DocumentiOf The WorldBank
FOR OFFICIALUSE ONLY .. Li Public Disclosure Authorized Report No. 6056-JO
Public Disclosure Authorized STAFF APPRAISAL REPORT
HASHEMITEKINGDOM OF JORDAN
JORDANWATER SlUPPLY AND SEWtERAGEPROJECT
Public Disclosure Authorized March 28, 1986
Public Disclosure Authorized Water SupplY and Sewerage Division Europe, Middle East and North Africa Regional Office
FThisdocumenthas a restricted distribution and may be usedby recipientsonly in the performance of their official duties.Its contents maynot otherwisebe disclosedwithout World Bank authorization. CURRENCYEQUIVALENTS
Currency Unit = Jordan Dinar (JD) JD 0.370 - US$1.00-i/ 3D 1.00 = US$2.70 JD 1.00 = 1,000 fils
MEASURES AND EQUIVALENTS
Kilometer (km) 0.62 mile Square Kilometer (km 2 ) 00.386 square mile Hectare (ha) = 2.47 acres Millimeter (mm) = 0.03937 inches Centimeter (cm) = 0.3937 inches Meter (m) - 39.37 inches 3 Cubic Meter (m ) = 264 US Gallons 3 Cubic Meter per second (m 'sec) = 22,800 US Gallons per day
Liter (1) - 0.264 US Gallons Liter per second (1/sec) = 22,800 US Gallons per day Liter per capita per day (lcd) = 0.246 US Gallons per capita per day
Milligram per liter (mg/l) - 1.0 part per million
ABBREVATIONS AND ACRONYMS
AWSA - Amman Water and Sewerage Authority GOJ - Government of Jordan JVA - Jordan Valley Authority KfW - Kreditanstalt fuer Wiederaufbau LRAIC - Long Run Average Incremental Cost MCM - Million Cubic Meters MOP - Ministry of Planning NRA - Natural Resources Authority PMCSU - Project Management and Constructicn Supervision Unit USAID - United States Agency for International Development WA - Water Authority of Jordan WSC - Water Supply Corporation
GOJ'S AND WA'S FISCAL YEAR
JANUARY 1 - DECEMBER 31
1/ As of December 1, i935 FOROFFIAL USEONLY
STAFF APPRAISAL REPORT
HASHEMITEKINGDOM OF JORDAN JORDAN WATER SUPPLY AND SEWERAGEPROJECT
TABLE OF CONTENTS
Page No.
LOAN AND PROJECT SUMMARY ...... I
I. SECTORAL CONTEXT .. *...... 1
Background ...... , ...... I Water Resources ...... I Water Supply and Sewerage ...... 2 Government Strategy in the Sector ...... 2 Institutional Aspects ...... 3 IDA/Bank Role in the Sector ...... 4 Rationale for Bank Involvement ...... 4
II. POPULATION, SECTOR SERVICE AND DEMAND IN PROJECT AREA .... 5
Project Area ...... 5 Population Projections ...... 5 Water Sources Development.. 6 Sewerage and Sewage Disposal. 8 Population Served and Standard of Services in Project Area . .9 Demand for Services .. 10
III. THE PROJECT...... 10
Genesis . .10 Project Objectives .. 12 Technological Aspects .. 13 Project Composition ...... 14
Cost Estimates...... 14 Project Financing Plan .. 16 Project Implementation ...... 17 Procurement .. 18 Disbursement .. 19
This report is base, ;r, the findings of an appraisal mission to Jordan in November/December l19b:. Mission members included Lars Rasmusson and Arun Banerjee.
This document has a restrktod distribution and may be used by recipientsonly in the performance of their ofMfcialduties. Its contents may not otherwise be disclosed without World Bnk authorization. TABLEOF CONTENTS(ContinueD
Page No.
IV. THE BENEFICIARY ...... 20
Organizationand Management ...... 20 InstitutionalDevelopment ...... O-* .....* .... 21 Staffing a'ndTraining..... 21 Billing and Collection ..... 22 Accounting ...... 22 Audit ...... 23 Insurance ...... 23
V. FINANCE ...... 23
Past Performanceand Present Position . .23 Tariff - Cost Recovery...... 24 The WA's Sources and Applicationsof Funds. 25 Future Financial Performance ...... 26
VI. ECONOMIC ANALYSIS AND PROJECT JUSTIFICATION . .28
Socio-EconomicAnalysis...... 28 Average IncrementalCosts . .29 Affordability ...... 29 Institution Building...... 29 Project Risks ...... 30
VII. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 30
ANNEXES
ANNEX I - Table 1 - Sewerage Service Levels .32 - Table 2 - Investment Plan (1986-90) .33 - Table 3 - Cost Estimates ...... 34 - Table 4 - Monitoring Criteria for Water Authority Operations.35 - Table 5 - Estimated Schedule of Disbursements 36
ANNEX 2 - Table 1 - Current Water and Sewerage Tariffs 37 - Table 2 - Income Statement Water Authority .. 39 Table 3 - Sources and Applicationof Funds Water Authority .40 - Table 4 - Balance Sheet-Water Authority 41 - Table 5 - Economic Rate of Return. 42 TABLEOF CONTENS (Contnued)
Page No.
ANNEX3 Project Components...... 43 ANNEX 4 AssumptionsUsed in FinancialProjections ...... 47 ANNEX 5 Additional InformationAvailable in Project File ...... 48
CHARTS
Chart No. 1 - Project ImplementationSchedule ...... 49 Ch..t No. 2 - OrganizationalChart of the Water Authority.50
MAPS
IBRD No. 19509 - Jordan - Water Sourcesand Supplies to Municipal Systems IBRDNo. 19510 - Jordan - Greater Amnan Area Sewerageand Sewage Disposal Systems IBRD No. 19511 - Jordan - Jerash Area Sewerageand Sewage Disposal Systems HASHElITE KINGDOM OF JORDAN
JORDAN WATER SUPPLY AND SEWERAGEPROJECT Loan and Proiect Summary
Borrower: The Hashemite Kingdom of Jordan.
Beneficiary: The Water Authority of Jordan (WA).
Amount: US$50.0 million equivalent.
Terms: 15 years, including three years of grace, at the standard variable interest rate.
Relending Terms: Same as the Bank loan. The WA will bear the foreign exchange and the interest rate risks.
Project Description: The project, which is part of the Government's high priority program to improve the water supply and sewerage services in Jordan, would include: (i) extension and rehabilitation of about 450 km of water mains; (ii) construction of one service reservoir and two pumping stations; (iii) construction and extension of about 365 km of trunk and collection sewers; (iv) construction of three and extension of two sewage treatment works; (v) supply of equipment for works operation and maintenance and water sources monitoring; and (vi) consultant services for engineering, construction supertision and water supply systems control.
The project would continue the institutional development efforts started under previous Bank loans. The main beneficiaries of the project would be low and middle-income families. Since the WA is reasonably well established, project preparation is at an advanced stage and because previous experience in project execution has been very good, no particular risks are foreseen during project executiun or in reaching the project objectives. Local Foreign Total -(US$ Millions) EstimatedCost*:
Water Supply 5.81 13.51 19.32 Sewerage 12.68 12.68 25.36 Sewage TreatmentWorks 3.14 6.59 9.73 Equipment - 6.76 6.76 ConsultingServices and Training 1.49 0.27 1.76
Land Acquisition 0.41 _0.41-
Base Cost 23.53 39.81 63.34
PhysicalContingencies 2.19 3.30 5.49 Price Contingencies 6.70 11.41 18.11
Total cost 32.42 54.52 86.94
InterestDuring Construction - 9.45 9.45
Total FinancingRequired 32.42 63.97 96.39
FinancingPlan:
ProposedWorld Bank Loan - 50.00 50.00 GovernmentContribution 30.55 13.97 44.52 Customer Contribution 1.87 - 1.87
Total Financing 32.42 63.97 96.39
Estimated Disbursements: Bank FY 1986 1987 1988 1989 1990 1991 1992 1993
US$ Million - …
Annual - 1.0 7.5 12.5 12.5 9.5 5.5 1.5 Cumulative - 1.0 8.5 21.0 33.5 43.0 48.5 50.0
EconomicJustification: Least cost program.
*Cost estimatesdo not include import duties and taxes, from which the project is exempt. HASHEMTE KIWGDOMOF JORDAN
JORDAN WATER SUPPLY AND SEWERAGEPROJECT
L SECTORAL CONTEXT
1.01 Jordan is a semi-desertcountry with a land area of about 91,000 sq. km with the only access to the sea along a 25 km coastlinein the south where the seaport of Aqaba is located. The most remarkablephysical featureof the country is the structuralsplit of the Red Sea/JordanRift Valley which has createda long narrow trough of land, running from Aqaba in the south to the foot of Mount Rermon in Syria in the north. Much of the land in this trough, which includes the Jordan Valley and Wadi Araba, is below sea level with the water level in the Dead Sea at -392 m. To the east, the land rises steeply to a plateau with an average altitude of about 800 m with peaks rising to over 1,500 m. This plateau constitutesthe uplands of Jordan and is characterized by a more temperateclimate and relativelyabundant rainfall. Further towards the east, rainfall decreases rapidlyand the land slopes gently to the Arabian Desert.
1.02 Current populationon thE.East Bank is estimatedat 2.5 million, of which some 70% is urban.t' About 902 of the populationlives in the northwest quadrantof the coun.ry. The net growth rate is about 42 per annum.
1.03 Administrativelythe East Bank of Jordan is divided into eight governorates: Amman, Irbid, Balqa, Kerak, Ma'an, Mafraq, Zarqa and Tafila. The governoratesare further subdividedinto districts,sub-districts and nahias, the smallest units of regionaladministration. The total number of nahias in the country is 44, encompassingabout 1,017 populationcenters.
Water Resources
1.04 About 80f of Jordan's land area is desert. Availabilityof water depends largely on rainfall,ranging from moderate amounts (600 millimeters per year) in the northern uplands to negligibleamounts in the southernand eastern deserts, over 85% of which is lost throughevaporation. As the more convenientlylocated sources of municipaland industrialwater supplies have become fully utilized,surface and groundwaterin other areas, hitherto used for agriculture,will have to be transportedat high cost over long distances
Urban communitiesare defined to include all principaltowns of each governorate,district, sub-district and the urban populationas computed correspondsroughly to the population in towns with 10,000 or more people. - 2 - and/or steep gradients1' to meet these needs. The rapid growth of the economy in recent years and the associated increase in municipal, industrial and agriculturalwater demands, coupled with Jordan's high rate of population increase,have put serious pressure on the country's limitedwater resources; and water scarcitymay become a principal constraintto economic growth. In these circumstances,it is crucial for Jordan to realize the maximum benefits from its limitedresources by the continueddevelopment and implementationof a sound sector strategy and through prudent water resourcemanagement.
Water Supply & Sewerage
1.05 About 87% of the total populationis supplied through house connectionswith remainingpopulation being served hrough standposts,private wells or tankers. However, due to transmissionand distributionsystem inadequacies,the supplies in many areas are intermittentand over 302 of water produced could be assumed to be lost through leakage (para. 3.02). With intermittentsuppl 4's there is a danger that contaminatedgroundwater can enter the system when depressurized,a risk which is particularlyacute where septic tanks and cesspits are used.
1.06 About 25b of the total populationis connected to a piped sewerage system while the remainingpopulation is served by septic tanks, cesspools, pit latrinesand similar facilities. Despite significantefforts to provide sewerage in recent years, rapid growth in urbanization,rising standardsof living and extensivebut uncoordinatedland developmenthave caused individual waste water disposal facilities to become inadequate,particularly in high density areas and in soils with limited percolationcapacity. Occasionally, overflowsor improperdisposal of cesspool waste occur, creating major health hazards. Severe outbreaks of cholera have occurred in Jordan, the latest in 1981. The infant mortality rate has declined in recent years but still remains high (60 per 1000 live births in 1982 compared with 15 per 1000 live births in the industrializedcountries) as does the incidenceof water-related infectiousdiseases. This suggests the need for continuingefforts to improve water supply and sanitation conditions in the country.
Government Strategy in the Sector
1.07 The scarcity of water and the high cost of its developmenthave long been recognizedby the Government. Based on a number of studies over the years, includingthe Bank Water Sector Study (ReportNo. 4699-JO) completed in January 1984, available water resourcesare projected to be adequate to meet municipaland industrialneeds beyond the turn of the century with a modest increaseavailable for irrigation if the Governmentpursues appropriate policies in the followingareas: (i) proper allocationof known resourcesand new resource development(which includes transfer of water from water surplus to deficit areas, continuingexploratory work for ground water and further
I~' Under the Deir Alla or the East Ghor Main Canal scheme for the Greater Amman water supply, pumping is required to a height of 1,200 m (para. 3.01). - 3 -
developmentof remainingsurface water sources); (ii) prudent water resource managementby strengtheningthe sector's institutionalcapability; (iii) quantity and quality control of water and wastewater;(iv) developmentof policiesrelated to reuse of waste water; (v) developmentof appropriatecost recoveryand other financialpolicies; and (vi) manpower planning and training.
1.08 Aided by sound Governmentpolicies, water conservationis generally practicedthroughout the country. The Governmenthas made impressivestrides in developing the sector. It has embarked on a program of large water projects to help relievewater shortages,particularly in the upland areas of northwestJordan. During the Five-YearPlan period (1981-85),almobt 16% of public sector investmentswas allocated for water sourcesdevelopment and supplies (includinguse for irrigation),which was abwt seven times the corresponding actual investments in the previous plan period (1976-80) and continuedpriority for the sector is expected in the next plan period (1986-90). The Governmenthas also adopted a policy for adequatelytreating all sewage from industriesand municipalitiesso that effluentsmay be suitable for reuse in agriculture and with the assistance of the United States Agency for InternationalDevelopment (USAID),it has developed a data managementsystem for monitoring quantitiesand qualityof water rescurces in the country.
