/Credits/Others: Total Bank Financing (US$ mil.): 38.00 Proposed Terms: Standard country terms for Jordan of 17 year maturity and five years grace. Commitment fees accrue at 0.85% for the first four years, and 0.75% thereafter. Financing Plan (US$ mil.) Source 1 Locat I Foreign I Total I I BORROWER I 0.00 I 51.1 I 51.1 INTERNATIONAL BANK FOR RECONSTRUCTIONAND 20.9 17.1 38.0 DEVELOPMENT ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT 19.7 19.7 39.4 EC: EUROPEAN INVESTMENT BANK (LOAN) 16.0 I 32.0 EC: EUROPEAN TNVESTMENT BANK (GRANT) 0.00 I 0.5 Total: 57.1 103.9 161.0

Borrower: Hashemite Kingdom of Jordan

Responsible Agency: Ministry ofPublic Works and Housing

Expected Effectiveness Date: August 3 1 2004 Project Implementation Period: August 3 1 2004 to December 3 1,2008 Expected Closing Date: June 30,2009 Does the project depart from the CAS in content or other significant respects? Ref: PAD A.3 [ ]Yes [XINO Does the project require any exceptions from Bank policies? Ref: PAD D. 7 [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [ IN0 Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? Ref: PAD C.5 [ ]Yes [XINO Does the project meet the Regional criteria for readiness for implementation? Ref: PAD D. 7 [XIYes [ ]No

Project development objective Re$ PAD B.2, Technical Annex 3 The Project’s development objectives are to: (i)support more efficient transport and logistics services by removing key infrastructure transport bottlenecks; and (ii)provide access to affordable land for productive investment and urban development purposes.

Project description [one-sentence summary of each component] Ref: PAD B.3.a, Technical Annex 4 The scope of the proposed Project would consist of: (a) constructing Phase 1 of the Amman Ring Road (40.0 km), which would be divided into three sections; (b) developing access infrastructure and utility services for inland port facilities, relocating the Amman Customs Depot, and supporting the Government’s on-going program to restructure the trucking industry; and (c) providing technical support for urban and transport planning, traffic engineering, and project management.

Which safeguard policies are triggered, if any? Ref: PAD 0.6, Technical Annex 10 Environmental Assessment (OP/BP/GP 4.0 1) Cultural Property (OPN 11.03, being revised as OP 4.1 1) Involuntary Resettlement (OP/BP 4.12)

Significant, non-standard conditions, if any, for: Ref: PAD C. 7 Boardpresentation: Not Applicable.

Loan Effectiveness: Not Applicable.

Covenants applicable to project implementation: Not Applicable. A. STRATEGIC CONTEXT AND RATIONALE

1. Country and Sector Issues

As the country’s capital and major commercial and industrial center, the Amman Metropolitan Area (AMA), which includes the cities of Amman, Zarqa, Ruseifa and surrounding areas, accounts for more than 50 percent of Jordan’s population, contains about 80 percent of the country’s industrial sector, and provides employment for around 55 percent of the nation’s inhabitants. Since the 1980~~the population of the AMA increased, on average, by 3.3 percent per annum, and now stands at just under 3.0 million. By 2020, the AMA is forecast to have 4.5 million inhabitants. Over the next twenty years, Jordan’s workforce will increase to 2.1 million, while the labor force in the AMA will more than double to 1.2 million (equivalent to the national workforce in 2001).

In recent years, the AMA has expanded to the extent where areas designated for development in the 1980s have become saturated and are no longer sufficient to accommodate continued growth. As a result, congestion is becoming an issue. Urban master plans, including designation ofnew areas for commercial, industrial and residential development, have not kept pace with economic growth, increasing levels ofurbanization, and steadily rising motorization rates.

At the national level, trade promotion is key to the Government’s strategy to maintain economic growth and create job opportunities. Evidence of the country’s commitment to a more liberal trade regime and to transforming Jordan into a regional trade and transport hub can be found in regional and international trade agreements entered into with the European Union and the United States. A promising development is Qualified Industrial Zones (QIZ), which were launched in 1996 and permit goods produced in these areas duty free entry into the American market. To date, Jordan has established seven QIZs, which collectively have attracted around US$383 million in investment, generated nearly 27,000 jobs for Jordanians, and contributed to an explosion in exports to the United States, which is now Jordan’s largest trading partner. However, the efficiency of transport logistics is a key determinant of a country’s international competitiveness. The country’s high freight transport costs are due to inadequate facilities and the lack of consolidated and efficient transport and logistics services, which serve as barriers not only to increasing trade flows, but also to attracting foreign direct investment. Left unchecked, these drawbacks will make it ever more difficult for Jordan to compete for global trade and investment flows.

For the AMA to begin addressing the pressing issues associated with its rapidly expanding municipalities, it must develop key missing links in its highway system, and designate land to accommodate on-going and fbture growth. For Jordan to build on its geographical advantage as a regional trade and transport hub, benefit from higher transit revenue and generate employment opportunities, it must reduce freight transport costs and increase existing trade flows. Achieving these objectives necessitates modernizing the country’s transport infrastructure, particularly in the AMA, by improving the connectivity ofits main highways, and upgrading transport facilities and services to be more efficient and competitive.

The AMA’s growing development challenges and Jordan’s overall objective of encouraging trade are interconnected, and straddle a number of sectors, particularly land transport, urban development, and trade facilitation. While Jordan has a well-developed highway network, certain links in its trunk road system are missing, and the development of a ring road for the AMA, which has long been a Government priority, can no longer be postponed. To accommodate the AMA’s growing population, new land for investment and urban development purposes is required. At the same time, the lack of space to make needed improvements to the 7 Amman Customs Depot, which is located in a densely populated area ofcentral Amman, coupled with the absence of an inland port that can offer comprehensive logistics services, hampers the development of an efficient logistics-transport chain. An oversupply ofoperators in the trucking industry, which has led to underutilization of its fleet, high costs, and low profitability, further complicates efforts to reduce costs. The Amman Development Corridor (ADC),’ located to the south and east of the AMA, provides an ideal site for developing a bypass for traffic to circumvent the AMA, and for establishing an integrated inland port. It has inexpensive land for urban expansion and industrial development, and excellent access to international trade routes, Queen Alia International Airport, the Port ofAqaba, and the capital city.

Missing Strategic Links in the Highway Network. For most of its 5,045 km, Jordan’s main highway network offers good coverage, has sufficient capacity to accommodate vehicle flows, and is in good condition. With the exception of a ring road for the AMA, and bypasses for secondary cities, the network is considered adequate. However, due, in part, to the lack of a ring road, the AMA suffers from increasing traffic congestion. In 2001 alone, the country’s vehicle fleet increased by 15.9 percent, prompted largely by lower duties on imported vehicles. Today, there are an estimated 500,000 vehicles in Jordan, or about 100 vehicles per thousand inhabitants. The development ofa ring road is a long standing initiative fully supported by the Government, and its first phase, Amman Ring Road Phase 1 (ARR-l), which would provide a much needed bypass for freight traffic, as well as access to affordable land for urban expansion, is in the advanced stages ofpreparation.

Other challenges in the road sector include the need to strengthen road management and financing for maintenance and to improve road safety in Jordan, which, in 1998, averaged about 18 deaths per 10,000 vehicles. A recent study found that countries with comparably sized vehicle fleets tended to have lower fatality rates.2 To enhance road management and sustain efforts to preserve the road network, the Government has taken several key steps in recent years, such as updating pavement design standards, and increasing the number of fixed and mobile scales to enforce axle load limits. To bolster maintenance financing, the creation ofa Road Fund was mandated in 1997. However, given the trucking industry’s poor financial performance, the Road Fund Law was never enacted, since it would have increased tariffs on heavy vehicles.

Need to Develop New Areas to Accommodate Growth in the AMA. To accommodate the growth ofAmman’s rapidly expanding population and associated demands by investors for access to reasonably priced land, and by residents for low cost housing, there is a need to plan and open new land for urban development. The scarcity of vacant, zoned and accessible land in the AMA is beginning to negate investment opportunities and affect outlying communities. As a matter of policy, and to support its higher level objective of stimulating economic growth, the Government should create the conditions for investors to access affordable and serviced land, and pools ofmanpower.

Municipal plans anticipate substantial new development to the east and south ofthe AMA. High land values, prime agricultural land, and topographical constraints to the north and west limit opportunities for substantial urban expansion, but relatively flat, low-cost land with few physical

’ The Amman Development Corridor covers the area of influence of Phase 1 of the Amman Ring Road (ARR-1). In the late-l990s, ARR-1 formed part of the proposed Amman Ring Road Project, which proceeded to the appraisal stage. Deaths per 10,000 motor vehicles in Oman, Macedonia, and Luxembourg were 16, 5, and 3 respectively in 1996. Source: Estimating Global Road Fatalities. Transport Research Laboratory, Department for Intemational Development, 2000. 8 constraints is available to the southeast, although it is without utility services and access is limited. This area is considered a prime location for accommodating growth, and twelve AMA municipalities have approved development plans within the ADC, or adjacent to it. Plans cover the establishment of industrial estates, free zones, QIZs, and low-income housing projects. However, intended industrial developments are widely dispersed, and the majority are located where land costs are low, and not in residential areas for their potential labor forces.

While the numerous municipal plans reinforce the area’s viability, most were devised in isolation, and some may not be compatible. Going forward, greater interaction and collaboration among the AMA’s various municipalities to prepare plans and pave the way for the AMA’s orderly expansion over the next twenty years is needed. Under the proposed Project, appropriate mechanisms would be put in place to permit affected municipalities to work in a more coordinated fashion, including the empowerment of a Technical Unit to facilitate planning and guide development within the ADC’s zone ofinfluence.

It is expected that access to affordable land will attract investment for both productive purposes and new housing developments. With lower housing costs and opportunities for employment, the lower- and middle-income earners may be attracted from the crowded areas of Zarqa and Sahab, which are well known as pools of labor. Furthermore, residential developments will be required to house the work force for the anticipated increase in trade and industrial expansion forecast for the ADC. The ARR-1 would act as the strategic highway and backbone to support development in the ADC.

Develop Jordan’s Potential as a Transport Hubfor the Region. Given its central location, with Saudi Arabia and the Gulf States to the south and southeast, Syria and Lebanon to the north, Israel and West Bank and Gaza to the west, and Iraq to the east, Jordan is ideally positioned to accommodate an expanding regional transit market for goods destined to neighboring countries.

Although Jordan has made significant progress in improving its trade performance by lowering tariffs, removing distortions in its customs regime, and diversifying its export structures, numerous challenges remain before it can fully capture its potential as a regional trade and transport hub. Measures to strengthen the country’s trade facilitation infrastructure and related institutions are needed to boost trade flows, which are constrained by a congested central Customs Depot, the absence of an inland port, and oversupply and fragmentation in the trucking industry. Actions to liberalize trade combined with a supportive transport chain can lower transport and logistics costs, increase trade volumes, and serve as a catalyst for job growth. Improved transport infrastructure, greater logistical efficiency, and more competitive freight carriers are issues ofprimary significance for the Government.

The Amman Customs Depot does not have the capacity to accommodate current demand for freight storage, parking for imported vehicles, or off-street parking for trucks. It is also poorly situated to accommodate expansion, as property around the Depot is densely populated and costly to acquire. Although the road infrastructure leading to the facility is well developed, it is severely congested and cannot support the increasing levels offreight traffic. This contributes to excessive truck idle times, longer periods to clear and inefficient customs operations.

3 It has been estimated that a ten percent reduction in the time it takes to clear customs would generate savings in the range ofJD300,OOO (US$428,500) per year for trucking organizations. 9 The quality and speed with which import, export and transit traffic is processed is impacted by the lack of an inland port, which can offer comprehensive, consolidated and efficient logistics services. Ideally, an inland port would be in close proximity to the Customs Depot, since both undertake complementary activities, which would result in more efficient clearing processes, contribute to lower transport costs, and encourage trade.

There is a growing need to rationalize Jordan’s trucking industry, which primarily transports freight to and from the Port of Aqaba, and transit goods for neighboring countries. During the 198Os, transit goods represented the major portion of freight traffic. However, an increase in competition from regional ports and a decline in cargo traffic transiting the country, mainly for Iraq, contributed to a significant decrease in traffic flows in the 1990s. Since then, distortions in the market, which perpetuate over-capacity and hold trucking tariffs above what would prevail under free market conditions, have combined to keep rates high. At present, three companies, two ofwhich are state-owned, while the third is a cartel, dominate the sector. Although Jordan’s fleet of trucks exceeds 12,000, market demand does not require more than 4,000 truck^.^ As a result, both truckers and users oftheir services suffer - individual operators do not have enough work to enable them to improve services and efficiency, while users must pay high rates for mediocre service. The Government has launched a program to restructure the trucking industry, including the elimination of official tariffs for the transport of most goods, and views the Amman Development Corridor Project (ADCP) as an opportunity for support to continue and deepen on-going reforms.

2. Rationale for Bank Involvement

Since the early 198Os, a number ofproposals have been put forward for developing a ring road that would divert traffic away from central areas ofAmman. The Government has long been an advocate of developing such a road, which remains one of their top priorities. Since the mid- 199Os, the Bank has maintained a near continuous dialogue with the Government on the matter. With assistance from the Bank, the proposed Amman Ring Road Project reached the appraisal stage in 1998, but did not proceed to negotiations, due to the Government’s decision to postpone most of its infrastructure investments. However, the need to construct the critical southeastem section (Phase 1) ofthe planned Amman Ring Road (ARR-1) has now become urgent, and it is viewed that a final opportunity to develop the road is at hand. It is against this background that the Government turned to the Bank for support to develop the Amman Development Corridor.

The Government felt that Bank involvement would be an effective catalyst to attract financing for the Project. It was viewed that with Bank support, interest among donors to participate in co- financing arrangements would be elevated, while comfort levels among private investors to make subsequent investments would be heightened.

The Bank’s extensive experience in financing large transport infrastructure projects, particularly roads, combined with its broad understanding of municipal planning and measures to facilitate trade,5 enhances the likelihood of a positive outcome for the project. Given the Bank’s diverse intemational experience in these interdependent areas, it is in a unique position to effectively integrate and coordinate the Project’s different issues.

The Borrower would likely derive other benefits from the Bank’s involvement, including: (i)the Bank’s intimate knowledge ofissues in the roads sector and the Project’s road component, given its previous involvement in preparing the Amman Ring Road Project; (ii)proper integration and

Road Sector Review, Dar A1 Handasah. March 2004. The Bank is providing on-going support to the Government to improve the country’s trade logistics. 10 consideration of environmental and social issues, particularly land acquisition and resettlement of inhabitants residing in affected areas; (iii)the Bank’s on-going support to strengthen trade logistics in Jordan, combined with its understanding of the ARR-1, which places it in a unique position to contribute to a reduction in transport and logistics costs; and (iv) advice to effectively plan and promote development within the ADC.

3. Higher Level Objectives to Which the Project Contributes

The current Country Assistance Strategy for Jordan, which was approved on January 21, 2003, identifies enhancing conditions for growth led by the private sector as an objective to be supported through Bank operations. The proposed Project would support this strategic objective through building a much-needed road link and logistics platform to facilitate the movement of transit traffic, and by providing access to affordable land for productive investments and urban development purposes. The Project would also support MENA’s strategic objective of promoting private sector development, as well as the Bank’s Infrastructure Action Plan, which calls for more responsiveness to Client demands for infrastructure development.

The Project is one of the Government’s highest priorities. It also supports the Govemment’s higher level objective of stimulating economic growth by lowering transport costs and supporting measures to strengthen the performance ofJordan’s trucking industry.

B. PROJECT DESCRIPTION

1. Lending Instrument

The Borrower selected a Fixed Spread Loan (FSL) with level repayments. The Loan has a 17- year maturity, including a five-year grace period. The currency ofthe Loan will be denominated in US Dollars.

2. [If Applicable] Program Objective and Phases

Not applicable.

3. Project Development Objective and Key Indicators

The Project’s development objectives are to: (i)support more efficient transport and logistics services by removing key infrastructure transport bottlenecks; and (ii)provide access to affordable land for productive investment and urban development purposes. These objectives would be achieved through: (a) building a critically needed link in the Amman Metropolitan Area’s (AMA) urban highway network - Phase 1 of the Amman Ring Road (AAR-l), which would improve access to the airport and points south, as well as to Zarqa and points north, by diverting commercial truck traffic around the AMA; (b) opening up around 300 square kilometers of affordable land for future expansion and growth of the AMA; (c) promoting the development of an efficient transport and logistics platform by providing basic infrastructure for a modem inland port and relocating the Amman Customs Depot; (d) supporting on going reforms to restructure the trucking industry, which would contribute to a reduction in freight transport costs; and (e) planning urban development in the ARR-1’s area ofinfluence.

The principal target groups would be the transport and trade industries, as well as developers. However, the general urban population of the AMA would likely benefit from less traffic congestion.

11 Key performance indicators to measure implementation progress and the achievement of development objectives would include: - Travel Times and Traflc Diversion. Taking annual traffic counts and measuring vehicle flows to assess travel times and traffic diversion fi-om urban streets to Phase 1 of the Amman Ring Road. Instruments include traffic counts, surveys and the traffic model developed for the Greater Amman Municipality (GAM) and used to undertake the economic evaluation ofthe Amman Ring Road (ARR). - Transport Costs and Activity at New Customs Depot. Assessing the evolution of transport logistics costs and the level of freight and goods processed through the new Customs Depot. Annual transport cost surveys and trade reports will serve as the primary instruments. - Consolidation of Trucking Industry. Calculating the number of general cargo and container trucking firms licensed under the new regulations (annually). Surveys of licensing records will be the principal tool through which relevant data will be gathered to calculate the ratio. - Urban and Industrial Development Within the ADC. Measuring the type and number of urban and industrial transactions within the ARR-1's zone of influence. The key tool will be annual surveys ofplanned and actual transactions within the ADC.

4. Project Components The scope ofthe proposed Project would consist of: (a) constructing Phase 1 ofthe Amman Ring Road (40.0 km), which would be divided into three sections; (b) developing access infiastructure and utility services for inland port facilities, relocating the Amman Customs Depot, and supporting the Government's on-going program to restructure the trucking industry; and (c) providing technical support for urban and transport planning, traffic engineering, and project management. The Project's estimated cost is US$161.0 million, and the Bank would finance around US$38.0 million.

Cost Estimate Financing Plan Components I ""* AFESD 1 IBRD I EIB million million I GoJ A: Amman Ring Road, Phase 1 (ARR-1) (40.0 km) Al: Section 1 (18.5 km) A2: Section 2 (14.5 km)

B: Inland Port and Trucking Industry B 1: Inland Port Access and Infrastructure B2: Custom Depot 0:30:-- .. .:--- __ 0.02

* Cost estimate including contmgencies.

12 The project would also seek to ensure that the first 40.0 km ofthe ARR-1 are constructed in an efficient and satisfactory manner, and that plans for the remaining 70 km are developed in close coordination with concerned urban planning authorities. The planning process would be participatory in nature and integrate road planning with urban development. This process would also help to minimize environmental and social impacts, while ensuring that needed rights-of- way are reserved for future implementation.

Of the sector issues identified in section A.l, the proposed Project would: (i)improve the connectivity ofthe highway network in the MA;(ii) provide access to affordable land for urban development and investment purposes; (iii)strengthen Jordan’s trade-transport chain by laying the groundwork for the development ofan inland port and relocating and upgrading the Customs Depot; and (iv) support on-going reforms to rationalize the trucking industry.

5. Lessons Learned and Reflected in the Project Design

Transport corridor projects are, by nature, complex and require strong commitment from counterpart authorities. Government support for the Project has been unwavering since the mid- 1990s, and counterpart agencies fully endorse its implementation.

Often, the benefits of developing roads can be subdued due to encroachment, and the design of the Project addresses this concem. The development of service roads, which will provide links between ARR-1 and adjacent areas planned for development, will help to control access. The Project will also provide support to a Technical Unit that will carry out urban planning initiatives, and promote and guide development within the ADC.

Unless properly managed, the implementation of large, complex infrastructure projects can lead to delays and cost overruns. To help avoid potential delays, bidding documents for the road component will be ready for tendering by effectiveness, and an international construction management firm with in-depth knowledge and practical experience in procurement and construction management will support the Project Management Team (PMT), which will be established at the Ministry of Public Works and Housing. In addition, prequalification criteria were prepared during project identification by a qualified engineering firm. The project is well advanced and major risks have been identifed.

6. Alternatives Considered and Reasons for Rejection

Private Financing of Phase 1 of the Amman Ring Road. Private financing for ARR-1 was explored through a study6 financed by the Ministry of Public Works and Housing in October 2002. This study concluded that, while the project was economically viable, there were questions as to the amount ofprivate sector financing that could be attracted for the project. This is because the benefits to investors were not considered commensurate with the perception of risk associated with the project. While a positive rate of return could be generated, the assumed minimum required Internal Rate ofRetum (IRR) on equity of 15 percent would not be achieved under any base case or sensitivity scenarios for the full cost of the highway. Put another way, with a required IRR of 15 percent, investors were able to estimate the level of revenues they could generate, and determine the amount they would be willing to invest. In the Government’s estimation, the amount that could be raised by private investors would not be sufficient to offset the costs of tendering the project, or the risks associated with granting exclusive rights or providing guarantees.

Amman Ring Road Phase 1, Volume 1- Financial Feasibility. Dar A1 Handasah, October 2002. 13 Other risks perceived by investors included: (i)the political and economic conditions prevailing throughout the region; and (ii)the lack of a precedent for toll roads in Jordan. To encourage greater private sector participation, consideration will be given to tendering a management contract for private operation and maintenance ofARR-1.

Expanding the Existing Amman Customs Facilities, Rather Than Relocation. Expanding the existing customs facilities, rather than relocating them to a site within the proposed Development Corridor, was considered. However, this was not deemed feasible because of the: (a) difficult geographical terrain of the area surrounding the Customs Depot; (b) high price of land at the present site; (c) complexity of obtaining needed rights ofways from numerous small landowners; and (d) already serious traffic congestion, which would only worsen with expanded facilities.

Maintaining the Status Quo. Permitting the Amman Customs Depot to continue operating at its present site, and allowing the development of an inland logistics ports to evolve independently and according to market needs was also considered, but rejected because: (a) the operating conditions at the Customs Depot would only continue to worsen with time; and (b) it was recognized that building both facilities in close proximity would serve as a dual anchor for subsequent development. Finally, neither ofthe last two alternatives responded to the objective ofproviding access to affordable land for productive investment and development purposes.

C. IMPLEMENTATION

1. Partnership Arrangements (if applicable)

The Bank played an instrumental role in mobilizing parallel financing from other donors, and coordinating their involvement in the project. The Project Team met with potential donors to gauge levels of interest in the project, and once ascertained, provided follow-up to structure a project that was satisfactory to the Government and participating financiers.

A complete financing plan for the project is in place and there are no finding gaps. The Arab Fund for Economic and Social Development (AFESD) and the European Investment Bank (Em) will provide parallel financing under the Project. The AFESD will finance all construction and supervision costs associated with Section 1 of the ARR-1, while the EIB will finance the same for Section 3 ofthe ARR-1, as well as the costs ofrelocating the Amman Customs Depot to the Inland Port at the ADC Madounah Interchange, and preparatory studies for Phases 2 and 3 ofthe ARR. The Bank will finance the ARR-1’s Section 2, access infrastructure and utility services for the inland port, support on going reforms in the trucking industry, consultancy services to plan development within the ADC, and technical support and project management services. Annex 5 provides an estimate ofcosts and a financing plan.

2. Institutional and Implementation Arrangements

The Project, which would be implemented between August 3 1, 2004 and December 3 1, 2008, would have a Loan closing date of June 30,2009.

The Ministry of Public Works and Housing (MoPWH) is the sole implementing agency and would be responsible for overall implementation ofthe project. For non-road related activities, MoPWH will involve: (a) the General Customs Department (GCD) of the Ministry of Finance (MoF) for the new Customs Depot and the Logistics Service Center at the Inland Port; (b) the Ministry of Transport (MOT) for the Inland Port Business Zone, and technical support for on going reforms in the trucking industry; and (c) the Ministry of Municipal Affairs, the Greater Amman Municipality (GAM) and other concemed municipalities for the Project’s urban 14 development planning activities. The MoPWH would also be responsible for implementing environmental, resettlement and cultural resources mitigation measures adopted for the Project.

Given the importance of the ADC and the need to ensure its development is both planned and organized, an inter-ministerial ADC Steering Committee and an Executive Committee will be established with membership from concemed ministries and municipalities, and the Office ofthe Prime Minister. The Committee’s chief function is to ensure that development within the ADC is planned and undertaken in a comprehensive, unified and coordinated manner.

A Technical Unit supported by the Project will be established under the ADC Steering Committee to work with all concerned municipalities. The Unit will carry out urban planning studies for development within the ADC’s zone of influence, and promote and guide development within and along the ADC. All decisions affecting land use and development will remain with concerned municipalities.

The MoPWHwill designate a Project Management Team (PMT) to implement the Project within budget, on schedule, and according to technical specifications. The PMT will be responsible for all project components, including carrying out monitoring and evaluation activities, and ensuring effective implementation ofthe environmental management and resettlement action plans. The PMT will also be responsible for reporting on implementation progress, monitoring and evaluation activities, the procurement process, financial management and audit requirements. The PMT will be supported by a core team of experts in project management (including procurement and financial management) hired through an international construction management firm.

Based on the Project’s financing plan, there will be three separate construction packages, which will be supervised by three separate consultants. The PMT will be responsible for all of these construction and supervision activities.

3. Monitoring and Evaluation of OutcomesResults

To monitor and evaluate progress in achieving outcomes and development objectives, traffic models and surveys will be utilized to regularly measure project indicators, as defined in Annex 3. The model to quantify traffic flows that was developed as part of the project’s economic evaluation, will be calibrated to measure traffic counts and the volume of traffic diverted from urban streets to ARR-1. Surveys will be developed to assess: (i)travel times; (ii)transport costs within Jordan; (iii)trade flows through the new customs facility; (iv) the number of trucking firms registered under the new freight transport regulations; and (v) measuring development within the ADC. Responsibility for calibrating the traffic model, developing the surveys, gathering data and statistics, updating indicators, and recording results will lie with the international construction management firm selected to support the PMT. A mid-term review will be camed out by March 3 1,2007.

4. Sustainability

There is strong demand among Government officials and trade industry leaders for this project, which has combined overdue investments in physical infrastructure with support for key policy reforms. As designed, it will cater to a number of pressing needs, including for an altemative route for freight traffic to bypass central Amman, opening new land for urban development, and developing an integrated logistics platform. The project has also been structured to encourage interaction with private operators, especially in developing measures to strengthen the

15 performance of the trucking industry by addressing prevailing monopolistic tendencies. Soliciting feedback from the private sector during project preparation and incorporating that input into the project’s design reinforces sustainability and the likelihood of maintaining expected benefits over the long-term.

The Borrower’s commitment to project objectives is robust, as evidenced by its successful actions to assemble parallel financing. Another indication ofGovernment ownership is apparent from its agreement to include financing to support a Technical Unit to promote and guide development within the ADC.

Without sufficient resources to maintain the ARR-1, which will carry heavy vehicles and require regular maintenance, could negatively affect the project’s sustainability. Beginning in 2008, the cost of routine maintenance for ARR-1 will be around US$115,000 per year. Periodic maintenance, which will be undertaken every eight years, is forecast to cost about US$2,250,000, or an average ofUS$280,000 per year. To ensure proper maintenance of ARR-1, a multi-year, performance-based contract with a private provider will be considered.

Once established, the annual cost to maintain and repair the inland port facility is estimated to be 0.5 percent oftotal investment costs. With total captial costs ofaround US$21.8 million (US$l5 million for land acquisition and US$6.8 for infrastructure development), maintenance costs, which will be bourne by the private operator, would be about US$110,000 per year beginning in 2009.

5. Critical Risks and Possible Controversial Aspects

Competing International Transport Routes. Given the geo-political situation in the region, and the fact that Jordan is surrounded by countries with equally well-developed infrastructure systems, there is a risk that Jordan’s role as a regional transport hub could be diminished should competing international transport routes open. This risk can only be mitigated through a concerted and continual effort to assess the potential impacts such changes would have on traffic, and to design measures to strengthen Jordan’s comparative advantages in trade and transport- related services.

Multiple Contractors for Road Construction. To accommodate the various sources of parallel financing, the works for each of the three road sections will be undertaken through separate contracts. During the construction phase, the project’s road component will be subjected to a number of risks, including completion delays, geo-technical difficulties, cost overruns, and environmentalhocial complications. Having multiple contractors jeopardizes quality and elevates the risks of not completing the road on time or within budget. To diminish these and other construction related risks, a single qualified international project manager would be hired to supervise and monitor all construction activities associated with the three road sections.

Land Acquisition. Given the amount of land to be acquired, the expropriation process could be prolonged, which could delay construction activities. To lessen this risk, a comprehensive Resettlement Action Plan was developed, all affected owners were informed through notices published in the local press, and the land acquisition process, which is on going, is scheduled to be completed by the end of 2004. Because the Government decided in 1998 that the Amman Ring Road was a controlled access road, owners will be filly compensated for the entirety of land expropriated for project purposes.

Unauthorized Roadside Developments. Unauthorized roadside developments, or unorganized and haphazard development along the corridor, could diminish project benefits. The 16 construction ofparallel service roads and well-located interchanges will protect against unlawfid developments. The use of performance-based maintenance contracts would also include responsibility for controlling access. In addition, the project will finance land use and urban planning studies to guide development along ARR-1.

Safeguard Issues. As with all “A” rated projects, the potential for environmental and/or social controversy exists. Possible controversial issues associated with the Project include: (i)damage to the environment; (ii)delays in resettling inhabitants and/or commercial entities in the project’s area of influence; (iii)chance archeological finds; and (iv) the capacity of local institutions to monitor and enforce environmental covenants. To lessen the potential for negative impact, an Environmental Management Plan, Resettlement Action Plan, and Cultural Resources Mitigtion Plan were hlly developed. These documents, which the Government has agreed to follow closely, thoroughly describe mitigating measures to be taken during project implementation and following project closing.

The rating ofthe risks identified above along with mitigation measures are summarized in Table 1 at the end ofAnnex 4.

6. Loan Conditions and Covenants

With the exception ofstandard covenants, none is required considering Jordan’s experience with Bank road projects and satisfactory compliance with commitments. The following covenants will apply to the project: Dated Covenants - Signing ofcontract for construction management firm by September 30,2004. - Submission ofreport on mid-term progress by December 3 1, 2006. Standard Covenant - Standard annual auditing requirements.

D. APPRAISAL SUMMARY

1. Economic and Financial Analyses

Economic Analysis. In 1998, a comprehensive economic assessment was carried out for several alternatives considered for Phase 1 of the Amman Ring Road (--I),as well as for future extensions (Phases 2 and 3) that would complete the ARR as envisaged. The results ofthe 1998 assessment confirmed the need for the Amman Ring Road both in terms of the need to expand capacity, and in terms of economic return. A comparative economic analysis corroborated the priority given to the southeastern section. In 2003, a cost-benefit analysis of the Project’s components yielded economic rates ofreturn (ERR) for the ARR-1 ofbetween 15.3 percent and 17.5 percent for the various scenarios analyzed (see Annex 9 for details). This is well above the 12 percent return considered necessary for economic justification of such infrastructure investments.

All project costs, including construction and maintenance, compensation, and existing highway improvements under the without project option, were quantified. The quantified benefits include, estimated savings resulting from reduced travel time, vehicle operating costs, and accidents. The estimates for Value of Time, Vehicle Operating Costs, accident costs, traffic demand and flow projections, and other input data necessary for the economic analysis were derived using several sources of information, survey data, and forecasts derived from a regional transport planning model calibrated for the assessment. 17 The economic analysis provided estimates of economic rates of retum, net present values, cost- benefit ratios, and first year rates ofretum for the alternatives considered. A series oftests were performed to assess the sensitivity of the results to changes in key parameters (e.g., traffic growth rates, value of time, construction cost, traffic reduction). A scenario analysis was also undertaken to assess the impact of a set of conditions that may evolve as the result of the project and other externalities.

Under a Base Case scenario, defined by no increase in construction or land acquisition costs, accident and land appreciation benefits, and sustained level of Iraqi transit traffic from the Port ofAqaba to Baghdad, the results ofthe cost-benefit analysis, using a discount rate of 12 percent, yielded an ERR of 17.5 percent and a net present value (NPV) of Jordanian Dinars (JD) 86.3 million.

A sensitivity analysis of the project was undertaken by changing key variables in the economic evaluation. The removal ofIraqi transit traffic, some 300 trucks per day, from the equation did not significantly impact the project, reducing the ERR from 17.5 percent to 16.2 percent.

2. Technical

ARR-1 would be a dual-lane carriageway built to intemational expressway standards. Access would be controlled and only possible at interchanges, and all crossings would be at different levels. The right-of-way along the entire length would have a minimum width of 80 meters to accommodate development ofARR-1 and its service roads.

Throughout the road’s design, which has now been completed, efforts were made to ensure that technical specifications and standards of the road were appropriate to the Borrower’s needs and to the geographical conditions along the chosen alignment. This was done through value engineering exercises, a series of design reviews, and a safety audit. As a result of these initiatives, a number of recommendations were incorporated to strengthen the road’s design. Some of the more significant modifications include: (i)adjustments to the vertical alignment in some sections of the road, especially at certain intersections, to improve visibility; (ii) incorporating changes to the design of bridges so that future widening of the road from two to three lanes could be accommodated; and (iii)improving design characteristics ofservice roads to accommodate speeds of 60 km per hour. Minor enhancements to refine the bid documents, which are nearing completion, is on going.

3. Fiduciary

Procurement. The Ministry of Public Works and Housing will be responsible for procurement activities associated with the project. A Project Management Team (PMT) led by a Project Manager will be staffed with engineers from the MoPWH, and supported by a core team of experts in project management (including procurement and financial management) hired through an international construction management firm. The PMT will have the main responsibility for the management ofthe procurement process for all the activities under the project. All invitations for bidders and consultant firms will be launched through the Government Tenders Directorate (GTD) within MoPWHwho have a good track record in the procurement ofworks.

The overall capacity for handling the procurement and contracts management is adequate for the project purposes. The presence of the construction management firm will strengthen the PMT capacity. A training workshop on the selection of consultants according to Bank Guidelines will be conducted prior to loan effectiveness to further strengthen the capacity of the PMT in this area. 18 Procurement of works financed under the Loan will be carried under International Competitive Bidding (ICB) using the Bank standard documents. Prequalification will be used for the Ring Road package. The prequalification documents are scheduled to be ready by April 2004.

The Quality-and Cost-Based Selection (QCBS) method will be used for selection of all consultant services for firms under the project. The two short listing for the two critical assignments for the construction supervision and the project management were launched in January 2004 with expected award of contracts synchronized with the award of contract for the ring road section financed by the Bank. Practically all contracts under the Loan will be subject to prior review.

Financial Management. In close coordination with the MoPWH's Finance Department and the MoPIC, the PMT will undertake project accounting and reporting functions, including the generation of the quarterly Financial Monitoring Reports (FMRs). However, the MoPWH will be responsible for the project funds and all related financial transactions. Terms ofreferences for the project financial management system will be defined and included in the PMT contract, which is expected to be concluded by effectiveness. Specific procedures for flow of funds and information are detailed in the Project Implementation Plan (PIP). The MoPIC, among other supervisory and monitoring functions, approves annual budgets and makes counterpart finds available for project implementation. MoPIC will make Loan proceeds and the counterpart funds available to the MoPWH. All payments under the project will be subject to the applicable government laws, controls and procedures.

The FMRs will include cash flow statements, project expenditure statements comparing actual figures to the project budget, and progress reports linking key performance indicators to project expenditures. To reduce the risk that data on payments will not be recorded in the project's financial records, the MoPWH's Finance Department and the PMT will reconcile, on a monthly basis, PMT accounting records and the project's budget line balances, as recorded in the MoPWH's records. The MoPWH will submit FMRs to the Bank on a quarterly basis and within 45 days from the end ofeach calendar quarter. The proposed form and content ofthe FMRs was agreed during negotiations and are included in the PIP.

Loan proceeds, which will be disbursed in accordance with the Bank's disbursement guidelines as outlined in the Disbursement Handbook, will be used to finance project activities through the traditional disbursement procedures currently in use, including direct payments, reimbursement and replenishment applications and special commitments, as warranted. The Project's financial statements will be audited annually by an external independent auditor, acceptable to the Bank, and in accordance with internationally accepted auditing standards. The MoPWH will submit annual audit reports to the Bank no later than six months following the close of each fiscal year subject to an audit. Terms of Reference for the audit will be prepared and submitted for the Bank's no objection, no later than six months prior to the end of each fiscal year. Audit costs will not be financed by the Bank Loan.

Intensive supervision during the start-up phase and during project implementation should be undertaken to ensure that the financial arrangements at the MoPWWPMT are functional, and that the MoPIC has allocated counterpart funds accordingly. Supervision should intensify during the pre-effectiveness period to ensure that the action plan is on time and the PMT's accounting system has been configured to the project's needs and is capable of generating the required quarterly FMRs. Financial management arrangements are detailed in Annex 7.

