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World Bank Document 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
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