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“Construction of Sewage Network and Wastewater Treatment Plant in the Settlement of Jurumleri, Municipality of Gazi Baba”

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“Construction of Sewage Network and Wastewater Treatment Plant in the Settlement of Jurumleri, Municipality of Gazi Baba” Republic of Macedonia Municipality of Gazi Baba Project Appraisal Document “Construction of sewage network and wastewater treatment plant in the settlement of Jurumleri, municipality of Gazi Baba” World Bank Municipal Services Improvement Project 1 Skopje, December 2018 2 The Project’s Appraisal Document was prepared by the Center for Promotion of Sustainable Agricultural Practices and Rural Development – CeProSARD CeProSARD Str. 1550 no.8a Vizbegovo 1000 Skopje, R. Macedonia Tel/fax: + 389 2 3061 391 http://www.ceprosard.org.mk CeProSARD would like to express many thanks for their generous and immense contribution to: WB MSIP team – PMU office, Skopje Mr. Boris Georgievski, Major of the Municipality of Gazi Baba All representatives from the municipality staff who help in receiving the appropriate documentation All stakeholders who participate at the interviews Skopje, December 2018 3 TABLE OF CONTENTS 1. INTRODUCTION ............................................................................................................................. 8 2. PROJECT DESCRIPTION ............................................................................................................ 10 2.1. General Information of the Municipality of Gazi Baba .......................................................................... 10 2.2. Demographic and economic profile ...................................................................................................... 12 2.2.1. Demographic profile .................................................................................................................................... 12 2.2.2. Economic profile ......................................................................................................................................... 14 2.3. General description of the project ......................................................................................................... 17 2.3.1. Current situation .......................................................................................................................................... 17 2.3.2. Future situation ........................................................................................................................................... 22 2.3.3. Strategic goals ............................................................................................................................................ 27 2.3.4. Knowledge and experience of the municipality of Gazi Baba ..................................................................... 27 2.4. Conclusions .......................................................................................................................................... 28 3. SOCIAL IMPACT .......................................................................................................................... 30 3.1. Sociological study ................................................................................................................................. 30 3.1.1. Social diversity and gender ......................................................................................................................... 30 3.1.2. Institutions, rules and behaviour ................................................................................................................. 31 3.1.3. Stakeholders ............................................................................................................................................... 32 3.1.4. Participation ................................................................................................................................................ 32 3.1.5. Social risks .................................................................................................................................................. 33 3.2. Other issues of considerations ............................................................................................................. 34 3.3. Resettlement issues ............................................................................................................................. 35 3.4. Conclusion on the project potential success and recommendation ...................................................... 35 4. ENVIRONMENTAL ANALYSIS ........................................................... Error! Bookmark not defined. 5. TECHNICAL DESCRIPTION ........................................................................................................ 55 5.1. Alternative solutions ............................................................................................................................. 62 5.2. Conclusion and recommendations ....................................................................................................... 63 6. FINANCIAL ANALYSIS ................................................................................................................ 64 6.1. Project costs ......................................................................................................................................... 64 6.2. Credit capacity ...................................................................................................................................... 65 6.3. Repayment of the loan ......................................................................................................................... 65 6.4. Financial Analysis of Municipal Capacity to Service the Long-term Debt ............................................. 66 6.5. Analysis of the financial feasibility of the project ................................................................................... 67 6.5.1. Time horizon ............................................................................................................................................... 67 6.5.2. Limitations of the analysis ........................................................................................................................... 67 6.5.3. Initial investment ......................................................................................................................................... 68 6.5.4. Inflation ....................................................................................................................................................... 68 6.5.5. Discount rate ............................................................................................................................................... 68 6.6. Projection of operating cash flows ........................................................................................................ 68 6.7. Other assumptions ............................................................................................................................... 75 6.8. Results of the financial analysis............................................................................................................ 75 6.9. Sensitivity analysis ............................................................................................................................... 79 6.10. Conclusions .......................................................................................................................................... 79 7. COST BENEFIT ANALYSIS ......................................................................................................... 80 7.1. General information .............................................................................................................................. 80 4 7.1.1. Limitations and constraints of the study ...................................................................................................... 80 7.1.2. Scope .......................................................................................................................................................... 80 7.2. Identification of the relevant costs and benefits .................................................................................... 81 7.2.1. Project costs ............................................................................................................................................... 81 7.2.2. Quantifiable benefits ................................................................................................................................... 82 7.2.3. Unquantifiable benefits ............................................................................................................................... 83 7.3. Economic valuation of costs ................................................................................................................. 84 7.3.1. Economic valuation of costs ....................................................................................................................... 84 7.4. Other assumptions ............................................................................................................................... 86 7.5. Valuation of the costs and benefits ....................................................................................................... 86 7.6. Results from the cost - benefit analysis ................................................................................................ 86 7.7. Sensitivity analysis ............................................................................................................................... 88 7.8. Conclusions .........................................................................................................................................
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