19 4. Social

The project would contribute to economic growth in Jordan by reducing transport costs through improved logistics, assistance to support on-going reforms in the trucking industry, and through the development ofa corridor that will open land for urban and industrial development purposes. It also provides an opportunity for longer-term social development outcomes through Government acceptance of the principle of full compensation to the project-affected persons in the event of compulsory land acquisition, which was and continues to be handled in accordance with World Bank guidelines. New policy guidelines for valuation will be established, and there has been a systematic incorporation of public participation, stakeholder consultation and attention to the needs ofvulnerable groups in land acquisition and resettlement processes.

A three-stage Information and Public Consultation Program involving the public and private sectors and the broader participation ofcivil society, was carried out in affected areas to describe the project and its potential social impacts. A mass media campaign was also conducted with over 25 community meetings, more than half of which were held with women. Public information packages in Arabic were made available to directly affected communities.

Three key specific social development issues were identified under the project: (a) involuntary resettlement; (b) the social impact of relocating the Customs Depot on its employees, and on surrounding commercial activities and adjacent residential areas; and (c) protection ofthe rights ofvulnerable groups.

Independent monitoring of compensation processes and negotiations will be carried out by a neutral and independent individual of high standing. The individual will be assigned by the MoPWH and report to both the MoPWH and the Bank. Expropriation and compensation costs have been included in the project’s cost estimate. The costs to administer implementation ofthe Resettlement Action Plan have also been included under the Project Management subcomponent.

5. Environment Environmental Category: A

The project uses an integrated approach to environmental assessment, mitigation, monitoring, and institutional strengtheningkapacity building during the project’s preparation and implementation phases. It supports improvements in environmental quality, including proper land acquisition and resettlement planning and management of culturallarchaeological property, and provides for special environmental training for capacity building and environmental awareness. Extensive public participation and socio-economic surveys were also key elements in the environmental assessment process. Annex 10 presents the Environmental Aspects and Environmental Management Plan (EMP), which will be monitored during supervision and evaluated at mid-term and upon project completion.

Environmental assessment. A detailed environmental assessment was prepared for the project in compliance with the provisions of ODP 4.01 for screening Category A projects. It includes an analysis of planning alternatives, an EMP, and descriptions of the public consultation process and socio-economic surveys.

Environmental impacts. The primary adverse environmental impacts are associated with the construction period. Potential construction impacts were subdivided into temporary (on-site and off site) and ~ermanent.~Implementation of the proposed Project would also result in

’ Land acquisition, relocation of the Customs Depot, resettlement and induced development. 20 operational impacts.' These impacts can be minimized through careful planning and supervision of construction activities and environmental monitoring. Direct benefits include a reduction in travel times and the costs of operating vehicles, and greater fuel efficiency. Important benefits come to urban neighborhoods, especially in the Zarqa and Sahab areas, currently subject to mass movements of large trucks through commercial and residential streets. These areas would benefit from reductions in vehicle and pedestrian accidents, less street level air, noise and light pollution, and improved local traffic flow. Improved access to areas adjacent to the road could stimulate economic opportunities through development ofservices and commercial operations.

Environmental Monitoring Plan (EMP). An EMP, including mitigation, monitoring, and institutional strengtheningkapacity building measures, has been prepared as an element of the Project. Mitigation measures focus on environmental supervision of the construction contractors, and actions to ensure environmental protection during the construction phase. The EMP provides for quality-controlled air, noise, dust, and water measurements to be used as baseline and trend data to support management decisions. In addition, the project supports a training program in environmental management, which targets the needs of national and local government officials, consulting firms, construction contractors, and local NGOs. The EMP will be implemented by the PMT and the three supervision consultants on the basis of terms of reference developed as part ofthe EMP. The cost of implementing the EMP has been distributed among the supervision ofthe three road packages, and under the Project Management subcomponent.

6. Safeguard Policies

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) X Natural Habitats (OPBP 4.04) X Pest Management (OP 4.09) X Cultural Property (OPN 1 1.03, being revised as OP 4.1 1) X Involuntary Resettlement (OP/BP 4.12) X Indigenous Peoples (OD 4.20, being revised as OP 4.10) X Forests (OP/BP 4.36) X Safety ofDams (OP/BP 4.37) X Projects in Disputed Areas (OP/BP/GP 7.60)* X Projects on International Waterways (OP/BP/GP 7.50) X

7. Policy Exceptions and Readiness

The Project will not necessitate exceptions to Bank policies, and will meet regional criteria on readiness for implementation. A procurement plan for each of the components and a realistic and satisfactory Project Implementation Plan are available. Engineering designs and associated bid documents for the first year's activities, as well as cost estimates and detailed terms of reference for consultancy services, have been completed, and the prequalification process has been initiated.

Emmanuel Forestier 6- Joseph P. Saba Task Team Leader Sector Director Country Director

' Noise, safety, and potential ground water contamination.

21 Annex 1: Country and Sector or Program Background JORDAN - AMMAN DEVELOPMENT CORRIDOR

A. TRANSPORT SECTOR

1. The Ministry of Public Works and Housing (MoPWH) is responsible for the country’s road infrastructure. The Ministry of Transport (MOT) is in charge ofoverall transport planning, and for regulating and coordinating road, rail, air and port services. MOTis also responsible for setting bus tariffs, taxi fares, and charges for transporting freight.

2. Jordan has a well-developed highway network, which consists of 2,972 km of primary roads, 2,073 km of secondary roads, and 2,319 km of rural roads. Outside the Amman urban area, roads have sufficient capacity to handle present traffic levels. However, certain links in the trunk road system are missing, particularly in the Greater Amman Area, due to rapid urbanization. The most critical road investments needed are a ring road for the AMA, and a couple ofbypasses for secondary cities. It is due, in part, to the lack ofa ring road that the AMA suffers from increasing traffic congestion. This congestion contributes directly to high transport and logistics costs in Jordan, and lessens the country’s overall competitiveness.

3. Rail transport is operated by two state corporations - the Hedjazi Jordan Railway (HJR), and the Aqaba Railway Corporation (ARC), which is included in the Government’s privatization program. The HJR originally ran from Syria, via Amman and Ma’an, to the Hedjaz region of Saudi Arabia. It currently operates outdated rolling stock and offers only sporadic service between the Syrian border and Amman. It operates on one line of single narrow gauge (1,050 mm) track, which is in very poor condition. Recent figures indicate that traffic flows are very limited with about 0.4 million ton-km for freight, and less than two million passenger-km. The ARC, a public corporation, operates railway services for the transport ofphosphate rock along a single line of295 km narrow gauge track, ofwhich 169 km are leased from the HJR. It basically transports about 2.5 million tons of phosphate rock per year from the mines of the Jordan Phosphate Mines Company (JPMC), which are located at El Hassa and El Abiad, to the Port of Aqaba. JPMC, the railway’s only customer, enjoys unrealistically low freight tariffs, which prevents the long-term viability ofARC rail operations. Furthermore, due to the rapid depletion ofphosphate at the Northern Mines, most ofJordan’s phosphate production is shifting to the new JPMC’s Phosphate mine that is not served by rail. Therefore, a rail spur serving that mine is currently needed.

4. Aqaba Port, which is operated by the Ports Corporation and was recently included in the newly established Aqaba Special Economic Zone (ASEZ), is Jordan’s only seaport. The activities of the port grew sharply in the 1980’s, and peaked in 1988 at about 20 million tons. The Gulf Crisis, which resulted in the embargo on Iraq and the blockade ofAqaba Port, severely affected the Port’s activities. In 1995, the Port handled about 11 million tons of cargo. This included bulk phosphate, potash, fertilizer and other bulk exports, transshipment goods, and the major portion of domestic imports. To accommodate anticipated future demand in industrial development, additional ports facilities need to be developed. In an effort to improve efficiency, the Government awarded a management contract to operate the container terminal in March 2004.

5. Jordan has three main airports handling over two million passengers and 70,000 tons of freight per year. All are managed, operated and controlled by the Civil Aviation Authority. Queen Alia Intemational Airport near Amman is the largest of the three, and is in need of 22 upgrading and modernization. The country’s regional airport, Aqaba Intemational, is being upgraded and modernized. The improvements are expected to be completed by mid-2004. The third airport is Amman’s Marka Airport. The Government is also examining alternatives for restructuring the civil aviation sector with the objective of gradually opening it to greater competition. An assessment ofoptions for privatizing Royal Jordanian, the state-owned national air carrier, is on-going. Certain landside activities at the country’s airports, including duty free shops and catering services, have already been privatized, and efforts are underway to enlist the support ofprivate operators to manage aircraft maintenance activities.

Land Transport

6. The large majority of domestic traffic for both freight and passengers is transported by road. The same is true for regional, import, export and transit traffic. Over the past couple of years, the Government of Jordan has developed a strategy for land transport through a series of policy and institutional studies. Included among the wide-ranging issues the Govemment’s seeks to address through its strategy is privatizing public sector enterprises, recovering costs in the transport sector generally, and the roads sector in particular, constructing the few remaining strategic links in the highway network, and improving road safety.

Transport Privatization 7. The Government’s privatization program includes concessioning a number of publicly owned transport sector enterprises, including the Public Transport Corporation, which operates urban and inter-urban bus services in competition with the private sector, Aqaba Railway Corporation, and Royal Jordanian, the national airline. The Bank has been involved in this program through various technical assistance activities.

8. Public Transport. Building on the experience gained through several 15-year concessions granted in 1993 to private bus operators to provide service throughout the Greater Amman Area, the Government decided, in November 1997, to franchise the Public Transport Corporation’s (PTC) remaining operations. Four packages comprising 29 routes were successfully awarded to three different operators for ten-year franchise periods.’ Since the dissolution of PTC in October 1999, bus services in Amman have improved, according to a survey conducted in late 2000.’0 In addition, the Government receives about US$700,000 in annual concession fees, which will be used to finance the operation of the new regulatory authority once established. The consolidation of regulatory powers, including the establishment of a regulatory authority for passenger land transport, materialized in December 2001. Public Transport Law No. 48 conferred responsibility for policy matters to the Ministry of Transport, and regulatory oversight to the new regulatory authority, the Public Transport Regulatory Commission.

9. Aqaba Railway Corporation (ARC). In the late 199Os, a concession scheme, supported by the World Bank, was considered as an appropriate mechanism for handing over ARC’S railway operations and financing a spur line to the Shidiya Mines and extending the rail line south of Aqaba to the Wadi I1 Industrial Area, where a new fertilizer factory was planned. In 1999, a concession was initially awarded to a private consortium, but a contract was never

9 While investors were not obligated to hire former PTC staff, approximately ten percent of drivers who had previously worked for PTC found employment with the new operators. lo The survey was carried out as part of the preparation of an Intensive Learning Implementation Completion Report ofthe Bank-financed Third Transport Project (Loan 3568-JO), closed in June 2000. 23 finalized and the transaction was later converted into a leasing arrangement. In the interim, the sponsors of the new fertilizer factory," Norsk-Hydro, decided to cancel their project in December 2000, which represented about forty percent of total throughput, and up to sixty percent of revenues for the designated concessionaire, as previous arrangements with the Government were no longer financially viable. While the privatization of railway operations held great promise and significant progress was achieved, it did not materialize, and today, ARC continues to operate as a money losing state-owned entity that is dependent on Government support. However, the Government remains committed to privatizing ARC'S operations, and is in the process ofrestructuring its operations, as a first step to full privatization. The Government intends to tender an operating concession. However, before it can proceed, a new freight contract with JPMC, something that is needed to make the concession financially viable, is necessary.

Road Network Planning and Maintenance 10. Strengthening overall road network planning and identifying sustainable sources of funding for road maintenance activities are also key Government objectives. Forward planning in such areas as prioritizing and sequencing the development of additional capacity, and bolstering measures to maintain the country's existing roads, are needed. It has long been recognized that preservation of the road network has been inadequate and under funded. As a result, the considerable backlog of deferred maintenance works (estimated at $US60.2 million over ten year period) will now have to be addressed as rehabilitation works. A maintenance management system, introduced in 1986, never came into use, and multi-year planning and programming of road maintenance is, therefore, not done. Between 1998 and 2003, annual spending on maintenance averaged about US$12.8 million, whereas needs have been estimated at some US$24.9 million. There is a need for increased and sustainable funding for road maintenance activities. The problem is exacerbated by over-employment in the road administration (force-account).

11. Road Fund. To address road maintenance over the longer term, the Government decided, in 1997, to charge road users directly instead of relying on the general budget, and to deposit user charges in a dedicated Road Maintenance Fund (RMF). Initially, the RMF would be hded by monies presently collected, and these charges would be progressively increased, and new ones introduced, to gradually achieve full cost recovery in the road sector. The key issue is the need for substantial tariff increases for heavy vehicles. The trucking industry's poor financial situation makes it difficult to impose full cost recovery on trucks, and operators are resistant to paying their fair share of road maintenance expenditures. Presently, annual charges are very low, and diesel fuel is sold at or below border prices without any road user surcharge. Since trucks are the major cause ofroad damage, the failure to charge them for road use directly affects the Government's ability to fund road maintenance. It is intended that there be user representation on the RMF Board to make it responsive to user needs, improve willingness to pay, and increase the transparency ofRMF operations. However, in spite ofwell prepared draft legislation and a broad consensus among most decision-makers, the continued economic uncertainty of the Jordanian economy make it difficult for the Government to amend the Road Law to introduce a Road Fund, which would have resulted either in an increase in fuel prices, a reduction in budget revenues, or a combination ofboth. The Government has yet to implement its road cost recovery strategy.

12. Truck Overloading. Since 1998, the establishment and enforcement of lower axle load limits has contributed to significant progress in reducing overloading oftrucks, which accelerates

" A USSO0 million Greenfield fertilizer plant at the Aqaba Industrial Jetty at Wadi 11. 24 deterioration of the road network. The Govemment increased the number of fixed and mobile scales, which are operated along heavily used sections ofkey highways. In addition, controls of trucks entering Jordan at the Syrian, Iraqi and Saudi borders were enhanced. Starting in July 1999, uniform axle load standards have been applied to all freight vehicles, and any truck with more than a five-ton total overload is not allowed to enter Jordan. From 1998 to 2000, the number of trucks weighted at all stations increased, while the percentage of overloaded trucks during the same period declined. Over the previous four years, the number ofoverloaded trucks reduced from 60,8 18 in 2000, to 28,720 in 2003.

Strategic Links in the Highway Network 13. The need to complete certain key strategic links in the country’s highway network, especially a bypass for the AMA, is becoming urgent. Because of the AMA’s rapid urbanization, as well as the lingering affects ofthe first Gulf Crisis, which led to the repatriation of thousands of cars and trucks as expatriates retumed from the Gulf States to Jordan, traffic congestion has increased substantially.

14. Amman Ring Road. The need for a ring road has become a priority over the past few years due to rapid urbanization and development sprawl in the AMA. As a result of the large increase in population, traffic levels throughout metropolitan Amman grew by more than six percent p.a. between 1989 and 1995. Another key factor that has intensified the need for a bypass is that Amman is the center ofan expanding regional trucking market. Commercial truck traffic utilizing the major north-south and east-west corridors, which connect Saudi Arabia with Syria and IsraeVWest Bank with Iraq, has increased considerably (5.8 percent a year). Both of these regional corridors funnel traffic directly into the AMA. Development of Phase 1 of the Amman Ring Road would serve to improve circulation ofurban traffic and allow heavy regional traffic to circumvent the urban street network, a central objective in the Government’s policy for the road sector. Presently, heavy vehicular regional traffic must transit densely populated areas and urban streets due to the lack of a bypass or ring road around the AMA. The problem will become more severe as regional integration increases and more traffic between neighboring countries crosses the AMA. Adding urgency to the matter is the fact that acquiring needed rights-of-way and removing encroachments in the rapidly expanding AMA is becoming increasingly difficult. The need for an alternative route for freight traffic to bypass central Amman is urgent.

15. Amman made two attempts in the past to develop a ring road. The planning and design for such a ring road was completed under the Comprehensive Study for the AMA, which was carried out in the late 1980s and recommended the construction of several ring roads. Detailed plans were drawn up for those roads, but they were only partially implemented, and completing them is no longer feasible due to the difficulties of acquiring land and removing encroachments in the rapidly expanding urban area.

Road Safety 16. The fatality rate on Jordanian roads, which is about 18 deaths per 10,000 vehicles (half of which are pedestrians), is more than ten times the rate for developed economies. Over the past decade, the number of accidents have increased by 7.8 percent annually, while fatalities have grown by 5.8 percent per annum. In 2002, Jordan recorded 52,913 road accidents, which resulted in 758 deaths and 17,381 injuries. Over 60 percent ofall traffic accidents happen within the Amman and Zarqa conurbation, with 36 percent ofall fatalities occurring in Amman. A very high proportion of the accidents involve pedestrians (about forty percent of all accidents with casualties). The cost to society, excluding property damage, were estimated to be US$145 25 million in 2002 alone. These are very high numbers considering that Jordan only has about 500,000 vehicles and a population of around five million inhabitants. Government officials ascribe the situation to rapid urban growth and high traffic density. The issue of traffic safety is complicated by the fact that several ministries and departments are responsible for driver training, vehicle inspections, public awareness, traffic laws and regulations, road network improvements, and traffic controls.

B. URBAN DEVELOPMENT IN THE AMA

17. The population ofthe Hashemite Kingdom of Jordan was slightly more than five million in 2001. From 1979 to 1994, population growth averaged 4.3 percent per annum, with a natural rate of growth of3.4 percent. The country also experienced rapid urbanization, with the ratio of urban to rural population shifting from 2090 to 80:20 since the early 1970s, and Amman, as the country’s capital and major commercial and industrial center, has attracted many residents seeking greater opportunities for employment. Since 1980, the population of the conurbation of Amman and Zarqa has grown, on average, by 3.3 percent per annum, and continuing high levels ofgrowth are expected over the next ten years. It is estimated that the area, which was home to approximately 2.7 million persons in 2001, or about 54 percent of the national population, will top three million residents by 2005, and reach 4.5 million by 2020.

18. From 1995 to 1999, Jordan’s total vehicle fleet grew by approximately 4.5 percent per annum. However, in 2001 alone, the number of vehicles in the country increased by 15.9 percent, prompted largely by lower duties on imported vehicles. With an estimated 500,000 vehicles in Jordan, there are about 100 vehicles per thousand inhabitants.

19. The size ofJordan’s labor force in 2001 was estimated to be 1.2 million. However, more than 50 percent of the national labor force is located in Amman and Zarqa Governorates. Current projections indicate that, over the next twenty years, Jordan’s workforce will increase to 2.1 million, while the workforce in the combined AmmadZarqa area will more than double to 1.2 million (equivalent to the national work force in 2001). The area also suffers from a stubbomly high unemployment rate ofaround 15 percent.

20. New Areas for Development. To accommodate the growth of Amman’s rapidly expanding population and associated demand for low cost housing, municipal plans anticipate substantial new development to the east and south ofthe AmmadZarqa area. High land values, prime agricultural land, and topographical constraints to the north and west ofthe AmmadZarqa area limit opportunities for substantial urban development, but relatively flat, affordable land with few physical constraints is available to the southeast, although it is without infrastructure services and access is limited.

21. It is expected that with access to low-cost land, investment would be generated for industrial development, as well as for the construction ofnew housing developments. With more affordable housing and opportunities for employment, the lower- and middle-income eamers may be attracted from the crowded areas ofZarqa and Sahab, which are well known as pools of labor. In addition, it is anticipated that others will shift from Amman because of the high property costs there. Furthermore, residential developments will be required to house the work force for the increased trade and transport services and industrial expansion forecast for the Amman Development Corridor (ADC). Section 1 of the Amman Ring Road would act as the strategic highway and backbone to support development in the ADC.

C. TRADE FACILITATION 26 22. Promoting trade and creating job opportunities are strategic priorities for the Government. Although Jordan has made significant progress in improving its trade performance by lowering tariffs, removing distortions in its customs regime, and diversifjmg its export structures, numerous challenges remain before it can hlly capture its potential as a regional trade and transport hub. Strengthened intermodal transport links, better logistical efficiency, and more competitive carriers are issues of primary significance for the Government. Intemational experience suggests that measures to liberalize trade combined with a supportive trade-transport chain can lower transport and logistics costs, increase trade volumes, encourage economies of scale and scope in distribution and productive activities, and serve as a catalyst for job growth.

23. Jordan ’s Potential as a Regional Trade and Transport Hub. Given its central location, with Saudi Arabia and the Gulf States to the south and southeast, Syria and Lebanon to the north, Israel and West Bank and Gaza to the west, and Iraq to the east, Jordan is ideally positioned to accommodate an expanding regional transit market for goods destined to countries with larger populations. Situated at the Middle East’s north-south and east-west trade routes, Jordan, and particularly Amman, has a distinct geographical advantage as a trade and transport hub for the region. Jordan’s import and export freight traffic also utilize the same routes, which channel traffic directly into the AmmadZarqa area.

24. At the national level, trade promotion is key to the Government’s strategy to maintain economic growth and create job opportunities. Evidence ofthe country’s commitment to a more liberal trade regime and to transforming the AMA into a regional trade and transport hub can be found in regional and international trade agreements entered into with the European Union and the United States. A promising development is Qualified Industrial Zones (QIZ), which were launched in 1996 and permit goods produced in these areas duty free entry into the American market. To date, Jordan has established seven QIZs, which collectively have attracted around US$383 million in investment, generated nearly 27,000 jobs for Jordanians, and contributed to an explosion in exports to the United States, which is now Jordan’s largest trading partner. However, the efficiency of transport logistics is a key determinant of a country’s international competitiveness. The country’s high freight transport costs are due to inadequate facilities and the lack ofconsolidated and efficient transport and logistics services, which serve as barriers not only to increasing trade flows, but also to attracting foreign direct investment. Left unchecked, these drawbacks will make it ever more difficult for Jordan to compete for global trade and investment flows.

25. The Port of Aqaba is the main entry point for most transit freight, through which an estimated 60 percent of Jordan’s trade freight passes. Sixty percent of imports into Jordan are transported by truck, while 76 percent of exports go by ship (much ofthis trade represents bulk commodities with low unit values, such as phosphate rock, potash and manufactured fertilizers). As such, it is not surprising that the heaviest volumes of freight traffic are between Amman and Aqaba Port.

26. A couple ofbasic constraints undermine the ability for Jordan to develop a fully efficient transport and logistics platform, and to capitalize on its potential as a regional trade and transport hub. Most international freight is trucked to the Amman Customs Depot, which is located in central Amman and is responsible for the clearance of Jordanian exports (60 percent), imports (96 percent),12 and the re-exportation of foreign commodities brought from the local market.

12 Certain legal restrictions contribute to the high percentage of imports processed through the Customs Depot, including a law requiring all imported vehicles to be cleared at Amman. 27 The Depot handles around 350 trucks per day, or approximately 110,000 trucks per year, and up to 70 percent of consignments are physically in~pected.’~However, the lack of adequate road infrastructure is causing severe congestion on the approach roads to the Depot, which cannot accommodate the increasing levels of transit traffic, and has contributed to a general deterioration ofthe surrounding area in terms ofthe environment. Furthermore, the Depot’s site does not have the capacity to accommodate current demand for freight storage, parking for imported vehicles, and off-street parking for trucks,14 which creates further congestion in and around the Depot. Property around the Depot is densely populated and costly to acquire, ruling out the possibility for expansion. The limited road infrastructure and inadequate space contribute to excessive truck idle times, longer periods to clear increased operating costs, and inefficient customs operations.

27. Relocation of the Customs Depot to a larger site would remove local congestion at the existing location, provide improved access, permit greater space for freight storage and parking of vehicles, and provide the opportunity to adopt systems and procedures to improve coordination ofclearance procedures with other customs facilities throughout the country.

28. Another constraint to improving the quality and speed with which import, export and transit traffic is processed is the lack of an inland port, which can offer comprehensive, consolidated and efficient transport and logistics services. The development of such a facility would reinforce Amman’s role as a regional trading hub by reducing transport costs and the time needed to clear customs, and by encouraging the development ofrelated services. The intention would be to attract operators and inward investment to use the inland port as a base for regional stockholding operations from which their sales outlets or customers in regional markets could be quickly and efficiently supplied. Ideally, the inland port would be in close proximity to the Customs Depot, since both entities undertake complementary activities, which would result in more efficient clearing processes, contribute to lower transport costs, and encourage trade.

29. The ADC, located to the south and east of the AMA, provides an ideal location for developing an integrated inland port, with relatively inexpensive land for expansion and development, and excellent access to major international trade routes, Queen Alia International Airport, existing and planned industrial areas, and the capital ofAmman.

30. Rationalization of the Trucking Industry. There is a growing need to rationalize Jordan’s trucking industry, which primarily transports freight to and from the Port of Aqaba, and transit goods for neighboring countries. During the 1980s, transit goods represented the major portion offreight traffic. However, an increase in competition from regional ports and a decline in cargo traffic transiting the country, mainly for Iraq, contributed to a significant decrease in traffic flows in the 1990s. Since then, distortions in the market, which perpetuate over-capacity and hold trucking tariffs above what would prevail under free market conditions, have combined to keep rates high. At present, the sector is dominated by three companies, two of which are state- owned, while the third is a cartel. Although Jordan’s fleet of trucks exceeds 12,000, market demand does not require more than 4,000 trucks.16 As a result, both truckers and users of their services suffer - individual operators do not have enough work to enable them to improve services and efficiency, while users must pay high rates for mediocre service. The Government

l3 According to interviews with local freight forwarders. 14 Parking ofheavy goods vehicles occurs up to a radii of three km from the Customs Depot. l5 It has been estimated that a ten percent reduction in the time it takes to clear customs would generate savings in the range ofJD300,OOO (US$428,500) per year for trucking organizations. 16 Road Sector Review, Dar A1 Handasah. March 2004. 28 has launched a program to restructure the trucking industry, including the elimination ofofficial tariffs for the transport of most goods, and views the Amman Development Corridor Project (ADCP) as an opportunity for support to continue and deepen on-going reforms.

31. Although most rates for transporting freight have recently been liberalized, tariffs on imports entering the Port ofAqaba are still set by the Ministry of Transport, and they have not yet reached levels that permit Jordanian truck operators to compete with counterparts from neighboring countries. Finally, with ninety percent of trucks twenty years or older, quality of service and traffic safety are negatively affected. Exporters consider the low levels of service and outdated vehicles and equipment as severe constraints to promoting trade.

29 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. There are currently nine on-going Bank-financed projects in Jordan, one of which has objectives that are comparable to those ofthe Amman Development Comdor Project. Although more focused on improving the policy environment, the Horticultural Exports Promotion Project seeks to facilitate trade in agricultural commodities by improving the competitiveness and market access ofJordan’s perishable goods. The Community Infrastructure Development Project supports the development of urban projects throughout Jordan, but its development objectives are only tangentially comparable to those ofthe Project.

2. The Bank’s on-going Trade Facilitation and Logistics Study is also relevant to the ADCP. The Study was recently completed, and its findings will be disseminated through an upcoming workshop and series ofdiscussions with other donors. This will culminate in the development of an action plan detailing measures the Government will take to support trade services throughout Jordan.

3. The following projects, which are on-going or have recently been completed, are financed by other development agencies, and support trade facilitation or urban development in Jordan.

Sector/lssue Project Agency

Trade and Infrastructure financing to help establish United States Agency for Infrastructure Aqaba Special Economic Zone and Aqaba International Development International Industrial Estate. (United States)

Transport Technical assistance for privatization. United States Agency for Privatization International Development (United States)

Urban Program to address urban poverty, United Nations Development participatory urban governance, and the (UN Habitat) urban environment.

~ ~~ Regulatory Reform Technical assistance to reform and European Union integrate regulation ofthe truckingh-eight and public transport sectors.

Civil Aviation Support to restructure the civil aviation European Union sector, and gradually open it to greater competition.

30 Annex 3: Results Framework and Monitoring JORDAN - AMMAN DEVELOPMENT CORRIDOR

Results Framework

‘.’- - Qutcomelndicators . A. Support more efficient transport and A. 1. Use ofPhase 1 ofAmman Ring Indicators will be used to logistics services by removing key Road detect deviations from the infrastructure bottlenecks. A.2. Reduction in transport logistics projected path ofproject costs. outcomes, leading to timely A.3. Increase in trade flows through new corrective action by the customs facility. Borrower.

B. Provide access to affordable land for B. Development within the ADC’s zone productive investment and urban ofinfluence. development.

Component A: Ring Road, Phase 1 Component A Component A Percentage ofPhase 1 ofAmman Ring Disbursement rates vs. physical progress Detect implementation Road completed. (actual vs. planned). delays, then pinpoint causes.

Component B1: Access Infrastructure Component B1: Components B1, B2 and Percentage ofaccess and utility Disbursement rates vs. physical progress B3 : infrastructure completed. (actual vs. planned). Detect implementation delays, then pinpoint causes.

Component B2: Customs Depot Component B2: Percentage ofCustoms Depot Disbursement rates vs. physical progress completed. (actual vs. planned).

Component B3: Trucking Sector Component B3: Consolidation, competition and fleet Surveys measuring reform in the sector renewal. (annually).

~~ Component C1: ADC Promotion Component C1: Component C1: ADC promoted as area for investment Surveys measuring development within Monitor commitments. and development. the ADC (annually).

Component C2: Trans Planning and Component C2: Components C2, C3 and Engineering c4: Improved traffic planning and levels of Traffic counts and reports (annually). Detect implementation service on AMA road network. delays, then pinpoint causes and take corrective Component C3: Ring Road Planning Component C3: actions. Master Plan for developing Phases 2 and 3 ofRing Road developed. Master Plan completed (2007).

Component C4: Project Management Component C4: Effective project implementation. PMT established (2004).

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4 4 F c Annex 4: Detailed Project Description JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. The scope of the proposed Project would consist of: (a) constructing Phase 1 of the Amman Ring Road (40.0 km), which would be divided into three sections; (b) developing access infrastructure and utility services for inland port facilities, relocating the Amman Customs Depot, and supporting the on-going program to restructure the trucking industry; and (c) providing technical support for urban and transport planning, traffic engineering, and project management.

2. The Project's estimated cost is US$161.0 million, and the Bank would finance around US$38.0 million.

Component A: Amman Ring Road, Phase I. - Component Al: Amman RinP Road, Phase 1, Section 1. This 18.5 km section, which will be financed by the Arab Fund for Economic and Social Development (AFESD), begins at the Desert Highway, at a point approximately seven km north of Queen Alia International Airport, and extends in a northeasterly direction to a point about one km south of the Madounah Road Inter~ection.'~It is open, flat terrain with few physical constraints along the first 14 km, and the design speed is 100 km per hour. Due to the hilly topography of the five remaining kilometers north of the Sahab-Muwaqqar Road, the design speed is lowered to 80 km per hour. On each side of ARR-1, bi-directional service roads will be implemented with design speeds of60 km per hour. This section will include two interchanges at the Desert Highway and at Sahab-Muwaqqar Road. Between these interchanges, four intermediate connections are planned, three of which will be implemented under the project. A fifth connection is planned north ofthe Sahab Interchange. - Component A2: Amman Ring Road, Phase 1, Section 2. Continuing from the end of Section 1 in a northerly direction, this 14.5 km section is a two-lane, dual carriageway connecting Section 1 and the Zarqa Highway. The terrain is hilly or mountainous, and the design speed is 80 km per hour. This section, which will be financed by the Bank, includes the Madounah Road Interchange and access to the site ofthe new Customs Depot and Inland Port facilities, and the Fork Interchange with the Zarqa Eastern Bypass. Some service and access roads will also be developed along this section. - Component A3 : Amman Ring Road, Phase 1. Section 3. This section, which will be financed by the European Investment Bank (EIB), consists of two key segments. The first, the Zarqa Eastern Bypass, is a 4.6 km section connecting the ARR-1 with the ZarqdSyrian Border Highway, where an interchange will be built. It has severely constrained topography and a design speed of 80 km per hour. The second segment, the Zarqa Through Link to the city of Zarqa, is the last 2.4 km of the ARR-1 and has a design speed of 80 km per hour, except in urban areas where it drops to 60 km per hour. It includes an interchange at the

17 The 40.0 km first phase ofthe Amman Ring Road will be a two-lane, dual carriageway, with the possibility of widening to three lanes, and design speeds of 100 km per hour for 15 km, 80 km/h for 24 km and 60 ludh for six km. The right of way will be 80 meters in order to accommodate service roads on either side of the main carriageway, and to prevent encroachment. 33 intersection with the ZarqdAmman Highway, and a viaduct ending at the Yajouz Road Intersection (Section 3 ofthe ARR-1).

P Component B: Inland Port and Trucking Industry - Component B1: Inland Port Infrastructure. The Project would support the development of an inland port at the Madounah Interchange by constructing access infrastructure, primarily roads and fencing, and by extending trunk and network infrastructure for utility services. The Inland Port consists of a Logistics Service Center (a customs-bonded area), which will include the new Customs Depot, and a Business Zone, to be built around the Logistics Service Center for transport and logistics-related activities. Investors would then be invited to develop the superstructure and equipment, and to manage and operate the facility and associated services. - Component B2: Relocation ofAmman Customs Depot. This component involves relocating the Amman Customs Depot from its present location at the junction of Yadoudah and Sabah Roads, which is undersized and inadequate to accommodate growing levels of freight traffic, to the Logistics Service Center within the Inland Port. - Component B3: Support for On-Going Reforms in the Trucking Industry and Implementing the Inland Port. This component will provide support to the Government’s on-going reform program to: (a) consolidate the industry by reducing the number of operators; (b) creating competition to improve efficiency and service quality; and (c) renewing the trucking fleet. Assistance will also be provided to select a private sector operator to develop and operate the Inland Port. These activities will include the preparation ofstudies to support the identification and development of an appropriate regulatory structure to govern activities at the Inland Port, tender and transaction documents, a basis for selecting a developer/operator, and an operating contract/agreement with specified standards of performance.

P Component C: Technical Support and Project Management - Component C 1: Promoting Development Within the ADC. This component will provide technical support for urban planning initiatives, including a master plan for the ADC. It will also support a Technical Unit that will be in charge of promoting and guiding development within the ADC. The main role for the Unit would be to ensure that development is undertaken in a unified and coordinated manner. Component C2: AMA Transport Planning and Traffic Engineering. Because the project will have an impact on the AMA and its various municipalities, transport planning and network management functions should be strengthened. Under the project, support would be provided to improve coordination and integration of transport, urban development and land use planning initiatives through: (i) calibrating and regularly updating the traffic model developed for the Greater Amman Municipality (GAM) and used to assess the economic viability of the Amman Ring Road; (ii)carrying out regular traffic counts to keep the traffic model up-to-date; and (iii)conducting traffic engineering surveys and other studies. Output would be used to plan for additional network capacity, and to manage and better distribute traffic flows within the AMA highway network.

34 - Component C3: Master Planning for Ring Road, Phases 2 and 3. Assistance would be provided to prepare for Phases 2 and 3 (the western and northern sections) of the Amman Ring Road (ARR). Alignment of the full Ring Road would be determined in close coordination with concerned municipalities and planning authorities in order to reserve needed rights-of-way. - Component C4: Proiect Management. Resources would be provided to hire specialized skills from a qualified outside project management firm to manage the project, including carrying out monitoring and evaluation activities, and ensuring effective implementation of the environmental management and resettlement action plans. The specialized skills would also include expertise in urban and transport planning, traffic engineering, and logistics services.

Risks Risk Mitigation Measures 1. Development of Competing M 1.1 Concerted and continual effort to assess the potential International Transport Routes impacts such changes would have on trade traffic. 1.2 Based on 1.1, design measures to strengthen Jordan’s comparative advantages in transport and logistics services.

2. Multiple Contractors for Road M 2.1 A qualified international construction management Construction firm monitors all construction activities.

3. Land Acquisition M 3.1 Develop comprehensive Resettlement Action Plan. 3.2 Inform all affected owners through notices published in the local press. 3.3 Expropriations completed by the end of2004.

4. Unauthorized Roadside M 4.1 Construct parallel service roads and locate Developments interchanges at strategic points. 4.2.Develop land use and urban planning studies to guide development along ARR- 1 4.3 Performance-based maintenance contracts to include responsibility for controlling access.

5. Safeguard Issues M 5.1 Complete Environmental Management Plan, Resettlement Action Plan, and Cultural Resources Mitigtion Plan. Associated costs included in cost of the Project.

Overall rating M

Ratings: H = High; M = Moderate; N = Negligible.

35 Annex 4A: Detailed Description of Road Component JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. The Amman Ring Road (ARR) is comprised of three phases. Under the proposed Amman Development Comdor Project, Phase 1 of the Amman Ring Road (ARR-1) would be constructed. This would include the southeastem section ofthe ARR located between the Desert Highway in the South (expressway to the South, to Aqaba and Saudi Arabia), and the Yajouz Road to the North and East ofAmman (road going to the North-West ofAmman). Phases 2 and 3 ofthe ARR, which will not be developed under the Project, will join the Desert Highway in the South with the Jerash Highway to the northwest of Amman, and link the Jerash Highway with the Yajouz Road. Collectively, the ARR’s three phases would constitute a comprehensive ring road system around Amman.

2. Service roads would also be developed under the first phase of the ARR, and would run from the Desert Highway to the Madounah Road. The purpose of these service roads is to connect the distributor grid roads of the new city planned along this section (Amman Development Corridor) with the main highways.

