World Bank Document

PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB3767 Additional Financing - Second Decentralized City Management Project Name Project Public Disclosure Authorized Region AFRICA Sector General water, sanitation and flood protection sector (70%); Roads and highways (30%) Project ID P109209 Borrower(s) GOVERNMENT OF BENIN Implementing Agency Agence d’Exécution des Travaux Urbains (AGETUR) 01 BP 2780, Recette Principale, Cotonou, Benin Tel : 229 31 36 45. Fax: 229 61 21 66. Email: [email protected] Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared April 15, 2008 Date of Appraisal April 19, 2008 Authorization Public Disclosure Authorized Date of Board Approval June 26, 2008 1. Country and Sector Background Benin is a small, poor country with a population of 8.7 million and a per capita income of US$540 in 2006. Poverty remains widespread and per capita income is below the average for Sub-Saharan Africa. Since 1989, democracy has been greatly strengthened and the new Government, elected in 2006, has reaffirmed the importance of decentralization as a critical issue for development. There has been no significant change to the country and sector background since appraisal of the original project. The urbanization rate stands at 41 percent but is rapidly increasing, with an annual urban population growth rate of 5 percent. Limited infrastructure and Public Disclosure Authorized poor access to basic services affect living conditions in many neighborhoods and constrains the ability of the cities of Benin to reap the benefits of economies of scale normally linked with increased urbanization. 2. Objectives The project development objectives remain unchanged: to increase access to infrastructure and basic services for residents of Benin’s primary cities (Cotonou, Porto-Novo, and Parakou) and selected secondary cities (Abomey-Calavi, Lokossa, and Kandi). The additional financing would scale up the project impact in terms of the number of people gaining access to roads and being protected from periodic flooding. 3. Rationale for Bank Involvement Public Disclosure Authorized The three primary cites have priority programs of works for which funding is lacking. These programs include the construction and rehabilitation of 260 kilometers of roads and 167 kilometers of drainage. The original project was not able to address all the immense needs due to IDA constraints. Based on the satisfactory performance of the project and the scope of the needs, the Government requested Additional Financing for the project on June 26, 2007 to expand the scope of road rehabilitation and drainage works under Component B of the project, in view of the high impact of these works on the improvement of the quality of life of affected populations. This request was repeated in a letter to the Bank on July 23, 2007, requesting an Additional Financing of CFAF 17 billion. The neighborhoods in the three major cities that would benefit from the Additional Financing are suffering from periodic flooding in the rainy season, isolating them from the rest of the city, negatively impacting the health of the population, and seriously hindering access to social services and economic activities; the latter being particularly detrimental to single female headed households. The neighborhoods benefiting from the additional works are among the poorest and most deprived in the targeted cities. A large part of the beneficiaries from the drainage works live in the neighborhoods targeted under Component C of the original project, which were selected based on relative needs, level of poverty (measured as a lack of access to basic services), and level of community organization (to ensure stakeholder ownership and sustainability of the infrastructure financed under the project). The remaining works target poor neighborhoods that were not included in the original project for lack of resources, but which are characterized by inaccessibility during the rainy season and which in the worst cases suffer from stagnant water during six months of the year. 4. Description The Additional Financing would complement the works already being carried out in the cities of Cotonou, Porto-Novo, and Parakou under Component B of the original Project. The original project is financing 22 kilometers of road works and 4 kilometers of drainage works in the six cities. The proposed additional program contains an additional 8.5 kilometers of roads and 9.2 kilometers of drainage works in the three primary cities. The proposed Additional Financing would further finance cost overruns (US$1 million) for Component B, mainly related to the depreciation of the U.S. dollar. The activities will include: (i) rehabilitation (paving and drainage) of the road network; (ii) construction and rehabilitation of a primary drainage network in some neighborhoods not already served in the beneficiary cities; (iii) technical studies and supervision needed for implementation of these works; and (iv) periodic technical audits of works and contract management procedures as well as financial audits of works. The proposed additional activities are expected to be completed by December 31, 2010, six months after the closing date of the original project. As the ongoing road and drainage works in the three primary cities are close to completion, there is capacity in the implementing agency to assure timely delivery of the proposed additional program. Preparatory studies for the additional program have been financed under the original project and the bidding process can be launched immediately after effectiveness. 5. Financing Source: ($m.) BORROWER/RECIPIENT 6.62 International Development Association (IDA) 40.00 Total 46.62 6. Implementation The Additional Financing would be implemented using the same institutional arrangements, procurement1 and disbursement arrangements as for the original project, as they have been assessed to be strong by the Bank fiduciary teams. Within the Ministry in charge of urban affairs, a Project Unit has been set up under the original Project with the following four main functions: (i) follow-up and evaluation of work performed by the two executing agencies; (ii) act as the technical secretariat of the COSUCO, the Inter- Ministerial Committee in charge of the project’s global supervision; (iii) prepare consolidated technical and financial project reports for the Bank; and (iv) ensure dissemination of learning from the project to the entire Ministry. Following the Government’s request to keep the same institutional arrangements under the proposed Additional Financing and the satisfactory performance of the implementing agency in charge of Component B (AGETUR), this agency would continue to be in charge of the activities under the Additional Financing since the nature of the proposed activities has not changed 7. Sustainability Beneficiary cities have committed to financing recurrent costs for these investments as well as for the existing infrastructure. Cities’ counterpart contribution level is kept at 5 percent of the total investment cost as for the original project, based on track record, an estimate of real ability to pay, and the required equity incentive. 8. Lessons Learned from Past Operations in the Country/Sector Lessons learned and reflected in project design come from Phases I and II as well as from other recently completed projects. These consist of: strong coordination at the central level to mitigate implementation difficulties; capacity building integrated with project coordination; supervision of quality of works improved. • Strong coordination at the central level to mitigate implementation difficulties. Although there was not enough capacity at the central level to ensure smooth project implementation at the startup of Phase I, the project steering committee (Comité Interministériel de Suivi, de Coordination et d’Orientation - CISCO) later proved to be essential in ensuring timely contribution of counterpart funding from both the Central 1 Taking into account the revised procurement guidelines of October 2006. Government and the municipalities. The regular meetings, review of implementation reports, and direction that was given by the committee helped ensure smooth project implementation, which has been further strengthened under Phase II. • Capacity building will be integrated with project coordination. Phase I showed that having an agency outside the line Ministry assuring coordinating responsibilities meant a missed opportunity to build capacity at the central level. Because SERHAU had the role of technical secretariat of the CISCO, the Ministry in charge of urban affairs had limited resources to follow the project. By placing a Project Unit within the ministry, integrated project coordination and capacity building are assured for Phase II. The central level thus gains not only project knowledge, but also general project-management capacity. Transfer of the project to normal operation is eased and post-project continuity is assured. The Additional financing will use the same institutional arrangements than under the original project. • Supervision of quality of works improved. There was insufficient capacity at Ministry of Urban Affairs level to perform a sufficient check of the quality of works carried out under Phase I. Phase II, and the proposed additional financing, continue the strengthening of both the Ministry in charge of urban affairs and the cities’capacities in this area, through specific training and technical assistance. 9. Safeguard

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