Istitutional Aspects
1.09 In the past, the water supply and sewerage sector was plagued with problems of inadequatecoordination due to the large number of institutions involved. This often led to duplicationof efforts and sub-optimalinvestment decisions. As recommendedin the Bank's Water Sector Study, an autonomous agency, the Water Authorityof Jordan (WA) was created in December 1983 to assume the responsibilitiesfor providingwater supply and sewerage services, water resource allocation,management and monitoring,planning and project developmentfor the whole of Jordan. This has set the institutionalframework necessaryto better husband criticallyscarce water resourcesin order to sustain economic growth. The thrust of the WA's work will be to formulate policiesand take appropriatemeasures to augment the country'susable water resources,to efficientlyallocate these among the various competitiveusers, and to ensure that th.ewater allocated is used economically. The WA is being reorganizedin order to undertake its mandated role (para. 4.02).
1.10 In vies of the growth of the sector functionsand activities the demand for trained personnelhas becQme an urgent matter. In the past there was a number of differenttraining programs but these were generally ad hoc, unfecussedand suffered from a lack of coordination. With the assistanceof USAID, the WA is in the process of preparinga national trainingprogram (para. 4.09) to satisfyboth short- and long-termtraining needs.
1.11 Tariffs and charges for urban municipalwater supply and sewerage have generallybeen in line with the costs of these services. However, ineffectivecontrol of groundwaterextraction by industry and agriculture, where tariffs or extractionfees have not been imposed or are below costs of -4-
production,has contributedto the need for early developmentof distant water sources at high costs. T-hesematters will be partiallyaddressed in a tariff study (para. 5.05) for municipaland industrialwater uses to be completedby end-1986,which would also develop the necessaryfinancial strategies. The subject of appropriatepricing of agriculturalwater will be part of the Bank's continuousdialogue with the Government in establishingoverall developmentpriorities.
IDA/Bank Role in the Sector
1.12 IDA commenced its assistance to the sector in the 1960s. The FY62 Credit 18-JO for US$2.0 million and the FY64 Credit 43-JO for US$1.5 million supportedwater supply developmentrespectively in Amman and in the cities of Ramallah-ElBira, Jerusalem,Nablus, Azraq, Irbid, and Zarqa. In the 1970s, the Government concentratedits efforts on developingthe water supply and sewerage services of Amman, which also resulted in the creation of the former Amman Water and Sewerage Authority (AWSA). The FY73 US$8.7 million Credit 385-JO and the FY78 US$14 million Credit 780-JO assisted in the developmentof AWSA and helped finance investmentsfor Amman's rapidlyexpanding needs for additionalwater supply and sewerage facilities. These projects have been successfullyexecuted and completionreports for Credits 385-JO and 780-JO have been prepared. The lessons learnedfrom the above projects include the need for better coordinationin planning and executionand the particular importanceof reducingunaccounted-for water in a largelywater deficit situation. It was also noted that while substantialefforts had gone into the institutionaldevelopment of AWSA, weaknessesremained, particularly in its financialdepartment. These factors have been taken into account in the design of later projects,and in the establishmentof the WA.
1.13 In FY83. FY84 and FY85 the Bank provided furtherassistance through (i) Loan 2213-JO of US$17.0 million for che improvementof the water supply and sewerage servicesfor the cities of Zarqa and Ruseifa; (ii) Loan 2425-JO of US$30 million for the extensionof water supply, sewerage and sewage disposal facilitiesin the eight cities of Ramtha, Mafraq, Anjara, Ajloun, Ein Janneh, Kufrinja,Madaba and Ma'an: and (iii) Loan 2483-JO for the extension and improvementof the water supply and sewerage serviceswith the inclusion of sewage disposal facilitiesfor the Greater Amman area. These projects are presentlyunder executionwith significantprogress being made and with completionexpected during 1987, well ahead of schedule.
Rationale for Bank Involvement
1.14 The Bank's Water Sector Study (para. 1.07) made several recommendationsconcerning the sector's organizationand financialpolicies, outlined a strategy to develop availablewater resourcesfor meeting the needs of competingusers, establishedgeneral recommendationsfor appropriatewaste water disposal,and formulatedassociated investmentprograms. Based on this, the Bank's overall strategy in the sector includesassistance to the Government in implementingpolicies to efficientlymanage and allocate the country's scarce water resources,executing technicallysound and economically feasible projects to increaseusable water resources(inecluding effluent reuse), strengtheningthe sector institutionincluding training, and establishingsound pricing policies to assure economic use and conservationof water and to provide for adequate standardsin works operationand maintenance.
1.15 The proposed project has been designed to support the Bank's overall strategy. It would play an essentialrole in providingassistance and advice, and in ensuringproper follow-upactions for (i) the developmentof water resourcesmanagement and conservationprocedures; (ii) the developmentof appropriatemanagement and organizationalsystems for the WA; (iii) judicicus selectionand formulationof potentialprojects and related investment strategies;and (iv) improvementsin-operational areas such as financial planning,accounting, auditing, manpower developmentand training.
U. POPULATION SECTORSERVICE -ND DEMANDIN PROJECT AREA
Project Area
2.01 The project area includes the populationcenters of the Greater Amman and the Jerash areas and the town of Aqaba (Maps 1, 2 and 3). Amman, the capitalof the HashemiteKingdom of Jordan, has grown rapidly in the past two decades, and has become a major metropolis surroundedby growing suburbs and outlying communities. The economy of the Amman Region has, in recent years, been characterizedby a continuingshift in relative importancefrom the agriculturalsector to the industrialand service sectors. Most of the industrialactivities are concentratedin the Zarqa and Ruseifa areas.
2.02 Jerash located some 40 km north of Amman is a major tourist attractionwi.h its archaeologicalsites from the Roman era, when it was an importanttrade center. Aqaba locatedat the Red Sea is the only port in Jordan with increasi.ngimportance for the country'sindustrial development and also for the transitof goods to Iraq.
Population Projections
2.03 Populationprojections 1" for the Project Area are shown in Annex 1, Table 1, and summarizedbelow:
1985 1990 2000
Greater Amman Areal' 1,929,000 2,324,500 3,251,600 Jerash Area 39,900 48,100 67,200 Aqaba 50,000 60,250 84,300
TOTAL 2,018,900 2,432,850 3,403,100
-' IncludingZarqa/Ruseifa and Salt.
I/Source: The Water Authorityof Jordan. -6-
The above total populationrepresents about 75% of Jordan'spopulation by 1990. Correspondingpercentage of populationdirectly benefitting from the project would be about 101. Populationprojections for the different areas take into account factors such as employment,land use and expected industrial development.
Water Sources Development
2.04 The existing and future water supply systems in the northwest quadrantof Jordan (para. 1.02) which rely on a number of ground and surface water sources, are proposed to be fully integratedin the long term. Potable water supply will continue to be primarilyprovided from ground water sources while the surfacewater sources would be mainly allocatedto irrigation. The Deir Alla (surfacewater) and the Wadi Arab (groundwater) schemes (Map 1) are scheduled to be commissionedduring 1986 to serve the Greater Amman and Greater Irbid areas respectively.
2.05 Present and projectedwater demands in the northwestquadrant of Jordan, shown below, are based on two levels of per capita consumption. The lower estimate assumes no increasein the per capita water consumption(para. 2.14); the higher estimateassumes an increase in per capita consumptionof about 60X from 1985 to 2005. The lower estimate on which financial projectionshave been based may at least during an intermediateperiod represent future water demand because of high water costs. However, the design of various work componentsis, where applicable,based on the higher estimate to provide for a reasonablesafety margin (para. 3.14). These assumptionsare satisfactory.
1,3werEstimate Higher Estimate Municipal Industrial Total Municipal Industrial Total Year ------(Million m3/annum) ------
1985 72 13 85 72 13 85 1990 98 18 116 109 18 127 2005 168 29 197 213 29 242
2.06 Presentlydeveloped water sources and those proposed to be developed are shown below: _7_.
Water Sources Capacity (Millionm3/year (MCM)] PresentlyDeveloped: - Amman/Zarqa boreholes 20i' - Azraq boreholes 12 - Qastal/Siwaqa boreholes 7 - Samasdoud/Samaya boreholes 5 - Wadi Ajib 5 - Minor local sources 12 Sub Total 61
Under Development: - Deir Alla surface water 45 - Wadi Arab boreholes 20 Sub Total 65
Sources to be Developed: - Mukheiba springs/boreholes 20 - Wadi Wala with Rumeil Dam 12 - Wadi Mujib 10 - Side Wadis 12 - Yarmouk river, direct intake 25 - Yarmouk river, additionalat the construction ot Maqarin dams' 65
Sub Total 144
TOTAL K 270
In case a riparian rights issue for the Maqarin dam can not be satisfactorily resolved the developmentof the Euphrateswater source has been consideredas a possible alternativeto the Yarmouk river, although it would be far more expensive.
2.07 An analysis of projectedwater demand and water availabilityindicates that (i) existing water sources and those under development(total 126 MCM) would be sufficient to 1990; and (ii) total water resourceswould be sufficientbeyond the planning period 2005.
-i- This capacity may be increased to 30 MCM if groundwaterpollution is reducedand if effectiveblending with good quality water from other sources is achieved.
2' The constructionof the Maqarin dam would be subject to a satisfactory resolutionon the riparian rights issue. - 8 -
2.08 Water sources to be developed in the intermediatefuture include Mukheiba and/or Wadi Wala with the constructionof the Rumeil dam. It may then also be feasible to connect the Amman and Irbid areas with a water transmissionmain (the "nationalcarrier") in order to achieve the advantages of an integratedwater supply system. The WA is studying the alternative means by which this could be achieved as well as the timing of construction works which would depend on the increase in water demand in the future.
2.09 The extensionand rehabilitationof the water transmissionand distributionsystems, as proposed under the investmentplan (para. 3.03) with the additionalwater quantities to be made available through the commissioning of the Deir Alla and Wadi Arab projects will significantlyimprove the water supplies to the relatedareas.
2.10 The first priority would be extensionand rehabilitationof the water transmissionand distributionsystems in order to optimize the use of existing water sources and to ensure continuousand reliable supplies. Concurrently, preparatoryworks would be undertaken for subsequentwater source development.
Sewerage and Sewage Disposal
2.11 Although significant efforts have been or are being made in the construction and extension of sewerage and sewage disposal works, the needs have not yet been satisfactorilycovered. Master plans have been prepared for the Greater Amman and Greater Irbid areas but project implementationhas so far been limited to the central parts leaving the fringe areas without proper excreta disposal facilities. Studies have also been made for other major urban centers and an inventoryof required systems with a tentative establishmentof prioritieshave been carried out for all towns and villages with a populationexceeding 2,500.
2.12 It would neither be feasible nor economical to provide piped sewerage and sewage disposal services to the whole population. Hence, the WA has proposed and the Bank has agreed to basic criteria which are:
(i) extensionof the sewerage systems in areas already providedwith sewage disposal works in order to obtain optimal utilization;
(ii) identificationof areas where sewage effluent infiltration(through soakpits)poses a direct threat to a groundwatersource being used for potable water supply;
(iii) identificationof areas where, because of impermeablesoil conditions,individual excreta disposal facilitiesrequire frequent and costly pump outs, and are thereforenot economical;
(iv) identificationof areas with high populationdensity and significantgrowth potential;and
(v) provisionof simple but adequate sewage treatmentenabling effluent reuse for irrigationpurposes. -9-
These criteria thereforeform the basis on which sewerage sector development prioritiesare established.
Population Senred and Standard of Services in Project Area
2.13 The percentage of population connected to the public water supply system.(in 1985) in urban and rural areas are about 892 and 84% respectively. The remainderof the populationis served by standposts,water tankers and, to a minor extent, by privatewells.
2.14 Water consumptionby those connectedto the piped system averages 85 liters per capita per day (lcd). The unaccounted-forwateri' averages 45% of water producea,which is comparativelyhigh. With recently improvedwater supply and distributionsystem pressu the rate of leakagehas increased. However, it is expected to be reduced throughongoing rehabilitationor replacementof older water mains (paras. 3.02, 3.17). The water supply is for the time being sufficient. The water supply facilitiesare generally well operated and maintainedbut still some 6% of water samples being taken are bacteriologicallyunsatisfadtory.
2.15 The sewerageservice levels by areas are shown in Annex 1, Table 1. In Amman about 80% of the populationis connected to the piped sewerage system (in 1985) and, some 30% of the total urban populationof Jordan is served. The remainingpopulation relies mainly on cesspool installations,whereby effluent from the stored sewage percolates into the ground. There are five existing municipal sewage disposal systems in operation: (i) the Ain Ghazal Treatment Plant with a capacity of about 30,000 m3/day mainly serving the Amman municipality; (ii) the recentlycommissioned stabilization ponds at Schirbet es Samra with a capacity of about 70,000 m3/day mainly serving the Amman, Zarqa and Ruseifa municipalities; and (iii) smaller treatmentplants of various capacities(Annex 3) serving the municipalitiesof Salt, Jerash and Aqaba.
2.16 With the completionof ongoing projects (para. 3.01), the sewerage service levels includingsewage disposal are expected to cover about 552 of total urban populationby 1987.
2.17 Existing cesspool installationsoperate with varying degrees of efficiencydepending upon loadings,soil conditionsand maintenance. Maintenancecosts primarilyfor emptying can be significantand in many instancesthe effluent from neglectedcesspools overflows or is pumped illegallyinto the streets, creating a sanitary nuisance and a health hazard.
Unaccounted-forwater is the differencebetween volume of water produced and water billed divided by volume of water produced. It includes inaccuraciesin water metering, non-meteredwater used at standposts,and leakages. - 10 -
Demandfor Services
2.18 Since water productionfacilities are presentlyadequate, efforts are now being concentratedon the extensionand improvementof water services with the ultimate goal of serving the total populationwith satisfactorypiped water. In addition, existing distributionsystems requirecontinuous maintenanceand rehabilitationto reduce water losses, thus deferring the developmentof new and costly water sources. Of equal priority is the need to protect existing groundwatersources from sewage infiltration.