PHASE 1 OF THE AMMAN RING ROAD (ARR-1)

3. Between the Desert Highway and the Yajouz Road, the length ofthe ARR’s first phase is about 40.0 km. Overall, the ARR will be a dual two-lane carriageway built to expressway standards, whereby access is controlled and only possible at the interchanges, and all crossings are at different levels. The rights-of-way along ARR-1’s entire length will have a minimum width of 80 meters in order to build ARR-1 its and associated service roads.

4. Six main interchanges are planned along ARR-1, including, one at each extremity and four others linking: (i)the Sahab-Mawuqqar Road; (ii)the Madounah Road; (iii)the Zarqa Eastem Bypass; and (iv) the Zarqa Highway. There will also be additional interchanges or connections between ARR-1 and the service roads.

5. A typical cross section ofARR-1 can be characterized in the following manner: - Left camageway (0.5 meters ofverge + 3 meters ofshoulder + two lanes, 3.65 meters wide) + 4.5 meters ofmedian (including a New Jersey barrier) + right carriageway (symmetric ofthe left carriageway); - In cross section with climbing lane, the 3 meters shoulder + 0.5 meters verge is replaced by 3.65 meters ofclimbing lane + 1.2 meters shoulder + 0.5 meters verge. Section 1: Desert Highway to the Madounah Road Intersection

6. This section is about 18.5 km long. It starts with the Desert Highway Interchange and ends at a point two km south ofthe Sahab-Muwaqqar Interchange. This section consists ofthe: (i)Desert Highway Interchange; (ii)ARR-1 between the Desert Highway Interchange and the Sahab-Muwaqqar Interchange; (iii)Sahab-Muwaqqar Interchange; (iv) ARR- 1 between the Sahab-Muwaqqar Interchange and two km south of the Madounah Road Interchange; and (v) service roads. This section has been designed to the draft final design stage.

Desert Highway Interchange 7. The Desert Highway interchange will be a node between two expressways - ARR-1 and the Desert Highway to Aqaba - and it will not be possible to exit or enter the expressway

36 network at this interchange. Exits and entrances will be possible through the other interchanges along the Desert Highway, and two are rather close to this node: (i)the Madaba Interchange, two kilometers to the north; and (ii)the AI Isra University Interchange, two kilometers in the south.

8. The Desert Highway Interchange includes four directional ramps, all of which are two- lane ramps. The four ramps have a design speed of 80 km/h, and will be lighted, as is the existing Desert Highway. The ramps are reduced to one-lane near their entrance to an expressway. The cross section of each ramp include: 0.5 meters of verge + 1.2 meters of left shoulder + two lanes, 3.65 meters wide + 2.5 meters shoulder + 0.5 meters verge.

9. Ramp characteristics are the following: - Ramp A from ARR-1 to Amman is 1.629 km long. - Ramp B from Amman to ARR-1 is 1.423 km long. Ramp B includes a viaduct (called OP1 for overpass number 1) over the Desert Highway. The viaduct is curved, 13 meters wide, and is 180.5 meters long with five spans. The longest central span is 48.5 meters, and a pier of this viaduct is located in the median ofthe Desert Highway. This viaduct is a complex box girder viaduct. - Ramp C from ARR-1 to Aqaba is 1.433 km long. Ramp C includes two viaducts, the first (called OP2) passes over Ramp B, is curved, 13 meters wide, and 90 meters long with three spans. The longest span is 36 meters. The second viaduct (called OP3) passes over the Desert Highway, is curved, 13 meters wide, and 2 16 meters long with six spans. The longest span is 52 meters, and a pier of this viaduct is located in the median ofthe Desert Highway. The two viaducts are complex box girder viaducts. - Ramp D from Aqaba to ARR-1 is 1.430 km long and includes an underpass (called UPl), which crosses an access to the Desert Highway. The underpass is 16.19 meters long and ten meters wide.

10. The interchange includes mostly embankments, the highest one being 12.5 meters high and located on Ramp C. All the ramps cross an important wadi (river generally dry) and a large culvert is needed (8 meters x 3 meters). Landscaping ofthe areas between the ramps is planned.

11. Ramps A and B may interfere with the existing Madaba Interchange, as well as with existing accesses on the Desert Highway. Ramps C and D interfere with the existing access to the A1 Isra University, and may interfere with the existing Qastel Interchange. This is being analyzed in order to reach real expressway standards for the Desert Highway.

Section Between the Desert Highway Interchange and the Sahab-Muwaqqar Road 12. This section starts at the beginning of Ramps A and C of Desert Highway Interchange and ends at the crossing of the Sahab-Muwaqqar Road. It is 13.25 km long and has a design speed of 100 km/h. The majority of the section is located on embankments and there are some rare cuts. The highest embankment is 10.5 meters and the deepest cut five meters.

13. The topography of this section is flat with an altitude between 755 meters at the lowest point of its alignment, and 795 meters at the highest. The flat topography is suitable for future urbanization of the area, so this section of ARR-1 will also serve as the backbone of the new planned city, although ARR-1 will fully keep expressway standards in this section. Presently, agricultural activities prevail, but some locations are already being prepared for urbanization. These preparations include implementation of plots and access roads, although very few are located within 100 meters ofthis section’s alignment.

37 14. The following main events are noticed along this section:

- Kilometric Point (KP)'* 1.677. A road is restored with an overpass (OP6), which is 10 meters wide and 76 meters long. The bridge has three spans, with the central one 38 meters in length. The connection with the service roads will be achieved through roundabouts. - KP 4.339. A single track rail line, not electrified, but with a second track planned in the future, is restored with an underpass (UP2), which is 12.85 meters wide and 34.15 meters long. - KP 6.3. A road is restored with an overpass (OP7), which is 10.0 meters wide and 81.2 meters long. The bridge has three spans, with the central one 41.2 meters in length. A diamond interchange connects this road with the ARR-1, and connections with service roads will be achieved through roundabouts. - KP 9.277. A road is restored with an underpass (UP3), which is 10.8 meters wide and 35.76 meters long. A diamond interchange connects this road with the ARR-1, and connections with service roads will be achieved through roundabouts. - KP 13.25. The Sahab-Muwaqqar Road is restored under ARR-1. The bridge, designed as an overpass (OP4) above the Sahab-Muwaqqar Road, includes two spans of 32.0 meters and 34.0 meters in length, respectively. The overpass has piers in the median ofthe Sahab-Muwaqqar Road, and its width is two meters by 16.65 meters.

15. Conduits for future lighting and emergency telephones are to be implemented during the construction stage.

Sahab-Muwaqqar Interchange 16. The Sahab-Muwaqqar Road, which is a dual two-lane carriageway between Yadoudah Road and ARR-1, is not access controlled and has many accesses and crossroads. It has significant traffic volumes and traverses some urban areas between the Yadoudah Road and ARR-1.

17. The Sahab-Muwaqqar Interchange will allow vehicular traffic to enter or exit the expressway network. The interchange is designed with a cloverleaf shape, but without collecting lanes. As a result, rather short weaving distances, 150 meters long, are designed on ARR-1, as well as along the Sahab-Muwaqqar Road. The cloverleaf interchange includes eight ramps, all of which are one-lane ramps. There are four direct ramps, each with a length of between 800 meters and 1,000 meters and design speeds of60 km/h. Four loops are also involved, each with a length of about 360 meters, radii of 60 meters, and design speeds of 40 km/h. The cross section of each ramp includes: 0.5 meters ofverge + 1.2 meters of left shoulder + one lane, five meters wide + 2.5 meters shoulder + 0.5 meters verge.

18. The interchange is mostly located on embankments, the highest being 9.4 meters (Loop 3), and will be lighted at the first stage, although the Sahab-Muwaqqar Road is not.

Sahab-Muwaqqar Road to Madounah Road Section 19. This section is 5.25 km long. It starts with the Sahab-Muwaqqar Road (KP 13.25) and ends at KP18.50, that is, two km south of the Madounah Road, which is located at KP 20.54. It

The kilometric point zero is taken as the kilometric point zero for the whole ofARR-1. This point is located about 500 meters northeast ofthe Desert Highway. 38 has a design speed of 80 km/h. Connections between ARR-1 and the service roads are being designed.

20. This section of ARR-1 initially climbs fiom an altitude of 795 meters at Sahab- Muwaqqar Road to 895 meters in less than three kilometers with gradients reaching 5.2 percent. Along a one-kilometer section, the road stays at about this altitude before dipping to 835 meters, loosing 60 meters ofaltitude in two kilometers. The gradients reach 7.03 percent, and climbing lanes have been designed in the steep gradients.

21. In certain places, this topography is suitable for fhture urbanization, so this section of ARR-1 will also serve these developments. Presently, the area is dominated by agricultural activities. The highest embankment is 9.4 meters and the deepest cut is 16.8 meters.

22. Various existing roads are cut and not restored directly. Conduits for fhture lighting and emergency telephones will be implemented at the construction stage.

Service Roads

23. The service roads planned between the Desert Highway and Madounah Road, a distance of about 21 km, will allow the ADC to be served. Service roads are two-lane common roads with accesses and crossroads at grade. They will allow a link between the main highways, existing or planned, 'with the new development areas of the Amman Development Corridor. According to estimates, about 500,000 new inhabitants are expected to settle in this area, making it a satellite city ofthe AMA.

24. Service roads along Section1 total about 40 km. These service roads will be implemented in the ARR-1's right ofway, which is fixed at a minimum of 80 meters. One two- lane service road will be implemented on each side ofARR-1. They will provide links with the distributor grid roads of the area, as well as with the main highways (ARR-1, Desert Highway, Sahab-Muwaqqar and Madounah Roads).

25. Between the Desert Highway and the Sahab-Muwaqqar Road, the service roads will have design speeds of60 km/h. They will link with all roads they cross via properly designed at grade crossroads. The crossing for the railway will be at grade, and there will be three connections with ARR-1 at KP 1.7,6.3 and 9.3. The service roads will also connect with service roads ofthe Desert and Sahab-Muwaqqar Highways.

26. Between the Sahab-Muwaqqar Road and the Madounah Road, the service roads will have a design speed of40 km/h. They will link with all the roads they cross via properly designed at grade crossroads. One connection with ARR-1 will be designed. The service roads will also connect with the Sahab-Muwaqqar Highway and with the Madounah Road (under Section 2 for the latter).

Section 2: Madounah Road Interchange to South of Zarqa Eastern Bypass Interchange

27. This section is 14.5 km long. It starts at the end of Section 1, at KP18.5, about two km south ofthe Madounah Road. It ends at KP33.1, south of the interchange with the Zarqa Eastern Bypass. It consist ofthe: (i)ARR-1 between the end of Section 1 and Madounah Road and its related service roads; (ii)Madounah Interchange; and (iii)ARR-1 between the Madounah Road and the KP33.1, south of the Zarqa Eastern Bypass Interchange. This section has only been designed to the preliminary engineering design stage.

39 Segment From the End of Section I to the Madounah Road and Related Service Roads 28. This two km section is almost flat and suitable for future urbanization. It starts at KP18.50 (the northernmost part of section 1) and ends at the crossing with the Madounah Road (KP 20.54). It is located at the bottom ofhilly sections, so the design speed is 80 km/h.

29. The following events are noticed:

- At IW 19.61 a road is restored with an underpass; and

- At KP 20.54, the Madounah Road is restored under ARR-1, and the bridge is designed as an overpass (OP8) above the Madounah Road.

30. Service roads from Section 1 extend up to the Madounah Road. Therefore, about four km of such service roads are designed in this section, and connect the Madounah Road with roundabouts.

Madounah Interchange 3 1. The Madounah Interchange will allow vehicular traffic to enter and exit the expressway network. The Madounah Road, although a dual two-lane carriageway, is not access controlled. Its design and implementation are very poor, and only has a design speed of not more than 40 km/h. It lacks marking, signaling, and safety equipment. The Madounah Road does not cross any urban areas and present traffic volumes are very low.

32. The Madounah interchange was recently added, so its design is on-going. Near the interchange, the topography is suitable for future urbanization. Presently, the area is dominated by agricultural activities. The future Customs Depot and inland logistics port will be located to the north and east of the Madounah Interchange, which are also components of the Amman Development Corridor Project.

Section Between Madounah Road and KP 33.1

33. This section, which starts with the Madounah Interchange (KP 20.54) and ends south of the Zarqa Eastem Bypass Interchange (KP 33.1), is 12.69 km long. The topography is mountainous, and there are very few roads and inhabitants. It has a design speed of80 km/h.

34. The first four kilometers cross flat or hilly areas, and the altitude of the highway is 805 meters at its lowest point and 835 meters at its highest. Then the alignment presents a long and steep downhill gradient over four kilometers in which the it losses 125 meters of altitude. Gradients reach seven percent. Along its remaining length, the project also looses altitude, but at a much more progressive pace. The difficult topography does not allow any noticeable development in the vicinity of ARR-1 along this section. The highest embankment is 12.9 meters and the deepest cut 26.5 meters. Climbing lanes are designed in the steep gradients.

35. The following main events are noticed along this section: - At KP 22.15, there is an animal crossing through a small underpass.

- At KP 22.87, a road is restored through an underpass (UP5). - At KP 28.97, there is an animal crossing through a small underpass. - At KP 30.22, there is an animal crossing through a small underpass.

40 - At KP 3 1.92, a road is restored through an overpass (OP9), which has only one span, islO.0 meters wide and 36.3 meters long. 36. Conduits for future lighting and emergency telephones will be implemented at the construction stage.

Section 3: South of the Zarqa Eastern Bypass Interchange to the Yajouz Road, Including the Zarqa Eastern Bypass

37. This section presents two segments. The first is ARR-1 from the end of Section 2 (KP 33.1) up to the Yajouz Road (KP 35.5). The second segment is the Zarqa Eastern Bypass, which has a length of about 4.6 km. Both have been designed to expressway standards and their draft final designs are available.

ARR-1 Between KP 33.1 to the Yajouz Road

38. This section is 2.4 km long, and has a slight descent into a hilly area until just south of the Zarqa highway at KP 33.1. This section has a design speed of 80 km/h. It then passes through an urban area until its end. Its design speed through this stretch is reduced to 60 km/h. In this urban area, the alignment is mostly located on embankments, the highest ofwhich is 8.5 meters. The deepest cut is 3.8 meters. There is a clover leaf interchange with the Zarqa Highway at KP 34.3, and an at grade junction with traffic lights at the connection with the Yajouz Road.

39. The following main events are noticed along this section:

- At KP 34.34, ARR-1 crosses the Zarqa Highway, which is a busy thoroughfare that passes through Zarqa and connects with east Amman. ARR-1 crosses the Zarqa Highway with an overpass (OP5) that has two spans, each 35.5 meters long and 17.05 meters wide. - At KP 34.80, a Zarqa city street is restored through an overpass (OPll). The bridge, which is straight then curved, is ten meters wide and comprises three spans, the longest one being 35.5 meters. - At KP 35.00, ARR-1 crosses a valley through a viaduct, with a street restored under the viaduct (VD2). This viaduct is 308 meters long, has a width that varies from 25.1 meters to 80 meters, and has nine spans, the longest of which is 50 meters. The viaduct is made from precast beams ofvarious lengths. - At KP 35.50, ARR-1 connects with the Yajouz Road.

40. The Zarqa Highway Interchange will allow vehicular traffic to enter or exit the expressway network. The Zarqa Highway, although a dual two-lane carriageway, is not access controlled. It crosses the urban area of Zarqa, and carries a high volume of traffic. The interchange has a cloverleaf shape without collecting ramps. The typical cross-section of all ramps will be the same as that adopted for the ramps ofthe Sahab-Muwaqqar Interchange.

41. Two ramps with traffic lights and two lanes each connect ARR-1 with the Yajouz Road. Yajouz Road is a two-lane street with rather high traffic volumes, and a gradient of6.1 percent at the location ofthe connection.

42. There is just one kilometer between the Zarqa Highway and Yajouz Road. The Zarqa Highway leads to east Amman and Amman’s downtown area, while the Yajouz Road leads to 41 north Amman and west Amman. As such, both the Zarqa Highway and the Yajouz Road interchanges appear to be complementary. This section will have lighting at the first stage.

Zarqa Eastern Bypass 43. The Zarqa Eastern Bypass (ZEB), which constitutes a part of ARR-1, Section 3, would provide an alternate route for traffic to bypass the urban area ofZarqa, and a direct link between the northern terminus of ARR-1 and the existing expressway to Syria and Iraq (Highway 15). Without this section, through traffic would have to use ARR-1 until the Zarqa Highway Interchange, and then pass through the Zarqa Highway crossing an urban area, which is congested and would not be direct. The ZEB would permit through traffic to completely bypass the densely populated area of Zarqa, and appears to be fully justified and complementary to ARR-1.

44. The ZEB, which is located in a mountainous area, is about six kilometers long. It is a dual two-lane carriageway built to expressway standards. The typical cross-section is the same as that adopted for ARR-1 - that is, with a design speed of80 km/h.

45. ZEB starts with the Zarqa Eastern Bypass Interchange, which is an expressway node between ARR-1 and the Zarqa Eastern Bypass connecting ARR-1 at KP 3 1. It ends with another expressway node between the ZEB and Expressway 15 to Syria.

46. Both of these expressway nodes are directional interchanges, which only include the ramps needed for through traffic, meaning traffic flows between ARR-1 in the south and Expressway 15 to Syria in the north. Each interchange has two ramps with two lanes and design speeds of 80 kmih. Their typical cross-section is the same as that adopted for the ramps of the Desert Highway Interchange. Both interchanges will be lighted.

47. This section connects with ARR-1 at the altitude of 655 meters and climbs for a little more than one kilometer until reaching an altitude of 709 meters, before descending to an altitude of 618 meters over a two kilometer stretch. Gradients reach 6.5 percent, and there are little variations ofaltitude along the remaining 2.5 kilometers.

Zarqa Eastern Bypass Interchange 48. Ramp A (from ARR-1 to ZEB) ofthis interchange is 1.01 km long. The existing road is restored under Ramp A through an underpass (UP6) that is 10 meters wide and 20.43 meters long.

49. Ramp B (from ZEB to ARR-1) is 1.258 km long. It crosses both ARR-1 and an existing road through a viaduct (VDl), which is 301 meters long and 13 meters wide. The first part of the viaduct, built with precast beams, includes five spans of 34 meters and 4 by 35 meters in length. The second part is a box girder bridge with three spans, the central one above ARR-1 being the longest at 57 meters. The highest embankment is 8.6 meters, and the deepest cut is 14.0 meters.

Main Line 50. The main line of ZEB is 4.6 km long and only has one bridge restoring a road at KP 3.388. The bridge is an overpass (OP10) that is 10 meters wide and 71.5 meters long, and has three spans, the central one being the longest at 35.5 meters. The maximum gradient is 6.5 percent, and climbing lanes have been added in the steep gradients. The highest embankment is

42 18.2 meters, and the deepest cut 23.2 meters. Conduits for future lighting and emergency telephones will be implemented during construction.

Zarqa Interchange 51. Ramp A, from ZEB to Expressway 15, is 1.269 km long. Ramp Byfrom Expressway 15 to ZEB, is 1.52 km long, and Expressway 15 passes under ARR-1. The bridge is a skewed and curved underpass (UP7) that is 13 meters wide and 192.8 meters long. This long underpass will have the appearance of a tunnel, and lighting will be permanent.

43 Annex 4B: Description of Inland Port Component JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. A key objective of the proposed Project is to reinforce Amman’s role as a regional trading hub by developing an integrated logistics and transport platform that would effectively reduce transport costs and the time needed to clear goods through customs. In support of this goal, it is the Government’s intention to develop an inland port at the Madounah Interchange, and to relocate the existing Amman Customs Depot from its current site to the inland port. The facility, or “Inland Port,” will offer comprehensive, consolidated and efficient logistics and transport services, and will both serve the Greater Amman Area and cater to regional transit traffic. A critical factor for success is the presence of the Customs Depot at the Inland Port, which would result in more efficient clearing procedures, contribute to lower transport costs, and encourage trade.

2. The Project would support the development of an inland port at the Madounah Interchange by constructing access infrastructure, primarily roads and fencing, and by extending trunk and network infrastructure for utility services. The Inland Port consists of a Logistics Service Center (a customs-bonded area), which will include the new Customs Depot, and a Business Zone, to be built around the Logistics Service Center for transport and logistics-related activities.

3. The Customs Depot and inland port facilities would be integral partners and serve as the backbone for the logistics and transport platform. Together, they would act as a seamless facility with each performing their respective trade-related functions and activities in an integrated and complementary manner. Customs, which would continue to clear goods, ensure the safety of cargo, and collect revenues for the state, would benefit from a single point ofentry with state-of- the-art facilities and equipment. It would also provide a unique opportunity to be in early compliance with the International Standards for Port Security Code (ISPS), which is an internationally recognized system for certifying security of port operations worldwide. The inland port facilities, which would be operated by a qualified private management firm, would serve to bring together importers and exporters, and leverage the synergies ofcompanies offering services in the logistics-transport chain.

4. The overall Inland Port platform would be developed on 500 hectares of land located immediately to the north and east ofthe Madounah Interchange. The preferred approach would be to develop the site in a phased manner to avoid overbuilding and adversely affecting financial viability. The first phase, covering 120 hectares, would involve developing the site’s backbone, or “Logistics Service Center” (LSC) on 40 hectares. This will consist of the new Customs facility, which will have twice the capacity of its existing location, and a bonded area for warehousing goods, stacking containers, storing refrigerated commodities, and providing inspection facilities for customers. The remaining 80 hectares would be devoted to an “Inland Port Business Zone,” which would be developed for related services, such as cleaning and repairing containers, maintaining and repairing trucks, and housing and feeding drivers, or for light industrial services involving re-export or value added activities. However, these activities would be developed by private investors and according to market demand.

5. The Government will acquire the land, while the Project will finance the costs of: (a) relocating the Amman Customs Depot from its present location at the junction of Yadoudah and Sabah Roads in Amman; (b) providing access infrastructure, primarily roads, to the gate of the new inland port; (c) extending trunk and network infrastructure for utility services to the site; (iv)

44 fencing ofthe 500 hectare perimeter; and (d) minimal infrastructure, such as paving, to serve as a catalyst for future development.

6. The private sector, in partnership with the Government, would play an important role in developing the facilities. Depending on the strategy devised and investment model chosen, investors with proven experience and qualifications in managing, storing and processing containerized and general cargo would be invited to develop and operate the Inland Port. They would finance the superstructure, buildings and other needed facilities, equipment, and information technology systems under specified standards and conditions set by the Government.

45 Annex 4C: Restructuring of Trucking Industry

JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. The Government has developed a program for rationalizing the trucking industry. The program, which is currently being implemented, is based on: (a) consolidating the number of operators; (b) creating competition to improve efficiency and quality of services; and (c) renewing the trucking fleet.

Sector Consolidation. 2. With an oversupply of trucks in the sector (about 2.5 times the number needed), and a large number of individual operators, consolidation in the industry by reducing the number of operators is desirable. The oversupply contributes to running ofempty loads and long idle times. As a result, profits are low, which prevents operators from renewing their vehicles and contributes to high operating costs. Much of the fleet is old and unreliable, and the quality of service is poor with frequent breakdowns and occasional damage to goods.

3. At the heart of the consolidation effort is the new Road Freight Transport Law, which was passed in May 2002 as temporary legislation. It empowers the Ministry ofTransport (MOT) to organize the sector and to license operators. As a result, new regulations have been developed for the transport of various types of freight, including refrigerated goods, general cargo, containers, vegetable oils, crude oil and derivatives, vehicles, heavy loads, and livestock. The new regulations define requirements for companies to transport goods, including: (i)minimum numbers of trucks and staff; (ii)minimum values of capital assets; (iii)minimum numbers of square meters ofoffice space and parking for trucks; (iv) registration with the Ministry ofTrade and Industry; and (v) Bank Guarantees. The two large freight transport parastatals (Iraqi- Jordanian and Syrian-Jordanian Land Transport Companies), as well as freight forwarders, are also subject to the new regulations.

4. To date, the regulations have been implemented for the transport of vegetable oil, vehicles and heavy loads, and only companies registered with the MOT are permitted to transport these goods. Due to political sensitivities, the regulations have yet to be enforced for the transport of general cargo and containers, which represent the bulk of goods transported in the Kingdom. It is expected that the new regulations will apply to these key areas by mid-2004 and end-2004 respectively.

5. To lessen the impact, and as a first step, the new regulations permit individual truckers to operate under the umbrella of registered companies that have met the minimum requirements. Of those companies that have registered, an average of 38 percent of their overall fleets are comprised ofindividual operators (1 20 individual operatord320 total trucks).

6. It is expected that the temporary law will be enacted as permanent legislation by the end of2004.

Competition. 7. To promote competition, official tariffs for the transport ofgoods were eliminated in May 2003, and market rates now apply for all goods, including those in transit and those destined for locations within Jordan. This has already resulted in an estimated 20 percent reduction in these transport costs. The only exception is for imports entering the Port of Aqaba. MOTlaunched a process to eliminate these tariffs in December 2003, but it was stopped due to the potential negative impact on operators, and resistance from incumbent operators (UCOLT). 46 8. In an effort to encourage market forces, the requirement that trucks and trailers had to have identical license plates was removed in June 2003. This effectively permits trucks to haul different types of goods. In addition, the Government, which is a member ofthe Transport and Intemational Roads Convention (TIR), has signed bilateral transport agreements with all neighboring countries, as well as with Europe and the United States.

Fleet Renewal. 9. To encourage fleet renewal, tax incentives have been incorporated into law. These include the elimination of customs duties for the importation ofnew trucks, and reduced sales tax on imported trucks. In addition, it is against the law to import trucks that are more than ten years old. Since these incentives took affect in 2000, about five percent ofthe fleet has been renewed (excluding heavy vehicles). The percentage of the trucking fleet that is at least 1995 or newer now stands at 7.2 percent. While these incentives expired at the end of2003, they are expected to be renewed shortly.

10. The sale of Jordanian trucks to Iraqi operators is also having an impact on the fleet. This development serves to reinforce the Government’s objective of fleet renewal and builds on existing tax incentives.

11. With the signing of a management contract to operate the container terminal at the Port of Aqaba, it is expected that trade traffic will expand and trucks clearing customs will increase from around 500 per day to some 800 per day. The need to resolve the UCOLT queuing system and to free prices for imports entering Aqaba Port is building.

47 0 0 0 8 8 8 Annex 5A: Financial Summary JORDAN - AMMAN' DEVELOPMENT CORRIDOR

(in US$ millions)

49 Annex 6: Implementation Arrangements JORDAN - AMMAN DEVELOPMENT CORRIDOR

Implementation Period

1. The Project would be implemented between July 2004 and June 2009, and December 3 1, 2009 would be the scheduled Loan closing date.

Executing Agency

2. The Ministry of Public Works and Housing (MoPWH) is the sole implementing agency and would be responsible for overall implementation of the project. For non-road related activities, MoPWH will involve: (a) the Director General of Customs ofthe Ministry ofFinance (MoF) for the new Customs Depot and the Logistics Service Center at the Inland Port; (b) the Ministry of Transport (MOT) for the Inland Port Business Zone, and technical support for on going reforms in the trucking industry; and (c) the Ministry of Municipal Affairs, the Greater Amman Municipality (GAM) and other concemed municipalities for the Project’s urban development planning activities. The MoPWH would also be responsible for implementing environmental, resettlement and cultural resources mitigation measures adopted for the Project.

Urban Development in the ADC

3. Given the importance ofthe ADC and the need to ensure its development is both planned and organized, inter-ministerial Steering and Executive Committees will be established. The Committees will consist of the Secretaries General from the Ministry of Planning and International Cooperation, MoPWH, MOT, the Ministry of Municipal Affairs, and the Undersecretary of the Greater Amman Municipality. The Directors General of the Ministry of the Jordan Investment Board, the Customs Department, and the Land and Survey Department, and the Investment Promotion Corporation will also be included, as will representatives from other ADC municipalities, and the Office ofthe Prime Minister. The Committees’ chief function is to ensure that development within the ADC is planned and undertaken in a comprehensive, unified and coordinated manner.

4. A Technical Unit supported by the Project will be established under the Steering Committee to work with all concemed municipalities. The Unit will: (a) carry out urban planning studies for development within the ADC’s zone of influence; (b) promote and guide development within and along the ADC; (c) assist industrial and real estate developers to locate and prepare their projects; and (d) assess and monitor transport and land use impacts ofplanned developments. It will ensure that development of the ADC is undertaken in a unified and coordinated manner, and serve as a clearinghouse ofplans for development within the ADC. All decisions affecting land use and development will remain with concemed municipalities. The Unit will be staffed by qualified consultants (Urban Planners and Urban Economists), and will include staff from the planning departments ofthe Ministry ofMunicipal Affairs, as well as other concemed municipalities. The Technical Unit would most likely be situated in the premises of the GAM, in order to facilitate interaction with its urban planning units. Annex 6A is the draft decision establishing the ADC Steering and Executive Committees, and the ADC Technical Unit.

50 Project Management Team (PMT)

5. The MoPWH will designate a Project Management Team (PMT) to implement the Project within budget, on schedule, and according to technical specifications. The PMT will be responsible for all project components, including carrying out monitoring and evaluation activities, and ensuring effective implementation of the environmental management and resettlement action plans. The PMT will be led by a Project Manager (the Director ofHighway Studies at MoPWH), staffed with engineers from the MoPWH, and supported by a core team of experts in project management (including procurement and financial management) hired through an international construction management firm. In addition to the core team, a pool of specialized expertise would be available on which to draw skills on an “as needed” basis. These skills would include capacity in urban and transport planning, traffic engineering, and transport and logistics services. Terms of reference for the international construction management firm have been completed and agreed.

6. Based on the Project’s financing plan, there will be three separate construction packages, which will be supervised by three separate consultants. The PMT will be responsible for all of these construction and supervision activities.

7. The PMT will also be responsible for reporting on implementation progress, monitoring and evaluation activities, the procurement process, financial management and audit requirements.

8. The GCD and MOTappointed task teams that have been entrusted with contributing to the implementation of their respective components, and will work in close coordination with the PMT. The PMT will support the work ofthe ADC Urban Development Technical Unit.

9. The table on the following page provides an Organizational Chart depicting the implementation arrangements described above.

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b Annex 6A: Decision Establishing the ADC Steering and Executive Committees, and the ADC Urban Development Technical Unit JORDAN - AMMAN DEVELOPMENT CORRIDOR

With reference to the Prime Minister’s letter No. 6/6/2/7773, dated June 5, 2003, regarding the formation of a committee to be directed jointly by H.E. the Minister of Public Works and Housing and H.E. the Minister of Transport for the purpose of studying alternatives for entrusting an entity or suitable party with responsibility for organizing the use of lands surrounding the Amman Development Corridor (ADC) and determining the most suitable location for the proposed Logistics Inland Port and New Customs Depot, as based on the study that will be presented by Dar Al-Handasah Consultants, a meeting was held on January 1, 2004 at the Ministry of Public Works and Housing. The purpose of the meeting was to discuss the proposed entity that will be responsible for directing and encouraging the investment and enhancement ofthe development process within the specified development area located between the existing Hizam Road and two km east ofthe ADC. Authority for organizing land use within this area is vested in the Greater Amman Municipality (GAM), and a number of municipalities that are accountable to the Ministry ofMunicipal and Rural Affairs. Infrastructure services will remain vested in pertinent statutory undertakers and utility owners.

In subsequent meetings of the Council of Ministers on March 23, 2004 and April 21, 2004, the Council agreed to the following:

1. To consider as one development area the lands that fall between the existing Hizam Ring Road up to a distance oftwo km east ofthe ADC.

2. Forming a High Steering Committee, to be chaired by H.E. the Deputy Prime Minister, Minister ofIndustry and Trade, and including the following members:

= H.E. the Minister ofPlanning and Intemational Cooperation; = H.E. the Minister ofFinance; = H.E. the Minister ofEnvironment, Minister of Tourism and Antiquities/Environment; = H.E. the Minister ofPublic Works and Housing, Minister ofTransport ; = H.E. the Minister ofMunicipal Affairs; and

T. H.E. the Mayor ofGreater Amman.

The committee will steer matters related to, and falling within, the jurisdiction ofthe development area ofthe ADC.

3. Forming an Executive Committee consisting ofthe Secretary Generals ofMinistries concerned with the development ofthe ADC area, as well as the Municipality of Greater Amman. The purpose ofthe Committee will be to follow-up tasks related to administering and planning ofland use within the above mentioned development area. Membership will include:

= H.E. Secretary General ofMinistry ofMunicipal Affairs; = H.E. Secretary General ofMinistry ofPublic Works and Housing; = H.E. Secretary General ofMinistry ofPlanning and Intemational Cooperation; =, H.E. Secretary General ofMinistry ofTransport; 53 =, H.E. Director General ofMinistry ofthe Jordan Investment Board; = H.E. Director General ofthe Customs Department;

a H.E. Undersecretary ofMunicipality ofGreater Amman; H.E. Director General ofLands & Survey Department;

a H.E. The Secretary General ofthe Ministry ofEnvironment; and = H.E. Mr. Mohammad Al-Rawashdeh / Economic Adviser to H.E. the Prime Minister.

4. Through the introduction of a special Technical Unit, to be established within the Municipality of Greater Amman (MOGA), the MOGA and other concemed municipalities will be able to follow-up planning issues within the boundaries of the ADC development area. The Technical Unit, which will have a full-time manager with experience in land use planning, and be staffed with members from MOGA and the Ministry of Municipal and Rural Affairs, will be supported by a number of specialized experts and economists with practical experience in urban planning. The services ofthese specialized experts ill be remunerated from the project budget.

Establishment ofthe aforesaid Technical Unit will not alter the responsibilities ofthe concemed municipalities through the local Planning Councils and the Higher Planning Council, or the planning responsibilities ofMOGA.

The Technical Unit will be responsible for the following:

Issues related to the development area ofthe ADC; 0 Marketing and promoting urban development and investment within the ADC development area; 0 Facilitating investors’ access to serviced land for investment and development purposes, and obtaining technical permits and other requirements to enable investment within the ADC area; and. Supporting the goal of developing the ADC as a single unified area with common goals and objectives.

In addition to the above, a detailed methodology and work program for the said Technical Unit will be prepared.

5. Preparation of a master plan for developing the area would be prepared in coordination with the Ministry of Planning and International Cooperation by a specialized consultant in accordance with terms of reference approved by all planning parties, including the Ministry ofMunicipal and Rural Affairs and MOGA. The MOGA, in its capacity ofthe Employer, will follow-up the said consultant work, and the master plan will be approved by the committees referred to in “2” and “3” above, and endorsed by the honorable Council ofMinisters.

Under the supervision of the committee formed under item “3” of H.E. the Prime Minister’s letter No. 6/6/2/9776 dated 28/03/2004, the MOGA Technical Unit will be responsible for the in-situ follow-up ofthe master plan.

54 Annex 7: Financial Management and Disbursement Arrangements JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. The MoPWH, with support from the Project Management Team (PMT), will be responsible for managing project funds and all related financial transactions. MoPWH follows government principles and procedures defined by the legal framework and operational decrees applicable to the public sector in Jordan. The most recent Country Financial Accountability Assessment rated financial risk as moderate.

2. The MoPWH will be responsible for project funds, while the PMT will be responsible for the overall supervision of the activities including project planning, budgeting, invoice clearing, consolidating project information and reporting on these activities, including the generation of Financial Monitoring Reports (the FMRs) and other project monitoring reports to be used for project management and decision making. However, the PMT selection process should ensure that the entity recruited will have adequate resources and systems to administer the financial management aspects of the Project including a full time financial officer and an accounting software configured to the project reporting requirements. MoPWH financial management arrangements, control environment and flow of funds procedures have been assessed based on the Bank’s new FMR (Financial Monitoring Reports) Guidelines, to determine whether the financial management arrangements for the project are acceptable and can be relied upon. A detailed financial management questionnaire is included in the project files. The conclusion of the financial management assessment is summarized in the following table.

Comments 1. Implementing The MoPWH supported by the MoPIC has already implemented other Entity with Bank-fmanced projects. The PMT selection will eliminate the limitations limitations identified. 2. FundsFlow Satisfactory The part of the project funded by the loan will be financed through two sources, IBRD and the Borrower through MOPIC budget, therefore the flow offunds will be simple and straightforward. 3. Ministry Satisfactory Disbursement arranEements will be handled by staff familiar with the Staffing Bank disbursement guidelines while the project -reports will be generated by the PMT. 4. Accounting Satisfactory The Procedures in place are based on the laws applicable to the HKOJ Policies and with public sector. However an internal annex to MoPWH financial procedures Procedures limitations would be needed to introduce the relation with the PMT and defme the flow ofproject documents and funds. 5. Internal NIA Internal verification of payments is performed by the MOF auditor to Audit insure that funds have been allocated in the ministry budget and all invoices are in order. 6. Extemal NIA MoPWH, as per applicable laws, is not required to audit its records and Audit accounts by external independent auditors however these records are audited by the court of accounts. The project will be audited by external auditors acceptable to the Bank. 7. Reporting Unsatisfactory MoPWH manual accounting system is not capable of generating quarterly and project reports. To contain this risk The PMT will be responsible for the Monitoring generation of the project reports and financial statements including the FMRs (according to agreed-upon formats). 8. Information Unsatisfactory MoPWH applies a manual accounting system to follow on the accounts Systems and records of the projects implemented by the ministry. To contain this risk The selection process of the PMT should ensure that the fm has in place an accounting system capable to follow on the project accounts. 9. Risk Satisfactory The Risk Management would be contained With the selection ofthe PMT, Management which will undertake on behalf of the ministry the project accounting and reporting functions. Overall Rating Satisfactory

55 3. The system in place at MoPWH is based on principles and procedures defined by the legal framework and operational decrees applicable to the public sector including ministries. The control environment at MoPWH is adequate. However the financial system lacks the support ofa budgeting module and requires enhancement to become capable of generating timely project reports. To avoid the risk of MoPWH not being able to generate timely reports for project management and monitoring purposes, the PMT will undertake all project's accounting functions and reporting, including the generation of the quarterly FMRs, in close coordination with the MoPWH's Finance Department.

