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World Bank Document OFFICIAL USE ONLY R2006-0216/1 November 28, 2006 Public Disclosure Authorized Streamlined Procedure For meeting of Board: Tuesday, December 19, 2006 FROM: Vice President and Corporate Secretary Peru - Decentralized Rural Transport Project Project Appraisal Document Public Disclosure Authorized Attached is the Project Appraisal Document regarding a proposed loan to the Republic of Peru for a Decentralized Rural Transport Project (R2006-0216). This project will be taken up at a meeting of the Executive Directors on Tuesday, December 19, 2006 under the Streamlined Procedure. Distribution: Executive Directors and Alternates President Bank Group Senior Management Vice Presidents, Bank, IFC and MIGA Directors and Department Heads, Bank, IFC and MIGA Public Disclosure Authorized 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 Group authorization. Document of The World Bank FOR OFFICIAL USE ONLY Report No: 36484-PE PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$50 MILLION TO THE REPUBLIC OF PERU FOR A DECENTRALIZED RURAL TRANSPORT PROJECT November 15, 2006 Finance, Private Sector Development and Infrastructure Department Bolivia, Ecuador, Perú, República Bolivariana de Venezuela Country Management Unit Latin America and the Caribbean Region 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 November, 2006) Currency Unit = Peruvian Soles Nuevos = US$1 US$ = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AADT Average Annual Daily Traffic LDW Local Development Window APRA American Popular Revolutionary Alliance MEF Ministry of Economy and Finance CAS Country Assistance Strategy MoU Memorandum of Understanding CND Consejo Nacional de Descentralización (National MTC Ministerio de Transporte y Comunicaciones Decentralization Council) (Ministry of Transport and Communications) DEP Departamento Especial de Proyectos (Special NGO Non-Governmental Organization Projects Department) DGASA Dirección General de Asuntos Sociales y NMT Non-Motorized Transport Ambientales (General Directorate for Environmental and Social Affairs DPL Development Policy Loan OED Operations Evaluation Department ESAR Environmental and Social Assessment Report PCM Presidencia del Consejo de Ministros (Ministers’ Counsil Presidence) ESMF Environmental and Social Management PII Provincial Infrastructure Institute Framework FITEL Fondo de Desarrollo de las Telecomunicaciones PIU Project Implementation Unit (Telecommunications Development Fund) GDP Gross Domestic Product PPP Public-Private Partnership GoP Government of Peru PRI Provincial Road Institute HDM Highway Development and Management (model) PRONASAR Programa Nacional de Agua y Saneamiento Rural (Nacional Rural Water/Sanitation Program IBRD International Bank for Reconstruction and RED Roads Economic Decision (model) Development ICR Implementation Completion Report RPF Resettlement Policy Framework ICT Information Communication Technology SIAF Sistema Integral de Administración Financiera (Nacional System of Public Investment) IDB Inter-American Development Bank SIL Specific Investment Loan IFR Interim un-audited Financial Report TAL Technical Assistance Loan INDEPA Instituto Nacional de Desarrollo de Pueblos TORs Terms of Reference Andinos, Amazónicos y Afroperuano (Nacional Institute for the Development of Indigenous Peoples) IPE Instituto Peruano de Economía (Peruvian UPP Unión por el Perú Economics Institute) IPPF Indigenous Peoples Planning Framework vpd Vehicles per day Vice President: Pamela Cox Country Director: Marcelo Giugale Country Manager John Newman Sector Manager: Jose-Luis Irigoyen Task Team Leader: Nicolas Peltier-Thiberge PERU Peru Decentralized Rural Transport CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A. Country and sector issues....................................................................................................1 B. Rationale for Bank involvement ......................................................................................... 7 C. Higher level objectives to which the project contributes.................................................. 10 II. PROJECT DESCRIPTION ........................................................................................... 10 A. Lending instrument ........................................................................................................... 10 B. Project development objective and key indicators............................................................ 10 C. Project components........................................................................................................... 11 D. Lessons learned and reflected in the project design.......................................................... 14 E. Alternatives considered and reasons for rejection ............................................................ 16 III. IMPLEMENTATION .................................................................................................... 18 A. Partnership arrangements.................................................................................................. 18 B. Institutional and implementation arrangements................................................................ 19 C. Monitoring and evaluation of outcomes/results................................................................ 22 D. Sustainability..................................................................................................................... 23 E. Critical risks and possible controversial aspects............................................................... 24 F. Loan/credit conditions and covenants............................................................................... 26 IV. APPRAISAL SUMMARY ............................................................................................. 27 A. Economic and financial analyses...................................................................................... 27 B. Technical........................................................................................................................... 28 C. Fiduciary ........................................................................................................................... 28 D. Social................................................................................................................................. 30 E. Environment...................................................................................................................... 32 F. Safeguard policies............................................................................................................. 34 G. Policy Exceptions and Readiness...................................................................................... 34 Annex 1: Country and Sector Background .............................................................................. 35 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 46 Annex 3a: Results Framework .................................................................................................. 57 Annex 3b: Monitoring and Evaluation ..................................................................................... 61 Annex 4: Detailed Project Description...................................................................................... 66 Annex 5: Project Costs ............................................................................................................... 81 Annex 6: Implementation Arrangements ................................................................................. 83 Annex 7: Financial Management and Disbursement Arrangements..................................... 89 Annex 8: Procurement Arrangements.................................................................................... 105 Annex 9: Economic and Financial Analysis ........................................................................... 111 Annex 10: Safeguard Policy Issues.......................................................................................... 119 Annex 11: Project Preparation and Supervision ................................................................... 137 Annex 12: Documents in the Project File ............................................................................... 139 Annex 13: Statement of Loans and Credits............................................................................ 140 Annex 14: Country at a Glance ............................................................................................... 142 Annex 15: Maps IBRD 34989, IBRD 35059, IBRD 35060..................................................... 144 PERU PERU DECENTRALIZED RURAL TRANSPORT PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSFT Date: November 15, 2006 Team Leader: Nicolas Peltier-Thiberge Country Director: Marcelo Giugale Sectors: Roads and highways (50%); General Sector Director: Makhtar Diop public administration sector (30%); General Sector Manager: Jose-Luis Irigoyen transportation sector (20%) Themes: Rural services and infrastructure (P); Decentralization (S) Project ID: P095570 Environmental
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