2.19 With the provisionof adequatequantities of water there is an increasedneed for improvedwaste water collectionand disposal facilities, particularlyin higher populationdensity areas. The constructionand extensionof sewerage and sewage treatmentworks have thus been assigned enhanced priority. Furthermore,the reuse of treated effluentshas been recognizedby the Government as a means to provide a valuable contributionto water conservation.
m. THE PROJECT Genesis
3.01. Major projects under executionand funding agenciesare summarizedas follows:
(i) Zarqa/RuseifaWater Supply & Sewerage Project financed by the World Bank, Kreditanstaltfur Wideraufbau(KfW), USAID and Islamic DevelopmentBank;
(ii) Eight Cities Water Supply & Sewerage Project financed by the World Bank and European InvestmentBank;
(iii) Greater Amman Water Supply & Sewerage Project financed by the World Bank;
(iv) Deir Alla Water Supply Project for the Greater Amman area financed by USAID;
(v) Wadi Arab groundwatersource developmentfor the Greater Irbid area entirely financed by the Government;
(vi) Two Cities Water Supply & Sewerage Project financed by USAID; and
(vii) Extensionof sewerage and sewage disposal systems in Irbid and Aqaba.
All of the above projects are expected to be completedby no later than 1987.
3.02 The execution of all projects is progressingwell with all major Bank financed contractsalready awarded. Actions are also being taken to reduce unaccountedfor water (para. 2.14) through improvedmetering, billing and leak - 11 - detection. WA staff members have recently been trained in leak detectionat the Thames Water Board (UK) which, as a follow-upaction, will also provide a short-termadviser. The WA placed an order in December 1985 for 40,000 water meters, representingabout 15Z of the total number presently in use. Orders have also been placed for leak detectionequipment. The WA aims to have a satisfactorymetering system by no later than 1988 and this combinedwith actions being or to be taken on water main rehabilitation(para. 3.17) and meter reading and billing (para. 4.11) should enable a reductionof unaccountedfor water to about 25S by 1990 (para. 3.30). This level of unaccountedfor water should be acceptable in the medium term for a system of this age.
3.03 The WA has submitted to the Ministry of Planning (MOP) its investment program for the 5-Year Plan 1986-90which is simmnrizedin Annex 1, Table 2. Apart from ongoing works, the program includes:
(i) water resource studies and investigationsparticularly relating to management,monitoring and control, conservationand test drilling in order to ascertaingroundwater availability in deep aquifers;
(ii) developmentof additionalwater sources;
(iii) extensionand rehabilitationof water transmissionand distributionsystems includingadditional storage capacity;
(iv) extensionof sewerage and sewage disposal facilitiesin the Greater Amman and Irbid areas;
(v) extensionof sewerage systems in the Salt, Jerash and Aqaba urban areas; and
(vi) constructionof sewerage and sewage disposal systems ir.smaller urban areas.
The investmentplan is well balanced and reflects as appropriatethe sector policies and objectives (para. 1.07).
3.04 Based on water demand projectionsand the criteriawhich have been adopted (para. 2.12) to determine the need for piped sewerage systems, the immediatepriorities would relate to the studies, investigationsand works referred to under items 3.03 (i) to (v). For item 3.03 (iii) the WA has reached a tentativeagreement with KfW for financialassistance for related works in Irbid and neighboringdistricts. For item 3.03 (iv) USAID is expected to provide financialassistance for related works in the Greater Irbid Area. The WA also intends,with USAID assistance,to centralize its water supply monitoring through the installationof a telemetryand telecontrolsystem. Finally,with other bilateralassistance, the WA will undertakea comprehensivegroundwater survey with deep borehole test drilling. For a major portion of remainingworks under the priority items the Governmenthas requefLedBank financialassistance. Such assistancewould then enable the water supply and sewerage needs to be addressedon a country wide basis. - 12 -
3.05 A Master Plan, financedby USAID, for wastewater collectionand disposal for the Greater Amman Area, prepared by James M. Montgomery ConsultingEngineers and DMJM International(US consultingfirms) was completedin February 1982. The Master Plan proposeda phased extensionof requiredworks and subsequentlythe executionof the first phase was financed under the Greater Amman Project (Loan 2483-JO).
3.06 A study of the "Primaryand SecondaryCenveyance Systems for Domestic Water Supply in the Amman, Balqa and Irbid Govern',rates,"undertaken by consultants-'was completedin April 1985. The study evaluatesthe overall availabilityof water sources, their phased extensionsand their allocations between different users. It also analyzes,on a district basis, the needs for the extensionand strengtheningof transmissionand distributionsystems and of service reservoirs. A phased program was prepared for the executionof those works to be covered under the 5-Year Plan.
3.07 Proposed works to be undertaken in Aqaba and Jerash are also based on previouslyprepared master plans for the constructionand extensionof sewerage and sewage disposal facilities.
Project ObIectives
3.08 The project objectives would be: (i) to assist the Government in developingan optimal investmentplan for the sector; (ii) to develop water resourcesmanagement and conservationand water systems operationprocedures; (iii) to improve and extend water distributionand sewage collectionsystems; (iv) to augment present efforts to reduce unaccounted-forwater; (v) to reduce groundwaterpollution by the collectionand treatmentof sewage; (vi) to provide for recyclingof treated effluents;and (vi) to assist in the continueddevelopment of the WA.
3.09 The project would also contribute to an increase (from 1986 to 1990) in the percentageof populationserved by piped water supplies from 89% to close to 100% and by waterbornesewerage systems includingsewage treatment facilitiesfrom 32% to about 85% (urban areas only). Population to directly benefit from the project is estimatedat about 300,000.
3.10 The project would be consistantwith the country objectivesin water resourcesmanagement and conservationand would have a significantimpact on the living conditionsand the health standard through improvedexcreta disposal facilitiesand through reduced ground and surfacewater pollution.
'-' The study which covers the northwestquadrant of Jordan was prepared by Watson Hawksley and Sir Alexander Gibb & Partners (UK) in associationwith ArabtecL ConsultingEngineers. - 13 -
The project would also enable the .ecyclingof treated effluents to be used for agriculturalpurposes, particularly in the Jordan Valley.
Technological Aspects
3.11 The alternativesof extendinga piped sewerage system or maintaining individualon-site exereta disposal facilitieshave been evaluated based on agreed upon criteria (para 2.12). In the project areas, the high density populationand the necessityto protect availablegroundwater sources justify the constructionof piped sewerage systems. For adjacent drainage zones evaluationshave been made between the provisionof separate treatmentworks or pumping collectedsewage to one treatmentsite.
3.12 In order to safely recycle sewage effluentsand to conserve scarce water resourcesadequate sewage treatmentwould be required to minimize health risks. Proposed effluent quality standardsare: 30 mgli as a monthly average for both BOD5 (Five-DayBiological Oxygen Demand) and SS (SuspendedSolids) with faecal coliformorganisms as MPN (Most Probable Number) less than 1001100ml in 80% of sampled. These proposed quality levels are satisfactory. Sewage effluentsfrom the treatmentplants will be discharged into river beds where they will either percolateinto the groundwateror finally collect in impoundments. In this process the water quality will naturally further improve to the standard required for most types of irrigation.
3.13 Evaluationof alternativetreatment processes has shown that, where sufficientspace is available, stabilizationponds are the most economical form of treatment; in other cases primary and secondarysettling tanks combined with oxidationditches or rotating biologicaldisks (RBD) have been found to be feasible. Selected treatmentmethods for the differentareas are shown in Annex 3.
3.14 The basis for overall system design is as follows: (i) the per capita sewage flow, which has been assumed at 802 of the water consumption, varies between 70 tu 105 liters per day dependingon the area served; (ii) the peak flow factor has been assumed at twice the average sewage flow; (iii) the interceptorsare designed for the projectedflow by the year 2010; and (iv) the treatmentworks will be extended in phases with the first phase to cover the period up to the year 2000. W4herenecessary new trunk sewers will be provided with PVC or similar approved materials, to improve their capacitiesand act as a corrosionprotection. Sewer connectionsare being includedup to one meter from the property boundary lines. Thereafter they are financed by the propertyowner served (para. 3.29).
3.15 Alternativesselected and various project componentsrecommended for implementationrepresent the most feasible least cost solutionsat a discount rate of 10X. The proposedphasing of the various project componentsand the design criteria used are appropriate. - 14 - Projeet Composition
3.16 The project cotnposition,which is described in detail under Annex 3, cowprisesthe followingmajor components:
(i) extensionand rehabilitationof the water distributionsystems (includingservice reservoirand pumping stations)in the Greater Amman and Jerash areas;
(ii) extensionof the sewerage systems in the Greater Amman, Jerash and Aqaba areas;
(iii) constructionor extensionof five sewage treatmentworks (of which two are existing)in the GreaterAmman area and Jerash;
(iv) equipmentfor monitoringand control of water sourcesand water distributionsystems includingwater meters, pipes, valves and standby pumps;
(v) consultantservices for engineering,construction supervision and operation controland monitoring;and
(vi) training.
3.17 The extent of the works under each project component-'is snmmarizedas follows: (i) about 450 km of water mains in sizes varying from 80 to 400 mm, with about 300 km to be used for rehabilitationand 150 km for extensions; (ii) two pumping stations for water supply and one minor storage 3 tank with a capacity of 1,000 m ; (iii) about 365 km of sewers in sizes varying from 150 to 800 mm; and (iv) provisionof additionalsewage treatment capacity of about 7,300 m /day.
Cost Estimates
3.18 Annex 1, Table 3 shows a breakdown of the cost estimateswhich are suummarizedbelow:
' The extent of equipmentunder 3.16 (iv) cannot be specified in detail at present stage but will have to be decided upon during the course of project execution. - 15 -
Local Foreign Total Local Foreign Total 2 of ------JD --- US$ Equivalent--- Total -…Million …
Base Costs - Water Supply 2.15 5.00 7.15 5.81 13.51 19.32 22 - Sewerage 4.69 4.69 9.38 12.68 12.68 25.36 29 - Sewage Treatment 1.16 2.44 3.60 3.14 6.59 9.73 11 - Equipment - 2.50 2.50 - 6.76 6.76 8 - Land Acquisition 0.15 - 0.15 0.41 - 0.41 1 Sub-Total 8.15 14.63 22.78 22.04 39.54 61.58 71
ConsultantServices and Training 0.55 0.10 0.65 1.49 0.27 1.76 2
Contingencies - Physical 0.81 1.22 2.03 2.19 3.30 5.49 6 - Price 2.48 4.22 6.70 6.70 11.41 18.11 21 Sub-Total 3.29 5.44 8.73 8.89 14.71 23.60 27
TOTAL 11.99 20.17 32.16 32.42 54.52 86.94 100
InterestDuring Construction - 3.50 3.50 - 9.45 9.45
Total Financing Required 11.99 23.67 35.66 32.42 63.97 96.39
3.19 The cost estimatesare mainly based on preliminaryengineering design for the various project components. The base costs are end-1985 price levels and physical contingenciesaverage 10%. The followingprice contingencies1 ' for both civil works and equipmenthave been assumed: (i) for local expenditures5% for 1986 and 7T thereafter;and (ii) for foreign expenditures 7.22 for 1986, 6.82 for 1987-88, 72 for 1989, 7.1% for 1990 and 4% thereafter. The cost estimatesdo not includedirect import duties and taxes from which the WA is exempt.
3.20 The computationof the price contingenciesis based on the disbursementprofile for Jordan (9/11/85)"Combined for all Loan Types
IX' These are for foreignexpenditures according to the Bank "Guidelines on Expected Price Increasesand InterestRates" of February 5, 1986 and for local expendituresaccording to "EMENA Recent and Projected Rates of Inflation"(as of October 1985). - 16 -
General." An alternativeestimate based on a shorter project implementation period (para. 3.27) would reduce the total costs to US$79.0million with a foreignexchange componentof US$49.8million.
3.21 The costs for the consultantservices are estimatedat about US$1.6 million which correspondsto about 350 and 25 man-monthsfor local and foreign consultantsrespectively.
3.22 The foreign exchange componentis estimatedat US$64.0 million equivalent(including interest during construction)or 66% of total costs. This reflectsassumptions made regardinggoods to be imported,civil works contractsto be awarded to foreign and local contractorsand the average foreigncost components of locally manufacturedequipment.
Proieet Financing Plan
3.23 The project financingplan is given below:
Local Forei,n Total X ----- (US$ illion)-
Requirements(para. 3.18) 32.42 63.97 96.39 100
Financing
- ProposedBank Loan - 50.00 50.00 52 - GovernmentContribution 30.55 13.97 44.52 46 - CustomerContributions 1.87 - 1.87 2
TOTAL 32.42 63.97 96.39 100
3.24 The proposed Bank loan will be made to the Government,which coordinatesall foreign financingfor public sector investmentsthrough the MOP on standard terms for Jordan, i.e. for 15 years including3 years grace. The Governmentwill on-lend the Bank loan to the WA on the same terms and conditionsunder a separate subsidiaryloan agreement. The WA will bear both the foreignexchange and interest rate risks. Interestand other charges during constructionover the grace period will be added to the subsidiary loan. The executionof the subsidiaryloan agreement satisfactoryto the Bank will be a conditionof loan effectiveness. 17 - Proiect Implementatiou
3.25 The present status of project preparationis summarizedas follows: (i) a consultingfirm has been appointed for water distributionnetwork analysis and final engineering; (ii) final engineeringis ongoing for the constructionand extension of sewerageand sewage disposal systems; and (iii) final engineeringincluding preparation of tender documentswill be completed for the bulk of the works by mid-1986. The consultingfirms already appointed,or to be appointedare all local firms with foreign association. The procedures followed for the appointmentof consultantsare satisfactory and consistentwith the Bank guidelines.
3.26 For the implementationof the project the WA has establisheda separate ProjectManagement and ConstructionSupervision Unit (PMCSUJwhich has also been responsiblefor the preparationof the project. During project implementationthe PMCSU would be assistedby engineeringconsultants for (i) projectmanagement; (ii) tender evaluationand preparationof contract documents;(iii) finalizationof detailed engineeringand review of contractors'drawings; and (iv) supervisionof constructionworks and equipmentsupply and installation. These consultantservices will be provided by the same consultingfirms that have undertakenthe engineeringdesign. The WA is in the processof acquiring land for the sites of the sewage treatment works, which is expected to be completedby mid 1986. Based on past experiencein Jordan this should pose no problem.