MoPWH Current Financial Management Practices and IT system

4. An effective organization and financial structure characterize the control environment at MoPWH. Segregation of duties and responsibilities such as invoice verification and processing, accounting duties and issuance of payments is well observed in the day-to-day transactions. MoPWH records are subject to pre-verification by MoF's auditors and post audit by the Government Audit Bureau. MoPWH accounting policies follow the government budget allocation on cash basis principles. Each budget account is continuously monitored to avoid any overspending. Bank-financed projects and other international donors are accounted for under the MoPIC budget', which in tum transfers the project funds, local and foreign, to the implementing ministry. Presently, there is no systems or software's used to follow on the MoPWH accounts and records. The budget balances and all transactions are manually recorded.

Project Financial Management Arrangements

5. Three levels of different agencies, the MoPWH, the PMT located at the MoPWH and contractors/consultantntswill be involved in the implementation ofthe Project. However, to avoid the risk of MoPWH not being able to: (a) integrate budgeted activities for performance comparison and decision making; and (b) generate timely reports for project management and monitoring purposes--the services of the PMT will be required to manage these tasks in close cooperation with the Finance Department ofthe MoPWH, which, in tum, will be responsible for the project funds including the management of the SA and issuance of payments to contractors/consultants/vendors.

6. MoPWH. The execution of the Project is the responsibility of MoPWH who will be assisted by the PMT engaged for the day-to-day project administration. ContractorslconsultantsNendors invoices for advance payments or for incurred expenses, after being verified and cleared by the PMT, will be subject to MoPWH controls and procedures and will be honored through payments issued by the ministry. The PMT, as an extension to MoPWH Accounting Department, should have the capability to compile the project budget and cash forecasts and to maintain a reporting system able to follow on the project accounts and to generate FMRs. To facilitate this reconciliation an inter PMT/MoPWH account should be created within the PMT ledger.

7. Project Management Team (PMT). To ensure an effective project financial management, the PMT will be responsible for the overall supervision of the activities including project planning, budgeting, invoice clearing, consolidating project information and reporting on these activities to the ministry. The selection process will ensure that the entity recruited for the PMT will have adequate resources to administer the financial management aspects ofthe Project including a full time financial officer and an adequate accounting software capable of being configured to the project reporting needs. The PMT accounting system should be able to provide accurate, reliable, and timely accounting information on project's funding and activities and for

56 each individual component, sub-component and by financier. It should also provide periodical reconciliation of the PMT transactions with MoPWH project accounts and have to reconcile its ledger account with the Project special account. The PMT will have fiduciary responsibility towards the MoPWH and MoPIC. To fulfill these requirements, it has to ensure that its systems provide the necessary financial and physical progress information to the project management at all levels during implementation. The PMT financial and reporting obligations will be made explicit in its terms ofreference and contract. The capability ofthe PMT to reply to the Banks financial requirements including the generation of quarterly FMRs will be one of the selection criteria. The contract will define the roles, relationship and responsibilities of the PMT towards the MoPWH and MoPIC.

8. It is expected that the PMT accounting system needs six months, from effectiveness date, to be configured tested and certified as capable to follow on the project accounts and generate the required FMRs. During this transition period, interim arrangements will be developed by having in place simple project reporting using spreadsheets applications. This is a needed follow-on step to transfer to the PMT all records and activities that take place during this transition period. For this purpose a qualified accountant will be designated by the MoPWH accounting department to follow, using spread sheets application, on the project accounts and to generate simplified project reports.

9. As the above mentioned arrangements and procedures including the PMT status are not reflected in MoPWH legal framework and in order to ensure the accuracy and completeness of the PMT system data, there is a need to introduce a new activity requesting the monthly reconciliation between the MoPWH accounting records (project budget lines) and the PMT ledger. This will ensure the mirroring of the balances in both systems. The PMT financial officer, in coordination with the MoPWH and MoPIC Finance Departments, will be responsible for the preparation of the PMT/Govemment Manual of Procedures (MoPIC) detailing the following: - Level of coordination between PMT financial officer and MoPWH Finance Department; - Flow ofdocuments and the time frame/invoice clearance and levels ofauthority; - Supporting documents retention and safety; - Periodic reconciliation procedures between MoPWH accounts and PMT records; - Transparency ofthe Project activities and the audit trail for the review of government and external auditors; - Process for preparing and remitting Replenishment Applications; - Contracts posting into PMT system upon signature; - The chart ofaccounts adapted to the Project; - Budgeting process; - Financial reporting, including formats of FMRs, the reporting required by the MoPWH, and the frequency ofsuch reports; and - The TOR ofthe annual external audit for PIS.

57 Flow of Funds and Controls

10. In addition to the PMT verification and clearance, all invoices either for advance payments or for incurred expenses will be subject to MoPWH controls and procedures, which are considered adequate, and will be honored through payment requests issued by the ministry to the Central Bank. The MoPWH will be responsible for project funds, while MoPIC will transfer, as per applicable regulations, the counterpart funds to MoPWH, which, in turn, will honor the in process invoices.

Allocation of Loan Proceeds

11. The allocation ofLoan proceeds by expenditure category are summarized in Table C.

1 Allocated (US$) to be Financed l______l--_--i-_-

(4) Front End Fee ~ 380,000 Amount due under Section 2.04 of the La Agreement. I_------_-+-I__- _____ 4- i 3,720,000 1 I

58 Project Reports

12. Quarterly: MoPWH through the PMT will generate Financial Monitoring Reports and submit them to the Bank as part of the project progress report, or separately. These reports are made up of: - Financial Reports: to include a cash flow statement, beginning and ending project cash balances and an expenditure report comparing actual and planned expenditures in addition to the SA reconciliation statement. Also, a narrative report explaining all variances that exceed 15 percent when compared to plan and the proposed corrective actions should be included as an annex to the financial reports. - Physical Progress Reports: to include narrative information and output indicators linking financial information with physical progress. - Procurement Reports: providing information on the procurement ofthe goods, works, services and selection ofconsultants showing procurement performance against plan, including information on all authorized contract variations. These reports should be remitted to the Bank within 45 days from the end ofthe period. The proposed format ofthe reports, which were agreed during negotiations, are included in the project implementation plan.

13. Annually. Audited Project Financial Statements (PFS) will be submitted to the Bank. PFS, will include: - Statement of sources and utilization of funds, indicating funds received from various sources, and project expenditures. - Appropriate schedules classiflmg project expenditures by component, showing yearly and cumulative balances. - Special Account Reconciliation Statement reconciling opening and year-end- balances. - Statement of payments made using SOEs procedures as defined in the legal agreement. - Statement of project commitments, being the unpaid balances under the project signed contracts.

Auditing Arrangements

14. MoPWH will remit to the Bank not later than six months after the end of each year the audit report of the project. The extemal audit report shall encompass all Projects' activities and shall be in accordance with intemationally accepted auditing standards e.g., Intemational Standards on Auditing (ISA). The annual audit report of the project Accounts shall include an opinion on the PFS and a separate opinion on the SA transactions reconciling opening and year- end balances. In addition to the audit reports, the auditor will prepare a "management letter" identifying any observations, comments and deficiencies, in the system and controls, that the auditor considers pertinent, and shall provide recommendations for their improvements. The extemal independent auditor should be acceptable to the Bank and his Terms of Reference will be prepared and submitted for the Bank's no objection, at least six months prior to the end ofthe project fiscal year.

59 Risk Analysis 15. The following summarizes the risk assessment findings for the project:

I 1 Risk I Comments 1 I Inherent Risk I I I I 1.Countrv Financial Management Risk I M I The CFAA reDort for The Hashemite Kingdom ofJordan 1 2.Project Financial Management Issues The selection of the PMT is a critical factor for the success IM/ ofthe proiect including the generation offinancial reports. 3.Counterpart Funds L No issues were identified regarding government providing counterpart funds for the ongoing projects. Overall Inherent Risk M

I Control Risk I I I 1.Implementing Entity The MoPWH has experience in implementing Bank- financed projects and the PMT support will allow the IM I generation ofproject reports. 2.Funds Flow I M I The flow of funds is quite simple and MoPWH has adequate I I I disbursement experience with intemational donors -1 3.Staffing H The PMT need to be staffed with a qualified financial officer to follow on the project accounting while MoPWH finance department will follow on the project disbursements and replenishments 4.Accounting Policies and Procedures M The project is subject to the local laws and regulations however the MOPR need to be finalized to define the relation between MoPWH. MoPIC and the PMT I 5.Intemal Audit I I NIA I 6.Extemal Audit M External audit will be carried out by an independent auditor acceptable to the Bank. 7.Reporting and Monitoring M The PMT will generate the project FMRs 8 .Information Systems H This risk will be reduced through the selection of the PMT who should have an accounting software to follow onthe project accounts and transactions Overall Control Risk M

Bank Supervision 16. The Project will require intensive supervision during the start up phase and during implementation at the PMT - MoPWH - MoPIC levels. It will intensify initially to ensure that the action plan is on time and the PMT accounting system has been configured to reply to the project needs and to generate the required quarterly FMRs. Then the first supervision mission after effectiveness will take the form of a launch workshop where the PMT will be trained on Bank rules, regulations and guidelines. The Project will be supervised regularly thereafter.

Action Plan - Engage the PMT - by effectiveness - Configure PMT Accounting System - 6 months after PMT engagement - Finalize the Manual ofProcedures - 8 months after PMT engagement - Issue First FMR - 9 months after PMT engagement - Issue First Audit Report - 6 months after end ofproject first calendar year

60 Disbursement Arrangements 17. Loan proceeds, which will be disbursed in accordance with the Bank's disbursement guidelines as outlined in the Disbursement Handbook, will be used to finance project activities through the traditional disbursement procedures currently in use, including direct payments, reimbursement, replenishment applications and special commitments, as warranted. As projected by the Bank's standard disbursement profiles, disbursements would be completed four months after project closure. Disbursements would be made against standard Bank documentation. The Loan for US$ 38.00 million will be disbursed over an expected project implementation period of five years. Management ofproject funds and submission of replenishment applications will be the responsibility of the MoPWH (through the MoPIC), while the preparation of these replenishment applications throughout implementation will be the responsibility of the PMT. Payments made for eligible expenditures prior to the Loan signature date, but after March 31, 2004, in an aggregate amount not to exceed the equivalent ofUS$1 million, will be reimbursed to the Government on the basis of retroactive financing, upon submission of a replenishment application.

18. Replenishment applications will be prepared by the PMT and submitted to MoPWH for verification, signature and transmittal to the Bank through the MoPIC. Authorized signatories, names and corresponding specimens oftheir signatures will be submitted to the Bank prior to the receipt ofthe first replenishment application.

Special Account (SA) 19. Special Account. To facilitate project implementation, ensure that funds are readily available for project implementation, and make timely payments of the Bank's share of eligible expenditures to contractors, suppliers, consultants and others, the MoPIC will open a US Dollar Special Account (SA) at the Central Bank ofJordan. The authorized allocation ofthe SA will be the equivalent of US $3.8 million covering an estimated four months of eligible expenditures financed by the Loan, with an initial deposit ofUS$1.9 million. Full allocation can be claimed when cumulative disbursements reach US$6.0 million. The SA will be managed and administered by the MoPWH. The MoPWH will be responsible for submitting, through the MoPIC, replenishment applications with appropriate supporting documentation for expenditures incurred, and will retain and make the documents available for review by Bank supervision missions and project auditors. Deposits into and payments from the SA to pay for contractors, suppliers and consultants, would be made in accordance with the provision of the Loan Agreement. Replenishment ofthe SA would follow Bank's procedures, and a bank statement of SA transactions would support all replenishment applications. Initially, an advance for the equivalent ofabout four months expenditures will be transferred to the SA upon effectiveness of the Loan and receipt of a signed replenishment application. The minimum amount for submitting replenishment applications for direct payments and special commitments would be 20 percent ofthe respective authorized allocation ofthe SA.

Documents for Withdrawals 20. The borrower has indicated that the traditional method of disbursement will be used for this project. This method includes the use of Statements of Expenditures (SOEs), and the replenishment ofSAs will be based on receipt ofappropriate documentation.

Use of Statements of Expenditures (SOEs) 21. Use ofStatement ofExpenditure (SOEs). All applications to withdraw proceeds from the Loan will be fully documented, except for: (a) works under contracts costing less than US$3,000,000 equivalent each; (b) goods under contracts costing less than US$lOO,OOO; (c)

61 services under consultant firms contracts costing less than US$lOO,OOO equivalent each and under individual consultant contracts costing less than US$50,000 equivalent each, under such terms and conditions as the Bank shall specify by notice to the Borrower. The supporting documentation would be maintained by MoPWH and made available for review by Bank supervision missions upon request . Documentation relating to SOEs would be retained for up to one year from the date the Bank receives the audit report for the fiscal year in which the last withdrawal from the loan account was made.

62 Annex 8: Procurement JORDAN - AMMAN DEVELOPMENT CORRIDOR

1. Jordan’s public procurement system is a highly centralized, well defined system by a series of regulations issued by the Council of Ministers and managed by the Government Tenders Directorate (GTD) of the Ministry of Public Works and Housing (MoPWH) for civil works and consultants’ services and by the General Supplies Department (GSD) ofthe Ministry of Finance (MoF) for supplies and equipment. In the central government, procurement regulations specifies the responsibilities of ministries. Regulations also establish a series of thresholds, which determine what level of government authority exists for procurement of civil works, goods and services. Within each threshold level, the process is under the responsibility of committees. In addition, Special Tender Committees are formed for a particular project, which is distinguished, by its size, source of funding or other characteristics that require special attention. Committees submit their recommendations to higher level policy officials for ratification. Special Tender Committees are not restricted to any threshold and are used to expedite implementation ofspecial projects.

Use of Bank Guidelines and Standard Documents

2. Procurement of Works and Goods will be carried out in accordance with the Guidelines for Procurement under IBRD Loans and IDA Credits (World Bank, January 1995, Revised January and August 1996, September 1997 and January 1999). Bank’s standard pre-qualification documents will be used for the prequalification for the procurement of Works and the Bank standard bidding documents will be used for procurement of Works under International Competitive Bidding (ICB). The Bank’s Standard Bid Evaluation Form-Procurement of Goods or Works, will be used for bids evaluation reports. There will be no National Competitive Bidding (NCB) for works under the project. The component for goods is relatively small and is to provide computer and office equipment for the project management team (PMT) and will use shopping procedures.

3. The procurement ofServices will be carried out in accordance with the Guidelines for the Selection and Employment of Consultants by World Bank Borrowers (January 1997, revised September 1997, January 1999 and May 2002). The Standard Request for Proposals (RFP) for the selection ofconsultants (July 1997, revised April 1998 and July 1999) and the Standard Form of Contracts will be used for contracts above US$200,000.00 equivalent. For the selection process of firms, the Sample Form of Evaluation Report for the Selection of Consultants (October 1999) will be used. Selection of individual consultants will be in accordance with section V ofthe Guidelines using simplified forms ofcontracts that are acceptable to the Bank.

Advertising

4. A General Procurement Notice (GPN) was published online in the United Nations Development Business (UNDB), and the dgMarket on December 1, 2003. The GPN provided a description of the Project and a list of all major contracts for Works to be awarded under ICB procedures and for consultancy services estimated at more than US$200,000.

63 5. Specific Procurement Notices (SPN) for the prequalification for “Amman Ring Road” contract and the main service contracts will also be published in UNDB , dgMurket and in at least two newspaper of national circulation. The Special Procurement Notices (SPNs) will provide a description of required works and services and invite qualified contractors and expressions of interest for the consultants’ long-list. The SPNs for the first two technical assignments have already been published in January 03,2004.

Procurement Plan

6. A procurement plan covering all of the projects components and activities has been developed and is included in the Borrower’s Project Implementation Plan. The plan details all activities prior to loan effectiveness, and for the project’s first year of implementation. Procurement of all works and services will be undertaken in accordance with this plan as approved by the Bank. The plan will be updated on a quarterly basis.

Capacity Assessment

7. The Ministry ofPublic Works and Housing (MoPWH) will be responsible for the overall project, but will coordinate implementation of the different components with the General Customs Department (GCD), Transport (MOT), Municipal Affairs and concerned municipalities. However all procurement will be undertaken by the MoPWH who is well established in public procurement with a good knowledge of the Bank Guidelines and procedures particularly the procurement of works. To ensure quick and efficient implementation of this project, the PMT will be managing the procurement process for the project. To provide the required technical assistance in this task and assist in the contract management, a specialized construction management firm under appropriate arrangements will be recruited to ensure timely completion within the allocated budgets. This firm will provide support to the PMT for all procurement activities, construction contracts management, financial management and audit requirements, and would establish mechanisms for providing support to the entity charged with promoting development within the ADC. The above arrangement will ensure dedicated management for the project, dedicated technical resources in the preparation of the bidding documents, technical support to the pre-qualification and evaluation committees, and support to the MoPWH in managing the construction works. The bidding process itself will be managed by the Government Tenders Directorate (GTD) within MoPWH. The GTD was established as a directorate within the Ministry to deal with all public procurement of works above JD 100,000. The 1999 Bank Country Procurement Assessment Report indicates that the GTD has managed awards for procurement ofworks at values ofaround USD 125 million (135 contracts) and 242 million (119 contracts) for 1997 & 1998 respectively. They have also managed the procurement ofconsultants at values of ,USD 3.8 million (22 contracts) and 5.5 million (54 contracts) for 1997&1998 respectively. GTD has the experience in carrying the bidding process in values and complexities similar to the project under this loan. The head of the PMT and other staff in the road departments are members of the central committee for tendering within the GTD. This will ensure ownership and the full participation ofthe PMT in the evaluation process.

8. One of the areas that need strengthening for the PMT is the selection and employment of consultants according to the Bank procedures and Guidelines. To address this, the Bank will arrange training workshops on this subject prior to the loan effectiveness for MoPWH and MoPIC.

64 Procurement Implementation Arrangements 9. Works. The main works contracts are the Amman Ring Road package and the Inland Logistics Port (access and infrastructure). - Amman Ring Road Phase Z (ARR-I) - Section 2: This is estimated at US$32.872 million to be launched under an ICB procedure. A pre-qualification process will be conducted to determine pre-qualified contractors to bid for this contract. The pre- qualification documents are currently being prepared by the MoPWH and are scheduled to be submitted to the Bank for its review and no-objection by end ofApril 2004. The design ofthe works has been finalized and the bidding documents are also under preparation. It is estimated that the award of the contract will be in the fourth quarter of2004. The execution period will be 36 months. - Inland Port (access and infrastructure): This is estimated at US$4.897 million to be launched under an NCB procedure using post-qualification. The preparation of the bidding documents will commence in ofthe second quarter of2004 with an expected award of contract in the second quarter of 2005. The execution period will be 24 months.

10. Goods. Computers, and office equipment would be procured under International and National Shopping procedures for a total amount ofabout US$O. 1 million.

11. Services. The services packages are estimated at a total ofUS$5.707 million (US$5.354 by firms, and US$0.353 million by individual consultants) . The components will be: - Project Management, including EMP and RAP monitoring: estimated value of US$3.170 million. The Expression of Interest (EOI) has been launched in January 2004. The TOR and RFP are under preparation and will be submitted to the Bank for review in April 2004. Expected award ofcontract is by end ofthird quarter of2004. - Road Construction Supervision: Estimated value ofUS$1.284 million. The EO1 has been launched in January 2004. The TOR and RFP are under preparation and are expected to be submitted for the Bank’s review in April 2004 with a an expected award in the third quarter of2004. - Support to Consolidate Trucking Industry and establish the Inland Port: (US$O. 175 million firms and US$O. 141 million by individual consultants). The preparation ofthe TORs for these assignments will commence in the last quarter of2004 with expected award ofcontracts in mid 2005. - Master Planning studies and Corridor Promotion, (US$O..578 million firms and US$(?.21 2 individual consultants) and AMA Transport Planning/Traffic Engineering at an estimated value of US$0.147 million: the preparation of the TORs and launching of these packages will follow that of the previous assignment and will be further revised when the project is launched.

12. The most critical packages are those for the project management and the road construction supervision assignments. Both of these assignments are critical to the project and quick deployment of these two firms will ensure the required support and resources for the MoPWH in the management of the ring road construction. Meeting the milestones set above under para. 11 will ensure the availability ofthese two consulting firms by the time the award for the contract for the large civil works contracts.

65 Procurement Methods (Table A)

13. Procurement ofworks will be carried out using International Competitive Bidding for all contracts estimated at US$5,000,000 and above. Pre qualification will be used for Section 2 of the Amman Ring Road Phase I(ARR-1) due to its size.

14. Procurement of Goods will be conducted using shopping procedures for all packages below US$lOO,OOO.

15. Consultant Services for firms will be selected using the Quality-and Cost-Based Selection (QCBS) for value ofcontracts estimated at more than US$lOO,OOO equivalent or more, i.e. for all the assignments under the project. Additionally, selection based on Consultant’s Qualifications (CQ) will be used for assignments estimated at less than US$lOO,OOO equivalent per contract, if any.

16. For assignments for consultant firms estimated at less than US$lOO,OOO equivalent, the short list may be comprised entirely ofnational firms, provided at least three qualified local firms are available and competition including foreign consultants is not justified. However, intemational firms will not be excluded from consideration, if they have expressed interest.

17. Selection of Individual Consultants will be conducted in accordance with section V ofthe Guidelines.

Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement Method’ Expenditure Category Total Cost ICB NCB Othe? N.B.F. 1. Works - Amman Ring Road Phase 1 (ARR-I) 32.872 0 0 70.266 103.138

______~______--_---____-______I__~-~~~~~~~ 0 0 G7.941) * ______---___S??:?59 . - Access & Infrastructure for the Inland Port 0 4.897 0 0 4.897

~ (0) (4.162) 0 141162) - Construction ofthe new Customs Depot (excluding 0 0 0 2.843 2.843 Infrastructure) 0 0 0 0.000 32.872 4.897 0 73.110 110.878 (27.941) (4.162) 0 (32.103) 2. Goods 0 0 0.100 0 0.100 0 0 (0.095) (0.095) 3. Services 0 0 5.707 2.986 8.693 0 0 (5.422) (5.422) 4. Land Acquisition 0 0 0 40.903 40.903 0 0 0 0.000 5. Bank Front End Fee 0.380 0.380 (0.380) (0.380) Total 32.872 4.897 6.187 116.998 160.954 (27.941) (4.162) (5.897) (38.000) ’ Figures in parentheses are the amounts to be financed by the Loan. All costs include contingencies. Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i)managing the project, and (ii)re-lending project funds to local govemment units.

66 Table A1: Consultant Selection Arrangements- (US$ million equivalent) Selection Method Consultant Services Expenditure Category Total Cost' QCBS QBS SFB LCS CQ Other N.B.F. A. Firms

- Sutmort toConsolidateTruckingIndustrvandI 0.175 0 0 0 0 0 0 0.175 establish the Inland Port (0.166) 0 0 0 0 0 (0.166) - Master Planning Studies and Corridor Promotion 0.578 0. 0 0 0 0 0 0.578

______140) 0 0 0 0 0 i0.140) ___ - Project Management and Technical Support 3.170 0 0 0 0 0 0 3.170 (incl. EMP, CRMP and LAW Monitoring) (3.012) 0 0 0 0 0 (3.012) - Construction Sutlervision Services (incl. EMP 1.284 0 0 0 0 0 2.486 3.770

(5.087) 0 0 0 0 0 (5.087) B. Individuals - Individual consultants for the ADC Urban 0 0 0 0 0 0.212 0 0.212 Development Technical Unit 0 0 0 0 0 (0.201) (0.201) - Individual consultants for the consolidation ofthe 0 0 0 0 0 0.141 0 0.141 Trucking industry and establishment of the Inland 0 0 0 0 0 (0.134) (0.134) Port sub-total 0 0 0 0 0 0.353 0 0.353 0 0 0 0 0 (0.335) (0.335) Total 5.354 0 0 0 0 0.353 2.986 8.693 (5.087) 0 0 0 0 (0.335) (5.422) Including contingencies. Figures in parenthesis are the amounts to be financed by the Bank Loan. QCBS = Quality- and Cost-Based Selection, QBS = Quality-based Selection, SFB = Selection under a Fixed Budget, LCS = Least-Cost Selection, CQ = Selection Based on Consultants' Qualifications , Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc., N.B.F. = Not Bank-financed. Table B: Thresholds for Procurement Methods and Prior Review' Expenditure Contract Value Threshold Procurement Method Contracts Subject to Prior Review Category (US$ thousands) (US$ millions) 1. Works >US$3,000,000 ICB and NCB Both contracts at a total value US$37.8 million*

2. Goods us$100,000 for individuals more than $50,000* b) Individual Consultants: Individual Total value US$ 5.5 million >US$50,000 Consultants

Total value of contracts subject to prior review: US$43.3 million* ' Totals include gross full amount of contracts Le. not only Bank financed portion. Overall Procurement Risk Assessment: Low

Frequency of procurement supervision missions proposed: One every six months. The first year will require three missions to ensure proper implementation start-up and as there will be the majority ofprocurement packaging launching and processing.

67 Table C: Allocation of Loan Proceeds

(1) Works 28,900,000 85% (2) Goods and Equipment 100,000 100% of foreign expenditures, 100% of local expenditures (ex-factory cost) and 85% of local expenditures for items procured locally. (3) Consultant Services 4,900,000 95% for individual consultants, and 90% for consulting fums.

(4) Front End Fee 380,000 Amount due under Section 2.04 ofthe Loan Agreement. (5) Unallocated 3,720,000 Total: 38,000,000

Use of Statements of Expenditures (SOEs): See Annex 7.

Special Account: See Annex 7.

68 Annex 9: Economic and Financial Analysis JORDAN - AMMAN DEVELOPMENT CORRIDOR

Background 1. The development ofthe Amman Ring Road (ARR) has been a long-standing objective of the Government of Jordan (GOJ). Since the early 1980s, a number of proposals have been put forward for construction of a ring road that would divert traffic away from the central areas of Amman and contribute to a reduction in traffic congestion and pollution. Such a road would also provide benefits in the form of reduced transport costs not only for a number of key economic sectors, such as agriculture, industry and manufacturing, and trade and Free Zones, but also for commerce generally.

2. Over the past twenty years, various alignments for a ring road were also studied. These initiatives culminated in a 1997 pre-feasibility study, which examined the technical and economic benefits ofbuilding a ring road through phased construction. The pre-feasibility study divided the ARR into three distinct phases: - Phase 1: South-East Section from the Desert Highway to the Zarqa Highway and the Yajouz Road; - Phase 2: Western Section from the Desert Highway to the Jerash Highway; and - Phase 3: Northern Section from the Jerash Highway to the Yajouz Road (at Zarqa).

3. The 1997 study was followed by detailed economic, technical and environmental assessments for developing Phase 1 ofthe Amman Ring Road (ARR-l), which is constituted of two sections: (a) Section 1, from the Airport Road in the South (Desert Highway) to the Madounah Interchange; and (b) Section 2, from the Madounah Interchange to the Zarqa Highway in the North.

Recent Developments. 4. In September 2002, a study was undertaken to explore the economic development potential of the area through which the ARR-1 would pass, now known as the Amman Development Corridor (ADC). The study found that the mounting development challenges faced by the AMA and the Government’s overall objective of encouraging trade are interconnected, and straddle a number ofsectors, particularly land transport, urban development, and trade facilitation. To accommodate the AMA’s growing population, new land for investment and urban development purposes is required. At the same time, the lack of space to make needed improvements to the Amman Customs Depot, which is located in a densely populated area of central Amman, coupled with the absence of an inland port that can offer comprehensive logistics services, hampers the development of efficient transport and logistics services. An oversupply of operators in the trucking industry, which has led to underutilization of its fleet, high costs, and low profitability, further complicates efforts to reduce transport and logistics costs. The ADC, located to the south and east ofthe AMA, provides an ideal site for developing a bypass for traffic to circumvent the AMA, and offers affordable land for urban expansion, relocation of the Amman’s main Customs Depot, and establishment of an inland logistics port. It has relatively inexpensive land for urban expansion and industrial development, and excellent access to intemational trade routes, Queen Alia International Airport, the Port of Aqaba, existing and planned industrial areas, and the capital city. The project would focus on developing the critical eastern section ofthe ARR-1 as an industrial and residential corridor that would link the Zarqa Industrial Area to the east ofAmman with the Desert Highway to the south ofAmman and its international airport.

69 5. The ARR was originally conceived as a limited access dual two-lane highway with a 60 meter Right ofWay (ROW). However, due to the anticipated industrial development that would be generated as a result of the ring road, its concept as a limited highway, as well as the adequacy of the 60 meter ROW, was reexamined. A decision was taken to increase the ROW from 60 meters to 80 meters in order to accommodate two-lane service roads on either side ofthe main carriageway, and if necessary, expand the facility to a dual three-lane highway at a later stage. This would ensure that the highway itself would function as a limited access facility, while at the same time accommodate new development along the service roads.

6. In December 2003, traffic data were updated and a regional transport planning model calibrated to carry out a new economic analysis of the project. This was deemed necessary, given the many changes that have occurred since the project’s original concept. In the 1997 feasibility study, the ARR-1, the main component of the ADCP, was considered as an expressway whose main function would be to provide a bypass for the AMA. While maintaining this important function, ARR-1 is also now intended to stimulate and sustain urban development, and to serve as the backbone for the AMA’s expansion to the south and east. The extent and type ofdevelopment were estimated in a separate land use study (June 2003), which is available in project files. Key changes between the 1997 study and the ADCP are summarized in Table 9.1.

Table 9.1: Changes to Prqject Design 1997-2003) 2003 LandUse Planning / Trip Land use plans for developments east Land use plans fmalized and are taken Generation ofAmman not considered by the into account (for the eastern areas of GOJ. Amman). Ring Road (Bypass) versus Controlled access highway Controlled access highway serves as Development Corridor functioning as a bypass. backbone for an economic development corridor. Being a limited access highway, service roads added to facilitate access to adjacent developments. Traffic Modeling A strategic traffic model was used to A strategic/simulation model used to assess traffic impacts. assess traffic imoacts. Highway Design Service roads not included. Service roads included.

The “No Project” Option (Without Project). 7. Without the ADCP, and especially development of the ARR-1 and relocation of the Amman Customs Depot, there will likely be significant traffic, economic and social implications for the AMA. In terms of traffic, current growth rates are expected to exceed five percent per annum, and existing roads carrying both local and transit traffic along the north-south axis will be severely congested if additional road capacity is not provided in the near future. These roads include the Hizam Road, the Airport Road near Amman, and the Zarqa Highway. The Hizam Road has already been upgraded to a dual two-lane highway. However, frequent intersections and extensive strip development, coupled with daily traffic volumes ofover 30,000 vehicles per day (vpd), of which more than thirty percent is truck traffic, has reduced travel speeds to below 30 kph and increased the accident rate significantly. The Airport Road near Amman carries over 106,000 vpd, and a section of the road is currently being upgraded from dual two-lanes to dual three-lanes.

70 8. Without the ARR-1, it is estimated that existing roads would begin operating beyond their designed carrying capacities by 2008. This would increase travel times significantly, which in tum would constrain business development.

9. Not implementing the Project would also have a number of economic and social consequences, especially for the AMA, including: (a) access to affordable land for productive investment purposes and for developing low cost housing would not materialize; (b) opportunities for continued industrial growth and subsequent job creation would continue to erode; (c) the movement of imports, exports and goods in transit, which increasingly rely on overland transport, would continue to be constrained and subject to increasing travel times, delays and costs; (iv) transit traffic would continue to use existing roads in urban areas, contributing to congestion in residential areas around the existing Customs Depot and road corridors accessing intemational routes to Iraq, Syria, Lebanon and Aqaba; and (v) an opportunity to improve the efficiency ofJordan's trade logistics by relocating the Customs Depot and encouraging the development of an inland port in close proximity ofone another, would be lost.

The Project. 10. The scope of the proposed Project would consist of: (a) constructing Phase 1 of the Amman Ring Road (40.0 km), which would be divided into three sections; (b) developing access infi-astructure and utility services for inland port facilities, relocating the Amman Customs Depot, and supporting the Government's on-going program to restructure the trucking industry; and (c) providing technical support for urban and transport planning, traffic engineering, and project management.

Other Project Alternatives Considered. 11. A number ofalterative alignment options were assessed, ranging from an outer ring road, which was located some 15 km further to the east of the existing proposed alignment, to upgrading of existing north-south road corridors. The first option, an outer ring road, proved to be too costly, and generated high travel times and vehicle operating costs, which resulted in relatively low traffic volumes and low economic rates of retum. The option to upgrade the existing north-south axes necessitated the acquisition of substantial amounts ofprivately-owned residential and industrial property, and required the relocation of large numbers of project- affected persons. Because this option would have entailed significant delays and generated high costs, it was abandoned.

12. The current option was deemed best, as it would provide: (a) much needed additional road capacity; (b) ample space for AMA's rapidly expanding population and industrial activity; (c) opportunities to encourage investment and reduce unemployment levels; and (d) a viable option for relocating the Customs Depot and developing an inland logistics port in close proximity ofone another.

Traffic Surveys, Traffic Model Update. 13. Trafjc Surveys. Traffic surveys were conducted in October 2003 in order to update and validate the 24 hour and peak hour traffic models. They consisted of 12-hour manual classified counts, peak hour counts and automatic traffic counts. The main conclusions from the survey were: - Traffic over a twelve-hour period grew by 3.9 percent p.a. between 1999 and 2003; - Over a 24 hour period, traffic grew by 4.8 percent p.a. between 1999 and 2003;

71 - Airport Road at Marj El Hamam carries around 106,000 vpd, which represents an 11 percent increase p.a. since 1999; - After upgrading the Hizam Road from a single two-lane to a dual three-lane highway, it now carries 3 1,000 vpd, an increase of 15 percent p.a. since 1999; and - As a result of increased traffic levels along Hizam Road, the main link between Amman and the north-eastem region of Zarqa (Zarqa Highway) has experienced a slight drop in traffic since 1999, going from 83,600 vpd to 85,000 vpd in 2003a

14. Traffic Model Update. The traffic model developed for the 1997 pre-feasibility study of the ARR was based on a strategic road network that did not consider congestion at key junctions. In 1999, a study to examine the benefits of upgrading 19 junctions in the AMA was conducted. It necessitated the development ofa model that simulated traffic pattems in the AMA. As part of the ADCP’s economic evaluation, the 1999 model was updated for 2003 conditions, both in terms ofroad networks and trip matrices, to include a strategic and simulation network

15. The simulation network area covers the central urban area of Amman. All majorhtrategic junctions (traffic signals, roundabouts and priority junctions) within the simulation area were coded in detail. The strategic network represents the remaining national road network outside the AMA.

16. The 1999 trip matrices were updated using 2003 traffic counts. Four flow groups representing a one-hour period were created to characterize a typical day in the week. The flow groups represent the weekday moming peak, weekday peak, weekend peak, and the off-peak periods. Matrices were assigned onto the 2003 road network, and the assignment flows validated against the 2003 traffic counts.

Traffic Forecasts and Land Use Phasing. 17. Growth of normal traffic has been estimated for the base year 2003, and the planned opening of the project in 2008. An evaluation period of twenty years has been adopted with 201 8 as the intermediate year.

18. The traffic forecasts take into account the normal growth of traffic in the AMA, as well as expected growth resulting from the proposed expansion program to the east of Amman and development of the ADC. For normal traffic, a forecast model was developed that estimates rates ofgrowth in vehicle ownership per capita over the project assessment period for the AMA. A separate traffic generation model was developed, which estimates generation and attraction trips from the new areas to be developed east ofthe AMA and along the proposed ADC. These trip have been distributed (using gravity modeling) and added to the normal growth in vehicle trips in Amman.

19. GDP Growth. For the purposes of estimating traffic growth, the following GDP growth rates were adopted: 3.75 percent for the period 2002 to 2008, 3.50 percent for 2009 to 2013, and 3.00 percent for 2014 to 2028.

20. Population Forecasts. The population ofthe AMA is expected to continue growing at a rapid pace. Between 1997 and 2002, the populations ofAmman and Zarqa grew by 3.1 percent p.a. The population growth scenarios produced as part of the Amman Ring Road Study (1997- 1999) projected the population ofthe Amman Govemorate and the Zarqa sub region to total 3.25 million by 2005. Forecasts now show that the combined population ofthe Amman Govemorate and the Zarqa sub-region will exceed three million by 2005. These trends have been noted by

12 the Planning Department of the Greater Amman Municipality, and plan for future urban development are predicated on the principle of establishing new growth centers nearby the Amman and Zarqa municipalities.