3.27 The project implementationschedule is shown in Chart 1 and detailed CPM networks for individualcontracts will be prepared by respective contractors. The assumed project implementationperiod, 1986-91, is based on Jordan'sdisbursement profile (para. 3.20). However, based on experiencefrom ongoingprojects and the status of project preparation,the bulk of the works is expected to be executed during 1987-8P with completionin 1989 or 1990.
3.28 A projectmonitoring and reportingsystem includingselected financialperformance indicators (Annex 1, Table 4) was discussedand agreed upon during projectappraisal. Agreementwas reached at negotiationsthiat the WA should prepare quarterlyprogress reports to be sent to the Bank, commencingfrom the second quarter of 1986.
3.29 The WA has sewer regulationswhich require propertiesto be connected once the servicehas become available. This may pose some financial difficultyfor the lower income group but, based on previous experience from the Amman area, less than 2% of the beneficiariesmay need financial assistance. Assuranceswere obtained at negotiationsthat the WA will, if needed,assist in making adequate financialarrangements to enable low income families to be connected to the sewerage system.
3.30 The unaccolmted-forwater remainshi gh despite efforts being made on water meter replacementsand distributionsystem rehabilitation. Proper actions are being taken (para. 3.02) and the WA is expected to allocate sufficientfunds and manpower resourcesand to engage consultantassistance to enable a reductionin unaccounted-forwater on d country wide basis to a target level of 252 by 1990. The consultantassistance which is to be financedunder the Project will also cover distributionsystem operation and - 18 - control and may be undertakenin the context ot a proposed "twinning arrangement"with the Thames Water Board (U.K.) (para. 4.09). Progress to be made in reducingunaccounted-for water will be monitored throughoutproject impleLlentation.
3.31 During negotiationsassurances were obtained from the WA that within six months followingthe closing date of the loan it will prepare and submit to the Bank a project completionreport reviewingthe plannedobjectives and achievementsof the project includingcosts and benefits derived and performanceand contributionof all parties associatedwith project execution and system operation.
Procurement
3.32 Procurementmethods and related distributionof costs for the project componentsare shown in the table below:
ProcurementMethod 1/ Project Components ICB LCB Other Total ---- US$ Million
Water Supplyl' 23.41 3.50 - 26.91 (12.20) (1.80) (14.00) Sewerage-' 30.92 4.50 - 35.42 (16.20) (2.30) (18.50) Sewage Treatment Works3' 13.55 - - 13.55 (7.70) (7.70) Equipment-' 8.42 - - 8.42 (8.00) (8.00) Consulting Services - - 2.23 2.23 (1.80) (1.80)
TOTAL 76.30 8.00 2.23 86.53 (44.10) (4.1-0) (11.80) (50.00)
1/ Figures in parenthesisare the amounts to be financedunder the Bank loan. 2/ For water supply about 9 and for sewerageabout 1l contractshave been proposed on the basis of timing and location of works. 3/ For sewage treatmentworks S contractsare expected to be awarded. 4/ For equipment,contracts will be grouped during project execution. - 19 -
3.33 All equipmentsupply contractsand those civil works contracts estimated to cost more than US$1.5 million will be procured through InternationalCompetitive Bidding (ICB) in accordancewith Bank Group guidelines. Other civil works contractswith an aggregatecost n4itexceeding US$8.0 million would be awarded on the basis of local competitivebidding procedures,which are satisfactory. Based on previousexperience these contractsare too small in size and too scatteredin locationsto attract foreignbidders. For equipment to be procuredunder ICB a domestic preference of 15% or the import duty, whichever is lower,will be used for the purposes of bid evaluation. Documentsand awards for all contractsunder ICB representingabout 88% of project costs would be subject to prior review by the Bank. Other contractswould be subject to selectivepost-award reviews.1t is anticipatedthat local contractorswill be awarded the bulk of the civil works contracts,while local agencies or foreignsuppliers may be awarded the contractsfor treatmentplants and equipmentwhich would representabout 20% of total project costs.
Disbursement
3.34 Statisticaldata in the Bank shows that disbursementsfor the water supply and sewerage sector in the EMENA region extend over a ten year period; however, the disbursementperiod is 6.5 years for Jordan as an average for all loan types. The Jordan disbursementprofile has thereforebeen used for this project,based on which the loan would be fully disbursed,including payments of retentionmonies, by December 31, 1992. In order to expedite disbursements,a Special Account of US$2.0 million (equivalentto an average of four months disbursements)will be opened by the Government;this will be replenishedon the basis of standard documentationfor eligible reimbursable expenditures. All disbursementsunder the projectwould be made against standard documentationexcept for contractsbelow US$5C),000equivalent to be claimed under Statementsof Expendituresfor which relateddocumentation will be retained for review by Bank missions and auditedby independentauditors acceptable to the Bank (para. 4.14). A forecast of disbursementsis shown in Annex 1, Table 5.
3.35 The proposed Bank loan of US$50 millionwould be disbursedas follows:
Amount Percent of US$Million Expenditures Category Description Equivalent to be Financed
l. Equipment,Supplies and 14.0 100% of foreign expenditures Installation and 85% of local expenditure
2. Civil Works 30.7 60%
3. ConsultantServices and Training 1.8 100%
4. Unallocated 3.5
- TOTAL 50.0 - 20 -
3.36 The extensionand improvementof the water supply and sewerage systems in Jordan is a continuotisprocess and for contractsawarded according to Bank procurementprocedures, retroactive financing for expenditures incurredafter November 1, 1985 is recommendedup to an amount of US$3.0 million equivalent,or 6b of the Bank loan.
IV. THE BENEFICIARY
Or,anization and Management
4.01 The WA, created in December 1983 under Law No. 34 of 1983, has been assigned the responsibilityfor water resourcesmanagement and for the provisionof water supply and sewerage services throughoutJordan. It is an autonomousagency reporting to the Prime Minister'soffice, enjoying independentfinancial and administrativestatus. It has a twelve-memberBoard of Directors,of which ten are ex-officioand two are from the private sector. The Board is chaired by the Prime Minister. Headquartersin Amman are managed by a Presidentand a SecretaryGeneral who deputizes for him. Both positions are appointedby the Councilof Ministers. The headquartersin Amman perform the followingmajor functions:Water Supply and Sewerage Operations,Finance and Accounting,Administration, Water Resources Management,Planning and Project Implementation.Operation and maintenanceof water supply and sewerage is carried out by three regional offices, each under a manager, but supervisedby relatedheadquarters departments. The regional offices are also subject to controlby Water Councils composed of representativesfrom the public and private sectors.
4.02 The WA has since its establishmenttaken over th! Amman Water and Sewerage Authority (AWSA), the Water Supply Corporation(WS(), the water resourcesbranch of the Natural ResourcesAuthority (NRA), the water departmentof the Jordan Valley Authority(JVA) and about 300 municipal wacer supply operations. Because of various problemsencountered in the taking over of these sometimesdisparate entities, the WA's organizationalstructure has still to be consolidatedand alternativesolutions are being analysed. The organizationalstructure as shown in Chart 2 has still to be consideredas tentativeand will be subject to adjustments.
4.03 The number of the WA's staff engaged in water supply and sewerage operationsis about 3,000. This is equivalentto about 11.2 employeesper one thousand connectionsserved which is reasonablegiven the fact that the WA's responsibilitiesare spread over the whole country and that the population density outside the Greater Amman area is low. Another 550 people, previously belonging to the NRA, are engaged in well drilling activities.
4.04 Through the creation of the WA, staff from the differentorgani- zations were brought together to work in consolidatedunits and a number of previouslyoverlapping functions have been eliminated. While this will contribute to increasedproductivity, additional staff would still have to be recruited to operate new systems being or to be built and by end-1990/91when this project is to be completed,the WA staff is projectedto reach about 4,000. - 21 - Institutional Development
4.05 Institutionalassistance is being provided to the WA by the Bank under the Zarqa/RuseifaProject (Loan 2213-JO)and by the USAID,!/ with whom the Bank is cooperatingclosely. Related funds are being used to provide managementadvisory services to assist the WA in developing its organizational structure,staffing and trainingneeds, and propose personnelpolicies. Technicaland financialadvisors have also been engaged to assist the WA to improveoperating and maintenancepractices, to set up a data collection system for project planning purposes,and to preparemajor projects. ConsultantsZ-were appointedin January 1986 to undertake the design of appropriatetariff structureswith recommendationsto be made on feasible tariff levels, taking into account the need for water conservation.the affordabilityto the poor, and the generationof adequate revenues to allow the WA to remain financiallyviable. USAID is also assisting the WA in the evaluationof the need for computerizationof its various activitiesand would subsequentlyfinance the installationof computer facilitieswhich is expected to take place during 1986.
4.06 The period since the creation of the WA has essentiallybeen one of consolidation. Because of the urgent need to ensure satisfactorywater suppliesand to provide adequate sewerage and sewage disposal facilitiesthe WA has heavily concentratedon the developmentof its project planning, preparaticnand implementationcapacity, and impressivestrides have been made regarding these activities. At the same time issues such as organizational development,accounting and financialmanagement informationsystems, computerization,tariffs and training have been actively studied,but the stage of their implementationhas still to be ieached, which is however expected to take place during 1986-87. During supervisionof the proposed project the Bank will continue past efforts and emphasize the institutional developmentof the WA.
Stfing and Training
4.07 The WA's salary levels for its technicalstaff are competitive,and attractingand retainingqualified technical staff do not pose a problem. However, for financialstaff the salary levels are substantiallylower and there is a general shortage of qualifiedaccountants in Jordan. The issues
"i- USAID's assistance is being provided through two projects for improvementof water supply and sewerage services in the city of Irbid and the cities of Zarqa and Ruseifa (cofinancedby the Bank), and through the provisionof technicalassistance.
Z' The consultantstudy was originallyproposed to be financed under the Bank Loan 2213-JO,but subsequentlythe WA decided to include it under the USAID program. - 22-
related to salary structureand other personnelpolicies will be addressed under the managementadvisory services (para 4.05).
4.08 The WA has an ongoing training program financed largelyby the USAID. The program provides for trainingof managerialand professionalstaff abroad and operatingstaff at local institutions. The financialadvisor is providingon-the-job training to the accountingstaff in implementinga public utility accountingsystem. Several facilitiesexist in Jordan-the Amman PolytechnicInstitute, the VocationalTraining Corporation,the University of Jordan and the Yarmouk University--whichnow provide trainingfor technicians in civil, mechanical,electrical and chemicalengineering. Programs have been or are being developedfor training in water supply and wastewaterengineering and specificallyfor sewage treatmentplant operators,in view of the number of plants to be commissionedin the near future.
4.09 The USAID has, based on a study of the overall training requirements for the sector, prepared a proposal for a long term training program which is satisfactory. Consultant proposalshave been invited with award of cottract expected by mid-1986. This has beer incorporatedin USAID's "Water Systems and Services ManagementProject" and sufficientfunds have been provided for its implementation. The Bank is cooperatingclosely with USAID in these matters. In order to supplementthe above training programas needed the proposed project also includes a minor trainingcomponent which was requested by the WA particularlyin view of a possible "twinningarrangement" that could be establishedwith the Thames Water Board (TWB), UK which inter alia would entail WA's staff to be sent to TWB for training;the USAID only provides for overseas training in USA.
Blling and Collection
4.10 The WAbills its large volume customers in its Ammanoperations on a monthly basis and residential consumers quarterly. The consumers outside Amman are on a two month billing cycle. The billing for Amman is fully computerizedand operated by the WA's staff, while that outside Amman is done by a service bureau and some billing is done manually. The computer facilitiesare being upgraded (para.4.05) and by end-1987 all billing will be computerizedand done in-house.
4.11 The WA's accounts receivablerepresents a little less than four months of sales and can be improved. A part of the problem is that a substantialportion of the operationswhich the WA has taken over is spread out over a large area and the existing systemsof billing and collectionis less than satisfactory. The introductionof computersduring 1986-87, as well as differentincentives that are being devised by the WA's management,are expected to lead to substantialimprovements in WA's billing and collection efforts. Progress in reducing the proportionof outstandingreceivaldes would be monitored throughoutproject implementation.
Accountmg
4.12 The WA's accountingsystem for Amman follows the standard public -23- utility format, is on an accrual basis, and is reasonablywell kept; that outsideAmman is on a cash basis, as prescribedfor governmentagencies. Although these accounts may be translatedinto the more generallyused utility format, they are not entirely satisfactoryfrom an operatingpoint of view. The WA recognizesthis weakness and has decided to extend the accrual system to its entire operations. The system will be computerizedand, through appropriatecoding, will produce accounts to satisfy both the government-prescribedsystem and the public utility format with accruals.
4.13 The financialadvisor (para. 4.05) has already prepareda manual of accounts for implementationin early 1986. Meanwhile the accountingpersonnel are being trained. Implementationwill be monitored throughperiodic progress reports.
Audit
4.14 The WA's Amman operationshave been annually audited by a local independentauditing firm. The audit reports have been of acceptablequality and prepared in sufficientdetail. The operationsoutside Amman have until now been subject to a system of expenditurecontrol and final audit by the GovernmentAuditing Department. Since the accounting system of all the WA's operationswas convertedinto a standard public utility format beginning in 1985, assuranceswere obtained from the WA under the Bank loan for the Greater Amman Project that (i) from fiscal 1985 onwards all the WA's accounts would be audited by independentauditors acceptable to the Bank and experiencedin public utility accounting systems;and (ii) the audited financialstatements and the auditors report would be forwardedto the Bank within six months after the end of each tiscal year. At negotiationsit was agreed that these conditionswould be maintained. In addition,it was agreed that the auditors will certify, for each fiscal year, the validity and accuracy of all `isbursementsfrom the Bank loan account under the Special Account and Statementof Expenditures.
Insurance
4.15 The WA carries insurancewith a Jordanian insurancecompany which follows the general guidelines regardinginsurance for a Governmentagency. These primarily relate to workmen's compensationand third party liabilityfor vehicle and equipmentoperators. In view of the WA's expandingoperations, the adequacy of the insurancecoverage would be reviewed periodically.