21. According to Jordan’s Department ofStatistics, national population growth rates between 1997 and 2002 averaged 3.0 percent, and this rate is proposed to use as an estimate ofgrowth to 2018. It is anticipated that growth rates will decline to 2.75 percent p.a. fiom 2019 to 2028. As such, the growth rates adapted for Jordan to year 2028 are: 3.05 percent for the period 2003 to 2008, 3.00 percent for 2009 to 2013, and 2.75 percent for 2014 to 2028.

22. Vehicle Growth Forecasts. For the traffic model to provide a reasonable basis for deriving potential benefits ofthe project, it is necessary to use as fine an analytical framework as practicable. In this case, some 200 AMA internal traffic zones were utilized, and vehicle ownership rates per capita applied to the disaggregated population forecasts to give the vehicle fleet in each zone, and hence, de facto rates ofgrowth in vehicles per zone. Growth in the urban areas will continue up until 2013, when some level ofsaturation will be reached. Coupled with a gradual reduction in population growth leads to a leveling off oftraffic growth in the urban areas of Amman from 2013 onwards, as the development east of Amman gathers pace. The overall growth in traffic, in the AMA, including the development of areas to the east, is expected be around 4.8 percent per annum. Traffic in Zarqa will continue to grow at around 4.6 percent p.a. Elsewhere, in areas including Jizah, Fuheis, Sahab, Muwaqqar and Madaba, traffic is expected to grow at an average rate offour percent p.a. to year 2028. The results ofthis analysis are detailed in Table 9.2. Table 9.2: Annual Traffic Growth Rates (YO)

Amman 2.7 3.3 1.5 1.5 1.4 Outer Amman 2.6 3.4 1.6 1.5 1.5 Zara a 6.7 7.2 4.5 3.9 3.4 Jizah 5.7 6.4 4.5 4.4 4.4 Fuheis. Naur. Balaa 5.3 6.1 4.0 3.9 3.9

23. The results represent lower traffic growth within the central areas of Amman. Most growth will occur in the outer areas ofthe AMA, which reflects anticipated developments east of the AMA and within the ADC.

24. Land Use Phases. A separate traffic generation model was developed to estimate generation and attraction trips based on anticipated new developments east ofthe AMA. These trip have been distributed (using gravity modeling) and added to the normal growth in vehicle trips within the AMA. Expected developments east of the AMA and along the ADC were considered in two phases.

25. Phase 1 Urban Development. The first phase of urban development east of the AMA between Hizam Road constitutes approved local municipal plans covering an area approximately 3,336 hectares. Residential development will cover more than 75 percent of the planned areas, and two plans are dedicated to industrial development for the Sahab Industrial Estate and the A1 Tajamount Qualified Industrial Area. In addition, a long-term plan calls for the creation of a “new city” for 500,000 people to the east ofthe AMA, which would be developed over a twenty- year period.

73 26. An economic evaluation of this first phase of urban development was undertaken between the opening year (2008) and the design year (2028), with an intermediate year (2018). Development trips have been phased within these years. The population levels associated with the development during Phase 1 are 89,013 inhabitants in 2008, 311,500 inhabitants by 2018, and 531,000 in 2028. The rates of development assumed for the first phase of this urban development are summarized in Table 9.3. Table 9.3: Phase 1: Approved Municipal Development Plans Year Municipal Development Plans Between Hizam Road and the ARR I 2008 I 17 vercent ofvotential develovment occurs I I 2018 I 59 vercent of Dotential develovment occurs I I 2028 I 100 vercent ofvotential develovment occurs I

27. Phase 2 Urban Development. The second phase of urban development is based on a comdor ofurban development, which would be the direct result ofimproved access provided by the ARR-1. Full development of the ADC, which is expected to attract 530,000 inhabitants, is expected by 2028.

28. Presently, the speed of development is unknown and difficult to forecast. Through consultations with land-use planning specialists, development in the ADC is expected to start in 2008, the year in which the ARR-1 will open, and gradually expand through to 2028 and beyond.

29. The starting point would be the realization of developments in the vicinity of the proposed ARR-1 interchanges in the opening year 2008. Between the opening year and the design year 2028, it has been assumed that development will expand linearly along the ARR-1. During the opening year, it is assumed that the Customs Depot and an inland logistics port would be situated on the north-eastem comer of the Madounah Interchange at the ARR-1. For traffic appraisal purposes, the rates ofdevelopment assumed for the second phase ofurban development are summarized in Table 9.4. Table 9.4: Proposed Corridor Development Plans

Project Costs and Benefits 30. The analysis is primarily concemed with estimating quantifiable benefits as they accrue to road users in form ofreduced travel times and vehicle operating costs, and to the population at large through reduced accident costs. There are several important, but non-quantifiable, benefits, such as those derived from reduced pollution, increased trade, and improved access to industrial facilities in Sahab and Zarqa. Placing monetary values on these benefits was not attempted.

3 1. Vehicle operating costs (VOC) incorporate expenses associated with vehicle depreciation, replacement of tires, fuel prices, vehicle maintenance, labor, and several other vehicle and road operational characteristics. For a constant vehicle speed of 50 kph, total (fuel and non-hel) vehicle operating costs were the following: (i)US$O. 11 for a private car or taxi; (ii)US$O. 18bfor a light goods vehicle; $0.43b for a medium truck; and $0.48 and for a large truck.

32. The value of time (VOT) was estimated based on wage rates, trip purposes, and vehicle occupancy rates. Average income was found to be about JD1.37 per hour. Taking into account

74 the various professions, drivers and passengers, vehicle types and occupancies, etc, the analysis indicates that the average value of time for “in-work” trips is JD1.64 per hour and for “non- work” trips JD0.46 per hour.

33. The reduction in accident costs was derived from average rates used in 1997 updated to 2003. However, benefits are conservative, given the high rate ofaccidents along existing roads.

34. Project costs incorporated in the economic evaluation include those associated with land acquisition, compensation, construction of ARR-1 , development of access infrastructure for an inland logistics port, relocation of the Customs Depot, and road maintenance. Indirect costs, such as those resulting from a reduction in business and/or economic activities along existing routes due to the diversion oftraffic to ARR-1 , or environmental impacts, were not quantified.

35. Construction and maintenance costs were shadow priced to account for distortions between international and domestic prices that result from import duties, taxes, subsidies, and other non-price distortions to the whole economy. An estimate ofthe standard conversion factor (SCF) for Jordan was made by calculating the ratio between the “CIF” value of all imports, and their value inclusive ofduties and taxes on imports. A SCF value of0.93 was derived based on available data between 1997 and 2003. Major construction materials, such as steel, cement and bitumen, are subsidized. In order to compensate for this, an SCF factor of 1.0 has been incorporated. A summary ofthe costs is detailed in Table 9.5.

A: Amman Ring Road, Phase 1 (ARR-1) (40.0 km) 75.80 B: Inland Port and Trucking Industrv 5.71 C: Project Management and ADC Planning and Promotion 3.34 Land Acauisition and ComDensation Costs 29.00 World Bank Loan Front-End Fee 0.27 Total: 114.12

Cost-Benefit Analysis 36. The economic evaluation assesses the development of the committed schemes between Hizam Road and the ARR-1, otherwise known as Phase 1 in terms of development planning. With regards to potential “induced” development along the ARR-1, namely Phase 2, the only two committed projects are the relocation ofthe Customs Depot and an inland logistics port. No other commercial or industrial developments have been committed at this stage. Whilst the ADC has the potential to generate industrial and commercial activity, neither the speed ofdevelopment implementation nor land uses is known. Given these uncertainties, an economic evaluation for Phase 2 was not carried out for this study. However, for highway appraisal purposes, the Phase 2 development has been considered to year 201 8.

37. Key Assumptions. Tables 9.6 and 9.7 summarize key assumptions and parameters used in the economic evaluation. A key assumption has been made with regard to the project benefits in the forecast years, when additional capacity will again be necessary to accommodate future traffic demand. It is unrealistic to assume that the growth in traffic projected for evaluation purposes can be accommodated without significant improvements and/or additions to the road network and/or public transport system, and/or changes in transport policy. It is, therefore, assumed that additional capacity will be provided to meet demand and not all the benefits will be attributed to this project. Therefore, the benefits are held constant after the year in which the “capacity” is reached in the network. The indicator used for determining the year in which 75 “capacity” is reached is when the average speed in the road network drops below 20 kph during the peak period. This assumption will render the benefit estimate somewhat conservative. Table 9.6: Key Economic Input Values

-. Time Period 2: 2600 hours per year I Time Period 3: 196 hours per year Time Period 4: 2288 hours pe; year Total Construction Costs JD114.12 million 1’‘ year Construction 2004 Opening Year 2008 Evaluation period 20 years Construction Cost Distribution 2004 = 30% Construction Cost Distribution 2005 = 40% Land Acquisition Cost 100% sunk costs in 2004 Without Proiect No ARR-1 and all Phase development traffic loaded onto development and existing road network. With Project The ARR-1 as a dual two-lane highway, which is linked to the Phase 1 development networks via the major interchanges.

38. Cost-BeneJit Analysis Results - Base Case. The Base Case “Phase 1” Scenario comprises no increase in construction or land acquisition costs, includes accident and land appreciation benefits, and assumes that Iraqi transit traffic would continue to transit Jordan from the Port of Aqaba to Baghdad. The results, using a twelve percent discount rate, is an ERR of 17.5 percent and a NPV ofJD86.3 million. The economic stream of costs and benefits are presented in Table 9.8.

76 Table 9.8: Base Case Cost-Benefit Analysis - Stream of Costs and Benefits 100s) Year :onstructioi Total Cost 3enefits - 2004 54,764 54,764 -54,764 -46,619 2005 34,352 34,352 -34,352 -24,893 2006 2 1,470 2 1,470 -2 1,470 -13,244 2007 4,294 4,294 -4,294 -2,255 2008 80 80 1,52 1 2,790 4,3 1 1 4,23 1 1,891 2009 80 80 2,722 5,367 8,089 8,009 3,048 2010 80 80 3,937 8,149 12,086 12,006 3,889 201 1 80 80 5,172 11,139 16,312 16,232 4,476 2012 80 1,560 1,640 6,428 14,356 20,784 19,144 4,494 2013 80 80 7,703 17,818 25,521 25,441 5,084 2014 80 80 8,999 2 1,529 30,528 30,448 5,179 2015 80 80 10,320 25,5 1 1 35,831 35,751 5,177 2016 80 80 1 1,668 29,78 1 4 1,449 41,369 5,099 2017 80 80 13,039 34,347 47,385 47,305 4,964 2018 80 80 14,428 39,235 53,663 53,583 4,786 2019 80 80 17,337 49,288 66,625 66,545 5,060 2020 80 1,560 1,640 20,323 60,064 80,388 78,748 5,097 202 1 80 80 23,393 7 1,647 95,040 94,960 5,233 2022 80 80 26,536 84,052 110,588 110,508 5,184 2023 80 80 26,536 84,052 110,588 110,508 4,413 2024 80 80 26,536 84,052 110,58E 110,508 3,756 2025 80 80 26,536 84,052 110,582 110,508 3,198 2026 80 80 26,536 84,052 110,582 110,508 2,722 2027 80 80 26,536 84,052 110,588 110,508 2,317 2028 80 1,560 1,640 26.536 84.052 110,582 108.948 1.945

39. Sensitivity Analysis and Switching Values. Changes in key assumptions or parameters, which are subject to significant risk, were investigated through both simple sensitivity analysis and through estimation of switching values to assess the impact on the project’s ERR and NPV. The following sensitivity tests were carried out: - Value ofTime reduced by ten percent and twenty percent; - Fuel and non fuel related vehicle operating costs reduced by ten percent and twenty percent; - Construction costs increased by ten percent and twenty percent; - Land acquisition costs increased by ten percent and twenty percent; and - Iraq Transit Traffic lost as Iraqi ports recover.

40. The project was subjected to sensitivity analysis with all major components examined. The removal of transit traffic for Iraq, some 300 trucks per day, did not have a significantly impact on the project and reduced the ERR to 23.1 percent. The associated traffic that would be generated as a result of expansion and development in the ADC overwhelms Iraqi transit traffic.

41. The switching value of a parameter is the value of the parameter which causes the ERR for the project to drop to 12 percent. Switching values were computed for several key parameters for the base case, including the value of time, vehicle operating cost, construction costs, reduction in traffic (as a percentage), elimination of Iraq related transit traffic, and the

77 removal of accident benefits and land appreciation benefits. The “switching” analysis indicates that an adverse set ofcircumstances is required to render the project economically unjustifiable.

42. A scenario analysis was carried out to identify the best and worst case scenarios, and to evaluate the results vis-&vis an expectedibest estimate scenario. Rates of return and other economic indicators are calculated under the following four scenarios: (i) Base Case Scenario: No construction or land acquisition cost overruns, and the inclusion ofaccident and land appreciation benefits, as well as Iraqi transit traffic. (ii) Worst Case Scenario: Construction and land acquisition costs increase by thirty percent, and the benefits of accident, land appreciation, and Iraqi transit traffic are excluded. (iii)Possible Riskv Scenario: Construction and land acquisition costs increase by twenty percent and ten percent respectively, and the benefits ofaccident, land appreciation, and Iraqi transit traffic are excluded. (iv) Likelv/Exzected Scenario: Construction and land acquisition costs increase by twenty percent and ten percent respectively, the benefit of Iraqi transit traffic is excluded, but the benefits ofaccident and land appreciation are included.

43. The results of the various scenarios, which are provided in Table 9.9, indicate that the project continues to be economically viable even under a potential and possible risky set of events. The ERR is above 15 percent for the potentially pessimistic situations. Table 9.9: Sensitivity Analysis Results

I ERR (Yo) I NPV (JD million) I Base Case Scenario I 17.5% I 86.3 I I Worst Case Scenario I 15.3% I 59.8 I I Possible Riskv Scenario I 16.2% I 71.2 I I LikelvlExDected Scenario I 17.3% I 92.8 I

44. Customs Depot and Inland Port Components. The construction costs used in the base case scenario include those associated with relocating the Customs Depot. These costs, which include the access infrastructure and buildings, amount to some JD4.65 million, including project management and contingency costs. For the inland logistics port, costs included supporting off- site infrastructure, project management, contingency and promotional costs, which amounted to JD1.93 million.

45. The evaluation ofthe base case scenario produced an ERR of 17.5 percent and an NFV of JD 86.3 million. This indicates that the above-mentioned costs associated with the relocation of the Customs Depot and the construction of an inland logistics port can be absorbed by the ARR-1 component. If costs associated with the Customs Depot and an inland logistics port, amounting to JD7.18 million, were excluded from the cost-benefit analyses, the ERR and NPV would increase to 18.0 percent and JD92.0 million respectively.

78 Traffic Appraisal

46. The operational characteristics of the ARR-1 were assessed using a Level of Service (LoS) appraisal.

47. Phase I Development Scenario. The forecast traffic volumes for the Phase 1 development scenario are presented in Figure 9.1. As can be seen, the heaviest trafficked section is between the Desert Highway and the Sahab Highway, with forecasts in the range of 83,000 vpd by 2028.

48. Based on the assumption that LoS D is close to capacity, and LoS E to LoS F is considered to be above capacity, all sections ofARR-1 operate at LoS D or above in the design year 2028, with the exception of the section between the Desert Highway and the Sahab Interchange, which drops to LoS E towards year 2028.

49. The operational analysis indicates that the LoS at all proposed interchanges will operate at LoS D or better in the design year 2028, with the exception of the flow along the Desert Highway north of the intersection with the ARR-1. At this location, the north-to-west joining movement from the ARR-1 would result in total westbound flows along the Desert Highway that exceed the capacity of a two-lane carriageway. Consequently, this section of the Desert Highway would need to be widened to at least three, or perhaps four lanes westbound by 2028.

50. Phase 1 and Phase 2 Development Scenario to Forecast Year 2018. The ARR-1’s LoS service would be affected by the gradual development of the ADC. The impact of the development and its associated trip generation is clearly dependent upon the level and speed of additional network infrastructure. The associated commercial and industrial development along the ADC is expected to be driven by the private sector, and so its potential is dependent upon economic and financial dynamics ofthe AMA and country as a whole.

Average Daily Traffic (forecast)

79 51. The proposed land use strategy is inherently flexible, capable of implementation in "modules" within a one kilometer grid ofdistributor roads. Within this simple transport network, land uses can be re-arranged, or phased in response to changing development demands, and the speed at which new development is required. The assumption for the development for Phase 2 is therefore an assumption.

52. The traffic model was run for year 2018 for both Phase 1 and Phase 2 Development scenarios combined. This scenario assumes that for Phase 1 and Phase 2, 59 percent and 25 percent of development occurs respectively by 2018. A "worst case" operational analysis has been conducted for the morning peak hour for the road section between the Sahab and the Madounah Highways.

53. The analysis indicates that the highway section would operate at an LoS D by 2018. This implies that if Phase 2 development is significantly greater than 25 percent of its total capacity by year 2018 and the supporting road network infrastructure is unable to handle the expected traffic levels, then there will be a need to consider widening the main line highway between the Desert Highway and the Madounah Highway to a dual three-lane highway. The timing ofthis is clearly unknown, and is totally dependent upon the speed of development ofthe ADC.

Air Quality Assessment 54. The ADC will draw traffic from the urban areas of Amman and Zarqa, as well as transit traffic along the north - south and east - west axes, and this is expected to improve transportation efficiency in the urban areas as a result of reduced congestion. In theory, as speeds increase, emissions decrease, resulting in a net improvement in overall air quality that would, in turn, translate into improved health and other related benefits. Such improvements and benefits are expected to be seen primarily along the Hizam Road and in the vicinity ofAI Juwaidah.

55. This assessment of air quality depends on an estimation of changes in air quality throughout the modeled network. It should be noted that results are purely theoretical and are a result of standard input parameters and traffic model outputs. Nevertheless, the results indicate that during the morning peak hour, CO and COz are reduced by 1.2 percent and 0.9 percent respectively, and 3.1 percent and 2.6 percent respectively by 2018 and 2028. PMlO value is reduced by 2.4 percent by 2028. NOx is reduced by 1.1 percent by 2028, and Pb by 2.4 percent. Overall, emissions, in kilograms during the AM peak hour, is reduced by 2.6 percent by 2028.

80 Annex 10: Safeguard Policy Issues JORDAN - AMMAN DEVELOPMENT CORRIDOR

Annex 10.A: Environmental Management and Cultural Resources Management Plans

A. OVERVIEW

1. Introduction. The population of Jordan is now estimated at 5.3 million, 54 percent of which live in the Amman and Zarqa Governorates. To promote future development, the Government of Jordan, through the Ministry of Public Works and Housing (MoPWH), have undertaken a number of studies to assess the potential of an Amman Ring Road (ARR). The Feasibility Study and a full Environmental Impact Assessment for the eastern section of the ‘ring’, were completed and approved by the World Bank in 1999. Since the potential for future urban expansion westwards and northwards from the Amman-Zarqa conurbation is constrained by topography and other factors, recent and planned development schemes are rapidly extending the urban area eastwards towards the proposed ring road. The new road is therefore now seen as the focus for this easterly development and the original concept of the project has recently changed from one providing a road bypassing Amman-Zarqa, to one providing a development corridor, the Amman Development Corridor (ADC). This will form the vital transport link from which new residential, commercial, and industrial developments will be coordinated and efficiently served. The Amman-Zarqa conurbation also contains 80 percent of the Kingdom’s commercial and industrial activity and is the focal point for the international transit trade. However, the growth of both national and international freight is hampered by the lack of efficient Customs facilities, space for the storage of containers at Aqaba, and the lack of a Logistics Center through which to co-ordinate transport activities. Most ofJordan’s imports and exports pass through the existing Customs Depot at A1 Juwaidah, in the eastern suburbs of Amman, where increasing traffic causes congestion, pollution and danger to the public. It is therefore intended to relocate the existing Customs Depot and develop a new Inland Logistics Port, the CDP, on a single site adjacent to the new road.

2. Project Area. The ADC leaves the Desert Highway some 18 km south of Amman city center and takes a broad curve northwards to Zarqa, where it intersects with the Zarqa Highway, Zarqa Bypass and Yajouz Road. The total length of new road is 40.0 km. The CDP site is 20.5 km north of the Desert Highway at the ADCMadounah Road intersection. The ADC encompasses contracts include 7 interchanges, 13 road crossings, 1 railway crossing and 50 km of service roads. A Right ofWay (ROW) of 80 m has been adopted, with service roads provided throughout the alignment and as far as the CDP site.

3. Project Needs, Objectives, and Benefits. Current projections indicate the population of Jordan will increase to 8.1 million by 2020 and that of Amman and Zarqa Governorates to 4.5 million. Similarly, the Jordanian labor force, just over 1.2 million in 2001 of which 56 percent was located within the Amman and Zarqa Governorates, is predicted to increase to 2.1 million by 2020, with 1.2 million in Amman and Zarqa, equivalent to the entire national workforce in 2001. The Transport Sector has accounted for over 19 percent of GDP in each of the last three years and despite economic recession and regional problems continues to grow. However, the lack of infrastructure constrains future operation and expansion ofboth the sector and the Amman-Zarqa region. The primary objectives ofdeveloping the ADC are therefore to (a) make less expensive land available for future development; (b) provide opportunities for continued growth and employment; (c) facilitate the movement of imports and exports that increasingly rely upon overland transport; (d) facilitate the transit traffic between Aqaba and Syria, Saudi Arabia, Palestine and Iraq; (e) establish conditions for improved performance of the trucking industry; 81 (0 provide for the relocation of the Al-Juwaidah Customs Depot; and (g) provide for the development of an Inland Logistics Port. The existing Customs Depot at A1 Juwaidah cannot meet the current demand for freight storage or truck parking, and increasing traffic is seriously delaying procedures and causing severe congestion in adjacent areas. Relocation will provide a larger site with improved access, the absence of local congestion, and the opportunity to adopt systems that improve the co-ordination of clearance procedures with the five main land border crossings and Aqaba port. After completing Customs, trucks must be maintained and fuelled, and their drivers provided with accommodation and access to other government services such as passports, work permits and registration. These services are currently dispersed around the A1 Juwaidah Depot, often in residential areas that suffer the intrusion ofheavy goods vehicles, and consequently further congestion, pollution and danger. In addition, the random movement of international freight within the urban area, frequently with foreign drivers, is an on-going security problem for authorities responsible for monitoring the movement of goods and foreign nationals. The proposed new Inland Port will therefore offer (a) adequate space for the efficient movement and storage of freight; (b) a strategic location in respect of routes to international borders; (c) access to and from international routes away from urban areas; (d) proximity to Queen Alia International Airport, for air cargo; and (e) access to vehicle and driver services dedicated to the needs of freight traffic. In short, the proposed Project would support planned development of the eastern portion of the Amman-Zarqa urban area, anticipated to be a major area of growth over the next ten to twenty years as lands to the west and north become fully utilized. It would also facilitate improved transportation links on a regional, national and local level by establishing an efficient route around Amman-Zarqa. The direct benefits of the project would include a reduction in travel times and in the costs ofoperating vehicles, as well as greater fuel efficiency. Important benefits would come to urban neighborhoods, especially in the Zarqa and Sahab areas, currently subject to mass movements of large trucks through commercial and residential streets. These areas would benefit from significant reductions in vehicle and pedestrian accidents, less street level air, noise and light pollution, and improved local traffic flow. Road maintenance costs associated with overweight vehicles would also be reduced. Improved access to areas adjacent to the road would stimulate economic opportunities through development of services and commercial operations.

B. ENVIRONMENTAL STUDIES

4. Project Environment. Baseline conditions in respect of the biophysical environment were fully appraised in the 1999 EIA and each discipline has been re-addressed during the Update. While the majority ofparameters have limited influence on the development decisions to be taken, Ecology, Hydrology and Archaeology were identified as being the areas ofpotentially greatest concern during project development. In respect of socio-economic conditions, the most pertinent element is the proportion ofyoung people in the population.

(a). Ecology and Bio-Diversity: The ADC spans two Bio-geographical Zones: the Mediterranean Zone and the Irano-Turanian Zones. The Mediterranean Zone has been subjected to diverse human impacts over the millennia and has been significantly degraded over the last several hundred years. The Irano-Turanian Zone has faired better because of its ability to invade other zones, and while many floral and faunal species have migrated or disappeared, others have adapted and survived. The wadi systems that span both zones essentially comprise a separate third Zone, but one that is severely degraded by its proximity to urban development. The ADC does not contain any globally important habitats or ecosystems. There are no Nature Reserves or other legally protected areas within the ADC. No conservation practices are exercised apart from the control ofhunting and the monitoring of illegal trade in

82 wildlife, to the extent they are controlled and monitored throughout the Kingdom. The diversity of faunal and floral species in comparison to other sites in Jordan is low. The area has been inhabited for millennia, and deforestation, agriculture and overgrazing over the past few centuries has resulted in soil erosion, degradation and the disappearance of species. Few species found in the area have local, regional or global status.

(b). Surface and Ground Water Hydrology: The ADC and its zone of influence lie astride the boundary between the Dead Sea Drainage Basin and the Jordan River Drainage Basin. There are no perennial watercourses, although Wadi A1 Ush may contain minimal base flows well into the summer months. Ground water levels in the area are frequently 100-200 m below ground level. There is little or no evidence of private wells being used for agricultural activity outside of the Desert Highway corridor. There is apparently negligible use of wells in the rangeland areas to water herds. Only one well, at A1 Mnakher, is directly affected by the project and will be replaced.

(c). Archaeological, Historic and Cultural Heritage: The Department of Antiquities (DoA) undertook the Archaeological Survey of the ADC. A total of 43 sites were recorded, primarily in the Wadi AI Ush area and near Sahab, of which 24 were identified as being particularly threatened. Subsequent Detailed Design moved the road alignment, and only 3 sites now remain within 300 m of the ROW, and these are more than 200 m away. The remains of a village settlement at Khirbet El Manakhir, which was the subject ofsome concern from the World Bank at the time of the 1999 study, is now more than 500 m from the alignment. On the CDP site, DOA found two sites of High Significance and two of Low Significance. Preliminary site layout has left those of High Significance outside the area to be developed. Those of Low Significance will be investigated by DoA prior to construction.

(d). The Significance of Young People: The most significant feature ofthe population statistics is the proportion, currently 50.4 percent nationally and 47.5 percent in Amman, of young people 0-20 years of age, compared with those 40-65 years old, 15.6 percent nationally and 17.1 percent in Amman. Those in the former group will be seeking employment within the next 15-20 years, while the older age group will be retiring to make way for them. The national unemployment rate for 2002 is 15.3 percent, 815,300 persons, comprising 14 percent of the male population and 22 percent ofthe female population. 55 percent are 15-25 years ofage. Clearly, a major job creation program is required, and schemes such as the ADC and its subsequent developments will attempt to provide the necessary employment.

5. Complementary Studies. Evaluation of environmental, land acquisition and resettlement, and cultural resources issues has been an integral part of planning and design studies undertaken by the Government of Jordan to support identification, preparation, implementation and operation of the proposed project. The Ministry of Public Works and Housing (MoPWH) the implementing agency, with the assistance of a qualified intemational consulting firm, prepared an Environmental Assessment, a Resettlement Action Plan, a Cultural Resources Impact Assessment, and a proactive Information, Participation and Consultation Program in 1999 as part of the Amman Ring Road study and updated in 2003 for the Corridor Development Project. This program of complementary studies and consultations has been conducted by an interdisciplinary team of national, regional and international specialists. Their findings and recommendations have been directly incorporated into the design process or are 83 elements of the Environmental Management Plan (EMP) and its associated Cultural Resources Management Plan (CRMP), and a Land Acquisition and Resettlement Plan (LARP).

6. Policy and Legislative Framework. These documents have been prepared in compliance with the requirements of: 1) the Government of Jordan, including the “National Environmental Protection Law, 12/1995,” the “Antiquities Protection Law, 21/1988” and Decree (12) of 1987, referred to as the “Land Acquisition Law;” and 2) the procedures of the World Bank, including Operational Policy 4.01, “Environmental Assessment;” Operational Policy 4.12, “Involuntary Resettlement, Operational Policy Note 11.03/0P4.01 “Management of Cultural Property in Bank-Financed Projects;” and Environmental Assessment Sourcebook Update No. 8, “Cultural Heritage in Environmental Assessment.” The proposed Project was placed in World Bank environmental screening category “A” requiring a full environmental assessment, due to significant and diverse impacts associated with the proposed construction activities. In January 2003, the new Ministry of Environment (MoE) took over the responsibilities of GCEP and introduced a new EPL, but this has yet to be ratified by Parliament. EIA requirements have been prepared and although they also await ratification, are already being implemented for new projects. In the absence of legally enforceable EL4 regulations and procedures, the 1999 Assessment was undertaken in accordance with World Bank Operational Policies and Directives, and subsequently received formal approved from both the Bank and GCEP. Since the Bank’s requirements are generally more stringent than those ofthe Ministry, the EL4 Update continues to comply with World Bank procedures. A LARP was required because of the need to acquire over 834.5 ha hectares of land and to potentially resettle approximately 194 residents and about 75 farm workers. In addition, investigation of archaeological, historical and sacred sites is a standard requirement ofJordan and the World Bank for major new highway projects.

7. Compliance with Regulations and Procedures. The proposed Project is in fill compliance with the provisions of all applicable Jordanian and World Bank procedures. Formal clearance letters were obtained from the Ministry of Environment (MoE) concerning the Environmental Impact Assessment and the Department of Antiquities concerning the Cultural Resources Impact Assessment. Compliance with Operational Policy 4.12 would be achieved through: (a) a formal decision by the Government of Jordan to apply a Project-specific compensation formula for land acquisition compensation consistent with Bank policies; and (b) completion of the Project Affected Parties Census and Socio-Economic Survey and its fill integration into the final version ofthe LARP.

8. Information, Participation and Consultation Process. An extensive Information, Participation and Consultation (IPC) Program for the ADC has been undertaken. Initially, 3 Scoping Sessions and 1 Scoping Review Meeting were held during the 1998 Pre-Feasibility study. The second phase of the program was undertaken during the 1999 Feasibility Study and comprised: 1) Two technical sessions on issues of particular concern, cultural resources and socio-economics; 2) A second Scoping Session at Zarqa to discuss two new components, the Zarqa Eastern Bypass and Zarqa Through Link, and the results of the 1989 session; 3) Two project exhibitions to which the public were invited through the media; and 4) An Environmental Assessment Review Meeting. The third phase comprised the Census and Socio-Economic Survey of potentially affected persons to identify those affected and to create a database of potentially impacted plots. Four types of community consultation meetings were held with 1) representatives of local government, Mayors, elected members of the Municipalities and Governors in Amman, Zarqa, Sahab and Madaba; 2) representatives of communities in villages and scattered settlements along the route alignment, with separate meetings for women members of each community; 3) concerned government officials, women’s leaders, representatives of NGOs and Army officials; and 4) tribal and family leaders that have a high number of land

84 holdings and tribal ties within the project affected areas. More than 25 meetings were held during the survey, about half being specifically for women in the directly affected communities. Community-based meetings helped the survey team obtain information on PAPS, and the communities to better understand the objectives ofthe survey. For the CDP. an additional Census and Socio-Economic Survey ofpotentially affected persons has been undertaken at both the CDP site and the existing Customs Depot at A1 Juwaidah. The Information, Participation and Consultation Process revealed:

(a). Three areas of prime concern were identified for different Working Groups at each of the initial Scoping Sessions: 1) Natural and Physical Environment, particularly changes in land use, the depletion of water resources, and air pollution; 2) Land Acquisition and Resettlement, particularly the arrangements for compensation and uncontrolled planning; and 3) Cultural heritage and Urban Issues, particularly the risk to archaeological sites and the opportunities for employment and a better urban environment.

(b). One ofthe more significant findings ofthe sessions was the general recognition of the potential benefits of the project. With one exception, the high number of responses calling for other capital investments, the distribution of responses was broadly than expected. Three issues were identified that would have most bearing on the development ofthe Environmental Management Plan: (i) Issues relating to involuntary resettlement did not appear to be viewed by participants as a major concern, in the context of which resettlement was not viewed as a direct project cost; the existing regulations on resettlement were viewed as inadequate; no need was perceived to monitor resettlement, even with monitoring of other issues strongly identified as a preferred mitigation option; and information, research and consultation were ignored as a mitigation option. (ii) Project monitoring occupied a relatively strong position in the perception of participants, especially with regard to the natural environment. (iii)Participants were generally of the view that there was sufficient existing legislation to manage project impacts provided it was effectively enforced. This was well illustrated in respect of land use and urban development, where for 8 of the 13 issues, enforcement, institutional reform or capacity strengthening was identified as a mitigation option.

C. ENVIRONMENTAL ASSESSMENT

9. Evaluation of Potential Environmental Impacts. Consistent with Jordanian policies and World Bank procedures, the proposed Project has been placed in environmental screening category “A” and is the subject of a full Environmental Assessment (EA). The EA was completed and approved by the World Bank in 1999 as an integrated part the detailed Feasibility Study for the southern and eastern sections of the Ring Road. It included extensive mapping of physical, biological, socio-economic and cultural heritage features in the series of proposed alignments. This was followed by preparation of a constraints analysis used to identify sensitive areas in order to avoid impacts through alignment modification or, when necessary, to indicate mitigation actions to reduce the scope and extent of potentially adverse impacts. In addition to field surveys, consultations were held with local authorities and communities to identify the location ofimportant habitats, prime agricultural lands and other important natural and manmade features in or adjacent to the proposed right-of-way. The EIA update summarized and updated

85 the impacts associated with the proposed Amman Development Corridor (ADC). An Environmental Management Plan (EMP) was developed to eliminate or minimize these potential impacts.

10. Findings of the Environmental Assessment. The Environmental Assessment found that the greatest potential environmental impacts will occur during the construction phase. The potential construction impacts were subdivided into temporary (on-~ite'~and off site2') and permanent2'. Implementation of the proposed Project would also result in the operational impacts22(Table I).

(a). Disruption to Communications and Utilities. All existing roads, tracks, herd drive trails, and wildlife movement and foraging patterns that cross the ADC alignment will be subject to some disruption. The ADC crosses several public utilities over its 40 km. All cables and pipes will be reconnected or relayed, but limited disruption to service is inevitable. Access to the 31 km from the Desert Highway to Zarqa- Eastern BypasdZarqa-Through-Link Interchange is adequate and new roads are unlikely to be needed. The remaining 9 km has fewer existing access points but the terrain is difficult and the Contractor is likely to access the ROW from either end rather than cut new roads.

(b). Site Drainage: Temporary dislocation of existing drainage patterns is inevitable during road construction as cut and fill operations are undertaken. In the vicinity of existing watercourses and in the higher energy environments of Wadi A1 Ush, increased rates oferosion and sedimentation may result.

(e). Disposal of Surplus Materials. The 31 km from the Desert Highway to the Zarqa- Eastern BypasdZarqa-Through-Link Interchange have substantial misbalances of Cut and Fill. The 18.5 km from the desert highway to south of Madounah Road requires the import of some 1.5 million m3 whereas the 12.5 km from south of Madounah Road to Zarqa-Eastern BypasdZarqa-Through-Link Interchange is expected to generate an excess of some 1 million m3. The remaining 9 km is anticipated to have a small surplus of excavated material, 50,000 m3. This simple imbalance in volumes is exacerbated by the results of geotechnical investigations that indicate much ofthe Cut from The 18.5 km from the desert highway to south of Madounah Road will be unsuitable for reuse as Fill. Even if all excavated material were suitable for re-use, if the 3 1 km are executed concurrently and if agreement for material transfer could be made between Contractors, the transport ofmaterial from Wadi A1 Ush to a site near the Desert Highway may be uneconomic. Borrow pits will be therefore required for the 18.5 km from the desert highway to south of Madounah Road, while areas for the disposal of surplus material will be needed for the 12.5 km from south of Madounah Road to Zarqa-Eastern BypasdZarqa- Through-Link Interchange. The MoPWH has identified appropriate sites for

l9 Most significant temporary impacts, suffered during the period of construction at the site, are disruption to communications and utilities, site drainage, the imbalance of Cut and Fill, noise and air pollution *' The primary off-site temporary impacts will be those associated with Construction Camps, Borrow Pits, and sites used for the disposal of surplus materials *' The primary permanent impacts for both the ADC and CDP will result from land acquisition. Additional permanent impacts may result from the relocation of the Customs Depot from A1 Juwaidah and from induced development along the ADC. ** Primary operational impacts are noise, safety, and the potential for ground water pollution 86 disposal of surplus materials, and contractors will not be permitted to utilize alternative sites.

(d). Noise and Air Pollution. Dust is expected to be more of a problem on The 18.5 km from the desert highway to south of Madounah Road, as the soils are fragile and easily pulverized. Construction activities will enhance the already high noise and dust levels in the vicinity of the Zarqa-Eastern Bypass and Zarqa-Through-Link. The demolition ofthe Ministry ofSupplies stores on the Old Zarqa Road will create significant noise and dust emissions.

(e). Land Acquisition for the ADC. The acquisition requirement based on the ROW as defined in November 2003 is 405.9 ha. In addition, residual plot areas, in total some 1.7 ha, that are so small or of a shape that renders them of limited value to the existing owners and users, will also be acquired. There are also areas within the ROW between plots, wadis and roads, but outside plot boundaries, in total some 15.5 ha, that are Government owned and available at no charge. There are also plots owned by Greater Amman Municipality (16.9 ha) and the Jordanian Army (40.7) that are similarly available. The total expected purchase requirement is therefore some 334.5 ha.

(0. Residential Property Take. A total of 40 plots containing residential structures of various descriptions are affected by the ADC. The residential structure is directly affected on 19 of these, a total of 29 residential units, necessitating the resettlement of approximately 194 persons. Guardhouses that double as residential units for less than ten guards will also be acquired. A number of immigrant Egyptian and Iraqi fm workers are resident on affected sites. The precise number remains to be confirmed, but is thought to be around 75.

(g). Business Relocation. Direct impacts on commercial establishments are confined to five locations, one general amenity store, a firniture show room, and three chicken farms, all along the road’s alignment. At each of the three farms, the demolished structures could be reconstructed on the residual land.

(h). Agricultural Production Loss. The existing agricultural activities along the corridor are essentially two-fold; rain-fed arable cultivation and permanent tree crops. Some 187 ha of rain fed arable land will be acquired. Including a small allowance for areas taken out ofproduction because ofimpaired access, the total area lost to raid- fed agriculture is nearly 200 ha. The total acquisition of areas under permanent crops will be 29.9 ha.

(i). Land Acquisition. The acquisition requirement based on the ROW as defined in November 2003 is 405.9 ha. In addition, residual plot areas, in total some 1.7 ha, that are so small or of a shape that renders them of limited value to the existing owners and users, will also be acquired. There are also areas within the ROW between plots, wadis and roads, but outside plot boundaries, in total some 15.5 ha, that are Government owned and available at no charge. There are also plots owned by Greater Amman Municipality (16.9 ha on Contract 1) and the Jordanian Army (40.7 ha on Contract 3) that are similarly available. The total expected purchase requirement is therefore some 334.5 ha. For the acquisition of the CDP site, in total 500 ha, whole plots will generally be acquired, with relatively few instances ofplot severance.

87 (j). Severance. All existing surfaced vehicular links are to be retained and any severed access to individual properties restored. The majority of local unsurfaced tracks crossed by the ADC access agricultural land on the Contract 1 alignment. Most will no longer be required because the land they access is also being acquired for the ROW; an alternative route, albeit slightly longer, is available; and future access will be provided via the ADC service roads. In addition, there are no situations in which the only access to a given plot will be severed but the plot itself remains otherwise unaffected. Some provision for pedestrian crossing points is required on the Zarqa- Through-Link, and animal crossing points to maintain husbandry trails are also needed along the alignment.

(k). Impacts at AZ Juwaidah. Three populations will potentially be impacted, namely: customs officials and others who work at or use the existing Customs Depot; the proprietors and employees ofbusinesses in the vicinity; and local residents. Socio- economic surveys have been undertaken in all three and revealed the following: (i) Customs OfJicials and others Working at or Using the Depot. Some 70 percent of Government staff highlighted the positive advantages of relocation, citing three main expectations: improved storage, parking and cargo inspection facilities; improved organization and working procedures; and reduced pressure of work and quicker clearance of goods. The other 30 percent highlighted the negative aspects, primarily associated with the increased time, effort and cost of traveling to and from the new location. Of the Brokers and Agents nearly 60 percent considered relocation would affect their day-to-day dealing with the Depot, of which one-third thought the affect would be positive, two-thirds negative. 28 percent considered relocation would increase the time and cost oftraveling, but 67 percent also considered relocation would offer better offices and services, more modem organization and improved clearance procedures. Members ofthe general public clear their own goods are unlikely to suffer any overall effect. They are at most likely to use the Depot only a few times a year and while they will have to further to travel, the improved facilities with modem clearance procedures will more than offset the disadvantage. Lorry drivers may also be affected little. Foreign drivers and those from elsewhere in the Kingdom will no longer have to negotiate the congested roads ofA1 Juwaidah and will be afforded centralized services. New Customs procedures will reduce the time they and their vehicles are idle and passage to their final destination will be significantly easier. Those drivers whose home base is Amman may be impacted more. Ifthey time their journeys for an overnight or weekend stay with their families, shorter clearance time may make this less practical. (ii) Businesses in the Vicinity of the Depot. Businesses in the vicinity ofthe Depot are, to varying degrees, dependent upon its employees and visitors for a proportion oftheir customer base. Nearly 30 percent ofthe businesses reported they had no particular reason to be located either in A1 Juwaidah or in close proximity to the Customs Depot. Indeed, only 70 percent of owners thought their current location well suited to their business. A similar percentage ofshop owners thought their location had a positive effect on their customer. Some 58 percent of businesses thought they would stay where they were when the Depot moved, whereas 16 percent said they would follow it to its new location if facilities to do so were made available. The other would ‘wait and see.’ Twenty-eight percent of respondents suggested that business might improve

88 with Depot relocation due to reduced traffic noise and congestion, and five percent thought trade would improve with redevelopment ofthe Customs site. (iii)Local Residents. While the majority of residents considered the shops and services on the main thoroughfare to be significant to their lives, they were dissatisfied with the present state of the local environment. The concerns expressed were primarily the danger to their children, traffic noise, air pollution, and congestion. In general, this majority thought they would be better off not having the Customs Depot in their neighborhood.

(1). AI Juwaidah Redevelopment. As a result ofthe relocation ofthe Depot, a valuable 15 ha site on the outskirts of the Amman urban area and close to the major road network will become available for redevelopment. The ftture use ofthe site is likely to be either light industrial and commercial, or low cost residential. Whatever the nature of the redevelopment, it is likely to offset the loss of customer base for local shops and businesses.

(m). Induced Development. The ADC will have a major impact upon the areas through which it passes. Patterns of land use will change rapidly as the demand for development increases land values. The extent to which this impact is positive or negative will be determined by the efficiency of institutional planning and implementation structures. Whilst the 1999 EIA saw induced development as largely negative, the change in concept of the project to one that creates a development corridor allows it to be viewed more positively. However, without an effective planning framework the overall impact could still be substantially negative.

(n). Operational Impacts. The primary operational impacts are noise, safety, and the potential for ground water pollution. Other operational impacts of significance include (i)air quality impacts associated with emissions from trucks and cars using the road and from the suspension of dust; (ii)the introduction of lighting along the road in areas currently unlit at night; (iii)impacts associated with landscape maintenance measures along the highway; and (iv) localized impacts from routine highway maintenance activities. (9 Noise. The ADC may be expected to benefit routes within the Amman urban area currently utilized by long-haul transit traffic. These include Yadoudah Road, Hizam Road and the Zarqa Highway. Over the majority of the alignment, traffic noise will not be a significant problem. However, five ‘sensitive’ sites have been identified for which noise modeling in 1999 concluded a significant impact would be apparent at two, the cemeteries at the Sahab interchange and the mosque adjacent to the Zarqa-Through-Link, and that both would require mitigation. (ii) Safety. The ADC will facilitate the transfer ofheavy traffic to a higher standard road that will potentially reduce accident rates. With the relocation of the A1 Juwaidah Customs Depot, much of the heavy traffic will be taken off the Hizam and other roads in eastern Amman. The CDP will also provide the opportunity to introduce vigorous monitoring of the truck fleet for vehicle condition, its operation for overloading, driver condition and training, and restrict the non-essential movement oftrucks into the urban area. The transport of hazardous materials poses particular risks in the event of an accident. With the ADC hazardous materials will be transferred from predominantly urban

89 routes on to a road of higher design standard with much lower volumes of traffic, and thus less potential for accidents. The severity of any accident will, with the exception of one in Zarqa, be significantly less that an accident on alternative routes because the ADC will limit the potential for direct contact with the resident population, limit the effects on the transport system elsewhere by minimizing delay, and facilitate access by the emergency services. (iii)Ground Water Pollution. All surface watercourses in the region are seasonal and there is little potential for pollution, since contaminants will be dispersed or captured between flow events. Two sections of the ADC, the southern section immediately adjacent to the Desert Highway and the northern section cross groundwater recharge zones. Water levels are deep and the nature of the geological strata does not promote contamination by normal runoff. In the ‘Without Project’ scenario, the existing routes cross aquifers for mush of their length and hence offer greater potential for ground water pollution. The threat to ground water resources from accidental spillages, particularly of hazardous materials, will be markedly reduced.

11. Analysis of Alternatives. Alternatives to both the ADC and the CDP were examined.

(a). Alternatives for the ADC ‘Do Minimum’ and a wide variety of alternative development options have been considered throughout the period of project gestation. (i) ‘Do Minimum ’ Option. The ‘Do Minimum’ option comprises the upgrading of existing routes, which would be expensive, highly disruptive and wholly impractical. It would also not satisfy the needs and objectives of the ADC project. The previous assessment ofthe ‘Do Minimum’ alternative with respect to the full encirclement ofthe Capital identified the eastern section ofthe Ring Road, the ADC now proposed for construction, as one of these alternatives. It may therefore be argued that the Project Proponent has already opted for a ‘Do Minimum’ option. (ii) ‘Change of Policy’ Options. Since the project is conceived as fdfilling both strategic (national and regional) and local (sub-region, city) functions, no single alternative investment is viewed as being capable ofmeeting both these aims. The primary modal alternative, Heavy Rail, would primarily function along the existing north-south comdor. The existing line is now barely operational and there are no immediate plans for its upgrading and redevelopment. A Feasibility study for a Light Rail system between Zarqa and Amman has been undertaken, but the movements accommodated are only partly comparable to those projected for the Zarqa-Eastern Bypass and Zarqa- Through-Link. A Light Rail line would also not provide a future development spine that would act as the primary distributor as well as an inter-urban highway. (iii)Alignment Options. A wide variety of alignment options were considered during the Feasibility Study, particularly with respect to where the ADC left the Desert Highway and where it joined the Zarqa Highway. The final alignment reflects the recommendations of the 1999 EIA, the Cultural Resources Impact Statement and the guidelines established in the 1999 LARP.

90 (b) Alternatives for the CDP Site. The ADC provides the ideal location for the CDP with excellent access to international trade routes, existing and planned industrial areas, Queen Alia International Airport and the Capital. It encompasses extensive areas of relatively flat land free of development constraints, which will also accommodate new residential areas for port and customs employees, and new industrial developments that will support CDP activities. The Corridor is also crossed by the Hijaz Railway, which may be up-graded in the future, to create a multi-model international freight transport hub. Preliminary studies identified seven sites within the ADC that could accommodate the CDP, each with total area of at least 500 ha. Three were subsequently considered worthy of further evaluation on the basis of land and infrastructure costs, the potential for expansion and rail access and access to Amman and international borders. The sites were scored for each criterion and these scores multiplied by the value allocated to each criterion to reflect its relative importance. The evaluation confirmed a site on the Madounah Road to be the preferred location for the CDP, offering the lowest cost for acquisition, good opportunities for expansion, good access to Amman, and the best access to international borders. Further consideration of land in the vicinity by MoPWH concluded the CDP should be located in the northeast quadrant of the ADCLMadounah Road intersection. Approval ofthis site for CDP development was given by the Cabinet on November 23,2003.

D. ENVIRONMENTAL MANAGEMENT PLAN

12. Environmental Management Plan. An Environmental Management Plan (EMP) including mitigation, monitoring and institutional strengthening & capacity building has been prepared for the MoPWH by the environmental consultant.

13. Environmental Mitigation Plan. The key elements of the Plan include actions during the various phases ofthe project: Pre-construction, construction and operation phases (Table 11).

(a) Pre-Construction Impact Mitigation. The detailed Design has provided a major opportunity to minimize adverse environmental impacts through appropriate route selection and engineering design, particularly with respect to cultural resources, severance, drainage, slope stability, and safety. The final Right of Way (ROW) does not intercept any known archaeological remains. All existing roads crossing the ADC alignment have been retained via underpasses or overpasses. Drainage, particularly through Wadi A1 Ush, has taken account of flows in the main wadi and its tributaries, with and culverts located and sized to minimize the impact ofthe new road. Detailed geotechnical studies have been undertaken throughout the route and embankment slopes, compaction, and the need for retaining walls and other structural support determined by reference to international standards. The incorporation of the economic cost of accidents in the social cost-benefit analyses was found to justify any number of additional road safety measures beyond those required by standard engineering practice including the provision of: (i) A median concrete bamer, a New Jersey Barrier, will run the full length ofthe ADC. Where interchanges are some distance apart, intermediate crossing points and access from the service road to the mainline are provided. (ii) A 1.9 m high fencing to prevent animals gaining access to the highway; (iii)Future installation of emergency telephones and an automatic hazard warning, the latter a centrally controlled variable message system capable ofwarning of fog, accidents, and speed restrictions via electronic signage; 91 (iv) Street lighting to reduce accidents at night and at times ofreduced visibility; (v) Police parking lay-bys at 5-10 km intervals. (vi) PVC ducting across the highway at intervals of 1-2 km, to avoid delays and the risk ofaccidents due to excavations for fbture utility services. (vii) Arrester Beds or Truck Escape Ramps (TERs) on long steep gradients and where the possibility ofdamage caused by a runaway vehicle, such as a loaded tanker that would spill its load if it crashed, is greater than normal, have also been considered, but found to be unwarranted.

(b) Construction Impact Mitigation. Specific measures to reduce potential construction impacts would be taken regarding the detailed design, construction tenders, construction process and performance monitoring. Contractors would be required to provide and maintain equipment with proper noise abatement controls. Construction personnel would be expected to follow guidelines to minimize environmental damages by proper selection and operation of borrow areas and. quarries, use of dust suppression methods and proper collection and disposal ofwaste oil, lubricants and fuel. Borrow and quarry operations would be designed to minimize impacts and would be reclaimed at the end oftheir use. (i) On-Site temporary impacts. The majority of On-Site temporary impacts can be mitigated through good construction practice and effective site supervision. (ii) Off-Site Temporary Impacts. The sitting ofconstruction camps within an urban area is only acceptable at established industrial estates with appropriate access control. Since these camps will be closed after usage and considerable costs will be incurred returning the sites to their original state, land already identified for future development is preferred. It is preferable for each camp to be connected to an existing piped sewerage system, subject to the approval ofthe appropriate responsible agency. If no such connection is possible, it will be necessary to install a separate system for the collection and disposal of wastewater, and perhaps a separate system for industrial wastewater. Where practical, the Contractor shall recover, treat and re-use wastewater. (iii)Permanent Impacts. All land acquisition will be undertaken in accordance with Jordanian Law, primarily Decree No. 12 of 1987 and subsequent amendments, generally referred to as the Land Acquisition Law. The potential severance of community links were clearly identified in 1999 and have largely been mitigated by maintaining existing crossings. Animal crossings will be required at selected locations where herders’ trails will be severed, particularly on embankment or in cutting. The general height of culverts is two meter, adequate for the passage of small animals. Provision for larger animals has been made with the incorporation of three 3 x 3 meter box culverts located to reflect traditional patters ofmovement. Pedestrian access to the new road and interchanges will be also be prevented by this fencing. The existing roads have minimal pedestrian traffic and no special provision, such as pavements, has been made in the past.

(e) Mitigation of Operational Impacts. The Project would address operational impacts through a combination of carefully detailed design approaches, enforcement of vehicle standards and maintenance requirements and routine monitoring. Air pollution from vehicle emissions and suspended dust would predominantly be addressed through vehicle standards, use of inspections and regular collection of 92 roadway dust to reduce the source of materials. The mitigation of noise is required for the Mosque at the northern end of the Zarqa-Through-Link, and the two cemeteries near the Sahab interchange. While the Zarqa schools are not a source of extreme concern, they should be the subject ofsome attenuation, particularly as they will suffer further impact if road construction is eventually continued northwards. In designing the lighting for the ADC, consideration would be given to providing adequate light for safety while avoiding disturbance to adjacent communities. The planning activities would be used to support proper sitting and development of support facilities adjacent to the highway and to control improper disposal of waste materials including oil, lubricants, fuel and solid waste.

Mitigation of Impacts at the CDP Site. Since many of the impact mitigation measures to be imposed for the ADC represent only ‘Good Practice’, similar measures will be required for the CDP. The majority of land plots will be acquired in their entirety and the arrangements for PAP identification and compensation will be as for the ADC. Given the necessity for a high level of security, particularly in the area of the Customs Depot, the whole site is expected to be walled and access only permitted via controlled entrances and exits.

Mitigation of Impacts at Af Juwaidah Site. Government employees at the Depot will be offered free transport or transport subsidies in accordance with those previously applied when Ministries and other Government offices have been relocated. Businesses that wish to follow the Customs Depot to its new location are likely to be offered a variety ofincentives to do so.

Special Improvement Measures. The proposed Project would include as mitigation measures: 1) development of shelter belt plantings in areas adjacent to Sahab, Zarqa and other areas favorable for establishment and maintenance ofroadside vegetation; this would include landscaping and planting ofnative and well adapted species with low water demands; 2) development of selected roadside rest and recreation sites to reduce traffic accident risks and to provide wider benefits from the road; and 3) measures for the protection ofcultural resources.

14. Mitigation Measures for Construction Contracts. The EMP includes special measures for construction tenders and contracts to ensure its effective implementation:

(a) Construction Tenders. All construction contracts would include specific provisions concerning environmental, health and safety measures. The EMP includes detailed briefings of potential construction contractors conceming their responsibilities to address these issues during a pre-tender conference. These briefings would outline the specific provisions ofthe construction tender documents and contracts.

(b) Pre-Tender Conference. All pre-qualified contractors would be called to a pre- tender conference at which environmental, health and safety issues of special interest or concem would be outlined.

93 (c) Bid Documents. To support the stipulations of the pre-tender conference, contract bid documents should include a set of final engineering drawings on which environmentally sensitive areas within or immediately adjacent to the construction area are defined. Standard conditions requiring special care in the vicinity of the defined sites so as not to disturb them would be issued by the MoPWH.

(d) Procedures for Borrow Areas and Quarry Sites. The location of borrow areas and quarry sites selected by the contractor would be inspected and formally approved by the MPWH and MoE, to prevent environmental values being damaged by quarrying or borrow excavation. Such inspection would not be unreasonably delayed.

15. Environmental Monitoring Plan. The Environmental Monitoring Plan of the EMP would be implemented by consultants working under the MPWH in coordination with the Ministry of Environment. Environmental monitoring would be undertaken during the pre- construction, construction and operation phases to check the accuracy of the impact analysis, evaluate effectiveness of mitigation measures, respond to unanticipated environmental impacts and improve environmental control based on monitoring data. This would include provisions for:

Site Inspections. Site Inspections provide for the day-to-day monitoring of construction activities and sites, and will provide the primary mechanism by which contractors’ performance and subsequent system operations are assessed to comply with the appropriate Standards, Guidelines, Regulations, etc. Site inspections will be carried out 6 to 12 times per year at site clearance, general construction activities, batching and asphalt plants, and camp/maintenance facilities. During subsequent operations, all the major facilities such as maintenance depots, hazardous materials storage facilities, and administrative centers will be inspected at least once every six months.

Environmental Auditing. A program ofEnvironmental Auditing will be targeted at activities perceived as posing the highest environmental and/or public health risk. At least two Environmental Audits will be carried out for every major facility in operation during the construction phase, the first prior to handing over the site to the Contractor.

Baseline Condition Monitoring. The lack of ambient air quality and noise data is a particular shortcoming of the existing Environmental Baseline Data, and a comprehensive program of measurements prior to the commencement of construction at 20 sites throughout the ADC and on existing roads serving the A1 Juwaidah Depot will be undertaken.

Fixed Site Sampling: Construction. During construction, a fixed site sampling program will monitor noise, vibration and air quality at 13 sensitive sites throughout the period of construction. In addition, monitoring shall also be undertaken at the Main Camp for each construction contract, and at a fbrther 2 sites per contract at the discretion of the EL0 and MoE, these sites to be determined once the Contractors’ proposal for camp and other sites outside the ROW are known. Because wells in the vicinity of the ADC alignment do not primarily exploit the shallow aquifer, and water levels are deep no general ground water quality monitoring program is proposed. However, this will be reviewed when the location of off-site facilities are known, and the need for any new wells for construction water supplies is determined. Where the EL0 considers existing wells to be at risk from construction

94 activity, or new wells are in hydraulically-sensitive areas, the monitoring of water quality in vulnerable wells will be included in the project monitoring program.

Fixed Site Sampling: Post-ConstructiordOperations. Post-construction monitoring at 12 sites for a period ofnot less than 2 years will be implemented to measure the operational impacts ofthe ADC and to promote a better understanding ofthe overall long term impacts of such projects in Jordan. The establishment of permanent network would be a significant asset in assessing impacts resulting from future developments within and adjacent to the ADC’s zone ofinfluence.

Complaint Based Monitoring. Monitoring will be needed to investigate complaints of excessive noise and dust, and possibly the pollution ofwell water. The full extent of the investigations that will be required cannot be determined at this time but a contingency sum equating to approximately ten percent ofthe fixed monitoring site costs is applied to the overall program to accommodate them.

Cultural Resources Monitoring. Although no known sites of archaeological, historic or cultural interest are affected by the ADC alignment, it is prudent to allow for provisional CRM inputs to deal with Chance Finds, which given the long habitation of the area have to be anticipated. It is assumed that known sites close to of but outside the Right of Way that may be at risk from vandalism or looting by construction crews will be included in the site inspections undertaken by the MPWH and only if evidence of such damage is found will the DOA be called in to give an expert opinion. Copies ofall reports on Chance Finds, incidences of vandalism and other site visits undertaken by the DoA shall be submitted to the MPWH for circulation as appropriate.

Monitoring Implementation. Overall management of the monitoring program will rest with the MPWH. While the MPWH and its staff will undertake all site inspections and some monitoring, the majority of noise and air quality monitoring, and all laboratory analyses will be contracted out to an independent consultant reporting to the MPWH. The MoE will, as the competent authority under Jordanian law for all environmental issues in the Kingdom, be assigned a supervisory role.

Reporting. After each inspection during the construction phase, a location- and activity-specific report should be compiled, identifying areas of contractor non- compliance with the EMP and providing guiding remarks on the actions to be taken. The significance of the non compliance should also be noted. Copies of these reports should be sent to the MPWH, MOE, the supervising engineer and the contractors for their action. Every six months the reports should be compiled into a review document highlighting any areas ofpersistent non compliance or negligence by a contractor. This document should also contain records of any communications between MPWH, the supervising engineer, and contractors on matters relating to the environment. If appropriate, the MPWH may introduce a sliding scale of fines to be applied for repeated poor performance assessments ofan individual contractor.

16. Institutional Strengthening & Capacity Building. Implementation of ADC development will be a long and complex process, aimed at accommodating at least 500,000 people and creating 350,000 jobs within twenty years. There is a general consensus of opinion that a single Authority must be identified, which will have the responsibility for planning and managing this. The recommendation is for an organization that will incorporate the active participation of existing stakeholders as well as the present planning and implementing

95 authorities. The existing authorities will retain their present responsibilities, and also become active participants in the Authority. The new element provided by this Authority is one of strategic planning, coordination and promotion, designed to exploit and enhance existing resources, but with authority to innovate and provide a flexible response to changing market conditions.

17. At this stage, The Ministry of Public Works and Housing (MPWH) will establish a Project Management Team (PMT) to oversee all aspects of project. The principal aim of the Team in respect ofthe present report will be to 1) take an overview of engineering management, provide the necessary coordination between the construction contracts, and ensure the equal applications ofstandards throughout implementation; and, 2) implement the EMP. The PMT will primarily be accommodated in the offices of MPWH. Close liaison will be maintained with a number of governmental and non-governmental organizations as recourse needs to be made to their individual areas of responsibility and expertise including but not necessarily limited to the Ministries of Environment and Planning, the Natural Resources Authority, the Department of Land and Surveys, The Department of Antiquities, and all the local municipalities and utility providers.

18. MoPWH staff will need to be made sensitive to the requirements of the Environmental Management Plan (EMP) and the Land Acquisition and Resettlement Plan (LAFV). This would be achieved through a one-day seminar, which would also include discussion of the social background to the project. Concerned parties from other Government departments, organizations and environmental NGOs will be invited, with the dual aim of obtaining their comments on the proposed implementation procedures and allowing the Ministry to promote the vigorous procedures that have been introduced for the ADC for the first time in Jordan. It would include site inspections, noise and air monitoring, water quality sampling, and response to emergencies such as a chemical spill and to the unearthing of unrecorded archaeological remains. Staff ofthe Ministry of Environment could also usefilly attend. In addition, a half-day course on environmental awareness with specific reference to the ADC construction that should be given by the PMT to all Supervision Consultants’ staff and the management staff of the three contractors at the commencement of each contract and repeated at intervals to take account of new appointees. On completion of the project, the PMT will present a two-day seminar to review the results of its activities throughout the period of construction and initial operational monitoring. The most beneficial timing for this would be 6 to 12 months after the opening ofthe ADC. It is expected that staff from MoPWH, MoE, environmental monitoring contractors’, DLS and others involved in the project would also partake in the presentation. Invitees will include staff from these organizations, contractors and consultants not involved in the ADC, and relevant persons from other Government agencies, NGOs, contractor and ongoing construction projects.

19. EMP Schedule and Costs. A comprehensive implementation schedule is under preparation to integrate the activities of the EMP into the overall schedule. The costs for implementation of the environmental elements of the mitigation plan during the design and construction phases are included in the cost estimates for these activities. During the operational phase the costs of the mitigation actions would be assumed by the MPWH. It is estimated that monitoring activities under the EMP will cost JD 317,000 (Table 111), and the training program will cost JD 27,000 (Table IV). These costs are still to be finalized.

96 E. CULTURAL RESOURCES IMPACT ASSESSMENT

20. The present Cultural Resources Impact Assessment is based on the 1999 EIA for the Amman Ring Road (ARR),updated in 2004 for both the ADC and the CDP site.

21. Approach to the Assessment. Consistent with Jordanian and World Bank procedures a field-based evaluation was made of potential impacts to cultural resources in both the Pre- Feasibility and Feasibility Study phases. The Phase 1 Project included preparation of a Cultural Resources Impact Assessment (CRIA) by the Consultant in cooperation with the Cultural Resources Management (CRM) Project ofthe Department of Antiquities of Jordan (DAJ). This procedure is becoming standard for all major construction projects financed directly by, or through, the MPWH, and is part of a more complex cooperation agreement signed in 1994 by the MPWH and the DAJ with the assistance of the CRM Project. The preparation of the CRIA included a special public consultation meeting and representatives of the Department of Antiquities and Friends ofArchaeology have taken an active role in the full consultation process.

22. Field Survey. The MoPWH provided financial help to the Department ofAntiquities of Jordan (DOA) to conduct surveys along alignments identified for the Amman Ring Road (ARR) Project, and to prepare a preliminary report using survey results to evaluate the potential need for protective measures. The principal aim of the survey was to determine whether any cultural resources would be threatened by the Project, to understand the evolution of settlement within the Project area, to study the function and date of the architectural remains, and to understand historical land use patterns. A team of Jordanian archaeologists conducted surface surveys ofall the proposed alignments. The surveys were undertaken between September 1997 and April 1998 by eight staff from DOA headed by a CRM archaeologist. The team surveyed, registered and mapped all sites located within a 500 meter band of the road centerline. The survey was conducted on foot, with team members walking at distances between 15 and 40 meters apart. Sample collections were taken from each site and the features were recorded. A similar survey was undertaken in September 2003 for the CDP site.

23. Survey Findings. Forty-three sites along the provisional alignment of the ARR were identified by the survey from a variety ofperiods ranging from Paleolithic sites through modem cemeteries, with typical examples provided below. The survey identified twenty-three sites threatened by construction activities under the proposed Project, although none were thought to be at high risk.. The sites discovered include sherds and lithic scatters, watchtowers, enclosures, camps, water installations and others. The survey report provides a summary of principal characteristics of each site and contains a construction risk assessment in which the sites are placed into one of five categories. While the design of the Project at that time did not require destruction ofany of the identified sites, protection measures were recommended for each ofthe sites threatened. Each ofthese sites was to be subject to individual study although the extent of the examination would vary depending on the recommendations of the CRM archaeologist. It was also concluded that twenty sites in the vicinity of the right-of-way required further assessment due to potential secondary impacts from induced growth, and several important sites require measures to protect them from indirect threats by the erection of walls and fences to enclose the sites.

24. At the CDP site, four sites were identified as being threatened by construction activities. Two ofthese were identified to be ofhigh significance, containing structures that would need to be protected, and two were of low significance, containing scattered sherds but no structure, at which the DAJ wished to only undertake surface collection prior to construction.

97 Representative Sites Located During the CRM Survey Period 1 Typicalsite Paleolithic Age (Middle-Lower) 500,OO - 200,000 B.C Site No. 1 Pre-Pottery Neolithic Age 9000-5500 BC Site No. 6 Chalcolithic Age 4500-3000 B.C ca Site No. 4 Iron Age I1200-900 BC ca Site No. 15 Iron Age I1900-322 BC Site No. 7 RomadByzantine Age 1-600 AD Site No. 27 Islamic Age (Umayyad) 650-750 A.D Site No. 42 Recent Cemeteries Site No. 2

25. Significant Sites at Indirect Risk. The survey also identified three significant sites and one cluster of sites adjacent to the proposed ARR that were at risk from indirect impacts associated with the construction ofthe ARR and pressure from development activities that can be anticipated near the road.

26. Mitigation Plan Strategy. The basic strategy used in the CRMiP is that measures for cultural resource site preservation should be preventive, and will vary according to the character, significance, size, and location ofthe site, and the nature ofthe threats affecting its integrity. All altemative construction plans should be taken into consideration during Project definition, design, and Feasibility Study phases, in order to reduce the chance of destruction of cultural resource sites and landscapes falling within the limits of the construction area. Appropriate planning would also minimize the need for the DoA to conduct rescue excavations. Priority should be given to measures for preservation in situ of cultural resource sites, and in any case requiring the least amount of rescue excavation. Rescue excavation should be the last resort when other protection measures have failed or are impossible to achieve. This implies that salvage excavation, which is unplanned archaeological work done during construction and without proper documentation, should be done only in emergency cases and not as an altemative to preventive or mitigation measures.

27. Recommended Mitigation Plan. In accordance with this Strategy, the CRMiP has essentially been preventative, and primarily implemented during the Detailed Design phase of the Project with realignment of the road. There are now no known cultural remains within the Right ofWay (ROW). Only 4 sites are within 300m ofROW, the closest some 220 m away. The remains of the ancient village of Khirbet El-Manakher, which was the subject of concern to previous Bank missions, is now more than 500 m from the ROW. For the two High Significance sites on the CDP site, the preliminary layout of the site has been adjusted so they are both outside the area proposed for development.

Not withstanding the mitigation already implemented, Feasibility and Detailed Design of the CDP site and future Development Plans for the road comdor will still need to address Cultural Resources as and when these are undertaken. Future CRMiP will therefore include the following:

(a) ADC Development Planning. The preparation of formal Development Plans for the ADC will be undertaken by an ‘umbrella’ authority on which all the existing municipal and planning authorities, the utility agencies, and special interest departments such as DAJ, will be represented. With a comprehensive planning policy for the ADC, the existing laws of Jordan in respect of cultural heritage sites and the role of the DAJ are strong enough to ensure sites are appropriately protected.

98 Further Assessment of Threatened Sites. The fixther assessment ofthreatened sites will be conducted on a site-specific basis as future Development Plans are prepared. Depending on the potential importance of the site, this will include activities ranging from a minimum option of an intensive surface survey to limited site excavation.

Design Review and DeJinition of Mitigation Options. Through the direct contact between the DAJ and the ADC planning authority, each planning and design team will review altematives for mitigation options for each site. These could include relocation, realignment, redesign, site covering, various levels of excavations, and site protection measures.

Addressing Indirect Threats. Specific actions would be included in future Development Plans to address special concerns related to indirect threats to significant cultural resources located within the ADC zone ofinfluence. This would include important sites at Qasr Madhuna, Khirbet El-Mankhir, and several sites near Sahab.

Program Review. Once the ADC Development Plans are at a Draft Stage, it is planned that the mitigation proposals be the subject of a workshop and a peer review process. The workshop should be held under the auspices of a major archaeological NGO, probably be held over two days, and be supplemented by field excursions.

Community Consultation and Participation. As has been undertaken within the development of the present project, community consultation and participation will be included as an element of the CRMiP. This would include consultation sessions in Sahab, Zarqa and other affected communities to be conducted before, during and after the archaeological and historical sites investigations. Specific measures would be taken to facilitate visits by lower and high school classes to the excavations in order to give them a better understanding ofthe cultural resources ofJordan and the importance oftheir conservation. Opportunities would also be provided by the CRM Program of the DAJ to have members of the Friends of Archaeology and other parties interested in cultural resources participate in selected activities as volunteers.

28. Mitigation Measures for Contractors. Issues related to the effective implementation of the CRMiP by the three ADC road construction Contractors is being addressed through specific activities as part ofthe tendering process. Actions will include:

(a) Pre-Tender Conference. All pre-qualified contractors would be called to a Pre- Tender conference. In respect of cultural resources, the Contractors will be briefed on: (i)the DAJ’s well documented and previously implemented ‘Chance Find’ procedures; (ii)exclusion areas; (iii)special procedures to be adopted in the vicinity of sites defined as requiring protection; (iv) penalties for non compliance; and (v) coordination with and responsibilities to CRMmonitoring groups. The provisions and requirements for addressing cultural heritage issues will also be included in the pre-Tender Conference for contract Supervision Consultants.

(b) Bid Documents. To support the stipulations ofthe Pre-Tender Conference, contract bid documents include details of the procedures in respect of ‘Chance Finds’, the role of the DAJ in project monitoring, and the requirements of Contractors to protect known sites, even though are outside the ROW. Standard Conditions of Contract

99 including the requirements for special care in the vicinity of the sites so as not to disturb them will be issued by the DAJ.

(c) Site-Specific Measures. In addition, details of the site-specific measures will be provided as Instructions to Contractors. In general, four points have been added to Contract Documents that are beneficial for the protection of archaeological sites: Procedures for Borrow Areas, Quarv Sites and Access Roads. Although the need for Borrow Areas or new quarries is not anticipated, permission to develop such sites will need to accord with the requirements of the Natural Resources Authority, which include for archaeological site surveys and prior DAJ approval. In respect of any new construction access roads, the DAJ will undertake a walkover survey oftheir routes prior to them being approved. Observation of Construction Excavation. In areas where the DAJ suspects the existence of sub-surface remains, but where there is insufficient time for archaeological excavation or the importance of the site does not warrant full scale investigation prior to construction, a representative of the DAJ will be present during the opening of excavations to identify and record any archaeological remains found. Additional Salvage Excavation. In areas where the DAJ has determined that further salvage excavation would be necessary, based on the information developed during the Final Design Phase, this would be carried out at the beginning of the construction phase. Construction activities should be scheduled so as to leave any such area until late in the construction process, and construction activities would thus not be delayed by the archaeological excavation. The cost ofthe further salvage excavation would be included in the Bill ofQuantities as a provisional sum. Chance Find Procedures. Contract Documents include details of the DAJ’s ‘Chance Find’ procedures. These are well document, well practiced, and likely to already be well known to Contractors. Provision for Contractors to modify their Program of Works to facilitate rescue excavation of any particularly interesting or culturally valuable new find is also included in the Documents. 29. Graveyards and Burials. The survey identified three sites, Nos. 2, 19 and 28 that are believed to be small Bedouin cemeteries; their significance at this time is unknown. The representatives of MPWH and the Consultant would be required to enter into discussions with the Ministry of Awqaf and Islamic Affairs (MAIA) and affected communities on possible treatment options for these sites. The MAIA would be required to formally approve the final plans.

30. Cultural Resources Monitoring Plan. The Cultural Resources Monitoring Plan (CRMoP) complements the CRMiP. The CRMoP for the Project would be implemented by the DOA in cooperation with the MPWHand include:

(a) Construction Monitoring and Site Access. Regular and frequent site inspections would be required to permit effective monitoring of the Contractors’ performance regarding compliance with applicable guidelines, regulations and statutes, and with Contract Specifications. For the proposed CRMoP to be effective it will be necessary during the course of construction and operation, for authorized representatives of DAJ, the Environmentalist with to the Project Management Team (PMT), and others as necessary, to have guaranteed access to all sites, related to any

100 Project component, at all times. Provisions for such access will be included in all Contract Documents and operating agreements.

CRMoP. The CRMoP will include inspections ofpre-programmed events such as the opening ofnew areas, including Borrow areas, ofpotential interest to the DAJ, and ofun-programmed events, such as Chance Finds. Additional site inspections as considered necessary by the DAJ will be carried out regularly but not necessarily with a structured pattern. Reporting. Each inspection will be followed by the preparation of a summary report, submitted to the MPWH, for circulation through the PMT to relevant Supervision Consultants and Contractors as necessary. These reports will identify areas and activities, and any instances of areas ofnon-compliance with the CRMiP, with recommendations for remedial action. The content of these individual reports will be summarized in the Quarterly EMP Implementation Reports (QPRs) and the Annual Environmental Reports (AERs) prepared by the PMT. These reports will also contain relevant copies of correspondence andor reports of remedial action subsequent to the original site inspection report. Ifappropriate, the executing agency may introduce a sliding scale of fines to be applied for repeated poor performance assessments ofan individual contractor.