V. FINANCE
Past Performance and Present Position
5.01 The financial position of the WAreflects the nationwidescope of its operations, the scarcity of water which makes it imperative to protect and to - 24 - treat sources, and where feasible,to recycle effluents,the low average consumptionlevels, the locationalmismatch between water sourcesand consumptioncenters which necessitatesthe transportationof water over long distancesand steep gradients,and the relativelyhigh constructioncosts. The effect of these difficultcircumstances is evidencedby the existing water tariffs in Jordan which are the highest in the Middle East Region.1'
5.02 The WA derives most of its revenues from water and sewerage charges ba3ed on metered water consumption. In addition, the WA also collects a one-time sewerage connectionfee equal to 25% of the annual rental value of the property and a 4% annual tax on the same rental value for twenty years. For small communitieswithout a piped water supply the WA, for reasons of equity and affordability,provides water to these areas by tankersat average costs similar to piped water supply. For a substantialnomadic populationthe WA supplies the water free from water points for which the actual cost per cubic meter is up to ten times higher than in the larger populationcenters. The Governmentassumes a portion of the costs associatedwith the tanker and free water supply. During 1985 the WA took over a large number of water supply systems spread out all over the country along with the personnel employed in these operations. The resultingincrease in its wage bill had a temporarynegative impact on its financialperformance for the year. In the past, however, the WA's net revenueshave been sufficientto cover its operatingcosts and debt service.
5.03 At the end of 1985 the WA had a current ratio of 2.2 and a debt/equityratio of 33/67 which reflects the significantrole of the Governmentin the financingof the WA's facilities.
Tariff-Cost Recovery
5.04 The WA's tariffs are proposedby its Board of Directorsand subject to approval by the Council of Ministers. Water tariffsin its Amman and non-Ammanurban operationsare slightlydifferent; Annex 2, Table 1 provides detailed informationon existing tariffs. Water tariffs in its piped supply operationswhich average about JD 0.231 per cubic meter (US$0.62/m3) are adequate and in line with the cost of these services,while the cost of providingtanker supply and free water point service is partiallysupported by the Government. Water tariffs will require substantialupward adjustments mainly to offset the increasedpumping costs of the Deir Alla Scheme (para. 1.04),which will come into operation in 1986, albeit initiallyfor inter- mittentoperation to meet peak demands only.
5.05 Based on the current system of sewerage charges, the WA's average revenue is about JD 0.296 per cubic meter (US$0.80/M3), which is financially adequate. Such chargesare generallyless than the costs to maintain cesspool installations. The proposed tariff study will include the determinationof appropriatesewerage charges for cost recovery and the means for collecting them which may be either by continuingthe present system of a combinationof tariffs,user chargesand levies or by a sewerage surchargebased on water
3 t-' Jordan US$0.62/m; Tunisia US$0.31/m; Syria US$0.25/r3; Morocco US$0.16/m3; Egypt (Alexandria)US$0.10/m 3. -25- consumption. The study, for which the terms of reference were prepared with Bank assistance, will be carried out by consultants financed by USAID and the results of the study are expected to be submitted to the Bank for review by no later than December 1986, following which appropriate tariff structures and water and sewerage charges will be implemented.
The WA's Sources and ApRhleation of Funds
5.06 The table below shows the estimated sources and applications of funds for the WA for the period 1986-1991 and includes the overalL sector investments proposed in the recent Five-Year-Plan (1986-1990).
FY1986-1991 JD US$ 2 …------(Millions)--
Sources of Funds .Internal Cash Generation 105.04 283.61 23 .GovernmentContribution 184.30 497.61 40 .Customer Contributions 9.36 25.27 2 .Loans 159.70 431.19 35
TOTAL 458.40 1,437.68 100
Application of Funds .Capital Expenditures 347.44 938.09 76 .Debt Service 100.66 271.78 22 .Increases in Working Capital 10.30 27.81 2
TOTAL 458.40 1,237.68 100
5.07 The WA's investments during the period would be substantial, so that its fixed assets in 1992 will be three times as much as that in 1985 whereas the benefits would be derived over a long period. Funds generated from internal sources and customer contributions would provide about 25b of the overall funds required, all of which would be used for debt service and provide small increases in working capital. The WA will assume, starting in 1986, the liabilities associated with the substantial capital expenditures on water resources development -whichwere undertaken by the JVA (Deir Alla and Wadi Arab schemes). During 1986-91 the WA would be making investments of about JD 315.2 million (US$851.1 million) in addition to the investment under the proposed Bank project. Of this additional investment, JD 144.9 million (US$391.2 million) or about 46 percent would be financed by loans, so that WA's debt:equity position - 26 -
during the period would go from 33:67 to 43:57. Given the already high cost of water and low average levels of consumption,increasing water tariffs by any significantextent so as to enhance WA's self-financingcapacity would be difficultto justify from the standpoint of equity, conservationor affordability. The Governmentwould, therefore,continue to play a substantialfinancing role in WA's expansionprogram. During negotiationsit was agreed that the Government will for the proposed project, provide to the WA as an equity contributionall local funds and those foreign funds that are not coveredby the Bank loan.
Future Fioancial Performance
5.08 The financialforecasts for the WA as a whole and the assumptionson which they are based appear in Annex 2, Tables 2-4, and Annex 4.
5.09 The period coveredby the projections(1986-92) will be one of institutionalconsolidation and rapid growth for the WA. It has recently taken over the operating responsibilitiesfor water supply systems in more than 300 small town and rural communities. The number of water connections will rise by a third and that of sewersge about three times the 1985 level. By the year 1992 its volume of water sales is expected to be double that of 1985, and with the new sewage systems relatedvolumes to be billed will be almost five times as much. The volume of water supplied by tankersand at water points will level off by 1990. The revenues from water sales would increaseabout three times the present level and the revenues from sewerage and the taxes collectedfor sewerage services increaseby about six times. In the same period operatingexpenses would rise about 2.5 times the present level. The differencebetween revenuesand expenses would leave a margin which would be sufficientfor the WA to meet its overall financial objectives. Agreementwas reached under the Bank loan for the Greater Amman Water Supply and Sewerage Project (Loan 2483-JO) that the WA will from fiscal year 1985 onwards (i) for its metered water services maintain or adjust tariffsto provide sufficientrevenues to cover its operatingand maintenance expenses (excludingdepreciation), debt service or depreciationwhichever is higher and increasesin working capital and to finance commencingin fiscal year 1987 not less than 5% and from fiscal year 1989 onwards not less than 10% of the average annual investmentcost in each consecutivethree-year period comprisingone actual and two forecastyears; and (ii) for its sewerage operations,implement a system of user charges, fees and levies sufficient to cover full operatingand maintenancecost (excludingdepreciation) and debt serviceor depreciationwhichever is higher. For its water services by tankersand at water points, agreementwas obtained from the Governmentthat it would compensatethe WA for any deficits resultingfrom such operations. Based on unaudited financialresults for FY84 and the first three quarters of FY85 the WA complied with the financialcovenant in 1984 but fell short in 1985 mainly due to the large number of takeoverswhich occurred during the year. The level of operationalsubsidies received by the WA for the operation of its tanker services has been around JD 2.0 million per year.
5.10 The cast of water to consumersin Jordan is very high compared to most other countries in the region (para. 5.01). Based on estimatedsales for 1985 the average revenuecollected for its metered water supply has been about - 27 -
JD 0.231/m3 (US$0.62/m3). On the basis of surveys conductedby the WA's financialadvisor it is believed that with improvedmetering WA's revenues from metered water supply could increaseanywhere from 30-50% which underscoresthe need to improve operationswhich will certainly lead to improved financialperformance without substantialchanges in tariff levels. Under the circumstancesuntil and unless improvementsare made in metering, increasesin water tariffswould be difficultto justifyand the authorities are unlikely to grant any increases.
5.11 For sewerage,a complex system of charges which comprisesa sewage surtax on water sales and a fee based on property rental values, yields an average tariff of about JD 0.296/m 3 (US$0.80/m3). Although the population connectedto the sewerage system at present is low (about 25%). this is expected to increase rapidly in the coming years with the completionof about a dozen new sewerage systems. The problem here lies in the fact that the major part of the sewage charge derives from the tax based on property rental values which have not kept pace with inflationin recent years and often bear little resemblanceto actual rental values. The rental values are being revisedbut it will take severalyears before these translateinto higher revenues for sewerage.
5.12 A further aspect of the WA's financialoperations is the status of its accounting systems. Since creation of the WA in December 1983 it has taken over the water supply and sewerage operations in large and medium size cities and over 300 other systems in smaller towns and rural communities. While the takeover process is almost complete, the accounting systems, proceduresand control outside Amman are poor due mainly to past practices and the general scarcity of qualifiedaccounting personnel in Jordan. The WA is exerting significantefforts to remedy the situationby:
Mi) establishinga new accrual accounting system with assistance from its foreign FinancialAdvisor; this system is presently being translatedinto Arabic and the training of accounting personnelin its use will be carried out during 1986;
(ii) using the services of a firm of charteredsurveyors and valuationexperts (engaged in May 1985) for the valuationof all assets being taken over by the WA; this task was completed in December 1985; and
(iii) asseseing,with the assistanceof a USAID consulting team, WA's overall computerneeds, includingtraining and maintenancewith primary and priority emphasis on its accounting requirements. The consultant'srecommendations have been submitted and the procurementand delivery of the hardware and related technical assistance (also from USAID grant funds) will continue throughout1986.
5.13 While all of the above efforts are substantialand comprehensive,it will take anywhere from 4-5 years before any significantimprovements in WA's financialoperations become apparent. In the absence of a cost accounting system it is difficultto allocate operatingcosts in a meaningfulway between metered water supply, sewerageand water tanker services. A new financial covenant was agreed tu at negotiationstherefore, which will require the WA to -28 - meet all operatingand maintenancecosts (excludingdepreciation), debt serviceor depreciationwhichever is higher, and adequate increasesin working capitalfrom its water supply and sewerage charges. Under the new financial disciplinethe former operatingsubsidies for water tanker service, which were about equal to the expected contributionsto investments,will be eliminated. The new approach would also make setting of tariffs and the monitoring of its financialoperations much more simple and realistic. Investmentsafter 1990 will consist largely of continuousextensions to water supply and sewerage networks,with the exceptionof major water source development. However, the latter investmentwill be lumpy, lastingonly a few years, and would have distortedthe tariff setting formula under the old covenant.
5.14 Agreement was reached under the Bank loan for the Greater Amman Project that the WA would provide the Bank, three months before the beginning of each fiscal year, with copies of its forecastbudget for the fiscal year, financialprojections for the followingtwo years as well as its proposals for any adjustmentsin tariffs. It was agreed at negotationsto repeat these conditionsfor the new loan.
5.15 In the period 1985-92, the WA's debt-equityratio would be around 43:57 which although satisfactoryalso indicatesthat in spite of the importantrole that the Governmentwill play in sector financinga significant portionof the capital expansionprogram would be debt financed. In the same period its fixed assets in operationwould double. Average water tariffs would have to go up about 652 in this period, only slightlyabove the adjustmentnecessary for inflation,which also confirms the financialadequacy of the present water tariffs. Average charges for seweragewould not have to grow as much because of savings from economies of scale. The projectedwater supply and sewerage charges would be within the customersability and willingnessto pay (paras.6.05), and internal cash generationshould cover debt service.
VI. ECONOMIC ANALYSIS AND PROJECT JUSTIFICATION
Socio-Economic Analysis
6.01 The benefits accruing from a modern sewage collectionand disposal system would be substantialbut cannot be meaningfullyquantified. In assessingthese benefits the reductionof the incidenceof waterborne infectiousdiseases, prevention of the pollutionof waters used for various purposes,the improvementsin the general aesthetic conditionsand in the qualityof life, and the enhancementof opportunitiesfor economic development are all importantfactors. However, by using the revenues from sewerage as proxy and a minimum measure of the benefits accruing from this project the rate of return would be about 10% (Annex 2, Table 5).
6.02 Related socio-economicbenefits to be derived from this project are as follows: (i) improvedwater supply and extended sewage collection systems would result in enhanced hygenic standard and subsequentlyhave a favorable impacton general health conditions; (ii) the reductionin cesspool effluents -29- percolatinginto the ground would enable the continueduse of groundwater sources for domesticwater supply, thus avoiding its replacementby far more costly alternatives;and (iii) the provisionof treatedeffluents to be used for irrigationpurposes will contributeto agriculturaldevelopment.
6.03 The project provides severage services to two major refugee camps (Suknehand MokhayyanSouf) with a present populationof about 25,000. The proportionof the project that would benefit and that could be ascribed to the urban poor-' is estimatedat about 351 (or about 100,000)of populationto be served, and about 301 of project costs and related benefits regardingwater consumptionand sewage disposal.
Average IncremenW Costs
6.04 In Jordan the long-run average incrementalcost (LRAIC)of water at a discount rate of 10 varies between JD 0.370/m3 in areas where water is locallyavailable to JD 0.490/m3 for areas such as Amman, where part of the water has to be pumped over long distances (e.g. fromuthe Deir Alla). At present more than 30% of water sold is charged at the highest block tariff,vhich exceeds the LRAIC. This confirms the present appropriatenessof the tariff levels and a willingnessto pay for the actual costs of the water.
AVfordabMity
6.05 The water tariffs and sewerage charges as projectedwould not impose any seriousburden on even the lowest income segment. The lowest quintile of averagemonthly household income in the Amman area is estimatedat about JD 137. Assuming an average householdsize of six persons and an average per capita water consumptionof 65 liters/day,the average water and sewerage bill would be about JD 5.20/month,which representsabout 3.8% of the household income. This is consideredto be affordable.
institution Building
6.06 Significantinvestments have been and are scheduledto be made in the sector and by the end of the ongoirg 5-Year Plan (1986-90)the whole country would be providedwith satisfactorywater supply and sewerageor excreta disposalservices. Consequentlythe quantum of operationaland maintenance functionsand related costs will increase considerably,which also will increasethe need for institutionaland financialefficiency. A solid foundationhas been laid for the developmentof the WA into a well-functioning entity but still significantefforts will be needed before it can serve the
I' The urban poverty thresholdis defined as the 30% of the population with the lowest income. The 35% would relate to the inclusionof the refugeecamps with an unproportionatelyhigh percentageof urban poor. - 30 -
sector objectivesin a comprehensivemanner. The proposed project will provide a continuingand most valuable opportunityfor the Bank to assist the WA in its ongoing institutionaldevelopment.
Project Risks
6.07 A project risk, if any, may relate to the possibilityof not achieving projectednumber of sewer connectionsthat could affect the WA's income and overall financialviability. Until now, however, the population has indicateda willingnessto connect to the sewerage system when it becomes available,primarily because it provides cost savings as well as being convenient. It is expected that this trend will continue. Furthermore,it is expected that the tariff study would recommenda tariff structurewhich would make sewerage services more affordableto the lower income group while at the same time ensuring the financialviability of the WA.
VI. AGREEMENTS REACHED AND RECOMMENDATIONS
7.01 Agreementhaving been reached on the issues referred to in chapters 'III throughV of this report and subject to the conditionof effectivenessset forth in para. 3.24 the proposed project is suitable for a Bank loan of US$50.0 million to the WA for a term of 15 years includinga three year grace period, at the standard variable interest rate. KID181 SPIY An08SWAN8 PUECT
ImsUI BerniceLeel
1979 199 1986 198 398 199M9 -- --- It dipulatan -- w Population -- -- POPpatzan -- --- Population - Pownationn-- Popultion -- Population uents ------~~Served(2) lb Nnhe frvid 3 ae Served (2) ioatr servd ;i) ietr" Sevd (3 ae ere
& prop.l1w I. han" 'Systee' 65,0 969,0 775,200 80 1,0~ 885M,12388 1,044,043 939,699 ,0,1 ,1,9 4 114,9 ,5,0 4 3314 ,9,8 94 hun.on.dor 2462-JO O7,0l 90,318 36,127 40 9351,rJ 7500 00 9, 12 1,81 90 "101,01090999A.eca ae 42J 2, Saa'a Valley 6200 33,2 #, 3.WA es Sir 24,00 70,0 72,66 75,421 78,27 U31,35 40 of,2 6503 80 73,9 8Fzacdae2463-JO 4. Bat 23,00 4000 32,000 680 41,=2 25,707 86 43,096 37,064 86 44,3 40262 0 464 479 90 8,43,8 90lb 3naa ierp*la '5. IalWind o, 900 1,0 13,9 400 4591532 607 0 3,6 34,9 T0o be faveate under Prop.loon 5,00 (5,0 I1,70 16,162 16,776 37,413 6,95 40 18,075 16,7 90 bge 4izoece Node Prop.los 46. lee 12,302 12,1.70 5,00 40 33,255 Ai92 90 To be fjnoan~d Ndewpruploa el. ketee 4,0 33,000 13,410 11,852 to 8. MOdaftb,aat-Malnds 32,00 50,000 53,TOO 53,872 55,919 58,044 11609 20 604250 24,0 40 Finmncingstill besecred 63J-TOTM.(0) 87500 3,5,86 80,0 64 3,299,39 920,833 71 3,34,7731,012,830 75 3,41 .026 1,165,271 83 1,453,227 3,150 88 ,0,49 ,3998 3 8. ZARBO/IRISEA 559,600 677,700 M0,934 49,205 7 729,645 386,71 5s 757,272 628,618 83 186,152 754,706 96 816,05 734,421 9 Finamed uaft 2213-10aid
C. 8814181TE811 .CentralIrbid 112,954160,000 36000 4,982S 372,393 49,99229 178,942 121,680 68 (85,742 367,368 90 192,800 (72,520 90Fianced under 34(01 2.Sbob rn 92,I5 35,888 120,29 124,863 (29,600 334,533 159,645 55,858 40 Prpted "iane undr 335I( 5(3-TTAL(C) 258826,37220,66 4,982 2 297,254 49,993 17 308450 121,680 39 320,274 147,161 52 532,445 229,378 69 D. Elm3 CITIES 1. abuela 27,380 42,000 44,624 46,330 17,603 38 48,092 35,306 72 49,918 44926 90 51,151 46,633 90 inaned nude 2525-JO 2, Ilaraq 21,400 40,000 41,520 43,098 17,239 40 44,735 35,78 80 46,435 43,79 90 48,200 43,380 10 oweicdnuder 2525-10 3. Mniae 7,563 9,460 9,819 30,193 4,077 40 30,580 8,44 so (0,82 ,884" 9 1,29 30,259"9 Finanted aide 2525-JO 4. Ai na 4,600 7,000 7,266 7,542 3,017 40 7,829 6,263 e0 8,326 7,314 90 8,435 7,593 90 Filaeed wuder2525-1O 5. EJ&Janet 4,659 5,827 6,048 6,278 2,511 40 6,517 5,213 60 4,764 6,088 90 7,02 6,319 90 PinuKed aide 2525-1 11,410 11,844 12,294 4,917 40 12,763 10,209 80 12,246 33,923 90 13,749 32,374 90 Financed unader2525-JO 6. Knfrinje 9,122 1I1 7. Pautbe 29,000 36,000 37,398 28,788 15,535 40 40,262 32,210 00 41,792 57,612 90 43,380 3,042 90 Fifanced taidr 8. (loan 33,30 35,000 35,570 16,362 3,879 24 36,776 10,737 64 (7,413 15,324 88 18,075 3161,26790 Fianced oidor E38 613-10116.(i 134,952 167,697 174,069 180,684 68,761 28 187,550 343,990 77 394,677 174,861 90 202,075 181,867 9 E. 7130ti11US 1150 1. Eatek 11,805 213,00 22,317 23,105 9,266 40 24,045 (92680 24,959 22,463 90 25,907 23,317 90finace nadi 2. Weileb 12,495 20,000 20,760 23,549 4,741 22 22,368 136,86862 23,218 19,967 86 24,300 21,6909 Faiuicad unde (35410 5(3-70146 El 24,300 43,500 43,077 44,714 14,007 31 46,413 33,104 71 46,177 42,430 do 50,007 45,007 9 fiancedader prapJIap F. SOMASHMD1 (0,105 391,20 3,597 4 41,437 3,729 9 43,012 6,452 (5 44,646 (2,594 30 46,343 38,323 65 46,304 40,108 85 Tobe 8. SApAWi 26,986~am 50,00 51,900 53,872 36,362 20 55,919 39,144 70 58,044 52,240 90 60,250 54,ZM5 191of Financd aide prep.1oe 1. TOTAL" 1-,776,549 2,504,033 180,797 32 2,599,184 978,748 38 2,69~7,93 355,1 58 ,0,7 ,4,0 77 2,90,8912,53,03 8 8 A,07,36e2,5,76
t to Serld ant Inan referred to aea large Rusfe: Loa 22(3-JO, Eight Citien Loon2425-JO and Oreater Oema Loan2463-JO. lb IndicatedWecGAtaP earnd refers to and of year, *Indicates areas included under proposed Proj- Lkaeueeon,t, File: aim Senty 198A - 32 - ANNEX1 Table 2
HASHEMITEKINGOM OF JORDAN
JORDANWATER SUPPLYAND SEWERAGPfROJECT Investmnt Plan £la6L-12901 (JO Thousands)
198 LUZ 198 198 I=9 Total Water Resources Import of Drilling System 3.000 700 - 3,700 Investigation of Groundwater 1,000 800 600 Soo SOO 3,400 Improvement of Surface and Groundwater Monitoring System 30 80 80 80 80 350 Development of non-traditional Water Resources - _ 30-.QOl 4f 1,QM
Sub-Total 4.030 1,580 980 980 1.080 8,650 Water SupLly Central Control and Data Collection System - 700 700 200 - 1.600 Different Studies - 200 100 250 ISO 700 Network Analysts and Survey - 400 200 SO SO 900 Water Network for Main Towns 2.S00 1.500t.Soo 1,200 1,100 7.800 Secondary Network from Main to Distribution Reservoir - 6.000 5,800 5.500 6,200 23.500 Rehabilitation and Development of Existing Network New Networks 100 8.000 7,000 4.500 4.400 24.000 Army Camps - ,00g 900 soo 400 2Lfl00
Sub-Total 2,600 17,800 16.200 12.300 12.400 61.300 Seweragie Zarqa/Ruseifa- Phase I 6,000 2.500 - - - 8.500 Raqa'a and Wadi Sir - TP Phase I 8,500 - - - - 8,500
Central Irbid - Treatment Plant Central Irbid - Sewerage Network 8.000 - - 8.000
Ramtha - Treatment Plant & Network Ajloun, Anjara, Ain Janneh. 7.000 1500 - - - 8.500 Kufrinje. Haan, Hadaba. M-afraq Treatment Plant & Network
Kerak Treatment Plant & Network Tafila TreatmentPlant & Network 3.000 300 - - - 3,300
Network - Wadi Sir Sukneh. Safout. Baqaa - SOO 500 SOO SOO 2,000 Southern Greater Anman Treatment Plant - 1.000 2,000 3,000 2,000 8,000 Wastewater Reuse Station - - 100 200 200 500 South Zarqa Pumping Station - - 300 600 600 1,500
Salt Treatment Plant (Extension) Jerash Treatment Plant (Extension) 300 400 300 300 200 1,500
Rehabilitation - Old Network 1.000 - - - 1.000 Azraq Sewerage - Phase I so 100 250 250 150 loo Sewerage Network & Treatment Plants: Fuheis, Miahes, Naur - 2,250 2,000 1,750 1,S00 7.500 Army Camp - 200 300 400 SOO 1,400 Zarqa - Phase II - 2.000 2,000 1,500 1,500 7,000 Aqaba - Network 1,900 - - - - 1,900 Southern Cities - Phase II - - - 700 1,000 1.700 - Treatment Plant - 900 SOO - - 1,400 Village Network & Treatment Plant (38 Villages) - - Different Pro3ects 4.000 4 000 3.009 2.000 2.0Q0 Sl-000
Sub-Total 39,750 15,650 11,250 11,200 10.150 88,000
TOTAL 46L380 Ift50Q 8430 24 480 23 630 15ZL.2io
TP ^ Treatment Plant 1265W 33 ~~~~~~~~TM~~~~~~~ANNEX33I
HEmE KD4 CF J(FN Jtam w4ER %YAND 9Y PmlljEF Cost Estimates (JD tdusans) Foreign Currevy 1986 1987 19l8 1989 1990 1991 Tma. E itut8e PKsJ'l ka4k 5 (o) (8) -!5) (31) (2 (9).!! TI0W iexstA
A. 41± 9jUPPLY 1. rjaeriAethn Area: (*) Jabal Al-hussan, Jabal Al-L,sibdet. 18 563 697 607 203 2,250 70 (II) Salt 120 375 465 405 135 1,500 70 tVi) Ftieis, Mahis, Na'ur 60 250 3101 270 90 1,0Q 70 (iY) Yahoz, AI-Jubeiha, Abu Nuseir 40 125 155 135 45 500 70 kv) Suuttib En (Jawa, Sahab, ... ) 12U 375 465 405 135 1 5So 70 Sub-total (1) 540 1,688 2,092 1,822 6 68 70 Z. Jerash Villages and ijeb 32 100 124 108 36 400 70 Surlotal (A) 572 1,788 2,216 1,930 644 7,1.50 70 5,005
I. .:d1_ 1. Greater AnnmnArea; ti) Aim 80 250 310 210 90 1,000 50 til) zarqalRuseifa 80 250 310 270 90 I,00 59 (iii) Ftiwis, blahis, Na'ur, SiAeh 320 1,000 1,240 1,080 360 4,000 50 tUN) Salt 30 94 116 101 34 375 50 Sub-Total(1) 510 1,59i4 1,976 1,721 574 6,375 50 /. Jerash Area 160 500 620 540 160 2,000 50 A.qaba 80 250 310 270 90 1,000 50 Sub-Total (B) 750 2,344 2,906 2,531 844 9,375 50 4,688
SlI.E 11CAO W5 1. GreaterAmmn Area: (1) F elIs/Nhis 72 225 279 243 81 900 65 (ii) Na'tur 48 1SO 186 162 54 600 65 tixi) siase 80 250 310 270 90 1,000 65 (Iv) Salt (Extension) 56 175 217 189 63 700 65 Sub-Total L1) 256 800 992 864 288 3,200 65 4. Jerasl. (Extension) 32 1Ot 124 108 36 400 65 J. Ladciquisitixo 12 38 47 41 12 150 65 iur-Total (c) 300 938 T,163 1,01 336 -T7% 65 2,438
Oi. UILALhE (XSrMAB+KC/ 1,622 5,070 6,285 5,474 1,824 20,275 60 12,131
E. PWYSI(A.AuINNT ES (1) 162 507 629 547 182 2,027 60 1,216
F. taSUaL.MS I. Water syst,n control & atmitoriog equipent 8a 250 310 270 90 1,000 100 1,000 '. Meteorological & hydrological stations equip. 40 125 155 135 45 500 100 500 J. Material & equip.,e.g.water meters,pipes,valves 80 250 310 270 90 1 000 100 1 000 Sub-lotal (F) 200 625 775 675 225 2,0 I5
G. xiJLwar WMITES MANDTAIf 52 163 202 175 58 650 100
H. LAL DuE+F+GC 2,036 6,365 7,891 6,871 2,289 25,452 63 15,947
1. PRI: (I WINZWlES 204 1,120 2,028 2,370 977 6,699 49220
K. GRAN9OVAL 2,240 7,485 9,919 9,241 3,266 32,151 20,167 In USS'OO equivalent: 6,054 20,230 26,808 24,976 8,827 86,895 54,505
AltenativeAssulptlin an %=orter Project Eecution Period 2/
vistrbution of Costs (2) (10) (37) (36) (15) (2) (0) (100)
H. IUrALb'E+F.tG 2,545 9,417 9,163 3,818 509 25,452
1. HWj U Ig2EdLU4/ 81 942 1,612 981 176 3,792
K. (A4w lUTAL 2,626 10,359 10,775 4,799 685 29,244 In US$'oU equivalent; 7,097 27,997 29,122 12,970 1,851 79,037 63 49,793
I/ Cost aistribution is based an disbursent profile for Jordan (Septerber 11, 1985). "C4*in8d for all Lo1 TypesGaerral." 2/ ilie Alternative Asuqitii is based an experience frrn *goii pro0ects. I The Base Coats are e0t-985 prices. 4/ The follsiing price contiriies for both civil werks uxd equipment have been assuzmd: (i) for local experditures 52 for 1986 and 72 thereafter; and (ii) for foreign e wditwres 7.2% for 1986, 6.8% for 1987-88, 7% for 1989, 7.11 for 1990 a*d4% uhereafter.