31. Estimated Cost and Implementation Schedule. The CRMiP will be implemented in accordance with the overall Project Implementation Plan. Since no known cultural remains are under direct threat from construction, and the potential for Chance Finds is considered to be limited, the cost of the CRMoP is estimated to be JD 9,000, for site visits by DAJ inspectors. In addition the CRMoP will benefit from site inspections by the PMT Environmentalist and Supervision Consultants’ staff included in another budget line.

101 Summary of Potential Impacts Table 1.a. Temporary Impacts for the ADC

I Destruction ofnatural veeetation I Minor Damage to natural habitats, especially wadi systems Moderate Landscape Damage Destruction ofproductive lands Minor Damage to private property Minor Damage to cultural &historical resources Moderate Huntine Moderate Distribution of resident species Moderate Ecology and Destruction ofhabitats Moderate Bio-Diversity Egg collection and hunting ofbirds on Contract 2 High Road Kills Minor Disturbance to mimant birds Minor Archaeological and Damage to of known sites Minor Cultural Sites Destruction ofunknown sites Moderate Dislocation due to temporary closure and diversion ofexisting roads, Existing Communities Moderate stock routes and footaaths Interruption of supply Variable. Utilities Personal injury See Table 6.2. Cost ofreoair work. Destruction ofnatural vegetation Damage to natural habitats I Destruction oforoductive land I Access and Road Minor-Moderate. Disruption ofproductive land management; Construction Varies on location I Damage to Private oroDerty I Damage to archaeological and cultural resources; Damage to Utilities Soil and Water Pollution due to temporary activities Minor Pollution Pollution at Construction Camps, etc. Moderate Ponding Minor Drainage, Erosion and Rise in water table Not expected Sediment Load Upstream flooding Not expected Erosion and increase in watercourse sediment loading High in Wadi A1 Ush Sumlus Sooil I Excess fill from excavations and cuts I Minor Noise pollution from construction machinery Minor. Moderate at sensitive Air pollution from construction machinery sites Noise and Air Dust on accesshaul roads Moderate-High Dust from cut and fill operations depending on weather General construction activity High I Traffic at Construction Camos I High Deep excavations High Public Safety I Heavv eaubment movement and ooeration 1 Hieh Fuel and chemicals storage High Changes in existing roads High Demolition Public and Worker’s Safety High Use of Explosives I Public and Worker’s Safety 1 High I Water use at Construction Camus I Moderate Use ofaggregate resources Moderate Resource Consumption Aggregate Haulage Moderate Water use for construction Moderate-High

102 Summary of Potential Impacts Table 1.b Temporary Impacts at the CDP

Archaeological and Damage to sites, but known sites have been identified at an early stage Cultural Sites and have been taken into account during preliminary site layout. What little infrastructure there is will be diverted if needed in the Utilities Low future. All access roads off the Madounah Road, and all construction Access and Road activities, including camps, are expected to be within the confines of Low Construction the site. Whilst there will be significant potential for pollution, the limited Soil and Water catchment area and number of watercourses will aid the provision of Low Pollution adequate protection. Natural drainage over the site and its immediate vicinity will be replaced with artificial drainage. The extensive earthworks throughout Drainage' Erosion the site will generate runoff with a high sediment load and may be Low-Moderate and Sediment Load concentrated at few discharge points, with possibility of increased erosion. Surplus Spoil Cut and Fill quantities can be expected to balance. Low The area is extremely sparsely uninhabited. Noise and air quality Noise and Air pollution during construction will essentially be limited to the confines Low of the site. The site can be cordoned off in such a manner that unauthorized public Public Safety access will be barred. No major diversions of the existing road Low network are likelv

103 Summary of Potential Impacts Table 1.c: Permanent Impacts for the ADC

Potential Temporary Risk or Impact Risk

Rain Fed Arable Land I Loss of land, foreclosure and loss of farm resources, Low regionally, Moderare locally 1 produce and livelihood I PRODUCTION Perennial Crops Low regionally and locally LOSSES Loss of produce, income and livelihood Range Land Potentially High in context of ADC Loss of large areas with long term impact upon the future development. Low in respect of pastoral economy absolute production Loss of 200ha rain fed agricultural land I Moderate LAND ACQUISITION Loss of 95 ha grazing land Low, but locally Major AND Loss of 19 residentialbuildings Moderate PROPERTY TAKE Loss of non-residential structures I Low I Loss of other assets 1 Low I

Moderate overall, but Severe for those Displacement of 20 households POPULATION affected AND BUSINESS Low overall, but Severe for those DISPLACEMENT Relocationof 5 business premises affected Severance of existing utilities 1 Low I High if links not re-established after Severance of existing communication links construction I SEVERANCE Severance of rural communities Low

Wadi AI Ush only. High if links not re- Severance of individual properties established

DRAINAGE Interception of natural drainage High, but mitigated through design AND I Increased erosion and sediment loading from road EROSION High, but mitigated through design drainage, exposed cuts and embankments I Low. Most birds and animals will Birds and animals killed by traffic ECOLOGY quickly adapt 1 AND Area opened up to hunting, trapping, egg collecting and BIO-DIVERSITY Moderate plant removal

Remains affected by existing watercourses operating under Low revised flow regimes I ARCHAEOLOGICAL AND Area opened up to site vandalism, looting and destruction Moderate CULTURAL SITES High. Allow for site protection in future Sites outside the ADC affected by future development Development Plans.

104 Summary of Potential Impacts Table 1.d: Permanent Impacts at the CDP

Issue Potential Temporary Risk or Impact Landscape Severe initially, Low in terms ofADC Ultimate damage will be permanent over 5 h*, Damage development

Ecology and Habitats within the site will be destroyed, but affected species Moderate at first, Low longer term Bio-Diversity will establish themselves in adjacent areas.

There are few existing utility services on the site. Disruption to Construction will include completely new infrastructure Public Utilities yp,,,,ippc

~ ~ ~~~ Existing communities will be relocated. Tracks, paths and the Existing movement of herds will be re-routed around the site and any Communities watering points re-located. Land Acquisition Some 260 separate plots will be acquired, the majority in and Property their entirety. Loss of livelihood may be more significant than Low, but Severe for those affected Take severance. The limited population will be resettled. There are few, if Displacement any, non-agricultural businesses. Mitigation is likely to Low, but Severe for those affected include priority employment. Archaeological Sites have been identified at an early stage and taken into Low and Cultural Sites account in design

~~ ~ Whilst there will be significant potential for pollution, the and Water limited catchment area and number of watercourses will aid Low-Moderate Pollution the provision of adequate protection. Natural drainage over the site and its immediate vicinity will Drainage, Erosion be replaced with artificial drainage. Some watercourses may and Sediment Moderate receive contributions from ‘hosing down’ operations and Load rainfall will be more concentrated. Since the area is extremely sparsely uninhabited. Noise and Noise and Air air quality pollution will essentially be limited to the confines of the site. The nature of the site will require a high level of security Public Safety such that unauthorized public access and movement of goods will he harred.

105 Summary of Potential Impacts Table 1.e: Impacts at A1 Juwaidah

At the existing Customs Depot I Additional time and cost for travel to and Improved working conditions from the workplace

Reduced time available to visit family or Simplified working procedures Govemment friends Employees Reduced time to visit local facilities Reduced pressure of work I Increased pressure on partners to manage Improved security home and family - Private Sector Additional travel time and cost to and from Improved office and other facilities Employees the workplace Simplified clearance procedures General Public Longer and more expensive joumey to Improved reception and waiting facilities Users CDP Simplified clearance procedures

If resident in Amman, less able to time Avoidance of urban traffic conditions home visits

Drivers Shorter home visits due to reduced waiting Improved access to facilities time Reduced waiting time r- Partial or total loss of customer base Reduced traffic congestion, noise and air pollution Owners Opportunity to develop new customer base from Potential need to relocate ‘new’ traffic and redevelopment of Depot site

Employees I Less customers risks loss ofjob I Reduced traffic congestion, noise and air pollution - To Residents of AI Juwaidah

Loss of shops and other local amenities Reduced traffic congestion, noise and air pollution

Necessity to drive Or take when Improved and safer pedestrian access along the main visiting the CDP instead of walking to the thoroughfare Depot

To the Transport Sector Simplified clearance procedures I I I1 I I I I Reduced truck idle time I Improved working conditions for drivers Improved security

106 Summary of PotentialImpacts Table 1.f: Operational Impacts for the ADC

Noise and Air Qual Increased ambient noise along the ADC. Traffic Noise Low. Most of the route is unpopulated. Increased noise at sensitive sites such as schools Moderate. Relatively few sensitive sites, on which and mosques. the impact can be managed with barriers, etc. Potentially positive impact in the vicinity of A1 Reduced noise on some existing roads. Juwaidah

Vibration Damage to buildings. Low. Disamenity to occupants. Low.

Low. Generally, the same as for the ‘Without Air Quality Increase in vehicle emissions. Project’ situation. Potentially less slow traffic, therefore fewer emissions. Low. Few sensitive sites along the route. Traffic Impaired respiration and other health affects. diverted from densely populated areas, with potentially positive impacts in the vicinity of AI Juwaidah.

Energy Use Increase in the overall use of energy. Unknown and probably insignificant.

Road Safety General reduction in the rate of traffic accidents Traffic Accidents throughout the region. Moderate positive impacts. Reduced accidents on existing roads. Significant positive impacts’ particularly on the Hizam Road. Hazardous Reduced risk of accidents. Significant positive impact Materials Rerouting of hazardous loads away from the urban area. Significant positive impact

Surface Watercourses Pollution of watercourses by highway runoff. 1 Low Ground Water Pollution of aquifers. I Low Maintenance ~ I I Landscape Pollution and health impacts from the use of Low, and easily avoided through ‘Good Practice’ Maintenance pesticides and herbicides. procedures.

Highway Low and easily avoided. Disposal of contaminated solid waste. Maintenance Low and easily avoided through ‘Good Practice’ Increased traffic accidents due to diversions. procedures

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.^ ill Y .-C 0 Q a .-* i Ox L E a s c< a t f 5 ca E E .-0 .-c .-rn I B d Table 11. Summary of Impact Mitigation Requirements at AI Juwaidah (Continued)

Affected Community Impactllssue Potential Mitigation Measures Employees and Users of the Existing Customs Depot

Provision of free transport or supplement to salary, Travel to work, time and cost; Reduction in working hours or increased salaries; Govemment Less free time; Improvements in working conditions; Employees Disruption of social life. Provision of shops and services on site.

Provision of free transport or supplement to salary; Reduction in working hours; Travel to work, time and cost; Private Sector Improvements in the working environment; Less free time; Provision of office facilities at reduced rents; Employees Disruption of social life. Improved productivity with new working practices; Provision of shops and services on site.

Provision of improved receptiodwaiting facilities; Travel to Depot. Users Quicker Customs clearance. Provision of adequate parking facilities; Lorry Drivers Less free time. Provision of shops and services on site; Free transuort between the CDP and Amman. Owners and Employees of Businesses in the vicinity of the Depot Provision of compensation for proven losses; Provision of premises on CDP at reduced rents; Provision of rent supplements for businesses remaining in AI Reduced customer base; Juwaidah Owners Loss of income. Promotion of AI Juwaidah as a business area; Redevelopment of the Depot site to include housing from which to replace customer base.

Reduced working hours or loss of Provision of compensation for proven losses; Employees employment; Priority for employment at CDP; Loss of income. Provision of advice and counseling.

~~ ~ Residents of AI Juwaidah Reduced traffic congestion, noise and air pollution; Improved pedestrian access and public safety; Residents Of localshops and services Redevelopment of the Depot site to include recreational facilities for families and children.

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$ a P a Table III.Summary of Environmental Monitoring Requirements and Costs

entation Activity Esti cture

Transport rransport from Individual Visit Reports JD 40,000. irst construction Site Inspections Summary Reports for PMT reporting to Other costs covered by a :ontract. each contract every 6 MPWH payment of JD 6,000 for 3ther costs to months each QPR. ’MT EMP Total Cost: JD 94,000 3udget.

Equipment JD 53,000. Transport Covered above. PMT reporting to Pre-Construction JD 87,000 to PMT MPWH and MoE. JD 6,000 EMP budget. Environmental Quarterly Reports Quality Monitoring Water Quality analyses Construction JD 6,000 to to MWI Covered by a payment of MPWH budget JD 3,000 for each QPR. Post-Construction JD 6,000 Total Cost: JD 92,000

Monitoring by Included in Monthly JD 10,000 per contract per To each Supervision consultants ConstructionProgress year. Supervision Supervision reporting to PMT Consultants Reports Total Cost: JD 90,000 contract

Annual Annual Reports for each PMT reporting to JD 10,000 per year To PMT EMP Environmental contract MPWH and MoE Total Cost: 30.000 budget Reporting

JD 3,000 per year for all Individual ‘Chance To PMT EMP Cultural Resources DAJ reporting to PMT three contracts together Find’ Reports budget Monitoring Total Cost: 9,000

PMT and Independent In accordance with Monitor reporting to Included in LARP To PMT LARP Land Acquisition LARP implementation MPWH. implementation costs budget Monitoring requirements FA Missioners reporting to FAs

MPWH Inspector To MPWH JD 1000 per year for 2 Post-Construction Internal MPWH Reports reporting to MPWH Maintenance years Inspections Director of roads Budget

Total Cost JD 317,000

114 Table IV. Summary of Training Requirements

TRAINING FOR ADC PHASE 1 IMPLEMENTATION

MPWH and PMT staff, and those concemed EMP and LATG Provisions and 1 day JD 2,500 Procedures from other Govemment departments, organizations and NGOs

Environmental Project Management MoE staff and non-seconded MPWH 2 days JD 2,000 Environment staff Half day Environmental Awareness and All supervision consultants and contractors Repeated twice JD 1,500 staff Accountability yearly

Invited parties to whom a review of 2 x 2 days JD 9,000 End-of Project Seminars environmental and community liaison activities might be relevant

Total Cost of ADC Training JD 15,000

POSSIBLE EXTERNAL TRAININ(:

Topics in Project Management well To be Staff of Govemment departments, determined. A represented by the work undertaken municipalities, NGOs and others likely to be As appropriate for the ADC and representing Provisional Sum involved in the future development of the to the topic milestones in project implementation of ADC in Jordan I JD 12,000 is proposed.

115 Annex 10.B: Summary of the Land Acquisition and Resettlement Action Plan

A. INTRODUCTION 1. The draft Land Acquisition and Resettlement Plan (LARP)23was submitted to the Bank on February 12, 2004 and disclosed locally and through the Bank InfoShop before appraisal. An Executive Summary was prepared and submitted to the Bank on February 15,2004.

2. The present LARP is an update of the LARP prepared in September 1999 as part of a Category A World Bank Environmental Impact Assessment. An earlier Project-Affected Persons (PAPS) census and socio-economic survey were conducted and integrated into the 1999 LARP, which was prepared in a manner consistent with the provisions for a Resettlement Action Plan. An update ofthe ownership status was carried out in August 2002; and an updated land acquisition analysis was repeated in November 2003.

B. PROJECT OBJECTIVES and DESCRIPTION 3. The key development objectives ofthe Amman Development Corridor (ADC) project are support more efficient transport and logistics services by removing key infrastructure bottlenecks; and to provide access to affordable land for productive investment and development purposes, via (i)the construction ofthe first 40.0 km phase ofthe Amman Ring Road (ARR) to provide an alternative route for freight traffic to bypass central Amman;, (ii)the relocation ofthe Amman Customs Depot to an area where expansion can be adequately accommodated; and (iii) establishing basic infrastructure for a modem inland logistics port to be operated by the private sector. These would also serve as catalysts for enhancing conditions for private sector growth and investment, by opening up around 300 square km of affordable land for development within the corridor’s area ofinfluence.

4. The ADC project is located south east of Amman city center, and includes within its boundaries the major suburban population centers of Sahab and linkages with Zarqa city. The ADC also intersects with the national highways linking Amman and Zarqa with the rest of the Kingdom; and intemational traffic using the South-North Highway 15 and the East -West Highway 40 will be able to use the ADC to avoid passing through Greater Amman or Zarqa. The construction of the ARR-1 will be packaged into three contracts: (a) the Desert Highway South ofMadounah Road, located on agricultural terrain with little physical constraint; (b) South of Madounah Road to the Zarqa Eastem BypasdZarqa Through Link (Z-B/ZTL) Interchange, located in predominantly open, marginal, rainfed agricultural lands or uncultivable rangeland supporting a few village communities; and (c) Zarqa Eastem Bypass & Through Link, from the southern end ofthe Z-B/ZTL Interchange joining up to the Zarqa Highway.

C. PROJECT IMPACTS 5. The project impact assessment in the LARP addresses land acquisition, property and asset take, land users, resettlement, income loss and economic loss. - The project will impact some 498 plots, with 1,898 identified owners. By far the majority of land (95 percent of plots and 82 percent of affected land area) is privately owned, with the bulk being under individual ownership (81 percent ofplots and over 70 percent ofplot area affected). - Ownership for some seven percent ofthe land to be acquired is under dispute or review. The remainder is under private institutional or unknown ownership, constituting 29 plots

23 Land Acquisition and Resettlement Action Plan (LAW) and Resettlement Action Plan (RAP) are used interchangeably in this project. 116 (including community lands - some 13.5 percent of the total affected area; and public ownership (government - 19 plots, Greater Amman Municipality or the Jordanian army - 6 plots, or 10 percent ofthe total). - 40 plots containing residential structures are directly affected by the project. Of these, the residential structure is affected in 19 cases. Therefore, a total of 29 residential units (194 people) on 19 plots will need to be acquired and their residents resettled. Most units are occupied by owners or their families, with 10 tenancy agreements involved. None of the households to be resettled are from disadvantaged groups, though some 33 percent of the total plot owners are women, for whom special measures are provided to ensure that they receive their legal entitlements (see section E, Vulnerable Groups, below). In addition, 19 plots owned by GoJ contain land to be acquired for the project. All concerned ministries, government departments and the Armed Forces have been contacted and informed in writing ofthe probable need to acquire the land. - A total of 275 plots (55 percent of those affected) fall under the category of “severely impacted” (requiring a take of greater than 25 percent of their area). The majority are semi-urban, and nearly all are privately owned. However “severe impacts” on either owner, or user income or livelihood are anticipated in less than 20 cases. There are no instances where the livelihoods of households headed by women (or members of other potentially disadvantaged groups) are dependent on the use of severely impacted plots. - The land acquisition requirement for all three construction contracts will be 334.59 hectares (excluding off-site facilities such as borrow pits, construction yards, access roads). 73 percent of all land to be acquired is agricultural and opedrangeland. Less than 11 percent ofaffected land lies under residential or mixed residentiaVother built use, with the greater part ofthese plots being undeveloped. - Project impacts on fixed assets are unusually limited, comprising mostly fences and walls. There is one government-owned asset in the project-affected area - (decommissioned storage silos in Zarqa) but since it is non-fknctioning, and is already in government hands, it has not been included in project costs. - Among land users, there are no legal tenants with formal tenancy agreements; and no instances ofcash rental being paid to a land owner. 13 informal seasonal users ofgrazing land, on 4 plots will be affected by the project. Of these, one case of disputed land is likely to require a court settlement; in one case users will lose their livelihoods but will retain sufficient land to allow their activities to be rationalized and an equivalent production capacity to be re-established. All fixed assets were constructed by users and therefore constitute plot improvements for compensation purposes. - Direct impacts on non-farm employment are anticipated to be minimal, involving one corner shop; one hrniture manufacturing unit and showroom; and one chicken farm which will be forced to cease operation and relocate. In the case of the furniture factoryhhowroom there are specific requirements for relocation within the immediate location of the existing facility. Direct employment loss is confined to the furniture factory and the neighborhood shop, affecting less than 15 employees in total. Overall economic loss of employment, including farm and temporaryheasonal labor is anticipated to involve less than 50 people. Additionally, there are potential indirect effects on groups beyond the ADC who service road user groups on the existing ring road, whose livelihood may be impacted by economic loss from the diversion of their customer base. However, this effect is anticipated to be offset by the new economic opportunities associated with the project’s activities. - Seasonal farming is declining in the area, and the numbers of seasonal farm laborers likely to be affected are few (mainly students moving from farm to farm as employment 117 opportunities arise). Two categories of permanent farm labor totaling 85 people will be adversely affected by the project: 10 resident guards on ‘empty’ plots; and farm laborers resident on the five ‘commercial’ farm units (up to 75 persons).

D. LEGAL FRAMEWORK 6. Jordan has a legal framework in place to address resettlement issues, with the requisite basis and practice for expropriation, though this lacks some elements required to meet Bank standards, primarily relating to uncompensated land acquisition; compensation rates for tenants under the Land Acquisition Law (five percent for non-industrial and non-commercial purposes, which does not accord with World Bank guidelines); and post-compensation monitoring of Project-Affected Persons (PAPS) which is not currently standard Jordanian practice. Attachment One to this report provides a summary overview ofthe legislative framework in Jordan.

7. To address the land compensation issue, in response to a submission by the MPWH, the Jordanian Council ofMinisters issued a decision on June 13, 1998 to consider the Amman Ring Road a controlled access road pursuant to the provisions ofArticle 20 ofRoad By-Law No. 24 of 1986; and to compensate owners of expropriated lands against the whole expropriated area, pursuant to the provisions of Article 10 of Road By-Law No 12 for 1987 and its amendments. This represents a significant shift in legislation, which adequately addresses the issue of 25 percent uncompensated acquisition to bring it in line with Bank policy as laid down in OP4.12. All lands acquired for the project will be compensated at fkll replacement value. Specific compensation measures for tenants have been developed under the project to increase compensation as required, to meet Bank standards. Post-compensation monitoring ofPAPS will be addressed under the proposed project monitoring system.

8. Institutionally, there are three main types of land ownership in project-affected areas: individual, community and government. There are legally registered owners for each plot, entitled to compensation under existing legislation. 17 plots have characteristics suggesting community ownership, and each of these will be subject to specific additional consultation during the acquisition process to determine the mechanisms and nature of compensation due. The majority of customary use grazers are also owners of plots who will be compensated appropriately via the land acquisition process. Impact on grazing patterns will be addressed through provision of adequate numbers of crossings to enable east-west access to the lands adjacent to the ARR for herds to pass through.

E. SOCIO-ECONOMIC ASPECTS Project-Affected Communities 9. Two main categories of community are impacted by the project: urban communities in the Zarqa urban area; and rural communities in the project area.

10. Affected Urban Communities: Some 45 plots in urban communities in the Zarqa area over a limited stretch of 1-2km will be directly affected by the project’s activities. These have an average household size of 8, with few instances of multiple households per plot. Data on the wider affected community shows an absence ofspecific cohorts ofvulnerable groups or women; a youthful population with 65 percent under the age of24, with unemployment levels around the national average. Most households claim ownership of the dwellings and land on which they live, with documentary proof, though some ofthis is likely to be informal. Illegal occupation of either land or structures is very rare.

118 11. Rural Communities: Some 16,150 people living in 2000 rural family units are actively involved in utilization ofthe land resources ofthe area affected by the project. Large family size (13 or more children) reflects the continuation oftraditional Jordanian rural family lifestyles.

Economic Activity in Project Affected Areas 12. Rural communities in the project area are developing an increasingly diverse economic structure, seeking to maximize the opportunities available from both existing traditional lifestyles and those of an urban inhabitant: (e.g. continuing annual herd movements, but leaving behind members of the family to receive education, hiring replacement labor as necessary). However, the rural communities in the project area remain predominantly agricultural, retaining strong links to the land and to traditional socio-economic structures.. The main forms of economic activity in the affected area are traditional rain-fed agriculture; commercial family farms; and pastoralism .

13. Rainfed Agriculture consists ofcereal production supplemented by olive trees. Average yields are very low (<5kg/hectare), reflecting the poor capability of the land due to due to climatic constraints. Labor requirements are minimal, and farmers all have second jobs. However, these lands play a significant role in the pastoralist economy, providing late spring and early summer grazing. 19 instances of use of lands by pastoralists without knowledge or permission of owners were identified, on plots representing some 4.5 percent ofthe total area to be acquired.

14. Commercial Farming: Two types of farming, family-based and chicken farming were identified in the area impacted by the project (10-15 family farms, typically engaged in (usually irrigated) tree crop plantation with some arable crop production; and three chicken farms.

15. Pastoralists: Three sub-groups ofpastoralists have been identified: nomads; small herd owners; and “commercial” pastoralists. The first sub-group (ten percent of total affected pastoralists) is fully nomadic, moving in year long traditional cycles. Lands used by this group are well to the east of the project impact area, though some joint use of land with semi-nomadic groups from the area occurs. Small herder owners owning less than 100 sheep form the second sub-group (25 percent to 30 percent of pastoralists). They are predominantly settled in village communities with herds kept close by. Labor is almost exclusively provided by family members; and approximately 50 percent of family income is derived from their herds. The third sub-group, “commercial” pastoralists, are fully occupied in livestock herding, practicing a traditional way of life based on the movement east in November each year, when herds are moved into the interior to utilize natural grazing lands; remaining there till late sprindearly summer, when the westward movement to feed the herds on the remnants of agricultural crops takes place. Herds are large, and operated on a commercial basis, forming 90 percent of the income for this group. However in recent years the decline in the quality and quantity of available grazing on range lands has forced an increased dependency on fodder (with a consequent increase in production costs). This sub-group is semi-settled, often leaving family members in the village whilst the remainder migrate.

Profile of Project Affected People (PAPs) 16. The average household size of PAPs is 6.1 (higher than the national average of 5,1), reflecting the rural and pre-urban nature of the project impact zone and continued rural land ownership. The age-sex structure is broadly in line with that of the country as a whole, though slightly skewed towards elderly males, with women owners being younger (40-45 years on average). PAPs are better educated overall than the national average, but there are some pockets

119 ofhigh illiteracy among vulnerable sub-groups. Income levels are similar to those for Amman as a whole, with an average per capita income ofaround JD535.

Vulnerable Groups 17. Female plot owners (615), representing some 33 percent of the total, constitute the main potentially vulnerable group under the project. Whilst legally protected in terms of security of rights, women who are entitled to compensation in their own rights, as land owners, land users or employed persons (and who have double the illiteracy rate of their male counterparts), may be subject to pressure or harassment to sign over their rights or relinquish their entitlement to male relatives. This issue was initially recognized in the 1998 Census process, which held women- only meetings and consultations to ensure their specific concerns were addressed. A similar approach will be adopted in the implementation ofthe LARP. Female CLO specialist staff will be given the responsibility of ensuring that female PAPs are made aware of their rights and entitlements through such meetings and consultations; and that they are also aware of the assistance that will be available to them to ensure that those rights are exercised. Finally, no payment will be made for compensation to a female PAP to a bank account other than that opened for her, as the sole account holder, by the Project. Payment to pre-existing joint signatory, or new joint signatory accounts will be not permissible.

18. A second potentially vulnerable group are customary rights users (CRU)s whose livelihood is almost entirely dependent on the rangelands through which most ofthe project runs. However, freedom of passage and access to grazing for herders will be ensured through provision of appropriately-located crossing points. Once allocation has been defined and the value of affected assets established, rights of access and the distribution of compensation to PAPs, as well as internal appeal procedures within the community will be addressed by specific design solutions in the case of the former; and community meetings to develop a construction framework plan, in the case ofthe latter.

19. A third group, tenants, are also potentially vulnerable in that the five percent compensation defined in the current Land Acquisition Law for tenants with legally valid tenancy does not accord with Bank guidelines. However, there are no instances arising offormal tenancy agreements for land use rights. None the less, appropriate project-specific compensation procedures that meet Bank guidelines have been developed and any cases will be assessed on an individual basis.

Social Surveys 20. A comprehensive survey of existing PAPs for the Amman Ring Road was carried out in 1998. This covers project-affected communities, the types ofactivities impacted, a PAP profile, and within it, vulnerable groups, and is ready for disclosure. The survey of PAPs for the recently-included component (the new Customs Depot) remains to be completed, but uses the same methodology and approach and is consistent with the main component. An agreed framework for land acquisition for the new Depot has been put forward in the LARP, which applies the same principles and approach to resettlement as used for the survey ofPAPs for the Amman Ring Road; and agreement has been reached on how to address the needs of the PAPs for the main component ofthe project.

21. Three additional socio-economic surveys were carried out to assess the effects of the removal ofthe Customs Depot on those living and working in the affected area. These consisted of: (i)a sample survey of Customs Depot employees; (ii)a household survey ofresidents oftwo housing areas immediately adjacent to the depot; (iii)a 100 percent survey of commercial enterprises in the vicinity of lkm ofthe Customs Depot. Supplementary interviews were carried 120 out with community and other opinion leaders in relation to the Customs Depot, specifically: the Director of the Depot; representatives of civil servants, the local municipality and trade union federations relating to the commercial enterprises in the existing Depot area.

F. PUBLIC CONSULTATION 22. A three-stage Information and Public Consultation Program has been carried out, consisting of (a) project scoping sessions in Amman, Zarqa and east of Amman; initial consultations in affected areas (social issues seminar at Sahab; project exhibitions in Sahab and additional scoping sessions in Zarqa to discuss new route options); (b) census ofproject-affected persons and relates surveys; affected land identification for the 80m Right of Way (ROW), an asset base survey and land owners identification survey; and (c) an update of the affected land identification survey for the November 2003 agreed ROW; update of the asset base survey and owners identification survey: see Figure 1 below.

23. The scoping sessions identified community concerns as being centered on the adequacy of rates of compensation under existing practice; loss of forest; and traffic congestion. Participation in the consultation events consisted ofrepresentation from municipalities, Ministry of Public Works & Housing and six other ministries, the military, industry, academia, professional associations, the Jordan Environment Society, women’s organizations, local community representatives, and local leaders. Participants in the social issues seminar were identified with the assistance of local NGOs in Sahab. During the census and socio-economic survey period, a mass media campaign on prime time national TV and announcements in major daily newspapers was carried out. Some 25 community meetings (over half of which were directed towards women) were held with representatives of local government; of communities along the road alignment (with separate meetings for women community members); concerned government officials, women leaders, environment and other NGO and army representatives; and with heads of tribes and families having significant landholdings and tribal ties to lands within the project-affected areas. Three Liaison Offices were established in Zarqa and Sahah municipalities, and in the Ministry of Public Works and Housing (MPWH) for the period ofthe census and socio-economic survey (June 15 to August 31 1998). Public information packages (in Arabic) were made available to all PAPS and members of directly affected communities; to ministries, local government, NGOs and other concerned parties.

G. COMPENSATION Principles of Compensation Under the Project 24. Resettlement and compensation are approached under the project as an opportunity to develop and improve living standards, and potentially stimulate economic growth. All persons affected by the project will be entitled to compensation and rehabilitation. Project-specific principles include that all persons associated with rights to ownership or use of property to be acquired shall be entitled to compensation. Compensation will be due for, but not limited to, land, residential and non-residential structures, private infrastructure, standing and perennial crops, and trees. Additional mandatory compensation will be provided for costs incurred in relocation, removal costs, insurance, and loss of income. Discretionary compensation, provided it is not in breach of the laws of Jordan, can be applied for on a case by case basis. Compensation values will assessed at replacement cost, at market prices with a further additional cost included for the effect of compulsory acquisition. Compensation will be cumulative, to ensure equity, as single lump sum valuations do not promote transparency. All compensation due will be treated equally, without priority between equal competing claims.

Compensation Entitlements Included in the LARP

121 25. Land Acquisition Compensation: In addition to providing compensation for land acquisition at full replacement value, three other cases will receive compensation. A PAP whose landholding is reduced to an uneconomic size as a result of land acquisition will be entitled to have the residual fragment also acquired. A PAP losing part of a land holding where the productive operation of one or both residual elements is adversely affected by severance will be entitled to additional compensation. In all cases the PAP is entitled to compensation sufficient to allow for post-project use of the land at existing levels of productivity. A PAP losing part of a land holding where the residual land holding is deemed unsuitable for its previous use, or too expensive to retum it to a state in which its previous use can be maintained will be entitled to compensation for that land.

26. Non-Owner Use: Legal tenants, herders and any illegal occupants will be entitled to part of the compensation payable for the land, and to compensation for any improvements made by them. There are however no recorded instances ofloss offormal land use tenancy rights. Loss of access for herders will be addressed through provision of underpasses to retain traditional pattems of movement and land use between the two sides of the Amman Ring Road. All identified project-affected land users have constructed fixed assets on land used, which constitutes plot development for compensation purposes. Informal tenants will consequently be entitled to compensation for any land improvements made, and for lost income-eaming potential. No tenants will need to be resettled, forced to relocate businesses or lose a significant proportion of their livelihoods due to project impacts. All PAPs losing access to common land will be entitled to a share ofthe compensation available, proportionate to their share. Illegal occupants will be entitled to compensation equivalent to the replacement cost of land improvements undertaken, and any standing crops, provided they have no other land or assets.

Type of Compensation Offered 27. Following PAPs’ expressed preferences, the majority ofcompensation will be in the form of cash. Altemative options will be also be offered (e.g. land for land); and any expressed wishes of individual PAPs will be taken into account. Other than for community-owned lands, the need for land for land compensation would therefore be driven by preference rather than by socio-economic necessity.

28. Land for Land: While 15 percent of PAPs surveyed in the 1998 Census expressed a preference for land for land exchanges, only 2 instances of non-agricultural, project-induced losses affecting livelihoods from a total of 116 affected plots will occur, both located on the Zarqa Through Link. In both cases, good project management should allow the affected activities to be re-established at a new site without a need for a direct land for land swap. A minimum composite package ofcompensation will be established, whereby: plot owners are paid sufficient compensation to enable them to obtain land and property in suitable or better locations for commercial activity as those acquired; assistance is provided for identification of suitable sites, if requested by PAPs; new premises are operational and generating revenue streams prior to the closure and demolition of the existing facility; plot owners are provided with an income stream to maintain present levels ofincome throughout a transition period during which revenue streams may be reduced; and all government fees, taxes, and other charges incurred in relocation are met by the project.

29. In the case of community owned land (defined as those with more than 10 owners per plot - 42 instances affected by the project), there is also informal and formal use by Bedouin. Land for land would be likely to constitute the primary form of compensation in these cases, in accordance with previously stated preference by this group ofPAPs. Lands to be made available

122 would be required to be both suitable for the purpose required, and acceptable to the community involved.

30. Employment Opportunities: Employment opportunities arising under the project will be primarily for unskilled and semi-skilled workers (albeit non-permanent, semi- and unskilled), with few skilled or permanent employment opportunities being directly generated. However in the light of high national unemployment levels, including among PAPs, these employment opportunities will be offered to further support PAP households and to the extent possible, the local community over the medium term through a system of prioritized colored permits. Highest priority employment permits would be given to PAPs suffering temporary but potentially lengthy disruption of income, followed by unemployed PAPs, then by regional unemployed as a third level ofpriority. Women and minors entitled to permits would be able to nominate an alternative person to receive the permits, which otherwise will be non-transferable and unable to be sold. The project will provide hiring guidelines to construction contractors on how to prioritize local people with work permits where skill levels are equal between the two groups.

Entitlement Packages 3 1. In determining entitlements, category of loss rather than category of person affected will be used, since some PAPs will suffer more than one type of loss. Categories of loss and a summary of entitlement are shown below, with typical entitlement packages and compensation for affected assets described in Attachment Three: - loss of privately owned agricultural land: cash compensation based on market value of land, plus an additional 15 percent as compensation for compulsory acquisition; those losing their entire land to the project, and without other sources of income will receive priority work permits (green)24 and priority access to any project training opportunities. Farming will be permitted up to the time the land is required for construction, even after MPWH has taken possession. PAPs will not however be permitted to reside in structures after completion ofthe acquisition process. - loss of privately owned uncultivable land: All PAPs losing uncultivable land will be entitled to cash compensation; and will also be entitled to green or blue work permits and project training opportunities depending on family circumstances. - loss of community entitlement: All PAPs losing access to common land will be entitled to a share of the cash compensation available proportionate to their share of common land; and will be provided with training and work permits depending on their status. Land for land entitlements will also be available. - loss of crops, orchards and other trees: All PAPs losing crops, orchards and other trees will be entitled to cash compensation equivalent to: - For fruit trees etc: the rate of net annual income from the tree capitalized over a twenty-year period. - For timber trees: the market value of the wood, taking into account the species and the size ofthe tree. - Salvaged wood will be the property ofthe owner

24 A system ofcolored work permits (green and blue) will be implemented to compensate PAPs based on the severity ofthe project’s impact to their jobs. Green indicates a moderate impact, while blue signifies a partial impact. Compensation will be in the form ofpreferential treatment for jobs under the project. Criteria for determining blue and green work permits is contained the Project’s LAW. 123 - loss of agricultural infrastructure: All PAPs losing agricultural infrastructure (wells, internal access roads, walls, farm buildings, etc.) will be compensated at full replacement value. - loss of residential units: The owner of the dwelling structure will be provided with cash compensation sufficient to acquire a comparable unit as a replacement. If the owner ofthe dwelling structure is not the owner ofthe plot on which it is constructed, the former will be provided with compensation equivalent to a maximum of 5 percent oftotal compensation value. - loss of employment: Those who have lost employment (resident agricultural laborers and family laborers) will be provided with green permits, full assistance and priority access to project training. Seasonal laborers determined to be significantly impacted by the land acquisition will also be eligible for longer-term assistance and given access to project training.