March 198b i265b' - 34 -
ANNEX I Table 4
HASHEMI KINGDOM OF JORDAN JORDAN WATER SUPPLY AND SEWERAGEPROJECT
Monitoring Criteria For Water Authority Operations!'
1986 to '990 L Technical
Water produced (MCM/yr) Water sold (MCM/yr): Domestic Industrial Bulk Water Unaccounted-forwater (1) Water Surchargedfor Sewerage (MCMIyr) No. of water connections No. of sewage connections
IL Financial and Intitutiona
Average bulk tariff (JD/m;) Average retail tariff (JD/m3 ) Sewerage surcharge tariff (JD/m3) Debt service coverage Operatingexpense/cubic meter of water sold (JD) Operatingexpense/cubic meter of water surchargedfor sewerage (JD) Accounts receivableat end of year
No. of employees: Water Sewerage Other
Total
1/ This table is to be filled out at the completionof each year 1986-90. ANNEX1 Table 5
HASHEMITE KINGDOM OF JORDAN
JORDAN WATER SUPPLY AND SEWERAGE PROJECT
Estimated Schedule of Disbursements (US$ million)
Bank Fiscal Year Disbursementin CumulativeDisbursement and Semester Semester at End of Semester
1986 First Semester 00 Second Semester 00
1987 First Semester 00 Second Semester 1.0 1.0
1988 First Semester 2.5 3.5 Second Semester 5.0 8.5
1989 First Semester 5.5 14.0 Second Semester 7.0 21.0
1990 First Semester 6.5 27.5 Second Semester 6.0 33.5
1991 First Semester 5.5 39.0 Second Semester 4.0 43.0
1992 First Semester 3.0 46.0 Second Semester 2.5 48.5
1993 First Semester 1.5 50.0
1265W - 36 -
ANNEX2 Table 1 Page 1 of 2
HASHEMffE KINGDOM OF JORDAN
JORDAN WATER SUPFLY AND SEWERAGEPROJECT
CURRENT WATER AND SEWERAGETARIFFS
Operations Outside Amman
Water Tariffs (Urban Areas)
Bulk Water Supply - JD .085 per m3
Metered Retail Consumptionper month:
0 - 5 m3 - JD .100 per m3 6 - 15 m3 - JD .120 " " 16 - 25 m3 - JD .300 " " Over 25 m3 - JD .400 " " Universities - JD .300 " Connection Fee - JD2.000
Water Tariffs (Rural Areas)
Water DistributionPoints - JD .160 per m3
By Tankers:
5 - 6 m3 capacity - JD 2.500 per tanker 10 - 12 " " - JD 3.500 to JD 5.500 per tanker
Distributionof water at desert points is free.
Sewerage Tariffs
Sewer Surcharge - JD .030 per m3 Contribution to construction - 4% per annum of rental value over 20 years Connectionfee - 25% of rental value - 37 -
ANNEX 2 Table 1 Page 2 of 2
Amman Oeo
Water Tariffs
Metered Retail Consumption per billing cycle (3 months}.
1 - 20 m3 - JD .150 per m3 21 - 40 m3 - JD .250 " " 41 - 100 m3 - JD .400 " Over 100 m3 - JD .500 " "
Sewerage Tariffs
SewerageSurcharge - JD .030 per m3 Contribution to Construction - 4% per annum of rental va.ue over 20 years ConnectionFee - 25X of rental value Narch20,1986 HASNENITEKINODON OFJORDAN JORDANHATER SUPPLY ADSEIWIERAE PROJECT INCNESTATENENT WATERAUTHORITY
Asat Deceber31 1984 1995 1986 1987 198B 1989 1990 9I9 1992
WaterProduced (NCR) 80.82 86.23 90.54 95.07 99.82 104.81 110.05 115.56 121.33 Uaccounted(2) 45 45 41 37 32 29 25 24 24 TankerSales MCM) 3.2 3.0 2.9 2.6 2.4 2.2 2.0 2.0 2.0 Retail SalesINCI) 44.45 47.43 53.42 59.99 67.08 74.42 92.54 87.82 92.21 tillable Sewage(NCI) 11.00 13.50 20.60 27.70 34.90 44.20 53.60 61.49 69.16 No. of Connections-Water 250,200 267,000 276,900 287,100 297,700 309,700 320,100 339,000 339,500 No.of Connections-Sewer 51,500 59,000 90,000 121,000 152,000 193,000 244,0002254,000 TankerRate(JD/C0) 0.300 0.400 0.450 0.800 0.a00 0.900 0.8900 0.800 0.900 Ave.Pater RetailtJD/CI) 0.223 0.231 0.526 0.470 0.489 0.429 0.425 0.412 0.383 Ave.Sewer Surcharqe(JD/CN) 0.030 0.030 0.030 0.050 0.100 0.150 0.200 0.200 0,200 Ave:Sewer RatetJD7CI) 0.252 0.296 0.292 0.312 0.318 0.368 0.396 0.379 0.365 ------^------JD ILLIONS------REVENlUES TankerSales 0.96 1.20 1.26 2.09 1.92 1.76 1.60 1.60 1.60 Retail Sales 9.90 10.94 28.11 28.15 33.22 31.92 35.10 36.21 35.36 SewerageSurcharge 0.33 0.40 0.62 1.39 3.48 6.63 10.72 12.30 13.83 SeNerTax/Conn. Charges 2.44 3.59 5.40 7.26 7.60 9.65 10.53 10.9 11.43 OtherIncome 0.41 0.79 0.90 1.15 1.50 1.80 2.20 2.60 3.00 Total Revenues 14.04 16.92 36.29 40.02 47.72 51.76 60.15 63.69 65.22 EIPENSES
Salaries 5.90 9.33 10.27 11.30 12.42 13.67 15.00 15.75 16.60 Energy 4.18 6.61 11.28 12.16 13.13 14.15 15.27 16.00 16.73 Chq2cals 0.25 0.30 1.35 1.46 1.57 1.70 1.84 1.97 2.11 Maintenance 1.00 1.12 2.25 2.47 2.72 3.00 3.30 3.63 4.00 Adainistration 0.21 0.18 0.75 0.90 1.09 1.24 1.40 J.55 1.70 Total Expenses 11.54 17.54 25.90 28.29 30.92 33.76 36.81 39.90 41.14 IncoseBefore Depreciation 2.50 (0.63) 10.39 11.73 16.90 18.00 23.34 24.79 24.08 Less:Depreciatiot 3.47 3.79 6.52 9.58 9.53 12.44 13.47 14.98 15.02 IncomeBefore Interest (0.97) (4.41) 3.87 3.15 7.27 5.56 9.87 9.91 9.06 "| Less: Interest 2.74 2.73 5.94 6.72 9.58 10.95 12.93 12.36 11.66 Net Income(Losses) (3.71) (7.14) (2.07) (3.57) (2.31) (5.39) (3.06) (2.45) (2.60) OperatingRatio 0.92 1.04 0.71 0.71 0.65 0.65 0.61 0.61 0.63 HASHEMITEKINGOON OFJORDAN JORDANMATER SUPPLY AND SEVERAGE PROJECT SOURCESANDAPPLICATIONS OFFUNDS - ATERAUTHORITY (JDNILLIDNS)
As at Deceeber31 1994 1995 1986 1907 1989 1989 1990 1991 1992 1996-l991 2
Sourcesof Fonds InternalSources NetOperating tncose (0.97) (4.41) 3.87 3.15 7.27 5.56 9.87 9.91 9.06 39.42 92 Add:Depreciation 3.47 3.78 6.52 9.58 9.53 12.44 13.47 14.88 15.02 65.42 142 TotalInternal Sources 2.50 (0.63) 10.39 11.73 16.80 18.00 23.34 24.79 24.09 105.04 232 Sov.Equity Contribution 10.10 21.20 71.20 30.50 29.00 25.90 23.70 5.00 5.00 194.30 40S CustonerContributions 0.54 0.65 1.10 1.10 2.23 1.44 1.64 1.95 2.07 9.36 2S Borromsings ExistingLoans 12.29 16.12 S9.67 19.30 14.15 7.09 4.80 0.00 0.00 104.01 232 ProposedBank Loan 0.00 0.00 0100 1.79 4.51 5.63 5.09 1.50 0.00 18.52 42 OtherFuture loans 0.00 0.00 7.55 8,59 7.74 6.62 6.67 0.00 0.00 37.17 62 TotalBorrowings 12.29 16.12 66.22 29.68 26.40 19.34 16.56 1.50 0.00 159.10 352
Total Sourcesof Funds 23.43 37.35 148.91 73.01 73.43 64.68 65.24 33.14 31.15 45.40 1002
Applicationof Funds ExistingCapital Expenditures 24.23 33.97 110.16 32.51 24.32 15.08 11.41 0.00 0.00 193.48 422 ProjectExpenditures 0.00 0.00 0.00 2.25 7.50 9.14 9.26 3.26 0.00 32.21 71 OtherCapital Expenditures 0.00 0.00 21.59 26.69 25.13 21.93 21.43 5.00 5.00 121.75 272 Total CapitalExpenditures 24.23 33.97 131.74 61.44 56.95 46.95 42.10 9.26 5.00 347.44 762 Incr.(Decr.) inWork. Cap. (3.01) (0.99) 7.67 0.66 0.50 0.43 0.39 0.66 2.63 10.30 2a DebtService Interest 2.74 2.73 5.94 6.72 9.58 10.95 12.93 12.36 11.64 5B.41 132 Asortization 1.47 1.63 3.56 4.19 6.40 6.35 9.92 11.96 11.86 42.18 92 ______-_---- _------...... ------...... Total Debt Service 4.21 4,36 9.50 10.91 15.99 17.30 22.75 24.22 23.52 100.66 22 4 Total Applicationof Funds 25.43 37.35 149.91 73.01 73.43 64.66 65.24 33.14 31.15 458.40 1002 Debt=t SSe (0.14)c vnge 1.09F 1a.08S: 1.05 1.92094212.202 1X2.222 1.02 DebtSerVice COverage 0.59 10.141 1.09 1.08 I.OS 1.04 1.03 1.02 1.02 iASNERITEKIN6lO1 OF JMDMN JORD"MTER SUPPLY AIID 6SEERASE PRDJECT ALAICESMEET MATERAUTIiRITY (JDNILLIONS)
Asat Dseeuer31 1984 195 1986 1987 18 2 9809 99 199 1992
FIXEDASSETS Bross FixedAssets-Water 105.93 117,44 I.05 245.4 307.18 339.9 363.35 365.5 367.35 Less: epreciati on -ter 15.72 19.10 24.79 31.45 39.40 47.24 56.7 b6.73 79.75 ...... _.... _...... _ ._. Nit FixedAssets-Water 90.21 96.34 174.27 213.99 268.78 292.70 304.5 297.62 2884.0 BrossFited Assts-Sew, 14.13 16.15 33.52 73.99 101.04 141.23 154.02 157.02 160.02 Less:Depreciation-Son. 2.77 3.17 4.01 5.92 8.50 12.10 16.04 19.94 23.94 - . ------. ---- -...... _ ...... _...... _...... __ NetFixed Assets-Se. 1136 12.96 29.51 69.07 92.54 129.13 137.98 137.06 136.06 Workin Progress 24.59 46.69 62.98 61.75 36.31 16.66 32.36 47.50 59.34 Total Fixed Assets 126.16 157.99 206.76 343.81 397.63 438.4 476.94 42.18 464.02 ------. ._...... _ . ---- ...... _ ._....._... CURRENTASSETS .. .. .------Cash 1.73 1.76 3.97 4.39 3.24 4.11 3.60 4.38 7.64 1nventories 2.71 2.02 3.37 3.46 3.47 3.48 3.03 4.19 4.56 AccountsReceivable 4.40 3.5 9.30 9.8 10.01 10.U 11.38 11.02 10.16 TotalCurrent Assets 0.34 3. 3 1. 1731 17.52 10.07 10.81 19.60 22.38 ...... _ .... ------...... _ ...... ,...... _...... _...... total Assets 135.00 166.51 303.39 361.14 4i5.15 456.56 -9.75 501.78 50.40 g3333333 auumgau3 .. "ausun man,wasu gm.. 3333 auua 33 333 LIABILITIES Equity 93.34 104.54 175.74 206.24 234.24 260.14 23.64 266.64 293.64 DeferredEquity 24.67 24.67 24.67 24.67 24.67 24.67 24.67 24.67 24.67 RetainedEarnincs 116.35) 123.49) (25.56) 129.13) 131.44) 136.93) (39.39) 142.34) I44.4) CustowerContributions 2.59 3.23 4.33 5.43 7.66 9.10 10.74 12.59 14.46 ..,...... W.;.- _ ...... _.------...... _.,_ TotalEquity 94.24 109.96 179.16 207.21 235.13 257.08 279.36 283.76 28B.23 LongTerm Debt 37.60 53.72 11.94 149.62 176.02 195.36 211.92 213.42 213.42 CURRENTLIABILITIES AccountsPayable 3.16 3.93 4.27 4.31 4.00 4.12 4.47 4.60 4.75 TotalCurrent Liabilities 3.16 3.83 4.27 4.31 4.00 4.12 4.47 4.60 4.75 TotalLiabilities 135.00 166.51 303.39 361.14 415.15 456.56 495.75 501.79 504.40 33332333 23332332 3232333e 33333333 333323,3 23332333 3333333 3333333 M3,3I3I I. CurrentRatio 2.80 2.23 3.89 4.02 4.38 4.39 4.21 4.26 4.71 Debt-EquityRatio 0.29 0.33 0.40 0.42 0.43 0.43 0.43 0.43 0,43 Rateof Return(AY.NFA) ------0.61Z 0.322 0.572 0.351 0.571 0.543 0.531 -41-
ANNZX2
HASHETE IINGDONOF JORDAN
JORDANWATER SUPPLY AND SEWERAGEPRJECT MM= RATE(JF REMII
JD Thousands
MRS cSCAAMSr rm am oT'OPS& r.
1986 _ _ 1987 - . 155.w 11o5.00 (i5.W) 198 - 3610.00 3610.U0 (3610.t) 1989 1254.60 4475.f0 95.UO 4570. uo (3315.40) 1990 1302.0o 38.w0 99.U0 3997.U0 (2695.UO) 991 330.50 1298.uO 101.O 1399uG (bs8.- ;9g2 1368.60 - I04.00 W4.uO 1264.0. 1993 1411.20 - 107.00 W7.0 1304.2U 1994 1454.10 - LO.w 11MU.D 1344. .0 99S 1497.60 - L13.U0 113-00 13d4 60 L996 L542.W 11700 ILo I.425.60 :997 1589 _0 - .20. -A L20.A 146?.6, 1998 1636.50 ' - iT4.00 124.0 [51U.50 1999 1685.Z0 - 128.uu 1.u lSS1557±0 2000 1736.7 - 131.00 131.00 1605.7u 2001 1736.70 - 1L31.O i3l.3 1605.70 2002 1736.70 - U1.00 13100 1605.70 2003 1736.70 - 131 U14i0.0 1605.7t 2004 1736.70 - 131.00 131.UU 1iW5.70 2005 1-736.70 - 131.00 131.00 1605 70 2006 1736.70 - 131.00 131.U0 1I65 70 2007 1736.70 - 131.00 131.UO 1605.70 2006 1736.70 - 131.( 131.0J 1605.70 am9 1736.70 - 131.00 131.J0D 1605.7u 2010 1736.70 - 131.JO 131.00 165W.70 2011 1736.70 - 131.0U 131.00 1605 7o 2012 1736.70 - 131.0) 131.4jD 1605.70 2013 1736.70 - 131.t 131.UU 1605.70 ZD14 1736.70 - 131.(* 131.00 1605.70 2015 1736.70 - 131.00 131.00 1605.70 IE % RATEOF REDEKIS:
9.79 …_t -42- AU 3 Page 1 of 4
0ASHTE KINGDOMOF JORDAN
JORDAN WATERSUPPLY AND SEWERAGEPROJECT Proect CeMnMntM
The project components are briefly described as follows:
A. WATER SUPPLY
1. GreaterAmman Area
(i) Various areas such as Jabal Al-Hussain, Jabal Al-Luweideh, etc:
- length of pipes about 150 km - secondary and tertiary mains and house connections-' - pipe sizes 3/4" to 8" - 80X of pipes for rehabilitation and 202 for new areas - three contracts (combined civil works and equipment supply and installation) to be entered into
(ii) Salt:
- length of pipes about 60 km. - primary, secondary and tertiary mains and house connections - pipe sizes 3/4" to 16" - 801 of pipes for rehabilitationand 20% for new areas - one booster pumping station - two contracts
(iii) Fuheis, Mahis and Na'ur:
- length of pipes about 60 km - secondary and tertiary mains and house connections - pipe sizes 3/4" to 8" - 80X of pipes for rehabilitation and 20S for new areas - one contract for Fuheis/Mahis and one for Na'ur
(iv) Yahoz, Al-Jubeiha and Abu Nuseir:
- length of pipes about 40 km - secondary and tertiary mains and house connections - pipe sizes 3/4" to 8" - 601 of pipes for rehabilitation and 40% for new areas - one contract
(v) South Amman including Jawa, Sahab, Abu Alanda, etc:
- length of pipes about 100 km. - secondary and tertiary mains and house connections
House connections are included up to one meter inside the property boundary line. - 4 3. - ANNEX3 Page 2 of 4
- pipe sizes 3/4" to 8' - 602 of pipes for rehabilitationand 40% for new areas - two contracts
2. JerashVilares and Rieb
- length of pipes about 40 km. - secondary and tertiary mains and house connections - pipe sizes 3/4" to 6" - 100X of pipes for new areas - one storage tank with a capacity of 1000 ml and one pumping station - one contract
B. SEWERAGE
1. Greater Amman Area
(i) Various fill-in areas in Amman:
- length of pipes about 50 km. - trunk main, laterals and house connections- - sizes 150 to 800 mm - three to four contracts
(ii) Zarqa/Ruseifa:
- length of pipes about 40 km. - trunk mains, laterals and house connections - sizes 150 to 300 mm. - two contracts
(iii) Fuheis, Kahis, Na'ur and Sukneh:
- length of pipes about 140 km. - trunk mains, laterals and house connections - sizes 150 to 500 mm. - two contracts for Fuheis/Mahis one for Na'ur and one for Sukneh
(iv) Salt:
- length of pipes about 15 km. - trunk mains, laterals and house connections - sizes 150 to 300 mm. - one contract
2. Jerasharea (Jerash, Mokhayyan Souf and Souf)
- length of pipes about 80 km. - trunk mains, laterals and house connections - sizes 150 to 500 mm. - two contracts
House connections are included up to one meter outside the property boundary line. - 44 -
ANNEX 3 Page 3 of 4
3. Aqaba
- length of pipes about 40 km. - trunk mains, lateralsand house connections - sizes 150 to 300 mm. - two contracts
C. SEWAGE TREATMENTWORKS 1. Greater AmmnanArea
(i) Iuheis/Mahis(common treatmentworks for two areas):
- biological treatmentproposed using rotatingbiological disk& (RBD) - des gn capacity 1500 m3/day for a first stage extension
(ii) Na'ur:
- biologicaltreatment proposed using RBD - design capacity 870 m /day for a first stage extension
(iii) SuknehL' (includingAl-Hashimiye, Garica, Um-Salih):
- biological treatmentproposed with oxidationditches - design capacity 2000 m3/day for a first stage extension
(iv) Salt:
- extensionof existing treatmentworks for biological treatment using extended aeration - existing capacity 2440 m3/day to be extended to 3510 m3/day 2. Jerash
- extension of existing treatmentworks for biological treatment using oxidationditches - existing capacity 1155 m3/day to be extended to 3000 m 3/day
D. MISCELLANEOUS
1. For water distributionsystems, equipment for network analysis and for system control and monitoring.
2. Equipment for collectionand monitoring of meteorologicaland hydrologicaldata.
3. Equipmentsuch as water meters, pipes, valves, fittings,spare pumps.
Provisionwill be made at the treatmenitsite for the possible future inclusionof the sewage flow from East Zarqa, that is presently proposed to be pumped to Shirbet es Samra. - 45 -
ANNEX 3 Page 4 af 4
E. CONSULTANT SERVICES
1. Consultantassistance for engineeringfor:
- water distributionsystem network analysis and design (related works for the Jerash villages will be done by the WA);
- sewerage systems for the Jerash area and the Fuheis, Mahis, Na'ur, Sukneh and Zarqa/Ruseifadrainage zones (related works in Amman, Salt and Aqaba will be done by the WA);
- sewage treatmentworks for Fuheis/Mahis,Na'ur and Sakneh (the extensionof the sewage treatmentworks for Jerash and Salt will be done on a turnkey basis).
2. Consultantassistance for constructionsupervision for all works to be undertakenunder the project.
3. Other consultantassistance such as for water sources and water distributionsystem monitoringand control.
F. TRAINiNG
1. Any trainingas to be identifiedas supplementaryto the USAID proposed training program; this portion is expected to be limited to some US$100,000equivalent. 46 -
ANNEX4 Page I of 2
HASHEMITE KINGDOM OF JORDAN
JORDAN WATER SUPPLY AND SEWERAGE PROJECT
Assumptions Used In Financial Projections
General
Detailed income statementsfor the separate water supply systems which comprises the overall WA operationswere prepared by the Borrower. For the report, only the consolidatedincome statement,cash flow statementand the balance sheet have been presented.
Income Statement
Revenues from water and sewage tariffs are assumed to be increased to meet, over the projectionperiod, the proposed revised financial covenants,i.e., water tariffs and charges for sewerage would be establishedso as to cover operatingexpenses, debt service or depreciation,whichever is higher and working capital increases. No further subsidiesare expected for the water supply by tankers and at water points.
All operating expenses are adjusted for a 6% annual inflation. Salaries and wages are based on prevailingWA's salaries and wages scales. Adjustmentshave been made in the number of staff because of the future increases in WA's activitiesand salaries were adjusted to allow for general salary adjustmentsand for inflation. Improvementsin productivity- due to better coordinationand eliminationof certain overlappingfunctions - have also been assumed. The quantity of energy and chemical was projected on the basis of operatingrequirements. The energy costs are expected to go up dramaticallyin 1986 with the ,naugurationof the Deir Alla and Wadi Arab systems, although initially both systems will be primarilyused to meet peak demands. The effect of this huge increase on operating cost would also affect the average tariff needed to meet the financialdiscipline in the initial years. With increasedwater sales average water tariffswill level off.
Maintenancewas estimated to average about 1% of fixed assets values relating to the water activitiesand .5% of fixed assets values for sewerage. General and administrativeexpenses were projected in line with the expanded activities. Assets were depreciatedon a straight-line basis which averages at 3% of fixed assets for water works and at 2.5% for sewerage works. - 47
ANFIX 4 Page 2 of 2
Cash Flow Statement and Balance Sheet
The Government'scontributions consist of contributionsto W4A's investmentprogram which are included in the five year plan (1986-19)0), for the constructionof water works and sewerage to be operated by the WA as well as the contributionsmade for the constructionof the Deir Alla and Wadi Arab projects (constructedby JVA). Customer'scontributions include the amount collected in line with current regulationswhich provides for certain payments at the time of connecting to sewerage. In addition,some minor contributionsreferred to in WA's regulationas applicationfees are included hereunder. Accounts payable include two months of consumableoperating materials. Inventoriesare assumed to be eight months of the value of supplies of materials, chemicalsand fuel which is felt to be necessaryfor the present due to the dispersednature of WA operations. They are assumed to decline to about six months over the projectionperiod. Accounts receivablesare at present a little less than four months of sales but are projected to decline to about two and half months.
The on-lent proceeds of the Bank loan are assumed to carry an interestrate of 9X p.a., a commitment charge of 0.752 on the undisbursed balance,and would be repayableover 12 years after an initial grace period of three years. Other loans made to the WA by KfW and USAID are assumed to be repaid over 20 years after an initial ten- year grace period and to carry an interest rate of 5% per annum. A loan from the IslamicBank is projectedto be for 15 years including 5 years of grace and bears interest at 3% p.a.
Interestduring constructionwill be capitalizedand transferred to fixed assets in operationat the time of commissioning. During the constructionperiod, interest payments to the various lenders will be made by the Governmentand added to the on-lent proceeds of the various loans. - 48 -
ANNEX 5
HASHEMITEKINGDOM OF JORDAN
JORDAN WATER SUPPLY AND SEWERAGEPROJECT
Additional Information Available in Project File
A. LegalDoeuments
A-I Water Supply CorporationLaw (filed under the Greater Amman Water Supply & Sewerage Project Loan 2483-JO).
B. Studies
B-1 Final Master Plan Report and EngineeringDesign and Economic Analysis Report for WastewaterDisposal for Greater Amman Area (February1982) preparedby James M. MontgomeryConsulting Engineersand DMJM International(filed under the Greater Amman Water Supply & Sewerage Project Loan 2483-JO).
B-2 Study of the Primary and SecondaryConveyance Systems for Domestic Water Supply in the Amman, Balqa and Irbid Governorates (April 1985), Volumes 1, 2, 3 and 4, prepared by Watson Hawksley and Sir Alexander Gibb & Partners.
B-3 PreliminaryDesign Report on "WastewaterCollection & Treatment Systems for the Cities of Fuheis,Mahis, Naur and Sukneh" (1985) prepared by Afkar ConsultingEngineers and Sir FrederickSnow InternationalLimited.
B-4 PreliminaryReport on "SewerageScheme for Soof, Makkayyam Soof, Muqbila, Deir El-Liyyat,Al Nabi Had" (September1985) prepared by Associated ConsultingEngineers.
B-5 Bank Water Sector Study, Report No. 4699-JO (filed under the Greater Amman Water Supply & Sewerage Project Loan 2483-JO). HASHEMITEKINGDOM OF JORDAN JORDANWATER SUPPLY AND SEWERAGE PROJECT ProjectImplementation Schedule
PROJECT COMPONENTS1986 1987 '1988 1989 1990 1991 2 j 3 4OE2D2 3 4 | 1 2 3 4 1 2 3 4 1 4d
A WARRSUPr'1y aeeee *~ J O _ D 1 -i------. - -1 , ur eZee-M_11- eee=
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' ~~~~~~~~~~Sewerage,and Sewage PROPOSEDPROJECT WORKS SPwage TreatnmentWorkS (S;TWl -Major rrtunk Mains
- - ~~~~~~~ABUIl ADA iPOOPOr1 NON-PROJf(.' WORK . St~~~~~~~~~~~~~~~~wageTreatmninnWorks ISt W) -- Major trunk Mains jijWEIDEH~ ~ ~ AARWOPK, LINDrRCONSTRIU,C7tON Do~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~oe Major Trunk~Monaries QueenAba re jmt ~~~~~GeaerAnrin-- Gv(fate oudaie iii~~ ~~~~~~~~~~~~~~~~~~ociidTrtre Mom Ii' Qee Ato- 1L~~~~~~~~~~~~~~~~~ lnternottonalA,UJOfport -nill )B I~~~~M 01~ ~~ ~ ~ ~~~~ ~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~Ae 1 otmap~~~~~ K.>;;.: ___-- 2~~~~~~~~~t -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A At,-.- 0 IBRD 19511 /SYRIAN ARAB MUOBILA9-- REPUSL I MOKHAYYAMSUF - - ,70~ccuped Trermones 36*~~~~~~0 .,~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~,' H A"N JA~~~~~RASH JORDAN JORDAN WATER SUPPLY AND SEWERAGEPROJECT JARASHAREA Sewerage and Sewage Disposal Systems Proposed Existing * Sewage Treatment Works - Trunk Mains Built-up Areas 0 400 800 1200 1600 2000 meters 000f ORO r fvr ro ojo. , eU: .uts ,0 Dvr . SO. Ot o..eohJ rr0 p X i S L wjtn rtr sb0f-lbrt.cfy 0 bsrvrvor sv a 00 10.0 ruhr 0 FEBRUARY 1986