H. LARP IMPLEMENTATIONARRANGEMENTS Implementation Structure 32. The implementation structure for the LARP is described below. The role ofthe different agencies in LARP implementation is shown in Attachment 1. - A Compensation Review Board (CRB), an existing body that looks into first stage appeals, with powers to review compensation, resolve disputes, and adjudicate on appeals. - A Valuation Committee (VC), which will undertake valuation and approve initial offers of compensation made to PAPs, establish values for compensation, adjudicate on grievances, supervise negotiation and establish final offers. - A Community Liaison Office (CLO), as the unit through which all aspects of LARP coordination and planning will be channeled, responsible for day to day LARP implementation. Its roles are to act as a conduit for information between MoPWH and affected communities; to assist in implementation of the LARP; to carry out an advisory function to PAPs to assist them through the LARP period; and to provide coordination with all other government departments on the LARP. The CLO will be staffed with both female and male case officers, to better address gender-specific issues arising. These officers will be able to access any needed technical and other support from a technical support group consisting of legal experts, sociologists, and community advisors, including for provision of direct technical assistance or counseling to PAPs as needed. The CLO will be located in the MoPWH in Amman; will be maintained throughout the LAFS process; and will provide information materials on the project. - Representation of the PAP Community (RPC): Four representatives of the PAP community will assist the CLO through facilitating and monitoring implementation of approved compensation, valuation, grievance redressal and community liaison; and ensuring ‘voice’ and transparency for PAPs. Their involvement with the CLO will be maintained for the entire period of the expropriation process. The MoPWH will advertise in national newspapers to solicit nominations for representation, and a neutral third party (e.g. an NGO) will select four nominees to be appointed. - Other Government Institutions: The Lands & Survey Department (LSD) will assist the CLO in updating land records during the acquisition process and in preparing

124 revised records of plot ownership. The Council of Ministers will provide final approval ofcompensation agreements, following approval ofthe Ministry ofFinance.

Implementation Program 33. The LARP will be implemented in six stages: notification; valuation; negotiation; appeal; completion; implementation and monitoring. Notification 34. In addition to the consultation and survey process already undertaken (August 1998), a notification procedure is required to confirm to the community that the Project is to go ahead; and to meet statutory obligations under the LAL. Notifications, including a list of plot numbers and affected owners, for the affected land in the original component of the project have been placed in two stages in national newspapers on October 20th, and December loth, 2003. PAPs were given 15 days to appeal against land acquisition, which, though a relatively limited time was considered adequate in that the majority ofthe PAPs had already been consulted and advised in person (1 998) that they would be affected by the project.

Valuation 35. The legal evaluation in accordance with the existing laws in Jordan has already commenced under the Valuation Committee (VC). Following placement ofofficial notifications, all PAPs will be given the opportunity to visit the established Community Liaison Office (CLO) in the premises ofthe MPWH, where each will be informed of the valuation ofhisher property and will be offered the opportunity to appeal against acquisition. Ifno response is received within 14 days of notification by the CLO or by a method that permits a record of the date appeal, the initial valuation will go ahead, including recommendations on the nature of the compensation package.

Negotiation 36. Once PAPs have been identified and notified and a valuation prepared and received, further discussions and negations between individual PAPs and the CLO will be initiated. PAPs will have the right to appeal the valuation provided within a 28 days period from receipt of notification of the valuation. A period of 90 complete days shall be available to all PAPs for negotiation after receipt ofthe initial valuation.

37. No Appeal: If no intent to appeal is received by the end of the 28 day period, the PAP will be required to visit the CLO and requested to sign a document agreeing to the compensation offer.

38. Appeal: If an appeal is lodged the CLO may seek to negotiate with the PAP for the remaining element of a 90 days period to seek a compromise. If at the end of the period no agreement is reached and ratified, the case will be referred to the Compensation Review Board (CW.

39. No Response: If the PAP did not respond to the initial valuation and no further response is obtained within a ninety days period form the date of the initial notification and provided it can be adequately demonstrated that reasonable effort has been made by the CLO to contact the PAP, the case should be referred to the CRE3 for approval of the draft compensation offer. The funds allocated for this compensation will be retained within the Ministry of Finance in the project’s name and earmarked for the individual PAPs, until 2005. Thereafter it would be held within MoPWH’s roads budget for land acquisition, and in both cases to be claimed by the PAP on proof ofeligibility. 125 40. Appeal Against Acquisition: Written appeals against the project may be lodged with MPWH up to 15 days after newspaper publication of intent to acquire land. All appeals will be acknowledged in writing and considered by MPWH. To the extent possible these would be accommodated by the project mitigation program.

41. Grievance Redressal/Ownership Disputes: Where lack of formal documentation leads to disputes between parties that would affect the LARP implementation, further verification of status will be undertaken by the project. Where no conclusive documentation is available, the project will attempt to resolve the dispute, first via the CLO, which will review the records. If the CLO is unable to facilitate an agreement within the project framework, it will pass the case on to the CRB. If in turn the CRE3 is unable to find an acceptance solution, the resolution ofthe dispute may only be possible through the courts. In these cases the LARP process will proceed through to valuation irrespective of the status of the land. Compensations due will be assessed and fimds made available as per the no response procedure outlined for the negotiation process, above.

42. Appeal Against Compensation Valuation: Appeals against assessed levels of compensation will be heard by the CM, which will review each case put to it and reach one of three recommendations: confirm the original offer; propose a new offer at the hearing; establish new guidelines for the development of a revised offer to be developed under negotiation. If agreement is still not reached, the CLO will confirm the details ofthe last offer in writing to the PAP and refer the matter back to the CRE3. If the CRB do not wish to revise their offer, either party, the PAP or the CRB may refer the matter to the Courts. Once referred to the Courts the acquisition process is taken out ofthe hands of the project-specific implementation structure; and the judgment ofthe court will be binding on all parties.

Completion 43. On successful completion of negotiations, the VC will provide each PAP with a Compensation Statement recording the precise loss of property (type, physical dimensions, replacement value) or livelihood, state the compensation due for this loss to each property holder or household, and note eligibility for other compensatory program. Copies ofeach Statement will also be sent to the CLO. For those PAPSwho are unable to collect their checks within a short period ofthem being issued (e.g. due to absence abroad), the individually earmarked funds will be retained within the Ministry ofFinance in the project’s name until 2005. Thereafter it would be held within MoPWH’s roads budget for land acquisition.

Time Frame 44. The indicative time frame for notification, valuation, negotiation and completion are shown in Table 1OB. 1. Table 10B.1: Indicative Project Time Frame for Notification, Valuation & Completion

45. Cash compensation payments will be completed prior to the start of construction, to be varied only if (i)requested by the PAP; (ii)where substantial additional benefit can be demonstrated to accrue to the PAP; or (iii)where land ownership rights remain in dispute. In

126 this last case, compensation would be paid into an escrow account (as above) pending resolution of the dispute. Payments due will be made no later than 30 days following completion of an initial certificate of agreement. Programs for employment, training, and land swaps will be established on a case by case basis. The appeals framework time frame for the LARP is in Table 10B.2. Table 10B.2: Appeals Framework Time Frame

Project Monitoring 46. The project will have three forms of monitoring: internal, independent and external. Internal monitoring will be carried out by the CLO with the assistance of the Representatives of the PAP Community (RPC). Independent monitoring of compensation processes and negotiations will be carried out by an independent, neutral individual ofhigh standing, appointed by MPWH, reporting both to the Ministry and the Funding Agencies. External monitoring by the Bank and other Funding Agencies will be carried out as part of their supervision missions, mid-term review and implementation completion reporting. Implementation Schedule 47. An implementation schedule for the LARP is shown below in Attachment 2. Reporting on LARP Implementation 48. The CLO will be responsible for reporting on LARP implementation to the MPWH, the Ministry ofPlanning and International Cooperation and the Funding Agencies. Information will flow between the DLS, the CRB; and between the Independent Monitor and the CLO, and the concerned ministries and Funding Agencies. Written reporting will be monthly, on a contract- by-contract basis, for the first three months; every two months for the four subsequent months; then six-monthly.

I. LARP COSTS & RISKS 49. Table 10B.3 shows an itemized list of all LARP compensation-related costs. In addition to the JD 19 million required for land acquisition, the government has earmarked a provisional sum ofJD 10 million for the purchase of land for the new Customs Depot and Inland Logistics Port, making the total cost of land acquisition and resettlement some JD 29 million. Detailed cost bases for the individual components are provided in Attachment Five of this Annex. Table 10B.3: Overall LARP Costs (JD) - All Compensation Costs

Rain-fed Fanning 64,500 64,500 Total 9,802,105 4,395,153 385,093 3,716,991 780,115 19,079,457 50. The costs of administering and monitoring the LARP are estimated at JD 181,600 over an 18 month implementation period. Costs are divided into:(a) administration (CLO); (b) training of LARP implementation staff (CLO, MPWH, LSD, municipalities, other involved government agencies) in dealing with the public, including negotiating, counseling and consultation slulls; and (c) outreach program. The operating costs of LARP Administration, the Outreach and Monitoring programs are detailed in Attachment 4 and summarized below in Figure 1, and shown in detail for each activity in Attachment Four to this Annex.

Figure 1: Operating Costs of Administration, Outreach & Monitoring Programs

Administration Operational Costs JD 18 1,600 Training Costs JD 12,000 Outreach Costs JD 65,000 Independent Monitor Costs JD 37,500

Risks

51. A summary of displacement-related risks to LARP implementation is shown below in Table B.4.

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c1 8 0E 3 W> 5 E Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LARP) Attachment 1: Role and Responsibilities of Agencies in LAWImplementation

Table 1OB-A1. Role and Responsibilities of Agencies in LARP Implementation

Implementation R Stages Approve final design, Final Design/ MPWH Finalize concept LARP Design Review DLS Final definition oflands to be acquired Negotiation MPWH Establish CLO & RPC CLO Undertake Community liaison and Support Facilitate implementation ofapproved compensation RPC program; monitor compensation process for PAPS Establish values for compensation Adjudicate on gnevances Supervise negotiation and establish final offer vc Recommend acceptance ofcompensation- package to Ministry ofFinance Adjudicate on appeal against land acquisition values to CRB Implementation CRB Adjudicate on merit ofapplication for legal aid Ministry ofFinance Certify compensation agreements Council ofMinisters Final Approval ofLARP and compensation Final say in disputes regarding ownership rights and courts compensation Review of Procedures and case files Independent Monitor Review ofCase officers performance Review cases oflate payment or breach ofagreement Extemal Monitoring Ensure compliance with funding agreements

131 ul YW 3 .-a TI Y- O C 0 .-Y 3 E - 0 2 .CI c, ?? Q - c, ra 01 -u % P) 0 IB K .-0 Y CI& m .-N -m c 2 iE In 4 W a U .I -a .Iz 8 0 -0 .-0 3 L. 8 'I.4 0 E m i= P) N .I c, .I .II

2 A d 2 0 0 0 N a, B C cd m3 'c) E W Q n 0 P) Y I U 2.. W N Eul c, v2 W B g> id 2 t w 2 K m 3 II 0 5 C 0 4 + Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LARP) Attachment 3: Existing Legislative Framework

1. Decree 12 of 1987, commonly referred to as the Land Acquisition Law (LAL) constitutes the existing legal and policy framework for land acquisition and resettlement in Jordan.

2. Private Land: Up till now, appropriation ofprivate land without compensation has been permitted for up to 25 percent of the area ofa plot for road construction, expansion or widening. Assets within the 25 percent area attract compensation entitlements.

3. Communal Lands & Communal Use: The LAL contains no specific provisions for acquisition ofcommunal land or for loss oftraditional use rights. However, all lands affected by the project are registered by the Department of Land and Surveys to owners, government departments, or are under dispute. There are therefore legally registered owners for each plot, entitled to compensation under existing legislation. Notwithstanding, there are 17 plots in total (of which 12 are in ContractPhase 1) with characteristics suggesting cor"ity ownership, and each of these would appropriately be subject to specific additional consultation during the acquisition process to determine the mechanisms and nature of compensation due. The majority of grazers are owners ofplots who would be compensated appropriately via the land acquisition process. While customary rights users use different lands each year, and recognize they have no legal rights to the use of that land, it is also clear that they will suffer some loss from acquired lands and will thus suffer some adverse effects from the project, which may be addressed through provision of adequate numbers of crossings to enable east-west access to the lands adjacent to the ARR. Compensation rights for losses ofuse ofgovernment land will also require recognition.

4. Private Infrastructure: While the LAL does not refer to this category, later judgments (1996) concluded that compensation claims cover all that is in a property. Compensation for farmland may thus include itemized compensation for walls, greenhouses, wells, water rights etc.

5. Farm Produce: Tree and annual crops are subject to compensation under the LAL, but without defined guidelines on rates. Recent court judgments have considered prevailing flat rate single payment compensation inadequate following independent valuation reports.

6. Renters & Tenants: The LAL restricts the percentage oftotal compensation payable for a plot to 15 percent for industrial or commercial purposes; and up to five percent for other forms ofoccupation.

7. Mechanisms for Acquisition: A summary ofthe process for land acquisition and of the actions and responsibilities of parties in the implementation of Decree 12, 1987 is contained in Table 10.B-A1 below.

8. While the valuation committee (defined in Attachment One, Table 10B-A3 Summary of Actions & Responsibility of Parties in the Implementation of Decree 12, 1987) is essentially governmental in its composition, the law specifically empowers the Director of Lands and Surveys (DLS) to call upon any advice in a review ofcompensation if necessary.

9. Funds for compensation are provided from a budget line in the DLS, which is a department of the Ministry ofFinance. A similar process is undertaken for residential building acquisition, though this is not subject to Prime Ministerial approval. The law is specific in

133 stating that no court case shall impede the appropriation process, in effect judging the property and structure to have been acquired from the moment ofnotification.

10. Resettlement: There is currently no legislation that applies specifically to the rights of individuals, govemment and other parties in the case ofresettlement. Decree 12 is taken as the umbrella law and its compensation process and entitlement procedures would apply to the project. There are no specific provisions in the LAL for addressing loss ofincome or providing for income restoration, though these are not specifically excluded.

Table 10B-A3: Summary of Actions and Responsibility of Parties in the Implementation of Decree 12,1987 Proponent /Department of Lands Other Government Agency Project Affected Persons and Survey (DLS) as Agent of Proponent Step 1: The Director of DLS Any object to the acquisition on announces the desire to principle must be lodged within 15 expropriate a piece of land in 2 days of the publication ofthe intent daily newspapers, providing full to acquire. details on the land involved. Step 2: 15 to 90 days later the case is presented to the Prime Ministry for approval. The Prime Ministry has 6 months (from 15'days after the announcement) to ratify the expropriation ofthe land. Step 3: After decision ratified it is published in the official newspaper Step 4: DDLS forms a committee to estimate the compensation. This committfe would include five officials. All I evaluations are based on current land values and prices. Step 5: Details ofall the land Step 6: Affected persons than have units included in the Prime 30 days to discuss compensation Ministerial decision are with concerned authorities. Owners announced. This should include; have the right to object, and appeal names ofthe owners, and the against the compensation estimate. name number ofthe unit. Step 7: DDLS may form second committee to conduct a second evaluation

finalized after ratification by the owners have the right to take matters to the courts. Step 10: Judicial involvement when no agreement is reached.

* (i)Regional director of the Ministry of Public Works; (ii)Regional director of the Land and Survey department; (iii) Regional director of the Ministry of Finance; (iv) Regional director of the Ministry of Agriculture; and (v) Representative of the Auditing Bureau.

134 Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LARP) Attachment 4: LARP Process -- Issues Identified and Solutions Proposed

Problem Proposed Solution Guidelines for - Existing Guidelines cover agricultural - Review property valuation products - Update - Potential for variation in initial valuation - (Preferably) replace - Little basis for evaluating appeals - Compensation rate to be decided - Guidelines do not provide for fair by valuation committee compensation - Usually appealed against

Processes for Appeal Existing processes provide insufficient Grievance redressal process via & Resolution of opportunity for appeal & resolution of CLO Disputes disputes PAPs interests protected by Reliance on courts proposed informalhtanding Inequitable committee ofPAPS advising CLO Expensive to address claims, valuations, Lack ofclear procedures once objections grievances raised Tight time frame given threat of demolition prior to compensation No minimum time frame between notification ofintent to acquire, notification ofvaluation and end of review process No obligation by Proponent to notify PAP directly ofany action community - Lack ofmechanism for community - To be addressed by Representation on representation on valuation committee informallstanding committee of valuation committees - May be perceived as being used to limit PAPS costs - Further supported by Independent - Not transnarent. demonstrablv eauitable Monitor’s activities Compensation for - LAL-defined percentages oftotal - Project to establish guidelines for Non-Owners compensation (5% and 15%) low compensation - Reliance on legal instruments to ensure - All those affected by the project renters are not selectively disadvantaged will be entitled to compensation & would compromise project temperance rehabilitation objectives

Compensation for - LAL & LAR policies do not address - Project to establish guidelines for illegal use or land illegal use or occupation compensation occupation - Policies may still be required even though this does not appear to be a concern for the project based on initial evidence Support for PAPs - Considerable responsibility placed on - Project principle is to provide pro- PAPs with little assistance offered active support to PAPs taking - PAPSforced to invest time and effort in a particular account ofthe needs of Drocess not voluntarilv undertaken vulnerable grouDs Customary Rights - Lack ofclarity on customary rights use - Direct negotiation planned with Use compensation & its extent likely number ofless than 50 affected people individuals in this category

135 Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LAW) Attachment 5: Typical Entitlement Packages Assets

Structures: Owners of residential structures will be compensated for their dwelling at a rate to be defined by a valuation committee. Owner-occupiers will be compensated at least for the equivalent of replacement cost plus 15 percent. Owner non-occupants will be compensated at replacement cost only. Non-residential structures and private infrastructure (internal access roads, wells, walls, irrigation equipment, farm buildings etc) will be acquired at full replacement cost.

Crops: The value of field crops will be assess on the basis of average fam gate price over the past three years, adjusted for inflation. Yield estimates by crop will be derived from Ministry of Agriculture statistics for a given zone and land classification. To the extent possible construction should accommodate cropping seasons and productive land should only be acquired after harvesting. Compensation for perennial crops will be at a value equivalent to the rate of net annual income for the plot, capitalized over a 20 year period. For other trees, compensation will be based on the market value of the wood, taking into account the species and size of the tree. Salvaged wood will be the property ofthe owner.

Loss of Income, Employment or Livelihood: Resident agricultural laborers and family laborers will be entitled to compensation for loss of earnings and potential loss of livelihood. Seasonal agricultural laborers would not be compensated since they work on different farms each season. Where PAPs lose their employment or where a PAP family unit has its existing conditions changed to an extent that it is not able to pursue its present occupation under the new circumstances, they will be entitled to extensive support to restore production capabilities. All PAPs suffering temporary loss of income or livelihood as a result of project activities will be supported until their income-earning capacity is restored, or for a maximum period of three months.

Other Costs Incurred as a Result of Land Acquisition: Compensation will be provided for reasonable expenses incurred in change of residence or place of business resulting from land acquisition. Commercial properties adversely affected by construction activities may be entitled to compensation for lost commercial revenues. Support will be provided to PAPs through the transition period to ensure that their standard of living is not adversely affected. All those suffering a temporary loss of income or livelihood will be supported until their income-eaming capacity is restored, for a transition period ofup to three months.

Typical Entitlement Packages are shown in Table 1OB-A5, below.

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x Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LARP) Attachment 6: LARP Implementation Monitoring Costs

Table 10B-A6-1: Operation Costs of LARP Administration

Office AssistantBecretary

* It is assumed that community and government members will be unpaid (at least from Project Budgets). Some expenses may however be refunded.

Training Costs. A lump sum budget ofapproximately JD 12,000 is allocated to cover staff training costs. This component has two elements: (a) Training of CLOs in dealing with the public on an interpersonal basis. A specific training Program will be developed for all LARP Implementation staff that will be involved in dealing with the public. The course will be intensive, wide ranging, and will include modules on negotiating skills, and counseling and consulting. The overall cost includes: Cost ofTrainers JD 1200 per day for 5 days; Refreshments JD 600; and, Training Materials JD 1800 (b) Workshops to sensitize all parties involved to the LARP implementation process. Thee workshops are proposed: (i)for MPWH and LSD staff; (ii)for municipality staff and (iii)for other government agencies involved in the Project. Each workshop will last two days and will be led by the Community Liaison Manager (CLO). Costs are estimated at JD 1200 per session (to cover preparation of materials; hall /venue hire, and refreshments). Independent Monitoring Costs. The LARP monitoring budget includes only the costs for the Inspector and his transport. Other costs including office support, materials and support staff are accommodated in the overall project administration costs. These are based on a payment schedule as follows: - Daily Rate JD 300 inclusive; - No. ofDays 125 days over 18 months - Total Costs JD 37,500.

142 o Outreach Costs. Costs for the Outreach Component are provided below in Table 1OB-A6.2. These include the provision of additional (part time) staff to act as official recorders of meetings; and logistical and materials costs.

Table 1OB-A6.2: LARP Outreach Program Costs

6 Meeting Moderators Man Days 2x25 140 7,000 Consultation 6 Community Reporting Meetings Inc. In Mod. Fees Pub. & Materials Inc. In Mod. Fees Project Officers(s)* Provided by Municipalities

Staff: Senior equivalent Perstmonth na Project Assistants Information Computer Equipment Program Processors unit 2 6,000 Printer unit 1 800 Photocopier unit 1 1,100 Production Materials Lump sum 1 9.000 Publications Lump sum 9;ooo Publication and Lump sum 9,000 Materials Staff: Public Senior equivalent Perstmonth 1 1,800 1,800 Awareness Assistant Operate ftom 6 1,250 7,500 project Office Production Materials Lump sum 1 2,800 Publication Lump sum 1 3,000

Taken over an 18 month inspection period and assuming continued operating of all facilities and overall budget of JD 0.065 million is required.

143 Annex 10-B: Summary of the Land Acquisition and Resettlement Action Plan (LARP) Attachment 7: LARP Compensation Costs: Breakdowns by Category

1. Replacement Cost of Residential Units. Replacement costs for residential structures are derived from costs of materials prevailing in Jordan in October 2003. Replacement costs based on a one-off compensation payment are estimated at JD 1,565,600 (Table 1OB-A7.1) for the 19 structures involved. Table 10B-A7-1: Summary of Residential Compensation (JD) Contract 3 Contract 3 Contract 1 Contract 2 Structure Type Zarqa Eastern Bypass Zarqa Through Link Houses 138,600 43,500 300,000 Apartments 1,083,500 Total 138,600 43,500 1,383,500

144 Replacement Cost of Non-Residentialand Private Infrastructure 3. Non-residential compensation cost is restricted to some 7,616 linear meters of walls and fences, 18 gates, 6 water tanks or wells, and 3 structures used for utilities. Summary costs are provided in Table 1OB-A7-3. TablelOB-A7-3: Summary of Non Residential Compensation (JD) Structure Contract 3 Contract 3 Contract 1 Type I ‘Ontract * I (Zarqa Bypass) I (Zarqa Through Link) I Fences & Walls I 21,030 I 3,600 I I 51,530 1 l 600 1 300 I - I 1,8001 Water Tanks Or Wells 1500 500 1,000 Utilities 2,500 2,500 2,500 I Total I 25,630 I 6,900 1 - I 56.830 I

Commercial Compensation 4. Direct commercial losses are also limited, comprising chicken shed areas, store areas, one showroom, and one shop/factory. The chicken farms are typically not fully commercialized plants but appear to be operated as small family businesses. The shop/factory is a fiuniture shop on the ground floor ofthe apartment buildings to be acquired for the Zarqa Trough Link. Table 10B-A7.4 Compensation for Commercial Losses (JD) Structure Contract 1 Contract 2 Contract 3 Contract 3 Type (Zarqa Bypass) (Zarqa Through Link) ShopIFactory 12,500 Showroom - 15,000 Store Area 3,000 5,425 3,550 Chicken Sheds 27,900 5,925 Total 30,900 11,350 - 31,050

Compensation for Farm Produce 5. Compensation for farm produce is a loose generic title that includes compensation for both annual and perennial crops. a. Perennial Crops. A number of plots containing perennial crops are to be acquired. The unit rates are defined on the basis of the 20 years NPV or lump sum costs. The 20 years NPV calculations were derived from estimates of annual crop budgets prepared by the MOA. An estimated JD 679,915 will be required for compensation.. Associated with these crop losses will be the costs of replacement of imgation systems. While these are simple hose based drip systems that are generally fairly mobile some losses will be incurred and in other cases PAPSmay not wish to re-establish them. The full replacement cost of JD 35,700 will therefore likely be required. b. Rain-Fed Systems. Rain-fed grain production (almost exclusively barley) dominates the land use of Contract 1 of the Project Impact Area. For cost estimation purposes, it has been assumed that all annual crops will be lost with no salvage value, though in reality with good LARP planning, all crops may be harvested prior to construction start. The cost for this compensation item has been estimated at JD 64,500.

145 Annex 11: Project Preparation and Supervision JORDAN - AMMAN DEVELOPMENT CORRIDOR

Planned Actual PCN Review December 18,2003 December 18,2003 Initial PID to PIC January 8,2004 February 4,2004 Initial ISDS to PIC January 8,2004 February 9,2004 Appraisal February 24,2004 February 24,2004 Negotiations April 26,2004 March 29,2004 BoardRVP Approval May 27,2004 Planned Date of Effectiveness August 3 1,2004 Planned Date ofMid-Term Review December 3 1,2006 Planned Closing Date June 30,2009

Key institutions responsible for preparation of the project:

e Ministry ofPublic Works and Housing

Bank staff and consultants who worked on the project included:

Name Title Unit Mohammed D.E. Feghoul Lead Municipal EngineedTTL MNSIF George Tharakan Lead Transport Economist ECSIE Marc Juhel Lead Transport Specialist TUDTR James A. Reichert Financial Analyst MNSIF Imad Saleh Sr. Procurement Specialist MNACS Robert Bou Jaoude Sr. Financial Management Specialist MNACS Mutasem El Fade1 Environmental Specialist Consultant Ibrahim Dajani Operations Officer MNSIF Emma Hooper Social Scientist Consultant Nawaf A. Al-Mahamel Counsel LEGMS Andrina A. Ambrose Gardiner Sr. Finance Officer LOAGl Elena Gagieva Program Assistant MNSIF

Bank funds expended to date on project preparation: 1. Bank resources: $1 10,400 2. Trust funds: $500,000 (TF051885) 3. Total: $6 10,400

Estimated Approval and Supervision costs: 1. Remaining costs to approval: $39,600 2. Estimated annual supervision cost: $85,000

146 Annex 12: Documents in the Project File JORDAN - AMMAN DEVELOPMENT CORRIDOR

A. Project Implementation Plan Project Implementation Plan (March 2004).

B. Bank Staff Assessments

Global Links to Regional Networks: Improving Trade Logistics in the Hashemite Kingdom of Jordan. October 2003.

Jordan Transport Sector Note. March 2002.

Accelerating the National Social and Economic Transformation in Jordan. January 2002.

C. Other Assessment ofthe Feasibility of the Inland Port and Customs Depot in the Amman Development Corridor Project. Initial Appraisal Report, Haskoning Nederland BV, March 2004.

Road Sector Review, Dar A1 Handasah, March 2004.

Environmental Impact Assessment Update for the Amman Development Corridor Project, Dar A1 Handasah. February 2004.

Land Acquisition and Resettlement Plan Update for the Amman Development Corridor Project, Dar A1 Handasah. February 2004.

Economic Analysis of Amman Ring Road, Phase 1. January 2004. Land Use Study for Amman Development Corridor - Phase 1, Dar A1 Handasah. May 2003. Amman Development Corridor: Response to the European Investment Bank Requirements. October 2003. Draft Tender Documents, Amman Development Corridor, Phase 1, Dar AI Handasah. December 2002. Volume 1: Condition ofContract for Sections 1,2 and 3 Volume 2: Specifications for Sections 1,2 and 3 Volume 3: Bill of Quantities for Sections 1,2 and 3 Volume 4: Drawings for Sections 1 and 2

Amman Development Corridor, Phase 1 (Amman Ring Road), Bridgework Concepts, Dar A1 Handasah. December 2002.

Amman Ring Road Phase 1, Dar AI Handasah. October 2002. Volume 1: Financial Feasibility Volume 2: Geometric Design Volume 3: Consensus & Asset Base Survey Update

Design and Feasibility Studies for the Amman Ring Road, Dar A1 Handasah. September 2002.

Final Report for Amman Ring Road, Dar A1 Handasah, September 1999. Volume 1: Technical and Economic Evaluation Volume 2: Environmental Impact Assessment Volume 3: Land Acquisition Volume 4: Cultural Resources and Impact Assessment Volume 5: Review of Public Consultation Program

147 Annex 13: Statement of Loans and Credits JORDAN: JO-AMMAN DEVELOPMENT CORRIDOR

Difference between expected and actual Original Amount in US$ Millions disbursements Proiect ID FY Pumose IBRD IDA SF GEF Cancel. Undisb. Orin. Frm. Rev’d PO69847 2003 JO-Conservationof MedicinalIHerbal P1 0.00 0.00 0.00 5.00 0.00 4.75 -0.18 0.00 PO75829 2003 JO-Education Reform for Knowledge 120.00 0.00 0.00 0.00 0.00 117.80 5.80 0.00 Econ.1 PO76961 2002 Hort. Exports Promotion & Tech. Transfer 5.00 0.00 0.00 0.00 0.00 4.59 1.09 0.00 PO69326 2000 JO-HIGHER EDUCATION 34.70 0.00 0.00 0.00 0.00 22.22 14.69 0.00 DEVELOPMENT PO39749 1999 HEALTH SECTOR REFORM 35.00 0.00 0.00 0.00 0.00 10.20 7.87 -0.23 PO48521 1999 JO-AMMAN WATER & SANITATION 55.00 0.00 0.00 0.00 0.00 10.76 10.76 0.00 PO49581 1998 COMMUNITY Ih’FRA.DEV. 30.00 0.00 0.00 0.00 0.00 2.77 2.77 1.39 PO35997 1998 JO-SECOND TOURISM DEV. 32.00 0.00 0.00 0.00 0.00 11.18 11.18 1.26 Total: 311.70 0.00 0.00 5.00 0.00 184.27 53.98 2.42

JORDAN: STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions ofUS Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic 1998 AIHC 0.00 3.60 0.00 0.00 0.00 3.60 0.00 0.00 1987190193195103 Al-Hikma 14.74 0.00 0.00 0.00 11.74 0.00 0.00 0.00 1997 BTC 2.67 0.00 0.00 0.00 2.67 0.00 0.00 0.00 2001 Boscan Jordan 7.20 0.00 0.00 0.00 7.20 0.00 0.00 0.00 1997 El-Zay 2.14 0.00 0.00 0.00 2.14 0.00 0.00 0.00 2002 IITPDC 12.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995 IndoJordan 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1998 JHTC 8.57 0.00 0.00 0.00 8.57 0.00 0.00 0.00 2001 Jordan Gateway 3.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 1998 Jordinvest 0.00 1.41 0.00 0.00 0.00 1.41 0.00 0.00 1999 MAICO 0.00 0.75 0.00 0.00 0.00 0.75 0.00 0.00 2003 MEC 19.00 0.00 0.00 0.00 19.00 0.00 0.00 0.00 2000 MEIB 0.00 0.00 2.15 0.00 0.00 0.00 2.15 0.00 2002 MEREN 4.40 0.60 0.00 0.00 4.40 0.60 0.00 0.00 2003 Rubicon 0.00 1.oo 0.00 0.00 0.00 0.00 0.00 0.00 2002 SIC 7.33 0.00 0.00 0.00 7.33 0.00 0.00 0.00 1996 Zara 13.76 0.00 2.97 0.00 13.76 0.00 2.97 0.00 Total portfilio: 105.31 7.36 5.12 0.00 89.81 6.36 5.12 0.00

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic.

Total pending committment: 0.00 0.00 0.00 0.00

148 Annex 14: Country at a Glance JORDAN: JO-AMMAN DEVELOPMENT CORRIDOR M. East Lower- POVERTY and SOCIAL 8 North middle- Jordan Afrlca Income Development diamond' 2002 Population. mid-year (millions) 52 306 2.411 Life expectancy GNIpercapita (Atlasmethod,US$) 1760 2,070 1390 GNI (Atlas method, US$ billions) 91 670 3,352 Average annual growth, 1996-02 Population (%j 30 19 10 Labor force (%) 40 2.9 12 GNI Gross per primaty Most recent estimate (latest year available, 1996-02) capita nrollment Poverty (%of populatio n bel0 w nationalpo verty line) P Urban population (%of totalpopulation) 79 58 49 Life expectancy at birth (pars) 72 69 69 Infant mortality(per looolive births) 25 37 30 Child malnutntion (%of children under5) 5 n AcCeSS to improved water source Access to an improvedwater source (Omofpopulation) 96 00 01 llliteracy(%ofpopulationage 59 9 35 13 Gross primaryenrollment (%of school-age population) a1 95 m Male n1 90 m Female Dl 90 ID KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1982 1992 2001 2002 Economic ratios' GDP (US$ billions) 40 54 00 93 Gross domestic investmentlGDP 383 331 25 9 27 3 Trade Exports of goods and serviceslGDP 39A 499 442 45 1 Gross domestic savings/GDP -13 a 15 10 07 Gross national savingslGDP 187 26.3 27 0 Current account balancelGDP 59 -156 00 Interest paynentslGDP 20 53 2.5 19 TotaldebUGDP 549 1405 05.1 87 1 Total debt service/eTorts 91 88 n.3 a8 Present value of debVGDP 70.1 Present value of debtlexports n0.4 Indebtedness i 1982-92 1992.02 2001 2002 2002-06 (average annual grouth) .---Jordan GDP 13 37 43 4.9 5.8 GDP percamta -30 04 13 2.0 32 Lomr-middle-income group

STRUCTURE of the ECONOMY 1982 1992 2001 2002 (%of GDP) Agriculture 61 70 21 Industry 303 271 247 234 Manufacturing 09 I40 533 Services 637 651 732 Private consumption a57 768 760 742 General government consumption 201 217 230 251 Imports of goods and services 915 015 690 717

1982*92 1992-02 Growth of exports and imports (%) (average annual growh) 1 1 Agriculture 0.8 -4.4 -no 0 Industry -0.7 3.1 -DO 0 Manufacturing 14 4.9 -DO 0 Services 0.9 4.9 -DO 0 Private consumption -0.0 4.3 26 General government consumption -0.1 5.0 -4 6 Gross domestic investment 0.5 -0.4 96 Imports of goods and services 0.4 2.2 34

149 Jordan

PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 Inflation (%) Domestic prices I 10 (%change) 1l0T Consumer prices 7.5 4.0 i6 3.5 I Implicit GDP deflator 7.8 7.5 0.0 0 A 5

Government finance 0 (%of GDP, includes current grants) 1: 97 98 99 00 01 I Current revenue 44.7 35.8 30.4 32.5 -5 Current budget balance 18.7 7.9 2.0 2.4 ---GDPdeflator---GDPdeflatOr -CP( Overall surplus/deficit 5.1 -0.4 -3.7 -4.3

TRADE 1982 1992 2001 2002 Export and import levels (US$ mill.) (US$ mi//ions) Total exports (fob) 750 I220 2,522 7,500 Food ni 135 203 Phosphates 182 mo ti8 5,000 Manufactures 223 466 983 Total imports (cif) 3241 3957 5296 Food 544 at? 768 2.500 Fuel and energy 658 426 659 Capital goods 190 679 $492 0 96 97 98 99 00 01 02 Export price index (SSS=WOj 90 84 96 import price index (895=WOj 18 92 07 Exports c Inports Terms of trade (895=WOj 76 91 90

BALANCE of PAYMENTS 1982 1992 2001 2002 Current account balance to GDP (%) (US$ millions) Exports of goods and services 1895 2,688 3,899 4.82 Imports of goods and services 4288 4,324 6,094 6,665 Resource balance -2,394 -1856 -2,85 -2,472 Net income 93 -348 9 -75 Net current transfers $985 167 228 2,524 Current account balance -333 -835 -4 Financing items (net) 157 762 -233 Changes in net reserves V6 73 237 368 Memo: Reserves including gold (US$ mi//iolnsj 100 1038 3,292 2220 Conversion rate (DEC,/ocaYUS$) 0 A 0.7 0.7 0.7

EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) ~ Composition of 2002 debt (US$ mill.) Total debt outstanding and disbursed 2,646 7,967 7,518 8,094 , IBRD 56 569 886 1020 G 536 A:1.020 IDA 82 75 55 52 i I Total debt service 291 78 657 565 IBRD 4 94 05 94 ID A 1 2 3 3 Composition of net resource flows Official grants 677 It? 325 Official creditors 296 187 334 64 Private creditors t?4 -135 -70 -35 Foreign direct investment 59 41 00 Portfolio equity 0 0 -Y5 E 4245 World Bank program Commitments 60 0 t?O P5 A. IBRD E- Bilatetal Disbursements ti 88 181 66 B - IDA D - Gthw nultilateral F - Private Principal repayments 1 55 57 56 C-IMF G-Short-ter

150